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WORLDWIDE
INSURANCE TRUST
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JUNE 30, 1996
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VAN ECK
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WORLDWIDE
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BALANCED
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FUND
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SEMI-ANNUAL
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REPORT
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[LOGO]
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<PAGE>
VAN ECK WORLDWIDE BALANCED FUND
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JUNE 30, 1996 SEMI-ANNUAL REPORT
Dear Shareholder:
As we had expected in the beginning of 1996, world equity markets outperformed
bond markets for the first six months of the year. Equity investors initially
reacted negatively to declines in bond prices. However, after focusing on the
positive impact on earnings growth and noting the favorable supply/demand
situation in many equity markets, global equities registered strong gains.
Conversely, the first half of 1996 was challenging for global fixed income
investors, with declines in the U.S. bond market and moderate returns in most
European bond markets. Continued strength of the U.S. dollar lowered returns on
foreign securities for U.S. investors in unhedged portfolios. The Worldwide
Balanced Fund had a total return of 3.6% for the first six months of the year.
For the first half of the year we favored equities over bonds and emphasized
high quality, "blue chip" stocks. World equity markets overall rose 7.3% in the
first half of 1996. The U.S. market, your Fund's largest equity weighting, led
the rally, gaining 10.9% during this period. Though bond yields rose
significantly on strong economic growth, equity investors focused on an
investment backdrop of moderate growth, low inflation, corporate share buybacks,
and strong flows into equity mutual funds. Large capitalization cyclical stocks
led the market higher in the first quarter, with growth and small capitalization
stocks taking the lead in the second quarter.
The Japanese equity market, your Fund's second largest equity position,
performed in-line with our expectations at the start of the year. Reacting to
further signs of sustainable economic growth, the market increased 7.6% in local
currency terms, though given the weakness of the yen, this translated into only
a 1.2% increase on a dollar basis. The strength of the Japanese economy has
clearly surprised on the upside. To date, the Bank of Japan (BOJ) has been
reluctant to increase interest rates. Several factors are in place to naturally
cool the economy, including a decline in government spending and tax increases
slowing consumer spending growth. Thus, any premature change to monetary policy
by the BOJ could possibly accentuate the negative effects of the fiscal drag
already in place. We have maintained our focus on export/technology stocks, such
as Canon and Hitachi.
European equities rose 6.6% during the first six months of the year; here as
well, dollar strength eroded a significant portion of the gains (in local
currency terms, European equities rose 10.4%). The peripheral markets of Sweden
and Spain performed well in response to declining short- and long-term interest
rates as inflation subsided, and in Spain in reaction to a favorable electoral
outcome. With minimal economic growth on the horizon, defensive growth stocks
throughout Europe were in favor.
Asia Pacific and Latin American equities registered strong gains year-to-date.
Both regions' equity markets started the year strongly as international
investors (particularly U.S. institutions) increased their equity weightings in
the regions. As U.S. bonds began to sell off in March, many of the Asia Pacific
and Latin American markets had a knee-jerk reaction to higher U.S. bond yields
and the threat of increased short-term rates. After the initial reaction,
investors focused on corporate earnings and economic growth, supporting rallies
in most of the markets. Your Fund currently has small positions in Hong Kong,
Thailand and Chile.
The Worldwide Balanced Fund has remained very defensively positioned, holding a
significant cash position since the Fund's inception last year, and this has
hurt performance. Nonetheless, we retain a defensive outlook for the fixed
income markets as we see economic growth picking up through the remainder of
1996 and into 1997. Central banks have been maintaining "easy money" policies,
particularly in Japan and Germany, where short-term interest rates are at or
near historical lows. This could not only prove difficult for fixed income
markets, but could eventually put pressure on some equity markets as well,
particularly given that several equity markets have reached high valuations.
Van Eck Global
August 1, 1996
Average annual returns on the Fund for the 1-year and life (12/23/94) periods
ended 6/30/96 were 3.5% and 2.3%, respectively. These returns do not take
variable insurance/life fees and expenses into account.
This report must be accompanied or preceded by a Van Eck Worldwide Insurance
Trust 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 Securities Corporation, 99 Park Avenue, New York, NY 10016
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WORLDWIDE BALANCED FUND
STATEMENT OF NET ASSETS
JUNE 30, 1996 (UNAUDITED)
NO. OF SHARES COMMON STOCK VALUE (NOTE 1)
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CHILE: 0.5%
250 Chilgener S.A. (ADR) $6,000
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FINLAND: 0.3%
100 Nokia AB "A" (ADR) 3,700
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HONG KONG: 0.9%
700 Cheung Kong Holdings (ADR) 5,040
600 Sun Hung Kai Properties Ltd. (ADR) 6,075
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11,115
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JAPAN: 1.5%
60 Canon Inc. (ADR) 6,255
70 Hitachi Ltd. (ADR) 6,563
30 Nomura Securities Co. (ADR) 5,835
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18,653
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NETHERLANDS: 0.9%
125 ING Groep N.V. (ADR) 3,727
50 Philips Electronics N.V. 1,624
50 Philips Electronics N.V. (ADR) 1,631
25 Royal Dutch Petroleum Co.
New York Registry Shares 3,844
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10,826
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SPAIN: 0.4%
500 Compania Sevillana de Electricidad 4,601
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SWEDEN: 0.3%
100 Kinnevik AB "B" 3,029
100 Netcom Systems 1,130
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4,159
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THAILAND: 0.4%
1,000 Krung Thai Bank Ltd. - Foreign Registry 4,686
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See Notes to Financial Statements.
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WORLDWIDE BALANCED FUND
STATEMENT OF NET ASSETS (CONTINUED)
NO. OF SHARES COMMON STOCK VALUE (NOTE 1)
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UNITED KINGDOM: 1.3%
500 British Aerospace PLC $7,584
900 Compass Group PLC 8,230
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15,814
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UNITED STATES: 6.0%
150 Allied Signal Inc. 8,569
100 Burlington Northern Santa Fe 8,088
150 Intel Corp. 11,016
100 Merck & Co. 6,462
250 Monsanto Co. 8,125
150 Pfizer Inc. 10,706
175 SunAmerica, Inc. 9,888
150 Disney (Walt) Co. (The) 9,431
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72,285
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Total Common Stock: 12.5% (Cost: $137,754) 151,839
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Other Assets and
Liabilities 87.5% 1,064,252
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Total Net Assets 100.0% $1,216,091
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Glossary:
ADR - American Depository Receipt
Summary of Investments % of
by Industry Portfolio
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Aerospace & Defense 5.0%
Banks 5.5%
Brokerage 3.8%
Chemicals 5.4%
Drugs 7.1%
Electric Utilities 3.0%
Electrical Equipment 4.3%
Electronics 3.5%
Electronics & Electrical Equipment 1.1%
Entertainment & Leisure Time 6.2%
Financial Services 6.5%
Holding Co. - Diversified 2.0%
Manufacturing 5.6%
Office Equipment 4.1%
Oil Integrated - International 2.5%
Pharmaceutical 4.3%
Real Estate 7.3%
Restaurants 5.4%
Semiconductors & Equipment 7.3%
Telecommunications 0.8%
Transportation 5.3%
Utilities 4.0%
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100.0%
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See Notes to Financial Statements.
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WORLDWIDE BALANCED FUND
FINANCIAL STATEMENTS (UNAUDITED)
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STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1996
Assets:
Investments at value (identified cost, $137,754) (Note 1) $151,839
Cash 939,515
Receivables:
Capital shares sold 116,225
From Advisor 16,045
Dividends 208
Deferred organizational expenses (Note 1) 3,170
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Total assets 1,227,002
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Liabilities:
Payables:
Capital shares repurchased 289
Accounts payable 10,622
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Total liabilities 10,911
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Net Assets (Equivalent to $10.34 per share on
117,614 shares of beneficial interest
outstanding with an unlimited number of
$.001 par value shares authorized) $1,216,091
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Net assets consist of:
Aggregate paid in capital $1,201,503
Unrealized appreciation of investments 14,085
Undistributed net investment income 503
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$1,216,091
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See Notes to Financial Statements.
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WORLDWIDE BALANCED FUND
FINANCIAL STATEMENTS (UNAUDITED)
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STATEMENT OF OPERATIONS
FOR THE TWO MONTHS ENDED JUNE 30, 1996
Income:
Dividends (less foreign taxes withheld of $18) $ 528
Expenses:
Management (Note 2) $ 1,026
Administrative (Note 2) 342
Professional 0
Custodian 0
Custody 600
Professional 2,500
Miscellaneous 200
Amortization of deferred
organizational expenses (Note 1) 153
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Total expenses 4,821
Expenses assumed by the Advisor (Note 2) (4,821) 0
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Net investment income 528
Change in unrealized appreciation of investments:
Beginning of period 10,551
End of period 14,085
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Change in unrealized appreciation 3,534
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Net Increase in Net Assets
Resulting from Operations $ 4,062
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See Notes to Financial Statements.
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WORLDWIDE BALANCED FUND
FINANCIAL STATEMENTS (UNAUDITED)
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STATEMENTS OF CHANGES IN NET ASSETS
FOR THE TWO MONTHS YEAR
ENDED ENDED
JUNE 30, APRIL 30,
1996 1996
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Increase in Net Assets:
Operations:
Net investment income $528 $787
Change in unrealized appreciation
of investments 3,534 10,551
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Increase in net assets
resulting from operations 4,062 11,338
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Dividends to shareholders from:
Net investment income (812) 0
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Capital share transactions*:
Net proceeds from sales of shares 625,468 653,649
Reinvestment of dividends 812 0
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626,280 653,649
Cost of shares reacquired (21,373) (71,259)
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Increase in net assets resulting
from capital share transactions 604,907 582,390
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Total increase in net assets 608,157 593,728
Net Assets:
Beginning of period 607,934 14,206
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End of period (including
undistributed net investment
income of $503 and $787, respectively) $1,216,091 $607,934
========== ==========
*Shares of Beneficial Interest
Issued and Redeemed:
Shares sold 60,547 64,737
Reinvestment of Dividends 79 0
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60,626 64,737
Shares reacquired (2,073) (7,097)
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Net increase 58,553 57,640
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See Notes to Financial Statements.
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WORLDWIDE BALANCED FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
FOR THE TWO MONTHS FOR THE PERIOD FROM
ENDED DECEMBER 23, 1994+
JUNE 30, 1996 YEAR ENDED TO
(UNAUDITED) APRIL 30, 1996 APRIL 30, 1995
------------------ -------------- -------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 10.29 $ 10.00 $ 10.00
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Income From Investment Operations:
Net Investment Income 0.00++ 0.04++ 0.00
Net Unrealized Gains on Securities 0.06 0.25 0.00
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Total From Investment Operations 0.06 0.29 0.00
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Less: Distributions from
Net Investment Income (0.01) -- --
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Net Asset Value, End of Period $ 10.34 $ 10.29 $ 10.00
========= ========= =========
Total Return (a) 0.59% 2.90% 0.00%
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Ratios/Supplementary Data
Net Assets, End of Period (000) $1,216 $608 $14
Ratio of Expenses to Average Net Assets (b) 0.00% 0.00% 0.00%
Ratio of Net Income to Average Net Assets 0.39%(c) 0.42% 0.00%
Portfolio Turnover Rate 0.00% 0.00% 0.00%
Average Commision Rate Paid $0.0213 $0.0422
</TABLE>
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+ Commencement of operations.
++ Based on average shares outstanding.
(a) 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.
(b) Had the advisor not reimbursed expenses, the expense ratios would have been
3.53%, 8.94% and 78.40%, respectively.
(c) Annualized.
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See Notes to Financial Statements.
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WORLDWIDE BALANCED FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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NOTE 1-Significant Accounting Policies:
Van Eck Worldwide Insurance Trust (the "Trust"), organized as a Massachusetts
business trust on January 7, 1987, is registered under the Investment Company
Act of 1940. The following is a summary of significant accounting policies
consistently followed by the Worldwide Balanced Fund series, a non-diversified
fund (the "Fund") of the Trust in the preparation of its financial statements.
The policies are in conformity with generally accepted accounting principles.
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. Short-term obligations purchased with more than sixty days
remaining to maturity are valued at market. Short-term obligations purchased
with sixty days or less to maturity are valued at cost which with accrued
interest approximates value. Securities for which quotations are not available
are stated at fair value as determined by the Board of Trustees.
B. Federal Income Taxes-It is the Fund's policy to comply with the provisions of
the Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to its shareholders. Therefore, no federal
income tax provision is required.
C. Currency Translation-Assets and liabilities denominated in foreign currencies
and commitments under forward currency contracts are translated into U.S.
Dollars at the mean of the quoted bid and asked prices of such currencies on the
last business day of the fiscal period. Purchases and sales of investments are
translated at the exchange rates prevailing when such investments were acquired
or sold. Income and expenses are translated at the exchange rates prevailing
when accrued. Recognized gains or losses on security transactions attributable
to foreign currency fluctuations are recorded as net realized gains and losses
on investments. The portion of unrealized gains and losses on investments that
result from fluctuations in foreign currency exchange rates is not separately
disclosed.
D. Dividends and Distributions-Dividend income and distributions to shareholders
are recorded on the ex-dividend date.
E. Other-Security transactions are accounted for on the date the securities are
purchased or sold. Interest income is accrued as earned.
F. Deferred Organization Costs-Deferred organization costs are being amortized
over a period of five years.
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WORLDWIDE BALANCED FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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NOTE 2-Van Eck Associates Corporation (the "Advisor") earns fees for investment
management and advisory services. The fee is based on an annual rate of .75 of
1% of average daily net assets. Van Eck Associates Corporation also earns fees
for accounting and administrative services. The fee is based on an annual rate
of .25 of 1% of the Fund's average daily net assets. Fiduciary International,
Inc., the sub-investment advisor, earns fees for investment management. The fee
is based on an annual rate of .50 of 1% of the Fund's average daily net assets
and is paid by the Advisor from the advisory fees it receives from the Fund. The
sub-investment advisor waived its fee for the two months ended June 30, 1996.
Van Eck Associates Corporation agreed to waive its management fees and
administrative fees and assume all other expenses for the two months ended June
30, 1996. Certain of the officers and trustees of the Trust are officers,
directors or stockholders of Van Eck Associates Corporation and Van Eck
Securities Corporation. The Fund has a fee arrangement, based on cash balances
left on deposit with the custodian, which reduces the Fund's operating expenses.
NOTE 3-Purchases and proceed from sales of securities, other than short-term,
obligations aggregated $0 and $0, respectively, for the two months ended June
30, 1996. For federal income tax purposes the identified cost of investments
owned at June 30, 1996 was $137,754. As of June 30, 1996 net unrealized
appreciation for federal income tax purposes aggregated $14,085 of which $17,181
related to appreciated securities and $3,096 related to depreciated securities.
NOTE 4-The Fund may purchase securities on foreign exchanges. Securities of
foreign issuers involve special risks and consideration not typically associated
with investing in U.S. issuers. These risks include re-evaluation of currencies,
less reliable information about issuers, different securities transactions
clearance and settlement practices, and future adverse political and economic
developments. These risks are heightened for investments in emerging market
countries. Moreover, securities of many foreign issuers and their markets may be
less liquid and their prices more volatile than those of comparable U.S.
issuers.
