<PAGE>
Van Eck Global Income Fund
--------------------------------------
1996 Semi-Annual Report
Dear Fellow Shareholder:
After achieving exceptional returns in 1995, the U.S. bond market retreated
during the first half of 1996 as economic growth proved stronger than expected.
Most European bond markets achieved very moderate returns, but U.S. dollar
strength versus most currencies continued, lowering gains for U.S. investors.
For the first six months of 1996, the Global Income Fund had a total return of
- -2.2%.
BOND MARKET REVIEW
After a final cut in the federal funds target rate in the first quarter, U.S.
economic growth indicators came in stronger than expected and interest rates
began to rise (while bond prices began to decline). Rates on long-term Treasury
bonds, for example, rose from 6.15% at the beginning of the year to a high of
over 7% in June, ending the second quarter at 6.87%. In anticipation of
continued growth and doubtful that the Federal Reserve would continue the rate-
cutting trend that began in 1995, we adopted a defensive position in the
beginning of the year, favoring short-term bonds and lowering the Fund's
duration to approximately 3.0 years. We also decreased the Fund's U.S. bond
position to approximately 33% of assets, after having begun the year at over
40%.
In Europe, sluggish economic growth and a low inflation scenario (an ideal
environment for bonds) prompted interest rate reductions, and most European
markets achieved moderately positive returns in local currency terms. The
peripheral markets, such as Italy, Spain and Sweden, outperformed the core
European bond markets for the first six months of the year, providing good
returns (in both local currency and dollar terms). These countries continued to
get their fiscal affairs in order as they attempt to meet the terms for
European Monetary Union (EMU) in 1997, and their bond yields converged further
toward those of their core neighbors. In anticipation of these moves, in the
beginning of the second quarter we began to reduce core bond positions, such as
those in the Netherlands and Denmark, while increasing the Italian bond
position and maintaining the Spanish bond allocation.
We added substantial Canadian and UK bond positions to the portfolio during the
first half of the year. Both bond markets have witnessed good performance
recently, although total gains for the first six months were slight. The
Canadian government remains on track to eliminate the budget deficit by the
year 2000. The UK appears to have already discounted a probable Labour Party
victory in the upcoming elections and UK bonds have benefited from investor
skepticism regarding the success of EMU.
We liquidated the Fund's already slight position in Japanese bonds early in the
first quarter given expectations for a strong economic recovery after a long-
lived recession. Although economic growth rates were indeed high in the first
half (at an extraordinary 12% on an annualized basis), bond buying by the Bank
of Japan has supported prices despite fears of interest rate hikes. Japanese
bonds showed flat performance for the first half in local currency terms (with
negative returns in dollar terms).
<PAGE>
CURRENCY REVIEW
The U.S. dollar continued its climb against most major foreign currencies.
This strength rendered many positive bond returns negative for U.S. investors.
As a defensive measure, we have maintained a relatively large U.S. cash (and
cash equivalents) position in the Fund, ending the second quarter with an
allocation of approximately 23%.
THE OUTLOOK
Going forward we expect a continued revival of global growth as Japanese
reflation and European monetary easing take hold. Given this outlook, in our
opinion it will continue to be a challenging year for bonds, and we remain
defensively positioned with a fairly high cash allocation and a low average
portfolio duration. (Our perceptions of global growth, however, should be
tempered by the fragility of the global recovery, particularly to shocks such
as stock market declines or another EMU scare.) As for currencies, the dollar
could come under pressure as European and Asian economies gather steam
relative to the U.S. and potential pressures with EMU build. We are prepared
to maximize exposure to foreign currencies should their strength re-emerge.
We appreciate your participation in the Global Income Fund and look forward to
helping you meet your investment objectives in the future.
[Photo Appears Here] [Photo Appears Here]
/s/ John C. van Eck /s/ Madis Senner
John C. van Eck Madis Senner
Chairman Portfolio Manager
July 18, 1996
- -------------------------------------------------------------------------------
Performance Record as of 6/30/96
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
After Maximum
Average Annual Sales Charge Before Sales
Total Return of 4.75% Charge
- ----------------------------------------------------------
<S> <C> <C>
A shares--Life (since 4/30/87) 7.8% 8.4%
- ----------------------------------------------------------
5 year 5.0% 6.1%
- ----------------------------------------------------------
1 year (4.6)% 0.2%
- ----------------------------------------------------------
</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.
Note: B shares are no longer publicly offered.
<PAGE>
Global Income Fund
Investment Portfolio June 30, 1996 (unaudited)
<TABLE>
<CAPTION>
COUPON OR
INTEREST MATURITY
BONDS AND NOTES PRINCIPAL AMOUNT YIELD DATE VALUE (NOTE 1)
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CANADA: 9.2%
Canadian Government CAD 7,200,000 8.75% 12/01/05 $ 5,682,196
Canadian Government 3,350,000 7.50% 3/01/01 2,506,391
-----------
8,188,587
-----------
GERMANY: 10.2%
Federal Republic of
Germany DEM 5,100,000 7.50% 11/11/04 3,580,060
Federal Republic of
Germany 8,000,000 7.375% 1/03/05 5,569,830
-----------
9,149,890
-----------
ITALY: 6.3%
Republic of Italy ITL 4,400,000,000 10.50% 9/01/05 3,090,826
Republic of Italy 3,850,000,000 8.50% 4/01/99 2,525,053
-----------
5,615,879
-----------
SPAIN: 5.6%
Kingdom of Spain ESP 170,000,000 10.90% 8/30/03 1,486,215
Kingdom of Spain 455,000,000 7.40% 7/30/99 3,527,159
-----------
5,013,374
-----------
UNITED KINGDOM: 12.2%
United Kingdom
Treasury Note GBP 4,000,000 7.50% 12/07/06 6,037,482
United Kingdom
Treasury Note 3,200,000 7.00% 11/06/01 4,887,427
-----------
10,924,909
-----------
UNITED STATES: 33.1%
J.P. Morgan USD 5,000,000 6.50% 6/30/97 5,016,100
U.S. Treasury Note* 3,000,000 8.75% 8/15/20 3,591,564
U.S. Treasury Note* 4,500,000 6.50% 8/15/05 4,434,611
U.S. Treasury Note* 5,000,000 6.25% 4/30/01 4,953,905
U.S. Treasury Note* 4,850,000 5.75% 10/31/00 4,725,718
U.S. Treasury Note* 4,000,000 5.625% 1/31/98 3,976,252
U.S. Treasury Note* 1,000,000 5.625% 2/15/06 927,032
U.S. Treasury Note* 2,000,000 5.50% 11/15/98 1,968,439
-----------
29,593,621
-----------
TOTAL BONDS AND NOTES: 76.6% (COST: $68,063,689) 68,486,260
-----------
<CAPTION>
INTEREST
YIELD
AT TIME MATURITY
SHORT-TERM OBLIGATIONS: 23.4% PRINCIPAL AMOUNT OF PURCHASE DATE
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Treasury Bill USD 16,500,000 4.40% 7/11/96 16,479,833
General Electric Capital Corp.
Commercial Paper 4,461,000 5.20% 7/01/96 4,461,000
-----------
Total Short-Term Obligations:
(amortized cost: $20,940,833) 20,940,833
-----------
TOTAL INVESTMENTS: 100% (cost: $89,004,522) $89,427,093
===========
</TABLE>
- -------
* These securities are segregated for forward currency contracts.
See Notes to Financial Statements.
<PAGE>
Global Income Fund Financial Statements (unaudited)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1996
<TABLE>
<CAPTION>
ASSETS:
<S> <C>
Investments at value (cost, $89,004,522) (Note 1) $89,427,093
Cash 134,931
Receivables:
Interest 1,917,821
Capital shares sold 6,022
Tax reclaims 2,682
Other 9,240
-----------
Total assets 91,497,789
-----------
LIABILITIES:
Payables:
Capital shares redeemed 799,773
Dividends payable 126,465
Accounts payable 311,735
Unrealized depreciation on forward foreign currency
contracts (Note 5) 128,057
-----------
Total liabilities 1,366,030
-----------
NET ASSETS $90,131,759
===========
CLASS A
Shares of beneficial interest outstanding 10,488,383
===========
Net asset value and redemption price per share $8.59
===========
Maximum offering price per share
(NAV/(1-maximum sales commission)) $9.00
===========
Net assets consist of:
Aggregate paid in capital 96,147,442
Unrealized appreciation of investments
and foreign currency transactions 283,829
Undistributed net investment income 741,908
Cumulative realized losses (7,041,420)
-----------
$90,131,759
===========
</TABLE>
- -----------------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1996
<S> <C> <C>
INCOME:
INTEREST INCOME $ 3,217,018
EXPENSES:
Management (Note 2) $ 371,818
Distribution Class A (Note 4) 123,939
Administration (Note 2) 55,285
Transfer agency 142,284
Custody 46,099
Professional 41,842
Reports to shareholders 26,622
Trustees fees 9,031
Other 46,775
---------
Total expenses 863,695
-----------
Net investment income 2,353,323
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
(NOTE 3)
Realized gain from security transactions 127,544
Realized loss from options (56,000)
Realized loss from foreign currency transactions (3,182,199)
Change in unrealized appreciation of foreign
denominated receivables and payables 488,976
Change in unrealized depreciation of forward
foreign currency contracts 9,069
Change in unrealized depreciation of investments (2,118,803)
-----------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(2,378,090)
===========
</TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR
JUNE 30, 1996 ENDED
(UNAUDITED) DECEMBER 31, 1995
------------- -----------------
<S> <C> <C>
DECREASE IN NET ASSETS:
Operations:
Net investment income $ 2,353,323 $ 6,820,689
Realized gain from security transactions 127,544 3,606,816
Realized gain from futures contracts -- (53,773)
Realized loss from options (56,000) (53,877)
Realized gain (loss) from foreign currency
transactions (3,182,199) 9,544,959
Change in unrealized appreciation of foreign
currency receivables and payables 9,069 (47,033)
Change in unrealized depreciation of forward
foreign currency contracts 488,976 (1,186,985)
Change in unrealized appreciation of
investments (2,118,803) 2,741,950
Change in unrealized appreciation of futures
contracts -- (47,444)
----------- ------------
Increase (decrease) in net assets resulting
from operations (2,378,090) 21,325,302
Dividends to shareholders from:
Net investment income
Class A (2,346,147) (7,685,453)
Class B -- (9,150)
----------- ------------
-- (7,694,603)
----------- ------------
Capital share transactions:
Net proceeds from sales of shares:
Class A Shares 5,185,839 47,072,009
Class B Shares -- 540,515
----------- ------------
5,185,839 47,612,524
----------- ------------
Reinvestment of dividends:
Class A Shares 1,577,957 5,356,995
Class B Shares -- 4,731
----------- ------------
1,577,957 5,361,726
----------- ------------
Cost of shares reacquired:
Class A Shares (24,283,138) (90,865,479)
Class B Shares -- (1,007,412)
----------- ------------
(24,283,138) (91,872,891)
----------- ------------
Decrease in net assets resulting from capital
share transactions (17,519,342) (38,898,641)
----------- ------------
Total decrease in net assets (22,243,579) (25,267,942)
NET ASSETS:
Beginning of period 112,375,338 137,643,280
----------- ------------
End of period (including undistributed net
investment income of $741,908 and $734,732,
respectively) $90,131,759 $112,375,338
=========== ============
</TABLE>
See Notes to Financial Statements.
<PAGE>
Global Income Fund Financial Statements
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period
<TABLE>
<CAPTION>
CLASS A
-----------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED EIGHT MONTHS
JUNE 30, YEAR ENDED DECEMBER 31, ENDED YEAR ENDED APRIL 30,
1996 --------------------------- DECEMBER 31, ------------------------------------------------
(UNAUDITED) 1995 1994 1993 1992 1992 1991 1990(c) 1989(c) 1988(c)
----------- -------- -------- ---- ---- -------- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, $9.00 $8.15 $8.96 $9.28 $9.91 $9.75 $9.44 $9.10 $10.09 $ 9.25
Beginning of Period.... ----- ----- ----- ----- ----- ----- ----- ----- ------ ------
Income from Investment
Operations:
Net Investment Income.. 0.15 0.47 0.55+ 0.75 0.51 0.770 0.99 0.953 0.86 0.67
Net Gain (Loss) on
Securities (both
realized and (0.35) 0.92 (0.80) (0.31) (0.50) 0.460 0.51 0.347 (0.47) 0.53
unrealized)........... ----- ---- ----- ----- ----- ------ ----- ----- ------ ------
Total from Investment (0.20) 1.39 (0.25) 0.44 0.01 1.230 1.50 1.300 0.39 1.20
Operations............. ----- ---- ----- ----- ---- ------ ----- ----- ------ ------
Less Distributions:
Dividends from Net
Investment Income(b).. (0.21) (0.54) -- (0.05) (0.47) (0.853) (0.96) (0.944) (1.11) (0.35)
Distributions from
Capital Gains......... -- -- -- (0.01) (0.17) (0.217) (0.23) (0.016) (0.27) (0.01)
Distributions from
Aggregate Paid In -- -- (0.56) (0.70) -- -- -- -- -- --
Capital............... ----- ----- ----- ----- ----- ------ ----- ----- ------ ------
Total Distributions..... (0.21) (0.54) (0.56) (0.76) (0.64) (1.070) (1.19) (0.960) (1.38) (0.36)
----- ----- ----- ----- ----- ------ ----- ------ ------ ------
Net Asset Value, End of $8.59 $9.00 $8.15 $8.96 $9.28 $9.91 $9.75 $9.44 $ 9.10 $10.09
Period................. ===== ===== ===== ===== ===== ====== ===== ===== ====== ======
Total Return (a)........ (2.23%) 17.27% (2.79%) 4.90% (0.18%) 13.19% 16.49% 15.00% 4.17% 13.30%
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of
Period (000)........... $90,132 $112,375 $137,242 $251,725 $290,961 $187,241 $84,016 $39,592 $36,383 $27,646
Ratio of Expenses to
Average Net Assets..... 1.74%++ 1.52% 1.39% 1.27% 1.32%++ 1.39% 1.61% 1.42%* 0.40%* 0.00%*
Ratio of Net Investment
Income to Average Net
Assets................. 4.75%++ 5.21% 6.55% 8.01% 7.58%++ 7.92% 10.00% 10.27% 9.10% 9.20%
Portfolio Turnover Rate. 97.0% 269.5% 148.4% 108.6% 44.2% 108.9% 276.1% 289.7% 386.3% 306.0%
</TABLE>
- -----------
(a) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of dividends and
distributions 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 returns calculated for a period of less than one
year are not annualized.
(b) Due to a change in the dividend declaration policy, thirteen monthly
dividends were recorded in the fiscal year ended April 30, 1992.
(c) Not covered by Report of Independent Accountants.
* The expense ratios would have been 1.60%, 1.56% and 1.93%, respectively, if
expenses were not assumed by the Advisor.
+ Based on average shares outstanding.
++ Annualized.
See Notes to Financial Statements.
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Van Eck Funds (the "Trust"), organized as a Massachusetts business trust on
April 3, 1985, is registered under the Investment Company Act of 1940. The
following is a summary of significant accounting policies consistently
followed by the Global Income Fund series (formerly World Income Fund), a non-
diversified fund (the "Fund") of the Trust in the preparation of its financial
statements. On April 25, 1995 all of Global Income Fund Class B shares were
redeemed. The policies are in conformity with generally accepted accounting
principles. The preparation of financial statements in conformity with
generally accepted accounting principals requires the use of management's
estimates and the actual results could differ.
A. SECURITY VALUATION--Securities traded on national exchanges and traded in
the NASDAQ National Market System are valued at the last sales prices
reported at the close of business on the last business day of the period.
Over-the-counter securities not included in the NASDAQ National Market
System and listed securities for which no sale was reported are valued at
the mean of the bid and asked prices. Short-term obligations are valued at
cost which with accrued interest approximates value. Forward foreign
currency contracts are valued at the spot currency rate plus an amount
("points") which reflects the differences in interest rates between the
U.S. and the foreign markets. Securities for which quotations are not
available are stated at fair value as determined by the Board of Trustees.
B. FEDERAL INCOME TAXES--It is the Fund's policy to comply with the provisions
of the Internal Revenue Code applicable to regulated investment companies
and to distribute all of its taxable income to its shareholders. Therefore,
no federal income tax provision is required.
C. CURRENCY TRANSLATION--Assets and liabilities denominated in foreign
currencies and commitments under forward currency contracts are translated
into U.S. dollars at the mean of the quoted bid and asked prices of such
currencies. 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 attributable to foreign currency
fluctuations on security transactions and other foreign denominated assets
and liabilities are recorded as net 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. OTHER--Security transactions are accounted for on the date the securities
are purchased or sold. Interest income is accrued as earned.
E. DISTRIBUTIONS TO SHAREHOLDERS--Distributions from net investment income and
realized gains, if any, are recorded on the ex-dividend date. Income and
capital gain distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
<PAGE>
Global Income Fund
- -------------------------------------------------------------------------------
F. USE OF DERIVATIVES INSTRUMENTS
OPTION CONTRACTS--The Fund may invest, for hedging and other purposes, in call
and put options on securities, currencies and commodities. Call and put
options give the Fund the right but not the obligation to buy (calls) or sell
(puts) the instrument underlying the option at a specified price. The premium
paid on the option, should it be exercised, will, on a call, increase the cost
of the instrument acquired and, on a put, reduce the proceeds received from
the sale of the instrument underlying the option. If the options are not
exercised, the premium paid will be recorded as a capital loss upon
expiration. The Fund may incur additional risk to the extent that the value of
the option contract does not correlate with the movements of the underlying
instrument.
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.
FUTURES CONTRACTS--The Fund may buy and sell financial futures contracts for
hedging purposes. When a Fund enters into a futures contract, it must make an
initial deposit ("initial margin") as a partial guarantee of its performance
under the contract. As the value of the futures contract fluctuates, the Fund
is required to make additional margin payments ("variation margin") to cover
any additional obligation it may have under the contract. In the remote chance
a broker cannot fulfill its obligation, the Fund could lose the variation
margin due to it. Risks may be caused by an imperfect correlation between the
movements in the price of the futures contract and the price of the underlying
instrument and interest rates. Gains and losses on futures contracts are
separately disclosed.
FORWARD CURRENCY CONTRACTS--The Fund may buy and sell forward currency
contracts to settle purchases and sales of foreign denominated securities. In
addition, the Fund may enter into forward currency contracts to hedge foreign
denominated assets. The Fund may incur additional risk from investments in
forward currency contracts if the counterparty is unable to fulfill its
obligations or there are unanticipated movements of the foreign currency
relative to the U.S. dollar. Realized and unrealized gains and losses from
forward currency contracts are included in realized and unrealized gain (loss)
from foreign currency transactions.
NOTE 2--Van Eck Associates Corporation earned fees of $371,818 for the six
months ended June 30, 1996 for investment management and advisory services.
The fee is based on an annual rate of .75 of 1% of the first $500 million of
average daily net assets, .65 of 1% on the next $250 million and .50 of 1% of
the excess over $750 million. Van Eck Securities Corporation received $6,090
for the six months ended June 30, 1996 from commissions earned on sales of
shares of beneficial interest of the Fund after deducting $33,961 allowed to
other dealers. In accordance with the advisory agreement, the Fund reimbursed
Van Eck Associates Corporation for costs incurred in connection with certain
administrative and operating functions. Certain of the officers and trustees
of the Trust are officers, directors or stockholders of Van Eck Associates
Corporation and Van Eck Securities Corporation.
NOTE 3--Purchases and proceeds from sales of investments, other than short-
term obligations, aggregated $99,602,166 and $78,398,747, respectively, for
the six months ended June 30, 1996. For federal income tax purposes the cost
of investments owned at June 30, 1996 was $68,063,689. As of June 30, 1996 net
unrealized appreciation for federal income tax purposes aggregated $422,571,
of which $1,291,750 related to appreciated investments and $869,179 related to
depreciated investments. As of December 31, 1995, the Fund had capital loss
carryforwards available to offset future capital gains expiring December 31,
2002 of $4,497,043.
NOTE 4--Pursuant to a Plan of Distribution (Rule 12b-1) the Fund accrues fees
of .25 of 1% of the average daily net assets for Class A shares. Fees charged
for the six months ended June 30, 1996 were $123,939 for Class A Shares. The
fees are intended to be used principally for payments to securities dealers
who have sold shares and service shareholder accounts of the Fund and the
remainder will be used for other actual promotion and distribution expenses
incurred by Van Eck Securities Corporation, the distributor.
NOTE 5--Shares of beneficial interest issued and redeemed:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED
1996 DECEMBER 31,
CLASS A (UNAUDITED) 1995
- ------- ----------- ------------
<S> <C> <C>
Shares sold 591,440 5,241,320
Reinvestment of dividends 181,833 2,155,721
---------- -----------
773,273 7,397,041
Shares reacquired (2,774,280) (23,817,073)
---------- -----------
Net decrease (2,001,007) 16,420,032
========== ===========
</TABLE>
<PAGE>
Global Income Fund
- -------------------------------------------------------------------------------
NOTE 6--At June 30, 1996 the Fund had the following outstanding forward
foreign currency contracts:
<TABLE>
<CAPTION>
VALUE AT UNREALIZED
SETTLEMENT CURRENT APPRECIATION
CONTRACTS DATE VALUE (DEPRECIATION)
- ---------------------------------- ----------- ----------- --------------
<S> <C> <C> <C>
FOREIGN CURRENCY PURCHASE CONTRACTS:
DEM 1,529,833
expiring 9/18/96 $ 1,009,791 $ 1,009,254 $ (537)
JPY 1,441,851,461
expiring 9/18/96 13,428,811 13,305,840 (122,971)
FOREIGN CURRENCY SALE CONTRACTS:
ITL 694,170,840
expiring 9/18/96 444,724 449,273 (4,549)
---------
$(128,057)
=========
</TABLE>
NOTE 7--Under normal market conditions, the Fund expects to invest at least
65% of its assets in debt securities. There is no limit on the amount the Fund
can invest in any one country or securities denominated in the currency of any
one country. Normally, the Fund will invest in at least three countries
besides the United States. 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 market value of debt securities generally varies in response to interest
rates and the financial condition of the issuer. Generally, the value of debt
securities will increase when interest rates decline and decrease when
interest rates rise.
Since the Fund may concentrate its investments in foreign debt securities, it
may be subject to greater credit risks and greater market and currency
fluctuations than portfolios invested solely in domestic debt securities.
<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.
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.
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.
[VAN ECK LOGO]
Van Eck Securities Corporation
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B96-0718-014
JUNE 30, 1996
Van Eck
Global
Income
Fund
Semi-Annual
Report
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