<PAGE>
Van Eck Global
Worldwide Insurance Trust
SEMI-ANNUAL REPORT
June 30, 1998
discipline
Worldwide Bond Fund
allocation
diversity
A TRADITION OF GLOBAL SOLUTIONS DESIGNED FOR INTELLIGENT INVESTMENT PLANNING AND
DIVERSIFICATION
<PAGE>
VAN ECK WORLDWIDE BOND FUND
- -------------------------------------------------------------------------------
Dear Fellow Shareholder:
The major global bond markets continued to provide competitive returns in the
first half of 1998 against a backdrop of stable growth, low inflation and low
interest rates. Economic uncertainty in Asia caused a general "flight to
quality" among bond investors and the traditional "safe-haven" markets
benefited. For the six months ended June 30, 1998, the Worldwide Bond Fund had a
total return of 3.4%, outperforming the Salomon Smith Barney World Government
Bond Index, which had a total return of 2.8% in U.S. dollar terms.
BOND MARKET REVIEW
The dominant influence in global fixed income markets during the first half of
the year has been the unremitting turmoil in the emerging markets. During the
past six months, the dramatic worsening of economic conditions in Asia, Latin
America, Russia and South Africa has led bond investors toward the relative
safety of low-risk, high-quality government bonds of the developed markets.
Interest rates have remained stable in the U.S. and most of core Europe due to
positive economic fundamentals as well as a growing recognition by central
bankers that the impact of the Asian currency collapse will likely have a
restraining impact on future economic growth and inflation.
The full extent of the turmoil in Asia was evident in the data released during
the second quarter, showing severe GDP (Gross Domestic Product) growth rate
declines in Korea, Thailand and Indonesia. The most recent phase of the Asian
financial crisis was sparked by Japan's economic downturn. This economic
contraction prompted 10-year Japanese bonds to rally as yields fell to new
lows during the second quarter. For U.S. investors, however, these gains were
eliminated as the yen fell against the dollar. (The portfolio benefited from
having no exposure to Japan throughout the first half.) Concerns then mounted
that a further yen depreciation would force a devaluation of the Hong Kong
dollar and Chinese renminbi (which did not actually occur), escalating the
crisis to new
heights. Asian currencies continued their downward spiral and financial-market
turmoil spread to other emerging markets. This precipitated further flights of
capital from lower-quality bond markets, and bond prices of higher-quality
developed markets were buoyed.
We have sustained an overweight position in Europe, where improving growth
prospects and lower-than-expected inflation led these bond markets to strong
performance. The core European economies benefited from an unseasonably warm
winter that spurred domestic economic activity and led to falling
unemployment, surging stock markets and rising consumer confidence. In May,
the European Union announced that Monetary Union would begin as scheduled on
January 1, 1999 with eleven founding members. Improved economic conditions,
along with positive sentiment surrounding the introduction of the Euro,
allowed European currencies to hold their own versus the U.S. dollar in the
first half. The harmonized CPI for the Euro area remained stable at 1.4% for
April and May; this benign inflation environment further reinforced existing
positive fundamentals. Expectations for the level at which short-term interest
rates will converge continue to be lowered on the back of low inflation as
well as liquidity concerns associated with the spreading turmoil in emerging
market countries. Declines in European bond yields (and, inversely, increases
in bond prices) have outpaced U.S. yield declines, in part because U.S.
Treasuries had already begun to benefit from a "flight to quality" before the
beginning of the period under review. The Fund has kept an overweight position
in higher-yielding European markets, specifically Sweden and Ireland, which
benefited performance. Overall, Europe currently represents 45% of the
portfolio, a slight increase from 41% at year end.
The UK bond market was the top performer in both 1997 and the first half of
1998. Your Fund, which was overweight UK bonds with an allocation of over 20%
throughout the first half of the year, was able to benefit from the UK's
impressive performance year to date and its high yield. For the six months
ended June 30, UK bonds achieved a return of 7.4% in U.S. dollar terms in
spite of a surprise hike in interest rates in June, the seventh rise in 18
months.
<PAGE>
VAN ECK WORLDWIDE BOND FUND
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During the first quarter, the U.S. economy continued to advance at a robust
5.4% annual pace. Economic activity in the first quarter was driven by a surge
in domestic demand. This was a result of a dramatic increase in consumer
refinancing activity that was spurred by the low U.S. interest rates. During
the second quarter, however, economic growth was more subdued due to a number
of factors, including weak exports resulting from the Asia crisis, the GM
strike and a bout of inventory reduction following a large buildup in the
first quarter. This slowdown, coupled with continued capital flows from the
emerging markets, benefited U.S. Treasuries. The U.S. bond market returned
4.2% for the first six months of 1998. Dollar bloc bonds broke out of their
recent trading range at the beginning of June. The recent widening in credit
spreads and problems in the emerging markets drove the bellwether 30-year
Treasury yield to 5.6% by quarter end, the lowest level since thirty-year
bonds were first issued in the late 1970s. We have maintained an approximate
47% weighting in the U.S. bond market, but have increased the duration, in
effect increasing the Fund's overall exposure to this market.
As did their Asian counterparts, New Zealand and Australian currencies
declined dramatically during the first six months of the year. We had
decreased the duration of New Zealand holdings during the first quarter, but
were unable to avoid losses created by the Fund's bond and currency exposure.
Throughout the first half of the year, the Fund continued to exclude
Australian holdings from the portfolio.
Also in the first quarter, we cut exposure to Canada (from a 4% weighting at
year end), due to prospects for continued currency weakness. Since Canadian
bonds are yielding less than those in the U.S., we eliminated exposure to
Canada in favor of the safety of the U.S. bond market.
THE OUTLOOK
We continue to be fairly optimistic on the outlook for global bond markets
given the current environment of slowing global growth and benign inflation
that presently characterizes much of the world. We remain positive on the
prospects for the higher yielding markets of the U.S. and the UK and feel that
these markets should continue to outperform most European bond markets, due to
relative growth differentials, on a total return basis during the second half
of the year. We feel that core European economies should experience stronger
growth on a relative basis, which should support these currencies versus the
dollar. We remain negative on the Japanese economy and look to remain
underweight in terms of both duration and currency exposure in that market.
We appreciate your participation in the Worldwide Bond Fund and look forward
to helping you meet your investment goals in the future.
PHOTO PHOTO PHOTO
/s/ John C. /s/ Charles T. /s/ Gregory F.
John C. Charles T. Gregory F.
van Eck Cameron Krenzer
Chairman Co- Co-
Portfolio Portfolio
Manager Manager
July 23, 1998
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PERFORMANCE RECORD AS OF 6/30/98
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<TABLE>
<CAPTION>
AVERAGE ANNUAL
TOTAL RETURN
- -------------------------
<S> <C>
Life (since 9/1/89) 6.2%
- -------------------------
5 years 5.7%
- -------------------------
1 year 6.8%
- -------------------------
</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.
<PAGE>
WORLDWIDE BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL VALUE
COUNTRY AMOUNT BONDS AND NOTES (NOTE 1)
- --------------------------------------------------------------------------
<C> <C> <S> <C>
FRANCE: 4.7%
FRF 30,500,000 French Government Bond
BTNS 5.50% due 10/12/01* $ 5,216,940
------------
GERMANY: 6.8%
Bundesrepublik Deutschland Bonds
DEM 7,000,000 7.375% due 1/03/05* 4,444,291
5,300,000 6.00% due 1/04/07* 3,186,373
------------
7,630,664
------------
IRELAND: 2.0%
IEP 1,350,000 Irish Government Bond
8.00% due 8/18/06 2,245,081
------------
ITALY: 1.9%
ITL 3,600,000,000 Italian Government Bond
7.50% due 10/01/99 2,095,409
------------
NEW ZEALAND: 5.2%
New Zealand Government Bonds
NZD 3,350,000 10.00% due 3/15/02 1,906,273
7,500,000 8.00% due 2/15/01 3,970,606
------------
5,876,879
------------
SPAIN: 0.8%
ESP 135,000,000 Spanish Government Bond
7.40% due 7/30/99 908,620
------------
SWEDEN: 5.3%
Swedish Government Bonds
SEK 14,000,000 10.25% due 5/05/03 2,172,672
28,000,000 6.00% due 2/09/05 3,740,428
------------
5,913,100
------------
UNITED KINGDOM: 23.8%
Great Britain Government Bonds
GBP 1,500,000 8.00% due 6/07/21 3,273,117
2,250,000 8.00% due 6/10/03 4,011,527
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL VALUE
COUNTRY AMOUNT BONDS AND NOTES (NOTE 1)
- -----------------------------------------------------------------------------
<C> <C> <S> <C>
UNITED KINGDOM (CONTINUED)
GBP 2,000,000 7.75% due 9/08/06 $ 3,707,977
6,800,000 7.50% due 12/07/06 12,490,599
2,000,000 6.00% due 8/10/99 3,292,505
------------
26,775,725
------------
UNITED STATES: 47.3%
U.S. Treasury Notes
USD 6,700,000 7.125% due 9/30/99* 6,827,722
8,600,000 6.50% due 8/15/05* 9,081,067
6,500,000 6.25% due 2/15/07* 6,810,785
11,250,000 6.00% due 8/15/00 11,358,990
5,000,000 5.875% due 9/30/02 5,064,065
3,400,000 5.50% due 11/15/98* 3,402,128
U.S. Treasury Bonds
4,000,000 6.75% due 8/15/26* 4,581,252
5,250,000 6.625% due 2/15/27* 5,932,505
------------
53,058,514
------------
TOTAL BONDS AND NOTES: 97.8%
(COST: $108,356,844) 109,720,932
------------
<CAPTION>
SHORT-TERM OBLIGATION
- -----------------------------------------------------------------------------
<C> <C> <S> <C>
UNITED STATES: 0.4%
USD 495,000 American Express Co. Commercial Paper
due 7/01/98
Interest Yield 6.03% (Amortized Cost:
$495,000) 495,000
------------
TOTAL INVESTMENTS: 98.2%
(COST: $108,851,844) 110,215,932
OTHER ASSETS LESS LIABILITIES: 1.8% 1,964,231
------------
NET ASSETS: 100% $112,180,163
============
</TABLE>
- -------
*These securities are segregated for forward currency contracts.
See Notes to Financial Statements
<PAGE>
WORLDWIDE BOND FUND FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<S> <C>
JUNE 30, 1998
ASSETS:
Investments at value (cost, $108,851,844) (Note 1)............... $110,215,932
Cash............................................................. 928
Receivables:
Interest........................................................ 2,587,881
Capital shares sold............................................. 59,752
Unrealized appreciation on forward currency contracts (Note 4).. 22,323
------------
Total assets.................................................... 112,886,816
------------
LIABILITIES:
Payables:
Unrealized depreciation on forward currency contracts (Note 4).. 584,826
Capital shares redeemed......................................... 32,415
Accounts payable................................................ 89,412
------------
Total liabilities............................................... 706,653
------------
Net Assets....................................................... $112,180,163
============
Shares outstanding............................................... 9,966,762
============
Net asset value, redemption price and offering price per share
($112,180,163 / 9,966,762)...................................... $11.26
============
Net assets consist of:
Aggregate paid in capital....................................... $110,355,227
Unrealized appreciation of investments, forward foreign currency
contracts and foreign currency receivables and payables........ 774,485
Undistributed net investment income............................. 1,654,473
Accumulated realized loss....................................... (604,022)
------------
$112,180,163
============
</TABLE>
<TABLE>
<S> <C> <C>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998
INTEREST INCOME (Note 1).................................. $3,330,020
EXPENSES:
Management (Note 2)....................................... $556,621
Administration (Note 2)................................... 3,135
Custodian................................................. 33,246
Professional fees......................................... 23,989
Reports to shareholders................................... 22,210
Trustees' fees and expenses............................... 15,099
Other..................................................... 20,464
--------
Total expenses........................................... 674,764
----------
Net investment income.................................... 2,655,256
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (Note
3):
Realized gain from security transactions.................. 1,031,776
Realized loss from foreign currency transactions.......... (654,239)
Change in unrealized appreciation of investments.......... 729,725
Change in unrealized depreciation of forward foreign
currency contracts and foreign currency receivables and
payables................................................. (153,889)
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS...... $3,608,629
==========
</TABLE>
See Notes to Financial Statements
<PAGE>
WORLDWIDE BOND FUND FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED
1998 DECEMBER 31,
(UNAUDITED) 1997
------------ ------------
<S> <C> <C>
DECREASE IN NET ASSETS:
OPERATIONS:
Net investment income... $ 2,655,256 $ 4,818,806
Realized gain from secu-
rity transactions...... 1,031,776 939,587
Realized loss from for-
eign currency transac-
tions.................. (654,239) (1,588,761)
Change in unrealized
appreciation of
investments............ 729,725 (1,375,718)
Change in unrealized de-
preciation of forward
foreign currency con-
tracts and foreign cur-
rency receivables and
payables............... (153,889) (229,114)
------------ ------------
Increase in net assets
resulting from opera-
tions.................. 3,608,629 2,564,800
------------ ------------
Dividends to sharehold-
ers from net investment
income................. (1,020,300) (3,749,849)
------------ ------------
CAPITAL SHARE TRANSAC-
TIONS*:
Net proceeds from sales
of shares.............. 17,856,602 33,108,189
Reinvestment of
dividends.............. 1,020,300 3,749,849
------------ ------------
18,876,902 36,858,038
Cost of shares
reacquired............. (21,745,724) (41,888,456)
------------ ------------
Decrease in net assets
resulting from capital
share transactions..... (2,868,822) (5,030,418)
------------ ------------
Total decrease in net
assets................. (280,493) (6,215,467)
NET ASSETS:
Beginning of period...... 112,460,656 118,676,123
------------ ------------
End of period (including
undistributed net in-
vestment income of
$1,654,473 and $723,165,
respectively).............$112,180,163 $112,460,656
============ ============
*SHARES OF BENEFICIAL
INTEREST ISSUED AND
REDEEMED (UNLIMITED
NUMBER OF $.001 PAR
VALUE SHARES AUTHORIZED)
Shares sold............. 1,596,702 3,059,504
Reinvestment of divi-
dends.................. 92,755 355,099
------------ ------------
1,689,457 3,414,603
Shares reacquired....... (1,951,286) (3,880,804)
------------ ------------
Net decrease............ (261,829) (466,201)
============ ============
</TABLE>
See Notes to Financial Statements
<PAGE>
WORLDWIDE BOND FUND
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FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period
<TABLE>
<CAPTION>
FOR THE SIX MONTHS FOR THE EIGHT MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED APRIL 30,
JUNE 30, 1998 DECEMBER 31, DECEMBER 31, ------------------------------------
(UNAUDITED) 1997 1996 1996 1995 1994 1993
------------------ ------------ -------------------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Begin-
ning of Period......... $ 10.99 $ 11.10 $ 10.88 $ 11.46 $ 10.05 $ 10.62 $ 11.57
-------- -------- -------- -------- -------- ------- -------
Income From Investment
Operations:
Net Investment Income.. 0.27 0.48 0.36 0.58 0.68* 0.63 0.81
Net Gain (Loss) on
Securities (both
realized and
unrealized)........... 0.10 (0.23) 0.17 (0.34) 0.77 (0.37) (0.75)
-------- -------- -------- -------- -------- ------- -------
Total from Investment
Operations............. 0.37 0.25 0.53 0.24 1.45 0.26 0.06
-------- -------- -------- -------- -------- ------- -------
Less Distributions:
Dividends from Net In-
vestment Income....... (0.10) (0.36) (0.31) (0.82) (0.04) (0.72) (0.83)
Distributions from Cap-
ital Gains............ -- -- -- -- -- (0.11) (0.18)
-------- -------- -------- -------- -------- ------- -------
Total Distributions..... (0.10) (0.36) (0.31) (0.82) (0.04) (0.83) (1.01)
-------- -------- -------- -------- -------- ------- -------
Net Asset Value, End of
Period................. $ 11.26 $ 10.99 $ 11.10 $ 10.88 $ 11.46 $ 10.05 $ 10.62
======== ======== ======== ======== ======== ======= =======
Total Return (a)........ 3.39% 2.38% 4.98% 2.07% 14.51% 2.49% 0.38%
- --------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY
DATA
Net Assets, End of Pe-
riod (000)............. $112,180 $112,461 $118,676 $107,541 $113,466 $80,908 $66,035
Ratio of Gross Expenses
to Average Net Assets.. 1.21%(b) 1.12% 1.17%(b) 1.10% 0.99%
Ratio of Net Expenses to
Average Net Assets..... 1.21%(b) 1.12% 1.16%(b) 1.08% 0.98% 0.93% 1.01%
Ratio of Net Income to
Average Net Assets..... 4.77%(b) 4.31% 4.99%(b) 5.26% 6.24% 6.47% 8.47%
Portfolio Turnover Rate. 15.00% 135.36% 73.95% 208.05% 265.87% 37.59% 248.21%
</TABLE>
- -------
(a) 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 for periods less than one year are not
annualized.
(b) Annualized.
* Based on average shares outstanding.
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 Bond Fund (the "Fund"), a non-
diversified series 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. Futures are valued using the
closing price reported at the close of the Chicago Board of Trade. Forward
currency contracts are valued at the spot currency rate plus an amount
("points") which reflects the differences in interest rates between the U.S.
and the foreign markets. Securities for which quotations are not available are
stated at fair value as determined by the Board of Trustees.
B. FEDERAL INCOME TAXES--It is the Fund's policy to comply with the provisions
of the Internal Revenue Code applicable to regulated investment companies and
to distribute all of its taxable income to its shareholders. Therefore, no
federal income tax provision is required.
C. CURRENCY TRANSLATION--Assets and liabilities denominated in foreign
currencies and commitments under forward currency contracts are translated
into U.S. dollars at the mean of the quoted bid and asked prices of such
currencies on the last business day of the period. Purchases and sales of
investments are translated at the exchange rates prevailing when such
investments were acquired or sold. Income and expenses are translated at the
exchange rates prevailing when accrued. The number 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. DIVIDEND 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.
NOTE 2--Van Eck Associates Corporation (the "Adviser") earned fees of $556,621
for the six months ended June 30, 1998 for investment management and advisory
services. The fee is based on an annual rate of 1% on the first $500 million
of average daily net assets, .90 of 1%
<PAGE>
WORLDWIDE BOND FUND
- -------------------------------------------------------------------------------
on the next $250 million and .70 of 1% on the excess over $750 million.
Certain of the officers and trustees of the Trust are officers, directors or
stockholders of the adviser and Van Eck Securities Corporation. In accordance
with the advisory agreement, the Fund reimbursed the Adviser $3,135 for costs
incurred in connection with certain administrative functions.
NOTE 3--Purchases and proceeds from sales of securities, other than short-term
obligations, aggregated $17,115,209 and $15,965,819, 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 $108,851,844. As of June 30,
1998, net unrealized appreciation for federal income tax purposes aggregated
$1,364,088, of which $4,148,916 related to appreciated securities and
$2,784,828 related to depreciated securities. At December 31, 1997, the Fund
had a capital loss carry forward of $1,134,234 available, expiring December
31, 2004, to offset future capital gains.
NOTE 4--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,
1998 the Fund had the following outstanding forward currency contracts:
<TABLE>
<CAPTION>
VALUE AT UNREALIZED
SETTLEMENT CURRENT APPRECIATION
CONTRACTS DATE VALUE (DEPRECIATION)
--------- ----------- ----------- --------------
<C> <S> <C> <C> <C>
FORWARD CURRENCY BUY CONTRACTS:
DEM 27,700,000 expiring 9/16/98 $15,373,244 $15,392,386 $ 19,142
FRF 17,500,000 expiring 9/16/98 2,900,232 2,900,871 639
ITL 11,570,712,500 expiring 9/16/98 6,504,054 6,506,596 2,542
FORWARD CURRENCY SELL CONTRACTS:
DEM 15,000,000 expiring 9/16/98 8,421,762 8,335,227 86,535
GBP 13,950,000 expiring 9/16/98 22,674,650 23,162,482 (487,832)
IEP 1,480,000 expiring 9/16/98 2,058,680 2,059,583 (903)
NZD 7,500,000 expiring 9/16/98 3,682,500 3,865,126 (182,626)
---------
$(562,503)
=========
</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 5--OPTION CONTRACTS--The Fund may invest, for hedging and other purposes,
in call and put options on securities, currencies and commodities. Call and
put options give the Fund the right but not the obligation to buy (calls) or
sell (puts) the instrument underlying the option at a specified price. The
premium paid on the option, should it be exercised, will, on a call, increase
the cost of the instrument acquired and, on a put, reduce the proceeds
received from the sale of the instrument underlying the option. If the options
are not exercised, the premium paid will be recorded as a capital loss upon
expiration. The Fund may incur additional risk to the extent the value of the
underlying instrument does not correlate with the movement of the option
value.
The Fund may also write call or put options. As the writer of an option, the
Fund receives a premium. The Fund keeps the premium whether or not the option
is exercised. The premium will be recorded, upon expiration of the option, as
a short-term capital gain. If the option is exercised, the Fund must sell, in
the case of a written call, or buy, in the case of a written put, the
underlying instrument at the exercise price. The Fund may write only covered
puts and calls. A covered call option is an option in which the Fund owns the
instrument underlying the call. A covered call sold by the Fund exposes it
during the term of the option to possible loss of opportunity to realize
appreciation in the market price of the underlying instrument or to possible
continued holding of an underlying instrument which might otherwise have been
sold to protect against a decline in the market price of the underlying
instrument. A covered put exposes the Fund during the term of the option to a
decline in price of the underlying instrument. A put option sold by the Fund
is covered when, among other things, cash or short-term liquid securities are
placed in a segregated account to fulfill the obligations undertaken. The Fund
may incur additional risk from investments in written currency options if
there are unanticipated movements in the underlying currencies.
NOTE 6--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. 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 7--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.
The Fund has elected to show the deferred liability net of the asset for
financial statement purposes.
As of June 30, 1998, the total value of the assets and corresponding liability
of the Fund's portion of the Plan is $23,189.
<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
