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 Gold and Money 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 Global Funds prospectus, please call
the number listed below. Please read the prospectus before investing.
[LOGO]
Van Eck Securities Corporation
99 Park Avenue, New York, NY 10016
http://www.vaneck.com
For account assistance please call (800) 544-4653
June 30, 1996
- --------------------------------------------------------------------------------
VAN ECK
- --------------------------------------------------------------------------------
GOLD/
- --------------------------------------------------------------------------------
RESOURCES
- --------------------------------------------------------------------------------
FUND
- --------------------------------------------------------------------------------
SEMI-ANNUAL
- --------------------------------------------------------------------------------
REPORT
- --------------------------------------------------------------------------------
{LOGO]
<PAGE>
VAN ECK GOLD/RESOURCES FUND
---------------------------
1996 SEMI-ANNUAL REPORT
Dear Fellow Shareholder:
During the first half of 1996, the net asset value of your Fund rose 8.6%, to
$6.06 a share. Gold shares were very strong during the first quarter when gold
broke out of its long trading range of $380 to $390 an ounce and soundly pierced
the psychologically-important level of $400 an ounce. However, the shares gave
back some of their gains in the second quarter.
At the end of June, the gold price was $380.10 an ounce, down 1.7% from the end
of 1995, and 8.5% from its early-February high of $415.50 an ounce. Gold's rise
began right at the New Year, propelled by record levels of physical demand, a
rise in borrowing costs for producers, which both reflected the tightness of the
physical market and reduced producers' incentive to hedge, and by investment
demand generated by the "easy-money" policies practiced by monetary authorities
in most of the industrialized nations of the world. This competitive devaluation
of their currencies by central banks appears to have undermined confidence in
paper currencies globally and led to increased demand for the currency of last
resort--gold. Contributing to the decline in gold prices since the February peak
has been the sale of over 200 tonnes by the Central Bank of Belgium, the debacle
in the copper market (speculators were apparently forced to sell everything to
cover losses in copper positions), and a return to more normal borrowing costs
for producer hedging programs, suggesting an easing of the tightness in the
physical market. Also, the sharp decline in the South African rand, which
translates into much higher rand gold prices, encouraged South African gold
miners to sell additional output forward and lock in these attractive prices.
Particularly troublesome to sentiment has been the proposal by some members of
the International Monetary Fund (IMF) that the organization sell a small portion
of its gold reserves (about $2 billion worth, or about 5 million ounces at
current prices). This suggestion has been made in the past but some members are
opposed--Germany and Switzerland, most notably. Finally, the benign inflation
numbers and signs that the U.S. economy continued to grow robustly during the
second quarter whetted investors'appetites for financial assets, against which
gold must compete for investment dollars.
Australian gold shares, which represented 25% of the Fund at June 30, held up
reasonably well during the second quarter and registered a nearly 13% gain (in
U.S. dollars) for the first half, as measured by the Australian Stock Exchange
Gold Index. Their strength continues to derive from positive exploration results
and the prospect of appreciable reserve increases with year-end results
(Australian companies are generally on June 30 fiscal years). Adding to the
interest was the consolidation occurring within the industry and the prospect of
further reorganizations such as that which the Normandy group of companies is
planning, and of takeovers such as Newcrest Mining Ltd.'s attempt at Normandy.
We continue to believe the Australian sector represents excellent value and we
intend to maintain our exposure to the region at about current levels.
After having led in performance during the first quarter, North American gold
shares suffered the greatest setback of all the regional sectors during the
second quarter. We believe the superior liquidity of such "brand names" as
Barrick Gold Corp., Newmont Mining Corp., Placer Dome Inc. and Homestake Mining
Company forced investors and speculators alike to liquidate their positions in
these stocks in order to raise money to cover losses in other areas, such as
copper. If this is correct, we would expect these shares to be among the first
to rally when bullion resumes its uptrend. This has often been the case
historically. At June 30, your Fund was 71% invested in North America, primarily
in the large- and intermediate-capitalization stocks.
We believe gold share prices have come back into line with bullion prices, and
that bullion will strengthen again in the second half. We are therefore fully
invested, with less than 2% of the Fund in cash at this time.
The Outlook
It is important to note that during the first two weeks of July the price of
gold outperformed the Dow Jones Industrial Average ("the Dow"). The latter fell
300 points from 5,654.63 to 5,349.51 by July 15, whereas gold bucked the trend
<PAGE>
- --------------------------------------------------------------------------------
Dow Jones Industrial Average - Gold Price Ratio
1/1/76 - 6/30/96
[GRAPH]
Source: DATASTREAM
- --------------------------------------------------------------------------------
and rose from $380.10 to $385.20 an ounce. The ratio of the Dow to the price of
gold declined from 14.9 to 13.9 by July 15. In 1980, the ratio was less than
one. Since 1980, the Dow generally outperformed gold, with exceptions in
1986-1987 and 1989-1990. Gold and gold shares have gradually risen since 1992,
although the Dow has outperformed.
Long-term investors may remember periods when gold outperformed the Dow, namely
from 1929-1932, 1971-1974 and 1976-1980. In each of these periods gold investors
were up to approximately 10 times better off than investors in the Dow. These
periods were marked by failure of the global monetary authorities to achieve
their objectives of maintaining financial stability and sustaining economic
growth.
Are we beginning a new period when gold will greatly outperform the Dow? Will
the ratio of the Dow to gold revert to the mean of around seven? Can the
industrial world's monetary authorities succeed in maintaining financial
stability and sustaining economic growth?
RISING FINANCIAL RISKS
Even though investors have regained confidence in, and become complacent about,
global financial stability, there are rising underlying imbalances and risks.
Stability would be threatened if economic or price changes occurred too rapidly.
They might lead to a serious crisis and the potential for systemic risk. The
U.S. stock market has had a nine-year bull market and, according to many
measures, is overvalued and speculative. Cross-border transactions in bonds and
equities among the Group of Seven (excluding the United Kingdom) rose from 35%
of GDP in 1985 to around 140% in 1995. The debt build-up has continued. The
United States has had large current account deficits since 1981. It has
accumulated growing short-term liabilities to foreigners amounting to
approximately $1 trillion, with corresponding increasing debt-service
requirements. Total U.S. debt climbed from about 130% of GDP in 1980 to about
190% in 1995. Household debt has grown particularly rapidly.
- --------------------------------------------------------------------------------
Household Debt as % of Nominal GDP
3/31/76 - 3/31/96
[GRAPH]
Source: DATASTREAM
- --------------------------------------------------------------------------------
The outstanding "notional" (face) value of global derivative contracts (traded
on organized exchanges and over-the-counter) is estimated to have soared from $3
trillion in 1988 to $56 trillion currently. The money advanced against these
contracts is about $2.2 trillion. This is the greatest expansion of leverage the
world has ever seen. A sharp and prolonged decline of the Dow, a new fall of the
dollar, or another wave of debt defaults could pose a substantial risk of
financial crisis, credit contraction and deflation.
The latest Annual Report of the Bank for International Settlements stated that
"how to prevent or contain financial crises has become a key policy issue." Alan
Greenspan, the Chairman of the Federal Reserve System, said in May, "with
leveraging there will always exist a remote possibility of a chain reaction, a
cascading sequence of defaults that will culminate in a financial implosion if
it proceeds unchecked. Only a central bank, with unlimited power to create
money, can thwart such a process before it becomes destructive ." We believe
markets today may have more power to control events than central banks. Daily
turnover on the global foreign exchange markets has grown to approximately $1.2
trillion, but the ratio of the total official currency reserves of the world's
<PAGE>
central banks to the daily turnover has declined from approximately fifteen in
1977 to about one in 1995. In the past few years, there have been two striking
demonstrations of central bankers' inability to withstand speculative
onslaughts: the bursting of the European Monetary System's Exchange-Rate
Mechanism (ERM) in 1992 and the plunge of the Mexican peso in December 1994.
Edouard Balladur, the former French prime minister, stated recently that he saw
world prosperity threatened by monetary disorder, especially the unstable
relationship between the dollar and European currencies. George Soros, in his
book, Soros on Soros, writes that the "international financial markets are
inherently unstable" and that the "international financial system is in danger
of breaking down." Gold is the only monetary asset that is no one else's
liability, and accordingly, is riskless in terms of default. It is a "safe
haven" during monetary disorders and has assured liquidity. Gold is a bear
market alternative.
LONG-TERM INFLATION
Alan Greenspan, in his recent testimony to Congress, said that the favorable
developments on inflation, especially with regard to labor markets, may be
drawing to a close. He mentioned the strength in employment costs and the
acceleration of average hourly earnings. Wage gains that increase unit costs are
clearly inflationary. Rebuilding inventories will add to growth. The global
economy is gradually rebounding. Since mid-1995 all major nations, once again,
have been pursuing expansionary monetary policies. Foreign central banks' U.S.
Treasury securities held at the Federal Reserve (part of global monetary
reserves) have grown by about 20% during the last twelve months. We are
optimistic about the prospects for the global economy over the next two years.
At the end of a business cycle, inflationary pressures normally rise.
CONCLUSION
In view of rising financial risks, the possibility of a shift in investor
preferences from capital growth to capital preservation and the undervaluation
of gold in the marketplace, it is our opinion that forward-looking investors
will gradually increase the diversification of their portfolios into
gold-related assets. The price of gold broke out of a long bottom in January on
the upside and then returned to support levels. We believe a new period of gold
outperformance versus the Dow has begun. In our judgment, the fundamentals of a
trend toward greater commercial and investment demand for gold than supply of
newly-mined output, scrap, central bank and increased mine forward selling, will
lead to a new bull market in gold. The ability of the world's monetary
authorities to maintain financial stability and "sustainable economic growth"
may be seriously tested, and investor confidence may be shaken. Accordingly, we
believe that it is wise and prudent for all investment portfolios to be
diversified into gold and gold shares to hedge against risk and profit from
these possible developments.
We appreciate your participation in the Gold/Resources Fund and we look forward
to helping you meet your investment objectives in the future.
- ---------------- ---------------
PHOTO PHOTO
- ---------------- ---------------
/s/ John C. van Eck /s/ Lucille Palermo
----------------------- ----------------------
John C. van Eck Lucille Palermo
Chairman President
July 25, 1996
- --------------------------------------------------------------------------------
PERFORMANCE RECORD AS OF 6/30/96
- --------------------------------------------------------------------------------
AVERAGE ANNUAL AFTER MAXIMUM BEFORE
TOTAL RETURN SALES CHARGE OF 5.75% SALES CHARGE
- --------------------------------------------------------------------------------
Life (since 2/15/86) 6.3% 6.9%
- --------------------------------------------------------------------------------
10 year 7.4% 8.0%
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5 year 8.5% 9.8%
- --------------------------------------------------------------------------------
1 year 5.9% 12.4%
- --------------------------------------------------------------------------------
The performance data represents past performance and is not indicative of
futureresults. 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: C shares are no longer publicly offered.
<PAGE>
GOLD/RESOURCES FUND
INVESTMENT PORTFOLIO JUNE 30, 1996 (UNAUDITED)
NO. OF SHARES SECURITIES(a) VALUE (NOTE 1)
- --------------------------------------------------------------------------------
AUSTRALIA: 25.2%
215,000 Acacia Resources Ltd. $ 507,776
550,000 Australian Resources Ltd. 454,636
300,000 Consolidated Gold N.L. 115,725
250,000 Croesus Mining N.L. 181,067
763,500 Delta Gold N.L. 1,953,462
363,600 Dominion Mining Ltd. 211,820
700,000 Eagle Mining Corp. 1,675,268
230,000 Emperor Mines Ltd. 543,202
641,000 Ghana Gold Mines Ltd. 196,804
400,000 Ghana Gold Mines Ltd.
(Option expiring 6/30/97) 56,682
140,000 Giralia Resources N.L. 48,494
528,300 Gold Mines of Kalgoorlie Ltd. 578,106
1,000,000 Golden Shamrock Mines Ltd. 897,465
488,400 Great Central Mines N.L. 1,338,038
274,354 Herald Resources Ltd. 352,055
407,733 Jason Mining Ltd. 35,308
600,000 Macraes Mining Co. Ltd. 1,303,686
650,000 Mount Burgess Gold Mining Co. 117,695
1,065,000 Newcrest Mining Ltd. 4,275,948
1,175,680 Placer Pacific Ltd. 1,712,275
2,661,000 Plutonic Resources Ltd. 13,616,669
149,000 Posgold Ltd. 367,149
821,428 Resolute Samantha Gold N.L. 1,907,676
789,400 Sons of Gwalia N.L. 5,593,096
382,603 St. Barbara Mines Ltd. 249,999
200,000 Wiluna Mines Ltd. 173,199
-----------
38,463,300
-----------
CANADA: 37.7%
245,000 Arizona Star Resources Corp. 1,023,789
475,000 Barrick Gold Corp. 12,884,375
83,400 Bema Gold Corp. 314,878
92,000 Bolivar Goldfields Ltd. 101,169
90,000 Cathedral Gold Corp. 178,146
732,100 Dayton Mining Corp. 4,401,027
25,000 Dayton Mining Corp.
(Warrant expiring 7/31/97)* 21,994
563,100 El Callao Mining Corp. 474,738
200,000 Granges Inc. 278,582
500,000 Granges Inc. Units*+ 649,025
636,400 Hemlo Gold Mines Inc. 6,761,750
40,000 Iamgold International African
Mining Gold Corp. 168,615
80,000 Indochina Goldfields Ltd. 689,124
320,800 Miramar Mining Corp. 1,728,587
350,000 Pegasus Gold Inc. 4,287,500
250,000 Placer Dome Inc. 5,968,750
335,000 Prime Resources Group Inc. 2,480,480
95,000 Rayrock Yellowknife Resources Inc. 598,951
415,000 Richmont Mines Inc. 1,642,901
200,000 Royal Oak Mines Inc. 737,500
270,000 Solitario Resources Corp. 316,703
240,000 Teck Corporation (Class B) 4,926,505
1,507,278 Texas Star Resources Corp. 751,401
625,000 Tombstone Exploration Co.
Ltd. Units*+ 652,379
423,800 Treminco Resources Ltd. 326,228
450,000 TVX Gold Inc. 3,262,500
320,100 Viceroy Resource Corp. 1,853,883
-----------
57,481,480
-----------
GHANA: 1.1%
84,000 Ashanti Goldfields Co.
Ltd. (GDR) 1,659,000
-----------
PERU: .4%
32,000 Co. De Minas Buenaventur S.A.
(ADR) 636,000
-----------
UNITED STATES: 33.7%
50,000 Agnico Eagle Mines, Ltd. 812,500
550,000 Battle Mountain Gold Co.
(Class A) 3,987,500
455,000 Canyon Resources Corp. 1,251,250
127,000 Coeur D'Alene Mines Corp. 2,333,625
303,700 Crown Resources Corp. 1,594,425
340,000 Echo Bay Mines Ltd. 3,655,000
127,700 FMC Gold Co. 574,650
359,000 Freeport McMoran Copper & Gold
(Class A) 10,725,125
160,000 Goldcorp Inc. (Class A) 2,640,000
675,000 Homestake Mining Co. 11,559,375
75,000 Newmont Gold Co. 3,778,125
78,569 Newmont Mining Corp. 3,879,344
1,000,000 Piedmont Mining Co. Inc. 625,000
120,200 Santa Fe Pacific Gold Corp. 1,697,825
22,200 Stillwater Mining Co. 524,475
715,000 USMX, Inc. 1,742,814
-----------
51,381,033
-----------
TOTAL STOCKS & OTHER INVESTMENTS: 98.1%
(Cost $105,346,888) 149,620,813
-----------
PRINC. AMT. SHORT-TERM OBLIGATIONS: 1.9%
- ---------------------------------------------------
$2,907,000 General Electric Capital Corp.
Commercial Paper
6/01/96
Interest Yield of 5.20%
(Amortized Cost $2,907,000) 2,907,000
------------
TOTAL INVESTMENTS: 100% (Cost: $108,253,888) $152,527,813
============
- -------------
(a) Unless otherwise indicated, securities owned are shares of common stock.
* Fair value as determined by the Board of Trustees.
+ Restricted security, see Note 6.
GLOSSARY:
GDR--Global Depositary Receipt
SUMMARY OF
INVESTMENTS % OF
BY INDUSTRY PORTFOLIO
- ----------- ---------
Gold mining 85.3%
Copper 7.0%
Metals and mining 3.8%
Commercial paper 1.9%
Industrial metals 1.6%
Platinum 0.4%
------
100.0%
======
See Notes To Financial Statements.
<PAGE>
GOLD/RESOURCES FUND FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1996
ASSETS:
Investments at value (cost, $108,253,888)
(Note 1) $152,527,813
Cash 269,949
Receivables:
Capital shares sold 320,955
Securities sold 224,446
Dividends 67,427
Other assets 1,735
------------
Total assets 153,412,325
------------
LIABILITIES:
Payables:
Capital shares redeemed 271,764
Securities purchased 146,622
Accounts payable 348,856
------------
Total liabilities 767,242
------------
NET ASSETS $152,645,083
============
CLASS A
Shares of beneficial interest outstanding 25,209,732
============
Net asset value and redemption price per share $6.06
=====
Maximum offering price per share
(NAV/(1-maximum sales commission)) $6.43
=====
Net assets consist of:
Aggregate paid in capital $180,891,800
Unrealized appreciation of investments
and foreign currency 44,272,277
Distributions in excess of net
investment income (1,625,055)
Cumulative realized losses (70,893,939)
------------
$152,645,083
============
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
Six Months Ended June 30, 1996
INCOME:
Dividends (less foreign taxes withheld
of $19,410) $ 607,248
Interest income 68,887
------------
Total income 676,135
EXPENSES:
Management (Note 2) $655,810
Distribution Class A (Note 4) 218,603
Administrative (Note 2) 218,603
Transfer agent 231,202
Custody 50,856
Registration 11,824
Professional 39,809
Reports to shareholders 17,820
Trustees fees 14,062
Other 65,801
--------
Total expenses 1,524,390
-----------
Net investment loss (848,255)
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS (NOTE 3)
Realized gain from security transactions 11,001,786
Realized gain from foreign currency
transactions 1,879
Change in unrealized appreciation of
investments 5,183,283
-----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $15,338,693
===========
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS
ENDED YEAR
JUNE 30, ENDED
1996 DECEMBER 31,
(UNAUDITED) 1995
------------ -----------
Decrease in Net Assets:
OPERATIONS:
Net investment loss $ (848,255) $ (776,800)
Realized gain from
security transactions 11,001,786 9,074,322
Realized loss from options -- (65,625)
Realized gain from foreign
currency transactions 1,879 622
Change in unrealized
appreciation of foreign
denominated receivables
and payables (1,990) 241
Change in unrealized
appreciation of
investments 5,185,273 1,142,851
------------ ------------
Increase in net assets
resulting from
operations 15,338,693 9,375,611
------------ ------------
CAPITAL SHARE TRANSACTIONS:*
Net proceeds from sales
of shares
Class A Shares 61,420,377 172,364,530
Class C Shares -- 47,982
------------ ------------
61,420,377 172,412,512
------------ ------------
Cost of shares reacquired
Class A Shares (80,088,363) (211,854,936)
Class C Shares -- (77,390)
------------ ------------
(80,088,363) (211,932,326)
------------ ------------
Decrease in net assets
resulting from capital
share transactions (18,667,986) (39,519,814)
------------ ------------
Total decrease
in net assets (3,329,293) (30,144,203)
NET ASSETS:
Beginning of period 155,974,376 186,118,579
------------ ------------
End of period (including
distributions in excess of
net investment income of
$1,625,055 and $671,349) $152,645,083 $155,974,376
============ ============
*SHARES OF BENEFICIAL INTEREST
ISSUED AND REDEEMED
(UNLIMITED NUMBER OF $.001
PAR VALUE SHARES AUTHORIZED)
CLASS A CLASS A
------------ -----------
Shares sold 9,420,742 33,182,418
Shares reacquired (12,171,507) (40,012,589)
------------ -----------
Net decrease (2,750,765) (6,830,171)
============ ===========
CLASS C
-----------
Shares sold -- 9,917
Shares reacquired -- (14,997)
------------ -----------
Net decrease -- (5,080)
=========== ===========
See Notes to Financial Statements.
<PAGE>
GOLD/RESOURCES FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF AFFILIATED COMPANY TRANSACTIONS (UNAUDITED)
Transactions with affiliates (as defined in the Investment Company Act of 1940) of the Fund are listed below:
PURCHASES SALES 6/30/96
12/31/95 ------------------- ----------------
SHARE REALIZED SHARE MARKET DIVIDEND
ISSUER BALANCE SHARES COST SHARES COST GAIN (LOSS) BALANCE VALUE INCOME
-------- ------ ---- ------- ---- ----------- -------- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
USMX, Inc. 895,000 -- -- 180,000 $ 940,000 $(536,875) 715,000 $1,742,814 --
Treminco Resources Ltd. 498,800 -- -- 75,000 71,548 597 423,800 326,228 --
Piedmont Mining Co., Inc. 1,000,000 -- -- -- -- -- 1,000,000 625,000 --
Granges Inc. Units -- 500,000 954,479 -- -- -- 500,000 649,025 --
Texas Star Resources 135,000 1,777,778 466,667 405,500 146,461 (125,995) 1,507,278 751,401 --
Tombstone Exploration Co.
Ltd. Units -- 625,000 682,290 -- -- -- 625,000 652,379 --
---------- ---------- --------- ---------- ---------
Total $2,103,436 $1,158,009 $(662,273) $4,746,847 --
========== ========== ========= ========== =========
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period
CLASS A
------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED JUNE 30, YEAR ENDED DECEMBER 31,
1996 ---------------------------------------------------------------------------------
(UNAUDITED) 1995 1994 1993 1992 1991 1990(D) 1989(C) 1988(C) 1987(C)
------------- ---- ---- ---- ---- ----- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $5.58 $5.35 $6.34 $3.56 $3.73 $3.90 $5.33 $4.49 $5.72 $3.90
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Income from Investment
Operations:
Net Investment Income
(Loss).......... (0.04) (0.03) (0.02) (0.014) 0.002 0.010 0.025 0.002 0.01 0.02
Net Gains (Loss) on
Securities (both
realized and
unrealized) .... 0.52 0.26 (0.97) 2.794 (0.170) (0.169) (1.430) 0.846 (1.23) 1.82
----- ----- ----- ----- ----- ----- ----- ----- ---- ----
Total from Investment
Operations ....... 0.48 0.23 (0.99) 2.780 (0.168) (0.159) (1.405) 0.848 (1.22) 1.84
----- ----- ----- ----- ----- ----- ----- ----- ---- ----
Less Distributions:
Dividends from
Net Investment
Income (a)...... -- -- -- -- (0.002) (0.011) (0.025) (0.008) (0.01) (0.02)
----- ----- ----- ----- ----- ----- ----- ----- ---- ----
Net Asset Value,
End of Period .... $6.06 $5.58 $5.35 $6.34 $3.56 $3.73 $3.90 $5.33 $4.49 $5.72
===== ===== ===== ===== ===== ===== ===== ===== ===== =====
Total Return (b).... 8.6% 4.3% (15.6%) 78.09% (4.50%) (4.07%) (26.36%) 18.90% (21.30%) 47.30
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of
Period (000) .... $152,645 $155,974 $186,091 $211,450 $114,257 $136,288 $175,171 $252,860 $228,558 $252,717
Ratio of Expenses to
Average Net
Assets .......... 1.77%(d) 1.81% 1.52% 1.39% 1.57% 1.62% 1.44% 1.48% 1.39% 1.27%
Ratio of Net Income
(Loss) to Average
Net Assets ....... (0.99%)(d) (0.44%) (0.30%) (0.29%) 0.07% 0.27% 0.57% 0.04% 0.23% 0.39%
Portfolio Turnover
Rate 7.30% 6.16% 13.75% 7.79% 0.93% 7.89% 12.12% 4.17% 1.59% 1.99%
Average Brokerage
Commissions Paid. $0.0180
</TABLE>
- -------------
(a) Net of foreign taxes withheld (to be included in income and claimed as a tax
credit or deduction by the shareholder for federal income tax purposes) of
$.0060 for 1992, $.0080 for 1991, $.0083 for 1990, $.0070 for 1989, $.0051
for 1988 and $.0237 for 1987.
(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 calculated for a period of less than one year is not
annualized.
(c) Not covered by Report of Independent Accountants.
(d) Annualized.
See Notes to Financial Statements.
<PAGE>
GOLD/RESOURCES FUND
-------------------
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 Gold/Resources Fund series, a diversified fund (the "Fund") of the Trust
in the preparation of its financial statements. All of Gold/Resources Fund Class
C shares were redeemed on May 4, 1995. The policies are in conformity with
generally accepted accounting principles. The preparation of financial
statements in conformity with generally accepted accounting principles requires
the use of management's estimates and the actual results could differ.
A. SECURITY VALUATION -- Securities traded on national exchanges and traded in
the NASDAQ National Market System are valued at the last sales prices
reported at the close of business on the last business day of the 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. Direct investments in gold bullion
are valued at the mean of the bid and asked price quoted by a major
commodity dealer. Short-term obligations are valued at cost which with
accrued interest approximates value. Securities for which quotations are
not available are stated at fair value as determined by the Board of
Trustees.
B. FEDERAL INCOME TAXES -- It is the Fund's policy to comply with the
provisions of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to its shareholders.
Therefore, no federal income tax provision is required.
C. CURRENCY TRANSLATION-- Assets and liabilities denominated in foreign
currencies and commitments under forward currency contracts are translated
into U.S. dollars at the mean of the 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 attributable
to foreign currency fluctuations on foreign denominated assets and
liabilities are recorded as net realized gains and losses from foreign
currency transactions.
D. DISTRIBUTION TO SHAREHOLDERS -- Distributions from net investment income
and realized gains, if any, are recorded on the ex-dividend date. Income
distributions and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences are primarily due to differing
treatments for foreign currency transactions, net operating losses, and
unrealized income from passive foreign investment companies.
E. OTHER -- Security transactions are accounted for on the date the securities
are purchased or sold. Dividend income is recorded on the ex-dividend date
net of withholding taxes. Interest income is accrued as earned.
F. OPTION CONTRACTS -- The Fund may invest, for hedging purposes only, in call
and put options on securities, foreign 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 the value of the underlying instrument does not correlate with the
anticipated movements of the option values.
NOTE 2 -- Van Eck Associates Corporation earned fees of $655,810 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 $33,278 for the six
months ended June 30, 1996 from commissions earned on sales of Class A shares of
beneficial interest of the Fund after deducting $231,559 allowed to other
dealers. Van Eck Associates Corp. earned a fee of $218,603 for costs incurred in
connection with certain administrative and operational functions. The fee is
based on an annual rate of .25 of 1% on the first $750 million of average net
assets and .20 of 1% of the excess over $750 million. Certain of the officers
and trustees of the Trust are officers, directors or stockholders of Van Eck
Associates Corporation and Van Eck Securities Corporation.
NOTE 3 -- Purchases and proceeds from sales of investments other than short-term
obligations aggregated $12,118,774 and $30,539,717, respectively, for the six
months ended June 30, 1996. For federal income tax purposes the cost of
investments owned at June 30, 1996 was $108,253,888. As of June 30, 1996 net
unrealized appreciation for federal income tax purposes aggregated $44,273,925
of which $58,727,148 related to appreciated investments and $14,453,223 related
to depreciated investments. At December 31, 1995 the Fund had capital loss
carryforwards available to offset future capital gains expiring December 31,
1997, 1998, 1999, 2000 of $7,318,699, $35,251,632, $31,737,707 and $7,559,449,
respectively.
NOTE 4 -- Pursuant to a Rule 12b-1 Plan of Distribution (the "Plan"), the Fund
accrues fees of .25 of 1% of average daily net assets of the Fund. The fees are
intended to be used principally for 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.
NOTE 5 -- The Fund invests in foreign securities. Investments in foreign
securities may involve a greater degree of risk than investments in domestic
securities due to political, economic or social instability. In addition, some
foreign companies are not generally subject to the same uniform accounting,
auditing and financial rules as are American companies, and there may be less
government supervision and regulation. Foreign investments may also be subject
to foreign taxes, dividend collection fees and settlement delays.
The Fund may concentrate its investments in companies which are significantly
engaged in the exploration, development, production or distribution of gold and
other metals, minerals, oil, natural gas and coal and by investing in gold
bullion and coins. Since the Fund may so concentrate, it may be subject to
greater risks and market fluctuations than other more diversified portfolios.
The production and marketing of gold and other natural resources may be affected
by actions and changes in governments. In addition, gold and natural resources
securities may be cyclical in nature.
NOTE 6 -- Restricted Securities
The following securities are restricted as to sale:
Percent of
Date Net Assets
Acquired Cost Value at 6/30/96
-------- -------- -------- ----------
Granges Units 4/25/96 $954,479 $649,025 0.43%
Tombstone
Exploration Co.
Ltd. Units 5/23/96 682,290 652,290 0.43%
