Van Eck International Investors Gold Fund
-----------------------------------------
1995 Semi-Annual Report
Dear Fellow Shareholder:
During the first half of 1995 the total return of your Fund declined 11.8%. This
decline was primarily the result of a sharp fall in the prices of South African
gold-mining shares, which comprise about 46% of your portfolio. The earnings of
these mines have been under pressure from lower output and higher costs arising
from labor disturbances, and we are monitoring the situation closely. During the
last three years the average annual return on your Fund was 13.1%, largely due
to the fact that the South African mines outperformed the other sectors of the
industry in 1993 and 1994. In our judgment, they still offer greater value than
mine shares elsewhere in the world.
North American gold shares, which account for 35% of total investments, were the
best performing geographical sector of the portfolio during the first six months
of the year. Several companies representing the larger North American holdings
of your Fund, including Placer Dome, Newmont Mining and Barrick Gold, have
expansion plans underway which should add significantly to future gold reserves
and potential profitability. On average, as measured by the XAU index, North
American gold shares rose 9.9% during this period.
During the first six months of the year, the gold price traded in a fairly
narrow range of $372-$396 an ounce. In the early months of the year the
principal monetary focus was on the relationship of the dollar to the world's
stronger currencies, primarily the German mark and the Japanese yen. Concern
about the high U.S. capital account and current account deficits and an
outpouring of U.S. dollars to support the Mexican peso combined to drive the
dollar sharply lower. On March 30, however, the German Bundesbank lowered its
discount rate by .50% to 4%, partly in an attempt to support the dollar. Two
weeks later, Japan cut its discount rate almost in half and subsequently, has
further loosened monetary policy to ease pressure on Japanese financial
institutions and to support the dollar. Interest rates on savings deposits in
Japan are now 0.7%. Long-term bond yields have declined from about 4.7% at the
end of 1994 to around 3%.
The early moves toward more expansionary monetary policies by Germany and Japan
were each followed by a rise in the gold price to over $390 an ounce. Forward
sales of gold by producers, some calming of the currency markets and option
expiration-related trading appear to have capped the rally in June. Over the
last few years, sales of gold by European central banks have maintained downward
pressure on gold prices. Longer-term, however, the deliberate weakening of the
mark and yen to support the dollar may have made these currencies less
attractive alternatives to gold as a hedge against dollar holdings. Rising
physical demand for both jewelry and investment from Asia, and gradually rising
European and North American demand appear to have established a higher trading
range for gold in dollar terms even prior to a reassessment of global economic
and monetary conditions.
DIVIDEND NEWS
A quarterly dividend of $.03 a share on the Class A shares was paid on August 7,
1995 to shareholders of record on July 28, 1995. Your check was sent to you
unless you participate in the Dividend Reinvestment Plan, in which case a
statement was sent to you indicating the number of shares purchased for your
account at net asset value on the dividend reinvestment date, July 31, 1995.
GOLD IS UNDERVALUED
In our opinion, the price of gold is still undervalued in terms of its
historical relationship to consumer prices. The chart below shows the average
annual United States consumer price index and gold prices from 1975 through the
first half of 1995. (Gold was extremely undervalued in 1970 when it was held at
a fixed price of $35 an ounce. Accordingly, we are using 1975 gold and consumer
prices as a base.) According to this assumption, gold is currently over 15%
undervalued in dollar terms in comparison to the consumer price index. Of
course, gold is currently very cheap compared to its 1980 cyclical high of $850
an ounce.
The Price of Gold vs. the Consumer Price Index
1975-6/30/95
[line chart]
Sources:Gold price - London pm fix
CPI - Frank Russell Co.
THE
OUTLOOK
THE POTENTIAL FOR LONG-TERM INFLATION
The world overall appears to be in an unusually long economic expansion despite
recent sluggishness in some of the developed nations. Oxford Economic
Forecasting has just predicted that the world economy will grow by 3.5% this
year and then accelerate to 3.7% in 1996 and 3.8% in each of the following two
years. (In large part, this reflects rapid growth in Asia and other emerging
markets.)
After raising the federal funds target interest rate in steps from 3% in
February 1994 to 6% in February 1995 and reducing the growth rate of Fed credit
from an annual rate of about 10% in early 1994 to almost 0% in the second
quarter of 1995 to slow the economy and to prevent inflationary pressures from
accelerating, the Federal Reserve reversed course on July 6 and reduced the fed
funds target rate by .25% to 5.75%. From this level we believe the Fed will
adopt stimulative policies by gradually lowering short-term interest rates
further and increasing the growth rates of Fed credit over the next few years to
sustain consumer demand and economic growth, to offset the deflationary
pressures of excessive debt and indirectly to lower the interest cost of the
federal debt. The Bundesbank and the Bank of Japan have already lowered interest
rates to keep their currencies from appreciating further and to maintain
economic growth. In our opinion, they and other Western central banks will
continue to stimulate their economies to sustain economic growth and reduce
entrenched and unacceptably high unemployment levels.
The Bank of Japan, faced with the need to reduce the value of the yen, which has
appreciated about 15% so far this year, strongly stepped up its intervention to
support the dollar after the Federal Reserve reduced the fed funds target rate.
The increase in Federal Reserve holdings of United States Government securities
for foreign accounts (largely Japanese) at the time amounted to an average of
$10 billion a week, up from an average of $1.3 billion a week earlier this year.
This account has grown about 15% since the end of 1994 to approximately $470
billion. It is larger than total adjusted Fed credit of about $440 billion (the
amount of federal debt in effect turned into money). This rapid increase in
world foreign exchange reserves, especially if continued, should eventually add
to global inflationary pressures.
In the United States consumer prices have been trending upward, reaching a 3.5%
annual rate for the three months ended in May, increasing from only 1.9% for the
three months ended November 1994. So far, global rates of inflation have been
modest and they are expected to remain so until excess capacity in Japan,
France, the United Kingdom, Italy and a few other European countries disappears.
This may take a couple of years. Then we expect the pressure of global
stimulative monetary measures and sustained growth to lead first to creeping and
then to accelerating inflation until the monetary brakes are finally imposed.
RISING FINANCIAL MARKET RISKS
Since the beginning of this year, we believe financial risks have risen as
currency volatility increased, speculation rose and stock markets reached
near-record high valuations.
The globalization of financial markets and the primary focus of central banking
monetary policies on domestic objectives have given rise to extremely volatile
foreign exchange movements. So far this year the U.S. dollar has plunged 15%
against the yen and over 10% against the mark, hitting post-World War II lows in
April, while the Mexican peso collapsed last December. Every day, some $1
trillion in currency trades across the world's exchanges, a 14-fold increase
since 1980. Hedgers and speculators trade in an unpredictable market of more
than $18 trillion of financial futures, options, swaps and other exotic
derivatives, an average 25% annual rate of growth since 1991. Commodity/hedge
funds have an estimated $175 billion dedicated to speculation, and of course,
huge amounts outside those funds are used to speculate in the markets.
Inevitably, speculative risks exist and losses can be enormous. Barings, the
British merchant banking firm, failed in the beginning of the year. Orange
County, California defaulted on its municipal bond obligations. The Japanese
banking system had the equivalent of about $460 billion in bad loans, equivalent
to 9% of its GDP. A managing director of J.P. Morgan & Co., Inc. stated that the
derivative exposure of the nine largest U.S. banks had risen to 312% of their
capital.
This business cycle has not been driven by credit growth, which has remained
subdued, but rather by the securities markets. Over the last eight months,
equity markets have shown a steep and remarkably steady rise. However, history
is replete with boom/bust scenarios. No boom lasts forever, and using history as
a guide, the decline could be significant when it comes.
To stabilize world currencies and markets and to prevent a possible global
crisis, the world's central banks have total monetary reserves of only some $1.5
trillion, of which only about 22% is in gold. These monetary reserves are also
at risk -- the Bundesbank lost the equivalent of some $2 billion on its U.S.
investments in 1994. Japan's accumulated foreign assets have lost an estimated
$780 billion (a substantial portion of which is Bank of Japan losses on dollar
investments) in value so far over the last ten years.
In this environment, financial institutions and markets appear to be vulnerable.
A substantial loss of investor confidence could cause a global economic
disaster. According to Fortune Magazine, two new books (Gregory J. Millman's
"The Vandal's Crown" and Steven Salomon's "The Confidence Game") say this could
happen and argue that the governments of the leading industrial democracies,
preoccupied with election cycles, are not up to the job of managing their
nation's economies and currencies.
CONCLUSION
In view of rising financial market risks and the potential for another long-term
cycle of inflation, we believe global investment portfolios will be readjusted
to include greater proportions of gold. This should result in a sustained and
growing investment demand for gold. In Japan, for example, where financial and
market risks have risen, private investment demand has surged and the Bank of
Japan bought gold for the first time in 17 years. The price of gold in yen terms
has turned up sharply from its second quarter 1995 bottom (while it has declined
in yen terms ever since 1980), as illustrated in the chart below.
- --------------------------------------------------------------------------------
The Price of Gold in Yen (1/3/95 to 8/2/95)
[line chart]
Source: Bloomberg
- --------------------------------------------------------------------------------
Gold is the world's only default-free monetary store of value. It is also
considered "real money", a standard of value, by many people although it is no
longer used for transaction purposes. Based on historical records, gold and
gold-mining shares have a low, or sometimes negative correlation to industrial
stocks and bonds. Thus, their inclusion in an overall investment portfolio tends
to reduce risk and frequently may even improve the return. This, in our opinion,
is prudent investment strategy and is being adopted by many investors.
Given the current undervalued level for gold and its present underweighted
position in the average global portfolio, an anticipated growing investment
demand for diversification, together with strong commercial demand and limited
supply of gold, could propel its price upward. If, as we expect, the price of
gold in due course begins to outperform industrial stocks and bonds again,
investment demand could accelerate and lead over the coming years to another
exponential rise in the prices of gold and gold-mining shares.
We appreciate your participation in the International Investors Gold Fund and
look forward to helping you meet your investment objectives in the future.
[PHOTO]
/s/ John C. van Eck
John C. van Eck
Chairman
[PHOTO]
/S/ Henry J. Bingham
Henry J. Bingham
President
August 3, 1995
<PAGE>
This page left blank intentionally.
<PAGE>
GOLD SHARES AND
YOUR INCOME PORTFOLIO
(JUNE 30, 1975 - JUNE 30, 1995)
[bar chart]
This example illustrates the superior performance of a portfolio (original total
investment of $1000) invested for 20 years (period ended 6/30/95), 80% in the
unmanaged Lehman Brothers Long-Term Government Bond Index* and 20% in
International Investors Gold Fund (II) over a portfolio invested 100% in the
same bond index.** The portfolio that included gold shares (II) provided an
average annual rate of return of 11.3% compared to 10.3 % on the bonds-only
portfolio, resulting in the substantial difference in the final values of the
portfolios shown above.
GOLD SHARES AND
YOUR GROWTH PORTFOLIO
(JUNE 30, 1975 - JUNE 30, 1995)
[bar chart]
This example illustrates how gold shares might have improved the performance of
a stock portfolio invested in the S&P 500 Index, an unmanaged stock index, over
a 20-year period. The portfolio that included 20% International Investors Gold
Fund would have achieved an average annual rate of return of 13.7% versus 13.6%
for the stock-only portfolio.** The above chart illustrates the significance of
that difference for an original $1000 investment.
* U.S. Treasury Securities, which comprise the Lehman Brothers Long-Term
Government Bond Index, are backed by the U.S. Government for payment of
principal and interest. Shares of International Investors Gold Fund are not
so backed.
** The portfolios with 20% held in International Investors were rebalanced
yearly.
The S&P 500 and the Lehman Brothers Long-Term Government Bond Index are
unmanaged indexes and the Consumer Price Index is a measure of inflation.
Past performance is not indicative of future results. Investment return and
principal value of an investment will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost.
HOW A $10,000 INVESTMENT IN
INTERNATIONAL INVESTORS GOLD FUND-A
GREW TO $800,133
As of June 30, 1995, the average annual total returns were:
Before After Maximum
Sales Charge Sales Charge*
------------ -------------
Life of the Fund 11.9% 11.7%
Past twenty years 9.7% 9.4%
Past fifteen years 6.6% 6.1%
Past ten years 6.6% 6.0%
Past five years 4.7% 3.4%
Past one year (3.3)% (8.9)%
C Shares-Life+ (since 10/14/94) (20.9)% (21.7)%
Past performance is not indicative of future results.
* A shares: maximum sales charge = 5.75%
C shares: 1% redemption charge, 1st year
+ Not annualized
Note: International Investors Gold Fund became a gold-oriented fund in 1968.
The chart below illustrates how a $10,000 investment in International Investors
Gold Fund with income, dividends and capital gains distributions reinvested
would have grown to $800,133 over the life of the Fund. In the other charts to
the left, you will also see examples of how International Investors Gold Fund
shares might enhance the returns of two portfolios, one growth, the other
income-oriented. This information is provided strictly for illustrative purposes
and is not to be construed as a guarantee of future return in International
Investors Gold Fund or any Van Eck Fund. Past performance is not indicative of
future results.
[chart]
Initial investment .......... $ 10,000
Initial Net Asset Value ..... $ 9,417
Total Value of Investment ... $800,133
Consumer Price Index ........ $ 56,770
<PAGE>
INTERNATIONAL INVESTORS GOLD FUND
INVESTMENT PORTFOLIO JUNE 30, 1995 (UNAUDITED)
NO. OF SHARES SECURITIES (C) VALUE (NOTE 1)
- --------------------------------------------------------------------------------
MINING SHARES -- LARGE CAPITALIZATION: 61.0%
86,000 Anglo American Corp. of South Africab $ 4,611,750
50,000 Ashanti Goldfields Company Limited (GDS) 1,131,250
1,480,000 Barrick Gold Corporation 37,370,000
1,350,000 Driefontein Consolidated Limitedb 18,689,121
1,330,000 Echo Bay Mines Ltd. 11,970,000
810,000 Freeport-McMoRan Copper & Gold Inc.
(Class A) 16,706,250
1,425,649 Free State Consolidated Gold
Mines Limitedb 17,642,407
830,000 Gold Fields of South Africa Limitedb 22,202,500
150,000 Hemlo Gold Mines Inc. 1,593,750
1,530,000 Homestake Mining Company 25,245,000
860,000 Impala Platinum Holdings Limitedb 21,715,000
2,065,000 Kloof Gold Mining Limitedb 22,456,875
1,000,000 Newcrest Mining Corporation 4,221,823
280,000 Newmont Gold Company 11,270,000
240,000 Newmont Mining Corporation 10,050,000
1,240,000 Placer Dome Inc. 32,395,000
450,000 Placer Pacific Limited 999,401
6,100,000 Plutonic Resources Limited 24,671,054
548,200 Rustenburg Platinum Holdings Limitedb 11,409,413
450,000 Santa Fe Pacific Gold Corporation 5,456,250
2,080,000 TVX Gold Inc. 15,080,000
120,000 Teck Corporation (Class B) 2,371,326
243,900 Vaal Reefs Exploration and Mining
Company Limitedb 11,638,688
473,000 Western Deep Levels Limitedb 13,362,251
700,000 Western Mining Corporation Holdings
Limited 3,828,125
-----------
348,087,234
-----------
MINING SHARES -- MEDIUM CAPITALIZATION: 15.2%
1,340,000 Battle Mountain Gold Company 12,897,500
450,000 Coeur d'Alene Mines Corporation 7,818,750
2,795,000 Elandsrand Gold Mines Co. Ltd.b 13,555,750
3,035,000 Hartebeestfontein Gold Mining Co.
Limitedb 10,281,063
9,212,500 Middle Witwatersrand (Western Areas)
Limited 24,067,657
450,000 North Flinders Mines Limited 2,474,556
359,690 Potgietersrust Platinums Limited 2,954,772
1,780,000 Randfontein Estates Gold Mining Company
Witwatersrand Limited (The) 11,625,625
300,000 Royal Oak Mines Inc. 937,500
-----------
86,613,173
-----------
MINING SHARES -- SMALL CAPITALIZATION: 13.9%
540,000 Acacia Resources Ltd. 950,229
530,000 Alta Gold Co. 563,125
1,000,000 Australian Resources Ltd. 950,797
1,000,000 Beatrix Mines Ltd. 6,931,250
271,000 Central Pacific Minerals N.L. (ADR) 406,500
1,000,000 Consolidated Modderfontein Mines
Limited (ADR) 157,500
1,700,000 Deelkraal Gold Mining Company Limitedb 1,428,000
2,400,000 Doorfontein Gold Mining
Company Limiteda b 1,656,000
150,000 Durban Roodepoort Deep, Ltd.a b 1,368,750
700,000 Harmony Gold Mining Company Limitedb 5,512,500
760,000 Kinross Mines Limitedb 6,032,501
1,300,000 Loraine Gold Mines Ltd.a b 4,996,931
800,000 Miramar Mining Corporation 4,152,552
870,000 Pegasus Gold Inc. 8,808,750
1,270,000 Piedmont Mining Company Inc.a 575,501
320,500 Randgold & Exploration Company Limited 905,413
600,000 Resolute Samantha Gold N.L.d 1,187,787
250,000 Richmont Mines Inc. 610,134
500,000 St. Barbara Mines Limited 333,489
105,000 Stillwater Mining Company 2,920,313
275,000 USMX Inc. 739,063
946,200 Unisel Gold Mines Limited (ADR) 2,330,018
1,990,000 Western Areas Gold Minining
Company Limitedb 22,511,875
460,000 Winkelhaak Mines Limitedb 3,335,000
-----------
79,363,978
-----------
OTHER INDUSTRIES: 2.9%
53,000 Avenor, Inc. 1,129,385
8,550 Cetelem 1,323,803
3,750 Chargeurs 731,575
8,500 Compagnie de Saint-Gobian 1,028,282
1,000 Deutsche Bank AG (ADR) 48,606
4,000 MAN AG (Pfd.) 795,631
1,854,500 Peptide Technology Limited 671,089
16,000 Peugeot-Citroen S.A. (ADR) 555,739
70,000 Reuters Holdings Plc (Class B) (ADR) 3,508,750
20,000 Royal Dutch Petroleum Company 2,437,500
40,000 Shinawatra Computer and Communications
Company Limited (Foreign) 991,695
180,000 Singapore Airlines Limited (Foreign) 1,662,133
120,000 Sumitomo Marine & Fire Insurance
Co., Ltd. (The) 953,483
60,000 Takashimaya Company, Limited 807,556
-----------
16,645,227
-----------
TOTAL STOCKS & OTHER INVESTMENTS: 93.0%
(Cost: $361,950,565) 530,709,612
-----------
PRINC. AMT SHORT-TERM OBLIGATIONS: 7.0%
$11,924,000 American Express Corporation C.P.
due 07/03/95 Interest Yield of 5.85% 11,920,125
27,650,000 General Electric Capital Corporation C.P.
due 07/03/95 Interest Yield of 5.80% 27,641,091
-----------
TOTAL SHORT-TERM OBLIGATIONS:
(Amortized Cost: $39,554,823) 39,561,216
------------
TOTAL INVESTMENTS: 100% (Cost:$401,505,388) $570,270,828
============
- ------------
a Investment in companies of 5% or more whose outstanding voting securities are
held by the Fund (such as are defined as "Affiliated Companies" in the
Investment Company Act of 1940) (note 2).
b Includes securities in the form of American Depository Receipts (ADR). ADR's
are traded at prices substantially equivalent to those quoted for ordinary
shares.
c Unless otherwise indicated, securities owned are shares of common stock.
d Formerly Samantha Gold N.L.
Definitions:
Large Capitalization-- Market Capitalization of Over $1 billion.
Medium Capitalization--Market Capitalization of $500 million to $999.9 million.
Small Capitalization-- Market Capitalization under $499.9 million.
SUMMARY OF
INVESTMENTS % OF
BY COUNTRY PORTFOLIO
----------- ---------
Australia 7.1%
Canada 20.4%
France 0.6%
Germany 0.2%
Ghana 0.2%
Japan 0.3%
Netherlands 0.4%
Singapore 0.3%
South Africa 46.2%
Thailand 0.2%
United Kingdom 0.6%
United States++ 23.5%
------
100.0%
======
- ------------
++Includes Short-Term Securities.
See Notes to Financial Statements.
<PAGE>
INTERNATIONAL INVESTORS GOLD FUND
FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1995
ASSETS:
Investments at value (cost, $401,505,388)
(Notes 1 and 2) $570,270,828
Cash 480,213
Receivables:
Capital shares sold 789,954
Securities sold 106,018
Dividends and interest 1,680,278
Other 7,637
------------
Total assets 573,334,928
------------
LIABILITIES:
Payables:
Capital shares repurchased 32,728,853
Administrative fee payable 81,235
Distribution fee payable 3,171
Accounts payable 453,802
------------
Total liabilities 33,267,061
------------
NET ASSETS $540,067,867
============
CLASS A
Net asset value and redemption price per share
($539,398,525/40,333,696) $13.37
======
Maximum offering price per share
(NAV/(1 - maximum sales commission)) $14.19
======
CLASS C
Net asset value, offering price and redemption
price per share ($669,342/50,400)(Redemptions
may be subject to a contingent deferred sales
charge within the first year of ownership) $13.28
======
Net assets consist of:
Aggregate paid in capital $364,548,715
Unrealized appreciation of investments 168,766,973
Undistributed net investment income 961,082
Cumulative realized gains 5,791,097
------------
$540,067,867
============
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1995
INVESTMENT INCOME:
INCOME:
Dividends (net of foreign taxes withheld of
$722,916) (Note 2) $ 5,237,242
Interest 575,952
-----------
Total income 5,813,194
EXPENSES:
Management (Note 4) $2,140,068
Administrative (Note 4) 727,740
Distribution fee Class C (Note 5) 3,272
Transfer agent 723,406
Custodian 140,468
Reports to shareholders 104,144
Professional 85,562
Trustees 17,831
Registration 14,749
Other 8,160
-----------
Total expenses 3,965,400
-----------
Net investment income 1,847,794
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTE 3)
Realized gain from security transactions
(excluding short-term securities):
Proceeds from sales 29,133,639
Cost of securities sold 22,603,683
-----------
Realized gain 6,529,956
Realized loss from gold bullion (738,859)
Realized loss from foreign currency
transactions (7,600)
Unrealized appreciation of
investments:
Beginning of period 249,346,226
End of period 168,765,440
-----------
Change in unrealized appreciation (80,580,786)
Change in unrealized appreciation of
foreign denominated assets and
distributions 1,533
------------
NET DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ (72,947,962)
============
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS YEAR ENDED
ENDED JUNE 30, DECEMBER 31,
1995 (UNAUDITED) 1994
--------------- -----------
DECREASE IN NET ASSETS:
Operations:
Net investment income $ 1,847,794 $ 8,141,878
Realized gain from
security transactions 6,529,956 21,198,035
Realized gain (loss) from
gold bullion (738,859) 237,539
Realized gain (loss) from
foreign currency transactions (7,600) 219,947
Change in unrealized
appreciation of
investments (80,580,786) (34,502,171)
Change in unrealized
appreciation of foreign
denominated assets and
liabilities 1,533 --
----------- -----------
Decrease in net assets
resulting from
operations (72,947,962) (4,704,772)
Undistributed net investment
income included in price of
shares sold and reacquired
(Note 1) -- (21,375,012)
----------- -----------
Dividends to shareholders from:
Net investment income
Class A (1,803,323) (7,615,991)
Class C (568) (4,828)
----------- -----------
(1,803,891) (7,620,819)
----------- -----------
Net realized gain
Class A -- (21,697,760)
Class C -- (14,769)
----------- -----------
-- (21,712,529)
----------- -----------
(74,751,853) (55,413,132)
----------- -----------
Capital share transactions*
Net proceeds from sales of shares:
Class A shares 1,268,806,587 1,424,630,182
Class C shares 472,450 447,464
------------- -------------
1,269,279,037 1,425,077,646
------------- -------------
Reinvestment of dividends:
Class A shares 17,500,371 21,420,479
Class C shares 14,663 --
----------- -----------
17,515,034 21,420,479
----------- -----------
Cost of shares reacquired:
Class A shares (1,307,020,504)(1,483,391,850)
Class C shares (191,614) (930)
------------- -------------
(1,307,212,118)(1,483,392,780)
------------- -------------
Increase in additional paid in capital
for reversal of amounts previously
allocated to undistributed net
investment income (Note 1) -- 21,375,012
----------- -----------
Decrease in net assets resulting
from capital share
transactions (20,418,047) (15,519,643)
----------- -----------
Total decrease in net
assets (95,169,900) (70,932,775)
NET ASSETS:
Beginning of period 635,237,767 706,170,542
----------- -----------
End of period (including
undistributed net investment
income of $961,082 and
$924,779, respectively) $540,067,867 $635,237,767
============ ============
*SHARES OF BENEFICIAL INTEREST ISSUED AND
REDEEMED (UNLIMITED NUMBER OF $.001
PAR VALUE SHARES AUTHORIZED)
CLASS A CLASS A
---------- ----------
Shares sold 93,811,815 91,335,675
Reinvestment of dividends 1,358,631 1,340,989
----------- -----------
95,170,446 92,676,664
Shares reacquired (96,567,045) (94,855,788)
----------- -----------
Net decrease (1,396,599) (2,179,124)
=========== ===========
CLASS C CLASS C
----------- -----------
Shares sold 35,398 28,459
Reinvestment of dividends 1,286 --
----------- -----------
36,684 28,459
Shares reacquired (14,687) (56)
----------- -----------
Net increase 21,997 28,403
=========== ===========
<PAGE>
INTERNATIONAL INVESTORS GOLD FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period
<TABLE>
<CAPTION>
CLASS C
--------------
FOR THE PERIOD
CLASS A OCTOBER 14,
SIX MONTHS ------------------------------------------------- SIX MONTHS 1994++
ENDED YEAR ENDED DECEMBER 31, ENDED TO
JUNE 30, 1995 ------------------------------------------------- JUNE 30, 1995 DECEMBER 31,
(UNAUDITED 1994 1993 1992 1991 1990 (UNAUDITED 1994
------------ ------ ------ ------ ------ ------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value
Beginning of Period $15.21 $16.08 $ 7.81 $11.29 $11.32 $16.38 $15.13 $17.56
------ ------ ------ ------ ------ ------ ------ ------
Income from Investment
Operations:
Net Investment
Income (Loss) 0.04 0.19 0.14 0.17 0.16 0.26 (0.03) 0.04(c)
Net Gain (Loss)
on Securities
(both realized and
unrealized) (1.84) (0.36) 8.70 (3.44) 0.13 (4.67) (1.81) (1.78)
------ ------ ------ ------ ------ ------ ------ ------
Total from Investment
Operations (1.80) (0.17) 8.84 (3.27) 0.29 (4.41) (1.84) (1.74)
------ ------ ------ ------ ------ ------ ------ ------
Less Distributions:
Dividends from
Net Investment
Income (a) (0.04) (0.18) (0.13) (0.12) (0.17) (0.25) (0.01) (0.17)
Distributions from
Capital Gains -- (0.52) (0.44) (0.09) (0.15) (0.40) -- (0.52)
------ ------ ------ ------ ------ ------ ------ ------
Total Distributions (0.04) (0.70) (0.57) (0.21) (0.32) (0.65) (0.01) (0.69)
------ ------ ------ ------ ------ ------ ------ ------
Net Asset Value,
End of Period $13.37 $15.21 $16.08 $ 7.81 $11.29 $11.32 $13.28 $15.13
====== ====== ====== ====== ====== ====== ====== ======
Total Return (b) (11.84%) (1.04%) 113.41% (29.09%) 2.56% (27.00%) (12.16%) (9.9%)
- ----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY DATA
Net Assets,
End of Period (000) $539,399 $634,808 $706,171 $360,177 $568,859 $611,401 $669 $430
Ratio of
Expenses to Average
Net Assets 1.36%+ 1.15% 1.12% 1.18% 1.17% 0.97% 2.36%+ 2.27%+
Ratio of Net Income (Loss)
to Average Net
Assets 0.64%+ 1.23% 1.13% 1.72% 1.41% 1.83% (0.36)%+ 1.25%+
Portfolio Turnover Rate 1.47% 7.08% 7.20% 2.30% 2.20% 2.10% 4.98% 7.08%
- -----------
(a) Net of foreign taxes withheld (to be included in income and claimed as a tax
credit or deduction by the shareholder for federal income tax purposes) of
$0.07 for 1994, $0.05 for 1993, $0.04 for 1992, $0.03 for 1991, $0.07 for
1990.
(b) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all dividends
and distributions at net asset value during the period and a redemption on
the last day of the period. A sales charge is not reflected in the
calculation of total return. Total return calculated for a period of less
than one year is not annualized.
(c) Based on average shares outstanding.
+ Annualized.
++ Initial offering of Class C shares.
</TABLE>
See Notes to Financial Statements.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1 -- SIGNIFICANT ACCOUNTING POLICIES:
Van Eck Funds (the "Trust"), organized as a Massachusetts business trust on
April 3, 1985, is registered under the Investment Company Act of 1940. The
following is a summary of significant accounting policies consistently followed
by the International Investors Gold Fund series (formerly known as International
Investors), a diversified fund (the "Fund") of the Trust in the preparation of
its financial statements. The policies are in conformity with generally accepted
accounting principles.
A. SECURITY VALUATION -- Securities traded on national exchanges and traded in
the NASDAQ National Market System are valued at the last sales prices
reported at the close of business on the last business day of the period.
Over-the-counter securities not included in the NASDAQ National Market System
and listed securities for which no sale was reported are valued at the mean
of the bid and asked prices. Direct investments in gold bullion are valued at
the mean of the bid and asked price quoted by a major commodity dealer.
<PAGE>
Short-term obligations are valued at cost which with accrued interest
approximates value. Securities for which quotations are not available are
stated at fair value as determined by the Board of Trustees.
B. FEDERAL INCOME TAXES -- It is the Fund's policy to comply with the provisions
of the Internal Revenue Code applicable to regulated investment companies and
to distribute all of its taxable income to its shareholders. Therefore, no
federal income tax provision is required.
C. CURRENCY TRANSLATION -- Assets and liabilities denominated in foreign
currencies and commitments under forward currency contracts are translated
into U.S. dollars at the mean of the bid and asked prices of such currencies.
Purchases and sales of investments are translated at the exchange rates
prevailing when such investments were acquired or sold. Income and expenses
are translated at the exchange rates prevailing when accrued. The portion of
realized and unrealized gains and losses on investments that result from
fluctuations in foreign currency exchange rates are not separately disclosed.
Recognized gains or losses on other foreign denominated assets and
liabilities attributable to foreign currency fluctuations are recorded as net
realized gains and losses from foreign currency transactions.
D. DISTRIBUTIONS -- Dividends to shareholders from net investment income and
realized gains, if any, are recorded on the ex-dividend date. Income and
capital gains distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences are primarily due to the differing treatment of foreign
currency transactions.
E. OTHER -- Security transactions are accounted for on the date the securities
are purchased or sold. Dividend income is recorded on the ex-dividend date.
Interest income is accrued as earned.
F. ACCOUNTING CHANGE -- Prior to July 1, 1994, the Fund used equalization
accounting to keep a continuing shareholder's per share interest in
undistributed net investment income unaffected by shareholder activity. This
was accomplished by allocating a per share portion of the proceeds from sales
and the cost of redemptions of Fund shares to undistributed net investment
income. As of July 1, 1994, the Fund discontinued using equalization. This
change has no effect on the Fund's net assets, net asset value per share, or
its net decrease in net assets resulting from operations. Discontinuing the
use of book equalization will result in simpler financial statements. The
cumulative effect of the change was to decrease undistributed net investment
income and increase paid in capital previously reported through June 30, 1994
by $21,375,012.
NOTE 2 -- The market value of investments in affiliates (as defined in the
Investment Company Act of 1940) at six months ended June 30, 1995 aggregated
$8,601,421. The Fund did not earn any dividend income from its investments in
affiliates. NOTE 3 -- Purchases of investments other than short-term obligations
and gold bullion aggregated $8,601,421 for the six months ended June 30, 1995.
Purchases and sales of Gold Bullion totaled $57,495,298 and $75,933,712. For
federal income tax purposes the cost of investments owned at June 30, 1995 was
$401,505,388. As of June 30, 1995, net unrealized appreciation for federal
income tax purposes aggregated $168,765,440 of which $237,317,945 related to
appreciated investments and $68,552,505 related to depreciated investments.
NOTE 4 -- Van Eck Associates Corporation earned fees of $2,140,068 for the six
months ended June 30, 1995 for investment management and advisory services. The
fee was based on an annual rate of .75 of 1% of the first $500 million of
average daily net assets, .65 of 1% on the next $250 million and .50 of 1% of
the excess over $750 million. Van Eck Securities Corporation received $99,870
for the six months ended June 30, 1995 from commissions earned on sales of
shares of beneficial interest of the Fund after deducting $412,077 allowed to
other dealers. In accordance with the administration agreement, the Fund
reimbursed Van Eck Associates Corporation $727,740 for costs incurred in
connection with certain administrative and operational functions. Certain of the
officers and trustees of the Trust are officers, directors or stockholders of
Van Eck Associates Corporation and Van Eck Securities Corporation.
NOTE 5 -- Pursuant to a Rule 12b-1 Plan of Distribution (the "Plan"), the Fund
is authorized to incur distribution expenses which will principally be payments
to securities dealers who have sold shares and service shareholder accounts and
payments to Van Eck Securities Corporation ("VESC"), the distributor, for
reimbursement of other actual promotion and distribution expenses incurred by
the distributor on behalf of the Fund. The amount paid under the Plan in any one
year is limited to 1.00% of average daily net assets for Class C shares (the
"Annual Limitation"). For Class C shares, the Fund will pay to the selling
broker at the time of sale 1% of the amount of the purchase. Such advanced fees
will be collected by the Fund over the course of the first twelve months from
the time of purchase from 12b-1 fees. Should the payments to the brokers made by
the Fund exceed, on an annual basis, 1% of average daily net assets, VESC will
reimburse any excess. Shareholders redeeming within one year of purchase will be
subject to a 1% redemption charge which will be retained by the Fund. After the
first year, the 1% 12b-1 fee will be paid to VESC which will retain a portion of
the fee for distribution services and pay the remainder to brokers.
Distribution expenses incurred under the Plan that have not been paid because
they exceed the Annual Limitation may be carried forward to future years and
paid by the Fund within the Annual Limitation. VESC has waived its right to
reimbursement of the carried forward amounts incurred for the period October 14,
1994 through December 31, 1995 in the event the Plan is terminated, unless the
Board of Trustees determines that reimbursement of the carried forward amount is
appropriate. The excess of distribution expenses incurred over the Annual
Limitation at June 30, 1995, was $12,000 for Class C shares.
NOTE 6 -- The Fund declared an income dividend of $0.03 a share payable on
August 7, 1995 to Class A shareholders of record on July 28, 1995 with a
reinvestment date of July 31, 1995.
<PAGE>
VAN ECK FAMILY OF FUNDS
- --------------------------------------------------------------------------------
GLOBAL HARD ASSETS FUND
Seeks long-term capital appreciation by investing globally, primarily in "Hard
Asset Securities". Income is a secondary consideration.
INTERNATIONAL INVESTORS GOLD FUND
Founded in 1955, this Fund is the oldest gold-oriented mutual fund in the U.S.
It invests in gold-mining shares globally and seeks long-term capital
appreciation, moderate yield and protection against monetary uncertainties.
GOLD/RESOURCES FUND
Seeking a long-term global hedge against inflation and other risks, this Fund
invests in gold-mining and natural resources companies outside South Africa.
GOLD OPPORTUNITY FUND
Seeks capital appreciation by investing globally in equity securities of
companies engaged in the exploration, development, production and distribution
of gold and other precious metals, and through active asset allocation between
gold-related assets and cash instruments.
ASIA DYNASTY FUND
This Fund seeks long-term capital appreciation by investing in the equity
securities of companies that are expected to benefit from the development and
growth of the economies in the Asia Region. AIG Asset Management, Inc. serves as
sub-investment advisor to this Fund.
GLOBAL SMALLCAP FUND
Seeks long-term capital appreciation by investing globally in equity securities
of companies with small market capitalizations. The Fund is sub-advised by
Pictet International Management, Ltd.
GLOBAL BALANCED FUND
This Fund seeks long-term capital appreciation together with current income by
investing in stocks, bonds and money market instruments worldwide. Fiduciary
International, Inc. serves as sub-investment advisor to this Fund.
WORLD TRENDS FUND
This Fund combines trend investing and risk-control strategies to seek long-term
capital appreciation in the global marketplace.
GLOBAL INCOME FUND
This Fund emphasizes the current income component of total return by investing
principally in debt securities of foreign or U.S. government entities.
U.S. GOVERNMENT MONEY FUND
This Fund seeks the highest safety of principal and daily liquidity by investing
in U.S. Treasury bills and repurchase agreements collateralized by U.S.
Government obligations.
- --------------------------------------------------------------------------------
This report must be accompanied or preceded by a Van Eck Gold and Money Funds
prospectus which includes more complete information such as charges and expenses
and the risks associated with international investing including currency
fluctuations or controls, expropriation, nationalization and confiscatory
taxation. For a free Van Eck Global Funds prospectus, please call the number
listed below. Please read the prospectus before investing.
[VAN ECK LOGO]
Van Eck Securities Corporation
99 Park Avenue, New York, N.Y. 10016
For account assistance please call (800) 544-4653
X95-0801-009
JUNE 30, 1995
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VAN ECK
-------------------------
INTERNATIONAL
-------------------------
INVESTORS
-------------------------
GOLD
-------------------------
FUND
-------------------------
SEMI-ANNUAL
-------------------------
REPORT
[VAN ECK LOGO]
