VanEck® Merk® Gold Trust seeks to provide investors with a convenient and cost-efficient way to buy and hold gold through an exchange traded product with the option to take physical delivery of gold if and when desired.1
As a unique asset, gold may enhance portfolio diversification, acts as store of value and hedges against systemic financial and geopolitical risk.
While these basic principles of gold exposure remain constant over time, it is important to examine more closely the rationale for gold and gold stocks in today’s environment and why we believe the near-term future looks bright.
Bull markets can be classified as either secular (long term) or cyclical (bull phases within an overall bear market). Before its $1,400 per ounce breakout in June 2019, on a technical basis, gold appeared to be in a cyclical market, but now a longer, sustained rally may be likely—perhaps similar to the secular gold bull market of 2001 to 2008.
Source: RBC Capital Markets, Bloomberg, VanEck. Data as of March 2020. The effects of the COVID-19 pandemic are unknown and may exacerbate the other risks of the Fund. Past performance is not a guarantee of future results.
Gold is different from its metal counterparts in a number of ways. Unlike other metals, gold has an extremely narrow industrial application, which means that physical supply is driven by retail and investment demand. While there are certainly restraints on other resources, gold production is a specialized industry and may have already peaked. In fact, over the last three years, despite an increase in exploration spending, there have been no new deposits discovered, suggesting that future supply may be severely limited. With its global appeal, we believe demand for gold should persist, creating a broadening imbalance that may positively contribute to the long-term gold price.
Source: BofA Merrill Lynch Global Research, S&P Global Intelligence. Data as of December 2019. The effects of the COVID-19 pandemic are unknown and may exacerbate the other risks of the Fund. Past performance is not a guarantee of future results.
While the outcome of the 2020 market sell-off and related uncertainty are yet-to-be-seen, we remain optimistic about the outlook for gold and gold stocks to aid investors in their recovery. As a comparison to today’s environment, we can look at the 2008 financial crisis. During that period, gold and gold stocks bottomed and recovered much earlier than the S&P 500—recouping losses at/around the time the S&P reached its lows in February/March 2009. The S&P 500 took nearly two years to reach its pre-crisis levels again.
Source: VanEck, Bloomberg. Data as of March 2020. “S&P 500” represented by the S&P 500 Index TR (SPXT). “Gold Stocks” represented by the NYSE Arca Gold Miners Index Net Total Return (GDMNTR). “Gold” represented by gold spot prices. The effects of the COVID-19 pandemic are unknown and may exacerbate the other risks of the Fund. Past performance is not a guarantee of future results.
OUNZ shareholders can request access to their share of gold. Delivery requests of at least one ounce can be submitted for a variety gold coins and bars. Because investors own a pro-rata share of the gold in OUNZ, taking delivery is not taxable. You simply take delivery of what you already own.1, 2
VanEck’s leadership in gold investing extends more than 50 years, encompassing gold stocks and bullion across ETFs and mutual funds. We launched the U.S’s first gold stock fund (INIVX) in 1968 and issued the first gold miners ETF (GDX) in 2006.
Notes: Video first published by Bloomberg on 2/27/19; net assets as of
1Processing fees apply.
2If an investor redeems some or all of its shares in exchange for the underlying gold (including American Gold Eagle Coins) represented by the redeemed shares, the exchange will generally not be a taxable event for the investor (except with respect to any Cash Proceeds). A subsequent sale of the gold received by the investor will be a taxable event. For details, please see "Taxation of U.S. Investors" in the prospectus. A delivery applicant must submit a delivery application and payment for the processing and delivery fees to cover the cost of preparing and transporting the gold.
The delivery of physical gold to applicants may take considerable time and the delay in delivery could result in losses if the price of gold declines. A share submission is irrevocable.
Important Disclosures
VanEck Merk Gold Trust:
The material must be preceded or accompanied by a prospectus. Before investing you should carefully consider the VanEck Merk Gold Trust's (the “Trust") investment objectives, risks, charges and expenses. Please read the prospectus carefully before investing.
Investing involves risk, including possible loss of principal. The Trust is not an investment company registered under the Investment Company Act of 1940 or a commodity pool for the purposes of the Commodity Exchange Act. Shares of the Trust are not subject to the same regulatory requirements as mutual funds. Because shares of the Trust are intended to reflect the price of the gold held in the Trust, the market price of the shares is subject to fluctuations similar to those affecting gold prices. Additionally, shares of the Trust are bought and sold at market price, not at net asset value (“NAV”). Brokerage commissions will reduce returns.
The request for redemption of shares for gold is subject to a number of risks including but not limited to the potential for the price of gold to decline during the time between the submission of the request and delivery. Delivery may take a considerable amount of time depending on your location.
Commodities and commodity-index linked securities may be affected by changes in overall market movements and other factors such as weather, disease, embargoes, or political and regulatory developments, as well as trading activity of speculators and arbitrageurs in the underlying commodities.
Trust shares trade like stocks, are subject to investment risk and will fluctuate in market value. The value of Trust shares relates directly to the value of the gold held by the Trust (less its expenses), and fluctuations in the price of gold could materially and adversely affect an investment in the shares. The price received upon the sale of the shares, which trade at market price, may be more or less than the value of the gold represented by them. The Trust does not generate any income, and as the Trust regularly issues shares to pay for the Sponsor’s ongoing expenses, the amount of gold represented by each Share will decline over time. Investing involves risk, and you could lose money on an investment in the Trust. For a more complete discussion of the risk factors relative to the Trust, carefully read the prospectus.
VanEck International Investors Gold Fund
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. The Fund is subject to the risks associated with concentrating its assets in the gold industry, which can be significantly affected by international economic, monetary and political developments. The Fund’s overall portfolio may decline in value due to developments specific to the gold industry. The Fund’s investments in foreign securities involve risks related to adverse political and economic developments unique to a country or a region, currency fluctuations or controls, and the possibility of arbitrary action by foreign governments, or political, economic or social instability. The Fund is subject to risks associated with investments in Canadian issuers, commodities and commodity-linked derivatives, commodities and commodity-linked derivatives tax, gold-mining industry, derivatives, direct investments, emerging market securities, foreign currency transactions, foreign securities, other investment companies, management, market, non-diversification, operational, regulatory, small- and medium-capitalization companies and subsidiary risks.
VanEck Gold Miners ETF and VanEck Junior Gold Miners ETF
An investment in the Funds may be subject to risks which include, among others, investing in gold and silver mining companies, Canadian issuers, foreign securities, foreign currency, depositary receipts, small- and medium-capitalization companies, equity securities, market, operational, index tracking, authorized participant concentration, no guarantee of active trading market, trading issues, passive management risk, fund shares trading, premium/discount risk and liquidity of fund shares, non-diversified and concentration risks, all of which may adversely affect the Funds. Foreign investments are subject to risks, which include changes in economic and political conditions, foreign currency fluctuations, changes in foreign regulations, and changes in currency exchange rates which may negatively impact the Funds’ return. Small- and medium-capitalization companies may be subject to elevated risks. The Funds’ assets may be concentrated in a particular sector and may be subject to more risk than investments in a diverse group of sectors.
Diversification does not assure a profit or protect against loss.
Investing involves substantial risk and high volatility, including possible loss of principal. An investor should consider a Fund's investment objective, risks, charges and expenses carefully before investing. To obtain a prospectus and summary prospectus for VanEck Funds and VanEck ETFs, which contain this and other information, call 800.826.2333 or visit vaneck.com. Please read the prospectus and summary prospectus for VanEck Funds and VanEck ETFs carefully before investing.
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Van Eck Securities Corporation, Distributor of VanEck International Investors Gold Fund, VanEck Gold Miners ETF, and VanEck Junior Gold Miners ETF.