VAN ECK FUNDS, 497, 1997-05-23

VAN ECK FUNDS
497, 1997-05-23

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<PAGE>

PROSPECTUS APRIL 30, 1997
VAN ECK GOLD AND MONEY FUNDS
- -------------------------------------------------------------------------------
99 Park Avenue, New York, New York 10016
Account Assistance: (800) 544-4653
GOLD FUNDS

Van Eck Funds (the "Trust") is an open-end management investment company
consisting of separate funds, each of which has a specific investment
objective. This Prospectus relates to three funds of the Trust, Global Hard
Assets Fund, Gold/Resources Fund and International Investors Gold Fund
(collectively, the "Funds").

GLOBAL HARD ASSETS FUND (CLASS A, CLASS B AND CLASS C)--seeks long-term
capital appreciation by investing globally, primarily in "Hard Assets
Securities." Income is a secondary consideration.

GOLD/RESOURCES FUND (CLASS A)--seeks long-term capital appreciation by
investing in equity and debt securities of companies engaged in the
exploration, development, production and distribution of gold and other
natural resources such as strategic and other metals, minerals, oil, natural
gas and coal. Current income is not a consideration. This Fund will not invest
in the securities of South African issuers.

INTERNATIONAL INVESTORS GOLD FUND (CLASS A)--seeks long-term capital
appreciation, while retaining freedom to take current income into
consideration. The Fund has concentrated its investments in gold mining shares
since 1968 and has investments in other worldwide companies and industries.

Van Eck Associates Corporation (the "Adviser") 99 Park Avenue, New York, New
York 10016, serves as investment adviser to each of the Funds. See
"Management." Van Eck Securities Corporation (the "Distributor"), a wholly-
owned subsidiary of the Adviser, serves as Distributor of the Funds' shares.
See "Purchase of Shares--Alternative Purchase Arrangements" on page 24 to
determine your purchase options for Funds offering different classes of
shares.

Investors should be aware that an investment in Global Hard Assets Fund has
greater investment risk than many mutual funds. The Fund intends to engage in
a number of investment activities including borrowing for investment purposes
(i.e., engage in leveraging), making short sales of securities (i.e., make
sales of securities the Fund does not own), investing in countries with
emerging securities markets and economies and investing in restricted
securities, securities of unseasoned issuers and non-readily marketable
securities. These investment activities are considered to be speculative and
could result in additional cost and investment risk to the Fund. Consequently,
the Fund is not intended to be a complete investment program and is intended
for those investors who can assume greater risk with respect to a portion of
their investment portfolio. Further information on the Fund and these
activities is provided under "Risk Factors" on pages 13-22 and investors
should read this material carefully.
MONEY FUND

U.S. Government Money Fund--seeks safety of principal, daily liquidity and
current income by investing in short-term U.S. Treasury securities and other
securities carrying the "full faith and credit" guarantee of the U.S.
Government. THE FUND'S SHARES ARE NOT INSURED OR GUARANTEED BY THE U.S.
GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN A
$1.00 NET ASSET VALUE OR THAT THE FUND'S NET ASSET VALUE WILL NOT FLUCTUATE.

---------------

SHARES IN THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, A BANK, AND THE SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.

This Prospectus sets forth concisely information about the Trust and the Funds
that you should know before investing. It should be read and retained for
future reference. For more information about the Funds, please call the Funds
or the Distributor at the above telephone number.

A Statement of Additional Information dated April 30, 1997, which discusses
the Trust and the Funds, has been filed with the Securities and Exchange
Commission and is incorporated herein by reference. For a free copy, write to
the above address or call the telephone number listed above.

- -------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
- -------------------------------------------------------------------------------
<PAGE>

TABLE OF
CONTENTS PAGE
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Transaction Data............................................................ 3
Financial Highlights........................................................ 4
The Trust................................................................... 7
Investment Objectives and Policies.......................................... 7
Risk Factors................................................................ 13
Limiting Investment Risks................................................... 22
Purchase of Shares.......................................................... 23
Exchange Privilege.......................................................... 29
Tax-Sheltered Retirement Plans.............................................. 31
Investment Programs......................................................... 31
Redemption of Shares........................................................ 32
Dividends and Distributions................................................. 34
Management.................................................................. 34
Plan of Distribution........................................................ 40
Advertising................................................................. 41
Taxes....................................................................... 42
Description of the Trust.................................................... 43
Additional Information...................................................... 43
</TABLE>

2
<PAGE>

TRANSACTION DATA

<TABLE>
<CAPTION>
GOLD/ U.S.
RESOURCES INTERNATIONAL GOVERNMENT
GLOBAL HARD ASSETS FUND** FUND INVESTORS MONEY FUND
--------------------------------------- ------------ ------------- ------------
CLASS A CLASS B CLASS C CLASS A CLASS A
------------- ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION
EXPENSES:
Maximum Sales Charge
Imposed on Purchases
(as a percent of
offering price)........ 4.75% 0% 0% 5.75% 5.75% 0%
+Contingent Deferred
Sales or Redemption
Charge................. 0% 5.0% 1.00% 0% 0% 0%
== ==== ===== == == ==
ANNUAL FUND OPERATING
EXPENSES:
(as a percentage of
average net assets)
Management Fees........ 1.00% 1.00% 1.00% .75% .75% .50%
12b-1 Fees/Shareholder
Servicing Fees*........ .50% 1.00% 1.00% .25% 0% .25%
Administration Fee..... 0% 0% 0% .25% .25% 0%
Other Expenses......... .54% .56% .56% .46% .43% .48%
----- ----- ----- ----- ----- -----
Transfer and Dividend
Disbursing............. .15% .17% .17% .24% .24% .11%
Custodian Fees......... .12% .12% .12% .02% .03% .06%
Other Expenses......... .27% .27% .27% .20% .16% .31%
----- ---- ---- ---- ---- ----
Total Fund Operating
Expenses............... 2.04% 2.56% 2.56% 1.71% 1.43% 1.23%
===== ===== ===== ===== ===== =====
EXAMPLE: You would bear
the following expenses
on a $1,000 investment
assuming (1) 5% annual
return and (2)
redemption at the end of
each time period
1 year................. $ 67.22 $ 75.91 $ 35.91 $ 73.71 $ 71.22 $ 12.53
3 years................ $108.42 $119.65 $ 79.65 $107.74 $ 100.15 $ 39.03
5 years................ $152.10 156.04 $136.04 $144.05 $ 131.17 $ 67.57
10 years............... $273.14 289.51 $289.51 $245.81 $ 218.96 $148.86
</TABLE>
- ----
* Long-term shareholders in Funds may pay more than the economic equivalent of
the maximum front-end sales charge permitted by the NASD.
** The Adviser may temporarily reimburse and or waive certain operating
expenses of the Fund including management and administrative fees. Such
temporary reimbursements/waivers will have the effect of lowering the
Fund's expense ratio.
+ The Contingent Deferred Sales Charge on Class B shares is applied to the
lesser of purchase price or net asset value at redemption. The charge
imposed on such amount is scaled down from 5% during the first year to 0%
after the sixth year. A Redemption Charge on Class C shares of 1% is applied
to redemptions within the first year after purchase and is applied to the
lesser of purchase price or net asset value at redemption.

Total Fund Operating Expenses for Gold/Resources Fund, International Investors
Gold Fund and U.S. Government Money Fund are the actual annual operating
expenses, before fee waivers or expense reimbursements, if any, for the year
ended December 31, 1996. Operating Expenses for Global Hard Assets Fund, Class
B and Class C, are estimates and assume $40 million in net assets.

The above examples should not be considered a representation of past or future
expenses or investment return. Actual expenses may be greater or less than
those shown. Information regarding management fees and 12b-1 fees can be found
under "Management" and "Plan of Distribution."

3
<PAGE>

FINANCIAL HIGHLIGHTS

The Financial Highlights below give selected information for a share of each
Fund outstanding for the year or period indicated. The Financial Highlights
presented have been audited by Deloitte & Touche LLP, independent accountants,
for all years through December 31, 1991. For all other periods, the Financial
Highlights presented have been audited by Coopers & Lybrand L.L.P.,
independent accountants, whose report thereon appears in the Funds' Annual
Reports, which are incorporated by reference into the Trust's Statement of
Additional Information. This information should be read in conjunction with
the financial statements and related notes that also appear in the Funds'
Annual Reports.

<TABLE>
<CAPTION>
GLOBAL HARD ASSETS FUND
--------------------------------------------------------------------------
CLASS A CLASS B CLASS C
------------------------------ ------------ ------------------------------
FOR THE FOR THE FOR THE
PERIOD PERIOD PERIOD
YEAR ENDED NOVEMBER 2, APRIL 24, YEAR ENDED NOVEMBER 2,
DECEMBER 31, 1994(A) TO 1996(A) TO DECEMBER 31, 1994(A) TO
---------------- DECEMBER 31, DECEMBER 31, ---------------- DECEMBER 31,
FOR A SHARE OUTSTANDING 1996 1995 1994 1996 1996 1995 1994
THROUGHOUT EACH PERIOD ------- ------- ------------ ------------ ------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Begin-
ning of Period......... $ 10.68 $ 9.41 $ 9.53 $ 12.55 $ 10.76 $ 9.41 $ 9.53
------- ------- ------- ------- ------- ------- -------
Income from Investment
Operations:
Net Investment Income.. 0.15 0.32+ 0.010+ 0.11 0.11 0.34+ 0.01+
Net Gains (Loss) on
Investments (both
realized and
unrealized)........... 4.70 1.57 (0.115) 2.95 4.73 1.63 (0.12)
------- ------- ------- ------- ------- ------- -------
Total from Investment
Operations............. 4.85 1.89 (0.105) 3.06 4.84 1.97 (0.11)
------- ------- ------- ------- ------- ------- -------
Less Distributions:
Dividends from Net
Investment Income..... (0.14) (0.62) (0.015) (0.14) (0.11) (0.62) (0.01)
Distributions from
Capital Gains......... (0.95) -- -- (0.95) (0.95) -- --
Tax Return of Capital.. (0.02) -- -- (0.02) (0.02) -- --
------- ------- ------- ------- ------- ------- -------
(1.11) (0.62) (0.015) (1.11) (1.08) (0.62) (0.01)
------- ------- ------- ------- ------- ------- -------
Net Asset Value, End of
Period................. $ 14.42 $ 10.68 $ 9.41 $ 14.50 $ 14.52 $ 10.76 $ 9.41

======= ======= ======= ======= ======= ======= =======
Total Return (b)........ 45.61% 20.09% (1.10%) 24.55% 45.18% 20.94% (1.20%)

- -------------------------------------------------------------------------------
Ratios/Supplementary
Data
Net Assets, End of Pe-
riod (000)............. $27,226 $ 3,820 $ 1,419 $ 1,806 $ 1,935 $ 181 $ 8
Ratio of Gross Expenses
to Average Net Assets
(c).................... 2.63% 4.05% 3.40% 3.27% 6.02% 37.88% 39.49%
Ratio of Net Expenses to
Average Net Assets..... 0.72% 0% 0.15% * 1.64% * 1.31% 0% 0.56% *
Ratio of Net Investment
Income to Average Net
Assets................. 1.45% 3.08% 0.84% * 0.53% * 0.84% 3.30% 0.53% *
Portfolio Turnover Rate. 163.91% 179.33% 0% 163.91% 163.91% 179.33% 0%
Average Commission Rate
Paid (d)............... $0.0178 $0.0178 $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 Adviser 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 a commission is charged.
*Annualized.
+Based on average shares outstanding.

4
<PAGE>

FINANCIAL HIGHLIGHTS--(CONTINUED)

<TABLE>
<CAPTION>
GOLD/RESOURCES FUND (CLASS A)
-----------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------------------------------------------------
FOR A SHARE
OUTSTANDING
THROUGHOUT EACH 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986+
PERIOD -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of
Year............. $ 5.58 $ 5.35 $ 6.34 $ 3.56 $ 3.73 $ 3.90 $ 5.33 $ 4.49 $ 5.72 $ 3.90 $ 3.08
-------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------
Income from
Investment
Operations:
Net Investment
Income (Loss)... (0.06) (0.03) (0.02) (0.014) 0.002 0.010 0.025 0.002 0.01 0.02 --
Net Gains
(Losses) on
Securities (both
realized and
unrealized)..... 0.20 0.26 (0.97) 2.794 (0.170) (0.169) (1.430) 0.846 (1.23) 1.82 0.82
-------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------
Total from
Investment
Operations....... 0.14 0.23 (0.99) 2.780 (0.168) (0.159) (1.405) 0.848 (1.22) 1.84 0.82
-------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------
Less
Distributions:
Dividends from Net
Investment Income
(a).............. -- -- -- -- (0.002) (0.011) (0.025) (0.008) (0.01) (0.02) --
-------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------
Net Asset Value,
End of Year...... $ 5.72 $ 5.58 $ 5.35 $ 6.34 $ 3.56 $ 3.73 $ 3.90 $ 5.33 $ 4.49 $ 5.72 $ 3.90
======== ======== ======== ======== ======== ======== ======== ======== ======== ======== =======
Total Return (b).. 2.51% 4.3% (15.6%) 78.09% (4.50%) (4.07%) (26.36%) 18.90% (21.30%) 47.30% 26.38%
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplementary
Data
Net Assets, End of
Year (000)....... $132,298 $155,974 $186,091 $211,450 $114,257 $136,288 $175,171 $252,860 $228,558 $252,717 $38,691
Ratio of Expenses
to Average Net
Assets........... 1.71% 1.81% 1.52% 1.39% 1.57% 1.62% 1.44% 1.48% 1.39% 1.27% 1.52%*
Ratio of Net
Income (Loss) to
Average Net
Assets........... (0.75%) (0.44%) (0.30%) (0.29%) 0.07% 0.27% 0.57% 0.04% 0.23% 0.39% (0.02%)*
Portfolio Turnover
Rate............. 12.95% 6.16% 13.75% 7.79% 0.93% 7.89% 12.12% 4.17% 1.59% 1.99% --
Average Commission
Rate Paid (c).... $ .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, $.0080 for 1991, $.0083 for 1990, $.0070 for 1989,
$.0051 for 1988 and $.0237 for 1987.
(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) 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 a commission is charged.
* Annualized
+ From February 15, 1986 (commencement of operations) to December 31, 1986.

5
<PAGE>

FINANCIAL HIGHLIGHTS--(CONTINUED)

<TABLE>
<CAPTION>
INTERNATIONAL INVESTORS GOLD FUND (CLASS A)**
----------------------------------------------------------------------------------------------------
Year Ended December 31,
----------------------------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING 1996 1995 1994 1993 1992 1991 1990 1989* 1988* 1987
THROUGHOUT EACH PERIOD -------- -------- -------- -------- -------- -------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $13.35 $15.21 $16.08 $ 7.81 $11.29 $11.32 $16.38 $11.30 $15.29 $12.04
-------- -------- -------- -------- -------- -------- -------- -------- -------- ----------
Income from Investment
Operations:
Net Investment Income
(Loss)................. 0.05 0.08 0.19 0.14 0.17 0.16 0.26 0.32 0.34 0.48
Net Gain/(Loss) on
Securities
(both realized and
unrealized)............ (1.29) (1.44) (0.36) 8.70 (3.44) 0.13 (4.67) 5.39 (3.69) 3.72
-------- -------- -------- -------- -------- -------- -------- -------- -------- ----------
Total from Investment
Operations............. (1.24) (1.36) (0.17) 8.84 (3.27) 0.29 (4.41) 5.71 (3.35) 4.20
-------- -------- -------- -------- -------- -------- -------- -------- -------- ----------
Less Distributions:
Dividends from Net
Investment Income (a).. (0.07) (0.10) (0.18) (0.13) (0.12) (0.17) (0.25) (0.31) (0.29) (0.42)
Distributions from
Capital Gains.......... (0.14) (0.38) (0.52) (0.44) (0.09) (0.15) (0.40) (0.32) (0.35) (0.53)
Tax Return of Capital... -- (0.02) -- -- -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- -------- -------- -------- ----------
Total Distributions..... (0.21) (0.50) (0.70) (0.57) (0.21) (0.32) (0.65) (0.63) (0.64) (0.95)
-------- -------- -------- -------- -------- -------- -------- -------- -------- ----------
Net Asset Value, End of
Period................. $11.90 $13.35 $15.21 $16.08 $ 7.81 $11.29 $11.32 $16.38 $11.30 $15.29
======== ======== ======== ======== ======== ======== ======== ======== ======== ==========
Total Return (b)........ (9.37%) (8.93%) (1.04%) 113.41% (29.09%) 2.56% (27.00%) 51.30% (22.00%) 34.70%
-------- -------- -------- -------- -------- -------- -------- -------- -------- ----------
- -------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplementary
Data
Net Assets, End of
Period (000)........... $409,331 $519,795 $634,808 $706,171 $360,177 $568,859 $611,401 $924,110 $712,078 $1,040,381
Ratio of Expenses to
Average
Net Assets............. 1.43% 1.42% 1.15% 1.12% 1.18% 1.17% 0.97% 0.88% 0.83% 0.71%
Ratio of Net Income
(Loss) to Average Net
Assets................. 0.36% 0.55% 1.23% 1.13% 1.72% 1.41% 1.83% 2.38% 2.67% 3.34%
Portfolio Turnover Rate. 12.45% 4.10% 7.08% 7.20% 2.30% 2.20% 2.10% 3.50% 5.30% 1.00%
Average Commission Rate
Paid (c)............... $ 0.0197
</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 $0.01 for 1996, $0.03 for 1995, $0.07 for 1994, $0.05 for
1993, $0.04 for 1992, $0.03 for 1991, $0.07 for 1990, $0.07 for 1989,
$0.06 for 1988 and $0.07 for 1987.
(b) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all dividends
and distributions 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 calculated for a period of less
than one year is not annualized.
(c) 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 a commission is charged.
* Certain per share amounts have been reclassified.
** International Investors became a series of the Trust on April 30, 1991
pursuant to the reorganization of International Investors Incorporated, a
Delaware corporation, as a series of the Trust.

6
<PAGE>

FINANCIAL HIGHLIGHTS--(CONCLUDED)

<TABLE>
<CAPTION>
U.S. GOVERNMENT MONEY FUND
-----------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
THROUGHOUT EACH PERIOD -------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year...... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Income From Investment
Operations:
Net Investment Income.. .0385 0.0456 0.0311 0.0183 0.0220 0.0456 0.0685 0.0748 0.0594 0.0492
Less Distributions:
Dividends From Net In-
vestment Income....... (.0385) (0.0456) (0.0311) (0.0183) (0.0220) (0.0456) (0.0685) (0.0748) (0.0594) (0.0492)
-------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net Asset Value, End of
Year................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======= ======= ======= ======= ======= ======= ======= ======= =======
Total Return............ 3.85% 4.56% 3.11% 1.83% 2.20% 4.56% 6.85% 7.48% 5.94% 4.92%
- --------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY
DATA
Net Assets, End of Year
(000).................. $107,698 $70,130 $47,078 $31,109 $24,853 $35,287 $43,353 $47,620 $51,840 $45,126
Ratio of Expenses to
Average Net Assets (a). 1.23% 1.25% 1.12% 1.24% 1.44% 1.30% 1.17% 1.26% 0.80% 0.89%
Ratio of Net Income to
Average Net Assets..... 4.02% 4.45% 3.07% 1.83% 2.25% 4.61% 6.82% 7.47% 5.95% 5.07%
</TABLE>
- --------
(a) Had the Adviser not waived management fees, the 1989, 1988, 1987 and 1986
expense ratios would have been 1.31%, 1.30%, 1.39% and 1.66%,
respectively.

THE TRUST

Each of the Funds is a series (fund) of the Trust, a business trust organized
under the laws of the Commonwealth of Massachusetts on April 3, 1985. Class A
shares are denoted with the suffix-A, Class B shares with the suffix-B and
Class C shares with the suffix-C. The Funds are known as the Gold and Money
Funds. The Trust also consists of other funds, which, together with the Funds,
are hereinafter referred to as the "Van Eck Group of Funds."

Gold/Resources Fund, International Investors Gold Fund and U.S. Government
Money Fund are classified as diversified funds under the Investment Company
Act of 1940, as amended ("Act"). This means that with respect to 75% of the
Fund's assets, the Fund may not invest more than 5% of its total assets in any
one issuer or invest in more than 10% of the outstanding voting securities of
any issuer. Global Hard Assets Fund is classified as "non-diversified", which
means that the proportion of the Fund's assets that may be invested in the
securities of a single issuer is not limited by the Act. However, to meet
other requirements, the Fund at the close of each quarter of its taxable year
must, in general, limit its investments so that (i) no more than 25% of its
assets are invested in the securities of a single issuer, (ii) with respect to
50% of the Fund's assets, no more than 5% of its assets at the time of
purchase are invested in a single issuer and (iii) the Fund will not own more
than 10% of the outstanding voting securities of any one issuer.

INVESTMENT OBJECTIVES AND POLICIES

A description of the investment objectives and policies of each Fund is set
forth below. The investment objective of a Fund may not be changed without the
affirmative vote of a majority of the outstanding securities of that Fund, as
defined in the Act. As a result of the market risk inherent in any investment,
there is no assurance that the Funds will achieve their objectives. For
further information about a Fund's investment policies, see "Investment
Objectives and Policies of the Funds" in the Statement of Additional
Information.

GLOBAL HARD ASSETS FUND

OBJECTIVE:

Global Hard Assets Fund seeks long-term capital appreciation by investing
primarily in "Hard Asset Securities." Income is a secondary consideration.

7
<PAGE>

POLICIES:

The Adviser believes "Hard Asset Securities" (as defined below) offer an
opportunity to achieve long-term capital appreciation and to protect wealth
against eroding monetary values during periods of cyclical economic
expansions. Since the market action of Hard Asset Securities may move against
or independently of the market trend of industrial shares, the addition of
such securities to an overall portfolio may increase the return and reduce the
price fluctuations of such a portfolio. There can be no assurance that an
increased rate of return or a reduction in price fluctuations of a portfolio
will be achieved. An investment in the Fund's shares should be considered part
of an overall investment program rather than a complete investment program.

Hard Asset Securities include equity securities of "Hard Asset Companies" and
securities, including structured notes, whose value is linked to the price of
a Hard Asset commodity or a commodity index. See "Risk Factors--Indexed
Securities and Structured Notes." "Hard Asset Companies" includes companies
that are directly or indirectly (whether through supplier relationships,
servicing agreements or otherwise) engaged to a significant extent in the
exploration, development, production or distribution of one or more of the
following (together "Hard Assets"): (i) precious metals, (ii) ferrous and non-
ferrous metals, (iii) gas, petroleum, petrochemicals or other hydrocarbons,
(iv) forest products, (v) real estate and (vi) other basic non-agricultural
commodities. The Adviser considers that a company is engaged to a "significant
extent" in these activities if it derives at least 50% of its gross sales
revenues or profits from them.

Under normal market conditions, the Fund will invest at least 65% of its total
assets in "Hard Asset Securities" and the Fund will invest at least 5% of its
assets in each of the first five sectors listed above. The Fund has a
fundamental policy of concentrating in such industries and may invest up to
50% of its assets in any one of the above sectors. Therefore, it may be
subject to greater risks and market fluctuations than other investment
companies with more diversified portfolios. Some of these risks include:
volatility of energy and basic materials prices; possible instability of the
supply of various Hard Assets; the risks generally associated with extraction
of natural resources; actions and changes in government which could affect the
production and marketing of Hard Assets; and Hard Asset Securities may also
experience greater price fluctuations than the relevant Hard Asset.

The Fund seeks investment opportunities worldwide. Under normal conditions,
the Fund will invest its assets in at least three countries including the
United States. There is no limitation or restriction on the amount of assets
to be invested in any one country, developed or underdeveloped. Global
investing involves economic and political considerations not typically
applicable to the U.S. markets. See "Risk Factors--Foreign Securities" and
"Risk Factors--Emerging Market Securities" below.

The Fund may invest in common stocks; preferred stocks (either convertible or
non-convertible); rights; warrants; direct equity interests in trusts,
partnerships, joint ventures and other incorporated entities or enterprises;
and special classes of shares available only to foreign persons in those
markets that restrict ownership of certain classes of equity to nationals or
residents of that country. Direct investments are generally considered
illiquid and will be aggregated with other illiquid investments for purposes
of the limitation on illiquid investments. The Fund may invest up to 10% of
its net assets, taken at market value at the time of investment, in precious
metals, whether in bullion or coins.

The Fund may invest in lower quality, high-yielding debt securities (commonly
referred to as "junk bonds") of Hard Asset Companies rated as low as CCC by
S&P or Caa by Moody's. These debt instruments have some "equity"
characteristics in that, while not directly linked, their value may increase
or decrease with the value of a Hard Asset, reflecting the ability of the Hard
Asset Company to make scheduled payments of interest and principal. Lower
rated debt securities are considered speculative and involve greater risk of
loss than higher rated debt securities and are more sensitive to changes in
the issuer's capacity to pay. Debt rated Caa or CCC presents a significantly
greater risk of default than do higher rated securities and, in times of poor
business or economic conditions, the Fund may lose interest and/or principal
on such securities. In addition to sensitivity to interest rates, debt
securities of Hard Asset Companies may fluctuate in price in connection with
changes in the price of the relevant Hard Asset. The Fund will not invest more
than 25% of its assets in debt securities rated below BBB by S&P or Baa by
Moody's.

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The Fund may invest in derivatives, see "Risk Factors" below. Derivatives in
which the Fund may invest include futures contracts, forward contracts,
options, swaps and structured notes and other similar securities as may become
available in the market. The Fund may invest in indexed securities whose value
is linked to one or more currencies, interest rates, commodities, or financial
or commodity indices. An indexed security enables the investor to purchase a
note whose coupons and/or principal redemption are linked to the performance
of an underlying asset. Indexed securities may be publicly traded or may be
two-party contracts (such two-party agreements are structured notes). When the
Fund purchases a structured note it will make a payment of principal to the
counterparty. The Fund will purchase structured notes only from counterparties
rated A or better by S&P, Moody's or another nationally recognized statistical
rating organization. The Adviser will monitor the liquidity of structured
notes under the supervision of the Board of Trustees and structured notes
determined to be illiquid will be aggregated with other illiquid securities
and limited to 15% of the net assets of the Fund. Indexed securities may be
more volatile than the underlying instrument itself, and present many of the
same risks as investing in futures and options. Indexed securities are also
subject to credit risks associated with the issuer of the security with
respect to both principal and interest. In addition, the Fund may invest in
futures and forward contracts and options on precious metals and other Hard
Assets. Only securities linked to one or more non-agricultural commodities or
commodity indices will be considered a Hard Asset Security.

The Fund may invest up to 5% of its net assets in premiums for options on
equity securities and equity indexes and up to 5% of its net assets in
warrants, including options and warrants traded in over-the-counter markets.
Warrants received as dividends on securities held by the Fund and warrants
acquired in units or attached to securities are not included in this
restriction. The Fund may buy and sell financial futures contracts and options
in financial futures contracts. The Fund may purchase or sell puts and calls
on foreign currencies and securities; invest in "when-issued" securities,
"partly paid" securities (securities paid for over a period of time) and
securities of foreign issuers; and may lend its portfolio securities and
borrow money for investment purposes.

The Fund may invest up to 35% of its total assets in debt securities whose
value is not linked to the value of a Hard Asset or a Hard Asset Company and
in other securities of companies which are not Hard Asset Companies. Non-Hard
Asset debt securities include high grade, liquid debt securities of foreign
companies, foreign governments and the U.S. Government and their respective
agencies, instrumentalities, political subdivisions and authorities, as well
as in money market instruments denominated in U.S. dollars or a foreign
currency.

The Adviser believes the Fund may offer a hedge against inflation,
particularly commodity price driven inflation. However, there is no assurance
that rising commodity (or other hard asset) prices will result in higher
earnings or share prices for the Hard Asset Companies in the Fund. Hard Asset
Company equities are affected by many factors, including movements in the
overall stock market. Inflation may cause a decline in the overall stock
market, including the stocks of Hard Asset Companies.

The assets of the Fund invested in fixed income securities, excluding fixed
income securities whose value is linked to the value of a Hard Asset and of
Hard Asset Companies, will consist of securities which are believed by the
Adviser to be high grade, that is rated A or better by S&P or Moody's, Fitch-1
by Fitch or Duff-1 by D&P or if unrated, of comparable quality in the judgment
of the Adviser, subject to the supervision of the Board of Trustees. The
assets of the Fund invested in short-term instruments will consist primarily
of securities rated in the highest category (for example, commercial paper
rated "Prime-1" or "A-1" by Moody's and S&P, respectively) or if unrated, in
instruments that are determined to be of comparable quality in the judgment of
the Adviser, subject to the supervision of the Board of Trustees, or are
insured by foreign or U.S. governments, their agencies or instrumentalities as
to payment of principal and interest. The Fund may invest up to 10% of its
assets in asset-backed securities such as collateralized mortgage obligations
and other mortgage and non-mortgage asset-backed securities. Asset-backed
securities backed by Hard Assets and whose value is expected to be linked to
underlying Hard Assets are excluded from the 10% limitation. See "Risk
Factors--Debt Securities".

Although the Fund will not invest in real estate directly, it may invest up to
50% of its assets in equity securities of real estate investment trusts
("REIT's") and other real estate industry companies or companies with
substantial real estate investments. REITs are pooled investment vehicles
which invest primarily in income producing real estate or real estate related
loans or interests. REIT's and other real estate investments of the Fund are
subject to certain risks. See "Risk Factors--Real Estate Securities."

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<PAGE>

The Fund may invest in South African issuers. Political and social conditions
in South Africa, due to the unsettled political conditions which could recur
in South Africa or its neighboring countries, may pose certain risks to the
Fund's investments. If aggravated by local or international developments, such
risks could have an adverse effect on investments in South Africa, including
the Fund's investments and, under certain conditions, on the liquidity of the
Fund's portfolio and its ability to meet shareholder redemption requests. The
ability of the Fund to invest or hold its investments in South African
companies may be further affected by changes in United States or South African
laws or regulations.

The Fund may, for temporary defensive purposes, make substantial investments
in obligations of the U.S. Government, debt obligations of one or more foreign
governments, certificates of deposit, bankers' acceptances, high grade
commercial paper and repurchase agreements.

GOLD/RESOURCES FUND

OBJECTIVE:

Gold/Resources Fund seeks long-term capital appreciation by investing in
equity and debt securities of companies engaged in the exploration,
development, production and distribution of gold and other natural resources
such as strategic and other metals, minerals, oil, natural gas and coal, and
by investing in gold bullion and coins. The Fund may also invest in equity and
debt securities of companies which themselves invest in companies engaged in
these activities. Although current income may be realized, it is not an
investment objective. It is anticipated that the Fund will realize only a
nominal amount of current income. Normally, the Fund will have at least 65% of
its total assets invested in some combination of securities of companies
engaged in gold mining and natural resources activities.

POLICIES:

The Adviser believes that securities of precious metals and certain natural
resources companies offer an opportunity to protect wealth against eroding
monetary values. History indicates that the policies of many governments,
particularly persistent budget deficits and high rates of growth of monetary
reserves and money supply, have long-term inflationary consequences. During
periods of accelerating inflation the prices of many precious metals equity
securities have risen faster than the rate of inflation and the Adviser
believes that they will continue to do so in the future.

Since the market action of gold mining shares may move against or
independently of the market trend of industrial shares, the addition of such
shares to an overall portfolio may increase the portfolio's return and reduce
overall fluctuations in value. There can be no assurance that the Fund will
achieve its investment objective or that an increased rate of return or a
reduction in value fluctuation will be realized. Thus, an investment in the
Fund's shares should be considered part of an overall investment program
rather than a complete investment program.

Since the Fund may invest substantially all of its assets in securities of
companies engaged in gold mining and natural resources activities, the Fund
may be subject to greater risks and market fluctuations than other investment
companies with 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 securities may be
cyclical in nature.

The five largest gold producing countries are South Africa, the United States,
Australia, CIS (the former U.S.S.R.) and Canada. During normal market
conditions, the Fund expects to invest at least 25% of its assets in
securities of companies in Canada and the United States which are engaged in
gold mining. The Fund has no restrictions on the amount of its assets that may
be invested in securities of foreign issuers. The Fund will not invest in
securities of South African issuers. This is a fundamental policy of the Fund
which may be changed only with shareholder approval. See "Risk Factors."

The Fund may invest up to 5% of assets at the time of purchase in warrants. Of
this 5%, not more than 2% may be invested in warrants that are not listed on
the New York Stock Exchange or American Stock Exchange. The Fund may invest up
to 5% of assets at the time of purchase in preferred stocks and preferred
stocks which may be convertible into common stock. The Fund may buy and sell
financial futures contracts and options on financial futures contracts and may
write, purchase or sell puts and

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<PAGE>

calls on foreign currencies and securities, invest in "when issued"
securities, "partly paid" securities (securities paid for over a period of
time), and securities of foreign issuers; and may buy and sell commodity
futures contracts on precious metals and on precious metals indices and may
write, purchase or sell covered put and call options thereon.

The Fund may invest up to 35% of the value of its total assets in: (a) common
stock of companies not in the gold mining/natural resources areas; (b) high
grade corporate debt securities; and (c) obligations issued or guaranteed by
U.S. or foreign governments and repurchase agreements.

During periods of less favorable economic or market conditions, the Fund may
make substantial investments for temporary defensive purposes in obligations
of the U.S. Government, certificates of deposit, bankers' acceptances, high
grade commercial paper and repurchase agreements.

The Fund has reserved the right to invest up to 10% of its net assets, taken
at market value at the time of investment, in gold bullion and coins. The sole
source of return to the Fund from coins and bullion investments would be from
gains or losses realized on their sale. The Fund incurs custody costs in
storing gold bullion and coins. See "Risk Factors--Precious Metals."

INTERNATIONAL INVESTORS GOLD FUND

OBJECTIVE:

International Investors Gold Fund's primary investment objective is long-term
capital appreciation by investing in common stocks of gold mining companies,
while retaining freedom to take current income into consideration in selecting
investments. Under normal circumstances, the Fund will have at least 65% of
its total assets invested in that industry. However, the Fund may invest up to
100% of its assets or, for temporary defensive purposes, less than 25% of its
assets in that industry.

POLICIES:

The Fund believes securities of gold mining companies offer an opportunity to
achieve long-term capital appreciation and to protect wealth against eroding
monetary values. History indicates that governments of many leading industrial
nations have persistently pursued policies which may have long-term
inflationary consequences. These policies, especially the long-term increases
in government deficits and high rates of growth of monetary reserves and
credit, along with other factors such as increases in wage and benefit
payments exceeding increases in productivity, have been major factors in the
inflationary cycles experienced over the past twenty-five years in the United
States and abroad. During periods of accelerating inflation or currency
uncertainty, worldwide investment demand for gold and securities of gold
mining companies tends to increase and during periods of decelerating
inflation and currency stability, it tends to decrease. Other uncertain and
unstable political and social conditions have also stimulated demand for gold.
The Fund believes that the accelerating growth of monetary reserves and credit
in major industrial markets may have favorable effects on gold and gold mining
share prices.

Since the market action of gold mining shares has tended to move against or
independently of the market trend of industrial shares, the addition of such
shares to an overall portfolio may increase the portfolio's return and reduce
overall fluctuations in value. There can be no assurance that the Fund will
achieve its objectives or that an increased rate of return or a reduction in
value fluctuation will be realized. Thus, an investment in the Fund's shares
should be considered part of an overall investment program rather than a
complete investment program.

The Fund will concentrate at least 25% of its assets invested in common stocks
of gold mining companies. The Fund only concentrates its investments in the
gold mining industry. Additionally, it is the Fund's policy to invest
primarily in securities of

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<PAGE>

companies, wherever organized, whose properties, products or services are
international in scope or substantially in countries outside the United
States, of foreign governments, and in United States Treasury securities.
Under normal conditions, the Fund's policy is to select investments so that
over 50% of the value of its assets will be securities of foreign companies.
However, under unusual conditions, it may temporarily place a substantial
portion (no more than 75%) of its investments in debt or equity securities
issued by foreign companies, debt obligations of one or more foreign
governments and/or United States Treasury securities. Debt securities invested
in by the Fund will consist primarily of securities which are believed by the
Adviser to be high grade, that is, rated A or better by S&P or Moody's or, if
unrated, of comparable quality in the judgment of the Adviser. The Fund may
also enter into repurchase agreements with domestic broker-dealers, banks and
financial institutions in amounts up to an aggregate of 10% of the value of
the Fund's assets. However, the Fund has not in the past year invested, nor
does it currently intend to invest, more than 5% of its assets in repurchase
agreements at any one time.

The five largest gold producing countries are South Africa, the United States,
Australia, CIS (former U.S.S.R.) and Canada. Although investing in securities
of issuers engaged in the mining of gold and in foreign issuers may involve
special considerations and additional investment risks (see "Risk Factors,"
below), management believes that selective investment in such securities may
offer a greater return than shares of domestic industrial issuers.

The Fund may invest up to 12 1/2% of its total assets in gold and silver coins
which are legal tender in the country of issue. The sole source of return to
the Fund from coins and bullion would be from gains or losses realized on
their sale. The Fund incurs custody costs in storing gold bullion and coins.

These policies are fundamental policies which may be changed only by the
affirmative vote of a majority of the outstanding voting securities, as
defined in the Act.

The Fund may, for hedging purposes, invest up to 5% of its total assets, taken
at market value at the time of investment, in call and put options on domestic
and foreign securities and foreign currencies. This policy, adopted by the
Board of Trustees, may be changed without shareholder approval. The Fund may
purchase call options for the purpose of acquiring the underlying securities
for its portfolio. The Fund may purchase put options as a defensive technique
in order to protect against an anticipated decline in the value of securities
held by the Fund. The Fund may also invest in options on foreign currencies
which are either listed on a domestic securities exchange or traded on a
recognized foreign exchange. In addition, the Fund may purchase over-the-
counter foreign currency options from dealers or banks approved by the Trust's
Board of Trustees to hedge securities for which neither domestic nor foreign
exchange-traded options exist.

The Fund, under normal circumstances, will maintain investments in issuers
located in at least three countries other than the United States.

U.S. GOVERNMENT MONEY FUND

OBJECTIVES:

U.S. Government Money Fund seeks safety of principal, daily liquidity and
current income by investing in U.S. Treasury bills, notes, bonds and other
obligations guaranteed by the "full faith and credit" of the U.S. Government.

POLICIES:

Securities guaranteed by the U.S. Government include such obligations as
securities issued by the General Services Administration and the Small
Business Administration. The Fund may from time to time invest, without
limitation, in repurchase

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<PAGE>

agreements collateralized by such securities. As a matter of fundamental
policy, at least 80% of the Fund's total assets will at all times be
maintained in U.S. Government securities and repurchase agreements
collateralized by such securities.

The Fund follows an operating policy in order to maintain, pursuant to an SEC
rule, a constant net asset value of $1.00 per share, although there is no
assurance it can do so on a continuing basis. Although the Fund's fundamental
policy allows it to invest, with respect to 25% of its assets, more than 5% in
any one issuer (other than U.S. Government securities), it may do so only if
the SEC rule is amended in the future. All securities in which the Fund
invests have remaining maturities of 397 days or less at the date of purchase
and have been determined to be of high quality, with minimal credit risk, by
the Adviser acting under the supervision of the Board of Trustees of the
Trust. The Fund also maintains an average-weighted portfolio maturity of 90
days or less.

RISK FACTORS

The risks associated with investing in equity securities and fixed-income
securities include the risk that stock values tend to fluctuate with general
market and economic conditions and fixed-income and short-term instrument
values tend to fluctuate with interest rates and the credit rating of the
issuer. Since shares of the Funds represent an investment in securities with
fluctuating market prices, shareholders should understand that the value of
shares of the Funds will vary as the aggregate value of the Funds' portfolio
securities increases or decreases. Moreover, any dividends paid by the Funds
will increase or decrease in relation to the income received by the Funds from
their investments. In addition, assets of the Funds may be subject to other
special considerations, such as those listed below.

FOREIGN SECURITIES

Except for U.S. Government Money Fund, the Funds may purchase securities of
foreign issuers including foreign investment companies. Investments in foreign
securities may involve a greater degree of risk than investments in domestic
securities due to the possibility of exchange rate fluctuations and exchange
controls, less publicly available information, more volatile or less liquid
securities markets, and the possibility of expropriation, confiscatory
taxation or political, economic or social instability. In addition, some
foreign companies are not generally subject to the same uniform accounting,
auditing and financial reporting standards as are American companies and there
may be less government supervision and regulation of foreign stock exchanges,
brokers and companies.

Foreign securities may be subject to foreign taxes, higher custodian fees,
higher brokerage commissions and higher dividend collection fees which could
reduce the yield or return on such securities, although a shareholder of a
Fund may, subject to certain limitations, be entitled to claim a credit or
deduction for United States federal income tax purposes for his or her
proportionate share of such foreign taxes paid by the Fund. See "Foreign
Currency and Foreign Currency Transactions" below. See also "Taxes" in the
Prospectus and "Risks--Foreign Securities" in the Statement of Additional
Information.

Global Hard Assets Fund may invest in Russian issuers. Investments in Russia
involve the risks associated with other foreign emerging markets. In
particular, settlement, clearing and registration of securities in Russia is
in an underdeveloped state. Ownership of shares (except those held through
depositories that meet the requirements of the Act) is defined according to
entries in the issuer's share register and normally evidenced by extracts from
that register, which have no legal enforceability. Furthermore, share
registration is carried out either by the issuer or registrars located
throughout Russia, which are not necessarily subject to effective government
supervision. As a result, it is possible for the Fund to lose its registration
and thus its ownership of these securities due to fraud, illegal amendment,
negligence or even mere oversight. This system also may cause a delay in the
Fund's sale of Russian securities to a potential purchaser and subject the
Fund to the risk of loss in connection with the insolvency of a registrar. In
addition, while applicable Russian regulations impose liability on registrars
for losses resulting from their errors, it may be difficult for the Fund to
enforce any rights it may have against the registrar or issuer in the event of
the loss of share registration.

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<PAGE>

the right, among others, to inspect the share register and to obtain extracts
of share registers through regular audits. While these procedures reduce the
risk of loss, there can be no assurance that they will be effective. This
limitation may prevent the Fund from investing in the securities of certain
Russian issuers otherwise deemed suitable by the Adviser.

In addition to investing directly in the securities of United States and
foreign issuers, the Funds may also invest in American Depositary Receipts
(ADRs), European Depositary Receipts (EDRs), American Depositary Shares
(ADSs), Global Depositary Shares (GDSs) and securities of foreign investment
funds or trusts (including passive foreign investment companies). See "Foreign
Securities" in the Statement of Additional Information.

EMERGING MARKETS SECURITIES

Investments of the Funds (except for U.S. Government Money Fund) may be made
from time to time in companies in developing countries as well as in developed
countries. Shareholders should be aware that investing in the equity and fixed
income markets of developing countries involves exposure to potentially
unstable governments, economies based on only a few industries and securities
markets which trade a small number of securities and may therefore at times be
illiquid. Securities markets of developing countries tend to be more volatile
than the markets of developed countries. Countries with developing markets may
present the risk of nationalization of businesses, restrictions on foreign
ownership, or prohibitions of repatriation of assets, and may have less
protection of property rights than more developed countries. The economies of
countries with developing markets may be highly vulnerable to changes in local
or global trade conditions, and may suffer from extreme and volatile debt
burdens or inflation rates. Local securities markets may be unable to respond
effectively to increases in trading volume, potentially making prompt
liquidation of substantial holdings difficult or impossible at times.
Securities of issuers located in developing markets may have limited
marketability and may be subject to more abrupt or erratic price movements.
However, such markets have in the past provided the opportunity for higher
rates of return to investors. There is no assurance that these markets will
offer such opportunity in the future. The ability of a Fund to invest or hold
its investments in companies situated in developing countries may be further
affected by changes in United States or such countries' laws or regulations.

Many of these emerging markets limit the percentage of their domestic issuers
that foreign investors, such as the Funds, may own by requiring that such
issuers issue two classes of shares--"local" and "foreign" shares. Foreign
shares may be held only by investors that are not considered nationals or
residents of that country and generally are convertible into local shares.
Local shares are intended for ownership by nationals or residents of the
country. Foreign shares may be subject to various restrictions, including
restrictions on the right to receive dividends and other distributions and on
the right to vote. The market for foreign shares is generally less liquid than
the market for local shares, although in most cases foreign shares may be
converted into local shares. In addition, foreign shares often trade at a
premium to local shares. If the Funds were to own local shares and could not
participate in a stock, warrant or other distribution, the Funds could suffer
material dilution of their interest in that issuer and the value of their
holdings could decline dramatically, causing a loss on their investment.
Generally, it is expected that the Funds will hold foreign shares. The Funds
will only purchase local shares where foreign shares are not available for
purchase. Where permitted, the Funds will attempt to convert local shares to
foreign shares promptly.

A high proportion of the shares of many emerging market issuers may be held by
a limited number of persons and financial institutions. A limited number of
issuers may represent a disproportionately large percentage of market
capitalization and trading value and cause the securities markets to be
susceptible to influence by large investors trading significant blocks of
securities. A Fund's ability to participate fully in the smaller, less liquid
emerging markets may be limited by the policy restricting its investments in
illiquid securities. In addition, limited liquidity may impair a Fund's
ability to liquidate a position at the time and price it wishes to do so. Many
of these stock markets are undergoing a period of growth and change which may
result in trading volatility, and in difficulties in the settlement and
recording of transactions and in interpreting and applying the relevant law
and regulations. Certain developing countries do not have a comprehensive
system of laws, although substantial changes have occurred in this regard in
recent years. Even where adequate law exists in certain developing countries,
it may be impossible to obtain swift and equitable enforcement of such law or
to obtain enforcement of the judgment by a court of another jurisdiction.

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<PAGE>

In addition, stockbrokers and other intermediaries in emerging markets may not
perform as well as their counterparts in the United States and other more
developed securities markets. The prices at which a Fund may acquire
investments may be affected by trading by persons with material non-public
information and by securities transactions by brokers in anticipation of
transactions by a Fund in particular securities.

PRECIOUS METALS

Except for U.S. Government Money Fund, the Funds may invest in precious metal
coins, which have no numismatic value, and bullion. The value of such coins
and bullion is based primarily on their precious metal content. Since such
investments do not generate any investment income, the sole source of return
from such investments would be from gains or losses realized on their sale.
The Fund incurs additional costs in storing gold bullion and coins. These
storage costs are generally higher than custodial costs for securities.
Although subject to substantial fluctuations in value, management believes
such investments could be beneficial to the investment performance of the Fund
and could be a potential hedge against inflation, as well as an investment
with possible growth potential. In addition, at the appropriate time,
investments in precious metal coins or bullion could help to moderate
fluctuations in the Fund's portfolio value, as at times the prices of precious
metals have tended not to fluctuate as widely as shares of issuers engaged in
the mining of such precious metals. In view of the established world market
for precious metals, the daily value of such coins is readily ascertainable
and their liquidity is assured. The Fund will maintain its precious metal
coins and bullion with The Chase Manhattan Bank.

Precious metal trading is a speculative activity and its markets at times
volatile. Prices of precious metals are affected by factors such as cyclical
economic conditions, political events and monetary policies of various
countries. Markets are, therefore, volatile at times and there may be sharp
fluctuations in prices, even during periods of rising prices. Under current
U.S. tax law, the Fund may not receive more than 10% of its yearly income from
gains resulting from the sale of precious metals or any other physical
commodity. The Fund may be required, therefore, to hold its precious metals or
sell them at a loss, or to sell its portfolio securities at a gain, when it
would not otherwise do so for investment reasons.

FOREIGN CURRENCY AND FOREIGN CURRENCY TRANSACTIONS

Changes in currency exchange rates may affect the net asset value and
performance of the Funds (except for U.S. Government Money Fund. There can be
no assurance that the Adviser will be able to anticipate currency fluctuations
in exchange rates accurately. The Funds may invest in a variety of derivatives
and enter into hedging transactions to attempt to moderate the effect of
currency fluctuations. The Funds may purchase and sell put and call options
on, or enter into futures contracts or forward contracts to purchase or sell,
foreign currencies. This may reduce a Fund's losses on a security when a
foreign currency's value changes. The Funds will enter into forward contracts
to duplicate a cash market transaction. See "Swaps," "Options," "Futures
Contracts" and "Hedging and Other Investment Techniques and Strategies" below
and "Foreign Currency Transactions" and "Futures and Options Transactions" in
the Statement of Additional Information.

SWAPS

Global Hard Assets Fund may enter into currency swaps for hedging purposes.
Currency swaps involve the exchange of rights to make or receive payments of
the entire principal value in specified currencies. Since currency swaps are
individually negotiated, the Fund may expect to achieve an acceptable degree
of correlation between its portfolio investments and its currency swap
positions. The entire principal value of a currency swap is subject to the
risk that the other party to the swap will default on its contractual delivery
obligations. Global Hard Assets Fund may also enter into other asset swaps.
Asset swaps are similar to currency swaps in that the performance of a Hard
Asset (e.g., gold) may be "swapped" for another (e.g., energy).

The use of swaps is a highly specialized activity which involves investment
techniques and risks different from those associated with ordinary portfolio
transactions. If the Adviser is incorrect in its forecasts of market values
and currency exchange rates and Hard Assets values, the investment performance
of the Fund would be less favorable than it would have been if this investment
technique were not used. Swaps are generally considered illiquid and will be
aggregated with other illiquid positions for purposes of the limitation on
illiquid investments.

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<PAGE>

OPTIONS

Gold/Resources Fund may for hedging purposes only, invest up to 5% of its
total assets, taken at market value at the time of investment, in premiums on
call and put options (a type of derivative) on domestic and foreign
securities, foreign currencies and stock, bond and commodity indices, and for
hedging purposes only, may invest in call and put options on commodities, and
financial futures contracts and commodity futures contracts.

Global Hard Assets Fund and International Investors may for hedging and other
purposes (such as creating synthetic positions) invest up to 5% of their total
assets, taken at market value at the time of investment, in premiums on call
and put options on domestic and foreign securities, foreign currencies, stock,
bond and commodity indices, commodities, financial futures contracts and
commodity futures contracts. These policies may be changed without shareholder
approval.

The holder of the option has the right to purchase (call option) or sell (put
option) the underlying asset at the exercise price. If the option is not
exercised or sold, it becomes worthless at its expiration date and the premium
payment is lost to the option holder. As the writer of an option, the Fund
receives a premium. The Fund keeps the premium whether or not the option is
exercised. The Fund may write only covered put and call options. A covered
call option, which is a call option with respect to which the Fund owns the
underlying asset, 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 asset or to possible continued holding of an underlying asset
which might otherwise have been sold to protect against depreciation in the
market price of the underlying asset. A covered put option written by the Fund
exposes it during the term of the option to a decline in price of the
underlying asset. 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. Covering a put option sold does
not reduce the risk of loss.

The Funds may invest in options which are either listed on a domestic
securities exchange or traded on a recognized foreign exchange. In addition,
the Funds may purchase or sell over-the-counter options to hedge securities or
currencies for which neither domestic nor foreign exchange-traded options
exist from dealers or banks approved by the Board of Trustees. In general,
exchange traded options are third party contracts with standardized prices and
expiration dates. Over-the-counter options are two party contracts with price
and terms negotiated by the buyer and seller, are generally considered
illiquid and will be subject to the limitation on investments in illiquid
securities.

FUTURES CONTRACTS

Gold/Resources Fund may, for hedging purposes only, buy and sell financial
futures contracts, a type of derivative, which may include security and
interest-rate futures, stock and bond index futures contracts and foreign
currency futures contracts and may also buy and sell commodity futures
contracts which may include futures contracts on gold and other natural
resources and on gold and other natural resources indices.

Global Hard Assets Fund and International Investors Gold Fund may, for hedging
and other purposes (such as creating synthetic positions), buy and sell
financial futures contracts, which may include security and interest-rate
futures, stock and bond index futures contracts, foreign currency futures
contracts and commodity futures contracts including futures contracts on
commodity indices. The Funds will segregate with the custodian, among other
things, cash and/or other liquid securities so that they are not leveraged in
excess of applicable limits. See "Borrowing and Leverage" below.

A security or interest-rate futures contract is an agreement between two
parties to buy or sell a specified security at a set price on a future date.
An index futures contract is an agreement to take or make delivery of an
amount of cash based on the difference between the value of the index at the
beginning and at the end of the contract period. A foreign currency futures
contract is an agreement to buy or sell a specified amount of a currency for a
set price on a future date. A commodity futures contract is an agreement to
take or make delivery of a specified amount of a commodity, such as gold, at a
set price on a future date.

A Fund will not commit more than 5% of its total assets to initial margin
deposits on futures contracts and premiums on options on futures contracts,
except that margin deposits for futures positions entered into for BONA FIDE
hedging purposes, as such

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<PAGE>

term is defined in the Commodity Exchange Act, are excluded from the 5%
limitation. As the value of the underlying asset fluctuates, either party to
the contract is required to make additional margin payments, known as
"variation margin," to cover any additional obligation it may have under the
contract.

The Funds may write, purchase or sell put and call options on financial
futures contracts and, in addition, Global Hard Assets Fund may write,
purchase or sell put and call options on commodity futures contracts. The
Funds may write only covered put and call options. An option on a futures
contract gives the purchaser the right, but not the obligation, in return for
the premium paid, to assume a position in a specified underlying futures
contract (which position may be a long or short position) at a specified
exercise price during the option exercise period. The writer of an option is
obligated to assume a position in a specified futures contract if the option
is exercised.

In establishing a position in a futures contract, cash or high quality
securities equal in value to the current value of the underlying securities
less the margin requirement will be segregated, as may be required, with the
Fund's Custodian to ensure that the Fund's position is unleveraged. This
segregated account will be marked-to-market daily to reflect changes in the
value of the underlying futures contract. Certain exchanges do not permit
trading in particular commodities at prices in excess of daily price
fluctuation limits set by the exchange, and thus Global Hard Assets Fund could
be prevented from liquidating its positions and thus be subjected to losses.
Trading in futures contracts traded on foreign commodity exchanges may be
subject to the same or similar risks as trading in foreign securities. See
"Risk Factors--Foreign Securities" above and "Futures and Options
Transactions" in the Statement of Additional Information.

HEDGING AND OTHER INVESTMENT TECHNIQUES AND STRATEGIES

Options and futures contracts can be used by the Funds (except for U.S
Government Money Fund) as part of various hedging techniques and strategies.

When Global Hard Assets Fund intends to acquire securities or gold bullion or
coins for its portfolio, the Fund may use call options or futures contracts as
a means of fixing the price of the security (or gold) it intends to purchase
at the exercise price (in the case of an option) or contract price (in the
case of a futures contract). An increase in the acquisition cost would be
offset, in whole or part, by a gain on the option or futures contract. Options
and futures contracts requiring delivery of a security may also be useful to
the Fund in purchasing a large block of securities that would be more
difficult to acquire by direct market purchases. If the Fund holds a call
option rather than the underlying security itself, the Fund is partially
protected from any unexpected decline in the market price of the underlying
security and in such event could allow the call option to expire, incurring a
loss only to the extent of the premium paid for the option. Using a futures
contract would not offer such partial protection against market declines and
the Fund would experience a loss as if it had owned the underlying security.

To protect against anticipated declines in the value of the Funds' investment
holdings, the Funds may use options, forward and futures contracts, structured
notes (Global Hard Assets Fund), swaps and similar investments (commonly
referred to as derivatives) as a defensive technique to protect the value of
an asset the Adviser deems desirable to hold for tax or other considerations
or for investment reasons. If the anticipated decline in the value of the
asset occurs, it would be offset, in whole or part, by a gain on the futures
contract, put option or swap. The premium paid for the put option would reduce
any capital gain otherwise available for distribution when the security is
eventually sold.

The Funds may hedge against changes in the value of one currency in relation
to another currency in which portfolio securities of the Funds may be
denominated. A Fund may employ hedging strategies with options and futures
contracts on foreign currencies before the Fund purchases a foreign security,
during the period the Fund holds the foreign security, or between the date the
foreign security is purchased or sold and the date on which payment therefor
is made or received. Hedging against a change in the value of a foreign
currency in the foregoing manner does not eliminate fluctuations in the prices
of portfolio
securities or prevent losses if the prices of such securities decline.
Furthermore, such hedging transactions reduce or preclude the opportunity for
gain if the value of the hedged currency should change relative to the other
currency. Last, when the Funds use options and futures in anticipation of the
purchase of a portfolio security to hedge against adverse movements in the
security's underlying currency, but the purchase of such security is
subsequently deemed undesirable, the Fund may incur a gain or loss on the
option or futures contract.

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<PAGE>

In those situations where foreign currency options or futures contracts, or
options on futures contracts may not be readily purchased (or where such
options or contracts may be deemed illiquid) in the primary currency in which
the hedge is desired, the hedge may be obtained by purchasing or selling an
option, or futures contract or forward contract on a secondary currency. The
secondary currency will be selected based upon the Adviser's belief that there
exists a significant correlation between the exchange rate movements of the
primary and secondary currencies. This strategy may be employed with respect
to other securities and assets in which the Funds may invest. However, there
can be no assurances that, in the case of foreign currencies, the exchange
rate or the primary and secondary currencies will move as anticipated or, in
the case of other securities, or generally, that the relationship between the
hedged security and the hedging instrument will continue. If they do not move
as anticipated or the relationship does not continue, a loss may result to the
Funds on their investments in the hedging positions.

The Funds may also use futures contracts and options, forward contracts and/or
swaps as part of various investment techniques and strategies, such as
creating non-speculative "synthetic" positions (covered by segregation of
liquid assets) or implementing "cross-hedging" strategies. A "synthetic
position" is the duplication of a cash market transaction when deemed
advantageous by the Adviser for cost, liquidity or transactional efficiency
reasons. A cash market transaction is the purchase or sale of a security or
other asset for cash. "Cross-hedging" involves the use of one currency to
hedge against the decline in the value of another currency. The use of such
instruments as described herein involves several risks. First, there can be no
assurance that the prices of such instruments and the hedged security or the
cash market position will move as anticipated. If
prices do not move as anticipated, a Fund may incur a loss on its investment,
may not achieve the hedging protection it anticipated and/or incur a loss
greater than if it had entered into a cash market position. Second,
investments in such instruments may reduce the gains which would otherwise be
realized from the sale of the underlying securities or assets which are being
hedged. Third, positions in such instruments can be closed out only on an
exchange that provides a market for those instruments. There can be no
assurance that such a market will exist for a particular futures contract or
option. If the Fund cannot close out an exchange traded futures contract or
option which it holds, it would have to perform its contract obligation or
exercise its option to realize any profit and would incur transaction costs on
the sale of the underlying assets.

Over-the-counter options and other investments which do not have readily
available market quotations, are subject to the limitation on investments in
illiquid securities.

Global Hard Assets Fund may invest in commercial paper which is indexed to
certain specific foreign currency exchange rates. The terms of such commercial
paper provide that its principal amount is adjusted upwards or downwards (but
not below zero) at maturity to reflect changes in the exchange rate between
two currencies while the obligation is outstanding. The Fund will purchase
such commercial paper with the currency in which it is denominated and, at
maturity, will receive interest and principal payments thereon in that
currency, but the amount or principal payable by the issuer at maturity will
change in proportion to the change (if any) in the exchange rate between the
two specified currencies between the date the instrument is issued and the
date the instrument matures. While such commercial paper entails the risk of
loss of principal, the potential for realizing gains as a result of changes in
foreign currency exchange rates enables the Fund to hedge or cross-hedge
against a decline in the U.S. dollar value of investments denominated in
foreign currencies while providing an attractive money market rate of return.
The Fund will purchase such commercial paper for hedging purposes only, not
for speculation. The Fund will establish a segregated account with respect to
its investments in this type of commercial paper and will maintain in such
account cash not available for investment or U.S. Government securities or
other liquid high quality securities having a value equal to the aggregate
principal amount of outstanding commercial paper of this type.

See "Futures and Options Transactions" in the Statement of Additional
Information for further information about futures contracts and options,
including tax effects and risks to the Funds.

INDEXED SECURITIES AND STRUCTURED NOTES

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<PAGE>

and/or principal redemption are linked to the performance of an underlying
asset. Indexed securities may be positively or negatively indexed (i.e., their
value may increase or decrease if the underlying instrument appreciates).
Indexed securities may have return characteristics similar to direct
investments in the underlying instrument or to one or more options on the
underlying instrument. Indexed securities may be more volatile than the
underlying instrument itself, and present many of the same risks as investing
in futures and options. Indexed securities are also subject to credit risks
associated with the issuer of the security with respect to both principal and
interest. Only securities linked to one or more non-agricultural commodities
or commodity indices will be considered a Hard Asset Security.

Indexed securities may be publicly traded or may be two-party contracts (such
two-party agreements are referred to here collectively as structured notes).
When the Fund purchases a structured note, a type of derivative, it will make
a payment of principal to the counterparty. Some structured notes have a
guaranteed repayment of principal while others place a portion (or all) of the
principal at risk. The Fund will purchase structured notes only from
counterparties rated A or better by S&P, Moody's or another nationally
recognized statistical rating organization. The Adviser will monitor the
liquidity of structured notes under the supervision of the Board of Trustees
and notes determined to be illiquid will be aggregated with other illiquid
securities and subject to the Fund's limitation on illiquid securities.

DEBT SECURITIES

The market value of debt securities generally varies in response to changes in
interest rates, the financial condition of each issuer and the value of a Hard
Asset if linked to the value of a Hard Asset. These changes in market value
will be reflected in the Fund's net asset value.

Debt securities with similar maturities may have different yields, depending
upon several factors, including the relative financial condition of the
issuers. A description of debt securities ratings is contained in the Appendix
to the Statement of Additional Information. High grade means a rating of A or
better by Moody's or S&P's, or of comparable quality in the judgment of the
Adviser if no rating has been given by either service. Many securities of
foreign issuers are not rated by these services. Therefore, the selection of
such issuers depends to a large extent on the credit analysis performed by the
Adviser.

New issues of certain debt securities are often offered on a when-issued
basis, that is, the payment obligation and the interest rate are fixed at the
time the buyer enters into the commitment, but delivery and payment for the
securities normally take place after the date of the commitment to purchase.
The value of when-issued securities may vary prior to and after delivery
depending on market conditions and changes in interest rate levels. However,
the Funds will not accrue any income on these securities prior to delivery.
The Funds will maintain in a segregated account with their Custodian an amount
of cash or high quality securities equal (on a daily marked-to-market basis)
to the amount of its commitment to purchase the when-issued securities. See
"Debt Securities" in the Statement of Additional Information.

LOW RATED OR UNRATED DEBT SECURITIES

Global Hard Assets Fund may invest in lower quality, high-yielding debt
securities, including high-yielding foreign debt securities (commonly referred
to as "junk bonds") which are (i) rated as low as CCC by S&P or Caa by Moody's
or (ii) unrated. Lower rated and unrated debt securities have some "equity"
characteristics and are considered speculative and involve greater risk of
loss than higher rated debt securities and are more sensitive to changes in
the financial condition of their issuers and to price fluctuations in response
to changes in interest rates. Lower rated debt securities present a
significantly greater risk of default than do higher rated securities and, in
times of poor business or economic conditions, the Fund may lose interest
and/or principal on such securities. The Fund will not invest more than 25% of
its assets in debt securities rated below BBB by S&P or Baa by Moody's.

REAL ESTATE SECURITIES

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<PAGE>

real estate investments. The Fund is therefore subject to certain risks
associated with the real estate industry in general and REITs in particular.
REITs are subject to interest rate risk, heavy cash flow dependency, default
by borrowers, self-liquidation and the possibilities of failing to qualify for
the exemption from tax for distributed income under the Code. See "Real Estate
Securities" in the Statement of Additional Information.

ASSET-BACKED SECURITIES

Global Hard Assets Fund may invest in asset-backed securities. Asset-backed
securities represent interests in pools of consumer loans (generally unrelated
to mortgage loans) and most often are structured as pass-through securities.
Interest and principal payments ultimately depend on payment of the underlying
loans, although the securities may be supported by letters of credit or other
credit enhancements. The value of asset-backed securities may also depend on
the creditworthiness of the servicing agent for the loan pool, the originator
of the loans, or the financial institution providing the credit enhancement.

COLLATERALIZED MORTGAGE OBLIGATIONS ("CMOS")

Global Hard Assets Fund may invest in CMOs. CMOs are fixed-income securities
which are collateralized by pools of mortgage loans created by commercial
banks, savings and loan institutions, private mortgage insurance companies and
mortgage bankers. In effect, CMOs "pass through" the monthly payments made by
individual borrowers on their mortgage loans. Prepayments of the mortgages
included in the mortgage pool may influence the yield of the CMO. In addition,
prepayments usually increase when interest rates are decreasing, thereby
decreasing the life of the pool. As a result, reinvestment of prepayments may
be at a lower rate than that on the original CMO. Timely payment of interest
and principal (but not the market value) of these pools is supported by
various forms of insurance or guarantees. The Fund may buy CMOs
without insurance or guarantees if, in the opinion of the Adviser, the pooler
is creditworthy or if rated A or better by S&P or Moody's. S&P and Moody's
assign the same rating classifications to CMOs as they do to bonds. In the
event that any CMOs are determined to be investment companies, the Fund will
be subject to certain limitations under the Act.

PARTLY PAID SECURITIES

Partly paid securities are securities for which the purchaser pays on an
installment basis. A partly paid security trades net of outstanding
installment payments. For this reason, the obligation to make payment is
usually transferred upon sale of the security. Fluctuations in the market
value do not affect the obligation to make installment payments when due.
Partly paid securities become fully paid securities upon payment of the final
installment. Until that time, the issuer of a partly paid security typically
may retain the right to restrict the voting and dividend rights of the
security and to impose restrictions and penalties in the event of a
purchaser's default.

LOANS OF PORTFOLIO SECURITIES

Global Hard Assets Fund may lend to broker-dealers portfolio securities with
an aggregate market value of up to one-third of its total assets. Such loans
must be secured by collateral (consisting of any combination of cash, U.S.
Government securities or irrevocable letters of credit) in an amount at least
equal (on a daily marked-to-market basis) to the current market value of the
securities loaned. The Fund may terminate the loans at any time and obtain the
return of the securities loaned within one business day. The Fund will
continue to receive any interest or dividends paid on the loaned securities
and will continue to have voting rights with respect to the securities. The
Fund might experience risk of loss if the broker-dealer with which it has
engaged in a portfolio loan transaction breaches its agreement with the Fund.

BORROWING

Gold/Resources Fund may borrow up to 10% of the value of its total assets
(valued at cost) for temporary or emergency purposes. International Investors
Gold Fund may so borrow temporarily for emergency purposes. Global Hard Assets
Fund may borrow up to 30% of the value of its net assets to increase its
holdings of portfolio securities. Under the Act, each Fund is required to
maintain continuous asset coverage of 300% with respect to such borrowings and
to sell (within three days)

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<PAGE>

sufficient portfolio holdings to restore such coverage if it should decline to
less than 300% even if the sale would be disadvantageous from an investment
standpoint. Leveraging by means of borrowing will exaggerate the effect of any
increase or decrease in the value of portfolio securities on a Fund's net
asset value, and money borrowed will be subject to interest and other costs
which may or may not exceed the investment return received from the securities
purchased with borrowed funds. It is anticipated that such borrowings would be
pursuant to a negotiated loan agreement with a commercial bank or other
institutional lender.

DIRECT INVESTMENTS

Global Hard Assets Fund may invest up to 10% of its total assets in direct
investments. For more information, see "Risk Factors--Direct Investments" in
the Statement of Additional Information.

Direct investments include the private purchase from an enterprise of any
equity interest in the enterprise in the form of shares of common stock or
equity interests in trusts, partnerships, joint ventures or similar
enterprises, and (ii) the purchase of such an equity interest in an enterprise
from a principal investor in the enterprise. In each case a Fund will, at the
time of making the investment, enter into a shareholder or similar agreement
with the enterprise and one or more other holders of equity interests in the
enterprise. The Adviser anticipates that these agreements will, in appropriate
circumstances, provide for the Fund to appoint a representative to the board
of directors or similar body of the enterprise and for eventual disposition of
the Fund's investment in the enterprise. Such a representative of the Fund
will be expected to provide the Fund with the ability to monitor its
investment and protect its rights in the investment and will not be appointed
for the purpose of exercising management or control of the enterprise.

Certain of the Fund's direct investments will include investments in smaller,
less seasoned companies. These companies may have limited product lines,
markets or financial resources, or they may be dependent on a limited
management group. The Fund does not anticipate making direct investments in
start-up operations, although it is expected that in some cases the Fund's
direct investments will fund new operations for an enterprise which itself is
engaged in similar operations or is affiliated with an organization that is
engaged in similar operations.

Direct investments may involve a high degree of business and financial risk
that can result in substantial losses. Because of the absence of any public
trading market for these investments, the Fund may take longer to liquidate
these positions than would be the case for publicly traded securities.
Although these securities may be resold in privately negotiated transactions,
the prices on these sales could be less than those originally paid by the
Fund. Furthermore, issuers whose securities are not publicly traded may not be
subject to public disclosure and other investor protection requirements
applicable to publicly traded securities. If such securities are required to
be registered under the securities laws of one or more jurisdictions before
being resold, the Fund may be required to bear the expenses of registration.
In addition, in the event the Fund sells unlisted foreign securities, any
capital gains realized on such transactions may be subject to higher rates of
taxation than taxes payable on the sale of listed securities. Direct
investments are generally considered illiquid and will be aggregated with
other illiquid investments for purposes of the limitation on illiquid
investments. Direct investments can be difficult to price and will be valued
at fair value as determined in good faith by the Board of Trustees. The
pricing of direct investments may not be reflective of the price at which
these assets could be liquidated.

SHORT SALES

Global Hard Assets Fund may make short sales of equity securities. A short
sale occurs when the Fund sells a security which it does not own by borrowing
it from a broker. In the event that the value of the security that the Fund
sold short declines, the Fund will gain as it repurchases the security in the
market at the lower price. If the price of the security increases, the Fund
will suffer a loss as it will have to repurchase the security at the higher
price. Short sales may incur higher transaction costs than regular securities
transactions.

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<PAGE>

the market value of the securities sold short at the time they were sold short
and (ii) any cash, U.S. Government securities or other liquid, high-quality
securities required to be deposited as collateral with the broker in
connection with the short sale (not including the proceeds from the short
sale). Such segregated account will be marked to market daily, so that (i) the
amount in the segregated account plus the amount deposited with the broker as
collateral equals the current market value of the securities sold short and
(ii) in no event will the amount in the segregated account plus the amount
deposited with the broker as collateral fall below the original value of the
securities at the time they were sold short. The total value of the assets
deposited as collateral with the broker and deposited in the segregated
account will not exceed 50% of the Fund's net assets. The Fund's ability to
engage in short sales may be limited by the requirements of current U.S. tax
law that the Fund derive less than 30% of its gross income from the sale or
other disposition of securities held less than three months. Securities sold
short and then repurchased, regardless of the actual time between the two
transactions, are considered to have been held for less than three months.

REPURCHASE AGREEMENTS

Each of the Funds may engage in repurchase agreement transactions. In a
repurchase agreement, a Fund acquires a security for a relatively short
period, and simultaneously agrees to sell it back at an agreed upon price and
time. The agreement results in a fixed rate of return that is not subject to
market fluctuations during the Fund's holding period. The Funds will enter
into repurchase agreements with respect to securities in which they may invest
with member banks of the Federal Reserve System or certain non-bank dealers.
Under each repurchase agreement the selling institution will be required to
maintain the value of the securities subject to the repurchase agreement at
not less than their repurchase price. Repurchase agreements could involve
certain risks in the event of default or insolvency of the other party. The
Adviser, acting under the supervision of the Board of Trustees, reviews the
creditworthiness of those non-bank dealers with which the Funds enter into
repurchase agreements to evaluate these risks. See "Repurchase Agreements" in
the Statement of Additional Information.

LIMITING INVESTMENT RISKS

While an investment in any of the Funds is not without risk, the Funds follow
certain policies in managing their investments which may help to reduce risk.
Certain of these policies are deemed fundamental and may be changed as to a
Fund only with the approval of the holders of a majority of outstanding
shares. Such majority is defined as the vote of the lesser of (i) 67% or more
of the outstanding shares present at a meeting, if the holders of more than
50% of outstanding shares are present in person or by proxy, or (ii) more than
50% of outstanding shares. Certain of the more significant investment
restrictions applicable to the Funds are set forth below. Additional
restrictions are described in the Statement of Additional Information.

INTERNATIONAL INVESTORS GOLD FUND

The following apply to International Investors Gold Fund only:

1. The Fund will not invest more than 5% of the value of its total assets
in securities of any one issuer (other than the United States
Government).

2. The Fund will not acquire more than 10% of the outstanding or voting
securities of any one company.

3. The Fund will not invest in the securities of investment companies,
except by purchases in the open market where no commission or profit to
a sponsor or dealer results from such purchases (other than the
customary brokers' commissions) and then not in excess of 10% of total
assets, or except when such purchases, though not made in the open
market, are part of a plan of merger or consolidation.

4. The Fund will not invest more than 5% of total assets in securities of
companies which, including predecessors, do not have a record of at
least three years of continuous operation.

5. The Fund will not borrow money, except temporarily for extraordinary
purposes, in which case such borrowings shall not exceed 10% of total
assets (valued at cost).

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GLOBAL HARD ASSETS FUND, GOLD/RESOURCES FUND AND U.S. GOVERNMENT MONEY FUND

1. Gold/Resources Fund and U.S. Government Money Fund will not invest more
than 10% and Global Hard Assets Fund will not invest more than 15% of
the value of their net assets in securities which are not readily
marketable (including repurchase agreements which mature in more than
seven days and over-the-counter options and over-the-counter foreign
currency options).

2. The Funds under this heading will not purchase more than 10% of any
class of securities of a company, including more than 10% of its
outstanding voting securities, except that Global Hard Assets Fund may
purchase more than 10% of any non-voting class of securities;

3. The Funds under this heading will not invest more than 10% of their
total assets in securities of other investment companies.

4. Gold/Resources Fund and U.S. Government Money Fund may borrow money for
temporary or emergency purposes in amounts not exceeding 10% of the
value of their total assets valued at cost. These Funds will not
purchase securities for investment while borrowings equaling 5% or more
of their total assets are outstanding.

Further information regarding these and other of the Funds' investment
policies and restrictions is provided in the Statement of Additional
Information.

PURCHASE OF SHARES

Shares of the Funds may be purchased either by (1) ordering the shares through
a "Broker" or "Agent," as defined below, and forwarding a completed
Application or brokerage firm settlement instructions with payment (except for
Investors Fiduciary Trust Company fiduciary retirement accounts, which must be
purchased direct), or (2) completing an Application and mailing it with
payment to the Funds' Transfer Agent and Dividend Paying Agent, DST Systems,
Inc., ("DST"). Payment, made payable to the Van Eck Funds, must be in U.S.
Dollars. Third party checks will not be accepted. Checks drawn on a foreign
bank will not be accepted unless provisions are made for payment in U.S.
Dollars through a U.S. bank. Each Fund reserves the right to reject any
purchase order.

Initial purchases must be in the amount of $1,000 or more per account.
Subsequent purchases must be in the amount of $100 or more. Either minimum may
be reduced or waived by the Funds for pension or retirement plans, for
investment plans calling for periodic investments in shares of the Funds, for
sponsored payroll deduction plans, for split funding or other insurance
purchase plans or in other appropriate circumstances.

Shares of the Funds are sold at the public offering price (net asset value
plus applicable sales charge) next computed after receipt of a purchase order
in proper form, as follows. Generally, orders must be received by DST prior to
the close of business on the New York Stock Exchange, currently 4:00 p.m.,
Eastern Time. Orders mailed to DST, addressed to P.O. Box 418407, Kansas City,
Missouri, 64141, must be deposited in the DST P.O. Box prior to 11:30 a.m.,
Eastern Time, in order to receive the price computed that day. If a
shareholder desires to guarantee a given date of receipt, the order may be
mailed by overnight courier to DST at 1004 Baltimore, 4th Fl., Kansas City,
Missouri, 64105. Do not send mail to DST marked personal and/or confidential
as this may delay the processing of the order. If the Broker or Agent receives
the purchase order before the close of trading on the New York Stock Exchange
and transmits it to the Distributor by 5:00 P.M., Eastern Time, or to DST
through the facilities of the National Securities Clearing Corporation by 7:00
P.M., Eastern Time, the investor will receive the price of that day. If a
Broker or Agent receives an investor's order before the close of trading on
the New York Stock Exchange and fails to transmit it to the Distributor by the
above times, any resulting loss will be borne by the Broker or Agent. Orders
received after the above times will be processed on the next business day.

The assets of the Funds (except U.S. Government Money Fund) are valued at
market or, if market value is not ascertainable, at fair value as determined
in good faith by the Board of Trustees. The assets of U.S. Government Money
Fund are valued on the basis of amortized cost, which involves valuing a
portfolio security at its cost initially and, thereafter, assuming a constant

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amortization to maturity of any discount or premium, regardless of the impact
of fluctuating interest rates on the market value of the security. U.S.
Government Money Fund attempts to maintain a constant net asset value of $1.00
per share; however, there can be no assurance that the Fund will be able to do
so. The Funds may invest in securities or futures contracts listed or traded
on foreign exchanges which trade on Saturdays or other customary United States
national business holidays (i.e., days on which the Funds are not open for
business), and consequently, the net asset values of shares of the Funds may
be significantly affected on days when an investor has no access to the Funds.

An investor who wishes to purchase shares of more than one Fund must complete
separate Applications for each Fund and remit separate checks to each Fund. If
an investor fails to indicate the Fund to be purchased, the check will be
applied to a purchase of the U.S. Government Money Fund and the investor may
then exchange at current price into the desired Fund.

Certificates for shares of the Funds are issued only upon specific request to
DST. Due to the conversion feature, certificates are not recommended for Class
B or Class C shareholders.

Van Eck Securities Corporation, 99 Park Avenue, New York, New York 10016,
which is a wholly-owned subsidiary of the Adviser, serves as distributor of
the Funds' shares and has entered into Selling Group Agreements with selected
broker-dealers which have agreed to solicit purchasers for shares of the Funds
("Brokers") and into Selling Agency Agreements with banks or their
subsidiaries which have agreed to act as agent for their customers in the
purchase of shares of the Funds ("Agents"). A bank may be required to register
as a broker-dealer pursuant to state law.

ALTERNATIVE PURCHASE ARRANGEMENTS

Shares of the Funds (except for U.S. Government Money Fund) may be purchased
under any one or all of the following arrangements:

(i) with an initial sales charge imposed at the time of purchase ("Class A
shares") ALL FUNDS;

(ii) with a contingent deferred sales charge imposed at the time of
redemption if such redemption is within six years of the initial purchase
("Class B shares") GLOBAL HARD ASSETS FUND ONLY; OR

(iii) with a redemption charge imposed at the time of redemption if such
redemption is within 12 months of the initial purchase ("Class C shares")
GLOBAL HARD ASSETS FUND ONLY.

With respect to each class of shares, an ongoing asset-based fee for
distribution and services (12b-1 fee) is charged. The distribution services
fee applicable to Class B and C shares will be higher than that applicable to
Class A shares.

The alternative purchase arrangements permit an investor to choose the method
of purchasing shares that is more beneficial given the amount of the purchase,
the length of time the investor expects to hold the shares, and other
circumstances. Investors should consider whether, during the anticipated life
of their investment in the Fund, the accumulated distribution services fee
and, in the case of the Class B shares, the contingent deferred sale charge or
in the case of the Class C shares, the redemption charge would be less than
the initial sales charge and accumulated distribution services fee on Class A
shares. To assist investors in making this determination, the table under the
caption "Transaction Data" on page 3 sets forth examples of the charges
applicable to each class of shares. In this regard, Class A shares will
normally be more beneficial to the investor who qualifies for a reduced
initial sales charge. It is the sole responsibility of the investor, and his
or her Broker or Agent, to determine which sales charge alternative is most
advantageous.

Class A shares incur an initial sales charge when they are purchased and enjoy
the benefit of not being subject to any sales or redemption charge when they
are redeemed. Certain purchases of Class A shares qualify for reduced initial
sales charges. Class A shares are subject to an ongoing distribution and
services fee at an annual rate of up to .50% of the Fund's aggregate daily net
assets attributable to the Class A shares (See "Plan of Distribution").
Because Class A shares are subject to a lower distribution and services fee,
they pay correspondingly higher dividends per share and can be expected to
have a higher return per share than Class B and C shares. However, because
initial sales charges are deducted at the time of purchase, investors do not
have all their money invested initially and, therefore, would initially own
fewer shares. Investors not qualifying for reduced initial sales charges who
expect to maintain their investment for an extended period of time might
consider purchasing Class A

24
<PAGE>

shares because the accumulated distribution charges on Class B or C shares may
exceed the initial sales charge on Class A shares during the life of the
investment.

Class B and Class C shares do not incur a sales charge when they are
purchased, but Class B shares are subject to a sales charge if they are
redeemed within six years of purchase and Class C shares are subject to a
redemption charge if they are redeemed within one year of purchase. Class B
and Class C shares are subject to an ongoing distribution and services fee at
an annual rate of up to 1% of the Fund's aggregate average daily net assets
attributable to that Class of shares (see "Plan of Distribution"). Class B and
Class C shares enjoy the benefit of permitting all of the investor's dollars
to work from the time the investment is made. The higher ongoing distribution
and services fee paid by Class B and Class C shares will cause such shares to
have a higher expense ratio, pay lower dividends and have a lower return than
those of Class A shares. Class B and Class C shares will automatically convert
to Class A shares eight years after the end of the calendar month in which the
shareholder's order to purchase was accepted, in the circumstances and subject
to the qualifications described in this Prospectus. The purpose of the
conversion feature is to relieve the holder of the Class B and Class C shares
that have been outstanding for a period of time sufficient for the Distributor
to have been compensated for distribution expenses from the continuing burden
of such distribution-related expenses over an open-ended period of time. See
"Conversion Feature," below. Some investors might determine that it would be
more advantageous to purchase Class B or C shares in order to have all their
money invested initially, although remaining subject to higher distribution
charges and, in the case of Class B shares, for a six-year period being
subject to a contingent deferred sales charge, or, in the case of Class C
shares, for a one-year period being subject to a redemption charge.

The distribution expenses incurred by the Fund or its Distributor in
connection with the sale of Fund shares will be paid, in the case of Class B
and Class C shares, from the proceeds of the ongoing distribution and services
fee and the contingent deferred sales or redemption charge incurred upon
redemption within applicable time. (See tables of sales charges on pages 26
and 27.) Sales personnel of Brokers and Agents distributing the Fund's shares
may receive differing compensation from selling Class A, Class B or Class C
shares. Investors should understand that the purpose and function of the
contingent deferred sales charge or redemption charge and ongoing distribution
and services fees with respect to the Class B and Class C shares are the same
as those of the initial sales charge and ongoing distribution and services fee
with respect to the Class A shares.

Conversion Feature. Eight years after the end of the month in which the
shareholder's order to purchase Class B or Class C shares was accepted, such
shares will automatically convert to Class A shares and will no longer be
subject to the higher distribution and services fees. This conversion will be
on the basis of the relative net asset values of the two Classes, without the
imposition of any sales load, fee or other charge. The purpose of the
conversion feature is to relieve the holder of Class B and Class C shares from
most of the burden of distribution-related expenses for shares that have been
outstanding for a period of time sufficient for the Fund or its Distributor to
have been compensated for such expenses.

For purposes of conversion to Class A shares, shares purchased through the
reinvestment of dividends and distributions paid in respect to Class B or
Class C shares in a shareholder's Fund account will convert in a proportionate
amount to the non-reinvestment shares converted.

The conversion of Class B or Class C shares to Class A shares is subject to
the continuing availability of an opinion of counsel to the effect that (i)
the assessment of the higher distribution services fee and transfer agency
costs with respect to Class B or Class C shares does not result in the Fund's
dividends or distributions constituting "preferential dividends" under the
Internal Revenue Code of 1986, as amended (the "Code"), and (ii) the
conversion of shares does not constitute a taxable event under federal income
tax law. The conversion of Class B or Class C shares to Class A shares may be
suspended if such an opinion is no longer available. In that event, no further
conversions of Class B or Class C shares would occur, and shares might
continue to be subject to the higher distribution services fee for an
indefinite period which may extend beyond the period ending eight years after
the end of the month in which the shareholder's order to purchase was
accepted.

SALES CHARGES, DISTRIBUTION AND SERVICE FEES

Sales charges on purchases of shares of each of the Funds are set forth in the
tables below. Each Fund imposes a 12b-1 distribution and services fee. Class A
shares of Global Hard Assets Fund have a 12b-1 fee of .50% of average daily
net assets

25
<PAGE>

per annum. Shares of Gold/Resources Fund and U.S. Government Money Fund have a
12b-1 fee of .25 of 1% of average daily net assets per annum. International
Investors Gold Fund has no 12b-1 fee. All or a portion of these fees may be
paid to banks, brokers and dealers for their shareholder servicing, promotion
or distribution activities, as determined from time to time by the Funds.

Shareholders in Class B and Class C Funds should be aware that dividends
reinvested in new shares of the Fund will continue to be assessed the full
12b-1 fee, including that portion which is retained by the Distributor. Each
Fund's Class B and/or Class C shares imposes a 12b-1 fee of 1% of average
daily net assets. Of the 1% paid by the Fund, a portion will be retained by
the Distributor and up to .75 of 1% may be paid to Brokers and Agents for
distribution and up to .25 of 1% for servicing. The portion retained by the
Distributor is in payment for distribution expenses. The Distributor may vary
the portion retained by it from time to time, but the amount payable by the
Fund will not exceed 1%. The Distributor will monitor payments under the Plans
and will reduce such payments or take such other steps as may be necessary,
including payments from its own resources, to assure that Plan payments will
be consistent with the applicable rules of the National Association of
Securities Dealers, Inc.

THERE IS NO SALES CHARGE ON PURCHASES OF U.S. GOVERNMENT MONEY FUND. However,
the Fund pays the Distributor a fee for promotion and distribution services.
See "Plan of Distribution."

CLASS A
(GOLD/RESOURCES FUND AND INTERNATIONAL INVESTORS GOLD FUND)

<TABLE>
<CAPTION>
SALES CHARGE AS A DISCOUNT TO
PERCENTAGE OF BROKER OR AGENTS
------------------- AS A PERCENTAGE
OFFERING NET AMOUNT OF THE
DOLLAR AMOUNT OF PURCHASE PRICE INVESTED OFFERING PRICE*
- ------------------------- -------- ---------- ----------------
<S> <C> <C> <C>
Less than $25,000.......................... 5.75% 6.1% 4.75%
$25,000 to less than $50,000............... 5.00% 5.3% 4.00%
$50,000 to less than $100,000.............. 4.50% 4.7% 3.60%
$100,000 to less than $250,000............. 3.00% 3.1% 2.40%
$250,000 to less than $500,000............. 2.50% 2.6% 2.00%
$500,000 to less than $1,000,000........... 2.00% 2.0% 1.60%
$1,000,000 and over........................ None**
</TABLE>

(GLOBAL HARD ASSETS FUND)

<TABLE>
<CAPTION>
SALES CHARGE AS A DISCOUNT TO
PERCENTAGE OF BROKERS OR AGENTS
------------------- AS A PERCENTAGE
OFFERING NET AMOUNT OF THE
DOLLAR AMOUNT OF PURCHASE PRICE INVESTED OFFERING PRICE*
- ------------------------- -------- ---------- -----------------
<S> <C> <C> <C>
Less than $100,000........................ 4.75% 5.0% 4.00%
$100,000 to less than $250,000............ 3.75% 3.9% 3.15%
$250,000 to less than $500,000............ 2.50% 2.6% 2.00%
$500,000 to less than $1,000,000.......... 2.00% 2.0% 1.65%
$1,000,000 and over....................... None**
</TABLE>

<TABLE>
<CAPTION>
CLASS B***+
(GLOBAL HARD ASSETS FUND)
SHAREHOLDER'S TIME OF REDEMPTION CONTINGENT DEFERRED SALES CHARGE
- -------------------------------- --------------------------------
<S> <C> <C> <C> <C>
During Year One.......................................... 5.0% of the lesser of NAV or purchase price
During Year Two.......................................... 4.0% of the lesser of NAV or purchase price
During Year Three........................................ 4.0% of the lesser of NAV or purchase price
During Year Four......................................... 3.0% of the lesser of NAV or purchase price
During Year Five......................................... 2.0% of the lesser of NAV or purchase price
During Year Six.......................................... 1.0% of the lesser of NAV or purchase price
Thereafter............................................... None
</TABLE>

26
<PAGE>

<TABLE>
<CAPTION>
CLASS C***
(GLOBAL HARD ASSETS FUND)
SHAREHOLDER'S TIME OF REDEMPTION CONTINGENT DEFERRED REDEMPTION CHARGE
- -------------------------------- -------------------------------------
<S> <C> <C> <C>
During Year One.......................................... 1.0% of the lesser of NAV or purchase price
Thereafter............................................... None
</TABLE>
- --------
* Brokers or Agents who receive substantially all of the sales charge for
shares they sell may be deemed to be statutory underwriters.
** For any single purchase of $1,000,000 or more of Class A shares the
Distributor may pay a finder's fee to parties eligible to receive such a
fee. The fee will be paid during the first two years after any such
purchase and is calculated as a quarterly payment equal to 0.0625% (.25% on
an annual basis) of the average daily net asset value of the shares
purchased that remain outstanding throughout such months. An eligible
purchase is a single purchase for a single client (purchases for other
clients cannot be aggregated for purposes of qualification for the finder's
fee). Eligible purchases registered to a street or nominee name account
must provide appropriate verification of eligibility and average daily net
assets upon which payment is to be made. Purchases made through a bank
trust department, advisory firm or special program, as determined by the
Distributor, which purchases shares at net asset value do not qualify for
the finder's fee. The finder's fee will be credited to the dealer of record
on the record date (currently, the last calendar day of February, May,
August and November) and will be generally paid on the 20th day of the
following month. Please contact the Distributor to determine eligibility to
receive such fee.
*** Brokers or Agents who sell Class B shares receive a sales commission of
4.0% of the value of the shares sold at the time of investment. Brokers or
Agents who sell Class C shares receive a distribution and a servicing fee
of .75 of 1% and .25 of 1%, respectively, of the value of the shares sold
at the time of investment (see "Plan of Distribution"). The Distributor
may alter these amounts.
+ Shares purchased prior to April 30, 1997 remain subject to the contingent
deferred sales charge schedule in effect at the time of purchase.
- --------
- --------
Brokers and Agents may receive different compensation for selling Class A,
Class B or Class C shares.

The Class A initial sales charges vary depending on the amount of the
purchase, the number of shares of the Van Eck Group of Funds which are
eligible for the Right of Accumulation that an investor already owns, a Letter
of Intent to purchase additional shares during a 13-month period, or other
special purchase programs. See "Group Purchases," "Combined Purchases,"
"Letter of Intent" and "Right of Accumulation" below.

The contingent deferred sales charge on Class B and the redemption charge on
Class C is waived on redemptions of shares following the death or disability
of a Class B or Class C shareholder. An individual will be considered disabled
for this purpose if he or she meets the definition thereof in Section 72(m)(7)
of the Internal Revenue Code. The Distributor will require satisfactory proof
of death or disability. The charge may be waived where the decedent or
disabled person is either an individual shareholder or owns the shares with
his or her spouse as a joint tenant with right of survivorship, and where the
redemption is made within one year of the death or initial determination of
disability. The waiver of the charge applies to a total or partial redemption
but only to those shares held at the time of the death or initial
determination of disability. Additionally, the charge may be waived when a
total or partial redemption is made in connection with certain distributions
from retirement plans. The charge may be waived for any redemption in
connection with a lump-sum or other distribution following retirement or, in
the case of an IRA or Keogh Plan or custodial account pursuant to Section
403(b) of the Code, after attaining age 70 1/2 or, in the case of a qualified
pension or profit-sharing plan, after termination of employment after age 55.
The charge also may be waived on any redemption which results from the tax-
free return of an excess contribution pursuant to Section 408(d)(4) or (5) of
the Code, the return of excess deferral amounts pursuant to Sections 401(k)(8)
or 402(g) of the Code, or from the death or disability of the employee. The
charge is not waived from any distributions from IRAs or other qualified
retirement plans not specifically described above. A shareholder, or the
Broker or Agent, must notify DST at the time the redemption instructions are
provided whenever a waiver of the contingent deferred sales charge or
redemption charge applies.

27
<PAGE>

minimum asset requirements. Shares may also be purchased at net asset value
(a) (i) through an investment adviser who makes such purchases through a
broker/dealer, bank or trust company (each of which may impose transaction
fees on the purchase), (ii) by an investment adviser for its own account or
for a bona fide advisory account over which the investment adviser has
investment discretion or (iii) through a financial planner who charges a fee
and makes such purchases through a financial institution which maintains a net
asset value purchase program that enables the Distributor to realize certain
economies of scale or (b) through bank trust departments or a trust company on
behalf of bona fide trust or fiduciary accounts by notifying the Distributor
in advance of purchase. A bona fide advisory, trust or fiduciary account is
one which is charged an asset-based fee and whose purpose is other than
purchase of Fund shares at net asset value. Shares of the Funds which are sold
with a sales charge may be purchased by a foreign bank or other foreign
fiduciary account for the benefit of foreign investors at the sales charge
applicable to the Funds' $500,000 breakpoint level, in lieu of the sales
charges in the above scale. The Distributor has entered into arrangements with
foreign financial institutions pursuant to which such institutions may be
compensated by the Distributor from its own resources for assistance in
distributing Fund shares. Clients of Netherlands' insurance companies who are
not U.S. citizens or residents may purchase shares without a sales charge.
Shares may be purchased at net asset value on behalf of retirement and
deferred compensation plans and trusts funding such plans (excluding
Individual Retirement Accounts ("IRAs") and SEP-IRAs unless they qualify for
such purchase under one of the prior exceptions) including, but not limited
to, plans and trusts defined in Sections 401(a), 403(b) or 457 of the Internal
Revenue Code and "rabbi trusts" which participate in a program for the
purchase of shares at net asset value offered by a financial institution and
which institution maintains an omnibus account with the Fund. Brokers may
charge a transaction fee for effecting purchases at net asset value or
redemptions. See "Availability of Discounts."

The term "purchase" refers to a single purchase by an individual, to the
aggregate of concurrent purchases by an individual, his spouse and children
under the age of 21, or to a purchase by a corporation, a partnership or a
trustee or other fiduciary for a single trust, estate or fiduciary account.

Class A shares purchased and paid for with the proceeds of shares redeemed in
the past 3 months from a mutual fund (other than a fund managed by the Adviser
or any of its affiliates) on which a sales charge was paid (including Fund
shares purchased by means of an exchange from U.S. Government Money Fund whose
shares were purchased and paid for in this manner) may be purchased at net
asset value, provided that the representative of record is the same for the
Fund account as it was for the other mutual fund account. This waiver must be
requested when the purchase (or exchange) order is placed for shares of the
Fund, and the Distributor may require evidence of the investor's qualification
for this waiver.

In addition to the discounts allowed to Brokers and Agents, the Distributor
may, at its own expense, subject to applicable laws, provide additional
promotional incentives or payments in the form of merchandise (including
luxury merchandise) or trips (including trips to luxury resorts at exotic
locations or attendance at seminars/conferences at luxury resorts) to Brokers
or Agents that sell shares of the Funds. In some instances, these incentives
or payments will be offered only to certain Brokers or Agents who have sold or
may sell significant amounts of shares. Brokers and Agents who receive
additional concessions may be deemed to be underwriters as that term is
defined in the Securities Act of 1933.

GROUP PURCHASES

An individual who is a member of a qualified group may purchase shares of the
Funds at the reduced commission applicable to the group taken as a whole. The
commission is based upon the aggregate dollar value, at the current offering
price, of shares owned by the group, plus the securities currently being
purchased. For example, if members of the group held $20,000, calculated at
current offering price, of Gold/Resources Fund-A's shares and now were
investing $5,000, the sales charge would be 5.00%. Information concerning the
current sales charge applicable to a group may be obtained by contacting the
Distributor.

A "qualified group" is one which (i) has been in existence for more than six
months, (ii) has a purpose other than acquiring a Fund's shares at a discount
and (iii) satisfies uniform criteria which enables the Distributor to realize
economies of scale in its costs of distributing shares. A qualified group must
have more than 10 members, must be available to arrange for group meetings
between representatives of the Distributor and the members of the group, must
agree to include sales and other materials related to the Funds in its
publications and mailings to members at reduced or no cost to the Distributor,
and must

28
<PAGE>

seek to arrange the use of the Automatic Investment Plan. See "Investment
Programs" for information concerning the Automatic Investment Plan.

COMBINED PURCHASES

Shares of funds in the Van Eck Group of Funds (except U.S. Government Money
Fund) may be purchased at the initial sales charge applicable to the quantity
purchase levels shown above by combining concurrent purchases.

LETTER OF INTENT

Purchasers who anticipate that they will invest (other than through exchanges)
$100,000 or more in one or more of the funds in the Van Eck Group of Funds,
except for U.S. Government Money Fund (or $25,000 or more in International
Investors Gold Fund and Gold/Resources Fund), within thirteen months may
execute a Letter of Intent on the form in the Application. The execution of a
Letter of Intent will result in the purchaser paying a lower initial sales
charge, at the appropriate quantity purchase level shown above on all
purchases during a thirteen month period. A purchase not originally made
pursuant to a Letter of Intent may be included under a backdated Letter of
Intent executed within 90 days after such purchase. For further details,
including escrow provisions, see the Letter of Intent provisions in the
Instructions to the Application.

RIGHT OF ACCUMULATION

The above scale of initial sales charges also applies to an investor's current
purchase of shares of any of the funds in the Van Eck Group of Funds (except
for U.S. Government Money Fund) where the aggregate value of those shares plus
shares of these funds previously purchased and still owned, determined at the
current offering price, is more than $100,000 (or more than $25,000 for
International Investors Gold Fund and Gold/Resources Fund), provided the
Distributor or DST is notified by the investor or the Broker or Agent each
time a purchase is made which would so qualify. See "Investment Programs" in
the Statement of Additional Information.

AVAILABILITY OF DISCOUNTS

An investor or the Broker or Agent must notify DST or the Distributor at the
time of purchase whenever a quantity discount or reduced sales charge is
applicable to a purchase. Quantity discounts described above may be modified
or terminated at any time without prior notice.

EXCHANGE PRIVILEGE

The Adviser discourages trading in response to short-term market fluctuations.
Such activity may hinder the Adviser's or Sub-Adviser's ability to invest the
Funds' assets in accordance with their respective investment objectives and
policies, cause a Fund to incur additional brokerage, registration and other
expenses, and may be disadvantageous to other shareholders in either the Fund
being exchanged from or into or both. Shareholders are limited to six
exchanges per calendar year; however, exchanges from International Investors
Gold Fund may be excluded from this limitation if the Fund or Adviser believes
that exclusion will not be materially disadvantageous to other shareholders.
For purposes of determining the number of exchanges made per calendar year,
Fund accounts having the same beneficial owner or under common control will be
aggregated. This exchange limitation does not apply to U.S. Government Money
Fund. The Adviser may impose other restrictions on trading in Fund shares in
response to short-term market fluctuations. Active shareholders should consult
the Fund as to current policy.

Each Fund reserves the right to modify or terminate the Exchange Privilege of
the Fund or of any shareholder or to limit or reject any exchange. Although
each Fund will attempt to give shareholders prior notice whenever it is
reasonable to do so, it may impose these restrictions at any time when it
deems it to be in the best interest of remaining shareholders. If the exchange
is rejected, shareholders will nevertheless be able to redeem their shares.

29
<PAGE>

only be exchanged into Class A shares, subject to payment of the applicable
sales charge. For federal income tax purposes, any exchange pursuant to the
Exchange Privilege, other than exchanges in retirement plans offered by the
Funds, will be regarded as a sale of shares, and any gain or loss must
generally be recognized by the shareholder.

Class B or C shares exchanged for Class B or C shares of another fund with a
different contingent deferred sales charge or redemption charge schedule will
be subject to the contingent deferred sales charge or redemption charge
applicable to those shares at the time of original purchase.

Each Fund has the ability to redeem its shares in kind. Each Fund will pay in
cash all requests for redemption by any shareholder of record limited in
amount with respect to each shareholder of record during any ninety-day period
to the lesser of (i) $250,000 or (ii) 1% of the net asset value of such Fund
at the beginning of such period. See "Exchange Privilege" and "Redemption in
Kind" in the Statement of Additional Information.

WRITTEN EXCHANGE

Shareholders wishing to exchange shares may do so by sending to DST a written
request in proper form signed by all registered owners exactly as the account
is registered, specifying the number of shares or amount of investment to be
exchanged (or that all shares credited to a fund account be exchanged), along
with appropriate documentation, if necessary. Exchanges are only available in
states where purchases may legally be made. All persons authorized to sign on
behalf of joint owners, corporations, trusts, custodians, or other
organizations must supply appropriate evidence of the authority of each
signatory with each written request. Written exchange requests in proper order
will be executed on the day of receipt (or, if that is not a business day of
the Fund, on the next business day following receipt). Written exchange
requests may be sent to Van Eck Funds, c/o DST, either by regular mail to:
P.O. Box 418407, Kansas City, MO 64141, or by overnight courier to: 1004
Baltimore, 4th Floor, Kansas City, MO 64105.

TELEPHONE EXCHANGE AND REDEMPTION PRIVILEGES

Completion of the Account Application or receipt of settlement instructions
from a Broker or Agent for an eligible account shall constitute an election by
the investor to have available the Telephone Exchange Privilege and, except
for retirement plan accounts, the Telephone Redemption Privilege, unless
otherwise indicated. By electing one or both of the Privileges, the investor
is authorizing each Fund, its agents and affiliates to act on any instructions
they believe to be genuine. Each Fund, its agents and affiliates will employ
reasonable procedures, described below, to confirm the authenticity of these
communications and cannot be responsible for the authenticity of any telephone
instructions nor will they be liable for any loss or expenses resulting from
acting on any instructions, including those which are fraudulent and those not
authorized by the investor, unless they fail to employ these procedures.
Shareholders that elected NOT to establish the Telephone Exchange Privilege or
the Telephone Redemption Privilege on their accounts may later establish the
privilege by written request, signed by all registered owners on the account
and with appropriate documentation, as necessary.

The Telephone Exchange Privilege may not be available to accounts held by a
brokerage firm in street name and participants in retirement plans sponsored
by organizations other than the Trust, and participants in such plans should
consult with their sponsors to determine the availability of the Telephone
Exchange Privilege prior to exercising it.

The Telephone Redemption Privilege is not available to accounts registered in
"street name", nominee or corporate name and custodial accounts held by a
financial institution including Investors Fiduciary Trust Company retirement
accounts.

After acceptance by DST of an Application, a telephone exchange or telephone
redemption may be effected by contacting DST at 1-800-345-8506. Telephone
calls are recorded. Telephone instructions for exchanging or redeeming shares
on deposit with DST may be given by anyone claiming to be the shareholder, the
Broker or Agent of record, or an authorized representative of any of the
foregoing [the caller must identify his/her name and relationship to the
account] and will be executed only if they include the correct social security
number, tax identification number or account number. Telephone instructions
accepted after

30
<PAGE>

the close of business on the New York Stock Exchange will not be effected
until the following business day (see "Purchase of Shares"). In the case of
joint or multiple owners, one owner's call may effect the telephone exchange
or redemption.

If the exchanging shareholder does not have an account in the Fund into which
he/she is exchanging, a new account will be established with the same
registration, dividend and capital gain options, and dealer of record
specified in the shareholder's account in the existing Fund. In order to
establish an Automatic Withdrawal or Automatic Investment Plan or other
options for the new account, an exchanging shareholder must make the request
at the time of exchange and may be required to file an application which can
be obtained from DST or the Fund.

For accounts with the Telephone Redemption Privilege, telephone redemption
requests will only be accepted if the shares are held on deposit, if the
amount of the request is $50,000 or less per day and if the check is payable
to the shareholder(s) and sent to the address of record. A telephone
redemption will not be accepted if a change to the registered address has been
effected within one month of such request.

Because of unusual market conditions it may be difficult and/or impossible to
contact DST to effect the exchange or redemption. Shareholders should continue
to try to contact DST by telephone at the above telephone number or may
deliver written instructions by post or courier.

The Funds reserve the right to refuse a request for the Telephone Redemption
or Exchange Privilege without prior notice either during or after the call.
The Funds reserve the right to modify or terminate the Exchange Privilege at
any time. See "Exchange Privilege" in the Statement of Additional Information.

TAX-SHELTERED RETIREMENT PLANS

Shares of the Funds are available for purchase in connection with the
following tax-sheltered retirement plans:

INDIVIDUAL RETIREMENT ACCOUNT AND SPOUSAL INDIVIDUAL RETIREMENT ACCOUNT
("IRA/SPIRA")--available to anyone who has earned income. Investments may also
be made in the name of a spouse, if the spouse is treated as having no earned
income.

SIMPLIFIED EMPLOYEE PENSION PLAN ("SEP")--available to employers, including
self-employed individuals, seeking to provide retirement income to employees
through employer contributions or salary reduction contributions to employee
individual retirement accounts.

QUALIFIED PENSION PLAN--available to self-employed individuals, partnerships,
corporations and their employees.

403(B)(7) PROGRAM--available to employees of certain tax exempt organizations
and schools. See "Tax Sheltered Retirement Plans" in the Statement of
Additional Information. In addition, information concerning these plans is
available from the Funds. This information should be read carefully and
consultation with an attorney or tax adviser is advisable.

INVESTMENT PROGRAMS
DIVIDEND REINVESTMENT PLAN

Unless a shareholder has given notice to DST (the Funds' dividend paying
agent), either directly, or through a Broker or Agent, that dividends and
capital gains distributions of a Fund should be paid in cash, dividends and
capital gains distributions will be reinvested in shares of that Fund at net
asset value without a sales charge. Reinvestments of dividends and capital
gains distributions on shares of the Funds will occur on a date selected by
the Board of Trustees.

In addition, dividends and capital gains distributions paid by the Funds
(except Class B and C shares) in cash may be automatically invested at net
asset value on the payable date in Class A shares of any fund in the Van Eck
Group of Funds. A shareholder wishing to exercise this option should contact
DST for instructions.

31
<PAGE>

AUTOMATIC INVESTMENT PLAN

The Funds offer to investors a program for regularly investing specified
dollar amounts in a Fund. In establishing the Automatic Investment Plan, an
investor authorizes DST to collect a specified amount from his or her checking
account and use the proceeds to purchase shares of a Fund for the investor's
account. Further details of the Automatic Investment Plan are given in an
application which is available from DST or the Distributor. See "Investment
Programs" in the Statement of Additional Information.

AUTOMATIC EXCHANGE PLAN

The Funds offer a program for regularly exchanging a specified dollar amount
from one fund to another fund in the Van Eck Group of Funds (except Class B
and C shares). In establishing the Automatic Exchange Plan, an investor
authorizes DST to regularly exchange a specified amount from, and purchase
shares of, another fund in the Van Eck Group. Further details of the Automatic
Exchange Plan are given in an application which is available from DST or the
Fund. See "Investment Programs" in the Statement of Additional Information.

AUTOMATIC WITHDRAWAL PLAN

Any shareholder who owns shares of a Fund valued at $10,000 or more at current
offering price may establish an Automatic Withdrawal Plan under which he or
she will receive a monthly or quarterly check in a specified amount. The Plan
is not available to Class B and C shareholders. Further details on the
Automatic Withdrawal Plan are given in an application which is available from
DST or the Fund. See "Investment Programs" in the Statement of Additional
Information.

REDEMPTION OF SHARES

The market value of the securities in the portfolio of each Fund other than
U.S. Government Money Fund is subject to daily fluctuations and the net asset
value of the Funds' shares will fluctuate accordingly. U.S. Government Money
Fund attempts to maintain a constant net asset value of $1.00 per share;
however there can be no assurance that the Fund will be able to do so.
Therefore, the Funds' redemption value may be more or less than the
shareholder's cost. (See "Purchase of Shares.")

Except as noted, payment will normally be made within three days after
delivery of a proper redemption request except for such delays as may be
permitted under applicable law or rule. If shares of any Fund to be redeemed
were purchased by check, the Trust reserves the right to make payment on such
redemption request only after it has assured itself that the check has been
cleared for payment, which may take as long as 15 days.

The right of redemption may be suspended and payment postponed for any period
during which the New York Stock Exchange is closed (other than customary
weekend and holiday closings) or trading on that Exchange is restricted as
determined by the applicable rules and regulations of the Securities and
Exchange Commission; or during an emergency, as determined by the Securities
and Exchange Commission, as a result of which it is not reasonably practical
for the Funds to dispose of the securities owned by them or to determine
fairly their net asset values; or for any period that the Securities and
Exchange Commission may by order permit for the protection of shareholders of
the Funds.

The Funds reserve the right to redeem shares of a Fund and mail the proceeds
to a shareholder if, at any time, the number of shares in a shareholder's
account falls, subsequent to satisfying the initial investment requirement,
below a specified amount, currently 50 shares. Shareholders will be notified
and will have 30 days to bring the number of shares owned by them up to the
required amount before any redemption is made by that Fund.

WRITTEN REDEMPTION

32
<PAGE>

account be redeemed); (2) if the amount redeemed is $50,000 or more, or if the
proceeds of redemption are paid to other than the registered owner of the
shares at the address on record at DST, a guarantee of the signature of each
registered owner by an eligible guarantor institution (such as a broker-dealer
or bank; a notarization by a notary public is not acceptable); and (3) any
additional documents concerning authority and related matters in the case of
estates, trusts, guardianships, custodianships, partnerships and corporations
(e.g., appointments as executor or administrator, trust instruments or
certificates of corporate authority) requested by DST. If the shares to be
redeemed were issued in certificate form, the certificates must be endorsed
for transfer (or be accompanied by an endorsement) and must be submitted with
the written request for redemption. The requirement for a signature guarantee
is waived for redemptions of $50,000 or less if the redemption is a transfer
of assets from an IFTC held retirement plan in one of the funds in the Van Eck
Group of Funds to a retirement plan held by another recognized
custodian/trustee. For additional mailing instructions to DST and times of
processing, see "Purchase of Shares."

TELEPHONE REDEMPTION (SEE "TELEPHONE EXCHANGE AND REDEMPTION PRIVILEGES" ON
PAGE 30)

BROKER/AGENT CONFIRMED REDEMPTION

For the convenience of shareholders, the Funds (except U.S. Government Money
Fund) have authorized the Distributor as agent to accept confirmed orders only
from Brokers and Agents for the redemption of shares of the Funds. If a
shareholder uses the services of a Broker or Agent in effecting a redemption
of shares, the Broker or Agent may charge a fee for its services. The
redemption price is the net asset value per share next determined after the
redemption order is received by the Broker or Agent prior to the close of
business on the New York Stock Exchange on the day received. Brokers and
Agents have the responsibility of submitting such redemption orders to the
Distributor not later than 5:00 p.m., Eastern Time, or to DST through the
facilities of the National Securities Clearing Corporation by 7:00 p.m.,
Eastern Time, on such day in order to obtain that day's applicable redemption
price. Settlement of confirmed orders from accounts will not be effected until
receipt of instructions in proper form (including any share certificates) as
described above or an indemnity from the Broker or Agent of record on the
account. Some Brokers or Agents may have self-imposed restrictions regarding
the submission of confirmed redemption orders on behalf of shareholders. See
"Purchase of Shares" for DST's times of processing.

EXPEDITED REDEMPTION

Requests for Expedited Redemption of shares of any of the Funds in the Van Eck
Group of Funds may be made by telephone, telegram, other wire communication or
by letter upon completion of the Expedited Redemption portion of the Account
Application. Shareholders redeeming a minimum of at least $1,000 of shares
which are on deposit with DST may redeem by telephoning DST at 1-800-345-8506.
The Fund and/or DST reserve the right to refuse telephone requests at any
time. Proceeds of redeemed shares will be transmitted by wire to the
shareholder's bank account designated on the Application (which must be at a
domestic commercial bank which is a member of the Federal Reserve System). The
wire cost involved may automatically be deducted from the amount wired.
Shareholders may contact DST for additional information concerning an
Expedited Redemption. Due to unusual market conditions it may be difficult or
impossible to contact DST to effect the redemption. Shareholders should
continue to try to contact DST by telephone at the above telephone numbers or
may deliver written instructions by post or courier.

REDEMPTION BY CHECK

Shareholders of U.S. Government Money Fund may, upon completion of the
"Redemption by Check" portion of the Application, elect to redeem by check
shares of the Fund which are on deposit with DST. These checks, which are
drawn on The United Missouri Bank of Kansas City (the "Bank") may be made
payable to the order of any person and may not be drawn for less than $500 or
more than $5,000,000. The amount of the check may not be in excess of 90% of
the net asset value of the shares in the shareholder's account (excluding for
this purpose the current month's accumulated dividends and shares for which
certificates have been issued). When such a check is presented to the Bank for
payment, the Bank as the shareholders' agent, acting under the authority of
the Redemption by Check procedure, will cause the Fund to redeem a sufficient
number of full and fractional shares to cover the amount of the check. A
shareholder may not write a check to close an account but should follow

33
<PAGE>

the appropriate procedure set forth above. Retirement plan accounts, accounts
held on behalf of minors and accounts with IRS withholding are not eligible
for Redemption by Check. For further information concerning Redemption by
Check, shareholders should contact DST.

BUY-BACK PRIVILEGE

Any shareholder of a Fund (except U.S. Government Money Fund) who redeems
Class A shares of any of the Funds has a one-time right to reinvest in shares
of these Funds at net asset value without the payment of a sales charge within
30 days after the redemption. The amount of this reinvestment cannot exceed
the amount of the redemption proceeds and shareholders must inform the Fund or
DST that they are exercising this right at the time of the reinvestment.
Although redemption of shares is normally a taxable event and a gain or a loss
must be recognized, subsequent reinvestment within such 30-day period in the
same Fund is considered a "wash sale" under federal income tax law and no loss
on such redemption may be recognized for federal income tax purposes.

TRANSFER OF OWNERSHIP

To transfer ownership (re-register) all or a portion of shares held in a
shareholder's account, the shareholder must provide a written request with any
certificated shares and any documents concerning authority and related matters
as described above (see "Redemption of Shares") in proper form. Also, the
shareholder should provide a properly certified social security number,
taxpayer identification number, or certification of non-resident alien status
of the new owner at the time of transfer.

DIVIDENDS AND DISTRIBUTIONS

Global Hard Assets Fund and Gold/Resources Fund intend to make distributions
from net investment income in June and December and distribute any net
realized capital gains resulting from the Funds' investment activity annually
in December. International Investors Gold Fund intends to pay dividends from
net investment income in March, June, September and December and distribute
any net realized capital gains annually in December. U.S. Government Money
Fund declares dividends from its net investment income on each day on which
the Fund is open for business and distributes dividends on the last day of the
month. Dividend or capital gain distributions declared in December but paid in
January will be includible in a shareholder's income as of the record date
(usually in December) of such distributions. Short-term capital gains, if
declared, are treated the same as dividend income. The fiscal year of each of
the Funds ends on December 31.

MANAGEMENT

TRUSTEES

The management of the business and affairs is the responsibility of the Board
of Trustees. For information on the Trustees and officers of the Trust, see
"Trustees and Officers" in the Statement of Additional Information.

INVESTMENT ADVISER

Van Eck Associates Corporation, 99 Park Avenue, New York, NY 10016, serves as
the investment adviser and manager pursuant to Advisory Agreements with the
Trust. The Adviser manages the investment operations of the Funds and
furnishes the Funds with a continuous investment program which includes
determining which securities should be bought, sold or held. Global Hard
Assets Fund pays the Adviser a monthly fee at the annual rate of 1% of average
daily net assets, a portion of which is paid to the Adviser for accounting and
administrative services it provides to the Fund. Gold/Resources Fund and
International Investors Gold Fund each pay the Adviser a monthly fee at the
annual rate of .75 of 1% of the first $500 million of the average daily net
assets of the Fund, .65 of 1% of the next $250 million of the average daily
net assets and .50 of 1% of the average daily net assets in excess of $750
million. U.S. Government Money Fund pays the Adviser a monthly fee at the
annual rate of .50 of 1% of the first $500 million of average daily net
assets, .40 of 1% of the next $250 million of average daily net assets and
.375 of

34
<PAGE>

1% of average daily net assets in excess of $750 million. The advisory fees
paid by the Funds, except U.S. Government Money Fund are higher than the fees
paid by most investment companies because of the complexities of managing
these types of funds (such as following trends, industries and companies in
many different countries and stock markets throughout the world).

Van Eck Associates Corporation also performs accounting and administrative
services for Gold/Resources Fund and International Investors Gold Fund and is
paid at an annual rate of .25% of the first $750 million of each Fund's
average daily net assets and .20% of average daily net assets in excess of
$750 million.

John C. van Eck--Serves as Chief Gold Strategist of the gold funds. He is
Chairman of the Adviser and previously served as the Portfolio Manager of
International Investors Gold Fund. Mr. van Eck has over 45 years of investment
experience.

Gregory Krenzer--Portfolio Manager of U.S. Government Money Fund. He is
responsible for managing the Fund's portfolio of investments. He is also a
global fixed income analyst for the Adviser.

Lucille Palermo--Portfolio Manager of Gold/Resources Fund and International
Investors Gold Fund. She is responsible for managing the Funds' portfolios of
investments. She is Associate Director, Mining Research of the Adviser and an
officer of other mutual funds advised by the Adviser. Ms. Palermo has over 20
years of experience in the investment business.

Derek S. van Eck--Portfolio Manager of Global Hard Assets Fund. He is
responsible for managing the Fund's portfolio of investments. He is Director
of Global Investments and Executive Vice President of the Adviser and an
officer and/or portfolio manager of other mutual funds advised by the Adviser.

John C. van Eck, Chairman and President of the Trust, and members of his
immediate family own 100% of the voting stock of Van Eck Associates
Corporation.

At April 30, 1997, Mr. John C. van Eck and members of his immediate family
owned of record directly and indirectly approximately 2,222,345 shares of the
U.S. Government Money Fund which represented approximately 2.3% of the Fund.

35
<PAGE>

MANAGEMENT DISCUSSION AND ANALYSIS

GLOBAL HARD ASSETS FUND (CLASS A, B AND C)

For 1996, the Fund had a total return of 45.6%, while the Standard & Poor's
500 Index advanced 23.0% for the year. The Fund also outpaced the market while
assuming less risk--its net asset value fluctuated more than 1% in value on
only 16 days in 1996, compared to 38 days for the S&P Index.

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 an average
weighting of approximately 35% in the energy sector. Returns were driven by
stronger commodity prices, successful applications 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.

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 from roughly 17% to 26%. U.S. real estate investment trusts, or
REITs gained approximately 35% in 1996. Moreover, REITs finished the year on a
strong note, with fund flows into U.S. REITs accelerating significantly during
the fourth quarter.

Disappointing sectors included industrial metals, forest products and paper,
and precious metals. Industrial metals and paper shares underperformed the S&P
500 as the primary performance driver, underlying asset prices, declined.
Fortunately, our allocations to these sectors were low, with approximately 6%
of total investments in each.

Global Hard Assets Fund (Class A)
vs. Ibbotson Hard Assets Index vs. S&P 500

[GRAPHIC]

(dividends and capital gains reinvested)

$10,000 Initial investment Expenses (net of waivers) taken into account

Average Annual Total Return*

1 Year 38.7%
Since inception (11/2/94 25.8%

*Maximum sales charge of 4.75% taken into
account.

Van Eck Global
Hard Asset Ibbotson Hard
Fund-A S&P 500 Assets Index

11/2/94 9520 10000 10000
11/31/94 9311 9725 9494
12/31/94 9416 9917 9720
1/31/95 9125 10157 9284
2/31/95 9436 10524 9400
3/31/95 9936 10879 9880
4/31/95 10106 11183 10061
5/31/95 10326 11589 10120
6/31/95 10416 11914 10120
7/31/95 10706 12293 10488
8/31/95 10736 12289 10378
9/31/95 10776 12858 10446
10/31/95 10296 12794 10064
11/31/95 10626 13319 10439.11
12/31/95 11307 13630 10689.42
1/31/96 11900 14074 11052.66
2/31/96 12080 14172 11157.47
3/31/96 12662 14361 11456.63
4/31/96 13339 14553 11740.61
5/31/96 13541 14886 11697.91
6/31/96 13593 15004 11287.59
Jul 31, 96 13124 14317 11108.25
Aug 31, 96 13914 14586 11377.2
9/31/96 14276 15464 11314.68
Oct 31, 96 15066 15868 11492.64
11/31/96 15845 17032 11987.22
Dec 31, 96 16464 16751 12058.95

Past performance is not indicative of future results.

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.

36
<PAGE>

GLOBAL HARD ASSETS FUND (CLASS B)
VS. IBBOTSON HARD ASSETS INDEX VS. S&P 500

(dividends and capital gains reinvested)

[GRAPHIC]

$10,000 initial investment Expenses (net of waivers) taken into account

Average Annual Total Return*
----------------------------------
Since inception (4/24/96) 19.6%
----------------------------------
* Maximum applicable contingent
sales charge of 5% taken into account.

Van Eck Ibbotson
Global Hard Assets Hard Assets
Fund-B S&P 500 Index

4/24/96 10000 10000 10000
5/96 10263 10291 9964
6/96 10303 10373 9614
7/96 9949 9898 9461
8/31/96 10552 10084 9690
9/96 10825 10691 9637
10/96 11419 10970 9789
11/96 11997 11775 10210
12/31/96 11955 11581 10271

Past performance is not indicative of future results.

GLOBAL HARD ASSETS FUND (CLASS C)
VS. IBBOTSON HARD ASSETS INDEX VS. S&P 500

(dividends and capital gains reinvested)

[GRAPHIC]

$10,000 initial investment Expenses (net of waivers) taken into account

Average Annual Total Return
----------------------------------
1 Year* 44.2%
Since inception (11/2/94) 28.9%
----------------------------------
* 1-year redemption charge of 1%
taken into account.

Van Eck Ibbotson
Global Hard Assets Hard Assets
Fund-C S&P 500 Index

Nov 2, 94 10000 10000 10000
11/94 9780 9725 9494
12/31/94 9885 9917 9720
1/95 9580 10157 9284
Feb-95 9895 10524 9400
Mar-95 10420 10879 9880
Apr-95 10599 11183 10061
May-95 10830 11589 10120
Jun-95 10914 11914 10120
Jul-95 11219 12293 10488
Aug-95 11261 12289 10378
Sep-95 11292 12858 10446
Oct-95 10798 12794 10064
Nov-95 11135 13319 10439.11
12/31/95 11954 13630 10689.42
Jan-96 12576 14074 11052.66
2/28/96 12765 14172 11157.47
3/31/96 13387 14361 11456.63
4/30/96 14098 14553 11740.61
5/31/96 14309 14886 11697.91
6/30/96 14365 15004 11287.59
7/31/96 13872 14317 11108.25
8/31/96 14712 14586 11377.2
9/30/96 15092 15464 11314.68
10/31/96 15910 15868 11492.64
11/30/96 16716 17032 11987.22
12/31/96 17354 16751 12058.95

Past performance is not indicative of future results.

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.

37
<PAGE>

GOLD/RESOURCES FUND (CLASS A)

In 1996, the average gold price rose to $388 an ounce, up 1% from $384 an
ounce in 1995. In this environment, gold shares worldwide recorded mixed
performances. After hitting a six-year high in February, the price of gold
declined. Two key factors contributed to the downturn in the first half of the
year: fears of continued central bank selling and a proposal that the
International Monetary Fund (IMF) sell gold reserves to finance loans to
third-world countries. In the second half of the year, concerns over renewed
producer selling and lack of investment demand due to the strong run by
financial assets also put pressure on gold's price.

The Gold/Resources Fund rose 2.5% during the year. The Fund had most of its
assets in North America (35.9% of investments in Canada and 34.1% in the
United States). The Fund also had a substantial position in Australia (25.7%).
Australian stocks recorded the best investment results (up 5.2%) for the year.
Since Australian stocks generally do not have as much price leverage to
bullion as North American gold stocks, they tend to hold up better during
downtrends, such as the sharp decline in share prices following their peak at
the end of May.

Gold/Resources Fund (Class A)
vs. S&P 500

[GRAPHIC]

(dividends and capital gains reinvested)

$10,000 initial investment

Average Annual Total Return*

1 Year -3.4%
5 Year 7.6%
10 Year 3.5%
Since inception (2/15/86) 5.4%

*Maximum sales charge of 5.75% taken into
account.

Van Eck
Gold/Resources Fund-A S&P 500
--------------------- -------
2/15/86 9429 10000
6/30/86 8705 11608
12/31/86 11916 11404
6/30/87 19694 14526
12/31/87 17546 11995
6/30/88 16104 13517
12/31/88 13803 13973
6/30/89 13557 16280
12/31/89 16410 18387
6/30/90 12900 18948
12/31/90 12084 17815
6/30/91 11837 20348
12/31/91 11592 23219
6/30/92 11965 23066
12/31/92 11070 24985
6/30/93 18128 26197
12/31/93 19714 27492
6/30/94 17537 26572
12/31/94 16636 27866
6/30/95 16760 33479
12/31/95 17351 38300
6/30/96 18843 42160
12/31/96 17786 47071

Past performance is not indicative of future results.

38
<PAGE>

INTERNATIONAL INVESTORS GOLD FUND (CLASS A)

In 1996, the average gold price rose to $388 an ounce, up 1% from $384 an
ounce in 1995. In this environment, gold shares worldwide recorded mixed
performances. North American shares, which represented 43.9% of Fund
investments at year-end, rose a few percentage points on average. Some gold
shares provided excellent investment opportunities, even without help from the
gold price. For example, consolidation within the gold-mining industry has
become a reality and corporate activity has led to gains in share prices of
several target companies. This corporate activity has created considerable
interest in the industry around the world, including Australia. The Australian
Gold Index advanced about 5% in U.S. dollars due to a 7% appreciation in the
Australian dollar. Australian shares comprised 10.8% of total investments.

The Johannesburg Gold Share Index gained 11% but fell over 12% in U.S. dollars
because the South African rand declined over 20%. The currency came under
pressure due to the country's inflation rate, which is several points higher
than U.S. inflation, and capital flows out of South Africa. Lower commodity
prices (South Africa exports appreciable quantities of a wide variety of
minerals) and fears of political risks also contributed to the soft currency.
The Fund, which was about 38% weighted in South African shares, had a total
return of -9.4% for the year.

INTERNATIONAL INVESTORS GOLD FUND (CLASS A)
VS. S&P VS. MORGAN STANLEY GOLD MINES INDEX
(dividends and capital gains reinvested)

[GRAPHIC]

$10,000 initial investment

Average Annual Total-Return*

1 Year -14.6%
5 Year 3.1%
10 Year 3.3%
Since inception (2/10/56) $11.1%

* Maximum sales charge of 5.75% taken into account.

Van Eck Morgan
International Stanley
Investors Gold
Gold Fund-A S&P 500 Mines Index
-------------- ------- -----------
12/31/86 9428 10000 10000
6/30/87 13485 12738 14999
12/31/87 12709 10518 14254
6/30/88 10717 11853 10974
12/31/88 9907 12253 9481
6/30/89 10632 14276 10076
12/31/89 14989 16124 14182
6/30/90 11802 16615 10631
12/31/90 10940 15622 10506
6/30/91 11961 17843 10502
12/31/91 11219 20360 9651
6/30/92 10237 20226 8610
12/31/92 7956 21909 7000
6/30/93 14564 22972 13742
12/31/93 16980 24108 16125
6/30/94 15322 23301 14000
12/31/94 16802 24435 14325
6/30/95 14813 29358 14977
12/31/95 15302 33585 15172
6/30/96 15975 36970 15875
12/31/96 13869 41276 14749

Past performance is not indicative of future results.

EXPENSES

Each Fund bears all expenses of its operation other than those incurred by the
Adviser under the Advisory Agreements with the Trust. In particular, the Funds
pay: investment advisory fees, custodian fees and expenses, legal, accounting
and auditing fees and expenses, brokerage fees, taxes, expenses of preparing
prospectuses and shareholder reports for existing shareholders, registration
fees and expenses (including compensation of the Adviser's employees in
relation to the time spent on such matters), Rule 12b-1 distribution expenses
(exclusive of International Investors), expenses of the transfer and dividend
disbursing agent, the compensation and expenses of Trustees who are not
otherwise affiliated with the Trust, the Adviser or any of their

39
<PAGE>

affiliates, and any extraordinary expenses. Expenses incurred jointly by the
funds in the Van Eck Group of Funds are allocated among the funds in a manner
determined by the Trustees to be fair and equitable. Under the Advisory
Agreement, the Adviser provides the Funds with office space, facilities and
simple business equipment and provides the services of executive and clerical
personnel for administering the affairs of the Funds. The Adviser compensates
Trustees of the Trust if such persons are employees or affiliates of the
Adviser or its affiliates. The Funds reimburse the Adviser for its costs in
servicing shareholder accounts and maintaining books and records of each Fund,
including general ledger and daily net asset value accounting.

PLAN OF DISTRIBUTION

Each of the Funds (except International Investors Gold Fund) has adopted a
Plan of Distribution pursuant to Rule 12b-1 (the "Plans") under the Act. The
Plans may be terminated at any time by the vote of a majority of the Trustees
or by a vote of a majority of the outstanding voting securities of the
respective Fund or Class. These plans fall into two broad categories:
reimbursement plans and compensation plans. The fees under all Plans are paid
quarterly. The National Association of Securities Dealers, Inc. rules may
limit the amount payable under the Plans.

Under a reimbursement type plan, the fees, or a percentage thereof, are used
for payments to Agents and Brokers who service shareholder accounts of a Fund
and the remainder is used for other actual promotional and distribution
expenses incurred by the Distributor. A Plan's fees accrued by a Fund in
excess of payments to Brokers and Agents and reimbursement to the Distributor
for its actual expenses will be retained by the Fund. A reimbursement type
plan does not provide for the payment of interest as a distribution expense.

Under a compensation type plan, the fees under the Plan are not directly tied
to expenses and payments by the Fund may be more or less than actual expenses
incurred under the Plan. The excess of fees received over expenditures may
constitute a "profit" to the Distributor.

Both reimbursement and compensation type plans may have a "carry-forward"
provision. This provision provides that any reimbursable or payable amount
under the Plan attributable to a fiscal year of the Fund may be paid by the
Fund in a subsequent fiscal year, including after the termination of a Plan.
Amounts payable or reimbursable to the Distributor under the Plan that are not
paid because they exceed the annual limitation (carry-forward amounts) are
carried forward by the Funds to subsequent years and are paid within the
annual limitation in accordance with the Plans. Consequently, shareholders may
pay distribution expenses incurred by a Fund prior to becoming a shareholder.
Under a Plan without a carry-forward provision, fees paid by a Fund are paid
or used to reimburse the Distributor for servicing, promotional and
distribution expenses incurred only during the applicable fiscal year.

In the event a Plan with a carry-forward provision is terminated, the
Distributor would not be entitled to reimbursement in respect of costs
incurred in, or payment for, performing distribution activities which occur
after termination of the Plan. However, the Distributor would be entitled to
reimbursement of all carry-forward amounts and other costs properly incurred
in respect of shares distributed prior to termination of the Plan. The Fund
would continue to make payments to the Distributor subject to the annual
limitation until such time as all such amounts had been reimbursed.

Gold/Resources Fund-A and U.S. Government Money Fund have reimbursement type
plans. The 12b-1 fees are accrued daily at an annual rate of .25% of the
average daily net assets.

Global Hard Assets Fund-A, Global Hard Assets Fund-B and Global Hard Assets
Fund-C have compensation type plans. The 12b-1 fees are accrued daily at an
annual rate of .50% of average daily net assets for Global Hard Assets Fund-A
and at an annual rate of 1.00% of average daily net assets for Global Hard
Assets Fund-B and Global Hard Assets Fund-C. These Plans have a carry-forward
provision which provides that the Distributor, in the event of termination of
the Plans, will recoup amounts expended under the Plan, subject to the annual
limitation. For the periods prior to April 30, 1998, the Distributor has
agreed, with respect to Plans with a carry-forward provision, notwithstanding
anything to the contrary in the Plan, to waive its right to

40
<PAGE>

reimbursement of carry-forward amounts in the event the Plan is terminated
unless the Board of Trustees has determined that reimbursement of such carry-
forward amounts is appropriate.

Each Fund pays dealers, through the Distributor, (i) a service fee and a
distribution fee, at the time the shares are sold, not to exceed .25% for
Class A shares and .75% for Class B shares, of the net asset value of such
shares (excluding shares issued for reinvested dividends and distributions)
and (ii) after the first anniversary of the sale of shares, fees for services
and distribution at annual rates not to exceed an annual rate of .75% for
Class C shares, of the average daily net assets (including shares issued for
reinvested dividends and distributions). The Distributor may retain from the
distribution fee, for the payment of distribution expenses, an amount not to
exceed an annual rate of .50% of the average daily net assets. No dealer will
receive more than .25% of average daily net assets for servicing. The
Distributor will monitor payments under the Plans and will reduce such
payments or take such other steps as may be necessary, including payments from
its own resources, to assure that Plan payments are consistent with the
applicable rules of the National Association of Securities Dealers, Inc.

Holders of Class C shares on which service and distribution fees were paid at
the time of sale will be required to pay to the Fund a contingent deferred
redemption charge of 1% of the lower of cost or the then current net asset
value of any shares redeemed from that Fund before the first anniversary of
their purchase. If the shares are exchanged into another fund in the Van Eck
Group of Funds offering Class C shares and subsequently redeemed before the
first anniversary of their original purchase, the charge will be collected by
the other fund for the first fund.

Of the amounts expended under the Plan for the fiscal year ended December 31,
1996 for Global Hard Assets Fund, Gold/Resources Fund and U.S. Government
Money Fund, approximately 86% was paid to Brokers and Agents who sold shares
and/or service shareholder accounts of the Funds. The remaining 14% was
retained by the Distributor as reimbursement for expenses such as printing and
mailing prospectuses and sales material to other than current Fund
shareholders.

The Glass-Steagall Act prohibits banks from engaging in the business of
underwriting, selling or distributing securities such as shares of a mutual
fund. Although the scope of this prohibition under the Glass-Steagall Act has
not been fully defined, in the Distributor's opinion it should not prohibit
banks from being compensated for shareholder servicing. If, because of changes
in law or regulation, or because of new interpretations of existing law, a
bank or the Funds were prevented from continuing these arrangements, it is
expected that the Board would make other arrangements for these services and
that shareholders would not suffer adverse financial consequences.

ADVERTISING

From time to time, the Funds may use various media to advertise performance.
Past performance is not necessarily indicative of future performance.

U.S. Government Money Fund may advertise its "yield" and "effective yield."
Both yield figures are based on historical earnings and are not intended to
indicate future performance. The "yield" of the Fund refers to the income
generated by an investment in the Fund over a seven-day period (which period
will be stated in the advertisement). This income is then "annualized," I.E.
the amount of income generated by the investment during that week is assumed
to be generated each week over a 52-week period and is shown as a percentage
of the investment. The "effective yield" is calculated similarly but, when
annualized, the income earned by an investment in the Fund is assumed to be
reinvested. The "effective yield" will be slightly higher than the "yield"
because of the compounding effect of this assumed reinvestment.

All Funds except U.S. Government Money Fund may advertise performance in terms
of average annual total return, which is computed by finding the average
annual compounded rates of return over a period that would equate the initial
amount invested to the ending redeemable value. The calculation assumes the
maximum sales charge is deducted from the initial $1,000 payment and assumes
all dividends and distributions by the Funds are reinvested on the
reinvestment dates during the period, and includes all recurring fees that are
charged to all shareholder accounts. In addition, these Funds may advertise
aggregate total return for a specified period of time which is determined by
ascertaining the percentage change in the net asset value of

41
<PAGE>

shares of a Fund initially purchased assuming reinvestment of dividends and
capital gains distributions on such shares without giving effect to the length
of time of the investment. Sales loads and other non-recurring expenses may be
excluded from the calculation of rates of return with the result that such
rates may be higher than if such expenses and sales loads were included. All
other fees will be included in the calculation of rates of return. Performance
of the Funds is computed separately for each Class.

The annual total return, before sales charges, of International Investors Gold
Fund for each of the twenty years ended December 31, below, was:

TAXES

Each Fund has qualified and intends to continue to qualify as a "regulated
investment company" under the Code and will not pay federal income or excise
taxes to the extent that it distributes its net taxable investment income and
capital gains. See "Taxes" in the Statement of Additional Information.

Notice as to the tax status of a shareholder's dividends and distributions
will be mailed to shareholders annually. Income from dividends and
distributions is normally taxable whether or not reinvested. Distributions
from net investment income and short-term capital gains are taxed as ordinary
income. Distributions of long-term capital gains are taxed at capital gain
rates. Dividends or distributions declared in December of any calendar year
but paid during January of the following year are treated as received by a
shareholder on December 31 of the calendar year. Only a portion of the
dividends paid by Gold/Resources Fund are likely to qualify for the 70%
dividends received deduction allowable to corporations. None of the dividends
paid by the U.S. Government Money Fund qualifies for such deduction. If the
Funds fulfill certain requirements, shareholders may be able to claim a
foreign tax credit or deduction with respect to certain foreign withholding or
other taxes paid to foreign governments during the year.

Distributions of net investment income, and short-term capital gains if any,
made to non-resident aliens will be subject to 30% withholding or lower tax
treaty rates because such distributions are considered U.S. source income.
Currently, the Funds are not required to withhold tax from long-term capital
gains distributions paid to non-resident aliens.

The foregoing discussion relates only to generally applicable federal income
tax provisions. Shareholders should consult their own tax advisors regarding
taxes, including state and local taxes, applicable to dividends, distributions
and redemptions.

42
<PAGE>

DESCRIPTION OF THE TRUST

Van Eck Funds is an open-end management investment company organized as a
"business trust" under the laws of the Commonwealth of Massachusetts.

The Trustees have authority to issue an unlimited number of shares of
beneficial interest of each Fund (funds), $.001 par value. Currently eight
Funds of the Trust are being offered, which shares constitute the interests in
the Asia Dynasty Fund (Class A and B), Global Balanced Fund (Class A and B),
Emerging Markets Growth Fund (Class A, B and C), Global Hard Assets Fund
(Class A, B and C), Global Income Fund (Class A), International Investors Gold
Fund (Class A), Gold/Resources Fund (Class A), and U.S. Government Money Fund.
A "fund" is a separate pool of assets which is separately managed and which
may have different investment objectives from those of another fund. The
Trustees have the authority, without the necessity of a shareholder vote, to
create any number of new funds.

Each share of a Fund has equal dividend, redemption and liquidation rights,
and, when issued, is fully paid and non-assessable by the Trust, except that
expenses related to the distribution of shares of the separate classes, if
any, would be borne by the respective classes as appropriate, and could have
differing voting rights regarding, for example, the Plans of Distribution.
Under the Master Trust Agreement, no annual or regular meeting of shareholders
is required. Thus, there will ordinarily be no shareholder meetings unless
required by the Act. The Board of Trustees is a self-perpetuating body unless
and until fewer than 50% of the Trustees, then serving as Trustees, are
Trustees who were elected by shareholders. At that time another meeting of
shareholders will be called to elect Trustees. On any matter submitted to the
shareholders, the holder of each Trust share is entitled to one vote per share
(with proportionate voting for fractional shares). Under the Master Trust
Agreement, any Trustee may be removed by vote of two thirds of the outstanding
Trust shares; and holders of ten percent or more of the outstanding shares of
the Trust can require Trustees to call a meeting of shareholders for purposes
of voting on the removal of one or more Trustees. Shareholders of all Funds
are entitled to vote on matters affecting all of the Funds (such as the
elections of Trustees and ratification of the selection of the Trust's
independent accountants). On matters affecting an individual Fund a separate
vote of that Fund is required. Shareholders of a Fund are not entitled to vote
on any matter not affecting that Fund.

Under Massachusetts law, the shareholders of the Trust could, under certain
circumstances, be held personally liable for the obligations of the Trust.
However, the Master Trust Agreement of the Trust disclaims shareholder
liability for acts or obligations of the Trust and require that notice of such
disclaimer be given in each agreement, obligation or instrument entered into
or executed by the Trust or the Trustees. The Master Trust Agreement provides
for indemnification out of the Trust's property for all losses and expenses of
any shareholder held personally liable for the obligations of the Trust. Thus,
the risk of a shareholder incurring financial loss on account of shareholder
liability is limited to circumstances in which the Trust itself would be
unable to meet its obligations. The Adviser believes that, in view of the
above, the risk of personal liability to shareholders is remote.

ADDITIONAL INFORMATION
CUSTODIAN

The Custodian of the assets of the Trust is The Chase Manhattan Bank, Chase
Metrotech Center, Brooklyn, New York 11245.

TRANSFER AGENT

DST Systems, Inc., 1004 Baltimore, 4th Floor, Kansas City, Missouri 64105,
serves as the Funds' transfer agent.

INDEPENDENT ACCOUNTANTS

Coopers & Lybrand L.L.P., 1301 Avenue of the Americas, New York, New York
10019, provides audit services, consultation and advice with respect to
financial information in the Trust's filings with the Securities and Exchange
Commission, consults with the Trust on accounting and financial reporting
matters and prepares the Trust's tax returns.

COUNSEL

Goodwin, Procter & Hoar LLP, One Exchange Place, Boston, Massachusetts 02109,
serves as Counsel for the Trust.

43
<PAGE>

-----------------
Van Eck Funds
-----------------

Asia Dynasty Fund

Emerging Markets Growth Fund

Global Balanced Fund

Global Hard Assets Fund

Global Income Fund

Gold/Resources Fund

International Investors
Gold Fund

U.S. Government Money Fund

Your Investment Dealer is:
-------------------------------

Transfer Agent and Shareholder Service Representative:
DST Systems, Inc.
P.O. Box 418407
Kansas City, Missouri 64141
(800) 544-4653

[LOGO] VAN ECK GLOBAL

This prospectus is good until 4/30/98 unless superceded.

April 30, 1997

VAN ECK
-------------------------------
GOLD AND
-------------------------------
MONEY
-------------------------------
FUNDS
-------------------------------
PROSPECTUS
-------------------------------

Global Hard Assets Fund

Gold/Resources Fund

International Investors
Gold Fund

U.S. Government Money Fund

[LOGO] VAN ECK GLOBAL
<PAGE>

PROSPECTUS APRIL 30, 1997
VAN ECK GLOBAL FUNDS
- -------------------------------------------------------------------------------

99 Park Avenue, New York, New York 10016
Account Assistance: (800) 544-4653
- -------------------------------------------------------------------------------

Van Eck Funds (the "Trust") is an open-end management investment company
consisting of separate funds, each of which has a specific investment
objective. This Prospectus relates to four funds of the Trust, Asia Dynasty
Fund, Global Balanced Fund, Global Hard Assets Fund and Global Income Fund
(collectively, the "Funds").

Asia Dynasty Fund (Class A and Class B)--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 of the Asia region.

Global Balanced Fund (Class A and Class B)--seeks long-term capital
appreciation together with current income. Fiduciary International, Inc.
("FII" or "Sub-Adviser") serves as sub-investment adviser to this Fund.

Global Hard Assets Fund (Class A, Class B and Class C)--seeks long-term
capital appreciation by investing globally, primarily in "Hard Asset
Securities." Income is a secondary consideration.

GLOBAL INCOME FUND (CLASS A)--seeks high total return through a flexible
policy of investing globally, primarily in debt securities. The Fund
emphasizes the current income component of total return.

Van Eck Associates Corporation (the "Adviser") 99 Park Avenue, New York, New
York 10016, serves as investment adviser to Global Balanced Fund, Global Hard
Assets Fund and Global Income Fund. Van Eck Global Asset Management (Asia)
Limited, a wholly-owned subsidiary of the Adviser, located in Hong Kong,
serves as investment adviser to Asia Dynasty Fund. See "Management." Van Eck
Securities Corporation (the "Distributor"), a wholly-owned subsidiary of the
Adviser, serves as Distributor of the Funds' shares. See "Purchase of Shares--
Alternative Purchase Arrangements" on page 25 to determine your purchase
options for Funds offering different classes of shares.

Investors should be aware that an investment in Asia Dynasty Fund, Global
Balanced Fund and Global Hard Assets Fund has greater investment risk than
many mutual funds. The Funds intend to engage in a number of investment
activities including borrowing for investment purposes (i.e., engage in
leveraging), investing in countries with emerging securities markets and
economies and investing in restricted securities of unseasoned issuers and
non-readily marketable securities. These investment activities are considered
to be speculative and could result in additional cost and investment risk to
the Funds. Consequently, these Funds are not intended to be a complete
investment program and are intended for those investors who can assume greater
risk with respect to a portion of their investment portfolio. Further
information on the Funds and these activities is provided under "Risk Factors"
on pages 14-23 and investors should read this material carefully.

---------------
Shares in the Funds are not deposits or obligations of, or guaranteed or
endorsed by, a bank, and the shares are not federally insured by the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other agency.

- -------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
- -------------------------------------------------------------------------------
<PAGE>

<TABLE>
<CAPTION>
TABLE OF CONTENTS PAGE
- --------------------------------------------------------------------------------
<S> <C>
Transaction Data........................................................... 3
Financial Highlights....................................................... 4
The Trust.................................................................. 8
Investment Objectives and Policies......................................... 8
Risk Factors............................................................... 14
Limiting Investment Risks.................................................. 23
Purchase of Shares......................................................... 24
Exchange Privilege......................................................... 29
Tax-Sheltered Retirement Plans............................................. 31
Investment Programs........................................................ 31
Redemption of Shares....................................................... 32
Dividends and Distributions................................................ 34
Management................................................................. 34
Plan of Distribution....................................................... 43
Advertising................................................................ 44
Taxes...................................................................... 45
Description of the Trust................................................... 45
Additional Information..................................................... 46
</TABLE>

2
<PAGE>

TRANSACTION DATA

The following table is intended to assist an investor in understanding the
various direct and indirect costs and expenses borne by an investor in a Fund.
The sales charges are the maximum sales charges an investor would incur. Sales
charges decline depending on the amount of the purchase, the number of shares
an investor already owns or use of various investment programs. See "How to
Buy Shares of the Funds." The Adviser may from time to time waive fees and/or
reimburse certain expenses of a Fund.
<TABLE>
<CAPTION>
ASIA GLOBAL GLOBAL
DYNASTY FUND BALANCED FUND GLOBAL HARD ASSETS FUND** INCOME FUND
-------------------- ---------------------- -------------------------------- -------------
CLASS-A CLASS-B CLASS-A CLASS-B CLASS-A CLASS-B CLASS-C CLASS-A
--------- --------- --------- --------- ---------- --------- --------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION
EXPENSES:
Maximum Sales
Charge Imposed
on Purchases(as
a percent of
offering
price)......... 4.75% 0% 4.75% 0% 4.75% 0% 0% 4.75%
+Contingent
Deferred Sales
or Redemption
Charge......... 0% 5.0% 0% 5.0% 0% 5.0% 1.00% 0%
==== ==== ==== ===== ==== ==== ======
ANNUAL FUND OPERATING
EXPENSES: (as a percent
of average net assets)
Management Fees. .75% .75% .75%++ .75%++ 1.00% 1.00% 1.00% .75%
12b-1
Fees/Shareholder
Servicing
Fees*.......... .50% 1.00% .50% 1.00% .50% 1.00% 1.00% .25%
Administration
Fee............ .25% .25% .25% .25% 0% 0% 0% 0%
Other Expenses.. .92% .86% .67% .71% .54% .56% .56% .43%
---- ---- ---- ---- ----- ---- ---- ------
Transfer and
Dividend
Disbursing..... .27% .22% .34% .50% .15% .17% .17% .21%
Custodian Fees.. .36% .36% .15% .15% .12% .12% .12% --
Other Expenses.. .29% .28% .18% .06% .27% .27% .27% .22%
--- --- --- --- --- --- --- -----
Total Fund
Operating
Expenses....... 2.42% 2.86% 2.17% 2.71% 2.04% 2.56% 2.56% 1.43%
==== ==== ==== ==== ===== ==== ==== ======
EXAMPLE: You
would bear the
following
expenses on a
$1,000
investment
assuming (1) 5%
annual return
and (2)
redemption at
the end of each
time period
1 year......... $ 70.95 $ 78.91 $ 68.46 $ 77.41 $ 67.22 $ 75.91 $ 35.91 $ 61.36
3 years........ $119.37 $128.59 $112.18 $124.13 $108.42 $119.65 $ 79.65 $ 90.59
5 years........ $170.42 $170.85 $158.41 $163.47 $152.10 $ 156.04 $136.04 $121.95
10 years........ $310.04 $318.55 $285.93 $304.15 $273.14 $ 289.51 $289.51 $210.67
</TABLE>
- --------
* Long-term shareholders in Funds may pay more than the economic equivalent
of the maximum front-end sales charge permitted by the NASD. The
shareholder servicing fee will not exceed .25%.
** The Adviser may temporarily reimburse and or waive certain operating
expenses of the Fund including management and administrative fees. Such
temporary reimbursements/waivers will have the effect of lowering the
Fund's expense ratio.
+ The Contingent Deferred Sales Charge on Class B shares is applied to the
lesser of purchase price or net asset value at redemption. The charge
imposed on such amount is scaled down from 5% during the first year to 0%
after the sixth year. A Redemption Charge on Class C shares of 1% is
applied to redemptions within the first year after purchase and is applied
to the lesser of purchase price or net asset value at redemption.
++ Inclusive of the sub-investment advisory fee, which is paid by the Adviser.

Total Fund Operating Expenses for Asia Dynasty Fund, Global Balanced Fund and
Global Income Fund are the actual operating expenses, before fee waivers or
expense reimbursements, if any, for the period ended December 31, 1996.
Operating Expenses for Global Hard Assets Fund, Class B and Class C, are
estimates and assume $40 million in net assets.

3
<PAGE>

FINANCIAL HIGHLIGHTS

The Financial Highlights below give selected information for a share of each
Fund outstanding for the year or period indicated. The Financial Highlights
presented have been audited by Deloitte & Touche LLP, independent accountants,
for Global Income Fund for fiscal years through April 30, 1990. For all other
periods, the Financial Highlights presented have been audited by Coopers &
Lybrand L.L.P., independent accountants, whose report thereon appears in the
Funds' Annual Reports, which are incorporated by reference into the Trust's
Statement of Additional Information. This information should be read in
conjunction with the financial statements and related notes that also appear
in the Funds' Annual Reports.

<TABLE>
<CAPTION>
ASIA DYNASTY FUND
-----------------------------------------------------------------------------------------------------------
CLASS A CLASS B
----------------------------------------------------- -----------------------------------------------------
FOR THE PERIOD FOR THE PERIOD
MARCH 22, SEPTEMBER 1,
1993(a) 1993(a)
FOR A SHARE YEAR ENDED YEAR ENDED YEAR ENDED TO YEAR ENDED YEAR ENDED YEAR ENDED TO
OUTSTANDING DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
THROUGHOUT EACH 1996 1995 1994 1993 1996 1995 1994 1993
PERIOD ------------ ------------ ------------ -------------- ------------ ------------ ------------ --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of
Period.......... $ 12.40 $ 12.13 $ 15.28 $ 9.53 $ 12.33 $ 12.09 $ 15.25 $ 11.33

------- ------- ------- -------- ------- ------- ------- -------
Income from
Investment
Operations:
Net Investment
Loss........... (0.20) (0.02) -- (0.06)+ (0.24) (0.08) (0.06) (0.07)+
Net Gains (Loss)
on Securities
(both realized
and
unrealized).... 1.01 0.40 (2.86) 5.88 0.99 0.40 (2.86) 4.06
------- ------- ------- -------- ------- ------- ------- -------
Total from
Investment
Operations...... 0.81 0.38 (2.86) 5.82 0.75 0.32 (2.92) 3.99
------- ------- ------- -------- ------- ------- ------- -------
Less
Distributions:
Dividends from
Net Investment
Income......... -- (0.09) (0.07) -- -- (0.06) (0.02) --
Distributions
from Capital
Gains.......... -- -- (0.22) (0.07) -- -- (0.22) (0.07)
Tax Return of
Capital........ -- (0.02) -- -- -- (0.02) -- --
-------- -------
------- ------- ------- ------- ------- -------
Total
Distributions... -- (0.11) (0.29) (0.07) -- (0.08) (0.24) (0.07)
------- ------- ------- -------- ------- ------- ------- -------
Net Asset Value,
End of Period... $ 13.21 $ 12.40 $ 12.13 $ 15.28 $ 13.08 $ 12.33 $ 12.09 $ 15.25

======= ======= ======= ======== ======= ======= ======= =======
Total Return (b). 6.53% 3.13% (18.72%) 61.16% 6.08% 2.65% (19.15%) 35.22%

- -------------------------------------------------------------------------------
Ratios/Supplementary
Data
Net Assets, End
of Period (000). $44,351 $64,275 $83,787 $108,661 $20,296 $27,234 $35,024 $26,205
Ratios of Gross
Expenses to
Average Net
Assets (c)...... 2.42% 2.03% 1.85% 2.09% 2.86% 2.41% 2.38% 3.04%
Ratio of Net
Expenses to
Average Net
Assets.......... 2.42% 2.03% 1.85% 1.92% * 2.86% 2.41% 2.38% 3.04% *
Ratio of Net
Investment Loss
to Average Net
Assets.......... (0.73%) (0.08%) -- % (0.68%)* (1.14%) (0.52%) (0.50%) (2.17%)*
Portfolio
Turnover Rate... 52.97% 57.06% 51.08% 14.63% 52.99% 57.06% 51.08% 14.63%
Average
Commission
Rate Paid (d)... $0.0049 $0.0049
</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 all dividends
and capital gains 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 dividends and return. Total return for the period of
less than one year is not annualized.
(c) Had the Adviser not agreed to assume a portion of expenses of Class A.
(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 a commission is charged.
* Annualized.
+ Based on average shares outstanding.

4
<PAGE>

FINANCIAL HIGHLIGHTS--(CONTINUED)

<TABLE>
<CAPTION>
GLOBAL BALANCED FUND
--------------------------------------------------------
CLASS A
--------------------------------------------------------
FOR THE PERIOD
DECEMBER 20,
1993(A)
YEAR ENDED YEAR ENDED YEAR ENDED TO
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
FOR A SHARE OUTSTANDING 1996 1995 1994 1993
THROUGHOUT EACH PERIOD ------------ ------------ ------------ --------------
<S> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 10.31 $ 9.07 $ 9.53 $ 9.53
------- ------- ------- -------
Income from Investment
Operations:
Net Investment Income.. 0.12 0.07+ 0.19 + --
Net Gains (Loss) on
Securities (both
realized and
unrealized)........... 1.15 1.31 (0.56) --
------- ------- ------- -------
Total from Investment
Operations............. 1.27 1.38 (0.37) --
------- ------- ------- -------
Less Distributions:
Dividends from Net
Investment Income..... (0.11) (0.14) (0.09) --
Distribution from
Capital Gains......... (1.10) -- -- --
------- ------- ------- -------
(1.21) (0.14) (0.09) --
------- ------- ------- -------
Net Asset Value, End of
Period................. $ 10.37 $ 10.31 $ 9.07 $ 9.53
======= ======= ======= =======
Total Return (b)........ 12.28% 15.30% (3.90%) 0%

- -------------------------------------------------------------------------------
Ratios/Supplementary
Data
Net Assets, End of
Period (000)........... $29,331 $30,632 $13,986 $ 562
Ratio of Gross Expenses
to Average Net Assets.. 2.54% 2.69% 2.59% 7.76%
Ratio of Net Expenses to
Average Net Assets..... 2.17%(c) 2.69% 1.06%(c) 0.25% *(c)
Ratio of Net Investment
Income (Loss) to
Average Net Assets..... 1.05% 0.68% 1.99% (0.25%)*
Portfolio Turnover Rate. 114.30% 196.69% 174.76% 0%
Average Commission Rate
Paid(d)................ $0.0399
</TABLE>

FINANCIAL HIGHLIGHTS--(CONTINUED)

<TABLE>
<CAPTION>
GLOBAL BALANCED FUND
-------------------------------------------------------
CLASS B
-------------------------------------------------------
FOR THE PERIOD
DECEMBER 20,
1993(A)
YEAR ENDED YEAR ENDED YEAR ENDED TO
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
FOR A SHARE OUTSTANDING 1996 1995 1994 1993
THROUGHOUT EACH PERIOD ------------ ------------ ------------ --------------
<S> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 10.28 $ 9.02 $ 9.53 $ 9.53
------- ------ ------ -------
Income from Investment
Operations:
Net Investment Income.. 0.06 0.01 0.11 + --
Net Gains (Loss) on
Securities (both
realized and
unrealized)........... 1.14 1.28 (0.57) --
------- ------ ------ -------
Total from Investment
Operations............. 1.20 1.29 (0.46) --
------- ------ ------ -------
Less Distributions:
Dividends from Net
Investment Income..... (0.06) (0.03) (0.05) --
Distribution from
Capital Gains......... (1.10) -- -- --
------- ------ ------ -------
(1.16) (0.03) (0.05) --
------- ------ ------ -------
Net Asset Value, End of
Period................. $ 10.32 $10.28 $ 9.02 $ 9.53
======= ====== ====== =======
Total Return (b)........ 11.49% 14.54% (4.84%) 0%

- --------------------------------------------------------------------------------
Ratios/Supplementary
Data
Net Assets, End of
Period (000)........... $ 4,932 $6,151 $5,628 $130
Ratio of Gross Expenses
to Average Net Assets.. 3.19% 3.20% 3.21% 8.51%
Ratio of Net Expenses to
Average Net Assets..... 2.71%(c) 3.20% 1.88%(c) 1.00% *(c)
Ratio of Net Investment
Income (Loss) to
Average Net Assets..... 0.51% 0.14% 1.14% (1.00%)*
Portfolio Turnover Rate. 114.30% 196.69% 174.76% 0%
Average Commission Rate
Paid(d)................ $0.0399
</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 calculations of total
return. Total return for a period of less than one year is not annualized.
(c) After expenses reduced by a custodian fee, directed brokerage or advisory
fee waiver arrangement.
(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 a commission is charged.
* Annualized.
+ Based on average shares outstanding.

5
<PAGE>

FINANCIAL HIGHLIGHTS--(CONTINUED)

<TABLE>
<CAPTION>
GLOBAL HARD ASSETS FUND
--------------------------------------------------------------------------
CLASS A CLASS B CLASS C
------------------------------ ------------ ------------------------------
FOR THE FOR THE FOR THE
PERIOD PERIOD PERIOD
YEAR ENDED NOVEMBER 2, APRIL 24, YEAR ENDED NOVEMBER 2,
DECEMBER 31, 1994(a) TO 1996(a) TO DECEMBER 31, 1994(a) TO
---------------- DECEMBER 31, DECEMBER 31, ---------------- DECEMBER 31,
FOR A SHARE OUTSTANDING 1996 1995 1994 1996 1996 1995 1994
THROUGHOUT EACH PERIOD ------- ------- ------------ ------------ ------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Begin-
ning of Period......... $ 10.68 $ 9.41 $ 9.53 $ 12.55 $ 10.76 $ 9.41 $ 9.53
------- ------- ------- ------- ------- ------- -------
Income from Investment
Operations:
Net Investment Income.. 0.15 0.32+ 0.010+ 0.11 0.11 0.34+ 0.01+
Net Gains (Loss) on
Investments (both
realized and
unrealized)........... 4.70 1.57 (0.115) 2.95 4.73 1.63 (0.12)
------- ------- ------- ------- ------- ------- -------
Total from Investment
Operations............. 4.85 1.89 (0.105) 3.06 4.84 1.97 (0.11)
------- ------- ------- ------- ------- ------- -------
Less Distributions:
Dividends from Net
Investment Income..... (0.14) (0.62) (0.015) (0.14) (0.11) (0.62) (0.01)
Distributions from
Capital Gains......... (0.95) -- -- (0.95) (0.95) -- --
Tax Return of Capital.. (0.02) -- -- (0.02) (0.02) -- --
------- ------- ------- ------- ------- ------- -------
(1.11) (0.62) (0.015) (1.11) (1.08) (0.62) (0.01)
------- ------- ------- ------- ------- ------- -------
Net Asset Value, End of
Period................. $ 14.42 $ 10.68 $ 9.41 $ 14.50 $ 14.52 $ 10.76 $ 9.41

======= ======= ======= ======= ======= ======= =======
Total Return (b)........ 45.61% 20.09% (1.10%) 24.55% 45.18% 20.94% (1.20%)

- -------------------------------------------------------------------------------
Ratios/Supplementary
Data
Net Assets, End of Pe-
riod (000)............. $27,226 $ 3,820 $ 1,419 $ 1,806 $ 1,935 $ 181 $ 8
Ratio of Gross Expenses
to Average Net Assets
(c).................... 2.63% 4.05% 3.40% 3.27% 6.02% 37.88% 39.49%
Ratio of Net Expenses to
Average Net Assets..... 0.72% 0% 0.15% * 1.64% * 1.31% 0% 0.56% *
Ratio of Net Investment
Income to Average
Net Assets............. 1.45% 3.08% 0.84% * 0.53% * 0.84% 3.30% 0.53% *
Portfolio Turnover Rate. 163.91% 179.33% 0% 163.91% 163.91% 179.33% 0%
Average Commission Rate
Paid (d)............... $0.0178 $0.0178 $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 Adviser 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 a commission is charged.
*Annualized.
+Based on average shares outstanding.

6
<PAGE>

FINANCIAL HIGHLIGHTS--(CONCLUDED)

<TABLE>
<CAPTION>
GLOBAL INCOME FUND (CLASS A)
----------------------------------------------------------------------------------------------------
YEAR
ENDED EIGHT MONTHS
DECEMBER 31, ENDED YEAR ENDED APRIL 30,
---------------------------------------- DECEMBER 31, --------------------------------------------
FOR A SHARE OUTSTANDING 1996 1995 1994 1993 1992 1992 1991 1990 1989 1988
THROUGHOUT EACH PERIOD ------- -------- -------- -------- ------------ -------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 9.00 $ 8.15 $ 8.96 $ 9.28 $ 9.91 $ 9.75 $ 9.44 $ 9.10 $ 10.09 $ 9.25
------- -------- -------- -------- -------- -------- ------- ------- ------- -------
Income From Investment
Operations:
Net Investment Income.. 0.47 0.47 0.55+ 0.75 0.51 0.770 0.99 0.953 0.86 0.67
Net Gains or (Loss) on
Securities (both
realized and
unrealized)........... (0.27) 0.92 (0.80) (0.31) (0.50) 0.460 0.51 0.347 (0.47) 0.53
------- -------- -------- -------- -------- -------- ------- ------- ------- -------
Total From Investment
Operations........... 0.20 1.39 (0.25) 0.44 0.01 1.230 1.50 1.300 0.39 1.20
======= ======== ======== ======== ======== ======== ======= ======= ======= =======
Less Distributions:
Dividends From Net
Investment Income(b).. (0.42) (0.54) -- (0.05) (0.47) (0.853) (0.96) (0.944) (1.11) (0.35)
Distributions From
Capital Gains......... -- -- -- (0.01) (0.17) (0.217) (0.23) (0.016) (0.27) (0.01)
Distributions from
Aggregate Paid in
Capital............... -- -- (0.56) (0.70) -- -- -- -- -- --
------- -------- -------- -------- -------- -------- ------- ------- ------- -------
Total Distributions... (0.42) (0.54) (0.56) (0.76) (0.64) (1.070) (1.19) (0.960) (1.38) (0.36)
======= ======== ======== ======== ======== ======== ======= ======= ======= =======
Net Asset Value, End of
Period................. $ 8.78 $ 9.00 $ 8.15 $ 8.96 $ 9.28 $ 9.91 $ 9.75 $ 9.44 $ 9.10 $ 10.09
======= ======== ======== ======== ======== ======== ======= ======= ======= =======
Total Return(a)(c)...... 2.33% 17.27% (2.79%) 4.90% (0.18%) 13.19% 16.49% 15.00% 4.17% 13.30%
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY
DATA
Net Assets, End of
Period (000)........... $75,814 $112,375 $137,242 $251,725 $290,961 $187,241 $84,016 $39,592 $36,383 $27,646
Ratio of Gross Expenses
to Average
Net Assets............. 1.46%** 1.60%** 1.56%** 1.93%** 1.32%* 1.39% 1.61% 1.60% 1.56% 1.93%
Ratio of Net Expenses to
Average
Net Assets............. 1.43%* 1.52% 1.39% 1.27% 1.32%* 1.39% 1.61% 1.42% 0.40% 0.00%
Ratio of Net Income to
Average
Net Assets............. 4.98% 5.21% 6.55% 8.01% 7.58%* 7.92% 10.00% 10.27% 9.10% 9.20%
Portfolio Turnover Rate. 157.5% 269.5% 148.4% 108.6% 44.2% 108.9% 276.1% 289.7% 386.3% 306.0%
</TABLE>
- --------
(a) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of dividends and
distributions 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 returns calculated for a period of less than one
year are not annualized.
(b) Due to a change in the dividend declaration policy, thirteen monthly
dividends were recorded in the fiscal year ended April 30, 1992.
(c) The Adviser waived and/or reimbursed all or a portion of the Fund's fees
and expenses for fiscal years ended April 30, 1988, 1989 and 1990. If all
or a portion of fees and expenses were not waived or reimbursed, total
return would have been 11.37%, 3.01%, and 14.82%, respectively.
* Annualized
** If expenses were not assumed by the Adviser or reduced by a custodian fee
arrangement.
+ Based on average shares outstanding.

7
<PAGE>

THE TRUST

Each of the Funds is a separate series (fund) of the Trust, a business trust
organized under the laws of the Commonwealth of Massachusetts on April 3,
1985. Class A shares are denoted with the suffix -A, Class B shares with the
suffix -B and Class C shares with the suffix -C. The Funds are known as the
Van Eck Global Funds. The Trust also consists of other series, which, together
with the Funds, are hereinafter referred to as the "Van Eck Group of Funds."

Asia Dynasty Fund is classified as diversified as defined in the Investment
Company Act of 1940, as amended (the "Act"). This means that with respect to
75% of the Fund's assets, the Fund may not invest more than 5% of its total
assets in any issuer or invest in more than 10% of the outstanding voting
securities of any issuer. Global Balanced Fund, Global Hard Assets Fund and
Global Income Fund are classified as non-diversified, which means that the
proportion of the Fund's assets that may be invested in the securities of a
single issuer is not limited by the Act. However, to meet other requirements,
the Fund at the close of each quarter of its taxable year must, in general,
limit its investments so that (i) no more than 25% of its assets are invested
in the securities of a single issuer, (ii) with respect to 50% of the Fund's
assets, no more than 5% of its assets at the time of purchase are invested in
a single issuer and (iii) the Fund will not own more than 10% of the
outstanding voting securities of any one issuer.

INVESTMENT OBJECTIVES AND POLICIES

ASIA DYNASTY FUND

OBJECTIVE:

Asia Dynasty 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 of the Asia region.

POLICIES:

The Fund expects that substantially all of its assets will normally be
invested in equity securities, warrants and equity options of "Asia Growth
Companies." Asia Growth Companies consist of companies that (a) are located in
or whose securities are principally traded in an "Asia Region" country, as
defined below, (b)(i) have at least 50% of their assets in one or more
countries located in the Asia Region or (ii) derive at least 50% of their
gross sales revenues or profits from providing goods or services to, from or
within one or more countries located in the Asia Region or (c) have
manufacturing or other operations in China that are significant to such
companies. These investments are typically listed on stock exchanges or traded
in the over-the-counter markets in Asia Region countries, but may be traded on
exchanges or in markets outside the Asia Region. Similarly, the principal
offices of these companies may be located outside these countries.

The Fund will, under normal market conditions, invest at least 65% of its
total assets in equity securities of companies located in, or expected to
benefit from the growth of the economies of countries located in the Asia
Region. Asia Region countries include Burma, Cambodia, Hong Kong, India,
Indonesia, Korea, Laos, Malaysia, Pakistan, Peoples Republic of China
("China"), the Philippines, Singapore, Sri Lanka, Taiwan, Thailand and
Vietnam. Currently, the Fund does not consider Australia, Japan and New
Zealand to be part of the Asia Region. The countries constituting the Asia
Region may be changed by the Board without obtaining shareholder approval. The
Fund may commit 25% or more of its total assets to any one country in the Asia
Region. There can be no assurance that the Fund will meet its investment
objective. An investment in the Fund's shares should be considered part of an
overall investment program rather than a complete investment program.

The Fund currently invests more than 25% of its total assets in Hong Kong, but
has not identified any other country in which it currently intends to invest
to this extent. China is scheduled to assume sovereignty over Hong Kong on
July 1, 1997. Business

8
<PAGE>

confidence in Hong Kong can be significantly affected by such developments,
which in turn can affect markets and business performance. China governmental
actions can have a significant effect on the economic conditions in the Asia
Region, which could adversely affect the value and liquidity of the Fund's
investments.

The Chinese, Hong Kong and Taiwanese stock markets are undergoing a period of
growth and change which may result in trading volatility and difficulties in
the settlement and recording of transactions, and in interpreting and applying
the relevant law and regulations. In particular, the securities industry in
China and laws regarding fiduciary duties of officers and directors and the
protection of shareholders are not well developed. China and certain of the
other Asia Region countries do not have securities laws of nationwide
applicability. As changes to the Chinese legal system develop, the
promulgation of new laws, interpretation of existing laws and the preemption
of local laws by national laws may adversely affect foreign investors,
including the Fund. The uncertainties faced by foreign investors in China are
exacerbated by the fact that many laws, regulations and decrees of China are
not publicly available, but merely circulated internally. Similar risks exist
in other Asia Region countries.

In addition, Chinese and other Asia Region stockbrokers and other
intermediaries may not perform as well as their counterparts in the United
States and other more developed securities markets. The prices at which the
Fund may acquire investments may be affected by trading by persons with
material non-public information and by securities transactions by brokers in
anticipation of transactions by the Fund in particular securities.

The Fund may invest up to 5% of its net assets in options on equity securities
and up to 5% of its net assets in warrants, including options and warrants
traded in over-the-counter markets. The Fund may buy and sell financial
futures contracts and options on financial futures contracts. The Fund may
purchase or sell puts and calls on foreign currencies and securities, and
invest in "when issued" securities, "partly paid" securities (securities paid
for over a period of time), and securities of foreign issuers. The Fund may
lend its portfolio securities and borrow money for investment purposes (i.e.,
leverage its portfolio). For a further discussion of these investments, see
"Risk Factors."

Equity securities, for purposes of the 65% policy, include common and
preferred stocks; direct equity interests in trusts, partnerships, joint
ventures and other unincorporated entities or enterprises; special classes of
shares available only to foreign persons in such markets that restrict the
ownership of certain classes of equity to nationals or residents of the
country; convertible preferred stocks; and convertible debt instruments. Debt
securities issued by Asia Growth Companies are typically unrated. See "Risk
Factors--Direct Investments" for a discussion of the risks associated with
direct investments.

Over the past 20 years, the major Asian economies have generally performed
better than those of Europe and the United States. Although these markets are
volatile, the Fund's investment adviser believes that investment in the Asia
Region offers the opportunity for long-term capital appreciation which the
Fund's investment adviser believes may be greater than that of the mature
markets of Western Europe and the United States.

GLOBAL BALANCED FUND

OBJECTIVE:

Global Balanced Fund seeks long-term capital appreciation together with
current income.

POLICIES:

The Fund intends to achieve its investment objective by investing its assets
in the United States and other countries throughout the world, and by
allocating its assets among equity securities, fixed-income securities and
short-term instruments.

The Adviser believes that allocation of assets into many countries and across
asset classes can, over the long-term, provide higher returns than portfolios
invested solely in bonds with lower risk or volatility or than portfolios
invested entirely in stocks. Thus, the "risk-adjusted return" of a diversified
portfolio has the potential to be more attractive than some other, more
concentrated portfolios. In addition, the balanced approach reduces the risk
where events in any one country may adversely affect the entire portfolio.
Investors should note, however, that a balanced portfolio will generally be
more volatile than a portfolio consisting solely of bonds and may provide
lower returns than a portfolio consisting solely of stocks. Investors should
also be

9
<PAGE>

aware that although the Fund diversifies across more investment types than
most mutual funds, no one mutual fund can provide a complete investment
program for all investors. There can be no assurance that allocation of assets
both globally and across asset classes will reduce these risks or that the
Fund will achieve its investment objective.

The Fund seeks investment opportunities in the world's major stock, bond and
money markets. Under normal conditions, the Fund will invest its assets in at
least three countries including the United States. There is no limitation or
restriction on the amount of assets to be invested in any one asset class or
country. However, at least 25% of the Fund's total assets will always be
invested in fixed-income senior securities and at least 25% of the Fund's
total assets will always be invested in equities. Over the long-term, the Fund
will attempt to invest a minimum of 25% of its assets in the United States,
with the balance outside the United States, and the Fund will attempt to
maintain an asset allocation of 60% in equity securities and 40% in fixed-
income securities and short-term instruments.

The Fund will not invest more than 10% of its assets in the securities of
developing countries with emerging economies or securities markets. The Fund
may invest in asset-backed securities such as collateralized mortgage
obligations and other mortgage and non-mortgage asset-backed securities.

The average maturity of the debt securities in the Fund's portfolio will be
based on the judgment of FII as to future interest rate changes. The assets of
the Fund invested in fixed income securities will consist of securities which
are believed by FII to be high grade, that is, rated A or better by Standard &
Poor's Corporation ("S&P") or Moody's Investors Service, Inc. ("Moody's),
Fitch-1 by Fitch or Duff-1 by Duff & Phelps ("D&P") or if unrated, to be of
comparable high quality in the judgment of FII, subject to the supervision of
the Board of Trustees and the Adviser. The assets of the Fund invested in
short-term instruments will consist primarily of securities rated in the
highest category (for example, commercial paper rated "Prime-1" or "A-1" by
Moody's and S&P, respectively) or if unrated, in instruments that are
determined to be of comparable quality or are insured by foreign or U.S.
governments, their agencies or instrumentalities as to payment of principal
and interest. See "Risk Factors--Debt Securities."

During periods of adverse or unusual economic and/or market conditions, the
Fund may, for temporary defensive purposes, make substantial investments in
obligations of the U.S. Government, debt obligations of one or more foreign
governments, certificates of deposit, bankers' acceptances, high grade
commercial paper and repurchase agreements. For temporary defensive purposes,
the Fund can have all of its assets invested in any one country or currency.

The Fund may invest up to 5% of its net assets in options on equity securities
and up to 5% of its net assets in warrants, including options and warrants
traded in over-the-counter markets. The Fund may buy and sell financial
futures contracts and options on financial futures contracts. The Fund may
purchase or sell puts and calls on foreign currencies and securities, and
invest in "when-issued" securities, "partly paid" securities (securities paid
for over a period of time), and securities of foreign issuers. The Fund may
lend its portfolio securities and borrow money for investment purposes (i.e.,
leverage its portfolio). For a further discussion of these investments, see
"Risk Factors."

FII serves as sub-investment adviser to the Fund. FII is a wholly-owned
subsidiary of Fiduciary Investment Corporation, which, in turn, is a wholly-
owned subsidiary of Fiduciary Trust Company International. Fiduciary Trust
Company International has more than 30 years of experience in managing funds
that invest in international markets. The Adviser believes FII has unique
knowledge and experience in global investing.

FII will determine the amount of the Fund's assets to be invested in domestic
and foreign securities and the allocations to each asset class abroad will be
based on its assessment of where opportunities for long-term capital
appreciation and current income are expected to be most attractive. When
making this determination, FII will evaluate the political and economic risks
of the principal countries of the world, the relationship of their currencies
to the U.S. dollar, the outlook for their interest rates, credit quality, GNP
growth, inflation trends, yield relationships between markets, sectors, and
issues, demand and supply for funds, and a variety of other factors. FII
employs a "top down" assessment approach of countries, regions and currencies
and a "bottom up" assessment approach of stocks within selected sectors.

10
<PAGE>

GLOBAL HARD ASSETS FUND

OBJECTIVE:

Global Hard Assets Fund seeks long-term capital appreciation by investing
primarily in "Hard Asset Securities." Income is a secondary consideration.

POLICIES:

11
<PAGE>

sensitivity to interest rates, debt securities of Hard Asset Companies may
fluctuate in price in connection with changes in the price of the relevant
Hard Asset. The Fund will not invest more than 25% of its assets in debt
securities rated below BBB by S&P or Baa by Moody's.

12
<PAGE>

REITs are pooled investment vehicles which invest primarily in income
producing real estate or real estate related loans or interests. REIT's and
other real estate investments of the Fund are subject to certain risks. See
"Risk Factors--Real Estate Securities."

The Fund may invest in South African issuers. Political and social conditions
in South Africa, due to the unsettled political conditions which could recur
in South Africa or its neighboring countries, may pose certain risks to the
Fund's investments. If aggravated by local or international developments, such
risks could have an adverse effect on investments in South Africa, including
the Fund's investments and, under certain conditions, on the liquidity of the
Fund's portfolio and its ability to meet shareholder redemption requests. The
ability of the Fund to invest or hold its investments in South African
companies may be further affected by changes in the United States or South
African laws and regulations.

GLOBAL INCOME FUND

OBJECTIVE:

Global Income Fund seeks high total return through a flexible policy of
investing globally, primarily in debt securities.

POLICIES:

Total return is comprised of current income and capital appreciation. The Fund
attempts to achieve its investment objective by taking advantage of investment
opportunities throughout the world. The Fund emphasizes the current income
component of total return. Capital appreciation will result during times of
declining interest rates and, with respect to investing globally, as a result
of foreign currency fluctuations relative to a declining dollar. Normally, the
Fund will have at least 65% of its total assets invested in debt securities of
varying maturities.

The Adviser believes that diversification of assets on an international basis
may reduce the risk that events in any one country, including the United
States, may adversely affect the entire portfolio. However, there can be no
assurance that diversification of assets will reduce this risk. The Adviser
will determine the amount of the Fund's assets to be invested in corporate and
government securities based on its assessment of where opportunities for total
return are expected to be most attractive. When making this determination, the
Adviser will evaluate the political and economic risks of the principal
countries of the world, prospects for the relationship of their currencies to
the U.S. dollar, the outlook for their interest rates, credit quality and
other factors. The long-term assets of the Fund will consist of debt
securities rated B or better by S&P or Moody's or if unrated, of comparable
quality in the judgment of the Adviser. Debt securities rated BBB (investment
grade), BB or B will not exceed 25% of total net assets. Debt rated BB or B is
lower quality debt (commonly referred to as "junk bonds"). Lower rated debt
may offer higher returns, but also presents a greater risk of default than do
higher rated securities. As to debt securities rated BBB, BB or B, it is the
Adviser's intention to invest only in debt issued by a government or one of
its agencies, instrumentalities, political subdivisions or authorities. For a
further discussion of debt securities see "Risk Factors."

During normal market conditions, the Fund expects to invest at least 65% in
debt securities, such as obligations issued or guaranteed by a government or
any of its political subdivisions, agencies or instrumentalities, or by a
supranational organization chartered to promote economic development such as
the World Bank or European Economic Community, bonds, debentures, notes,
commercial paper, certificates of deposit and repurchase agreements, as well
as debt obligations which may have a call on a common stock or commodity by
means of a conversion privilege or attached warrants. The Fund may invest in
debt instruments of the U.S. Government and its agencies having varied
maturities, consisting of obligations issued or guaranteed as to both
principal and interest by the U.S. Government or backed by the "full faith and
credit" of the United States. In addition to direct obligations of the U.S.
Treasury such as Treasury bonds, notes and bills, these include securities
issued or guaranteed by

13
<PAGE>

different agencies such as the Federal Housing Administration, the Government
National Mortgage Association and the Small Business Administration. The Fund
may invest in collateralized mortgage obligations and other asset-backed
securities.

The average maturity of the debt securities in the Fund's portfolio will be
based on the Adviser's judgment as to future interest rate changes. The
Adviser expects the average maturity to be between three and ten years. In
addition, when the Adviser determines that a temporary defensive strategy is
warranted, the Fund may invest in securities maturing in 13 months or less,
and most or all of its investments may be in the United States or another
country.

The Fund may invest up to 5% of its net assets in options on equity securities
and up to 5% of its net assets in warrants, including options and warrants
traded in over-the-counter markets. Not more than 2% may be invested in
warrants that are not listed on the New York Stock Exchange or American Stock
Exchange. Warrants received as dividends on securities held by the Fund and
warrants acquired in units or attached to securities are not included in this
restriction. The Fund may invest up to 5% of its assets at the time of
purchase in preferred stocks and preferred stocks which may be convertible
into common stock. The Fund may buy and sell financial futures contracts and
options on financial futures contracts and may purchase or sell puts and calls
on foreign currencies and securities. The Fund may invest in "when-issued"
securities, "partly paid" securities (securities paid for over a period of
time) and securities of foreign issuers. In addition, the Fund may lend its
portfolio securities and borrow money for investment purposes (i.e., leverage
its portfolio). For a further discussion of these investments, see "Risk
Factors."

There is no limit on the amount the Fund may invest in any one country or in
securities denominated in the currency of any one country. Normally the Fund
will invest in three countries besides the United States. However, the Fund
may invest solely in the securities of one country such as the United States
when economic conditions warrant, such as an extreme undervaluation of the
currency and exceptionally high returns of that country's currency relative to
other currencies.

RISK FACTORS

FOREIGN SECURITIES

The Funds may purchase securities of foreign issuers including foreign
investment companies. Investments in foreign securities may involve a greater
degree of risk than investments in domestic securities due to the possibility
of exchange rate fluctuations and exchange controls, less publicly available
information, more volatile or less liquid securities markets, and the
possibility of expropriation, confiscatory taxation or political, economic or
social instability. In addition, some foreign companies are not generally
subject to the same uniform accounting, auditing and financial reporting
standards as are American companies and there may be less government
supervision and regulation of foreign stock exchanges, brokers and companies.

14
<PAGE>

Ownership of shares (except those held through depositories that meet the
requirements of the Act) is defined according to entries in the issuer's share
register and normally evidenced by extracts from that register, which have no
legal enforceability. Furthermore, share registration is carried out either by
the issuer or registrars located throughout Russia, which are not necessarily
subject to effective government supervision. As a result, it is possible for
the Fund to lose its registration and thus its ownership of these securities
due to fraud, illegal amendment, negligence or even mere oversight. This
system also may cause a delay in the Fund's sale of Russian securities to a
potential purchaser and subject the Fund to the risk of loss in connection
with the insolvency of a registrar. In addition, while applicable Russian
regulations impose liability on registrars for losses resulting from their
errors, it may be difficult for the Fund to enforce any rights it may have
against the registrar or issuer in the event of the loss of share
registration.

To reasonably ensure that its interest continues to be appropriately recorded,
the Fund will invest only in those Russian companies whose registrars have
entered into a contract with the Fund's Russian sub-custodian, which gives the
sub-custodian the right, among others, to inspect the share register and to
obtain extracts of share registers through regular audits. While these
procedures reduce the risk of loss, there can be no assurance that they will
be effective. This limitation may prevent the Fund from investing in the
securities of certain Russian issuers otherwise deemed suitable by the
Adviser.

EMERGING MARKETS SECURITIES

Investments of the Funds may be made from time to time in companies in
developing countries as well as in developed countries. Shareholders should be
aware that investing in the equity and fixed income markets of developing
countries involves
exposure to potentially unstable governments, economies based on only a few
industries and securities markets which trade a small number of securities and
may therefore at times be illiquid. Securities markets of developing countries
tend to be more volatile than the markets of developed countries. Countries
with developing markets may present the risk of nationalization of businesses,
restrictions on foreign ownership, or prohibitions of repatriation of assets,
and may have less protection of property rights than more developed countries.
The economies of countries with developing markets may be highly vulnerable to
changes in local or global trade conditions, and may suffer from extreme and
volatile debt burdens or inflation rates. Local securities markets may be
unable to respond effectively to increases in trading volume, potentially
making prompt liquidation of substantial holdings difficult or impossible at
times. Securities of issuers located in developing markets may have limited
marketability and may be subject to more abrupt or erratic price movements.
However, such markets have in the past provided the opportunity for higher
rates of return to investors. There is no assurance that these markets will
offer such opportunity in the future. The ability of a Fund to invest or hold
its investments in companies situated in developing countries may be further
affected by changes in United States or such countries' laws or regulations.

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PRECIOUS METALS

Global Hard Assets Fund may invest in precious metal coins, which have no
numismatic value, and bullion. The value of such coins and bullion is based
primarily on their precious metal content. Since such investments do not
generate any investment income, the sole source of return from such
investments would be from gains or losses realized on their sale. The Fund
incurs additional costs in storing gold bullion and coins. These storage costs
are generally higher than custodial costs for
securities. Although subject to substantial fluctuations in value, management
believes such investments could be beneficial to the investment performance of
the Fund and could be a potential hedge against inflation, as well as an
investment with possible growth potential. In addition, at the appropriate
time, investments in precious metal coins or bullion could help to moderate
fluctuations in the Fund's portfolio value, as at times the prices of precious
metals have tended not to fluctuate as widely as shares of issuers engaged in
the mining of such precious metals. In view of the established world market
for precious metals, the daily value of such coins is readily ascertainable
and their liquidity is assured. The Fund will maintain its precious metal
coins and bullion with Wilmington Trust Company.

FOREIGN CURRENCY AND FOREIGN CURRENCY TRANSACTIONS

Changes in currency exchange rates may affect the Funds' net asset value and
performance. There can be no assurance that the Adviser will be able to
anticipate currency fluctuations in exchange rates accurately. The Funds may
invest in a variety of derivatives and enter into hedging transactions to
attempt to moderate the effect of currency fluctuations. The Funds may
purchase and sell put and call options on, or enter into futures contracts or
forward contracts to purchase or sell, foreign currencies. This may reduce a
Fund's losses on a security when a foreign currency's value changes. The Funds
will enter into forward contracts to duplicate a cash market transaction. The
Funds will not purchase or sell foreign currency as an investment except that
Asia Dynasty Fund, Global Balanced Fund and Global Hard Assets Fund may enter
into currency swaps. See "Currency Swaps," "Options," "Futures Contracts" and
"Hedging and Other Investment Techniques and Strategies" below and "Foreign
Currency Transactions" and "Futures and Options Transactions" in the Statement
of Additional Information.

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<PAGE>

CURRENCY SWAPS

Except for Global Income Fund, the Funds may enter into currency swaps for
hedging purposes. Currency swaps involve the exchange of rights to make or
receive payments of the entire principal value in specified currencies. Since
currency swaps are individually negotiated, a Fund may expect to achieve an
acceptable degree of correlation between its portfolio investments and its
currency swap positions. The entire principal value of a currency swap is
subject to the risk that the other party to the swap will default on its
contractual delivery obligations. Global Hard Assets Fund may also enter into
other asset swaps. Asset swaps are similar to currency swaps in that the
performance of a Hard Asset (e.g., gold) may be "swapped" for another (e.g.,
energy).

The use of swaps is a highly specialized activity which involves investment
techniques and risks different from those associated with ordinary portfolio
transactions. If the Adviser or Sub-Adviser is incorrect in its forecasts of
market values and currency exchange rates and Hard Assets values, the
investment performance of the Fund would be less favorable than it would have
been if this investment technique were not used. Swaps are generally
considered illiquid and will be aggregated with other illiquid positions for
purposes of the limitation on illiquid investments.

OPTIONS

For hedging and other purposes (such as creating synthetic positions), each
Fund may invest up to 5% of its total assets, taken at market value at the
time of investment, in premiums on call and put options on domestic and
foreign securities, foreign currencies, stock and bond indices, financial
futures contracts and commodity futures contracts. This policy may be changed
without shareholder approval. The Funds may write call or put options. An
options transaction involves the writer of the option, upon receipt of a
premium, giving the right to sell (call option) or buy (put option) an
underlying asset at an agreed-upon exercise price.

The Funds may invest in options which are either listed on a domestic
securities exchange or traded on a recognized foreign exchange. In addition,
the Funds may purchase or sell over-the-counter options from dealers or banks
to hedge securities or currencies as approved by the Board of Trustees. In
general, exchange traded options are third party contracts with standardized
prices and expiration dates. Over-the-counter options are two party contracts
with price and terms negotiated by the buyer and seller, are generally
considered illiquid and will be subject to the limitation on investments in
illiquid securities.

FUTURES CONTRACTS

The Funds may buy and sell financial futures contracts which may include
security and interest-rate futures, stock and bond index futures contracts and
foreign currency futures contracts (for hedging purposes, as to Global Income
Fund). Global Hard Assets Fund may also buy and sell commodity futures
contracts, which may include futures on commodities indices for hedging and
other purposes, such as creating "synthetic" positions. A security or
interest-rate futures contract is an agreement between two parties to buy or
sell a specified security at a set price on a future date. An index futures
contract is an agreement to take or make delivery of an amount of cash based
on the difference between the value of the index at the beginning and at the
end of the contract period. A foreign currency futures contract is an
agreement to buy or sell a specified amount of a currency for a set price on a
future date. A commodity futures contract is an agreement to take or make
delivery of a specified amount of a commodity, such as gold, at a set price on
a future date.

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<PAGE>

A Fund will not commit more than 5% of its total assets to initial margin
deposits on futures contracts and premiums on options on futures contracts,
except that with respect to Asia Dynasty Fund, Global Balanced Fund and Global
Hard Assets Fund, margin deposits for futures positions entered into for BONA
FIDE hedging purposes, as such term is defined in the Commodity Exchange Act,
are excluded from the 5% limitation. As the value of the underlying asset
fluctuates, either party to the contract is required to make additional margin
payments, known as "variation margin," to cover any additional obligation it
may have under the contract.

HEDGING AND OTHER INVESTMENT TECHNIQUES AND STRATEGIES

Options and futures contracts can be used by the Funds as part of various
hedging techniques and strategies.

When the Funds intend to acquire securities (or gold bullion or coins in the
case of Global Hard Assets Fund) for their portfolios, they may use call
options or futures contracts as a means of fixing the price of the security
(or gold) they intend to purchase at the exercise price (in the case of an
option) or contract price (in the case of a futures contract). An increase in
the acquisition cost would be offset, in whole or part, by a gain on the
option or futures contract. Options and futures contracts requiring delivery
of a security may also be useful to the Funds in purchasing a large block of
securities that would be more difficult to acquire by direct market purchases.
If the Funds hold a call option rather than the underlying security itself,
the Funds are partially protected from any unexpected decline in the market
price of the underlying security and in such event could allow the call option
to expire, incurring a loss only to the extent of the premium paid for the
option. Using a futures contract would not offer such partial protection
against market declines and the Funds would experience a loss as if they had
owned the underlying security.

To protect against anticipated declines in the value of the Funds' investment
holdings, the Funds may use options, forward and futures contracts, structured
notes (Global Hard Assets Fund), swaps and similar investments (commonly
referred to as derivatives) as a defensive technique to protect the value of
an asset the Adviser (or Sub-Adviser) deems desirable to hold for tax or other
considerations or for investment reasons. If the anticipated decline in the
value of the asset occurs, it would be offset, in whole or part, by a gain on
the futures contract, put option or swap. The premium paid for the put option
would reduce any capital gain otherwise available for distribution when the
security is eventually sold.

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<PAGE>

securities or prevent losses if the prices of such securities decline.
Furthermore, such hedging transactions reduce or preclude the opportunity for
gain if the value of the hedged currency should change relative to the other
currency. Last, when the Funds use options and futures in anticipation of the
purchase of a portfolio security to hedge against adverse movements in the
security's underlying currency, but the purchase of such security is
subsequently deemed undesirable, the Fund may incur a gain or loss on the
option or futures contract.

In those situations where foreign currency options or futures contracts, or
options on futures contracts may not be readily purchased (or where such
options or contracts may be deemed illiquid) in the primary currency in which
the hedge is desired, the hedge may be obtained by purchasing or selling an
option, or futures contract or forward contract on a secondary currency. The
secondary currency will be selected based upon the Adviser's (or Sub-
Adviser's) belief that there exists a significant correlation between the
exchange rate movements of the primary and secondary currencies. This strategy
may be employed with respect to other securities and assets in which the Funds
may invest. However, there can be no assurances that, in the case of foreign
currencies, the exchange rate or the primary and secondary currencies will
move as anticipated or, in the case of other securities, or generally, that
the relationship between the hedged security and the hedging instrument will
continue. If they do not move as anticipated or the relationship does not
continue, a loss may result to the Funds on their investments in the hedging
positions.

The Funds may also use futures contracts and options, forward contracts and
swaps as part of various investment techniques and strategies, such as
creating non-speculative "synthetic" positions (covered by segregation of
liquid assets) or implementing "cross-hedging" strategies. A "synthetic
position" is the duplication of a cash market transaction when deemed
advantageous by the Adviser (or Sub-Adviser) for cost, liquidity or
transactional efficiency reasons. A cash market transaction is the purchase or
sale of a security or other asset for cash. "Cross-hedging" involves the use
of one currency to hedge against the decline in the value of another currency.
The use of such instruments as described herein involves several risks. First,
there can be no assurance that the prices of such instruments and the hedged
security or the cash market position will move as anticipated. If
prices do not move as anticipated, a Fund may incur a loss on its investment,
may not achieve the hedging protection it anticipated and/or incur a loss
greater than if it had entered into a cash market position. Second,
investments in such instruments may reduce the gains which would otherwise be
realized from the sale of the underlying securities or assets which are being
hedged. Third, positions in such instruments can be closed out only on an
exchange that provides a market for those instruments. There can be no
assurance that such a market will exist for a particular futures contract or
option. If the Fund cannot close out an exchange traded futures contract or
option which it holds, it would have to perform its contract obligation or
exercise its option to realize any profit and would incur transaction costs on
the sale of the underlying assets.

Over-the-counter options and other investments which do not have readily
available market quotations, are subject to the limitation on investments in
illiquid securities.

Global Balanced Fund, Global Hard Assets Fund and Global Income Fund may
invest in commercial paper which is indexed to certain specific foreign
currency exchange rates. The terms of such commercial paper provide that its
principal amount is adjusted upwards or downwards (but not below zero) at
maturity to reflect changes in the exchange rate between two currencies while
the obligation is outstanding. Each will purchase such commercial paper with
the currency in which it is denominated and, at maturity, will receive
interest and principal payments thereon in that currency, but the amount or
principal payable by the issuer at maturity will change in proportion to the
change (if any) in the exchange rate between the two specified currencies
between the date the instrument is issued and the date the instrument matures.
While such commercial paper entails the risk of loss of principal, the
potential for realizing gains as a result of changes in foreign currency
exchange rates enables that Fund to hedge or cross-hedge against a decline in
the U.S. dollar value of investments denominated in foreign currencies while
providing an attractive money market rate of return. Each will purchase such
commercial paper for hedging purposes only, not for speculation. The Funds
will establish a segregated account with respect to their investments in this
type of commercial paper and will maintain in such account cash not available
for investment or U.S. Government securities or other liquid high quality
securities having a value equal to the aggregate principal amount of
outstanding commercial paper of this type.

See "Futures and Options Transactions" in the Statement of Additional
Information for further information about futures contracts and options,
including tax effects and risks to the Funds.

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<PAGE>

INDEXED SECURITIES AND STRUCTURED NOTES

Global Hard Assets Fund may invest in indexed securities whose value is linked
to one or more currencies, interest rates, commodities, or financial or
commodity indices. An indexed security enables the investor to purchase a note
whose coupons and/or principal redemption are linked to the performance of an
underlying asset. Indexed securities may be positively or negatively indexed
(i.e., their value may increase or decrease if the underlying instrument
appreciates). Indexed securities may have return characteristics similar to
direct investments in the underlying instrument or to one or more options on
the underlying instrument. Indexed securities may be more volatile than the
underlying instrument itself, and present many of the same risks as investing
in futures and options. Indexed securities are also subject to credit risks
associated with the issuer of the security with respect to both principal and
interest. Only securities linked to one or more non-agricultural commodities
or commodity indices will be considered a Hard Asset Security.

DEBT SECURITIES

Debt securities with similar maturities may have different yields, depending
upon several factors, including the relative financial condition of the
issuers. A description of debt securities ratings is contained in the Appendix
to the Statement of Additional Information. High grade means a rating of A or
better by Moody's or S&P's, or of comparable quality in the judgment of the
Adviser (or Sub-Adviser) if no rating has been given by either service. Many
securities of foreign issuers are not rated by these services. Therefore, the
selection of such issuers depends to a large extent on the credit analysis
performed by the Adviser (or Sub-Adviser).

LOW RATED OR UNRATED DEBT SECURITIES

Global Hard Assets Fund and Global Income Fund may invest in lower quality,
high-yielding debt securities, including high-yielding foreign debt securities
(commonly referred to as "junk bonds") which are (i) rated as low as CCC by
S&P or Caa by Moody's (Global Hard Assets Fund) or B by S&P and Moody's
(Global Income Fund) or (ii) unrated. Lower rated and unrated debt securities
have some "equity" characteristics and are considered speculative and involve
greater risk of loss than higher rated debt securities and are more sensitive
to changes in the financial condition of their issuers and to price
fluctuations in response to changes in interest rates. Lower rated debt
securities present a significantly greater risk of default than do higher
rated securities and, in times of poor business or economic conditions, the
Fund may lose interest and/or principal on such

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<PAGE>

securities. Global Hard Assets Fund will not invest more than 25% of its
assets in debt securities rated below BBB by S&P or Baa by Moody's. Global
Income Fund will not invest more than 25% of its assets in debt securities
rated below B by S&P and Moody's.

REAL ESTATE SECURITIES

Although Global Hard Assets Fund will not invest in real estate directly, the
Fund may invest up to 50% of its assets in equity securities of Real Estate
Investment Trusts ("REITs") and other real estate industry companies or
companies with substantial real estate investments. The Fund is therefore
subject to certain risks associated with the real estate industry in general
and REITs in particular. REITs are subject to interest rate risk, heavy cash
flow dependency, default by borrowers, self-liquidation and the possibilities
of failing to qualify for the exemption from tax for distributed income under
the Code. See "Real Estate Securities" in the Statement of Additional
Information.

ASSET-BACKED SECURITIES

Except for Asia Dynasty Fund, the Funds may invest in asset-backed securities.
Asset-backed securities represent interests in pools of consumer loans
(generally unrelated to mortgage loans) and most often are structured as pass-
through securities. Interest and principal payments ultimately depend on
payment of the underlying loans, although the securities may be supported by
letters of credit or other credit enhancements. The value of asset-backed
securities may also depend on the creditworthiness of the servicing agent for
the loan pool, the originator of the loans, or the financial institution
providing the credit enhancement.

COLLATERALIZED MORTGAGE OBLIGATIONS ("CMOS")

Except for Asia Dynasty Fund, the Funds may invest in CMOs. CMOs are fixed-
income securities which are collateralized by pools of mortgage loans created
by commercial banks, savings and loan institutions, private mortgage insurance
companies and mortgage bankers. In effect, CMOs "pass through" the monthly
payments made by individual borrowers on their mortgage loans. Prepayments of
the mortgages included in the mortgage pool may influence the yield of the
CMO. In addition, prepayments usually increase when interest rates are
decreasing, thereby decreasing the life of the pool. As a result, reinvestment
of prepayments may be at a lower rate than that on the original CMO. Timely
payment of interest and principal (but not the market value) of these pools is
supported by various forms of insurance or guarantees. The Funds may buy CMOs
without insurance or guarantees if, in the opinion of the Adviser or Sub-
Adviser, the pooler is creditworthy or if rated A or better by S&P or Moody's.
S&P and Moody's assign the same rating classifications to CMOs as they do to
bonds. In the event that any CMOs are determined to be investment companies,
the Funds will be subject to certain limitations under the Act.

PARTLY PAID SECURITIES

LOANS OF PORTFOLIO SECURITIES

The Funds may lend to broker-dealers portfolio securities with an aggregate
market value of up to one-third of its total assets. Such loans must be
secured by collateral (consisting of any combination of cash, U.S. Government
securities or irrevocable letters of credit) in an amount at least equal (on a
daily marked-to-market basis) to the current market value of the securities
loaned. The Funds may terminate the loans at any time and obtain the return of
the securities loaned within one business day. The Funds will continue to
receive any interest or dividends paid on the loaned securities and will
continue to have voting rights with respect to the securities. The Funds might
experience risk of loss if the broker-dealer with which they have engaged in a
portfolio loan transaction breaches its agreement with the Funds.

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<PAGE>

BORROWING

The Funds may borrow up to 30% of the value of their net assets to increase
their holdings of portfolio securities. Under the Act, each Fund is required
to maintain continuous asset coverage of 300% with respect to such borrowings
and to sell (within three days) sufficient portfolio holdings to restore such
coverage if it should decline to less than 300% even if the sale would be
disadvantageous from an investment standpoint. Leveraging by means of
borrowing will exaggerate the effect of any increase or decrease in the value
of portfolio securities on a Fund's net asset value, and money borrowed will
be subject to interest and other costs which may or may not exceed the
investment return received from the securities purchased with borrowed funds.
It is anticipated that such borrowings would be pursuant to a negotiated loan
agreement with a commercial bank or other institutional lender.

DIRECT INVESTMENTS

Except for Global Income Fund, the Funds may invest up to 10% of their total
assets in direct investments. For more information, see "Risk Factors--Direct
Investments" in the Statement of Additional Information.

Direct investments include the private purchase from an enterprise of any
equity interest in the enterprise in the form of shares of common stock or
equity interests in trusts, partnerships, joint ventures or similar
enterprises, and (ii) the purchase of such an equity interest in an enterprise
from a principal investor in the enterprise. In each case a Fund will, at the
time of making the investment, enter into a shareholder or similar agreement
with the enterprise and one or more other holders of equity interests in the
enterprise. The Adviser (or Sub-Adviser) anticipates that these agreements
will, in appropriate circumstances, provide for the Fund to appoint a
representative to the board of directors or similar body of the enterprise and
for eventual disposition of the Fund's investment in the enterprise. Such a
representative of the Fund will be expected to provide the Fund with the
ability to monitor its investment and protect its rights in the investment and
will not be appointed for the purpose of exercising management or control of
the enterprise.

Certain of the Funds' direct investments, particularly the Asia Dynasty Fund's
investments in China, will include investments in smaller, less seasoned
companies. These companies may have limited product lines, markets or
financial resources, or they may be dependent on a limited management group.
The Funds do not anticipate making direct investments in start-up operations,
although it is expected that in some cases the Funds' direct investments will
fund new operations for an enterprise which itself is engaged in similar
operations or is affiliated with an organization that is engaged in similar
operations. With respect to the Asia Dynasty Fund, such direct investments may
be made in entities that are reasonably expected in the foreseeable future to
become Asia Growth Companies, either by expanding current operations or
establishing significant operations in the Asia Region.

Direct investments may involve a high degree of business and financial risk
that can result in substantial losses. Because of the absence of any public
trading market for these investments, a Fund may take longer to liquidate
these positions than would be the case for publicly traded securities.
Although these securities may be resold in privately negotiated transactions,
the prices on these sales could be less than those originally paid by the
Fund. Furthermore, issuers whose securities are not publicly traded may not be
subject to public disclosure and other investor protection requirements
applicable to publicly traded securities. If such securities are required to
be registered under the securities laws of one or more jurisdictions before
being resold, a Fund may be required to bear the expenses of registration. In
addition, in the event a Fund sells unlisted foreign securities, any capital
gains realized on such transactions may be subject to higher rates of taxation
than taxes payable on the sale of listed securities. Direct investments are
generally considered illiquid and will be aggregated with other illiquid
investments for purposes of the limitation on illiquid investments. Direct
investments can be difficult to price and will be valued at fair value as
determined in good faith by the Board of Trustees. The pricing of direct
investments may not be reflective of the price at which these assets could be
liquidated.

SHORT SALES

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The Fund will establish a segregated account with respect to its short sales
and maintain in such account cash not available for investment, U.S.
Government securities or other liquid, high-quality securities having a value
equal to the difference between (i) the market value of the securities sold
short at the time they were sold short and (ii) any cash, U.S. Government
securities or other liquid, high-quality securities required to be deposited
as collateral with the broker in connection with the short sale (not including
the proceeds from the short sale). Such segregated account will be marked to
market daily, so that (i) the amount in the segregated account plus the amount
deposited with the broker as collateral equals the current market value of the
securities sold short and (ii) in no event will the amount in the segregated
account plus the amount deposited with the broker as collateral fall below the
original value of the securities at the time they were sold short. The total
value of the assets deposited as collateral with the broker and deposited in
the segregated account will not exceed 50% of the Fund's net assets. The
Fund's ability to engage in short sales may be limited by the requirements of
current U.S. tax law that the Fund derive less than 30% of its gross income
from the sale or other disposition of securities held less than three months.
Securities sold short and then repurchased, regardless of the actual time
between the two transactions, are considered to have been held for less than
three months.

REPURCHASE AGREEMENTS

In a repurchase agreement, a Fund acquires a security for a relatively short
period, and simultaneously agrees to sell it back at an agreed upon price and
time. The agreement results in a fixed rate of return that is not subject to
market fluctuations during the Fund's holding period. The Funds will enter
into repurchase agreements with respect to securities in which they may invest
with member banks of the Federal Reserve System or certain non-bank dealers.
Under each repurchase agreement the selling institution will be required to
maintain the value of the securities subject to the repurchase agreement at
not less than their repurchase price. Repurchase agreements could involve
certain risks in the event of default or insolvency of the other party. The
Adviser (or Sub-Adviser), acting under the supervision of the Board of
Trustees, reviews the creditworthiness of those non-bank dealers with which
the Funds enter into repurchase agreements to evaluate these risks. See
"Repurchase Agreements" in the Statement of Additional Information.

LIMITING INVESTMENT RISKS

1. Asia Dynasty Fund, Global Balanced Fund and Global Hard Assets Fund will
not invest more than 15% of the value of their net assets in securities
which are not readily marketable (including repurchase agreements which
mature in more than seven days and over-the-counter options and over-
the-counter foreign currency options). Global Income Fund will not
invest more than 10% of the value of its net assets in over-the-counter
options, over-the-counter currency options and other investments (other
than short-term instruments) which are not readily marketable; however,
the Fund may invest an additional 5% in short-term money market
instruments which are not readily marketable, such as repurchase
agreements and time deposits which mature in more than seven days.

2. The Funds will not purchase more than 10% of any class of securities of
a company, including more than 10% of its outstanding voting securities
except that Asia Dynasty Fund, Global Balanced Fund and Global Hard
Assets Fund may purchase more than 10% of any non-voting class of
securities; and Asia Dynasty Fund, Global Balanced Fund and Global
Income Fund will not invest more than 25% of the value of their total
assets in securities of any one industry.

3. The Funds will not invest more than 10% of their total assets in
securities of other investment companies.

Further information regarding these and other of the Funds' investment
policies and restrictions is provided in the Statement of Additional
Information.

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PURCHASE OF SHARES

Shares of the Funds may be purchased either by (1) ordering the shares through
a "Broker" or "Agent," as defined below, and forwarding a completed
Application or brokerage firm settlement instructions with payment (except for
Investors Fiduciary Trust Company fiduciary retirement accounts, which must be
purchased direct); or (2) completing an Application and mailing it with
payment to the Funds' Transfer Agent and Dividend Paying Agent, DST Systems,
Inc., ("DST"). Payment, made payable to the Van Eck Funds, must be in U.S.
Dollars. Third party checks will not be accepted. Checks drawn on a foreign
bank will not be accepted unless provisions are made for payment in U.S.
Dollars through a U.S. bank. Each Fund reserves the right to reject any
purchase order.

The net asset value of each Fund is computed once daily, as of the close of
business on the New York Stock Exchange which is normally at 4:00 P.M.,
Eastern Time, on each business day, Monday through Friday, exclusive of
national business holidays. The assets of the Funds are valued at market or,
if market value is not ascertainable, at fair value as determined in good
faith by the Board of Trustees. The Funds may invest in securities or futures
contracts listed or traded on foreign exchanges which trade on Saturdays or
other customary United States national business holidays (i.e., days on which
the Funds are not open for business), and consequently, the net asset values
of shares of the Funds may be significantly affected on days when an investor
has no access to the Funds.

An investor who wishes to purchase shares of more than one Fund must complete
separate Applications for each Fund and remit separate checks to each Fund. If
an investor fails to indicate the Fund to be purchased, the check will be
applied to a purchase of the U.S. Government Money Fund, a series of Van Eck
Funds, and the investor may then exchange at current price into the desired
Fund.

Certificates for shares of the Funds are issued only upon specific request to
DST. Due to the conversion feature, certificates are not recommended for Class
B or Class C shareholders.

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<PAGE>

ALTERNATIVE PURCHASE ARRANGEMENTS

Shares of the Funds may be purchased under any one or all of the following
arrangements:

(i) with an initial sales charge imposed at the time of purchase ("Class A
shares") ALL FUNDS;

(ii) with a contingent deferred sales charge imposed at the time of
redemption if such redemption is within six years of the initial purchase
("Class B shares") ALL FUNDS EXCEPT GLOBAL INCOME FUND; OR

(iii) with a redemption charge imposed at the time of redemption if such
redemption is within 12 months of the initial purchase ("Class C shares")
GLOBAL HARD ASSETS FUND ONLY.

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<PAGE>

sales or redemption charge incurred upon redemption within applicable time.
(See tables of sales charges on pages 26 and 27.) Sales personnel of Brokers
and Agents distributing the Fund's shares may receive differing compensation
from selling Class A, Class B or Class C shares. Investors should understand
that the purpose and function of the contingent deferred sales charge or
redemption charge and ongoing distribution and services fees with respect to
the Class B and Class C shares are the same as those of the initial sales
charge and ongoing distribution and services fee with respect to the Class A
shares.

SALES CHARGES, DISTRIBUTION AND SERVICE FEES

Sales charges on purchases of shares of each of the Funds are set forth in the
tables below. Each Fund imposes a 12b-1 distribution and services fee. Except
for Global Income Fund, each Fund's Class A shares have a 12b-1 fee of .50% of
average daily net assets per annum. Global Income Fund-A has a 12b-1 fee of
.25% of average daily net assets per annum. All or a portion of these fees may
be paid to banks, brokers and dealers for their shareholder servicing,
promotion or distribution activities, as determined from time to time by the
Funds.

CLASS A
(ASIA DYNASTY FUND, GLOBAL BALANCED FUND, GLOBAL HARD ASSETS FUND & GLOBAL
INCOME FUND)
<TABLE>
<CAPTION>
SALES CHARGE AS A DISCOUNT TO
PERCENTAGE OF BROKERS OR AGENTS
------------------- AS A PERCENTAGE
OFFERING NET AMOUNT OF THE
DOLLAR AMOUNT OF PURCHASE PRICE INVESTED OFFERING PRICE*
- ------------------------- -------- ---------- -----------------
<S> <C> <C> <C>
Less than $100,000........................ 4.75% 5.0% 4.00%
$100,000 to less than $250,000............ 3.75% 3.9% 3.15%
$250,000 to less than $500,000............ 2.50% 2.6% 2.00%
$500,000 to less than $1,000,000.......... 2.00% 2.0% 1.65%
$1,000,000 and over....................... None**
</TABLE>

26
<PAGE>

<TABLE>
<CAPTION>
CLASS
B***+
(ASIA DYNASTY FUND, GLOBAL BALANCED FUND & GLOBAL HARD ASSETS FUND)
SHAREHOLDER'S TIME OF REDEMPTION CONTINGENT DEFERRED SALES CHARGE
- -------------------------------- --------------------------------
<S> <C>
During Year One.......................................... 5.0% of the lesser of NAV or purchase price
During Year Two.......................................... 4.0% of the lesser of NAV or purchase price
During Year Three........................................ 4.0% of the lesser of NAV or purchase price
During Year Four......................................... 3.0% of the lesser of NAV or purchase price
During Year Five......................................... 2.0% of the lesser of NAV or purchase price
During Year Six.......................................... 1.0% of the lesser of NAV or purchase price
Thereafter............................................... None
</TABLE>

<TABLE>
<CAPTION>
CLASS C***
(GLOBAL HARD ASSETS FUND)
SHAREHOLDER'S TIME OF REDEMPTION CONTINGENT DEFERRED REDEMPTION CHARGE
- -------------------------------- -------------------------------------
<S> <C> <C>
During Year One.......................................... 1.0% of the lesser of NAV or purchase price
Thereafter............................................... None
</TABLE>
- --------
* Brokers or Agents who receive substantially all of the sales charge for
shares they sell may be deemed to be statutory underwriters.
** For any single purchase of $1,000,000 or more of Class A shares the
Distributor may pay a finder's fee to parties eligible to receive such a
fee. The fee will be paid during the first two years after any such
purchase and is calculated as a quarterly payment equal to 0.0625% (.25%
on an annual basis) of the average daily net asset value of the shares
purchased that remain outstanding throughout such months. An eligible
purchase is a single purchase for a single client (purchases for other
clients cannot be aggregated for purposes of qualification for the
finder's fee). Eligible purchases registered to a street or nominee name
account must provide appropriate verification of eligibility and average
daily net assets upon which payment is to be made. Purchases made through
a bank trust department, advisory firm or special program, as determined
by the Distributor, which purchases shares at net asset value do not
qualify for the finder's fee. The finder's fee will be credited to the
dealer of record on the record date (currently, the last calendar day of
February, May, August and November) and will be generally paid on the 20th
day of the following month. Please contact the Distributor to determine
eligibility to receive such fee.
*** Brokers or Agents who sell Class B Shares receive a sales commission of
4.0% of the value of the shares sold at the time of investment. Brokers or
Agents who sell Class C shares receive a distribution and a servicing fee
of .75 of 1% and .25 of 1% respectively, of the value of the shares sold
at the time of investment (see "Plan of Distribution"). The Distributor
may alter these amounts.
+ Shares purchased prior to April 30, 1997 remain subject to the contingent
deferred sales charge schedule in effect at the time of purchase.
- --------
- --------
Brokers and Agents may receive different compensation for selling Class A,
Class B or Class C shares.

27
<PAGE>

excess deferral amounts pursuant to Sections 401(k)(8) or 402(g) of the Code,
or from the death or disability of the employee. The charge is not waived from
any distributions from IRAs or other qualified retirement plans not
specifically described above. A shareholder, or the Broker or Agent, must
notify DST at the time the redemption instructions are provided whenever a
waiver of the contingent deferred sales charge or redemption charge applies.

Shares of the Funds may be purchased without a sales charge by Trustees,
officers and full-time employees (and their parents, spouses and children
under the age of 21) and agents of the Trust, the Adviser, Sub-Adviser or the
Distributor and their affiliates and agents and by employees of Brokers or
Agents (and their spouses and children under the age of 21) or in connection
with a merger or other business combination, or by the Adviser for the benefit
of certain discretionary advisory accounts it manages meeting minimum asset
requirements. Shares may also be purchased at net asset value (a) (i) through
an investment adviser who makes such purchases through a broker/dealer, bank
or trust company (each of which may impose transaction fees on the purchase),
(ii) by an investment adviser for its own account or for a bona fide advisory
account over which the investment adviser has investment discretion or (iii)
through a financial planner who charges a fee and makes such purchases through
a financial institution which maintains a net asset value purchase program
that enables the Distributor to realize certain economies of scale or (b)
through bank trust departments or a trust company on behalf of bona fide trust
or fiduciary accounts by notifying the Distributor in advance of purchase. A
bona fide advisory, trust or fiduciary account is one which is charged an
asset-based fee and whose purpose is other than purchase of Fund shares at net
asset value. Shares of the Funds which are sold with a sales charge may be
purchased by a foreign bank or other foreign fiduciary account for the benefit
of foreign investors at the sales charge applicable to the Funds' $500,000
breakpoint level, in lieu of the sales charges in the above scale. The
Distributor has entered into arrangements with foreign financial institutions
pursuant to which such institutions may be compensated by the Distributor from
its own resources for assistance in distributing Fund shares. Clients of
Netherlands' insurance companies who are not U.S. citizens or residents may
purchase shares without a sales charge. Shares may be purchased at net asset
value on behalf of retirement and deferred compensation plans and trusts
funding such plans (excluding Individual Retirement Accounts ("IRAs") and SEP-
IRAs unless they qualify for such purchase under one of the prior exceptions)
including, but not limited to, plans and trusts defined in Sections 401(a),
403(b) or 457 of the Internal Revenue Code and "rabbi trusts" which
participate in a program for the purchase of shares at net asset value offered
by a financial institution and which institution maintains an omnibus account
with the Fund. Brokers may charge a transaction fee for effecting purchases at
net asset value or redemptions. See "Availability of Discounts."

GROUP PURCHASES

An individual who is a member of a qualified group may purchase shares of the
Funds at the reduced commission applicable to the group taken as a whole. The
commission is based upon the aggregate dollar value, at the current offering
price, of shares owned by the group, plus the securities currently being
purchased. For example, if members of the group held $80,000, calculated at
current offering price, of Global Income Fund-A's shares and now were
investing $25,000, the sales charge would be 3.75%. Information concerning the
current sales charge applicable to a group may be obtained by contacting the
Distributor.

28
<PAGE>

COMBINED PURCHASES

Shares of funds in the Van Eck Group of Funds (except U.S. Government Money
Fund ) may be purchased at the initial sales charge applicable to the quantity
purchase levels shown above by combining concurrent purchases.

LETTER OF INTENT

Purchasers who anticipate that they will invest (other than through exchanges)
$100,000 or more in one or more of the funds in the Van Eck Group of Funds,
except for U.S. Government Money Fund (or $25,000 or more in International
Investors Gold Fund and Gold/Resources Fund), within thirteen months may
execute a Letter of Intent on the form in the Application. The execution of a
Letter of Intent will result in the purchaser paying a lower initial sales
charge, at the appropriate quantity purchase level shown above, on all
purchases during a thirteen month period. A purchase not originally made
pursuant to a Letter of Intent may be included under a backdated Letter of
Intent executed within 90 days after such purchase. For further details,
including escrow provisions, see the Letter of Intent provisions in the
Instructions to the Application.

RIGHT OF ACCUMULATION

AVAILABILITY OF DISCOUNTS

EXCHANGE PRIVILEGE

29
<PAGE>

Shareholders of funds in the Van Eck Group of Funds may exchange shares, at
net asset value, for shares of the same Class of any of the other funds.
Shares of U.S. Government Money Fund acquired other than pursuant to the
Exchange Privilege may only be exchanged into Class A shares, subject to
payment of the applicable sales charge. For federal income tax purposes, any
exchange pursuant to the Exchange Privilege, other than exchanges in
retirement plans offered by the Funds, will be regarded as a sale of shares,
and any gain or loss must generally be recognized by the shareholder.

WRITTEN EXCHANGE

TELEPHONE EXCHANGE AND REDEMPTION PRIVILEGES

30
<PAGE>

TAX-SHELTERED RETIREMENT PLANS

Shares of the Funds are available for purchase in connection with the
following tax-sheltered retirement plans:

QUALIFIED PENSION PLAN--available to self-employed individuals, partnerships,
corporations and their employees.

INVESTMENT PROGRAMS
DIVIDEND REINVESTMENT PLAN

AUTOMATIC INVESTMENT PLAN

31
<PAGE>

proceeds to purchase shares of a Fund for the investor's account. Further
details of the Automatic Investment Plan are given in an application which is
available from DST or the Distributor. See "Investment Programs" in the
Statement of Additional Information.

AUTOMATIC EXCHANGE PLAN

AUTOMATIC WITHDRAWAL PLAN

REDEMPTION OF SHARES

The market value of the securities in the portfolio of each Fund is subject to
daily fluctuations and the net asset value of the Funds' shares will fluctuate
accordingly. Therefore, the Funds' redemption value may be more or less than
the shareholder's cost. (See "Purchase of Shares.")

WRITTEN REDEMPTION

A shareholder wishing to redeem shares of any of the Funds may do so by
sending to DST, P.O. Box 418407, Kansas City, Missouri 64141: (1) a written
request for redemption in proper form signed by all registered owners exactly
as the account is registered, specifying the number of shares or amount of
investment to be redeemed (or that all shares credited to a Fund account be
redeemed); (2) if the amount redeemed is $50,000 or more, or if the proceeds
of redemption are paid to other than the registered owner of the shares at the
address on record at DST, a guarantee of the signature of each registered
owner by an eligible guarantor institution (such as a broker-dealer or bank; a
notarization by a notary public is not acceptable); and (3) any additional
documents concerning authority and related matters in the case of estates,
trusts, guardianships, custodianships,

32
<PAGE>

partnerships and corporations (e.g., appointments as executor or
administrator, trust instruments or certificates of corporate authority)
requested by DST. If the shares to be redeemed were issued in certificate
form, the certificates must be endorsed for transfer (or be accompanied by an
endorsement) and must be submitted with the written request for redemption.
The requirement for a signature guarantee is waived for redemptions of $50,000
or less if the redemption is a transfer of assets from an IFTC held retirement
plan in one of the funds in the Van Eck Group of Funds to a retirement plan
held by another recognized custodian/trustee. For additional mailing
instructions to DST and times of processing, see "Purchase of Shares."

TELEPHONE REDEMPTION (SEE "TELEPHONE EXCHANGE AND REDEMPTION PRIVILEGES" ON
PAGE 30)

BROKER/AGENT CONFIRMED REDEMPTION

For the convenience of shareholders, the Funds have authorized the Distributor
as agent to accept confirmed orders only from Brokers and Agents for the
redemption of shares of the Funds. If a shareholder uses the services of a
Broker or Agent in effecting a redemption of shares, the Broker or Agent may
charge a fee for its services. The redemption price is the net asset value per
share next determined after the redemption order is received by the Broker or
Agent prior to the close of business on the New York Stock Exchange on the day
received. Brokers and Agents have the responsibility of submitting such
redemption orders to the Distributor not later than 5:00 p.m., Eastern Time,
or to DST through the facilities of the National Securities Clearing
Corporation by 7:00 p.m., Eastern Time, on such day in order to obtain that
day's applicable redemption price. Settlement of confirmed orders from
accounts will not be effected until receipt of instructions in proper form
(including any share certificates) as described above or an indemnity from the
Broker or Agent of record on the account. Some Brokers or Agents may have
self-imposed restrictions regarding the submission of confirmed redemption
orders on behalf of shareholders. See "Purchase of Shares" for DST's times of
processing.

EXPEDITED REDEMPTION

REDEMPTION BY CHECK

Shareholders of Global Balanced Fund-A and Global Income Fund-A may, upon
completion of the "Redemption by Check" portion of the Application, elect to
redeem by check shares of the Fund which are on deposit with DST. These
checks, which are drawn on The United Missouri Bank of Kansas City (the
"Bank") may be made payable to the order of any person and may not be drawn
for less than $500 or more than $5,000,000. The amount of the check may not be
in excess of 90% of the net asset value of the shares in the shareholder's
account (excluding for this purpose the current month's accumulated dividends
and shares for which certificates have been issued). When such a check is
presented to the Bank for payment, the Bank as the shareholders' agent, acting
under the authority of the Redemption by Check procedure, will cause the Fund
to redeem a sufficient number of full and fractional shares to cover the
amount of the check. A shareholder may not write a check to close an account
but should follow the appropriate procedure set forth above. Retirement plan
accounts, accounts held on behalf of minors and accounts with IRS withholding
are not eligible for Redemption by Check. For further information concerning
Redemption by Check, shareholders should contact DST.

33
<PAGE>

BUY-BACK PRIVILEGE

Any shareholder who redeems Class A shares of any of the Funds has a one-time
right to reinvest in shares of these Funds at net asset value without the
payment of a sales charge within 30 days after the redemption. The amount of
this reinvestment cannot exceed the amount of the redemption proceeds and
shareholders must inform the Fund or DST that they are exercising this right
at the time of the reinvestment. Although redemption of shares is normally a
taxable event and a gain or a loss must be recognized, subsequent reinvestment
within such 30-day period in the same Fund is considered a "wash sale" under
federal income tax law and no loss on such redemption may be recognized for
federal income tax purposes.

TRANSFER OF OWNERSHIP

DIVIDENDS AND DISTRIBUTIONS

Asia Dynasty Fund and Global Hard Assets Fund intend to make distributions
from net investment income in June and December and distribute any net
realized capital gains resulting from the Funds' investment activity annually
in December. Global Balanced Fund intends to make distributions from net
investment income on a quarterly basis in March, June, September and December
and distribute any net realized capital gains resulting from investment
activity annually in December. Global Income Fund intends to declare and pay
dividends monthly and net realized capital gains resulting from investment
activity annually in December. Dividend or capital gain distributions declared
in December but paid in January will be includible in a shareholder's income
as of the record date (usually in December) of such distributions. Short-term
capital gains, if declared, are treated the same as dividend income. The
fiscal year of each of the Funds ends on December 31.

MANAGEMENT
TRUSTEES

The management of the business and affairs of each Fund is the responsibility
of the Board of Trustees. For information on the Trustees and officers of the
Trust, see "Trustees and Officers" in the Statement of Additional Information.

INVESTMENT ADVISER, MANAGER AND ADMINISTRATOR

Van Eck Associates Corporation, 99 Park Avenue, New York, NY 10016, or an
affiliate of the Adviser serve as the investment adviser and manager to each
of the Funds pursuant to Advisory Agreements with the Trust. The Adviser or
its affiliate manage the investment operations of the Funds and furnish the
Funds with a continuous investment program which includes determining which
securities should be bought, sold or held. Asia Dynasty Fund and Global
Balanced Fund each pay the Adviser or its affiliate a monthly fee at the
annual rate of .75% of average daily net assets. Global Hard Assets Fund pays
the Adviser a monthly fee at the annual rate of 1.00% of average daily net
assets, a portion of which is paid to the Adviser for accounting and
administrative services it provides to the Fund. Global Income Fund pays the
Adviser a monthly fee at the annual rate of .75 of 1% of the first $500
million of the average daily net assets of the Fund, .65 of 1% of the next
$250 million of the average daily net assets and .50 of 1% of the average
daily net assets in excess of $750 million. The advisory fees paid to the
Adviser with respect to these Funds are higher than the fees paid by most
investment companies because of the complexities of managing these types of
funds (such as following trends, industries and companies in many different
countries and stock markets throughout the world).

Van Eck Associates Corporation also performs accounting and administrative
services for Asia Dynasty Fund and Global Balanced Fund and is paid a fee at
an annual rate of .25% of each of these Fund's average daily net assets.

34
<PAGE>

The Adviser acts as investment adviser or sub-investment adviser to other
registered investment companies and manages or advises managers of portfolios
of pension plans and others. Total aggregate assets under management of Van
Eck Associates Corporation at December 31, 1996 were approximately $1.6
billion. John C. van Eck, Chairman and President of the Trust, and members of
his immediate family own 100% of the voting stock of Van Eck Associates
Corporation.

Madis Senner--Portfolio Manager of Global Income Fund. He is responsible for
managing this Fund's portfolio of investments. Before joining Van Eck, Mr.
Senner was a global bond manager with Chase Manhattan Private Bank. Prior to
that, he was President of Sunray Securities, Inc., an investment management
firm that he founded, and, before that, was a global fixed income manager with
Clemente Capital, Inc. in New York City. Mr. Senner has over 10 years
experience in the investment business.

Derek S. van Eck--Portfolio Manager of Global Hard Assets Fund. He is
responsible for managing this Fund's portfolio of investments. He is Director
of Global Investments and Executive Vice President of the Adviser and an
officer and/or portfolio manager of other mutual funds advised by the Adviser.

Van Eck Global Asset Management (Asia) LImited, 2 Pacific Place, Hong Kong, a
wholly-owned subsidiary of the Adviser, has served as the investment adviser
and manager of Asia Dynasty Fund since October 8, 1996. Prior to that time,
the Adviser served as the Fund's investment adviser from August 1, 1996. AIG
Global Investment Corp. served as sub-investment adviser to Asia Dynasty Fund
until July 31, 1996.

Timothy Chan--Portfolio Manager of the Asia Dynasty Fund. He is responsible
for managing this Fund's portfolio of investments since August 1996. Mr. Chan
has 12 years of investment management experience in Hong Kong and Tokyo
managing funds with similar objectives as the Asia Dynasty Fund. Prior to
joining Van Eck, Mr. Chan served as Portfolio Manager for BZW Investment
Management, a subsidiary of Barclays Group. Before that, he was a Fund Manager
for Sun Hung Kai Fund Management and held a Fund Manager position with
Scimitar Asset Management Asia Ltd, Hong Kong, a wholly-owned subsidiary of
Standard Chartered Bank.

FII, Two World Trade Center, New York, New York 10048, serves as sub-
investment adviser to the Global Balanced Fund pursuant to a Sub-Investment
Advisory Agreement with the Trust. FII manages the investment operations of
the Global Balanced Fund and furnishes the Fund with a continuous investment
program that includes which securities should be bought, sold or held. The
Adviser manages and administers the business and affairs of the Fund. As
compensation for its services, FII is paid a monthly fee at an annual rate of
.50% of average daily net assets by the Adviser from the advisory fee it
receives from the Fund. FII serves as an investment adviser to other
registered investment companies.

FII is an indirect subsidiary of Fiduciary Trust Company International
("FTCI"). FTCI is a New York State chartered bank specializing in investment
and administration of assets for pensions and other institutional accounts
including individuals and families. FII has access to all of FTCI's investment
infrastructure. FTCI began investing globally in the 1960's and serves its
worldwide investment management and custody clients from offices in New York,
Los Angeles, Miami, Washington, D.C., London, Geneva and Hong Kong. FTCI has
over 60 investment professionals. FTCI has over 30 years of experience in
global management with over $11 billion managed under the global balanced
discipline. As of December 31, 1996, total assets under management by FII, its
parent organization FTCI and its subsidiaries, on behalf of all clients,
amounted to over $33 billion.

FII assigns a team of managers led by a global strategist, which includes a
global equity manager and a global fixed-income manager, to manage the Fund's
portfolio of investments. The team consults with the FTCI research department,
which includes international analysts who specialize in the equity markets of
Japan, Europe, the Pacific Basin and Latin America, when making investment
decisions. The three primary portfolio managers for the Global Balanced Fund
are listed below:

Anne M. Tatlock--FII's Global Strategist of the Fund. She has been serving in
that capacity since the Fund commenced operations. Ms. Tatlock joined FTCI in
1984 and is currently President of the company where she is responsible for
managing institutional investment management. Ms. Tatlock is head of the
Institutional Investment Department and a member of the Board of Directors,
the Global Investment Committee and the Investment Policy Committee at FTCI.

35
<PAGE>

Steven J. Miller--FII's Portfolio Manager of the Fund. He joined FTCI in 1994
after working for seven years with Vital Forsikring and Heller Financial, Inc.
Mr. Miller is responsible for managing institutional and international
portfolios. He is a Senior Vice President of FTCI as well as a member of the
Global Investment Committee and the Investment Policy Committee at FTCI.

Anthony S. Gould--Fixed Income Portfolio Manager of the Fund. He has been
serving in such capacity since July 1995. Mr. Gould joined FTCI in 1995
following six and a half years at BZW Investment Management, the asset
management subsidiary of the Barclays Group. He is a Senior Vice President of
FTCI where he is responsible for the management of global and international
fixed income portfolios for institutions.

MANAGEMENT DISCUSSION AND ANALYSIS

ASIA DYNASTY FUND (CLASS A AND B)

In 1996, Asian stock market performance was decidedly mixed. Some markets,
such as Hong Kong and Malaysia, recorded strong double-digit gains, while
others, such as Thailand and Korea, witnessed double-digit declines. For the
year, the Asia Dynasty Fund had a total return of 6.5%.

Over the year, significant changes were made to the Asia Dynasty Fund, most of
which were implemented by the new manager. Early in the year, the Fund was
overweighted in Thailand and slightly underweighted in Hong Kong. In the
second half of 1996, performance improved after the Fund increased its
allocation to Hong Kong and trimmed positions in Thailand, Singapore and
Korea. The Fund's three main sector weightings were banking, property and
telecommunications. Together these industry groups represented just over 50%
of the portfolio.

LOGO

36
<PAGE>

Asia Dynasty Fund (Class B)
vs. MSCI Far East Ex-Japan Free vs. S&P 500

(dividends and capital gains reinvested)

[GRAPHIC]

$10,000 initial investment

- ------------------------------------------------
Average Annual Total Return*
- ------------------------------------------------
1 Year 0.1%
Since inception (9/1/93) 4.6%
- ------------------------------------------------
* Maximum applicable contingent deferred sales
charge of 3% taken into account.

Van Eck MSCI Far East
Asia Dynasty Fund-B S&P 500 Ex-Japan Free
------------------- ------- -------------

9/1/93 10000 10000 10000
9/31/93 10221 9969 10366
10/31/93 11527 10162 12262
11/31/93 11598 10031 12162
12/31/93 13522 10200 15103
1/31/94 12759 10531 14058
2/31/94 12316 10215 13235
3/31/94 11012 9816 11765
4/31/94 11385 9929 12291
5/31/94 11660 10052 12800
6/31/94 11039 9858 12209
7/31/94 11633 10169 12874
8/31/94 12369 10551 13901
9/31/94 12165 10340 13654
10/31/94 12458 10556 13903
11/31/94 11261 10139 12560
12/31/94 10933 10388 12232
1/31/95 9513 10589 10906
2/31/95 10281 10971 11993
3/31/95 10318 11342 12015
4/31/95 10300 11659 11877
5/31/95 11385 12082 13305
6/31/95 11150 12421 13088
7/31/95 11502 12815 13273
8/31/95 10924 12811 12621
9/31/95 11059 13405 12824
10/31/95 10933 13338 12612
11/31/95 10688 13886 12462
12/31/95 11222 14209 13065
1/31/96 12259 14673 14245
2/28/96 12168 14774 14175
3/31/96 11959 14971 14263
4/31/96 12241 15172 14636
5/31/96 12014 15519 14469
6/30/96 11723 15641 14158
7/31/96 10858 14926 13113
8/31/96 11231 15206 13562
9/30/96 11568 16121 13887
10/31/96 11258 15542 13609
11/31/96 11977 17756 14372
12/31/96 11905 17463 14265

- --------------------------------------------------------------------------------
Past performance is not indicative of future results.
- --------------------------------------------------------------------------------

37
<PAGE>

GLOBAL BALANCED FUND (CLASS A AND B)

While not surpassing 1995's exceptionally high returns, global equity markets
produced strong gains in 1996, supported by low interest rates and moderate
economic growth. After selling off sharply in the first quarter due to worries
over stronger-than-expected growth, global bond markets rose modestly. The
Fund recorded a 12.3% total return for 1996.

For the year, global equities increased 14.0%, an impressive result
considering the 15.4 % decline in the Japanese market (in dollars). The U.S.
market again performed well on the back of continued moderate economic growth,
low inflation and good corporate earnings growth. European equities turned in
very strong performances (up 21.6%) as investors focused on the benefits to
continental interest rates from the more likely implementation of European
Monetary Union (EMU). Unrealized expectations of a sharp rebound in economic
and corporate earnings growth and a likely fiscal tightening for 1997
contributed to the poor investment results in Japanese equities. Asia Pacific
and Latin American markets registered gains of 21%-22% on average, though
performance within these regions was quite different on a country- and stock-
specific basis.

1996 was bittersweet for global fixed income investors. In local currency
terms, every major bond market outpaced the U.S. market, but an appreciating
U.S. dollar erased most of those gains. Global bonds also experienced an
unusual year. The three major bond markets, the U.S., Japan and Germany,
produced the lowest returns, while the riskiest markets, which include
emerging markets and the peripheral European markets, produced the best
investment results.

Global Balanced Fund (Class A)
vs. 60% MSCI World Equity & 40% Salomon Brothers World Government Bond
vs. S&P 500

[GRAPHIC]

(dividends and capital gains reinvested)

$10,000 initial investment Expenses (net of waivers) taken into
account
Average Annual Total Return*
1 Year 7.0%
Since inception (12/20/93) 5.7%

*Maximum sales charge of 4.75% taken into
account.

S&P 500 60% MSCI
Global World Equity & Van Eck
40% Salomon Brothers Global Balanced
World Bond Fund-A

12/31/93 9520 10000 10000
1/31/94 9700 10429 10325
2/31/94 9540 10322 10015
3/31/94 9201 10050 9624
4/31/94 9281 10242 9735
5/31/94 9341 10223 9856
6/31/94 9171 10266 9665
7/31/94 9361 10417 9970
8/31/94 9511 10592 10344
9/31/94 9451 10456 10138
10/31/94 9651 10703 10349
11/31/94 9179 10367 9940
12/31/94 9149 10440 10136
1/31/95 8867 10434 10382
2/31/95 9048 10634 10756
3/31/95 9462 11195 11120
4/31/95 9694 11514 11431
5/31/95 9916 11704 11846
6/31/95 10037 11730 12178
7/31/95 10371 12095 12565
8/31/95 10077 11768 12561
9/31/95 10351 12080 13142
10/31/95 10341 12004 13077
11/31/95 10412 12309 13614
12/31/95 10548 12578 13931
1/31/96 10661 12654 14385
2/28/97 10651 12676 14485
3/31/96 10732 12797 14678
4/30/96 10876 12958 14875
5/31/96 10876 12968 15215
6/30/97 10998 13049 15335
7/31/96 10741 12874 14634
8/31/96 10865 12984 14909
9/30/96 11214 13312 15806
10/31/96 11411 13469 16218
11/31/96 11916 13994 17408
12/31/96 11844 13816 17121

Past performance is not indicative of future results.

The Global Balanced Index consists of 60% MSCI World Equity Index and 40%
Salomon Brothers World Government Bond Index.

38
<PAGE>

Global Balanced Fund (Class B)
vs. 60% MSCI World Equity & 40% Salomon Brothers World Government Bond
vs. S&P 500

[GRAPHIC]

(dividends and capital gains reinvested)

$10,000 initial investment Expenses (net of waivers) taken into
account

Average Annual Total Return*
1 Year 6.5%
Since inception (12/20/93) 5.8%
*Maximum applicable contingent deferred sales
charge of 3% taken into account.

60% MSCI World S&P 500 Van Eck
Equity & 40% Salomon Global Balanced
Brothers World Fund-B
Government Bond
<S> <C> <C> <C>
12/31/93 10000 10000 10000
Jan-94 10189 10429 10325
Fed-94 10010 10322 10015
Mar-94 9654 10050 9624
Apr-94 9727 10242 9735
May-94 9780 10223 9856
Jun-94 9591 10266 9665
Jul-94 9790 10417 9970
Aug-94 9937 10592 10344
Sep-94 9864 10456 10138
Oct-94 10073 10703 10349
Nov-94 9579 10367 9940
12/31/94 9516 10440 10136
Jan-95 9231 10434 10382
Feb 95 9421 10634 10756
Mar-95 9833 11195 11120
Apr-95 10075 11514 11431
May-95 10297 11704 11846
Jun-95 10424 11730 12178
Jul-95 10762 12095 12565
Aug-95 10455 11768 12561
Sep-95 10741 12080 13142
Oct-95 10719 12004 13077
Nov-95 10783 12309 13614
12/31/95 10899 12578 13931
Jan-96 10995 12654 14385
Fed-96 10984 12676 14485
Mar-96 10069 12797 14678
Apr-96 11196 12958 14875
May-96 11206 12968 15215
Jun-96 11323 13049 15335
Jul-96 11047 12874 14634
Aug-96 11174 12984 14909
Sep-96 11524 13312 15806
Oct-96 11726 13469 16218
Nov-96 12248 13994 17408
12/31/96 12152 13816 17121
</TABLE>
Past performance is not indicative of future results.

The Global Balanced Index consists of 60% MSCI World Equity Index and 40%
Salomon Brothers World Government Bond Index.

39
<PAGE>

GLOBAL HARD ASSETS FUND (CLASS A, B AND C)

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, the Fund maintained an average
weighting of approximately 35% in the energy sector. Returns were driven by
stronger commodity prices, successful applications of technology to
exploration efforts and the cost reduction that this application of technology
brought to exploration and development efforts.

Real estate securities in the U.S. contributed significantly to performance,
particularly late in the year. In the fourth quarter, the Fund raised the
allocation to this sector from roughly 17% to 26%. U.S. real estate investment
trusts, or REITs, gained approximately 35% in 1996. Moreover, REITs finished
the year on a strong note, with fund flows into U.S. REITs accelerating
significantly during the fourth quarter.

Disappointing sectors included industrial metals, forest products and paper,
and precious metals. Industrial metals and paper shares underperformed the S&P
500 as the primary performance driver, underlying asset prices, declined.
Fortunately, the Fund's allocations to these sectors were low, with
approximately 6% of total investments in each.

Global Hard Assets Fund (Class A)
vs. Ibbotson Hard Assets Index vs. S&P 500

[GRAPHIC]

(dividends and capital gains reinvested)

$10,000 initial investment Expenses (net of waivers) taken into account

Average Annual Total Return*

1 Year 38.7%
Since inception (11/2/94) 25.8%

*Maximum sales charge of a 4.75% (taken
into account

Van Eck
Global Hard Assets Ibbotson
Fund-A S&P 500 Hard Assets Index
------------------ ------- -----------------
11/2/94 9520 10000 10000
11/31/94 9311 9725 9494
12/31/94 9416 9917 9720
1/31/95 9125 10157 9284
2/31/95 9436 10524 9400
3/31/95 9936 10879 9880
4/31/95 10106 11183 10061
5/31/95 10326 11589 10120
6/31/95 10416 11914 10120
7/31/95 10706 12293 10488
8/31/95 10736 12289 10378
9/31/95 10776 12858 10446
10/31/95 10296 12794 10064
11/31/95 10626 13319 10439.11
12/31/95 11307 13630 10689.42
1/31/96 11900 14074 11052.66
2/31/96 12080 14172 11157.47
3/31/96 12662 14361 11456.63
4/31/96 13339 14553 11740.61
5/31/96 13541 14886 11697.91
6/31/96 13593 15004 11287.59
Jul 31, 96 13124 14317 11108.25
Aug 31, 96 13914 14586 11377.2
9/31/96 14276 15464 11314.68
Oct 31, 96 15066 15868 11492.64
11/31/96 15845 17032 11987.22
Dec 31, 96 16464 16751 12058.95

Past performance is not indicative of future results.

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.

40
<PAGE>

GLOBAL HARD ASSETS FUND (CLASS B)
VS. IBBOTSON HARD ASSETS INDEX VS. S&P 500
(dividends and capital gains reinvested)

[GRAPHIC]

$10,000 initial investment Expenses (net of waivers) taken into account

Average Annual Total Return
-------------------------------------
Since inception (4/24/96) 19.6%
-------------------------------------
* Maximum applicable contingent sales
charge of 5% taken into account.

Van Eck
Global Hard Assets Ibbotson Hard
Fund-B S&P 500 Assets Index

Past performance is not indicative of future results.

GLOBAL HARD ASSETS FUND (CLASS C)
VS. IBBOTSON HARD ASSETS INDEX VS. S&P 500
(dividends and capital gains reinvested)

[GRAPHIC]

$10,000 initial investment Expenses (net of waivers) taken into account

Average Annual Total Return
-------------------------------------
1 Year* 44.2%
Since inception (11/2/94) 19.6%
-------------------------------------
* 1-year redemption charge of 1% taken
into account.

Van Eck
Global Hard Assets Ibbotson Hard
Fund-C S&P 500 Assets Index

Past performance is not indicative of future results.

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.

41
<PAGE>

GLOBAL INCOME FUND (CLASS A)

Compared to the strong returns recorded in 1995, most major bond markets
registered modest gains last year, which were reduced in dollar terms due to
strength of the U.S. currency. Several "peripheral," higher risk European
markets fared well, but a rise in U.S. interest rates due to stronger-than-
expected economic growth dampened the performance of domestic bonds. In this
environment, the Global Income Fund had a total return of 2.3% for the year
ended December 31, 1996.

U.S. interest rates increased sharply in February 1996 due to a surprisingly
strong January employment report. The rise in U.S. rates and subsequent
downturn in the U.S. bond market sparked a sell-off in many major
international markets during the first quarter of 1996. The trend toward
higher U.S. rates continued into the second quarter, aided by higher-than-
expected oil prices. By June 12, 1996, the yield on the 30-year U.S. Treasury
bond hit 7.19% (its high for 1996) after being as low at 5.95% on the second
trading day of the year.

In 1996, the U.S. dollar showed strength against most of the major currencies.
For example, the dollar was up 10.8% against the Japanese yen and 6.7% against
the German mark. The only major currencies in the G-7 to show consistent
strength against the dollar were the British pound and the Italian lira, which
advanced 10.5% and 4.5%, respectively, versus the dollar. The dollar's
relative strength against most major currencies dampened returns for U.S.
investors. The Fund's relatively high cash position on several occasions
throughout the year limited losses due to currency fluctuations.

Global Income Fund (Class A) vs.
Salomon Brothers World Government Bond Index

[GRAPHIC]

(dividends and capital gains reinvested)

$10,000 initial investment

Average Annual Total Return*

1 Year -2.5%
5 Year 2.4%
10 Year NA
Since inception (4/30/87) 7.9%

* Maximum sales charge of 4.75% taken
into account.

Salomon
Van Eck Brothers
Global Income World Government
Fund-A Bond Index
------------- ----------------
4/30/87 9526 10000
6/31/87 9547 9821
12/31/87 10192 10937
6/31/88 11018 10770
12/31/88 11338 11416
6/31/89 11357 11232
12/31/89 12634 11910
6/31/90 13498 12018
12/31/90 14746 13337
6/31/91 14828 13224
12/31/91 17632 15446
6/31/92 18121 15929
12/31/92 17018 16300
6/31/93 17381 17672
12/31/93 17852 18463
6/31/94 16751 18587
12/31/94 17355 18896
6/31/95 19863 22080
12/31/95 20352 22494
6/31/96 19899 22162
12/31/96 20829 23308

Past performance is not indicative of future results.

42
<PAGE>

EXPENSES

Each Fund bears all expenses of its operation other than those incurred by the
Adviser or its affiliate under the Advisory Agreements with the Trust and
those incurred by the Sub-Adviser, if any, under its Sub-Investment Advisory
Agreement. In particular, the Funds pay: investment advisory fees, custodian
fees and expenses, legal, accounting and auditing fees and expenses, brokerage
fees, taxes, expenses of preparing prospectuses and shareholder reports for
existing shareholders, registration fees and expenses (including compensation
of employees of the Adviser or its affiliate in relation to the time spent on
such matters), Rule 12b-1 distribution expenses, expenses of the transfer and
dividend disbursing agent, the compensation and expenses of Trustees who are
not otherwise affiliated with the Trust, the Adviser or Sub-Adviser or any of
their affiliates, and any extraordinary expenses. Expenses incurred jointly by
the funds in the Van Eck Group of Funds are allocated among the funds in a
manner determined by the Trustees to be fair and equitable. Under the Advisory
Agreements, the Adviser provides the Funds with office space, facilities and
simple business equipment and provides the services of executive and clerical
personnel for administering the affairs of the Funds. The Adviser or Sub-
Adviser compensates Trustees of the Trust if such persons are employees or
affiliates of the Adviser or Sub-Adviser or their affiliates. The Funds
reimburse the Adviser for its costs in servicing shareholder accounts and
maintaining books and records of each Fund, including general ledger and daily
net asset value accounting.

PLAN OF DISTRIBUTION

Each of the Funds has adopted a Plan of Distribution pursuant to Rule 12b-1
(the "Plans") under the Act. The Plans may be terminated at any time by a vote
of a majority of the Trustees, or by a vote of a majority of the outstanding
voting securities of the respective Fund. These Plans fall into two broad
categories: reimbursement plans and compensation plans. The fees under all
Plans are paid quarterly. The National Association of Securities Dealers, Inc.
rules may limit the amount payable under the Plans.

Under a reimbursement type plan, the fees, or a percentage thereof, are used
for payments to Agents and Brokers who service shareholder accounts of a Fund
and the remainder is used for other actual promotional and distribution
expenses incurred by the Distributor. A Plan's fees accrued by a Fund in
excess of payments to Brokers and Agents and reimbursement to the Distributor
for its actual expenses will be retained by the Fund. A reimbursement type
plan may provide for the payment of interest as a distribution expense.

Under a compensation type plan, the fees under the Plan are not directly tied
to expenses and payments by the Fund and may be more or less than actual
expenses incurred under the Plan. The excess of fees received over
expenditures may constitute a "profit" to the Distributor.

In the event a Plan with a carry-forward provision is terminated, the
Distributor would not be entitled to reimbursement in respect of costs
incurred in, or payment for, performing distribution activities which occur
after termination of the Plan. However, the
Distributor would be entitled to reimbursement of all carry-forward amounts
and other costs properly incurred in respect of shares distributed prior to
termination of the Plan. The Fund would continue to make payments to the
Distributor subject to the annual limitation until such time as all such
amounts had been reimbursed.

Asia Dynasty Fund-A and Global Income Fund-A have reimbursement type plans.
The 12b-1 fees are accrued daily at an annual rate of .50% of the average
daily net assets for Asia Dynasty Fund-A and at an annual rate of .25% of
average daily net assets for Global Income Fund-A. Asia Dynasty Fund-A has a
carry-forward provision.

43
<PAGE>

Asia Dynasty Fund-B, Global Balanced Fund-A, Global Balanced Fund-B, Global
Hard Assets Fund-A, Global Hard Assets Fund-B and Global Hard Assets Fund-C
have compensation type plans. The 12b-1 fees are accrued daily at an annual
rate of .50% of average daily net assets for Global Balanced Fund-A and Global
Hard Assets Fund-A and at an annual rate of 1.00% of average daily net assets
for Asia Dynasty Fund-B, Global Balanced Fund-B, Global Hard Assets Fund-A,
Global Hard Assets Fund-B and Global Hard Assets Fund-C. These Plans have a
carry-forward provision which provides that the Distributor, in the event of
termination of the Plans, will recoup amounts expended under the Plan, subject
to the annual limitation. For the periods prior to April 30, 1998, the
Distributor has agreed, with respect to Plans with a carry-forward provision,
notwithstanding anything to the contrary in the Plan, to waive its right to
reimbursement of carry-forward amounts in the event the Plan is terminated
unless the Board of Trustees has determined that reimbursement of such carry-
forward amounts is appropriate.

Each Fund pays dealers, through the Distributor, (i) a service fee and a
distribution fee, at the time the shares are sold, not to exceed .25% for
Class A shares and U.S. Government Money Fund and .75% for Class B shares, of
the net asset value of such shares (excluding shares issued for reinvested
dividends and distributions) and (ii) after the first anniversary of the sale
of shares, fees for services and distribution at annual rates not to exceed an
annual rate of .75% for Class C shares, of the average daily net assets
(including shares issued for reinvested dividends and distributions). The
Distributor may retain from the distribution fee, for the payment of
distribution expenses, an amount not to exceed an annual rate of .50% of the
average daily net assets. No dealer will receive more than .25% of average
daily net assets for servicing. The Distributor will monitor payments under
the Plans and will reduce such payments or take such other steps as may be
necessary, including payments from its own resources, to assure that Plan
payments are consistent with the applicable rules of the National Association
of Securities Dealers, Inc.

Holders of Class C shares on which service and distribution fees were paid at
the time of sale will be required to pay to the Fund a contingent deferred
redemption charge of 1% of the lower of cost or the then net asset value of
any shares redeemed from that Fund before the first anniversary of their
purchase. If the shares are exchanged into another fund in the Van Eck Group
of Funds offering Class C shares and subsequently redeemed before the first
anniversary of their original purchase, the charge will be collected by the
other fund for the first fund.

Of the amounts expended under the Plan for the fiscal year ended December 31,
1996 for Asia Dynasty Fund, Global Balanced Fund, Global Hard Assets Fund and
Global Income Fund, approximately 40% was paid to Brokers and Agents who sold
shares and/or service shareholder accounts of the Funds. The remaining 60% was
retained by the Distributor as reimbursement for expenses such as printing and
mailing prospectuses and sales material to other than current Fund
shareholders.

ADVERTISING

From time to time, the Funds may use various media to advertise performance.
Past performance is not necessarily indicative of future performance.

Global Income Fund may advertise performance in terms of 30-day yield, which
is computed by dividing the net investment income per share earned during the
30 days by the maximum offering price per share on the last day of the period.
Yield of the Fund is a function of the kind and quality of the instruments in
the Fund's portfolio, portfolio maturity, operating expenses and market
conditions.

All Funds may advertise performance in terms of average annual total return,
which is computed by finding the average annual compounded rates of return
over a period that would equate the initial amount invested to the ending
redeemable value. The calculation assumes the maximum sales charge is deducted
from the initial $1,000 payment and assumes all dividends and distributions by
the Funds are reinvested on the reinvestment dates during the period, and
includes all recurring fees that are charged to all shareholder accounts. In
addition, these Funds may advertise aggregate total return for a specified
period of time

44
<PAGE>

which is determined by ascertaining the percentage change in the net asset
value of shares of a Fund initially purchased assuming reinvestment of
dividends and capital gains distributions on such shares without giving effect
to the length of time of the investment. Sales loads and other non-recurring
expenses may be excluded from the calculation of rates of return with the
result that such rates may be higher than if such expenses and sales loads
were included. All other fees will be included in the calculation of rates of
return. Performance of the Funds is computed separately for each Class.

The Funds may quote performance results from recognized services and
publications which monitor the performance of mutual funds and the Funds may
compare their performance to various published historical indices. These
include market, economic and performance data and indices. For example, the
Funds may quote Morningstar ratings; market performance of the S&P 500 and the
Europe Australia Far East Index; the performance of various economies or
economic indicators; or compilations of historical performance data from
rating agencies. Micropal, Ltd., a worldwide mutual fund performance
evaluation service, is one such rating agency. Lipper Analytical Services is
another such rating agency. The Lipper performance analysis assumes
reinvestment of capital gains and distributions, but does not give effect to
sales charges or taxes. Asia Dynasty Fund is rated in the Asia ex-Japan Funds
category; Global Balanced Fund is rated in the Global Balanced Funds or the
Global Asset Allocation category; Global Hard Assets Fund is rated in the
Natural Resources Funds category or the Global Equity Funds category; and
Global Income Fund is rated in the World Income Funds category. Asia Dynasty
Fund may be compared to a Morgan Stanley Capital International Index, an Asia
(Ex-Japan) Index or another appropriate index. The Morgan Stanley Capital
International Equity and Salomon Brothers World Bond Indices, among others,
are indices to which the Global Balanced Fund and Global Income Fund may be
compared. Global Income Fund may be compared against certain indices or
services which monitor or publish certificate of deposit or other money market
rates or yields, such as the Federal Reserve Bulletin. Global Hard Assets Fund
may be compared to the Ibbotson Hard Assets Index or Morgan Stanley natural
resource indices. See the Appendix in the Statement of Additional Information.

TAXES

Notice as to the tax status of a shareholder's dividends and distributions
will be mailed to shareholders annually. Income from dividends and
distributions is normally taxable whether or not reinvested. Distributions
from net investment income and short-term capital gains are taxed as ordinary
income. Distributions of long-term capital gains are taxed at capital gain
rates. Dividends or distributions declared in December of any calendar year
but paid during January of the following year are treated as received by a
shareholder on December 31 of the calendar year. Only a portion of the
dividends paid by the Funds is likely to qualify for the 70% dividends
received deduction allowable to corporations. If the Funds fulfill certain
requirements, shareholders of these Funds may be able to claim a foreign tax
credit or deduction with respect to certain foreign withholding or other taxes
paid to foreign governments during the year.

Distributions of net investment income and short-term capital gains, if any,
made to non-resident aliens will be subject to 30% withholding or lower tax
treaty rates because such distributions are considered U.S. source income.
Currently, the Funds are not required to withhold tax from long-term capital
gains distributions paid to non-resident aliens.

DESCRIPTION OF THE TRUST

Van Eck Funds is an open-end management investment company organized as a
"business trust" under the laws of the Commonwealth of Massachusetts.

The Trustees have authority to issue an unlimited number of shares of
beneficial interest of each Fund, $.001 par value. Currently eight Funds of
the Trust are being offered, which shares constitute the interests in the Asia
Dynasty Fund (Class A and B), Global Balanced Fund (Class A and B), Emerging
Markets Growth Fund (Class A, B and C), Global Hard Assets Fund

45
<PAGE>

(Class A, B and C), Global Income Fund (Class A), International Investors Gold
Fund (Class A), Gold/Resources Fund (Class A), and U.S. Government Money Fund.
A "fund" is a separate pool of assets which is separately managed and which
may have different investment objectives from those of another fund. The
Trustees have the authority, without the necessity of a shareholder vote, to
create any number of new funds.

ADDITIONAL INFORMATION
CUSTODIAN

The Custodian of the assets of the Trust is The Chase Manhattan Bank, Chase
Metrotech Center, Brooklyn, New York 11245.

TRANSFER AGENT

DST Systems, Inc., 1004 Baltimore, 4th Floor, Kansas City, Missouri 64105,
serves as the Funds' transfer agent.

INDEPENDENT ACCOUNTANTS

COUNSEL

Goodwin, Procter & Hoar LLP, One Exchange Place, Boston, Massachusetts 02109,
serves as Counsel for the Trust.

46
<PAGE>

-----------------
Van Eck Funds
-----------------

Asia Dynasty Fund

Emerging Markets Growth Fund

Global Balanced Fund

Global Hard Assets Fund

Global Income Fund

Gold/Resources Fund

International Investors
Gold Fund

U.S. Government Money Fund

Your Investment Dealer is:
--------------------------------

Transfer Agent and Shareholder Service Representative:
DST Systems, Inc.
P.O. Box 418407
Kansas City, Missouri 64141
(800) 544-4653

[LOGO] VAN ECK GLOBAL

This prospectus is good until 4/30/98 unless superseded.

---------------------------
-----------------
April 30, 1997
-----------------

VAN ECK

GLOBAL

FUNDS

PROSPECTUS

ASIA DYNASTY FUND

GLOBAL BALANCED FUND

GLOBAL HARD ASSETS FUND

GLOBAL INCOME FUND

---------------------------

[LOGO] VAN ECK GLOBAL