<PAGE> 1
VAN ECK WORLDWIDE EMERGING MARKETS FUND
- --------------------------------------------------------------------------------
1997 ANNUAL REPORT
Dear Fellow Shareholder:
Although your Fund had risen 22.9% in the first six months of 1997 and as much
as 30.6% by the end of July, Asia's debt and currency crisis, which unfolded in
late summer, had a negative impact on the Fund's overall performance for the
year. For the twelve months ended December 31, 1997, the Worldwide Emerging
Markets Fund lost 11.6%*. This compares to an 11.6% decline in the benchmark
Morgan Stanley Capital International Emerging Markets Free Index (MSCI EMF
Index) and a 10.3% drop by the Fund's mutual fund peer group as measured by the
Lipper Emerging Markets Fund Index.
EMERGING MARKETS REVIEW
It was a volatile year for the world's emerging markets. Many lost ground by
year end solely because of Asia's financial crisis. Although many markets began
the year with strong gains, the first hiccup appeared in early March as U.S.
interest rates threatened to rise on fears of wage inflation; but, by May, U.S.
economic growth had slowed and inflation remained stable, and most markets
enjoyed significant rallies going into the summer. After midyear, however,
Asia's woes began to adversely impact markets, and October was particularly
difficult. By year end, Asia's emerging markets were the worst hit, declining
48.2%+ in 1997 in U.S. dollar terms. On the positive side, however, Latin
America rose 31.6% and Eastern Europe posted a smaller gain of 6.1%, led by
Russia, Turkey and Hungary.
ASIA AND THE INDIAN SUBCONTINENT
Thailand's decision in July to permit its currency (the baht) to float sent
shockwaves through Asia's economies in the second half of 1997. Asian
policymakers were unprepared for the challenges of economic restructuring, and
their currencies, in anticipation of much higher levels of inflation, plunged
against the U.S. dollar. The prospect of higher inflation and interest rates
caused severe damage to Southeast Asian stock markets. By October, the crisis
had gathered enough momentum to batter both Hong Kong and South Korea, causing
a global sell-off of equities. Your Fund's performance in 1997 was most
directly affected by the Asian crisis through its Hong Kong holdings, which
represented 13.5% of assets at June 30 and were reduced to 5.2% at year end.
Confidence in Asia--although overly abundant in recent years--was nowhere in
evidence in the second half of 1997, despite the region's continued high savings
rates and strong economic growth. This flagging confidence was further
exacerbated by a strong U.S. dollar, the weak Japanese economy, pegged exchange
rates and an over-reliance on short-term foreign currency funding. By year end,
however, appropriate policy responses had emerged in most Asian countries along
with bail-out packages from the International Monetary Fund (IMF) for Thailand,
South Korea, Indonesia and the Philippines; still, it may be several months
before a full recovery ensues.
From an opportunity standpoint, the region--which on average has sold at a 60%
premium to Latin America for the past ten years--now trades at a discount on a
forward basis; sentiment is at rock bottom and valuation parameters look
attractive. An export recovery is already under way in several countries and is
being complemented by a dramatic decline in imports. This will slowly rebuild
liquidity, which will be helped by foreign investment resulting from cheaper
prices and new investor-friendly policies. Nevertheless, global investors will
look for hard evidence of financial and economic reform, including full
liberalization of domestic financial markets, before committing the funds that
will spark Asia's recovery.
Overall, your Fund maintained an underweight and substantially divergent
position in Asia relative to the MSCI EMF Index, with less emphasis on Malaysia,
Taiwan and Korea and greater concentration in China/Hong Kong. Elsewhere in
Asia, India was one of the region's positive performers in 1997. At year end,
your Fund maintained an overweight position in India, given prospects of a
resumption of its economic reform program, improved economic growth and foreign
investment flow.
<PAGE> 2
LATIN AMERICA
In 1997, Latin America was somewhat immune to the impact of Asia's turmoil. The
region continued to benefit from its own economic recovery which followed the
peso crisis in early 1995. Mexico led the region as a return of confidence in
its economy has pushed shares in consumer goods and financial services companies
higher. Going forward, the economic outlook for Mexico will depend to a large
extent on U.S. growth. Last year, your Fund's holdings in the Mexican brewer
Femsa and its listed subsidiary, Coca-Cola Femsa, were particularly strong.
Brazil's impressive response to attacks on its currency reassured investors that
although economic growth will dip in 1998, its commitment to economic reform
remains in place. Longer term, Brazil's privatization program will be the key to
its economic health. Brazil should capitalize on investor confidence in 1998
with a return to international bond markets to help finance its $70 billion
current account deficit. Foreign direct investment is likely to account for more
than half the needed financing (mainly from Brazil's privatization of its
telecommunication and electric utilities); however, funding the balance will
keep Brazil vulnerable to shocks emanating from other parts of the world. In
1997, the Fund's holdings in Brazilian utilities such as Telebras, Petrobras and
Copel gained ground, reflecting upcoming efficiency gains from privatization.
Elsewhere in Latin America, Argentina's market failed to regain momentum at year
end due to exaggerated fears of an economic collapse in Brazil. However, IYE de
la Patagonia, a regional supermarket chain held by the Fund, rose 91% for the
year and was among the region's best performers.
In 1998, we expect economic growth in Latin America to decline slightly,
averaging more than 4% for the region as a whole, and inflation to continue its
downward trend. In the first quarter, Mexico, Argentina and Brazil are likely to
outperform the region; therefore, we have placed the bulk of our Latin American
positions in these markets. As the year progresses, we will monitor Latin
America for signs of vulnerability to external account deterioration as Asian
exports recover.
EUROPE, THE MIDDLE EAST AND AFRICA
Eastern Europe was a solid performer in 1997, spurred by prospects of economic
recovery and attractive valuations. Russia led the pack with its tremendous 112%
rise. Russia's economic recovery diminished the perceived risks of a severe
budget imbalance, although investor confidence remains much influenced by
politics. The region should continue to enjoy a modest rebound in growth and
falling inflation. Your Fund took profits in a number of Russian shares during
the year, but continues to hold Unified Energy Systems, which gained 137% in
1997 and still appears undervalued. At year end, your Fund held an overweight
position in Eastern Europe relative to the MSCI EMF Index, with holdings
concentrated in Russia, Hungary and Romania.
Southern European markets performed strongly as a result of the prospects of
European Monetary Union (EMU) convergence. Current valuations, especially in
Portugal, reflect this enthusiasm. Greece faces the challenge of whether or not
it can participate in monetary union without currency devaluation and a high
level of EU transfers. Interest rates have eased since the Asian-induced spike,
but Greece's stock market has not recovered, thus creating potential value.
The Middle East and Africa, highly disparate regions, posted mixed results in
1997. Israel's monetary policy remains tight as the government attempts to keep
inflation below 10%. In 1998, however, interest rates are likely to decline as
the year progresses. The Egyptian economy is likely to continue to experience
healthy real growth with inflation under 7%. Turkey will be worth watching
closely, as the government has signaled its intention to bring inflation down
dramatically from its current 80% level. Finally, we expect South Africa's
growth to slow as a result of Asia's crisis. Its interest rates should decline
in 1998, thus benefiting your Fund's South African financial services holdings.
THE OUTLOOK
Going forward, prospects for the emerging markets certainly look reasonable.
Although the past few months may have been uncomfortable, the long-term outlook
for many of the worst-hit emerging markets remains excellent. Some uncertainty
will persist until the full impact of Asia's financial crisis unfolds; this is
likely to make the emerging markets volatile in the near term. We continue to
favor the markets of Latin America and Eastern Europe, where economic progress
continues and the underlying economic fundamentals remain stronger than in Asia.
As Asian leaders are able to address the challenges posed by the global economy,
Asian currencies will stabilize,
<PAGE> 3
encouraging investors to return to the stock markets. We continue to believe
that it is prudent for investors to diversify their investment portfolios, and
that an allocation to the emerging markets may, over the long-term, increase
returns.
We appreciate your participation in the Worldwide Emerging Markets Fund and look
forward to helping you meet your investment goals in the future. Finally, we are
pleased to announce that on February 1, Gary Greenberg, Chief Investment Officer
of Peregrine Asset Management, will be joining the firm as Managing Director,
Van Eck Global Asset Management Asia, and Chief Investment
Officer - International Equities.
<TABLE>
<S> <C>
[PHOTO] [PHOTO]
/s/ JOHN C. VAN ECK /s/ GARY GREENBERG
John C. van Eck Gary Greenberg
Chairman Portfolio Manager
January 23, 1998
</TABLE>
+ 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 gross dividends. Indices are "Free" where applicable.
VAN ECK WORLDWIDE EMERGING MARKETS FUND
vs. MSCI Emerging Markets Free(2) Index
and S&P 500 Index
<TABLE>
<CAPTION>
Van Eck Worldwide MCSI Emerging S&P 500
Emerging Markets Fund Markets Free Index Index
<S> <C> <C>
12/95 10000 10000 10000
10929 10711 10340
10455 10541 10436
3/96 10424 10623 10537
11061 11047 10692
11596 10998 10968
6/96 11799 11067 11010
11708 10310 10523
12236 10574 10745
9/96 12286 10666 11350
12083 10381 11663
12540 10555 12545
12/96 12682 10603 12296
13860 11326 13064
14350 11811 13167
3/97 13809 11501 12626
13748 11521 13379
14604 11851 14194
6/97 15583 12485 14830
16561 12672 16010
14788 11059 15113
9/97 15104 11366 15941
12056 9501 15408
11241 9154 16122
12/97 11211 9375 16398
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------
*AVERAGE ANNUAL SINCE
TOTAL RETURN 12/31/97 1 YEAR INCEPTION(1)
- -------------------------------------------------------------
<S> <C> <C>
Van Eck Worldwide Emerging
Markets Fund(3) (11.6)% 5.3%
- -------------------------------------------------------------
MSCI Emerging Markets
Free Index (11.6)% (3.2)%
- -------------------------------------------------------------
S&P 500 Index 33.4% 28.1%
- -------------------------------------------------------------
</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 Van Eck Worldwide Emerging Markets Fund is 12/21/95.
2. "Free" includes only those securities available to foreign (e.g., U.S.)
investors.
3. Performance does not reflect the impact of the Fund's expenses, as they have
been partially reimbursed by the Adviser at certain times since the Fund's
inception.
Indices reflect the reinvestment of gross dividends.
This graph compares an initial $10,000 investment in the Van Eck Worldwide
Emerging Markets Fund made at its inception with a similar investment in the
MSCI Emerging Markets Free Index.
THE MORGAN STANLEY CAPITAL INTERNATIONAL EMERGING MARKETS FREE INDEX AND THE S&P
500 INDEX ARE UNMANAGED INDICES AND INCLUDE THE REINVESTMENT OF ALL DIVIDENDS,
BUT DO 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 EMERGING MARKETS FUND
- --------------------------------------------------------------------------------
TOP TEN EQUITY HOLDINGS AS OF DECEMBER 31, 1997
TELECOMUNICACOES BRASILEIRAS S.A. (TELEBRAS)
(BRAZIL, 5.2%)
Telebras is the monopoly telephone operator in Brazil for both cellular and
fixed line service and is Latin America's largest company by market
capitalization. Brazil's low penetration of telephone lines per capita gives
Telebras significant growth potential. Telebras is valued at a large discount to
other Latin American telecom companies and should be fully privatized in 1998,
thus supporting efficiency gains and increased value to shareholders.
NORILSK NICKEL
(RUSSIA, 3.3%)
Norilsk Nickel is Russia's largest metals producer. Although its core operations
are profitable, Norilsk Nickel is saddled with heavy social obligations, such as
hospitals and schools; it has recently paid off most of its tax arrears and is
negotiating the divestment of social ends to the local authority. Norilsk Nickel
was sold to Uneximbank, which has installed professional management and
increased focus on profitability.
GRUPO FINANCIERO BANCOMER S.A.
(MEXICO, 2.9%)
Bancomer is Mexico's second largest bank, with associates in insurance, asset
management (including the largest pension fund in Mexico) and long-distance
telephony. Its healthy loan profile indicates that it is leading the recovery of
the Mexican banking system. Bancomer trades at a discount to the Latin American
banking sector average, despite having better-than-average growth potential.
GRUPO ELEKTRA S.A. DE C.V.
(MEXICO, 2.5%)
Grupo Elektra operates more than 400 retail stores throughout Mexico and Central
America. The company sells consumer electronics, household appliances and
furniture, and offers money transfer services. It also provides financing to
low-income customers at very profitable interest rates. Elektra owns a minority
interest in Television Azteca, a highly successful Mexican television network.
TELECOMUNICACOES DE SAO PAULO S.A. (TELESP)
(BRAZIL, 2.4%)
Telesp, a subsidiary of Telebras, is the monopoly provider of telephone services
to the Sao Paulo metropolitan region, which is the wealthiest and most densely
populated region of Brazil. Telephone demand is very high in Sao Paulo and
Telesp has a large backlog. Telesp will be split into fixed line and cellular
providers later in 1998 and a controlling stake in each will be sold to a
strategic investor. Telesp's future as a privatized company appears bright.
TEVA PHARMACEUTICALS INDUSTRIES LTD.
(ISRAEL, 2.2%)
Teva is the largest company in Israel by market capitalization and is a
world-class drug producer little affected by the vagaries of the Middle East
peace process. Teva continues to benefit from its growing network of
distributors in the U.S., Continental Europe and the UK. Teva's proprietary
multiple sclerosis drug, Copaxone, has been approved for sale in the U.S. and
Canada and should be approved in Europe in 1998. This drug has the potential to
boost earnings dramatically.
PETROLEO BRASILEIRO S.A.
(BRAZIL, 2.2%)
The oil and gas production monopoly of Brazil, Petrobras remains under state
control. Petrobras is unlikely to be fully privatized in the short run, but a
30% strategic stake is likely to be sold off. The company has sizable reserves,
both proven and possible, and holds the world record for the deepest drilled
marine well. Recent developments in legislation may enable the company to
initiate joint ventures with international oil companies and remove loss-making
social obligations. Petrobras trades at a large discount to Western producers.
COCA-COLA FEMSA S.A.
(MEXICO, 2.1%)
Coca-Cola Femsa is a Coca-Cola anchor bottler with the franchise for the
metropolitan area of Mexico City, Southeastern Mexico and Buenos Aires,
Argentina. The company produces and distributes the Coca-Cola range of soft
drinks and has recently diversified into bottled water. Coca-Cola Femsa has been
increasing market share at the expense of Pepsi, through increased use of
technology and aggressive marketing campaigns.
GEDEON RICHTER RT.
(HUNGARY, 2.1%)
Gedeon Richter, Hungary's largest and most profitable drug producer, specializes
in cardiovascular, central nervous system, contraceptive and gastrointestinal
drugs. It has an excellent distribution network in Russia and the former Soviet
Union countries. Although per capita domestic consumption of drugs is low,
exports to the European Union represent an attractive opportunity.
BANCO DE A. EDWARDS
(CHILE, 2.0%)
Banco Edwards is a private bank that targets middle and high net-worth
individuals. It is benefiting from rising penetration of financial services in
Chile and cross selling of its products. Edwards' loan portfolio is clean and
well provisioned and its return on equity and assets are among the highest in
the country.
<PAGE> 5
WORLDWIDE EMERGING MARKETS FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NO. OF VALUE
COUNTRY SHARES SECURITIES (a) (NOTE 1)
- ---------------------------------------------------------------
<S> <C>
ARGENTINA: 3.4%
84,800 Banco Del Suquia S.A. $ 220,522
42,195 Banco Frances del Rio de la
Plata S.A. (ADR) 1,155,088
62,570 IYE de la Patagonia (Class B) 1,126,474
20,000 YPF S.A. (Sponsored ADR) 682,500
-----------
3,184,584
-----------
BRAZIL: 16.7%
124,870,000 Banco Credito Nacional S.A.
Pfd. 1,085,291
23,000 Cemig S.A. (ADR) 991,516
26,000,000 CIA Eletricidade de Bahia 1,747,234
101,422,428 CIA Paranaense de Energa Copel
Pfd. 1,683,454
3,872,000 CIA Saneamento Basilo de Sao
Paulo 919,385
3,095,800 Petroleo Brasileiro S.A. Pfd.
(b) 2,008,286
216,740 Telecomunicacoes de Sao Paulo
Pfd. 57,676
9,470,000 Telecomunicacoes de Sao Paulo
S.A. 2,155,177
8,364,000 Telecomunicacoes Brasileiras
S.A. (b) 4,806,019
-----------
15,454,038
-----------
CHILE: 2.0%
108,500 Banco de A. Edwards (ADR) 1,844,500
-----------
CHINA: 2.7%
940,200 Huangshan Tourism Development
Co. Ltd. (Class B) 746,519
1,530,000 Shenzhen Fangda Co. Ltd.
(Class B) 1,757,531
-----------
2,504,050
-----------
EGYPT: 1.3%
23,800 Al-Ahram Beverages Co. (GDR) 668,780
1,000 Commercial International Bank 20,179
21,070 Eastern Tobacco Co. 489,270
-----------
1,178,229
-----------
GREECE: 1.4%
56,000 Hellenic Bottling Co. S.A. 1,299,482
-----------
HONG KONG: 5.2%
160,000 Beijing Enterprises Holdings
Ltd. 410,955
490,000 China Foods Holdings Ltd. 161,272
111,000 CITIC Pacific Ltd. 441,261
1,480,000 Huaneng Power International
Convertible Bond 1.75%
5/21/2004 1,461,500
1,676,000 Qingling Motor Co. 822,014
201,000 Shanghai Industrial Holding 747,154
750,000 Ye(Ng) Fung Hong Ltd. 788,934
-----------
4,833,090
-----------
<CAPTION>
NO. OF VALUE
COUNTRY SHARES SECURITIES (a) (NOTE 1)
- ---------------------------------------------------------------
<S> <C>
HUNGARY: 4.4%
168,600 Euronet Services Inc. $ 1,306,650
16,400 Gedeon Richter Rt. (Sponsored
GDR)+ 1,906,500
91,000 Graboplast Rt. Textiles
(Sponsored GDR) 832,650
-----------
4,045,800
-----------
INDIA: 8.3%
69,950 Asea Brown Boveri Ltd. 838,686
124,600 Asian Paints Ltd. 956,750
24,350 Associated Cement Cos. 861,412
32,500 Bajaj Auto Ltd. 501,594
28,000 Hindalco Industries Ltd. 530,714
10,000 Hindustan Lever Ltd. 352,934
170,000 Hoechst Marion Roussel Ltd. 1,461,480
126,600 Mahanagar Telephone Nigam Ltd. 833,235
21,428 Ranbaxy Laboratories Ltd. 384,966
127,100 Tata Engineering & Locomotive
Co. 960,545
-----------
7,682,316
-----------
INDONESIA: 3.8%
8,915,000 Citra Marga Nusaphala Persada 963,784
339,500 Hanjaya Mandala Sampoerna "F" 253,860
544,000 PT Astra Intl."F" 139,676
3,893,000 PT Bimantara Citra "F" 736,514
292,000 PT Gudang Garam 440,631
693,500 PT Ramayaha Lestari Sentosa "F" 646,642
3,776,000 Putra Suarya Multidana 357,189
-----------
3,538,296
-----------
ISRAEL: 9.8%
760,165 Bank Leumi Le-Israel 1,276,036
42,500 Bio-Technology General
Corporation 456,875
40,000 Formula Systems (1985) Ltd. 1,230,995
13,500 Nice Systems Ltd. (ADR) 567,000
55,100 Orbotech Ltd. 1,756,313
177,150 Oshap Technologies Ltd. 1,749,356
43,330 Teva Pharmaceuticals Industries
Ltd. (ADR)* 2,050,051
-----------
9,086,626
-----------
MALAYSIA: 2.4%
278,000 Berjaya Sports Toto Berhad 712,087
523,333 KFC Holdings Berhad 848,757
535,750 Malaysia Assurance Alliance
Berhad 615,123
-----------
2,175,967
-----------
MEXICO: 13.9%
30,210 Cifra S.A. (ADR) 736,369
32,900 Coca-Cola Femsa S.A. (ADR) 1,908,200
101,500 Corp Internamericana
Entrenamiento (Series B) 787,641
145,900 Fomento Economico Mexicano,
S.A. de C.V. (Series B) 1,171,975
66,000 Grupo Elektra S.A. de C.V.
(GDR) 2,322,375
204,000 Grupo Financiero Bancomer S.A.
(ADR) (144 A) 2,652,000
69,500 Kimberly Clark de Mexico S.A.
(ADR) 1,641,938
</TABLE>
See Notes to Financial Statements.
<PAGE> 6
WORLDWIDE EMERGING MARKETS FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
DECEMBER 31, 1997 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NO. OF VALUE
COUNTRY SHARES SECURITIES (a) (NOTE 1)
- ---------------------------------------------------------------
<S> <C>
553,000 Nacional de Drogas S.A. de C.V. $ 478,485
50,000 Television Azteca S.A. de C.V.
(Sponsored ADR) 1,128,125
-----------
12,827,108
-----------
PERU: 1.4%
74,000 Credicorp Ltd. 1,332,000
-----------
PHILIPPINES: 2.6%
7,730,000 Belle Corp.+ 346,020
226,800 Benpres Holdings Corp. (GDR) 640,710
230,130 San Miguel Corporation (Class
B) 326,870
6,340,900 SM Prime Holdings Inc. 1,091,690
-----------
2,405,290
-----------
POLAND: 1.0%
57,045 Computerland Poland S.A.+ 906,247
-----------
ROMANIA: 2.5%
571,984 Carbid Fox 191,370
299,457 Petrobrazi S.A. 1,280,207
76,605 Petromidia 223,075
48,544 Romanian Growth Fund 327,670
24,150 Romcim 257,361
-----------
2,279,683
-----------
RUSSIA: 6.9%
15,550 Mosenergo (ADR) 581,570
335 Norilsk Nickel Pfd. (RDC) 1,969,800
180 Norilsk Nickel (RDC) 1,125,000
59,284 Noyabrskneftegaz 407,578
61,500 Surgutneftegaz (ADR) 622,688
5,150 Tatneft (ADR) 733,875
4,500,000 Unified Energy Systems Pfd. 969,750
-----------
6,410,261
-----------
SINGAPORE: 0.8%
376,000 Clipsal Industries Ltd. 481,280
91,000 Datacraft Asia Ltd. 234,780
-----------
716,060
-----------
SOUTH AFRICA: 2.9%
66,050 Liberty Life Assoc. of Africa
Ltd. 1,717,300
41,700 Nedcor Ltd. 923,264
-----------
2,640,564
-----------
SOUTH KOREA: 0.3%
5,714 SK Telecom (Warrants Expiring
7/12/99)+ 273,584
-----------
TAIWAN: 1.8%
100,000 ROC Taiwan Fund 812,500
50,000 Taiwan Fund Inc. 825,000
-----------
1,637,500
-----------
THAILAND: 1.2%
36,200 Ban Pu Coal Co. Ltd. 100,021
172,000 Bec World Public Co. Ltd. 731,134
329,300 Tipco Asphalt Public "F" 258,961
-----------
1,090,116
-----------
<CAPTION>
NO. OF VALUE
COUNTRY SHARES SECURITIES (a) (NOTE 1)
- ---------------------------------------------------------------
<S> <C>
CALL OPTION PURCHASES: 0.01%
20,055 Bank Leumi Le-Israel (strike
price @ ILS 5,511 expiring
8/10/1998) $ 11,431
-----------
TOTAL STOCKS AND OTHER INVESTMENTS: 96.70% (Cost:
$103,474,867) 89,356,822
OTHER ASSETS LESS LIABILITIES: 3.3% 3,076,097
-----------
NET ASSETS: 100% $92,432,919
===========
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF SUMMARY OF
INVESTMENTS % OF INVESTMENTS % OF
BY INDUSTRY PORTFOLIO BY INDUSTRY PORTFOLIO
- -------------------------------------------------------------
<S> <C> <C> <C>
Aluminum 0.6% Industrial Metals --
Assembly 0.2% Diversified 1.9%
Auto & Trucks 2.5% Insurance 2.5%
Automotive Finance 0.4% Investment Fund 2.2%
Banks 9.9% Manufacturing 1.9%
Beverages 4.5% Medical Products &
Brewers 1.3% Supplies 0.4%
Building Materials 0.3% Medical Services 0.5%
Cement 1.2% Metals 3.3%
Chemicals 0.2% Oil & Gas Exploration 0.4%
Coal 0.1% Oil Integrated 4.4%
Computers 5.1% Oil Refinery 1.6%
Conglomerates 2.4% Personal Products 2.3%
Consumer Products 0.4% Pharmaceuticals 5.8%
Electric 2.6% Real Estate 1.6%
Electronics & Electrical Restaurants 0.9%
Equipment 2.4% Retail 4.0%
Engineering & Supermarkets 1.2%
Construction 0.9% Telecommunications 8.8%
Entertainment 0.8% Television 1.2%
Entertainment & Tobacco 1.3%
Leisure Time 2.5% Toll Road Operator 1.0%
Finance 1.4% Utilities 6.4%
Financial Services 1.5% Other assets less
Foods & Beverages 0.9% liabilities 3.3%
Holding Company 0.2% -----
Holding Co --
Diversified 0.8% 100.0%
=====
</TABLE>
- ---------------
(a) Unless otherwise indicated, securities owned are shares of common stock.
(b) Includes securities in the form of ADR.
+ Non-income producing.
* Segregated for derivative contracts.
GLOSSARY:
<TABLE>
<S> <C>
ADR -- American Depositary Receipt
GDR -- Global Depositary Receipt
RDC -- Russian Depositary Certificate
"F" -- Foreign
</TABLE>
See Notes to Financial Statements.
<PAGE> 7
WORLDWIDE EMERGING MARKETS FUND
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<TABLE>
<S> <C>
ASSETS:
Investments at value (identified cost, $103,474,867) (Note 1)..................................................... $ 89,356,822
Cash.............................................................................................................. 2,552,215
Receivables:
Capital shares sold.............................................................................................. 547,275
From broker (Note 4)............................................................................................. 544,160
Dividends and interest........................................................................................... 519,603
Deferred organization costs (Note 1).............................................................................. 4,471
------------
Total assets................................................................................................. 93,524,546
------------
LIABILITIES:
Payables:
Capital shares redeemed.......................................................................................... 1,061,018
Accounts payable.................................................................................................. 30,609
------------
Total liabilities............................................................................................ 1,091,627
------------
Net assets........................................................................................................ $ 92,432,919
============
Shares outstanding................................................................................................ 8,401,298
============
Net asset value, redemption and offering price per share ($92,432,919/8,401,298).................................. $ 11.00
============
Net assets consist of:
Aggregate paid in capital........................................................................................ $118,781,978
Unrealized depreciation of investments, equity swaps and foreign currency........................................ (14,225,831)
Undistributed net investment income.............................................................................. 596,310
Accumulated realized loss........................................................................................ (12,719,538)
------------
$ 92,432,919
============
</TABLE>
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE
YEAR ENDED
DECEMBER 31, 1997
------------------------------
<S> <C> <C>
INCOME: (Note 1)
Dividend (net of foreign taxes withheld of $113,019)........................................ $ 1,807,131
Interest.................................................................................... 15,640
------------
1,822,771
EXPENSES:
Management (Note 2)......................................................................... $1,062,413
Administration (Note 2)..................................................................... 2,546
Professional................................................................................ 73,254
Custodian................................................................................... 133,208
Registration................................................................................ 37,653
Reports to shareholders..................................................................... 33,332
Trustees fees and expenses.................................................................. 8,567
Amortization of deferred organization costs (Note 1)........................................ 1,500
Other....................................................................................... 66,576
----------
Total expenses......................................................................... 1,419,049
Expenses assumed by the Advisor and reduced by a custodian fee arrangement (Note 2)......... (567,181)
----------
Net expenses........................................................................... 851,868
------------
Net investment income.................................................................. 970,903
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (Note 3):
Realized loss from security transactions.................................................... (11,105,861)
Realized loss from foreign currency transactions............................................ (361,787)
Realized loss on equity swaps and foreign future contracts.................................. (1,610,071)
Change in unrealized appreciation of foreign currency receivables and payables.............. 303
Change in unrealized depreciation of investments and equity swaps........................... (14,387,243)
------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS........................................ $(26,493,756)
============
</TABLE>
See Notes to Financial Statements.
<PAGE> 8
WORLDWIDE EMERGING MARKETS FUND
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE
FOR THE FOR THE PERIOD
YEAR EIGHT MONTHS DECEMBER 21,
ENDED ENDED 1995+ TO
DECEMBER 31, DECEMBER 31, APRIL 30,
1997 1996 1996
------------ ------------ ------------
<S> <C> <C> <C>
INCREASE IN NET ASSETS FROM:
OPERATIONS:
Net investment income........................................................... $ 970,903 $ 9,793 $ 3,557
Realized (loss) gain from security transactions................................. (11,105,861) 142,431 6,311
Realized loss from foreign currency transactions................................ (361,787) (3,503) (62)
Realized loss on equity swaps and foreign future contracts...................... (1,610,071) -- --
Change in unrealized appreciation (depreciation) of foreign currency receivables
and payables.................................................................. 303 (733) 317
Change in unrealized appreciation (depreciation) of investments and equity
swaps......................................................................... (14,387,243) 124,384 37,141
------------ ------------ ------------
Increase (Decrease) in net assets resulting from operations..................... (26,493,756) 272,372 47,264
------------ ------------ ------------
Dividends to shareholders from:
Net investment income........................................................... (171,583) (3,356) --
------------ ------------ ------------
CAPITAL SHARE TRANSACTIONS*:
Net proceeds from sales of shares............................................... 197,339,135 14,591,092 550,000
Reinvestment of dividends....................................................... 171,583 3,356 --
------------ ------------ ------------
197,510,718 14,594,448 550,000
Cost of shares reacquired....................................................... (93,767,481) (105,707) --
------------ ------------ ------------
Increase in net assets resulting from capital share transactions.................. 103,743,237 14,488,741 550,000
------------ ------------ ------------
Total increase in net assets................................................ 77,077,898 14,757,757 597,264
NET ASSETS:
Beginning of period............................................................... 15,355,021 597,264 --
------------ ------------ ------------
End of period (including undistributed net investment income of $596,310, $6,429
and $3,433, respectively)....................................................... $92,432,919 $15,355,021 $597,264
============ ============ ============
*SHARES OF BENEFICIAL INTEREST OUTSTANDING WITH AN UNLIMITED NUMBER OF $.001 PAR
VALUE SHARES AUTHORIZED, ISSUED AND REDEEMED:
Shares sold..................................................................... 13,987,525 1,183,568 54,566
Reinvestment of dividends....................................................... 12,617 294 --
------------ ------------ ------------
14,000,142 1,183,862 54,566
Shares reacquired............................................................... (6,828,716) (8,556) --
------------ ------------ ------------
Net increase.................................................................... 7,171,426 1,175,306 54,566
============ ============ ============
- ---------------
+ Commencement of operations.
</TABLE>
See Notes to Financial Statements.
<PAGE> 9
WORLDWIDE EMERGING MARKETS FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period
<TABLE>
<CAPTION>
FOR THE
FOR THE FOR THE PERIOD
YEAR EIGHT MONTHS DECEMBER 21,
ENDED ENDED 1995(a) TO
DECEMBER 31, DECEMBER 31, APRIL 30,
1997 1996 1996
------------ ------------- ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period..................................... $ 12.49 $ 10.95 $ 10.00
-------- ------- --------
Income From Investment Operations:
Net Investment Income.................................................. 0.14 0.01(b) 0.07(b)
Net Gain (Loss) on Securities (both realized and unrealized)........... (1.58) 1.59 0.88
-------- ------- --------
Total From Investment Operations......................................... (1.44) 1.60 0.95
-------- ------- --------
Less Distributions:
Distributions from net investment income............................... (0.05) (0.06) --
-------- ------- --------
Net Asset Value, End of Period........................................... $ 11.00 $ 12.49 $ 10.95
======== ======= ========
Total Return (c)......................................................... (11.61%) 14.66% 9.50%
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Period (000).......................................... $ 92,433 $15,355 $ 597
Ratio of Gross Expenses to Average Net Assets............................ 1.34% 2.64%(d) 2.06%(d)
Ratio of Net Expenses to Average Net Assets.............................. 0.80% 0.00%(d) 0.00%(d)
Ratio of Net Income to Average Net Assets................................ 0.91% 0.74%(d) 1.89%(d)
Portfolio Turnover Rate.................................................. 142.39% 29.53% 45.89%
Average Commission Rate Paid............................................. $ 0.0011 $0.0029 $ 0.0124
</TABLE>
- ---------------
(a) Commencement of operations.
(b) Based on average shares outstanding.
(c) 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.
(d) 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 Emerging Markets 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 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. 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 realized gains or losses from foreign currency transactions.
D. DIVIDENDS AND DISTRIBUTIONS--Dividend income and distributions to
shareholders are recorded on the ex-dividend date. Income 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 year ended December 31, 1997 decreased
undistributed net investment income and decreased accumulated net realized loss
by $209,439.
E. OTHER--Security transactions are accounted for on the date the securities are
purchased or sold. Interest income is accrued as earned.
F. DEFERRED ORGANIZATION-- Costs are being amortized over a period not to exceed
five years.
<PAGE> 10
WORLDWIDE EMERGING MARKETS FUND
- --------------------------------------------------------------------------------
G. 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.
NOTE 2--Van Eck Associates Corporation (the Adviser) earned fees of $1,062,413
for the year ended December 31, 1997 for investment management and advisory
services. The fee is based on an annual rate of 1% of the average daily net
assets, which includes the fee paid to the Adviser for accounting and
administrative services. Commencing January 11, 1997, the Adviser waived and
assumed all fees and expenses, excluding brokerage commissions, foreign tax and
interest expenses, to the extent they exceeded 1% of average daily net assets
until the Fund's net assets aggregated $50 million or until March 31, 1997,
whichever occurred first. On February 4, 1997, net assets exceeded $50 million
and the Adviser agreed to limit all expenses to 1.5% of the average daily net
assets. For the year ended December 31, 1997, the Adviser waived expenses in the
amount of $18,137. Certain of the officers and trustees of the Trust are
officers, directors or stockholders of Van Eck Associates Corporation and Van
Eck Securities Corporation.
In accordance with the advisory agreement, the Fund reimbursed Van Eck
Associates Corporation $2,546 for costs incurred in connection with certain
administrative functions.
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 $549,044 under this
arrangement. The Fund could have invested the assets used in connection with the
custodian fee arrangement in income producing assets if it had not entered into
such an arrangement.
NOTE 3--Purchases and sales of securities, other than short-term obligations,
aggregated $231,930,501 and $129,786,361, respectively, for the year ended
December 31, 1997. For federal income tax purposes, the identified cost of
investments owned at December 31, 1997 was $107,887,212. As of December 31,
1997, net unrealized depreciation for federal income tax purposes aggregated
$18,530,390, of which $9,105,102 related to appreciated securities and
$27,635,492 related to depreciated securities.
NOTE 4--The Fund entered into the following equity swap to gain investment
exposure to the relevant market of the underlying security. A swap is an
agreement that obligates the parties to exchange cash flows at specified
intervals. In the case of the following swap, the Fund is obligated to pay the
counterparty on trade date an amount based upon the value of the underlying
instrument and, at termination date, final payment is settled based on the value
of the underlying security on trade date versus the value on termination date
plus accrued dividends.
Risks may arise as a result of the failure of the other party to the contract to
comply with the terms of the swap contract. The loss incurred on the following
swap is limited to the payments made on the purchase date by the Fund.
Therefore, the Fund considers the credit worthiness of each counterparty to a
swap contract in evaluating potential credit risk. Additionally, risks may arise
from unanticipated movements in the value of the swap relative to the underlying
securities.
The Fund records a net receivable or payable daily, based on the change in the
value of the underlying securities. The net receivable or payable for financial
statement purposes is shown as due to or from broker. For the year ended
December 31, 1997, the Fund had realized losses of $1,595,292 from equity swaps.
At December 31, 1997, the Fund had the following outstanding swap with a single
counterparty (stated in U.S. dollars):
<TABLE>
<CAPTION>
UNDERLYING NUMBER OF NOTIONAL TERMINATION UNREALIZED
SECURITY SHARES AMOUNT DATE DEPRECIATION
- ------------------ --------- -------- ----------- --------------
<S> <C> <C> <C> <C>
Mahanagar
Telephone Nigam
Ltd. 51,800 $443,337 7/03/98 $ (107,673)
</TABLE>
NOTE 5--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 6--The Fund invests in warrants whose values are linked to indices or
underlying instruments. The Fund uses these warrants to gain exposure to markets
that might be difficult to invest in through conventional securities. Warrants
may be more volatile than their linked indices or underlying instruments.
Potential losses are limited to the amount of the original investment.
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 Fund has elected to show this
deferred liability net of the corresponding asset for financial statement
purposes. The Plan has been approved by the Internal Revenue Service.
As of December 31, 1997, the total value of the liability of the Fund's portion
of the Plan is $7,593.
NOTE 8--An income dividend of $0.09 a share and a short-term capital gain
dividend of $0.08 a share were paid on January 30, 1998 to shareholders of
record dated January 28, 1998 with a reinvestment date of January 30, 1998.
<PAGE> 11
- --------------------------------------------------------------------------------
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 Emerging Markets 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 and the financial
highlights for the year then ended, for the eight months ended December 31,
1996, and for the period December 21, 1995 (commencement of operations) to April
30, 1996. 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. 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 Emerging Markets 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 the year then
ended, for the eight months ended December 31, 1996, and for the period December
21, 1995 (commencement of operations) to April 30, 1996, in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
New York, New York
February 18, 1998
<PAGE> 12
DECEMBER 31, 1997
VAN ECK WORLDWIDE
INSURANCE TRUST
- ----------------------------- VAN ECK
WORLDWIDE
WORLDWIDE EMERGING INSURANCE TRUST
MARKETS FUND ANNUAL REPORT
WORLDWIDE
EMERGING MARKETS
FUND
VAN ECK WORLD WIDE 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
[VAN ECK GLOBAL LOGO] [VAN ECK GLOBAL LOGO]
