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 Defined
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 contract.
Fund Performance
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
1 Mo1 3 Mo1
YTD1 1 Yr 3 Yr 5
Yr 10 Yr Life Class A: NAV
(Inception 12/31/10) -2.62 4.78
4.78 -10.00 --
-- -- -2.99 Class A:
Maximum 5.75% load -8.26 -1.27
-1.27 -15.18 --
-- -- -7.48 UBS Bloomberg
CMCI -2.48 5.14
5.14 -8.88 15.73 3.86
-- 4.65 Average
Annual Total Returns (%) as of December 31, 2011
1 Mo1 3 Mo1 YTD1
1 Yr 3 Yr 5 Yr
10 Yr Life Class A: NAV (Inception
12/31/10) -1.92 2.26
-8.11 -8.11 -- --
-- -- Class A: Maximum 5.75%
load -7.59 -3.66
-13.38 -13.38 -- --
-- -- UBS Bloomberg CMCI
-1.99 2.66 -6.90
-6.90 13.37 3.84
-- --
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 reinvested.
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 classes.
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 and summary
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.