VanEck NDR Managed Allocation Fund Currently Bearish on Bonds, Prefers Safety of Cash

Since Donald Trump’s victory, stock prices have soared on a favorable reaction to the president-elect’s pro-business policy agenda, while bond prices have plummeted on fears of inflation.

The VanEck NDR Managed Allocation Fund (the “Fund”), a tactical asset allocation fund, uses model signals powered by Ned Davis Research (“NDR”) to determine its overall allocation to stocks, bonds and cash. This particular approach, known as “global tactical asset allocation”, uses macroeconomic, fundamental, and technical indicators to determine the model’s asset class decisions. Of these indicators, 50% are macroeconomic and fundamental indicators and the other 50% are technical, or price-based, indicators.

For the first time in over three years, the weight-of-the-evidence gathered from these indicators now favors cash over bonds. In fact, bonds are currently the least attractive asset class in the model, falling behind both equities and cash. The model’s technical indicators, which had been moderately bearish on bonds relative to cash in mid-October, became extremely bearish following the election. This had not happened in over six years. The macroeconomic and fundamental model indicators, which typically lag the technical indicators, retracted from bullish to neutral on bonds relative to cash post-election. This added support to the model’s overall bearish signal for bonds. Therefore, as of December 1, in accordance with the model, the Fund’s allocation was 81% equities, 11% bonds, and nearly 8% in cash.

“The model’s indicators turned decisively bullish on stocks over bonds in September. We are now moving even further away from bonds into a significant cash position,” said David Schassler, Portfolio Manager of the VanEck NDR Managed Allocation Fund. “Investing based on the weight-of-the-evidence, even when your emotions are telling you otherwise, is what sets us apart. This was most apparent in November when we maintained just over an 80% allocation to stocks leading into arguably the most contentious presidential election in modern times. It certainly worked in our favor.”

The model’s preference for cash over bonds is a rare occurrence and as such, the Fund has not, in the past, had a meaningful allocation to cash. “We think that the cash position is telling us that in today’s environment the safety of cash may be more valuable than any potential returns an investor receives from bonds. This is a bold move that doesn’t happen often,” said Paul Jakubowicz, a Director at Ned Davis Research.

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About VanEck

VanEck’s mission is to offer investors forward-looking, intelligently designed investment strategies that take advantage of targeted market opportunities. Founded in 1955, we were a pioneer in global investing with a history of placing clients’ interests first in all market environments. Today, the firm continues this tradition by offering active and passive investment portfolios in hard assets, emerging markets, precious metals, fixed income, and other alternative asset classes. VanEck Vectors ETPs span a range of sectors, asset classes and geographies. VanEck Vectors is one of the largest ETF families in the world, managing close to 70 funds globally. As of September 31, 2016, VanEck managed approximately $41.1 billion in assets, including mutual funds, ETFs, and institutional accounts.

About NDR

Ned Davis Research (NDR) specializes in quantitative research based on technical, fundamental and macroeconomic analysis. It is headquartered in Venice, Florida and has approximately 125 employees. NDR was founded in 1980 as an institutional investment research provider and in 2011 was sold to Euromoney Institutional Investor PLC, a London-based holding company that invests globally in media companies operating in the financial services industry. NDR is not an affiliate of VanEck and none of NDR’s employees are also employees of VanEck.

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Please call 800.826.2333 or visit vaneck.com for a free prospectus and summary prospectus. Investing involves risk, including possible loss of principal. An investor should consider the investment objective, risks, and charges and expenses of the investment company carefully before investing. The prospectus and summary prospectus contain this and information about the investment company. Please read the prospectus and summary prospectus carefully before investing.

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