<PAGE>
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Van Eck Global
Worldwide Insurance Trust
- --------------------------------------------------------------------------------
ANNUAL REPORT
December 31, 1998
discipline
Worldwide Emerging Markets Fund
allocation
diversity
A TRADITION OF GLOBAL SOLUTIONS DESIGNED FOR INTELLIGENT INVESTMENT PLANNING AND
DIVERSIFICATION
<PAGE>
Van Eck Worldwide Emerging Markets Fund
- --------------------------------------------------------------------------------
Dear Fellow Shareholder:
Nineteen ninety-eight was a difficult year for emerging markets as the
aftershocks of the Asian crisis spread across the world. Russia defaulted on
its bonds, the South African rand plummeted and fear of contagion spread to
Latin America. Strong rallies in the Asian and Latin American markets in the
fourth quarter did not fully erase the losses of the first three quarters.
Mediterranean Europe, which was somewhat insulated from the crisis, provided
the best performance among the emerging markets. For the twelve months ended
December 31, the Worldwide Emerging Markets Fund declined 34.2%. This compares
with a decline of 25.3% in the benchmark Morgan Stanley Capital International
(MSCI) Emerging Markets Free Index.
Review
The Asian economic crisis that started in 1997 gained momentum in the first few
weeks of 1998. A panic sell-off was followed by a strong rally in late January
and February. Adjusting to the prospects of deep recessions and a dramatic
decline in imports in Asia, several Latin American stock markets weakened early
in the year, as did commodity prices. This led to capital flight from resource-
based markets such as South Africa and Russia. Fixed income investors took
flight at this point and several countries became unable to roll over external
debt. Russia's default then threatened to spread the crisis to the developed
world.
As is often the case, things were darkest just before the dawn. The emerging
markets reached a selling climax in August, when the index lost 29% in a single
month. The high levels of volatility caused extreme risk aversion to spread to
the U.S. debt market, threatening highly leveraged hedge funds such as Long-
Term Capital Management and, via its creditors, the U.S. financial system. The
high level of systemic risk finally prompted the United States Federal Reserve
to act. A coordinated series of interest rate cuts led by the Fed brought
relief to investors around the world. Hong Kong intervened in its interbank and
stock markets, allowing interest rates to decline. The yen gained 16% in a
week, a move ascribed at the time to the dramatic unwinding of speculative
positions. Asian currencies then began to firm, allowing interest rates to
fall. This marked the beginning of the end of the crisis and emerging markets
began to recover, gaining 18% in the fourth quarter of the year (during which
your Fund gained 20.9%).
We maintained exposure to Asia during the year, expecting a rebound given the
dramatic declines these markets had experienced and the exceptionally
attractive valuations of the stocks. This was a drag on Fund performance until
the markets rallied in the fourth quarter. We were also underweight certain
European markets that performed well, benefiting from a "flight to quality,"
such as Poland and Portugal. Several strategies helped support performance. The
Greek market benefited from the prospects of convergence with Euroland and we
added to our positions in that market in March. Noticing the decline in the
price of oil and other commodities, we sold most of the portfolio's Russian
holdings early in the year and reduced the Latin American weighting in the
fourth quarter. The portfolio's Indian software stocks (Satyam, NIIT), a sector
we continue to emphasize, turned in exceptional performance.
Review by Market
Korea was the star market in 1998, rising over 100% in U.S. dollar terms. This
recovery reflected in part the tangible success of the government's efforts in
reshaping corporate Korea. Historically, heavily leveraged conglomerates, whose
unfocused corporate strategy included pursuing market share without regard for
profitability or shareholder value, dominated Korean industry and monopolized
the credit created by Korea's banks. The government has taken the initiative in
forcing these companies to concentrate on fewer activities and reduce their
level of indebtedness. Such rationalization could result in a greatly improved
return on investments.
For India, 1998 should have been a year to attract investors' attention and
capital, benefiting from its isolated position. Instead, the voters' desire for
a fresh approach to economics was disappointed by a budget
<PAGE>
Van Eck Worldwide Emerging Markets Fund
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that did little to promote liberalization. Nuclear weapon tests brought
sanctions and serious damage to investor sentiment. At the company level,
however, the software and consumer products company results have been very
encouraging, with software companies reporting high double and, in many cases,
triple digit growth.
By way of contrast, the socioeconomic consequences of the Asian crisis were
most apparent in Indonesia. An outburst of popular discontent at poor economic
conditions and "crony capitalism" culminated in the ousting of President
Suharto after 30 years in office. Today, restructuring of credit is now
starting to take place, the currency appears to have stabilized and the rural
economy has remained healthy. Elections this year will provide an important
signpost for Indonesia's future.
In Latin America the specter of government profligacy came back to haunt the
region. After Asia's crisis and Russia's autumn default, the appetite vanished
for financing any but the lowest risk economies, and Brazil's lack of
significant progress in cutting fiscal spending resulted in a sharp drop in
Latin American debt prices. Weak commodity prices exacerbated current account
deficits, putting even more pressure on currencies. The emerging market "risk
premium" (the higher yield paid by emerging market bonds versus U.S.
Treasuries) rose significantly, forcing local interest rates higher and
leading to a severe credit crunch. Economic growth slowed.
In spite of the crisis atmosphere, reformers in Latin countries made important
progress. Brazil's re-election of Fernando Enrique Cardoso to a second term,
the successful privatization of Telebras, the agreement with the IMF to cut
spending, and the decision to reform the oil sector were all important
achievements. However, Brazil's reforms have proven to be too little too late.
At this writing, the Brazilian government has devalued the real and faces a
return to high levels of inflation. Mexico's austere 1999 budget and hard
fought compromise over the bank rescue package were also laudable
achievements. Mexico's resolve to live within its means will be challenged as
the economy slows further this year.
Eastern Europe was generally a safe haven from the Asian and Latin American
storms. Benefiting from close proximity to Europe and convergence with the
euro-zone, these markets performed relatively well in 1998. Poland and Hungary
enjoyed 5% GDP growth, falling inflation and improving current accounts. Both
countries are in the process of implementing various EU programs centering on
convergence, and further interest rate declines seem likely. Russia, on the
other hand, collapsed into a state of anarchy after its default and looks
unlikely to recover soon.
Mediterranean Europe was also relatively insulated from the storms in Asia and
Latin America. Greece began to prepare in earnest for convergence with
Euroland. Inflation declined and interest rates began to head towards much
lower Euroland levels, sparking a rally in the stock market. Although
inflation has declined to low single digits, Greek interest rates remain
substantially above Euroland levels, and with Euroland membership scheduled
for 2001, lower rates in Greece remain a strong possibility. Israel's
technology sector performed well in the face of a difficult Israeli domestic
environment. Order books have continued to grow despite fears of a slowdown in
technology spending. Turkey made some progress toward reform in the first part
of the year with the privatization of Petrol Ofisi and enjoyed some success in
bringing down inflation. However, the Russian crisis caused a spike in
interest rates and focused investors on the size of the fiscal deficit and
need for refinancing in early 1999. Although most of the parties understand
the need for reform, coalition politics, corruption and posturing made
coherent and consistent policy difficult. An election scheduled for April
should allow the reform process to resume.
The Outlook
Emerging markets have undergone a wrenching change. Several economies broke
down but many are already recovering. Asian economies face a period of
convalescence as over-investment and over-leverage is worked out, but current
account surpluses and low levels of personal indebtedness should mean many of
the region's economies will return to positive growth this year. Brazil's
ambivalence toward balancing its
<PAGE>
Van Eck Worldwide Emerging Markets Fund
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budget has thrown the country back five years. Eastern European and
Mediterranean countries will strive to achieve convergence with Western Europe,
a prize which, if grasped, may underwrite years of strong, sustainable growth.
Therefore, this year the Fund is focusing on the Eastern and Mediterranean
economies, which will provide a benign backdrop in which companies can grow. In
the more challenging parts of the world, however, may lie the greatest
opportunities. Restructuring corporate Asia could unlock many of the same
reservoirs of value as witnessed in the late 1980s and early 1990s in the U.S.
and Europe. Coupled with the region's traditional strengths, which include
young populations, a high savings rate, and a strong work ethic, the outlook is
actually much brighter than many think. Finally, Mexico may succeed in laying
the groundwork that will allow it, like Chile, to enjoy years of non-
inflationary growth.
Although challenges lie ahead, there will be substantial opportunities for
investors as the emerging markets restructure. These economies contain 84% of
the world's population and represent 20% of its GDP. On a price to book basis,
they sell at a 65% discount to the developed markets of the world. While we
don't expect dramatic GDP growth in 1999, macroeconomic reform and corporate
restructuring can strengthen individual economies and add significant value to
individual companies, setting the stage for sustainable growth over the
upcoming decade.
We appreciate your participation in the Worldwide Emerging Markets Fund and
look forward to helping you meet your investment goals in the future.
[PHOTO OF JOHN C. VAN ECK APPEARS HERE] [PHOTO OF GARY GREENBERG APPEARS HERE]
/s/ John C. van Eck /s/ Gary Greenberg
John C. van Eck Gary Greenberg
Chairman Portfolio Manager
January 27, 1999
<PAGE>
Van Eck Worldwide Emerging Markets Fund
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Van Eck Worldwide Emerging Markets Fund
vs. MSCI Emerging Markets Free Index
[LINE GRAPH APPEARS HERE]
Van Eck Worldwide MSCI Emerging
Emerging Markets Fund Markets Free Index
--------------------- ------------------
12/95 10,000 10,000
1/96 10,929 10,711
2/96 10,455 10,541
3/96 10,424 10,623
4/96 11,061 11,047
5/96 11,596 10,998
6/96 11,799 11,067
7/96 11,708 10,310
8/96 12,236 10,574
9/96 12,286 10,666
10/96 12,083 10,381
11/96 12,540 10,555
12/96 12,682 10,603
1/97 13,860 11,326
2/97 14,350 11,811
3/97 13,809 11,501
4/97 13,748 11,521
5/97 14,604 11,851
6/97 15,583 12,485
7/97 16,561 12,672
8/97 14,788 11,059
9/97 15,104 11,366
10/97 12,056 9,501
11/97 11,241 9,154
12/97 11,211 9,375
1/98 10,130 8,640
2/98 11,167 9,541
3/98 11,717 9,955
4/98 11,603 9,847
5/98 9,830 8,497
6/98 8,658 7,606
7/98 9,062 7,847
8/98 6,107 5,578
9/98 6,107 5,932
10/98 6,605 6,557
11/98 7,341 7,102
12/98 7,383 6,999
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Average Annual Total Return 12/31/98 1 Year Since Inception*
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Van Eck Worldwide Emerging Market Funds+ -34.2% -9.9%
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MSCI Emerging Markets Free Index++ -25.3% -11.2%
- --------------------------------------------------------------------------------
This graph compares an initial $10,000 investment in the Van Eck Worldwide
Emerging Markets Fund made at 12/31/95 (inception date of the Fund was
12/21/95) with a similar investment in the MSCI Emerging Markets Free Index.
The graph shows month-end net asset values; however, the net asset value
fluctuates daily.
* Inception date for the Worldwide Emerging Markets Fund was 12/21/95; index
returns are calculated as of nearest month end (12/31/95).
+ Performance does not fully reflect the impact of the Fund's expenses, as they
have been fully or partially reimbursed by the Adviser at certain times since
the Fund's inception.
We will no longer compare the Fund to the S&P 500 Index since the S&P 500 is
not an emerging markets index. A $10,000 investment in the S&P 500 in 1998
would have grown to $12,852 by 12/31/98 versus the same investment in the Fund,
which would have declined to $6,585 by year end.
The Morgan Stanley Capital International Emerging Markets Free 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.
Past performance is not indicative of future results. Performance data quoted
represents past performance; 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.
++ "Free" includes only those securities available to foreign (e.g., U.S.)
investors.
Worldwide Emerging Markets Fund
Geographical Weightings
December 31, 1998
[Pie Chart Appears Here]
Brazil 9.6%
Greece 7.8%
Hong Kong 6.1%
Hungary 4.2%
India 9.3%
Indonesia 5.0%
Israel 8.1%
Mexico 7.5%
Philippines 2.5%
South Africa 3.9%
South Korea 8.2%
Turkey 6.0%
Cash/Other 21.8%
<PAGE>
Van Eck Worldwide Emerging Markets Fund
Top Ten Equity Holdings as of December 31, 1998*
Oshap Technologies, Ltd.
(Israel, 3.3%)
Oshap Technologies identifies and invests in software developers. The company
controls Tecnomatix Technologies Ltd., a leader in computer and process
engineering, as well as Decalogue (asset management) and MINT (middleware).
National Bank of Greece S.A.
(Greece, 3.2%)
National Bank of Greece offers many types of banking and related financial
services. The company provides loans, leasing, mortgages, deposits, investing
and insurance services to industrial, commercial and consumer clients. The bank
operates approximately 496 domestic branches and 13 overseas branches.
SK Telecom Co. Ltd. (Warrant)
(South Korea, 2.6%)
SK Telecom provides mobile telecommunications and paging services in Korea and
India. The company provides subscribers with digital cellular service and
business features, such as wireless fax and data transmission.
Al-Ahram Beverages Company S.A.E.
(Egypt, 1.9%)
Al-Ahram Beverages produces alcoholic and non-alcoholic beer and soft drinks in
Egypt. The company's alcoholic beer is sold in Egypt under the brand names
"Stella Local" and "Stella Export." Soft drinks are lemon-flavored "Cetrino"
and mandarin orange-flavored "Yousfino." Al-Ahram also produces beverages under
licenses from Carlsberg, RC Cola and Guinness.
Grupo Televisa S.A.
(Mexico, 1.8%)
Grupo Televisa, through its subsidiaries, produces and broadcasts television
programs and distributes programs in Spanish to countries worldwide. The
company also produces and broadcasts radio programming, produces music records,
promotes sports and special events, provides outdoor advertising services and
publishes magazines and newspapers.
MOL Magyar Olaj-es Gazipari Rt.
(Hungary, 1.7%)
MOL Magyar Olaj-es Gazipari is an integrated domestic oil and gas company. The
company produces crude oil, petroleum products, bitumens, lubricants and
natural gas. MOL owns and operates three refineries, oil and gas pipelines,
service stations and natural gas storage facilities. The company owns the
majority of domestic exploration rights.
Tele Norte Leste Participacoes S.A.
(Brazil, 1.6%)
Tele Norte Leste Participacoes provides local telecommunications services to
the northern Amazon and eastern regions of Brazil. The company operates as a
holding company for a number of other communications companies, including
Telest, which provides voice, data and video communications services.
S1 Corporation
(South Korea, 1.6%)
S1 Corporation, an affiliate of Samsung Group, provides security services to
corporations.
SNP Petrom
(Romania, 1.6%)
SNP Petrom (formerly Petrobrazi) is the largest refinery in Romania. Its
refining assets are currently being combined with exploration, production
assets and service stations to produce Romania's first fully integrated oil and
gas company.
Sarantis S.A.
(Greece, 1.5%)
Sarantis is a wholesaler and retailer of perfume, beauty aids, personal
hygiene, sunscreen and baby care products. The company also produces its own
line of beauty aid products. Brand names include "Estee Lauder," "Clinique,"
"Aramis," "Nina Ricci," "Versace," "Montana" and "Boss."
- -------
*Portfolio is subject to change.
<PAGE>
Worldwide Emerging Markets Fund
Schedule of Portfolio Investments
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
No. of
Shares or
Principal Value
Country Amount Securities (a) (Note 1)
- -----------------------------------------------------------------------------
<C> <C> <S> <C>
ARGENTINA: 0.7%
111,967 Banco del Suquia S.A. (Class B) $ 159,702
16,700 Banco del Suquia S.A. (d) (Negotiable
Obligations) 7,940
10,000 Banco Frances del Rio de la Plata S.A. (ADR) 207,500
----------
375,142
----------
BRAZIL: 9.6%
15,700,000 Banco de Estado de Sao Paulo S.A. (Banesp) 642,036
850,000 Banco Itau S.A. Pfd. 408,113
20,000 Cemig S.A. (ADR) 380,732
24,200 CIA Brasileira de Distribuicao Grupo Pao de
Acucar 375,100
12,000,000 CIA Eletricidade de Bahia (Coelba) 387,119
56,400,000 CIA Paranaense de Energia (Copel) (Pfd.) 403,857
31,322 CIA Saneamento Basilo de Sao Paulo (Sabesp)
(Rights expiring 1/05/99)+ 2,301
25,006,860 Embratel Participacoes S.A.(b)+ 432,945
2,700,000 Telecomunicacoes de Sao Paulo S.A. (Telesp) 233,568
1,500,000 Telecomunicacoes de Sao Paulo S.A. (Telesp)
(Pfd.)+ 202,281
1,372 Tele Centro Sul Participacoes S.A. (ADR) 57,367
41,000,000 Tele Centro Sul Participacoes S.A. (Pfd.)+ 348,228
6,472,744 Telesp Celular (b)+ 193,381
71,360 Tele Norte Leste Participacoes S.A. (ADR)+ 887,545
5,006,860 Telesp Participacoes (b)+ 269,535
----------
5,224,108
----------
CHILE: 0.8%
40,000 Banco de A. Edwards (ADR) 440,000
----------
CHINA: 0.9%
USD35,000 Huaneng Power International Convertible Bond
1.75%, 5/21/04 507,500
----------
EGYPT: 1.9%
36,800 Al-Ahram Beverages Co. S.A.E. (GDR) 1,061,680
----------
</TABLE>
<TABLE>
<CAPTION>
No. of
Shares or
Principal Value
Country Amount Securities (a) (Note 1)
- ----------------------------------------------------------------------------
<C> <C> <S> <C>
GHANA: 0.9%
50,000 Ashanti Goldfields Co. Ltd. (GDR) $ 468,750
----------
GREECE: 7.8%
23,200 Folli-Follie + 409,704
24,000 Hellenic Bottling Company S.A. 740,207
7,866 National Bank of Greece S.A. 1,767,956
18,500 Panafon Hellenic Telecomunication S.A. 491,705
57,807 Sarantis S.A. 824,930
----------
4,234,502
----------
HONG KONG: 6.1%
55,000 Cheung Kong (Holdings) Ltd. 395,773
450,000 China Telecom (Hong Kong) Ltd.+ 778,316
1,092,000 Henang International Group Co. Ltd.+ 398,180
1,200,000 JCG Holdings Ltd. 387,222
550,000 National Mutual Asia Ltd. 411,746
125,000 New World Development Company Ltd. 314,618
3,000,000 Tan Chong International Ltd. 294,288
400,000 Ng Fung Hong Ltd. 358,825
----------
3,338,968
----------
HUNGARY: 4.2%
13,800 Gedeon Richter Rt. (Sponsored GDR) 588,570
42,200 Magyar Tavkozlesi Rt. (Matav) (b) 776,095
33,400 MOL Magyar Olaj-es Gazipari Rt. (ADR) 922,675
----------
2,287,340
----------
INDIA: 9.3%
2,050 Asea Brown Boveri Ltd. 24,388
10,000 Bajaj Auto Ltd.+ 122,734
14,000 Hindustan Lever Ltd. 548,364
11,700 Housing Development Finance Corporation Ltd. 600,152
10,400 Infosys Technologies Ltd. 724,474
43,300 ITC Ltd. 764,657
90,000 Mahanagar Telephone Nigam Ltd. 388,227
12,000 NIIT Ltd. 458,809
39,456 Ranbaxy Laboratories Ltd. 248,981
37,500 Satyam Computer Services Ltd. 642,365
32,500 Videsh Sanchar Nigam Ltd. 563,986
----------
5,087,137
----------
</TABLE>
See Notes to Financial Statements
<PAGE>
Worldwide Emerging Markets Fund
Schedule of Portfolio Investments (Continued)
December 31, 1998
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<TABLE>
<CAPTION>
No. of
Shares or
Principal Value
Country Amount Securities (a) (Note 1)
- -------------------------------------------------------------------------------
<C> <C> <S> <C>
INDONESIA: 5.0%
USD1,700,000 PT Astra International Bond 8.75%, 8/07/03
(e)+ $ 476,000
6,000,000 PT Bimantara Citra 393,750
331,000 PT Guadang Garam Tbk 482,019
2,000,000 PT Pabrik Kertas Tjiwi Kimia 518,750
2,500,000 PT Ramayaha Lestari Sentosa "F" 601,563
750,000 PT Telekomunikasi Indonesia 253,125
----------
2,725,207
----------
ISRAEL: 8.1%
136,665 Bank Leumi Le-Israel 193,254
23,700 Formula Systems (1985) Ltd.+ 587,057
26,500 Nice Systems Ltd. (ADR)+ 573,063
14,000 Orbotech, Ltd.+ 663,250
237,150 Oshap Technologies, Ltd. 1,778,625
15,040 Teva Pharmaceuticals Industries Ltd. (ADR) 611,940
----------
4,407,189
----------
MEXICO: 7.5%
34,000 Cifra S.A. de C.V. (ADR)+ 412,549
130,000 Corp Internamericana de Entretenimiento S.A.
(Series B)+ 353,710
291,800 Fomento Economico Mexicano, S.A. de C.V.
(Series B) 780,687
3,000 Fomento Economico Mexicano, S.A. de C.V.
(ADR) 79,875
100,000 Grupo Financiero Bancomer S.A. (ADR) (144 A) 428,730
2,000,000 Grupo Financiero Bancomer S.A. (GDR) 428,067
40,750 Grupo Televisa S.A. (GDR)+ 1,006,016
21,500 Kimberly Clark de Mexico S.A. (ADR) 339,683
13,000 Panamerican Beverages Inc. (Class A) 283,563
----------
4,112,880
----------
PERU: 0.7%
41,400 Credicorp Ltd. 372,600
----------
</TABLE>
<TABLE>
<CAPTION>
No. of
Shares or
Principal Value
Country Amount Securities (a) (Note 1)
- ---------------------------------------------------------------------------------
<C> <C> <S> <C>
PHILIPPINES: 2.5%
222,600 Benpres Holdings Corp. (GDR)+ $ 695,625
2,700,000 DMCI Holdings Inc.+ 113,830
2,840,900 SM Prime Holdings Inc. 540,428
----------
1,349,883
----------
POLAND: 1.4%
50 Central European Foods, Inc. (c)(d)+ 275,000
25,000 Elektrim Spolka Akcyjna S.A. 270,655
47,000 Telekomunikacja Polska S.A. (GDR)+ 241,110
----------
786,765
----------
ROMANIA: 1.7%
299,457 SNP Petrom (c)(d) 847,739
48,544 The Romanian Growth Fund+ 91,262
----------
939,001
----------
SINGAPORE: 1.6%
250,000 Datacraft Asia Ltd. 442,500
280,000 DBS Land Ltd. 412,114
----------
854,614
----------
SOUTH AFRICA: 3.9%
455,000 FirstRand Ltd. 495,921
29,113 Liberty Life Assoc. of Africa Ltd. 400,349
26,965 Nedcor Ltd. 457,790
474,900 Softline Ltd.+ 511,967
16,400 South African Breweries Ltd. 276,199
----------
2,142,226
----------
SOUTH KOREA: 8.2%
80,000 Hanjin Heavy Industries 611,804
50,000 Housing & Commercial Bank, Korea 619,285
37,927 Medison Company Ltd. 441,378
1,160 Samsung Fire & Marine Insurance 433,915
334 Samsung Fire & Marine Insurance (Rights
expiring 1/14/99)+ 64,190
4,660 S1 Corporation 871,571
7,064 SK Telecom Co. Ltd. (Warrants expiring 12/07/99)+ 1,413,828
----------
4,455,971
----------
THAILAND: 0.8%
45,900 Grammy Entertainment PLC 219,714
122,000 Tipco Asphalt Public Co. "F"+ 196,341
----------
416,055
----------
</TABLE>
See Notes to Financial Statements
<PAGE>
Worldwide Emerging Markets Fund
Schedule of Portfolio Investments (Continued)
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
No. of
Shares or
Principal Value
Country Amount Securities (a) (Note 1)
- ------------------------------------------------------------------------------
<C> <C> <S> <C>
TURKEY: 6.0%
30,000,000 A.K. Bank T.A.S. $ 608,751
8,250,000 Carsi Buyuk Magazacilik A.S. 346,584
2,250,000 Enka Holding Yatirim A.S. 217,581
5,764,400 Guney Buracilik ve Malt Sanayii A.S. 392,944
250,000 Migros Turk T.A.S. 249,683
TRL535,000,000,000 Turkish Treasury Bill due 7/21/99
Interest Yield of 119.6% 1,057,872
16,875,000 Turkiye Garanti Bankasi A.S.+ 417,330
-----------
3,290,745
-----------
Total Stocks and Other Investments: 89.6%
(Cost: $52,813,449) 48,878,263
-----------
<CAPTION>
Principal Short-Term
Amount Obligation 2.8%
- ------------------------------------------------------------------------------
<C> <C> <S> <C>
USD1,500,000 General Electric Capital Commercial
Paper due 1/04/99 Interest Yield of
4.77% (Amortized Cost: $1,499,411) 1,499,411
-----------
Total Investments: 92.4%
(Cost: $54,312,860) 50,377,674
Other assets less liabilities: 7.6% 4,135,186
-----------
Net Assets: 100% $54,512,860
===========
</TABLE>
<TABLE>
<CAPTION>
Summary of
Investments % of
By Industry Portfolio
- ----------- ---------
<S> <C>
Auto, Trucks & Parts 0.7%
Banks 12.0%
Brewers 1.9%
Building Construction &
Materials 1.0%
Computer Services,
Software &
Equipment 9.7%
Conglomerate 2.0%
Consumer Products
& Services 3.9%
Electronics & Electrical
Equipment 1.2%
Entertainment &
Leisure 1.1%
Financial Services &
Insurance 6.3%
Food & Beverages 5.9%
Foreign Government
Bonds 2.8%
Forest Products 1.0%
</TABLE>
<TABLE>
<CAPTION>
Summary of
Investments % of
By Industry Net Assets
- ----------- ----------
<S> <C>
Industrial Products 1.1%
Investment Fund 0.2%
Media 1.8%
Medical Products
& Supplies 0.8%
Metals 0.9%
Oil & Gas
Exploration 3.2%
Pharmaceuticals 2.7%
Real Estate 3.1%
Retail 4.3%
Telecommunications 15.1%
Tobacco 2.3%
Utilities 3.1%
Wholesale Distributor 1.5%
Commercial Paper 2.8%
Other assets less
liabilities 7.6%
------
100.0%
======
</TABLE>
- -------
(a) Unless otherwise indicated, securities owned are shares of common stock.
(b) Includes securities in the form of ADRs.
(c) Fair value as determined by the Board of Trustees.
(d) Restricted security, see Note 8.
(e) Security in default on interest payment.
+ Non-income producing.
Glossary:
ADR-American Depositary Receipt
"F"-Foreign Registry
GDR-Global Depositary Receipt
See Notes to Financial Statements
<PAGE>
Worldwide Emerging Markets Fund Financial Statements
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
<TABLE>
<S> <C>
December 31, 1998
Assets:
Investments at value (cost, $54,312,860) (Note 1)................ $ 50,377,674
Cash, at value (cost, $2,441,285)................................ 2,420,427
Receivables:
Securities sold................................................. 1,947,315
Capital shares sold............................................. 768,285
Dividends....................................................... 95,971
Unrealized appreciation on forward foreign currency contracts
(Note 6)....................................................... 6,132
Deferred organization costs and other assets (Note 1)............ 2,971
------------
Total assets................................................... 55,618,775
------------
Liabilities:
Payables:
Securities purchased............................................ 1,021,760
Capital shares redeemed......................................... 3,266
Accounts payable................................................ 80,889
------------
Total liabilities.............................................. 1,105,915
------------
Net assets....................................................... $ 54,512,860
============
Shares outstanding............................................... 7,659,493
============
Net asset value, redemption and offering price per share
($54,512,860 / 7,659,493)....................................... $7.12
============
Net assets consist of:
Aggregate paid in capital....................................... $108,957,244
Unrealized depreciation of investments, forward foreign currency
contracts and foreign currencies............................... (3,951,131)
Accumulated net investment loss................................. (522,533)
Accumulated realized loss....................................... (49,970,720)
------------
$ 54,512,860
============
</TABLE>
<TABLE>
<S> <C> <C>
Statement of Operations
Year Ended December 31, 1998
Income: (Note 1)
Dividends (net of foreign taxes withheld of
$205,956).......................................... $ 1,612,673
Interest............................................ 105,504
------------
Total income...................................... 1,718,177
Expenses:
Management (Note 2)................................. $ 683,102
Administration (Note 2)............................. 8,270
Custodian........................................... 285,165
Reports to shareholders............................. 56,872
Professional........................................ 22,532
Trustees' fees and expenses......................... 18,985
Amortization of deferred organization costs (Note
1)................................................. 1,500
Other............................................... 23,648
----------
Total expenses.................................... 1,100,074
Expenses Assumed by Adviser (Note 2)................ (75,422)
----------
Net expense....................................... 1,024,652
------------
Net investment income............................. 693,525
Realized and Unrealized Gain (Loss) on Investments
(Note 3):
Realized loss from security transactions............ (36,487,046)
Realized loss from foreign currency transactions.... (358,972)
Realized loss on options............................ (720,000)
Realized loss on equity swaps and foreign futures
contracts.......................................... (108,570)
Change in unrealized depreciation of forward foreign
currency contracts and foreign currencies.......... (15,832)
Change in unrealized appreciation of investments and
equity swaps....................................... 10,290,532
------------
Net Decrease in Net Assets Resulting from
Operations......................................... $(26,706,363)
============
</TABLE>
See Notes to Financial Statements
<PAGE>
Worldwide Emerging Markets Fund Financial Statements
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, December 31,
1998 1997
------------- ------------
<S> <C> <C>
Increase (Decrease) in Net Assets From:
Operations:
Net investment income............................ $ 693,525 $ 970,903
Realized loss from security transactions......... (36,487,046) (11,105,861)
Realized loss from foreign currency transactions. (358,972) (361,787)
Realized loss on options......................... (720,000) --
Realized loss on equity swaps and foreign futures
contracts....................................... (108,570) (1,610,071)
Change in unrealized appreciation (depreciation)
of forward foreign currency contracts and
foreign currencies.............................. (15,832) 303
Change in unrealized appreciation (depreciation)
of investments and equity swaps................. 10,290,532 (14,387,243)
------------- ------------
Decrease in net assets resulting from operations. (26,706,363) (26,493,756)
------------- ------------
Dividends and distributions to shareholders from:
Net investment income............................ (735,333) (171,583)
Net realized gains............................... (653,629) --
------------- ------------
Total dividends and distributions................ (1,388,962) (171,583)
------------- ------------
Capital share transactions*:
Net proceeds from sales of shares................ 95,273,382 197,339,135
Reinvestment of dividends........................ 1,388,962 171,583
------------- ------------
96,662,344 197,510,718
Cost of shares reacquired........................ (106,487,078) (93,767,481)
------------- ------------
Increase (decrease) in net assets resulting from
capital share transactions...................... (9,824,734) 103,743,237
------------- ------------
Total increase (decrease) in net assets.......... (37,920,059) 77,077,898
Net Assets:
Beginning of year................................. 92,432,919 15,355,021
------------- ------------
End of year (including undistributed net invest-
ment income of $522,533 and $596,310, respective-
ly).............................................. $ 54,512,860 $ 92,432,919
============= ============
*Shares of Beneficial Interest Issued and Redeemed
(with an unlimited number of $.001 Par Value
Shares Authorized, Issued and Redeemed):
Shares sold...................................... 11,726,158 13,987,525
Reinvestment of dividends........................ 142,166 12,617
------------- ------------
11,868,324 14,000,142
Shares reacquired................................ (12,610,129) (6,828,716)
------------- ------------
Net increase (decrease).......................... (741,805) 7,171,426
============= ============
</TABLE>
See Notes to Financial Statements
<PAGE>
Worldwide Emerging Markets Fund
- -------------------------------------------------------------------------------
Financial Highlights
For a share outstanding throughout each period
<TABLE>
<CAPTION>
For The Period
For The Eight December 21,
Year Ended Year Ended Months Ended 1995(a) to
December 31, December 31, December 31, April 30
1998 1997 1996 1996
------------ ------------ ------------- --------------
<S> <C> <C> <C> <C>
Net Asset Value, Begin-
ning of Period......... $ 11.00 $ 12.49 $ 10.95 $10.00
------- ------- ------- ------
Income From Investment
Operations:
Net Investment Income... 0.09 0.14 0.01(b) 0.07(b)
Net Gain (Loss) on In-
vestments (both real-
ized and unrealized)... (3.80) (1.58) 1.59 0.88
------- ------- ------- ------
Total From Investment
Operations............. (3.71) (1.44) 1.60 0.95
------- ------- ------- ------
Less Dividend and Dis-
tributions:
Dividend from Net In-
vestment Income........ (0.09) (0.05) (0.06) --
Distributions from Capi-
tal Gains.............. (0.08) -- -- --
------- ------- ------- ------
Total Distributions..... (0.17) (0.05) (0.06) --
------- ------- ------- ------
Net Asset Value, End of
Period................. $ 7.12 $ 11.00 $ 12.49 $10.95
======= ======= ======= ======
Total Return (c)........ (34.15%) (11.61%) 14.66% 9.50%
- --------------------------------------------------------------------------------
Ratios/Supplementary
Data
Net Assets, End of Pe-
riod (000)............. $54,513 $92,433 $15,355 $ 597
Ratio of Gross Expenses
to Average Net Assets.. 1.61% 1.34% 2.64%(d) 2.06%(d)
Ratio of Net Expenses to
Average Net Assets..... 1.50% 0.80% 0.00%(d) 0.00%(d)
Ratio of Net Investment
Income Average Net As-
sets................... 1.02% 0.91% 0.74%(d) 1.89%(d)
Portfolio Turnover Rate. 117.16% 142.39% 29.53% 45.89%
</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 and
distributions at net asset value during the period and a redemption on the
last day of the period. Total returns for periods of less than one year is
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 preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that effect the reported amounts in the financial
statements. Actual results could differ from those estimated.
A. Security Valuation--Securities traded on national exchanges or 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. 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 foreign 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 year. 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 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 such amounts reported in accordance with generally accepted
accounting principles. These differences are primarily due to differing
treatment of foreign currency transactions. The effect of these differences
for the year ended December 31, 1998 is an increase to accumulated net
investment loss and a decrease to accumulated realized loss by $1,077,035.
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.
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
<PAGE>
Worldwide Emerging Markets Fund
- -------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
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.
Equity Swaps--The Fund may enter into equity swaps 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. 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 counterparty to the contract to comply with the terms of
the swap contract. The Fund bears the risk of loss of the amount expected to
be received under a swap agreement in the event of the default of the
counterparty. 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. There were no open equity swap agreements at
December 31, 1998.
Note 2--Van Eck Associates Corporation (the "Adviser") earned fees of $683,102
for the year ended December 31, 1998 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. Certain of the officers and trustees of the Trust are
officers, directors or stockholders of the Adviser and Van Eck Securities
Corporation. For the year ended December 31, 1998, the Adviser agreed to
assume expenses exceeding 1.50% of the Fund's average daily net assets,
totaling $75,422.
In accordance with the advisory agreement, the Fund reimbursed the Adviser
$8,270 for costs incurred in connection with certain administrative functions
for the year ended December 31, 1998.
Note 3--Purchases and sales of securities, other than short-term obligations,
aggregated $77,845,945 and $92,246,063, respectively, for the year ended
December 31, 1998. For federal income tax purposes, the identified cost of
investments owned at December 31, 1998 was $55,953,507. As of December 31,
1998, net unrealized depreciation for federal income tax purposes aggregated
$5,575,833 of which $6,539,881 related to appreciated securities and
$12,115,714 related to depreciated securities. As of December 31, 1998, the
Fund had a capital loss carry forward of $42,412,949 available, expiring
December 31, 2006.
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--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 6--Forward Foreign 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 foreign currency contracts are included
in realized gain from foreign currency transactions. At December 31, 1998, the
Fund had the following outstanding forward foreign currency contract:
<TABLE>
<CAPTION>
Value at
Settlement Current Unrealized
Contract Date Value Appreciation
-------- ---------- -------- ------------
<C> <S> <C> <C> <C>
Foreign Foreign Currency Purchase Contract:
GRD 136,285,876
expiring
1/04/99 $486,214 $480,082 $6,132
</TABLE>
The Fund may incur additional risk from investments in forward foreign
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 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.
The Fund has elected to show the deferred liability net of the asset for
financial statement purposes.
As of December 31, 1998 the total value of the asset and corresponding
liability of the Fund's portion of the Plan is $15,355.
Note 8--Restricted Securities
The following securities are restricted as to sale and may be deemed illiquid:
<TABLE>
<CAPTION>
Percent
of Net
Date Assets at
Acquired Cost Value 12/31/98
-------- ---------- --------- ---------
<S> <C> <C> <C> <C>
Banco del Suquia S.A. (Negotiable
Obligations) 6/15/98 $ 16,689 $ 7,940 0.0%
Central European Foods, Inc. 6/01/98 275,000 275,000 0.6%
SNP Petrom 10/27/97 1,936,469 847,739 1.6%
</TABLE>
<PAGE>
Worldwide Emerging Markets Fund
- -------------------------------------------------------------------------------
To the Trustees of Van Eck Worldwide Insurance Trust and the Shareholders of
Worldwide Emerging Markets Fund:
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of portfolio investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of the Worldwide
Emerging Markets Fund (one of the Funds comprising Van Eck Worldwide Insurance
Trust, hereafter referred to as the "Fund") at December 31, 1998, and the
results of its operations, the changes in its net assets and the financial
highlights for each of the periods presented, in conformity with generally
accepted accounting principles. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities at December 31, 1998 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
PricewaterhouseCoopers LLP
New York, New York
February 12, 1999
<PAGE>
[LOGO OF VAN ECK GLOBAL APPEARS HERE]
Investment Adviser: Van Eck Associates Corporation
Distributor: Van Eck Securities Corporation
99 Park Avenue, New York, NY 10016 www.vaneck.com
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 fluctuation or controls,
expropriation, nationalization and confiscatory taxation. Please read the
prospectus carefully before investing.
