<PAGE> 1
VAN ECK GLOBAL BALANCED FUND
----------------------------
1997 SEMI-ANNUAL REPORT
Dear Fellow Shareholder:
We are pleased to report that the Global Balanced Fund achieved a total return
of 12.1% for the six months ended June 30, 1997 versus the average among global
asset allocation/global balanced funds of 8.0%, according to Micropal, Inc., a
mutual fund evaluation service. In the first half of 1997, global equities
produced exceptionally strong returns. Accelerating global growth, relatively
few inflationary signs and low interest rates set the stage for the high
returns. Global bonds, while clearly unable to keep pace with equities,
produced above-coupon returns in local currencies; however, the strength of the
dollar against European currencies wiped out much of the gains.
WORLD EQUITY MARKETS
Global equities registered extraordinarily high returns during the first half
of 1997, with the MSCI World Index increasing 15.4% in U.S. dollars. Central
themes were: strong American equity markets (both North and South); dollar
strength versus Europe, which helped drive European export growth; and
increased volatility in Japan and Asia Pacific.
U.S. equities wasted no time in adding to the bull market performances of 1995
and 1996, increasing 7.5% during the first two months of the year. The Federal
Reserve responded to an acceleration in U.S. economic growth by increasing
interest rates by 25 basis points (0.25%) in March, the first of what many
investors assumed would be several rate hikes in 1997. Investor fears over
accelerating growth and Fed rate hikes led to a 10% market correction in March
and April. Fed watchers welcomed the resultant slowdown in the pace of U.S.
growth as the need for further rate hikes had, for the moment, subsided. The
ensuing rally pushed the U.S. market up 20.8% at the end of June, with
investors flocking to large capitalization blue chip stocks, a sector well
represented in the Fund's portfolio (Merck, AIG, Intel). The strong U.S.
equity market set a positive backdrop for other global equity markets.
European equities continued to shine this year, increasing 24.7% in local
currency terms, though the previously mentioned dollar strength led to smaller
gains in dollar terms (+14.3%). With fiscal policy remaining tight to comply
with Maastricht-treaty EMU (European Monetary Union) constraints,
competitively-priced exports were the primary drivers of European economic
growth. Elections in the UK (+9.2%) and France (+9.2%) were the significant
political events this year, with the market initially receiving Labour's UK
victory much better than the recent Socialist win in France (though subsequent
back-tracking by newly-elected Prime Minister Jospin has for the moment
alleviated investor concerns about a significant move to the left in France).
Switzerland (+31.3%) and Spain (+20.7%) were the two strongest performing
European markets during the quarter, with corporate activity and the strong
dollar helping equities in the former market, while the dollar and low interest
rates due to Spain's expected inclusion in the first round of EMU fueled the
rally in Spanish equities. The portfolio's positions in Novartis and Roche in
Switzerland and Banco Santander in Spain benefited from these favorable trends.
For Japanese equities, it was a tale of two quarters. An anticipated economic
slowdown and weakness in the banking sector contributed to market weakness
through the middle of April. In this environment, and with further dollar
strength versus the yen, the "Nifty-30" stocks (a group of Japanese companies
dominated by technology and exporters) were strong performers. Toward the end
of April, a sudden shift took place. Investors realized that
<PAGE> 2
their worries over the fiscal tightening, which went into effect on April 1,
proved to be exaggerated. Rumors of imminent discount rate hikes and talk from
Mr. Sakakibara (known as "Mr. Yen" because of his frequent comments on the
currency) that the yen was undervalued given the stage of Japan's economic
cycle led to a sharp reversal in the yen/dollar rate from a yen low of 127 to
115 (hitting 111 yen/$ at the high). With expectations of stronger economic
growth, the Nikkei 225 rallied 17.8% (in yen) from its low, with the "Nifty-30"
stocks taking a back seat to more domestic-oriented sectors. Our underweight
position in Japan in the second quarter had a negative effect as fears of an
economic slowdown proved unfounded. Currently, we continue to favor technology
and export stocks (Canon Inc., Sony) due to their higher earnings growth
visibility and lower P/E multiples (paradoxically, in Japan, high growth,
internationally competitive companies tend to have lower multiples, more
in-line with their global competitors).
There was a marked contrast between Latin American and Asia Pacific equity
markets. Latin American equities (+40.8%) performed well across the board with
investors encouraged by economic growth, declining inflation trends and
continued attempts by governments to deregulate their state-dominated
economies. Brazil (+54.1%) was the strongest performer, with portfolio
holdings Telebras and Cemig representing prime examples of state companies
benefiting from deregulation and privatization. Anticipating favorable market
developments, we increased allocations to Brazil and Mexico in the beginning of
the year.
It was much more difficult to make money in Asia Pacific equities, which
increased only 1.6% during the period. Hong Kong stood out in the region,
increasing 9.8%, despite a weak start to the year. Hong Kong shares rallied
strongly in the period leading up to the July 1 handover to China. A strong
residential property market, significant money flows coming into the territory
from China and investor enthusiasm for "red chip" stocks (mainland
China-oriented companies traded in Hong Kong) supported the market rally.
Portfolio holding HSBC, the Hong Kong-based global bank, led the market as
investors tried to increase exposure to Hong Kong equities. While long-term
fundamentals are still strong, any anti-speculation moves by the new government
could take some of the froth out of a temporarily overheating market. Other
markets in the region have had to deal with country-specific problems: Thailand
- - weak growth and high interest rates to support the currency (which was
eventually allowed to float); Malaysia - slowing growth and property
restrictions; and Korea - weak exports, bankruptcies and government scandals.
While we reduced holdings in Asia Pacific markets, the portfolio's small
positions in Malaysia and the Philippines registered strong negative returns,
in line with their respective markets.
WORLD BOND MARKETS
The predominant themes in the global fixed income markets over the past six
months have been: the continued benign inflation backdrop, which has allowed
central banks to tolerate periods of above-trend growth without raising
interest rates; the march (at times unsteady) toward European Monetary Union
(EMU); and the playing out of the end-game of the cyclical appreciation of the
dollar.
It is remarkable that, in the seventh year of expansion, the U.S. economy has
yet to generate much in the way of inflationary pressures-indeed, recent data
show inflation to have fallen to 2.5%, a new low for this cycle. This is
especially remarkable given record levels of stock prices and consumer
confidence along with low levels of unemployment. The absence of inflation has
led many to declare a new era of stable and permanently low inflation as new
technologies, global competition and job insecurity have combined to stimulate
growth without inflation. While the reality of low inflation causes us to
believe in some kind of "paradigm shift," these factors, if they persist, will
impact long-term rates of growth and inflation. In other words, the business
cycle is not dead, but rather its nature continues to change. It is the
business cycle, the ebb and flow of consumer demand
<PAGE> 3
and investment, that will continue to dominate growth and inflation in the
short-to-medium term.
The longer inflation has remained under control, the more converts to "new
paradigm thinking" there have been. The real test for this theory is likely to
come over the next eighteen months, which are likely to see the fastest rates
of global growth in a decade. Until recently, subdued global growth acted as a
shock absorber for above-trend U.S. growth, but as global economic activity
revives in response to record low short-term interest rates, the shock absorber
will disappear. Bond markets have apparently accepted this thinking and have
happily absorbed the plentifully available liquidity. In particular, the U.S.
market appears fully-priced and we believe yields may head higher as the
economy reaccelerates. Among the dollar bloc countries, we have underweighted
the U.S. bond position while increasing exposure to Australia and New Zealand,
which have outperformed due to declining inflation and short-term interest
rates.
The dollar has been in a cyclical upswing for almost two years, largely a
function of differentials in growth and interest rates with its trading
partners. With other economies at much earlier phases of the economic cycle
than the U.S., rates of growth (and eventually interest rates) will begin to
favor foreign currencies. The recent deterioration of the U.S. trade balance
is another indication that further dollar gains will be difficult to achieve.
From a peak of 127 Japanese yen, the dollar has fallen by more than 10% in less
than two months, but has been relatively stable against the German mark as EMU
concerns have reduced the attractiveness of European currencies. We have
increased yen weightings from low levels at the beginning of the year and have
reduced dollar exposure somewhat.
In Europe, the key "core" countries' (France and Germany) governments are
surprisingly discovering that meeting the Maastricht criteria for EMU
qualification is proving much more difficult than expected as anemic domestic
demand has put upward pressure on fiscal deficits. In Germany, the finance
minister attempted a transfer of the profit from the revaluation of Central
Bank gold reserves to the government budget before being forced into a
humiliating step down. In France, President Chirac called a snap election,
which led to a defeat of the right-wing government at the hands of a
Socialist/Communist coalition. The new government seems unlikely to take
"real" action to bring the deficit back in line with the Maastricht targets,
but may be inclined to use "smoke-and-mirrors" or else accept a deficit close
to target rather than one at or below target. These events increase the
likelihood of a delay in the project or of a more broadly-based EMU than
originally envisaged by the "core" countries. Apart from some short-term
volatility, there has been a remarkably muted reaction by markets to date. The
UK market has been the star performer within Europe as the incoming Labour
administration took the unexpected step of granting the Bank of England
independence in setting interest rates, leading to a sizeable rally in bond
prices (4.5% in one day). We maintained a neutral weighting overall in Europe
and an overweight position in UK bonds throughout the first half.
THE OUTLOOK
While the economic growth, inflation and interest rate outlook is favorable, we
do not expect returns realized during the first six months of the year to be
matched during the second half. In the current environment, we continue to
favor equities over bonds, investing approximately 70% of your Fund's assets in
the former.
Though positive toward U.S. equities, we are currently underweight, realizing
that at current valuations the market may have to catch its breath for a
moment. Export growth stemming from weak European currencies relative to the
dollar continues to be the driving force for European economic growth. We
maintain our exposure to European exporters as well as financials and
traditional growth stocks in Europe and the UK. As mentioned above, from a
macroeconomic viewpoint,
<PAGE> 4
our bias is toward increasing exposure to Japanese equities. The problem we
face is finding attractive investment opportunities at the company-specific
level. Valuations for the market are expensive; however, we will continue to
focus on individual issues and anticipate increasing our exposure to the
domestic Japanese economy over the next quarter. In emerging markets, Latin
America remains our preferred region given the growth being realized and the
still reasonable valuations in various sectors.
Over the coming months, the fate of EMU should be closer to a resolution. With
the risk premium between German and other European markets almost eliminated on
long-term bonds (with the notable exception of the UK), we have increased
German bond weightings at the expense of other European positions. Outside
Germany, exposures are in longer-term UK issues, where credible monetary policy
and fiscally conservative policies should lead to strong performance, and which
should continue to be a safe haven during times of EMU turbulence. Emphasis is
also on shorter-term Italian bonds, where favorable inflation data and weak
growth should pave the way for interest rate cuts. Within the dollar bloc, the
Australian and New Zealand markets are attractive with high real yields and
anemic growth while the U.S. market looks vulnerable to any data that may lead
the Fed to raise rates before year end. Accordingly, we remain underweight in
our duration exposure. The revival in Japanese growth has caused us to
increase yen exposure, which we will continue to increase at the expense of the
dollar and European currencies.
We appreciate your participation in the Global Balanced Fund and we look
forward to helping you meet your investment objectives in the future.
[PHOTO] [PHOTO] [PHOTO]
Anne M. Tatlock Steven J. Miller Anthony S. Gould
Global Strategist Global Equity Global Bond
Manager Manager
July 17, 1997
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
PERFORMANCE RECORD AS OF 6/30/97
- ------------------------------------------------------------------------------------------
AVERAGE ANNUAL AFTER MAXIMUM BEFORE
TOTAL RETURN SALES CHARGE+ SALES CHARGE
- ------------------------------------------------------------------------------------------
<S> <C> <C>
A shares-Life (since 12/20/93) 8.4% 9.9%
- ------------------------------------------------------------------------------------------
1 year 15.0% 20.7%
- ------------------------------------------------------------------------------------------
B shares-Life (since 12/20/93) 8.4% 9.1%
- ------------------------------------------------------------------------------------------
1 year 15.0% 20.0%
- ------------------------------------------------------------------------------------------
</TABLE>
The performance data represents past performance and is not indicative of
future results. Investment return and principal value of an investment in the
Fund will vary so that shares, when redeemed, may be worth more or less than
their original cost.
The Advisor is currently waiving certain or all expenses on the Fund. Had the
Fund incurred all expenses, investment returns would have been reduced.
+ A shares: maximum sales charge = 4.75%
B shares: maximum contingent deferred sales charge = 5.00%
Note: All equity performance figures are Morgan Stanley Capital International
Indices.
<PAGE> 5
REPRESENTATIVE EQUITY HOLDINGS*
-------------------------------
JUNE 30, 1997
AMERICAN INTERNATIONAL GROUP, INC. (AIG)
(U.S., 4.8%)
American International Group (AIG) is the premier growth participant in the
global insurance business with over 50% of its revenues generated overseas.
AIG's earnings predictability is related to its superior financial strength,
market leadership in numerous insurance and financial segments, and its
balanced mix of domestic and international businesses. The company is
well-positioned to benefit from the increasing need for financial service
products resulting from aging global demographics.
BANK OF IRELAND
(IRELAND, 0.8%)
The Bank of Ireland is the largest bank in the Republic of Ireland. The bank
is currently experiencing strong growth in demand for traditional banking
services as a very young Irish population enters the workforce and as the Irish
economy continues to receive a disproportionate share of foreign direct
investment into Europe. Outside of traditional banking, the company is
well-positioned with leading investment management and brokerage divisions. We
expect strong profit growth to continue for the Bank of Ireland as our outlook
for the Irish economy remains very positive.
THE BOEING COMPANY
(U.S., 0.6%)
Boeing is the world's largest manufacturer of commercial airplanes with the
dominant market share position and the broadest product-line offering.
Boeing's planned acquisition of McDonnell-Douglas will create a global
aerospace powerhouse. Though the European anti-trust commission is likely to
receive some concessions from Boeing, the merger should proceed with the
benefits to the combined entity relatively intact. Projected revenues and
order backlog for the combined entity are $50 billion and $100 billion,
respectively, for 1998. Boeing's dominance in commercial aerospace and
McDonnell-Douglas' strength in defense contracting should reduce Boeing's
earnings cyclicality and extend the earnings cycle.
COMPASS GROUP PLC
(UK, 0.7%)
Compass Group is one of the leading international contract caterers, with
operations in the UK, U.S., Continental Europe and Scandinavia. The contract
catering market is in the midst of a secular growth phase as private
businesses, educational institutions and government entities continue to
outsource their in-house dining services. Compass has supplemented the
industry growth potential with several well-timed acquisitions in the major
markets outside of the UK and is therefore solidly positioned to deliver strong
future earnings growth.
ROCHE HOLDING AG
(SWITZERLAND, 0.8%)
Roche is Switzerland's second largest pharmaceutical company and ranks among
the world leaders in the industry. The company's businesses are broken down
into four main groups: pharmaceuticals, vitamins and fine chemicals,
diagnostics, and fragrances and flavors. The company maintains an extensive and
diversified drug business in antibiotics, cardiac treatments and cancer
therapies. The recently announced acquisition of Boehringer Mannheim will
allow Roche to fully leverage Boehringer's strong diagnostics product offering
with Roche's own infrastructure, thereby enabling the company to compete more
effectively. Roche remains one of the highest quality investment vehicles
within the pharmaceutical sector due to its strong product pipeline and
earnings base diversification.
SGS-THOMSON MICROELECTRONICS N.V.
(FRANCE, 0.7%)
SGS-Thomson is a broadly-based semiconductor manufacturer ranked thirteenth
worldwide and sixth in Europe based on sales. The company's main businesses are
focused on high margin value-added products. The company is a world leader in
70% of its sales and is the leading maker of analogue-integrated circuits.
Management's strategy is to have leading technology and industry positions in
above-sector-average growth products. A strong management strategy coupled with
an enhanced product mix should result in the continued positive performance of
the stock over the long term.
SONY CORPORATION
(JAPAN, 1.0%)
Sony is Japan's predominant manufacturer of consumer electronics and boasts a
strong global presence as well as a worldwide reputation for high-quality and
innovative products. Sony has launched a number of new, hit products such as
Playstation and the digital camcorder and will be introducing more new products
in the near future. Under the leadership of its new president, Nobuyuki Idei,
it has reorganized its business units in order to promote greater
entrepreneurship and profitability. Earnings have entered into a period of
strong growth that is expected to continue through the turn of the century, yet
its stock is priced at multiples well below market averages.
TELECOMUNICACOES BRASILEIRAS S.A. (TELEBRAS)
(BRAZIL, 1.1%)
Telebras is a holding company that directly owns all of the telecommunications
concessions for local services as well as domestic and international long
distance in Brazil. The Brazilian federal government is currently in the
process of deregulating the sector and privatizing Telebras at the subsidiary
level. Due to the government's inability to make the appropriate capital
expenditures in the last few years and to relatively low telephone penetration
levels versus the rest of the region, the growth potential of the
telecommunications sector in Brazil is very attractive. In addition, Telebras'
valuation ranks among the least expensive telecom service providers in the
region. Most recently, the government began selling concessions for cellular
services in most major cities; transaction prices realized have been ahead of
expectations.
Note: Equities are listed as percentage of net assets.
* Portfolio is subject to change.
<PAGE> 6
GLOBAL BALANCED FUND
STATEMENT OF NET ASSETS JUNE 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NO. OF SHARES
OR PRINCIPAL VALUE
AMOUNT SECURITIES (a) (NOTE 1)
- ---------------------------------------------------------------
<C> <S> <C>
ARGENTINA: 1.37%
9,400 Banca de Galicia y Buenos Aires
(ADR) $ 247,925
3,000 Telecom Argentina (ADR) 157,500
-----------
405,425
-----------
AUSTRALIA: 0.85%
Government of Australia Bond
AUD 282,000 10.00% 2/15/2006 253,208
-----------
BRAZIL: 2.83%
5,300 Cemig S.A. (ADR) 272,950
3,800 Compenhia Siderurgica Nacional
(ADR) 125,400
2,150 Telecomunicacoes Brasileiras
S.A. (ADR) 326,263
3,100 Uniao de Bancos Brasileiros
S.A. 115,088
-----------
839,701
-----------
CANADA: 2.55%
Government of Canada Bonds
CAD 200,000 7.50% 12/01/2003 155,997
CAD 600,000 6.75% 8/28/2006 600,938
-----------
756,935
-----------
DENMARK: 1.14%
Denmark Government Bond
DKK 460,000 8.00% 3/15/2006 77,828
5,000 ISS International Service
System A/S 179,196
DKK 520,000 Unikredit Bond 8.00% 10/01/2016 82,611
-----------
339,635
-----------
FINLAND: 0.60%
6,000 Metra Oy (Class B) 180,736
-----------
FRANCE: 1.96%
1,200 Cetelem 150,885
3,700 Lagardere S.C.A. 107,462
2,900 Scor S.A. 116,744
2,600 SGS-Thomson Microelectronic 205,264
-----------
580,355
-----------
GERMANY: 5.74%
Bundesrepublik Obligation Bond
DEM 450,000 5.875% 5/15/2000 271,289
Bundesschatzan Bonds
DEM 320,000 3.75% 3/19/1999 184,349
DEM 470,000 3.50% 12/18/1998 269,901
Deutschland Republic Bonds
DEM 90,000 6.00% 1/05/2006 53,022
DEM 100,000 6.25% 1/04/2024 55,376
DEM 399,000 7.125% 12/20/2002 253,159
910 Fresenius AG (Pfd.) 206,598
8,200 Lufthansa AG 157,253
4,500 VEBA AG 252,830
-----------
1,703,777
-----------
HONG KONG: 1.57%
5,000 Asia Satellite
Telecommunications (ADR) 150,625
6,862 HSBC Holdings PLC 206,382
82,971 Mandarin Oriental
International Ltd. 107,862
-----------
464,869
-----------
<CAPTION>
NO. OF SHARES
OR PRINCIPAL VALUE
AMOUNT SECURITIES (a) (NOTE 1)
- ---------------------------------------------------------------
<C> <S> <C>
INDIA: 0.60%
3,400 India Magnum Fund 'B' $ 176,800
-----------
INDONESIA: 0.37%
3,400 PT Telekomunikasi Indonesia
(Persero) 110,500
-----------
IRELAND: 1.35%
21,215 Bank of Ireland 233,287
Irish Government Bond
IEP 100,000 8.00% 8/18/2006 166,229
-----------
399,516
-----------
ITALY: 6.11%
21,100 Banco Popolare di Milano 126,431
BTPS Bonds
ITL 490,000,000 10.50% 7/15/2000 322,292
ITL 1,850,000,000 10.50% 7/15/1998 1,130,183
15,200 Eni S.p.A. 84,797
41,200 Fiat S.p.A. 148,340
-----------
1,812,043
-----------
JAPAN: 10.69%
13,000 Aiwa Co., Ltd. 298,407
11,000 Canon Inc. 299,541
800 Canon Sales Co. 18,642
1,200 Circle K Japan Co. Ltd. 68,915
Export-Import Japan Bond
JPY 50,000,000 2.875% 7/28/2005 451,778
3,000 Fuji Machine 108,662
IBRD World Bank Bond
JPY 20,000,000 4.50% 6/20/2000 191,001
Japanese Government Bond
JPY 10,000,000 3.20% 3/20/2006 92,245
3,000 Jusco Co. Ltd. 101,331
1,100 Keyence Corp. 163,211
9,000 Matsushita Electric Industrial
Co., Ltd. 181,453
38,000 Mitsubishi Heavy Industries
Ltd. 291,529
4,000 Murata Mfg. Co., Ltd. 159,197
3,000 Rohm Co. 308,967
3,400 Sony Corp (ADR)* 299,200
13,000 Sumitomo Trust & Banking Co.,
Ltd. 139,559
-----------
3,173,638
-----------
MALAYSIA: 0.66%
11,000 Malayan Banking Bhd 115,445
17,000 Perusahaan Otomobil Nasional
Bhd 79,445
-----------
194,890
-----------
MEXICO: 2.14%
17,000 Apasco S.A. 121,076
4,600 Coca-Cola Femsa S.A. (ADR) 237,475
56,000 Grupo Financiero Banamex-
Accival, S.A. de C.V. 144,006
4,000 Panamerican Beverage Inc. "A" 131,500
-----------
634,057
-----------
NETHERLANDS: 3.13%
3,293 Aegon N.V. 229,763
900 Akzo Nobel N.V. Ord. 123,300
1,104 Nutricia Verenigde Bedrijven
N.V. 174,300
</TABLE>
See Notes to Financial Statements.
<PAGE> 7
GLOBAL BALANCED FUND
STATEMENT OF NET ASSETS JUNE 30, 1997 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NO. OF SHARES
OR PRINCIPAL VALUE
AMOUNT SECURITIES (a) (NOTE 1)
- ---------------------------------------------------------------
<C> <S> <C>
3,900 Polygram N.V. $ 204,583
3,600 Royal Dutch Petroleum Co. (N.Y.
Registry Shares) (ADR)* 195,750
-----------
927,696
-----------
NEW ZEALAND: 0.91%
New Zealand Government Bond
NZD 353,000 10.00% 3/18/2002 270,991
-----------
PHILIPPINES: 1.18%
243,000 Fortune Cement Corp. 58,948
National Power Bonds
USD 150,000 8.40% 12/15/2016 145,313
USD 150,000 7.875% 12/15/2016 146,813
-----------
351,074
-----------
PORTUGAL: 0.52%
1,850 Telecel-Comunicacaoes Pesso 153,378
-----------
SOUTH KOREA: 1.36%
Export/Import Bank Bond
KRW 320,000 6.375% 2/15/2006 299,400
10,403 SK Telecom Co. Ltd. (ADR) 104,680
-----------
404,080
-----------
SPAIN: 1.89%
9,000 Banco de Santander SA 277,242
3,300 Repsol S.A. 139,496
5,300 Vallehermoso S.A. 142,946
-----------
559,684
-----------
SWEDEN: 1.71%
7,000 CN Sparbanken Sverige AB-Class
A 156,039
SEK 2,400,000 Swedish Government Bond
10.25% 5/05/2000 351,860
-----------
507,899
-----------
SWITZERLAND: 2.72%
96 Ciba Specialty Chemical AG 8,870
330 Clariant AG 213,442
146 Novartis AG 233,232
18 Roche Holding Genuseheine
(Warrants expiring 5/05/1998) 1,379
26 Roche Holding AG 234,988
7,700 Tag Heuer International S.A.
(ADR) 115,981
-----------
807,892
-----------
UNITED KINGDOM: 11.41%
31,000 Amvescap PLC 180,378
16,000 Argos PLC 145,574
9,000 British Aerospace PLC 200,256
<CAPTION>
NO. OF SHARES
OR PRINCIPAL VALUE
AMOUNT SECURITIES (a) (NOTE 1)
- ---------------------------------------------------------------
<S> <C> <C>
British Air Capital Conv. Bond
GBP 29,000 9.75% 6/15/2005 $ 145,445
10,000 British Petroleum Co. PLC 124,447
19,100 Compass Group PLC 214,322
22,000 Hays PLC 208,772
19,000 Lloyds TSB Group PLC 194,537
1,900 Reuters Holdings PLC (ADR) 119,700
64,000 Rentokil Initial PLC 224,821
10,531 Siebe PLC 178,568
11,402 SmithKline Beecham Corp. 209,857
United Kingdom Treasury Notes
GBP 314,000 7.50% 12/07/2006 536,323
GBP 160,000 8.00% 12/07/2015 289,851
GBP 250,000 7.00% 11/06/2001 414,522
-----------
3,387,373
-----------
UNITED STATES: 30.61%
3,500 American Express Company* 260,750
9,500 American International Group,
Inc.* 1,419,079
5,000 Baker Hughes Inc.* 193,438
5,400 Bank of New York Co. Inc.* 234,900
3,600 Boeing Co. (The)* 191,025
2,500 Burlington Northern Santa Fe* 224,688
7,000 Cisco Systems, Inc. 469,875
3,800 Coastal Corp. 202,113
1,300 CPC International Inc. 120,006
3,500 Deere & Co. 192,063
12,000 Federal Home Loan Mortgage
Corp. 412,500
8,500 Federal National Mortgage
Assoc. 370,813
3,200 Federated Department Stores,
Inc.* 111,200
6,000 Fort Howard Corp. 303,750
4,000 General Electric Co. 261,500
5,000 Home Depot Inc. 344,689
2,000 Intel Corp. 283,625
5,000 Lucent Technologies Inc. 360,313
13,300 Merck & Co. 1,376,566
4,000 Mobil Corp. 279,500
4,000 Oracle Systems Corp. 201,500
3,400 Pfizer Inc. 406,300
1,500 Procter & Gamble Co.* 211,875
U.S. Treasury Bond
USD 110,000 7.875% 2/15/2021* 122,616
U.S. Treasury Notes
USD 495,000 7.00% 7/15/2006* 509,386
USD 20,000 7.25% 5/15/2016 20,863
-----------
9,084,933
-----------
</TABLE>
See Notes to Financial Statements.
<PAGE> 8
GLOBAL BALANCED FUND
STATEMENT OF NET ASSETS JUNE 30, 1997 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NO. OF VALUE
CONTRACTS SECURITIES (a) (NOTE 1)
- ---------------------------------------------------------------
<C> <S> <C>
TOTAL STOCKS AND OTHER INVESTMENTS: 95.97%
(Cost: $20,230,275) $28,481,085
OPTIONS PURCHASED: 0.03%
9,000 Eurostyle Put Option U.S.
Treasury 7% due 7/15/2006
(strike @ USD 102.18 expiring
9/11/97)
(Cost: $6,750) 7,603
-----------
TOTAL INVESTMENTS: 96.0% (Cost: $20,237,025) 28,488,688
OTHER ASSETS LESS LIABILITIES: 4.0% 1,189,645
-----------
NET ASSET:S 100% $29,678,333
===========
</TABLE>
- ---------------
(a) Unless otherwise indicated, securities owned are shares of common
stock.
* These securities are segregated for forward currency contracts.
Glossary:
ADR -- American Depositary Receipt
<TABLE>
<CAPTION>
SUMMARY OF
INVESTMENTS % OF
BY INDUSTRY PORTFOLIO
- ---------- ---------
<S> <C>
Aerospace & Military
Technology 1.4%
Banks 5.0%
Beverages 1.3%
Building Materials &
Components 0.2%
Chemicals 1.2%
Commercial Service 1.4%
Diversified 0.7%
Domestic Oil & Gas 0.7%
Drugs & Healthcare 9.2%
Electric Utilities 1.8%
Electronics &
Electrical
Equipment 6.9%
Eurobonds 1.0%
Financial Services 8.3%
Food & Household
Products 2.5%
Foreign Government
Bonds 25.5%
Hotels/Motels 0.4%
Housing &
Construction 1.0%
Insurance 6.6%
International Oil 1.9%
Machinery 2.9%
Merchandising 0.3%
Metals & Mining 0.4%
Natural Gas
Transmission 0.7%
Office Equipment 1.7%
Oil Service &
Products 0.7%
Paper & Forest
Products 1.0%
Publishing &
Broascasting 1.1%
Real Estate 0.5%
Retail 2.8%
Science & Technology 3.8%
Telecommunications 3.5%
Transportation 1.3%
U.S. Government
Agencies &
Obligations
2.3%
-----
100.0%
=====
</TABLE>
See Notes to Financial Statements.
<PAGE> 9
GLOBAL BALANCED FUND
FINANCIAL STATEMENTS (unaudited)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997
<TABLE>
<S> <C>
ASSETS:
Investments at value (cost, $20,237,025) (Note 1).............................................................. $28,488,688
Cash........................................................................................................... 1,245,636
Receivables:
Interest and dividends....................................................................................... 263,836
Capital shares sold.......................................................................................... 31,384
Deferred organization costs and other assets................................................................... 5,203
-----------
Total assets............................................................................................. 30,034,747
-----------
LIABILITIES:
Payables:
Securities purchased......................................................................................... 199,011
Capital shares repurchased................................................................................... 9,074
Unrealized depreciation on open forward foreign currency contracts (Note 5).................................. 7,415
Accounts payable............................................................................................. 140,914
-----------
Total liabilities........................................................................................ 356,414
-----------
Net assets................................................................................................... $29,678,333
===========
CLASS A
Net asset value and redemption price per share
($24,645,250/2,129,749)...................................................................................... $11.57
======
Maximum offering price per share:
(NAV/1-maximum sales commission)............................................................................. $12.15
======
CLASS B
Net asset value, offering price and redemption price per share ($5,033,083/436,852) (Redemption may be subject
to a contingent deferred sales charge within the first six years of ownership)............................... $11.52
Net assets consist of:
Aggregate paid in capital.................................................................................... $19,388,057
Unrealized appreciation of investments, forward currency contracts and options............................... 8,234,277
Overdistributed net investment income........................................................................ (63,293)
Undistributed realized gains................................................................................. 2,119,292
-----------
$29,678,333
===========
</TABLE>
See Notes to Financial Statements.
<PAGE> 10
GLOBAL BALANCED FUND
FINANCIAL STATEMENTS (unaudited)
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997
<TABLE>
<S> <C> <C>
INCOME
Interest................................................................................ $ 289,391
Dividends (less foreign taxes withheld of $21,065)...................................... 143,022
----------
432,413
EXPENSES:
Management (Note 2)..................................................................... $106,380
Distribution--Class A (Note 4).......................................................... 59,005
Distribution--Class B (Note 4).......................................................... 23,830
Administrative (Note 2)................................................................. 47,426
Transfer agent.......................................................................... 55,020
Registration............................................................................ 26,823
Reports to shareholders................................................................. 19,015
Custodian............................................................................... 16,750
Professional............................................................................ 6,539
Amortization of organization costs...................................................... 3,415
Other................................................................................... 21,729
--------
385,932
Expenses assumed by the Advisor (Note 2)................................................ (90,518)
--------
Total expenses.................................................................... 295,414
----------
Net investment income............................................................. 136,999
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 3)
Realized gain from security transactions................................................ 2,018,543
Realized gain from foreign currency transactions........................................ 28,719
Change in unrealized appreciation of investments and options............................ 1,109,607
Change in unrealized appreciation of forward currency contracts and other assets and
liabilities........................................................................... (32,903)
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................................... $3,260,965
==========
</TABLE>
See Notes to Financial Statements.
<PAGE> 11
GLOBAL BALANCED FUND
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1997 DECEMBER 31,
(UNAUDITED) 1996
---------------- ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income................................................................ $ 136,999 $ 311,618
Realized gain from security transactions............................................. 2,018,543 3,755,314
Realized gain from foreign currency transactions..................................... 28,719 251,979
Realized loss on options............................................................. -- (5,023)
Change in unrealized appreciation (depreciation) of investments and options.......... 1,109,607 (733,232)
Change in unrealized appreciation of forward currency contracts and other assets and
liabilities........................................................................ (32,903) 13,058
------------ -----------
Increase in net assets resulting from operations..................................... 3,260,965 3,593,714
------------ -----------
Dividends to shareholders from:
Net investment income:
Class A Shares..................................................................... (107,111) (266,076)
Class B Shares..................................................................... (8,870) (27,916)
------------ -----------
(115,981) (293,992)
------------ -----------
Net realized gain:
Class A Shares..................................................................... -- (2,388,543)
Class B Shares..................................................................... -- (478,173)
------------ -----------
-- (2,866,716)
------------ -----------
3,144,984 433,006
------------ -----------
Capital share transactions (Note 6):
Net proceeds from sales of shares:
Class A Shares..................................................................... 1,310,059 2,010,892
Class B Shares..................................................................... 202,686 489,537
------------ -----------
1,512,745 2,500,429
------------ -----------
Reinvestment of dividends:
Class A Shares..................................................................... 87,858 2,328,070
Class B Shares..................................................................... 6,611 372,827
------------ -----------
94,469 2,700,897
------------ -----------
Cost of shares reacquired:
Class A Shares..................................................................... (3,767,931) (10,938,566)
Class B Shares..................................................................... (636,965) (2,147,338)
------------ -----------
(4,404,896) (13,085,904)
------------ -----------
Decrease in net assets resulting from capital share transactions....................... (2,797,682) (7,884,578)
------------ -----------
Total increase (decrease) in net assets.......................................... 347,302 (7,451,572)
NET ASSETS:
Beginning of period.................................................................... 29,331,031 36,782,603
------------ -----------
End of period (including overdistributed net investment income of $(63,293) and
$(14,809) respectively).............................................................. $ 29,678,333 $29,331,031
============ ===========
</TABLE>
See Notes to Financial Statements.
<PAGE> 12
GLOBAL BALANCED FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------
FOR THE FOR THE PERIOD
SIX MONTHS DECEMBER 20,
ENDED YEAR ENDED DECEMBER 31, 1993(a) TO
JUNE 30, 1997 --------------------------- DECEMBER 31,
(UNAUDITED) 1996 1995 1994 1993
------------- ------- ------- ------- --------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.......... $10.37 $10.31 $9.07 $9.53 $9.53
---------- ------- ------- ------- -------
Income from Investment Operations:
Net Investment Income....................... 0.07 0.12 0.07+ 0.19+ --
Net Gain (Loss) on Securities (both
realized and unrealized)................ 1.18 1.15 1.31 (0.56) --
---------- ------- ------- ------- -------
Total from Investment Operations.............. 1.25 1.27 1.38 (0.37) --
---------- ------- ------- ------- -------
Less Distributions:
Dividends from Net Investment Income........ (0.05) (0.11) (0.14) (0.09) --
Distribution from Capital Gains............. -- (1.10) -- -- --
---------- ------- ------- ------- -------
(0.05) (1.21) (0.14) (0.09) --
---------- ------- ------- ------- -------
Net Asset Value, End of Period................ $11.57 $10.37 $10.31 $9.07 $9.53
========== ======= ======= ======= ==========
Total Return(b)............................... 12.07% 12.28% 15.30% (3.90%) 0%
- ---------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Period (000)............... $24,645 $29,331 $30,632 $13,986 $562
Ratio of Gross Expenses To Average Net
Assets...................................... 2.58%* 2.54% 2.69% 2.59% 7.76%
Ratio of Net Expenses to Average Net Assets... 2.00%*(c) 2.17%(c) 2.69% 1.06%(c) 0.25%*(c)
Ratio of Net Investment Income (Loss) to
Average Net Assets.......................... 1.05%* 1.05% 0.68% 1.99% (0.25%)*
Portfolio Turnover Rate....................... 33.82% 114.30% 196.69% 174.76% 0%
Average Commissions Rate Paid(d).............. $0.099 $0.0399
<CAPTION>
CLASS B
-------------------------------------------------------------------
FOR THE FOR THE PERIOD
SIX MONTHS DECEMBER 20,
ENDED YEAR ENDED DECEMBER 31, 1993(a) TO
JUNE 30, 1997 --------------------------- DECEMBER 31,
(UNAUDITED) 1996 1995 1994 1993
------------- ------- ------- ------- --------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.......... $10.32 $10.28 $9.02 $9.53 $9.53
---------- ------- ------- ------- -------
Income from Investment Operations:
Net Investment Income....................... 0.04 0.06 0.01 0.11+ --
Net Gain (Loss) on Securities (both
realized and unrealized)................ 1.18 1.14 1.28 (0.57) --
---------- ------- ------- ------- -------
Total from Investment Operations.............. 1.22 1.20 1.29 (0.46) --
---------- ------- ------- ------- -------
Less Distributions:
Dividends from Net Investment Income........ (0.02) (0.06) (0.03) (0.05) --
Distribution from Capital Gains............. (1.10) -- -- --
---------- ------- ------- ------- -------
(0.02) (1.16) (0.03) (0.05) --
---------- ------- ------- ------- -------
Net Asset Value, End of Period................ $11.52 $10.32 $10.28 $9.02 $9.53
========== ======= ======= ======= =======
Total Return(b)............................... 11.83% 11.49% 14.54% (4.84%) 0%
- ----------------------------------------------- ---------- ------------------------------------------------
RATIOS/SUPPLEMENTARY DATA $5,033
Net Assets, End of Period (000)............... $4,932 $6,151 $5,628 $130
Ratio of Gross Expenses To Average Net 3.41%*
Assets...................................... 2.51%*(c) 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 0.55%*
Average Net Assets.......................... 33.82% 0.51% 0.14% 1.14% (1.00%)*
Portfolio Turnover Rate....................... $0.0499 114.30% 196.69% 174.76% 0%
Average Commissions 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.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
<PAGE> 13
GLOBAL BALANCED FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Van Eck Funds (the "Trust"), organized as a Massachusetts business trust on
April 3, 1985, is registered under the Investment Company Act of 1940. The
following is a summary of significant accounting policies consistently followed
by the Global Balanced Fund series, a non-diversified fund (the "Fund") of the
Trust in the preparation of its financial statements. The policies are in
conformity with generally accepted accounting principles. The preparation of
financial statements, in conformity with generally accepted accounting
principles, requires the use of management's estimates and the actual amounts
could differ.
A. SECURITY VALUATION--Securities traded on national or foreign exchanges are
valued at the last sales prices reported at the close of business on the last
business day of the period. Over-the-counter securities and listed securities
for which no sale was reported are valued at the mean of the bid and asked
prices. Short-term obligations are valued at cost which with accrued interest
approximates value. Securities for which quotations are not available are stated
at fair value as determined by the Board of Trustees.
B. FEDERAL INCOME TAXES--It is the Fund's policy to comply with the provisions
of the Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to its shareholders. Therefore, no federal
income tax provision is required.
C. CURRENCY TRANSLATION--Assets and liabilities denominated in foreign
currencies and commitments under forward currency contracts are translated into
U.S. dollars at the mean of the quoted bid and asked prices of such currencies.
Purchases and sales of investments are translated at the exchange rates
prevailing when such investments were acquired or sold. Income and expenses are
translated at the exchange rates prevailing when accrued. Realized gains or
losses on security transactions and other foreign currency denominated assets
and liabilities attributable to foreign currency fluctuations are recorded as
realized gains and losses from foreign currency transactions. The portion of
unrealized gains and losses on investments that result from fluctuations in
foreign currency exchange rates are not separately disclosed.
D. DISTRIBUTIONS--Dividends to shareholders from net investment income and
realized gains, if any, are recorded on the ex-dividend date. Income and capital
gains distributions are determined in accordance with income tax regulations
which may differ from generally accepted accounting principles.
E. OTHER--Security transactions are accounted for on the date the securities are
purchased or sold. Dividend income is recorded on the ex-dividend date. Interest
income is accrued as earned. Premiums paid on bonds purchased are not amortized.
F. DEFERRED ORGANIZATION COSTS--Deferred organization costs are being amortized
over a period not exceeding five years.
G. USE OF DERIVATIVE INSTRUMENTS
OPTION CONTRACTS--The Fund may invest, for hedging and other purposes, in call
and put options on securities, currencies and commodities. Call and put options
give the Fund the right but not the obligation to buy (calls) or sell (puts) the
instrument underlying the option at a specified price. The premium paid on the
option, should it be exercised, will, on a call, increase the cost of the
instrument acquired and, on a put, reduce the proceeds received from the sale of
the instrument underlying the option. If the options are not exercised, the
premium paid will be recorded as a capital loss upon expiration. The Fund may
incur additional risk to the extent the value of the underlying instrument does
not correlate with the movement of the option value.
The Fund may also write call or put options. As the writer of an option, the
Fund receives a premium. The Fund keeps the premium whether or not the option is
exercised. The premium will be recorded, upon expiration of the option, as a
short-term capital gain. If the option is exercised, the Fund must sell, in the
case of a written call, or buy, in the case of a written put, the underlying
instrument at the exercise price. The Fund may write only covered puts and
calls. A covered call option is an option in which the Fund owns the instrument
underlying the call. A covered call sold by the Fund exposes it during the term
of the option to possible loss of opportunity to realize appreciation in the
market price of the underlying instrument or to possible continued holding of an
underlying instrument which might otherwise have been sold to protect against a
decline in the market price of the underlying instrument. A covered put exposes
the Fund during the term of the option to a decline in price of the underlying
instrument. A put option sold by the Fund is covered when, among other things,
cash or short-term liquid securities are placed in a segregated account to
fulfill the obligations undertaken. The Fund may incur additional risk from
investments in written currency options if there are unanticipated movements in
the underlying currencies.
FORWARD CURRENCY CONTRACTS--The Fund may buy and sell forward currency contracts
to settle purchases and sales of foreign denominated securities. In addition,
the Fund may enter into forward currency contracts to hedge foreign denominated
assets. The Fund may incur additional risk from investments in forward currency
contracts if the counterparty is unable to fulfill its obligations or there are
unanticipated movements of the foreign currency relative to the U.S. dollar.
Realized gains and losses from forward currency contracts are included in
realized gain (loss) from foreign currency transactions.
NOTE 2--Van Eck Associates Corporation (the "Advisor") earned fees of $106,380
for the six months ended June 30, 1997 for investment management and advisory
services. The fee is based on an annual rate of .75 of 1% of the Fund's average
daily net assets. Van Eck Associates Corporation also earned fees for accounting
and administrative services in the amount of $47,426 for the six months ended
June 30, 1997. The fee is based on an annual rate of .25 of 1% of the Fund's
average daily net assets. For the six months ended June 30, 1997, the Advisor
has agreed to assume expenses in excess of 2% of the average daily net assets of
Class A shares and 2.5% of daily average net assets for Class B shares. The
Fund's expenses were reduced by $90,518 under this agreement. Fiduciary
International, Inc., the sub-investment advisor, earned fees of $70,920 for the
six months ended June 30, 1997 for investment management. The fee is based on an
annual rate of .50 of 1% of the Fund's average daily net assets and is paid by
the Advisor from the advisory fees it receives from the Fund. Van Eck Securities
Corporation received $1,404 for the six months ended June 30, 1997 from
commissions earned on sales of Class A shares after deducting $4,018 allowed to
other dealers. Certain of the officers and trustees of the Trust are officers,
directors or stockholders of Van Eck Associates Corporation and Van Eck
Securities Corporation.
NOTE 3--Purchases and proceeds from sales of investments other than short-term
obligations, aggregated $9,452,039 and $12,813,135, respectively, for the six
months ended June 30, 1997. For federal income tax purposes the cost of
investments owned at June 30, 1997 was $20,237,025. As of June 30, 1997 net
unrealized appreciation for federal income tax purposes aggregated $8,251,663 of
which $8,706,030 related to appreciated investments and $454,367 related to
depreciated investments.
NOTE 4--Pursuant to a Rule 12b-1 Plan of Distribution (the "Plan"), the Fund is
authorized to incur distribution expenses which will principally be payments to
securities dealers who have sold shares and service shareholder accounts and
payments to Van Eck Securities Corporation ("VESC"), the distributor, for
reimbursement of other actual promotion and distribution expenses incurred by
the distributor on behalf of the Fund. The amount paid under the Plan in any one
year is limited to .50% of average daily net assets for Class A shares, and
1.00% of average daily net assets for Class B shares (the "Annual Limitation").
Distribution expenses incurred under the Plan that have
<PAGE> 14
GLOBAL BALANCED FUND
- --------------------------------------------------------------------------------
not been paid because they exceed the Annual Limitation may be carried forward
to future years and paid by the Fund within the Annual Limitation. VESC has
waived its right to reimbursement for the carried forward amounts through
September 30, 1997 in the event the Plan is terminated, unless the Board of
Trustees determines that reimbursement of carried forward amounts is
appropriate.
The excess of distribution expenses incurred over the Annual Limitation at June
30, 1997 was $555,273 for Class A shares and $349,798 for Class B shares.
NOTE 5--FORWARD CURRENCY CONTRACTS--The Fund may buy and sell forward currency
contracts to settle purchases and sales of foreign denominated securities. In
addition, the Fund may enter into forward currency contracts to hedge foreign
denominated assets. Realized gains and losses from forward currency contracts
are included in realized loss from foreign currency transactions. At June 30,
1997, the Fund had the following outstanding forward currency contracts:
<TABLE>
<CAPTION>
VALUE AT UNREALIZED
SETTLEMENT CURRENT APPRECIATION
CONTRACTS DATE VALUE (DEPRECIATION)
- --------------------------------------------------------------------------
<S> <C> <C> <C>
FOREIGN CURRENCY PURCHASE CONTRACTS:
AUD 81,000 expiring 7/17/97 $ 60,928 $ 61,047 $ 119
CAD 107,300 expiring 7/21/97 723,135 726,166 3,031
DEM 1,777,580 expiring
8/21/97 1,047,904 1,023,069 (24,835)
DKK 1,794,000 expiring
7/14/97 275,552 270,382 (5,170)
ESP 32,486,000 expiring
8/14/97 226,825 220,517 (6,308)
FRF 622,050 expiring 8/20/97 110,000 106,207 (3,793)
IEP 61,471 expiring 9/05/97 93,000 93,088 88
JPY 41,179,430 expiring
7/09/97 361,063 359,919 (1,144)
NOK 1,579,854 expiring
8/11/97 223,092 216,069 (7,023)
FOREIGN CURRENCY SALE CONTRACTS:
CHF 761,000 expiring 9/10/97 532,913 525,411 7,502
DEM 1,129,763 expiring
8/21/97 666,646 650,224 16,422
DKK 1,736,904 expiring
7/14/97 266,836 261,777 5,059
FRF 2,734,000 expiring
8/20/97 479,649 466,796 12,853
GBP 361,364 expiring 8/08/97 588,396 600,904 (12,508)
IEP 115,000 expiring 9/05/97 173,650 174,148 (498)
ITL 2,110,834 expiring
7/21/97 1,244,111 1,240,923 3,188
JPY 149,936,000 expiring
7/09/97 1,295,903 1,310,482 (14,579)
NLG 1,189,000 expiring
8/21/97 626,515 607,824 18,691
NZD 386,000 expiring 7/23/97 265,684 262,395 3,289
SEK 1,588,000 expiring
8/13/97 204,376 206,175 (1,799)
---------
$ (7,415)
=========
</TABLE>
The Fund may incur additional risk from investments in forward currency
contracts if the counterparty is unable to fulfill its obligation or there are
unanticipated movements of the foreign currency relative to the U.S. dollar.
NOTE 6--Shares of Beneficial Interest Issued and Redeemed (unlimited number of
$.001 par value shares authorized):
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1997 DECEMBER 31,
(UNAUDITED) 1996
---------------- ------------
<S> <C> <C>
CLASS A
Shares sold 121,486 188,315
Shares issued in connection with
an acquisition
Reinvestment of dividends 7,727 224,134
--------- -----------
129,213 412,449
Shares reacquired (353,402) (1,028,397)
--------- -----------
Net decrease (224,189) (615,948)
========= ===========
CLASS B
Shares sold 18,508 46,481
Reinvestment of dividends 609 36,074
--------- -----------
19,117 85,555
Shares reacquired (60,040) (202,890)
--------- -----------
Net decrease (40,923) (120,335)
========= ===========
</TABLE>
NOTE 7--The Fund invests in foreign securities. Investments in foreign
securities may involve a greater degree of risk than investments in domestic
securities due to political, economic or social instability. Foreign investments
may also be subject to foreign taxes and settlement delays.
The Fund will attempt to maintain an asset allocation of 60% in equity
securities and 40% in debt securities. Since the Fund may have significant
investments in foreign debt securities it may be subject to greater credit and
interest risks and greater currency fluctuations than portfolios with
significant investments in domestic debt securities.
NOTE 8--Trustee Deferred Compensation Plan. The Trust established a Deferred
Compensation Plan (the "Plan") for trustees. Commencing January 1, 1996, the
Trustees can elect to defer receipt of their trustee fees until retirement,
disability or termination from the board. The Fund's contributions to the Plan
are limited to the amount of fees earned by the participating trustees. The fees
otherwise payable to the participating trustees are invested in shares of the
Van Eck Funds as directed by the trustees. If a trustee has directed all or a
portion of his fee to be invested in the Fund, the unfunded liability remains
outstanding in the Fund's records since the Fund can not invest in itself. The
Plan has been approved by the Internal Revenue Service.
As of June 30, 1997 the total value of the assets and corresponding liability of
the Fund's portion of the Plan is $4,089.
<PAGE> 15
[THIS PAGE INTENTIONALLY LEFT BLANK.]
<PAGE> 16
VAN ECK FAMILY OF FUNDS
- -------------------------------
GLOBAL HARD ASSETS FUND
Seeks long-term capital appreciation by investing globally, primarily in "Hard
Asset Securities." Income is a secondary consideration.
INTERNATIONAL INVESTORS GOLD FUND
Founded in 1955, this Fund is the oldest gold-oriented mutual fund in (the U.S.
It invests in gold-mining shares globally and seeks long-term capital
appreciation, moderate yield and protection against monetary uncertainties.
GOLD/RESOURCES FUND
Seeking a long-term global hedge against inflation and other risks, this Fund
invests in gold-mining and natural resources companies outside South Africa.
EMERGING MARKETS GROWTH FUND
This Fund seeks long-term capital appreciation by investing primarily in equity
securities in emerging markets around the world.
ASIA DYNASTY FUND
This Fund seeks long-term capital appreciation by investing in the equity
securities of companies that are expected to benefit from the development and
growth of the economies in the Asia Region.
GLOBAL BALANCED FUND
This Fund seeks long-term capital appreciation together with current income by
investing in stocks, bonds and money market instruments worldwide.
GLOBAL INCOME FUND
This Fund seeks high total return through a flexible policy of investing
globally, primarily in debt securities.
U.S. GOVERNMENT MONEY FUND
This Fund seeks the highest safety of principal and daily liquidity by
investing in U.S. Treasury bills and repurchase agreements collateralized by
U.S. Government obligations.
This report must be accompanied or preceded by a Van Eck Global Funds
prospectus, which includes more complete information, such as charges and
expenses and the risks associated with international investing, including
currency fluctuations or controls, expropriation, nationalization and
confiscatory taxation. For a free Van Eck Gold & Money Funds prospectus, please
call the number listed below. Please read the prospectus before investing.
[VAN ECK GLOBAL LOGO]
Van Eck Securities Corporation
99 Park Avenue, New York, NY 10016
www.vaneck.com
FOR ACCOUNT ASSISTANCE PLEASE CALL (800) 544-4653
For Content, Date: 8/20
FR1997-0718-0085
JUNE 30, 1997
VAN ECK
--------------------------
GLOBAL
--------------------------
BALANCED
--------------------------
FUND
--------------------------
SEMI-ANNUAL
--------------------------
REPORT
[VAN ECK GLOBAL LOGO]
