<PAGE>
Van Eck Global Hard Assets Fund
----------------------------------------
1996 Semi-Annual Report
Dear Fellow Shareholder:
We are pleased to report that the Van Eck Global Hard Assets Fund is up 20.2%
year-to-date as of June 30, as many hard asset sectors performed well on strong
global economic growth during the first half of the year. In addition, the Fund
has outperformed the S&P 500, which rose 10.1%, and the Ibbotson Hard Assets
Index*, which rose 5.8% over this period. The Global Hard Assets Fund has also
outperformed the S&P 500 over the past twelve months. Of particular note, the
Fund has outperformed the S&P 500 with one-third less risk (as measured by
standard deviation) this year.
ECONOMIC REVIEW AND OUTLOOK
During the first six months of the year, economic growth in the U.S. surprised
market participants with its vigor and investors continually increased
projections for GDP growth and inflationary expectations. Thus, rather than
expecting cuts in the federal funds rate, investors began to anticipate rate
increases by the end of December. Economic growth was also stronger than
anticipated in Japan, where first quarter GDP growth increased over 12% on an
annualized basis. In Europe, however, economic growth was lower than
anticipated at only modest levels, while strong economic growth continued in
the emerging countries of Asia and Latin America.
Going forward, we continue to believe that the economic environment is
favorable for hard asset performance. Global economic growth should continue to
accelerate modestly. We broadly agree with the recently-released IMF estimates
of an acceleration of global growth from 3.5% last year to 3.8% this year and
4.3% in 1997 (despite differences in regional economic growth, with the U.S.
and Japan at a healthy 2.5% estimated rate compared with 0.8% in Germany).
Signs of healthy growth include strength in leading economic indicators,
positively sloped yield curves in major industrial economies and a stimulative
monetary policy as measured by 25% annual growth rates in G7 monetary reserves.
These growth estimates are consistent with our view that the inflation rate in
the U.S. has troughed and will rise modestly in the coming year. In Japan and
Germany, although inflation rates are presently rising, they are likely to be
muted in the coming year. We expect growth rates to continue to be
exceptionally strong in the developing economies of Asia and to strengthen
further in Latin America.
SECTOR REVIEW AND OUTLOOK
Energy, the largest allocation in your Fund throughout the first half of the
year at approximately 40% of assets, performed well during this period and we
expect good performance to continue, albeit in selected energy sectors. While
some investors anticipate oil price declines over the remainder of the year, we
believe prices will remain strong and may in fact rise. Consensus forecasts
have consistently underestimated demand and, in our view, the commodity markets
will not see Iraqi oil until September at the earliest. This suggests that any
supply disruptions could cause significant upward movement in oil prices. An
example of this occurred this past spring as low oil inventories, caused by the
adoption of "just-in-time" inventory practices, combined with strong demand,
stemming from an unexpectedly cold winter in the Northeast, led crude oil
prices to rise above $25 per barrel. The market fell from those levels, but
stabilized at $20 per barrel despite news of renewed Iraqi supply. Commodity
fundamentals for natural gas also remain strong, but we continue to believe
that the natural gas producers are better investments. Approximately 18% of the
Fund is allocated to exploration and production companies that will benefit
from this strong pricing environment. Our top holdings include Louisiana Land &
Exploration and United Meridian Corporation. Your portfolio also continues to
hold deep-water offshore drilling companies as supply/demand fundamentals
remain strong and offshore rig-leasing rates continue to climb. Our top holding
in this sector is Reading & Bates (R&B), a leading deep-water drilling company.
We believe R&B's earnings will be much stronger than anticipated and that
valuation multiples will expand.
In the base metals markets, the primary focus has been the Sumitomo copper
scandal. The Fund sidestepped the scandal and the associated copper price crash
since it had no exposure to the underlying asset nor to any copper-related
equities. Our fundamental view on copper had been bearish for some time, with
supply growing at nearly four times demand. We found much better value in other
base metals investments, such as aluminum and tin equities. We believe recent
weakness in many base metals prices stems, at least in part, from "knock-on"
impacts from the copper scandal and that current levels represent good value.
This value, combined with our view that demand should increase during the
second half of
- -------
* The Ibbotson Hard Assets Index is 75% equities of global companies whose
primary business is linked to hard assets and 25% commodity futures. The equity
component consists of equal weightings of the MSCI Gold Mines, Non-Ferrous
Metals, Energy Sources, and Forest Products and Paper Indices, and the National
Association of Real Estate Investment Trusts Equity Index. The commodity
component consists of equal weightings of the Goldman Sachs Energy, Precious
Metals and Industrial Metals Indices.
<PAGE>
1996 and in 1997, should result in higher prices. Therefore, base metals may
be an important driver of the Fund during the second half of the year. One of
our top holdings in this sector is Alcoa, the largest aluminum producer in the
world.
Gold shares completed a round trip during the first six months of the year.
The year started with a bang as gold jumped to over $415 per ounce in early
February and gold shares rose over 25%. That ascent was retraced with most of
the decline occurring during June, when gold shares turned in their worst
performance in 18 months. The Fund's exposure to gold ranged from a high of
20% to a low of 8.5% during the first half of the year, ending the second
quarter with a 9% allocation. Fundamentally, we believe gold is attractive
based on its commercial supply/demand gap. In addition, investment demand
should increase over the next year as central banks engage in aggressive
monetary "reflation" (or "easy" monetary policy). On the supply side, central
bank sales and mining company hedging programs have put pressure on the gold
price. It is virtually impossible to predict when these sales will end, but
recently some mining companies have announced reversals of hedging programs,
which should be a bullish indicator. Our strategy for gold shares is to buy on
weakness as support levels are reached.
False start. Those two words describe the recent action in paper shares. The
equity market had begun to anticipate price increases in many paper grades
over the past several months. However, during June information was released
suggesting that commodity price increases were going to be postponed until
1997, and paper shares declined. While valuations are extremely cheap in the
paper sector, we continue to position the Fund defensively. Our allocation has
been at or below 10% of total assets so far this year. In addition, we have
concentrated the portfolio in defensive holdings, such as tissue company Fort
Howard, timberland owner Rayonier, and cellulose pulp producer Buckeye
Cellulose.
In the real estate arena, market fundamentals in the U.S. continue to improve,
particularly in the hotel, suburban office and industrial sectors, where
occupancy levels and rate growth are strong. Apartment markets nationwide are
at supply/demand equilibrium, but select markets are experiencing imbalances
due to development restrictions, which are preventing supply from keeping up
with job growth. Retail real estate continues to suffer as the nation is still
"over-stored." Internationally, strong GDP growth is driving record
development activity in China and South East Asia. The Hong Kong market is
showing signs of strength as the colony prepares for 1997, while Singapore's
recently enacted anti-speculation moves have cooled the markets. Europe
continues to be sluggish, reflecting the overall economy. We believe that real
estate can continue to provide consistent returns and acts as a portfolio
stabilizer to other sectors in the Fund. Our allocation of about 19% reflects
this view.
We continue to emphasize the role of hard assets as an excellent portfolio
diversifier and complement to traditional investments. We believe the outlook
for the sector overall is very favorable, particularly given strong global
growth and increasing demand for hard assets.
We appreciate your participation in the Global Hard Assets 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/ Derek S. van Eck
John C. van Eck Derek S. van Eck
Chairman Portfolio Manager
July 25, 1996
- -------------------------------------------------------------------------------
Performance Record as of 6/30/96
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Average Annual After Maximum Before Sales
Total Return Sales Charge* Charge
- ------------------------------------------------------------
<S> <C> <C>
A shares--Life (since 11/2/94) 20.3 % 23.9%
- ------------------------------------------------------------
1 year 24.3 % 30.5%
- ------------------------------------------------------------
B shares--Life (since 4/24/96)** (2.0)% 3.0%
- ------------------------------------------------------------
C shares--Life (since 11/2/94) 24.4 % 24.4%
- ------------------------------------------------------------
1 year 30.6 % 31.6%
- ------------------------------------------------------------
</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 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 = 5.0%.
C shares: 1% redemption charge, 1st year.
**Not annualized.
<PAGE>
Global Hard Assets Fund Investment Portfolio June 30, 1996 (unaudited)
<TABLE>
<CAPTION>
NO. OF SHARES SECURITIES(A) VALUE (NOTE 1)
- ------------------------------------------------
<C> <S> <C>
AUSTRALIA: 4.6%
BASE METALS: 1.5%
63,000 Queensland
Nickel Industry
Ltd. $ 140,855
----------
GOLD MINING: 3.1%
35,000 Acacia Resources
Ltd. 82,661
14,620 Emperor Mines
Ltd. 34,529
136,000 Ghana Gold Mines
Ltd. 41,756
41,150 Herald Resources
Ltd. 52,804
12,000 Sons of Gwalia
N.L. 85,023
----------
296,773
----------
437,628
----------
CANADA: 5.5%
BASE METALS: 0.7%
1,500 Cameco Corp. 70,709
----------
ENERGY: 1.8%
23,000 Pacalta
Resources Ltd. 83,465
25,000 Pacalta
Resources Ltd.
Units* 84,300
----------
167,765
----------
FOREST PRODUCTS: 1.2%
8,500 MacMillan
Bloedel Ltd. 112,789
----------
GOLD MINING: 1.8%
4,550 Barrick Gold
Corp. 123,419
57,800 El Callao Mining
Corp. 48,730
----------
172,149
----------
523,412
----------
FRANCE: 1.6%
ENERGY: 1.6%
12,000 Forasol-Foramer
N.V. 151,500
----------
INDONESIA: 1.6%
BASE METALS: 1.6%
8,200 P.T. Tambang
Timah (GDR 144A) 148,625
----------
NETHERLANDS: 0.2%
REAL ESTATE: 0.2%
1,000 Renaissance
Hotel Group N.V. 21,500
----------
NORWAY: 1.4%
ENERGY: 1.4%
5,000 Transocean AS 129,535
----------
SPAIN: 0.6%
ENERGY: 0.6%
1,500 Repsol, S.A.
(ADR) 52,125
----------
UNITED STATES: 73.8%
BASE METALS: 6.9%
3,200 Aluminum Company
of America+ 183,600
13,400 Century Aluminum
Co. 211,050
4,000 Kaiser Aluminum
Corp. 44,000
4,500 Northwestern
Steel and Wire
Co. 24,188
7,500 Titanium Metals
Corp. 194,063
----------
656,901
----------
ENERGY: 35.8%
1,000 Amoco Corp.+ 72,375
3,500 Anadarko
Petroleum Corp.+ 203,000
8,000 Cairn Energy
USA, Inc. 115,000
11,700 Dawson
Production
Services, Inc. 134,550
4,300 Devon Energy
USA, Inc. 105,350
4,000 Diamond Offshore
Drilling Inc. 229,000
2,500 Dresser
Industries, Inc. 73,750
4,000 Ensco
International
Inc. 130,000
5,000 Flores & Rucks,
Inc. 172,500
</TABLE>
<TABLE>
<CAPTION>
NO. OF SHARES SECURITIES(A) VALUE (NOTE 1)
- ---------------------------------------------------
<C> <S> <C>
4,300 Global
Industries Ltd. $ 127,925
4,000 KCS Energy, Inc 115,000
4,500 Louisiana Land &
Exploration Co. 259,313
7,500 Marine Drilling
Co., Inc. 75,938
600 Mobil Corp. + 67,275
4,500 Nuevo Energy Co. 145,125
12,000 Pride Petroleum
Services, Inc. 171,000
13,000 Reading & Bates
Corp. 287,625
13,700 SGI
International,
Inc. 78,775
1,500 Sonat Offshore
Drilling, Inc. 75,750
4,600 Tidewater, Inc. 201,825
3,000 Triton Energy
Ltd. 145,875
6,000 United Meridian
Corp. 216,000
2,500 Vastar Resources
Inc. 93,438
3,100 Weatherford
Enterra, Inc. 93,000
----------
3,389,389
----------
FOREST PRODUCTS: 8.4%
6,950 Buckeye
Cellulose Corp. 191,994
3,700 Consolidated
Papers, Inc. 192,400
10,000 Fort Howard
Corp. 198,750
5,600 Rayonier Inc. 212,800
----------
795,944
----------
GOLD MINING: 4.1%
5,200 Getchell Gold
Corp. 171,600
5,000 Homestake Mining
Corp 85,625
2,600 Newmont Mining
Corp. 128,375
----------
385,600
----------
REAL ESTATE: 18.6%
3,500 Avalon
Properties, Inc. 76,125
2,500 Beacon
Properties Corp. 64,062
6,500 Bedford Property
Investors, Inc. 87,750
1,400 CBL & Associates
Properties, Inc. 31,324
3,500 Carramerica
Realty Corp. 84,000
11,000 Dayton Superior
Corp. 144,375
3,000 Duke Realty
Investments,
Inc. 90,750
4,000 Equity
Residential
Properties Trust 131,500
1,000 HFS, Inc. 70,000
7,500 Highwoods
Properties, Inc. 207,185
5,500 Interstate
Hotels Co. 122,375
14,000 Pacific
Greystone Corp. 176,750
4,000 Patriot American
Hospitality Inc. 118,500
6,000 Public Storage,
Inc. 123,750
2,500 ROC Communities,
Inc. 59,688
4,783 Security Capital
Industrial Trust 84,300
2,800 Storage USA,
Inc. 90,300
----------
1,762,734
----------
6,990,568
----------
TOTAL STOCKS AND OTHER SECURITIES: 89.3%
(cost: $7,626,150) 8,454,893
----------
<CAPTION>
PRINCIPAL AMOUNT SHORT-TERM OBLIGATIONS
- ---------------------------------------------------
<C> <S> <C>
$600,000 U.S. Treasury
Bill due 7/11/96
Interest
Yield 4.40% 599,267
418,000 General Electric
Capital Corp.
Commercial Paper
due 7/01/96
Interest Yield
of 5.20% 418,000
----------
TOTAL SHORT-TERM OBLIGATIONS: 10.7%
(amortized cost: $1,017,267) 1,017,267
----------
TOTAL INVESTMENTS: 100% (cost
$8,643,417) $9,472,160
==========
</TABLE>
(a) Unless otherwise indicated, securities owned are shares of common stock.
* Fair value as determined by Board of Trustees.
+ Securities segregated for futures contracts.
Glossary:
ADR--American Depositary Receipts
GDR--Global Depositary Receipts
See Notes to Financial Statements.
<PAGE>
Global Hard Assets Fund Financial Statements (unaudited)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1996
<TABLE>
<S> <C>
ASSETS:
Investments at value (cost, $8,643,417) (Note 1) $ 9,472,160
Cash 144,037
Cash--initial margin for futures (Note 6) 38,300
Receivables:
Securities sold 271,350
Capital shares sold 535,471
From Advisor 127,393
Dividends 12,258
Open forward currency contract (Note 7) 2,246
Deferred organization costs and other assets 25,416
-----------
Total assets 10,628,631
-----------
LIABILITIES:
Payables:
Securities purchased 558,415
Deferred organization costs 34,113
Dividends payable 7,686
Accounts payable 27,916
Due to broker-variation margin (Note 6) 42,356
-----------
Total liabilities 670,486
-----------
NET ASSETS $ 9,958,145
===========
CLASS A
Net asset value and redemption price per share
($9,145,977/717,958) $12.74
======
Maximum offering price per share (NAV/(1-maximum sales
commission)) $13.38
======
CLASS B
Net asset value, offering price, and redemption price per share
($247,198/19,268) (Redemption may be subject to a contingent
deferred sales charge within the first six years of ownership) $12.83
======
CLASS C
Net asset value, offering price and redemption price per share
($564,970/44,033) (Redemption may be subject to a contingent
deferred sales charge within the first year of ownership) $12.83
======
Net assets consist of:
Aggregate paid in capital $ 8,668,602
Unrealized appreciation of investments, futures and foreign
denominated assets, liabilities and foreign forward exchange
contracts 821,120
Distributions in excess of net investment income (1,854)
Undistributed realized gains 470,277
-----------
$ 9,958,145
===========
</TABLE>
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
Six Months Ended June 30, 1996
<TABLE>
<S> <C> <C>
INCOME:
Dividends (less foreign taxes withheld of $1,526) $ 54,648
Interest 24,536
--------
Total income $79,184
EXPENSES:
Management (Note 2) 32,350
Distribution Class A (Note 4) 15,254
Distribution Class B (Note 4) 294
Distribution Class C (Note 4) 1,547
Administration (Note 2) 206
Transfer agency 27,153
Custody 9,000
Professional 7,530
Reports to shareholders 5,500
Registration 5,000
Amortization of deferred organization costs 3,937
Other 600
--------
Total expenses 108,371
Expenses assumed by the Advisor (Note 2) (108,371)
--------
Net expenses --
-------
Net investment income 79,184
</TABLE>
<TABLE>
<S> <C>
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 3)
Realized gain from security transactions $ 420,970
Realized gain from futures contracts 55,477
Realized loss from options (6,085)
Realized loss from foreign currency transactions (4,572)
Change in unrealized appreciation of foreign denominated
assets, liabilities and foreign forward exchange contracts 2,055
Change in unrealized appreciation of investments and futures 493,126
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $1,040,155
==========
</TABLE>
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR
JUNE 30, ENDED
1996 DECEMBER 31,
(UNAUDITED) 1995
----------- ------------
<S> <C> <C>
INCREASE IN NET ASSETS:
OPERATIONS:
Net investment income $ 79,184 $ 92,284
Realized gain from
security transactions 420,970 110,229
Realized gain (loss) from
futures contracts 55,477 (8,549)
Realized loss from
options (6,085) (3,178)
Realized gain (loss) from
foreign currency
transactions (4,572) 26,126
Change in unrealized
appreciation of foreign
denominated assets,
liabilities and foreign
forward exchange
contracts 2,055 163
Change in unrealized
appreciation of
investments and futures 493,126 338,597
----------- -----------
Increase in net assets
resulting from
operations 1,040,155 555,672
----------- -----------
Dividends to shareholders
from:
Net investment income:
Class A Shares (70,266) (208,703)
Class B Shares (1,914) --
Class C Shares (4,286) (8,428)
----------- -----------
(76,466) (217,131)
----------- -----------
963,689 338,541
----------- -----------
CAPITAL SHARE
TRANSACTIONS (NOTE 5):
Net proceeds from sales
of shares:
Class A Shares 6,999,125 3,672,872
Class B Shares 244,192 --
Class C Shares 385,457 161,154
----------- -----------
7,628,774 3,834,026
----------- -----------
Reinvestment of
dividends:
Class A Shares 63,312 186,116
Class B Shares 1,238 --
Class C Shares 4,230 8,422
----------- -----------
68,780 194,538
----------- -----------
Cost of shares
reacquired:
Class A Shares (2,654,897) (1,792,934)
Class B Shares -- --
Class C Shares (48,923) (609)
----------- -----------
(2,703,820) (1,793,543)
----------- -----------
Increase in net assets
resulting from capital
share transactions 4,993,734 2,235,021
----------- -----------
Total increase in net
assets 5,957,423 2,573,562
NET ASSETS:
Beginning of period 4,000,722 1,427,160
----------- -----------
End of period (including
distributions in excess
of net investment
income of $1,854 and
$0, respectively) $ 9,958,145 $ 4,000,722
=========== ===========
</TABLE>
See Notes to Financial Statements.
<PAGE>
- -------------------------------------------------------------------------------
Global Hard Assets Fund
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
------------------------------------- ----------- -------------------------------------
FOR THE
FOR THE PERIOD FOR THE
SIX MONTHS PERIOD APRIL 24, SIX MONTHS PERIOD
ENDED NOVEMBER 2, 1996(a) TO ENDED NOVEMBER 2,
JUNE 30, YEAR ENDED 1994(a) TO JUNE 30, JUNE 30, YEAR ENDED 1994(a) TO
1996 DECEMBER 31, DECEMBER 31, 1996 1996 DECEMBER 31, DECEMBER 31,
(UNAUDITED) 1995 1994 (UNAUDITED) (UNAUDITED) 1995 1994
----------- ------------ ------------ ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 10.68 $ 9.41 $9.53 $ 12.55 $ 10.76 $ 9.41 $9.53
------- ------ ------ ------- ------- ------ -----
Income from Investment
Operations:
Net Investment Income.. 0.11 0.32+ 0.010+ 0.04 0.09 0.34+ 0.01+
Net Gain (Loss) on
Investments (both
realized and
unrealized)........... 2.05 1.57 (0.115) 0.34 2.08 1.63 (0.12)
------- ------ ------ ------- ------- ------ -----
Total from Investment
Operations............. 2.16 1.89 (0.105)* 0.38 2.17 1.97 (0.11)
------- ------ ------ ------- ------- ------ -----
Less Distributions:
Dividends from Net
Investment Income..... (0.10) (0.62) (0.015) (0.10) (0.10) (0.62) (0.01)
------- ------ ------ ------- ------- ------ -----
Net Asset Value, End of
Period................. $ 12.74 $10.68 $9.41 $ 12.83 $ 12.83 $10.76 $9.41
======= ====== ====== ======= ======= ====== =====
Total Return (b)........ 20.22% 20.09% (1.10%) 3.03% 20.17% 20.94% (1.20%)
- -----------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY
DATA
Net Assets, End of
Period (000)........... $ 9,146 $3,820 $1,419 $247 $565 $181 $8
Ratio of Expenses to
Average Net Assets (c). 0%* 0% 0.15%* 0%* 0%* 0% 0.56%*
Ratio of Net Investment
Income to Average Net
Assets................. 2.45%* 3.08% 0.84%* 255%* 2.55%* 3.30% 0.53%*
Portfolio Turnover Rate. 82.20% 179.33% 0% 82.20% 82.20% 179.33% 0%
Average Commission Rate
Paid................... $0.0394 $0.0394 $0.0394
</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
2.89%*, 4.05%, 3.40%*, 2.95%*, 12.40%*, 37.88% and 39.49%*, respectively,
if the expenses had not been assumed by the Advisor.
* Annualized.
+ Based on average shares outstanding.
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 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. The
preparation of financial statements in conformity with generally accepted
accounting principles requires the use of management's estimates and the
actual results could differ.
A. SECURITY VALUATION--Securities traded on national 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 rate 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.
F. DEFERRED ORGANIZATION COSTS--Deferred organization costs are being
amortized over a period of five years beginning on November 2, 1994
(commencement of operations).
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. Call and put
options give the Fund the right but not the
<PAGE>
Global Hard Assets Fund
- -------------------------------------------------------------------------------
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.
NOTE 2--Van Eck Associates Corporation (the "Advisor") earned fees of $32,350
for investment management and advisory services. The fee was based on an
annual rate of 1% of the Fund's average daily net assets. The Advisor agreed
to waive its management fees and administrative fees for the six months ended
June 30, 1996. The Advisor also agreed to assume all distribution expenses for
the six months ended June 30, 1996. The Advisor incurred and waived $206 of
transfer agency expenses. The Advisor also agreed to assume all other expenses
for the six months ended June 30, 1996. Van Eck Securities Corporation (the
"Distributor") received $11,785 for the six months ended June 30, 1996 from
commissions earned on sales of Class A shares after deducting $81,268 allowed
to other dealers. Certain of the officers and trustees of the Trust are
officers, directors or stockholders of Van Eck Associates Corporation and Van
Eck Securities Corporation. As of June 30, 1996 Van Eck Associates Corporation
owned 15.64% of the outstanding Class A shares of beneficial interest.
NOTE 3--Purchases and proceeds from sales of investments, other than short-
term obligations, aggregated $8,706,031 and $4,336,174, respectively, for the
six months ended June 30, 1996. For federal income tax purposes the cost of
investments owned at June 30, 1996 was $8,643,417. As of June 30, 1996 net
unrealized appreciation for federal income tax purposes aggregated $828,743 of
which $952,047 related to appreciated investments and $123,304 related to
depreciated investments.
Transactions in call options written for the six months ended June 30, 1996
were as follows:
<TABLE>
<CAPTION>
NUMBER OF
CONTRACTS PREMIUMS
--------- --------
<S> <C> <C>
Options outstanding at beginning of period 0 $ 0
Options written 1 1,750
Options closed (1) (1,750)
--- -------
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 Classes B and 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 November 1, 1996 and VESC has agreed to
assume the Fund's obligation to pay the dealers. No payments have been made
for the six months ended June 30, 1996.
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 April 30, 1995 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 June 30, 1996, was $130,407 for
Class A shares, $627 for Class B shares, and $90,149 for Class C shares.
<PAGE>
Global Hard Assets Fund
- -------------------------------------------------------------------------------
NOTE 5--SHARES OF BENEFICIAL INTEREST ISSUED AND REDEEMED (unlimited number of
$.001 par value shares authorized):
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED
1996 DECEMBER 31,
(UNAUDITED) 1995
------------------ ------------
<S> <C> <C>
CLASS A
Shares sold 567,376 360,738
Shares reinvested 4,970 17,425
-------- --------
572,346 378,163
Shares reacquired (211,936) (171,459)
-------- --------
Net increase 360,410 206,704
======== ========
<CAPTION>
FOR THE PERIOD
APRIL 24, 1996+ TO
JUNE 30, 1996
(UNAUDITED)
------------------
<S> <C>
CLASS B
Shares sold 19,172
Shares reinvested 96
--------
19,268
Shares reacquired --
--------
Net increase 19,268
========
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, 1996 DECEMBER 31,
(UNAUDITED) 1995
------------------ ------------
<S> <C> <C>
CLASS C
Shares sold 30,877 15,208
Shares reinvested 330 783
-------- --------
31,207 15,991
Shares reacquired (3,997) (61)
-------- --------
Net increase 27,210 15,930
======== ========
</TABLE>
- -------
+ Commencement of operations.
NOTE 6--FUTURES CONTRACTS:
As of June 30, 1996 the Fund was long 10 lead futures contracts which expire
August 8, 1996 with a contract value of $313,006. 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 June 30, 1996, $9,869 is the unrealized depreciation 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 June 30, 1996, the Fund had the following outstanding forward foreign
currency contract:
<TABLE>
<CAPTION>
VALUE AT
SETTLEMENT CURRENT UNREALIZED
CONTRACT DATE VALUE APPRECIATION
- -------- ---------- -------- ------------
<S> <C> <C> <C>
FOREIGN CURRENCY SALES
CONTRACT
AUD expiring 7/14/96 $434,693 $432,447 $2,246
</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.
NOTE 9--RESTRICTED SECURITY
The following security is restricted as to sale:
<TABLE>
<CAPTION>
PERCENT OF
DATE NET ASSETS
ACQUIRED COST VALUE AT 6/30/96
-------- ------- ------- ----------
<S> <C> <C> <C> <C>
Pacalta Resources Ltd. Units 6/12/96 $96,038 $84,300 0.89%
</TABLE>
<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 prospectus, which includes more
complete information, such as charges and expenses and the risks associated with
international investing, including currency fluctuations or controls,
expropriation, nationalization and confiscatory taxation. Please read the
prospectus before investing.
[VAN ECK LOGO]
B96-0731-017
Van Eck Securities Corporation
99 Park Avenue, New York, N.Y. 10016
http://www.vaneck.com
For account assistance please call (800) 544-4653
June 30, 1996
Van Eck
Global
Hard
Assets
Fund
Semi-Annual
Report
[VAN ECK LOGO]
