<PAGE>
- --------------------------------------------------------------------------------
Van Eck Global
Worldwide Insurance Trust
- --------------------------------------------------------------------------------
ANNUAL REPORT
December 31, 1998
discipline
Worldwide Bond Fund
allocation
diversity
A TRADITION OF GLOBAL SOLUTIONS DESIGNED FOR INTELLIGENT INVESTMENT PLANNING AND
DIVERSIFICATION
<PAGE>
Van Eck Worldwide Bond Fund
- --------------------------------------------------------------------------------
Dear Fellow Shareholder:
The major global bond markets provided excellent returns in 1998. Traditional
"safe-haven" markets benefited from low inflation, slowing global growth and
the diminishing liquidity found in alternative markets. The general "flight to
quality" theme that was evident throughout the year was dominated by continued
economic uncertainty in Asia, followed by concerns regarding devaluation and
default in Russia and the possible repercussions in other emerging markets. For
the twelve months ended December 31, 1998, the Worldwide Bond Fund achieved a
return of 12.8%, compared to a total return of 15.3% for the Salomon Smith
Barney World Government Bond Index.
Bond Market Review
During the first half of the year, sentiment moved away from worries about
domestic inflationary pressures and high growth to an atmosphere of slowing
growth and low inflation. The unremitting turmoil in the emerging markets that
evolved in 1997 kept safety on the minds of most investors going into 1998. As
a result, high-quality, long duration bonds of developed markets continuously
gained ground.
The third quarter of the year proved to be extremely volatile for global
markets in general and provided the biggest boost to the safest of bonds. The
devaluation in Russia and possible contagion effect on Brazil hung overhead as
the Asian financial crisis, which began with Thailand's devaluation of the baht
in July 1997, remained fresh on the minds of many investors. Clinton's public
confession and talks of possible impeachment added to the panic. Hedge funds
around the world were forced to unload illiquid assets as a result of the
collapse of the Long-Term Capital Management hedge fund. Consequently, August
was the best month for government bonds as investors flooded the market in a
complete retreat from riskier investments.
The fourth quarter saw a turning point for these trends. The Federal Reserve
pumped liquidity back into the economy by cutting rates three times within a
seven-week time period. These announcements (in particular, the unexpected
October 17 announcement) returned confidence to the markets. Stocks recovered
and investors began to venture back into riskier debt.
Throughout the year, we maintained a substantial position in Europe. While
experiencing some volatility as a result of proximity to Russia, European bond
markets achieved superior returns. For the year ended December 31, 1998, these
markets averaged returns of approximately 20% in U.S. dollar terms. Improving
economic conditions along with positive sentiment surrounding the introduction
of the euro (and the subsequent interest rate convergence at 3%) buoyed
European currencies. These currencies, which were favorably represented in the
Fund, were further inflated after the dollar fell sharply following the events
of the third quarter. At December 31, 1998, Continental European bonds
represented 23% of net assets, up from 19% at year-end 1997.
The UK bond market was the top performer in both 1997 and 1998, measured both
in local currency and in U.S. dollar terms. For the twelve months ended
December 31, 1998, UK bonds achieved a return of 21% in U.S. dollar terms. The
Worldwide Bond Fund benefited from its allocation of over 20% (overweight the
Index by approximately 3 times), which was sustained throughout the year. Our
UK currency exposure was hedged during the year; this proved beneficial to the
Fund as sterling, unlike the euro currencies, traded similar to the dollar and
finished down on the year.
The U.S. bond market posted impressive returns for the year, with the Lehman
Brothers Aggregate Bond Index up 8.7%. Super-safe Treasuries did even better as
30-year Treasuries gained 16.5%. A growing budget surplus reduced U.S.
borrowing needs and sent yields down to 5.09% (from 5.92% at year-end 1997),
the lowest yields seen since the mid-1960s. The financial panic that erupted in
August (as discussed above) further benefited Treasury bonds. During the final
months of 1998, U.S. bonds traded in a moderate range on the question of global
growth, stock market gains and economic conditions in Latin America. Your
<PAGE>
Van Eck Worldwide Bond Fund
- -------------------------------------------------------------------------------
Fund maintained an overweight position in U.S. bonds (45% or more) throughout
the year. We also extended the duration of our U.S. bond position, thereby
increasing our participation in the exceptional performance of this market.
We eliminated the Fund's exposure to the Canadian bond market early in the
year (from a 4% weighting) due to an expected continuation of currency
weakness. We cut Canadian exposure in favor of higher-yielding U.S. bonds.
This decision proved beneficial as the Canadian bond market turned in a
lackluster 1.9% return in U.S. dollar terms.
New Zealand and Australian currencies continued to decline dramatically
throughout the year, mostly attributable to association with their Asian
counterparts and their link to commodity prices. Throughout the year, the Fund
continued to exclude Australian holdings from the portfolio. The duration of
the Fund's New Zealand holdings (5.2% of total net assets at December 31,
1998) was decreased during the year, and the currency exposure was hedged for
a portion of the year.
It has been a volatile year for the Japanese bond market. The market rallied
for the first nine months of 1998, but finished the year with the worst
performance among bond markets in local currency terms (0.5%). In U.S. dollar
terms, however, the market gained 15.9% due to a sharp recovery in the
Japanese yen toward year end. Your Fund had no exposure to Japan's bond market
and was underweight the yen. While the Fund would have benefited from more
exposure to the yen during the fourth quarter, we felt that the low yields,
negative macroeconomic conditions and the volatile Japanese currency did not
warrant a substantial position in Japan.
The Outlook
Our outlook for the global bond markets continues to be cautiously optimistic.
Global growth continues to be moderate, providing a positive fixed income
environment. Going forward, we plan to maintain our high weighting to the U.S.
bond market. However, we will closely monitor domestic economic conditions. We
believe that most of the outperformance seen in the UK bond market has already
occurred and we will look to lighten our heavy exposure there. Our outlook on
the Japanese economy remains negative, and we intend to remain underweight in
this market. We will consider increasing our allocation to emerging market
debt due to favorable interest rate spreads evident in those regions.
Currently, we are keeping close watch on economic events that are unfolding in
the emerging markets (such as the recent floatation of the Brazilian real) as
they should present some promising investment opportunities in fixed income
markets around the world.
We appreciate your participation in the Worldwide Bond Fund and look forward
to helping you meet your investment goals in the future.
[PHOTO APPEARS HERE] [PHOTO APPEARS HERE] [PHOTO APPEARS HERE]
/s/ John C. van Eck /s/ Charles T. Cameron /s/ Gregory F. Krenzer
John C. van Eck Charles T. Cameron Gregory F. Krenzer
Chairman Co-Portfolio Co-Portfolio
Manager Manager
January 27, 1999
<PAGE>
Van Eck Worldwide Bond Fund
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Van Eck Worldwide Bond Fund
vs. Salomon Smith Barney
World Gov't Bond Index
[LINE GRAPH APPEARS HERE]
Van Eck Worldwide Salomon Smith Barney Bros.
Bond Fund World Gov't Bond Index
--------- ----------------------
9/1/89 10,000 10,000
9/89 10,000 10,190
10/89 10,010 10,275
11/89 10,010 10,368
12/89 10,070 10,495
1/90 10,120 10,356
2/90 9,930 10,197
3/90 10,050 10,096
4/90 10,100 10,065
5/90 10,199 10,399
6/90 10,465 10,590
7/90 10,721 10,922
8/90 10,844 10,837
9/90 10,875 10,958
10/90 11,079 11,447
11/90 11,203 11,637
12/90 11,203 11,752
1/91 11,549 12,046
2/91 11,580 12,049
3/91 11,129 11,612
4/91 11,350 11,790
5/91 11,432 11,775
6/91 11,185 11,652
7/91 11,443 11,901
8/91 11,701 12,132
9/91 12,324 12,606
10/91 12,464 12,738
11/91 12,559 12,937
12/91 13,263 13,610
1/92 12,867 13,368
2/92 12,812 13,294
3/92 12,658 13,153
4/92 12,702 13,247
5/92 13,194 13,654
6/92 13,568 14,036
7/92 13,837 14,363
8/92 14,095 14,765
9/92 13,475 14,913
10/92 13,054 14,508
11/92 12,458 14,278
12/92 12,566 14,363
1/93 12,578 14,613
2/93 12,723 14,901
3/93 12,771 15,130
4/93 12,783 15,449
5/93 12,806 15,604
6/93 12,908 15,572
7/93 12,755 15,615
8/93 13,276 16,085
9/93 13,365 16,277
10/93 13,466 16,249
11/93 13,284 16,134
12/93 13,545 16,271
1/94 13,832 16,401
2/94 13,467 16,294
3/94 13,076 16,271
4/94 13,102 16,289
5/94 12,909 16,146
6/94 12,922 16,379
7/94 12,987 16,510
8/94 12,974 16,452
9/94 13,170 16,570
10/94 13,458 16,835
11/94 13,380 16,603
12/94 13,367 16,650
1/95 13,485 16,999
2/95 13,917 17,434
3/95 14,846 18,470
4/95 15,003 18,812
5/95 15,275 19,342
6/95 15,316 19,456
7/95 15,330 19,503
8/95 15,205 18,832
9/95 15,385 19,252
10/95 15,482 19,394
11/95 15,539 19,614
12/95 15,680 19,820
1/96 15,539 19,576
2/96 15,412 19,476
3/96 15,285 19,449
4/96 15,314 19,371
5/96 15,250 19,375
6/96 15,352 19,528
7/96 15,569 19,903
8/96 15,540 19,980
9/96 15,612 20,062
10/96 15,960 20,437
11/96 16,221 20,707
12/96 16,076 20,539
1/97 15,815 19,990
2/97 15,830 19,841
3/97 15,650 19,690
4/97 15,605 19,517
5/97 15,800 20,048
6/97 15,935 20,287
7/97 15,920 20,129
8/97 15,785 20,117
9/97 16,234 20,545
10/97 16,474 20,972
11/97 16,429 20,650
12/97 16,459 20,587
1/98 16,624 20,787.49
2/98 16,669 20,956.47
3/98 16,669 20,749.02
4/98 16,866 21,080.73
5/98 17,017 21,130.13
6/98 17,017 21 161.32
7/98 17,153 21,189.4
8/98 17,606 21,766.53
9/98 18,407 22,923.9
10/98 18,392 23,602.93
11/98 18,271 23,269.77
12/98 18,558 23,737
- --------------------------------------------------------------------------------
Average Annual Total Return 12/31/98 1 Year 5 Years Since Inception*
- --------------------------------------------------------------------------------
Van Eck Worlwide Bond Fund 12.8% 6.5% 6.9%
- --------------------------------------------------------------------------------
Salomon Smith Barney World Gov't Bond Index 15.3% 7.9% 9.7%
- --------------------------------------------------------------------------------
This graph compares an initial $10,000 investment in the Van Eck Worldwide Bond
Fund made at its inception with a similar investment in the Salomon Smith
Barney World Government Bond Index. The graph shows month-end net asset values;
however, the net asset value fluctuates daily.
*Inception date for the Worldwide Bond Fund was 9/1/89; index returns are
calculated as of nearest month end (8/31/89).
The Salomon Smith Barney World Government Bond Index is an unmanaged index and
includes the reinvestment of all dividends, but does not reflect the payment of
transaction costs, advisory fees or expenses that are associated with an
investment in the Fund.
Past performance is not indicative of future results. Performance data quoted
represents past performance; the investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than the original cost. These returns do not take variable
annuity/life fees and expenses into account.
<PAGE>
Worldwide Bond Fund
Schedule of Portfolio Investments
December 31, 1998
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<TABLE>
<CAPTION>
Principal Value
Country Amount Bonds and Notes (Note 1)
- -----------------------------------------------------------------------------
<C> <C> <S> <C>
FRANCE: 4.9%
French Government Bond
FRF 30,500,000 BTAN
5.50% due 10/12/01* $ 5,783,582
------------
GERMANY: 10.1%
Bundesrepublik Deutschland Bonds
DEM 7,000,000 7.375% due 1/03/05* 5,047,239
5,300,000 6.00% due 1/04/07* 3,650,857
5,000,000 5.625% due 1/04/28 3,389,803
------------
12,087,899
------------
IRELAND: 2.1%
Irish Government Bond
IEP 1,350,000 8.00% due 8/18/06 2,549,019
------------
ITALY: 1.9%
Italian Government Bond
ITL 3,600,000,000 7.50% due 10/01/99 2,238,441
------------
NEW ZEALAND: 5.2%
New Zealand Government Bonds
NZD 3,350,000 10.00% due 3/15/02 2,004,084
7,500,000 8.00% due 2/15/01 4,165,495
------------
6,169,579
------------
SPAIN: 0.8%
Spanish Government Bond
ESP 135,000,000 7.40% due 7/30/99 974,252
------------
SWEDEN: 5.0%
Swedish Government Bonds
SEK 14,000,000 10.25% due 5/05/03 2,166,020
28,000,000 6.00% due 2/09/05 3,833,565
------------
5,999,585
------------
</TABLE>
<TABLE>
<CAPTION>
Principal Value
Country Amount Bonds and Notes (Note 1)
- -----------------------------------------------------------------------------
<C> <C> <S> <C>
UNITED KINGDOM: 20.9%
Great Britain Government Bonds
GBP 1,500,000 8.00% due 6/07/21 $ 3,771,248
2,250,000 8.00% due 6/10/03 4,262,921
6,800,000 7.50% due 12/07/06 13,561,066
2,000,000 6.00% due 8/10/99 3,329,037
------------
24,924,272
------------
UNITED STATES: 44.9%
U.S. Treasury Notes
USD 8,600,000 6.50% due 8/15/05* 9,451,942
4,500,000 6.25% due 2/15/07* 4,937,346
11,250,000 6.00% due 8/15/00 11,485,553
10,000,000 5.875% due 9/30/02 10,400,000
U.S. Treasury Bonds
4,000,000 6.75% due 8/15/26* 4,795,000
10,500,000 6.625% due 2/15/27* 12,422,815
------------
53,492,656
------------
Total Bonds and Notes: 95.8%
(Cost: $107,275,309) 114,219,285
------------
<CAPTION>
Short-Term Obligation
- -----------------------------------------------------------------------------
<C> <C> <S> <C>
UNITED STATES: 1.7%
General Electric Co.
USD 2,050,000 Commercial Paper due 1/04/99
Interest Yield 4.77%
(Amortized Cost: $2,049,197) 2,049,197
------------
Total Investments: 97.5%
(Cost: $109,324,506) 116,268,482
Other assets less liabilities: 2.5% 3,014,027
------------
Net Assets: 100% $119,282,509
============
</TABLE>
- -------
* These securities are segregated as collateral for forward foreign currency
contracts.
See Notes to Financial Statements
<PAGE>
Worldwide Bond Fund Financial Statements
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
December 31, 1998
<TABLE>
<S> <C>
Assets:
Investments at value (cost, $109,324,506) (Note 1).................. $116,268,482
Cash................................................................ 52,177
Receivables:
Interest........................................................... 2,591,662
Capital shares sold................................................ 256,465
Unrealized appreciation on forward foreign currency contracts (Note
4)................................................................. 565,949
------------
Total assets...................................................... 119,734,735
------------
Liabilities:
Payables:
Capital shares redeemed............................................ 40,974
Accounts payable.................................................... 43,515
Unrealized depreciation on forward foreign currency contracts (Note
4)................................................................. 367,737
------------
Total liabilities................................................. 452,226
------------
Net assets.......................................................... $119,282,509
============
Shares outstanding.................................................. 9,714,626
============
Net asset value, redemption price and offering price per share
($119,282,509 / 9,714,626)......................................... $ 12.28
============
Net assets consist of:
Aggregate paid in capital.......................................... $106,699,401
Unrealized appreciation of investments, forward foreign currency
contracts and foreign currencies.................................. 7,159,811
Undistributed net investment income................................ 4,450,964
Undistributed realized gain........................................ 972,333
------------
$119,282,509
============
</TABLE>
Statement of Operations
For the Year Ended December 31, 1998
<TABLE>
<S> <C> <C>
Interest income (Note 1).............................. $ 6,937,247
Expenses:
Management (Note 2)................................... $1,180,505
Administration (Note 2)............................... 8,568
Professional fees..................................... 40,407
Reports to shareholders............................... 36,231
Custodian............................................. 34,117
Trustees' fees and expenses........................... 28,882
Other................................................. 33,905
----------
Total expenses...................................... 1,362,615
----------
Net investment income............................... 5,574,632
Realized and Unrealized Gain (Loss) on Investments
(Note 3):
Realized gain from security transactions.............. 1,940,736
Realized loss from foreign currency transactions...... (109,729)
Change in unrealized appreciation of investments...... 6,508,262
Change in unrealized depreciation of forward foreign
currency contracts and foreign currencies............ 452,900
-----------
Net Increase in Net Assets Resulting from Operations.. $14,366,801
===========
</TABLE>
See Notes to Financial Statements
<PAGE>
Worldwide Bond Fund Financial Statements
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, December 31,
1998 1997
------------ ------------
<S> <C> <C>
Increase (Decrease) in Net Assets:
Operations:
Net investment income............................. $ 5,574,632 $ 4,818,806
Realized gain from security transactions.......... 1,940,736 939,587
Realized loss from foreign currency transactions.. (109,729) (1,588,761)
Change in unrealized appreciation of investments.. 6,508,262 (1,375,718)
Change in unrealized depreciation of forward
foreign currency contracts and foreign
currencies....................................... 452,900 (229,114)
------------ ------------
Increase in net assets resulting from operations.. 14,366,801 2,564,800
------------ ------------
Dividends to shareholders from net investment
income............................................ (1,020,300) (3,749,849)
------------ ------------
Capital share transactions*:
Net proceeds from sales of shares................. 83,615,224 33,108,189
Reinvestment of dividends......................... 1,020,300 3,749,849
------------ ------------
84,635,524 36,858,038
Cost of shares reacquired......................... (91,160,172) (41,888,456)
------------ ------------
Decrease in net assets resulting from capital
share transactions............................... (6,524,648) (5,030,418)
------------ ------------
Total increase (decrease) in net assets........... 6,821,853 (6,215,467)
Net Assets:
Beginning of year.................................. 112,460,656 118,676,123
------------ ------------
End of year (including undistributed net investment
income of $4,450,964 and $723,165, respectively).. $119,282,509 $112,460,656
============ ============
*Shares of Beneficial Interest Issued and Redeemed
(Unlimited number of $.001 par value shares
authorized)
Shares sold....................................... 7,092,902 3,059,504
Reinvestment of dividends......................... 92,755 355,099
------------ ------------
7,185,657 3,414,603
Shares reacquired................................. (7,699,622) (3,880,804)
------------ ------------
Net decrease...................................... (513,965) (466,201)
============ ============
</TABLE>
See Notes to Financial Statements
<PAGE>
Worldwide Bond Fund
- -------------------------------------------------------------------------------
Financial Highlights
For a share outstanding throughout each period
<TABLE>
<CAPTION>
For the
Year Ended Eight Months
December 31, Ended Year Ended April 30,
------------------ December 31, ---------------------------
1998 1997 1996 1996 1995 1994
-------- -------- ------------ -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 10.99 $ 11.10 $ 10.88 $ 11.46 $ 10.05 $ 10.62
-------- -------- -------- -------- -------- -------
Income From Investment
Operations:
Net Investment Income.. 0.57 0.48 0.36 0.58 0.68* 0.63
Net Gain (Loss) on
Investments (both
realized and
unrealized)........... 0.82 (0.23) 0.17 (0.34) 0.77 (0.37)
-------- -------- -------- -------- -------- -------
Total from Investment
Operations............. 1.39 0.25 0.53 0.24 1.45 0.26
-------- -------- -------- -------- -------- -------
Less Dividends and
Distributions:
Dividends from Net
Investment Income..... (0.10) (0.36) (0.31) (0.82) (0.04) (0.72)
Distributions from
Capital Gains......... -- -- -- -- -- (0.11)
-------- -------- -------- -------- -------- -------
Total Dividends and
Distributions.......... (0.10) (0.36) (0.31) (0.82) (0.04) (0.83)
-------- -------- -------- -------- -------- -------
Net Asset Value, End of
Period................. $ 12.28 $ 10.99 $ 11.10 $ 10.88 $ 11.46 $ 10.05
======== ======== ======== ======== ======== =======
Total Return (a)........ 12.75% 2.38% 4.98% 2.07% 14.51% 2.49%
- ----------------------------------------------------------------------------------------
Ratios/Supplementary
Data
Net Assets, End of
Period (000)........... $119,283 $112,461 $118,676 $107,541 $113,466 $80,908
Ratio of Gross Expenses
to Average Net Assets.. 1.15% 1.12% 1.17%(b) 1.10% 0.99%
Ratio of Net Expenses to
Average Net Assets..... 1.15% 1.12% 1.16%(b) 1.08% 0.98% 0.93%
Ratio of Net Investment
Income to Average Net
Assets................. 4.72% 4.31% 4.99%(b) 5.26% 6.24% 6.47%
Portfolio Turnover Rate. 30.59% 135.36% 73.95% 208.05% 265.87% 37.59%
</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. Total return for periods less than one year is not
annualized.
(b) Annualized.
* Based on average shares outstanding.
See Notes to Financial Statements
- -------------------------------------------------------------------------------
Notes To Financial Statements
Note 1--Significant Accounting Policies:
Van Eck Worldwide Insurance Trust (the "Trust"), organized as a Massachusetts
business trust on January 7, 1987, is registered under the Investment Company
Act of 1940. The following is a summary of significant accounting policies
consistently followed by the Worldwide Bond Fund (the "Fund"), a non-
diversified series of the Trust, in the preparation of its financial
statements. The policies are in conformity with generally accepted accounting
principles. The preparation of financial statements in conformity with
generally accepted accounting principles requires 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 exchanges or on the
NASDAQ National Market System are valued at the last sales prices reported at
the close of business on the last business day of the year. Over-the-counter
securities not included in the NASDAQ National Market System and listed
securities for which no sale was reported are valued at the mean of the bid
and asked prices. Short-term obligations purchased with more than sixty days
remaining to maturity are valued at market. Short-term obligations purchased
with sixty days or less to maturity are valued at amortized cost which with
accrued interest approximates value. Futures are valued using the closing
price reported at the close of the Chicago Board of Trade. 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 the foreign markets. Securities for which quotations are not available are
stated at fair value as determined by the Board of Trustees.
B. Federal Income Taxes--It is the Fund's policy to comply with the provisions
of the Internal Revenue Code applicable to regulated investment companies and
to distribute all of its taxable income to its shareholders. Therefore, no
federal income tax provision is required.
C. Currency Translation--Assets and liabilities denominated in foreign
currencies and commitments under forward foreign currency contracts are
translated into U.S. dollars at the mean of the quoted bid and asked prices of
such currencies on the last business day of the year. Purchases and sales of
investments are translated at the exchange rates prevailing when such
investments were acquired or sold. Income and expenses are translated at the
exchange rates prevailing when accrued. The portion of realized and unrealized
gains and losses on investments that results from fluctuations in foreign
currency exchange rates is not separately disclosed. Recognized gains or
losses attributable to foreign currency fluctuations on foreign currency
denominated assets and liabilities are recorded as net realized gains and
losses from foreign currency transactions. These differences are primarily due
to differing treatment of foreign currency transactions. The effect of these
differences for the year ended December 31, 1998 is an increase to
undistributed net investment income and a decrease to undistributed realized
gains by $826,533.
<PAGE>
Worldwide Bond Fund
- -------------------------------------------------------------------------------
Notes To Financial Statements (continued)
D. Dividend and Distributions--Dividend income and distributions to
shareholders are recorded on the ex-dividend date. Income distributions and
capital gain distributions are determined in accordance
with income tax regulations which may differ from such amounts reported in
accordance with generally accepted accounting principles.
E. Other--Security transactions are accounted for on the date the securities
are purchased or sold. Interest income is accrued as earned.
Note 2--Van Eck Associates Corporation (the "Adviser") earned fees of
$1,180,505 for the year ended December 31, 1998 for investment management and
advisory services. The fee is based on an annual rate of 1% on the first $500
million of average daily net assets, .90 of 1% on the next $250 million and
.70 of 1% on the excess over $750 million. Certain of the officers and
trustees of the Trust are officers, directors or stockholders of the adviser
and Van Eck Securities Corporation. In accordance with the advisory agreement,
the Fund paid the Adviser $8,568 for costs incurred in connection with certain
administrative functions.
Note 3--Purchases and proceeds from sales of securities, other than short-term
obligations, aggregated $34,174,181 and $34,835,437, respectively, for the
year ended December 31, 1998. For federal income tax purposes, the identified
cost of investments owned at December 31, 1998 was $109,324,506. At December
31, 1998, net unrealized appreciation for federal income tax purposes
aggregated $6,943,976, of which $8,309,234 related to appreciated securities
and $1,365,258 related to depreciated securities.
Note 4--Forward Foreign Currency Contracts-The Fund may buy and sell forward
foreign currency contracts to settle purchases and sales of foreign
denominated securities. In addition, the Fund may enter into forward foreign
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 December 31, 1998, the Fund had the
following outstanding forward foreign currency contracts:
<TABLE>
<CAPTION>
Value At Unrealized
Settlement Current Appreciation
Contracts Date Value (Depreciation)
--------- ----------- ----------- --------------
<C> <S> <C> <C> <C>
Forward Foreign Currency Buy Contracts:
DEM 33,700,000
expiring
3/17/99 $20,548,780 $20,302,269 $(246,511)
FRF 44,700,000
expiring
3/17/99 8,128,307 8,027,082 (101,225)
GBP 1,050,000
expiring
3/17/99 1,756,808 1,736,807 (20,001)
JPY 500,000,000
expiring
3/17/99 4,386,927 4,460,144 73,217
Forward Foreign Currency Sell Contract:
GBP 13,950,000
expiring
3/17/99 23,567,450 23,074,718 492,732
---------
$ 198,212
=========
</TABLE>
The Fund may incur additional risk from investments in forward foreign
currency contracts if the counterparty is unable to fulfill its obligation or
there are unanticipated movements of the foreign currency relative to the U.S.
dollar.
Note 5--Option Contracts--The Fund may invest, for hedging and other purposes,
in call and put options on securities, currencies and commodities. Call and
put options give the Fund the right but not the obligation to buy (calls) or
sell (puts) the instrument underlying the option at a specified price. The
premium paid on the option, should it be exercised, will, on a call, increase
the cost of the instrument acquired and, on a put, reduce the proceeds
received from the sale of the instrument underlying the option. If the options
are not exercised, the premium paid will be recorded as a capital loss upon
expiration. The Fund may incur additional risk to the extent the value of the
underlying instrument does not correlate with the movement of the option
value.
The Fund may also write call or put options. As the writer of an option, the
Fund receives a premium. The Fund keeps the premium whether or not the option
is exercised. The premium will be recorded, upon expiration of the option, as
a short-term capital gain. If the option is exercised, the Fund must sell, in
the case of a written call, or buy, in the case of a written put, the
underlying instrument at the exercise price. The Fund may write only covered
puts and calls. A covered call option is an option in which the Fund owns the
instrument underlying the call. A covered call sold by the Fund exposes it
during the term of the option to possible loss of opportunity to realize
appreciation in the market price of the underlying instrument or to possible
continued holding of an underlying instrument which might otherwise have been
sold to protect against a decline in the market price of the underlying
instrument. A covered put exposes the Fund during the term of the option to a
decline in price of the underlying instrument. A put option sold by the Fund
is covered when, among other things, cash or short-term liquid securities are
placed in a segregated account to fulfill the obligations undertaken. The Fund
may incur additional risk from investments in written currency options if
there are unanticipated movements in the underlying currencies.
Note 6--The Fund invests in foreign securities. Investments in foreign
securities may involve a greater degree of risk than investments in domestic
securities due to political, economic or social instability. Foreign
investments may also be subject to foreign taxes and settlement delays. Since
the Fund may have significant investments in foreign debt securities it may be
subject to greater credit and interest risks and greater currency fluctuations
than portfolios with significant investments in domestic debt securities.
Note 7--Trustee Deferred Compensation Plan--The Trust established a Deferred
Compensation Plan (the "Plan") for trustees. Commencing January 1, 1996, the
Trustees can elect to defer receipt of their trustee fees until retirement,
disability or termination from the board. The Fund's contributions to the Plan
are limited to the amount of fees earned by the participating trustees. The
fees otherwise payable to the participating Trustees are invested in shares of
the Van Eck Funds as directed by the Trustees. The Plan has been approved by
the Internal Revenue Service.
The Fund has elected to show the deferred liability net of the asset for
financial statement purposes.
As of December 31, 1998, the total value of the assets and corresponding
liability of the Fund's portion of the Plan is $30,335.
Note 8--An income dividend of $0.47 a share, a short-term capital gain
distribution of $0.03 a share and a long-term capital gain distribution of
$0.18 a share was paid on January 29, 1999 to shareholders of record date
January 27, 1999 with a reinvestment date of January 29, 1999.
<PAGE>
Worldwide Bond Fund
- --------------------------------------------------------------------------------
To the Trustees of Van Eck Worldwide Insurance Trust and the Shareholders of
Worldwide Bond Fund:
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of portfolio investments, and the related statements of operations
and of changes in net assets and the financial highlights present fairly, in
all material respects, the financial position of the Worldwide Bond Fund (one
of the Funds comprising Van Eck Worldwide Insurance Trust, hereafter referred
to as the "Fund") at December 31, 1998, and the results of its operations, the
changes in its net assets and the financial highlights for each of the periods
presented, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits, which included confirmation of
securities at December 31, 1998 by correspondence with the custodian and
brokers, provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
New York, New York
February 12, 1999
<PAGE>
[LOGO OF VAN ECK GLOBAL APPEARS HERE]
Investment Adviser: Van Eck Associates Corporation
Distributor: Van Eck Securities Corporation
99 Park Avenue, New York, NY 10016 www.vaneck.com
This report must be accompanied or preceded by a prospectus, which includes more
complete information, such as charges and expenses and the risks associated with
international investing, including currency fluctuation or controls,
expropriation, nationalization and confiscatory taxation. Please read the
prospectus carefully before investing.
