<PAGE>
Van Eck Global
Worldwide Insurance Trust
SEMI-ANNUAL REPORT
June 30, 1998
discipline
Worldwide Real Estate Fund
allocation
diversity
A TRADITION OF GLOBAL SOLUTIONS DESIGNED FOR INTELLIGENT INVESTMENT PLANNING AND
DIVERSIFICATION
<PAGE>
VAN ECK WORLDWIDE REAL ESTATE FUND
- --------------------------------------------------------------------------------
Dear Fellow Shareholder:
The first six months of 1998 were challenging for global real estate markets.
The Salomon Smith Barney World Property Index declined 9.3% in the first half
of the year, while U.S. REITs fell about 5%. In this environment, the Van Eck
Worldwide Real Estate Fund significantly outperformed, due to both prudent
diversification and selective stock picking. Your Fund had a total return of -
1.6% for the first six months of the year compared to an average return of -
5.3% among 71 real estate funds tracked by Standard & Poor's Micropal, a mutual
fund evaluation service. The Worldwide Real Estate Fund remains up 17.7% since
its inception on June 23, 1997.
NORTH AMERICA
At 57% of total net assets, the U.S. remained the Fund's largest country
allocation, with office and hotel holdings the largest sector weightings. As we
headed into 1998, the environment remained favorable for most commercial
property sectors and fundamentals were strong, with earnings and cash flow
growth rates well in excess of the broader stock market. However, a number of
factors had a negative effect.
First, some investors became concerned about a potential real estate "bubble,"
as certain "trophy" buildings have recently traded hands at seemingly high
prices. In our opinion, while absolute values have risen, factoring in today's
higher rents and attractive interest rates, prices are still generally
reasonable. Second, many were worried about new supply flooding the market.
While it is true that construction starts have been up significantly, except
for select cities and property types, we are comfortable that landlord pricing
power will hold as a strong economy and job creation drive demand.
Adding to negative sentiment was press coverage of IRS reforms passed by
Congress that target "paired share" REITs (a specific REIT structure), which
has left many uninformed investors concerned that the REIT structure itself is
endangered. We believe that, going forward, these measures should have a
negligible effect on REITs and REIT shareholders as a whole.
Finally, many growth and income funds that had owned REITs as a defensive
measure in the second half of 1997 exited the group in pursuit of more
aggressive returns in other sectors of the market.
We believe that these factors have resulted in very attractive valuations and
thus have added to your Fund's U.S. holdings. We augmented positions in Patriot
American Hospitality and Starwood Hotels & Resorts, two of the largest paired
share REITs in the market, which were oversold and remain promising, in our
opinion.
We maintained your portfolio's overweight position in Canada with over 16% of
assets in Canadian holdings. We believe the Canadian real estate market offers
enormous potential at this time. Most of the positive factors prevalent in the
U.S. market have been present in Canada, with the added advantage that Canada's
real estate cycle has been one to three years behind the U.S. Therefore, we
were surprised that Canadian property companies declined significantly in the
first half of the year as well. Canadian investors focused on a potential
slowdown as a result of the Asia crisis (Canada is a large trading partner to
Asia), as well as pending bank mergers, both of which could dampen demand for
real estate. Further impacting returns to U.S. investors was a weak Canadian
dollar, which has been trading at record lows. As we are still positive on the
outlook for the Canadian property market given strong fundamentals, we
selectively added to the portfolio's Canadian positions (in stocks such as
TrizecHahn and Bentall) as prices declined.
EUROPE
At June 30, your Fund had 11% of total assets in Europe, including Finland,
France, Sweden and the UK. The broad European stock markets turned in
exceptional performance in the first half of the year due to rising GDP (Gross
Domestic Product) growth estimates, a generally favorable interest rate
environment and euphoria over economic and monetary union. Selective European
property stocks benefited from this favorable backdrop as well as from
improving real estate fundamentals on the Continent, and the European stocks
held in your portfolio
<PAGE>
VAN ECK WORLDWIDE REAL ESTATE FUND
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achieved exceptional returns. A recently added position in Sponda (a Finnish
IPO - initial public offering), a substantial position in France's Accor (a
hotel stock benefiting from World Cup-related tourism), and several Swedish
holdings (which benefited primarily from corporate restructurings) all provided
strong returns for the Fund. Even in the UK, despite concerns of overheating
property markets and high property stock valuations, our holdings in Thistle
Hotels (which is said to be a merger candidate) and Millennium & Copthorne
(another hotel company) boosted Fund performance.
THE FAR EAST
Asia's financial crisis, which hit in the latter half of 1997, continues to be
a major problem. Even after a 35% decline in Asian property stocks last year,
these equities declined further in 1998 as recessions, shaky currencies and
high interest rates depressed demand. The Fund remained very underweighted in
the Far East, with a 4% total allocation to Australia and Japan. In Japan,
there has been continued soft real estate demand on the back of a weak economy
and continued government dithering, but we have maintained a small position
while awaiting signs of reforms that could stimulate the economy, and hence,
demand for real estate. We have hedged the majority of the Fund's yen exposure,
eliminating the downside risk from currency weakness. Your Fund's only
Australian stock, Westfield Holdings (which is the adviser to another Fund
holding, Westfield America), has been an exception among its peers, with
significant positive performance year to date.
THE OUTLOOK
The outlook for real estate investments in many regions of the world remains
positive. In the U.S., REITs are notably undervalued, both on a relative basis
to the broad market and on an absolute basis. U.S. property values are up only
about one third as much as the S&P 500 over the last four years. Moreover, U.S.
REITs are trading at record dividend yield spreads to the S&P--investors
currently earn an average of 6% on REITs versus 1.5% on the S&P 500. FFO
("funds from operations") multiples on REITs are near record lows compared to
the S&P 500, while earnings growth rates for REITs are substantially higher.
Further, many REITs are trading at or near their underlying asset value,
providing a degree of downside protection. We believe that as investors
reevaluate relative value and their concerns over general market volatility
grow, they will again become buyers of real estate securities as a defensive
move.
In the current environment, we plan to maintain the portfolio's overweight
position in the U.S. We plan to continue to emphasize the office and hotel
sectors and will remain underweighted in retail and residential stocks given
where we are in the U.S. real estate cycle.
In Canada, we believe fundamentals are intact and see even less risk of
overbuilding in the next one to two years than in the U.S. Additionally,
interest rates in Canada continue to be near record lows, providing support to
the generally more highly-leveraged Canadian property companies.
In Europe, we may moderately increase exposure. Improving economies and
recently recovering real estate markets are positives. Also of note, public
real estate companies on the Continent are becoming more focused and proactive,
following the U.S. REIT example. Valuations here are not cheap, however, and we
will add to these positions on a selective basis, focusing on corporate
restructurings and other unique opportunities.
Although we remain cautious on the region overall, we may selectively add to
the Far East allocation, given depressed stock prices. We believe that pent-up
demand for residential property in places like Hong Kong will present
opportunities for the Fund in the future. We plan to maintain the small
Japanese position, waiting for positive signs in the economy, but will continue
to hedge the yen.
<PAGE>
VAN ECK WORLDWIDE REAL ESTATE FUND
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We thank you for your participation in the Worldwide Real Estate Fund and look
forward to helping you meet your investment goals in the future.
PHOTO PHOTO
/s/ John C. van Eck /s/ Kevin L. Reid
John C. van Eck Kevin L. Reid
Chairman Portfolio Manager
July 27, 1998
SECTOR WEIGHTINGS
AS OF JUNE 30, 1998
PIE CHART
Diversified 19.6%
Hotels 22.8%
Office/Industrial 23.9%
Residential 5.8%
Retail 9.2%
Specialty 7.0%
Cash/Other 11.7%
- --------------------------------------------------------------------------------
PERFORMANCE RECORD AS OF 6/30/98
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL
TOTAL RETURN
- --------------------------------
<S> <C>
Since Inception (6/23/97) 17.3%
- --------------------------------
1 Year 20.2%
- --------------------------------
</TABLE>
PAST PERFORMANCE IS NOT INDICATIVE OF
FUTURE RESULTS.
Performance data quoted represents past performance and the investment return
and principal value of an investment will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than the original cost. These
returns do not take variable annuity/life fees and expenses into account.
GEOGRAPHICAL WEIGHTINGS
AS OF JUNE 30, 1998
PIE CHART
Australia 1.2%
Canada 16.5%
Finland 2.9%
France 3.3%
Japan 2.8%
Sweden 2.7%
United Kingdom 2.2%
United States 56.7%
Cash/Other 11.7%
<PAGE>
VAN ECK WORLDWIDE REAL ESTATE FUND
TOP TEN EQUITY HOLDINGS AS OF JUNE 30, 1998
PATRIOT AMERICAN HOSPITALITY, INC.
(U.S., 4.8%)
Patriot American Hospitality is a hotel real estate investment trust (REIT).
The REIT is affiliated with Wyndham Hotel Corporation, a hotel management and
operating company. Shares of the Trust and operating company are paired and
trade as a unit.
STARWOOD HOTELS & RESORTS
(U.S., 4.8%)
Starwood Hotels & Resorts is a fully integrated owner/operator of full service
hotels. It is comprised of Starwood Hotels & Resorts Trust, a REIT, which owns
primarily hotel assets, and Starwood Hotels & Resorts Worldwide, Inc., a hotel
management and operating company, which manages the hotels and related assets.
Starwood controls both the Westin and Sheraton brands, among others. Shares of
the Trust and operating company are paired and trade as a unit.
SIGNATURE RESORTS, INC.
(U.S., 4.8%)
Recently renamed Sunterra Corporation, the company owns and operates vacation
ownership resorts. Sunterra Corporation's properties include 85 resort
locations around the world with more than 200,000 owner families. The company,
through its Marc Hotels & Resorts subsidiary, manages an additional 22 resorts
in Hawaii.
CORNERSTONE PROPERTIES, INC.
(U.S., 2.9%)
Cornerstone Properties is a self-advised equity real estate investment trust.
The company invests in Class A office properties in prime central business
district locations and major suburban office markets in the United States.
SPONDA OYJ
(FINLAND, 2.9%)
Sponda is a real estate company that owns and manages commercial rental
properties primarily located in and around Helsinki and in the city of Tampere
in Finland. Sponda owns and manages the dominant retail mall in Scandinavia, in
addition to industrial buildings, a hotel, offices and retail stores. The
company is partly owned by the Finnish government.
BENTALL CORPORATION
(CANADA, 2.9%)
Bentall owns, manages and develops office properties. The company's real estate
portfolio consists of downtown and suburban office space in Vancouver, British
Columbia; Seattle, Washington and southern California.
MACK-CALI REALTY CORPORATION
(U.S., 2.9%)
Mack-Cali is a self-administered and self-managed real estate investment trust.
Along with its subsidiaries, the company develops, owns, manages and leases
mostly office and related properties. Mack-Cali's properties are located
primarily in the Northeast and Southwest regions of the United States.
TRIZECHAHN CORPORATION
(CANADA, 2.7%)
TrizecHahn is a real estate development and operating company. The company,
through its wholly owned subsidiaries, acquires, develops, manages and owns
income-producing commercial real estate comprised primarily of office buildings
in the United States and Canada and super-regional retail centers in the United
States. The company is also active outside North America, particularly in
Europe.
EQUITY OFFICE PROPERTIES TRUST
(U.S., 2.4%)
Equity Office Properties is a fully integrated, self-administered and self-
managed real estate investment trust (REIT) engaged in acquiring, owning,
managing, leasing and renovating office properties and parking facilities. The
company's assets are owned by, and its operations are conducted through, EOP
Operating Limited Partnership.
ACCOR SA
(FRANCE, 2.3%)
Accor operates a network of 2,577 hotels, 3,000 travel agencies and 1,000
restaurants worldwide. Major brand names controlled by Accor include "Ibis"
hotels, "Hotel Sofitel" and "Europcar." The company is the largest owner of
hotel rooms in France and one of the world's largest hotel companies.
<PAGE>
WORLDWIDE REAL ESTATE FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 1998 (UNAUDITED)
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<TABLE>
<CAPTION>
NO. OF VALUE
COUNTRY SHARES SECURITIES (A) (NOTE 1)
- -------------------------------------------------------------
<C> <C> <S> <C>
AUSTRALIA: 1.2%
3,000 Westfield Holdings Ltd. $ 14,635
---------
CANADA: 16.5%
3,000 Bentall Corporation 34,733
1,000 Boardwalk Equities, Inc. 11,578
1,000 Brookfield Properties Corp. 13,791
1,000 Cadillac Fairview Corp. 23,000
1,500 Cambridge Shopping Centres, Ltd. 13,536
500 Four Seasons Hotels, Inc. 17,625
3,500 Legacy Hotels REIT 20,499
1,500 O&Y Properties Corp. 7,968
2,500 Royal Host REIT 8,939
1,500 TrizecHahn Corporation 32,156
3,000 UniHost Corp. 14,813
---------
198,638
---------
FINLAND: 2.9%
5,000 Sponda Oyj 35,029
---------
FRANCE: 3.3%
100 Accor SA 27,917
75 Societe Fonciere Lyonnaise 11,818
---------
39,735
---------
JAPAN: 2.8%
2,000 Mitsubishi Estate Co. Ltd. 17,534
2,000 Mitsui Fudoson Co. Ltd. 15,752
---------
33,286
---------
SWEDEN: 2.7%
450 Asticus AB 4,951
1,000 Castellum AB 11,754
1,900 Diligentia AB 16,393
---------
33,098
---------
UNITED KINGDOM: 2.2%
1,500 Millennium & Copthorne Hotels PLC 13,480
3,500 Thistle Hotels PLC 12,722
---------
26,202
---------
UNITED STATES: 56.7%
600 AMB Property Corp. 14,700
750 Arden Realty, Inc. 19,406
500 Bedford Property Investors, Inc. 9,125
1,100 Brandywine Realty Trust 24,613
3,000 Bridgestreet Accommodations, Inc. 13,875
1,000 Capital Senior Living Corp. 12,313
800 CapStar Hotel Co. 22,400
500 CarrAmerica Realty Corp. 14,188
</TABLE>
<TABLE>
<CAPTION>
NO. OF VALUE
COUNTRY SHARES SECURITIES (A) (NOTE 1)
- --------------------------------------------------------------------
<C> <C> <S> <C>
UNITED STATES (CONTINUED)
500 Catellus Development Corp. $ 8,844
2,000 Cornerstone Properties, Inc. 35,250
400 Corporate Office Properties Trust, Inc. 3,550
1,000 Equity Office Properties Trust 28,375
500 Equity Residential Properties Trust 23,719
2,500 Excel Legacy Corp. 10,938
500 Excel Realty Trust, Inc. 14,406
2,000 Grove Property Trust 20,875
500 Host Marriott Corp. 8,906
500 Kilroy Realty Corp. 12,500
650 LaSalle Hotel Properties 11,009
500 Macerich Co. (The) 14,656
1,000 Mack-Cali Realty Corporation 34,375
500 Parkway Properties, Inc. 14,750
2,438 Patriot American Hospitality, Inc. 58,352
1,500 Philips International Realty Corp. 24,750
1,000 Prentiss Properties Trust 24,313
1,000 Security Capital Group--B
(Warrants expiring 9/18/98) 344
3,500 Signature Resorts, Inc. 57,750
900 SL Green Realty Corp. 20,250
1,300 St. Joe Company (The) 21,900
1,200 Starwood Hotels & Resorts 57,975
300 Tower Realty Trust, Inc. 6,713
200 TriNet Corporate Realty Trust, Inc. 6,800
1,000 United Dominion Realty Trust, Inc. 13,875
1,000 Westfield America, Inc. 18,375
----------
684,170
----------
TOTAL STOCKS AND OTHER INVESTMENTS: 88.3%
(COST: $1,087,079) 1,064,793
OTHER ASSETS LESS LIABILITIES: 11.7% 140,843
----------
NET ASSETS: 100% $1,205,636
==========
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF
INVESTMENTS % OF
BY INDUSTRY NET ASSETS
- ----------- ----------
<S> <C>
Diversified 19.6%
Hotels 22.8%
Office/Industrial 23.9%
Residential 5.8%
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF
INVESTMENTS % OF
BY INDUSTRY NET ASSETS
- ----------- ----------
<S> <C>
Retail 9.2%
Specialty 7.0%
Other assets less liabilities 11.7%
------
100.0%
======
</TABLE>
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(a) Unless otherwise indicated, securities owned are shares of common stock.
See Notes to Financial Statements
<PAGE>
WORLDWIDE REAL ESTATE FUND FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<S> <C>
JUNE 30, 1998
ASSETS:
Investments at value (cost, $1,087,079) (Note 1)................... $1,064,793
Cash............................................................... 79,931
Receivables:
Securities sold................................................... 54,350
From Adviser...................................................... 32,672
Dividends......................................................... 5,953
Capital shares sold............................................... 1,746
Deferred organization costs (Note 1)............................... 5,698
----------
Total assets..................................................... 1,245,143
----------
LIABILITIES:
Payables:
Securities purchased.............................................. 30,100
Unrealized depreciation on forward currency contracts (Note 5)..... 88
Accounts payable................................................... 9,319
----------
Total liabilities................................................ 39,507
----------
Net assets......................................................... $1,205,636
==========
Shares outstanding................................................. 113,845
==========
Net asset value, redemption and offering price per share
($1,205,636 / 113,845)............................................ $10.59
======
Net assets consist of:
Aggregate paid in capital......................................... $1,219,497
Unrealized depreciation of investments, forward currency contracts
and foreign currency............................................. (22,688)
Undistributed net investment income............................... 12,696
Overdistributed realized gains.................................... (3,869)
----------
$1,205,636
==========
</TABLE>
<TABLE>
<S> <C> <C>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998
INCOME: (Note 1)
Dividends (net of foreign taxes withheld of $492).......... $ 15,743
Interest................................................... 1,297
--------
17,040
EXPENSES:
Management (Note 2)........................................ $ 4,701
Administration (Note 2).................................... 659
Reports to shareholders.................................... 16,707
Professional............................................... 6,395
Amortization of deferred organization costs................ 710
Other...................................................... 655
--------
Total expenses........................................... 29,827
Expenses assumed by the Adviser and reduced by a broker
arrangement (Note 2)...................................... (26,488)
--------
Net expenses............................................. 3,339
--------
Net investment income.................................... 13,701
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (Note
3):
Realized loss from security transactions................... (509)
Realized gain from foreign currency transactions........... 90
Change in unrealized appreciation of forward currency
contracts and foreign currency receivables and payables... (464)
Change in unrealized appreciation of investments........... (36,560)
--------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS....... $(23,742)
========
</TABLE>
See Notes to Financial Statements
<PAGE>
WORLDWIDE REAL ESTATE FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS FOR THE
ENDED PERIOD JUNE 23,
JUNE 30, 1997+ TO
1998 DECEMBER 31,
(UNAUDITED) 1997
----------- ---------------
<S> <C> <C>
INCREASE IN NET ASSETS:
OPERATIONS:
Net investment income............................. $ 13,701 $ 12,708
Realized gain (loss) from security transactions... (509) 65,851
Realized gain from foreign currency transactions.. 90 911
Change in unrealized appreciation of forward
currency contracts and foreign currency
receivables and payables......................... (464) 62
Change in unrealized appreciation of investments.. (36,560) 14,274
---------- --------
Increase (decrease) in net assets resulting from
operations....................................... (23,742) 93,806
---------- --------
Dividends and distributions to shareholders from:
Net investment income............................. (13,400) --
Net realized gains................................ (70,525) --
---------- --------
Total dividends and distributions................. (83,925) --
---------- --------
CAPITAL SHARE TRANSACTIONS*:
Net proceeds from sales of shares................. 396,276 750,000
Reinvestment of dividends......................... 83,925 --
Cost of shares reacquired......................... (10,704) --
---------- --------
Increase in net assets resulting from capital
share transactions............................... 469,497 750,000
---------- --------
Total increase in net assets...................... 361,830 843,806
NET ASSETS:
Beginning of period................................ 843,806 --
---------- --------
End of period (including undistributed net
investment income of $12,696 and $12,305,
respectively)..................................... $1,205,636 $843,806
========== ========
*SHARES OF BENEFICIAL INTEREST OUTSTANDING WITH AN
UNLIMITED NUMBER OF $.001 PAR VALUE SHARES
AUTHORIZED AND ISSUED:
Shares sold....................................... 36,480 70,525
Dividends reinvested.............................. 7,851 --
Shares reacquired................................. (1,011) --
---------- --------
Net increase...................................... 43,320 70,525
========== ========
</TABLE>
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+ Commencement of operations.
See Notes to Financial Statements
<PAGE>
WORLDWIDE REAL ESTATE FUND
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period
<TABLE>
<CAPTION>
FOR THE SIX FOR THE PERIOD
MONTHS ENDED JUNE 23, 1997(A)
JUNE 30, 1998 TO DECEMBER 31,
(UNAUDITED) 1997
------------- ----------------
<S> <C> <C>
Net Asset Value, Beginning of Period............ $ 11.96 $ 10.00
------- -------
Income From Investment Operations:
Net Investment Income.......................... 0.13 0.18
Net Gains (Losses) on Securities (both realized
and unrealized)............................... (0.31) 1.78
------- -------
Total From Investment Operations................ (0.18) 1.96
------- -------
Less Distributions:
Distributions from Net Investment Income....... (0.19) --
Distributions from Capital Gains............... (1.00) --
------- -------
Total Distributions............................. (1.19) --
------- -------
Net Asset Value, End of Period.................. $ 10.59 $ 11.96
======= =======
Total Return (b)................................ (1.60%) 19.60%
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Period (000)................. $ 1,206 $ 844
Ratio of Gross Expenses to Average Net Assets
(c)............................................ 6.34% 4.92
Ratio of Net Expenses to Average Net Assets (c). 0.71% 0.00
Ratio of Net Income to Average Net Assets (c)... 2.91% 3.62%
Portfolio Turnover Rate......................... 45% 123%
Average Commission Rate Paid.................... $0.0245 $0.0619
</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 distributions
at net asset value during the period and a redemption on the last day of
the period. Total return is not annualized.
(c) Annualized.
See Notes to Financial Statements
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Van Eck Worldwide Insurance Trust (the "Trust"), organized as a Massachusetts
business trust on January 7, 1987, is registered under the Investment Company
Act of 1940. The following is a summary of significant accounting policies
consistently followed by the Worldwide Real Estate Fund series, a diversified
fund (the "Fund") of the Trust, in the preparation of its financial
statements. The policies are in conformity with generally accepted accounting
principles. The preparation of financial statements in conformity with
generally accepted accounting principles requires the use of management's
estimates, and the actual amounts could differ.
A. SECURITY VALUATION--Securities traded on national exchanges and traded on
the NASDAQ National Market System are valued at the last sales prices reported
at the close of business on the last business day of the period. Over-the-
counter securities not included in the NASDAQ National Market System and
listed securities for which no sale was reported are valued at the mean of the
bid and asked prices. Short-term obligations purchased with more than sixty
days remaining to maturity are valued at market. Short-term obligations
purchased with sixty days or less to maturity are valued at amortized 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 on the last business day of the period. Purchases and sales of
investments are translated at the exchange rates prevailing when such
investments were acquired or sold. Income and expenses are translated at the
exchange rates prevailing when accrued. The portion of realized and unrealized
gains and losses on investments that results from fluctuations in foreign
currency exchange rates is not separately disclosed. Recognized gains or
losses attributable to foreign currency fluctuations on foreign currency
denominated assets and liabilities are recorded as net realized gains and
losses from foreign currency transactions.
D. DIVIDENDS AND DISTRIBUTIONS--Dividend income and distributions to
shareholders are recorded on the ex-dividend date. Income distributions and
capital gain distributions are determined in accordance with income tax
regulations, which may differ from generally accepted accounting principles.
E. OTHER--Security transactions are accounted for on the date the securities
are purchased or sold. Interest income is accrued as earned.
F. Deferred organization costs are being amortized over a period not to exceed
five years.
NOTE 2--Van Eck Associates Corporation (the "Adviser") earned fees for
investment management and advisory services. The fee is based on an annual
rate of 1% of the average daily net assets, which includes the fee paid to the
Adviser for accounting and administrative services. For the six months ended
June 30, 1998, the Adviser agreed to waive its management fees of $4,701 and
assume all expenses of the Fund except
<PAGE>
WORLDWIDE REAL ESTATE FUND
- -------------------------------------------------------------------------------
interest, taxes, brokerage commissions and extraordinary expenses for the
period January 1, 1998 to February 28, 1998. The Adviser also agreed to assume
expenses exceeding 1% of average daily net assets except interest, taxes,
brokerage commissions and extraordinary expenses for the period March 1, 1998
to June 30, 1998. For the six months ended June 30, 1998, the Adviser assumed
expenses in the amount of $26,223. Certain of the officers and trustees of the
Trust are officers, directors or stockholders of the Adviser and Van Eck
Securities Corporation. As of June 30, 1998, the Adviser owned 69% of the
outstanding shares of beneficial interest of the Fund.
In accordance with the advisory agreement, the Fund reimburses the Adviser for
costs incurred in connection with certain administrative functions which
amounted to $659. For the six months ended June 30, 1998, the Adviser agreed
to assume such costs.
The Fund directs certain portfolio trades to a broker that, in turn, pays a
portion of the Fund's operating expenses. For the six months ended June 30,
1998, the portion of the Fund's expenses reduced by this directed brokerage
arrangement amounted to $265.
NOTE 3--Purchases and sales of securities, other than short-term obligations,
aggregated $760,655 and $382,120, respectively, for the six months ended June
30, 1998. For federal income tax purposes, the identified cost of investments
owned at June 30, 1998 was $1,087,079. As of June 30, 1998, net unrealized
depreciation for federal income tax purposes aggregated $22,286, of which
$42,477 related to appreciated securities and $64,763 related to depreciated
securities.
NOTE 4--The Fund may purchase securities on foreign exchanges. Securities of
foreign issuers involve special risks and considerations not typically
associated with investing in U.S. issuers. These risks include devaluation of
currencies, less reliable information about issuers, different securities
transactions clearance and settlement practices, and future adverse political
and economic developments. These risks are heightened for investments in
emerging market countries. Moreover, securities of many foreign issuers and
their markets may be less liquid and their prices more volatile than those of
comparable U.S. issuers.
NOTE 5--FORWARD CURRENCY CONTRACTS:
The Fund bought and sold forward foreign currency contracts to settle
purchases and sales of foreign denominated securities. The Fund may incur
additional risk from investments in forward foreign currency contracts if the
counterparty is unable to fulfill its obligations or there are unanticipated
movements of the foreign currency relative to the U.S. dollar. Realized and
unrealized gains and losses from forward currency contracts are included in
realized and unrealized gain (loss) from forward currency transactions.
At June 30, 1998, the Fund had the following outstanding forward currency
contracts:
<TABLE>
<CAPTION>
VALUE AT UNREALIZED
SETTLEMENT CURRENT (APPRECIATION)
CONTRACT DATE VALUE DEPRECIATION
- -------- ---------- ------- --------------
<S> <C> <C> <C> <C>
FORWARD CURRENCY BUY CONTRACT
JPY 2,211,048
expiring
7/02/98 $15,886 $15,889 $ 3
FORWARD CURRENCY SELL CONTRACT
JPY 3,500,000
expiring
9/16/98 25,421 25,512 (91)
----
$(88)
====
</TABLE>
NOTE 6--TRUSTEE DEFERRED COMPENSATION PLAN--The Trust established a Deferred
Compensation Plan (the "Plan") for Trustees. Commencing January 1, 1996, the
Trustees can elect to defer receipt of their trustee fees until retirement,
disability or termination from the board. The Fund's contributions to the Plan
are limited to the amount of fees earned by the participating Trustees. The
fees otherwise payable to the participating Trustees are invested in shares of
the Van Eck Funds as directed by the Trustees. The Plan has been approved by
the Internal Revenue Service. As of June 30, 1998, the total value of the
liability of the Fund's portion of the plan is $60.
<PAGE>
LOGO VAN ECK GLOBAL
Investment Adviser: Van Eck Associates Corporation
Distributor: Van Eck Securities Corporation
99 Park Avenue, New York, NY 10016 www.vaneck.com
FR 1998-0728-0039
