<PAGE>
- --------------------------------------------------------------------------------
Van Eck Global
Worldwide Insurance Trust
- --------------------------------------------------------------------------------
ANNUAL REPORT
December 31, 1998
discipline
Worldwide Real Estate Fund
allocation
diversity
A TRADITION OF GLOBAL SOLUTIONS DESIGNED FOR INTELLIGENT INVESTMENT PLANNING AND
DIVERSIFICATION
<PAGE>
Van Eck Worldwide Real Estate Fund
- --------------------------------------------------------------------------------
Dear Fellow Shareholder:
Nineteen ninety-eight was a volatile year for investments in general and a
difficult year for global real estate securities. Despite strong real estate
fundamentals and attractive opportunities in many markets, investors focused on
several concerns that developed during the year that pushed real estate stock
prices down. The NAREIT Index, a U.S.-based index, declined 17.5% for the year,
while the Salomon Smith Barney World Property Index declined 13.3% during the
period. In this environment, your Fund compared favorably, with a total return
of -11.4%.
Review
Throughout 1998, fundamentals in the U.S. real estate market remained strong.
Rents were rising and vacancies were low and declining; real estate companies
had pricing power. Just as compelling, real estate securities offered
substantially higher earnings growth and lower valuations than the S&P 500. For
these reasons, the U.S. remained the largest country allocation in the Fund
throughout the year, accounting for 57% of total net assets at December 31,
1998. Investor sentiment, however, focused on other factors and the
disappointing performance results were in clear contrast to the underlying
strength of the securities versus the rest of the market.
In the beginning of the year, investors were anxious that the U.S. real estate
market was reaching the end of its cycle -- that things were almost too good.
Prices in the direct market for acquisitions had risen dramatically since the
bottom of the cycle in the early '90s, and building (new supply) had picked up
dramatically. In the second quarter, there was negative press coverage of IRS
reforms that were passed by Congress targeting "paired share" REITs (a specific
REIT structure), which left many uninformed investors concerned that the REIT
structure itself was endangered. Last summer, when the Russian economy and the
Long-Term Capital Management hedge fund fell into crisis, the U.S. stock market
fell dramatically and REITs followed suit. Capital that had been available for
mortgages disappeared, and while this had the positive effect of reducing
supply concerns, investors were overwhelmed with the worry that the U.S.
economy was heading into a recession and that the real estate market would
decline. Finally, in the fourth quarter, as the stock market rebounded, REITs
continued to lag -- possibly a result of "tax loss selling." For these reasons,
U.S. real estate securities turned in negative performance (their worst in 25
years) despite an exceptionally good year for the real estate business.
The environment was similar in the Canadian market. Here declines were even
more surprising since the Canadian real estate market boasted most of the
strengths of the U.S. real estate market, with the added advantage that
Canada's real estate cycle has been one to three years behind that of the U.S.
Given these positives, your portfolio had a large position of approximately 14-
15% of total net assets in Canadian real estate securities during the year.
However, as commodity prices dropped throughout the year, the Canadian dollar,
GDP growth estimates and stock market all suffered.
The continental European markets (about 12% of total net assets) were strongly
influenced by the imminent introduction of the euro, and real estate securities
performed relatively well, particularly in the first quarter. Much of Europe's
real estate cycle was in the beginning of an upswing. Many securities were
attractively priced and many real estate companies began to position themselves
to take advantage of pending European unity. Again, however, market volatility
hit in the second and especially third quarters, and real estate securities
continued to lag the recovery in the fourth. In the UK, recession fears began
to take hold after the first quarter when valuations were fairly high and real
estate securities began to decline. This, the largest real estate market in
Europe, declined over 20% for the year.
We have been very cautious about markets in the Far East (less than 5% of net
assets), which have been extremely volatile. Asia fell into a severe financial
crisis in the second half of 1997 and stocks, including property stocks,
declined dramatically in most of these markets.
<PAGE>
Van Eck Worldwide Real Estate Fund
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The Fund remained very underweighted in the region throughout 1998, awaiting
real signs of recovery. In the fourth quarter, the markets rebounded
dramatically off extreme lows, and rose over 40%; they still finished the year
in negative territory.
Defensive strategies that we employed as market volatility increased helped
Fund performance relative to our benchmarks. We maintained a high cash position
that averaged approximately 12-14% throughout the year and accounted for 25% of
assets for a time during the third quarter. We also increased weightings in
landlords that hold long-term leases to high-credit tenants (such as Boston
Properties, Cornerstone Properties, and TrizecHahn) as a defensive measure at a
time of slowing economic growth.
The Outlook
The underlying strength of many of the world's real estate markets remains
intact. We are positive on the outlook for 1999 given the substantial
underpricing of real estate securities versus the general market at this time,
particularly in North America. While we are not at the beginning stages of the
U.S. real estate cycle, landlord pricing power is still strong. We do not have
an overbuilding/oversupply situation such as we did in 1991, and though growth
may be slowing, a recession does not appear imminent. REITs offer substantially
higher earnings growth and valuations are well below their average relative to
the S&P 500. Continental Europe will continue to be a major beneficiary of the
euro. Mergers and acquisitions activity there should also be a boon,
particularly in the first half of 1999. The UK is at the end of its real estate
cycle, and we have only select positions there. Asia remains an uncertainty,
and until we see a substantial and sustained improvement in the underlying real
estate markets there, we are unlikely to drastically increase the Fund's
exposure to this region.
We thank you for your participation in the Worldwide Real Estate Fund and look
forward to helping you meet your investment goals in the future.
[PHOTO OF JOHN C. van ECK [PHOTO OF KEVIN L. REID
APPEARS HERE] APPEARS HERE]
/s/ John C. van Eck /s/ Kevin L. Reid
John C. van Eck Kevin L. Reid
Chairman Portfolio Manager
January 27, 1999
<PAGE>
Van Eck Worldwide Real Estate Fund
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Van Eck Worldwide Real Estate Fund
vs. Salomon Smith Barney World Property Index
and NAREIT Index
[CHART APPEARS HERE]
Van Eck Worldwide Salomon Smith Barney
Real Estate Fund World Property Index NAREIT Index
---------------- -------------------- ------------
6/97 10,000 10,000 10,000.00
7/97 11,164 10,206 10,309.00
8/97 11,226 9,713 10,284.26
9/97 12,237 10,180 11,182.07
10/97 12,104 8,807 10,880.16
11/97 12,022 8,741 11,115.17
12/97 12,217 8,583 11,377.49
1/98 12,135 8,265 11,317.19
2/98 12,441 8,901 11,124.79
3/98 12,725 8,834 11,323.93
4/98 12,475 8,490 10,954.77
5/98 12,123 8,010 10,878.09
6/98 12,021 7,783 10,804.11
7/98 11,261 7,260 10,102.93
8/98 10,148 6,517 9,149.51
9/98 10,285 6,892 9,667.47
10/98 10,398 7,334 9,448.62
11/98 10,761 7,530 9,628.10
12/98 10,829 7,445 9,385.47
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Average Annual Total Return 12/31/98 1 Year Since Inception*
- --------------------------------------------------------------------------------
Van Eck Worldwide Real Estate Fund+ -11.4% 3.9%
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Salomon Smith Barney World Property Index -13.3% -17.9%
- --------------------------------------------------------------------------------
NAREIT (U.S.Equity Real Estate) Index -17.5% -4.1%
- --------------------------------------------------------------------------------
This graph compares an initial $10,000 investment in the Van Eck Worldwide Real
Estate Fund made at 6/30/97 (inception date of the Fund was 6/23/97) with a
similar investment in the Salomon Smith Barney World Property Index and the
NAREIT Index. The graph shows month-end net asset values; however, the net
asset value fluctuates daily.
*Inception date for the Worldwide Real Estate Fund was 6/23/97; index returns
are calculated as of nearest month end (6/30/97).
+ Performance does not fully reflect the impact of the Fund's expenses, as they
have been fully or partially reimbursed by the Adviser at certain times since
the Fund's inception.
The Salomon Smith Barney World Property Index and the NAREIT Index (a U.S.
equity real estate index) are unmanaged indices and include the reinvestment of
all dividends, but do not reflect the payment of transaction costs, advisory
fees or expenses that are associated with an investment in the Fund.
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.
Worldwide Real Estate Fund
Sector Weightings
December 31, 1998
[PIE CHART APPEARS HERE]
Residential 6.7%
Retail 9.2%
Specialty 5.4%
Cash/Other 11.7%
Diversified 23.6%
Hotels 5.5%
Office/Industrial 37.9%
Worldwide Real Estate Fund
Geographical Weightings
December 31, 1998
[PIE CHART APPEARS HERE]
United States 56.6%
Cash/Other 11.7
Australia 0.8%
Canada 13.8%
Finland 2.3%
France 5.8%
Hong Kong 2.3%
Italy 0.9%
Japan 1.7%
United Kingdom 1.2%
Sweden 1.3%
Spain 1.6%
<PAGE>
Van Eck Worldwide Real Estate Fund
Top Ten Equity Holdings as of December 31, 1998*
TrizecHahn Corporation
(Canada, 4.3%)
TrizecHahn is a real estate development and operating company. The company,
through its wholly owned subsidiaries, acquires, develops, manages and owns
income-producing commercial real estate comprised primarily of office buildings
in the United States and Canada.
Boston Properties, Inc.
(U.S., 3.8%)
Boston Properties develops, redevelops, acquires, manages, operates and leases
commercial office and industrial real estate properties. The company has a
significant presence in the Boston, Washington, D.C. and midtown Manhattan real
estate markets.
CB Richard Ellis Services Inc.
(U.S., 3.3%)
CB Richard Ellis Services provides commercial real estate services, such as
brokerage services, corporate services, property management, real estate market
research, mortgage banking, investment management and advisory services,
evaluation and appraisal services.
Equity Office Properties Trust
(U.S., 3.0%)
Equity Office Properties is a fully integrated, self-administered and self-
managed real estate investment trust (REIT) engaged in acquiring, owning,
managing, leasing and renovating office properties and parking facilities. The
company's assets are owned by, and its operations are conducted through, EOP
Operating Limited Partnership.
United Dominion Realty Trust, Inc.
(U.S., 2.7%)
United Dominion Realty is a self-administered real estate investment trust. The
company owns and operates apartment communities located in the sun-belt, from
Delaware to Nevada.
Tower Realty Trust, Inc.
(U.S., 2.6%)
Tower Realty Trust is a fully integrated, self-administered and self-managed
real estate investment trust. The company develops, acquires, owns, renovates,
manages and leases office properties in Manhattan, Phoenix, Tucson and Orlando.
Brookfield Properties Corporation
(Canada, 2.6%)
Brookfield Properties is a diversified North American real estate development
company. The company owns 58 commercial rental properties, develops residential
land, builds homes and offers real estate management services.
Cornerstone Properties, Inc.
(U.S., 2.5%)
Cornerstone Properties is a self-advised equity real estate investment trust.
The company invests in Class A office properties in prime central business
district locations and major suburban office markets in the United States.
Cadillac Fairview Corporation
(Canada, 2.5%)
Cadillac Fairview owns, manages and develops commercial real estate in North
America, focusing on high quality retail centers in Canada and the United
States. The company also focuses on office properties in major Canadian cities.
Cadillac owns interests in or manages 92 properties amounting to approximately
48 million square feet.
Boardwalk Equities, Inc.
(Canada, 2.3%)
Boardwalk Equities is a real estate company that acquires and manages multi-
family residential projects throughout western Canada. Boardwalk owns or has
contracted to acquire over 21,500 units.
- -------
* Portfolio is subject to change.
<PAGE>
Worldwide Real Estate Fund
Schedule of Portfolio Investments
December 31, 1998
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<TABLE>
<CAPTION>
No. of Value
Country Shares Securities (a) (Note 1)
- ---------------------------------------------------------------
<C> <C> <S> <C>
AUSTRALIA: 0.8%
3,000 Westfield Holdings Ltd. $ 15,208
----------
CANADA: 13.8%
1,200 Bentall Corp.+ 12,540
4,000 Boardwalk Equities, Inc. 44,154
4,000 Brookfield Properties Corp. 49,118
2,500 Cadillac Fairview Corp.+ 46,719
2,350 Oxford Properties Group, Inc.+ 27,935
4,000 TrizecHahn Corp. 82,002
----------
262,468
----------
FINLAND: 2.3%
7,500 Sponda Oyj 43,685
----------
FRANCE: 5.8%
150 Accor S.A. 32,470
300 Societe du Louvre 22,487
175 Societe Fonciere Lyonnaise+ 27,488
75 Societe Fonciere Lyonnaise+ 79
(Warrants expiring 7/30/02)
200 Unibail S.A. 29,160
----------
111,684
----------
HONG KONG: 2.3%
3,000 Cheung Kong Holdings, Ltd. 21,588
3,000 Sun Hung Kai Properties, Ltd. 21,878
----------
43,466
----------
ITALY: 0.9%
35,000 Unione Immobiliare SpA 18,266
----------
JAPAN: 1.7%
2,000 Mitsubishi Estate Co. Ltd. 17,854
2,000 Mitsui Fudoson Co. Ltd. 15,069
----------
32,923
----------
SPAIN: 1.6%
1,000 Metrovacesa, S.A. 30,013
----------
SWEDEN: 1.3%
1,000 Castellum AB 10,831
1,900 Diligentia AB 13,330
----------
24,161
----------
UNITED KINGDOM: 1.2%
3,000 British Land Co. PLC 22,113
----------
UNITED STATES: 56.6%
1,000 AMB Property Corp. 22,000
1,250 Arden Realty, Inc. 28,984
2,000 Bedford Property Investors, Inc. 33,750
2,400 Boston Properties, Inc. 73,200
1,100 Brandywine Realty Trust 19,663
1,500 Cabot Industrial Trust 30,656
1,500 CarrAmerica Realty Corp. 36,000
1,500 Catellus Development Corp.+ 21,469
3,500 CB Richard Ellis Service Inc. 63,438
3,000 Cornerstone Properties, Inc. 46,875
</TABLE>
<TABLE>
<CAPTION>
No. of Value
Country Shares Securities (a) (Note 1)
- --------------------------------------------------------------------
<C> <C> <S> <C>
UNITED STATES (continued)
2,400 Equity Office Properties Trust $ 57,600
1,000 Equity Residential Properties Trust 40,438
10,000 Excel Legacy Corp.+ 40,000
3,000 Grove Property Trust 35,250
5,000 Grubb & Ellis Co. 40,313
1,500 Highwoods Properties, Inc. 38,625
1,800 Kilroy Realty Corp. 41,400
1,000 Macerich Co. (The) 25,625
1,000 Mack-Cali Realty Corporation 30,875
1,500 New Plan Excel Realty Trust 33,281
4,337 Patriot American Hospitality, Inc. 26,022
1,000 Philips International Realty Corp. 15,375
1,000 Prentiss Properties Trust 22,313
2,000 Prologis Trust 41,500
1,000 Simon Property Group, Inc. 28,500
1,100 Starwood Hotels & Resorts Trust 24,956
2,500 Tower Realty Trust, Inc. 50,313
1,600 TriNet Corporate Realty Trust, Inc. 42,800
5,000 United Dominion Realty Trust, Inc. 51,563
1,000 Westfield America, Inc. 17,250
----------
1,080,034
----------
Total Stocks and Other Investments: 88.3%
(Cost: $1,688,715) 1,684,021
----------
<CAPTION>
Principal
Amount Short-Term Obligations
- --------------------------------------------------------------------
<C> <C> <S> <C>
U.S. Treasury Bills
$100,000 due 1/21/99 Yield 4.50% 99,753
175,000 due 2/04/99 Yield 4.42% 174,279
----------
Total Short-Term Obligations: 14.4%
(Amortized Cost: $274,032) 274,032
----------
Total Investments: 102.7%
(Cost: $1,962,747) 1,958,053
Other assets less liabilities: (2.7%) (51,675)
----------
Net Assets: 100% $1,906,378
==========
</TABLE>
<TABLE>
<CAPTION>
Summary of
Investments % of
By Industry Net Assets
- ----------- ----------
<S> <C>
Diversified 23.6%
Hotels 5.5%
Office/Industrial 37.9%
Residential 6.7%
</TABLE>
<TABLE>
<CAPTION>
Summary of
Investments % of
By Industry Net Assets
- ----------- ----------
<S> <C>
Retail 9.2%
Specialty 5.4%
U.S Treasury Bills 14.4%
Other assets less liabilities (2.7%)
-----
100.0%
=====
</TABLE>
- -------
(a) Unless otherwise indicated, securities owned are shares of common stock.
+ Non-income producing.
See Notes to Financial Statements
<PAGE>
Worldwide Real Estate Fund Financial Statements
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
December 31, 1998
<TABLE>
<S> <C>
Assets:
Investments at value (cost, $1,962,747) (Note 1)................... $1,958,053
Cash............................................................... 110,211
Receivables:
Securities sold................................................... 20,288
Capital Shares sold............................................... 13,661
Dividends......................................................... 11,735
Unrealized appreciation on forward foreign currency contracts (Note
5)................................................................ 4
Deferred organization costs and other assets (Note 1).............. 5,380
----------
Total assets..................................................... 2,119,332
----------
Liabilities:
Payables:
Securities purchased.............................................. 177,462
Capital shares redeemed........................................... 14,661
Unrealized depreciation on forward foreign currency contracts (Note
5)................................................................ 900
Accounts payable................................................... 19,931
----------
Total liabilities................................................ 212,954
----------
Net assets......................................................... $1,906,378
==========
Shares outstanding................................................. 199,762
==========
Net asset value, redemption and offering price per share
($1,906,378 / 199,762)............................................ $9.54
==========
Net assets consist of:
Aggregate paid in capital......................................... $2,033,819
Unrealized depreciation of investments, forward foreign currency
contracts and foreign currencies................................. (5,728)
Undistributed net investment income............................... 29,972
Accumulated realized loss......................................... (151,685)
----------
$1,906,378
==========
</TABLE>
Statement of Operations
Year Ended December 31, 1998
<TABLE>
<S> <C> <C>
Income: (Note 1)
Dividends (net of foreign taxes withheld of $871)........ $ 47,480
Interest................................................. 4,621
---------
Total income........................................... 52,101
Expenses:
Management (Note 2)...................................... $ 12,340
Administration (Note 2).................................. 4,295
Reports to shareholders.................................. 32,076
Professional............................................. 10,395
Custodian................................................ 3,259
Amortization of deferred organization costs.............. 2,180
Registration............................................. 204
Trustees' fees and expenses.............................. 138
Other.................................................... 721
--------
Total expenses......................................... 65,608
Expenses assumed by the Adviser and reduced by brokerage
and custodian fee arrangements (Note 2)................. (54,633)
--------
Net expenses........................................... 10,975
---------
Net investment income .................................. 41,126
Realized and Unrealized Loss on Investments (Note 3):
Realized loss from security transactions................. (151,377)
Realized loss from foreign currency transactions......... (7,007)
Change in unrealized appreciation of forward foreign
currency contracts and foreign currencies............... (1,096)
Change in unrealized appreciation of investments......... (18,968)
---------
Net Decrease in Net Assets Resulting from Operations..... $(137,322)
=========
</TABLE>
See Notes to Financial Statements
<PAGE>
Worldwide Real Estate Fund Financial Statements
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
For the
Period June 23,
Year Ended 1997+ to
December 31, December 31,
1998 1997
------------ ---------------
<S> <C> <C>
Increase (Decrease) in Net Assets:
Operations:
Net investment income............................ $ 41,126 $ 12,708
Realized gain (loss) from security transactions.. (151,377) 65,851
Realized gain (loss) from foreign currency trans-
actions......................................... (7,007) 911
Change in unrealized appreciation of forward for-
eign currency contracts......................... (1,096) 62
Change in unrealized appreciation of investments. (18,968) 14,274
---------- --------
Increase (decrease) in net assets resulting from
operations...................................... (137,322) 93,806
---------- --------
Dividends and distributions to shareholders from:
Net investment income............................ (13,400) --
Net realized gains............................... (70,525) --
---------- --------
Total dividends and distributions................ (83,925) --
---------- --------
Capital share transactions*:
Net proceeds from sales of shares................ 1,425,098 750,000
Reinvestment of dividends........................ 83,925 --
Cost of shares reacquired........................ (225,204) --
---------- --------
Increase in net assets resulting from capital
share transactions.............................. 1,283,819 750,000
---------- --------
Total increase in net assets..................... 1,062,572 843,806
Net Assets:
Beginning of period............................... 843,806 --
---------- --------
End of period (including undistributed net invest-
ment income of $29,972 and $12,305, respective-
ly).............................................. $1,906,378 $843,806
========== ========
*Shares of Beneficial Interest Issued and Redeemed
(unlimited number of $.001 par value shares
authorized)
Shares sold...................................... 145,519 70,525
Reinvestment of dividends........................ 7,851 --
---------- --------
153,370 70,525
Shares reacquired................................ (24,133) --
---------- --------
Net increase..................................... 129,237 70,525
========== ========
</TABLE>
- -------
+ Commencement of operations.
See Notes to Financial Statements
<PAGE>
Worldwide Real Estate Fund
- -------------------------------------------------------------------------------
Financial Highlights
For a share outstanding throughout each period
<TABLE>
<CAPTION>
For the Period
Year Ended June 23, 1997(a)
December 31, to December 31,
1998 1997
------------ ----------------
<S> <C> <C>
Net Asset Value, Beginning of Period............. $ 11.96 $10.00
-------- ------
Income From Investment Operations:
Net Investment Income........................... 0.22 0.18
Net Gain (Loss) on Investments (both realized
and unrealized)................................ (1.45) 1.78
-------- ------
Total From Investment Operations................. (1.23) 1.96
-------- ------
Less Dividends and Distributions:
Dividends from Net Investment Income............ (0.19) --
Distributions from Capital Gains................ (1.00) --
-------- ------
Total Dividends and Distributions................ (1.19) --
-------- ------
Net Asset Value, End of Period................... $ 9.54 $11.96
======== ======
Total Return (b)................................. (11.35%) 19.60%
- --------------------------------------------------------------------------------
Ratios/Supplementary Data
Net Assets, End of Period (000).................. $ 1,906 $ 844
Ratio of Gross Expenses to Average Net Assets.... 5.32% 4.92%(c)
Ratio of Net Expenses to Average Net Assets...... 0.89% 0.00%(c)
Ratio of Net Investment Income to Average Net As-
sets............................................ 3.33% 3.62%(c)
Portfolio Turnover Rate.......................... 107% 123%
</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. Total returns are not annualized.
(c) Annualized.
See Notes to Financial Statements
- -------------------------------------------------------------------------------
Notes to Financial Statements
Note 1--Significant Accounting Policies:
Van Eck Worldwide Insurance Trust (the "Trust"), organized as a Massachusetts
business trust on January 7, 1987, is registered under the Investment Company
Act of 1940. The following is a summary of significant accounting policies
consistently followed by the Worldwide Real Estate Fund series (the "Fund"), a
diversified fund of the Trust, in the preparation of its financial statements.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that effect the reported amounts in the financial statements. Actual results
could differ from those estimates.
A. Security Valuation--Securities traded on national exchanges or traded on
the NASDAQ National Market System are valued at the last sales prices reported
at the close of business on the last business day of the year. Over-the-
counter securities not included in the NASDAQ National Market System and
listed securities for which no sale was reported are valued at the mean of the
bid and asked prices. Short-term obligations purchased with more than sixty
days remaining to maturity are valued at market. Short-term obligations
purchased with sixty days or less to maturity are valued at amortized cost
which with accrued interest approximates value. Forward 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.
D. Dividends and Distributions--Dividend income and distributions to
shareholders are recorded on the ex-dividend date. Income distributions and
capital gain distributions are determined in accordance with income tax
regulations, which may differ from such amounts reported in accordance with
generally accepted accounting principles. These differences are primarily due
to differing treatment of foreign currency transactions. The effect of these
differences for the year ended December 31, 1998 is a decrease to
undistributed net investment income and an increase to accumulated realized
loss by $10,059.
E. Other--Security transactions are accounted for on the date the securities
are purchased or sold. Interest income is accrued as earned.
F. Deferred organization costs are being amortized over a period not to exceed
five years.
Note 2--Van Eck Associates Corporation (the "Adviser") earned fees for
investment management and advisory services. The fee is based on an annual
rate of 1% of the average daily net assets. The Adviser agreed to waive its
management fees and assume all expenses of the
<PAGE>
Worldwide Real Estate Fund
- -------------------------------------------------------------------------------
Notes to Financial Statements (continued)
Fund except interest, taxes, brokerage commissions and extraordinary expenses
for the period January 1, 1998 to February 28, 1998. The Adviser also agreed
to assume expenses exceeding 1% of average daily net assets except interest,
taxes, brokerage commissions and extraordinary expenses for the period March
1, 1998 to December 31, 1998. For the year ended December 31, 1998, the
Adviser assumed expenses in the amount of $49,729. Certain of the officers and
trustees of the Trust are officers, directors or stockholders of the Adviser
and Van Eck Securities Corporation. As of December 31, 1998, the Adviser owned
39% of the outstanding shares of beneficial interest of the Fund.
In accordance with the advisory agreement, the Fund paid the Adviser for costs
incurred in connection with certain administrative functions which amounted to
$4,295. For the year ended December 31, 1998, the Adviser agreed to assume
such costs.
The Fund has a fee arrangement based on cash balances left on deposit with the
custodian, which reduced the Fund's operating expenses by $4,639 for the year
ended December 31, 1998. The Fund also directs certain portfolio trades to a
broker that, in turn, pays a portion of the Fund's operating expenses. For the
year ended December 31, 1998, the portion of the Fund's expenses reduced by
this directed brokerage arrangement amounted to $265.
Note 3--Purchases and sales of securities, other than short-term obligations,
aggregated $2,266,213 and $1,135,026, respectively, for the year ended
December 31, 1998. For federal income tax purposes, the identified cost of
investments owned at December 31, 1998 was $2,007,570. As of December 31,
1998, net unrealized depreciation for federal income tax purposes aggregated
$49,517, of which $67,370 related to appreciated securities and $116,887
related to depreciated securities. As of December 31, 1998, the Fund had a
capital loss carryforward of $95,300 available, expiring December 31, 2006.
Note 4--The Fund may purchase securities on foreign exchanges. Securities of
foreign issuers involve special risks and considerations not typically
associated with investing in U.S. issuers. These risks include devaluation of
currencies, less reliable information about issuers, different securities
transactions clearance and settlement practices, and future adverse political
and economic developments. These risks are heightened for investments in
emerging market countries. Moreover, securities of many foreign issuers and
their markets may be less liquid and their prices more volatile than those of
comparable U.S. issuers.
Note 5--Forward Foreign Currency Contracts: The Fund bought and sold forward
foreign currency contracts to settle purchases and sales of foreign
denominated securities. The Fund may incur additional risk from investments in
forward foreign currency contracts if the counterparty is unable to fulfill
its obligations or there are unanticipated movements of the foreign currency
relative to the U.S. dollar. Realized and unrealized gains and losses from
forward foreign currency contracts are included in realized and unrealized
gain (loss) from 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
Contract Date Value (Depreciation)
- -------- ---------- ------- --------------
<S> <C> <C> <C> <C>
Forward Foreign Currency Buy Contracts:
FRF 275,688
expiring
1/29/99 $49,321 $49,320 $ (1)
GBP 13,806 expiring
1/05/99 23,244 22,894 (350)
HKD 343,420
expiring
1/05/99 44,327 44,327 --
ITL 30,175,250
expiring
1/07/99 18,264 18,268 4
Forward Foreign Currency Sell Contract:
JPY 3,500,000
expiring
3/17/99 30,672 31,221 (549)
-----
$(896)
=====
</TABLE>
Note 6--Trustee Deferred Compensation Plan--The Trust established a Deferred
Compensation Plan (the "Plan") for Trustees. Commencing January 1, 1996, the
Trustees can elect to defer receipt of their trustee fees until retirement,
disability or termination from the board. The Fund's contributions to the Plan
are limited to the amount of fees earned by the participating Trustees. The
fees otherwise payable to the participating Trustees are invested in shares of
the Van Eck Funds as directed by the Trustees. The Plan has been approved by
the Internal Revenue Service.
The Fund has elected to show the deferred liability net of the asset for
financial statement purposes.
As of December 31, 1998, the total value of the asset and corresponding
liability of the Fund's portion of the plan is $119.
Note 7--An income dividend of $0.20 a share was paid on January 29, 1999 to
shareholders of record date January 27, 1999 with a reinvestment date of Janu-
ary 29, 1999.
<PAGE>
Worldwide Real Estate Fund
- -------------------------------------------------------------------------------
To the Trustees of Van Eck Worldwide Insurance Trust and Shareholders of
Worldwide Real Estate 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 Real
Estate 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.
