J U N E 3 0 , 1 9 9 5
Van Eck
Global
Balanced
Fund
Semi-Annual
Report
(LOGO)
Van Eck Global
The Unusual Funds(sm)
<PAGE>
Van Eck Global Balanced Fund
1995 Semi-Annual Report
Dear Fellow Shareholder:
Most world stock and bond markets achieved strong gains during the first six
months of 1995 as interest rates stabilized and began to fall. The dramatic
decline in the U.S. dollar further boosted returns for U.S. investors in foreign
securities. We are pleased to report that the Global Balanced Fund had a total
return of 9.7% for the six months ended June 30, 1995 compared to the sector
average among global balanced and asset allocation funds of 8.8%.*
World Equity Markets
Most stock markets worldwide have achieved substantial returns so far this year,
particularly during the second quarter, with the notable exception of the
Japanese market, which fell over 8% in dollar terms (and a surprising 22% in yen
terms). Equity securities accounted for approximately two-thirds of your Fund's
portfolio throughout the first half of the year.
We began the year expecting improved growth in Japan. However, a strengthening
yen, further weakness in the real estate market and the Kobe earthquake had a
dampening effect on the economy, and a decline in Japanese equities negatively
affected the Fund's overall performance. In February, as these troubles became
apparent, we reduced the Fund's exposure to the Japanese market from a fairly
heavy weighting of about 24% to a significant underweighting of 5% of equities
held. We reallocated those assets in favor of the U.S., which appeared to be
reacting to strong corporate earnings, and the U.K. equity market, which has
been offering attractive valuations and which tends to follow the U.S.
market.
U.S. equities, which account for almost half of total equities held, gained an
impressive 20% during the first half. As the U.S. economy slowed, we decreased
holdings in consumer cyclicals and are emphasizing technology stocks, the
leading sector so far this year, and media companies, both of which are fast
growing, multi-national plays. We also hold a number of companies that are
benefiting from restructurings, including American Express, Mobil and IBM. Among
the top performers in the portfolio over the past six months were Capital Cities
ABC, the major media company, and Cisco and Texas Instruments, both technology
companies.
Your portfolio's largest European equity positions have been in Germany and
France (both rose over 12% in U.S. dollar terms). Both are highly liquid markets
where valuations are still reasonable and lower interest rates should have a
positive effect. Lower rates and slowing economies have prompted a reduction in
cyclical stocks and an increase in financials, such as France's Compagnie
Bancaire and Spain's Banco Central Hispanoamericano.
World Bond Markets
After a difficult 1994 when consistent increases in the U.S. federal funds rate
had a negative effect on most fixed income markets, bonds rallied on news of
slowing economic growth in the U.S., Europe and Japan, an apparent end to
interest rate hikes in the U.S. and a lowering of rates in Europe, led by the
Bundesbank's cut in the discount rate of .50% in March. Total bond holdings
comprised between 26%-32% of your portfolio during the first six months of 1995.
Japanese bonds, which account for almost 10% of your portfolio's bond holdings,
were the leading performers for the first half of the year, up 12% in yen terms,
and an almost unprecedented 32% in U.S. dollar terms. Bonds tend to react well
to economic downturns, and Japan seems to be a case in point. In recent months,
Japan has witnessed sluggish economic growth, rising unemployment and the Kobe
earthquake. The Bank of Japan has responded by pushing short-term rates to
record lows in an attempt to stimulate economic activity. The weak stock market
has also contributed to bond market strength as many domestic investors have
sought the relative safety of bonds.
Other strong performers included German bonds (about 14% of the Fund's bond
position), up 7.3% in mark terms and 20% in dollar terms, and French bonds (over
8% of total bonds held), which gained 7% in francs and over 17% in dollars. U.S.
bonds, over 25% of the total bond weighting, rose 11%, again on slowing economic
growth and stabilizing interest rates.
As the year began, bond markets were still reacting to the devaluation of the
Mexican peso. We thus reduced bond holdings in the "peripheral" markets such as
Italy, Spain and Sweden at that time, in favor of the core, lower-risk markets
such as Germany and Denmark. More recently, as yield spreads have increased, we
have again added Spain and Italy. Yields there are now significantly higher
than those on German bonds, for example, and we believe, attractive on a
risk/return basis.
Currency Review
The beginning of the year will be remembered for the dramatic decline in the
U.S. dollar--a result of the U.S. bailout of the Mexican peso, perceived
weakness of the current Administration and the continuing U.S. trade deficit.
The dollar fell to record post-World War II lows on April 19 and ended the
second quarter down over 10% versus the German mark and approximately 15%
versus the Japanese yen. Your Fund benefited, both from increased returns on
foreign investments and from a significant lowering of U.S. dollar exposure
during the first quarter.
The Outlook
Looking forward, the dominant force for global investing will be the direction
of U.S. interest rates and the underlying strength of the U.S. economy. Although
we continue to expect an economic slowdown, an environment of strong exports and
low inflation should contribute to a healthy rate of growth. Given stabilized
U.S. interest rates and a slowly rebounding dollar, we have once again increased
U.S. dollar holdings. A further lowering of European interest rates should help
the economy there and we expect continued corporate earnings growth. We remain
cautious about the Japanese equity market. Japan's impasse in solving the
financial sector's debt situation and the weak real estate market may take time
to resolve. While your Fund's exposure to Japanese stocks remains low, when
these problems are alleviated the market should bounce, and we would increase
the position should we see signs of improvement.
We remain bullish on the long-term potential of Asia despite volatility in 1994
and early 1995. The region continues to grow at more than twice the rate of the
industrialized world, price-to-earnings ratios are at historically low trading
ranges and lower U.S. interest rates should be very positive for the region.
Stock prices began to rebound during the second quarter of 1995. We currently
hold 6.3% of total investments in Asia (ex-Japan).
Among the global bond markets, European bonds now offer some of the best values
available against the U.S. market over the past five years. As the U.S. economy
picks up again it is more likely for interest rates to decline further in Europe
rather than here, and thus, we are emphasizing European bonds. As Japan's
troubles continue, the Japanese government may institute a rescue package,
which, along with fairly high valuations from recent gains, would be negative
for Japanese bonds, and we remain underweighted.
We appreciate your participation in the Global Balanced Fund and look forward
to helping you meet your investment objectives in the future.
(Photos & Signatures of
Anne M. Tatlock Global Strategist
Brian Hopkinson Sr. Global Equity Manager)
July 10, 1995
* among 23 global balanced/asset allocation funds, according to Micropal, Inc.,
a mutual fund evaluation service.
Note: Effective July 1, 1995, Anthony S. Gould has replaced Cheng-Hock Lau as
global bond manager for the Global Balanced Fund. Mr. Gould has nine years of
investment experience. Previously, he served as vice president and director at
BZW Investment Management where he was responsible for managing global fixed
income portfolios for pension funds, central banks and other institutional
clients.
Performance Record as of 6/30/95
Average Annual After Maximum Before
Total Return Sales Charge+ Sales Charge
- ------------------------------------------------------------
A shares-Life (since 12/17/93) 0.2% 3.5%
- ------------------------------------------------------------
1 year 4.2% 9.5%
- ------------------------------------------------------------
B shares-Life (since 12/17/93) 0.2% 2.7%
- ------------------------------------------------------------
1 year 3.7% 8.7%
- ------------------------------------------------------------
The performance data represents past performance and is not indicative of future
results. Investment return and principal value of an investment in the Fund will
vary so that shares, when redeemed, may be worth more or less than their
original cost.
At certain times in the past we have waived certain or all expenses on the Fund.
Had the Fund incurred all expenses, investment returns would have been reduced.
+ A shares: maximum sales charge = 4.75%
B shares: maximum contingent deferred sales charge = 5.00%
<PAGE>
Representative Holdings*
June 30, 1995
Credit local de France
(France, 0.7%)
Credit local de France (CLF) is one of the highest quality financials available
in the French market. CLF is the main issuer of loans to French local
authorities. The bank enjoys a strong equity base and high solvency ratio given
the low level of risk attributed to its customer base. Because CLF operates in
mature markets, efforts have been undertaken to diversify geographically. Most
recently, the bank purchased a controlling stake in the German mortgage bank,
Bayerische Hypotheken.
Mannesmann AG
(Germany, 0.7%)
Mannesmann is one of Europe's leading capital goods manufacturers with a strong
presence in the fast-growing German mobile phone market. The company's
telecommunications division, Mobilfunk, was granted the country's second
cellular license in the early nineties. These activities became profitable in
1994 and now account for almost 40% of operating profits. Following a period of
extensive restructuring and repositioning of the cyclical businesses, these
operations are now enjoying the benefits of a pick-up in economic activity
throughout Europe. In 1995, the stock's performance was flat through the end of
June. Recently, however, the company has generated some interest as the
performance of the cellular division continues to exceed expectations.
Roche Holding Ltd.
(Switzerland, 0.7%)
Roche is Switzerland's largest pharmaceutical company and ranks among the
world's biggest players in the industry. The company's businesses are broken
down into four main groups: pharmaceuticals, vitamins and fine chemicals,
diagnostics and fragrances and flavors. The company maintains an extensive and
diversified drug business with leading positions in antibiotics, cardiac
treatments and cancer therapies. The acquisition of the U.S. concern, Syntex,
in 1994 should result in greater research capacity and will present an
opportunity to expand the distribution network. Roche continues to offer top
quality within the pharmaceutical sector.
The British Petroleum Co., PLC
(U.K., 0.6%)
British Petroleum (BP) is one of the world's largest integrated oil companies.
Since 1992, BP has undergone a major corporate restructuring, shedding non-core
businesses while organizing the remaining divisions into three core groups: BP
Exploration, BP Oil and BP Chemicals. The company succeeded in reaching its
targeted goals of doubling profits by 1995, increasing capital spending and
repaying over $3 billion of debt. BP has set itself equally aggressive
cost-cutting targets for the next three years and appears likely to achieve
them. The company is currently increasing oil production at existing fields and
is well poised to grow reserves in the future, particularly at fields in the
West of Shetlands area, Columbia and Vietnam.
First Pacific Co. Ltd.
(Hong Kong, 0.4%)
First Pacific is a Hong Kong conglomerate with interests in four main areas:
marketing and distribution, integrated property services, telecommunications and
financial services. While marketing and distribution accounted for 49% of First
Pacifics profits in 1994, future growth for the company lies in
telecommunications. Its telecommunications operations, which include cellular
and paging services, are currently in Hong Kong, the Philippines and Indonesia,
with footholds in both India and China. The stock remains attractively valued,
currently trading at a 25% discount to its net asset value, while also trading
at a small discount to the overall Hong Kong market.
The News Corp. Ltd.
(Australia, 0.5%)
News Corp. is a leading global media company with interests in newspapers,
magazines, book publishing, film and television. Its geographic
diversification is truly global with operations in Australia, the U.K., the
U.S., Asia, Europe and Latin America. News Corp. is among the most attractively
priced international media and entertainment companies, with double digit
growth rates and a solid base of assets.
Mattel, Inc.
(U.S., 1.1%)
The company is the world leader in the design, manufacturing and marketing of
children's toys. Mattel is based in the United States and also has offices and
facilities in 36 countries, selling its products in more than 140 nations
worldwide. Through several opportune acquisitions, Mattel has now surpassed
Hasbro as the largest toy company in terms of sales. Mattel's focus has been on
core products such as its Barbie, Fisher-Price, Disney and Hot Wheels lines.
This strategy has been highly successful. The company has excellent prospects
for growth in new areas overseas and has the ability to broaden its product
lines with new innovations and acquisitions. Interestingly, toys are fairly
recession proof.
Texas Instruments Incorporated
(U.S., 1.5%)
The company is one of the world's largest and most diversified producers of
semiconductors, which account for 67% of revenues. Royalty income, mostly
related to DRAM patents, but also other electronics, semiconductors and PC's,
represent approximately 35% of earnings. Other products include laptop PC's,
printers and defense electronics. Texas Instruments is benefiting from the
worldwide strength of the semiconductor industry, healthy production, yield
improvements and strong potential for an increase in margin. A promising
potential new product is the digital micro-mirror, for future use in large,
bright color displays.
Note: Equities are listed as percentage of investments held.
* Portfolio is subject to change.
(Pie Chart)
Geographical Distribution
June 30, 1995
Percent of Total Investments Held
United States 40.7%
Pacific (ex-Japan) 9.4%
UK and Ireland 11.4%
Japan 6.5%
Continental Europe 29.9%
Other 2.1%
(End Chart)
<PAGE>
Global Balanced Fund
Investment Portfolio June 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
No. of Shares
or Principal Value
Amount Securities (a) (Note 1)
- ------------- --------------------------------- ------------
<S> <C> <C>
Australia: 1.0%
6,053 Amcor Ltd. $ 44,667
4,467 Broken Hill Proprietary Co., Ltd. 54,073
15,817 News Corporation Ltd. Pfd. 78,112
----------
176,852
----------
Canada: 0.8%
CAD 204,000 Government of Canada Bond 6.50%
6/1/2004 135,242
----------
Chile: 0.4%
700 Chilgener S.A. (ADR) 22,138
300 Embotelladora Andina S.A. (ADR) 10,538
2000 Madeco S.A. (ADR) 57,500
----------
90,176
----------
China: 0.1%
2,000 Jilin Chemical Industrial Company
Ltd. (ADR) 38,500
----------
Columbia: 0.1%
2,500 Cementos Paz Del Rio, S.A. (ADR) 42,188
Denmark: 1.9%
DKK Kingdom of Denmark Bond 7.00%
1,929,000 12/15/2004 321,857
France: 6.7%
1,950 AXA Ex Cie Du 105,471
FRF
1,195,000 Bons de Tresor 7.00% 11/12/1999 245,796
470 Castorama Dubois Investisse 78,010
600 Compagnie Bancaire S.A. 71,841
1,390 Credit Local de France 129,129
FRF 990,000 France O.A.T. Principal Strip
8.50% 10/25/2019 27,636
430 Groupe Danone 72,436
500 Legrand S.A. 79,480
200 LVMH--(Moet-Hennessy) 36,045
510 Lyonnaise Des Eaux S.A. 48,305
250 Primagaz Cie 43,611
FRF 650,000 Republic of France Bond 8.50%
11/25/2002 141,795
610 Saint Gobain Papier Bois S.A. 73,794
----------
1,153,349
----------
Germany: 7.0%
DEM 919,000 Deutschland Republic Bond 7.125%
12/20/2002 671,560
DEM 38,000 Deutschland Republic Bond 7.375%
1/03/2005 28,079
112 Fresenius USA AG (Pfd). 75,582
168 Linde AG 99,642
405 Mannesman AG 123,766
305 VEBA AG 119,900
125 Wella AG Pfd. $ 99,454
----------
1,217,983
----------
Hong Kong: 1.9%
8,000 Cheung Kong Holdings Ltd 39,598
70,901 First Pacific Co. Ltd. 62,767
6,000 Guoco Group Ltd. 27,993
6,299 HSBC Holdings PLC 80,796
8,000 Sun Hung Kai Properties Ltd. 59,191
8,000 Swire Pacific Ltd. "A" 61,000
----------
331,345
----------
India: 0.1%
4,000 Arvind Mills Ltd. (GDR) (144A) 21,240
----------
Indonesia: 0.7%
37,500 Lippo Bank (Foreign) 66,092
1,500 P.T. Indonesia Satellite (ADR) 57,375
----------
123,467
----------
Ireland: 0.8%
8,625 Bank of Ireland 49,479
6,000 CRH PLC 40,270
14,000 Jefferson Smurfit Group PLC 42,387
----------
132,136
----------
Italy: 1.8%
ITL Buoni Poliennali Bond 9.50%
550,000,000 12/01/1999 306,815
----------
Japan: 6.5%
400 Autobacs Seven 38,961
2,000 Canon Sales 55,490
10,000 Daicel Chemical Industries 51,240
Yen 8,700,000 Japanese Government Bond #151
5.00% 9/20/02 117,958
Japanese Government Bond #10
Yen 29,200,000 4.90% 3/20/09 408,007
2,000 Mitsubishi Bank Ltd. 43,211
4,000 Mitsubishi Estate Co. Ltd 45,100
3,000 Mitsubishi Trust & Banking Corp. 42,503
6 Nippon Telegraph & Telephone 50,295
170 Nippon Television Network 38,335
4,000 Sekisui Chemical Co. 47,226
5,000 Sumitomo Bakelite Co. Ltd 34,238
8,000 Taisei Corp. 47,320
1,000 Tokyo Electron Ltd. 34,238
2,000 Tostem Corporation 61,629
----------
1,115,751
----------
Malaysia: 1.0%
23,000 DCB Holdings Berhad 67,453
5,000 Genting Berhad 49,426
10,000 United Engineers Ltd. 63,577
----------
180,456
----------
See Notes to Financial Statements.
<PAGE>
Mexico: 0.1%
50,000 Fotoluz Corporacion S.A. "B" $ 12,780
----------
Netherlands: 3.2%
3,188 Aegon NV 110,347
480 Heineken NV 72,699
2,800 Koninklijke Ahold NV 100,368
2,600 Philips Electronics NV 110,160
1,900 Royal PTT Nederland NV 68,352
1,110 Wolters Kluwer 98,002
----------
559,928
----------
New Zealand: 2.1%
10,000 Carter Holt Harvey 24,462
20,000 Fletcher Forestry Shares 26,333
NZ$ 485,000 New Zealand Government Bond 6.50%
2/15/2000 308,156
----------
358,951
----------
Norway: 0.6%
2,360 Orkla A/S "A" 105,549
----------
Philippines: 0.1%
78,650 S M Prime Holdings Inc. 21,544
----------
Singapore: 0.8%
3,000 Fraser & Neave Ltd. 34,574
5,000 Keppel Corporation Ltd. 40,802
6,000 United Overseas Bank Ltd. 56,693
----------
132,069
----------
South Africa: 0.8%
5,000 Barlow Limited 51,000
12,000 General Mining Union Corp. 40,800
5,000 Sasol Ltd. 47,813
----------
139,613
----------
South Korea: 0.9%
1,000 Korea Mobile Telecommunications 35,750
800 Pohang Iron & Steel Ltd (ADR) 23,600
1,911 Samsung Electronics Ltd. (GDS) 101,264
----------
160,614
----------
Spain: 4.5%
1,575 Banco Central Hispanoamericano 33,415
ESP Kingdom of Spain Bond 10.25%
93,300,000 11/30/1998 744,278
----------
777,693
----------
Sweden: 1.0%
900 Autoliv AB 48,125
600 Hennes & Mauritz AB "B" 35,135
8,400 SSAB Svenskt Stal AB ("A" Free
Shares) 97,570
----------
180,830
----------
Switzerland: 3.2%
130 Alusuisse-Lonza Holdings AG $ 82,218
110 BBC Brown Boveri Ltd. 114,067
300 Merkur Holding AG Reg'd 84,298
415 Oerlikon-Buehrle Hldg AG 36,283
18 Roche Holdings AG 116,190
195 Winterthur Schweiz. (Right) 1,408
195 Winterthur Schweiz. Vers 117,390
----------
551,854
----------
Taiwan: 0.2%
3,751 Tuntex Distinct-GDS 34,697
----------
Thailand: 0.4%
50,000 Bangkok Bank Public Company Ltd.
(Foreign) 50,875
6,000 Krung Thai Bank Ltd. (Foreign) 24,306
----------
75,181
----------
United Kingdom: 10.6%
9,200 British Aerospace PLC 82,537
29,000 British Air Capital Conv. B 86,300
8,069 British Airport Authority 63,261
15,359 British Petroleum Co., PLC 110,258
15,900 BTR PLC 80,951
13,100 Cadbury Schweppes PLC 95,816
4,000 Carlton Communications PLC 60,744
11,300 Chubb Security PLC 56,541
15,300 Compass Group PLC 90,452
5,000 David S. Smith Holdings 51,629
10,400 Granada Group PLC 100,760
5,700 Greencore Group PLC 43,053
8,500 Guinness PLC 64,067
9,600 Legal & General Group 81,383
22,000 Morrison Wm. Supermarket 51,534
10,800 National Westminster Bank 93,966
8,900 Powergen PLC 27,159
10,181 Siebe PLC 101,559
10,883 Smithkline Beecham-A 98,676
18,800 Takare PLC 57,519
4,096 Thorn EMI PLC 85,177
(pound)55,000 United Kingdom Treasury Note
9.75% 8/27/2002 93,736
(pound)55,000 United Kingdom Treasury Note
7.00% 11/6/2001 81,891
(pound)42,000 United Kingdom Treasury Note
8.50% 12/7/2005 67,105
----------
1,826,074
----------
See Notes to Financial Statements.
<PAGE>
United States: 40.7%
2,000 American Express Co. 6.25% 'FDC'
DECS (b) $ 97,000
4,200 American Express Company 147,525
8,000 Archer-Daniels Midland Co. 149,000
4,000 Bank of New York Co. Inc. 161,500
6,500 Bergen Brunswig Corporation 148,688
6,500 BJ Services Company 147,875
2,900 CBS Inc. 194,300
3,500 Cabletron Systems, Inc. 186,375
2,500 Capital Cities ABC, Inc.* 270,000
5,000 Cisco Systems, Inc.* 252,813
4,800 Coastal Corp. 145,800
5,000 Davidson & Associates Inc. 198,750
4,600 The Walt Disney Company* 255,875
1,500 Du Pont de Nemours (E.I.) 103,125
3,700 Eaton Corp.* 215,063
5,800 Enron Corp.* 203,725
6,100 Federated Department Stores, Inc. 157,075
10,000 Fort Howard Corp. 141,250
3,000 General Electric Co. 169,125
5,000 General Instruments Corp.* 191,875
5,700 Health Management Associates,
Inc. 166,725
1,600 International Business Machines
Corp. 153,600
$180,000 Liberty Property L.P. Convertible
Sub. Deb. 8.00% 07/01/2001 176,625
7,125 Mattel Inc.* 185,250
3,000 Merck & Co. 147,000
2,000 Mobil Corp 192,000
500 Pakistan Telecom (GDR) 50,750
1,700 Pfizer Inc.* 157,038
2,000 Procter & Gamble Co. 143,750
$200,000 RTC Commercial MTG Pass thru CRT
1994 Class A 2C 7.45% 6/25/26* 203,250
3,500 Sunamerica Inc. Series D
Convertible 3/01/96 161,000
8,000 Tanger Factory Outlet Centers,
Inc. 203,000
2,000 Texas Instruments Inc.* 267,750
2,800 Union Camp Corp. 162,050
$319,000 U.S. Treasury Bond 7.25%
5/15/2016* 338,888
$209,000 U.S. Treasury Bond 7.50%
11/15/2024* 231,631
$218,000 U.S. Treasury Bond 10.75%
8/15/2005* 289,293
$196,000 U.S. Treasury Note 7.50%
11/15/2001* 210,333
$7,000 U.S. Treasury Note 7.50%
2/15/2005* 7,625
----------
6,984,297
----------
</TABLE>
<TABLE>
<CAPTION>
Notional Value Securities (a) Value (Note 1)
-------------------------------- -------------- ----------------
<S> <C> <C>
Total Stocks and Other Investments: 100.0%
(Cost: $15,901,281) $17,309,031
----------------
</TABLE>
<TABLE>
<CAPTION>
Options Purchased: 0.0%
<S> <C> <C>
- ----------------------------------------------------------------------
Yen 700,000 Nikkei 225 Call Option
(strike @19,830
expiring 09 /08/ 95) 0
Yen 459,875 DEM Put Option (strike
DEM
@1.415 expiring
08/01/95) 2,328
--------------
(Cost $56,872) 2,328
--------------
Total Investments: 100% (Cost:
15,958,153) 17,311,359
--------------
</TABLE>
<TABLE>
<CAPTION>
Options Written: 0.0%
---------------------------------------------------
<S> <C> <C>
Yen 422,500 DEM Call Option
(strike DEM
@1.30 expiring
08/01/95) (733)
Yen 487,500 DEM Put Option (strike
DEM
@1.50 expiring
08/01/95) (141)
------------
(Premiums Received
$4,872) (874)
------------
Total Investments Net of Options
Written: 100%
(Cost: $15,953,281) $17,310,485
============
</TABLE>
(a) Unless otherwise indicated, securities owned are Shares of common stock.
(b) Matures October 15, 1996 with a value based upon the average
closing price of First Data Corp. common stock.
*These securities are segregated for forward currency contracts.
<TABLE>
<CAPTION>
Summary of Summary of
Investments % of Investments % of
By Industry Portfolio By Industry Portfolio
- ----------------------------- ---------- ----------------------------- ------------
<S> <C> <C> <C>
Banks 5.4% Machinery 4.5%
Chemical 1.6% Metals & Mining 1.3%
Communications 2.4% Natural Gas Transmission 2.0%
Consumer Non Durables 1.4% Oil Service & Products 1.1%
Drug & Health Care 5.6% Other Capital Goods 0.7%
EDP & Office Equipment 2.0% Other Energy 0.3%
Electric & Other Utilities 1.0% Other Financial 5.5%
Electric Equipment 3.2% Other Intermediate Goods 0.8%
Electronics 3.2% Other Science & Technology 1.9%
Food & Household Products 5.3% Other Services 3.8%
Government 28.8% Paper & Forest Products 2.8%
Housing & Construction 1.9% Publishing & Broadcasting 4.4%
Insurance 1.8% Real Estate 1.2%
International Oil 1.7% Real Estate Investment Trust 1.0%
Retail 2.2%
Transportation 1.2%
---------------
100.0%
===============
</TABLE>
See Notes to Financial Statements.
<PAGE>
Global Balanced Fund Financial Statements (Unaudited)
<TABLE>
<CAPTION>
Statement of Assets and Liabilities
<S> <C>
June 30, 1995
Assets:
Investments at value (cost, $15,958,153) (Note 1) $ 17,311,359
Cash 1,181,394
Receivables:
Securities sold 56,528
Interest and dividends 215,582
Capital shares sold 117,440
Open forward foreign currency contracts (Note 5) 50,637
Deferred organization costs 24,151
------------
Total assets 18,957,091
------------
Liabilities:
Payables:
Capital shares repurchased 139,211
Securities purchased 18,826
Open forward currency contracts (Note 5) 150,334
Distribution fee 10,111
Options written (premiums received $4,872) 874
Accounts payable 136,700
------------
Total liabilities 456,056
------------
Net assets $ 18,501,035
============
Class A
Net asset value and redemption price per share
($12,575,374/1,267,004) $ 9.93
============
Maximum offering price per share
(NAV/(1-maximum sales commission) $ 10.43
============
Class B
Net asset value, offering price and redemption
price per share ($5,925,661/600,531) (Redemption may
be subject to a contingent deferred sales
charge within the first six years of ownership) $ 9.87
============
Net assets consist of:
Aggregate paid in capital $ 17,726,698
Unrealized appreciation of investments and options 1,209,542
Undistributed net investment income 52,706
Cumulative realized losses (487,911)
------------
$ 18,501,035
============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statement of Operations
<S> <C> <C>
For the Six Months Ended June 30, 1995
Income
Interest $ 205,138
Dividends (less foreign taxes withheld of $11,238) 138,550
---------
343,688
Expenses:
Management (Note 2) $69,795
Distribution--Class A (Note 4) 32,352
Distribution--Class B (Note 4) 28,355
Administrative (Note 2) 23,265
Transfer agent 17,482
Custodian 18,766
Professional 10,630
Reports to shareholders 8,267
Amortization of deferred organization
costs 3,415
Registration 6,192
Trustees 2,646
Other 8,779
Total expenses 229,944
----------
Net investment income 113,744
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Statement of Operations--(cont'd)
Realized and Unrealized Gain (Loss) on Investments
(Note 3) Realized loss from security transactions (excluding short-term securities):
Proceeds from sales $ 23,452,144
Cost of securities sold 23,913,560
------------
Realized loss $ (461,416)
Realized gain from foreign currency transactions 521,011
Realized loss on options (75,966)
Change in unrealized appreciation of investments 1,675,043
Change in unrealized appreciation of options written (4,894)
Change in unrealized depreciation of forward currency
contracts and other assets and liabilities (59,162)
------------
Net Increase in Net Assets Resulting from Operations $ 1,708,360
============
</TABLE>
<TABLE>
<CAPTION>
Statements of Changes in Net Assets
Six Months
Ended Year
June 30, Ended
1995 December 31,
(unaudited) 1994
---------- ------------
<S> <C> <C>
Increase (Decrease) in Net Assets:
Operations:
Net investment income $ 113,744 $ 300,631
Realized loss from security transactions (461,416) (565,965)
Realized gain (loss) from foreign
currency transactions 521,011 (58,569)
Realized loss on options (75,966) --
Change in unrealized appreciation
of investments and options written 1,670,149 (312,945)
Change in unrealized depreciation of
forward currency contracts and other assets
and liabilities (59,162) (88,500)
Increase (decrease) in net assets
resulting from operations 1,708,360 (725,348)
---------- ------------
Dividends to shareholders from net investment income:
Class A Shares (26,975) (144,891)
Class B Shares (6,059) (30,750)
---------- ------------
(33,034) (175,641)
---------- ------------
1,675,326 (900,989)
---------- ------------
Capital share transactions (Note 6): Net proceeds from sales of shares:
Class A Shares 1,506,226 20,677,424
Class B Shares 447,042 7,497,962
---------- ------------
1,953,268 28,175,386
---------- ------------
Reinvestment of dividends:
Class A Shares 81,333 52,830
See Notes to Financial Statements.
<PAGE>
Class B Shares 19,766 10,017
---------- ------------
101,099 62,847
---------- ------------
Cost of shares reacquired:
Class A Shares (4,159,784) (6,679,916)
Class B Shares (682,878) (1,735,396)
---------- ------------
(4,842,662) (8,415,312)
---------- ------------
Increase (decrease) in net assets
resulting
from capital share transactions (2,788,295) 19,822,921
---------- ------------
Total increase (decrease) in
net assets (1,112,969) 18,921,932
Net Assets:
Beginning of period 19,614,004 692,072
---------- ------------
End of period (including undistributed
net investment income and accumulated net
investment loss of $52,706 and ($28,004),
respectively) $18,501,035 $19,614,004
========== ============
</TABLE>
See Notes to Financial Statements.
<PAGE>
Global Balanced Fund
Financial Highlights
For a share outstanding throughout each period
<TABLE>
<CAPTION>
Class A Class B
--------------------------------------- ----------------------------------------
For the
Period
December For the
Six 20, Six Period
Months Year 1993 (a) Months Year December 20,
Ended Ended to Ended Ended 1993 (a)
June 30, December December June 30, December to
1995 31, 31, 1995 31, December 31,
(unaudited) 1994 1993 (unaudited) 1994 1993
----------- ---------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 9.07 $ 9.53 $9.53 $9.02 $ 9.53 $9.53
------- ------ ----- ------ ------- -----
Income from Investment Operations:
Net Investment Income 0.06 0.19+ -- 0.04 0.11+ --
Net Gain (Loss) on Securities
(both realized and unrealized) 0.82 (0.56) -- 0.82 (0.57) --
------- ------ ----- ------ ------- -----
Total from Investment Operations 0.88 (0.37) -- 0.86 (0.46) --
------- ------ ----- ------ ------- -----
Less Distributions:
Dividends from Net Investment Income (.02) (0.09) -- (.01) (0.05) --
------- ------ ----- ------ ------- -----
Net Asset Value, End of Period $ 9.93 $ 9.07 $9.53 $9.87 $ 9.02 $9.53
======= ====== ===== ====== ======= =====
Total Return (b) 9.71% (3.90%) 0% 9.54% (4.84%) 0%
- -----------------------------------------------------------------------------------------------------------------------------
Ratios/Supplementary Data
Net Assets, End of Period (000) $12,575 $13,986 $562 $5,926 $5,628 $130
Ratio of Expenses to Average Net
Assets 2.32%* 1.06%(c) 0.25%*(c) 2.82%* 1.88%(c) 1.00%*(c)
Ratio of Net Investment Income (Loss) to
Average Net Assets 1.37%* 1.99% (0.25%)* 0.87%* 1.14% (1.00%)*
Portfolio Turnover Rate 115.22% 174.76% 0% 115.22% 174.76% 0%
</TABLE>
(a) Commencement of operations.
(b) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of dividends 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 calculations of total return. Total return
for a period of less than one year is not annualized.
(c) The expense ratios for Class A shares and Class B shares would have been
2.59%, 7.76%, and 3.21% and 8.51%, respectively if the expenses were not
assumed by the Advisor.
* Annualized.
+ Based on average shares outstanding.
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 Global Balanced Fund series, a non-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 or foreign exchanges 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 and listed securities for which no sale
was reported are valued at the mean of the bid and asked prices. 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 tax able 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 quoted 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. Recognized gains or
losses on security transactions and other foreign currency denominated assets
and liabilities attributable to foreign currency fluctuations are recorded as
realized gains and losses from foreign currency transactions. The portion of
unrealized gains and losses on investments that result from fluctuations in
foreign currency exchange rates are not separately disclosed.
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 and net capital loss carryforwards.
<PAGE>
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. Premiums paid on bonds purchased are
not amortized.
F. Deferred Organization Costs--Deferred organization costs are being
amortized over a period not exceeding five years.
G. Contracts Held for Investment Purposes
Option Contracts--The Fund may invest, for hedging and other purposes, in call
and put options on securities, currencies and commodities. Call and put options
give the Fund the right but not the obligation to buy (calls) or sell (puts) the
instrument underlying the option at a specified price. The premium paid on the
option, should it be exercised, will, on a call, increase the cost of the
instrument acquired and, on a put, reduce the proceeds received from the sale of
the instrument underlying the option. If the options are not exercised, the
premium paid will be recorded as a capital loss upon expiration. The Fund may
incur additional risk to the extent the value of the underlying instrument does
not correlate with the anticipated movements of the option values.
The Fund may also write call or put options. As the writer of an option, the
Fund receives a premium. The Fund keeps the premium whether or not the option is
exercised. The premium will be recorded, upon expiration of the option, as a
short-term capital gain. If the option is exercised, the Fund must sell, in the
case of a written call, or buy, in the case of a written put, the underlying
instrument at the exercise price. The Fund may write only covered puts and
calls. A covered call option is an option in which the Fund owns the instrument
underlying the call. A covered call sold by the Fund exposes it during the term
of the option to possible loss of opportunity to realize appreciation in the
market price of the underlying instrument or to possible continued holding of an
underlying instrument which might otherwise have been sold to protect against a
decline in the market price of the underlying instrument. A covered put exposes
the Fund during the term of the option to a decline in price of the underlying
instrument. A put option sold by the Fund is covered when, among other things,
cash or short-term liquid securities are placed in a segregated account to
fulfill the obligations undertaken.
Forward Currency Contracts--The Fund may buy and sell forward currency contracts
to settle purchases and sales of foreign denominated securities. In addition,
the Fund may enter into forward currency contracts to hedge foreign denominated
assets. The Fund may incur additional risk from investments in forward currency
contracts if the counterparty is unable to fulfill its obligations or there are
unanticipated movements of the foreign currency relative to the U.S. dollar.
Realized and unrealized gains and losses from forward currency contracts are
included in realized and unrealized gain (loss) from foreign currency
transactions.
Note 2--Van Eck Associates Corporation (the "Advisor") earned fees of $69,795
for the six months ended June 30, 1995 for investment management and advisory
services. The fee is based on an annual rate of .75 of 1% of the Fund's average
daily net assets. Van Eck Associates Corporation also earned fees for accounting
and administrative services in the amount of $23,265 for the six months ended
June 30, 1995. The fee is based on an annual rate of .25 of 1% of the Fund's
average daily net assets. Fiduciary International, Inc., the sub-investment
advisor, earned fees of $46,530 for the six months ended June 30, 1995 for
investment management. The fee is based on an annual rate of .50 of 1% of the
Fund's average daily net assets and is paid by the Advisor from the advisory
fees it receives from the Fund. Van Eck Securities Corporation received $1,117
for the six months ended June 30, 1995 from commissions earned on sales of Class
A shares after deducting $5,472 allowed to other dealers. 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 3--Purchases of investments other than short-term obligations aggregated
$20,597,753 for the six months ended June 30, 1995. For federal income tax
purposes the cost of investments owned at June 30, 1995 was $15,958,153. As of
June 30, 1995 net unrealized appreciation for federal income tax purposes
aggregated $1,353,206 of which $1,666,571 related to appreciated investments and
$313,365 related to depreciated investments. At December 31, 1994, the Fund had
$508,759 of capital loss carryforwards available to offset future capital gains
expiring December 31, 2002.
Transactions in call and put options written for the six months ended June
30, 1995 were as follows:
<TABLE>
<CAPTION>
Number
of
Contracts Premiums
-------- ----------
<S> <C> <C>
Options outstanding at
beginning of period 2 $ 18,702
Options written 9 99,148
Options expired (9) (112,978)
Options outstanding at
end
of period 2 $ 4,872
======== ==========
</TABLE>
The Fund may incur additional risk from investments in written currency
options if there are unanticipated movements in the underlying currencies.
Note 4--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 .50% of average daily net assets for Class A shares and 1.00%
of average daily net assets for Class B shares (the "Annual Limitation").
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 for the carried forward amounts incurred for the year ended
December 31, 1994 through April 30, 1995 in the event the Plan is terminated,
unless the Board of Trustees determines that reimbursement of carried forward
amounts is appropriate.
The excess of distribution expenses incurred over the Annual Limitation at June
30, 1995 was $158,243 for Class A shares and $239,953 for Class B shares.
<PAGE>
Note 5--At June 30, 1995 the Fund had the following outstanding forward
currency contracts.
<TABLE>
<CAPTION>
Value at Unrealized
Settlement Current Appreciation
Contracts Date Value (Depreciation)
------ -------------------------------------- -------- -------- -------------
<S> <C> <C> <C> <C>
Foreign Currency Buy Contracts:
CAD 224,000 expiring 9/15/95 $ 156,792 $ 157,798 $ 1,006
DEM 4,392,000 expiring 8/16/95 3,177,708 3,183,614 5,906
DKK 508,000 expiring 8/10/95 94,240 94,051 (189)
ESP 78,708,000 expiring
8/03/95 646,163 648,656 2,493
FRF 763,000 expiring 9/12/95 156,213 157,202 989
GBP 1,442,000 expiring 9/05/95 2,274,147 2,294,357 20,210
ITL 1,171,582,000 expiring 7/05/95-7/17/95 703,846 716,237 12,391
JPY 223,525,000 expiring 9/06/95 2,656,358 2,663,488 7,130
SEK 126,378 expiring 9/06/95 17,480 17,372 (108)
Foreign Currency Sales Contracts:
DEM 4,216,145 expiring 8/16/95 2,945,262 3,055,596 (110,334)
DKK 2,133,000 expiring 8/10/95 395,329 394,901 428
ESP 172,931,000 expiring 8/03/95 1,409,096 1,425,175 (16,079)
FRF 1,949,321 expiring
7/31/95-9/12/95 393,313 401,700 (8,387)
GBP 1,316,538 expiring 9/05/95 2,090,808 2,094,735 (3,927)
HKD 2,332,000 expiring 7/13/95 301,593 301,416 177
ITL 1,408,447,000 expiring 7/17/95 848,505 860,918 (12,413)
JPY 11,301,000 expiring 9/06/95 135,319 134,661 658
NZD 442,000 expiring 8/15/95 294,637 294,285 352
-------------
($99,697)
=============
</TABLE>
Note 6--Shares of Beneficial Interest Issued and Redeemed (unlimited number
of $.001 par value shares authorized):
<TABLE>
<CAPTION>
Six Months
Ended
June 30, Year Ended
1995 December 31,
(unaudited) 1994
----------- ------------
<S> <C> <C>
Class A
Shares sold 163,288 2,191,127
Reinvestment of
dividends 8,843 5,529
----------- ------------
172,131 2,196,656
Shares reacquired (447,932) (712,779)
----------- ------------
Net increase (decrease) (275,801) 1,483,877
=========== ============
Class B
Shares sold 48,962 797,147
Reinvestment of
dividends 2,163 1,045
----------- ------------
51,125 798,192
Shares reacquired (74,213) (188,267)
----------- ------------
Net increase (decrease) (23,088) 609,925
=========== ============
</TABLE>
Note 7--The Fund declared income dividends of $0.02 and $0.01 a share for Class
A and Class B shares, respectively. The dividends were payable on August 7, 1995
to 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 Global 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 Gold & Money Funds prospectus, please call the number listed below.
Please read the prospectus before investing.
(Graphic--Van Eck Logo)
Van Eck Securities Corporation
99 Park Avenue, New York, NY 10016
For account assistance please call (800) 544-4653
B95-0718-004
