Falcon Perspectives January 2011
Investment Compass gives an insight into the investment decisions of our specialists.
FALCON PERSPECTIVES - january 2011
Investment Review and Outlook
International equity markets capitalized on their excellent December performances and began 2011 well, supported by upbeat macroeconomic data and a good start into the fourth quarter earnings season. We expect the positive trends to remain in place on the back of the continued global economic recovery, ample monetary support and reasonable valuations. Emerging markets might underperform due to increased inflation pressure, which has caused several regional central banks to become more restrictive. However, the macroeconomic
growth perspective for this heterogeneous group of countries remains bright for the foreseeable future.
In addition, investors’ higher risk appetite should support commodity prices. On the other hand, government bonds are likely to face headwinds as long-term interest rates are expected to creep higher, thanks to accelerating macroeconomic dynamics. Higher-yielding and emerging market bonds still offer attractive opportunities in the fixed income sector. There are some risks that could challenge the positive outlook for riskier asset classes, such as an unexpected setback in the US economy, worldwide contagion of the European debt crisis and markedly rising long-term interest rates.
Investment Review and Outlook
Van Eck Falcon Hard Assets Fund
The Van Eck Falcon Hard Assets Fund enables the investor to benefit from the strong worldwide demand for commodities thanks to the global economic recovery and the ongoing dynamics in emerging markets, above all in China. The fund offers additional valuable investment characteristics such as diversification benefits due to hard assets’ relatively low correlations to traditional asset classes such as bonds or stocks. Last but not least, hard assets provide a natural hedge against inflation.
Hard assets or non-financial assets are investments with an intrinsic value such as oil, gold, copper and other commodities. Non-financial assets have a value in use. Typically this use is either in some sort of manufacturing process (e.g. in the case of oil and base metals)
or as a consumable good (e.g. agricultural goods). On the other hand, financial assets have a paper value only. The Van Eck Falcon Hard Assets Fund seeks long-term capital appreciation through global investments in shares and equity-linked securities of hard assets
companies. Such companies are primarily active in exploration, development, production, distribution or facilitation of processing
relating to hard assets.
Van Eck Falcon Hard Assets Fund