--------------------
DECEMBER 31, 1995
--------------------
VAN ECK
--------------------
GLOBAL
--------------------
BALANCED
--------------------
FUND
--------------------
ANNUAL
--------------------
REPORT
--------------------
[VAN ECK GLOBAL LOGO]
<PAGE>
Van Eck Global Balanced Fund
----------------------------
1995 Annual Report
Dear Fellow Shareholder:
Nineteen ninety-five was an exceptional year for most world bond markets,
spurred by declining interest rates and slowing economic growth. Most major
stock markets also turned in solid performance, while the U.S. stock market had
a spectacular year in an environment of low interest rates and expanding
corporate earnings. The Global Balanced Fund achieved a total return of 15.3%
for the year ended December 31, 1995.
World Equity Markets
Contrary to expectations at the beginning of 1995, which called for average
returns for the year, most major world stock markets achieved unusually strong
performance as global economic growth decelerated and key interest rates began
to decline in a reverse of the trends of 1994. The Japanese equity market was
the significant exception as continued economic weakness weighed heavily on the
market, particularly in the first half of the year. Equity securities comprised
approximately two-thirds of your Fund's portfolio throughout the year.
Your portfolio was heavily weighted toward the U.S. equity market throughout
1995 (generally greater than 40% of the equity holdings), reflecting our
forecast of higher returns due to stronger relative growth in the U.S. versus
the international economies. Declining interest rates, low inflation and
increasing corporate earnings fueled a U.S. stock market rally that saw the Dow
Jones Industrial Average reach successive record highs throughout the year,
pushing through both the 4000 and 5000 levels.
As economic growth slowed in the U.S., our stock selection emphasis shifted from
more economically sensitive companies to defensive and growth-related stocks. We
focused heavily on three key sectors: financial companies, which benefited from
the lower interest rate environment (Bank of New York, American Express);
pharmaceuticals, which continue to benefit from strong new product introductions
and favorable demographic changes (Merck, Pfizer); and technology stocks, which
benefit from corporate focus on improved productivity and the boom in consumer
spending on multimedia technologies (Texas Instruments, Cabletron Systems).
Stocks in this latter industry registered strong gains in the first half of the
year though volatility and price weakness were more prevalent later in the year.
European markets registered strong gains in 1995, with the vast majority of the
markets' advances coming in the first half of the year. The weakness of the U.S.
dollar during the course of the year accounted for close to one-third of the
gains as expressed in U.S. dollars. Throughout much of 1995, we focused on
defensive sectors as it was apparent that, with a subdued economic growth
outlook, investors would pay a premium for companies capable of generating
relatively strong earnings growth. The portfolio had significant exposure to
media and service companies (Carlton Communications), financials (National
Westminster, AXA), and consumer non-durables (Heineken, Nutricia).
The Japanese stock market was the worst performing major equity market during
1995, registering a gain of less than 1% in dollar terms. We began the year
anticipating a recovery in the Japanese economy and market after a four-year
period of underperformance. The Kobe earthquake, continued weakness in the real
estate market, and a more than 20% rally in the Japanese yen (and the resulting
negative impact on export trade), severely impacted the economic outlook,
delaying any prospective rebound in the Japanese economy. Responding to these
events, the Japanese equity market was down 8% by the end of June (down 21% in
yen). Our exposure to Japanese equities was reduced from 20% of total equities
at the beginning of 1995 to approximately 5% by the end of the first quarter.
While this reduction contributed positively to second quarter returns, the
negative impact in the first quarter was significant.
The market rebounded dramatically in the second half of the year in response to
the Bank of Japan's increasing of the money supply, an improvement in the trade
surplus, the resulting 25%+ decline in the yen, and further government fiscal
spending packages. Having increased the Japanese weighting to 11% over the
period from August to November, we were hesitant to commit additional funds
until the building blocks for a sustainable recovery were in place. As these
surfaced, we further increased the Fund's exposure by year end. Nonetheless, our
underweight position in the strongly performing Japanese market negatively
impacted total returns for
<PAGE>
the second half of 1995. Sector emphasis in this market includes technology
(Hitachi, NEC); securities companies, which should benefit from continued
strength in the stock market (Daiwa Securities, Nomura Securities);
export-related stocks, which are direct beneficiaries of yen weakness (Canon,
Sony); and domestic companies exposed to the cyclical recovery (Mitsubishi Heavy
Industries).
World Bond Markets
Most bond markets produced returns in the range of 15-20% during 1995 (in local
currency terms, and generally higher returns in U.S. dollar terms, with the
exception of Japan), rivaling the returns of many stock markets. Sluggish
growth, declining interest rates, disinflation and neutral to restrictive fiscal
policy is the ideal environment for bond markets, and these are the conditions
that prevailed throughout much of the world in 1995. Bonds comprised between 25%
and 36% of the Fund's assets during the year.
As the year began, we were cautious on the outlook for bonds after rising
short-term U.S. interest rates had precipitated the bond market debacle of 1994.
Following the collapse of confidence in Mexico in December 1994, we believed
that investors would avoid the bond markets of the more heavily indebted
nations, and accordingly decreased our positions in the higher risk peripheral
European bond markets, such as Italy and Spain. At the same time, we maintained
heavy weightings in the more stable dollar-bloc markets. By the end of the first
quarter, economic growth began to slow in the U.S. and Europe and inflationary
pressures were clearly dissipating. The German discount rate was cut in March,
and as the growth slowdown continued into the second quarter, expectations grew
of further rate cuts in Europe and an end to the tightening cycle in the U.S.,
fueling the bond market rally.
As the rally continued, we began to decrease our position in dollar-bloc bonds
in favor of European bonds, forecasting that the growth slowdown would be more
pronounced in Europe, and therefore, that interest rates had further to fall
than in the U.S. In the second half of the year, this forecast proved accurate,
with European markets outperforming the U.S. by 3.5% in local currency terms.
However, our risk-averse strategy in the peripheral European markets prevented
us from taking full advantage of the powerful rally. In expectation of a
continued benign interest rate environment and improving inflationary and fiscal
developments in these countries, we once again increased our weightings in Italy
and Spain, which rallied strongly in the last weeks of 1995.
Japan once again proved the exception. Its one-year return of 9.6% in dollar
terms masks a gain of 32% in the first half of the year, and a substantial loss
in the second half. The same unfortunate circumstances that troubled the
Japanese equity market had the opposite effect on bonds in the first half.
During the second half of the year, the sharp fall of the yen and measures
designed to stimulate growth -- expansionary monetary policy and very low
interest rates -- pushed down bond prices even as they boosted stocks. We
maintained an underweight position in Japanese bonds throughout the year at
between 9% and 18% of the total bond allocation, recognizing the high level of
risk in that market and the future negative impact on bond prices of the
authorities' response to the banking crisis and increased government spending.
The Outlook
While the exceptional returns of global bond and stock markets in 1995 will
probably not be repeated in the near future, we believe the investment
environment remains reasonably positive. With a moderate growth, low inflation
backdrop, we continue to favor stocks over bonds, with approximately two-thirds
of the Fund currently invested in equities in more than twenty countries
worldwide. We anticipate further dollar strength versus the Japanese yen and
have positioned the portfolio accordingly.
In the equity markets, we expect international markets to outperform the U.S.,
although there are still reasonable values on selective U.S. stocks. In Europe,
as in the U.S., portfolio emphasis is on defensive growth stocks rather than
cyclicals as growth and consumer spending continue at a slow pace. We maintain
an underweight position in Europe, instead favoring the Asia-Pacific and
Japanese markets which should benefit from improving economic outlooks. Strong
earnings growth in the Far East continues while Japan's current economic
environment provides a favorable backdrop for Japanese equities.
We expect further interest rate cuts in both Europe and the U.S. in the first
half of 1996, which would again benefit bond markets in those countries.
Anticipating slower relative growth in Europe and given that Europe is behind
the U.S. in terms of its economic cycle, European rates may continue to decline
in the second half as well. Therefore, we currently favor the European bond
markets, although we expect some volatility in the coming year as deliberations
continue over Europe's desire and ability to have a single currency by 1999. We
remain underweight in Japanese bonds where interest
<PAGE>
rates remain very low and where the economy is expected to rebound.
We appreciate your participation in the Global Balanced Fund and we look forward
to helping you meet your investment objectives in the future.
(Photo of Anne M. Tatlock)
Anne M. Tatlock
Global Strategist
(Photo of Steven J. Miller)
Steven J. Miller
Global Equity
Manager
(Photo of Anthony S. Gould)
Anthony S. Gould
Global Bond
Manager
January 19, 1996
- --------------------------------------------------------------
PERFORMANCE RECORD AS OF 12/31/95
- --------------------------------------------------------------
Average Annual After Maximum Before
Total Return Sales Charge+ Sales Charge
- --------------------------------------------------------------
A shares-Life (since 12/20/93) 2.7% 5.2%
- --------------------------------------------------------------
1 year 9.9% 15.3%
- --------------------------------------------------------------
B shares-Life (since 12/20/93) 2.9% 4.3%
- --------------------------------------------------------------
1 year 9.5% 14.5%
- --------------------------------------------------------------
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%
Representative Equity Holdings*
--------------------------------
December 31, 1995
Hitachi Ltd.
(Japan, 3.1%)
Hitachi is Japan's largest integrated electric machinery manufacturer, with
business interests in computers, semiconductors, power plants, capital
equipment, consumer electronics and electronic components and materials. Hitachi
is attractive not only as a beneficiary of a weaker Japanese yen, but also due
to its exposure to the domestic economic recovery in private capital spending in
Japan. Its diversified product line provides downside protection for profits in
the event of a weak DRAM (computer memory) market, while significant upside
potential remains from both its industrial and consumer electronics divisions.
Mitsubishi Heavy Industries
(Japan, 0.5%)
Mitsubishi Heavy Industries (MHI) is the largest heavy machinery manufacturer in
Japan, with operations in power plants and systems, industrial machinery,
shipbuilding, infrastructure, and civilian and defense aerospace. MHI should
benefit from a recovery in capital spending in Japan, continued growth in Asia
and a weaker Japanese yen. Management has demonstrated its commitment to
maintaining competitiveness through cost control, leaving the company well
positioned in the current Japanese business environment.
<PAGE>
Nomura Securities Co. Ltd.
(Japan, 3.6%)
Nomura is a Japanese brokerage firm with a presence in the major international
financial markets. In 1995, Nomura benefited from the strong rally and the
increased trading volumes in Japanese bonds. Nomura's prospects in 1996 are
strong as the anticipated turnaround in the Japanese economy has led to a
significant pick-up in equity trading volumes. Additionally, the company should
benefit as domestic retail investors invest money in overseas bond markets.
First Pacific Co., Ltd.
(Hong Kong, 0.2%)
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 55% of estimated profits in 1995, future profit growth lies in
telecommunications. First Pacific's telecommunications operations, which include
cellular and paging services, are currently in Hong Kong, the Philippines and
Indonesia, with footholds in India and China. The stock remains attractively
valued, trading at a discount to its net asset value and to the overall Hong
Kong market.
Cheung Kong (Holdings) Ltd.
(Hong Kong, 0.2%)
Cheung Kong is a leading Hong Kong investment company focusing on residential
property development with an estimated land bank of 12 million square feet. Li
Ka Shing is the majority owner of Cheung Kong (35%) and is considered one of the
most astute businessmen in Hong Kong. The company is an excellent proxy for the
Hong Kong equity market and is a direct beneficiary of the recovery in
residential property. While Cheung Kong is one of the leading property
companies, it also provides a broader exposure to Hong Kong and China through
its investment interest in Hutchison Whampoa, a Hong Kong conglomerate.
Compass Group plc
(U.K., 0.4%)
Compass Group is one of the leading international contract caterers, with
operations in the U.K., the U.S., Continental Europe and Scandinavia. The
contract catering market is in the midst of a secular growth phase as private
businesses, educational institutions and government entities continue to
outsource their in-house dining services. Compass has supplemented the industry
growth potential with several well-timed acquisitions in the major markets
outside of the U.K., and is therefore solidly positioned to deliver strong
future earnings growth.
Roche Holdings ag
(Switzerland, 0.4%)
Roche is Switzerland's largest pharmaceutical company and ranks among the world
leaders 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 Syntex in 1994 has enhanced the company's research
capability and allowed for the expansion of its distribution network. Roche
remains one of the highest quality investment vehicles within the pharmaceutical
sector.
American International Group (AIG)
(U.S., 4.3%)
The American International Group (AIG) is the premier growth participant in the
global insurance industry with over 50% of its revenues generated overseas.
AIG's strategic focus, global presence and exemplary balance sheet should enable
it to outpace the earnings performance of most insurance entities over the next
several years.
The Walt Disney Company
(U.S., 0.8%)
The Walt Disney Company is a diversified international entertainment company
with operations in three business segments: filmed entertainment, theme parks
and resorts, and consumer products. Disney has one of the most valuable film and
TV programing libraries. The acquisition of Capital Cities/ABC is a good
strategic fit for the company, bringing distribution capabilities and strong
management to the team.
Mattel, Inc.
(U.S., 0.7%)
Mattel remains a world leader in the design, manufacturing and marketing of
children's toys. Based in the United States, it has offices in 36 countries and
sells its products in more than 140 nations worldwide. Almost 80% of its sales
come from core products -- these include Barbie, Disney, Hot Wheels and Fisher
Price. The company's prospects remain excellent with its ability to grow in new
areas overseas and to broaden its product lines with new innovations and
acquisitions. In the current low growth environment, the company's
recession-resistant toy business should continue to generate strong future
profits growth.
Note: Equities are listed as percentage of total investments held.
* Portfolio is subject to change.
<PAGE>
Global Balanced Fund
Investment Portfolio December 31, 1995
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
No. of Shares
or Principal Value
Amount Securities (a) (Note 1)
- ------------------------------------------------------------------------
<S> <C> <C>
Australia: 0.5%
AUD 110,000 Government of Australia 9.00%
9/15/2004 $ 86,107
15,915 News Corporation Ltd. Pfd. 74,353
----------
160,460
----------
Austria: 0.3%
ATS 910,000 Republic of Austria 7.00%
2/14/2000 96,064
----------
Belgium: 0.3%
BEF 3,170,000 Kingdom of Belgium 8.00%
12/24/2012 112,513
---------
Canada: 1.8%
CAD 634,000 Government of Canada Bond 6.50%
6/1/2004 449,013
4,000 Seagrams Co. Ltd. 138,500
----------
587,513
----------
Chile: 0.3%
2,000 Chilgener S.A. (ADR) 50,000
2,000 Madeco SA (ADR) 54,000
----------
104,000
----------
Columbia: 0.2%
2,500 Cementos Diamante SA
(ADR) 144A+ 50,000
----------
Denmark: 1.7%
DKK 3,189,000 Kingdom of Denmark Bond 7.00%
12/15/2004 569,254
----------
France: 6.4%
1,340 AXA 90,125
FRF 3,700,000 BTAN 7.25% 8/12/1997 779,202
FRF 1,695,000 Bons du Tresor 7.00% 11/12/1999 361,009
429 Castorama Dubois Investissement 70,123
1,200 Cetelem 224,763
720 Credit Local de France 57,524
FRF 2,160,000 France O.A.T. Principal Strip
8.50% 10/25/2019 71,252
420 Legrand 64,714
750 Primagaz 59,462
FRF 1,140,000 Republic of France Bond 8.50%
11/25/2002 259,899
500 Societe Generale 61,653
----------
2,099,726
----------
Germany: 6.4%
DEM 390,000 Bundesrepublik 6.25% 1/04/2024 252,623
DEM 670,000 Bundesrepublik 6.50% 7/15/2003 485,291
DEM 1,279,000 Deutschland Republic Bond 7.125%
12/20/2002 962,685
DEM 38,000 Deutschland Republic Bond 7.375%
1/03/2005 28,880
No. of Shares
or Principal Value
Amount Securities (a) (Note 1)
- ------------------------------------------------------------------------
620 Fresenius AG (Pfd.) $ 58,635
DEM 190,000 German Unity Fund Bond 8.00%
1/21/2002 148,903
205 Mannesman AG 65,104
2,200 VEBA AG 93,168
----------
2,095,289
----------
Hong Kong: 1.0%
8,000 Cheung Kong (Holdings) Ltd. 48,729
56,416 First Pacific Co., Ltd. 62,745
6,343 HSBC Holdings PLC 95,976
8,000 Sun Hung Kai Properties Ltd. 65,438
5,000 Swire Pacific Ltd. "A" 38,797
----------
311,685
----------
India 2.4%
18,400 India Magnum Fund "B"+ 782,000
----------
Ireland: 0.4%
6,225 Bank of Ireland 45,565
6,000 CRH PLC 44,982
5,751 Greencore Group PLC 50,032
----------
140,579
----------
Italy: 4.0%
ITL 1,060,000,000 BTPS 10.5% 4/01/2000 672,880
ITL 860,000,000 BTPS 10.5% 4/15/1998 545,271
45,600 Telecom Italia Mobile+ 80,259
----------
1,298,410
----------
Japan: 21.9%
8,000 Canon Inc. 144,681
5,250 Canon Sales Co. 139,628
6,000 Credit Saison Co., Ltd. 142,747
25,000 Daicel Chemical Industries 1 141,925
7,000 Daiwa Securities Co., Ltd. 106,963
7,000 Hankyu Department Store 103,578
100,000 Hitachi Ltd. 1,005,000
1,000 Ito-Yokado Co. Ltd. 61,509
JPY 41,100,000 Japanese Government Bond 6.50%
3/20/2001 482,007
JPY 32,600,000 Japanese Government Bond 3.70%
3/20/2004 331,404
JPY 56,100,000 Japanese Government Bond 4.60%
3/20/2003 603,949
19,000 Kawasaki Kisen Kaisha Ltd.+ 60,271
8,000 Minebea Co. Ltd. 67,002
8,000 Mitsubishi Estate Co. Ltd. 99,807
22,000 Mitsubishi Heavy Industries 175,106
7,000 NEC Corp. 85,300
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
Global Balanced Fund
Investment Portfolio December 31, 1995
- ------------------------------------------------------------------------
No. of Shares
or Principal Value
Amount Securities (a) (Note 1)
- ------------------------------------------------------------------------
<S> <C> <C>
113,000 Nikkei 300 Stock Index Listed
Fund+ $ 319,110
6 Nippon Telegraph & Telephone 49,422
10,000 Nisshinbo Industries Co. Ltd. 96,712
51,000 Nkk Corp.+ 137,118
55,000 Nomura Securities Co. Ltd. 1,196,809
9,000 Onward Kashiyama Co., Ltd. 146,228
9,000 Sekisui Chemical Co. 132,302
16,000 Sony Corp. (ADR) 982,000
7,000 Sumitomo Bakelite Co., Ltd. 55,242
17,000 Sumitomo Marine & Fire 139,420
8,000 Taisei Corp. 53,308
5,000 Takuma Co. Ltd. 68,182
2,000 Tostem Corporation 66,344
----------
7,193,074
----------
Malaysia: 0.4%
23,000 DCB Holdings Berhad 67,034
10,000 United Engineers 63,805
----------
130,839
----------
Netherlands: 4.1%
3,188 Aegon N.V. 140,742
2,020 Ahold N.V. Koninklijke 82,282
480 Heineken N.V. 84,985
1,100 Nutricia Verenigde Bedri 88,794
2,600 Philips Electronics N.V. 93,781
6,000 Royal Dutch Petroleum Co. (ADR) 846,750
----------
1,337,334
----------
New Zealand: 0.3%
NZD 160,000 New Zealand Government 10.00%
7/15/1997 107,436
----------
Pakistan: 0.1%
500 Pakistan Telecom (GDR)+ 43,500
----------
Philippines: 0.2%
42,500 C & P Homes Inc.+ 31,208
78,650 SM Prime Holdings Inc. 22,501
----------
53,709
----------
Singapore: 0.2%
5,000 Keppel Corporation Ltd. 44,545
3,000 United Overseas Bank Ltd. 28,848
----------
73,393
----------
South Africa: 0.6%
5,000 Barlow Limited 70,625
12,000 General Mining Union Corp. 40,800
2,400 Malbak Ltd. (GDR) 16,500
</TABLE>
<TABLE>
<CAPTION>
No. of Shares
or Principal Value
Amount Securities (a) (Note 1)
- ------------------------------------------------------------------------
<S> <C> <C>
6,220 Malbak Ltd. Ord. $ 42,763
10,000 Sentrachem Ltd. 35,660
27 South African Breweries 991
----------
207,339
----------
South Korea: 0.4%
200 Korea Electric Power Corp. (ADR) 5,350
2,800 Korea Electric Power Corp. (ADR)
(New) 74,200
1,000 Korea Mobile Comm (GDS) 144A+ 44,000
----------
123,550
----------
Spain: 5.4%
3,000 Banco de Santander SA 150,117
ESP 118,530,000 Kingdom of Spain Bond 10.25%
11/30/1998 998,650
ESP 8,840,000 Kingdom of Spain Bond 12.25%
3/25/2000 79,825
16,200 Repsol, S.A. (ADR) 532,575
----------
1,761,167
----------
Sweden: 0.5%
2,000 Astra AB "A" 79,748
600 Hennes & Mauritz AB "B" 33,404
2,460 Skandia Forsakrings AB 66,442
----------
179,594
----------
Switzerland: 1.1%
60 BBC Brown Boveri AG 69,671
18 Roche Holdings AG 142,331
195 Winterthur Schweiz Vers 137,886
----------
349,888
----------
Taiwan: 0.1%
2,200 Advanced Semiconductor+ 29,535
----------
Thailand: 0.2%
THB 50,000 Bangkok Bank Public Conv. Bond
3.25% 3/03/2004 53,375
----------
United Kingdom: 8.5%
9,262 British Aerospace PLC 114,473
GBP 29,000 British Air Capital Conv. Bond
9.75% 6/15/2005 3 92,192
8,176 British Airport Authority 61,493
132 British Petroleum Co., PLC 1,103
90,000 Cable & Wireless PLC 642,011
4,000 Carlton Communications PLC 59,921
11,300 Chubb Security PLC 55,812
15,300 Compass Group PLC 116,141
9,600 Legal & General Group 99,744
10,954 National Westminster Bank 110,245
9,078 Powergen PLC 195 P/P 31,182
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
Global Balanced Fund
Investment Portfolio December 31, 1995
- ------------------------------------------------------------------------
No. of Shares
or Principal Value
Amount Securities (a) (Note 1)
- ------------------------------------------------------------------------
<S> <C> <C>
12,000 Reuters Holdings PLC (ADR) $ 661,500
6,481 Siebe PLC 79,800
11,010 Smithkline Beecham 121,224
9,500 Takare PLC 26,371
4,096 Thorn EMI PLC 96,358
GBP 30,000 United Kingdom Treasury Note
8.00% 12/7/2000 48,793
GBP 70,000 United Kingdom Treasury Note
7.75% 9/8/2006 110,724
GBP 70,000 United Kingdom Treasury Note
8.75% 8/25/2017 119,983
GBP 85,000 United Kingdom Treasury Note
9.75% 8/27/2002 149,648
-----------
2,798,718
-----------
United States: 30.3%
2,000 American Express Co. 6.25% "FDC"
DECS (b) 111,000
4,200 American Express Company* 173,775
15,200 American International Group 1,406,000
4,000 Bank of New York Co. Inc.* 195,000
3,500 Cabletron Systems+ 283,500
1,000 Capital Cities ABC, Inc.* 123,375
5,000 Cisco Systems, Inc.+ 373,125
4,800 Coastal Corp. 178,800
10,000 Davidson & Associates Inc. 220,000
4,600 Disney (Walt) Co. 271,400
6,100 Federated Dept. Stores, Inc.+* 167,750
10,000 Fort Howard Corp.+ 225,000
3,000 General Electric Co. 216,000
8,550 Health Management Associates,
Inc. 223,369
3,500 Intel Corp. 198,625
2,600 International Business Machines
Corp. 238,550
USD 180,000 Liberty Property L.P.
Convertible Sub. Deb. 8.00%
7/01/2001 186,750
7,125 Mattel, Inc. 219,094
21,000 Merck & Co. 1,380,750
2,000 Mobil Corp. 224,000
3,400 Pfizer Inc. 214,200
2,000 Procter & Gamble Co.* 166,000
USD 150,000 Scholastic Corp. Conv. Bond
5.00% 8/18/2005 172,500
4,000 Texas Instruments Inc. 207,000
2,800 Union Camp Corp. 133,350
USD 158,000 U.S. Treasury Bond 10.75%
8/15/2005* 217,176
USD 219,000 U.S. Treasury Bond 7.25%
5/15/2016* 250,139
</TABLE>
<TABLE>
<CAPTION>
No. of Shares
or Principal Value
Amount Securities (a) (Note 1)
- ------------------------------------------------------------------------
<S> <C> <C>
USD 110,000 U.S. Treasury Bond 7.875%
2/15/2021 $ 135,455
USD 460,000 U.S. Treasury Note 6.375%
8/15/2002* 482,713
USD 226,000 U.S. Treasury Note 7.50%
11/15/2001* 249,094
USD 1,090,000 U.S. Treasury Note 5.875%
7/31/1997* 1,101,745
-----------
9,945,235
-----------
Total Investments: 100%
(Cost: $24,919,891) $32,795,179
===========
</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.
+ Non-income producing security
<TABLE>
<CAPTION>
Summary of
Investments % of
By Industry Portfolio
- ----------------------------- ------------
<S> <C>
Aerospace & Defense 0.3%
Air Transport 0.2%
Banks 2.6%
Beverages 0.4%
Brewers 0.3%
Broadcast Media 0.6%
Brokerage 4.0%
Building Materials 0.3%
Capital Goods 0.9%
Chemicals 1.1%
Computer Software 0.7%
Computers 0.7%
Country Funds 3.4%
Distribution 0.4%
Electric Utilities 0.6%
Electronics & Electrical
Equipment 8.3%
Engineering 0.4%
Engineering & Construction 0.4%
Entertainment & Leisure Time 1.1%
Financial Services 2.3%
Food Processing 0.2%
Foreign Government Bonds 27.2%
Healthcare 0.3%
Holding Co.-Diversified 0.6%
Home Building 0.1%
Household Products 0.5%
Insurance 1.6%
Machine Tools 0.2%
Machinery 0.2%
</TABLE>
<TABLE>
<CAPTION>
Summary of
Investments % of
By Industry Portfolio
- ------------------------------- ------------
<S> <C>
Media 2.3%
Medical Products & Supplies 0.2%
Medical Services 0.8%
Metals-Miscellaneous 0.2%
Miscellaneous 0.2%
Multi-Line Insurance 4.3%
Natural Resources 0.1%
Office Equipment 0.4%
Oil Integrated-International 4.9%
Oil-Domestic 0.7%
Paper & Forest Products 1.1%
Pharmaceutical 6.0%
Property-Casualty Insurance 0.4%
Publishing 0.5%
Real Estate 0.7%
Real Estate Investment Trust 0.6%
Retail 1.3%
Retail-Special Line 0.3%
Semiconductors 1.3%
Services 0.5%
Steel 0.4%
Telecommunications 2.6%
Textiles 0.7%
Thrift Holding Company 1.1%
Toys 0.7%
Transportation 0.3%
U.S. Government Agencies &
Obligations 7.4%
Utilities 0.1%
-----
100.0%
=====
</TABLE>
See Notes to Financial Statements.
<PAGE>
Global Balanced Fund Financial Statements
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Statement of Assets and Liabilities
<S> <C>
December 31, 1995
Assets:
Investments at value (cost, $24,919,891) (Note 1) $32,795,179
Cash 5,544,643
Receivables:
Securities sold 330,201
Interest and dividends 304,254
Capital shares sold 42,720
Open forward foreign currency contracts (Note 5) 64,622
Deferred organization costs 20,679
Other 6,515
-----------
Total assets 39,108,813
-----------
Liabilities:
Payables:
Capital shares repurchased 102,836
Securities purchased 2,008,504
Dividend payable 36,291
Open forward foreign currency contracts (Note 5) 72,949
Management fee 919
Distribution fee 15,171
Accounts payable 89,540
-----------
Total liabilities 2,326,210
-----------
Net assets $36,782,603
===========
Class A
Net asset value and redemption price per share
($30,631,934/2,969,886) $10.31
===========
Maximum offering price per share
(NAV/(1-maximum sales commission) $10.82
===========
Class B
Net asset value, offering price and redemption
price per share ($6,150,669/598,110) (Redemption may be
subject to a contingent deferred sales charge within the
first six
years of ownership) $10.28
===========
Net assets consist of:
Aggregate paid in capital $30,044,832
Unrealized appreciation of investments and options 7,877,749
Undistributed net investment income 53,307
Cumulative realized losses (1,193,285)
------------
$36,782,603
============
</TABLE>
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Statement of Operations
<S> <C> <C>
For the Year Ended December 31, 1995
Income
Interest $ 416,848
Dividends (less foreign taxes withheld
of $15,582) 210,947
---------
627,795
Expenses:
Management (Note 2) $141,393
Distribution--Class A
(Note 4) 65,046
Distribution--Class B
(Note 4) 58,828
Administrative (Note 2) 52,403
Transfer agent 59,645
Custodian 72,873
Professional 30,473
Reports to shareholders 25,408
Other 26,214
--------
Total expenses 532,283
---------
Net investment income 95,512
</TABLE>
<TABLE>
<CAPTION>
Statement of Operations--(cont'd)
<S> <C> <C>
Realized and Unrealized Gain (Loss)
on Investments (Note 3)
Realized loss from security transactions
(excluding short-term securities):
Proceeds from sales 37,194,195
Cost of securities sold 37,343,373
-----------
Realized loss $ (149,178)
Realized loss from foreign currency
transactions (126,137)
Realized loss on options (126,372)
Change in unrealized appreciation of
investments 2,827,030
Change in unrealized appreciation of
options written (8,892)
Change in unrealized depreciation of
forward currency contracts and other
assets and liabilities 90,961
----------
Net Increase in Net Assets Resulting
from Operations $2,602,924
==========
</TABLE>
- -------------------------------------------------------------------------------
Statements of Changes in Net Assets
For the Years Ended December 31, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
Increase (Decrease) in Net Assets:
Operations:
Net investment income $ 95,512 $ 300,631
Realized loss from security transactions (149,178) (565,965)
Realized loss from foreign currency
transactions (126,137) (58,569)
Realized loss on options (126,372) --
Change in unrealized appreciation
of investments and options written 2,818,138 (312,945)
Change in unrealized depreciation of
forward
currency contracts and other assets and
liabilities 90,961 (88,500)
---------- -----------
Increase (decrease) in net assets
resulting from operations 2,602,924 (725,348)
------------ -----------
Dividends to shareholders from net
investment income:
Class A Shares (316,521) (144,891)
Class B Shares (17,738) (30,750)
---------- ------------
(334,259) (175,641)
----------- ------------
2,268,665 (900,989)
---------- ------------
Capital share transactions (Note 6):
Net proceeds from sales of shares:
Class A Shares 4,933,615 20,677,424
Class B Shares 967,866 7,497,962
----------- ------------
5,901,481 28,175,386
------------ ------------
Net asset value of shares issued
in connection with acquisition--
Class A Shares (Note 7) 19,351,109 --
------------ ------------
Reinvestment of dividends:
Class A Shares 327,164 52,830
Class B Shares 28,882 10,017
----------- ------------
356,046 62,847
------------ ------------
Cost of shares reacquired:
Class A Shares (9,470,615) (6,679,916)
Class B Shares (1,238,087) (1,735,396)
----------- ------------
(10,708,702) (8,415,312)
------------ ------------
Increase in net assets resulting
from capital share transactions 14,899,934 19,822,921
------------ ------------
Total increase in net assets 17,168,599 18,921,932
Net Assets:
Beginning of year 19,614,004 692,072
------------ ------------
End of year (including undistributed net
investment income and accumulated net
investment loss of $53,307 and ($28,004),
respectively) $ 36,782,603 $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 For the
Period Period
Year Year December 20, Year Year December 20,
Ended Ended 1993 (a) Ended Ended 1993 (a)
December December to December December to
31, 31, December 31, 31, 31, December 31,
1995 1994 1993 1995 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 0.07+ 0.19+ -- 0.01 0.11+ --
Net Gain (Loss) on Securities
(both realized and unrealized) 1.31 (0.56) -- 1.28 (0.57) --
-------- -------- ---------- ------- -------- ----------
Total from Investment Operations 1.38 (0.37) -- 1.29 (0.46) --
-------- -------- ---------- ------- -------- ----------
Less Distributions:
Dividends from Net Investment Income (0.14) (0.09) -- (0.03) (0.05) --
-------- -------- ---------- ------- -------- ----------
Net Asset Value, End of Period $ 10.31 $ 9.07 $ 9.53 $ 10.28 $ 9.02 $ 9.53
======== ======== ========== ======= ======== ==========
Total Return (b) 15.30% (3.90%) 0% 14.54% (4.84%) 0%
----------------------------------------------------------------------------------------------------------------------------
Ratios/Supplementary Data
Net Assets, End of Period (000) $30,632 $13,986 $562 $6,151 $5,628 $130
Ratio of Expenses to Average Net
Assets 2.69% 1.06%((c)) 0.25%*((c)) 3.20% 1.88%((c)) 1.00%*((c))
Ratio of Net Investment Income (Loss)
to Average Net Assets 0.68% 1.99% (0.25%)* 0.14% 1.14% (1.00%)*
Portfolio Turnover Rate 196.69% 174.76% 0% 196.69% 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
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 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. 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, post-October losses and net capital loss carryforwards.
The effect of these differences for the year ended December 31, 1995, increased
accumulated realized losses by $320,058 and decreased accumulated net
investment loss by $320,058.
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. Use of Derivative Instruments
Option Contracts--The Fund may invest, for hedging and other purposes, in call
and put options on securities, currencies and commodities.
<PAGE>
GLOBAL BALANCED FUND
- -------------------------------------------------------------------------------
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 movement of the option value.
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. The Fund may incur additional
risk from investments in written currency options if there are unanticipated
movements in the underlying currencies.
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 gains and losses from forward currency
contracts are included in realized gain (loss) from foreign currency
transactions.
Note 2--Van Eck Associates Corporation (the "Advisor") earned fees of $141,393
for the year ended December 31, 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 $52,403 for the year
ended December 31, 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 $94,262 for the year ended December 31,
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 $1,982 for the year ended December 31, 1995 from commissions earned on
sales of Class A shares after deducting $8,982 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
$43,197,368 for the year ended December 31, 1995. For federal income tax
purposes the cost of investments owned at December 31, 1995 was $24,919,891. As
of December 31, 1995 net unrealized appreciation for federal income tax
purposes aggregated $7,875,288 of which $8,040,358 related to appreciated
investments and $165,070 related to depreciated investments. At December 31,
1995, the Fund had $583,319 of capital loss carryforwards expiring December 31,
2002, and $600,692 expiring December 31, 2003, available to offset future
capital gains.
Transactions in call and put options written for the year ended December 31,
1995 were as follows:
<TABLE>
<CAPTION>
Number of
Contracts Premiums
---------- ---------
<S> <C> <C>
Options outstanding at
beginning of period 2 $ 18,702
Options written 7 17,427
Options expired 3 (5,451)
Options closed 6 (30,678)
-------- --------
Options outstanding at
end of period 0 $ 0
======== ========
</TABLE>
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 as of December 31, 1995 through
May 1, 1996 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
December 31, 1995 was $187,090 for Class A shares and $304,474 for Class B 11
shares.
Note 5--At December 31, 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 Purchase Contracts:
ATS 553,469 expiring 1/3/96 $ 54,867 $ 54,758 $ (109)
AUD 395,000 expiring 1/16/96 292,379 293,120 741
CAD 285,480 expiring 2/16/96 209,569 209,099 (470)
DEM 1,951,665 expiring 2/16/96 1,368,989 1,360,615 (8,374)
DKK 189,420 expiring 2/12/96 34,324 34,059 (265)
ESP 6,298,000 expiring 2/6/96 51,663 51,532 (131)
FRF 1,281,540 expiring 1/12/96 260,000 261,272 1,272
GBP 912,740 expiring 1,414,270 1,415,146 876
1/3/96-1/8/96
ITL 1,599,916,752 expiring 1,003,267 1,003,187 (80)
1/2/96-4/18/96
JPY 253,609,505 expiring 2,497,969 2,455,922 (42,047)
1/4/96-1/8/96
Foreign Currency Sale Contracts:
ATS 1,012,000 expiring 5/15/96 101,639 100,731 908
AUD 496,000 expiring 1/16/96 366,608 368,069 (1,461)
BEF 3,421,000 expiring 1/12/96 115,955 115,869 86
CAD 377,533 expiring 277,968 276,523 1,445
1/2/96-2/16/96
</TABLE>
<PAGE>
GLOBAL BALANCED FUND
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value at Unrealized
Settlement Current Appreciation
Contracts Date Value (Depreciation)
- ---------------------------------------------------------------- ----------------
<S> <C> <C> <C> <C>
DEM 2,846,166 expiring
1/2/96-2/16/96 $1,990,417 $1,984,148 $ 6,269
DKK 2,999,030 expiring
1/2/96-2/12/96 544,113 539,218 4,895
ESP 140,660,599 expiring
1/2/96-2/6/96 1,142,033 1,151,141 (9,108)
FRF 5,790,000 expiring 1/12/96 1,172,791 1,180,427 (7,636)
GBP 245,624 expiring 1/2/96-1/8/96 381,716 380,830 886
HKD 2,332,000 expiring 2/22/96 301,506 301,495 11
IDR 86,791,894 expiring
1/3/96-1/5/96 37,841 37,958 (117)
ITL 1,613,891,000 expiring 4/18/96 999,607 1,002,368 (2,761)
JPY 195,117,500 expiring 1/8/96 1,937,082 1,889,849 47,233
MYR 62,904 expiring 1/2/96-1/3/96 24,736 24,775 (39)
NZD 128,519 expiring 1/3/96-1/16/96 83,672 83,859 (187)
SEK 382,270 expiring 1/2/96-1/3/96 57,355 57,519 (164)
-------
$(8,327)
=======
</TABLE>
Note 6--Shares of Beneficial Interest Issued and Redeemed (unlimited number of
$.001 par value shares authorized):
<TABLE>
<CAPTION>
Year Ended
December Year Ended
31, December 31,
1995 1994
<S> <C> <C>
---------- ------------
Class A
Shares sold 494,827 2,191,127
Shares issued in connection with an
acquisition 1,869,672 --
Reinvestment of dividends 32,689 5,529
---------- ---------
2,397,188 2,196,656
</TABLE>
<TABLE>
<CAPTION>
Year Ended
December Year Ended
31, December 31,
1995 1994
<S> <C> <C>
---------- ------------
Shares reacquired (970,107) (712,779)
---------- ---------
Net increase (decrease) 1,427,081 1,483,877
========== =========
Class B
Shares sold 100,484 797,147
Reinvestment of dividends 3,060 1,045
---------- ---------
103,544 798,192
Shares reacquired (129,053) (188,267)
---------- ---------
Net increase (decrease) (25,509) 609,925
========== =========
</TABLE>
Note 7--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. Foreign
investments may also be subject to foreign taxes and settlement delays.
The Fund will attempt to maintain an asset allocation of 60% in equity
securities and 40% in debt securities. Since the Fund may have significant
investments in foreign debt securities it may be subject to greater credit and
interest risks and greater currency fluctuations than portfolios with
significant investments in domestic debt securities
As of the close of business on December 22, 1995, the Fund acquired all the net
assets of World Trends Fund pursuant to a plan of reorganization approved by
World Trends Fund shareholders on December 18, 1995. The acquisition was
accomplished by a tax-free exchange of 1,869,672 shares of Global Balanced Fund
(Class A) (valued at $19,351,109) for the 2,333,233 shares of World Trends Fund
outstanding on December 22, 1995. World Trends Fund's net assets at that date,
$19,351,109, including $5,370,095 of unrealized appreciation, were combined with
those of the Fund. The aggregate net assets of Global Balanced Fund and World
Trends Fund before the acquisition were $17,967,912 and $19,351,109,
respectively.
- -------------------------------------------------------------------------------
Report of Independent Accountants
To the Board of Trustees and Shareholders of the
Van Eck Funds:
We have audited the accompanying statement of assets and liabilities, including
the investment portfolio, of the Global Balanced Fund (the "Fund") (one of the
series constituting the Van Eck Funds) as of December 31, 1995, and the related
statements of operations for the year then ended, and the statements of changes
in net assets and the financial highlights for each of the two years in the
period then ended, and the financial highlights for the period December 20,
1993 (commencement of operations) to December 31, 1993. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1995, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Global Balanced Fund series of the Van Eck Funds as of December 31, 1995, the
results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and the financial
highlights for each of the two years in the period then ended and for the
period December 20, 1993 (commencement of operations) to December 31, 1993, in
conformity with generally accepted accounting principles.
Coopers & Lybrand L.L.P.
New York, New York
February 23, 1996
<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 Global Investment Corp. serves
as sub-investment advisor to this Fund.
Asia Infrastructure Fund
Seeks long-term capital appreciation by investing in the equity securities of
infrastructure companies that are expected to benefit from the development and
growth of the economies in the Asia Region. AIG Global Investment Corp. serves
as sub-investment advisor to this Fund.
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.
Global Income Fund
This Fund seeks high total return through a flexible policy of investing
globally, primarily in debt securities.
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.
[Van Eck Global Logo]
X96-0201-014
Van Eck Securities Corporation
99 Park Avenue, New York, NY 10016
For account assistance please call (800) 544-4653
