VAN ECK ASIA INFRASTRUCTURE FUND
--------------------------------
1996 ANNUAL REPORT
Dear Fellow Shareholder:
We are pleased to report that the Van Eck Asia Infrastructure Fund had a total
return of 17.8% for the year ended December 31, 1996 and was ranked the number
one Pacific Region Fund among 38 for the period, according to Lipper Analytical
Services, Inc.* Asian stock market performance for the year was decidedly mixed.
Some markets, such as Hong Kong and Malaysia, recorded strong double-digit
gains, while others, such as Thailand and Korea, witnessed double-digit
declines. Thus, your Fund's performance was largely due to prudent country and
sector allocation decisions. In August, we appointed a new portfolio manager,
Mr. Timothy Chan, who is based in our Hong Kong office.** This resulted in
several important portfolio developments that should serve as a strong
foundation for your Fund in 1997.
In 1996, there was a flood of new issues, share placements and corporate
spin-offs within the infrastructure sector. Hong Kong experienced the most
activity in initial public offerings (IPOs), many of which were related to
China's infrastructure projects. The performance of these issues varied greatly
due to the large supply of IPOs during the period.
1996 was a good year for transportation companies, particularly road and bridge
operators. CKI Holdings in Hong Kong and Litrak in Malaysia were well received
by investors after coming to market in July and November, respectively.
Container-port operators, such as Cosco Pacific, also fared well. However,
investors were apathetic on railway company IPOs, such as Hong Kong-based
Guangshen Railway.
The energy sector recorded solid gains due largely to higher energy prices. The
price of crude oil increased from US $23 per barrel at the beginning of last
year to US $26 per barrel by December. Coal and oil and gas exploration
companies in Indonesia and Thailand were among the top performers. In light of
higher energy prices, electric power plants and airline companies
lost ground.
In the building materials sector, cement companies showed steady price strength
across the region, particularly in Indonesia and the Philippines.
The ongoing deregulation of the telecommunications sector in every Asian country
resulted in severe price and market share competition for telephone companies.
Further, an increased supply of telecommunications stock exacerbated the
situation as several governments initiated large placements of
telecommunications shares during the year.
In 1996, the Asia Infrastructure Fund was overweighted in Hong Kong and
Malaysia, two of the better performing Asian markets, and underweighted in South
Korea and Thailand, two of the region's most notable underperformers. From a
sector perspective, the Fund was well represented in heavy construction and
engineering, building materials and energy production and distribution stocks.
On balance, these sectors registered attractive investment returns for the year.
Telecommunications, which underperformed significantly last year, were
underrepresented in the portfolio.
In August, we began to increase the Fund's position in Hong Kong due to that
market's solid fundamentals and attractive growth prospects. For the same
reasons, we augmented the Fund's investments in the building materials, energy
and construction and engineering sectors, while reducing the Fund's holdings in
air transportation and telecommunications.
Your Fund was more highly diversified by year end as stocks were added to the
portfolio, particularly since August. At December 31, approximately 15% of total
assets were in cash--however, given a positive outlook on the Asian markets, we
plan to invest these assets as opportunities arise in the coming months.
The Outlook
The outlook for infrastructure development in Asia remains favorable, which
should translate into substan-
<PAGE>
tial long-term opportunities for investors going forward. According to the World
Bank's estimation, Asia will spend US $1.5 trillion in the next decade on
infrastructure projects--50% in China and 40% among Korea, Indonesia and
Thailand. Singapore, which has announced plans to upgrade the quality of its
air, sea and communications infrastructure, is expected to spend US $4.3
billion. Thailand will privatize its infrastructure projects (highways, the
bullet train, etc.), according to the Ministry of Telecommunications and
Transportation. Shanghai, China's largest city, also plans to invest US $36.1
billion between 1996 and 2000 on infrastructure projects.
The Fund expects equity financing to remain a major way to raise money for
infrastructure in 1997, and thus, many new issues should provide new
opportunities. A number of infrastructure-related IPOs have been scheduled for
1997, and at this time, we expect several to be part of the Fund's investment
strategy in the coming year.
In regard to country selection, we intend to maintain a higher weighting to Hong
Kong. Prospects for the market overall are positive, and moreover, Hong Kong's
stock market is an indispensable fund-raising center for China's infrastructure
projects. In terms of sector selection, we plan to continue to favor road and
bridge operators as well as construction, building materials and energy
companies as fundamentals remain strong.
We appreciate your participation in the Asia Infrastructure Fund and look
forward to helping you meet your investment goals in the future.
[PHOTO] [PHOTO]
/s/ John C. Van Eck /s/ Timothy Chan
John C. van Eck Timothy Chan
Chairman Portfolio Manager
January 30, 1997
*The Fund ranked 24th among 30 funds since its inception (8/3/94).
**Mr. Chan has 12 years of experience working in the financial markets and ten
years of experience in Asia-region investment management. Before joining Van
Eck, he was a portfolio manager with BZW Investment Management Ltd. in Hong
Kong, and prior to BZW, he was a portfolio manager with Sun Hung Kai Fund
Management Ltd.
- --------------------------------------------------------------------------------
PERFORMANCE RECORD AS OF 12/31/96
- --------------------------------------------------------------------------------
Average Annual After Maximum Before
Total Return Sales Charge* Sales Charge
- --------------------------------------------------------------------------------
A shares--Life (since 8/3/94) (3.7)% (1.7)%
- --------------------------------------------------------------------------------
1 year 12.2% 17.8%
- --------------------------------------------------------------------------------
B shares--Life (since 4/24/96)** (3.8)% 2.2%
- --------------------------------------------------------------------------------
The performance data represents past performance and is not indicative of future
results. Investment return and principal value of an investment in the Fund will
vary so that shares, when redeemed, may be worth more or less than their
original cost.
The Advisor is currently waiving certain or all expenses on the Fund. Had the
Fund incurred all expenses, investment returns would have been reduced.
*A shares: maximum sales charge = 4.75%
B shares: maximum contingent deferred sales charge = 6.00%
**Not annualized
C shares are no longer publicly offered.
<PAGE>
ASIA INFRASTRUCTURE FUND
INVESTMENT PORTFOLIO DECEMBER 31, 1996
- --------------------------------------------------------------------------------
No. of Shares Securities Value (Note 1)
- --------------------------------------------------------------------------------
Hong Kong: 48.4%
48,000 Cheung Kong Infrastructure $127,222
280,000 CIG-WH International Holdings 68,783
114,000 Cosco Pacific Ltd. 132,652
222,000 Guangshen Railway Co. Ltd. 96,153
19,000 Hong Kong Electric Holdings 63,133
90,000 Hopewell Holdings 58,181
16,000 Hutchison Whampoa Ltd. 125,671
20,000 New World Infrastructure Ltd. 58,439
200,000 Paul Y-ITC Construction
Holdings Ltd. 47,838
300,000 Wai Kee Holdings Ltd. 62,447
13,000 Wharf Holdings Ltd. 64,878
----------
905,397
----------
Indonesia: 7.1%
64,500 P.T. Bukaka Teknik Utama "F" 49,153
26,000 P.T. Medco Energi Corp. "F" 47,332
11,000 P.T. Semen Gresik "F" 35,394
----------
131,879
----------
Malaysia: 19.0%
25,000 Lingkaran Trans Kota Holdings+ 51,475
30,000 Petronas Gas Bhd.
(Warrants expiring 8/17/2000)+ 61,176
32,000 Renong Berhad 56,765
13,000 Road Builder (M) Hldgs. Bhd 73,609
23,000 Sungei Way Holdings 68,303
5,000 Telekom Malaysia Berhad 44,546
----------
355,874
----------
Philippines: 5.7%
29,000 First Philippine Holding (Class B) 66,141
750 Philippine Long Distance
Telephone Co. 41,195
----------
107,336
----------
Singapore: 8.2%
10,000 Singapore Airlines Ltd. "F" 90,747
15,000 Van der Horst Ltd. 62,701
----------
153,448
----------
South Korea: 3.3%
5,500 Dong-Ah Construction (EDR)+ $ 57,751
484 Dong-Ah Construction
(EDR) New+ 4,777
----------
62,528
----------
Thailand: 8.3%
1,500 Ban Pu Coal Co. Ltd. "F" 27,832
12,000 Electricity Generating
Public Co. "F" 32,744
3,500 PTT Exploration & Production
Public Company "F" 50,479
7,200 Tipco Asphalt Public Co. "F" 43,783
----------
154,838
----------
Total Stocks & Other Investments: 100%
(Cost: $1,980,032) $1,871,300
==========
Summary of Investments By Industry % of Portfolio
- --------------------------------------------------------------------------------
Airlines 4.8%
Building & Construction 3.3%
Building Materials 6.0%
Cement 1.9%
Coal 1.5%
Conglomerates 10.2%
Electric Utilities 5.1%
Engineering & Construction 26.6%
Holding Companies 6.1%
Oil & Gas Exploration 8.5%
Packaging 3.4%
Railroads 5.1%
Real Estate 3.1%
Telecommunications 4.6%
Transportation 9.8%
------
100.00%
======
- ----------
(a) Unless otherwise indicated, securities owned are shares of common stock.
Glossary:
EDR - European Depositary Receipt
F - Foreign registry
+ Non-income producing
<PAGE>
ASIA INFRASTRUCTURE FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
December 31, 1996
Assets:
Investments at value (cost, $1,980,032) (Note 1) $1,871,300
Cash 350,579
Receivables:
Capital shares sold 4,259
Securities sold 35,927
Dividends 383
From Advisor 11,015
Deferred organization cost 17,000
----------
Total assets 2,290,463
----------
Liabilities:
Payables:
Securities purchased 36,454
Capital shares redeemed 1,389
Accounts payable 27,530
----------
Total liabilities 65,373
----------
Net Assets $2,225,090
==========
Class A
Net asset value and redemption price per share
($2,161,331/242,427) $ 8.92
==========
Maximum offering price per share
(NAV/(1-maximum sales commission)) $ 9.36
==========
Class B
Net asset value and redemption price
per share ($62,429/7,022) (Redemptions may
be subject to a contingent deferred sales
charge within the first six years of ownership) $8.89
==========
Class C
Net asset value and redemption price
per share ($1,330/149) (Redemptions may be
subject to a contingent deferred sales charge
within the first year of ownership) $8.90
==========
Net assets consist of:
Aggregate paid in capital $2,520,900
Unrealized appreciation of investments
and foreign currency (108,831)
Cumulative realized losses (186,979)
----------
$2,225,090
==========
- --------------------------------------------------------------------------------
Statement of Operations
For the Year Ended December 31, 1996
Income:
Dividends (less foreign taxes withheld of $1,183) $ 20,178
Expenses:
Management (Note 2) $ 10,958
Distribution Class A (Note 4) 7,142
Distribution Class B (Note 4) 313
Administration 6,527
Transfer agency 38,618
Registration 18,649
Professional 14,249
Reports to shareholders 7,136
Amortization of deferred organization cost 6,581
Trustee 5,359
Custody 3,186
Other 4,057
--------
122,775
Expenses assumed by the Advisor (Note 2) (93,555)
--------
Total expenses 29,220
---------
Net investment loss (9,042)
Realized and Unrealized Gain (Loss)
on Investments (Note 3)
Realized gain from security transactions 252,653
Realized loss from foreign currency transactions (978)
Change in unrealized appreciation of investments
and foreign denominated receivables and payables (68,686)
---------
Net Increase in Net Assets Resulting
From Operations $ 173,947
=========
Statements of Changes in Net Assets
For the Years Ended December 31, 1996 and 1995
1996 1995
----------------------------
Increase (Decrease) in Net Assets:
Operations:
Net investment income (loss) $ (9,042) $ 4,982
Realized gain (loss) from
security transactions 252,653 (80,060)
Realized loss from foreign
currency transactions (978) (3,516)
Change in unrealized appreciation
of investments and foreign
denominated receivables and
payables (68,686) 176,494
----------- -----------
Increase in net assets
resulting from operations 173,947 97,900
----------- -----------
Capital share transactions:
Net proceeds from sales of shares:
Class A shares 2,292,640 948,369
Class B shares 67,082 --
Class C shares -- 9,523
----------- -----------
2,359,722 957,892
----------- -----------
Reinvestment of dividends:
Class A shares -- 19,074
Class B shares -- --
Class C shares -- 325
----------- -----------
-- 19,399
----------- -----------
Cost of shares reacquired:
Class A shares (1,041,725) (1,366,575)
Class B shares (5,697) --
Class C shares -- (20,086)
----------- -----------
(1,047,422) (1,386,661)
----------- -----------
Increase (decrease) in net assets resulting
from capital share transactions 1,312,300 (409,370)
----------- -----------
Total increase (decrease) in net assets 1,486,247 (311,470)
Net Assets:
Beginning of year 738,843 1,050,313
----------- -----------
End of year $ 2,225,090 $ 738,843
=========== ===========
<PAGE>
ASIA INFRASTRUCTURE FUND
- --------------------------------------------------------------------------------
Financial Highlights
For a share outstanding throughout each period
<TABLE>
<CAPTION>
Class A
-----------------------------------------------
Year Year For the Period
Ended Ended August 3,1994(a)
December 31, December 31, to
1996 1996 December 31, 1994
------------ ------------ -----------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period ......... $7.57 $7.04 $9.53
----- ----- -----
Income from Investment Operations:
Net Investment Income (loss) ................. (0.04) 0.04+ 0.18+
Net Gain (Loss) on Securities (both
realized and unrealized) ................... 1.39 0.49 (2.50)
----- ----- -----
Total from Investment Operations ............. 1.35 0.53 (2.32)
----- ----- -----
Dividends from Net Investment Income ......... -- -- (0.17)
----- ----- -----
Net Asset Value, End of Period ............... $8.92 $7.57 $7.04
===== ===== =====
Total Return (b) ............................. 17.83% 7.53% (24.3%)
- ------------------------------------------------------------------------------------------------
Ratios/Supplementary Data
Net Assets, End of Period (000) .............. $2,161 $738 $1,038
Ratio of Gross Expenses to Average
Net Assets (c) ............................... 8.03% 8.29% 2.71%
Ratio of Net Expenses to Average Net Assets .. 2.00% 1.72% 0.28%
Ratio of Net Investment Income (loss) to
Average Net Assets ......................... (0.62%) 0.52% 1.78%*
Portfolio Turnover Rate ...................... 183% 90% 147%
Average Commission Rate Paid** ............... $0.0021
<CAPTION>
Class B Class C
----------------- ----------------------------------------------
For the Period
For the Period Year Year October 14,1994(a)
April 24, 1996(a) Ended Ended to
to December 31, December 31, December 31, December 31,
1996 1996 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ......... $8.70 $7.55 $7.04 $9.53
----- ----- ----- -----
Income from Investment Operations:
Net Investment Income (loss) ................. (0.03) (0.03) 0.05+ 0.06
Net Gain (Loss) on Securities (both
realized and unrealized) ................... 0.22 1.38 0.46 (2.36)
----- ----- ----- -----
Total from Investment Operations ............. 0.19 1.35 0.51 (2.30)
Dividends from Net Investment Income ......... -- -- -- (0.19)
----- ----- ----- -----
Net Asset Value, End of Period ............... $8.89 $8.90 $7.55 $7.04
===== ===== ===== =====
Total Return (b) ............................. 2.18% 17.88% 7.24% (24.1%)
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplementary Data
Net Assets, End of Period (000) .............. $62 $1 $1 $12
Ratio of Gross Expenses to Average
Net Assets (c) ............................... *23.94% *46.17% 141.85% 24.29%*
Ratio of Net Expenses to Average Net Assets .. *2.00% *2.00% 1.26% 1.02%*
Ratio of Net Investment Income (loss) to
Average Net Assets ......................... (0.57%)* (0.39%) 0.64% 4.15%*
Portfolio Turnover Rate ...................... 183% 183% 90% 147%
Average Commission Rate Paid** ............... $0.0021 $0.0021
</TABLE>
- -----------
(a) Commencement of operations.
(b) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of 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) If the expenses were not assumed by the Advisor.
* Annualized.
** For fiscal years beginning on or after September 1,1995, a fund is required
to disclose its average commission rate per share for trades in which
commission is charged.
+ Based on average shares outstanding.
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 Asia Infrastructure Fund series, a non-diversified fund (the "Fund") of
the Trust in the preparation of its financial statements. The policies are in
conformity with generally accepted accounting principles. The preparation of
financial statements in conformity with generally accepted accounting principles
requires the use of management's estimates and the actual amounts could differ.
A. Security Valuation -- Securities traded on national or foreign exchanges
are valued at the last sales prices reported at the close of business on
the last day of the year. Over-the-counter securities and listed securities
for which no sale was reported are valued at the mean of the bid and asked
prices. 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 quoted 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 is not separately disclosed. Recognized gains or losses attributable
to foreign currency fluctuations on other foreign denominated assets and
liabilities are recorded as net realized gains and losses from foreign
currency transactions.
D. Other -- Security transactions are accounted for on the date the securities
are purchased or sold. Dividend income and distributions to shareholders
are recorded on the ex-dividend date.
E. Distributions -- Income and capital gain distributions are determined in
accordance with federal income tax regulations
<PAGE>
ASIA INFRASTRUCTURE FUND
- --------------------------------------------------------------------------------
which may differ from generally accepted accounting principles. These
differences are primarily due to differing treatments for foreign currency
transactions, wash sales, and net operating losses. The effect of these
differences for the year ended December 31, 1996 was a decrease in
accumulated net investment loss of $9,042, a decrease in cumulative
realized losses of $1,051 and a decrease in aggregate paid in capital of
$10,093.
F. Deferred Organization Costs -- Deferred organization costs are being
amortized over a period not exceeding five years.
Note 2 -- Van Eck Associates Corporation (the "Advisor") earned fees of $10,958
for investment management and advisory services. The fee was based on an annual
rate of .75 of 1% of the Fund's average daily net assets. Van Eck Associates
Corporation also earned fees for accounting and administrative services. The fee
was based on an annual rate of .25 of 1% of the Fund's average daily net assets.
AIG Asset Management, Inc., the sub-investment advisor, earned fees for
investment management. The fee was based on an annual rate of .50 of 1% of the
Fund's average daily net assets and was paid by the Advisor from the advisory
fees it received from the Fund. On July 31, 1996, the Fund terminated its
sub-investment-advisory agreement with AIG Asset Management, Inc. On August 1,
1996, the Advisor commenced management of the portfolio of investments. Van Eck
Associates Corporation agreed to waive its management fees and administrative
fees and to assume all expenses of the Fund in excess of 2% of average daily net
assets for the period January 1, 1996 to December 31, 1996. Van Eck Securities
Corporation received $4,002 for the year ended December 31, 1996 from
commissions earned on sales of Class A shares after deducting $16,613 allowed to
other dealers. 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 December 31, 1996 Van Eck Associates Corporation
owned 100% of the outstanding shares of beneficial interest of the Fund's Class
C shares. Class C shares are presently not offered for sale.
Note 3 -- Purchases and proceeds from sales of investments, other than
short-term obligations, aggregated $3,177,112 and $2,194,801, respectively, for
the year ended December 31, 1996. For federal income tax purposes the cost of
investments owned at December 31, 1996 was $1,981,012. At December 31, 1996, net
unrealized depreciation for federal income tax purposes aggregated $109,712, of
which $60,940 related to appreciated investments and $170,652 related to
depreciated investments. At December 31, 1996, the Fund had $185,999 of capital
loss carryforwards available to offset future capital gains, expiring December
31, 2003.
Note 4 -- Pursuant to a Rule 12b-1 Plan of Distribution (the "Plan"), the Fund
is authorized to incur distribution expenses which will principally be payments
to securities dealers who have sold shares and service shareholder accounts and
payments to Van Eck Securities Corporation ("VESC"), the distributor, for
reimbursement of other actual promotion and distribution expenses incurred by
the distributor on behalf of the Fund. The amount paid under the Plan in any one
year is limited to .50% of average daily net assets for Class A shares and 1.00%
of average daily net assets for Class B shares (the "Annual Limitations").
Distribution expenses incurred under the Plan that have not been paid because
they exceed the Annual Limitation may be carried forward to future years and
paid by the Fund within the Annual Limitation. VESC has waived its right to
reimbursement of the carried forward amounts incurred for the period August 3,
1994 (commencement of operations) through April 30, 1997 in the event the Plan
is terminated, unless the Board of Trustees determines that reimbursement of the
carried forward amounts is appropriate. The cumulative excess of distribution
expenses incurred over the Annual Limitation at December 31, 1996 was $70,831
for Class A shares, $3,124 for Class B shares, and $16,737 for Class C shares.
Note 5 -- The Fund invests in foreign securities. Investments in foreign
securities may involve a greater degree of risk than investments in domestic
securities due to political, economic or social instability. In addition, some
foreign companies are not generally subject to the same uniform accounting,
auditing and financial rules as are American companies, and there may be less
government supervision and regulation. Foreign investment may also be subject to
foreign taxes, dividend collection fees and settlement delays.
The Fund may concentrate its investments in companies which are significantly
involved in the design, construction, development, manufacture, sales, leasing,
installation or operation of, or the ownership of property in connection with
infrastructure facilities, systems, products and technologies in various Asian
countries.
Since the Fund may so concentrate, it may be subject to greater economic, social
and political risks and market fluctuations than other more diversified domestic
and foreign portfolios.
Note 6 -- Shares of Beneficial Interest Issued and Redeemed (unlimited number of
$0.001 par value shares authorized):
Year Ended Year Ended
December 31, December 31,
1996 1995
------------ ------------
Class A
Shares sold 266,545 144,304
Reinvestment of dividends -- 2,709
-------- --------
266,545 147,013
Shares reacquired (121,582) (196,986)
-------- --------
Net increase (decrease) 144,963 (49,973)
======== ========
For the Period
April 24, 1996+
to December 31,
1996
-------------
Class B
Shares sold 7,699
Reinvestment of dividends --
------
7,699
Shares reacquired (677)
------
Net increase 7,022
======
Year Ended Year Ended
December 31, December 31,
1996 1995
------------ ------------
Class C
Shares sold -- 1,475
Reinvestment of dividends -- 46
----- ------
-- 1,521
Shares reacquired -- (3,092)
----- ------
Net decrease -- (1,571)
===== ======
+ Commencement of operations.
<PAGE>
Report of Independent Accountants
To the Board of Trustees and Shareholders of the
Van Eck Funds:
We have audited the accompanying statement of assets and liabilities, including
the investment portfolio, of the Asia Infrastructure Fund (the "Fund") (one of
the series constituting the Van Eck Funds) as of December 31, 1996, 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 two years in the period then ended and
for the period August 3, 1994 (commencement of operations) to December 31, 1994.
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 audits 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, 1996 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
Asia Infrastructure Fund series of the Van Eck Funds as of December 31, 1996,
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 two years in the period then ended, and for the
period August 3, 1994 (commencement of operations) to December 31, 1994, in
conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
New York, New York
February 21, 1997
<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.
Emerging Markets Growth Fund
This Fund seeks long-term capital appreciation by investing primarily in equity
securities in emerging markets around the world.
Asia Dynasty Fund
This Fund seeks long-term capital appreciation by investing in the equity
securities of companies that are expected to benefit from the development and
growth of the economies in the Asia Region.
Asia Infrastructure Fund
Seeks long-term capital appreciation by investing in the equity securities of
infrastructure companies that are expected to benefit from the development and
growth of the economies in the Asia Region.
Global Balanced Fund
This Fund seeks long-term capital appreciation together with current income by
investing in stocks, bonds and money market instruments worldwide.
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 Global 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 Gold and Money Funds prospectus,
please call the number listed below. Please read the prospectus before
investing.
[LOGO] Van Eck Global
Van Eck Securities Corporation
99 Park Avenue, New York, NY 10016
http://www.vaneck.com
For account asistance please call (800) 544-4653
FX1997-0206-0114
================================================================================
DECEMBER 31, 1996
VAN ECK
ASIA
INFRASTRUCTURE
FUND
ANNUAL
REPORT
================================================================================
[LOGO] Van Eck Global
