<PAGE> 1
VAN ECK WORLDWIDE REAL ESTATE FUND
- --------------------------------------------------------------------------------
1997 ANNUAL REPORT
Dear Fellow Shareholder:
We are pleased to report that in its first seven months of operation, the
Worldwide Real Estate Fund posted impressive results in seeking to meet its
objective of maximizing total return. From its inception on June 23, 1997,
through December 31, 1997, your Fund rose 19.6%.* In addition, the Fund
substantially outperformed the benchmark Salomon Smith Barney World Property
Index, which declined 13.7% for the period. U.S. real estate mutual funds, as
measured by Micropal, Inc. (a mutual fund evaluation service), gained 15.1% for
the second half of 1997.
REVIEW OF REAL ESTATE MARKET CYCLES
A central investment thesis of your Fund is that real estate markets are very
cyclical in nature-- shifting from periods of development to oversupply, then
stabilization and recovery, depending on factors such as economic growth,
employment, interest rates, etc. In addition, real estate markets are also
extremely localized; one geographic region or property type may be in recovery
while another is in decline. By actively managing the geographic and sector
weightings in the Fund, we can take advantage of the opportunities presented by
these localized cycles. As of December 31, 1997, approximately 75% of your Fund
was invested in real estate equities of North America, 7% in Europe, 4% in the
Far East and 14% in cash.
NORTH AMERICA
At 54% of net assets on December 31, 1997, the U.S. represented your Fund's
largest country holding. The U.S. currently enjoys a healthy position in both
its economy and the real estate cycle. Strong economic growth, solid corporate
earnings growth and low interest rates helped propel the U.S. stock market to
new highs in 1997, with the S&P 500 Index gaining 33.4%. The healthy
fundamentals which underpinned the rising equity market last year were also very
supportive to U.S. real estate equities, particularly low interest rates, which
made the cost of borrowing very attractive. U.S. REITs (real estate investment
trusts) posted a return of nearly 20% in 1997.
Throughout the year, the supply/demand dynamics continued to be extremely
favorable in the U.S. full-service hotel and office property sectors, where your
Fund was heavily weighted. These two sectors were among the best industry
performers. Office rents and daily hotel rates increased dramatically as strong
demand continued to outstrip supply growth. While good news for the hotel
business, many traveling Americans found it increasingly difficult last year to
find rooms and were forced to pay far more than they were accustomed to as hotel
owners "auctioned off" a limited supply of rooms. By contrast, the retail real
estate sector continued to suffer in 1997 from a glut of space; there are
currently 20 square feet of retail shopping space per capita in America, far
more than in other parts of the world. Given this, your Fund held modest
weightings in U.S. retail real estate stocks. The Fund also had a relatively
small weighting in U.S. apartments, given the shift in favor of home sales in
the low interest rate environment.
Canadian real estate companies, including Canadian REITs, represented
approximately 19% of your Fund at year end. As did the U.S., Canada enjoyed a
very positive real estate market in 1997. The country appears to be
approximately 12 to 18 months behind the U.S. in its economic recovery, and has
been steadily moving from the recovery phase to the development phase within the
real estate cycle. Most real estate sectors in Canada performed well last year,
particularly the office sector where we saw
<PAGE> 2
rents spike upwards. Also, Canada's resurgent economy and renewed consumer
confidence led to higher hotel occupancy rates and increased demand for retail
shopping space. For the year, the return on Canadian real estate equities
matched that of their U.S. counterparts.
EUROPE
At year end, your Fund held positions in France, the UK and Sweden, which in
aggregate amounted to approximately 7% of the Fund's portfolio. Europe
experienced steady economic growth in 1997 and generally its real estate markets
are at attractive points in their cyclical recoveries. The core countries of
Europe marched steadily toward European Monetary Union (EMU), scheduled by the
Maastrich treaty to begin January 1999. This resulted in a continuing
convergence of European interest rates as the region prepares for a single
currency, the "euro." The UK--although not slated to join EMU at this
time--enjoyed a very healthy economy and real estate sector. Your Fund was
primarily invested in the office and hotel sectors. We see growing interest on
the part of U.S. and multinational hotel corporations eager to gain access to
overseas markets. In fact, several of the Fund's U.S. hotel REIT holdings have
announced intentions to expand into Europe in 1998. In the office sector,
several markets stabilized in 1997 and have begun to experience positive rent
growth.
THE FAR EAST
The year was a challenging one for Asia. What began in July as a currency
debacle among the Southeast Asian countries spread throughout Asia, and by
October had impacted Hong Kong, South Korea and Japan, causing a global sell-off
of equities. While the details vary by country, the region continues to suffer
from high current account and fiscal deficits, excessive foreign currency
borrowing to finance inefficient capital spending (including over-investment in
property), and ongoing government interference in banking systems and capital
markets. Even with International Monetary Fund bail-out packages in place for
the region, investors have been wary to return to Asia.
Property stocks in Asia were devastated in 1997, with the region down nearly 40%
in U.S. dollar terms. Several of the markets, most notably Thailand and
Malaysia, continue to be plagued by severe over-investment in real estate.
Singapore, although healthier, is also overbuilt and continues to suffer from
the region's turmoil. Hong Kong is a bit of a paradox; supply/demand
fundamentals in the residential property market, in particular, are strong, yet
the overhanging threat of a Hong Kong dollar-peg failure has resulted in
extremely high short-term interest rates and a severe correction in property
stocks in the second half of 1997.
We have been cautious about Asia as a whole, and at December 31, 1997, had 4% of
your Fund's portfolio in the Far East, all in Japan and Australia. Although
overall the Far East was battered by economic and financial woes, real estate
stocks in Japan and Australia had positive returns in 1997. Both markets
demonstrated real estate stocks' low correlation to local equity markets. The
real estate supply/demand fundamentals are generally positive in these markets;
in Tokyo, vacancy rates are below 5% in prime, centrally located office
buildings.
THE OUTLOOK
Going forward, we believe that the environment remains very favorable for global
real estate investments. The sector will continue to offer attractive
opportunities to play local market recoveries. Our preferred investments remain
the North American full-service hotel, office and industrial sectors. We expect
that U.S. REITs will deliver less robust returns than in recent years, as
undervalued real estate becomes more scarce. Nevertheless, relatively strong
earnings growth and outstanding earnings visibility should enable U.S. real
estate stocks to post relatively attractive total returns in 1998. We expect to
increase your Fund's weightings in both Europe and Asia in 1998, as we see good
values and attractive cyclical recovery opportunities.
We thank you for your participation in the Worldwide Real Estate Fund and look
forward to helping you meet your investment goals in the future.
<PAGE> 3
<TABLE>
<S> <C>
[PHOTO] [PHOTO]
/s/ JOHN C. VAN ECK /s/ KEVIN REID
John C. van Eck Kevin L. Reid
Chairman Portfolio Manager
January 30, 1998
</TABLE>
VAN ECK WORLDWIDE REAL ESTATE FUND
vs. Salomon Smith Barney World Property Index
<TABLE>
<CAPTION>
Van Eck Worldwide Salomon Smith Barney
Real Estate Fund World Property Index
<S> <C> <C>
6/97 10000 10000
7/97 11164 10206
8/97 11226 9713
9/97 12237 10180
10/97 12104 8807
11/97 12022 8741
12/97 12217 8583
</TABLE>
<TABLE>
<CAPTION>
SINCE
*TOTAL RETURN 12/31/97 INCEPTION++
-------------------------------------------------------
<S> <C>
Van Eck Worldwide Real Estate Fund+ 19.6%
-------------------------------------------------------
Salomon Smith Barney World Property Index -13.7%
-------------------------------------------------------
</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.
+ 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.
++Inception date for the Worldwide Real Estate Fund is 6/23/97. Returns are not
annualized.
This graph compares an initial $10,000 investment in the Van Eck Worldwide Real
Estate Fund made at its inception with a similar investment in the Salomon Smith
Barney World Property Index.
THE SALOMON SMITH BARNEY WORLD PROPERTY 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> 4
VAN ECK WORLDWIDE REAL ESTATE FUND
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TOP TEN EQUITY HOLDINGS AS OF DECEMBER 31, 1997
THE MACERICH COMPANY
(U.S. REIT, 3.4%)
Macerich has focused on the acquisition, redevelopment, management and leasing
of regional malls since 1972. Its portfolio consists of 23 regional malls and
three community centers totaling more than 19.1 million square feet. Since
completing its initial public offering, Macerich's portfolio has grown 112%.
EQUITY RESIDENTIAL PROPERTIES TRUST (EQR)
(U.S. REIT, 3.0%)
Chicago-based EQR is the nation's largest multi-family REIT. EQR's portfolio
includes 480 properties with over 136,000 units in 33 states. Stable occupancy
levels of close to 95% and consistent growth in cash flow are the result of
EQR's strategy to minimize asset and geographic concentration and to direct new
investments into improving markets.
EQUITY OFFICE PROPERTIES TRUST (EOP)
(U.S. REIT, 3.0%)
EOP is a self-administered, self-advised REIT with more than 700 employees. It
owns and operates 114 offices containing 39.8 million square feet and 16 parking
facilities containing 16,304 parking spaces. Its office properties -- located in
35 suburban and central business districts in 20 states and Washington,
D.C. -- enjoyed 92.5% occupancy rates in 1997. Since its initial public offering
in July 1997, EOP has announced more than $1.2 billion in acquisitions.
AMB PROPERTY CORPORATION
(U.S. REIT, 3.0%)
Founded in 1983 to acquire and operate industrial properties and community
shopping centers, AMB went public in mid-November and instantly became one of
the largest REITs in the U.S. For its clients, AMB has acquired over 160
properties, representing approximately $3 billion and more than 57 million
square feet. Its current portfolio includes 128 properties, totaling 43.6
million square feet, located in 24 markets.
LEGACY HOTELS REAL ESTATE INVESTMENT TRUST
(CANADA REIT, 2.8%)
Legacy offers high-quality investment exposure to Canada's first-class hotel
industry at a very attractive time in the industry's cycle. Formed in 1997 by CP
Hotels Corporation, Legacy is Canada's leading first-class hotel; its portfolio
consists of 11 properties including the landmark Royal York Hotel, Toronto,
Hotel Vancouver and Queen Elizabeth, Montreal.
CADILLAC FAIRVIEW CORPORATION
(CANADIAN C-CORP., 2.8%)
Cadillac Fairview is one of the largest real estate operating companies in North
America, with over two decades of experience and approximately 46 million square
feet owned, co-owned or under management in both the U.S. and Canada. Cadillac
enjoys a significant presence in the Canadian shopping center and office
building sectors. Its diversified portfolio, both by property type and
geography, helps Cadillac weather varying economic cycles.
TRIZECHAHN CORPORATION
(CANADIAN C-CORP., 2.7%)
TrizecHahn acquires, develops, manages and owns income-producing commercial real
estate. It is active in the office building sector in the U.S. and Canada,
regional malls in the U.S., and development operations in Europe. TrizecHahn
also holds a 15.7% interest in Barrick Gold. Its property portfolio consists of
interests in 75 income-producing properties containing 58.7 million square feet.
STARWOOD LODGING
(U.S. REIT, 2.7%)
Starwood is primarily an owner/operator of full-service hotels. Starwood has a
geographically diversified portfolio of hotel assets, including interests in 121
hotels with more than 33,000 rooms located in 34 states, Washington, D.C.,
Mexico and the UK. Many of its hotels are operated under licensing, membership
of franchise or management agreements with national hotel organizations. (At the
time of this writing, Starwood had acquired Westin and changed its name to
Starwood Hotels & Resorts Trust; also, its acquisition of ITT Sheraton was
pending.)
PATRIOT AMERICAN HOSPITALITY, INC.
(U.S. REIT, 2.7%)
Patriot American Hospitality, Inc. is based in Dallas, Texas and is the nation's
second-largest hotel REIT with a portfolio comprised of 197 owned, managed,
<PAGE> 5
leased or franchised upscale hotels and resorts with more than 48,000 rooms. Its
properties include Wyndham Hotels, Carefree Resorts, Grand Bay Hotels, Registry
Resorts and ClubHouse Inns, among others. Patriot also provides management
services for third-party owned hotels and resorts. (At the time of this writing,
Patriot's acquisition of Interstate Hotels was pending.)
GROVE PROPERTY TRUST
(U.S. REIT, 2.6%)
Grove Property Trust is engaged in the acquisition, repositioning, management
and operation of mid-priced multi-family communities in the Northeastern U.S. It
is a fully integrated real estate organization with in-house acquisition,
repositioning and renovation, financing, marketing, leasing and property
management expertise. Grove's regional focus and its quality, experienced
management team give it a strong competitive advantage in the highly fragmented
Northeastern apartment market.
SECTOR WEIGHTINGS*
------------------------------------------------
AS OF DECEMBER 31, 1997
<TABLE>
<S> <C>
Office/Industrial 21.7%
Hotels 21.2%
Diversified 19.2%
Cash/Other 14.3%
Retail 10.4%
Residential 7.2%
Specialty 6.0%
</TABLE>
* Sector weightings are shown as percentage of total net assets.
<PAGE> 6
WORLDWIDE REAL ESTATE FUND
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
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<TABLE>
<CAPTION>
NO. OF VALUE
COUNTRY SHARES SECURITIES (a) (NOTE 1)
- ---------------------------------------------------------------
<S> <C>
AUSTRALIA: 1.4%
3,000 Westfield Holdings Ltd. $11,523
--------
CANADA: 19.3%
2,500 Avista Real Estate Investment
Trust (Installment Receipts) 11,192
500 Brookfield Properties Corp. 8,342
1,000 Cadillac Fairview Corporation+ 23,500
1,500 Cambridge Shopping Centres Ltd. 15,057
500 Four Seasons Hotels, Inc. 15,813
3,500 Legacy Hotels Real Estate
Investment Trust 23,749
1,500 O&Y Properties Corp.(Special
Warrants Expiring
10/10/98)(b)*+ 8,394
500 Oxford Properties Group, Inc. 13,641
2,500 Royal Host Real Estate Investment
Trust 12,941
1,000 TrizecHahn Corporation 23,188
1,000 UniHost 6,890
--------
162,707
--------
FRANCE: 3.2%
100 Accor S.A.+ 18,577
75 Societe Fonciere Lyonnaise 8,803
--------
27,380
--------
JAPAN: 2.4%
1,000 Mitsubishi Estate Co. Ltd. 10,890
1,000 Mitsui Fudoson Co. Ltd. 9,663
--------
20,553
--------
MEXICO: 2.0%
15,000 Grupo Accion S.A. de C.V. 16,735
--------
SWEDEN: 1.2%
1,000 Castellum AB 9,957
--------
UNITED KINGDOM: 2.3%
1,500 Millenium & Copthorne Hotels PLC 10,392
3,500 Thistle Hotels PLC 9,093
--------
19,485
--------
UNITED STATES: 53.9%
1,000 AMB Property Corporation 25,125
500 Arden Realty, Inc. 15,375
500 Brandywine Realty Trust 12,563
1,000 Bridgestreet Accomodations, Inc.+ 10,156
1,000 Capital Senior Living Corp.+ 10,438
500 CapStar Hotel Company+ 17,156
500 Colonial Properties Trust 15,063
500 Cornerstone Properties, Inc. 9,594
800 Equity Office Properties Trust 25,250
<CAPTION>
NO. OF VALUE
COUNTRY SHARES SECURITIES (a) (NOTE 1)
- ---------------------------------------------------------------
<S> <C>
UNITED STATES (CONTINUED)
500 Equity Residential Properties
Trust $25,281
500 Excel Realty Trust, Inc. 15,750
500 Felcor Suite Hotels, Inc. 17,750
2,000 Grove Property Trust 21,750
1,000 Lexington Corporate Properties,
Inc. 15,438
1,000 Macerich Company (The) 28,500
500 Mack-Cali Realty Corp. 20,500
500 Parkway Properties, Inc. 17,156
800 Patriot American Hospitality,
Inc. 23,050
700 Prentiss Properties Trust 19,556
400 Public Storage, Inc. 11,750
500 S.L. Green Realty Corp. 12,965
400 Starwood Lodging 23,150
700 Storage Trust Realty 18,419
500 Tower Realty Trust, Inc. 12,313
1,000 United Dominion Realty Trust 13,938
1,000 Westfield America, Inc. 17,000
--------
454,986
--------
TOTAL STOCKS AND OTHER INVESTMENTS: 85.7%
(Cost: $709,052) 723,326
--------
<CAPTION>
PRINCIPAL
AMOUNT SHORT-TERM OBLIGATION: 17.7%
- --------------------------------------------------------------
<S> <C>
$150,000 U.S. Treasury Bill Interest Yield
5.17% due 2/05/98 (amortized
cost: $149,262) 149,262
--------
TOTAL INVESTMENTS: 103.4% (COST $858,314) 872,588
OTHER ASSETS LESS LIABILITIES: (3.4%) (28,782)
--------
NET ASSETS: 100% $843,806
========
<CAPTION>
SUMMARY OF SUMMARY OF %
INVESTMENTS % OF INVESTMENTS OF NET
BY INDUSTRY NET ASSETS BY INDUSTRY ASSETS
- ----------------- ----------- ------------------ ------
<S> <C> <C> <C>
Diversified 19.2% Retail 10.4%
Hotels 21.2% Specialty 6.0%
Office/Industrial 21.7% U.S. Treasury Bill 17.7%
Other assets less
Residential 7.2% liabilities (3.4%)
-----
100.0%
=====
</TABLE>
- ---------------
(a) Unless otherwise indicated, securities owned are shares of common stock.
(b) Restricted security, see Note 7.
* Fair value as determined by the Board of Trustees.
+ Non-income producing.
See Notes to Financial Statements.
<PAGE> 7
WORLDWIDE REAL ESTATE FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<TABLE>
<S> <C>
ASSETS:
Investments at value (identified cost, $858,314) (Note 1)........................................................... $ 872,588
Cash................................................................................................................ 98,611
Receivables:
Securities sold.................................................................................................... 24,198
From Advisor....................................................................................................... 11,899
Dividends.......................................................................................................... 2,996
Deferred organization costs (Note 1)................................................................................ 6,413
----------
Total assets................................................................................................... 1,016,705
----------
LIABILITIES:
Payables:
Securities purchased............................................................................................... 152,521
Organization costs................................................................................................. 7,162
Unrealized depreciation on open forward currency contracts (Note 5)................................................. 246
Accounts payable.................................................................................................... 12,970
----------
Total liabilities.............................................................................................. 172,899
----------
Net assets.......................................................................................................... $ 843,806
==========
Shares outstanding.................................................................................................. 70,525
==========
Net asset value, redemption and offering price per share ($843,806 / 70,525)........................................ $11.96
======
Net assets consist of:
Aggregate paid in capital.......................................................................................... $ 750,000
Unrealized appreciation of investments, forward currency contracts, and foreign currency........................... 14,336
Undistributed net investment income................................................................................ 12,305
Undistributed realized gain........................................................................................ 67,165
----------
$ 843,806
==========
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE PERIOD
JUNE 23, 1997+
TO
DECEMBER 31, 1997
--------------------
<S> <C> <C>
INCOME: (Note 1)
Dividend (net of foreign taxes withheld of $153).......................................................... $11,564
Interest.................................................................................................. 1,144
-------
12,708
EXPENSES:
Management (Note 2)....................................................................................... $ 3,529
Professional.............................................................................................. 8,000
Reports to shareholders................................................................................... 3,000
Custodian................................................................................................. 1,976
Amortization of organization costs........................................................................ 749
-------
Total expenses....................................................................................... 17,254
Expenses assumed by the Advisor and reduced by a custodian fee arrangement (Note 2)....................... 17,254
-------
Net expenses......................................................................................... --
-------
Net investment income................................................................................ 12,708
REALIZED AND UNREALIZED GAIN ON INVESTMENTS (Note 3):
Realized gain from security transactions.................................................................. 65,851
Realized gain from foreign currency transactions.......................................................... 911
Unrealized appreciation of forward currency contracts and foreign currency receivables and payables....... 62
Unrealized appreciation of investments.................................................................... 14,274
-------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS...................................................... $93,806
=======
</TABLE>
- ---------------
+ Commencement of operations.
See Notes to Financial Statements.
<PAGE> 8
WORLDWIDE REAL ESTATE FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE
PERIOD JUNE 23,
1997+ TO
DECEMBER 31,
1997
---------------
<S> <C>
INCREASE IN NET ASSETS:
OPERATIONS:
Net investment income..................................................................................... $ 12,708
Realized gain from security transactions.................................................................. 65,851
Realized gain from foreign currency transactions.......................................................... 911
Unrealized appreciation of forward currency contracts and foreign currency receivables and payables....... 62
Unrealized appreciation of investments.................................................................... 14,274
--------
Increase in net assets resulting from operations.......................................................... 93,806
--------
CAPITAL SHARE TRANSACTIONS*:
Net proceeds from sales of shares......................................................................... 750,000
Cost of shares reacquired................................................................................. --
--------
Increase in net assets resulting from capital share transactions............................................ 750,000
--------
Total increase in net assets.......................................................................... 843,806
NET ASSETS:
Beginning of period......................................................................................... --
--------
End of period (including undistributed net investment income of $12,305).................................... $ 843,806
========
*SHARES OF BENEFICIAL INTEREST OUTSTANDING WITH AN UNLIMITED NUMBER OF $.001 PAR VALUE SHARES
AUTHORIZED AND ISSUED:
Shares sold............................................................................................... 70,525
Shares reacquired......................................................................................... --
--------
Net increase.............................................................................................. 70,525
========
</TABLE>
- ---------------
+ Commencement of operations.
See Notes to Financial Statements.
<PAGE> 9
WORLDWIDE REAL ESTATE FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share outstanding throughout the period
<TABLE>
<CAPTION>
FOR THE PERIOD
JUNE 23, 1997 (a)
TO DECEMBER 31,
1997
-----------------
<S> <C>
Net Asset Value, Beginning of Period...................................................................... $ 10.00
-------
Income From Investment Operations:
Net Investment Income................................................................................... 0.18
Net Gains on Securities (both realized and unrealized).................................................. 1.78
-------
Total From Investment Operations.......................................................................... 1.96
-------
Less Distributions:
Distributions from net investment income................................................................ --
-------
Net Asset Value, End of Period............................................................................ $ 11.96
=======
Total Return (b).......................................................................................... 19.60%
- ---------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Period (000)........................................................................... $ 844
Ratio of Gross Expenses to Average Net Assets (c)......................................................... 4.92%
Ratio of Net Expenses to Average Net Assets (c)........................................................... 0.00%
Ratio of Net Income to Average Net Assets (c)............................................................. 3.62%
Portfolio Turnover Rate................................................................................... 123%
Average Commission Rate Paid.............................................................................. $0.0619
</TABLE>
- ---------------
(a) Commencement of operations.
(b) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, and a redemption on the last day
of the period. Total return is not annualized.
(c) Annualized.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Van Eck Worldwide Insurance Trust (the "Trust"), organized as a Massachusetts
business trust on January 7, 1987, is registered under the Investment Company
Act of 1940. The following is a summary of significant accounting policies
consistently followed by the Worldwide Real Estate Fund series, a diversified
fund (the "Fund"), of the Trust in the preparation of its financial statements.
The policies are in conformity with generally accepted accounting principles.
The preparation of financial statements in conformity with generally accepted
accounting principles requires the use of management's estimates, and the actual
amounts could differ.
A. SECURITY VALUATION--Securities traded on national exchanges and traded on the
NASDAQ National Market System are valued at the last sales prices reported at
the close of business on the last business day of the period. Over-the-counter
securities not included in the NASDAQ National Market System and listed
securities for which no sale was reported are valued at the mean of the bid and
asked prices. Short-term obligations purchased with more than sixty days
remaining to maturity are valued at market. Short-term obligations purchased
with sixty days or less to maturity are valued at amortized cost which with
accrued interest approximates value. Securities for which quotations are not
available are stated at fair value as determined by the Board of Trustees.
B. FEDERAL INCOME TAXES--It is the Fund's policy to comply with the provisions
of the Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to its shareholders. Therefore, no federal
income tax provision is required.
C. CURRENCY TRANSLATION--Assets and liabilities denominated in foreign
currencies and commitments under forward currency contracts are translated into
U.S. dollars at the mean of the quoted bid and asked prices of such currencies
on the last business day of the period. Purchases and sales of investments are
translated at the exchange rates prevailing when such investments were acquired
or sold. Income and expenses are translated at the exchange rates prevailing
when accrued. The portion of realized and unrealized gains and losses on
investments that result from fluctuations in foreign currency exchange rates is
not separately disclosed. Recognized gains or losses attributable to foreign
currency fluctuations on foreign currency denominated assets and liabilities are
recorded as net realized gains and losses from foreign currency transactions.
D. DIVIDENDS AND DISTRIBUTIONS--Dividend income and distributions to
shareholders are recorded on the ex-dividend date. Income distributions and
capital gain distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments for foreign currency
transactions. The effect of these differences for the period ended December 31,
1997 decreased undistributed net investment income and increased undistributed
realized gains by $403.
E. OTHER--Security transactions are accounted for on the date the securities are
purchased or sold. Interest income is accrued as earned.
F. Deferred organizational costs are being amortized over a period not to exceed
five years.
NOTE 2--Van Eck Associates Corporation earned fees for investment management and
advisory services. The fee is based on an annual rate of 1% of the average daily
net assets, which includes the fee paid to the Advisor for accounting and
administrative services. For the period ended December 31, 1997, Van Eck
Associates Corporation agreed to waive its management fees of $3,529 and assume
all expenses of the Fund
<PAGE> 10
WORLDWIDE REAL ESTATE FUND
- --------------------------------------------------------------------------------
except interest, taxes, brokerage commissions and extraordinary expenses in the
amount of $11,899. Certain of the officers and trustees of the Trust are
officers, directors or stockholders of Van Eck Associates Corporation and Van
Eck Securities Corporation. As of December 31, 1997, Van Eck Associates Corp.
owned 100% of the outstanding shares of beneficial interest of the Fund.
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 period ended
December 31, 1997, the Fund's expenses were reduced by $1,826, 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 $1,331,557 and $688,356, respectively, for the period ended December
31, 1997. For federal income tax purposes, the identified cost of investments
owned at December 31, 1997 was $861,823. As of December 31, 1997, net unrealized
appreciation for federal income tax purposes aggregated $10,765, of which
$27,049 related to appreciated securities and $16,284 related to depreciated
securities.
NOTE 4--The Fund may purchase securities on foreign exchanges. Securities of
foreign issuers involve special risks and considerations not typically
associated with investing in U.S. issuers. These risks include devaluation of
currencies, less reliable information about issuers, different securities
transactions clearance and settlement practices, and future adverse political
and economic developments. These risks are heightened for investments in
emerging market countries. Moreover, securities of many foreign issuers and
their markets may be less liquid and their prices more volatile than those of
comparable U.S. issuers.
NOTE 5--FORWARD CURRENCY CONTRACTS:
The Fund bought and sold forward foreign currency contracts to settle purchases
and sales of foreign denominated securities. The Fund may incur additional risk
from investments in forward foreign currency contracts if the counterparty is
unable to fulfill its obligations or there are unanticipated movements of the
foreign currency relative to the U.S. dollar. Realized and unrealized gains and
losses from forward foreign currency contracts are included in realized and
unrealized gain (loss) from forward currency transactions.
At December 31, 1997, the Fund had the following outstanding forward currency
contracts:
<TABLE>
<CAPTION>
VALUE AT
SETTLEMENT CURRENT UNREALIZED
CONTRACT DATE VALUE DEPRECIATION
- ---- ---------- ------- ------------
<S> <C> <C>
FORWARD CURRENCY BUY CONTRACTS
AUD 17,664 expiring
1/08/98 $ 11,530 $11,499 $ (31)
FRF 111,554 expiring
1/30/98 18,667 18,520 (147)
JPY 2,693,915 expiring
1/07/98 20,726 20,658 (68)
------
$ (246)
======
</TABLE>
NOTE 6--TRUSTEE DEFERRED COMPENSATION PLAN--The Trust established a Deferred
Compensation Plan (the "Plan") for trustees. Commencing January 1, 1996, the
Trustees can elect to defer receipt of their trustee fees until retirement,
disability or termination from the board. The Fund's contributions to the Plan
are limited to the amount of fees earned by the participating trustees. The fees
otherwise payable to the participating Trustees are invested in shares of the
Van Eck Funds as directed by the Trustees. The Plan has been approved by the
Internal Revenue Service.
NOTE 7--RESTRICTED SECURITIES
The following securities are restricted as to sale:
<TABLE>
<CAPTION>
PERCENT OF
DATE NET ASSETS
ACQUIRED COST VALUE AT 12/31/97
-------- ------ ------ -----------
<S> <C> <C> <C> <C>
O&Y Properties
Corp. Special
Warrants expiring
10/10/98 10/07/97 $8,743 $8,394 0.99%
</TABLE>
NOTE 8--An income dividend of $0.19 a share and a short-term capital gain
dividend of $1.00 a share was paid on January 30, 1998 to shareholders of record
date January 28, 1998 with a reinvestment date of January 30, 1998.
<PAGE> 11
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees and Shareholders
of the Van Eck Worldwide Insurance Trust:
We have audited the accompanying statement of assets and liabilities, including
the schedule of portfolio investments, of the Worldwide Real Estate 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, statement of
changes in net assets, and the financial highlights for the period June 23, 1997
(commencement of operations) to December 31, 1997. 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 audit.
We conducted our audit 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 audit provides 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 Real Estate Fund series of the Van Eck Worldwide Insurance Trust as of
December 31, 1997, the results of its operations, the changes in its net assets,
and the financial highlights for the period June 23, 1997 (commencement of
operations) to December 31, 1997, in conformity with generally accepted
accounting principles.
COOPERS & LYBRAND L.L.P.
New York, New York
February 13, 1998
<PAGE> 12
VAN ECK WORLDWIDE
INSURANCE TRUST
--------------------------------
WORLDWIDE REAL
ESTATE 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.
FR1998-0203-0194
[VAN ECK GLOBAL LOGO]
DECEMBER 31, 1997
VAN ECK
WORLDWIDE
INSURANCE TRUST
ANNUAL REPORT
WORLDWIDE
REAL ESTATE
FUND
[VAN ECK GLOBAL LOGO]
