Van Eck U.S. Government Money Fund
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1995 Annual Report
Dear Fellow Shareholder:
The U.S. Government Money Fund continues to meet its objectives of a high
degree of safety and daily liquidity. It also serves to assist investors who
wish to employ our exchange privileges or use our checkwriting privileges. The
Fund's seven-day average yield was 4.10%* and the 30-day average yield was
4.29%* on December 31, 1995. The total net assets were $70,130,014 as of
December 31, 1995.
As 1995 progressed, it became apparent that Federal Reserve tightening during
1994 and in early 1995 was dampening economic activity. Weaker economic data
and a perceived lessening of inflationary pressures prompted the Federal
Reserve to lower the federal funds target rate to 5.75% on July 6, 1995 and
then to 5.50% on December 19. While Treasury bill yields remained relatively
steady during the first half of 1995, falling slightly from 5.50% to 5.40%,
they declined more significantly as 1995 drew to a close, ending the year near
5.00%. During the year, a larger portion of the Fund's assets were invested in
repurchase agreements to take advantage of the higher yields that these
instruments offered compared to Treasury bills.
The Fund's investment strategy continues to emphasize safety by investing in
short-term United States Treasury obligations and repurchase agreements
collateralized by United States Treasury obligations. U.S. Treasury obligations
are the most conservative money market investments and offer the highest degree
of security since they are backed by the United States Government. Of course,
shares of the Fund are not guaranteed by the U.S. Government and there can be
no guarantee that the price of the Fund's shares will not fluctuate.**
Repurchase agreements allow us to take advantage of higher yields without
significantly increasing risk. The Fund's repurchase agreements are
collateralized 102% by United States Treasury obligations with maturities of
less than five years. In addition, your Fund has possession of the collateral.
We plan to continue our current investment strategy, keeping an equal weighting
between U. S. Treasury bills and repurchase agreements over time.
The U.S. Government Money Fund offers daily liquidity and checkwriting
privileges, providing the kind of convenient access to cash not available in
many other types of investments. The Fund also provides an excellent base from
which investors may transfer money into or out of other members of the Van Eck
Family of Funds.***
We appreciate your participation in the U.S. Government Money Fund and look
forward to helping you meet your investment objectives in the future.
[Photo of John C. van Eck] [Photo of Paul A. DiPerna]
John C. van Eck Paul A. DiPerna
Chairman Portfolio Manager
January 10, 1996
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* Performance data represents past performance and is not indicative of
future results.
** There can be no assurance that the Fund will be able to maintain a stable
net asset value of $1.00 per share.
*** Currently, there is no charge imposed on exchanges or limits as to frequency
of exchanges for this Fund. However, shareholders are limited to six
exchanges per calendar year for other Funds in the Van Eck Family of Funds,
and the Funds reserve the right to modify or terminate the terms of the
Exchange Privilege.
<PAGE>
U.S. Government Money Fund
Financial Statements
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Statement of Net Assets
December 31, 1995
Assets:
Investment at value:
<TABLE>
<CAPTION>
Annualized
Yield at
Time of
Principal Date of Purchase Value
Amount Maturity or Coupon Rate (Note 1)
- ------------------------------------------------------------------
<S> <C> <C> <C>
U.S. Treasury Bills:
$ 5,000,000 1/25/96 5.36% $ 4,982,926
5,000,000 2/8/96 4.55% 4,976,618
5,000,000 2/29/96 4.67% 4,962,380
5,000,000 3/7/96 5.05% 4,954,410
14,990,000 3/28/96 4.91% 14,814,176
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34,690,510
Repurchase Agreements (Note 4):
Cost $16,900,000 purchased on
12/29/95; maturity value--
$16,910,328 (with Merrill
Lynch, Pierce, Fenner &
Smith Incorporated collater-
alized by $16,965,000 U.S.
Treasury Note due 10/31/97
with an interest rate of
5.625%) 1/2/96 5.50% 16,900,000
Cost $16,900,000 purchased on
12/29/95; maturity value--
$16,910,328 (with HSBC
Securities Incorporated
collateralized by
$16,630,000 U.S. Treasury
Note due 3/31/97 with an
interest rate of
6.875%) 1/2/96 5.50% 16,900,000
----------
Total investments (amor-
tized cost $68,490,510)* 68,490,510
Cash 16,789
Receivables:
Capital shares sold 8,849,627
Interest 20,656
Other 63
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Total assets 77,377,645
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Liabilities:
Payables:
Capital shares repurchased 7,042,847
Dividends payable 158,423
Distribution fee payable 11,315
Management fee payable 3,466
Accounts payable 31,580
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Total liabilities 7,247,631
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Net Assets $70,130,014
==========
Shares of beneficial interest
out-standing (unlimited number
of $0.001 par value shares
authorized) 70,130,014
==========
Net asset value, redemption
price and offering price per
share $1.00
=====
</TABLE>
* The amortized cost is the same for federal income tax purposes.
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Statement of Operations
For the Year Ended December 31, 1995
<TABLE>
<CAPTION>
<S> <C> <C>
Interest Income (Note 1) $3,267,478
Expenses:
Management (Note 2) $286,736
Distribution (Note 3) 146,784
Transfer agent 81,786
Registration 38,044
Custodian 30,016
Administration (Note 2) 70,233
Professional 23,920
Reports to shareholders 7,146
Other 31,767
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Total expenses 716,432
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Net investment
income $2,551,046
==========
</TABLE>
<PAGE>
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Statements of Changes in Net Assets
For the Years Ended December 31, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
--------------- ---------------
<S> <C> <C>
Increase in Net Assets:
Operations:
Net investment income paid to
shareholders as dividends
(Note 1) $ 2,551,046 $ 1,944,543
=============== ===============
From capital share transactions
(at net asset value of $1.00
per share):
Net proceeds from sales of
shares $ 2,471,670,939 $ 1,776,705,661
Shares issued on reinvestment
of dividends from net
investment income 1,818,591 1,307,946
--------------- ---------------
2,473,489,530 1,778,013,607
Cost of shares reacquired (2,450,437,723) (1,762,044,239)
--------------- ---------------
Increase in net assets resulting
from capital share
transactions 23,051,807 15,969,368
Net Assets:
Beginning of year 47,078,207 31,108,839
-------------- ---------------
End of year $ 70,130,014 $ 47,078,207
=============== ===============
</TABLE>
See Notes to Financial Statements.
<PAGE>
U.S. Government Money Fund
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Financial Highlights
For a share outstanding throughout each period
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------------------------------------
1995 1994 1993 1992 1991
------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00
------- ------- ------- ------- -----
Income from Investment Operations:
Net Investment Income 0.0456 0.0311 0.0183 0.0220 0.0456
Less Distributions:
Dividends from net investment
income (0.0456) (0.0311) (0.0183) (0.0220) (0.0456)
------- ------- ------- ------- -------
Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00
======= ======= ======= ======= =======
Total Return 4.56% 3.11% 1.83% 2.20% 4.56%
- ---------------------------------------------------------------------------------------------------------------
Ratio/Supplementary Data
Net Assets, End of Period (000) $70,130 $47,078 $31,109 $24,853 $35,287
Ratio of Expenses to Average Net
Assets (a) 1.25% 1.12% 1.24% 1.44% 1.30%
Ratio of Net Income to Average Net
Assets 4.45% 3.07% 1.83% 2.25% 4.61%
<CAPTION>
(continued)
Year Ended December 31,
------------------------------------------------------
1990 1989 1988 1987 1986+
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $1.00 1.00 $1.00 $1.00 $1.00
------- ------- ------- ------- -------
Income from Investment Operations:
Net Investment Income 0.0685 0.0748 0.0594 0.0492 0.0427
Less Distributions:
Dividends from net investment
income (0.0685) (0.0748) (0.0594) (0.0492) (0.0427)
------- ------- ------- ------- -------
Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00
======= ======= ======= ======= =======
Total Return 6.85% 7.48% 5.94% 4.92% 4.27%
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Ratio/Supplementary Data
Net Assets, End of Period (000) $43,353 $47,620 $51,840 $45,126 $10,420
Ratio of Expenses to Average Net
Assets (a) 1.17% 1.26% 0.80% 0.89% 1.16%*
Ratio of Net Income to Average Net
Assets 6.82% 7.47% 5.95% 5.07% 4.75%*
</TABLE>
+ From February 15, 1986 (commencement of operations) to December 31, 1986.
(a) Had the Adviser not waived management fees, the 1989, 1988, 1987 and 1986
expense ratios would have been 1.31%, 1.30%, 1.39% and 1.66%, respectively,
and total return would have been lower.
* Annualized.
See Notes to Financial Statements.
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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 as an open-ended management investment company.
The following is a summary of significant accounting policies consistently
followed by the U.S. Government Money 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.
A. Security valuation--The Fund uses the amortized cost method to value
securities. The amortized cost method involves valuing a security at its cost
initially and, thereafter, a constant amortization to maturity of any discount
or premium. Generally, the amortized cost of the security approximates the
market value.
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 it required.
C. Dividend distributions--The Fund declares dividends from its net
investment income on each day the Fund is open for business and distributes
dividends on the last day of the month.
D. Other--Security transactions are accounted for on the date the securities
are purchased or sold. Interest income is recorded as earned. Realized gains
and losses from security transactions are recorded on a specific identification
basis.
Note 2--Van Eck Associates Corporation earned fees of $286,736 for the year
ended December 31, 1995 for investment management and advisory services. The
fee is based on an annual rate of .50 of 1% of the first $500 million of
average daily net assets, .40 of 1% on the next $250 million and .375 of 1% of
the excess over $750 million. In accordance with the advisory agreement, the
Fund reimbursed Van Eck Associates Corporation for the year ended December 31,
1995 $70,233 for costs incurred in connection with certain administrative and
operating 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.
Note 3--Pursuant to a Plan of Distribution (Rule 12b-1) the Fund accrues fees
of .25 of 1% of the average daily net assets of the Fund. The fees are intended
to be used principally for payments to securities dealers who have sold shares
and service shareholder accounts of the Fund and the remainder will be used for
other actual promotion and distribution expenses incurred by Van Eck Securities
Corporation, the distributor. Fees accrued for the year ended December 31, 1995
were $146,784.
Note 4--Collateral for repurchase agreements is held by the Fund's custodian,
the value of which must be at least 102% of the underlying debt obligation. In
the remote chance the counterparty should fail to complete the repurchase
agreement, realization and retention of the collateral may be subject to legal
proceedings and the Fund would become exposed to market fluctuation on the
collateral.
<PAGE>
Report of Independent Accountants
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To the Shareholders and Board of
Trustees of Van Eck Funds:
We have audited the accompanying statement of net assets of the U.S. Government
Money 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 five 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.
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. 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
U.S. Government Money Fund 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 five years in the period then ended, in conformity
with generally accepted accounting principles.
Coopers & Lybrand L.L.P.
New York, New York
January 19, 1996
<PAGE>
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<PAGE>
VAN ECK FAMILY OF FUNDs
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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 Asset Management, Inc. 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 Asset Management, Inc. 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.
[Van Eck Global Logo]
X96-0116-002
Van Eck Securities Corporation
99 Park Avenue, New York, NY 10016
For account assistance please call (800) 544-4653
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DECEMBER 31, 1995
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VAN ECK
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U.S. GOVERNMENT
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MONEY
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FUND
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ANNUAL
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REPORT
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[VAN ECK GLOBAL LOGO]
