<PAGE>
Van Eck Global
Worldwide Insurance Trust
SEMI-ANNUAL REPORT
June 30, 1998
discipline
Worldwide Hard Assets Fund
allocation
diversity
A TRADITION OF GLOBAL SOLUTIONS DESIGNED FOR INTELLIGENT INVESTMENT PLANNING AND
DIVERSIFICATION
<PAGE>
VAN ECK WORLDWIDE HARD ASSETS FUND
- --------------------------------------------------------------------------------
Dear Fellow Shareholder:
Performance was unexpectedly difficult during the first half of the year as
concerns over a slowing global economy put pressure on most hard asset sectors.
In this environment, the Fund declined 13.3% during the first six months of
1998. Related indices also fell sharply: the Goldman Sachs Commodity Index fell
18.3%, the Morgan Stanley Real Estate Index fell 5.1%, and gold shares declined
4.1% (MSCI Gold Mines Index). Several energy-related indices fell
precipitously, particularly the oil service and exploration and production
sectors in the U.S. and Canada, which declined over 20%.
REVIEW
During the first half of the year, most hard asset sectors suffered greatly
from fallout related to the Asian economic crisis. We anticipated some
weakness, but did not foresee the depth of the damage. Our efforts to hedge the
natural resource equity positions through short commodity positions were
successful, but not nearly sufficient to offset significant weakness in the
equities. Finally, our defensive position in U.S. REITs failed to provide
protection.
Asia's economic crisis is being driven by the region's large debt overhang, the
lack of a solvent Asian banking system, and the deflationary transition from
command to market economies in China and Japan. Economic conditions were
exacerbated by IMF-administered austerity programs in some countries that
served to damage rather than repair their economies in the short term.
The weakening of the Asian economies, and thus demand from the region, had a
large impact on hard asset investments. Non-Japan Asia has played a large role
in the commodity markets in recent years. For example, Korea, China, India and
the ASEAN-4 (Indonesia, Malaysia, the Philippines and Thailand) accounted for
about 60% of the total growth in world petroleum consumption from 1992 to 1996
and 60-65% of world consumption growth in aluminum, zinc and lead. In addition,
since most commodities are priced in dollars, strength in the trade-weighted
value of the dollar has been a negative for commodity demand and pricing.
Finally, supply additions in many markets continued, putting further pressure
on prices.
Understanding this negative impact, we hedged a substantial portion of the
Fund's oil and metals exposure during the first half of the year and the Fund
profited. Oil prices fell about 20% and industrial metals prices fell about 12%
during the first half. Still, allocations to natural resource shares (40-50% of
the portfolio) proved to be too high.
In contrast to difficult conditions in other markets, North American real
estate appeared to offer strong underlying fundamentals and defensive
characteristics and we therefore allocated over one-third of the portfolio to
this sector. However, U.S. real estate securities also declined. Despite low
interest rates, earnings and cash flow growth rates well in excess of the U.S.
equity market, with multiples one-half and dividend yields four times that of
the U.S. equity market, the market focused on other concerns. These included
assumptions that real estate prices have peaked, that legislative changes would
alter the REIT structure and that additions to supply would result in dramatic
overbuilding.
Our analysis suggests that these concerns are overdone and that exceptional
value can be found in real estate securities. While we agree that prices have
risen significantly, so have rents; therefore, the drop in property yields has
not been as dramatic as some believe. Furthermore, debt rates and mortgage
spreads have declined, preserving positive leverage. Finally, steadily
increasing demand due to a strong economy and strong job growth is positive. We
believe that the market is ignoring attractive internal growth prospects and
development opportunities that should enable the group to deliver earnings and
cash flow growth well in excess of the U.S. stock market. In regard to recent
legislative attacks on REITs, we believe reforms should have a negligible
effect on these securities going forward. Importantly, it appears that the
downside in the group is limited given the rise in asset values that underpins
current stock prices.
<PAGE>
VAN ECK WORLDWIDE HARD ASSETS FUND
- --------------------------------------------------------------------------------
Pulp and paper stocks (approximately 6% of portfolio assets) ended the first
half unchanged as strong performance during the first quarter was taken back in
the second. Demand weakness in Asia was a key factor in subdued commodity
prices, as Asia accounts for approximately one-third of global paper
consumption. Significant consolidation activity in one of the most fragmented
industries helped buoy valuations during the period.
Industrial metals stocks, which comprise only about 4% of your portfolio,
declined during the first half. As in the forest products sector, cost cutting
and consolidation were key positives but were more than offset by declining
commodity prices on the back of weak Asian demand.
Gold (about 8% of your portfolio) has been trading in a tight range of $280-
$310 an ounce throughout most of the year as the majority of the negatives
appear to have been factored into prices last year. Notably, the recent
pronouncements by the European Central Bank suggest that gold will comprise 15%
of its total reserves, in line with expectations.
THE OUTLOOK
Going forward, we will continue to focus on fundamentals, as always. We are
further concentrating the portfolio in the most promising sectors and have been
upgrading the quality of the Fund's stocks in the process. We feel that there
are good absolute and relative values to be realized in hard assets, but
recognize that some investors may not be ready to return to the group near term
given the underperformance of the last six months. Still, we believe there are
selective opportunities at current valuations and that the Fund is well
positioned for the second half of 1998.
We continue to favor real estate for the reasons detailed above, and have
allocated approximately 40% of your Fund to this sector. Our real estate
position is based on conditions of strong pricing power and cheap valuations--
both on a relative basis versus the market and on an absolute basis--in select
segments of the North American real estate industry.
We believe oil prices are near a bottom. The recently announced OPEC production
cuts (of approximately 4% of global production) should be enough to swing the
market into a deficit situation in the fourth quarter and bring inventories
down to a level that has historically resulted in higher trading ranges than
current prices. In addition, there have been recent discussions of a "new
alliance" of oil producers who control 70% of the world's known oil reserves.
The goal of this alliance would be to boost oil prices by more than 50%. These
factors, combined with conservative demand estimates and an expected decrease
in inventory levels, should push oil prices up significantly by year end.
We are maintaining a small, selective allocation to pulp and paper stocks. We
believe recent restructurings are very healthy for the sector from a
fundamental standpoint. Further, downside risk should be moderated by prices
that are near costs of production, and long-term healthy supply/demand
conditions should help support equity valuations despite reduced demand from
Asia.
Industrial metals prices are likely to remain subdued in the coming months due
to ongoing weakness in demand from Asia. We believe prices are near lows, but
that upside is limited in the short term. The third quarter may prove to be an
excellent opportunity to purchase equity holdings in this sector for long-term
appreciation and we may add to the position. Historically, purchases at current
valuation levels have been very rewarding.
With regard to gold, we anticipate that the tight trading range established in
the first half will be maintained for the remainder of the year and we will
maintain our policy of buying dips. The key driver of gold, investment demand,
will be muted due to the lack of inflationary pressures in the world economy.
On the positive side, while we think that additional gold sales by European
central banks are likely or at least the threat of gold sales is likely, we
believe that factor has been priced in. The supply/demand situation in
<PAGE>
VAN ECK WORLDWIDE HARD ASSETS FUND
- --------------------------------------------------------------------------------
platinum group metals markets looks healthy from an intermediate perspective.
We believe Russian stockpiles of palladium have been depleted to close to zero.
We have several equity possibilities in this sector that we are actively
monitoring and will likely purchase as core fundamental holdings during the
summer. These are attractively valued growth stories with restructuring
benefits.
We appreciate your participation in the Worldwide Hard Assets Fund and look
forward to helping you meet your investment goals in the future.
PHOTO PHOTO PHOTO
/s/ John C. van Eck /s/ Derek S. van Eck /s/ Kevin L. Reid
John C. van Eck Derek S. van Eck Kevin L. Reid
Chairman Co-Portfolio Co-Portfolio
Manager Manager
July 27, 1998
SECTOR WEIGHTINGS
AS OF JUNE 30, 1998
PIE CHART
Real Estate 38.6 %
Energy 30.7%
Cash/Other 12.3%
Precious Metals 7.8%
Industrial Metals 4.4%
Forest Products & Paper 6.2%
- --------------------------------------------------------------------------------
PERFORMANCE RECORD AS OF 6/30/98
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL
TOTAL RETURN
- ----------------------------
<S> <C>
Life (since 9/1/89) 4.9 %
- ----------------------------
5 years 3.9 %
- ----------------------------
1 year (14.5)%
- ----------------------------
</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
United States 57.1%
Canada 22.7%
Cash/Other 12.2%
Australia 2.1%
Singapore 1.9%
Russia 1.4%
United Kingdom 1.0%
Italy 0.7%
Mexico 0.6%
South Africa 0.3%
<PAGE>
VAN ECK WORLDWIDE HARD ASSETS FUND
TOP TEN EQUITY HOLDINGS AS OF JUNE 30, 1998
PATRIOT AMERICAN HOSPITALITY, INC.
(U.S., 3.4%)
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., 3.2%)
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.
EQUITY RESIDENTIAL PROPERTIES TRUST
(U.S., 2.0%)
Equity Residential Properties is a real estate investment trust that owns and
operates multi-family properties containing apartment units. Its properties are
located in 34 states throughout the United States. The company is one of the
largest owners of apartments in the United States.
ASIA PULP & PAPER COMPANY LTD.
(SINGAPORE, 1.9%)
Asia Pulp & Paper, through its subsidiaries, is a vertically integrated pulp
and paper producer in Asia (except Japan) and throughout the world. The company
produces a variety of printing and writing paper, including coated and uncoated
freesheets, cut-sized photocopier paper, stationery and carbonless paper and a
range of tissue paper products.
SMITH INTERNATIONAL, INC.
(U.S., 1.8%)
Smith International supplies products and services to the oil and gas
exploration and production industry. The company's products and services
include drilling and completion fluid systems, solids control equipment, waste
management services, three-cone
drill bits, diamond drill bits, fishing services, drilling tools, underreamers,
sidetracking systems and liner hangers.
MACK-CALI REALTY CORPORATION
(U.S., 1.8%)
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.
PHILIPS INTERNATIONAL REALTY CORP.
(U.S., 1.7%)
Philips International is a real estate investment trust. The company owns,
develops and redevelops neighborhood and community shopping centers
predominantly located in the New York consolidated metropolitan area and, to a
lesser extent, the Miami-Fort Lauderdale metropolitan area.
HIGHWOODS PROPERTIES, INC.
(U.S., 1.6%)
Highwoods Properties, with its operating partnership and subsidiaries,
develops, manages, leases and acquires office and industrial properties.
PARKWAY PROPERTIES, INC.
(U.S., 1.5%)
Parkway Properties is a self-administered real estate investment trust (REIT).
The company acquires, manages, finances and leases office properties.
BJ SERVICES COMPANY
(U.S., 1.5%)
BJ Services provides pressure pumping and other oilfield services for the
petroleum industry worldwide. The company's pressure pumping services consist
of well stimulation, cementing, sand control, and coiled tubing services used
in the completion of new oil and natural gas wells. BJ Services also provides
remedial work on existing onshore and offshore wells.
<PAGE>
WORLDWIDE HARD ASSETS FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
See Notes to Financial Statements
<TABLE>
<CAPTION>
NO. OF SHARES
OR PRINCIPAL VALUE
AMOUNT SECURITIES (A) (NOTE 1)
- ------------------------------------------------------------------------------
<C> <S> <C>
AUSTRALIA: 2.1%
ENERGY: 0.7%
971,800 Portman Mining Ltd. $ 782,007
------------
PRECIOUS METALS: 1.4%
835,400 Acacia Resources Ltd. 889,434
380,000 Delta Gold NL 465,736
425,000 Gullewa Gold NL 9,208
130,000 Ranger Minerals NL 288,887
------------
1,653,265
------------
2,435,272
------------
CANADA: 22.7%
ENERGY: 11.8%
83,000 AltaGas Service Inc. (Special Warrants expiring
1/24/99)(b)* 494,603
668,500 Black Sea Energy Ltd. 250,400
800,000 Bromley-Marr ECOS, Inc. 302,380
145,500 Carmanah Resources Ltd. 292,318
70,000 Chieftain International, Inc. 1,658,125
425,000 Cypress Energy Inc. 1,447,203
165,000 Edge Energy Inc. 438,247
149,500 Hurricane Hydrocarbons Ltd. (Class A) 722,886
170,000 Interoil Corp. 892,500
550,000 KAPPA Energy Co. Inc. 191,031
240,000 KAPPA Energy Co. Inc. (Special Warrants expiring
6/04/99)(b)* 75,186
187,100 NQL Drilling Tools Inc. 1,146,797
222,500 Pacalta Resources Ltd. 1,288,010
CAD375,000 Pacalta Resources Ltd. Sr. Notes Series B 10.75%
6/15/04 375,000
120,000 Plains Energy Services Ltd. 514,864
101,000 Prudential Steel Ltd. 777,267
360,000 Startech Energy, Inc. 1,115,538
265,000 Stellarton Energy Corp. 442,163
1,000,000 Volterra Resources Inc. 476,726
706,000 Windsor Energy Corp. 1,250,111
------------
14,151,355
------------
FOREST PRODUCTS: 1.4%
148,500 St. Laurent Paperboard Inc. 1,714,220
------------
INDUSTRIAL METALS: 1.9%
1,126,000 Auspex Minerals Ltd. 253,060
51,000 Cameco Corp. 1,424,047
1,467,600 International Uranium Corp. 529,729
------------
2,206,836
------------
</TABLE>
<TABLE>
<CAPTION>
NO. OF SHARES
OR PRINCIPAL VALUE
AMOUNT SECURITIES (A) (NOTE 1)
- ------------------------------------------------------------------------
<C> <S> <C>
CANADA (CONTINUED)
PRECIOUS METALS: 1.8%
36,900 Barrick Gold Corp. $ 708,019
1,000 Brazilian Resources Inc. 146
1,613,800 Brazilian Resources Inc. (Special Warrants
expiring 9/11/98)(b)* 236,297
23,600 Euro-Nevada Mining Corp. 322,253
130,000 Greenstone Resources Ltd. 500,221
50,000 Meridian Gold Inc. 103,858
88,500 Namibian Minerals Corp. 201,910
27,500 Pacific Rim Mining Corp. 13,110
43,500 Rio Narcea Gold Mines, Ltd. 96,578
------------
2,182,392
------------
REAL ESTATE: 5.8%
60,000 Bentall Corp. 694,657
60,000 Brookfield Properties Corp. 827,459
65,000 Cadillac Fairview Corp. 1,495,000
40,000 Cambridge Shopping Centres Ltd. 360,949
175,000 Legacy Hotels REIT 1,024,960
110,000 O&Y Properties Corp. 584,329
65,000 TrizecHahn Corp. 1,393,438
120,000 UniHost Corp. 592,502
------------
6,973,294
------------
27,228,097
------------
ITALY: 0.7%
ENERGY: 0.7%
13,000 Ente Nazionale Idrocaburi S.p.A. (ADR) 845,000
------------
MEXICO: 0.6%
ENERGY: 0.6%
58,500 Tubos de Acero de Mexico S.A. 749,531
------------
RUSSIA: 1.4%
ENERGY: 1.4%
4,230 Ural Petroleum Corp.* 1,692,024
------------
SINGAPORE: 1.9%
FOREST PRODUCTS: 1.9%
205,100 Asia Pulp & Paper Company Ltd. 2,307,375
------------
SOUTH AFRICA: 0.3%
PRECIOUS METALS: 0.3%
135,000 Western Areas Gold Mining Co. Ltd. (ADR) 411,750
------------
</TABLE>
<PAGE>
WORLDWIDE HARD ASSETS FUND
SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
See Notes to Financial Statements
<TABLE>
<CAPTION>
NO. OF SHARES
OR PRINCIPAL VALUE
AMOUNT SECURITIES (A) (NOTE 1)
- -------------------------------------------------------------------------
<C> <S> <C>
UNITED KINGDOM: 1.0%
ENERGY: 0.6%
7,500 British Petroleum Co. plc (ADR) $ 661,875
------------
INDUSTRIAL METALS: 0.4%
271,700 Billiton plc 550,435
------------
1,212,310
------------
UNITED STATES: 57.1%
ENERGY: 14.9%
20,500 Apache Corp. 645,750
60,000 BJ Services Company 1,743,750
17,000 Burlington Resources Inc. 732,063
69,900 Denali Inc. 1,092,188
15,000 EVI Weatherford Inc. 556,875
15,000 Exxon Corp. 1,069,688
47,100 Forcenergy Inc. 838,969
39,000 J. Ray McDermott, S.A. 1,618,500
140,000 KCS Energy, Inc. 1,601,250
82,000 Louis Dreyfus Natural Gas Corp. 1,552,875
80,000 Miller Exploration Co. 620,000
8,700 Mobil Corp. 666,638
28,200 Pride International, Inc. 477,638
60,600 Smith International, Inc. 2,109,638
38,500 Stone Energy Corp. 1,369,156
71,500 Swift Energy Co. 1,139,531
------------
17,834,509
------------
FOREST PRODUCTS: 2.9%
27,300 Bowater Inc. 1,289,925
21,800 Fort James Corp. 970,100
36,000 Willamette Industries, Inc. 1,152,000
------------
3,412,025
------------
INDUSTRIAL METALS: 2.1%
20,000 Aluminum Co. of America 1,318,750
85,000 Steel Dynamics, Inc. 1,179,375
------------
2,498,125
------------
INSURANCE: 0.1%
3,000 Highlands Insurance Group, Inc. 55,500
------------
PRECIOUS METALS: 4.3%
57,400 Getchell Gold Corp. 861,000
81,000 Homestake Mining Co. 840,375
USD2,800,000 Morgan Guaranty Trust Co. Gold/Silver Ratio
Indexed Note 2,652,160
31,500 Newmont Mining Corp. 744,188
------------
5,097,723
------------
</TABLE>
<TABLE>
<CAPTION>
NO. OF SHARES
OR PRINCIPAL VALUE
AMOUNT SECURITIES (A) (NOTE 1)
- ------------------------------------------------------------------------
<C> <S> <C>
UNITED STATES (CONTINUED)
REAL ESTATE: 32.8%
55,000 AMB Property Corp. $ 1,347,500
37,100 Arden Realty, Inc. 959,963
25,000 Bedford Property Investors, Inc. 456,250
50,000 Brandywine Realty Trust 1,118,750
60,000 CapStar Hotel Co. 1,680,000
47,100 CarrAmerica Realty Corp. 1,336,463
60,000 Cornerstone Properties, Inc. 1,057,500
30,000 Corporate Office Properties Trust, Inc. 266,250
60,000 Equity Office Properties Trust 1,702,500
50,000 Equity Residential Properties Trust 2,371,875
34,000 Excel Legacy Corp. 148,750
46,450 Excel Realty Trust, Inc. 1,338,341
60,000 Highwoods Properties, Inc. 1,938,750
27,200 Host Marriott Corp. 484,500
59,900 Kilroy Realty Corp. 1,497,500
59,300 LaSalle Hotel Properties 1,004,394
25,000 Macerich Co. (The) 732,813
61,000 Mack-Cali Realty Corporation 2,096,875
37,000 Pan Pacific Retail Properties, Inc. 753,875
60,000 Parkway Properties, Inc. 1,770,000
171,199 Patriot American Hospitality, Inc. 4,098,060
125,000 Philips International Realty Corp. 2,062,500
45,000 Prentiss Properties Trust 1,094,063
1,523 Security Capital Group-B (Warrants
expiring 9/18/98) 524
100,000 Signature Resorts, Inc. 1,650,000
17,500 SL Green Realty Corp. 393,750
80,000 Starwood Hotels & Resorts 3,865,000
26,400 Tower Realty Trust, Inc. 590,700
20,000 TriNet Corporate Realty Trust, Inc. 680,000
35,000 Westfield America, Inc. 643,126
------------
39,140,572
------------
68,038,454
------------
TOTAL STOCKS AND OTHER INVESTMENTS: 87.8%
(COST: $117,687,452) 104,919,813
------------
</TABLE>
<PAGE>
WORLDWIDE HARD ASSETS FUND
SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
See Notes to Financial Statements
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT SECURITIES (A) (NOTE 1)
- --------------------------------------------------------------------------------
<C> <S> <C>
SHORT-TERM OBLIGATIONS: 10.3%
USD5,800,000 American Express Co. due 7/01/98 Interest Yield
6.03% $ 5,800,000
1,400,000 General Electric Co. due 7/01/98 Interest Yield
5.68% 1,400,000
5,100,000 U.S. Treasury Bill due 7/23/98 Interest Yield 4.92% 5,084,666
------------
TOTAL SHORT-TERM OBLIGATIONS: 10.3%
(AMORTIZED COST: $12,284,666) 12,284,666
------------
TOTAL INVESTMENTS: 98.1%
(COST: $129,972,118) 117,204,479
OTHER ASSETS LESS LIABILITIES: 1.9% 2,234,411
------------
NET ASSETS: 100% $119,438,890
============
</TABLE>
- -------
(a) Unless otherwise indicated, securities owned are shares of common stock.
(b) Restricted security, See Note 6.
* Fair value as determined by the Board of Trustees.
Glossary:
ADR--American Depositary Receipt
GDR--Global Depositary Receipt
<TABLE>
<CAPTION>
SUMMARY OF
NET ASSETS % OF
BY INDUSTRY NET ASSETS
- ----------- ----------
<S> <C>
Energy 30.7%
Forest Products
& Paper 6.2%
Industrial Met-
als 4.4%
Insurance 0.1%
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF
NET ASSETS % OF
BY INDUSTRY NET ASSETS
- ----------- ----------
<S> <C>
Precious Metals 7.8%
Real Estate 38.6%
U.S. Treasury
Bill 4.3%
Commercial Paper 6.0%
Other assets
less
liabilities 1.9%
------
100.0%
======
</TABLE>
<PAGE>
WORLDWIDE HARD ASSETS FUND FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<S> <C>
JUNE 30, 1998
ASSETS:
Investments at value (cost, $129,972,118) (Note 1)............... $117,204,479
Cash............................................................. 338,604
Receivables:
Securities sold................................................. 2,689,596
Capital shares sold............................................. 1,040,205
Dividends and interest.......................................... 410,353
------------
Total assets................................................... 121,683,237
------------
LIABILITIES:
Payables:
Securities purchased............................................ 2,007,450
Unrealized depreciation on forward currency contracts (Note 5).. 56,652
Capital shares repurchased...................................... 8,956
Accounts payable................................................ 171,289
------------
Total liabilities.............................................. 2,244,347
------------
Net assets....................................................... $119,438,890
============
Shares outstanding............................................... 10,337,032
============
Net asset value, redemption and offering price per share
($119,438,890 / 10,337,032)..................................... $11.55
======
Net assets consist of:
Aggregate paid in capital....................................... $130,901,557
Unrealized depreciation of investments, forward foreign currency
contracts and foreign currency receivables and payables........ (12,865,233)
Undistributed net investment income............................. 1,036,101
Undistributed realized gain..................................... 366,465
------------
$119,438,890
============
</TABLE>
<TABLE>
<S> <C> <C>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998
INCOME:
Dividends (less foreign taxes withheld of $25,694)..... $ 1,264,995
Interest............................................... 362,959
------------
Total income......................................... 1,627,954
EXPENSES:
Management (Note 2).................................... $699,511
Administration (Note 2)................................ 1,002
Reports to shareholders................................ 35,214
Custodian.............................................. 32,653
Professional........................................... 28,854
Trustees' fees and expenses............................ 14,724
Other.................................................. 20,157
--------
Total expenses....................................... 832,115
Expenses reduced by a directed brokerage arrangement
(Note 2).............................................. (16,491)
--------
Net expenses......................................... 815,624
------------
Net investment income................................ 812,330
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
(Note 3):
Realized gain from security transactions............... 4,020,042
Realized gain from foreign currency transactions....... 262,835
Realized loss from options............................. (380,061)
Realized loss from futures contracts................... (39,064)
Change in unrealized depreciation of forward foreign
currency contracts and foreign currency receivables
and payables.......................................... (58,528)
Change in unrealized appreciation of investments and
futures contracts..................................... (24,171,126)
------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS... $(19,553,572)
============
</TABLE>
See Notes to Financial Statements
<PAGE>
WORLDWIDE HARD ASSETS FUND FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS
ENDED
JUNE 30, 1998 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1997
------------- -----------------
<S> <C> <C>
DECREASE IN NET ASSETS:
OPERATIONS:
Net investment income......................... $ 812,330 $ 1,105,680
Realized gain from security transactions...... 4,020,042 19,469,353
Realized gain (loss) from foreign currency
transactions................................. 262,835 (156,861)
Realized gain (loss) from options............. (380,061) 405,632
Realized loss from futures contracts.......... (39,064) --
Change in unrealized depreciation of forward
foreign currency contracts and foreign cur-
rency receivables and payables............... (58,528) (31,422)
Change in unrealized appreciation of invest-
ments and futures contracts.................. (24,171,126) (22,921,982)
------------ -------------
Decrease in net assets resulting from opera-
tions........................................ (19,553,572) (2,129,600)
------------ -------------
Dividends to shareholders from:
Net investment income......................... (892,481) (3,252,318)
Net realized gains............................ (21,915,374) (4,406,366)
------------ -------------
Total dividends and distributions............. (22,807,855) (7,658,684)
------------ -------------
CAPITAL SHARE TRANSACTIONS*:
Net proceeds from sales of shares............. 64,179,478 217,010,487
Reinvestment of dividends..................... 22,807,855 7,658,684
------------ -------------
86,987,333 224,669,171
Cost of shares reacquired..................... (81,119,702) (226,365,559)
------------ -------------
Increase (decrease) in net assets resulting
from capital share transactions.............. 5,867,631 (1,696,388)
------------ -------------
Total decrease in net assets.................. (36,493,796) (11,484,672)
NET ASSETS:
Beginning of period............................ 155,932,686 167,417,358
------------ -------------
End of period (including undistributed net
investment income of $1,036,101 and $853,417,
respectively)................................. $119,438,890 $ 155,932,686
============ =============
*SHARES OF BENEFICIAL INTEREST ISSUED AND
REDEEMED (WITH AN UNLIMITED NUMBER OF $.001
PAR VALUE SHARES AUTHORIZED):
Shares sold................................... 4,857,685 13,234,532
Reinvestment of dividends..................... 1,787,449 481,073
------------ -------------
6,645,134 13,715,605
Shares reacquired............................. (6,225,110) (13,811,497)
------------ -------------
Net increase (decrease)....................... 420,024 (95,892)
============ =============
</TABLE>
See Notes to Financial Statements
<PAGE>
WORLDWIDE HARD ASSETS FUND
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period
<TABLE>
<CAPTION>
FOR THE FOR THE
SIX MONTHS 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,
Beginning of Period.... $ 15.72 $ 16.72 $ 16.92 $ 13.49 $ 13.11 $ 10.61 $ 8.25
-------- -------- -------- -------- -------- ------- -------
Income from Investment
Operations:
Net Investment Income.. 0.08 0.09 0.02 0.12 0.08 0.07 0.01
Net Gain (Loss) on
Securities (both
realized and
unrealized)........... (1.95) (0.36) 0.09 3.44 0.37 2.47 2.39
-------- -------- -------- -------- -------- ------- -------
Total from Investment
Operations............. (1.87) (0.27) 0.11 3.56 0.45 2.54 2.40
-------- -------- -------- -------- -------- ------- -------
Less Distributions:
Dividends from Net
Investment Income..... (0.09) (0.31) (0.16) (0.13) (0.07) (0.04) (0.04)
Dividends from Capital
Gains................. (2.21) (0.42) (0.15) -- -- -- --
-------- -------- -------- -------- -------- ------- -------
Total Distributions..... (2.30) (0.73) (0.31) (0.13) (0.07) (0.04) (0.04)
-------- -------- -------- -------- -------- ------- -------
Net Asset Value, End of
Period................. $ 11.55 $ 15.72 $ 16.72 $ 16.92 $ 13.49 $ 13.11 $ 10.61
======== ======== ======== ======== ======== ======= =======
Total Return (a)........ (13.28%) (1.67%) 0.60% 26.66% 3.43% 23.96% 29.19%
- ---------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY
DATA
Net Assets, End of
Period (000)........... $119,439 $155,933 $167,417 $186,370 $127,320 $81,248 $30,896
Ratio of Gross Expenses
to Average Net Assets.. 1.19% 1.18% 1.24%* 1.08% -- -- --
Ratio of Net Expenses to
Average Net Assets..... 1.17% 1.17% 1.23%* 1.08%(b) 0.96% 0.96% 1.61%
Ratio of Net Income to
Average Net Assets..... 1.16% 0.64% 0.10%* 0.81% 0.71% 0.64% 0.25%
Portfolio Turnover Rate. 77.78% 102.82% 46.14% 26.37% 23.30% 15.84% 14.61%
Average Commission Rate
Paid (c)............... $ 0.0421 $ 0.0594 $ 0.0305 $ 0.0310
</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 of less than one year are not
annualized.
(b) The ratio was not impacted by the directed brokerage arrangement.
(c) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for trades in
which a commission is charged.
* Annualized.
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 Hard Assets 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. 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 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
<PAGE>
WORLDWIDE HARD ASSETS FUND
- -------------------------------------------------------------------------------
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. USE OF DERIVATIVE INSTRUMENTS
OPTION CONTRACTS--The Fund may invest, for hedging and other purposes, in call
and put options on securities, currencies and commodities. Call and put
options give the Fund the right but not the obligation to buy (calls) or sell
(puts) the instrument underlying the option at a specified price. The premium
paid on the option, should it be exercised, will, on a call, increase the cost
of the instrument acquired and, on a put, reduce the proceeds received from
the sale of the instrument underlying the option. If the options are not
exercised, the premium paid will be recorded as a capital loss upon
expiration. The Fund may incur additional risk to the extent the value of the
underlying instrument does not correlate with the movement of the option
value.
The Fund may also write call or put options. As the writer of an option, the
Fund receives a premium. The Fund keeps the premium whether or not the option
is exercised. The premium will be recorded, upon expiration of the option, as
a short-term capital gain. If the option is exercised, the Fund must sell, in
the case of a written call, or buy, in the case of a written put, the
underlying instrument at the exercise price. The Fund may write only covered
puts and calls. A covered call option is an option in which the Fund owns the
instrument underlying the call. A covered call sold by the Fund exposes it
during the term of the option to possible loss of opportunity to realize
appreciation in the market price of the underlying instrument or to possible
continued holding of an underlying instrument which might otherwise have been
sold to protect against a decline in the market price of the underlying
instrument. A covered put exposes the Fund during the term of the option to a
decline in price of the underlying instrument. A put option sold by the Fund
is covered when, among other things, cash or short-term liquid securities are
placed in a segregated account to fulfill the obligations undertaken. The Fund
may incur additional risk from investments in written currency options if
there are unanticipated movements in the underlying currencies.
FUTURES CONTRACTS--The Fund may buy and sell financial futures contracts for
hedging purposes. When a fund enters into a futures contract, it must make an
initial deposit ("initial margin") as a partial guarantee of its performance
under the contract. As the value of the futures contract fluctuates, the Fund
is required to make additional margin payments ("variation margin") to cover
any additional obligation it may have under the contract. In the remote chance
a broker cannot fulfill its obligation, the fund could lose the variation
margin due to it. Risks may be caused by an imperfect correlation between the
movements in price of the futures contract and the price of the underlying
instrument and interest rates. Gains and losses on futures contracts are
separately disclosed.
STRUCTURED NOTES--The Fund may invest in indexed securities whose value is
linked to one or more currencies, interest rates, commodities, or financial or
commodity indices. When the Fund purchases a structured note (a non-publicly
traded indexed security entered into directly between two parties) it will
make a payment of principal to the counterparty. The Fund will purchase
structured notes only from counterparties rated A or better by S&P, Moody's or
another nationally recognized statistical rating organization. Van Eck
Associates Corp. will monitor the liquidity of structured notes under
supervision of the Board of Trustees and structured notes determined to be
illiquid will be aggregated with other illiquid securities limited to 15% of
the net assets of the Fund. Indexed securities may be more volatile than the
underlying instrument itself, and present many of the same risks as investing
in futures and options. Indexed securities are also subject to credit risks
associated with the issuer of the security with respect to both principal and
interest. At June 30, 1998, the Fund had a Morgan Guaranty Trust Co.
Gold/Silver Ratio Indexed Note with a value of $2,652,160 that represented
2.22% of the net assets of the Fund.
NOTE 2--Van Eck Associates Corporation (the "Adviser") earned fees of $699,511
for the six months ended June 30, 1998 for investment management and advisory
services. This fee is based on an annual rate of 1% of the first $500 million
of average daily net assets, .90 of 1% on the next $250 million and .70 of 1%
on the excess over $750 million, which includes the fee paid to the Adviser
for accounting and administrative services. 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 reimburses the Adviser for
costs incurred in connection with certain administrative functions which
amounted to $1,002 for the six months ended June 30, 1998.
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 Fund's expenses were reduced by $16,491 under this arrangement.
NOTE 3--Purchases and sales of securities other than short-term obligations
aggregated $99,479,701 and $116,946,808, 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 $129,972,118. As of June 30, 1998, net
unrealized depreciation for federal income tax purposes aggregated
$12,767,639, of which $7,561,948, related to appreciated securities and
$20,329,587 related to depreciated securities.
NOTE 4--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. In addition, some
foreign companies are not generally subject to the same uniform accounting,
auditing and financial reporting rules as are American companies and there may
be less government supervision and regulation. Foreign investments may also be
subject to foreign taxes, dividend collection fees and settlement delays.
The Fund invests in South African securities. South African securities may be
subject to greater political, social and economic risks than investments in
more developed foreign markets. Emerging market countries, such as South
Africa, may present the risk of nationalization of businesses, or prohibitions
of repatriation of assets, and may have less protection of property rights
than more developed countries.
The Fund may concentrate its investments in companies which are significantly
engaged in the exploration, development, production and distribution of gold
and other natural resources such as strategic and other metals, minerals,
forest products, oil, natural gas and coal and by investing in gold bullion
and coins. Since the Fund may so concentrate, it may be subject to greater
risks and market fluctuations than other more diversified portfolios. The
production and marketing of gold and other natural resources may be affected
by actions and changes in governments. In addition, gold and natural resources
may be cyclical in nature.
NOTE 5--FORWARD CURRENCY CONTRACTS--The Fund may buy and sell forward currency
contracts to settle purchases and sales of foreign denominated securities. In
addition, the Fund may enter into forward currency contracts to hedge foreign
denominated assets. Realized gains and losses from forward currency contracts
are included in realized gain from foreign currency transactions.
At June 30, 1998, the Fund had the following outstanding forward foreign
currency contract:
<TABLE>
<CAPTION>
VALUE AT
SETTLEMENT CURRENT UNREALIZED
CONTRACT DATE VALUE DEPRECIATION
-------- ----------- ----------- ------------
<C> <S> <C> <C> <C>
FOREIGN CURRENCY SALE CONTRACT:
CAD 21,750,000 expiring 9/16/98 $14,778,827 $14,835,479 $(56,652)
</TABLE>
<PAGE>
WORLDWIDE HARD ASSETS FUND
- --------------------------------------------------------------------------------
The Fund may incur additional risk from investments in forward currency
contracts if the counterparty is unable to fulfill its obligation or there are
unanticipated movements of the foreign currency relative to the U.S. dollar.
NOTE 6--RESTRICTED SECURITIES
The following securities are restricted as to sale:
<TABLE>
<CAPTION>
PERCENT OF
DATE NET ASSETS AT
ACQUIRED COST VALUE 6/30/98
-------- -------- -------- -------------
<C> <S> <C> <C> <C>
4/23/98 AltaGas Service Inc. (Special
Warrants expiring 1/24/99) $507,069 $494,603 0.41%
3/12/97 Brazilian Resources Inc. (Special
Warrant expiring 9/11/98) 508,750 236,297 0.20%
6/01/98 KAPPA Energy Co. Inc. (Special
Warrants expiring 6/04/99) 107,364 75,186 0.06%
</TABLE>
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.
As of June 30, 1998, the total value of the assets and corresponding liability
of the Fund's portion of the Plan is $33,853.
<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
