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]
B96-0731-017
Van Eck Securities Corporation
99 Park Avenue, New York, NY 10016
http://www.vaneck.com
FOR ACCOUNT ASSISTANCE PLEASE CALL (800) 544-4653
================================================================================
J U N E 3 0 , 1 9 9 6
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VAN ECK
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INTERNATIONAL
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INVESTORS
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GOLD
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FUND
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SEMI-ANNUAL
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REPORT
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- LOGO -
<PAGE>
VAN ECK INTERNATIONAL INVESTORS GOLD FUND
-----------------------------------------
1996 SEMI-ANNUAL REPORT
Dear Fellow Shareholder:
During the first half of 1996, International Investors Gold Fund produced a
total return of 4.4%, including reinvested dividends, while the price of gold
bullion declined 1.7% to $380.10 an ounce. All of the gains in the gold share
market occurred in January and early February when gold broke out of a long
trading range, rising to a high of $415.50 an ounce. From its November 1995
bottom to its February high your Fund rose 39% compared with an 8.4% rise in the
price of gold, demonstrating once again the leverage of gold-mining shares.
The impetus for the early strength of gold appears to have been three-fold.
First was the late 1995 sharp rise in the cost of borrowing gold, which lessened
the incentive for mining companies to sell large quantities of gold forward.
Second was the continued strength of gold fabrication demand, which last year
exceeded new mine and scrap supplies by approximately 25%. The third, and
perhaps most important factor, was the almost universal rush toward "easy
money." Eleven European nations lowered interest rates in December 1995 and the
central banks of the United States and other countries have cut interest rates
further this year. Germany's 2.5% and Japan's 0.5% central bank discount rates
are at post-World War II record lows, which has resulted in better gold
performance in terms of these previously strong currencies than in dollar terms.
The decline in the gold price that began in February was attributable to a
normal correction, in our judgment. This correction was accentuated by the sale
of 203 tonnes of gold by the Belgian central bank, recurring suggestions by some
members that the International Monetary Fund sell $2 billion of its gold
reserves over a period of several years, reports of increases in forward selling
(particularly by South African mines to fund development projects as gold
borrowing costs moved closer to normal levels) and by somewhat less volatility
in the currency markets and higher long-term real (inflation-adjusted) interest
rates, particularly in the United States.
Two conflicting cross currents have affected South African gold shares this
year. On the negative side, the 19% depreciation of the South African rand from
February through April caused some foreign liquidation of South African
securities. Since weakness in the currency occurred during a period of generally
lower gold prices, South African gold shares also declined in U.S. dollar terms,
although they did rise in terms of the rand. Recently, the relative performance
of the South African shares improved, despite a lower gold price, as it became
increasingly recognized that a lower rand would likely improve mine
profitability. Higher rand-denominated gold prices are unlikely to be matched
soon by higher costs, particularly in view of the government's recently released
"Macroeconomic Strategy," which calls for wage moderation to improve the
nation's competitiveness in international trade.
Furthermore, the South African mines are actively restructuring and
consolidating their operations to improve efficiency and open up new areas of
development. One mining finance house, Anglo Vaal Holdings Ltd., plans to merge
its four operating mining companies into a single unit to enable it to develop
more economical large gold deposits, potentially containing as much as forty
million ounces of mineable reserves. Other mining houses, including Randgold &
Exploration Co. Ltd. and Gencor Ltd., have similar restructuring programs in
progress, and in all likelihood, more are on the way. Developments in this
regard help explain the superior performance this year of Elandsrand Gold Mining
Co. Ltd., Free State Consolidated Gold Mines Ltd., Hartebeestfontein Gold Mining
Co. Ltd., Winkelhaak Mines Ltd., Randgold & Exploration Co. Ltd., Loraine Gold
Mines Ltd. and Middle Witwatersrand Ltd. At the end of the second quarter, South
African shares represented approximately 47% of Fund assets.
Taking the period as a whole, Australian shares, which now account for 10% of
assets, were the best performing geographical sector of the market. Many of
these companies have extensive exploration and mine development projects
underway, and therefore, are usually more affected by internal developments than
the South African mines (although in regard to South Africa, this characteristic
may be changing). Some of the better performing shares in the portfolio, which
have benefited either from recent exploration and development success or
improved operating conditions and consolidation, include Great Central Mines
N.L., North Flinders Mines Ltd. and Resolute Samantha Gold N.L. in Australia,
and North American mines, such as Richmont Mines Inc., Hemlo Gold Mines Inc.,
<PAGE>
Newmont Gold Co., Santa Fe Pacific Gold Corp. and Stillwater Mining Co.,
America's only significant platinum producer. North American mining shares now
account for approximately 42% of the portfolio.
DIVIDEND NEWS
A quarterly dividend of $.02 a share on Class A shares was paid on June 28, 1996
to shareholders of record on June 26, 1996. Your check was sent to you unless
you participate in the Dividend Reinvestment Plan, in which case a quarterly
statement was sent to you indicating the number of shares purchased for your
account at net asset value on the dividend reinvestment date, June 28, 1996.
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
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.
- --------------------------------------------------------------------------------
Dow Jones Industrial Average--Gold Price Ratio
1/1/76-6/30/96
[GRAPH]
Source: DATASTREAM
- --------------------------------------------------------------------------------
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 ten 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.
<PAGE>
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
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 defaults. It is a "safe
haven" during monetary disorders and has assured liquidity. Gold is a bear
market alternative.
LONG-TERM INFLATION
In his recent testimony to Congress, Alan Greenspan said that the recent
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 International Investors Gold Fund and we
look forward to helping you meet your investment objectives in the future.
--------------- ----------------
[PHOTO] [PHOTO]
--------------- ----------------
/s/John C. van Eck /s/Henry J. Bingham
--------------- ----------------
John C. van Eck Henry J. Bingham
Chairman President
July 25, 1996
Note: As of July 1, 1996, Lucille Palermo became President and Portfolio Manager
of International Investors Gold Fund. Ms. Palermo has over fifteen years'
experience in gold investing and also manages the Van Eck Gold/Resources Fund
and the Van Eck Gold Opportunity Fund.
<PAGE>
GOLD SHARES AND YOUR INCOME PORTFOLIO
JUNE 30, 1976-JUNE 30, 1996
[GRAPH]
This example illustrates the superior performance of a portfolio (original total
investment of $1000) invested for 20 years (period ended 6/30/96), 80% in the
unmanaged Lehman Brothers Government Bond Index* and 20% in International
Investors Gold Fund (II) over a portfolio invested 100% in the same bond
index.** The portfolio that included gold shares (II) provided an average annual
rate of return of 11.8% compared to 9.6 % on the bonds-only portfolio, resulting
in the substantial difference in the final values of the portfolios shown above.
GOLD SHARES AND YOUR GROWTH PORTFOLIO
JUNE 30, 1976-JUNE 30, 1996
[GRAPH]
This example illustrates how gold shares might have improved the performance of
a stock portfolio invested in the S&P 500 Index, an unmanaged stock index, over
a 20-year period. The portfolio that included 20% International Investors Gold
Fund would have achieved an average annual rate of return of 15.3% versus 14.2%
for the stock-only portfolio.** The above chart illustrates the significance of
that difference for an original $1000 investment.
* U.S. Treasury Securities, which comprise the Lehman Brothers Government Bond
Index, are backed by the U.S. Government for payment of principal and
interest. Shares of International Investors Gold Fund are not so backed.
** The portfolios with 20% held in International Investors were rebalanced
yearly.
The S&P 500 and the Lehman Brothers Government Bond Index are unmanaged indexes
and the Consumer Price Index is a measure of inflation. Past performance is not
indicative of future results. Investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost.
HOW A $10,000 INVESTMENT IN INTERNATIONAL INVESTORS GOLD FUND-CLASS A GREW TO
$862,909
As of June 30, 1996 the average annual
total returns were:
Before After Maximum
Sales Charge Sales Charge*
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A shares-Life (since 2/10/56) 11.8% 11.6%
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Past twenty years 13.8% 13.5%
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Past fifteen years 7.5% 7.1%
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Past ten years 8.3% 7.7%
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Past five years 6.0% 4.7%
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Past one year 7.8% 1.6%
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C shares-Life (since 10/14/94) (9.4)% (9.4)%
- --------------------------------------------------------------------------------
Past one year 6.5% 5.5%
- --------------------------------------------------------------------------------
Past performance is not indicative of future results.
*A shares: maximum sales charge = 5.75%
C shares: 1% redemption charge, 1st year
[GRAPH]
Note: International Investors Gold Fund became a gold-oriented fund in 1968.
<PAGE>
The chart below illustrates how a $10,000 investment in International Investors
Gold Fund-Class A with income, dividends and capital gains distributions
reinvested would have grown to $862,909 over the life of the Fund. In the other
charts to the left, you will also see examples of how International Investors
Gold Fund -Class A shares might enhance the returns of two portfolios, one
growth, the other income-oriented. This information is provided strictly for
illustrative purposes and is not to be construed as a guarantee of future
returns in International Investors Gold Fund or any Van Eck Fund. Past
performance is not indicative of future results.
[GRAPH]
<PAGE>
INTERNATIONAL INVESTORS GOLD FUND
INVESTMENT PORTFOLIO JUNE 30, 1996 (UNAUDITED)
NO. OF SHARES SECURITIES (a) VALUE (NOTE 1)
- --------------------------------------------------------------------------------
AUSTRALIA: 9.8%
800,000 Acacia Resources Ltd. $ 1,889,400
1,000,000 Australian Resources Ltd. 826,613
271,000 Central Pacific Minerals N.L. 2,235,750
500,000 Emperor Mines Ltd. 1,180,875
2,042,000 Ghana Gold Mines Ltd. 626,950
809,800 Great Central Mines N.L. 2,218,552
916,500 Newcrest Mining Ltd. 3,679,725
300,000 North Flinders Mines Ltd. 1,993,317
380,000 Placer Pacific Ltd. 553,437
5,150,000 Plutonic Resources Ltd. 26,353,194
600,000 Resolute Samantha Gold N.L. 1,393,432
250,000 Sons of Gwalia N.L. 1,771,313
500,000 St. Barbara Mines Ltd. 326,709
700,000 WMC Ltd. 5,053,136
-----------
50,102,403
-----------
CANADA: 20.4%
60,000 Agnico Eagle Mines, Ltd. 975,000
1,000,000 Barrick Gold Corp. 27,125,000
300,000 Bema Gold Corp. Reg 144A 1,132,656
200,000 Cambior Inc. 2,646,531
390,000 Canarc Units+ 456,289
920,000 Echo Bay Mines Ltd. 9,890,000
190,000 Goldcorp Inc. (Class A) 3,135,000
500,000 Granges Units+ 649,023
150,000 Hemlo Gold Mines Inc. 1,593,750
800,000 Miramar Mining Corp. 4,310,692
140,000 Pangea Goldfields Units+ 470,255
750,000 Pegasus Gold Inc. 9,187,500
1,010,000 Placer Dome Inc. 24,113,750
250,000 Richmont Mines Inc. 989,700
300,000 Royal Oak Mines Inc. 1,106,250
30,000 Stone Consolidated Corp. 368,388
120,000 Teck Corp. (Class B) 2,463,253
1,800,000 TVX Gold Inc. 13,050,000
-----------
103,663,037
-----------
GHANA: 0.6%
160,000 Ashanti Goldfields Co. Ltd. (GDR) 3,160,000
-----------
NETHERLANDS: 0.7%
15,000 Renaissance Hotel Group N.V. 322,500
20,000 Royal Dutch Petroleum Co.
N.Y. Registry Shares 3,075,000
-----------
3,397,500
-----------
NORWAY: 0.1%
12,000 Petroleum Geo-Services A/S (ADR) 340,500
-----------
PERU: 0.2%
44,500 Co. De Minas Buenaventura
S.A. (ADR) 884,437
-----------
PHILIPPINES: 0.1%
500,000 Filinvest Development Corp. 262,354
-----------
SOUTH AFRICA: 46.7%
86,000 Anglo American Corp. of
South Africa (b) 5,439,500
1,000,000 Beatrix Mines Ltd. 8,062,500
1,297,249 Blyvooruitzicht Gold
Mining Co. Ltd. (b) 2,189,107
1,075,000 Consolidated Modderfontein
Mines Ltd. (ADR) 421,938
1,700,000 Deelkraal Gold
Mining Co. Ltd. (ADR) 1,615,000
1,140,000 Driefontein
Consolidated Ltd. (b) 14,962,501
150,000 Durban Roodepoort Deep Ltd. (b) 1,312,501
83,924 Durban Roodeport Deep, Ltd. 8%
Preferred 775,190
2,075,000 Elandsrand Gold
Mining Co. Ltd. (b) 11,542,187
1,165,649 Free State Consolidated
Gold Mines Ltd. (b) 10,782,253
610,000 Gold Fields of South
Africa Ltd. (b) 18,452,500
680,000 Harmony Gold Mining Co. Ltd.(b) 6,502,500
1,900,000 Hartebeestfontein Gold
Mining Co. Ltd. (ADR) 6,471,970
835,000 Impala Platinum Holdings Ltd.(b) 12,003,125
590,000 Kinross Mines Ltd. (b) 6,324,087
1,866,900 Kloof Gold Mining Ltd. (b) 18,085,594
1,300,000 Loraine Gold Mines Ltd. (b) 4,712,500
6,792,000 Middle Witwatersrand
(Western Areas) Ltd. 30,309,300
439,780 Potgietersrust Platinum Ltd. 2,185,157
1,750,000 Randfontein Estates Gold 10,696,875
520,500 Randgold & Exploration Co. Ltd. 2,732,625
557,924 Rustenburg Platinum
Holdings Ltd. (b) 8,717,563
896,200 Unisel Gold Mines Ltd. (ADR) 3,237,523
161,100 Vaal Reefs Exploration and
Mining Co. Ltd. 12,888,000
1,170,154 Western Area Gold
Mining Co. Ltd. (b) 18,247,137
420,300 Western Deep Levels Ltd. (b) 15,235,876
375,000 Winkelhaak Mines Ltd. (b) 3,140,625
-----------
237,045,634
-----------
SPAIN: 0.1%
7,500 Repsol, S.A. (ADR) 260,625
-----------
UNITED KINGDOM: 0.1%
500,000 Reunion Mining PLC 481,290
-----------
UNITED STATES: 21.1%
530,000 Alta Gold Co. 1,888,125
1,500 Amoco Corp. 108,563
10,000 Baker Hughes Inc. 328,750
1,150,000 Battle Mountain Gold Co. 8,337,500
6,850 Camco International Inc. 232,044
370,000 Coeur D'Alene Mines 6,798,750
10,000 Cross Timbers Oil Co. 247,500
6,300 Devon Energy Corp. 154,350
10,000 Ensco International Inc. 325,000
34,000 Forest Oil Corp. 463,250
540,000 Freeport-McMoRan Copper &
Gold Inc. (Class A) 16,132,500
280,000 Getchell Gold Corporation 9,240,000
1,360,000 Homestake Mining Corp. 23,290,000
6,000 Louisiana Land & Exploration Co. 345,750
1,000 Mobil Corp. 112,125
260,000 Newmont Gold Co. 13,097,500
240,000 Newmont Mining Corp. 11,850,000
10,000 Nuevo Energy Co. 322,500
98,000 Pacific Greystone Corp. 1,237,250
12,500 Patriot American Hospitality Inc. 370,313
1,270,000 Piedmont Mining Co., Inc. 793,750
15,000 Reading & Bates Corp. 331,875
480,000 Santa Fe Pacific Gold Corp. 6,780,000
17,300 Security Capital Industrial Trust 304,913
105,000 Stillwater Mining Co. 2,480,625
3,000 Triton Energy Ltd. 145,874
11,600 Union Pacific Resources Group Inc. 310,300
15,000 United Meridian Corp. 540,000
275,000 USMX Inc. 670,312
10,000 USX-Marathon Group Inc. 201,250
5,000 Weatherford Enterra Inc. 150,000
-----------
107,590,669
-----------
TOTAL STOCKS & OTHER INVESTMENTS: 99.9%
(Cost $305,426,135) 507,188,449
-----------
See Notes to Financial Statements.
<PAGE>
INTERNATIONAL INVESTORS GOLD FUND
INVESTMENT PORTFOLIO JUNE 30, 1996 (UNAUDITED)
NUMBER OF
CONTRACTS CALL OPTIONS PURCHASED: 0.1% VALUE (NOTE 1)
- --------------------------------------------------------------------------------
47,249 Blyvooruitzicht Gold Mining Co. Ltd.
Strike Price @ 6 ZAR Expiring
12/31/2000 $ 54,554
83,924 Durban Roodeport Deep Ltd.
Strike Price @ 30 ZAR Expiring
12/31/1999 387,595
------------
TOTAL CALL OPTIONS PURCHASED: 0.1%
(Cost $548,129) 442,149
------------
TOTAL INVESTMENTS: 100% (Cost $305,974,264) $507,630,598
============
(a)Unless otherwise indicated, securities owned are shares of common stock.
(b)Includes securities in the form of American Depositary Receipts (ADR). ADR's
are traded at prices substantially equivalent to those quoted for ordinary
shares.
* Fair value as determined by Board of Trustees.
+ Restricted securities, see Note 6.
SUMMARY OF
INVESTMENTS % OF
BY INDUSTRY PORTFOLIO
- ----------------------------- ---------
Gold Mining 76.4%
Mining--Finance House 10.7%
Platinum 5.0%
Copper 3.2%
Metals & Mining 1.6%
Mining--Diversified 1.0%
Oil Integrated--International 0.7%
Oil & Gas Exploration 0.4%
Oil/Gas Equipment & Services 0.3%
Home Building 0.2%
Real Estate Investment Trust 0.1%
Real Estate 0.1%
Mining 0.1%
Oil/Gas Domestic 0.1%
Paper & Forest Products 0.1%
------
100.0%
======
See Notes to Financial Statements.
<PAGE>
INTERNATIONAL INVESTORS GOLD FUND
FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1996
ASSETS:
Investments at value (cost, $305,974,264)
(Note 1) $507,630,598
Receivables:
Dividends 1,558,898
Securities sold 2,609,911
Tax reclaims 40.810
From Advisor 11,308
Other assets 4,388
------------
Total assets 511,855,913
------------
LIABILITIES:
Payables:
Due to Custodian 3,304,624
Capital shares redeemed 284,233
Securities purchased 54,828
Dividends payable 148,926
Accounts payable 149,964
------------
Total liabilities 3,942,575
------------
NET ASSETS $507,913,338
============
CLASS A
Net asset value and redemption
price per share
($505,928,311/36,418,682) $13.89
======
Maximum offering price per share
(NAV/(1 - maximum sales commission)) $14.74
======
CLASS C
Net asset value, offering and redemption
price per share ($1,985,027/144,683)
(Redemption may be subject to a contingent
deferred sales charge within the
first year of ownership) $13.72
======
Net assets consist of:
Aggregate paid in capital 292,705,909
Unrealized appreciation of investments and
foreign currency 201,570,928
Distribution in excess of net
investment income (1,291,152)
Undistributed realized gains 14,927,653
------------
$507,913,338
============
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
Six Months Ended June 30, 1996
INCOME:
Dividends (less foreign taxes withheld
of $46,699) $ 4,632,295
Interest 640,865
-----------
Total income $ 5,273,160
EXPENSES:
Management (Note 3) 2,221,418
Distribution Class C (Note 4) 8,637
Administration 758,941
Transfer agency 666,667
Custody 158,525
Registration 28,176
Professional 68,825
Reports to shareholders 57,728
Trustees fees 37,681
Other 130,182
-----------
Total expenses 4,136,780
Expenses assumed by Advisor
(Note 4) (11,308)
-----------
Net expenses 4,125,472
-----------
Net investment income 1,147,688
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTE 2)
Realized gain from security transactions 15,528,422
Realized loss from gold bullion (600,769)
Realized loss from foreign currency
transactions (52,094)
Change in unrealized depreciation of foreign
denominated receivables and payables (83,430)
Change in unrealized appreciation of
investments 20,380,715
-----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $36,320,532
===========
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS ENDED
JUNE 30, 1996 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1995
---------------- -----------------
DECREASE IN NET ASSETS:
Operations:
Net investment income $ 1,147,688 $ 3,162,104
Realized gain from
security transactions 15,528,422 15,298,241
Realized loss from gold bullion (600,769) (732,608)
Realized loss from foreign
currency transactions (52,094) (72,193)
Change in unrealized depreciation
of foreign currency receivables
and payables (83,430) (1,974)
Change in unrealized appreciation
(depreciation) of investments 20,380,715 (68,070,609)
------------- --------------
Increase (decrease) in net assets
resulting from operations 36,320,532 (50,417,039)
Dividends to shareholders from:
Net investment income
Class A shares (1,946,285) (4,029,551)
Class C shares -- (451)
------------- --------------
(1,946,285) (4,030,002)
------------- --------------
Net realized gain
Class A shares -- (14,509,609)
Class C shares -- (20,445)
------------- --------------
-- (14,530,054)
------------- --------------
Tax return of capital
Class A shares -- (729,570)
Class C shares -- (1,067)
------------- --------------
-- (730,637)
------------- --------------
34,374,247 (69,707,732)
------------- --------------
Capital share transactions*
Net proceeds from sales of shares:
Class A shares 1,593,404,763 2,320,963,093
Class C shares 1,995,036 674,526
------------- --------------
1,595,399,799 2,321,637,619
------------- --------------
Reinvestment of dividends:
Class A shares 1,501,144 34,594,341
Class C shares -- 32,330
------------- --------------
1,501,144 34,626,671
------------- --------------
Cost of shares reacquired:
Class A shares (1,643,304,463) (2,400,920,600)
Class C shares
(572,498) (358,616)
-------------- --------------
(1,643,876,961) (2,401,279,216)
-------------- --------------
Decrease in net assets resulting
from capital share transactions (46,976,018) (45,014,926)
-------------- --------------
Total decrease in net assets (12,601,771) (114,722,658)
NET ASSETS:
Beginning of period 520,515,109 635,237,767
-------------- --------------
End of period (including
overdistributed net
investment income of
$1,291,152 and distributions
in excess of $440,461,
respectively) $507,913,338 $520,515,109
============== ==============
*SHARES OF BENEFICIAL INTEREST
ISSUED AND REDEEMED (UNLIMITED
NUMBER OF $.001 PAR VALUE
SHARES AUTHORIZED)
CLASS A CLASS A
-------------- --------------
Shares sold 102,728,972 168,788,761
Reinvestment of dividends 101,040 2,413,214
-------------- --------------
102,830,012 171,201,975
Shares reacquired (105,349,953) (173,993,647)
-------------- --------------
Net decrease (2,519,941) (2,791,672)
============== ==============
CLASS C CLASS C
-------------- --------------
Shares sold 127,215 50,162
Reinvestment of dividends -- 2,662
-------------- --------------
127,215 52,824
Shares reacquired (36,993) (26,766)
-------------- --------------
Net increase 90,222 26,058
============== ==============
See Notes to Financial Statements.
<PAGE>
INTERNATIONAL INVESTORS GOLD FUND
- --------------------------------------------------------------------------------
STATEMENT OF AFFILIATED COMPANY TRANSACTIONS (UNAUDITED)
Transactions with affiliates (as defined in the Investment Company Act of 1940)
of the Fund are listed below:
<TABLE>
<CAPTION>
PURCHASES SALES
12/31/95 ------------------- -------------- 6/30/96
SHARE REALIZED SHARE MARKET DIVIDEND
ISSUER BALANCE SHARES COST SHARES COST GAIN (LOSS) BALANCE VALUE INCOME
-------- ------- ---- ------ ---- ----------- -------- ----- -------
Blyvooruitzicht Gold
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Mining Co. Ltd. 1,200,000 97,249 $150,596 -- -- -- 1,297,249 $ 2,189,107 --
Blyvooruitzicht Gold
Mining Co. Ltd.
(Options expiring
12/31/2000) -- 47,249 19,780 -- -- -- 47,249 54,554 --
Durban Roodepoort
Deep, Ltd. 150,000 -- -- -- -- -- 150,000 1,312,501 --
Durban Roodepoort
Deep, Ltd. 8% Preferred 83,924 -- -- -- -- -- 83,924 775,190 --
Durban Roodepoort Deep, Ltd.
(Options expiring
12/31/1999) 83,924 -- -- -- -- -- 83,924 387,595 --
Loraine Gold Mines Ltd. 1,300,000 -- -- -- -- -- 1,300,000 4,712,500 --
Piedmont Mining Co., Inc. 1,270,000 -- -- -- -- -- 1,270,000 793,750 --
Canarc Units -- 390,000 641,987 -- -- -- 390,000 456,289 --
Ghana Gold Mines Ltd. -- 2,042,000 639,123 -- -- -- 2,042,000 626,950 --
Granges Units -- 500,000 954,479 -- -- -- 500,000 649,023 --
---------- --------- -------- ------------ ------
Total $2,405,965 $ -- $ -- $11,957,459 --
========== ========= ======== ============ ======
</TABLE>
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period
<TABLE>
<CAPTION>
CLASS A CLASS C
-------------------------------------------------------- ---------------------------------------
SIX MONTHS SIX MONTHS FOR THE PERIOD
ENDED ENDED YEAR OCT. 14, 1994++
JUNE 30, YEAR ENDED DECEMBER 31, JUNE 30, ENDED TO
1996 ---------------------------------------- 1996 DEC. 31, DECEMBER 31,
(UNAUDITED) 1995 1994 1993 1992 1991 (UNAUDITED) 1995 1994
----------- ---- ---- ---- ---- ---- ------------ ------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value
Beginning of Period ...... $13.35 $15.21 $16.08 $ 7.81 $11.29 $11.32 $13.22 $15.13 $17.56
------ ------ ------ ------ ------ ------ ------ ------ ------
Income from Investment
Operations:
Net Investment Income (Loss) 0.03 0.08 0.19 0.14 0.17 0.16 (0.03) (0.07) 0.04(c)
Net Gain (Loss) on
Securities (both
realized and unrealized) 0.56 (1.44) (0.36) 8.70 (3.44) 0.13 0.53 (1.43) (1.78)
------ ------ ------ ------ ------ ------ ------ ------ ------
Total from Investment
Operations.................. 0.59 (1.36) (0.17) 8.84 (3.27) 0.29 0.50 (1.50) (1.74)
------ ------ ------ ------ ------ ------ ------ ------ ------
Less Distributions:
Dividends from Net
Investment
Income (a).............. (0.05) (0.10) (0.18) (0.13) (0.12) (0.17) -- (0.01) (0.17)
Distributions from
Capital Gains -- (0.38) (0.52) (0.44) (0.09) (0.15) -- (0.38) (0.52)
Tax Return of Capital -- (0.02) -- -- -- -- -- (0.02) --
------ ------ ------ ------ ------ ------ ------ ------ ------
Total Distributions......... (0.05) (0.50) (0.70) (0.57) (0.21) (0.32) -- (0.41) (0.69)
------ ------ ------ ------ ------ ------ ------ ------ ------
Net Asset Value,
End of Period............. $13.89 $13.35 $15.21 $16.08 $ 7.81 $11.29 $13.72 $13.22 $15.13
====== ====== ====== ====== ====== ====== ====== ====== ======
Total Return (b)............ 7.84% (8.93%) (1.04%)113.41% (29.09%) 2.56% 6.65% (9.91%) (9.9%)
- -----------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY DATA
Net Assets,
End of Period (000) $505,928 $519,795 $634,808 $706,171 $360,177 $568,859 $1,985 $720 $430
Ratio of Expenses to
Average
Net Assets.............. 1.36%+ 1.42% 1.15% 1.12% 1.18% 1.17% 2.36%+* 2.46%* 2.27%+
Ratio of Net Income
(Loss) to
Average Net Assets ..... 0.38 %+0.55% 1.23% 1.13% 1.72% 1.41% (0.62%)+ (0.45%) 1.25%+
Portfolio Turnover Rate ... 4.91 %4.10% 7.08% 7.20% 2.30% 2.20% 4.91% 4.10% 7.08%
Average Commission
Rate Paid $0.0281 $0.0281
- -----------
(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
$0.03 for 1995, $0.07 for 1994, $0.05 for 1993, $0.04 for 1992 and $0.03 for
1991.
(b) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all dividends
and distributions at net asset value during the period and a redemption on
the last day of the period. A sales charge is not reflected in the
calculation of total return. Total return calculated for a period of less
than one year is not annualized.
(c) Based on average shares outstanding.
* Had the Advisor not agreed to assume a portion of expenses for Class C, the
expense ratios would have been 3.66%+ and 5.57%.
+ Annualized.
++ Initial offering of Class C shares.
See notes to financial statements.
</TABLE>
<PAGE>
INTERNATIONAL INVESTORS GOLD 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 International Investors Gold Fund series (formerly known as International
Investors), a 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 finan-cial 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 ex-changes 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 prices 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 on other foreign denominated assets and
liabilities attributable to foreign currency fluctuations are recorded as net
realized gains and losses from foreign currency transactions.
D. DISTRIBUTIONS -- Dividends to shareholders from net investment income and
realized gains, if any, are recorded on the ex-dividend date. Income and
capital gains distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences are primarily due to the differing treatment of foreign
currency transactions and 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.
Interest income is accrued as earned.
NOTE 2 -- Purchases and proceeds from sales of investments
other than short-term obligations and gold bullion, aggregated $28,288,323 and
$68,899,730, respectively, for the six months ended June 30, 1996. Purchases and
sales of gold bullion totaled $20,275,947and $19,675,178, respectively. For
federal income tax purposes the cost of investments owned at June 30, 1996 was
$305,974,264. As of June 30, 1996, net unrealized appreciation for federal
income tax purposes aggregated $201,656,334 of which $243,065,607 related to
appreciated investments and $41,409,273 related to depreciated investments.
NOTE 3 -- Van Eck Associates Corporation earned fees of $2,221,418 for the six
months ended June 30, 1996 for investment management and advisory services. The
fee was 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 $85,595
for the six months ended June 30, 1996 from commissions earned on sales of
shares of beneficial interest of the Fund after deducting $707,805 allowed to
other dealers. In accordance with the administration agreement, the Fund
reimbursed Van Eck Associates Corporation $758,941 for costs incurred in
connection with certain administrative and operational functions. Certain of the
officers and trustees of the Trust are officers, directors or stockholders of
Van Eck Associates Corporation and Van Eck Securities Corporation.
The Advisor agreed to assume $11,308 of Class C transfer agency's expenses for
the six months ended June 30, 1996. In addition, the Fund had some of its
portfolio trades directed to a broker-dealer who, in return, agreed to pay a
portion of the Fund's expenses. The Fund directs certain portfolio trades to a
broker that, in turn, pays a portion of the Fund's operating expenses.
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 1.00% of average daily net assets for Class C shares (the
"Annual Limitation"). 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 advanced fees
will be expensed by the Fund over the course of the first twelve months from the
time of purchase. Should the payments made by the Fund to the brokers exceed, on
an annual basis, 1% of average daily net assets, VESC will reimburse 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.
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 October 14,
1994 through April 30, 1997 in the event the Plan is terminated, unless the
Board of Trustees determines that reimbursement of the carried forward amount is
appropriate. The cumulative excess of distribution expenses incurred over the
Annual Limitation at June 30, 1996, was $42,598 for Class C shares.
<PAGE>
INTERNATIONAL INVESTORS GOLD 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 has significant investments in South African securities. South African
securities may be subject to greater political, social and economic risks than
investments in more developed foreign markets. Emerging market countries, such
as South Africa, may present the risk of nationalization of businesses, or
prohibitions of repatriation of assets, and may have less protection of property
rights than more developed countries.
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
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
--------- ---- ----- ----------
Canarc Units 6/20/96 $641,987 $456,289 0.09%
Granges Units 4/25/96 954,479 649,023 0.13%
Pangea Goldfields Units 6/05/96 574,212 470,255 0.09%
