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WORLDWIDE
INSURANCE TRUST
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JUNE 30, 1996
VAN ECK
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WORLDWIDE
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EMERGING
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MARKETS
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FUND
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SEMI-ANNUAL
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REPORT
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[LOGO]
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VAN ECK WORLDWIDE EMERGING MARKETS FUND
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JUNE 30, 1996 SEMI-ANNUAL REPORT
Dear Shareholder:
The peace dividend from the ending of the cold war is now being collected by
emerging market investors. After a two year bear market, the first half of 1996
saw emerging markets outperform the developed markets, despite a growing fear of
rising interest rates in the U.S. and Japan. Markets that looked terrible in
1995, such as Russia, Venezuela, Hungary and India, took top honors.
In general, emerging market economies are flourishing in the current global
environment of steady growth with low interest rates. Asia is enjoying high
single digit growth rates, and Latin America continues to recover from the 1994
interest rate shock. Poland and the Czech Republic are making rapid progress
toward economic health.
In many cases, politics have moved markets in 1996. Political victories by
reformist candidates mean continued progress on the economic front. This in turn
spells increased foreign investment (thus, increased liquidity) and a withdrawal
from the private sector on the part of the state (resulting in increased
economic efficiency and growth). Russia, Brazil, India and Venezuela, where the
political backdrop to economic reform improved, have been strong. Markets where
the political backdrop deteriorated, such as Greece, South Africa and Sri Lanka,
declined.
Even the most promising markets face challenges. Several of Asia's stars, such
as Thailand, Korea and Malaysia, face large or rising current account deficits,
which have led to interest rate hikes. The weak yen and further drops in DRAM
(computer memory) prices are threatening South Korea's export machine. High
interest rates in India, the result of consistently high levels of government
borrowing, threaten to prevent the achievement of a high level of economic
growth unless cuts in popular spending programs are enacted. Brazil's
reform-minded administration faces the difficult challenge of curtailing
profligate spending on public sector employees and social security benefits.
Argentina's fragile recovery could be undermined by a strong surge in U.S.
interest rates. Russia faces enormous challenges.
PERFORMANCE REVIEW
The Worldwide Emerging Markets Fund achieved a total return of 18.0% for the six
months ended June 30, outperforming the average of its competitors (14.8%)* and
the Morgan Stanley Capital International Emerging Markets Free Index (9.3%). Our
country selection correctly emphasized Brazil and Indonesia early in the year,
and more recently Russia. We de-emphasized South Africa, which also benefited
the Fund.
At the stock level, performance was due in part to a strong showing by GUM (a
Russian department store), which doubled over the past two months. Telebras,
Brazil's telecom monopoly and KMT, Korea's cellular provider, have also risen
strongly since the beginning of the year. We remain positive towards Brazil and
Russia, where valuations remain attractive.
OUTLOOK
The outlook for emerging markets for the rest of the year is positive, in our
opinion. Valuations remain reasonable, 1993's mania is hardly in evidence and
profit growth remains healthy. The macroeconomic environment remains very
supportive in virtually every region. As investors, we are finding numerous
attractive investment opportunities. Absent some exogenous shock, the emerging
market investor can look forward to the rest of the year with confidence.
Gary Greenberg
Portfolio Manager
July 18, 1996
*Among 22 emerging market mutual funds offered in variable annuity/life
products, according to Morningstar, a mutual fund evaluation service.
Total returns on the Fund for the year-to-date and life (12/27/95) periods ended
6/30/96 were 18.0% and 16.8%, respectively. These returns do not take variable
insurance/life fees and expenses into account.
This report must be accompanied or preceded by a Van Eck Worldwide Insurance
Trust Prospectus which includes more complete information, such as charges and
expenses and the risks associated with international investing, including
currency fluctuations or controls, expropriation, nationalization and
confiscatory taxation. Please read the prospectus before investing.
Van Eck Securities Corporation, 99 Park Avenue, New York, NY 10016
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<PAGE>
WORLDWIDE EMERGING MARKETS FUND
INVESTMENT PORTFOLIO
JUNE 30, 1996 (UNAUDITED)
COUNTRY/INDUSTRY NO. OF SHARES SECURITIES (A) VALUE (NOTE 1)
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ARGENTINA: 3.0%
Supermarkets: 3.0%
2,000 S.A. Importadora y Exportadora de
la Pantagonia $ 21,008
--------
AUSTRALIA: 2.3%
Oil & Gas Exploration: 2.3%
100,000 Anzoil NL 15,745
--------
BRAZIL: 9.0%
Electric Utilities: 5.0%
1,200 Cemig S.A. (ADR) 34,500
Telecommunications: 4.0%
400 Telecomunicacoes Brasileiras
S.A. (ADR) 27,850
--------
62,350
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CHILE: 7.9%
Chemicals: 0.8%
100 Quimica Minera Chile S.A. 5,425
Electric Utilities: 3.2%
400 Chilectra S.A. (ADR) 22,400
Financial Services: 3.9%
1,100 A.F.P. Provida S.A. (ADR) 27,363
--------
55,188
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COLOMBIA: 1.9%
Banks: 1.9%
800 Banco Industrial Colombiano
(ADR) 13,500
--------
HONG KONG: 6.0%
Auto & Trucks: 3.4%
70,000 Qingling Motors Co. "H" 23,512
Metals: 2.6%
50,000 Shenzhen Fandga Co. Ltd. "B" 18,086
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41,598
--------
INDONESIA: 11.0%
Distilling/Tobacco: 4.1%
2,500 Hanjaya Mandala Sampoerna "F" 28,476
Holding Co.-Diversified: 4.5%
25,000 P.T. Bimantara Citra "F" 31,431
Life Insurance: 2.4%
13,000 P.T. Lippo Life Insurance "F" 17,113
--------
77,020
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See Notes to Financial Statements.
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WORLDWIDE EMERGING MARKETS FUND
INVESTMENT PORTFOLIO (CONTINUED)
COUNTRY/INDUSTRY NO. OF SHARES SECURITIES (A) VALUE (NOTE 1)
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ISRAEL: 1.6%
Holding Co. - Diversified: 1.6%
650 Koor Industries Ltd. (ADR) $ 11,213
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MALAYSIA: 9.7%
Insurance: 4.2%
5,500 Malaysia Assurance Alliance BHD 29,104
Miscellaneous: 1.7%
37,000 Aokam Perdana BHD 3.5% 6/13/2004 11,792
Real Estate: 1.5%
1,000 O.Y.L. Industries BHD 10,422
Restaurants: 2.3%
3,000 KFC Holdings (Malaysia) BHD 16,236
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67,554
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MEXICO: 4.0%
Banks: 4.0%
3,200 Grupo Financiero Bancomer
S.A. (GDR) 28,000
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PERU: 5.0%
Financial Services: 5.0%
1,762 Credicorp Ltd. 35,020
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PHILIPPINES: 4.6%
Cable Television Equipment: 4.6%
4,000 Benpres Holdings Corp. (GDR) 32,000
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RUSSIA: 9.5%
Oil & Gas Exploration: 3.6%
1 Irkutskenergo (RDC) 25,250
Retail: 2.7%
1 Trade House GUM (RDC) 18,750
Telecommunications: 3.2%
1 Rostelecom (RDC) 22,250
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66,250
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SOUTH KOREA: 5.7%
Electric Utilities: 3.4%
961 Korea Electric Power Corp. (ADR) 23,304
Telecommunications: 2.3%
45 Korea Mobile Telecommunications
Corp. (Warrants
expiring 12/07/1999) 16,143
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39,447
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See Notes to Financial Statements.
<PAGE>
WORLDWIDE EMERGING MARKETS FUND
INVESTMENT PORTFOLIO (CONTINUED)
COUNTRY/INDUSTRY NO. OF SHARES SECURITIES (A) VALUE (NOTE 1)
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TAIWAN: 3.0%
Miscellaneous: 3.0%
300 Taiwan Weighted Index
(Warrants expiring 3/12/1998) $ 20,723
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THAILAND: 15.8%
Banks: 4.0%
2,500 Siam Commercial Bank "F" 27,959
Insurance: 2.0%
3,000 Ayudhya Jardine CMG
Life Assurance 13,586
Real Estate: 2.8%
1,700 Land & House Co. Ltd. "F" 19,280
Telecommunications: 2.2%
1,000 Advanced Info. Services "F" 15,673
Television: 4.8%
6,000 Bec World Public Co. Ltd. 33,551
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110,049
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Total Investments: 100% (cost $626,318) $696,665
========
(a) Unless otherwise indicated, securities owned are shares of common stock.
Glossary:
ADR-American Depositary Receipt
"F"-Foreign registry
GDR-Global Depositary Receipt
RDC-Russian Depositary Certificate
SUMMAURY OF INVESTMENTS BY INDUSTRY
Auto & Trucks 3.4%
Banks 10.0%
Cable Television Equipment 4.6%
Chemicals 0.8%
Distilling/Tobacco 4.1%
Electric Utilities 11.5%
Financial Services 8.9%
Holding Co. - Diversified 6.1%
Insurance 6.1%
Life Insurance 2.5%
Metals 2.6%
Miscellaneous 4.7%
Oil & Gas Exploration 5.9%
Real Estate 4.3%
Restaurants 2.3%
Retail 2.7%
Supermarkets 3.0%
Telecommunications 11.7%
Television 4.8%
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100.0%
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See Notes to Financial Statements.
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WORLDWIDE EMERGING MARKETS FUND
FINANCIAL STATEMENTS (UNAUDITED)
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STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1996
Assets:
Investments at value (identified cost,
$626,318) (Note 1) $696,665
Cash 147,560
Due from brokers (Note 4) 2,934
Receivables:
Capital shares sold 73,093
Dividends and interest 2,991
From Advisor 12,118
Securities sold 19,791
Deferred organization expenses 6,399
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Total assets 961,551
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Liabilities:
Payables:
Securities purchased 91,018
Accounts payable 9,912
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Total liabilities 100,930
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Net Assets (Equivalent to $11.62 per share on 74,037
shares of beneficial interest
outstanding with an unlimited number of
$.001 par value shares authorized) $860,621
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Net assets consist of:
Aggregate paid in capital $773,750
Unrealized apppreciation of investments, equity swaps
and foreign currency 73,348
Undistributed net investment income 2,416
Undistributed realized gains 11,107
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$860,621
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See Notes to Financial Statements.
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WORLDWIDE EMERGING MARKETS FUND
FINANCIAL STATEMENTS (UNAUDITED)
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STATEMENT OF OPERATIONS
FOR THE TWO MONTHS ENDED JUNE 30, 1996
INCOME: (NOTE 1)
Dividend Income (net of foreign taxes withheld of $594) $ 2,053
EXPENSES:
Management (Note 2) $ 1,111
Professional 2,500
Amortization of organizational expenses (Note 1) 251
Custodian 400
Other 200
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Total expenses 4,462
Expenses assumed by the Advisor (Note 2) (4,462)
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Net expenses 0
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Net investment income 2,053
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTE 3)
Realized gain from security transactions 4,734
Realized gain from foreign currency transactions 286
Change in unrealized appreciation of foreign
currency receivables and payables (250)
Change in unrealized appreciation of investments
swaps 36,140
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NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 42,963
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See Notes to Financial Statements.
<PAGE>
WORLDWIDE EMERGING MARKETS FUND
FINANCIAL STATEMENTS (UNAUDITED)
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STATEMENTS OF CHANGES IN NET ASSETS
FOR THE
TWO MONTHS
ENDED FOR THE PERIOD
JUNE 30, 1996 DECEMBER 31, 1995+
(UNAUDITED) TO APRIL 30, 1996
INCREASE IN NET ASSETS: ------------- -------------------
OPERATIONS:
Net investment income $ 2,053 $ 3,557
Realized gain from security transactions 4,734 6,311
Realized gain (loss) from foreign currency
transactions 286 (62)
Change in unrealized appreciation of foreign
currency receivables and payables (250) 317
Change in unrealized appreciation
of investments and swaps 36,140 37,141
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Increase in net assets
resulting from operations 42,963 47,264
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Dividends to shareholders from:
Net investment income (3,356) --
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Capital share transactions*:
Net proceeds from sales of shares 220,561 550,000
Reinvestment of dividends 3,356 --
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223,917 550,000
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Cost of shares reacquired (167) --
Increase in net assets resulting -------- --------
from capital share transactions 223,750 550,000
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Total increase in net assets 263,357 597,264
NET ASSETS:
Beginning of period 597,264 --
-------- --------
End of period (including undistributed net
investment income of $2,416 and $3,433,
respectively) $860,621 $597,264
======== ========
*SHARES OF BENEFICIAL INTEREST
ISSUED AND REDEEMED:
Shares sold 19,191 54,566
Reinvestment of dividends 294 --
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19,485 54,566
Shares reacquired (14) --
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Net increase 19,471 54,566
======== ========
+Commencement of operations.
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See Notes to Financial Statements.
<PAGE>
WORLDWIDE EMERGING MARKETS FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
FOR THE TWO FOR THE PERIOD
MONTHS ENDED DECEMBER 21, 1995(A)
JUNE 30, 1996 TO
(UNAUDITED) APRIL 30, 1996
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Net Asset Values Beginning of Period $10.95 $10.00
Income From Investment Operations: -------- ---------
Net Investment Income (b) 0.04 0.07
Net Gains on Securities
(both realized and unrealized) 0.69 0.88
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Total From Investment Operations 0.73 0.95
Less Distributions: -------- ---------
Distributions from net investment income (0.06) --
-------- --------
Net Asset Value End of Period $11.62 $10.95
======== ========
Total Return (c) 6.68% 9.50%
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RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Period (000) $861 $597
Ratio of Expenses to Average
Net Assets (d) 0.00% 0.00%
Ratio of Net Income to Average Net Assets (e) 1.23% 1.89%
Portfolio Turnover Rate 21.64% 45.89%
Average Commission Rate Paid $0.0092 $0.0124
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(a) Commencement of operations.
(b) Based on average shares outstanding.
(c) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of dividends at net
asset value during the period and a redemption on the last day of the period.
Total return for the period ended were not annualized.
(d) Had the Advisor not reimbursed expenses and had there been no custodian fee
arrangement, the expense ratio for the period December 21, 1995 (commencement of
operations) to April 30, 1996 would have been 2.06% and 3.98% for the two
months ended June 30, 1996.
(e) Annualized.
See Notes to Financial Statements.
<PAGE>
WORLDWIDE EMERGING MARKETS FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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NOTE 1-Significant Accounting Policies:
Van Eck Worldwide Insurance Trust (the "Trust"), organized as a Massachusetts
business trust on January 7, 1987, is registered under the Investment Company
Act of 1940. The following is a summary of significant accounting policies
consistently followed by the Worldwide Emerging Markets Fund series, 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 financial statements in conformity with generally
accepted accounting principles requires the use of management's estimates, and
the actual results could differ.
A. Security valuation-Securities traded on national exchanges and traded in the
NASDAQ National Market System are valued at the last sales prices reported at
the close of business on the last business day of the period. Over-the-counter
securities not included in the NASDAQ National Market System and listed
securities for which no sale was reported are valued at the mean of the bid and
asked prices. Short-term obligations purchased with more than sixty days
remaining to maturity are valued at market. Short-term obligations purchased
with sixty days or less to maturity are valued at cost which with accrued
interest approximates value. Securities for which quotations are not available
are stated at fair value as determined by the Board of Trustees.
B. Federal income taxes-It is the Fund's policy to comply with the provisions of
the Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to its shareholders. Therefore, no federal
income tax provision is required.
C. Currency Translation-Assets and liabilities denominated in foreign currencies
and commitments under forward currency contracts are translated into U.S.
Dollars at the mean of the quoted bid and asked prices of such currencies on the
last business day of the period. Purchases and sales of investments are
translated at the exchange rates prevailing when such investments were acquired
or sold. Income and expenses are translated at the exchange rates prevailing
when accrued. The portion of realized and unrealized gains and losses on
investments that result from fluctuations in foreign currency exchange rates is
not separately disclosed. Recognized gains or losses attributable to foreign
currency fluctuations on foreign currency denominated assets and liabilities are
recorded as net realized gains and losses from foreign currency transactions.
D. Dividends and Distributions-Dividend income and distributions to shareholders
are recorded on the ex-dividend date. Income distributions and capital gain
distributions are determined in accordance with income tax regulations which may
differ from generally accepted accounting principles.
<PAGE>
WORLWIDE EMERGING MARKETS FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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E. Other-Security transactions are accounted for on the date the securities are
purchased or sold. Interest income is accrued as earned.
F. Deferred organizational costs will be amortized over a period not to exceed
five years.
NOTE 2-Van Eck Associates Corporation earns fees for investment management and
advisory services. The fee is based on an annual rate of 1% of the average daily
net assets, which includes the fee paid to the Advisor for accounting and
administrative services. For the two months ended June 30, 1996, Van Eck
Associates Corporation agreed to waive its management fees and assume all
expenses of the Fund. Certain of the officers and trustees of the Trust are
officers, directors or stockholders of Van Eck Associates Corporation and Van
Eck Securities Corporation. As of June 30, 1996 Van Eck Associates Corporation
owned 67.9% of the outstanding shares of the Fund.
NOTE 3-Purchases and sales of securities, other than short-term obligations,
aggregated $338,771 and $138,510, respectively, for the two months ended June
30, 1996. For federal income tax purposes the identified cost of investments
owned at June 30, 1996 was $626,319. As of June 30, 1996 net unrealized
appreciation for federal income tax purposes aggregated $70,346 of which $84,957
related to appreciated securities and $14,611 related to depreciated securities.
NOTE 4-The Fund entered into the following equity swaps to gain investment
exposure to the relevant market of the underlying securities. A swap is an
agreement that obligates two parties to exchange cash flows at specified
intervals. In the case of the following swaps the Fund is obligated to pay the
counterparty on trade date an amount based upon the value of the underlying
instrument and, at termination date, final payment is settled based on the value
of the underlying securities on trade date versus the value on termination date
plus accrued dividends.
Risks may arise as a result of the failure of the other party to the contract to
comply with the terms of the swap contract. The losses incurred on the following
swaps are limited to the payments made on the purchase date by the Fund.
Therefore, the Fund considers the creditworthiness of each counterparty to a
swap contract in evaluating potential credit risk. Additionally, risks may arise
from unanticipated movements in the value of the swaps relative to the
underlying securities.
The Fund records a net receivable or payable daily, based on the change on the
change in the value of the underlying securities. The net receivable or payable
for financial statement purposes is shown as due to and from broker.
<PAGE>
WORLDWIDE EMERGING MARKETS FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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At June 30, 1996 the Fund had the following outstanding swaps with a single
counterparty (stated in US dollars):
Unrealized
Underlying Number of National Termination Appreciation
Security Shares Amount Date (Depreciation)
----------- --------- -------- ----------- -------------
APPRECIATED SWAPS:
Asian Paints 1,000 $12,270 April, 14, 1997 $ 727
Donghu Fire Insurance 500 21,033 April, 26, 1997 3,322
------
4,049
------
DEPRECIATED SWAP:
India Cement LTD 3,000 15,191 June 6, 1997 (1,115)
------
$2,934
======
NOTE 5-The Fund may purchase securities on foreign exchanges. Securities of
foreign issuers involve special risks and considerations not typically
associated with investing in U.S. issuers. These risks include devaluation of
currencies, less reliable information about issuers, different securities
transactions clearance and settlement practices, and future adverse political
and economic developments. These risks are heightened for investments in
emerging market countries. Moreover, securities of many foreign issuers and
their markets may be less liquid and their prices more volatile than those of
comparable U.S. issuers.
NOTE 6-The Fund invests in warrants whose values are linked to indices or
underlying instruments. The Fund uses these warrants to gain exposure to markets
that might be difficult to invest in through conventional securities. Warrants
may be more volatile than their linked indices or underlying instruments. Poten-
tial losses are limited to the amount of the original investment.
