<PAGE>
Van Eck Worldwide Balanced Fund
--------------------------------------
1997 Annual Report
Dear Fellow Shareholder:
Once again, as they did in 1995 and 1996, global equity markets registered
strong gains in 1997, with western markets considerably more upbeat than those
in Asia. Although global bond markets benefited from falling inflation
expectations in the wake of Asia's turmoil, the strength of the U.S. dollar
limited gains to unhedged investors. The Worldwide Balanced Fund had a strong
year in 1997, achieving a total return of 10.4%*. This compares very favorably
to the 8.6% average return posted by the 72 global asset allocation/global
market funds as measured by Micropal, Inc., a mutual fund evaluation service.
The Fund's limited exposure to Japanese and Asian Pacific equities contributed
to its superior performance in 1997.
WORLD EQUITY MARKETS
In aggregate, global equity markets turned in a solid performance in 1997,
gaining 15.8%+. However, as has been the norm throughout the 1990's,
performance varied significantly among individual regions. Strong earnings
growth and a favorable interest rate environment propelled the U.S. stock
market to a 33.4% gain, as measured by the S&P 500 Index. The UK, Europe and
Latin America turned in solid 20%-plus returns; unfortunately, Asian countries
posted returns of a similar magnitude in negative territory. This was largely
due to the meltdown of Asian currencies, equities and economies--the investment
story that eclipsed all others this past year. The fallout soon spread to
Japan's already fragile market and economy, as well as to Latin America's
previously healthy markets. Europe, the UK and the U.S., although affected by
the turmoil, were more resilient and thus able to recover from an initial bout
of investor jitters.
THE UNITED STATES
The U.S.'s robust equity returns were achieved in an environment of increased
volatility, particularly in October when the sell-off of global equities caused
a 10% U.S. market correction. Nonetheless, many sectors enjoyed record gains.
Pharmaceuticals and financial services were notably strong sectors and are two
areas where the Fund had substantial holdings (e.g., Merck and AIG). Looking
ahead, we anticipate a slowing economic environment where bottom-up stock
picking, rather than sector selection, will be the key to outperformance. In
addition, we will focus more on domestically-oriented names, rather than multi-
nationals, in order to minimize exposure to Asia's problems.
THE UNITED KINGDOM AND CONTINENTAL EUROPE
Compared to the gyrations in Asia, the UK and European equity markets were
quite calm in 1997. The elections in the UK and France were the only notable
political events and both were eventually accepted by financial markets.
Confidence in European Monetary Union (EMU) grew over the course of the year;
what once seemed unlikely now appears attainable by January 1999. The success
in lowering budget deficits and inflation increased EMU's credibility in the
financial markets as well as widened the probable membership from a narrow few
to eleven countries. With a stronger political consensus in place for EMU,
interest rate convergence continued, with rates declining in some peripheral
countries, such as Spain, Italy and parts of Scandinavia. Europe's low
interest-rate environment, coupled with strong growth across the Atlantic, led
to further strengthening of the U.S. dollar, igniting export-led growth on the
Continent and providing strong support for European equity markets.
Spain (+25.4%) and Italy (+35.5%) were the flag-bearers for the interest-rate
convergence theme, while Switzerland (+44.3%), Germany (+24.6%) and the
Netherlands (+23.8%) benefited from newfound competitiveness in their export
markets. The much anticipated start of consolidation among European banks and
insurance companies led to strong outperformance by these sectors.
JAPAN
Investing in Japan was difficult in 1997, even without considering the impact
of Asia's crisis. The Nikkei 225 started the year in typical 90's fashion, with
an 11% sell-off in the face of an anticipated slowdown in economic growth. The
market staged a temporary comeback in April and May, rallying 16%, as investors
anticipated a relatively benign reaction to April tax hikes. By June, however,
Japanese equities sold off sharply as investors comprehended the negative
impact of the tax hikes on consumption and corporate capital investment plans.
With hindsight, the early positive readings were clearly misguided; Japan's
economy declined at an 11% annualized rate in the second quarter.
<PAGE>
Prior to Asia's crisis, the one positive factor for Japan over the past two
years had been the competitiveness of its currency. However, as Asia's woes
intensified, the yen became overvalued relative to its neighboring currencies,
which had devalued as much as 50% in just three months. Japan's already weak
domestic economy and crippled banking system, coupled with Asia's currency
devaluations, led to renewed weakness in Japanese equities, which declined
23.7% for the year (14.5% in yen terms).
ASIA PACIFIC
Although our outlook for Asia Pacific had been negative since midyear, we--
along with most investment professionals and investors--did not fully
anticipate the currency and market meltdown that occurred. What started as a
local problem in Thailand, quickly spread to Malaysia, Indonesia and the
Philippines, eventually working north towards Hong Kong and South Korea.
Although the specifics vary by country, the general problems in the region
were and continue to be high current account and fiscal deficits, excessive
foreign currency borrowing used to fund inefficient capital spending (e.g.,
empty office towers), and government interference in banking systems and
capital markets.
Even with International Monetary Fund (IMF) bail-out packages in place for
specific countries, investors have been hesitant to return to the region until
the long-term causes, such as government intervention in the free market
system, have been addressed. The magnitude of the currency and equity market
declines certainly exceeded investors' pessimistic expectations; in 1997, the
MSCI Far East Emerging Markets Free Index declined 56.2% (34.6% in local
currency terms). We currently maintain minimal exposure to the region.
LATIN AMERICA
Unlike their Asian counterparts, Latin American equities generated impressive
returns in 1997, rising 31.6%. The primary differences between the two regions
were: 1) growth was accelerating in Latin America while decelerating in
Southeast Asia; 2) investment spending in Latin America had been geared to
more productive areas; and 3) Latin American governments have been pursuing
pro-market policies while trying to shrink the government's role.
While growth prospects were indeed better in Latin America, the region was not
immune to the Asian sell-off. Brazil was the main target, as investors focused
on the country's relatively high current account deficit, questioning whether
the Brazilian real would be able to maintain its link to the U.S. dollar. The
jury is still out on this issue; one could argue that the controlled 7% annual
devaluation versus the dollar would eliminate the currency's 15% to 20%
overvaluation within a few years. Further, the government continues to take
appropriate steps to reform the public sector and reduce the fiscal deficit.
Nonetheless, if the pressure on its currency becomes excessive, the government
may have no choice. While this is unlikely, we recognize the increased risk in
Latin American equities. Subsequently, we reduced the Fund's exposure to the
region.
WORLD BOND MARKETS
For global fixed income markets, 1997 was marked by four major themes: 1) the
fall of global inflation rates and expectations; 2) the continued strength of
the U.S. dollar; 3) the march towards EMU; and most recently, 4) Asia's
turbulence. While not well positioned for the first of these trends, the Fund
was and remains well placed to profit from the latter three.
THE UNITED STATES
The absence of inflationary pressures in the U.S., in what was the seventh
year of economic expansion, is remarkable. Indeed, recent data show inflation
under 2.0%, a new low for this cycle. This is especially notable given
the buoyant stock market and low levels of unemployment. The strong dollar and
weak demand in Asia were in part responsible for this situation; this
prevented the Federal Reserve from taking further action following its 0.25%
hike in short-term interest rates in March, even as economic growth approached
4.0%. This environment, which also reflected the advantages of a shrinking
federal budget deficit, drove long-term bond yields below 6.5% (eventually
falling through 6.0%), even as unemployment fell to its lowest levels in 24
years. Early in the year, we were underweight in our duration exposure (a
measure of the portfolio's sensitivity to changing interest rates) relative to
the Salomon Smith Barney World Government Bond Index as we believed that a
continuation of above-trend growth (which did happen) would cause the Federal
<PAGE>
Reserve to continue to raise interest rates (which didn't happen); by year
end, our duration exposure was neutral relative to the Index.
THE UNITED KINGDOM AND CONTINENTAL EUROPE
In 1997, Europe made the steady march toward EMU, slated to begin in January
1999. Long-term yields in the "EMU-11" continued to converge, with rates
declining the most in the peripheral markets of Italy and Spain. The UK bond
market took top honors in performance, rising 14.8% in local currency terms.
The Bank of England was granted freedom to set interest rates by the
victorious Labour Party, leading to a sharp fall in government bond yields.
The new government also signaled its preference for joining EMU in the future,
further boosting bond prices.
JAPAN
In Japan, bond yields fell to the lowest levels in a developed country since
World War II, with ten-year yields declining to 1.8%. The economy weakened
once more as government efforts to reduce the budget deficit depressed final
demand. With short-term rates already at 0.5%, the authorities looked to a
weaker yen to boost exports. With such low yields and the risk of a policy
shift (which seemingly began at year end) throughout the year, we saw little
value in Japanese bonds.
ASIA PACIFIC
It is likely that 1997 will most be remembered for the collapse of the "Asian
miracle." At the start of 1997, the currencies of Thailand, Malaysia, the
Philippines, Indonesia (the ASEAN 4: the Association of South East Asian
Nations), Taiwan, South Korea and Hong Kong were either tied directly to the
U.S. dollar or more loosely linked. By year end, Hong Kong was the only
country able to maintain its peg, while its neighbors' previously stable
currencies plunged more than 50% against the dollar. As long as the currency
problems were limited to the ASEAN 4, a group of countries with a small share
of global trade, western markets were unaffected. However, as one currency
after another sank, pressure built on Hong Kong and South Korea, two nations
with more sizable economies and which are bigger players in global trade. As
Hong Kong stocks plummeted and the Korean won sank, western markets shuddered.
The ensuing flight-to-quality pushed U.S. and European bond yields lower and
led the U.S. dollar sharply higher. Additionally, falling gold and other
commodity prices reignited fears that Asia's crisis would push the global
economy into deflation, providing a further boost to bond prices.
THE OUTLOOK
In 1998, the international investment arena promises to be quite challenging.
The two most pressing issues are: 1) how Japan will address its economic and
banking system woes; and 2) the willingness of Asian governments to work with
the IMF and the eventual success of the rescue packages. Although it is too
early to render a verdict on Japan, the recently released bank rescue plan,
similar to the U.S. savings and loan rescue plan, and the tax cut package are
clearly steps in the right direction. More important, however, are the
implementation details, which should be ironed out over the next couple of
months.
As a result of Asia's financial crisis, growth prospects in the region are
quite poor for 1998. Even if the Asian governments work with the IMF, the
medicine will be painful for their domestic economies. The economies will have
to depend on exports for growth next year, thereby all but eliminating any
global inflationary worries. Investors will not be lured back to the region
any time soon in anticipation of a sharp pick-up in economic growth. Rather, a
change in the fundamental interrelationships between governments and
businesses and a more pro-market stance should provide impetus to investors to
make long-term investments in the region's equities and currencies.
While Japan and Asia Pacific may begin to sort out their problems in the first
half of 1998, at this stage we are hesitant to give them the benefit of the
doubt. Given this, the Fund continues to focus on U.S. and European equities,
which should benefit from relatively strong earnings growth in 1998 (the U.S.
will benefit more from low interest rates). Additionally, Asia's problems are
likely to warrant a scarcity premium for UK and European equities. Lastly,
while the risk of investing in Latin America has increased, the return
potential merits the Fund's exposure.
The outlook for fixed income markets will be greatly impacted by how soon
Asia's currency volatility ends. A worsening of the situation would reduce
global growth prospects, as well as impart a further deflationary
<PAGE>
influence on commodity and product prices. This would be unambiguously good
news for developed bond markets, particularly the U.S. and European markets. If
the crisis abates, we may add exposure to select emerging markets in Latin
America and Eastern Europe, which now offer outstanding long-term value. On the
other hand, if it deepens, the Fund's current fixed income portfolio of high-
quality, largely government securities should continue to perform well.
We appreciate your participation in the Worldwide Balanced Fund and look
forward to helping you meet your investment goals in the future.
/s/ John C. van Eck /s/ Derek S. van Eck
John C. van Eck Derek S. van Eck
Chairman Portfolio Manager
January 20, 1998
+ Note: unless otherwise stated, all stock market returns are Morgan Stanley
Capital International (MSCI) Indices, measured in U.S. dollar terms, and
reflect the reinvestment of net dividends.
LINE GRAPH
<TABLE>
<CAPTION>
Van Eck Worldwide Global Balanced
Balanced Fund Index
----------------- ---------------
<S> <C> <C>
12/94 10000 10000
10000 9995
10000 10186
3/95 10000 10724
10000 11029
10000 11211
6/95 10000 11237
10000 11586
10000 11273
9/95 9991 11572
9960 11499
10010 11791
12/95 9990 12049
10120 12122
10180 12143
3/96 10200 12259
10290 12413
10341 12422
6/96 10351 12500
10301 12333
10401 12438
9/96 10581 12752
10681 12902
10892 13406
12/96 11152 13235
11382 13190
11362 13243
3/97 11167 13047
11433 13259
11843 13895
6/97 12109 14379
12569 14733
12170 14139
9/97 12365 14722
12088 14380
12140 14446
12/97 12314 14536
</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.
The graph shows month-end net asset values; however, the net asset value
fluctuates daily.
1. Inception date for the Worldwide Balanced Fund is 12/23/94.
2. The Global Balanced Index consists of 60% Morgan Stanley Capital
International World Equity Index & 40% Salomon Smith Barney World Government
Bond Index.
3. Performance does not reflect the impact of the Fund's expenses, as they have
been fully reimbursed by the Adviser since the Fund's inception.
This graph compares an initial $10,000 investment in the Van Eck Worldwide
Balanced Fund made at its inception with a similar investment in a Global
Balanced Index.
THE GLOBAL BALANCED INDEX IS AN UNMANAGED INDEX AND INCLUDES THE REINVESTMENT
OF ALL DIVIDENDS, BUT DOES NOT REFLECT THE PAYMENT OF TRANSACTION COSTS,
ADVISORY FEES OR EXPENSES THAT ARE ASSOCIATED WITH AN INVESTMENT IN THE FUND.
<PAGE>
Worldwide Balanced Fund
Schedule of Portfolio Investments
December 31, 1997
<TABLE>
<CAPTION>
NO. OF VALUE
COMMON STOCKS SHARES (NOTE 1)
- ---------------------------------------------------------------------
<S> <C> <C>
ARGENTINA: 0.90%
Banco de Galicia Buenos Aires (ADR) 500 $ 12,875
Telecom Argentina Stet-France Telecom S.A. (ADR) 600 21,450
--------
34,325
--------
BRAZIL: 0.92%
Telecomunicacoes Brasileiras S.A. (ADR) 300 34,931
--------
CHILE: 0.22%
Chilgener S.A. (ADR) 332 8,134
--------
FINLAND: 0.19%
Nokia AB "A" (ADR) 100 7,000
--------
FRANCE: 1.44%
Carrefour S.A. 50 26,065
Scor S.A. 600 28,668
--------
54,733
--------
GERMANY: 1.09%
Hoechst AG 400 14,012
VEBA AG 400 27,245
--------
41,257
--------
HONG KONG: 1.07%
Cheung Kong (Holdings) Ltd. (ADR) 3,500 23,188
Sun Hung Kai Properties Ltd. (ADR) 2,500 17,500
--------
40,688
--------
JAPAN: 3.04%
Canon, Inc. (ADR) 200 23,350
Hitachi Ltd. (ADR) 300 20,756
Matsushita Electric Industrial Co. Ltd. 2,000 29,294
Mitsubishi Heavy Industries Ltd. 4,000 16,687
Nomura Securities Co. Ltd. (ADR) 30 3,990
Yamatake-Honeywell 2,000 21,319
--------
115,396
--------
MEXICO: 1.08%
Apasco S.A. 6,000 41,279
--------
NETHERLANDS: 1.91%
ING Groep N.V. (ADR) 800 33,850
Philips Electronics N.V. 50 3,000
Philips Electronics N.V. (ADR) 50 3,025
Royal Dutch Petroleum Co. (New York Registry Shares) 600 32,513
--------
72,388
--------
SPAIN: 0.04%
Compania Sevillana de Electricidad 168 1,571
--------
SWEDEN: 0.11%
Kinnevik AB "B" 100 1,657
NetCom Systems AB "A"+ 100 2,149
Modern Times Group Mfg.+ 100 599
--------
4,405
--------
SWITZERLAND: 0.85%
ABB AG-Registered 50 12,620
Roche Holdings AG 2 19,843
--------
32,463
--------
THAILAND: 0.01%
Krung Thai Bank Ltd. "F" 1,000 213
--------
UNITED KINGDOM: 0.67%
British Aerospace PLC 500 14,359
Compass Group PLC 900 11,045
--------
25,404
--------
</TABLE>
<TABLE>
<CAPTION>
NO. OF VALUE
COMMON STOCKS SHARES (NOTE 1)
- ---------------------------------------------------------------
<S> <C> <C>
UNITED STATES: 25.90%
Allied Signal, Inc. 300 $ 11,681
American Express Co. 700 62,475
American International Group 1,100 119,625
Boeing Co. 600 29,363
Burlington Northern Santa Fe Group, Inc. 700 65,056
Chase Manhattan Corp. 400 43,800
Cisco Systems Inc.+ 900 50,175
Disney (Walt) Co. (The) 400 39,625
Federal National Mortgage Association 1,500 85,594
Intel Corp. 700 49,175
Lucent Technologies, Inc. 1,000 79,875
Merck & Co. 1,400 148,748
Mobil Corp. 600 43,313
Monsanto Co. 800 33,600
Pfizer, Inc. 900 67,106
Solutia, Inc. 160 4,270
SunAmerica, Inc. 1,200 51,300
----------
984,783
----------
TOTAL COMMON STOCKS: 39.44%
(Cost: $1,243,590) 1,498,968
----------
<CAPTION>
PRINCIPAL
LONG-TERM BOND: 38.67% AMOUNT
- ---------------------------------------------------
<S> <C> <C>
U.S. Treasury Note 6.125% due 12/31/2001
(Cost: $1,462,570) $1,450,000 1,469,939
----------
<CAPTION>
SHORT-TERM OBLIGATION: 9.18%
- ---------------------------------------------------
<S> <C> <C>
U.S. Treasury Bill Interest Yield 5.32%
due 1/22/1998 (Amortized Cost: $348,938) $350,000 348,938
----------
TOTAL INVESTMENTS: 87.29% 3,317,845
(Cost: $3,055,098)
OTHER ASSETS LESS LIABILITIES: 12.71% 482,921
----------
NET ASSETS: 100% $3,800,766
==========
</TABLE>
Glossary:
ADR--American Depositary Receipt
"F"--Foreign Registry
+--Non-income producing.
<TABLE>
<CAPTION>
% OF
SUMMARY OF INVESTMENTS BY INDUSTRY NET ASSETS
- ----------------------------------------------
<S> <C>
Aerospace & Defense 1.6%
Banks 2.4%
Brokerage 0.1%
Cement 1.1%
Chemicals 1.4%
Drugs 1.8%
Electronics & Electrical Equipment 2.2%
Entertainment & Leisure Time 1.0%
Financial Services 5.3%
Insurance 3.9%
Manufacturing 0.3%
Office Equipment 0.6%
Oil Integrated--International 2.0%
Pharmaceuticals 4.4%
Real Estate 1.1%
Restaurants 0.3%
Retail 0.7%
Semiconductors & Equipment 1.3%
Telecommunications 3.6%
Thrift Holding Company 1.3%
Transportation 1.7%
U.S. Government Obligations 47.9%
Utilities 1.3%
Other assets less liabilities 12.7%
----
100%
====
</TABLE>
See Notes to Financial Statements.
<PAGE>
Worldwide Balanced Fund Financial Statements
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1997
<TABLE>
<S> <C>
ASSETS:
Investments at value (identified cost, $3,055,098) (Note 1)........ $3,317,845
Cash............................................................... 780,671
Receivables:
From Advisor...................................................... 30,823
Capital shares sold............................................... 6,559
Interest and dividends............................................ 1,771
Deferred organization costs (Note 1) and other assets.............. 12,847
----------
Total assets..................................................... 4,150,516
----------
LIABILITIES:
Payables:
Securities purchased.............................................. 303,848
Capital shares redeemed........................................... 3,671
Accounts payable................................................... 42,231
----------
Total liabilities................................................ 349,750
----------
Net Assets......................................................... $3,800,766
==========
Shares outstanding................................................. 315,961
==========
Net asset value, redemption and offering price per share
($3,800,766 / 315,961)............................................ $12.03
==========
Net assets consist of:
Aggregate paid in capital......................................... $3,443,755
Unrealized appreciation of investments and foreign currency....... 262,225
Undistributed net investment income............................... 94,786
----------
$3,800,766
==========
</TABLE>
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1997
------------------
<S> <C> <C>
INCOME:
Dividends (less foreign taxes withheld $825)............... $ 16,459
Interest................................................... 80,993
--------
97,452
EXPENSES:
Management (Note 2)........................................ $ 21,879
Administration (Note 2).................................... 9,931
Professional............................................... 23,918
Shareholder reporting...................................... 15,044
Amortization of organization costs (Note 2)................ 913
Custody.................................................... 880
Other...................................................... 1,537
--------
Total expenses............................................. 74,102
Expenses assumed by the Advisor and reduced by a custodian (74,102)
fee arrangement (Note 2).................................. --------
Net Expenses............................................... --
--------
Net investment income...................................... 97,452
REALIZED AND UNREALIZED GAIN (LOSS) OF INVESTMENTS (Note
3):
Realized loss from foreign currency transactions........... (938)
Change in unrealized depreciation of foreign currency
receivables and payables.................................. (69)
Change in unrealized appreciation of investments........... 164,701
--------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS....... $261,146
========
</TABLE>
See Notes to Financial Statements.
<PAGE>
Worldwide Balanced Fund Financial Statements
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE
EIGHT MONTHS
FOR THE ENDED YEAR
YEAR ENDED DECEMBER 31, ENDED
DECEMBER 31, 1997 1996 APRIL 30, 1996
----------------- ------------ --------------
<S> <C> <C> <C>
INCREASE IN NET ASSETS:
OPERATIONS:
Net investment income........... $ 97,452 $ 40,083 $ 787
Realized gain from security
transactions................... -- 883 --
Realized gain (loss) from
foreign currency transactions.. (938) 924 --
Change in unrealized
depreciation of foreign
currency receivables and
payables....................... (69) (453) --
Change in unrealized
appreciation of investments.... 164,701 87,495 10,551
----------- ---------- --------
Increase in net assets resulting
from operations................ 261,146 128,932 11,338
----------- ---------- --------
Dividends to shareholders from
net investment income.......... (43,593) (812) --
----------- ---------- --------
CAPITAL SHARE TRANSACTIONS:*
Net proceeds from sale of
shares......................... 2,860,034 1,647,934 653,649
Reinvestment of dividends....... 43,593 812 --
----------- ---------- --------
2,903,627 1,648,746 653,649
Cost of shares reacquired....... (1,085,994) (619,220) (71,259)
----------- ---------- --------
Increase in net assets resulting
from capital share
transactions................... 1,817,633 1,029,526 582,390
----------- ---------- --------
Total increase in net assets... 2,035,186 1,157,646 593,728
NET ASSETS:
Beginning of period............. 1,765,580 607,934 14,206
----------- ---------- --------
End of period (including
undistributed net investment
income of $94,786, $40,982 and
$787, respectively)............ $ 3,800,766 $1,765,580 $607,934
=========== ========== ========
*SHARES OF BENEFICIAL INTEREST
OUTSTANDING, ISSUED AND REDEEMED
(WITH AN UNLIMITED NUMBER OF
$.001 PAR VALUE SHARES
AUTHORIZED)
Shares sold..................... 246,044 157,450 64,737
Dividend reinvestment........... 3,920 79 --
----------- ---------- --------
249,964 157,529 64,737
Shares reacquired............... (92,547) (58,046) (7,097)
----------- ---------- --------
Net increase.................... 157,417 99,483 57,640
=========== ========== ========
</TABLE>
See Notes to Financial Statements.
<PAGE>
Worldwide Balanced Fund Financial Statements
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period
<TABLE>
<CAPTION>
FOR THE FOR THE
EIGHT MONTHS PERIOD FROM
ENDED DECEMBER 23, 1994+
YEAR ENDED DECEMBER 31, YEAR ENDED TO
DECEMBER 31, 1997 1996 APRIL 30, 1996 APRIL 30, 1995
----------------- ------------ -------------- ------------------
<S> <C> <C> <C> <C>
Net Asset Value, $ 11.14 $ 10.29 $ 10.00 $ 10.00
Beginning of Period.... ------- ------- ------- -------
Income From Investment
Operations:
Net Investment Income.. 0.29 0.25 0.04++ 0.00
Net Gains on Securities
(both realized and 0.85 0.61 0.25 0.00
unrealized)........... ------- ------- ------- -------
Total From Investment 1.14 0.86 0.29 0.00
Operations............. ------- ------- ------- -------
Less: Distributions from (0.25) (0.01) -- --
Net Investment Income.. ------- ------- ------- -------
Net Asset Value, End of
Period................. $ 12.03 $ 11.14 $ 10.29 $ 10.00
======= ======= ======= =======
Total Return (a)........ 10.42% 8.38% 2.90% 0.00%
- --------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY
DATA
Net Assets, End of
Period (000)........... $ 3,801 $ 1,766 $ 608 $ 14
Ratio of Gross Expenses
to Average Net Assets.. 2.54% 2.49%(b) 12.61% 78.40%(b)
Ratio of Net Expenses to
Average Net Assets..... 0.00% 0.00%(b) 0.00% 0.00%(b)
Ratio of Net Income to
Average Net Assets..... 3.34% 4.27%(b) 0.42% 0.00%(b)
Portfolio Turnover Rate. 0.00% 0.76% 0.00% 0.00%
Average Commission Rate
Paid (c)............... $0.0572 $0.0790 $0.0422
</TABLE>
- -------
+ Commencement of operations.
++ Based on average shares outstanding.
(a) 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. Total returns for the periods of less than one year were not
annualized.
(b) Annualized.
(c) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose the average commission rate per share it paid for
trades in which commission is charged.
See Notes to Financial Statements.
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Van Eck Worldwide Insurance Trust (the "Trust"), organized as a Massachusetts
business trust on January 7, 1987, is registered under the Investment Company
Act of 1940. The following is a summary of significant accounting policies
consistently followed by the Worldwide 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 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 year.
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. Recognized gains or losses on
security transactions attributable to foreign currency fluctuations are
recorded as net realized gains and losses on investments. The portion of
unrealized gains and losses on investments that result from fluctuations in
foreign currency exchange rates is not separately disclosed.
D. DIVIDENDS AND DISTRIBUTIONS--Dividend income and distributions to
shareholders are recorded on the ex-dividend date. Income distributions and
capital gain distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences primarily are due to differing treatments of foreign
currency transactions. The effect of these differences
<PAGE>
Worldwide Balanced Fund
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for the year ending December 31, 1997 increased undistributed net investment
income and decreased accumulated net realized gain by $99.
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--Deferred organization costs are being
amortized over a period of five years.
NOTE 2--Van Eck Associates Corporation (the "Adviser") earns fees for
investment management and advisory services. The fee is based on an annual
rate of .75 of 1% of average daily net assets. Van Eck Associates Corporation
also earns fees for accounting and administrative services. The fee is based
on an annual rate of .25 of 1% of the Fund's average daily net assets.
Fiduciary International, Inc., the sub-investment advisor, earns fees 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 Adviser from the advisory
fees it receives from the Fund. The sub-investment adviser waived its fee for
the year ended December 31, 1997. Van Eck Associates Corporation agreed to
waive its management fees and administrative fees and assume all other
expenses for the year ended December 31, 1997, in the amount of $73,222.
Certain of the officers and trustees of the Trust are officers, directors or
stockholders of Van Eck Associates Corporation and Van Eck Securities
Corporation or the parent company of Fiduciary International, Inc.
The Fund has a fee arrangement, based on cash balances left on deposit with
the custodian, which reduces the Fund's operating expenses. For the year ended
December 31, 1997, the Fund's expenses were reduced by $880 under this
arrangement. The Fund could have invested the assets used in connection with
the custodian fee arrangement in an income producing asset if it had not
entered into such an arrangement.
NOTE 3--Purchases and sales of securities, other than short-term obligations,
aggregated $1,317,295 and $0, respectively, for the year ended December 31,
1997. For federal income tax purposes, the identified cost of investments
owned at December 31, 1997 was $3,055,098.
As of December 31, 1997, net unrealized appreciation for federal income tax
purposes aggregated $262,747, of which $326,592 related to appreciated
securities and $63,845 related to depreciated securities.
NOTE 4--The Fund may purchase securities on foreign exchanges. Securities of
foreign issuers involve special risks and consideration not typically
associated with investing in U.S. issuers. These risks include re-evaluation
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--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 December 31, 1997, the total value of the assets and corresponding
liability of the Fund's portion of the Plan is $304.
NOTE 6--An income dividend of $0.30 a share was paid on January 30, 1998 to
shareholders of record on January 28, 1998, with the reinvestment date of
January 30, 1998.
NOTE 7--SUBSEQUENT EVENT--On December 1, 1997, the Trustees of the Fund
approved the liquidation of the Fund.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Trustees of
Van Eck Worldwide Insurance Trust:
We have audited the accompanying statement of assets and liabilities, including
the schedule of portfolio investments, of the Worldwide Balanced Fund (the
"Fund") (one of the series constituting the Van Eck Worldwide Insurance Trust)
as of December 31, 1997, and the related statement of operations for the year
then ended, the statements of changes in net assets for the year then ended,
for the eight months ended December 31, 1996, and for the year ended April 30,
1996, and the financial highlights for the year then ended, for the eight
months ended December 31, 1996 for the year ended April 30, 1996, and for the
period from December 23, 1994 (commencement of operations) to April 30, 1995.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1997, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Worldwide Balanced Fund series of the Van Eck Worldwide Insurance Trust as of
December 31, 1997, the results of its operations for the year then ended, the
changes in its net assets, and the financial highlights for each of the periods
referred to above, in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
New York, New York
February 13, 1998
<PAGE>
December 31, 1997
VAN ECK
WORLDWIDE
INSURANCE TRUST
ANNUAL REPORT
Worldwide
Balanced Fund
LOGO VAN ECK GLOBAL
VAN ECK WORLDWIDE
INSURANCE TRUST
- -----------------------
Worldwide Balanced Fund
Van Eck Worldwide Insurance Trust
- ----------------------------------
99 Park Avenue, New York, NY 10016
This report must be accompanied or preceded by a prospectus, which includes more
complete information, such as charges and expenses and the risks associated with
international investing, including currency fluctuations or controls,
expropriation, nationalization and confiscatory taxation. Please read the
prospectus carefully before investing.
FR1998-0123-0057
LOGO VAN ECK GLOBAL
