The UBS Bloomberg Constant Maturity (“CM”) Commodity Total Return Index
(ticker: CMCITR), a modern commodity index designed to reduce the
potential negative effects of contango, returned -2.48 percent in March,
bringing year to date and first quarter performance to +5.14 percent,
according to data released today by Van Eck Global and Bloomberg.
Performance was driven largely by the correction seen in the commodity
markets during the month, affected at least in part by reports of
subdued growth and lowering demand out of China, though oil markets,
which had seen significant tension to start the year, were relatively
subdued during the month.
Commodity curves moved in and out of contango during March. In the
energy space, WTI contango widened, while backwardation also widened.
Natural gas contango reduced from what had been severe levels. In other
commodity sub-sectors, sugar’s backwardation narrowed, while wheat and
other soft commodities’ contango increased significantly for the month.
During March, CMCITR’s performance exceeded that of other constant
maturity indices, including the Continuous Commodity Index (CCITR: -4.38
percent) and Greenhaven Continuous Commodity Index (GCC: -4.45 percent).
CMCITR also outperformed the more traditional Dow Jones UBS Commodity
Index (DJUBSTR), which returned -4.14 percent for the month while the
S&P Goldman Sachs Commodity Index (SPGSCITR) just outpaced CMCITR,
returning -2.35 during March. Year to date, CMCITR continues to far
outpace the DJUBSTR (which is up 0.89 percent through Q1) and is just 74
basis points behind the Q1 performance turned in by the SPGSCITR (which
has returned +5.88 percent year to date).
CMCI diversifies across 28 commodity components and up to five
maturities. The Index was designed to minimize investment exposure to
the front end of the futures curve; and by diversifying exposure across
multiple maturities, the Index seeks to mitigate the impact of contango,
a major concern for commodity investors.
CMCI is the underlying index for the Van Eck CM Commodity Index Fund
(tickers: CMCAX, COMIX, CMCYX), an open-end, index-based mutual fund
launched at the end of 2010.
Contango refers to an upward-sloping futures curve. When a curve is in
contango, the futures price is greater than the spot price. As a result,
the price of a futures contract is greater than the price of an expiring
contract. When this occurs, investors will incur an added cost each time
a contract expires and it is rolled over and replaced it with another
The performance shown for the indices does not reflect fees and
charges, which are assessed with the purchase and ownership of the Fund.
Indices are not securities in which investments can be made.
Average Annual Total Returns (%) as of March 31, 2012
Class A: NAV (Inception 12/31/10)
Class A: Maximum 5.75% load
UBS Bloomberg CMCI
Average Annual Total Returns (%) as of December 31, 2011
Class A: NAV (Inception 12/31/10)
Class A: Maximum 5.75% load
UBS Bloomberg CMCI
1One-month and year-to-date returns are not annualized.
The tables present past performance, which is no guarantee of future
results and which may be lower or higher than current performance.
Returns reflect applicable fee waivers and/or expense reimbursements.
Had the Fund incurred all expenses and fees, investment returns would
have been reduced. Investment returns and Fund share values will
fluctuate so that investor’s shares, when redeemed, may be worth more or
less than their original cost. Fund returns assume that dividends and
capital gains distributions have been reinvested in the Fund at NAV.
Index returns assume that dividends of the Index constituents have been
Expenses: Class A: Gross 1.52%; Net 0.95%. Expenses are capped
contractually until 05/01/12 at 0.95% for Class A. Caps exclude certain
expenses, such as interest.
About Van Eck Global
Founded in 1955, Van Eck Associates Corporation was among the first U.S.
money managers helping investors achieve greater diversification through
global investing. Today, the firm continues this tradition by offering
innovative, actively managed investment choices in hard assets, emerging
markets, precious metals including gold, and other alternative asset
Market Vectors exchange-traded products have been offered by Van Eck
Global since 2006 when the firm launched the nation’s first gold mining
ETF. Today, Market Vectors ETFs and ETNs span several asset classes,
including equities, municipal bonds and currency markets.
Van Eck Global also offers mutual funds, variable insurance products,
separate accounts and alternative investments. Designed for investors
seeking innovative choices for portfolio diversification, Van Eck
Global’s investment products are often categorized in asset classes
having returns with low correlations to those of more traditional U.S.
equity and fixed income investments.
All indices are unmanaged and include the reinvestment of all
dividends, but do not reflect the payment of transaction costs, advisory
fees or expenses that are associated with an investment in the Fund. An
index’s performance is not illustrative of any fund’s performance.
Indices are not securities in which investments can be made. Results
reflect past performance and do not guarantee future results. This
performance is historical and is provided to illustrate market trends.
The DJUBS is composed of futures contracts on 19 physical commodities.
The S&P GSCI is composed of futures contracts on 24 physical
commodities, with high energy concentration and limited diversification.
Both indices buy and sell short-term (i.e., “front month”) futures
contracts. In comparison, the UBS Bloomberg CMCI is composed of futures
contracts on 28 physical commodities and buys and sells contracts with
maturities of three months and, for some commodities, up to three years.
UBS and Bloomberg own or exclusively license, solely or jointly as
agreed between them all proprietary rights with respect to the Index. In
no way do UBS or Bloomberg sponsor or endorse, nor are they otherwise
involved in the issuance and offering of the Fund nor do either of them
make any representation or warranty, express or implied, to the holders
of the Fund or any member of the public regarding the advisability of
investing in the Fund or commodities generally or in futures
particularly, or as to results to be obtained from the use of the Index
or from the Fund.
Risks: You can lose money by investing in the Fund. Any
investment in the Fund should be part of an overall investment program,
not a complete program. Commodities are assets that have tangible
properties, such as oil, metals, and agriculture. Commodities and
commodity-linked derivatives may be affected by overall market movements
and other factors that affect the value of a particular industry or
commodity such as weather, disease, embargoes or political or regulatory
developments. The value of a commodity-linked derivative is generally
based on price movements of a commodity, a commodity futures contract, a
commodity index or other economic variables based on the commodity
markets. Derivatives use leverage, which may exaggerate a loss. The Fund
is subject to the risks associated with its investments in
commodity-linked derivatives, risks of investing in wholly owned
subsidiary, risk of tracking error, risks of aggressive investment
techniques, leverage risk, derivatives risks, counterparty risks,
non-diversification risk, credit risk, concentration risk and market
risk. The use of commodity-linked derivatives such as swaps,
commodity-linked structured notes and futures entails substantial risks,
including risk of loss of a significant portion of their principal
value, lack of a secondary market, increased volatility, correlation
risk, liquidity risk, interest-rate risk, market risk, credit risk,
valuation risk and tax risk. Gains and losses from speculative positions
in derivatives may be much greater than the derivative’s cost. At any
time, the risk of loss of any individual security held by the Fund could
be significantly higher than 50% of the security’s value. Investment in
commodity markets may not be suitable for all investors. The Fund’s
investment in commodity-linked derivative instruments may subject the
fund to greater volatility than investment in traditional securities.
For a description of these and other risk considerations, please refer
to the Fund’s prospectuses, which should be read carefully before you
invest. Again, the Fund offers investors exposure to the broad commodity
markets, currently by investing in a combination of commodity-linked
structured notes and swaps. The Fund has obtained a private letter
ruling from the IRS confirming that the income produced by certain types
of structured notes constitutes “qualifying income.”
Please call 800.826.2333 or visit vaneck.com
for performance information current to the most recent month end and for
a free prospectus
prospectus. An investor should consider the Fund’s investment
objective, risks, and charges and expenses carefully before investing.
The prospectus and summary prospectus contains this and other
information. Please read it carefully before investing.