<PAGE> 1
VAN ECK WORLDWIDE HARD ASSETS FUND
- -------------------------------------------------------------------------------
1996 ANNUAL REPORT
Dear Shareholder:
We are pleased to report that the Van Eck Worldwide Hard Assets Fund had a total
return of 48.1%* for the calendar year 1996 as strong supply and demand
fundamentals in the energy and real estate sectors drove returns up. In
comparison, the S&P 500 rose 23.0% for the year.
FUND REVIEW
The Fund's exceptional performance was fueled by strong supply and demand
fundamentals in the energy and real estate sectors. Energy was the Fund's
largest and best performing sector. In 1996, we maintained a heavy weighting to
the energy sector, ending the year with an approximate 40% weighting. Returns
were driven by stronger commodity prices, successful application of technology
to exploration efforts, and the cost reduction that this application of
technology brought to exploration and development efforts.
In 1996, crude oil prices averaged more than $4 per barrel higher than in 1995.
The reasons include a combination of stronger demand brought on by economic
growth in Asia and a cold winter in the U.S. and Europe, as well as production
delays in the non-OPEC countries and a lack of Iraqi exports for most of the
year. Natural gas prices were also sharply higher due primarily to a cold winter
in the Northeast and Midwest, which depleted inventories. Moreover, ongoing
advancements in technology continued to improve efficiencies and exploration
results. One estimate shows drilling success rates doubling in the past ten
years due to technological changes. The Fund's energy holdings benefited from
these trends, with some portfolio stocks, such as United Meridian Corp. and
Nuevo Energy, realizing spectacular gains of over 100%.
Real estate securities in the U.S. contributed significantly to performance,
particularly late in the year. In the fourth quarter, we raised the allocation
to this sector to over 27%. U.S. real estate investment trusts, or REITs, gained
approximately 35% for the year as supply and demand fundamentals continued to
improve. Moreover, REITs finished the year on a strong note, with fund flows
into U.S. REITs accelerating significantly during the fourth quarter. Mutual
funds and institutional REIT sector funds were the most notable buyers, the
former seeking a relatively safe haven and the latter replacing direct property
investments with REIT investments.
The outlook for REITs is favorable as fundamentals in the U.S. commercial
property markets are attractive. The overall vacancy rate for North American
office properties is about 12%, down from 20% in 1992. Vacancy rates in certain
sub-markets, especially suburban areas, are less than 10%. Full service hotel
occupancy rates have surged from the low 60% range to the high 60's on average,
with many cities enjoying occupancies well above 70%. New supply in both of
these sectors is still relatively minimal, with annual construction levels at
about one-fourth previous peak levels.
The Fund's largest real estate holding was Patriot American Hospitality (PAH), a
dynamic acquirer of full service (business class, luxury and resort) U.S.
hotels, which has strategic alliances with several of the premier lodging
companies in the U.S., including Hilton, Doubletree and Wyndham. Since going
public in October 1995, PAH has more than tripled the size of its portfolio.
Disappointing sectors included industrial metals, forest products and paper, and
precious metals. Industrial metals and paper shares had negative performance as
the underlying asset prices declined. Prices of industrial metals fell almost
9%, while pulp prices dropped nearly 50% from the highs set late in 1995. In
both industries, supply growth outstripped demand. In addition, both sectors
endured severe inventory corrections on both the producer and consumer levels.
These two factors resulted in a loss of pricing power, causing earnings to
decline significantly. Predicting underperformance in these sectors, our
allocation to each was low throughout the year at less than 7%. We were very
selective about the stocks we did hold in these sectors, choosing companies that
held up well in this environment, specifically low-cost producers and companies
with undervalued assets, such as Aluminum Company of America (Alcoa) and
Willamette.
Gold started the year on a strong note, jumping to over $418 per ounce in the
first quarter, but it gradually fell in price throughout 1996, finishing the
year at $367.70, down 5%. With low inflation dominating the monetary picture,
investment demand, an important
<PAGE> 2
price factor, was weak. Real short-term interest rates were positive, putting a
high opportunity cost on holding gold, and currency stability reigned. Further,
an increasing number of central banks, particularly in Europe, sold large
amounts of their gold reserves. Finally, after two years of declines, mine
production rose despite lower output from the world's largest supplier, South
Africa, where production dropped by 30 tonnes. The Morgan Stanley Capital
International Gold Mines Index declined 2.8% in 1996. Precious metals remained a
fairly low portfolio weighting at approximately 14% of total investments.
THE OUTLOOK
In 1997, we believe certain hard asset sectors, particularly energy and real
estate, will again outperform financial assets, although we do not expect a
repeat of the exceptional returns of 1996. The supply and demand fundamentals
that helped the Fund register solid investment results remain firmly in place.
We believe global growth will be healthy. The monetary environment is extremely
stimulative and central banks around the world are cutting interest rates.
Increased liquidity has been finding its way into financial assets, but over the
next year we expect to see much of that money going into the real economy,
pushing economic growth higher, with the emerging market countries showing
strength considerably higher than that of the industrialized world. Raw
materials are essential to the building of developing economies. Therefore,
strong economic growth leads to increasing demand and higher prices for hard
assets.
Our strategy will be to maintain a significant energy weighting due to the
sector's healthy fundamentals. We remain optimistic about the oil services and
drilling sector, a group for which we believe there is significant upside
potential. On the exploration side, our focus remains on companies with good
exploration success probabilities and away from companies with high commodity
exposure.
Expecting strong returns on real estate investments, we intend to maintain a
substantial weighting of Fund assets in this sector. The U.S. market remains the
most attractive on a risk-adjusted basis. Thus, we will continue to overweight
the Fund in the U.S., with an emphasis on the office/lodging sectors. We also
intend to add selected Asian property companies to take advantage of high growth
rates in the region.
We plan to increase exposure to industrial metals producers as the environment
for these companies appears to be improving and we will use weakness as buying
opportunities. Since we fail to see signs of improvement in the paper sector, we
intend to take a "wait-and-see" approach before increasing the Fund's
allocation. Finally, we plan to maintain a neutral stance on precious metals.
We would like to thank you for your investment in the Worldwide Hard Assets
Fund. We look forward to helping you meet your investment objectives in the
future.
<TABLE>
<S> <C>
John C. van Eck Derek S. van Eck
Chairman Portfolio Manager
</TABLE>
January 25, 1997
*Average annual returns on the Fund for the 1-year period ending 12/31/96 and
for the period from 8/21/95 (commencement of operations) through 12/31/96 were
48.1% and 38.8%, respectively. These returns do not take variable annuity/life
fees and expenses into account. 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.
<PAGE> 3
VAN ECK WORLDWIDE HARD ASSETS FUND
vs. Ibbotson Hard Assets Index*
and S&P 500 Index
<TABLE>
<CAPTION>
Van Eck
World-
Measurement wide Ibbotson
Period Hard Hard
(Fiscal Year Assets Assets S&P 500
Covered) Fund Index Index
<S> <C> <C> <C>
8/95 10,000 10,000 10,000
9/95 9,948 10,066 10,419
10/95 9,680 9,698 10,383
11/95 9,940 10,059 10,839
12/95 10,580 10,300 11,040
1/96 11,110 10,651 11,420
2/96 11,300 10,751 11,529
3/96 11,820 11,040 11,640
4/96 12,440 11,313 11,811
5/96 12,635 11,272 12,116
6/96 12,624 10,877 12,165
7/96 12,095 10,704 11,624
8/96 12,921 10,963 11,871
9/96 13,281 10,903 12,538
10/96 14,106 11,074 12,883
11/96 15,016 11,551 13,856
12/96 15,672 11,558 13,582
</TABLE>
Past performance is not indicative of future results.
The graph shows month-end net asset values, however, the net asset value
fluctuates daily.
*The Ibbotson Hard Assets Index is 75% equities of global companies whose
primary business is linked to hard assets and 25% commodity futures. The
equity component consists of equal weightings of the MSCI Gold Mines,
Non-Ferrous Metals, Energy Sources, and Forest Products and Paper Indices, and
the National Association of Real Estate Investment Trusts Equity Index. The
commodity component consists of equal weightings of the Goldman Sachs Energy,
Precious Metals and Industrial Metals Indices.
**Performance is net of the Fund's expenses only, which were fully reimbursed by
the Advisor.
<PAGE> 4
WORLDWIDE HARD ASSETS FUND
INVESTMENT PORTFOLIO DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COUNTRY/ NO. OF VALUE
INDUSTRY SHARES COMMON STOCK (NOTE 1)
------------------------------------------------------------
<S> <C> <C>
AUSTRALIA: 6.5%
PRECIOUS METALS: 6.5%
89,500 Consolidated Gold NL $ 33,435
9,000 Newcrest Mining Ltd. 35,768
24,212 Portman Mining Ltd. 45,417
250,000 Tanganyika Gold NL+ 68,555
----------
183,175
----------
CANADA: 16.1%
ENERGY: 9.3%
3,500 Abacan Resources Corp.+ 30,407
7,500 Canadian 88 Energy Corp.+ 32,828
1,800 Ensign Resource Service Group,
Inc. 33,157
6,000 Harcor Energy Inc.+ 29,250
4,000 Morrison Petroleum Ltd. 23,928
2,000 Pendaries Petroleum Ltd. 17,143
6,000 Pacalta Resources Ltd.+ 35,454
800 Talisman Energy Inc.+ 26,613
11,000 Windsor Energy Corp.+ 32,099
----------
260,879
----------
FERTILIZERS: 1.5%
500 Potash Corp. of Saskatchewan 42,500
----------
PRECIOUS METALS: 5.3%
1,200 Barrick Gold Corp. 34,500
2,900 Cambior Inc. 42,735
800 Cameco Corp. 32,040
1,900 Placer Dome Inc. 41,325
----------
150,600
----------
453,979
----------
FRANCE: 2.3%
ENERGY: 2.3%
3,000 Bouygues Offshore SA (ADR)+ 38,625
1,400 Forasol-Foramer N.V.+ 27,475
----------
66,100
----------
INDONESIA: 1.6%
INDUSTRIAL METALS: 1.0%
1,600 P.T. Tambang Timah
(GDR 144A) 29,000
----------
FOREST PRODUCTS & PAPER: 0.6%
1,500 Asia Pulp & Paper Co. Ltd.
(ADR)+ 17,063
----------
46,063
----------
ITALY: 1.5%
INDUSTRIAL METALS: 1.5%
800 Ente Nazionale Idrocarburi
S.p.A. (ADR) 41,300
----------
NETHERLANDS: 0.8%
REAL ESTATE: 0.8%
1,000 Renaissance Hotel Group N.V.+ 23,500
----------
<CAPTION>
COUNTRY/ NO. OF VALUE
INDUSTRY SHARES COMMON STOCK (NOTE 1)
------------------------------------------------------------
<S> <C> <C>
NORWAY: 2.9%
ENERGY: 1.4%
3,000 Alvern Norway AS+ $ 40,020
----------
FERTILIZER: 1.5%
800 Norsk Hydro A/S (ADR) 42,900
----------
82,920
----------
UNITED KINGDOM: 1.5%
ENERGY: 1.5%
300 British Petroleum PLC (ADR) 42,413
----------
UNITED STATES: 66.8%
INDUSTRIAL METALS: 3.1%
1,500 Alumax Inc.+ 50,063
600 Aluminum Company of America 38,250
----------
88,313
----------
BUILDING MATERIALS: 0.9%
2,000 Dayton Superior Corp. 26,250
----------
ENERGY: 27.9%
1,200 BJ Services Co.+ 61,200
300 Diamond Offshore Drilling Inc.+ 17,100
1,200 Ensco International Inc.+ 58,200
1,000 Falcon Drilling Co. Inc.+ 39,250
1,200 Flores & Rucks, Inc.+ 63,900
2,500 FX Energy Inc.+ 23,125
2,000 Input/Output Inc.+ 37,000
1,200 KCS Energy, Inc. 42,900
650 Louisiana Land & Exploration Co. 34,857
2,200 Marine Drilling Co., Inc.+ 43,313
1,800 Nabors Industries Inc.+ 34,650
500 Noble Affiliates, Inc. 23,938
900 Nuevo Energy Co.+ 46,800
5,000 SGI International, Inc.+ 20,157
1,500 Snyder Oil Corp. 26,063
1,500 Stone Energy Corp.+ 44,813
700 Trico Marine Services Inc.+ 33,600
650 Triton Energy Ltd.+ 31,525
1,200 United Meridian Corp.+ 62,100
1,300 UTI Energy Corp.+ 45,987
----------
790,478
----------
FOREST PRODUCTS & PAPER: 5.5%
1,300 Buckeye Cellulose Corp.+ 34,612
1,500 Fort Howard Corp.+ 41,532
1,000 Rayonier Inc. 38,375
600 Willamette Industries Inc. 41,775
----------
156,294
----------
PRECIOUS METALS: 2.9%
1,100 Getchell Gold Corp.+ 42,213
900 Newmont Mining Corp. 40,275
----------
82,488
----------
</TABLE>
See Notes to Financial Statements.
<PAGE> 5
WORLDWIDE HARD ASSETS FUND
INVESTMENT PORTFOLIO DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COUNTRY/ NO. OF VALUE
INDUSTRY SHARES COMMON STOCK (NOTE 1)
------------------------------------------------------------
<S> <C> <C>
REAL ESTATE: 26.5%
1,000 Amerco + $ 35,000
1,000 Arden Realty Group, Inc. 27,750
2,000 Boykin Lodging Co. 48,000
2,000 Brandywine Realty Trust 39,000
1,000 Cali Realty Corp. 30,875
2,000 Capstar Hotel Co. 39,250
1,000 Carramerica Realty Corp. 29,250
500 Developers Diversified Realty
Corp. 18,563
1,000 Equity Residential Properties
Trust 41,250
2,000 Excel Realty Trust Inc. 50,750
500 Federal Realty Investment Trust 13,563
900 HFS, Inc. 53,775
1,250 Highwoods Properties, Inc. 42,188
1,000 Interstate Hotels Co. + 28,250
2,000 Macerich Co. (The) 52,250
2,000 Meridian Industrial Trust Inc. 42,000
2,000 Patriot American Hospitality
Inc. 86,250
1,500 Prentiss Properties Trust 37,500
2,000 Studio Plus Hotels, Inc. 31,500
----------
746,964
----------
1,890,787
----------
TOTAL COMMON STOCKS: 100%
(Cost $2,446,798) $2,830,237
==========
+ Non-income producing.
</TABLE>
GLOSSARY:
ADR--American Depositary Receipt
GDR--Global Depositary Receipt
<TABLE>
<CAPTION>
SUMMARY OF
INVESTMENTS % OF
BY INDUSTRY PORTFOLIO
---------- -------
<S> <C>
Building Materials 0.9%
Energy 42.4%
Fertilizers 3.0%
Forest Products &
Paper 6.1%
Industrial Metals 5.6%
Precious Metals 14.7%
Real Estate 27.3%
------
100.0%
======
</TABLE>
See Notes to Financial Statements.
<PAGE> 6
WORLDWIDE HARD ASSETS FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1996
<TABLE>
<S> <C>
ASSETS:
Investments at value (identified cost, $2,446,798) (Note 1)..................................................... $2,830,237
Receivables:
Securities sold............................................................................................... 188,518
Dividends..................................................................................................... 5,915
From Advisor.................................................................................................. 2,077
Capital shares sold........................................................................................... 549
Deferred organization costs..................................................................................... 3,399
----------
Total assets.............................................................................................. 3,030,695
----------
LIABILITIES:
Payables:
Securities purchased.......................................................................................... 35,773
Due to custodian.............................................................................................. 18,306
Open foward currency contracts (Note 5)....................................................................... 3
Accounts payable.............................................................................................. 10,629
----------
Total liabilities......................................................................................... 64,711
----------
Net assets...................................................................................................... $2,965,984
=========
Shares outstanding.............................................................................................. 200,256
=========
Net asset value, redemption price and offering price per share.................................................. $ 14.81
=========
Net assets consist of:
Aggregate paid in capital..................................................................................... $2,266,740
Unrealized appreciation of investments, forward currency contracts and foreign currency....................... 383,431
Undistributed net investment income........................................................................... 19,107
Cumulative realized gains..................................................................................... 296,706
----------
$2,965,984
=========
</TABLE>
See Notes to Financial Statements.
<PAGE> 7
WORLDWIDE HARD ASSETS FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE
EIGHT MONTHS FOR THE PERIOD
ENDED AUGUST 21,
DECEMBER 31, TO APRIL 30,
1996 1996
--------------------- ---------------------
<S> <C> <C> <C> <C>
INCOME:
Dividends (less foreign taxes withheld of $555 and $158, respectively)..... $ 22,196 $ 8,039
Interest................................................................... 1,858 --
-------- --------
24,054 8,039
EXPENSES:
Management (Note 2)........................................................ $ 14,007 $ 5,527
Administration (Note 2).................................................... 340 --
Professional............................................................... 8,258 8,125
Custody.................................................................... 2,806 5,304
Reports to shareholders.................................................... 1,829 --
Amortization of deferred organization costs (Note 1)....................... 625 645
Registration............................................................... -- 430
Other...................................................................... 1,251 15
-------- --------
Total Expenses....................................................... 29,116 20,046
Expenses assumed by the Advisor and reduced by custodian fee and directed
brokerage agreements (Note 2)............................................ (29,116) (20,046)
-------- --------
Net expense.......................................................... 0 0
-------- --------
Net investment income................................................ 24,054 8,039
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTE 3):
Realized gain from security transactions................................... 295,819 77,671
Realized gain (loss) from foreign currency transactions.................... (2,498) 31
Change in unrealized appreciation (depreciation) of foreign currency
receivables, payables and forward foreign currency contracts............. 100 (108)
Change in unrealized appreciation of investments........................... 242,556 140,883
-------- --------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS....................... $560,031 $226,516
======== ========
</TABLE>
- ---------------
+ Commencement of operations.
See Notes to Financial Statements.
<PAGE> 8
WORLDWIDE HARD ASSETS FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE FOR THE
EIGHT MONTHS PERIOD AUGUST 21,
ENDED 1995+ TO
DECEMBER 31, APRIL 30,
1996 1996
------------ -----------------
<S> <C> <C>
INCREASE IN NET ASSETS:
OPERATIONS:
Net investment income................................................................. $ 24,054 8,039
Realized gain from security transactions.............................................. 295,819 77,671
Realized gain (loss) from foreign currency transactions............................... (2,498) 31
Change in unrealized appreciation (depreciation) of foreign currency receivables,
payables and forward currency contracts............................................. 100 (108)
Change in unrealized appreciation of investments...................................... 242,556 140,883
------------ -----------------
Increase in net assets resulting from operations...................................... 560,031 226,516
------------ -----------------
Dividends paid to shareholders from:
Net investment income................................................................. (87,303) --
------------ -----------------
472,728 226,516
------------ -----------------
CAPITAL SHARE TRANSACTIONS*:
Net proceeds from sales of shares..................................................... 883,008 1,331,768
Reinvestment of dividends............................................................. 87,303 --
------------ -----------------
970,311 1,331,768
Cost of shares reacquired............................................................. (28,216) (7,123)
------------ -----------------
Increase in net assets resulting from capital share transactions........................ 942,095 1,324,645
------------ -----------------
Total increase in net assets...................................................... 1,414,823 1,551,161
NET ASSETS:
Beginning of period..................................................................... 1,551,161 --
------------ -----------------
End of period (including undistributed net investment income of $19,107 and $8,625,
respectively)......................................................................... $2,965,984 $ 1,551,161
============ ================
*SHARES OF BENEFICIAL INTEREST ISSUED AND REDEEMED (UNLIMITED NUMBER OF $0.001 PAR VALUE
SHARES AUTHORIZED):
Shares sold........................................................................... 70,497 125,343
Shares reinvested..................................................................... 7,312 --
------------ -----------------
77,809 125,343
Shares reacquired..................................................................... (2,280) (616)
------------ -----------------
Net increase.......................................................................... 75,529 124,727
============ ================
</TABLE>
- ---------------
+ Commencement of operations.
See Notes to Financial Statements.
<PAGE> 9
WORLDWIDE HARD ASSETS FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period
<TABLE>
<CAPTION>
FOR THE FOR THE
EIGHT MONTHS PERIOD AUGUST 21,
ENDED 1995(a) TO
DECEMBER 31, APRIL 30,
1996 1996
------------- ------------------
<S> <C> <C>
Net Asset Value, Beginning of Period................................................. $12.44 $10.00
------------- -------
Income From Investment Operations:
Net Investment Income.............................................................. 0.36 0.11(b)
Net Gains on Securities (both realized and unrealized)............................. 2.71 2.33
------------- -------
Total from Investment Operations..................................................... 3.07 2.44
------------- -------
Less Distributions:
Dividends from Net Investment Income............................................... (.70) --
------------- -------
Net Asset Value, End of Period....................................................... $14.81 $12.44
============= ================
Total Return (c)..................................................................... 25.98% 24.40%
- ---------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Period (000)...................................................... $2,966 $1,551
Ratio of Gross Expenses to Average Net Assets(d)(e).................................. 2.07% 2.51%
Ratio of Net Expenses to Average Net Assets.......................................... 0.00% 0.00%
Ratio of Net Income to Average Net Assets (e)........................................ 1.72% 1.45%
Portfolio Turnover Rate.............................................................. 118.62% 119.54%
Average Commission Rate Paid......................................................... $0.0124 $0.0385
</TABLE>
- ---------------
(a) Commencement of operations.
(b) Based on average shares outstanding.
(c) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of dividends at
the net asset value during the period and a redemption on the last day of
the period. Total return for a period of less than one year is not
annualized.
(d) The ratio of Gross Expenses to Average Net Assets includes amounts paid
through custody fees and directed brokerage arrangements. See Note 2.
(e) Annualized.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Van Eck Worldwide Insurance Trust (the "Trust"), organized as a Massachusetts
business trust on January 7, 1987, is registered under the Investment Company
Act of 1940. The Worldwide Hard Assets Fund fiscal year end was changed from
April 30 to December 31. The following is a summary of significant accounting
policies consistently followed by the Worldwide Hard Assets 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 amounts could differ.
A. SECURITY VALUATION--Securities traded on national exchanges and traded in the
NASDAQ National Market System are valued at the last sales prices reported at
the close of business on the last business day of the period. Over-the-counter
securities not included in the NASDAQ National Market System and listed
securities for which no sale was reported are valued at the mean of the bid and
asked prices. Short-term obligations purchased with more than sixty days
remaining to maturity are valued at market. Short-term obligations purchased
with sixty days or less to maturity are valued at cost which with accrued
interest approximates value. Forward 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 the 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.
C. CURRENCY TRANSLATION--Assets and liabilities denominated in foreign
currencies and commitments under forward currency contracts are translated into
U.S. Dollars at the mean of the quoted bid and asked prices of such currencies
on the last business day of the period. Purchases and sales of investments are
translated at the exchange rates prevailing when such investments were acquired
or sold. Income and expenses are translated at the exchange rates prevailing
when accrued. The portion of realized and unrealized gains and losses on
investments that result from fluctuations in foreign currency exchange rates is
not separately disclosed. Recognized gains or losses attributable to foreign
currency fluctuations on foreign currency denominated assets and liabilities are
recorded as net realized gains and losses from foreign currency transactions.
<PAGE> 10
WORLDWIDE HARD ASSETS FUND
- --------------------------------------------------------------------------------
D. DIVIDENDS AND DISTRIBUTIONS--Dividend income and distributions to
shareholders are recorded on the ex-dividend date. Income distributions and
capital gain distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments for foreign currency
transactions and real estate investment trusts. The effect of these differences
for the period ended December 31, 1996 decreased over distributed net investment
income and decreased cumulative realized gains by $73,731.
E. OTHER--Security transactions are accounted for on the date the securities are
purchased or sold. Interest income is accrued as earned. Deferred organization
costs will be amortized over a period not exceeding five years.
NOTE 2--Van Eck Associates Corporation earns fees for investment management and
advisory services. The fee is based on an annual rate of 1% of the average daily
net assets, which includes the fee paid to the Advisor for accounting and
administrative services. For the period ended December 31, 1996, Van Eck
Associates Corporation agreed to waive its management fees and assume all other
expenses of the Fund. The Fund's expenses were reduced by $26,086 under this
arrangement. 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 26.42% of the outstanding shares of the Fund.
The Fund directs certain portfolio trades to a broker that, in turn, pays a
portion of the Fund's operating expenses. The Fund also has a fee arrangement,
based on cash balances left on deposit with the custodian, which also reduces
the Fund's operating expenses. For the eight months ended December 31, 1996, the
Fund's expenses were reduced by $224 and $2,806, respectively, under these
arrangements. The Fund could have invested the assets used in connection with
the custodian fee and direct brokerage arrangements in an income producing asset
if it had not entered into such arrangements.
NOTE 3--Purchases and sales of securities, other than short-term obligations,
aggregated $3,392,130 and $2,377,869, respectively, for the eight months ended
December 31, 1996. For federal income tax purposes, the identified cost of
investments owned at December 31, 1996 was $2,446,155. As of December 31, 1996,
net unrealized appreciation for federal income tax purposes aggregated $384,082,
of which $416,719 related to appreciated securities and $32,637 related to
depreciated securities.
NOTE 4--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 precious
metals, ferrous and non-ferrous metals, gas, petroleum, petrochemicals or other
hydrocarbons, forest products, real estate, and other basic non-agricultural
commodities. Since the Fund may so concentrate, it may be subject to greater
risks and market fluctuations than other more diversified portfolios. The
production and marketing of gold and other natural resources may be affected by
actions and changes in governments. In addition, gold and natural resources may
be cyclical in nature.
NOTE 5--FORWARD CURRENCY CONTRACTS--The Fund may buy and sell forward currency
contracts to settle purchases and sales of foreign denominated securities. In
addition, the Fund may enter into forward currency contracts to hedge foreign
denominated assets. Realized gains and losses from forward currency contracts
are included in realized loss from foreign currency transactions. At December
31, 1996, the Fund had the following outstanding forward currency contracts:
<TABLE>
<CAPTION>
VALUE AT CURRENT UNREALIZED
CONTRACTS SETTLEMENT DATE VALUE DEPRECIATION
- ---------------------- --------------- -------- ------------
<S> <C> <C> <C>
Foreign Currency Sale
Contract:
AUD 17,494 expiring
1/06/97 $13,902 $13,905 ($3)
============== ======= ===========
</TABLE>
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 6--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. The Plan has been approved by the
Internal Revenue Service.
As of December 31, 1996, the total value of the assets and corresponding
liability of the Fund's portion of the Plan is $77.
NOTE 7--An income dividend of $1.51 a share and a long term capital gain
distribution of $0.04 a share were paid on January 31, 1997 to shareholders of
record date January 29, 1997, with a reinvestment date of January 31, 1997.
<PAGE> 11
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Trustees of
Van Eck Worldwide Insurance Trust:
We have audited the accompanying statement of assets and liabilities, including
the investment portfolio, of the Worldwide Hard Assets Fund ("the Fund") (one of
the series constituting the Van Eck Worldwide Insurance Trust) as of December
31, 1996, the related statements of operations, the statements of changes in net
assets and the financial highlights for the eight months then ended and for the
period from August 21, 1995 (commencement of operations) to April 30, 1996.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 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
Worldwide Hard Assets Fund series of the Van Eck Worldwide Insurance Trust as of
December 31, 1996, the results of its operations, and the changes in its net
assets and the financial highlights for the eight months then ended and for the
period from August 21, 1995 (commencement of operations) to April 30, 1996, in
conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
New York, New York
February 18, 1997
<PAGE> 12
VAN ECK WORLDWIDE December 31, 1996
INSURANCE TRUST
-----------------
VAN ECK
Worldwide Hard Assets Fund WORLDWIDE
INSURANCE TRUST
ANNUAL REPORT
Worldwide
Hard Assets Fund
Van Eck Worldwide Insurance Trust
- ---------------------------------
99 Park Avenue, New York, NY 10016
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 carefully before
investing.
FR1997-0130-0040
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