VAN ECK ASIA INFRASTRUCTURE FUND
--------------------------------
1995 SEMI-ANNUAL REPORT
Dear Fellow Shareholder:
Asian markets experienced modest growth overall during the first half of 1995.
By June, Asia seemed to have recovered from the negative effects of the 1994
rise in global interest rates, as U.S. bond and equity markets rallied on the
news of a slowing economy and stable-to-lower interest rates. The Asia
Infrastructure Fund gained 1.7% during the first six months of the year.
ASIAN MARKET OVERVIEW
After a negative 1994 that resulted in relatively low stock valuations, at the
end of January we forecasted that better performance would emerge after the
Asian markets' current cycle of turbulence. Believing that Asia once again
offered tremendous value, we maintained that the sharp sell-down in January was
unsubstantiated, particularly as it appeared that the interest rate cycle was
turning. To take advantage, we maintained heavy weightings in the larger markets
of Hong Kong, Malaysia and Singapore, as well as substantially increasing our
portfolio weightings in both Thailand and Indonesia. By the last week in April,
sentiment had improved markedly on the back of tremendous stock and bond rallies
in the U.S. Investors began to believe that interest rate hikes, the initial
catalyst of the '94 correction, were at an end and might even decline, which
spurred an influx of foreign investment.
During the first half of the year, we increased our exposure to the
telecommunications sector, which, at June 30, represented 20% of the total
portfolio holdings. The communications systems that serve as a vital link
between Asia and the rest of the world are outdated and are expected to be
updated at a cost of over $100 billion by the end of the millennium. In
Indonesia, for example, there is exposure to one of the world's fastest growing
telecommunications markets. With a population of over 180 million and a
penetration rate significantly lower than other developing countries, the
government embarked on a fast-track economic development plan that calls for an
additional 5 million fixed lines over the next five years. One portfolio
holding, Indosat, the primary provider of international communications services
in Indonesia, is one of the main beneficiaries of this rapid telecommunications
infrastructure development. Indonesia appreciated 8% so far this year on the
surge of foreign liquidity. While the economy is continuing its strong growth
pattern, there may be some hurdles to overcome, given its large yen-denominated
debts and creeping inflation. Indonesian equities represent 10.9% of the
portfolio holdings.
In Thailand we are also emphasizing the telecommunications sector, investing in
such companies as Advanced Information Service Public Co., which provides
value-added telecommunication services such as paging and data communication.
This particular company also has a twenty-year concession to be the exclusive
operator of the 900 megahertz band cellular communication. With the recent
opening up of Vietnam, the company is well-placed to participate in that
country's telecommunication-modernization efforts. The Thai market ended the
first six months of the year up 3.3%. We increased the allocation to Thailand to
<PAGE>
12% of investments in June since this market continues to offer particularly
attractive prices.
In the first half of 1995 we also increased portfolio exposure to the heavy
construction sector which represented 27% of total net assets by June 30. In
Hong Kong, the portfolio currently holds Wing Fai International, a construction
company that is expected to benefit from the development of the Hong Kong
Airport Core Projects, the world's largest infrastructure development project
currently underway. Given that Hong Kong has one of the world's busiest
airports, Wing Fai is well placed as the only approved runway maintenance
contractor in Hong Kong. The company is also benefiting from the maintenance of
Hong Kong roadways and the development of low cost housing. As the Asian
investment proxy for foreign investors, Hong Kong has generally been the focal
point of liquidity-driven surges and retreats. During the first half of the year
we maintained a heavy weighting in Hong Kong of almost 49% of total holdings,
which proved beneficial as Hong Kong returned the strongest performance in the
region for the first six months of the year at over 10%.
In Malaysia we continue to emphasize both the heavy construction and the
telecommunications sectors, with such companies as Hume and Leader Universal.
Hume is a leading manufacturer of building materials such as concrete,
fiberboard, and granite. In addition, it manufactures steel products and engages
in specialized construction works such as pipe laying. Leader Universal
manufactures electrical and household wires, telecommunication and power cables,
aluminum rods and optical fiber cables, thus giving the company a broad exposure
to both power and telecommunications development in Asia. Malaysia, after a weak
start to the year, recovered strongly on corporate earnings that were in line
with expectations. We reduced our exposure slightly during the first half of the
year to 13.7% of total investments, which negatively impacted the portfolio as
the Malaysian market gained over 10% by June 30.
THE OUTLOOK
Asia appears on target to spend an expected $1 trillion by the year 2000 on
infrastructure projects. Near term, the interest rate environment is now more
positive, and many Asian markets remain at attractive levels, which should be
positive given strong corporate earnings growth. While issues, such as
leadership progression in China, do exist, the Asian economies continue to grow
at twice the rate of the developed world and, in our opinion, offer long-term
investment potential that outweighs the risks of short-term volatility.
[photo] [photo]
/s/John C. Van Eck /s/Peter Soo
John C. van Eck Peter Soo
Chairman Portfolio Manager
July 25, 1995
- --------------------------------------------------------------------------------
Performance Record as of 6/30/95*
- --------------------------------------------------------------------------------
After Maximum
Sales Charge Before
Total Return of 4.75% Sales Charge
- --------------------------------------------------------------------------------
A shares-Life (since 8/3/94) (26.7)% (23.1)%
- --------------------------------------------------------------------------------
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.
We are currently waiving certain or all expenses on the Fund. Had the Fund
incurred all expenses, investment returns would have been reduced.
* Not annualized.
Note: As of July 25, 1995, the Asia Infrastructure Fund is closed to new
purchases.
<PAGE>
ASIA INFRASTRUCTURE FUND
INVESTMENT PORTFOLIO JUNE 30, 1995 (UNAUDITED)
--------------------------------------------------
NO. OF SHARES SECURITIES (A) VALUE (NOTE 1)
- --------------------------------------------------------------------------------
HONG KONG: 49.1%
1,014,000 Chevalier International $ 166,429
186,000 Chevalier International Hldgs.
(Warrants expiring 9/30/97) 4,567
258,000 Singamas Container Holdings 55,350
3,000,000 Wing Fai International 267,521
600,000 Wing Fai International
(Warrants expiring 10/31/97) 9,305
----------
503,172
----------
INDONESIA: 10.9%
50,000 P.T. Bimantara Citra "F" 28,065
15,000 P.T. Indosat--"F" 56,915
4,000 P.T. Semen Gresik "F" 26,852
----------
111,832
----------
MALAYSIA: 13.7%
4,000 Hume Industries (M) Bhd. 21,821
33,333 Leader Universal Holdings Bhd. 118,949
----------
140,770
----------
PHILIPPINES: 5.3%
750 Philippine Long Distance
Telephone Co. 53,561
----------
SINGAPORE: 9.0%
10,000 Singapore Airlines Ltd. "F" 92,341
----------
THAILAND: 12.0%
2,400 Advanced Info Services 35,584
6,000 CH. Karnchang Public Co.,
Ltd. "F"* 38,647
13,000 Telecomasia Corporation 48,714
----------
122,945
----------
TOTAL STOCKS AND WARRANTS: 100% (Cost $1,172,737) $1,024,621
==========
SUMMARY OF INVESTMENTS BY INDUSTRY % OF PORTFOLIO
- ------------------------------------------------------
Conglomerate 2.7%
Construction Material 4.8%
Electric Equipment 11.6%
Engineering/Construction 47.5%
Manufacturing 5.4%
Telecommunications 19.0%
Transportation-Air 9.0%
----------
100.0%
==========
- ---------------------
(a) Unless otherwise indicated, securities owned are shares of common stock.
F - Foreign.
* Fair value as determined by the Board of Trustees.
See Notes to Financial Statements.
<PAGE>
ASIA INFRASTRUCTURE FUND FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1995
ASSETS:
Investments at value (cost, $1,172,737)
(Note 1) $1,024,621
Cash 102,903
Receivables:
From Advisor 52,791
Capital shares sold 1,000
Dividends 2,937
Deferred organization expense (Note 1) 26,890
Other assets 179
----------
Total assets 1,211,321
----------
LIABILITIES:
Payables:
Capital shares repurchased 1,724
Distribution fee 9,148
Securities purchased 66,993
Deferred organization costs 25,871
Accounts payable 21,094
----------
Total liabilities 124,830
----------
NET ASSETS $1,086,491
==========
CLASS A
Net asset value and redemption price per share
($1,085,425/151,572) $7.16
=====
Maximum offering price per share
(NAV/(1-maximum sales commission)) $7.52
=====
CLASS C
Net asset value, offering price
and redemption price per share
($1,066/149)(Redemptions may be subject
to a contingent deferred sales charge
within the first year of ownership) $7.15
=====
Net assets consist of:
Aggregate paid in capital $1,647,583
Unrealized depreciation of investments (148,116)
Undistributed net investment income 6,861
Cumulative realized losses (419,837)
----------
$1,086,491
==========
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1995
INCOME:
Dividends (less foreign taxes withheld of $725) $ 19,231
EXPENSES:
Management (Note 2) $ 3,879
Distribution Class A (Note 4) 2,562
Distribution Class C (Note 4) 47
Professional 6,500
Transfer agency 18,026
Registration 3,600
Custodian 781
Reports to shareholders 4,002
Administrative (Note 2) 1,580
Amortization of deferred organization expense 3,254
Other 743
----------
Total expenses 44,974
Expenses assumed by the Advisor (Note 2) (39,195) 5,779
---------- ----------
Net investment income 13,452
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTE 3)
Realized loss from security transactions
(excluding short-term securities):
Proceeds from sales 409,510
Cost of securities sold 465,548
----------
Realized loss (56,038)
Realized loss from foreign currency transactions (2,243)
Unrealized depreciation of investments:
Beginning of period (216,639)
End of period (148,116)
----------
Change in unrealized depreciation 68,523
----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 23,694
==========
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS FOR THE PERIOD
ENDED AUGUST 3,
JUNE 30, 1994+ TO
1995 DECEMBER 31,
(UNAUDITED) 1994
----------- ---------------
INCREASE IN NET ASSETS:
Operations:
Net investment income $ 13,452 $ 30,386
Realized loss from
security transactions (56,038) (354,201)
Realized loss from foreign
currency transactions (2,243) (19,359)
Change in unrealized
depreciation
of investments 68,523 (216,639)
----------- -----------
Increase in net assets resulting
from operations 23,694 (559,813)
----------- -----------
Dividends to shareholders from
Net investment income:
Class A Shares -- (24,646)
Class C Shares -- (327)
----------- -----------
-- (24,973)
----------- -----------
Capital share transactions*:
Net proceeds from sales
of shares
Class A Shares 863,204 7,717,794
Class C Shares 9,523 16,387
----------- -----------
872,727 7,734,181
----------- -----------
Reinvestment of dividends:
Class A Shares 19,074 --
Class B Shares 326 --
----------- -----------
19,400 --
----------- -----------
Cost of shares reacquired:
Class A shares (859,556) (6,099,082)
Class C shares (20,087) --
----------- -----------
(879,643) (6,099,082)
----------- -----------
Increase in net assets
resulting
from capital share
transactions 12,484 1,635,099
----------- -----------
Total increase in net
assets 36,178 1,050,313
NET ASSETS:
Beginning of period 1,050,313 --
----------- -----------
End of period (including
undistributed
and overdistributed
net investment income
of $6,861 and ($4,348),
respectively) $ 1,086,491 $ 1,050,313
=========== ===========
*SHARES OF BENEFICIAL INTEREST ISSUED
AND REDEEMED (UNLIMITED NUMBER OF
$0.001 PAR VALUE SHARES AUTHORIZED)
CLASS A
Shares sold 132,381 836,254
Reinvestment of dividends 2,709 --
----------- -----------
135,090 836,254
Shares reacquired (130,955) (688,817)
----------- -----------
Net increase 4,135 147,437
=========== ===========
CLASS C
Shares sold 1,475 1,720
Reinvestment of dividends 46 --
----------- -----------
1,521 1,720
Shares reacquired (3,092) --
----------- -----------
Net increase (decrease) (1,571) 1,720
=========== ===========
- -------------
+Commencement of operations.
See Notes to Financial Statements.
<PAGE>
ASIA INFRASTRUCTURE FUND
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FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period
<TABLE>
<CAPTION>
CLASS A CLASS C
------------------------------- --------------------------------
FOR THE SIX FOR THE PERIOD FOR THE SIX FOR THE PERIOD
MONTHS ENDED AUGUST 3, 1994 (A) MONTHS ENDED OCTOBER 14, 1994 (A)
JUNE 30, 1995 TO JUNE 30, 1995 TO
(UNAUDITED) DECEMBER 31, 1994 (UNAUDITED) DECEMBER 31, 1994
----------- ----------------- ----------- ------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 7.04 $ 9.53 $ 7.04 $ 9.53
------ ------ ------ -----
Income from Investment Operations:
Net Investment Income 0.09 0.18+ 0.07+ 0.06
Net Gain (Loss) on Securities (both
realized and unrealized) 0.03 (2.50) 0.04 (2.36)
------ ------ ------ -----
Total from Investment Operations 0.12 (2.32) 0.11 (2.30)
------ ------ ------ -----
Dividends from Net Investment Income -- (0.17) -- (0.19)
------ ------ ------ -----
Net Asset Value, End of Period $ 7.16 $ 7.04 $ 7.15 $ 7.04
====== ====== ====== =====
Total Return (b) 1.70% (24.3%) 1.56% (24.1%)
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Period (000) $1,085 $1,038 $ 1 $ 12
Ratio of Expenses to Average Net Assets (c) 1.11%* 0.28%* 1.61%* 1.02%*
Ratio of Net Investment Income to Average Net Assets 2.61%* 1.78%* 2.11%* 4.15%*
Portfolio Turnover Rate 41% 147% 41% 147%
</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 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) The expense ratios for Class A shares and Class C shares would have been
7.66%, 2.71%, 120.68%, and 24.29%, respectively if the expenses were not
assumed by the Advisor.
* Annualized.
+ Based on average shares outstanding.
See Notes to Financial Statements.
<PAGE>
ASIA INFRASTRUCTURE FUND
- --------------------------------------------------------------------------------
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 Asia Infrastructure 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 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 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 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. 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 security
transactions attributable to foreign currency fluctuations on other foreign
denominated assets and liabilities are recorded as net realized gains and
losses from foreign currency transactions.
D. OTHER -- Security transactions are accounted for on the date the securities
are purchased or sold. Dividend income and distributions to shareholders are
recorded on the ex-dividend date. Interest income is accrued as earned.
Income distributions and capital gain distributions are determined in
accordance with Federal income tax regulations which may differ from
generally accepted principles. The differences are primarily due to
differing treatments for foreign currency transactions, passive foreign
investment companies, and post October capital losses.
E. DEFERRED ORGANIZATION COSTS -- Deferred organization costs are being
amortized over a period not exceeding five years.
NOTE 2 -- VAN ECK ASSOCIATES Corporation (the "Advisor") earned fees of $3,879
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 earns fees for accounting and administrative services. The fee
is based on an annual rate of .25 of 1% of the Fund's average daily net assets.
AIG Asset Management, Inc., the sub-investment advisor, earns fees 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. For the period January 1, 1995 to April 12, 1995
Van Eck Associates Corporation agreed to assume for Class A shares the
distribution expenses in excess of 0.25 of 1% of average daily net assets of
Class A shares. Van Eck Associates Corporation also agreed to waive its
management fees and administrative fees and to assume all expenses of the Fund
for the period January 1, 1995 to April 12, 1995. For the period April 13, 1995
to June 30, 1995 Van Eck Associates agreed to assume all expenses exceeding 2%
of average daily net assets. Van Eck Securities Corporation received $305 for
the six months ended June 30, 1995 from commissions earned on sales of Class A
shares after deducting $1,366 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. As of June 30, 1995
Van Eck Associates Corporation owned 100% of the outstanding shares of
beneficial interest of the Fund's Class C shares.
NOTE 3 -- Purchases of investments other than short-term obligations aggregated
$445,885 for the six months ended June 30, 1995. For federal income tax purposes
the cost of investments owned at June 30, 1995 was $1,172,737. At June 30, 1995,
net unrealized depreciation for federal income tax purposes aggregated $148,116
of which $33,794 related to appreciated investment and $181,910 related to
depreciated investments.
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 C shares (the "Annual Limitations"). 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 ended August 3, 1994 (commencement of
operations) through December 31, 1995 in the event the Plan is terminated,
unless the Board of Trustees determines that reimbursement of the carried
forward amounts is appropriate.
The excess of distribution expenses incurred
over the Annual Limitation at June 30, 1995 was $36,036 for Class A shares and
$4,995 for Class C shares.
<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 and Money Funds prospectus, please call the number listed below.
Please read the prospectus before investing.
B95-0725-010
[Van Eck Logo]
Van Eck Securities Corporation
99 Park Avenue, New York, NY 10016
FOR ACCOUNT ASSISTANCE PLEASE CALL (800) 544-4653
JUNE 30, 1995
----------------
VAN ECK
ASIA
----------------
INFRASTRUCTURE
FUND
----------------
SEMI-ANNUAL
REPORT
----------------
[Van Eck Logo]
