VAN ECK INTERNATIONAL INVESTORS GOLD FUND
-----------------------------------------
1995 ANNUAL REPORT
Dear Fellow Shareholder:
We remain optimistic on the outlook for gold. Last year, however, provided mixed
results and your Fund declined 8.9%, mainly because of weakness in the prices of
South African gold-mining shares, particularly in the first half of the year and
in the month of October. During the last three years, your Fund's average annual
return was 24.4%, placing it fifth among the 28 precious metals funds monitored
by Micropal, Inc., a mutual fund evaluation service*. The favorable longer-term
results were due primarily to the superior performance of the South African
shares during periods of rising gold prices. For instance, they more than
doubled in 1993 from 1992 when the price of gold rose 17.4%.
We maintained our position in South African gold shares, which comprise
approximately 47% of Fund assets, because we believe that they are the cheapest
in the world and accordingly, offer superior investment value. However, during
much of 1995 the earnings of the South African mines were under pressure from
labor disturbances and lower output during the period of labor negotiations.
Late in the third quarter, a new labor agreement was reached that raised mining
wages by about the rate of inflation. The agreement also instituted policies to
improve mining efficiencies, including 365-day-a-year mining schedules common in
other countries, as well as the devolution of many labor relations issues to the
local mine level in order to facilitate additional improvements in productivity.
Evidence of the success of these changes should be forthcoming later this year.
Many South African mines are also proceeding with internal restructuring and
development programs, which are expected to extend mine life as well as to
reduce costs. Two companies represented in the Fund, Beatrix Mines Ltd. and
Western Areas Gold Mining Company Limited, are in the midst of substantial
growth phases as new areas of their mines are being developed.
North American gold shares, which account for approximately 40% of the
portfolio, were the best performing geographical sector of the Fund. Several of
these companies, including Barrick Gold Corporation, TVX Gold Inc. and Newmont
Mining Corporation, have active exploration, development and/or acquisition
programs underway, which may add materially to gold reserves, production and
future earning power.
Australian gold-mining companies account for about 8.5% of assets. Many are
actively pursuing exploration and development programs to add new reserves. The
development of underground reserves below several existing surface operations
should materially extend the size and lives of these mines. Several also have
policies to expand their activities into Indonesia and other Asian nations where
significant gold and copper/gold deposits remain to be developed.
DIVIDEND NEWS
A dividend of $.01 a share on the Class A shares and long-term capital gains
distributions of $.39 a share on both the Class A and Class C shares were paid
on December 29, 1995 to shareholders of record on December 27, 1995. You have
already received either a check or, if you participate in the dividend
reinvestment plan, a confirmation of the number of shares purchased for your
account at net asset value on the dividend reinvestment date, December 29, 1995.
GOLD IS UNDERVALUED
Since 1989, there has been a fundamental shortage of gold caused by a much
greater private demand for gold from fabricators and investors than supply from
newly-mined gold and scrap recovery. This shortage has been met by direct sales
of gold from central banks, sales of gold originating from mine forward sales
and option hedging. These sales were large and have put pressure on the gold
price.
The price of gold averaged $384 an ounce in 1995 and it traded in an unusually
narrow range from $371.50 to $395.20 an ounce. It thus continued its lackluster
performance which began in 1989. With 1989 as a base, the gold price is
undervalued compared to the U.S. Consumer Price Index. The latter has risen 23%
<PAGE>
- --------------------------------------------------------------------------------
Global Gold Supply, Demand and Price
(metric tons)
1990 1991 1992 1993 1994 1995
- -------------------------------------------------------------------
FUNDAMENTAL
Demand (fabrication,
Asiatic bar investment and 3087 2860 3488 3461 3104 3618
net Western investment)
Supply (mine production, 2671 2631 2714 2853 2885 2858
old gold scrap) ----------------------------------------
Supply Shortage 416 229 774 608 219 760
========================================
WHICH WAS MET BY:
CENTRAL BANKS
Net Additional Mine
Forward Sales, Option
Hedging and Gold Loans 229 111 172 110 133 621
(largely through central
bank loans)
Net Sales 187 118 602 498 86 139
---------------------------------------
Net Central Bank Supply 416 229 774 608 219 760
=======================================
Average Gold Price $384 $362 $344 $360 $384 $384
U.S. Consumer Price Index 130.7 136.2 140.3 144.5 148.2 152.5
Sources: "Gold 1995," Gold Fields Mineral Services, Ltd.
Department of Commerce
- --------------------------------------------------------------------------------
since 1989 while the price of gold was flat through the end of the year.
As indicated in the chart above, the demand for gold rose approximately 17% in
1995 and mine production remained flat. Demand is estimated to be about 27%
greater than supply. This increase in demand was partially met by the over
four-fold increase in mine forward sales and option hedging. These factors more
or less offset each other so there was little change in the spot price. However,
the growing demand for leased gold from the mine selling programs pushed up the
central bank lease rate in November to a peak and almost crisis level as shown
in the adjacent graph. This was accompanied by a decline in the annual contango
premium from about 6% in December 1994 to approximately 3% at present, which
lowered related forward prices. For instance, the December 1998 gold contract,
which was priced at $505 in December 1994, is now selling at about $434.50 an
ounce (at January 25) . The lower relative forward prices reduce the
attractiveness of forward sales to the mines.
GOLD MINE FORWARD SALES
Many gold mines sell a portion of their gold to bullion banks through forward
contracts at future prices, which carry a premium (called a contango) over
current (spot) prices, so that they can lock in the higher prices for future
sales. The bullion banks purchase the forward contracts from the mines over long
periods ahead and pay for the transaction by leasing the gold (usually for a
three-month period) from central banks, by selling the leased gold on the spot
market and by investing the proceeds at an interest rate to cover the cost of
the lease rate and the contango premium. The bullion banks usually have to roll
over their three-month leased gold with the central banks to meet the longer
terms of their contracts with the mines. The transaction is concluded when the
mine delivers the mined gold to the bullion bank, which in turn settles its
lease with the central banks.
LONG-RUN INFLATIONARY CYCLE
The monetary seeds of the next inflation cycle are being sown. In spite of
relatively tight money policies in the United States (high real interest rates
and reduced monetization of government debt), total global cash outstanding last
year grew by approximately 26%, largely caused by Japanese purchases of U.S.
Government debt. The political drive to reduce government deficits in the United
States, and in Europe to achieve European Monetary Union fiscal objectives,
means that these deflationary forces must be balanced by more expansive monetary
policies. Such policies will also be required to offset a period of global
- --------------------------------------------------------------------------------
<PAGE>
Gold 3-Month Lease Rates
1/1 to 12/31/95
1/1/95 1.0675 1/31/95 1.3
1.0075 1.31
0.9575 1.3225
1.0075 1.25
0.965 1.32
0.975 1.31
1.125 1.26
1 1.22
0.8975 1.21
0.8775 1.1175
0.895 1.16
0.905 1.19
0.908 1.25
1.033 1.1975
1.003 1.1875
0.99 1.1875
1.04 1.1575
1.25 1.185
1.303 1.215
1.283 1.3175
1.32
2/28/95 1.8475 3/31/95 1.4975
1.4675 1.47
1.5475 1.36
1.5975 1.3175
1.6075 1.2575
1.57 1.2175
1.52 1.1075
1.52 1.0475
1.55 1.0075
1.61 0.9275
1.5875 0.9275
1.6175 0.9275
1.6475 0.9175
1.6175 0.8975
1.9275 0.8975
1.7775 0.9775
1.6675 0.955
1.6975 0.975
1.6875 0.985
1.6775 0.985
1.6775
1.73
1.68
4/28/95 0.965 5/31/95 0.89
0.985 0.88
0.965 0.8175
0.935 0.8125
0.955 0.845
0.955 0.815
0.955 0.83
0.9425 0.79
0.98 0.79
0.99 0.78
1.01 0.82
1.0525 0.7575
1.0625 0.81
1.0325 0.8
1.0725 0.7675
1.0425 0.8375
1.0225 0.9175
0.9825 1.015
0.9725 1.035
1.0125 1.0775
0.97 1.1775
0.97 1.1375
0.95
6/30/95 1.0675 7/31/95 1.22
1.0975 1.3
1.1075 1.3
1.1775 1.38
1.2875 1.6025
1.4675 1.5625
1.3575 1.4125
1.2125 1.4125
1.0875 1.4025
1.13 1.4125
1.03 1.515
1.0925 1.475
1.0825 1.455
1.0725 1.465
1.175 1.475
1.175 1.425
1.155 1.5175
1.205 1.425
1.2925 1.5375
1.2925 1.4425
1.21 1.4425
1.42
1.5125
8/31/95 1.5125 9/29/95 1.7925
1.5225 1.8025
1.5225 1.7825
1.52 1.825
1.6125 1.845
1.5925 1.8525
1.5725 1.8625
1.5425 1.9238
1.44 1.8738
1.5025 1.9025
1.42 1.8025
1.44 1.9625
1.45 1.9938
1.4144 2.1438
1.45 2.225
1.3775 2.2938
1.45 2.3238
1.5175 2.2713
1.5375 2.2313
1.68 2.325
1.75 2.375
2.265
10/31/95 2.2438 11/30/95 4.0913
2.2938 4.1488
2.23 3.5588
2.2813 3.2088
2.25 2.7931
2.25 2.8675
2.5 2.8788
2.7913 2.88
3.0113 2.8688
3.0213 2.8075
3.0013 2.8588
2.85 3.0188
3.3813 3.0688
3.5313 3.3975
3.28 3.0625
3.1813 3.0725
3.0813 3.0538
3.5175 3.0538
3.64 3.0538
4.2113 3.0938
5.5213 2.6613
5.2913
12/29/95 2.5413
Source: Bloomberg
- --------------------------------------------------------------------------------
<PAGE>
economic weakness. The Federal Reserve has already reversed its tight policy by
quarter-point federal funds cuts in July and December and by reversing its tight
open market operations. Eleven European nations lowered interest rates in
December. We expect these trends, as well as Japanese easy money, to continue
this year. In our opinion, increased monetary liquidity will eventually be
followed by higher inflation.
Already, there are signs of an incipient build-up of inflationary forces. In the
United States, money supply (M3) has already turned up. Commodity prices, which
have apparently gone through a "mid-cycle" correction owing to the effects of
central bank tightening in 1994, have broken out on the upside. The Boeing labor
settlement may be the forerunner of climbing labor costs. It will raise wages 6
1/2% a year on average for the next four years. As the business cycle resumes
its growth, labor costs and consumer prices normally start to grow.
DEFLATIONARY SCENARIO
Even though we believe that the probabilities favor an inflationary scenario
over the near future, there is always the possibility that serious deflationary
pressures may prevail. The speculation in stocks and bonds may be peaking.
Households may be dragged down by excessive debt. Growing competition may drive
down corporate profits. The huge and rapidly growing amount of financial
derivatives, which has recently doubled to over $40 trillion, highlights the
possible risk of systemic failure in the economy. Investors may become concerned
about financial risks and seek to reduce debt and to liquefy their portfolios.
Historically, as paper assets lose value gold becomes the dominant store of
value. In four out of the last five long periods of financial and economic
contraction, the purchasing power of gold rose for at least three years after
the bust, and in some cases much longer.
CONCLUSION In our opinion, the shock of the November 1995 peak in the gold lease
rates, together with the reduced attractiveness to the mines of forward sales,
will lead to lower and even eventual zero growth in mine forward selling. With
this pressure gradually removed from the market, the fundamental supply shortage
will be met through higher prices driving down elastic fabrication demand. Thus,
gold's undervaluation compared to consumer prices should be corrected.
Renewed easing of global monetary policies will, in our opinion, restimulate the
world's economy to reverse its current slowdown and to resume its longer-term
upward path. An unexpected resurgence of demand could again put commodity and
consumer prices and labor costs on an upward path. An eventual inflationary
outcome cannot be excluded as the business cycle progresses.
We initially expect a decline in mine forward sales and net central bank direct
sales to start the next upward gold price trend. This may have begun with the
move in the spot price from $387.60 an ounce at the end of 1995 to $406.60 an
ounce in late January 1996. Subsequently, rising inflationary expectations (or
an unexpected deflationary outcome) may cause substantial investment
diversification into gold, causing a typical exponential upward move in gold
prices lasting several years, such as has been experienced in earlier gold
cycles. Gold is an asset class that tends to move contrarily to other asset
classes. This makes diversification of an investment portfolio into gold or
gold-mining shares prudent and even optimal at times, in our opinion.
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
January 25, 1996
*Rankings measure total return and do not take sales charges into consideration.
The fund ranked 9th out of 18 for ten years, 12th out of 26 for five years and
29th out of 33 for one year ended December 31, 1995.
<PAGE>
GOLD SHARES AND
YOUR INCOME PORTFOLIO
(1976-1995)
In dollars
Bonds Only 7568.799805
Gold Shares & Bonds 9785
THIS EXAMPLE ILLUSTRATES THE SUPERIOR PERFORMANCE OF A PORTFOLIO (ORIGINAL TOTAL
INVESTMENT OF $1000) INVESTED FOR 20 YEARS (PERIOD ENDED 12/31/95), 80% IN THE
UNMANAGED LEHMAN BROTHERS LONG-TERM 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 12.1% COMPARED TO 10.7 % 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
(1976-1995)
In dollars
Stocks Only 15079.400391
Gold Shares & Stocks 16366.5
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 15.0% VERSUS 14.5%
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 Long-Term
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 Long-Term 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 $826,573
AS OF DECEMBER 31, 1995, THE AVERAGE ANNUAL TOTAL RETURNS WERE:
Before After Maximum
Sales Charge Sales Charge*
Life of the Fund 11.8% 11.7%
- --------------------------------------------------------
Past twenty years 12.4% 12.0%
- --------------------------------------------------------
Past fifteen years 5.3% 4.9%
- --------------------------------------------------------
Past ten years 8.1% 7.4%
- --------------------------------------------------------
Past five years 6.9% 5.7%
- --------------------------------------------------------
Past one year (8.9)% (14.2)%
- --------------------------------------------------------
C Shares-Life (since 10/14/94) (15.8)% (16.6)%
- --------------------------------------------------------
Past one year (9.9)% (10.8)%
- --------------------------------------------------------
Past performance is not indicative of future results.
* A shares: maximum sales charge = 5.75%
C shares: 1% redemption charge, 1st year
<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 $826,573 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.
Date Consumer Total Value of
1/56 Price Index Investment
6/56 10000 9417
12/56 10137 9870
6/57 10299 9606
12/57 10498 10565
6/58 10609 9245
12/58 10797 10821
6/59 10797 13113
12/59 10797 14541
6/60 10873 17026
12/60 10960 17992
6/61 11122 18732
12/61 11134 20969
6/62 11197 20703
12/62 11271 18866
6/63 11333 19297
12/63 11420 21063
6/64 11521 20566
12/64 11572 21715
6/65 11660 22387
12/65 11797 21378
6/66 11886 22522
12/66 12097 22553
6/67 12284 20945
12/67 12419 23202
6/68 12657 28652
12/68 12955 34712
6/69 13254 35393
12/69 13665 32890
6/70 14063 29607
12/70 14486 29543
6/71 14834 32214
12/71 15133 34652
6/72 15276 31056
12/72 15511 52884
6/73 15799 49707
12/73 16428 85823
6/74 17185 95394
12/74 18228 115627
6/75 19282 105701
12/75 19927 125962
6/76 20634 80271
12/76 21105 64842
6/77 21629 57352
12/77 22560 60865
6/78 23093 76269
12/78 24233 80920
6/79 25179 83485
12/79 26818 128486
6/80 28533 230977
12/80 30730 308630
6/81 32071 380148
12/81 33672 291480
6/82 34939 304809
12/82 36067 229784
6/83 36291 462854
12/83 37000 529346
6/84 37671 503377
12/84 38565 512036
6/85 39159 388015
12/85 40000 422873
6/86 40640 380161
12/86 40708 388060
6/87 41104 509280
12/87 42221 728405
6/88 42915 686473
12/88 43882 578872
6/89 44811 535147
12/89 46150 574279
6/90 46893 809644
12/90 48307 637487
6/91 49753 590909
12/91 50574 646075
6/92 51281 606025
12/92 52138 552941
6/93 52930 429773
12/93 53819 786693
6/94 55020 917181
12/94 55650 827655
6/95 56693 907594
12/95 57176 826573
Initial Investment $10,000
Initial Net Asset Value $9,417
Note: International Investors Gold Fund became a gold-oriented fund in 1968.
<PAGE>
INTERNATIONAL INVESTORS GOLD FUND
INVESTMENT PORTFOLIO DECEMBER 31, 1995
No. of Shares Securities(c) Value(Note 1)
- --------------------------------------------------------------------------------
AUSTRALIA: 8.49%
540,000 Acacia Resources Ltd.+ $ 970,626
1,000,000 Australian Resources Ltd. 1,017,567
271,000 Central Pacific Minerals N.L. (ADR)+ 1,075,545
809,800 Great Central Mines N.L.+ 1,563,845
1,000,000 Newcrest Mining Ltd. 4,203,965
450,000 North Flinders Mines Ltd. 2,525,164
1,854,500 Peptide Technology Ltd.+ 537,198
450,000 Placer Pacific Ltd. 929,180
5,378,000 Plutonic Resources Ltd. 25,564,861
600,000 Resolute Samantha Gold N.L. (d) 1,270,103
500,000 St. Barbara Mines Ltd. 308,241
700,000 WMC Ltd. 4,571,875
-----------
44,538,170
-----------
CANADA: 21.59%
1,390,000 Barrick Gold Corp. 36,661,250
1,180,000 Echo Bay Mines Ltd. 12,242,500
150,000 Hemlo Gold Mines Inc. 1,406,250
800,000 Miramar Mining Corp.+ 3,955,319
800,000 Pegasus Gold Inc.+ 11,100,000
1,210,000 Placer Dome Inc. 29,191,250
250,000 Richmont Mines Inc.+ 659,220
300,000 Royal Oak Mines Inc.+ 1,068,750
30,000 Stone Consolidated Corp.+ 384,545
120,000 Teck Corp. (Class B) 2,340,231
2,000,000 TVX Gold Inc.+ 14,250,000
-----------
113,259,315
-----------
GHANA: .31%
80,000 Ashanti Goldfields Co. Ltd. GDS 1,610,000
-----------
NETHERLANDS: .61%
15,000 Renaissance Hotel Group N.V.+ 382,500
20,000 Royal Dutch Petroleum Co.
N.Y. Registry Shares 2,822,500
-----------
3,205,000
-----------
NORWAY: .08%
2,500 Norsk Hydro As (ADR)+ 104,688
12,000 Petroleum Geo-Services As (ADR)+ 300,000
-----------
404,688
-----------
PHILIPPINES: .03%
250,000 Filinvest Development Corp. 166,889
-----------
SOUTH AFRICA: 46.99%
86,000 Anglo American Corp. of South Africa (b) 5,181,500
1,000,000 Beatrix Mines Ltd. 8,906,250
1,200,000 Blyvooruitzicht Gold Mining Co.
Ltd. (a)(b)+ 1,875,000
1,000,000 Consolidated Modderfontein Mines
Ltd. (ADR)+ 117,500
1,700,000 Deelkraal Gold Mining Co. Ltd. (b) 1,360,000
1,290,000 Driefontein Consolidated Ltd. (b) 15,963,750
150,000 Durban Roodepoort Deep, Ltd. (a) (b)+ 1,284,375
83,924 Durban Roodepoort Deep,
Ltd. 8% Preferred (a)+ 736,680
2,255,000 Elandsrand Gold Mines Co. Ltd. (b) 10,922,730
1,425,649 Free State Consolidated Gold Mines
Ltd. (b) 10,335,955
695,000 Gold Fields of South Africa Ltd. (b) 20,676,250
700,000 Harmony Gold Mining Co. Ltd. (b) 6,081,250
2,310,000 Hartebeestfontein Gold Mining Co.
Ltd. (b) 5,786,550
860,000 Impala Platinum Holdings Ltd. (b) 16,340,000
640,000 Kinross Mines Ltd. (b) 5,960,000
<PAGE>
No. of Shares Securities(c) Value(Note 1)
- --------------------------------------------------------------------------------
SOUTH AFRICA (cont'd)
1,905,000 Kloof Gold Mining Ltd. (b) $17,978,437
1,300,000 Loraine Gold Mines Ltd. (a) (b)+ 3,786,250
7,392,500 Middle Witwatersrand (Western Areas) Ltd. 28,645,938
439,780 Potgietersrust Platinum Ltd. 2,657,921
1,780,000 Randfontein Estates Gold Mining Co.
Witwatersrand Ltd. (The) 11,369,750
320,500 Randgold & Exploration Co. Ltd. 1,302,031
554,334 Rustenburg Platinum Holdings Ltd. (b) 9,111,865
896,200 Unisel Gold Mines Ltd. (ADR) 2,363,728
188,900 Vaal Reefs Exploration
And Mining Co. Ltd. (b) 11,353,875
1,635,152 Western Areas Gold Mining Co. Ltd. (b) 27,644,361
473,000 Western Deep Levels Ltd. (b) 15,490,750
460,000 Winkelhaak Mines Ltd. (b) 3,248,750
-----------
246,481,446
-----------
SPAIN: .05%
7,500 Repsol, S.A. (ADR)+ 246,563
-----------
SWEDEN: .05%
25,000 Stora Kopparbergs `B' Free+ 299,054
-----------
UNITED STATES: 19.44%
530,000 Alta Gold Co.+ 828,125
1,500 Amoco Corp. 107,813
2,000 Anadarko Petroleum Corp. 108,250
7,000 Apache Corp. 206,500
10,000 Baker Hughes Inc.+ 243,750
1,200,000 Battle Mountain Gold Co. 10,050,000
10,000 Bowater Inc. 355,000
6,850 Camco International Inc.+ 191,800
8,000 Champion International Corp. 336,000
400,000 Coeur D'Alene Mines Corp. 6,850,000
10,000 Cross Timbers Oil Company 176,250
7,500 Enron Corp. 285,938
6,000 Enron Oil and Gas Co.+ 144,000
10,000 Ensco International Inc.+ 230,000
140,000 Firstmiss Gold, Inc.+ 3,115,000
750,000 Freeport- McMoRan Copper &
Gold Inc. (Class A) 21,000,000
1,500,000 Homestake Mining Corp. 23,437,500
6,500 Jefferson Smurfit Corp.+ 61,750
6,000 Louisiana Land & Exploration Co. 257,250
1,000 Mobil Corp.+ 112,000
280,000 Newmont Gold Co. 12,250,000
240,000 Newmont Mining Corp. 10,860,000
10,000 Nuevo Energy Co.+ 223,750
12,500 Patriot American Hospitality Inc. 321,875
1,270,000 Piedmont Mining Co., Inc. (a)+ 516,001
15,000 Reading & Bates Corp.+ 225,000
450,000 Santa Fe Pacific Gold Corp. 5,456,250
17,300 Security Capital Industrial Trust 302,750
105,000 Stillwater Mining Co.+ 2,021,250
10.000 Tejas Power Corp. (Class A)+ 91,250
3,000 Triton Energy Corp.+ 172,125
11,600 Union Pacific Resources Group Inc. 294,350
15,000 United Meridian Corp.+ 260,625
275,000 USMX Inc.+ 541,420
10,000 USX-Marathon Group+ 195,000
5,000 Weatherford Enterra Inc.+ 144,375
-----------
101,972,947
-----------
TOTAL STOCKS & OTHER INVESTMENTS: 97.64%
(Cost $331,057,250) 512,184,072
-----------
See Notes to Financial Statements.
<PAGE>
INTERNATIONAL INVESTORS GOLD FUND
INVESTMENT PORTFOLIO DECEMBER 31, 1995
NOTIONAL VALUE CALL OPTIONS PURCHASED: 0.05%
- ---------------------------------------------------
$83,924 Durban Roodeport Deep, Ltd.
Strike price @ $30.00 Expiring 12/96
(Cost $127,460) (a) $ 276,255
------------
PRINC. AMT. SHORT-TERM OBLIGATIONS: 2.31%
- ---------------------------------------------------
$12,109,000 General Electric Capital Corp. Commercial Paper
Due 1/2/96
Interest Yield Of 5.55%
(Amortized Cost $12,107,133) 12,107,133
------------
TOTAL INVESTMENTS: 100% (Cost: $343,291,843) $524,567,460
============
- ----------
a Investment in companies of 5% or more whose outstanding voting securities
are held by the Fund (such as are defined as "Affiliated Comapnies" in the
Investment Company Act of 1940) (Note 2).
b Includes securities in the form of American Depository Receipts (ADR). ADR's
are traded at prices substantially equivalent to those quoted for ordinary
shares.
c Unless otherwise indicated, securities owned are shares of common stock.
d Formerly Samantha Gold N.L.
+ Non-income producing.
SUMMARY OF
INVESTMENTS % OF
BY INDUSTRY PORTFOLIO
- ----------- --------
Gold and Silver 74.1%
Mining--Finance House 10.4%
Platinum 5.7%
Diversified Metals 5.3%
Oil Integrated - International 0.6%
Oil & Gas Exploration 0.5%
Oil/Gas Equipment and Service 0.3%
Paper & Forest Products 0.3%
Real Estate 0.2%
Drugs 0.1%
Oil Integrated--Domestic 0.1%
Natural Gas--Diversified 0.1%
Commercial Paper 2.3%
------
100.0%
======
See Notes to Financial Statements.
<PAGE>
INTERNATIONAL INVESTORS GOLD FUND
- --------------------------------------------------------------------------------
INTERNATIONAL INVESTORS GOLD FUND
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1995
ASSETS:
Investments at value (cost, $343,291,843) (Note 1 & 2) $524,567,460
Cash 34,363
Receivables:
Dividends 941,902
Securities sold 556,463
Capital shares sold 7,423,401
Tax reclaims 47,023
Miscellaneous 28,138
From Advisor 22,578
Other assets 10,237
------------
Total assets 533,631,565
------------
LIABILITIES:
Payables:
Capital shares redeemed 9,719,072
Securities purchased 108,737
Dividends payable 2,885,870
Accounts payable 402,777
------------
Total liabilities 13,116,456
------------
NET ASSETS $520,515,109
============
CLASS A
Net asset value and redemption price per share
($519,795,077/38,938,623) $13.35
======
Maximum offering price per share
(NAV/(1 - maximum sales commission)) $14.16
======
CLASS C
Net asset value, offering and redemption price per share
($720,032/54,461)(Redemption may be
subject to a contingent deferred sales charge
within the first year of ownership) $13.22
======
Net assets consist of:
Aggregate paid in capital $339,681,927
Unrealized appreciation of investments and
foreign currency 181,273,643
Distribution in excess of net investment income (440,461)
-----------
$520,515,109
============
- -------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1995
INCOME:
Dividends (less foreign taxes withheld
of $1,215,543) $ 9,920,093
Interest income 1,430,904
-----------
Total income $11,350,997
EXPENSES:
Management (Note 4) 4,256,866
Distribution Class C (Note 5) 7,245
Administration 1,656,091
Transfer agency 1,324,951
Custody 320,493
Registration 56,964
Professional 139,145
Reports to shareholders 116,710
Trustees fees 76,181
Other 263,192
-----------
Total expenses 8,217,838
Expenses assumed by Advisor and reduced
by a directed brokerage
arrangement (Note 4) (28,945)
-----------
Net expenses 8,188,893
-----------
Net investment income 3,162,104
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTE 3)
Realized gain from security transactions
(excluding short-term securities):
Proceeds from sales 82,322,439
Cost of securities sold 67,024,198
-----------
Realized gain 15,298,241
Realized loss from gold bullion (732,608)
Realized loss from foreign currency
transactions (72,193)
Change in unrealized depreciation of foreign
denominated receivables and payables (1,974)
Change in unrealized appreciation of
investments (68,070,609)
-----------
NET DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS $(50,417,039)
============
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
For the Years Ended December 31, 1995 and 1994
1995 1994
------------ ------------
DECREASE IN NET ASSETS:
Operations:
Net investment income $ 3,162,104 $ 8,141,878
Realized gain from
security transactions 15,298,241 21,198,035
Realized gain (loss) from gold bullion (732,608) 237,539
Realized gain (loss) from foreign
currency transactions (72,193) 219,947
Change in unrealized depreciation
of foreign currency receivables
and payables (1,974) --
Change in unrealized appreciation of
investments (68,070,609) (34,502,171)
-------------- --------------
Decrease in net assets
resulting from operations (50,417,039) (4,704,772)
Undistributed net investment
income included in price of shares
sold and reacquired (Note 1) -- (21,375,012)
-------------- --------------
(50,417,039) (26,079,784)
-------------- --------------
Dividends to shareholders from:
Net investment income
Class A (4,029,551) (7,615,991)
Class C (451) (4,828)
-------------- --------------
(4,030,002) (7,620,819)
-------------- --------------
Net realized gain
Class A (14,509,609) (21,697,760)
Class C (20,445) (14,769)
-------------- --------------
(14,530,054) (21,712,529)
-------------- --------------
Tax return of capital
Class A (729,570) --
Class C (1,067) --
-------------- --------------
(730,637) --
-------------- --------------
(69,707,732) (55,413,132)
-------------- --------------
Capital share transactions*
Net proceeds from sales of shares:
Class A shares 2,320,963,093 1,424,630,182
Class C shares 674,526 447,464
-------------- --------------
2,321,637,619 1,425,077,646
-------------- --------------
Reinvestment of dividends:
Class A shares 34,594,341 21,420,479
Class C shares 32,330 --
-------------- --------------
34,626,671 21,420,479
-------------- --------------
Cost of shares reacquired:
Class A shares (2,400,920,600) (1,483,391,850)
Class C shares (358,616) (930)
-------------- --------------
(2,401,279,216) (1,483,392,780)
-------------- --------------
Increase in additional paid in capital
for reversal of amounts previously
allocated to undistributed net investment
income (Note 1-F) -- 21,375,012
-------------- --------------
Decrease in net assets resulting
from capital share transactions (45,014,926) (15,519,643)
-------------- --------------
Total decrease in net assets (114,722,658) (70,932,775)
NET ASSETS:
Beginning of year 635,237,767 706,170,542
-------------- --------------
End of year (including overdistributed net
investment income of $440,461 and
undistributed net investment income of
$924,779, respectively) $520,515,109 $635,237,767
============== ==============
*SHARES OF BENEFICIAL INTEREST ISSUED AND
REDEEMED (UNLIMITED NUMBER OF $.001
PAR VALUE SHARES AUTHORIZED)
CLASS A CLASS A
----------- -----------
Shares sold 168,788,761 91,335,675
Reinvestment of dividends 2,413,214 1,340,989
----------- -----------
171,201,975 92,676,664
Shares reacquired (173,993,647) (94,855,788)
----------- -----------
Net decrease (2,791,672) (2,179,124)
=========== ===========
CLASS C CLASS C
----------- -----------
Shares sold 50,162 28,459
Reinvestment of dividends 2,662 --
----------- -----------
52,824 28,459
Shares reacquired (26,766) (56)
----------- -----------
Net increase 26,058 28,403
=========== ===========
See Notes to Financial Statements.
<PAGE>
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period
<TABLE>
<CAPTION>
CLASS A
--------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989* 1988* 1987 1986
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value
Beginning of Period....... $15.21 $16.08 $ 7.81 $11.29 $11.32 $16.38 $11.30 $15.29 $12.04 $ 9.48
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Income from Investment
Operations:
Net Investment
Income (Loss)........... 0.08 0.19 0.14 0.17 0.16 0.26 0.32 0.34 0.48 0.43
Net Gain (Loss)
on Securities
(both realized and
unrealized)............. (1.44) (0.36) 8.70 (3.44) 0.13 (4.67) 5.39 (3.69) 3.72 2.73
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total from Investment
Operations.................. (1.36) (0.17) 8.84 (3.27) 0.29 (4.41) 5.71 (3.35) 4.20 3.16
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Less Distributions:
Dividends from
Net Investment
Income (a).............. (0.10) (0.18) (0.13) (0.12) (0.17) (0.25) (0.31) (0.29) (0.42) (0.40
Distributions from
Capital Gains........... (0.38) (0.52) (0.44) (0.09) (0.15) (0.40) (0.32) (0.35) (0.53) (0.20)
Tax Return of Capital..... (0.02) -- -- -- -- -- -- -- -- --
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total Distributions......... (0.50) (0.70) (0.57) (0.21) (0.32) (0.65) (0.63) (0.64) (0.95) (0.60)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net Asset Value,
End of Period............. $13.35 $15.21 $16.08 $ 7.81 $11.29 $11.32 $16.38 $11.30 $15.29 $12.04
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Total Return (b)............ (8.93%) (1.04%) 113.41% (29.09%) 2.56% (27.00%) 51.30% (22.00%) 34.70% 34.00%
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY DATA
Net Assets,
End of Period (000)..... $519,795 $634,808 $706,171 $360,177 $568,859 $611,401 $924,110 $712,078 $1,040,381 $824,386
Ratio of
Expenses to Average
Net Assets.............. 1.42% 1.15% 1.12% 1.18% 1.17% 0.97% 0.88% 0.83% 0.71% 0.86%
Ratio of Net Income (Loss)
to Average Net Assets... 0.55% 1.23% 1.13% 1.72% 1.41% 1.83% 2.38% 2.67% 3.34% 4.73%
Portfolio Turnover Rate..... 4.10% 7.08% 7.20% 2.30% 2.20% 2.10% 3.50% 5.30% 1.00% 3.10%
- -----------
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS (cont'd)
For a share outstanding throughout each period
CLASS C
---------------------
Year For the Period
Ended October 14, 1994++
Dec. 31, to
1995 December 31, 1994
------ ------------------
Net Asset Value
Beginning of Period........ $15.13 $17.56
------ ------
Income from Investment
Operations:
Net Investment
Income (Loss)............ (0.07) 0.04 (c)
Net Gain (Loss)
on Securities
(both realized and
unrealized).............. (1.43) (1.78)
------ ------
Total from Investment
Operations................... (1.50) (1.74)
------ ------
Less Distributions:
Dividends from
Net Investment
Income (a)............... (0.01) (0.17)
Distributions from
Capital Gains............ (0.38) (0.52)
Tax Return of Capital...... (0.02) --
------ ------
Total Distributions.......... (0.41) (0.69)
------ ------
Net Asset Value,
End of Period.............. $13.22 $15.13
====== ======
Total Return (b)............. (9.91%) (9.9%)
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY DATA
Net Assets,
End of Period (000)...... $720 $430
Ratio of
Expenses to Average
Net Assets............... 2.46%** 2.27%+
Ratio of Net Income (Loss) to
Average Net Assets....... (0.45%) 1.25%+
Portfolio Turnover Rate...... 4.10% 7.08%
- -----------
(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, $0.03
for 1991, $0.07 for 1990, $0.07 for 1989, $0.06 for 1988, $0.07 for 1987
and $0.05 for 1986.
(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.
* Certain per share amounts have been reclassified.
** Had the Advisor not agreed to assume a portion of expenses for Class C,
the expense ratio would have been 5.57%.
+ Annualized.
++ Initial offering of Class C shares.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
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.
A. SECURITY VALUATION -- Securities traded on national exchanges and traded in
the NASDAQ National Market System are valued at the last sales prices
<PAGE>
INTERNATIONAL INVESTORS GOLD FUND
- --------------------------------------------------------------------------------
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 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. The effect
of these differences for the year ended December 31, 1995 decreased
overdistributed net investment income by $28,098, decreased cumulative
realized losses by $241,811 and decreased paid in capital by $269,909.
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.
F. ACCOUNTING CHANGE -- Prior to July 1, 1994, the Fund used equalization
accounting to keep a continuing shareholder's per share interest in
undistributed net investment income unaffected by shareholder activity. This
was accomplished by allocating a per share portion of the proceeds from
sales and the cost of redemptions of Fund shares to undistributed net
investment income. As of July 1, 1994, the Fund discontinued using
equalization. This change has no effect on the Fund's net assets, net asset
value per share, or its net decrease in net assets resulting from
operations. Discontinuing the use of book equalization results in simpler
financial statements. The cumulative effect of the change was to decrease
undistributed net investment income and increase paid in capital previously
reported through June 30, 1994 by $21,375,012.
NOTE 2-- The market value of investments in affiliates (as defined in the
Investment Company Act of 1940) at December 31, 1995 aggregated $8,474,561. The
Fund did not earn any dividend income from its investments in affiliates.
NOTE 3 -- Purchases of investments other than short-term obligations and gold
bullion aggregated $22,125,824 for the year ended December 31, 1995. Purchases
and sales of Gold Bullion totaled $67,142,250 and $85,586,915. For federal
income tax purposes the cost of investments owned at December 31, 1995 was
$343,732,304. As of December 31, 1995, net unrealized appreciation for federal
income tax purposes aggregated $180,835,156 of which $245,957,780 related to
appreciated investments and $65,122,624 related to depreciated investments.
NOTE 4 -- Van Eck Associates Corporation earned fees of $4,256,866 for the year
ended December 31, 1995 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 $161,888 for the year
ended December 31, 1995 from commissions earned on sales of shares of beneficial
interest of the Fund after deducting $650,766 allowed to other dealers. In
accordance with the administration agreement, the Fund reimbursed Van Eck
Associates Corporation $1,324,951 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 $22,578 of Class C transfer agency's expenses for
the year ended December 31, 1995. 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. For the year ended December 31, 1995, the
portion of the Fund's expenses reduced by this directed brokerage arrangement
amounted to $6,367.
NOTE 5 -- 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 to the brokers made by the Fund 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
<PAGE>
INTERNATIONAL INVESTORS GOLD FUND
- --------------------------------------------------------------------------------
reimbursement of the carried forward amounts incurred for the period October 14,
1994 through April 30, 1996 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 December 31, 1995, was $22,558 for Class C shares.
NOTE 6 -- 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.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Trustees of the Van Eck Funds:
We have audited the accompanying statement of assets and liabilities, including
the investment portfolio, of the International Investors Gold Fund (the "Fund"),
(one of the series constituting the Van Eck Funds) as of December 31, 1995, and
the related statement of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended, and
the financial highlights for each of the four years in the period then ended.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. The financial
highlights for each of the six years in the period ended December 31, 1991 were
audited by other auditors whose report dated January 24, 1992, expressed an
unqualified opinion thereon.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1995, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
International Investors Gold Fund series of the Van Eck Funds as of December 31,
1995, the results of its operations for the year then ended, the changes in its
net assets for each of the two years in the period then ended, and the financial
highlights for each of the four years in the period then ended, in conformity
with generally accepted accounting principles.
New York, New York
February 19, 1996 Coopers & Lybrand L.L.P.
<PAGE>
VAN ECK FAMILY OF FUNDS
- --------------------------------------------------------------------------------
GLOBAL HARD ASSETS FUND
Seeks long-term capital appreciation by investing globally, primarily in "Hard
Asset Securities". Income is a secondary consideration.
INTERNATIONAL INVESTORS GOLD FUND
Founded in 1955, this Fund is the oldest gold-oriented mutual fund in the U.S.
It invests in gold-mining shares globally and seeks long-term capital
appreciation, moderate yield and protection against monetary uncertainties.
GOLD/RESOURCES FUND
Seeking a long-term global hedge against inflation and other risks, this Fund
invests in gold-mining and natural resources companies outside South Africa.
GOLD OPPORTUNITY FUND
Seeks capital appreciation by investing globally in equity securities of
companies engaged in the exploration, development, production and distribution
of gold and other precious metals, and through active asset allocation between
gold-related assets and cash instruments.
ASIA DYNASTY FUND
This Fund seeks long-term capital appreciation by investing in the equity
securities of companies that are expected to benefit from the development and
growth of the economies in the Asia Region. AIG Global Investment Corp. serves
as sub-investment advisor to this Fund.
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. AIG Global Investment Corp. serves
as sub-investment advisor to this Fund.
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
FOR ACCOUNT ASSISTANCE PLEASE CALL (800) 544-4653
DECEMBER 31, 1995
VAN ECK
INTERNATIONAL
INVESTORS
GOLD
FUND
ANNUAL
REPORT
X96-0130-006
