Van Eck Associates secures triple market returns following strategic entry into South African sovereign debt markets

Van Eck Associates reaps a 6.3% return after buying South African bonds during a record selloff, outperforming the emerging market average significantly.

By: AXL Media

Published: Apr 19, 2026, 2:30 PM EDT

Source: The information in this article was sourced from Bloomberg

Strategic Timing Captures Outsized Returns in Emerging Markets

Van Eck Associates Corp., a New York investment powerhouse managing approximately $225 billion, has successfully navigated a period of intense volatility in South African fixed income markets. After maintaining zero exposure to South African bonds at the onset of recent geopolitical tensions in the Middle East, the firm initiated a major buying campaign on March 16. This maneuver allowed the firm to capture a 6.3 percent return in dollar terms, a figure that nearly triples the 2.3 percent average seen across other developing nation local currency bonds during the same window. According to David Austerweil, a deputy portfolio manager at Van Eck, the firm identified a rare entry point when a year long rally hit a sharp reversal, creating an opportunity to rebuild positions at significantly more attractive valuations.

Geopolitical Conflict Triggers Record Capital Outflows

The opportunity for Van Eck arose from a massive exodus of foreign capital, as investors reacted to the inflationary pressures of rising oil prices triggered by the Iran war. In March alone, international investors divested a net R56 billion from the South African bond market, marking the largest monthly selloff since data tracking began thirty years ago. As yields on government rand bonds surged by more than 100 basis points, market participants feared that energy costs would derail the national economic recovery. However, Van Eck analysts determined that the market had overextended its pessimistic outlook, betting that the underlying fiscal story of South Africa remained intact despite the temporary shock of the regional conflict.

Long Term Debt Instruments Lead Performance Recovery

Focusing on the steepness of the yield curve, the investment firm directed its capital toward long dated maturities, specifically targeting bonds set to mature in 2037, 2040, and 2044. This focus on the long end of the curve proved prescient as these specific instruments outperformed the broader market once the initial panic subsided. David Austerweil noted that the market appeared to be waiting for a signal of stability to return, stating that it was remarkable how quickly investors sought to repurchase government debt once the "all clear" was perceived. This tactical shift toward high duration assets has allowed Van Eck to benefit from the subs...