VAN ECK GOLD/RESOURCES FUND
---------------------------
1997 SEMI-ANNUAL REPORT
Dear Fellow Shareholder:
Although the physical demand for gold grew faster than, and substantially
exceeded, the supply of newly-mined gold and old scrap, bearish sentiment grew
dramatically during the first half of this year. Commercial gold demand,
according to the World Gold Council, rose 17% during the first quarter to the
highest quarterly demand ever recorded in monitored markets. However, investment
demand, which fell from 424 tonnes in 1995 to 82 tonnes in 1996, continues to
languish. Booming global stock markets, prolonged low inflation rates and the
strong dollar compared to European currencies meant that the demand for gold
asset diversification was minimized. Global private investment portfolios hold
an estimated $260 billion of gold as preferred cash reserves. It is the swings
in these holdings that cause the big market moves in the gold price when
confidence in paper currencies, financial markets, fiscal budgets, central bank
management, bank solvency and the international monetary system either rises or
falls.
It was the fear of large-scale official sector sales, which hung over the gold
market for most of last year, that dominated the market for the first half of
this year. The big uncertainty is the gold reserve policy of the new European
Central Bank if the European Monetary Union (EMU) commences operations. Until
that time, prospective members are allowed to sell gold. Political pressures to
reduce fiscal deficits have caused some central banks to maximize earnings by
reducing the gold portion of their monetary reserves and investing the proceeds
in government securities. Other central banks have bought gold. Last year, 19
countries increased their gold reserves, three more than the number of sellers.
Net reported sales of 239 tonnes reflected gross sales of 588 tonnes against
gross purchases of 349 tonnes. Among last year's purchasers, China and Russia
were prominent.
The climax of this year's central bank selling was the unexpected announcement
on July 3 of the sale of 167 tonnes of gold by the Reserve Bank of Australia
over the past six months. The gold portion of Australia's monetary reserves thus
was reduced from about 15% to 5%. In contrast, the Bank of Canada also reduced
the gold content of its monetary reserves to approximately 5%, but this was done
openly and over a period of twelve years at prices that were profitable for the
Canadian gold miners. The Australian sales were mostly done at prices below the
cost of mining in Australia. Confidence was, of course, shaken by this action,
which demoralized the mining industry. The Prime Minister of Australia, John
Howard, publicly tried to justify the action, and accordingly demonstrated how
political forces dominate the so-called independence of the Reserve Bank of
Australia.
Speculators have exploited this fear and uncertainty by selling large amounts of
gold short. One estimate puts the short interest at over 2,000 tonnes. They
presumably hope to cover their shorts by buying from other central banks if they
make further sales. This pressure has driven the price of gold down from $368.30
an ounce at the end of 1996 to $334.80 an ounce at the end of June 1997. This
decline was part of an intermediate downtrend that began in February 1996 at
$415.50 an ounce and finally reached a closing low of $318.00 an ounce on July
16, 1997.
GOLD SHARES
The weakness in the gold price, combined with continued fallout in the junior
exploration sector following the uncovering of the fraud at Bre-X Minerals,
contributed to significant declines in the price of gold shares around the world
since year-end 1996.
In North America, the Philadelphia Gold and Silver Index fell 18% during the
first half of 1997, making it the best performer among the regional gold share
indexes, helped by relatively good performances from Battle Mountain, Newmont
and Homestake-companies with low or declining costs, solid reserve bases and
growth potential. On June 30, Gold/Resources had 40% of its assets in the United
States. The Toronto Gold and Silver Index, more than half of which is made up by
Barrick Gold and Placer Dome, fared less well, declining 27% in U.S. dollar
terms. Additionally, the Canadian index contains many junior companies that have
<PAGE>
suffered declines of 30-40% since the Bre-X scandal. Your Fund was 35% invested
in Canadian shares on June 30. In Australia, a 5% decline in the currency
translated into a 24% decline in the Australian Stock Exchange Gold Index
through the end of June. The decline was compounded by poor operating results at
several mines due to record-breaking rains in Western Australia and, in some
cases, start-up problems at new or expanding operations or those making the
transition from open-pit to underground mining. Approximately 20% of your Fund
is in Australian shares.
Many mining companies have sold gold forward for periods of three years or more
and thus have protected their earnings and cash positions during this period of
extreme gold price weakness. Other companies may find it difficult to secure
financing for their current exploration or development programs. We accordingly
reviewed our holdings and have placed emphasis on what we believe to be the
better valued mines and prospects and companies that are restructuring and
aiming at enhancing shareholder values. Most of the pure gold shares we have
kept in the portfolio are considered defensive because of either their low-cost
and solid reserve structure, or because they have appreciable hedging positions
in place (for example, Barrick, Newmont, Eagle Mining, Sons of Gwalia). Others,
selling at or below the net present value of their assets, represent good value
and are possible takeover candidates by senior producers seeking growth through
acquisition now that prices have come down. Several Australian companies fall
into this category, such as Herald Resources, Acacia Resources, Great Central
Mines and Wiluna Mines. The junior exploration companies we have kept have
attractive properties with sound geological potential and are adequately
financed to complete current drilling programs. On June 30, these "junior"
explorers represented less than 10% of Gold/Resources. We have sold the
"high-cost" producers in the Fund, such as Echo Bay and Royal Oak.
Since worries over EMU may persist and financial markets may continue to draw
most investment dollars, we considered it prudent to diversify a portion of
Gold/Resources into companies producing other natural resources whose demand
continues to benefit from economic expansion in many parts of the world,
particularly in the emerging markets. To take advantage of strong prices for
metals like zinc and copper, we have initiated positions in shares of several
diversified mining companies, such as North Ltd., Boliden Ltd. and Titanium
Metals. Similarly, we believe some sectors of the forest products group will
benefit from better pricing power and rationalization within the industry;
Willamette Industries, Mead Corporation and Fort Howard Paper (which is merging
with James River) are good examples. Additionally, we believe certain energy
exploration ("E&P's") and drilling companies offer exciting potential for
appreciation given the increasing levels of exploration dollars being spent in
the search for hydrocarbons to replace the world's rapidly depleting oil and gas
reserves. Here we have initiated positions in Santa Fe and Triton Energy.
Accordingly, as of June 30, Gold/Resources had over 20% of its assets invested
in diversified metals, forest products and energy companies. Additionally,
approximately 2% of your Fund was invested in Normandy Mining and Buenaventura,
two gold-mining companies with significant base metals exposure.
THE OUTLOOK
We believe gold bullion is showing signs of a typically oversold
market--record-low sentiment, record-high speculative shorts, increased
volatility, companies shutting down high-cost mines and prices close to the
industry's average cost of production. However, we remain concerned about the
timing of a sustained recovery, given the persistent fears of further central
bank sales, and also about the relatively high valuations still accorded some
gold shares, particularly the North American senior producers. Accordingly, we
will continue to concentrate on precious metals shares with low costs,
high-quality reserve bases and healthy balance sheets, while pursuing
opportunities in the broader natural resource universe, where we believe the
potential for capital appreciation is attractive. For example, we project
continued global economic growth for the foreseeable future. This will fuel
increased demand for base metals and for energy, in our opinion. In some
sectors, supply will not be able to keep up with this demand and prices should
rise. Aluminum, zinc and natural gas could be beneficiaries of such scenarios,
in our view. We will likely maintain, or even increase, our exposure to these
sectors, where we see better value than in some areas in the gold sector.
Additionally, we believe the restructuring taking shape in the forest products
area as well as healthy demand for things like newsprint and pulp will continue
<PAGE>
to afford opportunities for profit such as provided by the positions in Mead
Corp. and Willamette Industries.
We appreciate your participation in the Gold/Resources Fund and look forward to
helping you meet your investment objectives in the future.
[PHOTO] [PHOTO]
/s/JOHN C. VAN ECK /s/LUCILLE PALERMO
- ------------------ ------------------
JOHN C. VAN ECK LUCILLE PALERMO
CHAIRMAN PRESIDENT
JULY 29, 1997
- --------------------------------------------------------------------------------
PERFORMANCE RECORD AS OF 6/30/97
- --------------------------------------------------------------------------------
AVERAGE ANNUAL AFTER MAXIMUM BEFORE
TOTAL RETURN SALES CHARGE OF 5.75%* SALES CHARGE
- --------------------------------------------------------------------------------
A shares--Life (since 2/15/86) 3.3% 3.9%
- --------------------------------------------------------------------------------
10 year (3.6)% (3.0)%
- --------------------------------------------------------------------------------
5 year 2.8% 4.0%
- --------------------------------------------------------------------------------
1 year (27.4)% (22.9)%
- --------------------------------------------------------------------------------
The performance data reflects 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.
Note: C shares are no longer publicly offered.
<PAGE>
GOLD/RESOURCES FUND
STATEMENT OF NET ASSETS JUNE 30, 1997 (unaudited)
NO. OF SHARES SECURITIES(A) VALUE (NOTE 1)
- --------------------------------------------------------------------------------
AUSTRALIA: 19.9%
425,000 Acacia Resources Ltd. $ 557,250
1,850,000 Australian Resources Ltd. 752,796
990,000 Consolidated Gold N.L. 216,344
350,000 Croesus Mining N.L. 118,684
305,422 Delta Gold N.L. 508,633
313,600 Dominion Mining Ltd. 155,967
156,800 Dominion Mining Ltd.
(Option expiring 12/31/98) 22,450
700,000 Eagle Mining Corp. 1,334,537
230,000 Emperor Mines Ltd. 320,636
630,375 Ghana Gold Mines Ltd. 133,301
140,000 Giralia Resources N.L. 11,605
679,300 Golden Shamrock Mines Ltd. Deferred 69,617
708,300 Goldstream Mining N.L. 245,520
338,400 Great Central Mines N.L. 643,113
1,250,000 Gullewa Gold N.L. 32,968
274,354 Herald Resources Ltd. 138,515
351,483 Imperial Mining N.L. 37,080
371,576 Macraes Mining Co. Ltd. 518,002
400,000 Menzies Gold N.L. 120,568
650,000 Mount Burgess Gold Mining Co. N.L. 55,348
400,000 Mount Leyshon Gold Mines Ltd. 536,528
171,900 Newcrest Mining Ltd. 473,969
1,083,033 Normandy Mining Ltd. 1,216,018
200,000 North Ltd. 761,086
1,946,894 Plutonic Resources Ltd. 6,073,719
771,428 Resolute Samantha Gold N.L. 1,371,891
737,964 Sons of Gwalia N.L. 2,741,537
222,600 Wiluna Mines Ltd. 78,838
-----------
19,246,520
-----------
CANADA: 35.3%
65,000 Abacan Resource Corp. 207,188
59,100 Alamos Minerals Ltd. 52,655
50,000 Atna Resources Ltd. 126,761
270,000 Barrick Gold Corp. 5,940,000
63,400 Bema Gold Corp. 383,463
43,600 Boliden Limited
(Installment Receipt) 232,125
650,000 Dakota Mining Corp. 650,000
682,100 Dayton Mining Corp. 2,371,571
490,350 El Callao Mining Corp. 408,462
106,900 Fletcher Challenge Canada Ltd. 1,780,957
97,400 Geomaque Exploration Ltd. 225,765
320,000 Goldcorp Inc. (Class A) 2,280,000
160,000 Golden Knight Resources Inc. 326,826
50,000 Greenstone Resources Ltd. 438,231
40,000 Iamgold International African Mining
Gold Corp. 156,459
250,000 International Rorrima Gold
(Special Warrant expiring
12/18/97)(b)* 52,606
150,000 Meridian Gold Inc. 407,446
78,900 Minefinders Corp. Ltd. 176,026
320,800 Miramar Mining Corp. 1,161,856
56,000 Nevsun Resources 168,339
125,000 Northern Crown Mines Ltd. 200,248
25,000 Pacific Rim Mining Corp.
(Warrants Expiring 4/04/98)(b)* 60,231
150,000 Placer Dome Inc. 2,456,256
285,000 Prime Resources Group Inc. 2,064,395
40,000 Prudential Steel Ltd. 1,101,010
194,700 Queenstake Resources Ltd. 286,292
415,000 Richmont Mines Inc. 1,518,054
300,000 Rift Resources Ltd. 167,325
7,100 Rio Narcea Gold Mines Ltd. 21,343
195,000 Solitario Resources Corp. 635,616
455,278 Star Resources Corp. 59,360
240,000 Teck Corporation (Class B) 4,858,933
250,000 TVX Gold Inc. 1,328,125
320,100 Viceroy Resource Corp. 1,043,389
800,000 Vista Gold Corp. 718,554
-----------
34,065,867
-----------
GHANA: 1.4%
30,191 Ashanti Goldfields Co. Ltd. 352,857
84,000 Ashanti Goldfields Co. Ltd. (GDR) 981,750
-----------
1,334,607
-----------
PERU: 0.6%
32,000 Co. de Minas Buenaventura S.A. (ADR) 630,000
-----------
UNITED STATES: 39.8%
100,000 Amax Gold, Inc. 612,500
645,872 Battle Mountain Canada Inc.
(Exchangable Shares) 3,673,397
450,000 Battle Mountain Gold Co. (Class A) 2,559,375
305,000 Canyon Resources Corp. 743,438
303,700 Crown Resources Corp. 1,936,088
10,000 Fort Howard Corp. 506,250
259,000 Freeport McMoran Copper & Gold
(Class A) 7,575,750
45,000 Getchell Gold Corp. 1,586,250
600,000 Homestake Mining Co. 7,837,500
8,000 Mead Corp. 498,000
31,400 Meridian Gold Inc. 137,375
50,000 Newmont Gold Co. 1,996,875
142,505 Newmont Mining Corp. 5,557,695
1,000,000 Piedmont Mining Co. Inc.(c) 300,000
45,000 Santa Fe Energy Resources, Inc. 660,938
10,000 Santa Fe International Corp. 340,000
30,000 Titanium Metals Co. 948,750
10,000 Triton Energy Ltd. 458,125
7,500 Willamette Industries, Inc. 525,000
-----------
38,453,306
-----------
TOTAL STOCKS & OTHER INVESTMENTS: 97.0%
(Cost $86,738,106) 93,730,300
OTHER ASSETS LESS LIABILITIES: 3.0% 2,901,027
-----------
NET ASSETS: 100.0% $96,631,327
===========
- ----------
(a) Unless otherwise indicated, securities owned are shares of common stock.
(b) Restricted security, see Note 6.
(c) Affiliated company, see schedule of affiliated company transactions.
* Fair value as determined by the Board of Trustees.
GLOSSARY:
ADR--American Depositary Receipt
GDR--Global Depositary Receipt
SUMMARY OF
INVESTMENTS % OF
BY INDUSTRY PORTFOLIO
- ---------- --------
Gold Mining 77.2%
Industrial Metals 9.9%
Diversified Mining 6.3%
Paper and Forest Products 3.5%
Oil & Gas Exploration 1.4%
Oil Drilling & Services 1.2%
Oil/Gas Equipment & Services 0.4%
Diamonds 0.1%
------
100.0%
======
See Notes to Financial Statements.
<PAGE>
GOLD/RESOURCES FUND FINANCIAL STATEMENTS (unaudited)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1997
ASSETS:
Investments at value
(cost, $86,738,106) (Note 1) $93,730,300
Receivables:
Receivables securities sold 3,929,229
Capital shares sold 123,415
Dividends 23,467
-----------
Total assets 97,806,411
-----------
LIABILITIES:
Payables:
Securities purchased 485,140
Due to custodian 137,265
Capital shares redeemed 300,593
Open forward currency contracts (Note 7) 7,523
Accounts payable 244,563
-----------
Total liabilities 1,175,084
-----------
NET ASSETS $96,631,327
===========
CLASS A
Shares outstanding 20,689,007
===========
Net asset value and redemption price per
share ($96,631,327/20,689,007) $4.67
=====
Maximum offering price per share
(NAV/(1-maximum sales commission)) $4.95
=====
Net assets consist of:
Aggregate paid in capital $155,056,868
Unrealized appreciation of investments
and foreign currency 6,996,405
Distributions in excess of net
investment income (971,144)
Cumulative realized losses (64,450,802)
------------
$ 96,631,327
============
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1997
INCOME:
Dividends (less foreign taxes withheld
of $81,103) $ 665,284
Interest income 92,301
-----------
Total income 757,585
EXPENSES:
Management (Note 2) $435,293
Distribution Class A (Note 4) 145,083
Administrative (Note 2) 178,019
Transfer agent 181,351
Professional 31,643
Reports to shareholders 25,491
Custody 18,734
Trustees fees 11,259
Other 44,569
--------
Total expenses 1,071,442
-------------
Net investment loss (313,857)
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTE 3)
Realized gain from security transactions 5,823,913
Realized loss from foreign currency
transactions (1,178)
Change in unrealized appreciation
(depreciation) of foreign denominated
receivables and payables 5,698
Change in unrealized appreciation
of investments (28,755,864)
-------------
NET DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS $(23,241,288)
=============
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1997 DECEMBER 31,
(UNAUDITED) 1996
------------ -------------
DECREASE IN NET ASSETS:
OPERATIONS:
Net investment loss $ (313,857) $(1,197,834)
Realized gain from
security transactions 5,823,913 11,608,917
Realized loss from foreign
currency transactions (1,178) (1,760)
Change in unrealized
appreciation (depreciation)
of foreign denominated
receivables and payables 5,698 (1,558)
Change in unrealized
appreciation of
investments (28,755,864) (3,340,865)
----------- -----------
Increase (Decrease)in net
assets resulting from
operations (23,241,288) 7,066,900
----------- -----------
CAPITAL SHARE TRANSACTIONS:*
Net proceeds from sales of
shares
Class A Shares 20,967,541 98,482,977
Cost of shares reacquired
Class A Shares (33,393,301) (129,225,878)
----------- ------------
Decrease in net assets
resulting from capital
share transactions (12,425,760) (30,742,901)
----------- ------------
Total decrease
in net assets (35,667,048) (23,676,001)
NET ASSETS:
Beginning of period 132,298,375 155,974,376
----------- ------------
End of period (including distributions
in excess of net investment income
of $971,144 and $656,109,
respectively) $96,631,327 $132,298,375
=========== ============
*SHARES OF BENEFICIAL INTEREST
ISSUED AND REDEEMED
(UNLIMITED NUMBER OF $.001
PAR VALUE SHARES AUTHORIZED)
CLASS A CLASS A
---------- -----------
Shares sold 3,891,390 15,679,748
Shares reacquired (6,318,149) (20,524,479)
----------- -----------
Net decrease (2,426,759) (4,844,731)
=========== ===========
See Notes to Financial Statements.
<PAGE>
GOLD / RESOURCES FUND
- --------------------------------------------------------------------------------
SCHEDULE OF AFFILIATED COMPANY TRANSACTIONS
Transactions with affiliates for the six months ended June 30, 1997 (as defined
in the Investment Company Act of 1940) of the Fund are listed below:
<TABLE>
<CAPTION>
PURCHASES SALES
------------------- ----------------
12/31/96 6/30/96
SHARE REALIZED SHARE MARKET DIVIDEND
ISSUER BALANCE SHARES COST SHARES COST GAIN (LOSS) BALANCE VALUE INCOME
-------- ------- ---- ------- ---- ----------- -------- ----- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Piedmont Mining Co., Inc. 1,000,000 -- -- -- -- -- 1,000,000 $300,000 --
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------
FOR THE SIX
MONTHS ENDED
JUNE 30, 1997
(UNAUDITED) 1996 1995 1994 1993 1992
------------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period .................. $5.72 $5.58 $5.35 $6.34 $3.56 $3.73
----- ----- ----- ----- ----- -----
Income from Investment Operations:
Net Investment Income (Loss).......... (0.02) (0.06) (0.03) (0.02) (0.014) 0.002
Net Gains (Losses) on Securities
(both realized and unrealized) ..... (1.03) 0.20 0.26 (0.97) 2.794 (0.170)
----- ----- ----- ----- ----- -----
Total from Investment Operations ....... (1.05) 0.14 0.23 (0.99) 2.780 (0.168)
----- ----- ----- ----- ----- -----
Less Distributions:
Dividends from Net Investment
Income (a).......................... -- -- -- -- -- (0.002)
----- ----- ----- ----- ----- -----
Net Asset Value, End of Period ......... $4.67 $5.72 $5.58 $5.35 $6.34 $3.56
===== ===== ===== ===== ===== =====
Total Return (b)........................ (18.36%) 2.51% 4.3% (15.6%) 78.09% (4.50%)
- --------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Period (000) ........ $96,631 $132,298 $155,974 $186,091 $211,450 $114,257
Ratio of Expenses to Average Net Assets 1.85%(c) 1.71% 1.81% 1.52% 1.39% 1.57%
Ratio of Net Income (Loss) to
Average Net Assets ................... (0.54%)(c) (0.75%) (0.44%) (0.30%) (0.29%) 0.07%
Portfolio Turnover Rate .............. 10.95% 12.95% 6.16% 13.75% 7.79% 0.93%
Average Brokerage Commissions Paid (d) $0.0238 $0.0186
</TABLE>
- -------------
(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
$.0060 for 1992.
(b) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the year, reinvestment of dividends at net
asset value during the year and a redemption on the last day of the year. A
sales charge is not reflected in the calculation of total return.
(c) Annualized.
(d) For the 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 a commission is charged.
See Notes to Financial Statements.
<PAGE>
GOLD/RESOURCES FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1 -- SIGNIFICANT ACCOUNTING POLICIES:
Van Eck Funds (the "Trust"), organized as a Massachusetts business trust on
April 3, 1985, is registered under the Investment Company Act of 1940. The
following is a summary of significant accounting policies consistently followed
by the Gold/Resources 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. Direct investments in gold bullion if
any 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 attributable
to foreign currency fluctuations on foreign denominated assets and
liabilities are recorded as net realized gains and losses from foreign
currency transactions.
D. DISTRIBUTION TO SHAREHOLDERS -- Distributions from net investment income
and realized gains, if any, 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.
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
net of withholding taxes. Interest income is accrued as earned.
F. OPTION CONTRACTS -- The Fund may invest, for hedging purposes only, in call
and put options on securities, foreign currencies and commodities. Call and
put options give the Fund the right but not the obligation to buy (calls)
or sell (puts) the instrument underlying the option at a specified price.
The premium paid on the option, should it be exercised, will, on a call,
increase the cost of the instrument acquired and, on a put, reduce the
proceeds received from the sale of the instrument underlying the option. If
the options are not exercised, the premium paid will be recorded as a
capital loss upon expiration. The Fund may incur additional risk to the
extent the value of the underlying instrument does not correlate with the
anticipated movements of the option values.
NOTE 2 -- Van Eck Associates Corporation earned fees of $435,293 for the six
months ended June 30, 1997 for investment management and advisory services. The
fee is 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 $20,874 for the six
months ended June 30, 1997 from commissions earned on sales of Class A shares of
beneficial interest of the Fund after deducting $82,939 allowed to other
dealers. Van Eck Associates Corp. earned a fee of $178,019 for costs incurred in
connection with certain administrative and operational functions. The fee is
based on an annual rate of .25 of 1% on the first $750 million of average net
assets and .20 of 1% of the excess over $750 million. 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 -- Purchases and proceeds from sales of investments other than short-term
obligations aggregated $12,288,243 and $25,331,125, respectively, for the six
months ended June 30, 1997. For federal income tax purposes the cost of
investments owned at June 30, 1997 was $86,738,106. As of June 30, 1997 net
unrealized appreciation for federal income tax purposes aggregated $6,992,194 of
which $27,171,659 related to appreciated investments and $20,179,465 related to
depreciated investments. At December 31, 1996 the Fund had capital loss
carryforwards of 70,079,832 available to offset future capital gains expiring
December 31, 1998, 1999, 2000 of $30,782,696, $31,737,707 and $7,559,429,
respectively.
NOTE 4 -- Pursuant to a Rule 12b-1 Plan of Distribution (the "Plan"), the Fund
accrues fees of .25 of 1% of 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 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.
NOTE 5 -- The Fund invests in foreign securities. Investments in foreign
securities may involve a greater degree of risk than investments in domestic
securities due to political, economic or social instability. In addition, some
foreign companies are not generally subject to the same uniform accounting,
auditing and financial rules as are American companies, and there may be less
government supervision and regulation. Foreign investments may also be subject
to foreign taxes, dividend collection fees and settlement delays. The Fund 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
<PAGE>
GOLD/RESOURCES FUND
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production and marketing of gold and other natural resources may be affected by
actions and changes in governments. In addition, gold and natural resources
securities may be cyclical in nature.
NOTE 6 -- RESTRICTED SECURITIES
The following securities are restricted as to sale:
PERCENT OF
DATE NET ASSETS
ACQUIRED COST VALUE AT 6/30/97
-------- ------- ------ ---------
Dayton Mining
Warrant....... 1/31/96 -- -- --
International
Rorrima Gold
Special Warrant 10/22/96 $147,951 $52,606 0.05%
Pacific Rim Mining
Corp. Special
Warrant ...... 4/02/97 $114,741 $60,231 0.06%
Rift Resources Ltd
Warrants...... 11/13/96 -- -- --
Tombstone Explor-
ation Co. Wt.. 10/3/96 -- -- --
Vista Gold Corp.
Warrants...... 4/25/96 -- -- --
NOTE 7 -- FORWARD CURRENCY CONTRACTS -- The Fund may buy and sell forward
foreign currency contracts to settle purchases and sales of foreign denominated
securities. In addition, the Fund may enter into forward foreign currency
contracts to hedge foreign denominated assets. Realized gains and losses from
forward foreign currency contracts are included in realized gain from foreign
currency transactions. At June 30, 1997, the Fund had the following outstanding
forward foreign currency contract:
Foreign Currency Buy Contracts:
VALUE AT UNREALIZED
CONTRACTS SETTLEMENT DATE CURRENT VALUE DEPRECIATION
- --------- --------------- ------------- ------------
AUD 1,626,797
expiring in
7/07/97 $1,218,350 $1,225,873 $(7,523)
The Fund may incur additional risk from investments in forward currency
contracts if the counterparty is unable to fulfill its obligation or there are
unanticipated movements of the foreign currency relative to the U.S. dollar.
NOTE 8 -- Trustee Deferred Compensation Plan. The Trust established a Deferred
Compensation Plan (the "Plan") for trustees. Commencing January 1, 1996, the
Trustees can elect to defer receipt of their trustee fees until retirement,
disability or termination from the board. The Fund's contributions to the Plan
are limited to the amount of fees earned by the participating trustees. The fees
otherwise payable to the participating trustees are invested in shares of the
Van Eck Funds as directed by the trustees. If a trustee has directed all or a
portion of his fee to be invested in the Fund, the unfunded liability remains
outstanding in the Fund's records since the Fund can not invest in itself. The
Plan has been approved by the Internal Revenue Service.
As of June 30, 1997, the total value of the assets and corresponding liability
of the Fund's portion of the Plan is $19,033.
<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.
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.
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.
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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]
Van Eck Securities Corporation
99 Park Avenue, New York, NY 10016
www.vaneck.com
FOR ACCOUNT ASSISTANCE PLEASE CALL (800) 544-4653
F1997-0801-0101
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J U N E 3 0 , 1 9 9 7
VAN ECK
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GOLD/
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RESOURCES
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FUND
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SEMI-ANNUAL
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REPORT
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VAN ECK GLOBAL [LOGO]
