<PAGE>
Van Eck Global Hard Assets Fund
-------------------------------
1997 Semi-Annual Report
Dear Fellow Shareholder:
The Global Hard Assets Fund rose 8.5% during the first half of 1997 following
the Fund's 45% gain in 1996. In comparison, most relevant commodity price
indices were down, such as the Goldman Sachs Commodity Index (GSCI) and the
Commodity Research Bureau (CRB) Index, which declined 9.1% and 2.3%,
respectively. Financial assets were extremely strong with the S&P 500 rising
20.6% over the same time period. Real estate securities gained 5%.
REVIEW
The biggest surprise of the first half of the year was the strength of financial
asset performance relative to hard asset performance. At the beginning of the
year, our forecasts called for healthy global economic growth and strong demand
for commodities in an environment in which inventories in many commodity sectors
were at historical lows. This has typically been a recipe for exceptional hard
asset performance. In contrast, financial assets appeared to be fully-valued
with peaking profit growth. We therefore expected hard assets to outperform
financial assets. However, so far this year, the opposite has held true. There
are two primary reasons: an excellent macroeconomic environment for financial
assets and supply concerns in regard to hard assets. Strong economic growth with
low inflation resulted in both rising earnings and multiples in the stock
market. The real growth rate of the U.S. economy, for example, rose 5.9% during
the first quarter of the year, yet inflation rates are near 25-year lows.
Meanwhile, new supplies in certain hard asset sectors put pressure on these
markets.
On the equity side, the Fund's winners included energy, paper and forest
products and industrial metals shares while losses were sustained in gold-mining
shares and some oil exploration and production company shares. The Fund's big
winners in the energy sector included Pacalta Resources, a Canadian exploration
and production company, which rose 100% during the first six months, and Windsor
Energy, up 50% during the first half of the year, both on successful drilling
results. In the oil service sector, winners included Gulf Island Fabrication, up
76% since its IPO (initial public offering), and Key Energy, up 60% during the
year.
Holdings that underperformed included United Meridian, an exploration and
production (E&P) company with properties in Africa and the U.S., which had some
disappointing drilling results (down 41% this year), and Abacan Resources, a
Canadian E&P company, which sustained poor operating results (down 63% this
year). Among forest products and paper stocks, profitable holdings included Fort
Howard, up over 80% due to an announced merger with James River, another tissue
producer, and Buckeye Cellulose, a specialty pulp producer, which gained 27%.
In the commodities markets, oversupply was the issue. Oil prices declined over
20% on renewed supplies from Iraq and record oil production. Gold prices
declined nearly 10% on fears of central bank sales adding supply to the market.
These fears were confirmed on July 3 when the Australian Central Bank announced
it had sold 167 tonnes of gold, or two-thirds of its gold reserves, in the first
half of the year. In both cases, the Fund was able to profit from hedged
positions implemented due to our expectation that short-term supply pressures
would cause price weakness. Supply of new stock was a feature in the real estate
market as new equity issuance reached record levels during the first half of the
year. While real estate indices rose approximately 5% over the period,
performance was constrained by this new supply. Finally, supply concerns had a
positive effect on the copper market where supply disruptions pushed prices 14%
higher, despite analyst forecasts of price declines.
Real estate securities lagged in the first half of 1997. In terms of relative
performance, the U.S. underperformed--the Wilshire, NAREIT and Morgan Stanley
REIT indices were up approximately 5% versus the broader market, which rose
almost 20%. While this is somewhat ironic in light of the strong recovery in
industry fundamentals in the U.S., it is not surprising given REIT's robust
returns in 1996 (up 35%), their historic seasonal outperformance in the second
half of the year and a crowded underwriting calendar. Property shares in Japan
performed in line with a recovering market there, which reflects improving
supply/demand relationships, especially in prime property. Most of the
Southeast Asian markets (Thailand, Philippines, Malaysia) declined sharply due
to over-
<PAGE>
supply situations and central bank moves to prevent continued overinvestment in
the sector. Hong Kong, on the other hand, rallied up to the handover to China on
July 1. The primary risk to the Hong Kong property markets in the short term is
that the government may take action to slow the degree of property price
inflation that has occurred due to chronic supply/demand imbalances. The Fund's
current allocation to Asia property issues is very small.
THE OUTLOOK
We continue to expect positive returns for hard assets in the second half of the
year, driven by real estate and forest products and paper companies. Our
commodity price projections continue to be dominated by supply-side concerns
during the summer months with a pick-up in the fourth quarter of the year. On a
macroeconomic level, we believe the second half of the year will see moderately
rising global economic growth with flat to moderately rising interest rates here
in the U.S.
The Fund's current allocation is approximately 83% equity exposure, over 6%
commodity exposure and over 10% cash.* This commodity exposure is a mixture of
long positions and hedged positions. The ultimate effect, we believe, is to
lower risk in the Fund. Our analysis suggests that aluminum and zinc commodities
offer relative value over related equities, and hence, we have purchased the
underlying commodities in the Fund. We have hedged a portion of the oil
exposure in the Fund as our analysis suggests additional downside to oil prices
over the summer.
With regard to forest products and paper, we believe the cycle is beginning to
turn positive after nearly two years of difficult market conditions. We see
initial signs of rising commodity prices (pulp, newsprint, linerboard) and
improving commodity fundamentals, such as falling inventories and lower future
supply increases. This environment is one in which paper shares outperform. Our
biggest holdings in the sector include Mead, a producer of pulp, printing and
writing papers, and Abitibi-Consolidated, the largest newsprint producer in the
world.
Real estate securities should also perform well in the second half of the year.
We continue to see improving real estate fundamentals, a beneficial interest
rate environment and reasonably attractive relative valuations. Moreover, we
believe that portfolio managers' more defensive postures during the second half
of the year should lead to real estate outperformance as they increase their
real estate holdings. Our larger holdings in the sector include Boston
Properties, a leading office developer, and Patriot American Hospitality, a
dominant hotel owner.
We would like to thank you for your investment in the Global Hard Assets Fund.
We look forward to helping you meet your investment objectives in the future.
[PHOTO] [PHOTO]
John C. van Eck Derek S. van Eck
Chairman Portfolio Manager
July 24, 1997
*These allocations reflect futures positions. Futures contracts (com-
modity exposure) are listed in Note 6 in the "Notes to Financial
Statements" section. For accounting purposes, they are not listed as
part of the "Statement of Net Assets." In addition, for portfolio allo-
cation purposes, futures are netted against cash and equivalents,
which is also not reflected in the "Statement of Net Assets."
- --------------------------------------------------------------
Performance Record as of 6/30/97
- --------------------------------------------------------------
Average Annual After Maximum Before
Total Return Sales Charge+ Sales Charge
- --------------------------------------------------------------
A shares--Life (since 11/2/94) 24.4% 26.7%
- --------------------------------------------------------------
1 year 25.1% 31.4%
- --------------------------------------------------------------
B shares--Life (since 4/24/96) 25.3% 28.5%
- --------------------------------------------------------------
1 year 25.8% 30.8%
- --------------------------------------------------------------
C shares--Life (since 11/2/94) 26.7% 26.7%
- --------------------------------------------------------------
1 year 29.7% 30.7%
- --------------------------------------------------------------
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 = 5.0%
C shares: 1% redemption charge, 1st year
<PAGE>
Sector Weightings*
-----------------
as of June 30, 1997
[PIE CHART]
Sector Percentage
------ ----------
Cash/Equiv. 10.8%
Energy 32.0%
Real Estate 24.9%
Industrial Metals 15.5%
Forest Products/
Paper 11.3%
Precious Metals 4.9%
Other 0.6%
*Sector weighings are shown as percentage of total investments and reflect
futures positions (see Note 6 in "Notes to Financial Statements").
Geographical Weightings+
-----------------------
as of June 30, 1997
[PIE CHART]
Sector Percentage
------ ----------
United States 51.2%
Italy 0.6%
Canada 21.1%
Russia 0.9%
Australia 3.3%
Sweden 0.6%
Singapore 1.2%
France 0.6%
Cash/Equiv. 19.3%
Other 1.2%
+ Listed as percentage of total net assets.
<PAGE>
Top Ten Equity Holdings*
-----------------------
As of June 30, 1997
KCS ENERGY, INC.
(U.S., 2.0%)
KCS is a mid-capitalization exploration and production company. The company's
key focus areas are the Gulf Coast and Rocky Mountains. KCS has been one of the
top performing exploration companies over the past five years in terms of
reserve growth, production growth and return on equity.
MEAD CORPORATION
(U.S., 1.9%)
Mead is a paper and forest products company based in Ohio. It produces paper,
pulp and paperboard, and manufactures and distributes school, office and
industrial supplies. Mead sells its products worldwide.
TITANIUM METALS CORPORATION
(U.S., 1.7%)
Titanium Metals is an integrated producer of high quality titanium products for
aerospace, industrial and consumer applications. The company's products include
titanium sponge, titanium ingot and slab, mill products and castings. End-use
markets for titanium producers include commercial airplanes and golf clubs.
BUCKEYE CELLULOSE CORPORATION
(U.S., 1.7%)
Buckeye Cellulose manufactures and markets specialty cellulose pulps worldwide.
The company manufactures both wood-based and cotton linter-based specialty
cellulose pulps. End-use markets for the company's products include food
casings, high performance auto filters, automobile tires, diapers and other
consumer products.
PACALTA RESOURCES LTD.
(Canada, 1.7%)
Pacalta is an intermediate-sized Canadian exploration and production company.
The company's main producing properties are in Ecuador with additional
properties in Canada and Latin America. Pacalta's success exemplifies the
opportunities available as countries around the world allow increased activity
by foreign oil companies.
BOSTON PROPERTIES, INC.
(U.S., 1.6%)
Boston Properties is a leading office developer focused on the Boston, D.C. and
New York City markets. The company recently completed its IPO, but has a nearly
30-year track record as a successful private company. We expect Boston
Properties to grow aggressively through acquisitions and development activity,
and also through continued improvement in core portfolio cash flow.
GETCHELL GOLD CORPORATION
(U.S., 1.6%)
Getchell Gold is an intermediate-sized gold producer with properties in Nevada.
The company has a growing production and reserve base with good exploration
potential.
PRUDENTIAL STEEL LTD.
(Canada, 1.5%)
Prudential Steel is the dominant producer of tubular goods and line pipe for the
Canadian oil industry. Tubular goods are steel products that are used within
the wells and line pipe is used in the construction of gas- gathering systems.
The company plans an expansion into the United States in mid-1998.
PATRIOT AMERICAN HOSPITALITY INC.
(U.S., 1.3%)
Patriot American Hospitality (PAH) is one of the fastest growing hotel REITs in
the U.S. The Dallas-based company focuses on acquiring, redeveloping and
repositioning hotels for long-term growth through a combination of improved
operating performance and appreciation in value.
KEY ENERGY GROUP
(U.S., 1.3%)
Key Energy is one of the leading U.S. operators of workover rigs, which are used
to perform maintenance work on existing wells. The company has been the leading
consolidator in what remains a relatively fragmented market.
Note: Equities are listed as percentage of total net assets.
* Portfolio is subject to change.
<PAGE>
Global Hard Assets Fund
Statement of Net Assets June 30, 1997 (unaudited)
<TABLE>
<CAPTION>
NO. OF
SHARES OR
PRINCIPAL AMOUNT SECURITIES(A) VALUE (NOTE 1)
- ---------------------------------------------------
<C> <S> <C>
AUSTRALIA: 3.3%
ENERGY: 0.9%
240,469 Portman Mining
Ltd. $ 597,978
-----------
INDUSTRIAL METALS: 1.7%
24,400 CRA Ltd. 415,170
9,000,000 Gullewa Gold NL 237,368
259,700 Pasminco Ltd. 526,425
-----------
1,178,963
-----------
PRECIOUS METALS: 0.7%
250,000 Australian
Resources Ltd. 101,729
914,545 Consolidated
Gold NL 199,855
500,000 Tanganyika Gold
NL 152,594
-----------
454,178
-----------
2,231,119
-----------
CANADA: 21.1%
ENERGY: 12.0%
150,000 Abacan Resources
Corp. 478,125
200,000 Black Sea Energy
Ltd. 564,992
72,500 Canadian 88
Energy Corp. 294,086
30,000 CE Franklin Ltd. 154,286
25,700 Chieftain
International,
Inc. 563,794
19,800 Ensign Resource
Service Group,
Inc. 468,270
91,000 Pacalta
Resources Ltd. 1,104,089
CAN375,000 Pacalta 10.75%
6/15/04 381,563
47,400 Pendaries
Petroleum Ltd. 540,763
95,000 Plains Energy 653,725
30,000 Plains Energy
Services 76,056
37,500 Prudential Steel
Ltd. 1,032,197
60,000 Interoil Corp. 690,000
110,000 Stellarton
Energy (Special
Warrant Expiring
6/17/98)+* 315,438
7,000 Talisman Energy
Inc. 215,240
20,000 Upton Resources
Inc. 105,613
85,000 Windsor Energy
Corp. 378,653
-----------
8,016,890
-----------
FOREST PRODUCTS: 3.7%
48,000 Abitibi-Price
Inc. 857,050
45,000 Fletcher
Challenge Canada
Ltd. 749,701
55,000 St. Laurent
Paperboard, Inc. 856,542
-----------
2,463,293
-----------
INDUSTRIAL METALS: 2.7%
80,600 Atna Resources
Ltd. 204,339
43,600 Boliden Ltd.
(Installment
Receipt) 232,124
175,000 Breakwater
Resources Ltd. 608,453
6,200 Cameco Corp. 232,407
517,200 International
Uranium Corp. 487,023
-----------
1,764,346
-----------
PRECIOUS METALS: 1.2%
9,300 Arizona Star
Resources 59,618
30,000 Barrick Gold
Corp.(b) 660,000
707,700 Brazilian
Resources Inc.
(Special Warrant
Expiring
3/12/98)+* 102,063
-----------
821,681
-----------
REAL ESTATE:1.5%
10,000 Intrawest Corp. 163,750
40,000 TrizecHahn
Corporation 855,000
-----------
1,018,750
-----------
14,084,960
-----------
FRANCE: 0.6%
ENERGY: 0.6%
32,000 Bouygues
Offshore SA
(ADR) 400,000
-----------
HONG KONG: 0.4%
REAL ESTATE: 0.4%
100,000 Hong Kong Land
Holdings Ltd. 266,000
-----------
ITALY: 0.6%
ENERGY: 0.6%
6,500 Ente Nationale
Idrocaburi
S.p.A. 369,688
-----------
</TABLE>
<TABLE>
<CAPTION>
NO. OF
SHARES OR
PRINCIPAL AMOUNT SECURITIES(A) VALUE (NOTE 1)
- ---------------------------------------------------
<C> <S> <C>
NEW ZEALAND: 0.3%
PRECIOUS METALS: 0.3%
539,000 Summit Gold NL $ 166,527
-----------
NORWAY: 0.2%
ENERGY: 0.2%
30,000 Alvern Norway AS 163,925
-----------
RUSSIA: 0.9%
ENERGY: 0.9%
1,650 Ural Petroleum
Corp.* 632,494
-----------
SINGAPORE: 1.2%
FOREST PRODUCTS: 0.8%
35,200 Asia Pulp &
Paper Co. Ltd. 532,400
-----------
REAL ESTATE: 0.4%
90,000 DBS Land Ltd. 284,535
-----------
816,935
-----------
SWEDEN: 0.6%
REAL ESTATE: 0.6%
50,000 Castellum AB 375,842
-----------
UNITED KINGDOM: 0.3%
ENERGY: 0.3%
3,000 British
Petroleum PLC
(ADR)(b) 224,625
-----------
UNITED STATES: 51.2%
ENERGY: 15.6%
6,300 Atwood Oceanics
Inc. 422,100
7,000 BJ Services
Company 375,375
9,300 ENSCO
International
Inc.(b) 490,575
29,500 Gulf Island
Fabrication Inc. 755,938
30,000 Input/Output
Inc. 543,750
66,000 KCS Energy, Inc. 1,344,750
50,000 Key Energy Group 890,625
2,400 Mobil Corp.(b) 167,700
10,900 Nuevo Energy
Co.(b) 446,900
10,000 Ocean Energy
Inc. 462,500
2,772 Pride Petroleum
Services, Inc. 66,528
46,000 SGI
International,
Inc. 152,375
40,000 Santa Fe Energy
Resources, Inc. 587,500
15,000 Santa Fe
International
Corp. 510,000
36,000 Snyder Oil Corp. 661,500
25,000 Stone Energy
Corp. 684,375
28,000 Tosco Corp. 838,250
8,800 Triton Energy
Ltd.(b) 403,150
13,400 UTI Energy Corp. 614,725
-----------
10,418,616
-----------
FERTILIZER: 0.6%
5,400 Potash Corp. of
Saskatchewan
Inc.(b) 405,338
-----------
FOREST PRODUCTS AND PAPER: 6.5%
33,250 Buckeye
Cellulose
Corporation 1,122,188
13,300 Fort Howard
Corp.(b) 673,313
20,450 Mead Corporation 1,273,013
11,400 Rayonier Inc. 479,513
11,600 Willamette
Industries,
Inc.(b) 812,000
-----------
4,360,027
-----------
INDUSTRIAL METALS: 4.5%
16,800 Alumax Inc.(b) 637,350
46,700 LTV Corp. 665,475
700,000 Noble Group Ltd. 546,000
36,400 Titanium Metals
Corporation(b) 1,151,150
-----------
2,999,975
-----------
PRECIOUS METALS: 2.6%
30,700 Getchell Gold
Corporation 1,082,175
17,000 Newmont Mining
Corp. 663,000
-----------
1,745,175
-----------
REAL ESTATE: 21.4%
15,000 Alexandria Real
Estate Equities 329,063
20,000 Arden Realty
Group, Inc. 520,000
27,000 Bedford Property
Investors Inc. 543,375
40,000 Boston
Properties, Inc. 1,100,000
20,000 Boykin Lodging
Co. 478,750
</TABLE>
See Notes to Financial Statements.
<PAGE>
Global Hard Assets Fund
Statement of Net Assets June 30, 1997 (continued)
<TABLE>
<CAPTION>
NO. OR
PRINCIPAL AMOUNT
OF SHARES SECURITIES(A) VALUE (NOTE 1)
- ---------------------------------------------------
<C> <S> <C>
20,000 Brandywine
Realty Trust $ 405,000
15,000 Cali Realty
Corp. 510,000
22,000 Capstar Hotel
Co.(b) 704,000
21,500 Carramerica
Realty Corp. 618,125
20,000 Colonial
Properties Trust 587,500
35,000 Cornerstone
Properties Inc. 538,125
15,000 Equity
Residential
Properties Trust 712,500
18,000 Excel Realty
Trust Inc. 474,750
20,000 Great Lakes REIT
Inc. 328,750
8,750 Highwoods
Properties, Inc. 280,000
10,000 Interstate
Hotels Co. 294,375
20,000 Kilroy Realty
Corp. 505,000
20,000 Liberty Property
Trust 497,500
12,500 Macerich Co.
(The) 346,875
35,000 Patriot American
Hospitality Inc. 892,500
26,500 Prentiss
Properties Trust 679,063
24,000 Public Storage
Inc. 702,000
40,000 Servico Inc. 595,000
10,000 Starwood Lodging
Trust 426,875
13,200 TriNet Corporate
Realty Trust,
Inc. 436,425
10,000 Urban Shopping
Centers Inc. 318,750
25,000 Westfield
America Inc. 421,875
------------
14,246,176
------------
34,175,307
------------
TOTAL STOCKS AND OTHER SECURITIES:
80.7%
(cost: $48,682,800) 53,907,422
------------
<CAPTION>
PRINCIPAL AMOUNT SHORT- VALUE (NOTE 1)
TERM OBLIGATIONS
- ---------------------------------------------------
<C> <S> <C>
$4,000,000 U.S. Treasury
Bill due 7/24/97
Interest
Yield 4.80% 3,987,554
4,000,000 U.S. Treasury
Bill due 7/24/97
Interest
Yield 4.97% 3,987,989
236,000 General Electric
Company
Commercial Paper
due 7/01/97
Interest Yield
5.90% 236,000
3,000,000 General Electric
Company
Commercial Paper
due 7/11/97
Interest Yield
5.56% 2,995,367
------------
TOTAL SHORT-TERM OBLIGATIONS:
16.8%
(amortized cost: $11,206,910) 11,206,910
------------
TOTAL INVESTMENTS: 97.5% (cost
$59,889,710) 65,114,332
OTHER ASSETS LESS LIABILITIES:
2.5% 1,647,133
------------
NET ASSETS: 100.0% $ 66,761,465
============
</TABLE>
(a)Unless otherwise indicated, securities owned are shares of common stock.
(b) Securities segregated for futures contracts.
*Fair value as determined by Board of Trustees.
+Restricted security, see Note 10.
Glossary:
ADR--American Depositary Receipts
GDR--Global Depositary Receipts
<TABLE>
<CAPTION>
SUMMARY OF INVESTMENTS BY % OF
INDUSTRY PORTFOLIO
- --------------------------- ---------
<S> <C>
Energy 32.0%
Fertilizers 0.6%
Forest Products and Paper 11.3%
Industrial Metals 9.1%
Precious Metals 4.9%
Real Estate 24.9%
U.S. Government Obligations 12.2%
Commercial Paper 5.0%
------
100.0%
======
</TABLE>
See Notes to Financial Statements.
<PAGE>
Global Hard Assets Fund Financial Statements (unaudited)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1997
<TABLE>
<S> <C>
ASSETS:
Investments at value (cost, $59,889,710) (Note 1) $65,114,332
Cash 1,799,395
Cash--initial margin for futures (Note 6) 213,300
Receivables:
Securities sold 1,814,105
Capital shares sold 1,333,875
Interest and dividends 117,443
Deferred organization costs and other assets (Note 1) 23,805
-----------
Total assets 70,416,255
-----------
LIABILITIES:
Payables:
Capital shares redeemed 430,365
Securities purchased 3,054,022
Dividends payable 10,956
Due to broker-variation margin (Note 6) 43,866
Unrealized depreciation on open forward currency contracts
(Note 7) 1,463
Accounts payable 114,118
-----------
Total liabilities 3,654,790
-----------
NET ASSETS $66,761,465
===========
CLASS A
Net asset value and redemption price per share
($54,869,468/3,512,551) $15.62
======
Maximum offering price per share (NAV/(1-maximum sales
commission)) $16.40
======
CLASS B
Net asset value, offering price, and redemption price per share
($5,809,821/370,320) (Redemption may be subject to a contingent
deferred sales charge within the first six years of ownership) $15.69
======
CLASS C
Net asset value, offering price and redemption price per share
($6,082,176/387,089) (Redemption may be subject to a contingent
deferred sales charge within the first year of ownership) $15.71
======
Net assets consist of:
Aggregate paid in capital $59,499,255
Unrealized appreciation of investments, futures and foreign
denominated assets, liabilities and foreign forward exchange
contracts 5,138,625
Undistributed net investment income 16,569
Undistributed realized gains 2,107,016
-----------
$66,761,465
===========
</TABLE>
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1997
<TABLE>
<S> <C> <C>
INCOME:
Dividends (less foreign taxes withheld of $3,321) $397,159
Interest 224,260
--------
Total income 621,419
EXPENSES:
Management (Note 2) $248,489
Distribution Class A (Note 4) 103,840
Distribution Class B (Note 4) 19,330
Distribution Class C (Note 4) 21,478
Administration (Note 2) 6,850
Transfer agency 55,144
Reports to shareholders 25,122
Custody 18,685
Professional 12,187
Registration 12,525
Amortization of organization costs 3,915
Other 18,981
--------
Total expenses 546,546
Expenses assumed by the Advisor and reduced by a directed
brokerage arrangements
(Note 2) (27,942)
--------
Net expenses 518,604
--------
Net investment income 102,815
</TABLE>
<TABLE>
<S> <C> <C>
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
(NOTE 3):
Realized gain from security transactions $1,473,929
Realized gain from futures contracts 503,084
Realized gain from options 190,451
Realized loss from foreign currency transactions (5,660)
Change in unrealized appreciation of foreign denominated
assets, liabilities and foreign forward exchange contracts (3,080)
Change in unrealized appreciation of investments and futures 1,744,365
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $4,005,904
==========
</TABLE>
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS ENDED
JUNE 30, YEAR ENDED
1997 DECEMBER 31,
(UNAUDITED) 1996
---------------- ------------
<S> <C> <C> <C>
INCREASE IN NET ASSETS:
OPERATIONS:
Net investment income $ 102,815 $ 167,874
Realized gain from security transactions 1,473,929 1,802,548
Realized gain (loss) from futures
contracts 503,084 (6,413)
Realized gain (loss) from options 190,451 (6,085)
Realized loss from foreign currency
transactions (5,660) (18,109)
Change in unrealized appreciation of
foreign denominated assets, liabilities
and foreign forward exchange contracts (3,080) (806)
Change in unrealized appreciation of
investments and futures 1,744,365 3,072,207
------------ -----------
Increase in net assets resulting from
operations 4,005,904 5,011,216
------------ -----------
Dividends to shareholders from:
Net investment income:
Class A Shares (69,559) (138,261)
Class B Shares -- (6,619)
Class C Shares -- (5,498)
------------ -----------
(69,559) (150,378)
------------ -----------
Tax return of capital:
Class A Shares -- (24,349)
Class B Shares -- (1,685)
Class C Shares -- (1,736)
------------ -----------
-- (27,770)
------------ -----------
Realized gains:
Class A Shares -- (1,624,532)
Class B Shares -- (112,412)
Class C Shares -- (115,843)
------------ -----------
-- (1,852,787)
------------ -----------
3,936,345 2,980,281
------------ -----------
CAPITAL SHARE TRANSACTIONS (NOTE 5):
Net proceeds from sales of shares:
Class A Shares 36,854,104 23,268,676
Class B Shares 3,778,838 1,647,285
Class C Shares 5,003,145 1,618,492
------------ -----------
45,636,087 26,534,453
------------ -----------
Reinvestment of dividends:
Class A Shares 58,613 1,573,761
Class B Shares -- 68,637
Class C Shares -- 115,442
------------ -----------
58,613 1,757,840
------------ -----------
Cost of shares reacquired:
Class A Shares (12,543,044) (4,153,693)
Class B Shares (103,942) (29)
Class C Shares (1,189,190) (152,978)
------------ -----------
(13,836,176) (4,306,700)
------------ -----------
Increase in net assets resulting from
capital share transactions 31,858,524 23,985,593
------------ -----------
Total increase in net assets 35,794,869 26,965,874
NET ASSETS:
Beginning of period 30,966,596 4,000,722
------------ -----------
End of period (including undistributed
net investment income of $16,569 and
overdistributed net investment income
of $(11,027), respectively) $ 66,761,465 $30,966,596
============ ===========
</TABLE>
See Notes to Financial Statements.
<PAGE>
Global Hard Assets Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period
<TABLE>
<CAPTION>
CLASS A CLASS B
-------------------------------------------- --------------------------
FOR THE SIX FOR THE SIX
MONTHS FOR THE PERIOD MONTHS FOR THE PERIOD
ENDED YEAR ENDED NOVEMBER 2, ENDED APRIL 24,
JUNE 30, DECEMBER 31, 1994(A) TO JUNE 30, 1996(A) TO
1997 ---------------- DECEMBER 31, 1997 DECEMBER 31,
(UNAUDITED) 1996 1995 1994 (UNAUDITED) 1996
----------- ------- ------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of
Period.......... $ 14.42 $ 10.68 $ 9.41 $ 9.53 $ 14.50 $ 12.55
------- ------- ------- ------- ------- -------
Income from
Investment
Operations:
Net Investment
Income......... 0.04 0.15 0.32+ 0.010+ 0.01 0.11
Net Gain (Loss)
on Investments
(both realized
and
unrealized).... 1.18 4.70 1.57 (0.115) 1.18 2.95
------- ------- ------- ------- ------- -------
Total from
Investment
Operations...... 1.22 4.85 1.89 (0.105) 1.19 3.06
------- ------- ------- ------- ------- -------
Less
Distributions:
Dividends from
Net Investment
Income......... (0.02) (0.14) (0.62) (0.015) -- (0.14)
Distributions
from Capital
Gains.......... -- (0.95) -- -- -- (0.95)
Tax Return of
Capital........ -- (0.02) -- -- -- (0.02)
------- ------- ------- ------- ------- -------
(0.02) (1.11) (0.62) (0.015) -- (1.11)
------- ------- ------- ------- ------- -------
Net Asset Value,
End of Period... $ 15.62 $ 14.42 $ 10.68 $ 9.41 $ 15.69 $ 14.50
======= ======= ======= ======= ======= =======
Total Return (b). 8.46% 45.61% 20.09% (1.10%) 8.21% 24.55%
- ---------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY
DATA
Net Assets, End
of Period (000). $66,761 $27,226 $3,820 $1,419 $5,810 $1,806
Ratio of Gross
Expenses to
Average Net
Assets (c)...... 2.01%* 2.63% 4.05% 3.40% 3.15%* 3.27%
Ratio of Net
Expenses to
Average Net
Assets.......... 2.00%* 0.72% 0% 0.15%* 2.50%* 1.64%*
Ratio of Net
Investment
Income (Loss) to
Average Net
Assets.......... 0.49%* 1.45% 3.08% 0.84%* 0.03%* .53%*
Portfolio
Turnover Rate... 55.77% 163.91% 179.33% 0% 55.77% 163.91%
Average
Commission Rate
Paid (d)........ $0.0307 $0.0178 $0.0307 $0.0178
<CAPTION>
CLASS C
--------------------------------------------
FOR THE SIX
MONTHS FOR THE PERIOD
ENDED YEAR ENDED NOVEMBER 2,
JUNE 30, DECEMBER 31, 1994(A) TO
1997 ----------------- DECEMBER 31,
(UNAUDITED) 1996 1995 1994
----------- -------- -------- --------------
<S> <C> <C> <C> <C>
Net Asset Value,
Beginning of
Period.......... $ 14.52 $ 10.76 $ 9.41 $ 9.53
----------- -------- -------- --------------
Income from
Investment
Operations:
Net Investment
Income......... 0.01 0.11 0.34+ 0.01+
Net Gain (Loss)
on Investments
(both realized
and
unrealized).... 1.18 4.73 1.63 (0.12)
----------- -------- -------- --------------
Total from
Investment
Operations...... 1.19 4.84 1.97 (0.11)
----------- -------- -------- --------------
Less
Distributions:
Dividends from
Net Investment
Income......... -- (0.11) (0.62) (0.01)
Distributions
from Capital
Gains.......... -- (0.95) -- --
Tax Return of
Capital........ -- (0.02) -- --
----------- -------- -------- --------------
-- (1.08) (0.62) (0.01)
----------- -------- -------- --------------
Net Asset Value,
End of Period... $ 15.71 $ 14.52 $ 10.76 $ 9.41
=========== ======== ======== ==============
Total Return (b). 8.20% 45.18% 20.94% (1.20%)
- ---------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY
DATA
Net Assets, End
of Period (000). $6,082 $1,935 $181 $8
Ratio of Gross
Expenses to
Average Net
Assets (c)...... 3.22%* 6.02% 37.88% 39.49%
Ratio of Net
Expenses to
Average Net
Assets.......... 2.50%* 1.31% 0% 0.56%*
Ratio of Net
Investment
Income (Loss) to
Average Net
Assets.......... (0.01)%* .84% 3.30% 0.53%*
Portfolio
Turnover Rate... 55.77% 163.91% 179.33% 0%
Average
Commission Rate
Paid (d)........ $0.0307 $0.0178
</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, reinvestment of dividends at
net asset value during the period and a redemption on the last day of the
period. A sales charge is not reflected in the calculation of total return.
Total return for a period of less than one year is not annualized.
(c) Had the Advisor not assumed expenses or had expenses not been reduced by
custodian fee and directed brokerage arrangements.
(d) 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.
* Annualized.
+ Based on average shares outstanding.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
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 Global Hard Assets 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 results
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 business day of the period. 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. Forward foreign currency contracts
are valued at the spot currency rate plus an amount ("points") which reflects
the differences in interest rates between the U.S. and foreign markets.
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.
<PAGE>
Global Hard Assets Fund
- -------------------------------------------------------------------------------
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 and the
appreciation (depreciation) attributable to foreign currency fluctuations
on other foreign denominated assets and liabilities are recorded as net
realized and unrealized gains and losses from foreign currency
transactions, respectively.
D. OTHER--Security transactions are accounted for on the date the securities
are purchased or sold. Dividend income is recorded on the ex-dividend date.
Interest income is accrued as earned.
E. DISTRIBUTIONS TO SHAREHOLDERS--Dividends to shareholders from net
investment income and realized gains, if any, are recorded on the ex-
dividend date. Income and capital gains distributions are determined in
accordance with income tax regulations which may differ from generally
accepted accounting principles.
F. DEFERRED ORGANIZATION COSTS--Deferred organization costs are being
amortized over a period of five years beginning on November 2, 1994
(commencement of operations).
G. USE OF DERIVATIVE INSTRUMENTS
OPTION CONTRACTS--The Fund may invest, for hedging and other purposes, in
call and put options on securities, 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
movement of the option value.
The Fund may also write call or put options. As the writer of an option, the
Fund receives a premium. The Fund keeps the premium whether or not the
option is exercised. The premium will be recorded, upon expiration of the
option, as a short-term capital gain. If the option is exercised, the Fund
must sell, in the case of a written call, or buy, in the case of a written
put, the underlying instrument at the exercise price. The Fund may write
only covered puts and calls. A covered call option is an option in which the
Fund owns the instrument underlying the call. A covered call sold by the
Fund exposes it during the term of the option to possible loss of
opportunity to realize appreciation in the market price of the underlying
instrument or to possible continued holding of an underlying instrument
which might otherwise have been sold to protect against a decline in the
market price of the underlying instrument. A covered put exposes the Fund
during the term of the option to a decline in price of the underlying
instrument. A put option sold by the Fund is covered when, among other
things, cash or short-term liquid securities are placed in a segregated
account to fulfill the obligations undertaken. The Fund may incur additional
risk from investments in written currency options if there are unanticipated
movements in the underlying currencies.
NOTE 2--Van Eck Associates Corporation (the "Advisor") earned fees of $248,489
for investment management and advisory services. The fee was based on an
annual rate of 1% of the Fund's average daily net assets. The Advisor agreed
to assume expenses exceeding 2% of average daily net assets for the period
January 1, 1997 to June 30, 1997 for Class A shares. For Class B and C shares
the Advisor agreed to assume expenses in excess of 2.5% of average daily net
assets for the period January 1, 1997 to June 30, 1997.
The Fund has a fee arrangement based on cash balances left on deposit with the
custodian, which reduces the Fund's operating expenses. The Fund had some of
the portfolio trades directed to a broker-dealer who, in return, agreed to pay
a portion of the Fund's expenses. For the six months ended June 30, 1997, the
portion of the Fund's expenses reduced by this directed brokerage arrangement
amounted to $1,862.
In accordance with the advisory agreement, the Fund reimbursed Van Eck
Associates Corporation $6,850 for costs incurred in connection with certain
administrative and operating functions. Van Eck Securities Corporation (the
"Distributor") received $71,517 for the six months ended June 30, 1997 from
commissions earned on sales of Class A shares after deducting $430,945 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.
NOTE 3--Purchases and proceeds from sales of investments, other than short-
term obligations, aggregated $47,613,267 and $22,781,847, respectively, for
the year ended June 30, 1997. For federal income tax purposes the cost of
investments owned at June 30, 1997 was $59,889,710. As of June 30, 1997 net
unrealized appreciation for federal income tax purposes aggregated $5,224,622
of which $7,463,121 related to appreciated investments and $2,238,499 related
to depreciated investments.
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 Classes B and C shares (the "Annual
Limitations"). For Class C shares, the Fund will pay to the selling broker at
the time of sale 1% of the amount of the purchase. Such 12b-1 fees will be
expensed by the Fund over the course of the first twelve months from the time
of purchase. Should the payments to the brokers made by the Fund exceed, on an
annual basis, 1% of average daily net assets, VESC will reimburse the Fund for
any excess. Class C shareholders redeeming within one year of purchase will be
subject to a 1% redemption charge which will be retained by the Fund. After
the first year, the 1% 12b-1 fee will be paid to VESC which will retain a
portion of the fee for distribution services and pay the remainder to brokers.
Distribution expenses incurred under the Plan that have not been paid because
they exceed the Annual Limitation may be carried forward to future years and
paid by the Fund within the Annual Limitation. VESC has waived its right to
reimbursement of the carried forward amounts incurred for the period November
2, 1994 through June 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 accumulated amount of excess distribution expenses
incurred over the Annual Limitations as of June 30, 1997, was $424,700 for
Class A shares, $73,913 for Class B shares, and $177,896 for Class C shares.
<PAGE>
Global Hard Assets Fund
- -------------------------------------------------------------------------------
NOTE 5--SHARES OF BENEFICIAL INTEREST ISSUED AND REDEEMED (unlimited number of
$.001 par value shares authorized):
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED
JUNE 30,
1997 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1996
------------ ------------------
CLASS A
<S> <C> <C>
Shares sold 2,478,999 1,743,237
Shares reinvested 3,753 109,716
--------- ---------
2,482,752 1,852,953
Shares reacquired (858,730) (321,972)
--------- ---------
Net increase 1,624,022 1,530,981
========= =========
<CAPTION>
FOR THE SIX
MONTHS ENDED
JUNE 30, FOR THE PERIOD
1997 APRIL 24, 1996+ TO
(UNAUDITED) DECEMBER 31, 1996
------------ ------------------
CLASS B
<S> <C> <C>
Shares sold 252,703 119,806
Shares reinvested -- 4,744
--------- ---------
252,703 124,550
Shares reacquired (6,931) (2)
--------- ---------
Net increase 245,772 124,548
========= =========
<CAPTION>
FOR THE SIX
MONTHS ENDED
JUNE 30,
1997 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1996
------------ ------------------
<S> <C> <C>
CLASS C
Shares sold 333,575 119,532
Shares reinvested -- 8,772
--------- ---------
---------
333,575 128,304
Shares reacquired (79,748) (11,865)
--------- ---------
Net increase 253,827 116,439
========= =========
</TABLE>
- -------
+ Commencement of operations.
NOTE 6--FUTURES CONTRACTS:
As of June 30, 1997, the Fund was long futures contracts. The long aluminum
and zinc contracts were acquired in lieu of a direct acquisition of the
commodities. The Advisor believes these synthetic positions are a duplication
of the purchases of the commodities and believes the futures contracts are
more advantageous for operational and liquidity reasons than a direct
acquisition of the commodities. In the remote chance the broker cannot fulfill
its obligation, the Fund could lose any variation margin due it. Subsequent
payments are made or received each day dependent upon the daily fluctuations
in the value of the underlying commodity. Risks may be caused by an imperfect
correlation between the movements in the price of the futures contract and the
price of the underlying commodity. Realized gains and losses from futures
contracts are reported separately.
<TABLE>
<CAPTION>
UNREALIZED
EXPIRATION NUMBER OF CONTRACT CURRENT APPRECIATION
LONG DATE CONTRACTS VALUE VALUE (DEPRECIATION)
CONTRACTS: ------------------ --------- ---------- --------- --------------
<S> <C> <C> <C> <C> <C>
Aluminum August 1, 1997 15 $ 610,500 $ 590,742 $(19,758)
Aluminum August 8, 1997 15 624,563 590,743 (33,820)
Aluminum September 5, 1997 15 600,000 595,781 (4,219)
Aluminum September 11, 1997 46 1,870,130 1,827,062 (43,068)
Zinc September 5, 1997 18 620,100 638,663 18,563
--------
Net unrealized
depreciation (82,302)
========
</TABLE>
NOTE 7--FORWARD CURRENCY CONTRACTS:
The Fund bought and sold forward foreign currency contracts to settle
purchases and sales of foreign denominated securities. The Fund may incur
additional risk from investments in forward foreign currency contracts if the
counterparty is unable to fulfill its obligations or there are unanticipated
movements of the foreign currency relative to the U.S. dollar. Realized and
unrealized gains and losses from forward foreign currency contracts are
included in realized and unrealized gain (loss) from foreign currency
transactions.
At June 30, 1997, the Fund had the following outstanding forward foreign
currency contracts:
<TABLE>
<CAPTION>
VALUE AT
SETTLEMENT CURRENT UNREALIZED
CONTRACT DATE VALUE DEPRECIATION
- -------- ---------- -------- ------------
<S> <C> <C> <C>
FOREIGN CURRENCY BUY CONTRACTS
SGD 209,170 expiring 7/01/97 $146,722 $146,303 $ (419)
SGD 209,002 expiring 7/02/97 146,611 146,186 (425)
FOREIGN CURRENCY SALES CONTRACT
AUD 204,201 expiring 7/02/97 153,257 153,876 (619)
-------
$(1,463)
=======
</TABLE>
NOTE 8--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
governmental 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
precious metals, ferrous and non-ferrous metals, oil and gas, forest products,
real estate and other non-agricultural commodities. Since the Fund may so
concentrate, it may be subject to greater risks and market fluctuations than
other more diversified portfolios.
NOTE 9--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 $3,303.
NOTE 10--RESTRICTED SECURITIES
The following securities are restricted as to sale:
<TABLE>
<CAPTION>
PERCENT OF
DATE NET ASSETS
ACQUIRED COST VALUE AT 6/30/97
-------- ------- ------- ----------
<S> <C> <C> <C> <C>
Brazilian Resources Inc. Special Warrant 3/12/97 223,102 102,063 0.15%
Stellarton Energy Corp. Special Warrant 6/17/97 270,329 315,438 0.47%
</TABLE>
<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.
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.
- -------------------------------------------------------------------------------
This report must be accompanied or preceded by a 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.
[LOGO] VAN ECK GLOBAL
Van Eck Securities Corporation
99 Park Avenue, New York, N.Y. 10016
www.vaneck.com
For account assistance please call (800) 544-4653
FR1997-0728-0051
JUNE 30, 1997
VAN ECK
GLOBAL
HARD
ASSETS
FUND
SEMI-ANNUAL
REPORT
[LOGO] VAN ECK GLOBAL
