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Improving fundamentals and lower credit and interest rate risk has made EM high yield corporate bonds attractive this year.

Emerging market corporate bonds (HYEM) fared better in 2018 than EM sovereign and EM local bonds.

The US fixed income market saw a strong close to 2018.

The IT sector was the most underweighted sector in the Morningstar Wide Moat Index last year. The sector reported a loss of 3.08% in 2018.

Moat companies (MOAT) (FB) (INTC) or moat stocks are companies that have an advantage over their competitors in the industry.

One such situation occurred this month as a direct result of the very tragic wildfires that struck California over the last two years.

The cautionary advice to “expect the unexpected” makes a lot of sense for investors—at least in the sense that we should all learn to manage our own expectations by realizing there are outcomes we may not have anticipated.

VanEck’s Guided Allocation ETFs are set up to protect your portfolio when stock markets decline and offer exposure to gains during an upturn.

Oil prices and many other commodities surged for most of last year.

Spreads narrow when the economy improves and there is a lower chance of a default, causing junk bond prices to rise and yields to fall.

Without a second half catalyst, gold will probably drift sideways, falling below the lower trend line and further eroding confidence in the metal.

he second half of 2018 should be very interesting for the gold market. The chart shows the gold price has formed a wedge or pennant pattern that has been in place for several years.

It seems that every time new, scary headlines emerge, press articles declare that gold no longer serves as a safe haven.

Gold remained resilient in May, as the U.S. dollar strengthened considerably. The U.S. Dollar Index (DXY)1 gained 2.4% and closed the month at its highs for the year.

VanEck GURUSHINA: Since you mentioned the recession, I think when we talk about global growth, there is something else interesting happening right now. Mainly it looks like there is a discrepancy, rising discrepancy between growth outlook in the U.S. and Europe. From your point of view, what does it mean for investment opportunities? VAN ECK: […]

But let’s think about maybe more actionable items in terms of growth, because it’s clear that at least there are now some signs on growth inflection, maybe not globally, but at least in some parts of the world.

Number two, the higher fiscal deficit picture because of the tax law, so that has raised this issue. It projects into 2019 as well.

With global rates normalizing, geopolitics still posing major risks, and with one of the longest bull runs in U.S. stocks apparently stalling, 2018 might be a year of paradigm shift.

2017 was a good year for both the stock market (SPY) as well as the debt market.

Capital is allocated amongst assets on which the model is bullish on using an optimization process designed to maximize our diversification and minimize our volatility.

At launch, RAAX had a small weighting to coal, but in May, this exposure was completely eliminated based on falling coal equity prices and weakening supply and demand data.

RAAX remains fully invested across commodities, natural resource equities, and MLPs. As they were at launch, the largest weightings remain in diversified commodities (30%), gold bullion (20%), and agribusiness equities (20%).

VanEck The VanEck Vectors Real Asset Allocation ETF (RAAX) uses a data-driven, rules-based process that leverages over 50 indicators (technical, macroeconomic and fundamental, commodity price, and sentiment) to allocate across 12 individual real asset segments in five broad real asset sectors. These objective indicators identify the segments with positive expected returns. Then, using correlation and […]

A third consideration that combines the credit exposure with floating rate exposure is business development companies.

Are there any other strategies that investors might want to consider in this environment?

You have laid out a good case to consider both emerging markets local currency bonds as well as floating rate investment grade debt.

Gold equities outperformed gold bullion in March, as the NYSE Arca Gold Miners Index (GDMNTR)1 gained 2.9%, while the MVIS Global Junior Gold Miners Index (MVGDXJTR)2 advanced 2.2%.

Real yields are nominal yields adjusted for inflation, which is often one of the greatest contributors to the nominal yield levels of emerging markets local currency bonds.

Real yields in emerging markets (or EM) have remained at compelling levels over the past few years.

Now that we understand the investment process overall, can you give us a few example sectors and how they work?

Now that we understand why the macro environment is supportive, why don’t you tell us a little bit about the investment process?

Building on a legacy in the real asset space, VanEck is soon to debut a new fund, ticker RAAX.

There are expected, and possibly more aggressive, interest rate hikes over the next several years, and potential commodity supply constraints resulting from years of capital expenditure reductions in the metals and oil industries.

Economic/business cycles are never exactly the same, and the current cycle is no exception. But we are most likely entering the late stages of this expansion.

Commodities and interest rates both tend to rise late in the economic/business cycle. As a normal cycle develops, the economy expands and gains momentum.

The US Federal Reserve recently raised the benchmark lending rate by 25 basis points—the sixth hike since December 2015.

The Federal Reserve has indicated that three interest rate hikes could occur in 2018, followed by another two increases in 2019.

January’s higher-than-expected consumer price index generated worries that the Federal Reserve might start raising interest rates aggressively

Looking ahead for 2018, industry analysts stated in a Bloomberg article that they expect gold to perform better early in the year led, by the “January effect.”

The main factor that caps economic growth and inflation for a country is the amount of debt the country carries. Debt, if used in the right way, can boost economic growth—but it can also damage the economy.

The Senate passed President Donald Trump’s long-awaited tax reform bill in December. This tax reform makes substantial changes to tax rates for both corporates and individuals.

Gold (GLD)(GLDX) has always been considered a safe-haven asset, offering investors diversification benefits. This unique asset gives investors a chance to hedge and earn positive returns.

Digital assets based on DLT (distributed ledger technology) allows users to initiate and verify their own transactions without any central authority such as banks.

Shorting of bitcoins is currently done through unregulated exchanges. However, given bitcoin’s huge volatility, shorting becomes a risky affair.

Blockchain technology holds a lot of promise due to its many advantages such as transparency, faster transactions at lower costs, and a reliable system.

The founders of bitcoin have set a limit of 21 million bitcoins that can be mined over a period of time. Of those, 16.8 million are already in circulation.

In DLT (distributed ledger technology), details of the transactions are recorded in multiple places called blocks. These blocks are then chained together on a shared network.

Bitcoin and its underlying technology (XLK), blockchain, are interesting concepts that have caught the attention of people all around the world.

The sharp rise and fall in the price of bitcoin are mainly because ownership of the currency is heavily concentrated in just a few hands.

The price of bitcoin (SOXL) (SOXX) has risen 69,278.6% over the last five years. On the other hand, in the last seven days, it has plummeted 27% to $12,466.

Deutsche Bank is planning to use blockchain technology in currency settlement, trade processing, and derivative contracts.

Before updating data on a blockchain, users must agree about the veracity of the transaction through a process called consensus.

Despite the higher number of transactions that need to be updated regularly by users, the transaction capacity is intentionally kept very low by the bitcoin founders.

Despite recent declines, the SMH ETF has risen over 41% in the last 12 months. Meanwhile, NVIDIA has risen a whopping 186.7% in the same period, while AMD has returned 15.5% in that period.

Blockchain technology involves massive computer processing power, which requires huge quantities of memory chips, graphics cards, and processors.

The smart beta approach aims to benefit from market inefficiencies to deliver higher risk-adjusted returns and improve diversification.

There are a lot of reasons behind the sharp rally in EMs (SCHE). The prominent reason is that the GDP growth in many of these nations has improved in the last few quarters partially on the back of the rise in commodity prices like copper and oil.

While some market veterans remained skeptical about digital assets, others are quietly moving in.

In September, the Federal Reserve announced it will trim its $4.5 trillion balance sheet.

One of the biggest trends in the global economy over the past two years is the reduction in manufacturing capacity in China (FXI) (MCHI).

Since last year’s presidential election, the US stock markets (IVV) (VTI) have seen volatility fall to almost a 50-year low.

While MOTI’s performance these past 12 months alone has been notable, its returns since inception have been equally impressive.

Building on the success and popularity of VanEck Vectors® Morningstar Wide Moat ETF (MOAT®) and its underlying index’s approach to investing in the U.S., VanEck launched MOTI in 2015 to expand investor access to Morningstar’s core equity research in the international arena.

The performance of VanEck Vectors® Morningstar International Moat ETF (MOTI®) tells an impressive story about the importance of not only identifying quality companies with sustainable competitive advantages but also factoring in valuation to determine the right entry points.

Global climate leaders have set a $1 trillion target for green finance by 2020, which would require a tenfold increase in global green bonds issuance.

Green bonds carry the same risk-return profile as conventional bonds. However, these bonds fund projects focused on energy efficiency, clean water, transportation, biodiversity, and sustainable waste management.

Green muni bonds accounted for 56% of US green bond issuances in the first half of 2017 and are expected to touch $10 billion this year.

Over the last ten years, the green bonds (GRNB) universe has expanded and diversified, holding 600 bonds from 24 countries in 23 currencies.

Investor complacency doesn’t hide the fact that there are financial risks to QT. Forty percent of the Fed’s balance sheet unwind is in mortgage-backed securities at the same time that the housing market is showing signs of slowing.

Since the financial crisis, the stock market has risen consistently as long as the Fed continued to buy treasuries and mortgage-backed securities through its quantitative easing policies (QE 1-3).

A record number of junior companies attended the Precious Metals Summit. We are finding companies with attractive development projects in North America and West Africa as well as some exciting discoveries that merit watching.

Gold stock indices also traded near their highs for the year, but then followed the gold price lower. During September the NYSE Arca Gold Miners Index (GDMNTR) retreated 6.5%.

The momentum gold experienced in August carried over into early September. Geopolitical tension continued as South Korea reacted to possible preparation by North Korea for an intercontinental ballistic missile launch.

The healthcare sector has been the most challenged sector since the presidential elections in November 2016.

Moat company Polaris Industries (PII) has been doing well this year, returning ~30.0% year-to-date as of October 23, 2017.

SINA (SINA), a China-based online media company, benefited the International Moat Index the most in September.

The US Moat Index has been performing fairly well this year. As of September 30, 2017, it has outperformed, rising 20.5% over the S&P 500 Index’s (SPY) (SPX-INDEX) rise of 18.6% YTD.

CapitaLand Commercial Trust (CCT SP) is a Singapore based real estate investment trust (REIT) that owns 10 office properties in the city’s central business district (CBD).

Telefonica SA (TEF SM) is headquartered in Spain and is one of the world’s largest telephone operators reaching more than 350 million customers.

United Parcel Services (UPS US) earns a “wide economic moat” rating from Morningstar from efficient scale, cost advantage, and the network effect.

To demonstrate the power of efficient scale in creating economic moats, we highlight four companies: U.S.-based wide moats CSX Corporation and UPS, and international narrow moats Telefonica SA (Spain) and CapitaLand Commercial (Singapore).

Across the five moat sources (network effect, intangible assets, cost advantage, switching costs, and efficient scale), efficient scale is the most likely to drive a “narrow moat” rating from Morningstar.

“How Moats Translate into Sustainable Competitive Advantages” is a five-part moat investing education series that explores the primary sources of economic moats.

In 2016, Puerto Rico defaulted on constitutionally guaranteed GO (general obligation) bonds. On May 3, 2017, Puerto Rico filed for Title III bankruptcy.

Compared to a corporate bond with a similar credit rating, muni bonds are less likely to default while offering modest yields.

In this series, we will shed light on Moody’s recent data report, US Municipal Bond Defaults and Recoveries, 1970–2016. Muni bond prices sparked in 2016, especially when President Trump announced his infrastructure spending plans.

The performance of municipal bonds has fallen since the 2016 election, as President Trump’s tax reform and infrastructure spending plans have caused some concern among investors.

The rally in emerging markets (VWO) has mainly been driven by higher earnings growth on the back of an improved business environment, rising exports, and strengthening corporate balance sheets.

As the emerging market local debt assets (EBND) (ELD) continue to evolve and expand, investors are increasingly looking for opportunities in the space to enhance returns.

With the addition of three new countries to the JPMorgan GBI-EM Global Diversified Index earlier this year, the EM local debt (FEMB) market continued its growth in 2017.

During the past two decades, EM (emerging markets) local debt has evolved to become the largest and most liquid debt market within the emerging market bond space.

KION Group AG (KGX GR) is a German multinational manufacturer of materials handling equipment, specializing in forklift trucks, warehouse equipment, and industrial trucks.

Canadian Imperial Bank of Commerce (CM CN) is the fifth largest bank in Canada and boasts 11 million clients.

TransDigm Group Inc. (TDG US) is a leading designer and manufacturer of engineered aircraft components for commercial and military aircraft.

The technology industry is the most competitive industry, making it crucial for companies in this industry to have a competitive edge for survival.

Many successful companies build customer loyalty by offering high-quality products and/or services. Some also have the unique advantage of integrating their products….

“How Moats Translate into Sustainable Competitive Advantages” is a five-part moat investing education series that explores the primary sources of economic moats. she

The services provided by municipal borrowers have always been, and remain, vital to our everyday life. The need to protect these services from possible disruption has become ever more important.

One possible driver to action could simply be alerting the public through their local media outlets just what havoc can be, and has been, wrought by cyberattacks.

Addressing cybersecurity successfully will be predicated on a significant psychological shift in thinking. A shift to thinking first and foremost about prevention, not cure.