VAN ECK GLOBAL
SEMI-ANNUAL REPORT
June 30, 1999
Van Eck Funds
Asia Dynasty Fund
Global Hard Assets Fund
Global Leaders Fund
Gold/Resources Fund
International Investors Gold Fund
U.S. Government Money Fund
GLOBAL INVESTMENTS SINCE 1955
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VAN ECK ASIA DYNASTY FUND
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Dear Fellow Shareholder:
In the first half of 1999, Asian stock markets made substantial gains, fueled by
ample liquidity and a rebound in growth expectations that took many by surprise.
The Van Eck Asia Dynasty Fund was correctly positioned to capitalize on this
rebound and achieved a total return of 69.5% over the six-month period. We are
pleased to report that your Fund is ranked first for the one-, three- and
five-year periods ended June 30, 1999, according to Standard & Poor's Micropal.*
Your Fund also compared favorably to the Morgan Stanley Capital International
Far East Free Ex-Japan Index, which rose 45.8% during the first half of 1999. As
always, we strive to achieve competitive returns while controlling risk.
REVIEW
All Asian markets posted large gains during the period under review, led by
China and Indonesia. These rallies were fueled by an environment of strong
financial liquidity in most countries. Asia as a whole is still running large
trade surpluses, and the flow of investments into these countries has been
strong. Both of these factors would naturally lead to a strengthening of local
currencies. However, to ensure that the competitive gain won by devaluation is
not whittled away, Asian governments have intervened (or threatened to
intervene) to prevent substantial appreciation of their currencies. By selling
the local currency and buying foreign currencies, they have provided the
domestic financial systems with plenty of liquidity. The most obvious
manifestation of this is in sharply lower interest rates, many of which are
below pre-crisis levels. As the attraction of putting money on deposit with
banks has lessened, money has instead been directed into stocks.
This liquidity may have been responsible for the initial surge in stock prices,
but the improving fundamentals certainly justify further price increases. Not
only are there increasing signs of economic recovery, there are also many
examples of value-enhancing corporate restructurings taking place. These two
factors combined should cause a very strong upturn in earnings for at least this
year and next.
REVIEW BY MARKET
The HONG KONG MARKET began the year in relatively poor shape. The economy
appeared to be lagging other Asian economies due to high real interest rates and
a perception that the Chinese economy was still slowing despite huge efforts to
revive growth through government spending. In addition, there was an overhang of
stock from government stock market support in 1998. As the year progressed, more
positive news emerged and the Hong Kong market ended the first half up 35% in
U.S. dollar terms. The government announced the resumption of land sales, which
was seen as a vote of confidence in recovering property prices. Although CHINA'S
WTO (World Trade Organization) talks with the U.S. did not ultimately bear
fruit, significant concessions were made and the commitment to liberalization
and reform in China is heartening. The most significant change, in our opinion,
is the shift to aggressive reflation in China. Provided interest rates remain
stable in Hong Kong, Chinese reflation ought to be hugely positive for both
Chinese and Hong Kong stocks, despite the fact that greater reflation may lead
to the depreciation of the Chinese currency at some time in the future. Your
Fund has been relatively underweight in Hong Kong through the first half of the
year. In the second quarter, we added to China-related stocks, including China
Everbright (a financial conglomerate) and China Telecom.
The TAIWANESE MARKET lagged behind other Asian markets, although it still
managed to gain 32% in the first half. The Taiwanese economy did not experience
the same excesses as other Asian economies principally because capital controls
are tighter in Taiwan. This economy is therefore not quite on the same track as
other Asian economies and will not rebound as dramatically. Because of these
capital controls, the Taiwanese market is particularly sensitive to inward
capital flows generated by strong exports. The key to exports is the electronics
cycle, which has turned very positive. The book-to-bill ratio (the ratio of
electronics orders to shipments) is now at 1.3, the highest since 1996.
Consequently, your Fund has been building up positions in leading stocks in the
electronics sector, such as Acer and Asustek.
In economic terms, the biggest rebound has been seen in KOREA, which is
currently growing at about 7%. Huge inflows into domestic mutual funds have
propelled the market upwards, allowing many indebted companies to issue equity
to reduce their debt-to-equity ratios. The market, which gained over 63% in the
first half, has benefited significantly from company restructuring plans, which
have reduced costs and increased the low returns on equity that have been the
norm in the past.
MALAYSIA successfully defied the skeptics by engineering a recovery in its
domestic economy despite (or perhaps because of) capital controls that were put
in place last year. These capital controls have now been substantially lifted
and have been replaced by a staggered capital gains tax. Political infighting
was a focus for the market in the first half, as the corruption trial of former
Deputy Prime Minister Anwar Ibrahim made headlines. Although the political noise
has abated somewhat, Prime Minister Mahathir may be
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VAN ECK ASIA DYNASTY FUND
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tempted to call early elections, which would probably be positive for stocks.
Looking to the next quarter, Malaysia has room to reduce interest rates further
and this is what typically drives stock market performance here. We re-entered
the Malaysian market in the first half. Your Fund currently has holdings in the
financial, motor and gaming sectors. We expect the market, which saw a rise of
38% in the first half, to rise further, particularly if it is readmitted to the
major benchmark indices later in the year.
The Fund has remained overweight in INDONESIA throughout the last six months,
participating fully in a market that rose 98% over that period. The key event
for Indonesia was the first fully democratic elections in 30 years, which took
place in the second quarter. These elections were conducted in a substantially
more peaceful atmosphere than many dared to hope for. On the negative side, the
counting of votes has taken far longer than anticipated, giving rise to charges
of manipulation. Although the final results have yet to be announced, it appears
clear that Megawati Sukarnoputri's PDI party has secured the largest amount of
votes. The next stage is the election of the President, which will involve a
great deal of political maneuvering among the many parties. Meanwhile, the
economy returned to growth in the first quarter of 1999. Although the growth was
only 0.3%, this was substantially better than expected. Interest rates have also
declined dramatically from over 40% to 17% at June 30. The Fund is currently
invested in the banking and automotive sectors in this country.
The PHILIPPINE MARKET (+29%) was driven by indications of a recovery in domestic
consumption, frequent reductions in interest rates, and a pickup in corporate
mergers and acquisitions activity. The Fund is currently invested in stocks that
should benefit from these trends. These range from the nation's leading fast
food company (Jollibee) to its dominant telecommunications operator (PLDT).
With improving Asian trade and strong electronics orders, it is not surprising
that SINGAPORE STOCKS fared well in the first half of 1999, rising 53%.
Singapore companies have been among the most eager to restructure, which has
also contributed to returns. During the first half a number of companies
(principally banks) indicated their intention to merge the foreign and local
shareholdings, causing the foreign shares, which had traded at a substantial
premium, to underperform. The Fund benefited from this trend by buying options
on local shares in Singapore Airlines, which has made it known that they intend
to merge their shares.
In THAILAND (+46%) the pace of restructuring non-performing loans has picked up
over the last few months, contributing to the reduction of these bad debts. This
process has been substantially aided by the passage of a number of measures to
establish a more effective bankruptcy procedure. Continued interest rate cuts
have also helped. Just as importantly, the banks have demonstrated more zeal to
go after recalcitrant debtors. The Fund is overweight this market, with domestic
consumption, property and finance stocks.
After a strong start to the year, the INDIAN MARKET failed to keep pace with the
rest of Asia in the second quarter (still ending the first half up 33%). This
was largely due to the fall of the Indian Government, which lost a vote of
confidence by one vote, marking the end of the third Indian Government in three
years. Logistical difficulties have meant the postponement of the general
election until September, with the final result not available until October. The
resulting political hiatus has not been particularly helpful, nor has the
ongoing military dispute in Kashmir. On the positive side, statistics such as
cement sales are pointing to a pickup in the economy, with subdued inflation.
THE OUTLOOK
The global environment is benign, with good liquidity and overall OECD growth
expectations being revised upwards. In particular, Japanese demand is
strengthening in the areas that matter most to Asia, such as electronics and
tourism.
The economic recovery in Asia is well underway and, in our view, it goes beyond
the year-on-year effect of a poor 1998. While some quibble about the quality and
sustainability of the growth, we believe that the breadth of the recovery is
impressive. Consumption is strengthening as unemployment falls, savings get
spent and the wealth effect kicks in. Fiscal spending should remain strong and
exports should get a boost from rising intra-Asian trade. Crucially, progress is
being made in clearing financial systems of bad debt, which should allow banks
to start lending again.
As 1999 progresses, we should be moving from liquidity drivers to earnings-based
support for further stock appreciation. It is important to keep in mind that
although there is a strong cyclical story, the deeply cathartic effect of the
Asian crisis has produced extremely significant structural change. There is now
far more pressure being applied to companies by the providers of capital, be it
debt or equity, for a decent return on capital. In addition, the entry of
foreign competition into many sectors of the economy, in particular the
financial sector, will force managements to get rid of much of the fat that
accumulated through many easy years and focus their businesses on operations
that really add value.
For these reasons, we look forward to the second half of 1999 and beyond with a
good deal of confidence for
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VAN ECK ASIA DYNASTY FUND
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Asian markets. As we approach the end of the year, we may see quiet, thin
trading conditions due to Y2K concerns. We believe that this should only be a
temporary phenomenon and the increasingly strong fundamentals of Asia should
bring renewed momentum to Asian markets thereafter.
We would like to thank you for your participation in the Van Eck Asia Dynasty
Fund, and we look forward to working with you in the future.
[PHOTO OMITTED] [PHOTO OMITTED]
/s/DAVID A. SEMPLE /s/DAVID M. HULME
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DAVID A. SEMPLE DAVID M. HULME
CO-PORTFOLIO MANAGER CO-PORTFOLIO MANAGER
July 13, 1999
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Note: Effective July 1, 1999, David Hulme was named co-portfolio manager of the
Van Eck Asia Dynasty Fund, along with David Semple, who has been co-portfolio
manager since March 1999.
*The Fund ranked first among 63 funds for one year, first among 49 funds for the
three-year period, first among 20 funds for the five-year period and first among
eleven since inception (3/22/93).
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PERFORMANCE RECORD AS OF 6/30/99
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AVERAGE ANNUAL AFTER MAXIMUM BEFORE SALES
TOTAL RETURN SALES CHARGE* CHARGE
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A shares--Life (since 3/22/93) 7.3% 8.3%
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5 years 3.4% 4.6%
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1 year 106.6% 119.2%
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B shares--Life (since 9/1/93) 4.9% 5.1%
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5 years 3.5% 3.9%
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1 year 111.9% 116.9%
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THE PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NOT INDICATIVE OF FUTURE
RESULTS. Investment return and principal value of an investment in the Fund will
vary so that shares, when redeemed, may be worth more or less than their
original cost.
At certain times in the past, the Adviser waived certain or all expenses on the
Fund. Had the Fund incurred all expenses, investment returns would have been
reduced.
* A shares: maximum sales charge = 5.75% (Prior to 5/1/99 the maximum sales
charge was 4.75%.)
B shares: maximum contingent deferred sales charge = 5.00% Geographical
Weightings+ June 30, 1999 Van Eck Asia Dynasty Fund Top Ten Equity Holdings as
of June 30, 1999*
[The following represents a pie chart in the printed material]
GRAPHICAL WEIGHTINGS+
JUNE 30, 1999
Cash/Equivalents 10.8%
China 3.2%
Hong Kong 19.6%
India 6.2%
Philippines 6.8%
Indonesia 7.5%
Singapore 11.3%
South Korea 11.3%
Taiwan 9.2%
Thailand 8.0%
Malaysia 6.1%
+Weightings take option positions into account
(See "Schedule of Portfolio Investments" p.23)
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VAN ECK ASIA DYNASTY FUND
TOP TEN EQUITY HOLDINGS AS OF JUNE 30, 1999*
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R.O.C. TAIWAN FUND
(TAIWAN, 4.4%)
The R.O.C. Fund is a closed-end mutual fund whose objective is to invest in
publicly traded securities of Taiwanese companies. This fund is trading at a
discount to the underlying value of its assets.
SHIN CORPORATION PLC
(THAILAND, 2.8%)
Shin Corporation, through its listed subsidiaries, is involved in mobile
telecommunications and satellite operations. After reorganizing the group, Shin
Corp. is in a position to take advantage of the expected liberalization and
consolidation of the Thai telecom industry.
CHINA TELECOM (HONG KONG) LTD.
(HONG KONG, 2.3%)
China Telecom provides mobile telecommunications in three provinces of China
(Guangdong, Zhejiang and Jiangsu). Later in the year, it is expected that China
Telecom will acquire further provinces from its parent, the Ministry of
Information Industry.
HSBC HOLDINGS PLC
(HONG KONG, 2.2%)
HSBC is the holding company for the HSBC Group, which provides banking and
financial services in the Asia region as well as in Europe, the Middle East and
the Americas.
DEVELOPMENT BANK OF SINGAPORE (DBS)
(SINGAPORE, 2.0%)
DBS is engaged in a wide range of financial services activities in Singapore and
around the region. DBS should benefit from the deregulation of Singapore's
banking sector. The recent acquisitions of stakes in banks in Singapore,
Thailand, Philippines and Hong Kong will provide the bank with synergies as well
as exposure to recovery throughout Southeast Asia.
HOUSING & COMMERCIAL BANK, KOREA
(SOUTH KOREA, 2.0%)
Housing & Commercial Bank, formerly known as Korea Housing Bank, specializes in
mortgage financing but also undertakes a full range of commercial banking
activities. Its restructuring and cost-cutting efforts have started to bear
fruit, and the bank has made vast improvements in financial "transparency"
(i.e., discernibility). International bank ING has recently taken an 11% stake
in the company.
SK TELECOM CO. LTD.
(SOUTH KOREA, 1.9%)
SK Telecom is Korea's market leader in mobile telecommunications, with a market
share of 42%. The industry has been growing quickly even during the recession in
Korea, partly due to handset subsidies offered by the network operators, which
have now been phased out.
PT BIMANTARA CITRA
(INDONESIA, 1.8%)
Bimantara Citra was established as a trading company by President Suharto's
second son, Bambang Trihatmodjo, who serves as the company's president. The
company is in seven business areas: media & broadcasting, telecom, transport &
automotive, chemicals, infrastructure, financial services and property. The
company currently derives the bulk of its earnings from RCTI, a private TV
broadcaster in Indonesia with 37% market share, and its telecom subsidiary
(fixed line and cellular).
COMMERCE ASSET HOLDINGS BHD.
(MALAYSIA, 1.8%)
Commerce Asset is a financial services holding company principally engaged in
commercial banking. Bank of Commerce is currently merging with Bank Bumi, the
second-largest commercial bank in Malaysia, on terms that are very advantageous
to Bank of Commerce. The merger should greatly enhance the asset size of the
banking business, and the number of branches that it runs.
CHEIL JEDANG CORP.
(SOUTH KOREA, 1.8%)
Cheil Jedang is one of the leading food producers in Korea. The company
manufactures a range of staple products such as sugar, flour, cooking oil and
seasonings. The company also holds stakes in a number of Samsung Group companies
such as Samsung Life, Samsung Electronics and Samsung Corporation.
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*Portfolio is subject to change.
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VAN ECK GLOBAL HARD ASSETS FUND
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Dear Fellow Shareholder:
We are pleased to report that hard assets had an excellent first half of the
year and the Global Hard Assets Fund rose 15.9% during this period. Hard assets
substantially outperformed financial assets during the period--in comparison,
the S&P 500 Index rose 12.4% for the six months ended June 30, 1999. Hard asset
performance was driven by two factors: 1) a realization that global economic
growth was rising; and 2) an increasingly favorable supply/demand environment
for most hard asset sectors.
REVIEW
The first half of 1999 witnessed a reversal of the major trends that affected
the hard assets markets throughout 1998. Confidence in global economic growth
returned in the first quarter as the emerging economies, particularly in Asia,
began to recover strongly after 18 months in a downward spiral. The Japanese
economy also began to recover after several years of zero growth and government
waffling, as positive steps were finally taken to remedy the situation. Economic
growth figures for the developed world came in higher than expected and fears of
a global slowdown subsided. Further, several hard asset sectors have gone
through major supply cutbacks as a result of a number of factors. These included
an OPEC agreement to cut supplies (announced in March) and mergers and
acquisitions activity, which has resulted in supply reductions. These two
factors--a solid increase in demand due to strong global growth and the decrease
in supply--provided an extremely positive environment for these investments in
the first half, and we expect these trends to remain in place throughout the
year. An additional positive force was a broad move from growth stocks into
cyclical and "value" stocks in the second quarter--partly a result of revised
economic growth figures, but also an investor reaction to the lofty valuations
and questionable earnings of technology (particularly Internet) stocks.
ENERGY PRICES rose sharply during the second quarter as a result of the OPEC
supply cutback that came after two years of indecision. Energy stocks, which
remain the portfolio's largest weighting at over 35% of total assets at June 30,
were up 53% overall for the first six months of the year. We continue to favor
exploration and production companies, such as Anadarko and Alberta Energy, and
oil service companies. We are emphasizing companies with substantial natural gas
exposure since we believe this sector currently offers the best fundamentals
among hard assets, with strong demand growth (expected at over 3% this year) and
an expected supply decline of almost 3%. As for crude oil, we do not expect the
price to rise much further, but if the price is sustained at current levels, oil
service companies should capture higher profits. Some of the Fund's oil service
stocks, such as Baker Hughes and Cooper Cameron, were significant contributors
to performance in the first half. Mergers and acquisitions continue to play an
important positive role in this sector. Recent deals include the pending merger
of Exxon and Mobil, the takeover of YPF by Repsol, British Petroleum's takeover
of Amoco and recent rumors of Texaco as a possible takeover target.
REAL ESTATE SECURITIES, which accounted for over 25% of the Fund's holdings at
June 30, turned in positive performance for the first six months of the year.
The U.S. real estate market, which accounted for most of the Fund's real estate
holdings, began the year with negative performance, but rallied strongly in the
second quarter, concurrent with the move out of technology and growth stocks
(the U.S.-based Morgan Stanley REIT Index ended the first half up 4.6%). Several
positive developments contributed to this turnaround: investment guru Warren
Buffet purchased REITs in April, which helped boost investor perception of the
sector; there were several management-led privatizations (an additional sign of
strength and confidence); and real estate companies continued to meet or exceed
earnings estimates. Several of the Fund's REIT holdings were up 10% or more in
the first half, including Equity Residential and Boston Properties. Many of
these same dynamics were at work in Canada where the Fund held stocks such as
TrizecHahn, Oxford Property Group and Brookfield Properties. Our Canadian
property exposure also benefited from the recovery in the Canadian dollar during
the first half of 1999. This sector continues to offer a low risk,
income-producing component for the Fund, and values here remain attractive.
FOREST PRODUCTS AND PAPER, 13% of the Fund's holdings at June 30, had an
explosive run in the first half of the year, ending the period up approximately
25%. In addition to increased demand with renewed economic growth, certain
companies have shut down excess capacity, a push that has been driven primarily
by mergers and acquisitions activity (Fund holding Smurfit-Stone Container has
been notable in this regard). The combination of these factors led to several
price increases either announced or realized in certain segments of the
industry. Furthermore, talk of additional consolidation in the sector has fueled
returns. One example, Weyerhauser's announced bid for MacMillan Bloedel (the
largest Canadian paper company and a Fund holding) helped boost the entire
Canadian paper sector. Meanwhile, timber and building materials prices have
sky-rocketed as a result of the strong housing market in the U.S. and holdings
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VAN ECK GLOBAL HARD ASSETS FUND
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such as Plum Creek Timber (which converted from a publicly traded partnership to
a REIT--the first timber REIT) contributed to performance. The only sectors
within this group that have yet to rebound are the newsprint and pulp sectors
and we believe they will perform well into the second half. We have bought
several of these stocks, including Brazilian pulp company Aracruz and newsprint
company Bowater.
INDUSTRIAL METALS (approximately 10% of assets at June 30) performed well
overall, with mixed performance among the group. While sensitive to the economic
turnaround, the supply-demand scenario has not been as strong as it has for the
energy and forest products sectors. Therefore, we have kept this weighting
fairly low, with only selective holdings. While aluminum and copper companies
have yet to rebound substantially, Alcoa, by far our largest holding in this
group and a company that has done well even in flat-to-declining commodity
markets, turned in solid gains.
PRECIOUS METALS (about 8% of assets) had mixed results. The platinum and
palladium markets stayed afloat, with decent supply-demand pictures and some
industrial demand. The gold market, however, fell further, primarily the result
of additional central bank selling. In this sector, we hold only select stocks
based on their individual strengths. For example, Stillwater, a platinum and
palladium producer and our largest holding in this sector, was up substantially
for the first half.
THE OUTLOOK
The macroeconomic background for hard assets remains positive. We expect the
unprecedented monetary stimulus the world has experienced during the last nine
months--there have been 156 interest rate cuts during that period--to continue
to stimulate worldwide economic growth. The U.S. economy has been running in
overdrive and we expect it to continue to plow ahead. The European economy has
been sluggish, but appears to be strengthening. The Japanese economy has slowly
begun to turn up. Asia is recovering from its recession and even Latin America
has turned in better-than-expected growth. The global economy is getting
stronger and commodity-related currencies are strengthening. These should be
positive factors for hard asset performance.
We would like to thank you for your participation in the Van Eck Global Hard
Assets Fund, and we look forward to working with you in the future.
[PHOTO OMITTED] [PHOTO OMITTED]
/S/DEREK S. VAN ECK /S/KEVIN L. REID
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DEREK S. VAN ECK KEVIN L. REID
CO-PORTFOLIO CO-PORTFOLIO
MANAGER MANAGER
July 20, 1999
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VAN ECK GLOBAL HARD ASSETS FUND
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PERFORMANCE RECORD AS OF 6/30/99
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AVERAGE ANNUAL AFTER MAXIMUM BEFORE SALES
TOTAL RETURN SALES CHARGE* CHARGE
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A shares--Life (since 11/2/94) 8.5% 9.9%
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1 year (12.7)% (7.4)%
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B shares--Life (since 4/24/96) 2.3% 3.1%
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1 year (12.5)% (7.9)%
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C shares-Life (since 11/2/94) 9.7% 9.7%
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1 year (8.9)% (8.0)%
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THE PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NOT INDICATIVE OF FUTURE
RESULTS. Investment return and principal value of an investment in the Fund will
vary so that shares, when redeemed, may be worth more or less than their
original cost.
The Adviser is currently waiving certain or all expenses on the Fund. Had the
Fund incurred all expenses, investment returns would have been reduced.
* A shares: maximum sales charge = 5.75% (Prior to 5/1/99 the
maximum sales charge was 4.75%.)
B shares: maximum contingent deferred sales charge = 5.0%
C shares: 1% redemption charge, 1st year
GEOGRAPHICAL WEIGHTINGS+
JUNE 30, 1999
[The following tables represents a pie chart in the printed material]
Australia 4.4%
Canada 18.6%
Russia 3.0%
United Kingdom 1.4%
Cash/Equivalents 5.0%
Hong Kong 2.5%
Norway 1.4%
Brazil 1.4%
Other 4.0%
SECTOR WEIGHTINGS+
JUNE 30, 1999
Energy 36.8%
Industrial Metals 9.7%
Precious Metals 8.3%
Forest Products and
Paper 13.0%
Real Estate 27.0%
Cash/Equivalents 5.0%
Other 0.2%
+ Weightings take "short" positions into account (See "Schedule of Portfolio
Investments" p.25)
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VAN ECK GLOBAL HARD ASSETS FUND
TOP TEN EQUITY HOLDINGS AS OF JUNE 30, 1999*
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ANADARKO PETROLEUM CORPORATION
(U.S., 2.7%)
Anadarko is an independent oil and gas exploration and production company. The
company explores for oil in Kansas, Oklahoma and Texas, as well as offshore in
the Gulf of Mexico and Alaska. Anadarko also owns and operates gas-gathering
systems in its U.S.core-producing areas. It also develops crude oil reserves in
Algeria.
ALUMINUM COMPANY OF AMERICA (ALCOA)
(U.S., 2.4%)
Alcoa is an integrated aluminum company. The company produces aluminum and
alumina. It is involved in mining, refining, smelting, fabricating and
recycling. Alcoa serves customers worldwide in the packaging, automotive,
aerospace, construction and other markets with a variety of fabricated and
finished products.
STILLWATER MINING COMPANY
(U.S., 2.3%)
Stillwater Mining explores for, develops, extracts, processes and refines
platinum, palladium and associated metals from the J-M Reef, located in
Stillwater and Sweet Grass Counties, Montana. The company currently operates the
Stillwater Mine, an underground mine located in Nye, Montana.
GLOBAL INDUSTRIES LTD.
(U.S., 2.3%)
Global Industries provides oil field construction services. These services
include pipeline construction, platform installation and removal, diving
services, and construction support. The company provides its services to the
offshore oil and gas industry in the U.S. Gulf of Mexico and select
international areas.
KHANTY-MANSIYSK OIL COMPANY
(RUSSIA, 2.3%)
KMOC, formerly Ural Petroleum Corp., is a U.S.-registered, privately held oil
exploration and production company focused exclusively on the Western Siberian
region of the Russian Federation. Through controlled subsidiaries, KMOC holds
production licenses in 11 fields totaling an estimated two billion barrels in
proven, probable and possible reserves.
COOPER CAMERON CORPORATION (U.S., 2.2% )
Cooper Cameron manufactures oil and gas pressure control equipment. The
company's equipment is used for oil and gas drilling, production and
transmission used in onshore, offshore and sub-sea applications. Cooper also
manufactures gas turbines, centrifugal gas and air compressors and other
products.
EXXON CORPORATION
(U.S., 2.1%)
Exxon explores for and produces crude oil and natural gas, manufactures
petroleum products, and transports and sells crude oil, natural gas and
petroleum products. The company also manufactures and markets basic
petrochemicals and supplies specialty rubbers and additives for fuels and
lubricants.
TRIZECHAHN CORPORATION
(CANADA, 2.0%)
TrizecHahn is an integrated real estate development and operating company. The
company owns, develops and manages office buildings and mixed-use properties in
the U.S., Canada and Europe and, through its developmental units, creates
retail/entertainment and office projects in North America and Europe.
PLUM CREEK TIMBER COMPANY, INC.
(U.S., 2.0%)
Plum Creek Timber is an integrated forest products company. The company's
timberlands and mills are located in the Pacific Northwest and the southeast and
northeast United States.
CYPRESS ENERGY, INC.
(CANADA, 1.7%)
Cypress Energy is an oil and gas exploration, development and production
company. The Calgary-based company's operations are focused on western Canada.
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*Portfolio is subject to change.
8
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VAN ECK GLOBAL LEADERS FUND
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Dear Fellow Shareholder:
Seeing greater long-term potential from investing in global equity markets
versus global bond markets, the Van Eck Global Balanced Fund requested and
received shareholder approval to shift toward a primary emphasis on global
equities. As a result of the change in focus, the name of the Fund was changed
to the Global Leaders Fund, and its investment approach is now to invest in the
leading companies in growth industries around the world. The effective date for
the change was May 1, 1999, with the shift into equities completed by the end of
May.
The Global Leaders Fund had a total return of 2.8% during the first half of
the year, comparing favorably with a blend of the MSCI World Index (+8.7%) and
the Salomon Smith Barney World Government Bond Index (-7.2%). Though
outperforming the blended benchmark, the total return for the Fund was
negatively impacted by the Fund's exposure to bonds in the first four to five
months of the year as unexpectedly strong global growth and fears of rising
interest rates pushed bond prices lower. In terms of equities, the Fund's move
into Japan and Asia was beneficial, partially offsetting growth stock weakness
in the developed western markets. Most of the relative stock weakness was due to
the sharp and sudden correction in global growth stocks during April as
investors reacted to signs of a worldwide growth recovery by shifting towards
cyclical value stocks. Further to this point, while the MSCI World Index
increased 8.7% during the first half of the year, there was a significant
divergence in the performance of MSCI World Value (+11.9%) versus MSCI World
Growth (+5.5%), the latter of which the equity portfolio of the Fund
outperformed. With such an extreme difference in performance between the two
disciplines, this outperformance versus MSCI World Growth should be noted.
WORLD EQUITY MARKETS
Global economies' ability to recover from last October's depression-like
sentiment has been the biggest surprise in global markets during 1999. While
international economic growth is hardly robust, the bias has clearly shifted to
the upside. It is no surprise that ASIAN MARKETS, showing signs of economic
recovery after having suffered for almost eighteen months, outperformed in this
environment (+26.2%*+). Looking briefly at Europe, the euro's less-than-stellar
debut (falling 11% versus the dollar due primarily to relative growth prospects
in the two regions) resulted in a 2.3% decline for EUROPEAN SHARES over the past
six months (+8.2% in local currency terms). No overview would be complete
without mentioning the Brazilian devaluation that occurred in January. The
actual event came as little surprise to international investors--what caught
investors off-guard was the turnaround that occurred in the ensuing months. By
maintaining fiscal discipline, and with inflation kept in control, the
government was able to reduce interest rates from 45% to 25%, thereby providing
fuel for the rallies that spread across LATIN AMERICAN EQUITY MARKETS (+31.0%).
Once again, U.S. EQUITIES performed quite well, registering a gain of 12.7% over
the past six months. The year started with expectations of global economic
weakness and continued low inflation, with some worries of deflation. While some
signs of a pickup in global growth emerged in the first quarter, a rebound in
the price of oil, followed by the release of the April CPI (consumer price
index) data, led to a rapid rotation out of growth stocks into cyclical value
stocks. Investor concerns quickly focused on the rise in global growth and on
the degree to which the Federal Reserve would be required to increase rates. The
sudden change in investor perception hit the market in dramatic fashion, with
growth stocks (+10.7%) underperforming value stocks (+14.7%) for the first half
of the year. While initially taking a hit, the technology sector weathered the
value storm, leading all sectors with a gain of 25.1%. Maintaining our focus on
earnings growth, we continued to invest in global leaders such as EMC (data
storage), Cisco Systems (Internet infrastructure) and Tyco International
(industrial services).
Our decision to significantly increase the portfolio's Japanese exposure during
the end of last year and the first quarter of this year was rewarded, as
JAPANESE SHARES increased 20.8% by June 30. As the government's fiscal stimulus
package and bank rescue plan were implemented, and as more Japanese companies
announced shareholder-friendly restructuring plans, investor sentiment turned
strongly positive. The markets were surprised with the release of the first
quarter GDP data, showing the economy was expanding at a 7.9% annualized growth
rate. Though close inspection of the data reveals that most of the growth was
due to government spending and one-off seasonal distortions, the economy does
appear to have bottomed and could be positioned for a recovery in 2000. The
financial health of the banking system was strengthened and the banking sector
outperformed significantly over the past six months. As we increased the
portfolio's weight in Japan, we diversified the portfolio by adding domestic
exposure in defensive sectors (cellular telecom company NTT DoCoMo and
pharmaceutical Takeda Chemicals) as well as more economically sensitive areas
(Bank of Tokyo-Mitsubishi, and conglomerate/restructuring play Hitachi).
Outpacing their Japanese neighbors, ASIAN (EX-JAPAN) EQUITIES delivered gains of
26.2%+ over the past six months, with the previously beaten down Asian emerging
markets delivering even stronger returns (+55.4%). A confluence of events led to
the outperformance of Asian shares over the period.
9
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VAN ECK GLOBAL LEADERS FUND
- --------------------------------------------------------------------------------
Strong U.S. economic growth rejuvenated the technology export sectors in Taiwan,
Singapore, and Korea. As currencies began to stabilize, governments were able to
reduce interest rates by 3% to 4%, helping to revive residential property
markets in Hong Kong and Singapore. The circle was completed with the rebound in
consumer sentiment. The portfolio participated in the Asian rebound, primarily
through holdings in Hong Kong and Singapore financials (HSBC and DBS).
THE OUTLOOK
Our aggressive move into Japan was vindicated by the strong performance in that
market over the past few quarters. While evidence of a full-scale economic
recovery remains scant, a commitment from the government, the Bank of Japan, and
Japanese corporations to "turning the ship" appears to be in place. We maintain
our relatively high weighting in Japan, awaiting clearer signs of an
accelerating economic recovery before further increasing exposure. The Asian
recovery seems to be gaining momentum (barring any significant U.S. interest
rate increases); thus, our bias going forward will be to increase our exposure
to emerging markets in the region. Looking at Latin America, we anticipate
maintaining our focus on Mexican shares as the Mexican economy continues to
benefit from economic strength in the U.S., the destination for 80% of Mexican
exports. While U.S. economic growth and corporate earnings continue to surprise
on the upside, we are cautious toward U.S. equity valuations, moving to a
slightly underweight position in the domestic market. Finally, nascent signs of
a return to growth in the UK and Europe are leading us to marginally shift
toward a greater emphasis on cyclicals in those regions. We are increasing our
focus on growth companies benefiting from secular trends in their businesses,
yet tied to the pickup in economic activity.
We would like to thank you for your participation in the Van Eck Global Leaders
Fund, and we look forward to helping you meet your investment needs in the
future.
[PHOTO OMITTED] [PHOTO OMITTED] [PHOTO OMITTED]
/s/ Anne M. Tatlock /s/ Steven J. Miller /s/ E. Alexandra
- ------------------- -------------------- ----------------
ANNE M. TATLOCK STEVEN J. MILLER E. ALEXANDRA
GLOBAL STRATEGIST CO-PORTFOLIO VON STACKELBERG
MANAGER CO-PORTFOLIO MANAGER
July 15, 1999
*All stock market returns are Morgan Stanley Capital International (MSCI)
Indices (with net dividends) in U.S. dollar terms.
+MSCI Pacific ex-Japan Index
10
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VAN ECK GLOBAL LEADERS FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PERFORMANCE RECORD AS OF 6/30/99
- --------------------------------------------------------------------------------
AVERAGE ANNUAL AFTER MAXIMUM BEFORE SALES
TOTAL RETURN SALES CHARGE** CHARGE
- --------------------------------------------------------------------------------
A shares--Life (since 12/20/93) 9.7% 10.9%
- --------------------------------------------------------------------------------
5 years 11.6% 13.0%
- --------------------------------------------------------------------------------
1 year 1.6% 7.8%
- --------------------------------------------------------------------------------
B shares--Life (since 12/20/93) 10.1% 10.2%
- --------------------------------------------------------------------------------
5 years 12.0% 12.3%
- --------------------------------------------------------------------------------
1 year 2.8% 7.4%
- --------------------------------------------------------------------------------
THE PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NOT INDICATIVE OF FUTURE
RESULTS. Investment return and principal value of an investment in the Fund will
vary so that shares, when redeemed, may be worth more or less than their
original cost.
The Adviser is currently waiving certain or all expenses on the Fund. Had the
Fund incurred all expenses, investment returns would have been reduced.
** A shares: maximum sales charge = 5.75% (Prior to 5/1/99 maximum sales charge
was 4.75%.)
B shares: maximum contingent deferred sales charge = 5.00%
GEORGRAPHICAL WEIGHTINGS
JUNE 30, 1999
[picture of pie chart]
Hong Kong 2.1%
Other 10.0%
France 4.3%
Germany 2.5%
Italy 3.2%
Japan 11.4%
Netherlands 2.7%
United Kingdom 8.6%
United States 55.2%
11
<PAGE>
VAN ECK GLOBAL LEADERS FUND
REPRESENTATIVE EQUITY HOLDINGS AS OF JUNE 30, 1999*
- --------------------------------------------------------------------------------
CISCO SYSTEMS, INC.
(U.S., 3.6 %)
Cisco Systems is recognized globally as the leading supplier of products that
help to build the Internet and corporate intranets. Cisco's networking solutions
connect people, computing devices and computer networks, allowing people to
access or transfer information through an open system, enhancing productivity
and efficiency. Cisco sells its products in over 110 countries, with a
significant proportion of its sales to business customers generated via the
Internet. Selling to the "dot.com" companies of the world, Cisco represents a
low risk way to invest in the internet's continued growth.
COMPASS GROUP PLC
(UK, 1.3%)
Compass Group is one of the leading international contract caterers,
with operations in the UK, U.S., Continental Europe and Scandinavia. The
contract catering market is in the midst of a secular growth phase as private
businesses, educational institutions, and government entities continue to
outsource their inhouse dining services. Compass has supplemented the industry
growth potential with several well-timed acquisitions in the major markets
outside of the UK, and is therefore solidly positioned to deliver strong future
earnings growth.
DEVELOPMENT BANK OF SINGAPORE, LTD. (DBS)
(SINGAPORE, 1.0%)
DBS is the largest of the big four Singapore banks and controls over one-half of
the ATM network in Singapore. The banking industry in Singapore is the best
capitalized in the region. DBS has used this to take advantage of the Asian
crisis and build a strong regional franchise. Over the past couple of years it
has built exposure in Thailand, Hong Kong and the Philippines. It has also
acquired Post Office Savings (POS) Bank from the Singapore government. Under the
leadership of its new CEO, John Olds (ex-J.P. Morgan), DBS is carefully
integrating these acquisitions and concentrating on improving its
return-on-equity. DBS is likely to become the region's second most powerful bank
behind HSBC.
EMC CORP.
(U.S., 1.7%)
Every transaction on the Internet needs to be stored. While Cisco Systems is
building the Internet, EMC is warehousing, or storing the Internet. EMC designs
intelligent enterprise storage and retrieval systems. EMC's enterprise storage
systems, software products and services provide information access and storage
solutions for applications such as: online reservation systems, transaction
processing, customer billing, year 2000 compliance, the Internet, corporate
intranets, disaster recovery, data mining and data warehousing. EMC has a $60
billion market capitalization and is directly positioned to benefit from the
projected growth in Internet traffic and e-commerce.
NOKIA OYJ
(FINLAND, 1.6%)
Nokia is a global leader in the manufacturing and development of wireless
telecommunications equipment. We expect the company to continue to grow revenue
and earnings at a rapid pace well into the next century. The main driver of
growth for Nokia should be the continued explosive growth in the use of wireless
technology as wireless data transmission emerges. Wireless growth will lead to
increased demand for both Nokia's cellular phones and cellular infrastructure
equipment. We also believe that Nokia will grow more rapidly than the overall
wireless market as its product offering strength will drive further market share
gains.
NTT MOBILE COMMUNICATIONS NETWORK, INC.
(NTT DOCOMO)
(JAPAN, 1.3%)
NTT DoCoMo is the world's largest single-market provider of cellular services
with a customer base of more than 20 million subscribers who provide the company
with stable growth in cash flow. Despite Japan's economic problems, subscriber
growth continues to be strong and pricing is relatively stable. Earnings growth
is expected to average greater than 10% over the next five years. The stock's
size, earnings stability and growth prospects should continue to support the
stock valuation in a recovering Japanese market.
12
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VAN ECK GLOBAL LEADERS FUND
- --------------------------------------------------------------------------------
TAKEDA CHEMICAL INDUSTRIES
(JAPAN, 1.3%)
Takeda is the largest pharmaceutical company in Japan and the 14th largest in
the world. The company has a well-diversified product line of drugs in the areas
of ulcer, hypertension and diabetes treatments. It stands to benefit from the
impact of demographic trends in Japan and has been successfully restructuring
costs while simultaneously investing in promising new drug areas and expanding
its overseas operations.
TYCO INTERNATIONAL LTD.
(U.S., 1.8%)
Tyco is a diversified manufacturing and service company operating in four
segments. Disposable and Specialty Products makes disposable medical supplies
and other specialty products. Fire and Security Services makes and installs fire
detection and suppression systems and installs and monitors electronic security
systems. Flow Control Products produces pipe, pipe fittings, tubing flow meters,
and other steel products used in a variety of commercial and industrial
applications. Electrical and Electronic Components makes components and designs
and installs undersea cable communication systems. Tyco, with its leading market
share in each of its four business segments, offers superior earnings growth
potential in each of these segments, both domestically and internationally, as
management has proven its ability to successfully integrate its numerous
acquisitions as well as leverage its existing base.
- ---------------
*Portfolio is subject to change.
13
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VAN ECK GOLD/RESOURCES FUND
- --------------------------------------------------------------------------------
Dear Fellow Shareholder:
During the first quarter of 1999, the prices of gold-mining shares and gold
continued their consolidation, which began last October. This consolidation came
after prices rose sharply during the market turmoil at the end of last summer.
During the second quarter, the gold market digested (1) the repeated political
calls by some national leaders for the IMF to sell up to 300 tonnes of gold
(over a ten-year period); and (2) the Swiss referendum that, among other things,
removed the constitutional barrier that prevented the Swiss National Bank from
selling gold. The price of gold rallied from just below $280 an ounce on March
30 to just above $290 an ounce on May 6 and appeared to be heading higher. Gold
shares were also strong. During this period (March 30-May 6), the Van Eck
Gold/Resources Fund had a total return of 24% as the net asset value climbed
from $2.71 a share to $3.37 a share.
Then, on May 7, the British Labor Government unexpectedly announced its decision
to sell 415 tonnes of its gold reserves over "the medium term," thereby reducing
its holdings to 300 tonnes. This cuts the gold portion of its official reserves
from about 16.7% to about 7%. Initially, it planned to sell 125 tonnes over the
next year in five auctions every two months. This announcement, of course,
immediately and seriously damaged market sentiment and the price of gold fell to
$263.10 an ounce on June 30, a 20-year low. Gold/Resources' net asset value fell
to $2.70 a share (which was still above last August's low). For the six months
ended June 30, your Fund had a total return of -11.2%.
The British announcement brought forth positive statements from the world's
major central bankers. On May 19, the governor of the Bank of France said that
the position of the Bank of France and France itself, the Bundesbank, the Bank
of Italy and the United States, (the four main holders of gold in the world),
"is not to sell gold." The next day, the Chairman of the U.S. Federal Reserve
Bank, Alan Greenspan, confirmed that "we should hold our gold. Gold still
represents the ultimate form of payment in the world . . . Fiat money in
extremis is accepted by nobody. Gold is always accepted . . . and is perceived
to be an element of stability in the currency and in the ultimate value of a
currency." The U.S. Secretary of the Treasury Rubin also stated, "I do not think
the United States should sell its gold for a whole host of reasons." In
addition, Bank of England former head of Treasury Smeeton observed, "While
things are undoubtedly pretty benign at the moment it's hardly wise to think it
will be plain sailing forever after. One only needs to consider our rather poor
track record in economic management in the last 25 years." In the British House
of Commons, the British decision was criticized "as a reckless act, which goes
against Britain's national interest." In June, the head of the Banking
Department for the Bank for International Settlements said, "The central banks
will always hold gold. It is still their job to protect the financial system
from crises of confidence in fiat currencies."
Gold investment demand continues to expand and investors are taking advantage of
the lower prices. U.S. Mint Eagle gold coin sales soared 159% during the first
quarter of 1999 over the same 1998 quarter. During the second quarter they were
up 75% over the same 1998 quarter. June sales were 24% ahead of May.
GOLD-MINING SHARES
Gold-mining companies are leveraged to the gold price, with the degree of
leverage dependent on a company's cost structure. As a result of this leverage,
gold shares normally outperform bullion by a wide margin as the gold price
increases and, conversely, underperform relative to bullion in a declining
market. Whereas the gold price has declined 8.9% in the first half, it is highly
unusual that, except for the Australian index, the gold equity indices have
outperformed bullion by as much as 10%! We believe there are several reasons for
this positive divergence: (1) gold bullion has been oversold by short
speculators in the wake of the Bank of England announcement; (2) gold equity
investors are anticipating a higher gold price commensurate with the higher
share valuations; and (3) signs of strength in the Asian economies have improved
the demand outlook for many commodities and rekindled inflationary concerns.
In the first six months of 1999, SOUTH AFRICAN GOLD SHARES gained 1.2% (in U.S.
dollar terms), as measured by the Johannesburg Stock Exchange Gold Index.
Leading the South Africans was Anglogold with a gain of 9.9%. Anglogold
continues to increase its presence globally, becoming a newly appointed member
of the widely followed Philadelphia Gold and Silver Index (XAU). Gold/Resources'
shareholder approval to invest in South African shares became effective on May
1, 1999. At the end of the second quarter, the Fund was 2.6% invested in South
African shares, with positions in Anglogold, Goldfields Limited, Harmony and
Avgold.
NORTH AMERICAN SHARES, as measured by the Toronto Stock Exchange Gold Index and
the Standard and Poor's Gold Index, declined 6.4% and 2.0%, respectively, during
the first six months of the year. Gold/Resources' top holding (14.7% of total
net assets) is Barrick, which declined 0.6% in the first half. Barrick has
reported favorable drilling results from its Pascua project that straddles the
Chilean/Argentine border. These results have turned this into a robust property
capable of producing over 600,000 ounces per year and generating attractive
returns at current gold prices.
14
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VAN ECK GOLD/RESOURCES FUND
- --------------------------------------------------------------------------------
Also outperforming the indices was our next largest holding, Placer Dome, with a
gain of 2.7%. North American shares accounted for 72.4% of Fund assets at
midyear.
AUSTRALIAN PRODUCERS posted a 17.3% decline as gauged by the Australian Stock
Exchange Gold Index (in U.S. dollar terms). The large decline was due to
Australian dollar strength coupled with the low U.S. dollar gold price. This
combination produced new long-term lows in the Aussie dollar gold price.
Ironically, while most Aussie gold shares posted disappointing returns for the
first half, Newcrest's 62% gain was the best performance worldwide. New
management has drawn investor attention with a strong operating performance and
focused growth outlook. As of June 30, 1999 the Fund was 19.6% invested in
Australia, with Newcrest comprising the largest position at 6.3% of assets.
We viewed the Bank of England May 7, 1999 announcement to sell a portion of its
gold reserve as an extraordinary event that would temporarily apply downward
pressure on gold equity prices. To help preserve shareholder value while the
market adjusts to this event, Gold/Resources has acquired a number of non-gold
assets. At midyear, the Fund was 9.1% invested in other natural resource
equities (oil and gas, platinum, timber) that are expected to perform well in a
reflationary environment.
THE OUTLOOK
With (1) probable lower net central bank sales this year compared to last year's
412 tonnes; (2) lease rate pressure reducing mine forward sales; (3) rising
investment demand; (4) strong jewelry demand; (5) reduced gold scrap sales from
last year's Asian crisis; (6) a huge short position; (7) peak bearish sentiment;
and (8) the possible closure of more mines, we believe a good case can be made
that the gold market is close to a major bottom. In fact, in view of these and
the following two additional factors, in our opinion, the price of gold could
gradually rise from its current oversold level to its historic (1913-1998) real
average purchasing power parity with the consumer price index.
POSSIBLE FUTURE NEGATIVE RETURNS ON STOCKS
The current unprecedented rise in U.S. stock prices since 1990 has run at a
compound annual rate of about 20%. It has been fueled by rising profits and
rising valuations. The technology investment boom was supported by swiftly
rising money supply and credit expansion, which fed through to higher output,
higher asset prices and huge speculation--not to higher commodity prices.
However, there are dangerous imbalances in the economy. From 1980 through 1998,
U.S. nominal GDP grew at a compound average annual rate of 6.5% while total debt
climbed at an annual 9.2% rate (see Exhibit I below). The ratio of total debt to
GDP rose from 1.7 in 1980 to 2.7 in 1998. The rate of debt expansion has
recently accelerated. Last year, business, household and financial debt rose by
$2 trillion or 13% over 1997. Financial debt alone rose by $1.1 trillion or 20%
over 1997 (see Exhibit II below).
Exhibit I
DEBT IS GROWING FASTER THAN GDP
[GRAPHIC OMITTED]
EXHIBIT II
FINANCIAL BORROWING IS SOARING
[The following table represents a chart in the printed piece]
Nonfinancial Financial
sector loans sector loans
1960 35 4.9
1961 44 2
1962 53 5
1963 56 7
1964 64 6
1965 67 9
1966 67 11
1967 76 1
1968 93 10
1969 89 28
1970 91 16
1971 135 11
1972 156 24
1973 184 47
1974 175 49
1975 194 3
1976 245 24
1977 321.2 53.6
1978 390.7 75
1979 392 91
1980 344 73
1981 410 104.3
1982 439.9 93
1983 573.7 104.5
1984 791.1 157.7
1985 963.4 205
1986 842.9 327.8
1987 718.5 291.6
1988 786 249
1989 686 225
1990 655 213
1991 468 171
1992 523 244
1993 587 294
1994 577 468
1995 703 456
1996 720 552.1
1997 736.9 652.8
1998 952.5 1116
Nominal GDP grew by $562 billion last year, up 7% over 1997. During the first
quarter of this year, debt growth rates were also approximately the same as in
1998. How risky and sustainable is this debt growth? Is it excessive? Debt
excesses are the mother of every economic crisis because rapidly rising debt
service
15
<PAGE>
VAN ECK GOLD/RESOURCES FUND
- --------------------------------------------------------------------------------
charges eventually squeeze limited income growth and put pressure on spending.
There are already signs of problems. Standard & Poor's reports that despite the
record nine-year expansion in the U.S., the number of companies defaulting on
their bonds is rising sharply, and credit quality is reaching the lowest point
in a decade. Moody's Investor Service also reports that defaults have risen
sharply in the second quarter of the year to the highest number since the end of
the Second World War.
The IMF recently stated that U.S. domestic demand growth, which has been running
at an unsustainable pace, will need to slow eventually in order to reduce the
U.S. current account deficit. The inflow of foreign capital may become less
forthcoming. The private sector savings-investment balance has deteriorated to a
deficit of 5% of GDP, a magnitude that has no precedent, suggesting that a drop
in demand is a potential risk to the U.S. and world economies. The typical boom
ends with rising interest rates. Already, U.S. interest rates have begun to
rise. The IMF suggests a possible "hard landing" scenario, in which the
household savings rate rises, U.S. equity prices fall 30% and the dollar
depreciates around 10%.
In a period of negative returns on stocks, investors seek to protect wealth. In
a flight-to-safety environment, gold has always been included in investment
portfolios as well as other forms of cash. Historian W. Robert Hoye, in
"Institutional Advisors," has studied gold's performance in the stock market
bubbles of 1720, 1772, 1825, 1873 and 1929. In each bubble "the deflated price
of gold has had a significant low in the year the bubble completed." Then gold
rose in the following three years. Investors sought to protect real wealth.
POSSIBLE SUSTAINED FUTURE NEGATIVE REAL SHORT-TERM INTEREST RATES
A longer-term reason for private investment demand to rise is the eventual
probability of future negative real short-term interest rates. For over 50
years, central bankers have followed policies of easy money to promote growth
through relatively lower-than-equilibrium short-term interest rates and credit
expansion. Government debt has been constantly monetized. This policy favors
debtors but discriminates against short-term creditors. In our opinion, central
bankers will undoubtedly follow the same policies during the next recession,
which may well end in a "liquidity trap." A "liquidity trap" is reached when a
nation's demand for goods and services consistently falls short of its capacity
to produce them. The central bank then drives short-term interest rates down to
extremely low levels to stimulate its economy. This policy fails if consumers
react by saving more due to low interest rates to reach their retirement
objectives or to reduce their debt levels and accordingly, spend less. Japan may
have reached this condition. Japanese annual money market rates have been
reduced from 4.6% in 1992 to approximately 0.06% currently. Japanese households
reacted last year by increasing their gold investments by 29% over 1997 and by
70% during the first quarter of this year, compared to a year earlier. Professor
Paul Krugman, author of "The Return of Depression Economics," argues that what
has happened in Japan could also happen in Europe and America. He recommends
"managed inflation" policies to avoid liquidity traps. Thus, investors can
anticipate the probability of extremely low short-term interest rates and
creeping inflation. The consequences could be negative real short-term interest
rates. Gold could, as in the 1970s, become "the only game in town."
POSSIBLE OUTCOME
If, as and when investment conditions again favor the consideration of gold as a
prudent asset class, it would take relatively little additional diversification
of portfolios into gold to result in a major bull market in the price of gold.
It is estimated that, out of an estimated 130,000 tonne global stock of gold,
approximately 60,000 tonnes, worth about $500 billion today, is held by private
investors. This may be equivalent to about 3% of global cash and savings
accounts or 1% of overall global investment portfolios. It is held in the form
of bars, coins and high carat (22-24 carat) jewelry, which is also bought to
preserve wealth. It is the attitude of these global private investors toward
gold compared to other forms of investment, and their confidence in financial
and economic conditions that often determines the price of gold. In the event
that equities have negative returns and short-term interest rates carry negative
real yields, private investors could easily increase their holdings by 2% or
about 1,000 tonnes a year. This possible increase in investment demand is
relatively inelastic and, pushing against a limited supply of gold and an
elastic jewelry demand, could, in our opinion, result in another $850 an ounce
price as in 1980 or even higher.
16
<PAGE>
VAN ECK GOLD/RESOURCES FUND
- --------------------------------------------------------------------------------
We appreciate your participation in the Van Eck Gold/Resources Fund and look
forward to helping you meet your investment needs in the future.
[PHOTO OMITTED] [PHOTO OMITTED] [PHOTO OMITTED]
/s/JOHN C. VAN ECK /s/JOSEPH M. FOSTER /s/SAMUEL S. HEWITT
- ------------------ ------------------- -------------------
JOHN C. VAN ECK JOSEPH M. FOSTER SAMUEL S. HEWITT
CHAIRMAN MANAGEMENT TEAM MANAGEMENT TEAM
MEMBER MEMBER
July 23, 1999
- ----------------------------------------------------------
PERFORMANCE RECORD AS OF 6/30/99
- ----------------------------------------------------------
AFTER MAXIMUM
AVERAGE ANNUAL SALES CHARGE BEFORE SALES
TOTAL RETURN of 5.75% Charge
- ----------------------------------------------------------
Life (since 2/15/86) (1.3)% (0.9)%
- ----------------------------------------------------------
10 years (5.2)% (4.7)%
- ----------------------------------------------------------
5 years (14.7)% (13.7)%
- ----------------------------------------------------------
1 year (21.1)% (16.2)%
- ----------------------------------------------------------
THE PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NOT INDICATIVE OF FUTURE
RESULTS. Investment return and principal value of an investment in the Fund will
vary so that shares, when redeemed, may be worth more or less than their
original cost.
GEOGRAPHICAL WEIGHTINGS
JUNE 30, 1999
[FIGURES BELOW REPRESENT PLOTPOINTS IN PRINTED PIECE]
Australia 19.6% 0.196
Canada 53.0% 0.53
Ghana 4.1% 0.041
South Africa 2.6% 0.026
United States 19.4% 0.194
Cash/Equivalents/\rOther 1.3% 0.013
17
<PAGE>
VAN ECK INTERNATIONAL INVESTORS GOLD FUND
- --------------------------------------------------------------------------------
Dear Fellow Shareholder:
During the first quarter of 1999, the prices of gold-mining shares and gold
continued their consolidation, which began last October. This consolidation came
after prices rose sharply during the market turmoil at the end of last summer.
During the second quarter, the gold market digested (1) the repeated political
calls by some national leaders for the IMF to sell up to 300 tonnes of gold
(over a ten-year period); and (2) the Swiss referendum that, among other things,
removed the constitutional barrier that prevented the Swiss National Bank from
selling gold. The price of gold rallied from just below $280 an ounce on March
30 to just above $290 an ounce on May 6 and appeared to be heading higher. Gold
shares were also strong. During this period (March 30-May 6), the Van Eck
International Investors Gold Fund had a total return of 22% as the net asset
value climbed from $6.00 a share to $7.30 a share.
Then, on May 7, the British Labor Government unexpectedly announced its decision
to sell 415 tonnes of its gold reserves over "the medium term," thereby reducing
its holdings to 300 tonnes. This cuts the gold portion of its official reserves
from about 16.7% to about 7%. Initially, it planned to sell 125 tonnes over the
next year in five auctions every two months. This announcement, of course,
immediately and seriously damaged market sentiment and the price of gold fell to
$263.10 an ounce on June 30, a 20-year low. International Investors' net asset
value fell to $6.03 a share (which was still above last August's low). For the
six months ended June 30, your Fund had a total return of -8.1%.
The British announcement brought forth positive statements from the world's
major central bankers. On May 19, the governor of the Bank of France said that
the position of the Bank of France and France itself, the Bundesbank, the Bank
of Italy and the United States (the four main holders of gold in the world), "is
not to sell gold." The next day, the Chairman of the U.S. Federal Reserve Bank,
Alan Greenspan, confirmed that "we should hold our gold. Gold still represents
the ultimate form of payment in the world . . . Fiat money in extremis is
accepted by nobody. Gold is always accepted . . . and is perceived to be an
element of stability in the currency and in the ultimate value of a currency."
The U.S. Secretary of the Treasury Rubin also stated, "I do not think the United
States should sell its gold for a whole host of reasons." In addition, Bank of
England former head of Treasury Smeeton observed, "While things are undoubtedly
pretty benign at the moment it's hardly wise to think it will be plain sailing
forever after. One only needs to consider our rather poor track record in
economic management in the last 25 years." In the British House of Commons, the
British decision was criticized "as a reckless act, which goes against Britain's
national interest." In June, the head of the Banking Department for the Bank for
International Settlements said, "The central banks will always hold gold. It is
still their job to protect the financial system from crises of confidence in
fiat currencies."
Gold investment demand continues to expand and investors are taking advantage of
the lower prices. U.S. Mint Eagle gold coin sales soared 159% during the first
quarter of 1999 over the same 1998 quarter. During the second quarter they were
up 75% over the same 1998 quarter. June sales were 24% ahead of May.
DIVIDEND NEWS
A quarterly dividend of $.01 a share was paid on June 30, 1999 to shareholders
of record on June 28, 1999. You should have received a check or, if you
participate in the dividend reinvestment plan, a statement showing the number of
shares purchased for your account at net asset value on the dividend
reinvestment date, June 30, 1999.
GOLD-MINING SHARES
Gold-mining companies are leveraged to the gold price, with the degree of
leverage dependent on a company's cost structure. As a result of this leverage,
gold shares normally outperform bullion by a wide margin as the gold price
increases and, conversely, underperform relative to bullion in a declining
market. Whereas the gold price has declined 8.9% in the first half, it is highly
unusual that, except for the Australian index, the gold equity indices have
outperformed bullion by as much as 10%! We believe there are several reasons for
this positive divergence: (1) gold bullion has been oversold by short
speculators in the wake of the Bank of England announcement; (2) gold equity
investors are anticipating a higher gold price commensurate with the higher
share valuations; and (3) signs of strength in the Asian economies have improved
the demand outlook for many commodities and rekindled inflationary concerns.
In the first six months of 1999, SOUTH AFRICAN GOLD SHARES gained 1.2% (in U.S.
dollar terms), as measured by the Johannesburg Stock Exchange Gold Index.
Leading the South Africans was Anglogold, with a gain of 9.9%. Anglogold
continues to increase its presence globally, becoming a newly appointed member
of the widely followed Philadelphia Gold and Silver Index (XAU). Also, the
platinum producers Impala and Anglo American Platinum (Amplats) have had a
spectacular first half, with returns of 84.3% and 69.4%, respectively. The
fundamental supply/demand outlook for platinum and palladium are favorable and
18
<PAGE>
VAN ECK INTERNATIONAL INVESTORS GOLD FUND
- --------------------------------------------------------------------------------
operational improvements have made these companies quite profitable. At the end
of the second quarter, International Investors was 13.9% invested in South
Africa. Our largest holding was Anglogold at 3.2%. Following some profit taking,
Impala and Amplats combined accounted for 5.3% of assets.
NORTH AMERICAN SHARES, as measured by the Toronto Stock Exchange Gold Index and
the Standard and Poor's Gold Index, declined 6.4% and 2.0%, respectively, during
the first six months of the year. International Investors' top holding (8.0% of
assets) is Barrick, which declined 0.6% in the first half. Barrick has reported
favorable drilling results from its Pascua project that straddles the
Chilean/Argentine border. These results have turned this into a robust property
capable of producing over 600,000 ounces per year and generating attractive
returns at current gold prices. Also outperforming the indices was our next
largest holding, Placer Dome, with a gain of 2.7%. North American shares
accounted for 33.9% of Fund assets at midyear.
AUSTRALIAN PRODUCERS posted a 17.3% decline as gauged by the Australian Stock
Exchange Gold Index (in U.S. dollar terms). The large decline was due to
Australian dollar strength coupled with the low U.S. dollar gold price. This
combination produced new long-term lows in the Aussie dollar gold price.
Ironically, while most Aussie gold shares posted disappointing returns for the
first half, Newcrest's 62% gain was the best performance worldwide. New
management has drawn investor attention with a strong operating performance and
focused growth outlook. As of June 30, the Fund was 9.8% invested in Australia,
with Newcrest comprising the largest position at 2.8% of assets.
We viewed the Bank of England's May 7, 1999 announcement to sell a portion of
its gold reserve as an extraordinary event that would temporarily apply downward
pressure on gold equity prices. To help preserve shareholder value while the
market adjusts to this event, the Fund had a relatively high midyear cash and
cash equivalents position. The Fund is also 5.2% invested in other natural
resource equities (oil and gas, base metals, timber) that are expected to
perform well in a reflationary environment.
THE OUTLOOK
With (1) probable lower net central bank sales this year compared to last year's
412 tonnes; (2) lease rate pressure reducing mine forward sales; (3) rising
investment demand; (4) strong jewelry demand; (5) reduced gold scrap sales from
last year's Asian crisis; (6) a huge short position; (7) peak bearish sentiment;
and (8) the possible closure of more mines, we believe a good case can be made
that the gold market is close to a major bottom. In fact, in view of these and
the following two additional factors, in our opinion, the price of gold could
gradually rise from its current oversold level to its historic (1913-1998) real
average purchasing power parity with the consumer price index.
POSSIBLE FUTURE NEGATIVE RETURNS ON STOCKS
The current unprecedented rise in U.S. stock prices since 1990 has run at a
compound annual rate of about 20%. It has been fueled by rising profits and
rising valuations. The technology investment boom was supported by swiftly
rising money supply and credit expansion, which fed through to higher output,
higher asset prices and huge speculation--not to higher commodity prices.
However, there are dangerous imbalances in the economy.
From 1980 through 1998, U.S. nominal GDP grew at a compound average annual rate
of 6.5% while total debt climbed at an annual 9.2% rate (see Exhibit I below).
The ratio of total debt to GDP rose from 1.7 in 1980 to 2.7 in 1998. The rate of
debt expansion has recently accelerated. Last year, business, household and
financial debt rose by $2 trillion or 13% over 1997. Financial debt alone rose
by $1.1 trillion or 20% over 1997 (see Exhibit II below).
EXHIBIT I
DEBT IS GROWING FASTER THAN GDP
[GRAPHIC OMITTED]
EXHIBIT II
FINANCIAL BORROWING IS SOARING
[FIGURES BELOW REPRESENT PLOTPOINTS IN PRINTED PIECE]
Nonfinancial sector loans Financial sector loans
1960 35 4.9
1961 44 2
1962 53 5
1963 56 7
1964 64 6
1965 67 9
1966 67 11
1967 76 1
1968 93 10
1969 89 28
1970 91 16
1971 135 11
1972 156 24
1973 184 47
1974 175 49
1975 194 3
1976 245 24
1977 321.2 53.6
1978 390.7 75
1979 392 91
1980 344 73
1981 410 104.3
1982 439.9 93
1983 573.7 104.5
1984 791.1 157.7
1985 963.4 205
1986 842.9 327.8
1987 718.5 291.6
1988 786 249
1989 686 225
1990 655 213
1991 468 171
1992 523 244
1993 587 294
1994 577 468
1995 703 456
1996 720 552.1
1997 736.9 652.8
1998 952.5 1116
19
<PAGE>
VAN ECK INTERNATIONAL INVESTORS GOLD FUND
- --------------------------------------------------------------------------------
Nominal GDP grew by $562 billion last year, up 7% over 1997. During the first
quarter of this year, debt growth rates were also approximately the same as in
1998. How risky and sustainable is this debt growth? Is it excessive? Debt
excesses are the mother of every economic crisis because rapidly rising debt
service charges eventually squeeze limited income growth and put pressure on
spending. There are already signs of problems. Standard & Poor's reports that
despite the record nine-year expansion in the U.S., the number of companies
defaulting on their bonds is rising sharply, and credit quality is reaching the
lowest point in a decade. Moody's Investor Service also reports that defaults
have risen sharply in the second quarter of the year to the highest number since
the end of the Second World War.
The IMF recently stated that U.S. domestic demand growth, which has been running
at an unsustainable pace, will need to slow eventually in order to reduce the
U.S. current account deficit. The inflow of foreign capital may become less
forthcoming. The private sector savings-investment balance has deteriorated to a
deficit of 5% of GDP, a magnitude that has no precedent, suggesting that a drop
in demand is a potential risk to the U.S. and world economies. The typical boom
ends with rising interest rates. Already, U.S. interest rates have begun to
rise. The IMF suggests a possible "hard landing" scenario, in which the
household savings rate rises, U.S. equity prices fall 30% and the dollar
depreciates around 10%.
In a period of negative returns on stocks, investors seek to protect wealth. In
a flight-to-safety environment, gold has always been included in investment
portfolios as well as other forms of cash. Historian W. Robert Hoye, in
"Institutional Advisors," has studied gold's performance in the stock market
bubbles of 1720, 1772, 1825, 1873 and 1929. In each bubble "the deflated price
of gold has had a significant low in the year the bubble completed." Then gold
rose in the following three years.
POSSIBLE SUSTAINED FUTURE NEGATIVE REAL SHORT-TERM INTEREST RATES
A longer-term reason for private investment demand to rise is the eventual
probability of future negative real short-term interest rates. For over 50
years, central bankers have followed policies of easy money to promote growth
through relatively-lower-than-equilibrium short-term interest rates and credit
expansion. Government debt has been constantly monetized. This policy favors
debtors but discriminates against short-term creditors. In our opinion, central
bankers will undoubtedly follow the same policies during the next recession,
which may well end in a "liquidity trap." A "liquidity trap" is reached when a
nation's demand for goods and services consistently falls short of its capacity
to produce them. The central bank then drives short-term interest rates down to
extremely low levels to stimulate its economy. This policy fails if consumers
react by saving more due to low interest rates to reach their retirement
objectives or to reduce their debt levels and accordingly, spend less. Japan may
have reached this condition. Japanese annual money market rates have been
reduced from 4.6% in 1992 to approximately 0.06% currently. Japanese households
reacted last year by increasing their gold investments by 29% over 1997 and by
70% during the first quarter of this year, compared to a year earlier. Professor
Paul Krugman, author of "The Return of Depression Economics," argues that what
has happened in Japan could also happen in Europe and America. He recommends
"managed inflation" policies to avoid liquidity traps. Thus, investors can
anticipate the probability of extremely low short-term interest rates and
creeping inflation. The consequences could be negative real short-term interest
rates. Gold could, as in the 1970s, become "the only game in town."
POSSIBLE OUTCOME
If, as and when investment conditions again favor the consideration of gold as a
prudent asset class, it would take relatively little additional diversification
of portfolios into gold to result in a major bull market in the price of gold.
It is estimated that, out of an estimated 130,000 tonne global stock of gold,
approximately 60,000 tonnes, worth about $500 billion today, is held by private
investors. This may be equivalent to about 3% of global cash and savings
accounts or 1% of overall global investment portfolios. It is held in the form
of bars, coins and high carat (22-24 carat) jewelry, which is also bought to
preserve wealth. It is the attitude of these global private investors toward
gold compared to other forms of investment, and their confidence in financial
and economic conditions that often determines the price of gold. In the event
that equities have negative real returns and short-term interest rates carry
negative yields, private investors could easily increase their holdings by 2% or
about 1,000 tonnes a year. This possible increase in investment demand is
relatively inelastic and, pushing against a limited supply of gold and an
elastic jewelry demand, could, in our opinion, result in another $850 an ounce
price as in 1980 or even higher.
20
<PAGE>
VAN ECK INTERNATIONAL INVESTORS GOLD FUND
- --------------------------------------------------------------------------------
We appreciate your participation in the Van Eck
International Investors Gold Fund and look forward to helping you meet your
investment needs in the future.
[PHOTO OMITTED] [PHOTO OMITTED] [PHOTO OMITTED]
/s/JOHN C. VAN ECK /s/JOSEPH M. FOSTER /s/SAMUEL S. HEWITT
- ------------------ ------------------- -------------------
JOHN C. VAN ECK JOSEPH M. FOSTER SAMUEL S. HEWITT
CHAIRMAN MANAGEMENT TEAM MANAGEMENT TEAM
MEMBER MEMBER
July 23, 1999
- ----------------------------------------------------------
PERFORMANCE RECORD AS OF 6/30/99
- ----------------------------------------------------------
AFTER MAXIMUM
AVERAGE ANNUAL SALES CHARGE BEFORE SALES
TOTAL RETURN OF 5.75% CHARGE
- ----------------------------------------------------------
Life (since 2/10/56) 8.8% 8.9%
- ----------------------------------------------------------
20 years 5.4% 5.7%
- ----------------------------------------------------------
15 years (2.2)% (1.8)%
- ----------------------------------------------------------
10 years (4.4)% (3.8)%
- ----------------------------------------------------------
5 years (15.0)% (14.0)%
- ----------------------------------------------------------
1 year (14.9)% (9.7)%
- ----------------------------------------------------------
THE PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NOT INDICATIVE OF FUTURE
RESULTS. Investment return and principal value of an investment in the Fund will
vary so that shares, when redeemed, may be worth more or less than their
original cost.
GEOGRAPHICAL WEIGHTINGS+
JUNE 30, 1999
[FIGURES BELOW REPRESENT PLOTPOINTS IN PRINTED PIECE]
Australia 9.8% 0.098
Canada 21.8% 0.218
South Africa 13.9% 0.139
Ghana 2.0% 0.02
Singapore 0.6% 0.006
United States 12.1% 0.121
Cash/Equivalents 39.8% 0.398
+Weightings take option positions into account (See "Schedule of Portfolio
Investment" p.30)
21
<PAGE>
VAN ECK U.S. GOVERNMENT MONEY FUND
- --------------------------------------------------------------------------------
Dear Fellow Shareholder:
The U. S. Government Money Fund continues to meet its objectives as an
investment that provides a high degree of safety and daily liquidity. It also
serves to assist investors who wish to employ our exchange privileges or to use
our checkwriting privileges. The Fund's seven-day average yield was 2.92%* and
its 30-day average yield was 3.08% on June 30, 1999. The Fund's total net assets
were $37.5 million as of June 30, 1999.
During the first half of the year, the yield on three-month Treasury bills
averaged 4.53%. Treasury bill rates reached their lows of 4.25% toward the end
of January on the back of flight-to-quality buying that was sparked by the
devaluation of the Brazilian real (Brazil's currency). Three-month bill rates
then moved higher through the end of February, reaching a high of 4.70% on March
1 as investor nervousness over recent financial market turmoil began to abate.
Treasury bill rates rose steadily during the second quarter as a robust U.S.
economy, a rising stock market, and mounting concern over a potential resurgence
in inflationary pressures caused investors to discount a preemptive tightening
of monetary policy by the Federal Reserve. Officials at the Fed seemed to be in
agreement with this view as they raised the Fed Funds target rate by 25 basis
points (0.25%) to 5.00%, on June 30. On the back of these factors, the
three-month Treasury bill ended the first half at its year-to-date high, with a
yield of approximately 4.80%.
The Fund's investment strategy continues to emphasize safety by investing in
short-term U.S. Treasury obligations and repurchase agreements collateralized by
U.S. Treasury obligations. These obligations are the most conservative money
market investments and offer the highest degree of security since they are
backed by the government. Of course, shares of the Fund are not guaranteed by
the United States Government and there can be no guarantee that the price of the
Fund's shares will not fluctuate.** Repurchase agreements allow us to take
advantage of higher yields without significantly increasing risk. The Fund's
repurchase agreements are collateralized 102% by United States Treasury
obligations with maturities of less than five years. In addition, your Fund has
possession of the collateral.
We plan to continue our general investment strategy of keeping an equal
weighting between U.S. Treasury bills and repurchase agreements over time.
However, repurchase agreements currently offer an attractive yield pickup over
Treasury bills and we will look to place more emphasis on repurchase agreements
while this scenario exists. The U.S. Government Money Fund offers daily
liquidity and checkwriting privileges, providing the kind of convenient access
to cash not available in many other types of investments. The Fund also provides
an excellent base from which investors may transfer money into or out of other
members of the Van Eck Family of Funds.***
We appreciate your participation in the U.S. Government Money Fund and look
forward to helping you meet your investment objectives in the future.
[PHOTO OMITTED]
/s/GREGORY F. KRENZER
- ---------------------
GREGORY F. KRENZER
PORTFOLIO MANAGER
July 16, 1999
- ---------------------
* Performance data represents past performance and is not
indicative of future results.
** There can be no assurance that the Fund will be able to maintain a stable
net asset value of $1.00 per share.
*** Currently, there is no charge imposed on exchanges or limits as to
frequency of exchanges for this Fund. However, shareholders are
limited to six exchanges per calendar year for other Van Eck and Van
Eck/Chubb Funds. The Funds reserve the right to modify or terminate the
terms of the Exchange Privilege.
22
<PAGE>
ASIA DYNASTY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1999 (UNAUDITED)
NO. OF SHARES
OR PRINCIPAL
AMOUNT SECURITIES (A) VALUE (NOTE 1)
- --------------------------------------------------------------------------------
CHINA: 3.2%
40,000 Huaneng Power International Ltd. $ 685,000
7,000,000 Maanshan Iron and Steel Co. Ltd. 640,571
-----------
1,325,571
-----------
HONG KONG: 19.6%
50,000 Cheung Kong (Holdings) Ltd. 444,662
650,000 China Everbright Pacific Ltd. 649,271
335,000 China Telecom (Hong Kong) Ltd. 930,476
600,000 Cosco Pacific Ltd. 498,794
400,000 Giordano International Ltd. 283,551
225,000 Guangdong Kelon Electrical Co., Ltd. 262,447
225,000 HKR International Ltd. 194,298
24,800 HSBC Holdings PLC 904,584
32,000 Hutchison Whampoa Ltd. 289,739
60,000 Johnson Electric Holdings Ltd. 247,464
250,000 Kerry Properties Ltd. 330,274
134,000 Li & Fung Ltd. 321,239
700,000 Orient Overseas International Ltd. 257,130
65,000 Pacific Century Insurance Holdings, Ltd. 52,611
525,000 Paul Y Properties Group Ltd. (c) 524,411
600,000 Sino Land Co. 344,129
4,150,000 South Sea Development Co. 358,371
44,000 Sun Hung Kai Properties Ltd. 401,227
81,000 Television Broadcasts Co. 380,012
113,000 Wing Hang Bank Ltd. 363,379
-----------
8,038,069
-----------
INDIA: 6.2%
500 Dr. Reedy's Laboratories Ltd. 9,602
4,500 Hindustan Lever Ltd. 246,887
45,000 Hindustan Petroleum Corp. 257,780
4,000 Housing Development Finance
Corporation Ltd. 204,887
3,000 Infosys Technologies Ltd. 250,784
4,600 ITC Ltd. 116,166
54,000 Mahanagar Telephone Nigam Ltd. 231,535
6,950 NIIT Ltd. 325,711
22,000 Satyam Computer Services Ltd. 643,040
250 Siemens India Ltd. 1,328
500 Tata Infotech Ltd. 12,264
12,644 Videsh Sanchar Nigam Ltd. 266,404
-----------
2,566,388
-----------
INDONESIA: 7.5%
USD 620,000 PT Astra Overseas Finance Bond
8.75% 8/07/03 (b) 334,800
2,500,000 PT Bank Pan Indonesia 729,927
3,454,500 PT Bimantara Citra 756,459
409,500 PT Indofood Sukses Makmur 561,941
6,000,000 PT Lippo Bank 328,467
900,000 PT Pabrik Kertas Tjiwi Kimia 348,175
-----------
3,059,769
-----------
MALAYSIA: 6.1%
280,000 Berjaya Sports Toto Berhad (c) 643,342
300,000 Commerce Asset Holdings Berhad (c) 736,296
183,000 IOI Properties Berhad (c) 301,018
200,000 MAA Holdings Berhad (c) 417,754
180,000 UMW Holdings Berhad (c) 401,827
-----------
2,500,237
-----------
PHILIPPINES: 6.8%
500,000 Benpres Holdings Corp. $ 118,265
4,200 Benpres Holdings Corp. (GDR) 20,055
3,188,000 International Container Systems, Inc. 414,733
600,000 Jollibee Foods Corp.
Warrants (expiring 3/24/03) 307,490
325,000 La Tondena Distillers, Inc. 384,362
10,105,300 Merto Pacific Corp. 504,601
22,000 Philippine Long Distance
Telephone Co. 670,700
145,000 Philippine National Bank 392,509
-----------
2,812,715
-----------
SINGAPORE: 9.3%
33,000 City Development Ltd. (Class A) 211,252
65,000 Datacraft Asia Ltd. 283,400
67,500 DBS Bank "F" 824,578
95,000 DBS Land Ltd. 189,698
100,000 Natsteel Electronics Ltd. 437,540
39,080 Overseas-Chinese Banking Corp.,
Ltd. "F" 325,915
119,000 Pacific Century Insurance Holdings Ltd. 506,695
25,723 Singapore Press Holdings Ltd. 438,108
49,000 Star Cruises PLC 218,540
50,000 Venture Manufacturing
(Singapore) Ltd. 384,683
-----------
3,820,409
-----------
SOUTH KOREA: 11.3%
9,300 Cheil Jedang Corp. 731,948
26,000 Housing & Commercial Bank, Korea 819,870
30,000 Koram Bank 375,809
8,000 Korea Telecom 530,799
10,000 Pohang Iron & Steel (ADR) 336,250
1,189 S1 Corp. 229,068
80 S1 Corp. Rights (expiring 7/19/99) 3,635
3,786 Samsung Electronics 415,396
605 Samsung Fire & Marine Insurance 425,982
795 SK Telecom Co. Ltd. 768,322
-----------
4,637,079
-----------
TAIWAN: 9.2%
45,000 Acer, Inc. (GDR) 562,500
23,800 Asustek Computers, Inc. 342,720
25,000 Evergreen Marine Corp. 463,125
223,000 R.O.C. Taiwan Fund 1,797,938
17,500 Taiwan Semiconductor
Manufacturing Co.(ADR) 595,000
-----------
3,761,283
-----------
THAILAND: 8.0%
90,000 Bangkok Bank Public Co. Ltd. 196,235
200,000 Capital Nomura Securities Public Co. 612,134
180,000 MBK Properties & Development PLC 147,481
850,000 Quality House Public Co. Ltd. 500,744
100,000 Siam Pulp & Paper Co. Ltd. 216,684
260,000 Shin Corp. PLC 1,147,892
97,000 Thai Farmers Bank Public Co. Ltd. 194,420
75,600 The Pizza Public Company Ltd. 265,173
-----------
3,280,763
-----------
TOTAL STOCKS AND OTHER INVESTMENTS: 87.2%
(Cost: $23,341,446) 35,802,283
-----------
See Notes to Financial Statements
23
<PAGE>
ASIA DYNASTY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1999 (UNAUDITED)
NO. OF
CONTRACTS CALL OPTION PURCHASED: 2.0% VALUE (NOTE 1)
- --------------------------------------------------------------------------------
SINGAPORE: 2.0%
95,000 Singapore Airlines Ltd. Zero Strike
Call Option (expiring 6/08/00)
(cost: $713,514) $ 825,747
-----------
PRINCIPAL
AMOUNT SHORT-TERM OBLIGATION: 0.8%
- --------------------------------------------------------------------------------
USD 335,000 American Express Co. Commercial Paper
due 7/01/99 Interest Yield 5.66%
(Amortized Cost : $335,000) 335,000
-----------
TOTAL INVESTMENTS: 90.0% 36,963,030
(Cost: $24,389,960)
OTHER ASSETS LESS LIABILITIES: 10.0% 4,105,833
-----------
NET ASSETS: 100% $41,068,863
===========
- ----------------------
(a) Unless otherwise indicated, securities owned are shares of common stock.
(b) Security is in default on interest payments.
(c) Restricted security, see Note 8.
GLOSSARY:
ADR - American Depositary Receipt
"F" - Foreign Registry
GDR - Global Depositary Receipt
SUMMARY OF % OF
INVESTMENTS NET
BY INDUSTRY ASSETS
- ------------- -------
Auto 0.8%
Banking 0.5%
Broadcast Media 0.9%
Computer Services, Software & Equipment 4.7%
Conglomerates 2.8%
Consumer Products & Services 1.2%
Electrical Equipment 0.6%
Electronics 3.6%
Energy 1.6%
Engineering & Construction1. 0%
Entertainment & Leisure Time 2.1%
Financial Services & Insurance 18.9%
Foods & Beverages 5.5%
Foreign Government Bonds 4.4%
Forest Products 1.4%
Holding Companies 1.0%
Manufacturing 0.8%
Oil Refining 0.6%
Publishing 1.1%
Real Estate 8.7%
Retail 0.7%
Semiconductors 1.4%
Shipping 4.0%
Steel 2.4%
Technology 2.9%
Telecommunications 13.6%
Call Option Purchased 2.0%
Short-Term Obligation 0.8%
Other assets less liabilities 10.0%
-----
100.0%
=====
See Notes to Financial Statements
24
<PAGE>
GLOBAL HARD ASSETS FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1999 (UNAUDITED)
NO. OF SHARES SECURITIES (A) VALUE (NOTE 1)
- ----------------------------------------------------------------
AUSTRALIA: 4.4%
ENERGY: 1.6%
34,000 Broken Hill Proprietary Co. Ltd. $ 393,146
409,635 Portman Mining Ltd. 178,640
191,788 Portman Mining Ltd. Rights
(expiring 7/19/99) 887
-----------
572,673
-----------
INDUSTRIAL METALS: 1.7%
533,500 Pasminco Ltd. 587,987
-----------
PRECIOUS METALS: 1.1%
255,620 Acacia Resources Ltd. 295,577
341,545 Consolidated Gold NL 6,996
2,250,000 Gullewa Gold NL 56,494
-----------
359,067
-----------
1,519,727
-----------
BRAZIL: 1.4%
FOREST PRODUCTS AND PAPER: 1.4%
22,600 Aracruz Celulose S.A. (ADR) 497,200
-----------
Canada: 19.3%
Energy: 7.6%
15,950 Alberta Energy Company Ltd. 513,186
41,000 AltaGas Service Co., Inc. (b)* 278,893
27,600 Anderson Exploration Ltd. 363,281
39,100 Berkley Petroleum Corp. 328,471
150,000 Cypress Energy, Inc. 607,102
49,800 Interoil Corp. 37,350
160,000 Kappa Energy Company, Inc. 32,651
25,000 Poco Petroleums Ltd. 202,367
144,500 Stellarton Energy Corp. 186,756
333,000 Windsor Energy Corp. (b)* 88,341
-----------
2,638,398
-----------
FOREST PRODUCTS AND PAPER: 3.1%
35,000 Abitibi-Consolidated, Inc. 398,125
11,000 MacMillan Bloedel Ltd. 197,163
37,500 St. Laurent Paperboard, Inc. 477,008
-----------
1,072,296
-----------
PRECIOUS METALS: 1.7%
27,000 Barrick Gold Corp. 523,125
707,700 Brazilian Resources, Inc. 81,837
-----------
604,962
-----------
REAL ESTATE: 6.9%
22,000 Bentall Corp. 229,712
26,000 Boardwalk Equities, Inc. 263,519
30,000 Brookfield Properties Corp. 390,790
20,000 Cadillac Fairview Corp. 377,500
40,000 Oxford Property Group, Inc. 424,461
35,000 TrizecHahn Corp. 713,125
-----------
2,399,107
-----------
6,714,763
-----------
FRANCE: 1.1%
REAL ESTATE: 1.1%
3,500 Societe Fonciere Lyonnaise Warrants
(expiring 7/30/02)* 2,272
3,000 Unibail S.A. 383,637
3,000 Unibail S.A. Warrants
(expiring 5/11/04) $ 14,468
-----------
400,377
-----------
GREECE: 0.1%
INSURANCE: 0.1%
1,830 Interamerican Insurance Co. 40,628
-----------
HONG KONG: 2.5%
REAL ESTATE: 2.5%
40,000 Cheung Kong (Holdings) Ltd. 355,730
230,000 HKR International Ltd. 198,616
35,000 Sun Hung Kai Properties Ltd. 319,158
-----------
873,504
-----------
ITALY: 1.1%
ENERGY: 1.1%
6,500 Ente Nazionale Idrocaburi
S.p.A. (ADR) 390,000
-----------
NETHERLANDS: 1.1%
ENERGY: 1.1%
6,400 Royal Dutch Petroleum Co. 385,600
-----------
NORWAY: 1.4%
ENERGY: 1.4%
46,300 Stolt Comex Seaway S.A. 503,513
-----------
RUSSIA: 3.0%
ENERGY: 3.0%
1,679 Khanty-Mansiysk Oil Co. (b)* 797,525
5,200 Lukoil Holding Corp. (c) 121,768
7,800 Surgutneftegaz, Inc. (ADR) 61,889
7,800 Surgutneftegaz, Inc. Pfd. (ADR) 34,561
-----------
1,015,743
-----------
SINGAPORE: 0.5%
FOREST PRODUCTS AND PAPER: 0.5%
17,000 Asia Pulp and Paper
Company Ltd. (ADR) 163,625
-----------
UNITED KINGDOM: 1.4%
ENERGY:1.1%
3,400 BP Amoco PLC (Sponsored ADR) 368,900
-----------
INDUSTRIAL METALS: 0.3%
36,100 Billiton PLC 126,478
-----------
495,378
-----------
UNITED STATES: 59.3%
ENERGY: 19.9%
25,700 Anadarko Petroleum Corp. 946,081
6,750 Apache Corp. 263,250
17,000 Baker Hughes, Inc. 569,500
8,000 Burlington Resources, Inc. 346,000
20,900 Cooper Cameron Corp. 774,606
9,500 Exxon Corp. 732,688
63,000 Global Industries Ltd. 807,188
24,000 Global Marine, Inc. 370,500
20,900 Marine Drilling Companies, Inc. 286,069
2,100 Mobil Corp. 207,900
36,200 Ocean Energy, Inc. 348,425
See Notes to Financial Statements
25
<PAGE>
GLOBAL HARD ASSETS FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1999 (UNAUDITED)
NO. OF SHARES
OR PRINCIPAL
AMOUNT SECURITIES(A) VALUE (NOTE 1)
- ----------------------------------------------------------------
UNITED STATES: (CONTINUED)
25,700 Santa Fe International Corp. $ 591,100
5,000 Schlumberger Ltd. 318,438
6,000 Texaco, Inc. 375,000
-----------
6,936,745
-----------
FOREST PRODUCTS AND PAPER: 8.0%
10,000 Bowater, Inc. 472,500
8,100 Georgia-Pacific Group 383,738
7,500 Georgia-Pacific Timber Corp. 189,375
9,450 International Paper Co. 477,225
22,600 Plum Creek Timber Company, Inc. 703,425
27,400 Smurfit-Stone Container Corp. 563,413
-----------
2,789,676
-----------
INDUSTRIAL METALS: 7.7%
22,300 AK Steel Holdings Corp. 501,750
10,000 Alcan Aluminium Ltd. 319,375
13,500 Aluminum Co. of America (Alcoa, Inc.) 835,313
19,700 Freeport-McMoran Copper & Gold, Inc. 353,369
6,000 Nucor Corp. 284,625
6,240 Reynolds Metals Co. 368,160
-----------
2,662,592
-----------
PRECIOUS METALS: 6.5%
USD 1,100,000 Business Development Bank of Canada
Yen/Gold Linked Note 4.85% 9/30/99 884,400
28,500 Newmont Mining Co. 566,437
25,000 Stillwater Mining Co. 817,188
-----------
2,268,025
-----------
REAL ESTATE: 17.2%
15,000 AMB Property Corp. 352,500
6,000 Apartment Investment &
Management Co. 256,500
20,000 Bedford Property Investors, Inc. 357,500
9,000 Boston Properties, Inc. 322,875
18,000 Brandywine Realty Trust 356,625
12,000 CarrAmerica Realty Corp. 300,000
20,000 Cornerstone Properties, Inc. 317,500
15,000 Crescent Real Estate Equities Co. 356,250
6,000 Equity Office Properties Trust 153,750
5,000 Equity Residential Properties Trust 225,313
25,000 Host Marriott Corp. 296,875
15,000 Kilroy Realty Corp. 365,625
12,000 Macerich Co. (The) 315,000
12,000 Mack-Cali Realty Corp. 371,250
9,200 New Plan Excel Realty Trust 165,600
10,700 Prentiss Properties Trust 251,450
15,000 ProLogis Trust 303,750
10,000 Simon Property Group, Inc. 253,750
10,000 Starwood Hotels & Resorts
Worldwide, Inc. 305,625
78,618 Wyndham International, Inc. 353,776
-----------
5,981,514
-----------
20,638,552
-----------
TOTAL STOCKS AND OTHER INVESTMENTS: 96.6%
(Cost: $33,550,149) 33,638,610
-----------
NO. OF
CONTRACTS CALL OPTION PURCHASED: 0.1% VALUE (NOTE 1)
- --------------------------------------------------------------------------------
126 August Comex Gold
(strike price @ $265
expiring 7/09/99) (Cost: $25,519) $ 27,720
-----------
PRINCIPAL
AMOUNT SHORT-TERM OBLIGATION: 2.1%
- --------------------------------------------------------------------------------
USD 750,000 General Electric Co.
Commercial Paper due 7/01/99
Interest Yield 5.07%
(Amortized cost: $750,000) 750,000
-----------
TOTAL INVESTMENTS: 98.8%
(Cost: $34,325,668) 34,416,330
-----------
NO. OF
SHARES SECURITIES SOLD SHORT: (1.7%)
- --------------------------------------------------------------------------------
CANADA: (0.7%)
REAL ESTATE: (0.7%)
5,100 Four Seasons Hotels, Inc. (224,719)
-----------
UNITED STATES: (1.0%)
PRECIOUS METALS: (1.0%)
145,000 Battle Mountain Gold Co. (353,437)
-----------
TOTAL SECURITIES SOLD SHORT:
(Proceeds received: $499,748) (578,156)
-----------
TOTAL INVESTMENTS NET OF SECURITIES
SOLD SHORT: 97.1% 33,838,174
OTHER ASSETS LESS LIABILITIES: 2.9% 992,944
-----------
NET ASSETS: 100%
$34,831,118
===========
- --------------------
(a) Unless otherwise indicated, securities owned are shares of common stock.
(b) Restricted security, see Note 8.
(c) Includes securities in the form of American Depositary Receipts (ADR). ADR's
are traded at prices substantially equivalent to those quoted for ordinary
shares.
* Fair value as determined by Board of Trustees.
GLOSSARY:
ADR - American Depositary Receipt
SUMMARY OF % OF
INVESTMENTS NET
BY INDUSTRY ASSETS
- ------------- -------
Energy 36.8%
Forest Products and Paper 13.0%
Industrial Metals 9.7%
Insurance 0.1%
Precious Metals 8.3%
Real Estate 27.0%
Call Option 0.1%
Short-Term Obligation 2.1%
Other assets less liabilities 2.9%
-----
100.0%
=====
See Notes to Financial Statements
26
<PAGE>
GLOBAL LEADERS FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1999 (UNAUDITED)
No. of Shares Securities (a) Value (Note 1)
- -------------------------------------------------------------------------------
Australia: 0.7%
8,500 Brambles Industries Ltd. $ 223,532
----------
Brazil: 0.5%
6,500 Telesp Participacoes S.A. 148,688
----------
Denmark: 0.9%
5,700 ISS International Service
Systems A.S. 304,074
----------
Finland: 1.6%
5,700 Nokia Oyj (Class A) 499,253
----------
France: 4.3%
2,900 AXA S.A. 353,516
1,300 Castorama Dubois
Investissements S.A. 308,105
1,500 Groupe Danone 386,419
700 Havas Advertising S.A. 150,683
1,500 Total S.A. (Class B) 193,363
----------
1,392,086
----------
Germany: 2.5%
3,300 DaimlerChrysler AG 285,641
910 Fresenius AG (Pfd.) 160,817
2,500 Mannesmann AG 372,765
----------
819,223
----------
Greece: 0.4%
5,200 Stet Hellas Telecommunications
S.A. (ADR) 116,350
----------
Hong Kong: 2.1%
32,000 Cheung Kong (Holdings) Ltd. 284,584
10,400 HSBC Holdings PLC 379,342
----------
663,926
----------
Ireland: 1.3%
16,978 Bank of Ireland 283,700
5,400 Elan Corp. PLC 149,850
----------
433,550
----------
Italy: 3.2%
60,000 Credito Italiano S.p.A 263,383
31,000 ENI S.p.A. 184,955
24,000 Mondadori (Arnoldo) Editore
S.p.A. 415,477
17,000 Telecom Italia S.p.A. 176,579
----------
1,040,394
----------
Japan: 11.4%
2,900 Advantest Corp. 318,537
24,000 Bank of Tokyo-Mitsubishi Bank 341,512
14,000 Canon, Inc. 402,362
6,900 Circle K Japan Co. Ltd. 287,203
33,000 Fuji Bank Ltd. 230,020
50,000 Hitachi Ltd. 468,679
1,000 Keyence Corp. 174,918
43,000 Komatsu Ltd. 274,510
3,200 NTT Mobile Communications
Network, Inc. 433,415
1,000 Rohm Co. 156,502
1,600 Sony Corp.(ADR) 176,600
9,000 Takeda Chemical Industries 416,979
----------
3,681,237
----------
Mexico: 1.4%
93,000 Cifra S.A. de C.V. 177,707
3,000 Grupo Televisa S.A.(ADR) 134,438
1,700 Telephonos de Mexico (ADR) 137,381
----------
449,526
----------
Netherlands: 2.7%
10,100 Nutreco Holdings N.V. 358,020
2,100 Royal Dutch Petroleum Co.
(New York Registry Shares)
(ADR)* 126,525
10,028 Wolters Kluwer N.V. 398,867
----------
883,412
----------
Portugal: 0.5%
1,140 Telecel-Comunicacoes
Pessoasis S.A. 146,839
----------
Singapore: 1.0%
27,000 Development Bank of
Singapore, Ltd. 329,829
----------
Spain: 0.0%
456 Banco de Santander S.A. 4,746
----------
Sweden: 1.3%
16,350 ForeningsSparbanken AB (Class A) 231,089
13,000 Securitas AB 194,458
----------
425,547
----------
Switzerland: 1.3%
1,390 UBS AG 414,485
----------
Taiwan: 0.3%
2,500 Taiwan Semiconductors
Manufacturing Co. 85,000
----------
United Kingdom: 8.6%
35,000 Alliance Unich PLC 244,697
15,000 Amvescap PLC 133,955
10,434 British Petroleum Co. PLC 187,345
42,200 Compass Group PLC 418,769
12,052 Glaxo Wellcome PLC 334,758
21,761 Lloyds TSB Group PLC 296,044
40,129 Misys PLC 344,131
12,000 Select Appointments Holdings PLC 288,000
36,000 St. James Place Capital PLC 131,377
20,056 Vodafone Group PLC 395,520
----------
2,774,596
----------
United States: 55.2%
7,500 ADC Telecommunications, Inc. 341,719
3,500 American Express Co.* 455,438
7,000 American International Group,
Inc.* 819,438
4,000 America Online, Inc. 442,000
9,000 AT&T Corp. 502,313
12,500 Bank of New York Co., Inc.* 458,594
8,000 Cardinal Health, Inc. 513,000
10,400 CBS Corp. 451,750
18,000 Cisco Systems, Inc. 1,161,000
6,000 Clear Channel Communications,
Inc. 413,625
13,600 Coastal Corp. 544,000
7,000 Dayton Hudson Corp. 455,000
10,000 EMC Corp. 550,000
27
<PAGE>
GLOBAL LEADERS FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1999 (UNAUDITED)
No. of Shares Securities (a) Value (Note 1)
- -------------------------------------------------------------------------------
United States (continued)
5,600 Exxon Corp. $ 431,900
8,500 Federal National Mortgage
Association 581,188
4,300 General Electric Co. 485,900
8,000 Home Depot, Inc. 515,500
7,900 Intel Corp. 470,050
4,000 International Business Machines
Corp. 517,000
6,300 Lilly (Eli) & Corp. 451,238
12,000 Lucent Technologies, Inc. 809,250
15,700 Masco Corp. 453,338
6,200 Maytag Corp. 432,063
5,287 MCI WorldCom, Inc. 456,004
8,000 Merck & Co., Inc. 592,000
6,800 Microsoft Corp. 613,275
4,000 Pfizer, Inc. 439,000
5,500 Pharamacia & Upjohn, Inc. 304,467
4,700 Procter & Gamble Co.* 419,475
7,400 Schlumberger Ltd. 471,288
9,000 Solectron Corp. 600,188
15,900 Staples, Inc. 491,906
6,000 Tyco International Ltd. 568,500
7,500 United Technologies Corp. 537,649
-----------
17,749,056
-----------
Total Stocks: 101.3%
(Cost: $23,907,452) 32,585,349
OTHER ASSETS LESS LIABILITIES: (1.3%) (427,654)
-----------
NET ASSETS: 100% $32,157,695
===========
- --------------------------------------------------------
(a) Unless otherwise indicated, securities owned are
shares of common stock.
* These securities are segregated for forward
foreign currency contracts.
Glossary:
ADR - American Depositary Receipt
SUMMARY OF % OF
INVESTMENTS NET
BY INDUSTRY ASSETS
- ------------- -------
Auto & Truck 0.9%
Banks 9.6%
Building & Construction 1.4%
Communications 1.3%
Drug & Healthcare 4.8%
Durables 1.3%
Electronic Data Processing,
Office Equipment & Supplies 6.3%
Electronics & Electrical Equipment 17.2%
Financial Services 4.0%
Food & Household Products 4.9%
Holding Companies 0.4%
Insurance 3.7%
Machinery 2.0%
Manufacturing 3.4%
Medical Products & Supplies 3.0%
Natural Gas-Pipelines 1.7%
Office Equipment & Supplies 1.3%
Oil-Integrated 2.9%
Oil Services & Products 2.1%
Other Services 3.1%
Pharmaceuticals 3.4%
Publishing & Broadcasting 4.8%
Real Estate 0.9%
Retail 7.0%
Science & Technology 5.0%
Telecommunications 1.1%
Utilities 3.8%
Other assets less liabilities (1.3%)
-----
100.0%
=====
See Notes to Financial Statements
28
<PAGE>
GLOBAL/RESOURCES FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1999 (UNAUDITED)
NO. OF SHARES SECURITIES (A) VALUE (NOTE 1)
- ---------------------------------------------------------------
AUSTRALIA: 19.6%
1,500,000 Acacia Resources Ltd. $ 1,734,469
1,147,189 Delta Gold NL 1,629,711
1,041,381 Lihir Gold Ltd. 784,425
1,143,215 Newcrest Mining Ltd. 2,562,246
500,000 Normandy Mining Ltd. 332,357
500,000 Red Back Mining NL 85,898
358,900 Resolute Ltd. 180,229
300,000 Ross Mining NL 126,864
230,523 Sons of Gwalia Ltd. 605,769
----------
8,041,968
----------
CANADA: 53.0%
38,000 Abitibi-Consolidated, Inc. 436,841
166,800 Agnico-Eagle Mines Ltd. 1,032,075
125,000 Barrick Gold Corp. 6,037,579
25,000 Berkley Petroleum Corp. 210,019
USD 1,000,000 Business Development Bank of Canada
Yen/Gold Linked Note 4.85%,
9/30/99 804,000
87,500 Central Fund of Canada Ltd.
(Class A) 328,125
200,000 Claude Resources, Inc. 199,986
74,700 Cumberland Resources Ltd. 104,166
157,600 Euro-Nevada Mining Corp. 1,886,783
73,000 Franco Nevada Mining Co. 1,137,133
291,600 Geomaque Explorations Ltd. 156,699
178,600 Goldcorp, Inc. (Class A) 863,000
182,000 IAMGOLD, International African
Mining Gold Corp. 371,403
511,200 Meridian Gold, Inc. 2,381,960
385,245 Placer Dome, Inc. 4,550,713
416,200 Richmont Mines, Inc. 806,863
239,800 Romarco Minerals, Inc. 233,258
146,500 Solitario Resources Corp. 123,569
27,000 TVX Gold, Inc. 27,000
----------
21,691,172
----------
GHANA: 4.1%
236,000 Ashanti Goldfields Co. Ltd.
(Sponsored GDR) 1,637,250
30,191 Ashanti GSM Ltd. (Series C) 64,155
----------
1,701,405
----------
SOUTH AFRICA: 2.6%
16,000 Anglogold Ltd. (Sponsored ADR) 344,000
479,400 Avgold Ltd. 251,685
62,000 Goldfields Ltd. 213,125
55,800 Harmony Gold Mining Co. 270,285
----------
1,079,095
----------
UNITED STATES: 19.4%
13,200 AK Steel Holding Corp. 297,000
10,000 Anadarko Petroleum Corp. 368,125
287,972 Battle Mountain Canada, Inc. 701,931
(Exchangeable Shares)
56,300 Battle Mountain Gold Co.
(Class A) 137,231
228,700 Crown Resources Corp. 371,636
288,000 Glamis Gold Ltd. 522,000
375,101 Homestake Mining Co. 3,071,139
60,000 Ocean Energy, Inc. 577,500
1,000,000 Piedmont Mining Co., Inc. (b) 80,000
55,750 Stillwater Mining Co. 1,822,328
-----------
7,948,890
-----------
Total Stocks and Other Investments: 98.7%
(Cost: $37,876,545) 40,462,530
-----------
No. of
Contracts Put Options Purchased: 0.1% Value (Note 1)
- ---------------------------------------------------------
900 Philadephia Gold & Silver Index
(strike price @ $55.00
expiring 7/17/99) $ 28,125
400 Philadephia Gold & Silver Index
(strike price @ $60.00
expiring 7/17/9 9) 25,000
---------
Total Put Options Purchased
(Cost: $285,300) 53,125
---------
Principal
Amount Short-Term Obligation: 2.8%
- --------------------------------------------------------
USD1,160,000 American Express Co. Commercial Paper
due 7/01/99 Interest Yield 5.50%
(Amortized Cost: $1,160,000) 1,160,000
----------
TOTAL INVESTMENTS: 101.6%
(Cost: $39,321,845) 41,675,655
OTHER ASSETS LESS LIABILITIES: (1.6%) (689,985)
-----------
NET ASSETS: 100% $40,985,670
===========
- --------------------------------------------------------
(a) Unless otherwise indicated, securities owned are shares of common stock.
(b) Affiliated company, see Schedule of Affiliated Company Transactions (Note 9)
GLOSSARY:
ADR - American Depositary Receipt
GDR - Global Depositary Receipt
SUMMARY OF % OF
INVESTMENTS NET
BY INDUSTRY ASSETS
- ------------- ------
Forest Products 1.1%
Gold Mining 89.6%
Industrial Metals-Diversified 0.7%
Oil & Gas Exploration 2.8%
Platinum/Palladium/Rhodium 4.5%
Put Options Purchased 0.1%
Short-Term Obligation 2.8%
Other assets less liabilities (1.6%)
-----
100.0%
=====
See Notes to Financial Statements
29
<PAGE>
INTERNATIONAL INVESTORS GOLD FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1999 (UNAUDITED)
AUSTRALIA: 9.8%
4,640,000 Acacia Resources Ltd. $ 5,365,290
2,837,400 Delta Gold N.L. 4,030,845
4,107,102 Lihir Gold Ltd. 3,093,695
2,940,750 Newcrest Mining Ltd. 6,590,997
2,844,941 Normandy Mining Ltd. 1,891,073
1,000,396 Resolute Ltd. 502,368
528,800 Sons of Gwalia Ltd. 1,389,584
------------
22,863,852
------------
CANADA: 21.1%
140,000 Abitibi-Consolidated, Inc. 1,609,414
192,300 Agnico-Eagle Mines Ltd. 1,189,856
959,871 Barrick Gold Corp. 18,597,504
423,200 Euro-Nevada Mining Corp. 5,066,539
149,000 Franco Nevada Mining Corp. 2,320,998
250,000 Geomaque Explorations Ltd. 134,344
254,300 GoldCorp., Inc. (Class A) 1,271,500
90,000 Inco Ltd. 1,620,000
1,326,500 Meridian Gold, Inc. 6,180,889
866,275 Placer Dome, Inc. 10,232,873
350,000 Richmont Mines, Inc. 678,525
111,500 Romarco Minerals, Inc. 108,458
146,000 TVX Gold, Inc. 146,000
------------
49,156,900
------------
GHANA: 2.0%
647,400 Ashanti Goldfields Co. Ltd.
(Sponsored GDR) 4,768,838
------------
SINGAPORE: 0.6%
145,000 Asia Pulp & Paper (ADR) 1,395,625
------------
SOUTH AFRICA: 13.9%
233,957 Anglo American Platinum
Corporation Ltd. (ADR) 5,424,878
50,860 Anglogold Ltd. 2,186,980
239,649 Anglogold Ltd.(ADR) 5,152,454
4,630,755 Avgold Ltd. 2,431,146
1,240,862 Gold Fields Ltd. (ADR) 4,265,463
6,280,215 Gold Fields of South
Africa Ltd. (ADR) 2,310,779
801,140 Harmony Gold
Mining Co. Ltd. (ADR) 3,880,521
274,000 Impala Platinum
Holdings Ltd. (ADR) 6,850,002
------------
32,502,223
------------
United States: 11.5%
84,800 AK Steel Holding Corp. 1,908,000
55,000 Anadarko Petroleum Corp. 2,024,688
222,700 Battle Mountain Gold Co. 542,831
30,000 Bowater, Inc. 1,417,500
USD 6,000,000 Business Development Bank of
Canada Yen/Gold Linked Note
4.85% 11/17/99 5,634,000
750,000 Glamis Gold Ltd. 1,359,375
592,939 Homestake Mining Co. 4,854,688
118,000 Newmont Mining Corp. 2,345,250
220,000 Ocean Energy, Inc. 2,117,500
1,270,000 Piedmont Mining Co., Inc. (b) 101,600
130,000 Stillwater Mining Co. 4,249,375
------------
26,554,807
------------
TOTAL STOCKS AND OTHER INVESTMENTS: 58.9%
(Cost: $121,378,999) 137,242,245
------------
NO. OF
CONTRACTS CALL OPTIONS PURCHASED: 1.3% VALUE (NOTE 1)
- --------------------------------------------------------------------------------
800,000 Homestake Mining Co.
(strike price @ $7.50
expiring 1/22/00) $ 1,500,000
500,000 Placer Dome, Inc.
(strike price @ $10.00
expiring 1/22/00) 1,531,250
------------
TOTAL CALL OPTIONS PURCHASED
(Cost: $2,807,750) 3,031,250
------------
Put Options Purchased: 0.0%
- --------------------------------------------------------------------------------
3,100 Philadelphia Gold & Silver
Index (strike price @ $55.00
expiring 7/17/99) 96,875
1,600 Philadelphia Gold & Silver
Index (strike price
@ $60.00 expiring 7/17/99) 100,000
------------
TOTAL PUT OPTIONS PURCHASED
(Cost: $1,037,120) 196,875
------------
PRINCIPAL
AMOUNT SHORT-TERM OBLIGATIONS: 35.4%
- --------------------------------------------------------------------------------
$20,000,000 American Express Corp.
Commercial Paper
due 7/01/99 Interest
Yield 5.58% 20,000,000
20,000,000 General Electric Capital Corp.
Commercial Paper
due 7/01/99 Interest
Yield 5.07% 20,000,000
U.S. Treasury Bills
13,000,000 due 7/22/99 Interest
Yield 4.21% 12,968,529
10,000,000 due 9/23/99 Interest
Yield 4.67% 9,892,433
20,000,000 due 10/28/99 Interest
Yield 4.68% 19,694,567
------------
Total Short-Term Obligations
(Amortized Cost: $82,555,529) 82,555,529
------------
Total Investments: 95.6%
(Cost: $207,779,389) 223,025,899
Other assets less liabilities: 4.4% 10,277,570
------------
Net Assets: 100% $233,303,469
============
- ----------
(a) Unless otherwise indicated, securities owned are shares of common stock.
(b) Affiliated company, see Schedule of Affiliated Company Transactions (Note
9).
GLOSSARY:
ADR - American Depositary Receipt
GDR - Global Depositary Receipt
SUMMARY OF % OF
INVESTMENTS NET
BY INDUSTRY ASSETS
- ------------- -------
Gold & Silver 46.5%
Industrial Metals-Diversified 1.5%
Oil & Gas Exploration 1.8%
Paper & Forest Products 1.9%
Platinum/Palladium/ Rhodium 7.1%
Precious Metals-Finance
Options Purchased 1.4%
Short-Term Obligations 35.4%
Other assets less liabilities 4.4%
-----
100.0%
=====
See Notes to Financial Statements
30
<PAGE>
U.S. GOVERNMENT MONEY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1999 (UNAUDITED)
ANNUALIZED YIELD
AT TIME OF
PRINCIPAL MATURITY PURCHASE OR VALUE
AMOUNT DATE COUPON RATE (NOTE 1)
- -----------------------------------------------------------
U.S. TREASURY BILLS: 96.0%
$14,300,000 8/26/99 4.37% $14,204,126
10,000,000 9/23/99 4.59% 9,894,534
-----------
TOTAL U.S. TREASURY BILLS
(Amortized Cost: $24,098,660) 24,098,660
-----------
REPURCHASE AGREEMENTS: 54.2% (NOTE 12):
$6,800,000
(Cost: $6,800,000)
Purchased on 6/30/99;
maturity value-
$6,800,878 (with
Merrill Lynch & Co., Inc.
collateralized by
$6,905,000 U.S. Treasury
Note due 5/31/00 with
an interest rate of
5.50% with a value
of $6,996,500) 7/01/99 4.65% 6,800,000
$6,800,000
(Cost: $6,800,000)
Purchased on 6/30/99;
maturity value--
$6,800,987 (with
PaineWebber Group, Inc.
collateralized by
$6,910,000 U.S. Treasury
Note due 11/30/00 with
an interest rate of
5.63% with a value
of $6,942,170) 7/01/99 4.75% 6,800,000
-----------
Total Repurchase Agreements
(Cost: $13,600,000) 13,600,000
-----------
TOTAL INVESTMENTS: 150.2%
(Cost: $37,698,660) 37,698,660
OTHER ASSETS LESS LIABILITIES: (50.2%) (12,599,753)
-----------
NET ASSETS: 100% $25,098,907
===========
See Notes to Financial Statements
31
<PAGE>
VAN ECK FUNDS
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
ASIA DYNASTY GLOBAL HARD ASSETS GLOBAL
FUND FUND LEADERS FUND
------------ ------------------ --------------
ASSETS:
<S> <C> <C> <C>
Investments at cost ................................. $ 24,389,960 $ 34,325,668 $ 23,907,452
============= ============= =============
Investments at value (Note 1) ....................... $ 36,963,030 $ 34,416,330 $ 32,585,349
Cash ................................................ 789,470 2,264,708 --
Cash--initial margin ................................ 323,229 38,990 --
Segregated cash for short sales (Note 1) ............ -- 1,294,349 --
Receivables:
Capital shares sold ............................... 2,570,180 30,910 36,079
Securities sold ................................... 844,615 499,748 264,480
Due from broker (Note 11) ......................... -- 8,970 --
Interest and dividends ............................ 32,535 115,853 53,823
Unrealized appreciation on open
forward foreign currency contracts (Note 6) ....... -- -- 28,650
Deferred organization costs and other assets (Note 1) 94,720 20,753 --
------------- ------------- -------------
Total assets .................................. 41,617,779 38,690,611 32,968,381
------------- ------------- -------------
LIABILITIES:
Payables:
Due to custodian .................................. -- -- 86,421
Securities purchased .............................. 440,665 2,734,167 173,583
Dividends payable ................................. -- 15,465 --
Capital shares redeemed ........................... 23,824 117,916 414,983
Due to broker (Note 11) ........................... 44,175 -- --
For securities sold short ......................... -- 272,800 --
Accounts payable .................................. 40,252 140,989 110,860
Securities sold short, at value
(proceeds $499,748) (Note 1) ...................... -- 578,156 --
Unrealized depreciation on open forward
foreign currency contracts (Note 6) ............... -- -- 24,839
------------- ------------- -------------
Total liabilities ............................. 548,916 3,859,493 810,686
------------- ------------- -------------
NET ASSETS .......................................... $ 41,068,863 $ 34,831,118 $ 32,157,695
============= ============= =============
CLASS A SHARES+:
Net assets .......................................... $ 32,726,333 $ 25,733,863 $ 26,914,450
============= ============= =============
Shares outstanding .................................. 2,476,253 2,157,563 2,434,797
============= ============= =============
Net asset value and redemption price per share ...... $ 13.22 $ 11.93 $ 11.05
============= ============= =============
Maximum offering price per share
(NAV/(1--maximum sales commission)) ............... $ 14.03 $ 12.66 $ 11.72
============= ============= =============
CLASS B SHARES:
Net assets .......................................... $ 8,342,530 $ 5,219,870 $ 5,243,245
============= ============= =============
Shares outstanding .................................. 655,485 436,178 479,455
============= ============= =============
Net asset value, maximum offering and
redemption price per share (Redemption may be
subject to a contingent deferred sales charge
within the first six years of ownership) .......... $ 12.73 $ 11.97 $ 10.94
============= ============= =============
CLASS C SHARES:
Net assets .......................................... -- $ 3,877,385 --
=============
Shares outstanding .................................. -- 323,100 --
=============
Net asset value, maximum offering and
redemption price per share (Redemption may be
subject to a contingent deferred sales charge
within the first year of ownership) ............... -- $ 12.00 --
=============
Net assets consist of:
Aggregate paid in capital ......................... $ 27,935,224 $ 48,255,269 $ 22,394,192
Unrealized appreciation (depreciation) of
investments, options, short sales, swaps,
futures, foreign forward currency
contracts and foreign currencies ................ 12,522,600 (5,972) 8,681,883
Undistributed (overdistributed)
net investment income (loss) .................... (229,925) (12,922) (299,624)
Accumulated realized gain (loss) .................. 840,964 (13,405,257) 1,381,244
------------- ------------- -------------
$ 41,068,863 $ 34,831,118 $ 32,157,695
============= ============= =============
</TABLE>
- ----------
+ The U.S. Government Money Fund does not have a designated class of shares.
32
<PAGE>
<TABLE>
<CAPTION>
INTERNATIONAL
GOLD/RESOURCES INVESTORS U.S. GOVERNMENT
FUND GOLD FUND MONEY FUND
---------------- ---------------- ------------------
ASSETS:
<S> <C> <C> <C>
Investments at cost ................................. $ 39,321,845 $ 207,779,389 $ 37,698,660
============= ============= =============
Investments at value (Note 1) ....................... $ 41,675,655 $ 223,025,899 $ 37,698,660
Cash ................................................ -- 2,212,396 6,951
Cash--initial margin ................................ -- -- --
Segregated cash for short sales (Note 1) ............ -- -- --
Receivables:
Capital shares sold ............................... 201,011 13,112,546 604,170
Securities sold ................................... 121,225 460,089 --
Due from broker (Note 11) ......................... -- -- --
Interest and dividends ............................ 42,037 205,359 1,776
Unrealized appreciation on open
forward foreign currency contracts (Note 6) ....... -- -- --
Deferred organization costs and other assets (Note 1) -- -- --
------------- ------------- -------------
Total assets .................................. 42,039,928 239,016,289 38,311,557
------------- ------------- -------------
LIABILITIES:
Payables:
Due to custodian .................................. 38,102 -- --
Securities purchased .............................. 875,336 5,037,294 --
Dividends payable ................................. -- 60,263 22,839
Capital shares redeemed ........................... 19,992 198,971 13,107,020
Due to broker (Note 11) ........................... -- -- --
For securities sold short ......................... -- -- --
Accounts payable .................................. 120,828 416,292 82,791
Securities sold short, at value
(proceeds $499,748) (Note 1) ...................... -- -- --
Unrealized depreciation on open forward
foreign currency contracts (Note 6) ............... -- -- --
------------- ------------- -------------
Total liabilities ............................. 1,054,258 5,712,820 13,212,650
------------- ------------- -------------
NET ASSETS .......................................... $ 40,985,670 $ 233,303,469 $ 25,098,907
============= ============= =============
CLASS A SHARES+:
Net assets .......................................... $ 40,985,670 $ 233,303,469 $ 25,098,907
============= ============= =============
Shares outstanding .................................. 15,199,717 38,666,462 25,108,780
============= ============= =============
Net asset value and redemption price per share ...... $ 2.70 $ 6.03 $ 1.00
============= ============= =============
Maximum offering price per share
(NAV/(1--maximum sales commission)) ............... $ 2.86 $ 6.40 --
============= ============= =============
CLASS B SHARES:
Net assets .......................................... -- -- --
Shares outstanding .................................. -- -- --
Net asset value, maximum offering and
redemption price per share (Redemption may be
subject to a contingent deferred sales charge
within the first six years of ownership) .......... -- -- --
CLASS C SHARES:
Net assets .......................................... -- -- --
Shares outstanding .................................. -- -- --
Net asset value, maximum offering and
redemption price per share (Redemption may be
subject to a contingent deferred sales charge
within the first year of ownership) ............... -- -- --
Net assets consist of:
Aggregate paid in capital ......................... $ 106,938,491 $ 236,247,336 $ 25,108,780
Unrealized appreciation (depreciation) of
investments, options, short sales, swaps,
futures, foreign forward currency
contracts and foreign currencies ................ 2,353,603 15,246,992 --
Undistributed (overdistributed)
net investment income (loss) .................... (762,963) (258,393) --
Accumulated realized gain (loss) .................. (67,543,461) (17,932,466) (9,873)
------------- ------------- -------------
$ 40,985,670 $ 233,303,469 $ 25,098,907
============= ============= =============
</TABLE>
33
<PAGE>
VAN ECK FUNDS
STATEMENT OF OPERATIONS
Six Months Ended June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
ASIA DYNASTY GLOBAL HARD
FUND ASSETS FUND
------------- --------------
<S> <C> <C>
INCOME:
Dividends ............................................................ $ 351,033 $ 398,066
Interest ............................................................. 10,084 88,194
Foreign taxes withheld ............................................... (98,399) (32,629)
----------- ----------
Total income 262,718 453,631
----------- ----------
EXPENSES:
Management (Note 2) .................................................. 78,881 160,693
Distribution Class A (Note 4) ........................................ 38,702 57,697
Distribution Class B (Note 4) ........................................ 27,770 25,881
Distribution Class C (Note 4) ........................................ -- 19,418
Administration (Note 2) .............................................. 31,883 10,063
Transfer agent ....................................................... 40,732 78,440
Professional ......................................................... 19,740 16,069
Reports to shareholders .............................................. 4,705 17,333
Registration ......................................................... 9,052 17,333
Custodian ............................................................ 7,414 16,412
Trustees' fees and expenses .......................................... 2,338 6,849
Amortization of deferred organization costs .......................... -- 3,915
Other ................................................................ 4,888 13,698
----------- ----------
Total expenses ....................................................... 266,105 443,801
Expenses assumed by the Adviser (Note 2) -- (92,186)
----------- ----------
Net expenses ......................................................... 266,105 351,615
----------- ----------
Net investment income (loss) ......................................... (3,387) 102,016
----------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 3):
Realized gain (loss) from security transactions ...................... 3,027,322 (2,746,192)
Realized gain from futures contracts and short sales ................. 80,166 189,990
Realized loss from options ........................................... -- (9,929)
Realized gain (loss) from foreign currency transactions .............. (146,804) (13,829)
Change in unrealized appreciation (depreciation) of foreign
currencies and forward foreign currency contracts .................. 19,820 (27,717)
Change in unrealized appreciation (depreciation) of investments,
futures, swaps, short sales and options ............................ 9,921,058 6,886,618
----------- ----------
Net gain (loss) on investments and foreign currency .................. 12,901,562 4,278,941
----------- ----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS .......................................... $12,898,175 $4,380,957
=========== ==========
</TABLE>
See Notes to Financial Statements
34
<PAGE>
VAN ECK FUNDS
STATEMENT OF OPERATIONS
Six Months Ended June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
GLOBAL LEADERS GOLD/RESOURCES
FUND FUND
-------------- ---------------
<S> <C> <C>
INCOME:
Dividends ............................................................ $ 152,785 $ 373,895
Interest ............................................................. 276,986 131,369
Foreign taxes withheld ............................................... (13,075) (19,522)
------------ ----------
Total income 416,696 485,742
------------ ----------
EXPENSES:
Management (Note 2) .................................................. 122,285 175,576
Distribution Class A (Note 4) ........................................ 67,223 58,525
Distribution Class B (Note 4) ........................................ 28,600 --
Distribution Class C (Note 4) ........................................ -- --
Administration (Note 2) .............................................. 47,793 84,142
Transfer agent ....................................................... 58,771 153,002
Professional ......................................................... 17,223 21,929
Reports to shareholders .............................................. 19,161 24,816
Registration ......................................................... 11,822 10,881
Custodian ............................................................ 10,614 6,419
Trustees' fees and expenses .......................................... 3,261 7,830
Amortization of deferred organization costs .......................... -- --
Other ................................................................ 4,790 52,156
------------ ----------
Total expenses ....................................................... 391,543 595,276
Expenses assumed by the Adviser (Note 2) (51,150) --
------------ ----------
Net expenses ......................................................... 340,393 595,276
------------ ----------
Net investment income (loss) ......................................... 76,303 (109,534)
------------ ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 3):
Realized gain (loss) from security transactions ...................... 1,233,996 (8,440,514)
Realized gain from futures contracts and short sales ................. -- --
Realized loss from options ........................................... -- (228,656)
Realized gain (loss) from foreign currency transactions .............. (23,671) (13,373)
Change in unrealized appreciation (depreciation) of foreign
currencies and forward foreign currency contracts .................. 13,887 (7,102)
Change in unrealized appreciation (depreciation) of investments,
futures, swaps, short sales and options ............................ (390,982) 3,292,336
------------ ----------
Net gain (loss) on investments and foreign currency .................. 833,230 (5,397,309)
------------ ----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS .......................................... $ 909,533 $(5,506,843)
============ ==========
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL INVESTORS U.S. GOVERNMENT
GOLD FUND MONEY FUND
----------------------- -----------------
<S> <C> <C>
INCOME:
Dividends ............................................................ $ 1,597,685 --
Interest ............................................................. 1,161,764 $1,677,513
Foreign taxes withheld ............................................... (70,868) --
---------- ----------
Total income 2,688,581 1,677,513
---------- ----------
EXPENSES:
Management (Note 2) .................................................. 736,662 190,954
Distribution Class A (Note 4) ........................................ 78,165 95,477
Distribution Class B (Note 4) ........................................ -- --
Distribution Class C (Note 4) ........................................ -- --
Administration (Note 2) .............................................. 319,502 33,715
Transfer agent ....................................................... 495,258 36,470
Professional ......................................................... 40,395 10,855
Reports to shareholders .............................................. 92,059 26,669
Registration ......................................................... 15,925 15,632
Custodian ............................................................ 7,276 34,438
Trustees' fees and expenses .......................................... 27,324 10,477
Amortization of deferred organization costs .......................... -- --
Other ................................................................ 145,300 14,589
---------- ----------
Total expenses ....................................................... 1,957,866 469,276
Expenses assumed by the Adviser (Note 2) -- --
---------- ----------
Net expenses ......................................................... 1,957,866 469,276
---------- ----------
Net investment income (loss) ......................................... 730,715 1,208,237
---------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 3):
Realized gain (loss) from security transactions ...................... 2,832,399 (9,873)
Realized gain from futures contracts and short sales ................. -- --
Realized loss from options ........................................... (507,469) --
Realized gain (loss) from foreign currency transactions .............. (127,146) --
Change in unrealized appreciation (depreciation) of foreign
currencies and forward foreign currency contracts .................. 57,658 --
Change in unrealized appreciation (depreciation) of investments,
futures, swaps, short sales and options ............................ (10,191,026) --
---------- ----------
Net gain (loss) on investments and foreign currency .................. (7,935,584) (9,873)
---------- ----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS .......................................... $(7,204,869) $1,198,364
========== ==========
</TABLE>
See Notes to Financial Statements
35
<PAGE>
VAN ECK FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
ASIA DYNASTY GLOBAL HARD ASSETS
FUND FUND
------------------------------------------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31,
1999 (UNAUDITED) 1998 1999 (UNAUDITED) 1998
---------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income (loss) $ (3,387) $ (50,259) $ 102,016 $ 254,796
Realized gain (loss) from security transactions 3,027,322 (2,143,295) (2,746,192) (11,838,909)
Realized gain (loss) from futures contracts and short sales 80,166 (84,091) 189,990 981,114
Realized gain (loss) from options -- (150,000) (9,929) 29,667
Realized gain (loss) from foreign currency transactions (146,804) (160,175) (13,829) 259,365
Change in unrealized appreciation (depreciation)
of foreign currencies and forward foreign
currency contracts 19,820 (48,286) (27,717) (10,926)
Change in unrealized appreciation (depreciation) of
investments, futures, short sales, swaps and options 9,921,058 2,137,795 6,886,618 (12,074,129)
----------- ----------- ----------- -----------
Increase (decrease) in net assets resulting from operations 12,898,175 (498,311) 4,380,957 (22,399,022)
----------- ----------- ----------- -----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Class A Shares+ -- -- (107,853) (351,353)
Class B Shares -- -- -- (78,071)
Class C Shares -- -- -- (57,310)
Realized gain:
Class A Shares+ -- -- -- (65,219)
Class B Shares -- -- -- (13,433)
Class C Shares -- -- -- (10,454)
Tax return of capital:
Class A Shares -- -- -- --
Class B Shares -- -- -- --
Class C Shares -- -- -- --
----------- ----------- ----------- -----------
Total dividends and distributions -- -- (107,853) (575,840)
----------- ----------- ----------- -----------
CAPITAL SHARE TRANSACTIONS (NOTE 5):
Net proceeds from sales of shares:
Class A Shares+ 28,081,658 12,813,182 6,856,920 10,330,661
Class B Shares 1,097,062 574,435 310,856 2,521,220
Class C Shares -- -- 142,594 2,088,807
----------- ----------- ----------- -----------
29,178,720 13,387,617 7,310,370 14,940,688
----------- ----------- ----------- -----------
Capital shares issued
in connection with an acquisition (Note 12) -- -- -- --
----------- ----------- ----------- -----------
Reinvestment of dividends:
Class A Shares+ -- -- 90,570 348,855
Class B Shares -- -- -- 67,976
Class C Shares -- -- -- 48,859
----------- ----------- ----------- -----------
-- -- 90,570 465,690
----------- ----------- ----------- -----------
Cost of shares reacquired:
Class A Shares+ (15,773,268) (14,805,663) (7,181,713) (32,246,447)
Class B Shares (861,571) (2,243,075) (1,388,038) (4,073,105)
Class C Shares -- -- (832,846) (4,132,931)
----------- ----------- ----------- -----------
(16,634,839) (17,048,738) (9,402,597) (40,452,483)
----------- ----------- ----------- -----------
Increase (decrease) in net assets resulting from capital
share transactions 12,543,881 (3,661,121) (2,001,657) (25,046,105)
----------- ----------- ----------- -----------
Total increase (decrease) in net assets 25,442,056 (4,159,432) 2,271,447 (48,020,967)
NET ASSETS:
Beginning of period 15,626,807 19,786,239 32,559,671 80,580,638
----------- ----------- ----------- -----------
End of period $41,068,863 $15,626,807 $34,831,118 $32,559,671
=========== =========== =========== ===========
Undistributed net investment income or accumulated net
investment loss $ (229,925) $ (79,734) $ (12,922) $ 6,744
=========== =========== =========== ===========
</TABLE>
See Notes to Financial Statements
36
<PAGE>
<TABLE>
<CAPTION>
GLOBAL LEADERS GOLD/RESOURCES
FUND FUND
----------------------------------------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31,
1999 (UNAUDITED) 1998 1999 (UNAUDITED) 1998
--------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income (loss) ............................... $ 76,303 $ 239,560 $ (109,534) $ (585,706)
Realized gain (loss) from security transactions ............ 1,233,996 4,374,568 (8,440,514) (13,823,751)
Realized gain (loss) from futures contracts and short sales -- -- -- --
Realized gain (loss) from options .......................... -- (5,335) (228,656) (872,230)
Realized gain (loss) from foreign currency transactions .... (23,671) (163,137) (13,373) (68,135)
Change in unrealized appreciation (depreciation)
of foreign currencies and forward foreign
currency contracts ....................................... 13,887 (101,957) (7,102) 43,626
Change in unrealized appreciation (depreciation) of
investments, futures, short sales, swaps and options ..... (390,982) 1,605,960 3,292,336 7,613,527
----------- ----------- ---------- -----------
Increase (decrease) in net assets resulting from operations 909,533 5,949,659 (5,506,843) (7,692,669)
----------- ----------- ----------- -----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Class A Shares+ .......................................... (75,802) -- -- --
Class B Shares ........................................... (5,379) -- -- --
Class C Shares ........................................... -- -- -- --
Realized gain:
Class A Shares+ .......................................... -- (3,600,593) -- --
Class B Shares ........................................... -- (787,314) -- --
Class C Shares ........................................... -- -- -- --
Tax return of capital:
Class A Shares ........................................... -- (179,959) -- --
Class B Shares ........................................... -- (24,623) -- --
Class C Shares ........................................... -- -- -- --
----------- ----------- ----------- -----------
Total dividends and distributions .......................... (81,181) (4,592,489) -- --
----------- ----------- ----------- -----------
CAPITAL SHARE TRANSACTIONS (NOTE 5):
Net proceeds from sales of shares:
Class A Shares+ .......................................... 2,291,920 3,878,822 7,472,701 20,425,854
Class B Shares ........................................... 671,818 1,319,201 -- --
Class C Shares ........................................... -- -- -- --
----------- ----------- ----------- -----------
............................................................. 2,963,738 5,198,023 7,472,701 20,425,854
----------- ----------- ----------- -----------
Capital shares issued
in connection with an acquisition (Note 12) .............. -- -- -- --
----------- ----------- ----------- -----------
Reinvestment of dividends:
Class A Shares+ .......................................... 67,767 3,416,709 -- --
Class B Shares ........................................... 4,129 619,243 -- --
Class C Shares ........................................... -- -- -- --
----------- ----------- ----------- -----------
............................................................. 71,896 4,035,952 -- --
----------- ----------- ----------- -----------
Cost of shares reacquired:
Class A Shares+ .......................................... (3,592,951) (5,624,160) (14,377,191) (25,486,897)
Class B Shares ........................................... (1,613,496) (1,151,921) -- --
Class C Shares ........................................... -- -- -- --
----------- ----------- ----------- -----------
............................................................. (5,206,447) (6,776,081) (14,377,191) (25,486,897)
----------- ----------- ----------- -----------
Increase (decrease) in net assets resulting from capital
share transactions ....................................... (2,170,813) 2,457,894 (6,904,490) (5,061,043)
----------- ----------- ----------- -----------
Total increase (decrease) in net assets .................... (1,342,461) 3,815,064 (12,411,333) (12,753,712)
NET ASSETS:
Beginning of period ........................................ 33,500,156 29,685,092 53,397,003 66,150,715
----------- ----------- ----------- -----------
End of period .............................................. $32,157,695 $33,500,156 $40,985,670 $53,397,003
=========== =========== =========== ===========
Undistributed net investment income or accumulated net
investment loss .......................................... $ (299,624) $ (171,441) $ (762,963) $ (640,056)
=========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL INVESTORS GOLD U.S. GOVERNMENT MONEY
FUND FUND
-----------------------------------------------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31,
1999 (UNAUDITED) 1998 1999 (UNAUDITED) 1998
----------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income (loss) ............................... $ 730,715 $ 2,250,149 $ 1,208,237 $ 2,902,109
Realized gain (loss) from security transactions ............ 2,832,399 (14,423,140) 35,613
Realized gain (loss) from futures contracts and short sales -- -- (9,873) --
Realized gain (loss) from options .......................... (507,469) (2,818,392) -- --
Realized gain (loss) from foreign currency transactions .... (127,146) (235,689) -- --
Change in unrealized appreciation (depreciation)
of foreign currencies and forward foreign
currency contracts ....................................... 57,658 (2,193) -- --
Change in unrealized appreciation (depreciation) of
investments, futures, short sales, swaps and options ..... (10,191,026) 7,266,073 -- --
--------------- ------------- ------------ ------------
Increase (decrease) in net assets resulting from operations (7,204,869) (7,963,192) 1,198,364 2,937,722
--------------- ------------- ------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Class A Shares+ .......................................... (861,962) (2,107,262) (1,208,237) (2,902,109)
Class B Shares ........................................... -- -- -- --
Class C Shares ........................................... -- -- -- --
Realized gain:
Class A Shares+ .......................................... -- -- -- (35,613)
Class B Shares ........................................... -- -- -- --
Class C Shares ........................................... -- -- -- --
Tax return of capital:
Class A Shares ........................................... -- -- -- --
Class B Shares ........................................... -- -- -- --
Class C Shares ........................................... -- -- -- --
--------------- ------------- -------------- --------------
Total dividends and distributions .......................... (861,962) (2,107,262) (1,208,237) (2,937,722)
--------------- ------------- -------------- --------------
CAPITAL SHARE TRANSACTIONS (NOTE 5):
Net proceeds from sales of shares:
Class A Shares+ .......................................... 1,949,887,468 3,725,426,622 1,940,271,210 3,670,980,599
Class B Shares ........................................... -- -- -- --
Class C Shares ........................................... -- -- --
--------------- ------------- -------------- --------------
1,949,887,468 3,725,426,622 1,940,271,210 3,670,980,599
--------------- ------------- -------------- --------------
Capital shares issued
in connection with an acquisition (Note 12) .............. -- -- -- 7,517,642
--------------- ------------- -------------- --------------
Reinvestment of dividends:
Class A Shares+ .......................................... 683,134 1,512,309 671,506 1,495,988
Class B Shares ........................................... -- -- -- --
Class C Shares ........................................... -- -- -- --
--------------- ------------- -------------- --------------
683,134 1,512,309 671,506 1,495,988
--------------- ------------- -------------- --------------
Cost of shares reacquired:
Class A Shares+ .......................................... (1,947,838,971) (3,711,174,134) (1,963,056,108) (3,709,422,005)
Class B Shares ........................................... -- -- -- --
Class C Shares ........................................... -- -- -- --
--------------- ------------- -------------- --------------
(1,947,838,971) (3,711,174,134) (1,963,056,108) (3,709,422,005)
--------------- ------------- -------------- --------------
Increase (decrease) in net assets resulting from capital
share transactions ....................................... 2,731,631 15,764,797 (22,113,392) (29,427,776)
--------------- ------------- -------------- --------------
Total increase (decrease) in net assets .................... (5,335,200) 5,694,343 (22,123,265) (29,427,776)
NET ASSETS:
Beginning of period ........................................ 238,638,669 232,944,326 47,222,172 76,649,948
--------------- ------------- -------------- --------------
End of period .............................................. $ 233,303,469 $ 238,638,669 $ 25,098,907 $ 47,222,172
=============== ============= ============== ==============
Undistributed net investment income or accumulated net
investment loss .......................................... $ (258,393) $ -- $ -- $ --
=============== ============= ============== ==============
</TABLE>
- ----------
+The U.S. Government Money Fund does not have a designated class of shares.
See notes to financial statements
37
<PAGE>
ASIA DYNASTY FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period:
<TABLE>
<CAPTION>
CLASS A
SIX MONTHS ------------------------------------------
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1999 ------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
---------- ----- ----- ----- ----- ----
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period. $ 7.80 $ 7.82 $13.21 $12.40 $12.13 $15.28
------ ------ ------ ------ ------ -----
Income from Investment Operations:
Net Investment Income (Loss)....... 0.03(d) (0.01) (0.28) (0.20) (0.02) --
Net Gain (Loss) on Investments
(both Realized and Unrealized)... 5.39 (0.01) (3.82) 1.01 0.40 (2.86)
------ ------ ------ ------ ------ -----
Total from Investment Operations..... 5.42 (0.02) (4.10) 0.81 0.38 (2.86)
------ ------ ------ ------ ------ -----
Less Dividends and Distributions:
Dividends from Net Investment
Income -- -- -- -- (0.09) (0.07)
Distributions from Capital Gains... -- -- (1.15) -- -- (0.22)
Tax Return of Capital.............. -- -- (0.14) -- (0.02) --
------ ------ ------ ------ ------ -----
Total Dividends and Distributions.... -- -- (1.29) -- (0.11) (0.29)
------ ------ ------ ------ ------ -----
Net Asset Value, End of Period....... $13.22 $7.80 $7.82 $13.21 $12.40 $12.13
====== ====== ====== ====== ====== =====
Total Return (a)..................... 69.49% (0.26%) (32.10%) 6.53% 3.13% (18.72%)
- -------------------------------------------------------------------------------------------
Ratios/Supplementary Data
Net Assets, End of
Period (000).......................$32,726 $10,685 $12,873 $44,351 $64,275 $83,787
Ratio of Gross Expenses to Average
Net Assets 2.10%(c) 3.13% 2.38% 2.42% 2.03% 1.85%
Ratio of Net Expenses to Average
Net Assets 2.10%(c) 2.43%(b) 2.38% 2.42% 2.03% 1.85%
Ratio of Net Investmen Income (Loss)
to Average Net Assets.............. 0.44%(c) (0.09%) (0.76%) (0.73%) (0.08%) --%
Portfolio Turnover Rate.............. 74.69% 121.96% 200.45% 52.99% 57.06% 51.08%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
SIX MONTHS -------------------------------------------
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1999 -------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
--------- ----- ----- ------ ----- -----
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period. $ 7.54 $7.63 $13.08 $12.33 $12.09 $15.25
------ ------ ------ ------ ------ ------
Income from Investment Operations:
Net Investment Income (Loss)....... (0.06)(d) (0.07) (0.30) (0.24) (0.08) (0.06)
Net Gain (Loss) on Investments
(both Realized and Unrealized)... 5.25 (0.02) (3.86) 0.99 0.40 (2.86)
------ ------ ------ ------ ------ ------
Total from Investment Operations..... 5.19 (0.09) (4.16) 0.75 0.32 (2.92)
------ ------ ------ ------ ------ ------
Less Dividends and Distributions:
Dividends from Net Investment
Income -- -- -- -- (0.06) (0.02)
Distributions from Capital Gains... -- -- (1.15) -- -- (0.22)
Tax Return of Capital.............. -- -- (0.14) -- (0.02) --
------ ------ ------ ------ ------ ------
Total Dividends and Distributions.... -- -- (1.29) -- (0.08) (0.24)
------ ------ ------ ------ ------ ------
Net Asset Value, End of Period....... $12.73 $7.54 $ 7.63 $13.08 $12.33 $12.09
====== ====== ====== ====== ====== ======
Total Return (a)..................... 68.83% (1.18%) (32.87%) 6.08% 2.65% (19.15%)
- --------------------------------------------------------------------------------------------
Ratios/Supplementary Data
Net Assets, End of
Period (000)....................... $8,343 $4,942 $6,914 $20,296 $27,234 $35,024
Ratio of Gross Expenses to Average
Net Assets 3.73%(c) 3.83% 3.00% 2.86% 2.41% 2.38%
Ratio of Net Expenses to Average
Net Assets 3.73%(c) 3.14%(b) 3.00% 2.86% 2.41% 2.38%
Ratio of Net Investmen Income (Loss)
to Average Net Assets.............. (1.36%)(c)(0.79%) (1.36%) (1.14%) (0.52%) (0.50%)
Portfolio Turnover Rate.............. 74.69% 121.96% 200.45% 52.99% 57.06% 51.08%
</TABLE>
- ----------
(a)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. A sales charge is not reflected in the calculation of
total dividends and return. Total returns for periods of less than one year
are not annualized.
(b)After expenses reduced by a custodian fee arrangement.
(c)Annualized.
(d)Based on average shares outstanding.
See Notes to Financial Statements
38
<PAGE>
GLOBAL HARD ASSETS FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period:
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------
FOR THE
PERIOD
SIX MONTHS NOVEMBER 2
ENDED YEAR ENDED DECEMBER 31, 1994(A) TO
JUNE 30, 1999 --------------------------------------- DECEMBER 31,
(UNAUDITED) 1998 1997 1996 1995 1994
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $10.34 $15.50 $14.42 $10.68 $ 9.41 $ 9.53
------ ------ ------ ------ ------ ------
Income from Investment Operations:
Net Investment Income (Loss).... 0.04 0.10 0.05 0.15 0.32(e) 0.010(e)
Net Gain (Loss) on Investments
(both Realized and Unrealized) 1.60 (5.09) 2.01 4.70 1.57 (0.115)
------ ------ ------ ------ ------ ------
Total from Investment Operations.. 1.64 (4.99) 2.06 4.85 1.89 (0.105)
------ ------ ------ ------ ------ ------
Less Dividends and Distributions:
Dividends from Net Investment
Income (0.05) (0.15) (0.02) (0.14) (0.62) (0.015)
Net Distributions from
Capital Gains -- (0.02) (0.96) (0.95) -- --
Tax Return of Capital........... -- -- -- (0.02) -- --
------ ------ ------ ------ ------ ------
Total Dividends and Distributions. (0.05) (0.17) (0.98) (1.11) (0.62) (0.015)
------ ------ ------ ------ ------ ------
Net Asset Value, End of Period.... $11.93 $10.34 $15.50 $14.42 $10.68 $9.41
====== ====== ====== ====== ====== ======
Total Return (b).................. 15.86% (32.25%) 14.29% (45.61%) 20.09% (1.10%)
- ---------------------------------------------------------------------------------------------------------
Ratios/Supplementary Data
Net Assets, End of Period (000)... $25,734 $22,969 $61,341 $27,226 $3,820 $1,419
Ratio of Gross Expenses to
Average Net Assets (c)............ 2.51%(d) 2.11% 2.00% 2.63% 4.05% 3.40%(d)
Ratio of Net Expenses to
Average Net Assets.............. 2.00%(d) 2.00% 1.97% 0.72% 0.00% 0.15%(d)
Ratio of Net Investment Income
(Loss) to Average Net Assets.... 0.82%(d) 0.58% 0.36% 1.45% 3.08% 0.84%(d)
Portfolio Turnover Rate........... 117.52% 167.79% 118.10% 163.91% 179.33% 0.00%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
-------------------------------------------------
FOR THE
SIX MONTHS PERIOD
ENDED APRIL 24,
JUNE 30, YEAR ENDED DECEMBER 31, 1996(A) TO
1999 ----------------------- DECEMBER 31,
UNAUDITED 1998 1997 1996
--------- ------ ------ ------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $10.37 $15.60 $14.50 $12.55
------ ------ ------ ------
Income from Investment Operations:
Net Investment Income (Loss).... 0.01 0.01 (0.01) 0.11
Net Gain (Loss) on Investments
(both Realized and Unrealized) 1.59 (5.08) 2.00 2.95
------ ------ ------ ------
Total from Investment Operations.. 1.60 (5.07) 1.99 3.06
------ ------ ------ ------
Less Dividends and Distributions:
Dividends from Net Investment
Income -- (0.14) -- (0.14)
Net Distributions from
Capital Gains -- (0.02) (0.89) (0.95)
Tax Return of Capital........... -- -- -- (0.02)
------ ------ ------ ------
Total Dividends and Distributions. 0.00 (0.16) (0.89) (1.11)
------ ------ ------ ------
Net Asset Value, End of Period.... $11.97 $10.37 $15.60 $14.50
====== ====== ====== ======
Total Return (b).................. 15.43% (32.55%) (13.72%) 24.55%
- ---------------------------------------------------------------------------------------
Ratios/Supplementary Data
Net Assets, End of Period (000)... $5,220 $5,580 $10,541 $1,806
Ratio of Gross Expenses to
Average Net Assets (c)............ 3.23%(d) 2.81% 2.73% 3.27%
Ratio of Net Expenses to
Average Net Assets.............. 2.67%(d) 2.50% 2.50% 1.64%(d)
Ratio of Net Investment Income
(Loss) to Average Net Assets.... 0.15%(d) 0.12% (0.13%) 0.53%(d)
Portfolio Turnover Rate........... 117.52% 167.79% 118.10% 163.91%
</TABLE>
<TABLE>
<CAPTION>
CLASS C
---------------------------------------------------------------------
FOR THE
SIX MONTHS PERIOD
ENDED NOVEMBER 2,
JUNE 30, YEAR ENDED DECEMBER 31, 1994(A)
1999 ---------------------------------------- DECEMBER 31,
(UNAUDITED) 1998 1997 1996 1995 1994
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $10.40 $15.64 $14.52 $10.76 $ 9.41 $9.53
------ ------ ------ ------ ------ ------
Income from Investment Operations:
Net Investment Income (Loss).... 0.01 0.01 (0.01) 0.11 0.34 0.01(e)
Net Gain (Loss) on Investments
(both Realized and Unrealized) 1.59 (5.09) 2.00 4.73 1.63 (0.12)
------ ------ ------ ------ ------ ------
Total from Investment Operations.. 1.60 (5.08) 1.99 4.84 1.97 (0.11)
------ ------ ------ ------ ------ ------
Less Dividends and Distributions:
Dividends from Net Investment
Income -- (0.14) -- (0.11) (0.62) (0.01)
Net Distributions from
Capital Gains -- (0.02) (0.87) (0.95) -- --
Tax Return of Capital........... -- -- -- (0.02) -- --
------ ------ ------ ------ ------ ------
Total Dividends and Distributions. -- (0.16) (0.87) (1.08) (0.62) (0.01)
------ ------ ------ ------ ------ ------
Net Asset Value, End of Period.... $12.00 $10.40 $15.64 $14.52 $10.76 $9.41
====== ====== ====== ====== ====== ======
Total Return (b).................. 15.38% (32.53%) 13.71% 45.18% 20.94% (1.20%)
- ------------------------------------------------------------------------------------------------------
Ratios/Supplementary Data
Net Assets, End of Period (000)... $3,877 $4,011 $8,698 $1,935 $181 $8
Ratio of Gross Expenses to
Average Net Assets (c)............ 3.66%(d) 3.00% 2.94% 6.02% 37.88% 39.49%(d)
Ratio of Net Expenses to
Average Net Assets.............. 2.67%(d) 2.50% 2.50% 1.31% 0.00% 0.56%(d)
Ratio of Net Investment Income
(Loss) to Average Net Assets.... 0.16%(d) 0.11% (0.15%) 0.84% 3.30% 0.53%(d)
Portfolio Turnover Rate........... 117.52% 167.79% 118.10% 163.91% 179.33% 0.00%
</TABLE>
- ----------
(a)Commencement of operations.
(b)Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of dividends and
distributions at net asset value during the period and a redemption on the
last day of the period. A sales charge is not reflected in the calculation of
total return. Total returns for periods of less than one year are not
annualized.
(c)Had the Adviser not assumed expenses or had expenses not been reduced by
custodian fee and directed brokerage arrangements.
(d)Annualized.
(e)Based on average shares outstanding.
See Notes to Financial Statements
39
<PAGE>
GLOBAL LEADERS FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period:
<TABLE>
<CAPTION>
SIX MONTHS CLASS A
ENDED -----------------------------------------------------------
JUNE 30, YEAR ENDED DECEMBER 31,
1999 -----------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
---------- ------ ----- ----- ----- ----
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period. $10.78 $10.38 $10.37 $10.31 $ 9.07 $9.53
------ ------ ------ ------ ------ ------
Income from Investment Operations:
Net Investment Income.............. 0.02 0.02 0.10 0.12 0.07(a) 0.19(a)
Net Gain (Loss) on Investments
(both Realized and Unrealized)... 0.28 2.07 1.43 1.15 1.31 (0.56)
------ ------ ------ ------ ------ ------
Total from Investment Operations..... 0.30 2.09 1.53 1.27 1.38 (0.37)
------ ------ ------ ------ ------ ------
Less Dividends and Distributions:
Dividends from Net Investment
Income (d) (0.03) -- (0.08) (0.11) (0.14) (0.09)
Distribution from Capital Gains.... -- (1.61) (1.43) (1.10) -- --
Tax Return of Capital.............. -- (0.08) (0.01) -- -- --
------ ------ ------ ------ ------ ------
Total Dividends and Distributions.... (0.03) (1.69) (1.52) (1.21) (0.14) (0.09)
------ ------ ------ ------ ------ ------
Net Asset Value, End of Period....... $11.05 $10.78 $10.38 $10.37 $10.31 $9.07
====== ====== ====== ====== ====== ======
Total Return (b)..................... 2.79% 20.65% 14.77% 12.28% 15.30% (3.90)%
- ------------------------------------------------------------------------------------------------------------------
Ratios/Supplementary Data
Net Assets, End of Period (000)......$26,914 $27,461 $24,630 $29,331 $30,632 $13,986
Ratio of Gross Expenses To Average
Net Assets 2.24%(e) 2.32% 2.45% 2.54% 2.69% 2.59%
Ratio of Net Expenses to Average
Net Assets 2.00%(c)(e) 2.00%(c) 2.00%(c) 2.17%(c) 2.69% 1.06%(c)
Ratio of Net Investment Income to
Average Net Assets 0.56%(e) 0.85% 0.85% 1.05% 0.68% 1.99%
Portfolio Turnover Rate.............. 64.32% 87.79% 78.07% 114.30% 196.69% 174.76%
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS CLASS B
ENDED -----------------------------------------------------------
JUNE 30, YEAR ENDED DECEMBER 31,
1999 -----------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
----------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $10.67 $10.31 $10.32 $10.28 $ 9.02 $9.53
------ ------ ------ ------ ------ ------
Income from Investment Operations:
Net Investment Income............. 0.00 0.00 0.04 0.06 0.01 0.11(a)
Net Gain (Loss) on Investments
(both Realized and Unrealized).. 0.28 2.02 1.43 1.14 1.28 (0.57)
------ ------ ------ ------ ------ ------
Total from Investment Operations.... 0.28 2.02 1.47 1.20 1.29 (0.46)
------ ------ ------ ------ ------ ------
Less Dividends and Distributions:
Dividends from Net Investment
Income (d) (0.01) -- (0.03) (0.06) (0.03) (0.05)
Distribution from Capital Gains... -- (1.61) (1.45) (1.10) -- --
Tax Return of Capital............. -- (0.05) -- -- -- --
------ ------ ------ ------ ------ ------
Total Dividends and Distributions... (0.01) (1.66) (1.48) (1.16) (0.03) (0.05)
------ ------ ------ ------ ------ ------
Net Asset Value, End of Period...... $10.94 $10.67 $10.31 $10.32 $10.28 $9.02
====== ====== ====== ====== ====== ======
Total Return (b).................... 2.63% 20.07% 14.26% 11.49% 14.54% (4.84%)
- -----------------------------------------------------------------------------------------------------------------
Ratios/Supplementary Data
Net Assets, End of Period (000)..... $5,243 $6,039 $5,055 $4,932 $6,151 $5,628
Ratio of Gross Expenses To Average
Net Assets 3.15%(e) 3.25% 2.51% 3.19% 3.20% 3.21%
Ratio of Net Expenses to Average
Net Assets 2.50%(c)(e) 2.50%(c) 2.50%(c) 2.71%(c) 3.20% 1.88%(c)
Ratio of Net Investment Income to
Average Net Assets 0.06%(e) 0.36% 0.36% 0.51% 0.14% 1.14%
Portfolio Turnover Rate............. 64.32% 87.79% 78.07% 114.30% 196.69% 174.76%
</TABLE>
- ----------
(a)Based on average shares outstanding.
(b)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. A sales charge is not reflected in the calculation of
total return. Total returns for periods of less than one year are not
annualized.
(c)After expenses reduced by a custodian fee, directed brokerage or Advisory
fee waiver arrangement.
(d)Net of foreign taxes withheld (to be included in income and claimed as a tax
credit on deduction by the shareholder for federal income tax purposes) of
$0.01 for 1997.
(e)Annualized.
See Notes to Financial Statements
40
<PAGE>
GOLD/RESOURCES FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
<TABLE>
<CAPTION>
CLASS A
-----------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1999 ------------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
-------------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........ $3.04 $3.47 $5.72 $5.58 $5.35 $6.34
----- ----- ----- ----- ----- -----
Income from Investment Operations:
Net Investment Loss....................... (0.01) (0.04) (0.04) (0.06) (0.03) (0.02)
Net Gain (Loss) on Investments
(both Realized and Unrealized).......... (0.33) (0.39) (2.21) 0.20 0.26 (0.97)
----- ----- ----- ----- ----- -----
Total from Investment Operations............ (0.34) (0.43) (2.25) 0.14 0.23 (0.99)
----- ----- ----- ----- ----- -----
Net Asset Value, End of Period.............. $2.70 $3.04 $3.47 $5.72 $5.58 $5.35
===== ===== ===== ===== ===== =====
Total Return (a)............................ (11.18%) (12.39%) (39.34%) 2.51% 4.3% (15.60%)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Period (000)............. $40,986 $53,397 $66,151 $132,298 $155,974 $186,091
Ratio of Gross Expenses to Average Net Assets 2.54%(c) 2.24% 1.87% 1.71% 1.81% 1.52%
Ratio of Net Expenses to Average Net Assets. 2.54%(c) 2.21%(b) 1.87% 1.71% 1.81% 1.52%
Ratio of Net Investment Loss to
Average Net Assets........................ (0.47%)(c) (0.98%) (0.57%) (0.75%) (0.44%) (0.30%)
Portfolio Turnover Rate..................... 47.03% 79.99% 32.46% 12.95% 6.16% 13.75%
</TABLE>
- ----------
(a) 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. A sales charge is not reflected in the calculation
of total return. Total returns for periods less than one year are not
annualized.
(b) After expenses reduced by a custodian fee and directed brokerage
arrangement.
(c) Annualized.
See Notes to Financial Statements
41
<PAGE>
INTERNATIONAL INVESTORS GOLD FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period:
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1999 ----------------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
------------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........ $6.59 $7.54 $11.90 $13.35 $15.21 $16.08
----- ----- ------ ------ ------ ------
Income from Investment Operations:
Net Investment Income..................... 0.03 0.06 0.09 0.05 0.08 0.19
Net Gain (Loss) on Investments
(both Realized and Unrealized).......... (0.56) (0.95) (4.36) (1.29) (1.44) (0.36)
----- ----- ------ ------ ------ ------
Total from Investment Operations............ (0.53) (0.89) (4.27) (1.24) (1.36) (0.17)
----- ----- ------ ------ ------ ------
Less Dividends and Distributions:
Dividends from Net Investment Income (a).. (0.03) (0.06) (0.09) (0.07) (0.10) (0.18)
Distributions from Capital Gains.......... -- -- -- (0.14) (0.38) (0.52)
Tax Return of Capital..................... -- -- -- -- (0.02) --
----- ----- ------ ------ ------ ------
Total Dividends and Distributions........... (0.03) (0.06) (0.09) (0.21) (0.50) (0.70)
----- ----- ------ ------ ------ ------
Net Asset Value, End of Period.............. $6.03 $6.59 $ 7.54 $11.90 $13.35 $15.21
===== ===== ====== ====== ====== ======
Total Return (b)............................ (8.05%) (11.87%) (36.00%) (9.37%) (8.93%) (1.04%)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Period (000)............. $233,303 $238,639 $232,944 $409,331 $519,795 $634,808
Ratio of Gross Expenses to Average Net Assets 1.99%(d) 1.78% 1.52% 1.43% 1.42% 1.15%
Ratio of Net Expenses to Average Net Assets. 1.99%(d) 1.76%(c) 1.47%(c) 1.43% 1.42% 1.15%
Ratio of Net Investment Income to
Average Net Assets........................ 0.74%(d) 0.99% 0.90% 0.36% 0.55% 1.23%
Portfolio Turnover Rate..................... 45.64% 86.65% 19.99% 112.45% 4.10% 7.08%
</TABLE>
- ----------
(a) Net of foreign taxes withheld (to be included in income and claimed as a tax
credit or deduction by the shareholder for federal income tax purposes) of
$0 for 1998 and 1997, $0.01 for 1996, $0.03 for 1995 and $0.07 for 1994.
(b) 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. A sales charge is not reflected in the calculation
of total return. Total returns for periods of less than one year are not
annualized.
(c) After expenses reduced by a custodian fee and directed brokerage
arrangement.
(d) Annualized.
See Notes to Financial Statements
42
<PAGE>
U.S. GOVERNMENT MONEY FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1999 -----------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
------------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........ $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
------ ------ ------ ------ ------ ------
Income from Investment Operations:
Net Investment Income..................... .0156 0.0388 0.0377 0.0385 0.0456 0.0311
Less Distributions to Shareholders:
Dividends from Net Investment Income...... (.0156) (0.0388) (0.0377) (0.0385) (0.0456) (0.0311)
------ ------ ------ ------ ------ ------
Net Asset Value, End of Period.............. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
====== ====== ====== ====== ====== ======
Total Return................................ 3.15%(a) 3.88% 3.77% 3.85% 4.56% 3.11%
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplementary Data
Net Assets, End of Period (000)............. $25,099 $47,222 $76,650 $107,698 $70,130 $47,078
Ratio of Gross Expenses to Average Net Assets 1.23%(a) 1.20% 1.28% 1.23% 1.25% 1.12%
Ratio of Net Investment Income to
Average Net Assets........................ 3.16%(a) 3.89% 3.91% 4.02% 4.45% 3.07%
</TABLE>
- ----------
(a) Annualized.
See Notes to Financial Statements
43
<PAGE>
VAN ECK FUNDS
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Van Eck Funds (the "Trust"), organized as a Massachusetts business trust on
April 3, 1985, is registered under the Investment Company Act of 1940. The Trust
operates as a series fund currently comprised of six portfolios: Asia Dynasty
Fund, Global Leaders Fund (name changed on May 1, 1999 from Global Balanced
Fund), Global Hard Assets Fund, Gold/Resources Fund, International Investors
Gold Fund and U.S. Government Money Fund (the "Funds"). Asia Dynasty Fund, and
U.S. Government Money Fund are classified as diversified funds under the
Investment Company Act of 1940, as amended. Global Hard Assets Fund, Global
Leaders Fund, Gold/Resources Fund and International Investors Gold Fund are
non-diversified funds. The following is a summary of significant accounting
policies consistently followed by the Funds in the preparation of their
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 management to make
estimates and assumptions that effect the reported amounts in the financial
statements. Actual results could differ from those estimates.
A. SECURITY VALUATION--Securities traded on national or foreign exchanges are
valued at the last sales prices reported at the close of business on the
last business day of the period. Over-the-counter securities and listed
securities for which no sale was reported are valued at the mean of the bid
and asked prices. Short-term obligations are valued at amortized cost which
with accrued interest approximates value. Forward foreign 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 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 each Funds' policy to comply with the provisions
of the Internal Revenue Code applicable to regulated investment companies
and to distribute all of their taxable income to their 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. 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. Realized gains or losses and the appreciation
(depreciation) attributable to foreign currency fluctuations on other
foreign currency denominated assets and liabilities are recorded as net
realized or unrealized gains and losses from foreign currency transactions,
respectively.
D. OTHER--Security transactions are accounted for on the date the securities
are purchased or sold. Dividend income is recorded on the ex-dividend date.
Interest income is accrued as earned.
E. DISTRIBUTIONS TO SHAREHOLDERS--Dividends to shareholders from net investment
income and realized gains, if any, are recorded on the ex-dividend date.
Income and capital gains distributions are determined in accordance with
income tax regulations which may differ from such amounts determined in
accordance with generally accepted accounting principles.
F. DEFERRED ORGANIZATION COSTS--Deferred organization costs are being amortized
over a period of five years.
USE OF DERIVATIVE INSTRUMENTS
G. OPTION CONTRACTS--The Funds (except U.S. Government Money Fund) may invest,
for hedging and other purposes, in call and put options on securities,
currencies and commodities. Call and put options give the Funds 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 Funds
may incur additional risk to the extent the value of the underlying
instrument does not correlate with the movement of the option value.
The Funds (except U.S. Government Money Fund) may also write call or put
options. As the writer of an option, the Funds receive a premium. The Funds
keep 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 Funds 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 Funds may write only covered puts and calls. A covered
call option is an option in which the Funds own the instrument underlying
the call. A covered call sold by the Funds expose them 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 Funds during the term of the option to a decline in
price of the underlying instrument. A put option sold by the Funds is
covered when, among other things, cash or short-term liquid securities are
placed in a segregated account to fulfill the obligations undertaken. The
Funds may incur additional risk from investments in written currency options
if there are unanticipated movements in the underlying currencies.
H. SHORT SALES--The Global Hard Assets Fund may make short sales of equity
securities. A short sale occurs when the Fund sells a security which it does
not own by borrowing it from a broker. In the event that the value of the
security that the Fund sold short declines, the Fund will gain as it
repurchases the security in the market at the lower price. If the price of
the security increases, the Fund will suffer a loss as it will have to
repurchase the security at the higher price. Short sales may incur higher
transaction costs than regular securities transactions.
44
<PAGE>
VAN ECK FUNDS
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(continued)
- --------------------------------------------------------------------------------
Cash is deposited in a segregated account with brokers, maintained by the
Fund, for its short sales. At June 30, 1999, amounts deposited in the
segregated accounts amounted to $1,294,349. Proceeds from securities sold
short are reported as liabilities and are marked to market. Gains and losses
are classified as realized when short positions are closed. At June 30,
1999, the Fund had realized loss of $213,381 and unrealized depreciation of
$78,408 on short sales of securities.
I. FUTURES--The Funds (except U.S. Government Money Fund) may buy and sell
financial futures contracts which may include security and interest-rate
futures, stock and bond index futures contracts and foreign currency futures
contracts. The Funds may engage in these transactions for hedging purposes
and (except for Gold/Resources Fund) for other purposes. Global Hard Assets
Fund may also buy and sell commodity futures contracts, which may include
futures on natural resources and natural resource indices. A security or
interest-rate futures contract is an agreement between two parties to buy or
sell a specified security at a set price on a future date. An index futures
contract is an agreement to take or make delivery of an amount of cash based
on the difference between the value of the index at the beginning and at the
end of the contract period. A foreign currency futures contract is an
agreement to buy or sell a specified amount of currency for a set price on a
future date. A commodity futures contract is an agreement to take or make
delivery of a specified amount of a commodity, such as gold, at a set price
on a future date.
J. STRUCTURED NOTES--The Funds may invest in indexed securities whose value is
linked to one or more currencies, interest rates, commodities, or financial
or commodity indices. When the Fund purchases a structured note (a
non-publicly traded indexed security entered into directly between two
parties) it will make a payment of principal to the counterparty. The Fund
will purchase structured notes only from counterparties rated A or better by
S&P, Moody's or another nationally recognized statistical rating
organization. Van Eck Associates Corp. will monitor the liquidity of
structured notes under supervision of the Board of Trustees and structured
notes determined to be illiquid will be aggregated with other illiquid
securities and limited to 15% of the net assets of the Fund.
Indexed securities may be more volatile than the underlying instrument
itself, and present many of the same risks as investing in futures and
options. Indexed securities are also subject to credit risks associated with
the issuer of the security with respect to both principal and interest. At
June 30, 1999, the following structured notes were outstanding:
% OF NET
VALUE ASSETS
----------- -----------
Business Development Bank of Canada
Yen/Gold Linked Note
GLOBAL HARD ASSETS FUND ................ $ 884,400 2.5%
GOLD/RESOURCES FUND..................... $ 804,000 2.0%
INTERNATIONAL INVESTORS GOLD FUND ...... $5,634,000 2.4%
NOTE 2--Van Eck Associates Corporation (the "Adviser") earns fees for investment
management and advisory services. The Asia Dynasty Fund and Global Leaders Fund
each pay the Adviser a monthly fee at the annual rate of .75% of average daily
net assets. The Global Hard Assets Fund pays the Adviser a monthly fee at the
annual rate of 1% of average daily net assets, a portion of which is paid to the
Adviser for accounting and administrative services it provides to the Fund. The
Gold/Resources and International Investors Gold Funds each pay the Adviser a
monthly fee at the annual rate of .75 of 1% of the first $500 million of average
daily net assets of the Fund, .65 of 1% of the next $250 million of average
daily net assets and .50 of 1% of average daily net assets in excess of $750
million. The U.S. Government Money Fund pays the Adviser a monthly fee at the
annual rate of .50 of 1% of the first $500 million of average daily net assets,
.40 of 1% of the next $250 million of average daily net assets and .375 of 1% of
average daily net assets in excess of $750 million.
In accordance with the advisory agreement, the Funds reimbursed Van Eck
Associates Corporation for costs incurred in connection with certain
administrative and operating functions.
For the six months ended June 30, 1999, the Adviser agreed to assume expenses
exceeding 2% of average daily net assets for Class A shares and 2.5% of average
daily net assets for Class B shares for the Global Leaders Fund. Expenses were
reduced by $44,614 under this agreement. For the six months ended June 30, 1999,
the Adviser agreed to assume expenses exceeding 2% of average daily net assets
for Class A shares and 2.5% of average daily net assets for the period January
1, 1999 to February 28, 1999 and 2.75% of average daily net assets for the
period March 1, 1999 to June 30, 1999 for Class B and C shares, for the Global
Hard Assets Fund. Expenses were reduced by $92,186 under this agreement.
Van Eck Associates Corporation also performs accounting and administrative
services for Asia Dynasty Fund, Global Leaders Fund, Gold/Resources Fund and
International Investors Gold Fund and is paid at an annual rate of .25 of 1% of
average daily net assets (Asia Dynasty Fund and Global Leaders Fund) or at an
annual rate of .25 of 1% of the first $750 million of each Fund's average daily
net assets and .20 of 1% of average daily net assets in excess of $750 million
(Gold/Resources Fund and International Investors Gold Fund).
The Funds have a fee arrangement based on cash balances left on deposit with the
custodian which reduces operating expenses. For the six months ended June 30,
1999, the portion of expenses reduced under this arrangement amounted to $6,536
for the Global Leaders Fund.
The Funds (except the U.S. Government Money Fund) had some of the portfolio
trades directed to a broker-dealer who, in return, agreed to pay a portion of
the Funds' expenses.
For the six months ended June 30,1999, Van Eck Securities Corporation (the
Distributor) received $249,962 in sales loads of which $201,509 was reallowed to
broker dealers.
Certain of the officers and trustees of the Trust are officers, directors or
stockholders of Van Eck Associates Corporation and Van Eck Securities
Corporation.
45
<PAGE>
VAN ECK FUNDS
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
NOTE 3--INVESTMENTS
For federal income tax purposes, the identified cost of investments owned at
June 30, 1999 is $24,389,960, $34,325,668, $23,907,452, $39,321,845 and
$207,779,389 for the Asia Dynasty Fund, Global Hard Assets Fund, Global Leaders
Fund, Gold/Resources Fund and International Investors Gold Fund, respectively.
The U.S. Government Money Fund's identified cost for federal income taxes is the
same for financial reporting purposes. As of June 30, 1999, gross unrealized
gains and losses were as follows:
Gross Gross Net
Unrealized Unrealized Unrealized
Gains Losses Gains
------------ ----------- -----------
Asia Dynasty Fund...........$ 12,677,436 $ 104,366 $12,573,070
Global Hard Assets Fund..... 3,825,638 3,734,976 90,662
Global Leaders Fund......... 9,180,355 502,458 8,677,897
Gold/Resources Fund......... 9,257,513 6,903,703 2,353,810
International Investors
Gold Fund ................ 38,677,505 23,430,995 15,246,510
At December 31, 1998 the Funds had the following capital loss carryforward
available to offset future capital gains; Asia Dynasty Fund $2,192,520 expiring
December 31, 2006; Global Hard Assets Fund $10,038,525 expiring December 31,
2006; Gold/Resources Fund $56,893,160 expiring between December 31, 1999 through
December 31, 2006; International Investors Gold Fund $13,754,006 expiring
between December 31, 2005 through December 31, 2006.
Purchases and sales of investment securities for the six months ended June 30,
1999, other than short-term obligations, were as follows:
PROCEEDS
COST OF FROM
INVESTMENT INVESTMENT
SECURITIES SECURITIES
PURCHASED SOLD
----------- -----------
Asia Dynasty Fund................ $23,003,239 $15,629,349
Global Hard Assets Fund.......... 37,072,292 40,541,315
Global Leaders Fund.............. 20,656,996 22,076,859
Gold/Resources Fund.............. 20,884,042 22,614,077
International Investors
Gold Fund 69,881,084 87,507,340
NOTE 4--Pursuant to Rule 12b-1 Plans of Distribution (the Plans) all of the
Funds (except International Investors Gold Fund) are authorized to incur
distribution expenses which will principally be payments to securities dealers
who have sold shares and serviced shareholder accounts and payments to Van Eck
Securities Corporation (VESC), the distributor, for reimbursement of other
actual promotion and distribution expenses incurred by the distributor on behalf
of the Funds. The amount paid under the Plans in any one year is limited to
0.50% of average daily net assets (except for Gold Resources Fund, International
Investors Gold Fund and U.S. Government Money Fund which is 0.25%) for Class A
shares and 1% of average daily net assets for Classes B and C shares (the Annual
Limitations). For Class C shares, the Funds will pay to the selling broker at
the time of sale 1% of the amount of the purchase. Such Class C 12b-1 fees will
be expensed by the Funds over the course of the first twelve months from the
time of purchase. Should the payments to the brokers made by the Funds exceed,
on an annual basis, 1% of average daily net assets, VESC will reimburse the
Funds for any excess. Class C shareholders redeeming within one year of purchase
will be subject to a 1% redemption charge which will be retained by the Funds.
After the first year, the 1% 12b-1 fee will be paid to VESC which will retain a
portion of the fee for distribution services and pay the remainder to brokers.
Distribution expenses incurred under the Plans that have not been paid because
they exceed the Annual Limitation may be carried forward to future years and
paid by the Funds within the Annual Limitation.
VESC has waived its right to reimbursement of the carried forward amounts
incurred through June 30, 1999 in the event the Plans are terminated, unless the
Board of Trustees determines that reimbursement of the carried forward amounts
is appropriate.
The accumulated amount of excess distribution expenses incurred over the Annual
Limitations as of June 30, 1999, were as follows: Asia Dynasty Fund - $1,226,521
for Class A shares and $1,492,659 for Class B shares; Global Hard Assets Fund -
$887,786 for Class A shares, $90,600 for Class B shares and $290,062 for Class C
shares; Global Leaders Fund - $911,249 for Class A shares and $430,618 for Class
B shares.
NOTE 5--Shares of Beneficial Interest Issued and Redeemed (unlimited number of
$.001 par value shares authorized):
ASIA DYNASTY FUND
------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
1999 (UNAUDITED) 1998
-----------------------------------
Class A
Shares sold 2,734,496 1,999,713
Shares reinvested -- --
------------- ----------
2,734,496 1,999,713
Shares reacquired (1,628,475) (2,275,305)
------------- ----------
Net increase (decrease) 1,106,021 (275,592)
============= ==========
Class B
Shares sold 103,679 84,734
Shares reinvested -- --
------------- ----------
103,679 84,734
Shares reacquired (103,440) (335,960)
------------- ----------
Net increase (decrease) 239 (251,226)
============= ==========
GLOBAL HARD ASSETS FUND
-----------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
1999 (UNAUDITED) 1998
-----------------------------------
Class A
Shares sold 586,963 738,118
Reinvestment of dividends 7,701 31,509
------------- ----------
594,664 769,627
Shares reacquired (657,702) (2,507,005)
------------- ----------
Net decrease (63,038) (1,737,378)
============= ==========
Class B
Shares sold 27,489 182,498
Reinvestment of dividends -- 6,161
------------- ----------
27,489 188,659
Shares reacquired (129,415) (326,389)
------------- ----------
Net decrease (101,926) (137,730)
============= ==========
46
<PAGE>
VAN ECK FUNDS
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
GLOBAL HARD ASSETS FUND (CONT.)
-----------------------------------------
Class C
Shares sold 13,008 149,229
Shares reinvested -- 4,414
------------- ----------
13,008 153,643
Shares reacquired (75,688) (323,996)
------------- ----------
Net decrease (62,680) (170,353)
============= ==========
GLOBAL LEADERS FUND
-----------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
1999 (UNAUDITED) 1998
----------------------------------
Class A
Shares sold 212,335 346,394
Shares reinvested 6,234 324,735
------------- ----------
218,569 671,129
Shares reacquired (332,037) (495,431)
------------- ----------
Net increase (decrease) (113,468) 175,698
============= ==========
Class B
Shares sold 62,754 117,857
Shares reinvested 383 59,495
------------- ----------
63,137 177,352
Shares reacquired (149,692) (101,591)
------------- ----------
Net increase (decrease) (86,555) 75,761
============= ==========
GOLD/RESOURCES FUND
-----------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
1999 (UNAUDITED) 1998
-----------------------------------
Class A
Shares sold 2,525,500 6,268,313
Shares reacquired (4,876,365) (7,783,650)
------------- ----------
Net decrease (2,350,865) (1,515,337)
============= ==========
INTERNATIONAL INVESTORS GOLD FUND
-----------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
1999 (UNAUDITED) 1998
-----------------------------------
Class A
Shares sold 308,015,326 521,796,216
Shares reinvested 112,358 211,708
---------------- -----------
308,127,684 522,007,924
Shares reacquired (305,655,503) (516,717,224)
---------------- ------------
Net increase 2,472,181 5,290,700
================ ===========
U.S. GOVERNMENT MONEY MARKET FUND
-----------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
1999 (UNAUDITED) 1998
-----------------------------------
Shares sold 1,940,271,210 3,670,980,599
Shares issued in
connection with
an acquisition -- 7,517,642
Shares reinvested 671,506 1,495,988
---------------- -------------
1,940,942,716 3,679,994,229
Shares reacquired (1,963,056,108) (3,709,422,005)
---------------- -------------
Net decrease (22,113,392) (29,427,776)
================ =============
NOTE 6--Forward Foreign Currency Contracts--The Funds (except U.S. Government
Money Fund) may buy and sell forward foreign currency contracts to settle
purchases and sales of foreign denominated securities. In addition, the Funds
(except U.S. Government Money 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 loss from foreign currency
transactions. At June 30,1999, the following forward foreign currency contracts
were outstanding:
VALUE AT UNREALIZED
SETTLEMENT CURRENT APPRECIATION
CONTRACTS DATE VALUE (DEPRECIATION)
- --------------------------------------------------------------------------------
GLOBAL LEADERS FUND
Foreign Currency Purchase Contracts:
AUD 753,000 expiring 7/29/99 $493,042 $501,343 $8,301
EUR 171,094 expiring 7/06/99 177,809 176,303 (1,506)
GBP 470,000 expiring 7/13/99 761,870 741,228 (20,642)
-------
(13,847)
-------
Foreign Currency Sale Contracts:
AUD 753,000 expiring 7/29/99 498,652 501,343 (2,691)
GBP 411,000 expiring 7/13/99 661,710 648,180 13,530
GBP 59,000 expiring 7/13/99 94,407 93,048 1,359
JPY 13,290,319 expiring 7/06/99 109,855 109,760 95
JPY 71,184,825 expiring 7/21/99 595,191 589,826 5,365
------
17,658
------
$3,811
======
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
Funds 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
Funds have 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 June 30, 1999, the total liability portion of the Plan is as follows:
Asia Dynasty Fund-$12,157, Global Hard Assets Fund-$15,348, Global Leaders
Fund-$11,547, Gold/Resources Fund-$29,077, International Investors Gold
Fund-$99,658 and U.S. Government Money Fund-$34,596.
47
<PAGE>
VAN ECK FUNDS
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
NOTE 8--RESTRICTED SECURITIES
The following securities are restricted as to sale and deemed to be illiquid:
PERCENT OF
DATES NET ASSETS
ACQUIRED COST VALUE AT 6/30/99
----------- --------- -------- ----------
ASIA DYNASTY FUND
Berjaya Sports
Toto Berhad 4/26/99 $443,334 $643,342 1.6%
Commerce Asset
Holdings Berhad 4/26/99 430,236 736,296 1.8%
IOI Properties Berhad 5/6/99-
6/4/99 263,259 301,018 0.7%
MMA Holdings Berhad 4/27/99 248,836 417,754 1.0%
Paul Y Properties
Group Ltd. 5/10/99 67,803 524,411 1.3%
UMW Holdings Berhad 5/12/99-
5/13/99 306,700 401,827 1.0%
GLOBAL HARD ASSETS FUND
AltaGas Service Co., Inc. 4/23/98 250,480 278,893 0.8%
Khanty-Mansiysk
Oil Co. 1/31/97 549,995 797,525 2.3%
Windsor Energy
Corp 7/09/96-
5/27/99 1,266,515 88,341 0.3%
NOTE 9--Schedule of Affiliated Company Transactions:
Transactions with affiliates (as defined by the Investment Company Act of 1940)
for the six months ended June 30, 1999:
GOLD/ INTERNATIONAL
RESOURCES INVESTORS
FUND GOLD FUND
------------- --------------
PIEDMONT MINING CO.
12/31/98 Share Balance 1,000,000 1,270,000
Purchases:
Shares -- --
Cost -- --
Sales:
Shares -- --
Cost -- --
Realized Gain (Loss) -- --
6/30/99 Share Balance 1,000,000 1,270,000
Market Value $80,000 $101,600
Dividend Income -- --
NOTE 10--Collateral for repurchase agreements, the value of which must be at
least 102% of the underlying debt obligation, plus accrued interest, is held by
the Funds' custodian. In the remote chance the counterparty should fail to
complete the repurchase agreement, realization and retention of the collateral
may be subject to legal proceedings and the Funds would become exposed to market
fluctuation on the collateral.
NOTE 11--EQUITY SWAPS
The Funds 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. At June 30,
1999, the following swaps were outstanding (stated in U.S. dollars):
UNREALIZED
UNDERLYING NUMBER OF NOTIONAL TERMINATION APPRECIATION
SECURITY SHARES AMOUNT DATE (DEPRECIATION)
- ---------- --------- -------- ----------- --------------
ASIA DYNASTY
FUND
United
Microelectronics
Corp. 131,000 $279,054 6/23/00 $(44,175)
Global Hard
Assets Fund
Gazprom
Oil Co. 239,200 $ 47,960 3/15/00 8,970
NOTE 12--Acquisition
U.S. GOVERNMENT MONEY FUND:
As of the close of business on April 24, 1998, the Fund acquired all the net
assets of the Van Eck/Chubb Money Market Fund pursuant to a plan of
reorganization approved by the Van Eck/Chubb Money Market Fund shareholders on
April 16, 1998. The acquisition was accomplished by a tax-free exchange of
7,517,642 shares of U.S. Government Money Fund (valued at $7,517,642) for the
7,517,642 shares of Van Eck/Chubb Money Market Fund outstanding on April 24,
1998. Van Eck/Chubb Money Market Fund's net assets at that date, $7,517,642,
were combined with those of U.S. Government Money Fund. The aggregate net assets
of U.S. Government Money Fund and Van Eck/Chubb Money Market Fund before the
acquisition were $32,921,989 and $7,517,642, respectively.
NOTE 13--CHANGE OF INDEPENDENT ACCOUNTANT
During the fiscal year the Board of Trustees of the Van Eck Funds approved a
change of the Fund's Independent Accountants to Ernst & Young LLP.
48
<PAGE>
[LOGO]
Investment Adviser: Van Eck Associates Corporation
Distributor: Van Eck Securities Corporation
99 Park Avenue, New York, NY 10016 www.vaneck.com
Account Assistance: (800) 544-4653
This report must be accompanied or preceded by a Van Eck Global 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 you invest.
