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WORLDWIDE INSURANCE TRUST
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JUNE 30, 1996
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VAN ECK
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GOLD &
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NATURAL
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RESOURCES
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FUND
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SEMI-ANNUAL
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REPORT
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[LOGO]
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<PAGE>
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VAN ECK GOLD & NATURAL RESOURCES FUND
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JUNE 30, 1996 SEMI-ANNUAL REPORT
Dear Shareholder:
PERFORMANCE
We are pleased to report that the Van Eck Gold and Natural Resources Fund is up
10.5% year-to-date through June 30, as many natural resources sectors performed
well on strong economic growth throughout much of the world during the first
half of 1996. The Fund outperformed the S&P 500, which rose 10.1% over this
period.
ECONOMIC REVIEW AND OUTLOOK
During the first six months of the year, economic growth in the U.S. surprised
market participants with its vigor and investors continually increased
projections for GDP growth and inflation. Thus, rather than expecting cuts in
the federal funds rate, investors began to anticipate rate increases by the end
of December. Economic growth was also stronger than anticipated in Japan where
first quarter GDP growth increased over 12% on an annualized basis. In Europe,
however, economic growth was lower than anticipated at only modest levels, while
strong growth continued in the emerging countries of Asia and Latin America.
Going forward, we continue to believe that the economic environment is favorable
for natural resources performance. Global economic growth should continue to
accelerate modestly. We broadly agree with the recently-released International
Monetary Fund (IMF) estimates of an acceleration of global growth from 3.5% last
year to 3.8% this year and 4.3% in 1997 (despite differences in regional
economic growth, with the U.S. and Japan running at a healthy 2.5% estimated
rate, compared with 0.8% in Germany). Signs of healthy growth include strength
in leading economic indicators, positively sloped yield curves in major
industrial economies and a stimulative monetary policy as measured by 25% annual
growth rates in G7 monetary reserves. These growth estimates are consistent with
our view that the inflation rate in the U.S. has troughed and will rise modestly
in the coming year. In Japan and Germany, although inflation rates are presently
rising, they are likely to be muted in the coming year. We expect growth rates
to continue to be exceptionally strong in Asia and to strengthen further in
Latin America.
SECTOR REVIEW AND OUTLOOK
The energy sector, your Fund's second largest sector allocation at 29.4%,
performed well throughout the first half and we expect good performance to
continue, albeit in selected energy sectors. While some investors anticipate oil
price declines over the remainder of the year, we believe oil prices will remain
strong and may in fact rise. Consensus forecasts have consistently
underestimated demand and, in our view, commodity markets will not see Iraqi oil
until September at the earliest. This suggests that any supply disruptions could
cause significant upward movements in oil prices. An example of this occurred
this past spring as low oil inventories, caused by the adoption of
"just-in-time" inventory practices, combined with strong demand, stemming from
an unexpectedly cold winter in the Northeast, led to a rise in crude oil prices
to over $25 per barrel. The market fell from those levels but stabilized at $20
per barrel despite news of renewed Iraqi supply. Commodity fundamentals for
natural gas also remain strong but we continue to believe that the natural gas
producers are a better investment. Almost 15% of the Fund is allocated to
exploration and production companies which will benefit from this strong pricing
environment. Our top holdings include Louisiana Land & Exploration, Triton
Energy and United Meridian Corporation. Your portfolio also continues to hold
deep-water offshore drilling companies and oil service companies as
supply/demand fundamentals remain strong and offshore rig-leasing rates continue
to climb.
In the base metals markets, the primary focus has been the Sumitomo copper
scandal. The Fund generally sidestepped the scandal and the associated copper
price crash since it had only indirect exposure to copper-related equities. Our
fundamental view on copper had been bearish for some time, with supply growing
at nearly four times demand, and we found much better value in other base
metals, particularly aluminum and other diversified equities. We believe recent
weakness in many base metals prices stem, at least in part, from "knock-on"
impacts from the copper scandal and that current levels represent good value.
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<PAGE>
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This value, combined with our view that demand should increase during the second
half of 1996 and in 1997, should result in higher prices. Therefore, base metals
may be an important driver of the Fund during the last half of the year.
Gold shares completed a round trip during the first six months of the year. The
year started with a bang as gold jumped to over $415 per ounce in early February
and gold shares rose over 25%. That ascent was retraced with most of the decline
occurring during June when gold shares turned in their worst performance in 18
months. The Fund's exposure to gold ranged from a high of 55% to a low of
approximately 40% during the first half of the year, ending the second quarter
with a 51% allocation. Fundamentally, we believe gold is attractive based on its
commercial supply/demand gap. In addition, we believe investment demand will
increase as central banks engage in monetary "reflation" (or "easy" monetary
policy) and competitive currency devaluation. On the other side of the ledger,
central bank sales and mining company hedging programs have put pressure on the
gold price. It is virtually impossible to predict when these sales will end, but
recently some mining companies have announced reversals of hedging programs,
which we believe is a bullish indicator.
False start. Those two words describe the recent action in paper shares. The
equity market had begun to anticipate price increases in many paper grades over
the past several months. However, during June information was released that
suggested that commodity price increases were going to be postponed until 1997
and paper shares declined. While valuations are extremely cheap in the paper
sector, we continue to position the Fund defensively. Our allocation has been at
about or below 6% of the portfolio so far this year. In addition, we have
concentrated the portfolio in defensive holdings, such as tissue company Fort
Howard and cellulose pulp producer Buckeye Cellulose.
In the real estate arena, market fundamentals in the U.S. continue to improve,
particularly in the hotel, suburban office and industrial sectors, where
occupancy levels and rate growth are strong. Apartment markets nationwide are at
supply/demand equilibrium but select markets are experiencing imbalances due to
development restrictions which are preventing supply from keeping up with job
growth. Retail real estate continues to suffer as the nation is still
"over-stored." We believe that real estate can continue to provide consistent
returns and acts as a portfolio stabilizer to other sectors in the Fund.
We continue to emphasize the role of natural resources and hard assets as an
excellent portfolio diversifier and complement to traditional investments. We
believe the outlook for the sector overall is very favorable, particularly given
strong growth and increasing demand.
We appreciate your participation in the Gold and Natural Resources Fund and look
forward to helping you meet your investment objectives in the future.
Derek S. van Eck
Portfolio Manager
July 18, 1996
Average annual returns on the Fund for the 1-year, 5-year and life (9/1/89)
periods ended 6/30/96 were 18.6%, 12.0% and 7.8%, respectively. These returns do
not take variable insurance/life fees and expenses into account.
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.
This report must be accompanied or preceded by a Van Eck Worldwide Insurance
Trust 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. Please read the prospectus before investing.
Van Eck Securities Corporation, 99 Park Avenue, New York, NY 10016
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<PAGE>
GOLD AND NATURAL RESOURCES FUND
INVESTMENT PORTFOLIO
JUNE 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
NO. OF SHARES SECURITIES(A) VALUE(NOTE 1)
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<S> <C> <C> <C> <C>
AUSTRALIA: 13.3%
420,000 ACACIA RESOURCES LTD. $ 991,935
374,500 ASHTON MINING LTD. ORD. 530,685
550,000 AUSTRALIAN RESOURCES LTD. 454,637
400,006 DELTA GOLD NL. ORD. 1,023,440
200,000 EMPEROR MINES LTD. 472,350
253,000 GREAT CENTRAL MINES NL. 693,126
480,000 NEWCREST MINING LTD. 1,927,188
145,000 NORTH FLINDERS MINES LTD. 963,437
429,996 PLACER PACIFIC LTD. ORD. 626,252
500,000 PLUTONIC RESOURCES LTD. 2,558,563
70,000 POSGOLD LTD. 172,486
200,000 RESOLUTE SAMANTHA LTD. 464,478
600,000 RGC LTD. 2,904,953
350,000 SONS OF GWALIA N.L. ORD. 2,479,838
1,000,000 ST. BARBARA MINES LTD. 653,418
550,000 WMC LTD. 3,970,322
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20,887,106
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CANADA: 21.1%
80,000 AGNICO EAGLE MINES, LTD. 1,300,000
140,000 BARRICK GOLD CORP. 3,797,500
44,000 CAMBIOR INC. 582,237
30,000 CAMECO CORP. 1,414,171
75,000 CANARC UNITS *+ 87,748
170,000 ECHO BAY MINES LTD. 1,827,500
65,000 GOLDCORP INC. (CLASS A) 1,072,500
300,000 GRANGES INC. UNITS*+ 389,414
270,000 HEMLO GOLD MINES INC. 2,868,750
250,000 MACMILLAN BLOEDEL LTD. 3,317,327
120,000 MIRAMAR MINING CORP. 646,604
400,000 NAMIBIAN MINERALS CORP. 2,082,035
40,000 PANGEA GOLDFIELDS UNITS*+ 134,359
130,000 PEGASUS GOLD INC. 1,592,500
170,000 PLACER DOME INC. 4,058,750
80,000 POCO PETROLEUMS LTD. 612,881
30,000 RENAISSANCE ENERGY LTD. 791,760
220,000 TECK CORPORATION (CLASS B) 4,515,963
300,000 TVX GOLD INC. 2,175,000
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33,266,998
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GHANA: 0.8%
60,000 ASHANTI GOLDFIELDS COMPANY LTD. (GDR) 1,185,000
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INDONESIA: 0.2%
17,400 PT TAMBANG TIMAH (GDR) 315,375
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NORWAY: 0.8%
50,000 TRANSOCEAN A/S 1,295,347
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SOUTH AFRICA: 8.8%
100,000 Beatrix Mines Ltd. (ADR) 1,773,750
220,000 Beatrix Mines Ltd. Ord. 806,250
30,000 Driefontein Consolidated Ltd. (ADR) 1,050,000
80,000 Driefontein Consolidated Ltd. Ord. 393,750
80,000 Freestate Consolidated Mines (ADR) 740,000
80,000 Harmony Gold Mining Ltd. (ADR) 765,000
100,000 Impala Platinum Holdings (ADR) 1,437,500
95,000 Kloof Gold Mining (ADR) 920,313
100,000 Randgold & Exploration (ADR) 525,000
91,149 Rustenburg Platinum Holdings (ADR) 1,424,203
54,000 St. Helena Gold (ADR) 293,625
150,000 Western Areas Gold Minining (ADR) 2,339,070
40,000 Western Deep Levels Ltd (ADR) 1,450,000
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13,918,461
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UNITED KINGDOM: 2.7%
18,000 British Petroleum Plc(ADR) 1,923,750
40,000 Rtz Plc Sponsored (ADR) 2,410,000
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4,333,750
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</TABLE>
See Notes to Financial Statements.
<PAGE>
GOLD AND NATURAL RESOURCES FUND
INVESTMENT PORTFOLIO (CONTINUED)
<TABLE>
<CAPTION>
No. of Shares Securities(a) Value(Note 1)
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<S> <C> <C> <C> <C>
UNITED STATES: 52.3%
50,000 Alta Gold Co. $ 178,125
47,000 Anadarko Petroleum Corp. 2,726,000
15,600 Baker Hughes Inc. 512,850
60,000 Battle Mountain Gold Co. 435,000
109,700 Buckeye Cellulose Corp. 3,030,463
56,700 Cairn Energy Usa Inc. 815,063
10,000 Century Aluminum Co. 157,500
60,000 Coeur D'Alene Mines 1,102,500
49,200 Dayton Superior Corp. 645,750
45,700 Devon Energy Corp. 1,119,650
35,700 Diamond Offshore Drilling Inc. 2,043,825
8,400 First Mississippi. 186,900
135,000 Forasol-Foramer NV 1,704,375
152,000 Forest Oil Corp. 2,071,000
175,000 Fort Howard Corp. 3,478,125
90,000 Freeport Mcmoran Copper & Gold 'A' 2,688,750
107,600 General Chemical Group Inc. 2,178,900
150,000 Getchell Gold Corp. 4,950,000
30,000 Halliburton Co. 1,665,000
27,000 Helmerich & Payne 988,875
3,000 Highlands Insurance Group 56,250
40,000 Highwoods Properties Inc. 1,105,000
270,000 Homestake Mining Corp. 4,623,750
110,000 Kaiser Aluminum Corp. 1,210,000
65,000 Louisiana Land & Exploration Co. 3,745,625
19,000 Mobil Corp. 2,130,375
130,000 Newmont Mining 6,418,750
42,600 Noble Affiliates, Inc. 1,608,150
50,000 Nuevo Energy Co. 1,612,500
98,500 Pride Petroleum Services Inc. 1,403,625
40,000 Reading & Bates Corp. 885,000
56,000 Reynolds Metals Company 2,919,000
18,000 Royal Dutch Petroleum Co. 2,767,500
310,000 Santa Fe Pacific Gold Corp. 4,378,750
18,000 Schlumberger Ltd. 1,516,500
60,400 Seitel Inc. 1,653,450
19,550 Sonat Offshore Drilling Inc. 987,275
30,000 St. Mary Land & Exploration 502,500
42,000 Stillwater Mining Company 992,250
79,000 Triton Energy Ltd. 3,841,375
20,000 Union Pacific Resources Group Inc. 535,000
80,200 United Meridian Corp. 2,887,200
65,000 Weatherford Enterra Inc. 1,950,000
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82,408,475
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TOTAL INVESTMENTS: 100.0%
(cost $128,867,934) 157,610,512
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</TABLE>
(a) Unless otherwise indicated, securities owned are shares of common stock.
* Fair value as determined by the Board of Trustees.
+ Restricted securities see note 6.
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SUMMARY OF INVESTMENTS % OF SUMMARY OF INVESTMENTS % OF
BY INDUSTRY PORTFOLIO BY INDUSTRY PORTFOLIO
Gold Mining 51.49% Non-Ferrous Metals 1.53%
Oil & Gas Exploration 11.67% Chemicals 1.50%
Oil/Gas Equipment & Services 10.54% Metals Misc. 0.90%
Paper & Forest Products 6.23% Aluminum 0.87%
Oil Integrated-International 4.33% Real Estate Investment Trust 0.70%
Platinum 2.45% Mining 0.54%
Oil/Gas Domestic 2.33% Oil & Gas products 0.50%
Metals 1.85% Builing Materials 0.41%
Copper 1.71% Metals and Mining 0.41%
Insurance 0.04%
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100.00%
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See Notes to Financial Statements.
<PAGE>
GOLD AND NATURAL RESOURCES FUND
FINANCIAL STATEMENTS (UNAUDITED)
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Statement of Assets and Liabilities
June 30, 1996
Assets:
Investments at value (identified cost,
$128,867,934) (Note 1) $157,610,512
Receivables:
Capital shares sold 42,698
Securities sold 3,288,861
Dividends 186,617
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Total assets 161,128,688
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Liabilities:
Payables:
Due to custodian 5,775,228
Securities purchased 3,706,021
Capital shares repurchased 2,641,309
Accounts payable 185,557
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Total liabilities 12,308,115
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Net Assets (Equivalent to $15.65 per
share on 9,507,472 shares of
beneficial interest outstanding with
an unlimited number of
$.001 par value shares authorized) $148,820,573
============
Net assets consist of:
Aggregate paid in capital 118,858,797
Unrealized appreciation of investments,
forward currency contracts
and foreign currency 28,742,421
Undistributed net investment income 87,811
Undistributed realized gains 1,131,544
============
$148,820,573
============
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See Notes to Financial Statements.
<PAGE>
GOLD AND NATURAL RESOURCES FUND
STATEMENTS OF CHANGES IN NET ASSETS
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<TABLE>
<CAPTION>
FOR THE TWO MONTHS
ENDED JUNE 30, 1996 YEAR ENDED
(UNAUDITED) APRIL 30, 1996
------------------- --------------
<S> <C> <C>
Increase (Decrease) in Net Assets:
Operations:
Net investment income $ 123,977 $ 1,122,903
Realized gain (loss) from
security transactions 2,414,838 3,080,740
Realized gain (loss) from
foreign currency transactions 1,601 (4,602)
Change in unrealized appreciation (depreciation) of
foreign currency receivables and payables (698) 899
Change in unrealized appreciation
of investments (12,634,047) 28,055,575
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Increase in net assets
resulting from operations (10,094,330) 32,255,515
Dividends to shareholders from:
Net investment income (1,668,571) (1,119,954)
Net realized gains (1,636,276) 0
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(3,304,847) (1,119,954)
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(13,399,177) 31,135,561
Capital share transactions*:
Net proceeds from sales of shares 27,803,824 248,311,248
Reinvestment of dividends 3,304,847 1,119,954
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31,108,671 249,431,202
Cost of shares reacquired (55,258,648) (221,516,726)
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Increase (decrease) in net assets resulting
from capital share transactions (24,149,976) 27,914,476
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Total increase (decrease) in net assets (37,549,153) 59,050,037
Net Assets:
Beginning of period 186,369,726 127,319,689
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End of period (including undistributed
net investment income of $87,811 and $1,632,405,
respectively) $ 148,820,573 $ 186,369,726
============= =============
*Shares of Beneficial Interest
Issued and Redeemed:
Shares sold 1,653,713 16,179,492
Reinvestment of dividends 194,403 40,771
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1,848,116 16,220,263
Shares reacquired (3,353,683) (12,979,210)
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Net increase (decrease) (1,505,567) 3,241,053
============= =============
</TABLE>
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See Notes to Financial Statements.
<PAGE>
GOLD AND NATURAL RESOURCES FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
FOR THE TWO
MONTHS ENDED YEAR ENDED APRIL 30,
JUNE 30, 1996 ------------------------------------------------------------
(UNAUDITED) 1996 1995 1994 1993 1992
----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $ 16.92 $ 13.49 $ 13.11 $ 10.61 $ 8.25 $ 8.85
--------- --------- --------- --------- --------- -------
Income From Investment Operations:
Net Investment Income (0.31) 0.12 0.08 0.07 0.01 0.04
Net Gains, Loss on Securities (both
realized and unrealized) (0.65) 3.44 0.37 2.47 2.39 (0.53)
--------- --------- --------- --------- --------- -------
Total From Investment Operations (0.96) 3.56 0.45 2.54 2.40 (0.49)
--------- --------- --------- --------- --------- -------
Less Distributions:
Dividends from net investment income (0.16) (0.13) (0.07) (0.04) (0.04) (0.11)
Dividends from net realized gains (0.15) -- -- -- -- --
--------- --------- --------- --------- --------- -------
Total Distributions (0.31) (0.13) (0.07) (0.04) (0.04) (0.11)
--------- --------- --------- --------- --------- -------
Net Asset Value, End of Year $ 15.65 $ 16.92 $ 13.49 $ 13.11 $ 10.61 $ 8.25
========= ========= ========= ========= ========= =======
Total Return (a) (5.82%) 26.66% 3.43% 23.96% 29.19% (5.62%)
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplementary Data
Net Assets, End of Year (000) $ 148,821 $186,370 $ 127,320 $ 81,248 $ 30,896 $ 9,836
Ratio of Expenses to Average Net Assets 1.04%* 1.08%(b) 0.96% 0.96% 1.61% 1.32%
Ratio of Net Income to Average Net Assets 0.03%* 0.81% 0.71% 0.64% 0.25% 0.60%
Portfolio Turnover Rate 10.86% 26.37% 23.30% 15.84% 14.61% 0.48%
Average Commission Rate Paid $ 0.0383 $ 0.0310
</TABLE>
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(a) 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.
(b) The ratio was not impacted by the directed brokerage and custodian fee
arrangements.
* Annualized
See Notes to Financial Statements.
<PAGE>
GOLD AND NATURAL RESOURCES FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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NOTE 1-Significant Accounting Policies:
Van Eck Worldwide Insurance Trust (the "Trust"), organized as a Massachusetts
business trust on January 7, 1987, is registered under the Investment Company
Act of 1940. The following is a summary of significant accounting policies
consistently followed by the Gold and Natural Resources Fund, 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.
The preparation of financial statements in conformity with generally accepted
accounting principles requires the use of management's estimates, and the actual
results could differ.
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 year. 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. Short-term obligations purchased with more than sixty days
remaining to maturity are valued at market. Short-term obligations purchased
with sixty days or less to maturity are valued at cost which with accrued
interest approximates value. Forward currency contracts are valued at the spot
currency rate plus an amount ("points") which reflects the differences in
interest rates between the U.S. and the foreign markets. 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 quoted bid and asked prices of such currencies on the
last business day of the year. 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 is not
separately disclosed. Recognized gains or losses attributable to foreign
currency fluctuations on foreign currency denominated assets and liabilities are
recorded as net realized gains and losses from foreign currency transactions.
<PAGE>
GOLD AND NATURAL RESOURCES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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D. Dividends and Distributions-Dividend income and distributions to shareholders
are recorded on the ex-dividend date. Income distributions and capital gain
distributions are determined in accordance with income tax regulations which may
differ from generally accepted accounting principles. These differences are
primarily due to differing treatments for foreign currency transactions, passive
foreign investment companies and wash sales.
E. Other-Security transactions are accounted for on the date the securities are
purchased or sold. Interest income is accrued as earned.
NOTE 2-Van Eck Associates Corporation earned fees of $291,506, for the two
months ended June 30, 1996 for investment management and advisory services. This
fee, which includes the fee paid to the Advisor for accounting and
administrative services, is based on an annual rate of 1% of the first $500
million of average daily net assets, .90 of 1% on the next $250 million and .70
of 1% on the excess over $750 million. 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 and sales of securities other than short-term obligations
aggregated $18,190,279 and $21029,872 respectively, for the two months ended
June 30, 1996. For federal income tax purposes the identified cost of
investments owned at June 30, 1996 was $128,867,934. As of June 30, 1996, net
unrealized appreciation for federal income tax purposes aggregated $28,742,578,
of which $33,560,595, related to appreciated securities and $4,818,017, related
to depreciated securities.
NOTE 4-The Fund invests in foreign securities. Investments in foreign securities
may involve a greater degree of risk than investments in domestic securities due
to political, economic or social instability. In addition, some foreign
companies are not generally subject to the same uniform accounting, auditing and
financial rules as are American companies, and there may be less government
supervision and regulation. Foreign investments may also be subject to foreign
taxes, dividend collection fees and settlement delays.
The Fund has investments in South African securities. South African securities
may be subject to greater political, social and economic risks than investments
in more developed foreign markets. Emerging market countries, such as South
Africa, may present the risk of nationalization of businesses, or prohibitions
of repatriation of assets, and may have less protection of property rights than
more developed countries.
<PAGE>
GOLD AND NATURAL RESOURCES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
NOTE 4 - (continued)
The Fund may concentrate its investments in companies which are significantly
engaged in the exploration, development, production and distribution of gold and
other natural resources such as strategic and other metals, minerals, forest
products, oil, natural gas and coal and by investing in gold bullion and coins.
Since the Fund may so concentrate, it may be subject to greater risks and market
fluctuations than other more diversified portfolios. The production and
marketing of gold and other natural resources may be affected by actions and
changes in governments. In addition, gold and natural resources may be cyclical
in nature.
NOTE 5- 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 forw currency contracts to hedge foreign
denominated assets. Realized gains and losses from forward currency contracts
are included in realized gain from foreign currency transactions.
The Fund may incur additional risk from investments in forward currency
contracts if the counterparty is unable to fulfill its obligation or there are
unanticipated movements of the foreign currency relative to the U.S. dollar.
NOTE 6-Restricted Security
The following securities are restricted as to sale:
Percent of
Date Net Assets
Acquired Cost Value at 6/30/96
-------- ---- ----- ----------
Canarc Units 6/20/96 $123,459 $87,748 0.06%
Granges Inc. Units 4/25/96 $572,687 $389,414 0.26%
Pangea Goldfields Units 6/05/96 $164,061 $134,359 0.09%
