<PAGE>
Van Eck Global Hard Assets Fund
--------------------------------------------------
1995 Annual Report
Dear Fellow Shareholder:
We are pleased to report that the Global Hard Assets Fund had a total return of
20.1% for the twelve months ended December 31, 1995, outperforming the Ibbotson
Hard Assets Index, which rose approximately 10.0% during the same period, and
the sector average of 17.0% among its competitive universe of 13 natural
resource/hard asset funds.* Your Fund achieved solid returns despite a year of
mixed results for hard assets. Overall in 1995, hard asset equities achieved
better performance than hard asset commodities as financial assets had an
unusually strong year.
Macroeconomic events were the driving force behind hard asset performance
during 1995. Although the year began with expectations of economic strength,
growth in both the U.S. and Europe began to decelerate. In response, the
Federal Reserve lowered the federal funds target rate in July and again in
December, while key German interest rates were lowered as well. The resulting
increased liquidity, along with higher-than-expected corporate earnings, pushed
the financial markets to new highs--the S&P 500 rose 37% for the year. Given
this economic scenario, financial assets outperformed hard assets and hard
asset equities outperformed commodities, with the exception of the energy
sector. Commodities turned in mixed results, with energy prices up about 28%,
precious metals prices rising only 2% and base metals prices falling over 6%.
Your Fund has been primarily (85-90%) invested in the better performing hard
asset equities during the year rather than in the underlying commodities.**
Slowing economic growth prompted us to adopt a defensive strategy throughout
most of the year, reducing positions in those sectors most affected by
macroeconomic trends and most susceptible to volatility, such as base metals
and forest products and paper. Instead, the portfolio emphasized the lower
risk, core real estate and energy sectors, both of which had strong
fundamentals.
Energy, which was your Fund's largest sector allocation for much of the year
(ranging from 20-33% of the portfolio), was the best performing hard asset
sector in 1995. Energy stocks gained 19.6% overall, while energy commodities
rose 28%. Much of this performance came during the fourth quarter when colder-
than-anticipated weather combined with low inventories caused price spikes.
Natural gas futures rose to all-time highs. Crude oil prices also rose,
benefiting from the cold weather, supply disruptions and an announcement by
OPEC that it will maintain the current level of the production quota. In terms
of sub-sector performance, oil service companies were the top performers,
followed by exploration and production companies, and finally integrated energy
companies.
The commercial real estate markets in the United States improved materially in
1995 and U.S. equity REITs delivered a total return of approximately 15%. The
allocation to the sector, which began the year at approximately 5%, was
increased throughout the year, and totaled approximately 26% of portfolio
investments by year end. Fundamentals in the hotel, office and industrial
sectors of this industry have been improving dramatically as vacancy rates
fall, new construction remains low and demand continues to increase, resulting
in improved earnings. A high dividend yield and direct benefits from declining
interest rates made this sector a good defensive strategy during 1995.
Both the forest product and paper and the base metals sectors are particularly
affected by macroeconomic trends. We began the year with fairly sizable
allocations to both sectors (approximately one-third of the portfolio in the
paper sector and about 18% in base metals) as some of the economic momentum
enjoyed during 1994 carried over into 1995. And, during the first half,
performance in these sectors was solid. However, slowing growth began to take
effect and demand, and thus, prices, weakened and we significantly decreased
these allocations, ending the year with only about 5% in each. Despite gains of
over
<PAGE>
9% for paper stocks at midyear, they ended 1995 down over 2% while base metals
stocks gained 8% for the year. Among the base metals, however, some
outperformed--aluminum stocks, which comprise our largest base metals
holdings, ended the year up 15%.
The precious metals market was relatively quiet in 1995 (the price of gold
bullion rose 1.3% for the year), but supply/demand fundamentals continue to be
very positive. This became evident in late November when gold lease rates
soared. We believe this illustrated the strength of gold market fundamentals--
that market demand had easily absorbed the record supply (caused largely by
substantial forward selling by the mines) throughout the year without price
weakness. In the equity markets, volatility was higher and timing and country
choices were critical. After a difficult January, shares rallied throughout
the spring and into summer, reaching a high in July. Shares then sold off in
dramatic fashion until the beginning of November and ended the year with a
final rally. The North American shares, which accounted for our entire gold
position throughout much of the year, were the best performers, while the
South Africans performed poorly (gold equities worldwide were up 5.9%). The
portfolio's allocation to this sector ranged between 7-20% throughout the
year, ending 1995 at approximately 14% of the portfolio.
THE OUTLOOK
We believe the outlook for hard assets is positive for several reasons.
Although recently economic growth has been sluggish, most forecasters are
predicting positive, albeit moderate global economic growth in 1996 and 1997,
driven by hard asset-intensive developing economies such as those in Asia (ex-
Japan), which are expected to continue to grow at an annual rate of 6-8% for
several years. Economic growth tends to directly benefit hard assets as
commodity demand, and thus, prices, increase. Many hard asset sectors are
already experiencing strong supply/demand fundamentals--base metals, for
example, are currently at a deficit. Aggressive monetary easing may reverse
current optimism with regard to financial assets in the year to come. In
addition, at current valuations hard assets are very attractive relative to
financial assets.
All of these factors bode well for hard assets in general. However, as
sluggish growth continues short-term, the portfolio remains defensively
positioned, emphasizing the energy and real estate sectors, which still offer
surprisingly attractive valuations even after last year's positive
performance. As we start to see signs of a pick-up, we are prepared to
increase allocations to sectors that would have a higher upside in such an
environment, such as base metals, precious metals and commodities.
We appreciate your participation in the Global Hard Assets Fund and we look
forward to helping you meet your investment objectives in the future.
[Photo Appears Here] [Photo Appears Here]
/s/ John C. van Eck /s/ Derek S. van Eck
John C. van Eck Derek S. van Eck
Chairman Portfolio Manager
January 22, 1996
* This fund grouping was compiled by Van Eck since there is no existing
natural resource/hard asset sector (that excludes specific sector funds). The
list includes every general natural resource and/or hard asset fund tracked
by Micropal, Inc., a mutual fund evaluation service.
** The Fund may invest up to 25% of assets in commodities.
- -------------------------------------------------------------------------------
Performance Record as of 12/31/95
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Average Annual After Maximum Before Sales
Total Return Sales Charge* Charge
- ---------------------------------------------------------
<S> <C> <C>
A Shares-Life (since 11/2/94) 11.2% 16.0%
- ---------------------------------------------------------
1 year 14.4% 20.1%
- ---------------------------------------------------------
C Shares-Life (since 11/2/94) 15.5% 16.5%
- ---------------------------------------------------------
1 year 19.9% 20.9%
- -------------------------------------------------------------------------------
</TABLE>
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.
The Advisor is currently waiving all expenses of the Fund. Had the Fund
incurred expenses, investment returns would have been reduced.
* A shares: maximum sales charge = 4.75%.
C shares: 1% redemption charge, 1st year.
<PAGE>
Global Hard Assets Fund Investment Portfolio December 31, 1995
<TABLE>
<CAPTION>
NO. OF SHARES COMMON STOCKS VALUE (NOTE 1)
- -------------------------------------------------
<C> <S> <C>
AUSTRALIA: 4.27%
GOLD MINING: 1.62%
15,000 Acacia Resources $ 26,962
Ltd.+
7,000 Sons Of Gwalia 38,474
Ltd. ----------
65,436
----------
MINING: 1.00%
19,000 Queensland 40,079
Nickel Industry ----------
Ltd.+
OIL INTEGRATED--INTERNATIONAL:
0.77%
2,200 Broken Hill 31,047
Proprietary Co. ----------
Ltd.
PAPER & FOREST PRODUCTS: .88%
5,000 Amcor Ltd. 35,281
----------
171,843
----------
CANADA: 8.11%
CHEMICALS--MISCELLANEOUS: 0.88%
500 Potash Corp. of 35,437
Saskatchewan ----------
Inc.
GOLD MINING: 3.25%
2,250 Barrick Gold 59,344
Corp.
4,000 Cambior Inc. 43,582
2,000 Pegasus Gold 27,750
Inc.+ ----------
130,676
----------
MINING--MISCELLANEOUS: 2.31%
2,500 Cameco Corp. 92,932
----------
OIL & GAS EXPLORATION: 0.72%
10,000 Barrington 28,932
Petroleum Ltd.+ ----------
PAPER & FOREST PRODUCTS: 0.95%
3,000 Stone 38,455
Consolidated ----------
Corp.+
326,432
----------
INDONESIA: 0.36%
MINING--MISCELLANEOUS: 0.36%
1,200 P.T. Tambang 14,580
Timah (GDR ----------
144A)+
NETHERLANDS: 5.06%
OIL INTEGRATED--INTERNATIONAL:
3.16%
900 Royal Dutch 127,012
Petroleum Co.-- ----------
NY Registry (ADR)
REAL ESTATE: 1.90%
3,000 Renaissance 76,500
Hotel Group ----------
N.V.+
203,512
----------
NEW ZEALAND: 1.50%
PAPER & FOREST PRODUCTS: 1.50%
28,000 Carter Holt 60,360
Harvey ----------
NORWAY: 3.43%
MISCELLANEOUS: 0.94%
4,000 Alvern Norway 37,802
A/S+ ----------
OIL INTEGRATED--INTERNATIONAL:
1.25%
1,200 Norsk Hydro AS 50,250
(ADR) ----------
OIL/GAS EQUIPMENT & SERVICES:
1.24%
2,000 Petroleum Geo- 50,000
Services AS ----------
(ADR)+
138,052
----------
SPAIN: 1.22%
OIL INTEGRATED--INTERNATIONAL:
1.22%
1,500 Repsol S.A. (ADR) 49,313
----------
SWEDEN: 1.49%
PAPER & FOREST PRODUCTS: 1.49%
5,000 Stora 59,811
Kopparbergs 'B' ----------
Free
UNITED STATES: 53.11%
ALUMINUM: 1.16%
3,000 Commonwealth 46,500
Aluminum Corp. ----------
COPPER: 0.69%
1,000 Magma Copper 27,875
Co.+ ----------
GOLD MINING: 5.41%
2,000 Battle Mountain 16,750
Gold Co.
3,000 Homestake Mining 46,875
Co.
</TABLE>
<TABLE>
<CAPTION>
NO. OF SHARES COMMON STOCKS VALUE (NOTE 1)
- ------------------------------------------------
<C> <S> <C>
3,000 Newmont Mining $ 135,750
Corp.
1,500 Santa Fe Pacific 18,187
Gold Corp. ----------
217,562
----------
NATURAL GAS--DIVERSIFIED: 1.42%
1,500 Enron Corp. 57,187
----------
OIL & GAS EXPLORATION: 8.59%
1,000 Anadarko 54,125
Petroleum Corp.
1,500 Apache Corp. 44,250
2,750 Cairn Energy USA 38,500
Inc.+
1,000 Louisiana Land & 42,875
Exploration Co.
1,700 Nuevo Energy 38,038
Co.+
2,400 Texas Meridian 32,700
Resources Corp.+
1,000 Triton Energy 57,375
Corp.+
800 Union Pacific 20,300
Resources Group
Inc.
1,000 United Meridian 17,375
Corp.+ ----------
345,538
----------
OIL INTEGRATED--DOMESTIC: 5.42%
2,000 USX-Marathon 39,000
Group
1,000 Amoco Corp. 71,875
500 Exxon Corp. 40,063
600 Mobil Corp. 67,200
----------
218,138
----------
OIL/GAS EQUIPMENT & SERVICES:
5.42%
1,700 Baker Hughes 41,437
Inc.
1,500 Camco 42,000
International
Inc.+
1,500 Dresser 36,563
Industries, Inc.
2,000 Ensco 46,000
International
Inc.+
2,500 Reading & Bates 37,500
Corp.+
500 Weatherford 14,438
Enterra Inc. ----------
217,938
----------
PAPER & FOREST PRODUCTS: 0.97%
1,350 Buckeye 29,700
Cellulose Corp.+
1,000 Jefferson 9,500
Smurfit Corp.+ ----------
39,200
----------
REAL ESTATE INVESTMENT TRUST:
24.03%
3,500 Avalon 75,250
Properties, Inc.
2,500 Beacon 57,500
Properties Corp.
3,500 Carr Realty 85,312
Corp.
1,400 CBL & Associates 30,450
Properties
2,500 Duke Realty 78,437
Investments,
Inc.
2,000 Equity 61,250
Residential
Properties Trust
1,000 Factory Stores 13,125
of America
2,000 First Industrial 45,000
Realty Trust,
Inc.
2,000 Oasis 45,500
Residential,
Inc.
5,000 Patriot American 128,750
Hospitality Inc.
1,000 Post Properties, 31,875
Inc.
2,000 Public Storage 38,000
Inc.
3,000 ROC Communities 72,000
Inc.
4,783 Security Capital 83,703
Industrial Trust
1,515 Security Capital 29,921
Pacific Trust
2,500 Sovran Self 65,937
Storage, Inc.
1,000 Spieker 25,125
Properties, Inc. ----------
967,135
----------
2,137,073
----------
TOTAL COMMON STOCKS: 78.55%
(cost: $2,835,303) 3,160,976
----------
<CAPTION>
PRINCIPAL SHORT-
AMOUNT TERM OBLIGATIONS
- ------------------------------------------------
<C> <S> <C>
$500,000 U.S. Treasury
Bill due 1/11/96
Interest yield
4.70% 499,347
175,000 American Express
Corp. C.P. due
1/2/96 Interest
Yield of 5.65% 174,973
189,000 General Electric
Capital Corp.
C.P. due 1/2/96
Interest Yield
of 5.55% 188,971
----------
TOTAL SHORT-TERM OBLIGATIONS:
21.45%
(amortized cost: $863,291) 863,291
----------
TOTAL INVESTMENTS: 100% (Cost: $4,024,267
$3,698,594) ==========
</TABLE>
- -------
+ Non-income producing
See Notes to Financial Statements.
<PAGE>
Global Hard Assets Fund Financial Statements
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1995
<TABLE>
<S> <C>
ASSETS:
Investments at value (cost, $3,698,594) (Note 1) $4,024,267
Cash 3,718
Cash--initial margin for futures (Note 6) 7,000
Receivables:
Dividends 9,960
Securities sold 91,856
Capital shares sold 65,046
From Advisor 93,519
Due from broker-variation margin (Note 6) 328
Deferred organization costs and other assets 30,447
----------
Total assets 4,326,141
----------
LIABILITIES:
Payables:
Securities purchased 184,878
Due to bank 38,260
Dividends payable 22,593
Deferred organization costs 34,113
Accounts payable 42,560
Open forward currency contracts (Note 7) 319
Miscellaneous 2,696
----------
Total liabilities 325,419
----------
NET ASSETS $4,000,722
==========
CLASS A
Net asset value and redemption price per share
($3,819,708/357,548) $10.68
======
Maximum offering price per share (NAV/(1-maximum sales
commission)) $11.21
======
CLASS C
Net asset value, offering price and redemption price per share
($181,014/16,823)
(Redemption may be subject to a contingent deferred sales charge
within the first year of ownership) $10.76
======
Net assets consist of:
Aggregate paid in capital $3,674,868
Unrealized appreciation of investments, futures and foreign
denominated assets, liabilities and foreign forward exchange
contracts 325,939
Cumulative realized losses (85)
----------
$4,000,722
==========
</TABLE>
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1995
<TABLE>
<S> <C> <C>
INCOME:
Dividends (less foreign taxes withheld of $2,280) $ 73,267
Interest income 19,017
---------
Total income $92,284
EXPENSES:
Management (Note 2) 29,887
Distribution Class A (Note 4) 14,547
Distribution Class C (Note 4) 664
Administration (Note 2) 750
Transfer agency 42,953
Custody 3,099
Registration 10,560
Professional 16,100
Reports to shareholders 15,140
Amortization of deferred organization costs 7,894
Other 2,026
---------
Total expenses 143,620
Expenses assumed by the Advisor (Note 2) (143,620)
---------
Net expenses 0
-------
Net investment income 92,284
</TABLE>
<TABLE>
<S> <C> <C>
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ( NOTE
3)
Realized gain from security transactions (excluding
short-term securities):
Proceeds from sales $4,452,007
Cost of securities sold 4,341,778
----------
Realized gain $110,229
Realized loss from futures contracts (8,549)
Realized loss from options (3,178)
Realized gain from foreign currency transactions 26,126
Change in unrealized appreciation of foreign denominated
assets, liabilities and foreign forward exchange
contracts 163
Change in unrealized appreciation of investments and
futures 338,597
--------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $555,672
========
</TABLE>
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE PERIOD
ENDED NOVEMBER 2, 1994+
DECEMBER 31, TO
1995 DECEMBER 31, 1994
------------ -----------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income $ 92,284 $ 1,594
Realized gain from security
transactions 110,229 --
Realized loss from futures contracts (8,549) --
Realized loss from options (3,178) --
Realized gain from foreign currency
transactions 26,126 83
Change in unrealized appreciation of
foreign denominated assets,
liabilities and foreign forward
exchange contracts 163 28
Change in unrealized appreciation
(depreciation) of investments and
futures 338,597 (12,849)
----------- ----------
Increase (decrease) in net assets
resulting from operations 555,672 (11,144)
----------- ----------
----------- ----------
Dividends to shareholders from:
Net investment income:
Class A Shares (208,703) (2,259)
Class C Shares (8,428) (9)
----------- ----------
(217,131) (2,268)
----------- ----------
338,541 (13,412)
----------- ----------
Capital share transactions (Note 5):
Net proceeds from sales of shares:
Class A Shares 3,672,872 1,487,999
Class C Shares 161,154 9,431
----------- ----------
3,834,026 1,497,430
----------- ----------
Reinvestment of dividends:
Class A Shares 186,116 --
Class C Shares 8,422 --
----------- ----------
194,538 --
----------- ----------
Cost of shares reacquired:
Class A Shares (1,792,934) (55,948)
Class C Shares (609) (910)
----------- ----------
(1,793,543) (56,858)
----------- ----------
Increase in net assets resulting from
capital share transactions 2,235,021 1,440,572
----------- ----------
Total increase in net assets 2,573,562 1,427,160
NET ASSETS:
Beginning of period 1,427,160 --
----------- ----------
End of period (including
distributions in excess of net
investment income of $0 and $591,
respectively) $ 4,000,722 $1,427,160
=========== ==========
</TABLE>
- -------
+ Commencement of operations.
See Notes to Financial Statements.
<PAGE>
- -------------------------------------------------------------------------------
Global Hard Assets Fund
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period
<TABLE>
<CAPTION>
CLASS A CLASS C
------------------------------------- -------------------------------------
FOR THE PERIOD FOR THE PERIOD
NOVEMBER 2, 1994(a) NOVEMBER 2, 1994(a)
YEAR ENDED TO YEAR ENDED TO
DECEMBER 31, 1995 DECEMBER 31, 1994 DECEMBER 31, 1995 DECEMBER 31, 1994
----------------- ------------------- ----------------- -------------------
<S> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 9.41 $9.53 $ 9.41 $9.53
------ ------ ------ -----
Income from Investment
Operations:
Net Investment Income+. 0.32 0.010 0.34 0.01
Net Gain (Loss) on
Investments (both
realized and
unrealized)........... 1.57 (0.115) 1.63 (0.12)
------ ------ ------ -----
Total from Investment
Operations............. 1.89 (0.105) 1.97 (0.11)
------ ------ ------ -----
Less Distributions:
Dividends from Net
Investment Income..... (.62) (0.015) (.62) (.01)
------ ------ ------ -----
Net Asset Value, End of
Period................. $10.68 $9.41 $10.76 $9.41
====== ====== ====== =====
Total Return (b)........ 20.09% (1.10%) 20.94% (1.20%)
- -----------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY
DATA
Net Assets, End of
Period (000)........... $3,820 $1,419 $181 $8
Ratio of Expenses to
Average Net Assets (c). 0% 0.15%* 0% 0.56%*
Ratio of Net Investment
Income to Average Net
Assets................. 3.08% 0.84%* 3.30% 0.53%*
Portfolio Turnover Rate. 179.33% 0% 179.33% 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 calculation 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 C shares would have been
4.05%, 3.40%*, 37.88% and 39.49%*, 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 Hard Assets 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. Forward currency contracts are valued
at the spot currency date plus an amount ("points") which reflects the
differences in interest rates between the U.S. and 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. 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 and the
appreciation (depreciation) attributable to foreign currency fluctuations
on other foreign denominated assets and liabilities are recorded as net
realized and unrealized gains and losses from foreign currency
transactions, respectively.
D. 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.
E. DISTRIBUTIONS TO SHAREHOLDERS--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, short-term capital
gains and Post-October losses. The effect of these differences for the year
ended December 31, 1995 decreased accumulated distributions in excess of
net investment income by $125,438, decreased cumulative realized gains by
$124,713 and decreased aggregate paid in capital by $725.
F. DEFERRED ORGANIZATION COSTS--Deferred organization costs are being
amortized over a period of five years beginning on November 2, 1994
(commencement of operations).
NOTE 2--Van Eck Associates Corporation (the "Advisor") earned fees of $29,887
for investment management and advisory services. The fee was based on an
annual rate of 1% of the Fund's average daily net assets. Van Eck Associates
Corporation agreed to waive its management fees and administrative fees for
the year ended December 31, 1995. Van Eck Associates Corp. also agreed to
assume all distribution expenses for the year ended December 31, 1995. Van Eck
Associates Corp. incurred and waived $208 of transfer agency expenses. Van Eck
Associates Corp. also agreed to assume all other expenses for the year ended
December 31, 1995. Van Eck Securities Corporation received $8,060 for the year
ended
<PAGE>
Global Hard Assets Fund
- -------------------------------------------------------------------------------
December 31, 1995 from commissions earned on sales of Class A shares after
deducting $44,788 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 December 31,
1995, Van Eck Associates Corporation owned 30.95% of the outstanding Class A
shares of beneficial interest.
NOTE 3--Purchases of investments other than short-term obligations aggregated
$5,860,270 for the year ended December 31, 1995. For federal income tax
purposes the cost of investments owned at December 31, 1995 was $3,698,594. As
of December 31, 1995 net unrealized appreciation for federal income tax
purposes aggregated $325,673 of which $367,138 related to appreciated
investments and $41,465 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 12b-1 fees will be
expensed by the Fund over the course of the first twelve months from the time
of purchase. Should the payments to the brokers made by the Fund exceed, on an
annual basis, 1% of average daily net assets, VESC will reimburse the Fund for
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.
All distribution fees and contingent deferred sales charges have been waived
by the Fund for Class C shares until May 1, 1996 and VESC has agreed to assume
the Fund's obligation to pay the dealers. No payments have been made for the
year ended December 31, 1995.
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 November
2, 1994 through March 31, 1996 in the event the Plan is terminated, unless the
Board of Trustees determines that reimbursement of the carried forward amounts
is appropriate. The accumulated amount of excess distribution expenses
incurred over the Annual Limitations as of December 31, 1995, was $109,828 for
Class A shares and $78,838 for Class C shares.
NOTE 5--SHARES OF BENEFICIAL INTEREST ISSUED AND REDEEMED (unlimited number of
$.001 par value shares authorized):
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR NOVEMBER 2, 1994+
ENDED TO
DECEMBER 31, 1995 DECEMBER 31, 1994
----------------- -----------------
CLASS A
<S> <C> <C>
Shares sold 360,738 156,803
Shares reinvested 17,425 --
-------- -------
378,163 156,803
Shares reacquired (171,459) (5,959)
-------- -------
Net increase 206,704 150,844
======== =======
<CAPTION>
CLASS C
<S> <C> <C>
Shares sold 15,208 991
Shares reinvested 783 --
-------- -------
15,991 991
Shares reacquired (61) (98)
-------- -------
Net increase 15,930 893
======== =======
</TABLE>
- -------
+ Commencement of operations.
NOTE 6--FUTURES CONTRACTS:
As of December 31, 1995 the Fund was long five Lead futures contracts which
expire March 1996 with a contract value of $89,625 and five Silver contracts
which expire March 1996 with a contract value of $129,750. The long contracts
were acquired in lieu of a direct acquisition of the commodities. The Advisor
believes these synthetic positions are a duplication of the purchases of the
commodities and believes the futures contracts are more advantageous for
operational and liquidity reasons than a direct acquisition of the
commodities. As of December 31, 1995, $75 is the unrealized appreciation of
the futures contracts. In the remote chance the broker cannot fulfill its
obligation, the Fund could lose any variation margin due it. Subsequent
payments are made or received each day dependent upon the daily fluctuations
in the value of the underlying commodity. Risks may be caused by an imperfect
correlation between the movements in the price of the futures contract and the
price of the underlying commodity.
NOTE 7--FORWARD CURRENCY CONTRACTS:
The Fund bought and sold forward currency contracts to settle purchases and
sales of foreign denominated securities. The Fund may incur additional risk
from investments in forward currency contracts if the counterparty is unable
to fulfill its obligations or there are unanticipated movements of the foreign
currency relative to the U.S. dollar. Realized and unrealized gains and losses
from forward currency contracts are included in realized and unrealized gain
(loss) from foreign currency transactions.
At December 31, 1995, the Fund had the following outstanding forward foreign
currency contracts:
<TABLE>
<CAPTION>
VALUE AT
SETTLEMENT CURRENT UNREALIZED
CONTRACTS DATE VALUE DEPRECIATION
--------- ---------- ------- ------------
<S> <C> <C> <C>
FOREIGN CURRENCY BUY CONTRACTS
AUD 53,882 expiring 1/05/96 $40,150 $40,021 $129
NZD 92,758 expiring 1/09/96 60,623 60,594 29
FOREIGN CURRENCY SALES CONTRACTS
NOK 224,983 expiring 1/03/96 35,277 35,438 161
----
$319
====
</TABLE>
NOTE 8--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
governmental supervision and regulation. Foreign investments may also be
subject to foreign taxes, dividend collection fees and settlement delays.
The Fund may concentrate its investments in companies which are significantly
engaged in the exploration, development, production or distribution of
precious metals, ferrous and non-ferrous metals, oil and gas, forest products,
real estate and other non-agricultural commodities. Since the Fund may so
concentrate, it may be subject to greater risks and market fluctuations than
other more diversified portfolios.
<PAGE>
- -------------------------------------------------------------------------------
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 Hard Assets Fund (the
"Fund") (one of the series constituting the Van Eck Funds) as of December 31,
1995, and the related statement of operations for the year then ended, the
statements of changes in net assets and the financial highlights for the year
then ended and the period November 2, 1994 (commencement of operations) to
December 31, 1994. 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 based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits 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 Hard Assets 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 and the financial highlights for the year then ended and the period
November 2, 1994 (commencement of operations) to December 31, 1994, in
conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
New York, New York
February 12, 1996
<PAGE>
December 31, 1995
Van Eck
- --------------------
Global
- --------------------
Hard
- --------------------
Assets
- --------------------
Fund
- --------------------
Annual
- --------------------
Report
- --------------------
[LOGO OF VAN ECK GLOBAL]
Van Eck Global
THE UNUSUAL FUNDS/sm/
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 & Money Funds prospectus, please call the number listed below.
Please read the prospectus before investing.
[LOGO OF VAN ECK GLOBAL]
Van Eck Global
THE UNUSUAL FUNDS/sm/
Van Eck Securities Corporation
99 Park Avenue, New York, N.Y. 10016
For account assistance please call (800) 544-4653
B96-0123-002
