<PAGE>
1933 ACT REGISTRATION NO. 2-97596
1940 ACT REGISTRATION NO. 811-4297
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 52
-AND-
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 53
VAN ECK FUNDS
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
99 PARK AVENUE, NEW YORK, NEW YORK 10016
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE)
212-687-5200
(REGISTRANT'S TELEPHONE NUMBER INCLUDING AREA CODE)
THOMAS ELWOOD, ESQ. - VAN ECK ASSOCIATES CORPORATION
99 PARK AVENUE, NEW YORK, NEW YORK 10016
(NAME AND ADDRESS OF AGENT FOR SERVICE)
COPY TO: PHILIP NEWMAN, ESQ., GOODWIN PROCTER & HOAR
EXCHANGE PLACE, BOSTON, MASSACHUSETTS 02109
__________________________________________________________________
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (CHECK APPROPRIATE BOX):
[ ] IMMEDIATELY UPON FILING PURSUANT [ ] ON MAY 1, 1998 PURSUANT TO
TO PARAGRAPH (B) PARAGRAPH (B)
[X] 60 DAYS AFTER FILING PURSUANT TO [ ] ON [DATE] PURSUANT TO
PARAGRAPH (A)(1) PARAGRAPH (A)(1)
[ ] 75 DAYS AFTER FILING PURSUANT TO [ ] ON (DATE) PURSUANT TO
PARAGRAPH (A)(2) PARAGRAPH (A)(2) OF RULE
485
IF APPROPRIATE, CHECK THE FOLLOWING BOX:
[ ] THIS POST-EFFECTIVE AMENDMENT DESIGNATES A NEW EFFECTIVE DATE FOR A
PREVIOUSLY FILED POST-EFFECTIVE AMENDMENT
____________________________________________________
Title of securities being registered. Shares of beneficial interest, $.001 par
value, of Asia Dynasty Fund.
<PAGE>
VAN ECK FUNDS
CROSS-REFERENCE PAGE
PURSUANT TO RULE 501 (B) OF REGULATION S-K
UNDER THE SECURITIES ACT OF 1933, AS AMENDED
FORM N-1A
PART A
ITEM NO. LOCATION IN PROSPECTUS
- -------- ----------------------
1. Cover Page Cover Page
2. Synopsis The Funds
3. Condensed Financial Information Financial Highlights
4. General Description of Registrant Other Investments, Investment Policies,
Investment Techniques and Risks.
5. Management of the Fund Management of the Funds;
6. Capital Stock and Other Securities Dividends and Capital Gains; Taxes;
7. Purchase of Securities Being
Offered How to buy, sell, exchange or transfer
shares.
8. Redemption or Repurchase How to buy, sell, exchange or transfer
shares.
9. Pending Legal Proceedings N/A
PART B LOCATION IN STATEMENT
ITEM NO. ADDITIONAL INFORMATION
- -------- ----------------------
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History N/A
13. Investment Objectives and Policies Investment Objectives and Policies;
Risk Factors; Investment Restrictions;
Portfolio Transactions and Brokerage
14. Management of the Fund Trustees and Officers
15. Control Persons and Principal Trustees and Officers
Holders of Securities
<PAGE>
PART B LOCATION IN STATEMENT
ITEM NO. ADDITIONAL INFORMATION
- -------- ----------------------
16. Investment Advisory and Other Investment Advisory Services;The
Services Distributor; Trustees and Officers;
Additional Information
17. Brokerage Allocation and Other Portfolio Transactions and Brokerage
Practices
18. Capital Stock and Other Securities General Information
19. Purchase, Redemption and Pricing Valuation of Shares; Exchange
of Securities Being Offered Privilege; Tax-Sheltered Retirement
Plans; Investment Programs;
Redemptions in Kind
20. Tax Status Taxes
21. Underwriters The Distributor
22. Calculation of Performance Data Performance
23. Financial Statements Financial Statements
<PAGE>
================================================================================
Van Eck Global
- --------------------------------------------------------------------------------
PROSPECTUS
_____, 1999
[GRAPHIC]
VAN ECK FUNDS
Asia Dynasty Fund
These securities have not been approved or disapproved either by the Securities
and Exchange Commission (SEC) or by any State Securities Commission. Neither the
SEC nor any State Commission has endorsed the accuracy or adequacy of this
prospectus. Any claim to the contrary is against the law.
- --------------------------------------------------------------------------------
GLOBAL INVESTMENTS SINCE 1955
================================================================================
YOUR INVESTMENT DEALER IS:
For more detailed information, see the Statement of Additional Information
(SAI), which is incorporated by reference into this prospectus.
For free copies of SAIs, annual or semi-annual reports or other inquiries...
o Call Van Eck at 1-800-826-1115, or visit the Van Eck website at
www.vaneck.com.
o Go to the Public Reference Room of the Securities and Exchange Commission.
o Call the SEC at 1-800-SEC-0330, or write to them at the Public Reference
Room, Washington, D.C. 20549-6009, and ask them to send you a copy. There
is a duplicating fee for this service.
o Download documents from the SEC's website at www.sec.gov
o The Fund's annual report includes a discussion of market conditions and
investment strategies that significantly affected the Fund's performance
last year.
[LOGO] Van Eck Global
Transfer Agent: Van Eck Funds
99 Park Avenue
New York, Ny 10016
1-800-221-2220
SEC registration number: 811-04297
<PAGE>
================================================================================
Table of Contents
================================================================================
<TABLE>
<S> <C>
I. THE FUNDS 2
INCLUDES A PROFILE OF THE FUND; ITS INVESTMENT STYLE AND PRINCIPAL
RISKS; HISTORIC PERFORMANCE; PERFORMANCE MEASURED AGAINST A RELEVANT
BENCHMARK; HIGHEST AND LOWEST PERFORMING QUARTERS; AND EXPENSES.
ASIA DYNASTY FUND 2
II. ADDITIONAL INVESTMENT STRATEGIES 5
OTHER INVESTMENTS, INVESTMENT POLICIES, INVESTMENT TECHNIQUES AND
RISKS.
III. SHAREHOLDER INFORMATION 14
HOW TO BUY, SELL, EXCHANGE, OR TRANSFER SHARES; AUTOMATIC SERVICES;
MINIMUM PURCHASE AND ACCOUNT SIZE; HOW TO CHOOSE A CLASS OF SHARES;
YOUR PRICE PER SHARE; SALES CHARGES; RETIREMENT PLANS; DIVIDENDS AND
CAPITAL GAINS; TAXES; AND MANAGEMENT OF THE FUND.
IV. FINANCIAL HIGHLIGHTS 16
TABLES THAT SHOW PER SHARE EARNINGS, EXPENSES,
AND PERFORMANCE OF THE FUND.
</TABLE>
<PAGE>
================================================================================
I. The Fund
================================================================================
INCLUDES A PROFILE OF THE FUND, ITS INVESTMENT STYLE AND PRINCIPAL RISKS;
HISTORIC PERFORMANCE; PERFORMANCE MEASURED AGAINST A RELEVANT BENCHMARK; HIGHEST
AND LOWEST PERFORMING QUARTERS; AND EXPENSES.
1. ASIA DYNASTY FUND PROFILE
OBJECTIVE
Asia Dynasty Fund seeks long-term capital appreciation by investing in the
equity securities of companies outside of Japan that stand to benefit from Asian
development.
PRINCIPAL STRATEGIES
Under normal circumstances, the Fund will invest at least 65% of total assets in
common and preferred stocks and other equity securities of companies in, or
expected to benefit from the growth of: Burma, Cambodia, Hong Kong, India,
Indonesia, Korea, Laos, Malaysia, Pakistan, Peoples Republic of China ("China"),
the Philippines, Singapore, Sri Lanka, Taiwan, Thailand, and Vietnam. The Fund
may invest as much as 25% of total assets in one country. The Fund attempts to
purchase securities with a high relative value to their share prices with
excellent growth prospects. The Fund currently invests more than 25% of its
total assets in Hong Kong.
PRINCIPAL RISKS
By definition, an Asian emerging markets fund involves above-average risk. Many
emerging markets are much less liquid and much more volatile than the U.S.
market. Asian countries, in particular, may have different or ineffective
securities regulation. Their economies and politics can be extremely volatile.
An investment in the Fund involves the risk of losing money.
2 VAN ECK GLOBAL PROSPECTUS
<PAGE>
I. THE FUNDS / ASIA DYNASTY
================================================================================
Asia Dynasty Fund Performance
================================================================================
This chart illustrates the historic variability of risk of the Fund from year to
year for a share of Asia Dynasty Fund (before sales charges) since Fund
inception on 3/22/93. This chart describes past performance only, and should not
be understood as a prediction for future results.
During the period covered, the Fund's highest performing quarter (ended
12/31/98) was 33.11%. The lowest performing quarter (ended 6/30/98) was
- -23.96%.
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Asia Dynasty Fund
Class A Shares Annual Total Returns (%)
As of December 31, 1998
<S> <C>
1994 -18.72
1995 3.13
1996 6.53
1997 -32.10
1998 -0.26
- --------------------------------------------------------------------------------
</TABLE>
Fund performance is shown with sales charges subtracted. This chart compares the
Fund's performance with a broad measure of market performance. Past performance
does not guarantee or predict future results.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Asia Dynasty Fund
1-, 5-Year and Life-of-Fund Performance
Plus a Comparison to the MSCI Far East Ex-Japan Free Index*
As of December 31, 1998
1 Year 5 Year Life-of-Fund
<S> <C> <C> <C>
Class A Shares -4.99% -10.44% -1.28%
Class B Shares -6.12% -10.50% -4.49%
MSCI Far East
Ex-Japan Free Index -4.82% -11.95% -0.28%+
- --------------------------------------------------------------------------------
</TABLE>
* The Morgan Stanley Capital International (MSCI) Far East Ex-Japan Free
Index is a market capitalization weighted index that captures the largest
60% of the publicly traded securities in each industry for nine Asian
markets (excluding Japan); the index includes only shares available for
purchase by foreign investors.
+ Life of Class A Shares; calculated from nearest month end (3/31/93).
VAN ECK GLOBAL PROSPECTUS 3
<PAGE>
================================================================================
Asia Dynasty Fund Expenses
================================================================================
This table shows certain fees and expenses you will incur as a Fund investor if
you buy and hold shares. You pay sales charges directly.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Asia Dynasty Fund
Shareholder Expenses (fees paid directly from your investment)
CLASS I
<S> <C>
Annual Fund Operating Expenses
(Expenses that are deducted from Fund assets)
Management 0.75%
Administration Fees 0.25%
Other Expenses 1.63%
Total Annual Fund Operating Expenses* 2.63%
- --------------------------------------------------------------------------------
</TABLE>
The adjacent table shows the expenses you would pay on a hypothetical $10,000
investment. The example presumes an average annual return of 5% with redemption
at the end of each time period. This illustration is hypothetical and assumes
that expenses remain the same and you reinvest dividends and distributions. For
a real investment, your actual expenses may be higher or lower than those shown.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Expense Example
What a $10,000 investment would actually cost
1 YEAR 3 YEAR 5 YEAR 10 YEAR
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class I $266 $817 $1,395 $2,964
- --------------------------------------------------------------------------------
</TABLE>
4 VAN ECK GLOBAL PROSPECTUS
<PAGE>
================================================================================
II. Additional Investment Strategies
================================================================================
OTHER INVESTMENTS, INVESTMENT POLICIES,
INVESTMENT TECHNIQUES AND RISKS.
MARKET RISK
An investment in any of the Funds involves "market risk" -- the risk that
securities prices may go up or down.
OTHER INVESTMENT TECHNIQUES AND RISK
BORROWING
Definition Borrowing to invest more is called "leverage." The first
four Funds named above may borrow up to 30% of their net
assets to buy more securities. The two Gold Funds may borrow
up to 50% of net assets in emergencies. All the Funds must
maintain assets equal to 300% of borrowings, and must sell
securities to maintain that margin, even if the sale hurts
the Funds' investment positions.
Risk Leverage exaggerates the effect of rises or falls in prices
of securities bought with borrowed money. Borrowing also
costs money, including fees and interest. The Funds expect
to borrow only via negotiated loan agreements with
commercials banks or other institutional lenders.
5 VAN ECK GLOBAL PROSPECTUS
<PAGE>
II. ADDITIONAL INVESTMENT STRATEGIES
================================================================================
================================================================================
COLLATERALIZED MORTGAGE OBLIGATIONS (CMOS)
Definition These securities are backed by a group of mortgages. CMOs
are fixed-income securities, rated by agencies like other
fixed-income securities; the Funds invest in CMOs rated A or
better by S&P and Moody's. CMOs "pass through" payments made
by individual mortgage holders.
Risk Mortgage holders often refinance when interest rates fall;
reinvestment of prepayments at lower rates can reduce the
yield of the CMO. Issuers of CMOs may support interest and
principal payments with insurance or guarantees. The Funds
may buy uninsured or non-guaranteed CMOs equal in
creditworthiness to insured or guaranteed CMOs.
DEFENSIVE INVESTING
Definition A deliberate, temporary shift in portfolio strategy which
may be undertaken when markets start behaving in volatile or
unusual ways. A Fund may, for temporary defensive purposes,
invest a substantial part of its assets in bonds of the U.S.
or foreign governments, certificates of deposit, bankers'
acceptances, high grade commercial paper, and repurchase
agreements. At such times, a Fund may have all of its assets
invested in a single country or currency.
Risk "Opportunity cost" - i.e., when a Fund has invested
defensively in low-risk, low-return securities, it may miss
an opportunity for profit in its normal investing areas. The
Funds may not achieve their investment objective during
periods of defensive investing.
VAN ECK GLOBAL PROSPECTUS 6
<PAGE>
================================================================================
================================================================================
Fund Policies:
Basic Risk Management Rules
- --------------------------------------------------------------------------------
1. Asia Dynasty Fund will not invest more than 15% of net assets in securities
which are not readily marketable.
DERIVATIVES
Definition A derivative is a security that derives its current value
from the current value of another security. It can also
derive its value from a commodity, a currency, or a
securities index. The Funds use derivatives, either on their
own, or in combination with other derivatives, to offset
other investments with the aim of reducing risk -- that is
called "hedging." The Funds also invest in derivatives for
their investment value.
Risks Derivatives bear special risks, by their very nature. First,
the Fund Advisers must correctly predict the price
movements, during the life of a derivative, of the
underlying asset in order to realize the desired results
from the investment. Second, the price swings of an
underlying security tend to be magnified in the price swing
of its derivative. If a Fund invests in a derivative with
"leverage" -- by borrowing -- an unanticipated price move
might result in the Fund losing more than its original
investment.
For a complete discussion of the kinds of derivatives the
Funds use, and of their risks, please see the SAI.
DIRECT INVESTMENTS
Definition Investments made directly with an enterprise via a
shareholder or similar agreements -- not via publicly traded
shares or interests. Direct investments may involve high
risk of substantial loss. Such positions may be hard to sell
because they are not listed on an exchange, and prices of
such positions may be unpredictable.
7 VAN ECK GLOBAL PROSPECTUS
<PAGE>
II. ADDITIONAL INVESTMENT STRATEGIES
================================================================================
================================================================================
Risk A direct investment price as stated for valuation may not be
the price the Fund could actually get if it had to sell.
Private issuers do not have to follow all the rules of
public issuers. Tax rates on realized gains from selling
private issue holdings may be higher than taxes on gains
from listed securities. The Board of Trustees considers
direct investments illiquid, and will aggregate direct
investments with other illiquid investments under the
illiquid investing limits of each Fund.
The Funds will not invest more than 10% of assets in direct
investments.
EMERGING MARKETS SECURITIES
Definition Securities of companies which are primarily in developing
countries. (See "Foreign Securities," below, for basic
information on foreign investing risks.)
Risk Investments in emerging markets securities are exposed to a
number of risks that may make these investments volatile in
price, or difficult to trade. Political risks may include
unstable governments, nationalization, restrictions on
foreign ownership, laws that prevent investors from getting
their money out of a country, and legal systems that do not
protect property rights as well as the laws of the U.S.
Market risks may include economies that concentrate in only
a few industries, securities issues that are held by only a
few investors, limited trading capacity in local exchanges,
and the possibility that markets or issues may be
manipulated by foreign nationals who have inside
information.
2. Asia Dynasty Fund will not purchase more than 10% of any class of securities
of a company, or more than 10% of a company's outstanding securities. Asia
Dynasty Fund may purchase more than 10% of any non-voting class of securities.
Asia Dynasty Fund will not invest more than 25% of the value of their total
assets in any one industry.
3. The Fund will not invest more than 10% of their total assets in other
investment companies.
VAN ECK GLOBAL PROSPECTUS 8
<PAGE>
================================================================================
================================================================================
FOREIGN SECURITIES
Definition Securities issued by foreign companies, traded in foreign
currencies, or issued by companies with most of their
business interests in foreign countries.
Risk Foreign investing involves greater risks than investing in
U.S. securities. These risks include: exchange rate
fluctuations and exchange controls; less publicly available
information; more volatile or less liquid securities
markets; and the possibility of expropriation, confiscatory
taxation, or political, economic or social instability.
Foreign accounting can be different -- and less revealing --
than American accounting practice. Foreign regulation of
stock exchanges may be inadequate or irregular.
Some of these risks may be reduced when Funds invest
indirectly in foreign issues via American Depositary
Receipts (ADRs), European Depositary Receipts (EDRs),
American Depositary Shares (ADSs), Global Depositary Shares
(GDSs), and others which are traded on larger, recognized
exchanges and in stronger, more recognized currencies.
Russia: The Funds invest only in those Russian companies
whose registrars have contracted to allow the Funds' Russian
sub-custodian to inspect share registers and to obtain
extracts of share registers through regular audits. These
procedures may reduce the risk of loss, but there can be no
assurance that they will be effective.
9 VAN ECK GLOBAL PROSPECTUS
<PAGE>
II. ADDITIONAL INVESTMENT STRATEGIES
================================================================================
================================================================================
LOANS OF PORTFOLIO SECURITIES
Definition The Fund may lend their securities, up to one-third of the
value of their portfolios, to broker-dealers. Broker-dealers
must collateralize (secure) these borrowings in full with
cash, U.S. Government securities, or high-quality letters of
credit.
Risk If a broker-dealer breaches its agreement either to pay for
the loan, to pay for the securities, or to return the
securities, the Fund may lose money.
VAN ECK GLOBAL PROSPECTUS 10
<PAGE>
================================================================================
================================================================================
PARTLY PAID SECURITIES
Definition Securities paid for on an installment basis. A partly paid
security trades net of outstanding installment payments --
the buyer "takes over payments," as it were.
Risk The buyer's rights are typically restricted until the
security is fully paid. If the value of a partly-paid
security declines before a Fund finishes paying for it, the
Fund will still owe the payments, but may find it hard to
sell.
11 VAN ECK GLOBAL PROSPECTUS
<PAGE>
================================================================================
================================================================================
REPURCHASE AGREEMENTS
Definition In a repurchase agreement, a Fund acquires a security for a
short time while agreeing to sell it back at a designated
price and time. The agreement creates a fixed rate of return
not subject to market fluctuations. The Funds enter into
these agreements generally with member banks of the Federal
Reserve System or certain non-bank dealers; these
counterparties collateralize the transaction.
Risk There is a risk of a counterparty defaulting on a "repo,"
but it is generally small.
Year 2000
The Adviser's computer system or the systems of other service providers could
have difficulties processing and calculating date-related information from and
after January 1, 2000. This is commonly known as the "Year 2000 Problem." The
Adviser is taking steps that it believes are reasonably designed to address the
problem in its own computers and to obtain assurances that comparable steps are
being taken by its service providers. However, there can be no assurance that
these steps will avoid any adverse impact on the Funds. The Fund is unable to
determine with certainty how the Year 2000 problem will affect its investments
in foreign securities and dealings with foreign exchanges.
VAN ECK GLOBAL PROSPECTUS 12
<PAGE>
================================================================================
III. How The Funds Are Managed
================================================================================
FUND MANAGEMENT, INCLUDING A DESCRIPTION OF THE ADVISER, THE PORTFOLIO
MANAGERS, THE CUSTODIAN, AND THE TRANSFER AGENT. HOW THE FUNDS SELL
SHARES TO INSURANCE COMPANY SEPARATE ACCOUNTS. FUND EXPENSES AND TAX
TREATMENT OF THE FUNDS.
1. MANAGEMENT OF THE FUNDS
DISTRIBUTOR
Van Eck Securities Corporation, 99 Park Avenue, New York, NY 10016 (the
"Distributor"), a wholly-owned subsidiary of Van Eck Associates Corporation, has
entered into a Distribution Agreement with the Trust. The Distributor receives
no compensation for share sales of the Funds. In addition, the Distributor may,
from time to time, pay additional cash compensation or other promotional
incentives to authorized dealers or agents that sell shares of the Fund. In some
instances, such cash compensation or other incentives may be offered only to
certain dealers or agents who employ registered representatives who have sold or
may sell significant amounts of shares of the Fund and/or the other Van Eck
Worldwide Insurance Funds managed by the Adviser during a specified period of
time.
INVESTMENT ADVISER
Van Eck Associates Corporation, 99 Park Avenue, New York, NY 10016 (the
"Adviser") serves as investment adviser to each of the Funds. Van Eck has been
an investment adviser since 1955 and also acts as adviser or sub-adviser to
other mutual funds registered with the SEC as well as managing and advising
other accounts and pension plans.
John C. van Eck, Chairman and President of the Trust, and members of his
immediate family, own 100% of the voting stock of the Adviser. As of March 31,
1999, total aggregate assets under the management of the Adviser were
approximately $1.1 billion.
THE ADVISER, THE FUNDS, AND INSURANCE COMPANY SEPARATE ACCOUNTS
The Funds sell shares to various insurance company variable annuity and variable
life insurance separate accounts as a funding vehicle for those accounts. The
Funds do not foresee any disadvantages to shareholders from their offering the
Funds to various companies. However, the Board of Trustees will monitor any
potential conflicts of interest. If conflicts arise, the Board may require an
insurance company to withdraw its investments in one Fund, and place them in
another. This might force a Fund to sell securities at a disadvantageous price.
The Board of Trustees may refuse to sell shares of a Fund to any separate
accounts. It may also suspend or terminate the offering of shares of a Fund if
required to do so by law or regulatory authority, or if such an action is in the
best interests of Fund shareholders.
FEES PAID TO THE ADVISER
Asia Dynasty Fund pays the Adviser a monthly fee at the annual rate of 0.75% of
the average daily net assets.
13 VAN ECK GLOBAL PROSPECTUS
<PAGE>
SHAREHOLDER INFORMATION
================================================================================
================================================================================
PORTFOLIO MANAGERS
DAVID SEMPLE David Semple is an Investment Director to the Adviser. He joined
Van Eck in 1998 and has been in the investing business for 9 years.
DAVID HULME David Hulme is an Investments Analyst for the Adviser. He joined
Van Eck in 1998 and has been in the investing business for 5 years.
THE TRUST
Van Eck Funds (the Trust) is an open-end management
investment company organized as a business trust under the laws of the
Commonwealth of Massachusetts.
THE CUSTODIAN
State Street Bank and Trust Co.
225 Franklin Street
Boston, MA 02110
THE TRANSFER AGENT
The Trust, 99 Park Avenue
New York, New York 10016
acts as its own transfer agent.
INDEPENDENT ACCOUNTANTS
Ernst & Young LLP
787 Seventh Avenue
New York, New York 10019
COUNSEL
Goodwin, Procter & Hoar LLP
One Exchange Place,
Boston, Massachusetts 02109
VAN ECK GLOBAL PROSPECTUS 14
<PAGE>
================================================================================
================================================================================
2. FUND EXPENSES
Each Fund bears all expenses of its own operations, other than those incurred by
the Adviser or its affiliate under its Advisory Agreement with the Trust. The
Adviser paid organizational expenses for the Funds at their inception; these
fees are being reimbursed to the Adviser by the Funds over sixty equal monthly
installments. The Adviser may, from time to time, waive the management fee
and/or agree to pay some or all expenses of the Funds. This has the effect of
increasing the yield and total return of the Funds.
3. TAXES
Each Fund qualifies, and intends to continue to qualify, as a "regulated
investment company" under the Internal Revenue Code (the Code). As such, the
Funds will not pay federal income tax to the extent that it distributes its
income and capital gains.
The Code requires funds used by insurance company variable annuity and life
insurance contracts to be adequately diversified, because annuities and life
insurance enjoy special tax privileges. The Funds intend to invest so as to
qualify for this proviso.
Tax matters for insurance contract holders are described in the Contract
prospectus.
4. HOW THE FUND SHARES ARE PRICED
Shares are bought or sold at net asset value. When an order is received at a
Fund before 4:00 p.m. Eastern time on any day when the New York Stock Exchange
is open for business, the trade will be effective that day. When an order is
received after 4:00 p.m. the trade will be effective at the net asset values
which are calculated on the next business day. The Funds are only priced on days
when the New York Stock Exchange is open. Several Funds have shares which trade
on foreign exchanges and the net asset value of these Funds may change on days
that shareholders are unable able to purchase or sell their shares.
5. SHAREHOLDER INQUIRIES
For further information about the Funds, please call or write your insurance
company, or call (800) 221-2220 (in New York, (212) 687-5200), or write to the
Funds at the address on the cover page.
15 VAN ECK GLOBAL PROSPECTUS
<PAGE>
IV. FINANCIAL HIGHLIGHTS
The financial highlights tables are intended to help you
understand the Funds financial performance for the past five
years. Certain information reflects financial results for a
single Fund share. The total returns in the table represent the
rate that an investor would have earned or lost on an investment
in the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by
PricewaterhouseCoopers LLP, whose report, along with the Fund's
financial statements are included in the Fund's annual report
which is available upon request.
1. ASIA DYNASTY FUND*
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Financial Highlights
For a Class A Share outstanding throughout each year:
Year ended December 31,
1998 1997 1996 1995 1994
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year $7.82 $13.21 $12.40 $12.13 $15.28
====================================================================================================================================
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) (0.01) (0.28) (0.20) (0.02) --
Net Gain (Loss) on
Investments (both Realized and Unrealized) (0.01) (3.82) 1.01 0.40 (2.86)
====================================================================================================================================
Total from Investment Operations (0.02) (4.10) 0.81 0.38 (2.86)
====================================================================================================================================
LESS DIVIDENDS AND DISTRIBUTIONS
From Dividends from
Net Investment Income -- -- -- (0.09) (0.07)
From Distributions from
Capital Gains -- (1.15) -- -- (0.22)
From Tax Return of Capital -- (0.14) -- (0.02) --
====================================================================================================================================
Total Dividends & Distributions -- (1.29) -- (0.11) (0.29)
====================================================================================================================================
Net Asset Value,
End of Year $7.80 $7.82 $13.21 $12.40 $12.13
====================================================================================================================================
Total Return (a) (0.26%) (32.10%) 6.53% 3.13% (18.72%)
====================================================================================================================================
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Period (000) $10,685 $12,873 $44,351 $64,275 $83,787
Ratio of Gross Expenses
to Average Net Assets 3.13% 2.38% 2.42% 2.03% 1.85%
Ratio of Net Expenses
to Average Net Assets 2.43%(b) 2.38% 2.42% 2.03% 1.85%
Ratio of Net Investment Income (Loss)
to Average Net Assets (0.09%) (0.76%) (0.73%) (0.08%) --
Portfolio Turnover Rate 121.96% 200.45% 52.99% 57.06% 51.08%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Total return is calculated assuming an initial investment made at net asset
value at the beginning of the year, reinvestment of dividends and
distributions at net asset value during the year and a redemption on the
last day of the year. A sales charge is not reflected in the calculation of
total dividends and return.
(b) After expenses reduced by a custodian fee arrangement.
* There are financial highlights for the Class A shares which include a .50%
distribution fee which is not present in Class I shares.
VAN ECK GLOBAL PROSPECTUS 16
<PAGE>
VAN ECK FUNDS
99 Park Avenue, New York, N.Y. 10016
Shareholder Services: Toll Free (800) 544-4653
Van Eck Funds (the "Trust") is a mutual fund consisting of six separate
series. This Statement of Additional information relates only to Van Eck Asia
Dynasty Fund (Class I) (the "Fund").
<TABLE>
<CAPTION>
TABLE OF CONTENTS Page
- -----------------
<S> <C>
GENERAL INFORMATION...................................................... 2
INVESTMENT OBJECTIVES AND POLICIES....................................... 2
RISK FACTORS ......................................................... 3
INVESTING IN FOREIGN SECURITIES................................. 3
EMERGING MARKETS SECURITIES..................................... 5
FOREIGN CURRENCY TRANSACTIONS................................... 5
FUTURES AND OPTIONS TRANSACTIONS................................ 7
MORTGAGE-BACKED SECURITIES...................................... 9
REAL ESTATE SECURITIES.......................................... 10
DEBT SECURITIES................................................. 11
DERIVATIVES..................................................... 11
CURRENCY SWAPS.................................................. 12
DIRECT INVESTMENTS.............................................. 13
REPURCHASE AGREEMENTS........................................... 13
RULE 144A SECURITIES............................................ 13
INVESTMENT RESTRICTIONS.................................................. 14
INVESTMENT ADVISORY SERVICES............................................. 18
THE DISTRIBUTOR.......................................................... 19
PORTFOLIO TRANSACTIONS AND BROKERAGE..................................... 21
TRUSTEES AND OFFICERS.................................................... 24
VALUATION OF SHARES...................................................... 27
TAXES.................................................................... 29
REDEMPTIONS IN KIND...................................................... 31
PERFORMANCE.............................................................. 31
ADDITIONAL INFORMATION................................................... 34
FINANCIAL STATEMENTS..................................................... 34
APPENDIX................................................................. 35
MARKET INDEX DESCRIPTIONS................................................ 38
</TABLE>
This Statement of Additional Information is not a prospectus and should be
read in conjunction with the Funds' current Prospectus, dated _____, 1999 (the
"Prospectus"), which is available at no charge upon written or telephone request
to the Trust at the address or telephone number at the top of this page.
Shareholders are advised to read and retain this Statement of Additional
Information for future reference.
STATEMENT OF ADDITIONAL INFORMATION - _____, 1999
<PAGE>
GENERAL INFORMATION
-------------------
Van Eck Funds (the "Trust") is an open-end management investment company
organized as a "business trust" under the laws of The Commonwealth of
Massachusetts on April 3, 1985. The Board of Trustees has authority to create
additional series or funds, each of which may issue a separate class of shares.
There are currently six series of Van Eck Funds. This statement of Additional
information relates only to Asia Dynasty Fund (Class I).
INVESTMENT OBJECTIVES AND POLICIES
----------------------------------
Asia Dynasty Fund
- -----------------
Asia Dynasty Fund may invest in equity securities, warrants and equity
options of companies located in, or expected to benefit from the developmental
growth of the economies of countries located in the Asian region ("Asia Growth
Companies"). Asia Growth Companies consist of companies that (a) are located in
or whose securities are principally traded in an "Asian Region" country, as
defined below, (b)(i) have at lease 50% of their assets in one or more countries
located in the Asian Region or (ii) derive at least 50% of their gross sales
revenues or profits from providing goods or services to, from or within one or
more countries located in the Asian Region or (c) have manufacturing or other
operations in China that are significant to such companies. These investments
are typically listed on stock exchanges or traded in the over-the-counter
markets in Asian Region countries, but may be traded on exchanges or in markets
outside the Asian Region. Similarly, the principal offices of these countries
may be located outside these countries. These countries include Burma, Peoples
Republic of China ("China"), Cambodia, Hong Kong, India, Indonesia, Korea, Laos,
Malaysia, Pakistan, the Philippines, Singapore, Sri Lanka, Taiwan, Thailand and
Vietnam and, when the Fund is in a defensive posture, Australia, Japan and New
Zealand. Currently, the Fund does not consider Australia, Japan and New Zealand
to be part of the Asian Region. The countries constituting the Asian Region may
be changed by the Board without shareholder approval. Equity securities for
purposes of the 65% policy, include common and preferred stocks, direct equity
interests in trusts, partnerships, joint ventures and other unincorporated
entities or enterprises, special classes of shares available only to foreign
persons in those markets that restrict ownership of certain classes of equity to
nationals or residents of that country, convertible preferred stocks and
convertible debt instruments. Debt securities issued by Asia Growth Companies
are typically unrated. The Fund may buy and sell financial futures contracts and
options on financial futures contracts, forward currency contracts and put or
call options on securities, securities indices and foreign currencies and
foreign currency swaps. The Fund may also lend its portfolio securities and
borrow money for investment purposes (i.e. leverage its portfolio).
The securities industry in China and laws regarding fiduciary duties of
officers and directors and the protection of shareholders are not well
developed. China and certain of the other Asian Region countries do not have
many securities laws of nationwide applicability. As changes to the Chinese
legal system develop, foreign investors, including the Fund, may be adversely
affected. The uncertainties faced by foreign investors in China are exacerbated
by the fact that many laws, regulations and decrees of China are not publicly
available, but merely circulated internally. Similar risks exist in other Asian
Region countries.
2
<PAGE>
Investors should recognize that investing in foreign securities involves
certain special considerations which are not typically associated with investing
in United States securities. Since investments in foreign companies will
frequently involve currencies of foreign countries, and since the above Funds
may hold securities and funds in foreign currencies, these Funds may be affected
favorably or unfavorably by changes in currency rates and in exchange control
regulations, if any, and may incur costs in connection with conversions between
various currencies. Most foreign stock markets, while growing in volume of
trading activity, have less volume than the New York Stock Exchange, and
securities of some foreign companies are less liquid and more volatile than
securities of comparable domestic companies. Similarly, volume and liquidity in
most foreign bond markets are less than in the United States, and at times
volatility of price can be greater than in the United States. Fixed commissions
on foreign securities exchanges are generally higher than negotiated commissions
on United States exchanges, although these Funds endeavor to achieve most
favorable net results on their portfolio transactions. There is generally less
government supervision and regulation of securities exchanges, brokers and
listed companies in foreign countries than in the United States. In addition,
with respect to certain foreign countries, there is the possibility of exchange
control restrictions, expropriation or confiscatory taxation, political,
economic or social instability, which could affect investments in those
countries. Foreign securities such as those purchased by these Funds may be
subject to foreign government taxes, higher custodian fees and dividend
collection fees which could reduce the yield on such securities.
Investments may be made from time to time Asia Dynasty Fund in companies in
developing countries as well as in developed countries. Asia Dynasty Fund, and
Global Hard Assets Fund may have a substantial portion of their assets in
developing countries. Although there is no universally accepted definition, a
developing country is generally considered by the Adviser ( FII) or to be a
country which is in the initial stages of industrialization. Shareholders should
be aware that investing in the equity and fixed income markets of developing
countries involves exposure to unstable governments, economies based on only a
few industries, and securities markets which trade a small number of securities.
Securities markets of developing countries tend to be more volatile than the
markets of developed countries; however, such markets have in the past provided
the opportunity for higher rates of return to investors.
Since the Asia Dynasty Fund will invest at least 65% of its total assets in
Asian region investments, its investment performance will be especially affected
by events affecting Asian region companies. The value and liquidity of Asian
region investments may be affected favorably or unfavorably by political,
economic, fiscal, regulatory or other developments in the Asian region or their
neighboring regions. The extent of economic development, political stability and
market depth of different countries in the Asian region varies widely. Certain
countries in the Asian region, including Cambodia, China, Laos, Indonesia,
Malaysia, the Philippines, Thailand, and Vietnam are either comparatively
underdeveloped or are in the process of becoming developed. Investments
typically involve greater potential for gain or loss than investments in
securities of issuers in developed countries. Given the Fund's investments, the
Fund will likely be particularly sensitive to changes in China's economy as the
result of a reversal of economic liberalization, political unrest or changes in
China's trading status.
The securities markets in the Asian region are substantially smaller,
less liquid and more volatile than the major securities markets in the United
States. A high proportion of the shares of many issuers may be held by a limited
number of persons and financial institutions, which may limit the number of
shares available for investment by the portfolio. Similarly, volume and
liquidity in the bond markets in the Asian region are less than in the United
States and, at times, price volatility can be greater than in the United States.
A limited number of issuers in the Asian region securities markets may represent
a disproportionately large percentage of market capitalization and trading
value. The limited liquidity of
3
<PAGE>
securities markets in the Asian region may also affect the Fund's ability to
acquire or dispose of securities at the price and time it wishes to do so.
Accordingly, during periods of rising securities prices in the more illiquid
Asian region securities markets, the Fund's ability to participate fully in such
price increases may be limited by its investment policy of investing not more
than 15% of its net assets in illiquid securities. Conversely, the Fund's
inability to dispose fully and promptly of positions in declining markets will
cause the Fund's net asset value to decline as the value of the unsold positions
is marked to lower prices. In addition, Asian region securities markets are
susceptible to being influenced by large investors trading significant blocks of
securities.
The Chinese, Hong Kong and Taiwanese stock markets are undergoing a
period of growth and change which may result in trading volatility and
difficulties in the settlement and recording of transactions, and in
interpreting and applying the relevant law and regulations. In particular, the
securities industry in China is not well developed. China has few securities
laws of nationwide applicability. The municipal securities regulations adopted
by Shanghai and Shenzhen municipalities are very new, as are their respective
securities exchanges and other self-regulatory organizations. In addition,
Chinese stockbrokers and other intermediaries may not perform as well as their
counterparts in the United States and other more developed securities markets.
The prices at which the Funds may acquire investments may be affected by trading
by persons with material non-public information and by securities transactions
by brokers in anticipation of transactions by the Funds in particular
securities. The securities markets in Cambodia, Laos and Vietnam are currently
non-existent.
Asia Dynasty Fund will invest in Asian region countries with emerging
economies or securities markets. Political and economic structures in many of
such countries may be undergoing significant evolution and rapid development,
and such countries may lack the social, political and economic stability
characteristic of the United States. Certain of such countries have in the past
failed to recognize private property rights and have at times nationalized or
expropriated the assets of private companies. As a result, the risks described
above, including the risks of nationalization or expropriation of assets, may be
heightened. In addition, unanticipated political or social developments may
affect the value of the Funds' investments in those countries and the
availability to the Funds of additional investments in those countries.
Economies in the Asian region may differ favorably or unfavorably from
the United States economy in such respects as rate of growth of gross national
product, rate of inflation, capital reinvestment, resource self-sufficiency and
balance of payments position. As export-driven economies, the economies of the
Asian region is affected by developments in the economies of its principal
trading partners. Revocation by the United States of China's "Most Favored
Nation" trading status, which the United States President and Congress
reconsider annually, would adversely affect the trade and economic development
of China and Hong Kong. Hong Kong, Japan and Taiwan have limited natural
resources, resulting in dependence on foreign sources for certain raw materials
and economic vulnerability to global fluctuations of price and supply.
China governmental actions can have a significant effect on the
economic conditions in the Asian region, which could adversely affect the value
and liquidity of the Fund's investments. Although the Chinese Government has
recently begun to institute economic reform policies, there can be no assurances
that it will continue to pursue such policies or, if it does, that such policies
will succeed.
China and certain of the other Asian region countries do not have
comprehensive systems of laws, although substantial changes have occurred in
China in this regard in recent years. The corporate form of organization has
only recently been permitted in China and national regulations governing
corporations were introduced only in May 1992. Prior to the introduction of such
regulations Shanghai had adopted a set of corporate regulations applicable to
corporations located or listed in Shanghai, and the relationship between the two
sets of regulations is not clear. Consequently, until a firmer legal basis is
provided, even such fundamental corporate law tenets as the limited liability
status of Chinese issuers and their authority to
4
<PAGE>
issue shares remain open to question. Laws regarding fiduciary duties of
officers and directors and the protection of shareholders are not well
developed. China's judiciary is relatively inexperienced in enforcing the laws
that exist, leading to a higher than usual degree of uncertainty as to the
outcome of litigation. Even where adequate law exists in China, it may be
impossible to obtain swift and equitable enforcement of such law, or to obtain
enforcement of the judgment by a court of another jurisdiction. The bankruptcy
laws pertaining to state enterprises have rarely been used and are untried in
regard to an enterprise with foreign shareholders, and there can be no assurance
that such shareholders, including the Funds, would be able to realize the value
of the assets of the enterprise or receive payment in convertible currency. As
the changes to the Chinese legal system develop, the promulgation of new laws,
existing laws and the preemption of local laws by national laws may adversely
affect foreign investors, including the Funds. The uncertainties faced by
foreign investors in China are exacerbated by the fact that many laws,
regulations and decrees of China are not publicly available, but merely
circulated internally. Similar risks exist in other Asian region countries.
Trading in futures contracts traded on foreign commodity exchanges may
be subject to the same or similar risks as trading in foreign securities.
Emerging Markets Securities
---------------------------
Investments of the Funds (except U.S. Government Money Fund) may be
made from time to time in companies in developing countries as well as in
developed countries. Shareholders should be aware that investing in the equity
and fixed income markets of developing countries involves exposure to
potentially unstable governments, the risk of nationalization of businesses,
restrictions on foreign ownership, prohibitions on repatriation of assets and a
system of laws that may offer less protection of property rights. Emerging
market economies may be based on only a few industries, may be highly vulnerable
to changes in local and global trade conditions, and may suffer from extreme and
volatile debt burdens or inflation rates.
Securities markets in these countries may trade a small number of
securities, may have a limited number of issuers and a high proportion of shares
of may issuers may be held by a relatively small number of persons or
institutions. Local securities markets may be unable to respond effectively to
increases in trading volume, potentially making prompt liquidation of
substantial holdings difficult or impossible at times. Securities of issuers
located in developing markets may have limited marketability and may be subject
to more abrupt or erratic price movements. Many of these stock markets are
undergoing a period of growth and change which may result in trading volatility,
and in difficulties in the settlement and recording of transactions and in
interpreting and applying the relevant law and regulations. In addition,
stockbrokers and other intermediaries in emerging markets may not perform in the
way their counterparts in the United States and other more developed securities
markets do. The prices at which a Fund may acquire investments may be affected
by trading by persons with material non-public information and by securities
transactions by brokers in anticipation of transactions by the Fund in
particular securities. Limited liquidity may impair a Fund's ability to
liquidate a position at the time and price it wishes to do so. In addition, a
Fund's ability to participate fully in the smaller, less liquid emerging markets
may be limited by the policy restricting its investments in illiquid securities.
Foreign Currency Transactions
-----------------------------
Under normal circumstances, consideration of the prospects for currency
exchange rates will be incorporated into the long-term investment decisions made
for the Fund with regard to overall
5
<PAGE>
diversification strategies. Although the Fund values its assets daily in terms
of U.S. Dollars, they do not intend physically to convert their holdings of
foreign currencies into U.S. dollars on a daily basis. The Funds will do so from
time to time, and investors should be aware of the costs of currency conversion.
Although foreign exchange dealers do not charge a fee for conversion, they do
realize a profit based on the difference (the "spread") between the prices at
which they are buying and selling various currencies. Thus, a dealer may offer
to sell a foreign currency to the Funds at one rate, while offering a lesser
rate of exchange should the Funds desire to resell that currency to the dealer.
The Funds will use forward contracts, along with futures contracts, foreign
exchange swaps (Asia Dynasty Fund, Global Leaders Fund, Global Hard Assets Fund
only) and put and call options (all types of derivatives), to "lock in" the U.S.
Dollar price of a security bought or sold and as part of their overall hedging
strategy. The Funds will conduct their foreign currency exchange transactions,
either on a spot (i.e., cash) basis at the spot rate prevailing in the foreign
currency exchange market, or through purchasing put and call options on, or
entering into futures contracts or forward contracts to purchase or sell foreign
currencies. See "Futures and Options Transactions."
Changes in currency exchange rates may affect the Funds' net asset
value and performance. There can be no assurance that the Funds' investment
adviser (or Sub-Adviser) will be able to anticipate currency fluctuations in
exchange rates accurately. The Funds may invest in a variety of derivatives and
enter into hedging transactions to attempt to moderate the effect of currency
fluctuations. The Funds may purchase and sell put and call options on, or enter
into futures contracts or forward contracts to purchase or sell, foreign
currencies. This may reduce a Fund's losses on a security when a foreign
currency's value changes. Hedging against a change in the value of a foreign
currency does not eliminate fluctuations in the prices of portfolio securities
or prevent losses if the prices of such securities decline. Furthermore, such
hedging transactions reduce or preclude the opportunity for gain if the value of
the hedged currency should change relative to the other currency. Last, when the
Funds use options and futures in anticipation of the purchase of a portfolio
security to hedge against adverse movements in the security's underlying
currency, but the purchase of such security is subsequently deemed undesirable,
the Fund may incur a gain or loss on the option or futures contract.
The Funds will enter into forward contracts to duplicate a cash market
transaction. Asia Dynasty Fund may enter into currency swaps. See also "Foreign
Currency Transactions" and "Futures and Options Transactions".
In those situations where foreign currency options or futures
contracts, or options on futures contracts may not be readily purchased (or
where they may be deemed illiquid) in the primary currency in which the hedge is
desired, the hedge may be obtained by purchasing or selling an option, or
futures contract or forward contract on a secondary currency. The secondary
currency will be selected based upon the investment adviser's (or Sub-Adviser's)
belief that there exists a significant correlation between the exchange rate
movements of the two currencies. However, there can be no assurances that the
exchange rate or the primary and secondary currencies will move as anticipated
or that the relationship between the hedged security and the hedging instrument
will continue. If they do not move as anticipated or the relationship does not
continue, a loss may result to the Funds on their investments in the hedging
positions.
A forward foreign currency contract, like a futures contract, involves
an obligation to purchase or sell a specific amount of currency at a future
date, which may be any fixed number of days from the date of the contract agreed
upon by the parties, at a price set at the time of the contract. Unlike foreign
currency futures contracts which are standardized exchange-traded contracts,
forward currency contracts are usually traded in the interbank market conducted
directly between currency traders (usually large commercial banks) and their
customers. A forward contract generally has no deposit requirement, and no
commissions are charged at any stage for such trades.
6
<PAGE>
The Adviser (or FII) will not commit any Fund to deliver under forward
contracts an amount of foreign currency in excess of the value of the Fund's
portfolio securities or other assets or obligations denominated in that
currency. The Funds' Custodian will place the securities being hedged, cash or
U.S. government securities or debt or equity securities into a segregated
account of the Fund in an amount equal to the value of the Fund's total assets
committed to the consummation of forward foreign currency contracts to ensure
that the Fund is not leveraged beyond applicable limits. If the value of the
securities placed in the segregated account declines, additional cash or
securities will be placed in the account on a daily basis so that the value of
the account will equal the amount of the Funds' commitments with respect to such
contracts. At the maturity of a forward contract, the Funds may either sell the
portfolio security and make delivery of the foreign currency, or they may retain
the security and terminate their contractual obligation to deliver the foreign
currency prior to maturity by purchasing an "offsetting" contract with the same
currency trader obligating it to purchase, on the same maturity date, the same
amount of the foreign currency. There can be no assurance, however, that the
Funds will be able to effect such a closing purchase transaction.
It is impossible to forecast the market value of a particular portfolio
security at the expiration of the contract. Accordingly, if a decision is made
to sell the security and make delivery of the foreign currency it may be
necessary for a Fund to purchase additional foreign currency on the spot market
(and bear the expense of such purchase) if the market value of the security is
less than the amount of foreign currency that a Fund is obligated to deliver.
If a Fund retains the portfolio security and engages in an offsetting
transaction, the Fund will incur a gain or a loss to the extent that there has
been movement in forward contract prices. Additionally, although such contracts
tend to minimize the risk of loss due to a decline in the value of the hedged
currency, at the same time, they tend to limit any potential gain which might
result should the value of such currency increase.
Futures And Options Transactions
--------------------------------
The Fund may invest in options on futures contracts. Compared to the
purchase or sale of futures contracts, the purchase and sale of options on
futures contracts involves less potential risk to the Funds because the maximum
exposure is the amount of the premiums paid for the options. Futures contracts
and options thereon are both types of derivatives.
The Funds 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 for other purposes. 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 a 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.
A Fund will not commit more then 5% of its total assets to initial
margin deposits on futures contracts and premiums on options on futures
contracts, except that margin deposits for futures positions entered into for
bona fide hedging purposes, as that term is defined in the Commodity Exchange
Act, are
7
<PAGE>
excluded from the 5% limitation. As the value of the underlying asset
fluctuates, either party to the contract is required to make additional margin
payments, known as "variation margin," to cover any additional obligation it may
have under the contract. In addition, cash or high quality securities equal in
value to the current value of the underlying securities less the margin
requirement will be segregated, as may be required, with the fund's custodian to
reflect changes in the value of the underlying futures contract.
For hedging purposes, each Fund, and for other purposes (such as
creating synthetic positions), the Fund may invest up to 5% of its total assets,
taken at market value at the time of investment, in premiums on call and put
options on domestic and foreign securities, foreign currencies, stock and bond
indices, financial futures contracts and commodity futures contracts. This
policy may be changed without shareholder approval.
The Fund may write, purchase or sell covered call or put options. An
options transaction involves the writer of the option, upon receipt of a
premium, giving the right to sell (call option) or buy (put option) an
underlying asset at an agreed-upon exercise price. The holder of the option has
the right to purchase (call option) or sell (put option) the underlying asset at
the exercise price. If the option is not exercised or sold, it becomes worthless
at its expiration date and the premium payment is lost to the option holder. As
the writer of an option, the Fund keeps the premium whether or not the option is
exercised. When a Fund sells a covered call option, which is a call option with
respect to which the Fund owns the underlying assets, the Fund may lost the
opportunity to realize appreciation in the market price of the underlying asset
or may have to hold the underlying asset, which might otherwise have been sold
to protect against depreciation. A covered put option written by the Fund
exposes it during the term of the option to a decline in the price of the
underlying asset. 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. Covering a put option sold does not
reduce the risk of loss.
The Fund may invest in options which are either listed on a domestic
securities exchange or traded on a recognized foreign exchange. In addition, the
Fund may purchase or sell over-the-counter options for dealers or banks to hedge
securities or currencies as approved by the Board of Trustees. In general,
8
<PAGE>
exchange traded options are third party contracts with standardized prices and
expiration dates. Over-the-counter options are two party contracts with price
and terms negotiated by the buyer and seller, are generally considered illiquid
and will be subject to the limitation on investments in illiquid securities.
It is the policy of each of the Fund to meet the requirements of the
Internal Revenue Code of 1986, as amended (the "Code") to qualify as a regulated
investment company to prevent double taxation of the Funds and their
shareholders. One of the requirements is that at least 90% of a Fund's gross
income be derived from dividends, interest, payment with respect to securities
loans and gains from the sale or other disposition of stocks or other
securities. Gains from commodity futures contracts do not currently qualify as
income for purposes of the 90% test. The extent to which the Funds may engage in
options and futures contract transactions may be materially limited by this
test.
Mortgage-Backed Securities
--------------------------
The Fund may invest in mortgage-backed securities. A mortgage-backed
security may be an obligation of the issuer backed by a mortgage or pool of
mortgages or a direct interest in an underlying pool of mortgages. The value of
mortgage-backed securities may change due to shifts in the market's perception
of issuers. In addition, regulatory or tax changes may adversely affect the
mortgage securities market as a whole. Stripped mortgage-backed securities are
created when an U.S. governmental agency or a financial institution separates
the interest and principal components of a mortgage-backed security and sells
them as individual securities. The holder of the "principal-only" security
("PO") receives the principal payments made by the underlying mortgage-backed
security, while the holder of the "interest-only" security ("IO") receives
interest payments from the same underlying security. The prices of stripped
mortgage-backed securities may be particularly affected by change in interest
rates. As interest rates fall, prepayment rates tend to increase, which tends to
reduce the price of IOs and increase prices of POs. Rising interest rates can
have the opposite effect. Changes in interest rates may also affect the
liquidity of IOs and POs.
9
<PAGE>
Real Estate Securities
----------------------
The Fund may invest a percentage of its assets in equity securities of
REIT and other real estate industry companies or companies with substantial real
estate investments. The Fund may invest a percentage of its assets in equity
securities of REITs and other real estate industry companies or companies with
substantial real estate investments.
REITs are pooled investment vehicles whose assets consist primarily of
interest in real estate and real estate loans. REITs are generally classified as
equity REITs, mortgage REITs or hybrid REITs. Equity REITs own interest in
property and realize income from the rents and gain or loss from the sale of
real estate interests. Mortgage REITs invest in real estate mortgage loans and
realize income from interest payments on the loans. Hybrid REITs invest in both
equity and debt. Equity REITs may be operating or financing companies. An
operating company provides operational and management expertise to and exercises
control over, many if not most operational aspects of the property.
REITS are not taxed on income distributed to shareholders provided they
comply with several requirements of the Code.
Investing in REITs involves certain unique risks in addition to those
risks associated with investing in the real estate industry in general. Equity
REITs may be affected by changes in the value of the underlying property owned
by the REITs, while mortgage REITs may be affected by the quality of any credit
extended. REITs are dependent upon management skills, are not diversified, and
are subject to the risks of financing projects. REITs are subject to heavy cash
flow dependency, default by borrowers, self-liquidation and the possibilities of
failing to qualify for the exemption from tax for distributed income under the
Code. REITs (especially mortgage REITs) are also subject to interest rate risk
(i.e., as interest rates rise, the value of the REIT may decline).
10
<PAGE>
Debt Securities
---------------
The Funds may invest in debt securities. The market value of debt
securities generally varies in response to changes in interest rates and the
financial condition of each issuer and the value of a Hard Asset if linked to
the value of a Hard Asset. Debt securities with similar maturities may have
different yields, depending upon several factors, including the relative
financial condition of the issuers. A description of debt securities ratings is
contained in the Appendix to the Statement of Additional Information. High grade
means a rating of A or better by Moody's or S&P's, or of comparable quality in
the judgment of the Adviser or (Sub-Adviser) if no rating has been given by
either service. Many securities of foreign issuers are not rated by these
services. Therefore, the selection of such issuers depends to a large extent on
the credit analysis performed by the Adviser or (Sub-Adviser). During periods of
declining interest rates, the value of debt securities generally increases.
Conversely, during periods of rising interest rates, the value of such
securities generally declines. These changes in market value will be reflected
in the Fund's net asset value. Debt securities with similar maturities may have
different yields, depending upon several factors, including the relative
financial condition of the issuers. For example, higher yields are generally
available from securities in the lower rating categories of S&P or Moody's.
However, the values of lower-rated securities generally fluctuate more than
those of high-grade securities. Many securities of foreign issuers are not rated
by these services. Therefore the selection of such issuers depends to a large
extent on the credit analysis performed by the Adviser (or FII).
New issues of certain debt securities are often offered on a when-
issued basis, that is, the payment obligation and the interest rate are fixed at
the time the buyer enters into the commitment, but delivery and payment for the
securities normally take place after the date of the commitment to purchase. The
value of when-issued securities may vary prior to and after delivery depending
on market conditions and changes in interest rate levels. However, the Funds do
not accrue any income on these securities prior to delivery. The Funds will
maintain in a segregated account with their Custodian an amount of cash or high
quality securities equal (on a daily marked-to-market basis) to the amount of
its commitment to purchase the when-issued securities.
Derivatives
-----------
The Funds may also use futures contracts and options, forward contracts
and swaps as part of various investment techniques and strategies, such as
creating non-speculative "synthetic" positions (covered by segregation of liquid
assets) or implementing "cross-hedging" strategies. A "synthetic position" is
the duplication of cash market transaction when deemed advantageous by the
Funds' Adviser (or Sub-Adviser) for cost, liquidity or transactional efficiency
reasons. A cash market transaction is the purchase or sale of the security or
other asset for cash. "Cross-hedging" involves the use of one currency to hedge
against the decline in the value of another currency. The use of such
instruments as described herein involves several risks. First, there can be no
assurance that the prices of such instruments and the hedge security or the cash
market position will move as anticipated. If prices do not move as anticipated,
a Fund may incur a loss on its investment, may not achieve the hedging
protection it anticipated and/or may incur a loss greater than if it had entered
into a cash market position. Second, investments in such instruments may reduce
the gains which would otherwise be realized from the sale of the underlying
securities or assets which are being hedged. Third, positions in such
instruments can be closed out only on an exchange that provides a market for
those instruments. There can be no assurance that such a market will exist for a
particular futures contract or option. If the Fund cannot close out an exchange
traded futures contract or option which it holds, it would have to perform its
contract obligation or exercise its option to realize any profit and would incur
transaction cost on the sale of the underlying assets.
11
<PAGE>
When the Fund intends to acquire securities (or gold bullion or coins
as the case may be) for their portfolio, they may use call options or futures
contracts as a means of fixing the price of the security (or gold) they intend
to purchase at the exercise price (in the case of an option) or contract price
(in the case of futures contact). An increase in the acquisition cost would be
offset, in whole or part, by a gain on the option or futures contract. Options
and futures contracts requiring delivery of a security may also be useful to the
Funds in purchasing a large block of securities that would be more difficult to
acquire by direct market purchases. If the Funds hold a call option rather than
the underlying security itself, the Funds are partially protected from any
unexpected decline in the market price of the underlying security and in such
event could allow the call option to expire, incurring a loss only to the extent
of the premium paid for the option. Using a futures contract would not offer
such partial protection against market declines and the Funds wold experience a
loss as if they had owned the underlying security.
Currency Swaps
--------------
Asia Dynasty Fund may enter into currency swaps for hedging purposes.
Currency swaps involve the exchange of rights to make or receive payments of the
entire principal value in specified currencies. Since currency swaps are
individually negotiated, a Fund may expect to achieve an acceptable degree of
correlation between its portfolio investments and its currency swap positions.
The entire principal value of a currency swap is subject to the risk that the
other party to the swap will default on its contractual delivery obligations.
The use of swaps is a highly specialized activity which involves
investment techniques and risks different from those associates with ordinary
portfolio transactions. If the Fund's investment adviser (or Sub-Adviser) is
incorrect in its forecasts of market values and currency exchange rates and/or
Hard Assets values, the investment performance of the fund would be less
favorable than it would have been if this investment technique were not used.
Swaps are generally considered illiquid and will be aggregated with other
illiquid positions for purposes of the limitation on illiquid investments.
12
<PAGE>
Direct Investments
------------------
Certain of the Fund's direct investments will include investments in
smaller, less seasoned companies. These companies may have limited product
lines, markets or financial resources, or they may be dependent on a limited
management group. The Funds do not anticipate making direct investments in
start-up operations, although it is expected that in some cases the Funds'
direct investments will fund new operations for an enterprise which itself is
engaged in similar operations or is affiliated with an organization that is
engaged in similar operations. With respect to the Asia Dynasty Fund, such
direct investments may be made in entities that are reasonably expected in the
foreseeable future to become Asia Growth Companies, either by expanding current
operations or establishing significant operations in the Asian Region.
Direct investments may involve a high degree of business and financial
risk that can result in substantial losses. Because of the absence of any public
trading market for these investments, the Funds may take longer to liquidate
these positions than would be the case for publicly traded securities. Although
these securities may be resold in privately negotiated transactions, the prices
on these sales could be less than those originally paid by the Funds.
Furthermore, issuers whose securities are not publicly traded may not be subject
to public disclosure and other investor protection requirements applicable to
publicly traded securities. If such securities are required to be registered
under the securities laws of one or more jurisdictions before being resold, the
Funds may be required to bear the expense of the registration. In addition, in
the event the Funds sell unlisted foreign securities, any capital gains realized
on such transactions may be subject to higher rates of taxation than taxes
payable on the sale of listed securities. Direct investments are generally
considered illiquid and will be aggregated with other illiquid investments for
purposes of the limitation on illiquid investments
Repurchase Agreements
---------------------
The Fund will not enter into a repurchase agreement with a maturity of
more than seven business days if, as a result, more than 15% of the value of a
Fund's total assets would then be invested in such repurchase agreements and
other illiquid securities. A Fund will only enter into a repurchase agreement
where (i) the underlying securities are of the type which the Fund's investment
policies would allow it to purchase directly, (ii) the market value of the
underlying security, including accrued interest, will be at all times equal to
or exceed the value of the repurchase agreement, and (iii) payment for the
underlying securities is made only upon physical delivery or evidence of book-
entry transfer to the account of the custodian or a bank acting as agent.
Rule 144A Securities And Section 4(2) Commercial Paper
------------------------------------------------------
The Securities and Exchange Commission adopted Rule 144A which allows a
broader institutional trading market for securities otherwise subject to
restriction on resale to the general public. Rule 144A establishes a "safe
harbor" from the registration requirements of the Securities Act of 1933 of
resales of certain securities to qualified institutional buyers. The Adviser (or
FII) anticipates that the market for certain restricted securities such as
institutional commercial paper will expand further as a result of this new
regulation and the development of an automated system for the trading, clearance
and settlement of
13
<PAGE>
unregistered securities of domestic and foreign issuers, such as the PORTAL
System sponsored by the National Association of Securities Dealers.
The Adviser will monitor the liquidity of restricted securities in the
Funds' holdings under the supervision of the Board of Trustees. In reaching
liquidity decisions, the Adviser (or FII) will consider, among other things, the
following factors: (1) the frequency of trades and quotes for the security; (2)
the number of dealers wishing to purchase or sell the security and the number of
other potential purchasers; (3) dealer undertakings to make a market in the
security and (4) the nature of the security and the nature of the marketplace
trades (e.g., the time needed to dispose of the security, the method of
soliciting offers and the mechanisms of the transfer).
In addition, commercial paper may be issued in reliance on the "private
placement" exemption from registration afforded by Section 4(2) of the
Securities Act of 1933. Such commercial paper is restricted as to disposition
under the federal securities laws and, therefore, any resale of such securities
must be effected in a transaction exempt from registration under the Securities
Act of 1933. Such commercial paper is normally resold to other investors through
or with the assistance of the issuer or investment dealers who make a market in
such securities, thus providing liquidity.
Securities eligible for resale pursuant to Rule 144A under the
Securities Act of 1933 and commercial paper issued in reliance on the Section
4(2) exemption under the 1940 Act may be determined to be liquid in accordance
with guidelines established by the Board of Trustees for purposes of complying
with investment restrictions applicable to investments by the Funds in illiquid
securities.
INVESTMENT RESTRICTIONS
-----------------------
The following investment restrictions are in addition to those
described in the Prospectus. Policies that are identified as fundamental may be
changed with respect to a Fund only with the approval of the holders of a
majority of the Fund's outstanding shares. Such majority is defined as the vote
of the lesser of (i) 67% or more of the outstanding shares present at a meeting,
if the holders of more than 50% of a Fund's outstanding shares are present in
person or by proxy, or (ii) more than 50% of a Fund's outstanding shares. As to
any of the following policies, if a percentage restriction is adhered to at the
time of investment, a later increase or decrease in percentage resulting from a
change in value of portfolio securities or amount of net assets will not be
considered a violation of the policy.
With respect to Asia Dynasty Fund restrictions 1, 4, 6, 7, 10, 12, 13,
17, 18, 19 and 20, are not fundamental, unless otherwise provided for by
applicable federal or state law.
The Asia Dynasty Fund may not:
1. Invest in securities which (i) are subject to legal or
contractual restrictions on resale ("restricted security")
or for which there is no readily available market quotation or
engage in a repurchase agreement maturing in more than seven
days with respect to any security if the result is that more
than 10% of a Fund's net assets would be invested in such
securities,
14
<PAGE>
and are "illiquid" securities, including repurchase agreements
maturing in more than 7 days and options traded over-the-
counter if the result is that more than 15% Asia Dynasty
Fund's, net assets would be invested in such securities.
2. Purchase or sell real estate, although the Asia Dynasty Fund
may purchase securities of companies which deal in real
estate, including securities of real estate investment trusts,
and may purchase securities which are collateralized by
interests in real estate.
3. Purchase or sell commodities or commodity futures contracts
(for the purpose of this restriction, forward foreign exchange
contracts are not deemed to be a commodity or commodity
contract). The Fund may not commit more than 5% of their total
assets to initial margin deposits on futures contracts.
4. Exclusive of the Asia Dynasty Fund, purchase securities of
other open-end investment companies except as part of a
merger, consolidation, reorganization or acquisition of
assets; Asia Dynasty Fund may not purchase more than 3% of the
total outstanding voting stock of any closed-end investment
company if more than 5% of any of these Funds' total assets
would be invested in securities of any closed-end investment
company, or more than 10% of such value in closed-end
investment companies in general. In addition, Asia Dynasty
Fund may not invest in the securities of closed-end investment
companies, except by purchase in the open market involving
only customary broker's commissions.
5. Make loans, except by (i) purchase of marketable bonds,
debentures, commercial paper and similar marketable evidences
of indebtedness and (ii) repurchase agreements. Asia Dynasty
Fund may lend to broker-dealers portfolio securities with an
aggregate market value up to one-third of its total assets.
6. As to 75% of the total assets of the Asia Dynasty Fund,
purchase securities of any issuer, if immediately thereafter
(i) more than 5% of a Fund's total assets (taken at market
value) would be invested in the securities of such issuer, or
(ii) more than 10% of the outstanding securities of any class
of such issuer would be held by a Fund (provided that these
limitations do not apply to obligations of the United States
Government, its agencies or instrumentalities).
7. Invest more than 5 percent of the value of its total assets in
securities of companies having, together with their
predecessors, a record of less than three years of continuous
operation.
15
<PAGE>
This restriction does not apply to Asia Dynasty Fund.
8. Underwrite any issue of securities (except to the extent that
a Fund may be deemed to be an underwriter within the meaning
of the Securities Act of 1933 in the disposition of restricted
securities).
9. The Fund may not borrow money, except Asia Dynasty Fund may
borrow up to 30% of the value of their respective net assets
to increase their holdings of portfolio securities. The Funds
will not borrow for the purpose of leveraging its portfolio
but will borrow only for temporary or emergency purposes.
10. Mortgage, pledge or otherwise encumber its assets except to
secure borrowing effected within the limitations set forth in
restriction (9).
11. Issue senior securities except insofar as a Fund may be deemed
to have issued a senior security by reason of (i) borrowing
money in accordance with restrictions described above; (ii)
entering into forward foreign currency contracts (iii)
financial futures contracts purchased on margin Asia Dynasty
Fund (iv) foreign currency swaps and (v) issuing multiple
classes of shares.
12. Make short sales of securities except that Asia Dynasty Fund
may engage in the transactions specified in restrictions (2),
(3) and (14).
13. Purchase any security on margin, except that it may obtain
such short-term credits as are necessary for clearance of
securities transactions and, with respect to Asia Dynasty Fund
and may make initial or maintenance margin payments in
connections with options and futures contracts and related
options and borrowing effected within the limitations set
forth in restriction (9).
14. Write, purchase or sell puts, calls, straddles, spreads or
combinations thereof, except that Asia Dynasty Fund may
purchase or sell puts and calls on foreign currencies and on
securities described under "Options Transactions" herein and
in the Prospectus and that Asia Dynasty Fund may write,
purchase or sell put and call options on financial futures
contracts, which include bond and stock index futures
contracts.
15. Make investments for the purpose of exercising control or
management.
16. Invest more than 25 percent of the value of a Fund's total
assets in the securities of issuers having their principal
business activities in the same industry, except the
Gold/Resources Fund and Global Hard Assets Fund and as
otherwise stated in any Fund's fundamental
16
<PAGE>
investment objective, and provided that this limitation does
not apply to obligations issued or guaranteed by the United
States Government, its agencies or instrumentalities.
17. Participate on a joint or joint and several basis in any
trading account in securities, although transactions for the
Funds and any other account under common or affiliated
management may be combined or allocated between the Funds and
such account.
18. Purchase participations or other interests Asia Dynasty Fund
in oil, gas or other mineral exploration or development
programs.
19. Invest more than 5% of its total assets in warrants, whether
or not the warrants are listed on the New York or American
Stock Exchanges, or more than 2% of the value of the assets of
a Fund (except Asia Dynasty Fund) in warrants which are not
listed on those exchanges. Warrants acquired in units or
attached to securities or received as dividends are not
included in this restriction.
20. Purchase or retain a security of any issuer if any of the
officers, directors or Trustees of a Fund or its investment
adviser owns beneficially more than 1/2 of 1% of the
securities of such issuer, or if such persons taken together
own more than 5% of the securities of such issuer.
21. Invest in real estate limited partnerships or in oil, gas or
other mineral leases.
With respect to restriction 3, forward foreign exchange contracts are
not deemed to be a commodity or commodity contract.
The following are not considered fundamental policies. Asia Dynasty
Fund may, for hedging purposes, buy and sell financial futures contracts which
may include stock and bond index futures contracts and foreign currency futures
contracts. These Funds may not commit more than 5% of their total assets to
initial margin deposits on futures contracts not used for hedging purposes.
With respect to restriction 16, companies in different geographical
locations will not be deemed to be in the same industry if the investment risks
associated with the securities of such companies are substantially different.
For example, although generally considered to be "interest rate sensitive,"
investing in banking institutions in different countries is generally dependent
upon substantially different risk factors, such as the condition and prospects
of the economy in a particular country and in particular industries, and
political conditions.
17
<PAGE>
INVESTMENT ADVISORY SERVICES
----------------------------
The investment adviser and manager of the Funds is Van Eck Associates
Corporation (the "Adviser"), a Delaware corporation, pursuant to an Advisory
Agreement with the Trust dated as of July 30, 1985, as amended. The Adviser
oversees an investment program for the Funds, subject to the overall supervision
and review of the Board of Trustees. The Adviser is currently the oldest and
largest gold manager investing in gold mining shares. The Adviser's team of gold
managers and analysts average over 25 years of experience.
The Adviser or FII provides the Funds with office space, facilities and
simple business equipment and provides the services of consultants, executive
and clerical personnel for administering their affairs. The Adviser compensates
all executive and clerical personnel and Trustees of the Trust if such persons
are employees or affiliates of the Adviser or its affiliates. The advisory
fee is computed daily and paid monthly at the following annual rates: Asia
Dynasty Fund pays a monthly fee at the rate of 0.75% as average daily net
assets.
The Adviser also performs administrative services for Asia Dynasty Fund
pursuant to a written agreement. The Adviser is also responsible for providing
accounting services to these Funds. For these accounting and administrative
services, Asia Dynasty Fund each pays .25 of 1% of its respective average daily
net assets.
18
<PAGE>
Advisory Agreements for all the Funds were reapproved by the Board of
Trustees of the Trust, including a majority of the Trustees who are not parties
to such Agreements or interested persons of any such party at a meeting held on
April 22, 1998.
The Advisory Agreement was approved by shareholders of the Asia Dynasty
Fund on ________________; The Advisory Agreements and Sub-Advisory Agreement
provide that they shall continue in effect from year to year with respect to a
Fund as long as it is approved at least annually both (i) by a vote of a
majority of the outstanding voting securities of the Fund (as defined in the
Act) or by the Trustees of the Trust, and (ii) in either event by a vote of a
majority of the Trustees who are not parties to the Agreement or "interested
persons" of any party thereto, cast in person at a meeting called for the
purpose of voting on such approval. The Agreements may be terminated on 60 days
written notice by either party and will terminate automatically in the event of
an assignment within the meaning of the Act.
Mr. John C. van Eck is Chairman of the Board of Directors of the
Adviser as well as President and Trustee of the Trust. Mr. van Eck offered the
first global mutual fund to U.S. investors in 1955 and offered the first gold
fund to U.S. investors in 1968. Mr. van Eck, Chairman and President of the Trust
and Van Eck Worldwide Insurance Trust, and members of his immediate, family own
100% of the voting stock of the Adviser.
THE DISTRIBUTOR
---------------
Shares of the Funds are offered on a continuous basis and are
distributed through Van Eck Securities Corporation, 99 Park Avenue, New York,
New York (the "Distributor"), a wholly owned subsidiary of Van Eck Associates
Corporation. The Trustees of the Trusts have approved a Distribution Agreement
appointing the Distributor as distributor of shares of the Funds. The
Distribution Agreement with respect to all Funds was last reapproved by the
action of the Trustees on April 22, 1998.
19
<PAGE>
The Distribution Agreement provides that the Distributor will pay all
fees and expenses in connection with printing and distributing prospectuses and
reports for use in offering and selling shares of the Funds and preparing,
printing and distributing advertising or promotional materials. The Funds will
pay all fees and expenses in connection with registering and qualifying their
shares under federal and state securities laws.
Van Eck Securities Corporation retained distributing commissions on
sales of shares of the Funds for the following fiscal years ended December 31
(except as noted) after reallowance to dealers as follows:
<TABLE>
<CAPTION>
Van Eck Securities Reallowance to
Corporation Dealers
----------- -------
<S> <C> <C> <C>
Asia Dynasty Fund 1998 $ 787 $ 5,621
1997 2,455 13,752
1996 22,269 109,025
</TABLE>
Asia Dynasty Fund (Class A and B) have also adopted a Plan which
provides for the compensation of brokers and dealers who sell shares of these
Funds or provide servicing. The Plan for Asia Dynasty Fund (Class A) is a
reimbursement type plan and provides for the payment of carry-over expenses to
the Distributor, incurred in one year but payable in a subsequent year(s), up to
the maximum for the Fund in any given year. Asia Dynasty Fund (Class B) Plans
are compensation type plans with a carry-forward provision which provides that
the Distributor recoup distribution expenses in the event the Plan is
terminated. For the periods prior to April 30, 1999, the Distributor has agreed
with respect to Plans with a carry-forward provision, notwithstanding anything
to the
20
<PAGE>
contrary in the Plan, to waive its right to reimbursement of carry-forward
amounts in the event the Plan is terminated unless the Board of Trustees has
determined that reimbursement of such carry-forward amounts is appropriate.
Pursuant to the Plans, the Distributor provides the Funds at least
quarterly with a written report of the amounts expended under the Plans and the
purpose for which such expenditures were made. The Trustees review such reports
on a quarterly basis.
The Plan was last reapproved for all Funds, by the Trustees of the
Trust, including a majority of the Trustees who are not "interested persons" of
the Funds and who have no direct or indirect financial interest in the operation
of the Plan, cast in person at a meeting called for the purpose of voting on
each such Plan on April 22, 1999. The Plan was approved by shareholders of the
Asia Dynasty Fund (Class B) on August 31, 1993.
A Plan shall continue in effect as to each Fund, provided such
continuance is approved annually by a vote of the Trustees in accordance with
the Act. A Plan may not be amended to increase materially the amount to be spent
for the services described therein without approval of the shareholders of the
Funds, and all material amendments to the Plan must also be approved by the
Trustees in the manner described above. A Plan may be terminated at any time,
without payment of any penalty, by vote of a majority of the Trustees who are
not "interested persons" of the Fund and who have no direct or indirect
financial interest in the operation of the Plan, or by a vote of a majority of
the outstanding voting securities of the Fund (as defined in the Act) on written
notice to any other party to the Plan. A Plan will automatically terminate in
the event of its assignment (as defined in the 1940 Act). So long as the Plan is
in effect, the election and nomination of Trustees who are not "interested
persons" of the Trust shall be committed to the discretion of the Trustees who
are not "interested persons." The Trustees have determined that, in their
judgment, there is a reasonable likelihood that the Plan will benefit the Funds
and their shareholders. The Funds will preserve copies of the Plan and any
agreement or report made pursuant to Rule 12b-1 under the Act, for a period of
not less than six years from the date of the Plan or such agreement or report,
the first two years in an easily accessible place. For additional information
regarding the Plans, see the Prospectus.
PORTFOLIO TRANSACTION AND BROKERAGE
-----------------------------------
The Adviser is responsible for decisions to buy and sell securities and
other investments for the Fund, the selection of brokers and dealers to effect
the transactions and the negotiation of brokerage commissions, if any. In
transactions on stock and commodity exchanges in the United States, these
commissions are negotiated, whereas on foreign stock and commodity exchanges
these commissions are generally fixed and are generally higher than brokerage
commissions in the United States. In the case of securities traded on the over-
the-counter markets, there is generally no stated commission, but the price
usually includes an undisclosed commission or markup. In underwritten offerings,
the price includes a disclosed fixed commission or discount. Most obligations in
which the U.S. Government Money Fund invests are normally traded on a
"principal" rather than agency basis. This may be done through a dealer (e.g.
securities firm or bank) who buys or sells for its own account rather than as an
agent for another client, or directly with the issuer. A dealer's profit, if
any, is the difference, or spread, between the dealer's purchase and sale price
for the obligation.
In purchasing and selling the Fund's portfolio investments, it is the
Adviser's policy to obtain quality execution at the most favorable prices
through responsible broker-dealers. In selecting broker-dealers, the Adviser or
the FII will consider various relevant factors, including, but not limited to,
the size and type of the transaction; the nature and character of the markets
for the security or asset to be purchased or sold; the execution efficiency,
settlement capability, and financial condition of the
21
<PAGE>
broker-dealer's firm; the broker-dealer's execution services rendered on a
continuing basis; and the reasonableness of any commissions.
In addition, the Adviser or the FII may allocate brokerage transactions
to broker-dealers who have entered into arrangements with the Adviser or FII
under which the broker-dealer allocates a portion of the commissions paid by a
Fund toward payment of the Fund's expenses such as transfer agency, printing or
other expenses. The services of the broker-dealer must be comparable to those of
other qualified broker-dealers.
The Adviser may cause the Fund to pay a broker-dealer who furnishes
brokerage and/or research services a commission that is in excess of the
commission another broker-dealer would have received for executing the
transaction if it is determined that such commission is reasonable in relation
to the value of the brokerage and/or research services as defined in Section
28(e) of the Securities Exchange Act of 1934 which have been provided. Such
research services may include, among other things, analyses and reports
concerning issuers, industries, securities, economic factors and trends, and
portfolio strategy. Any such research and other information provided by brokers
to the Adviser or FII are considered to be in addition to and not in lieu of
services required to be performed by the Adviser under the relevant Advisory
Agreement with the Trust. The research services provided by broker-dealers can
be useful to the Adviser in serving its other clients or clients of the Adviser
or their affiliates.
The table below shows the commissions paid on purchases and sales of
portfolio securities by each Fund during its respective fiscal year, and the
percentages of such amounts paid to brokers or dealers which furnished daily
quotations to the Funds for the purpose of calculating daily per share net asset
value and to brokers and dealers which sold shares of the Funds.
<TABLE>
<CAPTION>
Fund (fiscal year end) 1998
Commissions
<S> <C>
Asia Dynasty Fund (Class A and B) (12/31) $ 145,182
<CAPTION>
1997
Commissions
<S> <C>
Asia Dynasty Fund (Class A and B) (12/31) $675,167
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
Fund (fiscal year end) 1996
Commissions
<S> <C>
Asia Dynasty Fund (Class A and B) (12/31) $643,451
</TABLE>
The Trustees periodically review the Adviser's and FII's performance of
its responsibilities in connection with the placement of portfolio transactions
on behalf of the Funds and review the commissions paid by the Funds over
representative periods of time to determine if they are reasonable in relation
to the benefits to the Funds.
Investment decisions for the Fund are made independently from those of
the other investment accounts managed by the Adviser or affiliated companies.
Occasions may arise, however, when the same investment decision is made for more
than one client's account. It is the practice of the Adviser and FII to allocate
such purchases or sales insofar as feasible among its several clients or the
clients of its affiliates in a manner it deems equitable. The principal factors
which the Adviser considers in making such allocations are the relative
investment objectives of the clients, the relative size of the portfolio
holdings of the same or comparable securities and the then availability in the
particular account of funds for investment. Portfolio securities held by one
client of the Adviser may also be held by one or more of its other clients or by
clients of its affiliates. When two or more of its clients or clients of its
affiliates are engaged in the simultaneous sale or purchase of securities,
transactions are allocated as to amount in accordance with formulae deemed to be
equitable as to each client. There may be circumstances when purchases or sales
of portfolio securities for one or more clients will have an adverse effect on
other clients.
Consistent with the Conduct Rules of the National Association of
Securities Dealers, Inc. and subject to seeking the most favorable price and
execution available and such other policies as the Trustees may determine, the
Adviser or FII may consider sales of shares of the Funds as a factor in the
selection of broker-dealers to execute portfolio transactions for the Funds.
While it is the policy of the Fund generally not to engage in trading
for short-term gains, the Funds will effect portfolio transactions without
regard to the holding period if, in the judgment of the Adviser such
transactions are advisable in light of a change in circumstances of a particular
company, within a particular industry or country, or in general market, economic
or political conditions. The Asia Dynasty Fund and anticipate that their annual
portfolio turnover rates will not exceed 100%.
The portfolio turnover rate of the Fund may vary greatly from year to
year. In addition, since the Fund may have a high rate of portfolio turnover,
the Fund may realize capital gains or losses. Capital gains will be distributed
annually to the shareholders. Capital losses cannot be distributed to
shareholders but may be used to offset capital gains at the Fund level. See
"Taxes" in the Prospectus and the Statement of Additional Information.
The Adviser and related persons, may from time to time, buy and sell
for their own accounts securities recommended to clients for purchase or sale.
The Adviser recognizes that this practice may result in conflicts of interest.
However, to minimize or eliminate such conflicts a Code of Ethics has been
adopted by the Adviser which requires that all trading in securities suitable
for purchase by client accounts must be approved in advance by a person familiar
with purchase and sell orders or recommendations. Approval will be granted if
the security has not been purchased or sold or recommended for purchase or sale
on behalf of a
23
<PAGE>
client account within seven days; or if the security has been purchased or sold
or recommended for purchase or sale by a client account, it is determined that
the trading activity will not have a negative or appreciable impact on the price
or market of the security or the activity is of such a nature that it does not
present the dangers or potential for abuses or likely to result in harm or
detriment to a client account. At the end of each calendar quarter, all related
personnel of the Adviser are required to file a report of all transactions
entered into during the quarter. These reports are reviewed by a senior officer
of the Adviser.
TRUSTEES AND OFFICERS
---------------------
The Trustees and Officers of the Van Eck Funds, their address, position
with the Trust and principal occupations during the past five years are set
forth below.
Trustees of Van Eck Funds:
<TABLE>
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------------
John C van Eck @* Chairman of the Board and Chairman of the Board and
575 Park Avenue Trustee Director and President of other
New York, NY Investment Companies advised by
the Adviser, Chairman, Van Eck
Associates Corporation
(investment adviser) and Van
Eck Securities Corporation
(broker-dealer); Director,
Eclipse Financial Assets Trust
(Mutual Fund) Former director
of Abex Inc. (aerospace)
- ----------------------------------------------------------------------------------------------------------
Jeremy Biggs @#+ Trustee Trustee of other investment
1220 Park Avenue companies advised by the
New York, NY 10128 Adviser, Vice Chairman,
Director, and Chief Investment
Officer of Fiduciary Trust
Company International
(investment manager), parent
company of Fiduciary
International, inc., Chairman
of the Davis Funds Group
(mutual funds management
company) Treasurer and Director
of Royal Oak Foundation (the UK
National Trust); Director and
former of the Union Settlement
Association (the community
service organization); First
Vice President , Trustee and
Chairman of Finance Committee
of the St. James School, St.
James Maryland.
Richard Cowell #+ Trustee Trustee of other investment
240 El Vedado Way companies advised by the
Palm Beach Florida Adviser; Private Investor;
Director West Indies &
Caribbean Development Ltd.
(real estate)
Philip DeFeo Trustee Trustee of other investment
99 Park Avenue companies advised by the
New York, New York Adviser; Former, President of
Van Eck Associates Corporation
and Van Eck Securities
Corporation Former Executive
Vice President Cedel
International
Wesley G. McCain #+ Trustee Trustee of other affiliated
40 East 30th Street investment companies advised or
New York, New York administered by the Adviser;
Chairman and Owner, Towneley
Capital Management, Inc.;
Chairman, Eclipse Funds; Chairman
and Owner, Eclipse Financial
Services Inc.; General Partner,
Pharaoh Partners, L.P.; Principal,
Pharaoh Partners, (Cayman) LDC;
President and Owner, Millbrook
Associates, Imc.; Trustee, Libre
Group Trust, Director, Libre
Investments (Cayman) Ltd.; Former
Director, International Investors
Incorporated.
David Olderman # Trustee Trustee of other investment
40 East 52nd Street companies advised by the Adviser;
New York, New York Chairman of the Board, American
Copy Equipment Company; Chairman
of the Board Brighton Partners Inc.
Ralph Peters #* Trustee Trustee of other investment
66 Strimples Road companies advised by the Adviser;
Stockton, New Jersey Director Sun Life Insurance and
Annuity Company of New York;
Director U.S. Life Income Fund
Richard Stamberger # Trustee Trustee of another investment
888 17th Street companies advised by the Adviser;
Washington, D.C. Principal, National Strategies,
Inc., Partner and Co-Founder,
Quest partners, LLC, Executive
Vice President, Chief Operating
Officer and a Director of NuCable
Resources Corporation
Jan van Eck @** Trustee Officer and Director of Van Eck
99 Park Avenue Associates Corporation Van Eck
New York, New York Securities and other affiliated
companies
Derek van Eck @** Trustee and Officer Officer and Director of Van Eck
99 Park Avenue Associates Corporation Van Eck
New York, New York Securities and other affiliated
companies
Officer of the Trust:
Bruce Smith Vice President and Treasurer Officer of other investment
99 Park Avenue companies advised by the
New York, New York Administrator; Senior Managing
Director, Portfolio Accounting of
Van Eck Associates Corporation and
Senior Managing Director of Van
Eck Securities.
Thomas Elwood Vice President and Secretary Officer of other investment
99 Park Avenue companies advised by the
New York, New York Administrator; Vice President,
Secretary and General Counsel of
Van Eck Associates Corporation and
Van Eck Securities; former
Assistant Counsel Jefferson Pilot
Financial Insurance Company and
officer of other investment
companies advised by Jefferson
Pilot Financial Insurance and its
affiliates.
Joseph DiMaggio Controller Officer of other investment
99 Park Avenue companies advised by the Adviser;
New York, New York Director of Portfolio Accounting
of Van Eck Associates Corporation.
Charles Cameron Vice President Vice President of another
99 Park Avenue investment company advised by the
New York, New York Adviser
Susan Lashley Vice President Officer of other investment
99 Park Avenue companies advised by the
New York, New York Administrator.
Kevin Reid Vice President Officer of other investment
99 Park Avenue companies advised by the
New York, New York Administrator.
Gregory Krenzer President of U.S. Government Research analyst and Portfolio
99 Park Avenue Money Fund Assistant (Global Fixed Income) of
New York, New York Van Eck Associates Corporation.
Susan Min Assistant Secretary of other
99 Park Avenue Assistant Secretary investment companies advised or
New York, New York administered by the Adviser, Staff
Attorney of Van Eck Associates
Corporation.
---------------------------------------------------------------------------------------------------------
</TABLE>
24
<PAGE>
______
@ An "interested person" as defined in the 1940 Act.
* Member of Executive Committee -exercises general powers of Board of
Trustees between meetings of the Board.
** Son of Mr. John C. van Eck
# Member of the Nominating Committee.
+ Member of the Audit Committee -reviews fees, services, procedures,
conclusions and recommendations of independent auditors.
Compensation Table
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Name of Person Aggregate Pension or Retirement Total Compensation From Fund
Position Compensation From Benefits Accrued As and Fund Complex (a) Paid to
Fund Part of Fund Expenses Directors
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
John C. van Eck $ 0 $ 0 $ 0
- ---------------------------------------------------------------------------------------------------------------
Jeremy Biggs $ 0 $20,467 $39,250
- ---------------------------------------------------------------------------------------------------------------
Richard Cowell $20,467 $ 0 $33,500
- ---------------------------------------------------------------------------------------------------------------
Philip DeFeo $ 0 $ 0 $ 0
- ---------------------------------------------------------------------------------------------------------------
Wesley McCain $ 0 $20,467 $39,250
- ---------------------------------------------------------------------------------------------------------------
David Olderman $ 0 $16,496 $31,250
- ---------------------------------------------------------------------------------------------------------------
Ralph Peters $18,940 $ 0 $31,000
- ---------------------------------------------------------------------------------------------------------------
Richard Stamberger $ 9469 $ 9469 $31,000
- ---------------------------------------------------------------------------------------------------------------
Jan van Eck $ 0 $ 0 $ 0
- ---------------------------------------------------------------------------------------------------------------
Derek van Eck $ 0 $ 0 $ 0
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
(a) The term "fund complex" refers to the Funds of the Trust, the series of
the Van Eck Worldwide Insurance Trust and the Van Eck/Chubb, Funds, Inc., which
are also managed by the Adviser. The Trustees are paid a fee for their services
to the Trust. No other compensation, including pension or other retirement
benefits, is paid to the Trustees by the fund complex.
As of February 16, 1999, all of the Officers and Trustees of the Trust
as a group owned the number of shares indicated of each Fund: 31,637.98 shares
of Asia Dynasty Fund - Class A, equal to approximately 2.2% of the shares
outstanding; As of February 16, 1999, all of the Officers and Trustees of the
Trust as a group owned less than 1% of shares outstanding of each of the other
Funds and Classes.
As of February 16, 1999, the following persons owned 5% or more of the
shares of the Fund(s) indicated below:
<TABLE>
<CAPTION>
Asia Dynasty Fund (Class B shares)
- ----------------------------------
<S> <C>
MLPF&S for the sole benefit 41.43%
of its customers
4800 Deer Lake Drive East
</TABLE>
25
<PAGE>
<TABLE>
<S> <C>
Asia Dynasty Fund (Class A shares)
- ----------------------------------
MLPF&S for the sole benefit 12.95%
of its customers
4800 Deer Lake Drive East
3rd Floor
Jacksonville, FL 32246-6484
</TABLE>
26
<PAGE>
VALUATION OF SHARES
-------------------
The net asset value per share of the Fund is computed by dividing the
value of all of a Fund's securities plus cash and other assets, less
liabilities, by the number of shares outstanding. The net asset value per share
is computed as of the close of the New York Stock Exchange, Monday through
Friday, exclusive of national business holidays. The Funds will be closed on the
following national business holidays: New Years Day, Martin Luther King Jr.'s
birthday, President's Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas. The net asset values need not be computed
on a day in which no orders to purchase, sell or redeem shares of the Funds have
been received.
Dividends paid by a Fund with respect to Class A, Class B and Class C
shares will be calculated in the same manner, at the same time and on the same
day and will be in the same amount, except that the higher distribution services
fee and any incremental transfer agency costs relating to Class B or Class C
shares will be borne exclusively by that Class. The Trustees have determined
that currently no conflict of interest exists between the Class A and Class B
shares or Class A and Class C shares. On an ongoing basis, the Board of
Trustees, pursuant to their fiduciary duties under the 1940 Act and state laws,
will seek to ensure that no such conflict arises.
Shares are sold at the public offering price which is determined once
each day the Funds are open for business and is the net asset value per share.
The net asset value need not be computed on a day in which no orders to
purchase, sell or redeem shares of the Fund has been received.
27
<PAGE>
The value of a financial futures or commodity futures contract equals
the unrealized gain or loss on the contract that is determined by marking it to
the current settlement price for a like contract acquired on the day on which
the commodity futures contract is being valued. A settlement price may not be
used if the market makes a limit move with respect to a particular commodity.
Securities or futures contracts for which market quotations are readily
available are valued at market value, which is currently determined using the
last reported sale price. If no sales are reported as in the case of most
securities traded over-the-counter, securities are valued at the mean of their
bid and asked prices at the close of trading on the New York Stock Exchange (the
"Exchange"). In cases where securities are traded on more than one exchange, the
securities are valued on the exchange designated by or under the authority of
the Board of Trustees as the primary market. Short-term investments having a
maturity of 60 days or less are valued at amortized cost, which approximates
market. Options are valued at the last sales price unless the last sales price
does not fall within the bid and ask prices at the close of the market, in which
case the mean of the bid and ask prices is used. All other securities are valued
at their fair value as determined in good faith by the Trustees. Foreign
securities or futures contracts quoted in foreign currencies are valued at
appropriately translated foreign market closing prices or as the Board of
Trustees may prescribe.
Generally, trading in foreign securities and futures contracts, as well
as corporate bonds, United States government securities and money market
instruments, is substantially completed each day at various times prior to the
close of the Exchange. The values of such securities used in determining the net
asset value of the shares of the Funds may be computed as of such times. Foreign
currency exchange rates are also generally determined prior to the close of the
Exchange. Occasionally, events affecting the value of such securities and such
exchange rates may occur between such times and the close of the Exchange which
will not be reflected in the computation of the Fund's net asset values. If
events materially affecting the value of such securities occur during such
period, then these securities will be valued at their fair value as determined
in good faith by the Trustees.
28
<PAGE>
TAXES
-----
Taxation of the Fund - In General
- ---------------------------------
The Fund intends to continue to continue to qualify and elect to be
treated each taxable year as a "regulated investment company" under Subchapter M
of the Code. To so qualify, each Fund must, among other things, (a) derive at
least 90% of its gross income from dividends, interest, payments with respect to
securities loans, gains from the sale or other disposition of stock, securities
or foreign currencies, or other income (including gains from options, futures or
forward contracts) derived with respect to its business of investing in such
stock, securities or currencies; and (b) satisfy certain diversification
requirements.
As a regulated investment company, a Fund will not be subject to
federal income tax on its net investment income and capital gain net income
(capital gains in excess of its capital losses) that it distributes to
shareholders if at least 90% of its net investment income and short-term capital
gains for the taxable year are distributed. However, if for any taxable year a
Fund does not satisfy the requirements of Subchapter M of the Code, all of its
taxable income will be subject to tax at regular corporate rates without any
deduction for distribution to shareholders, and such distributions will be
taxable to shareholders as ordinary income to the extent of the Fund's current
or accumulated earnings or profits.
The Fund will be liable for a nondeductible 4% excise tax on amounts
not distributed on a timely basis in accordance with a calendar year
distribution requirement. To avoid the tax, during each calendar year the Fund
must distribute, or be deemed to have distributed, (i) at least 98% of its
ordinary income (not taking into account any capital gains or losses) for the
calendar year, (ii) at least 98% of its capital gains in excess of its capital
losses (adjusted for certain ordinary losses) for the twelve month period ending
on October 31 (or December 31, if the Fund so elects), and (iii) all ordinary
income and capital gains for previous years that were not distributed during
such years. For this purpose, any income or gain retained by the Fund that is
subject to corporate tax will be considered to have been distributed by year-
end. The Funds intend to make sufficient distributions to avoid this 4% excise
tax.
Taxation of the Funds' Investments
- ----------------------------------
29
<PAGE>
Options and Futures Transactions. Certain of the Funds' investments may
--------------------------------
be subject to provisions of the Code that (i) require inclusion of unrealized
gains or losses in the Funds' income for purposes of the 90% test, the excise
tax and the distribution requirements applicable to regulated investment
companies, (ii) defer recognition of realized losses, and (iii) characterize
both realized and unrealized gain or loss as short-term or long-term gain or
loss. Such provisions generally apply to options and futures contracts. The
extent to which the Funds make such investments may be materially limited by
these provisions of the Code.
Foreign Currency Transactions. Under Section 988 of the Code, special
-----------------------------
rules are provided for certain foreign currency transactions. Foreign currency
gains or losses from foreign currency contracts (whether or not traded in the
interbank market), from futures contracts that are not "regulated futures
contracts," and from unlisted options are treated as ordinary income or loss
under Section 988. The Funds may elect to have foreign currency-related
regulated futures contracts and listed options subject to ordinary income or
loss treatment under Section 988. In addition, in certain circumstances, the
Funds may elect capital gain or loss for foreign currency transactions. The
rules under Section 988 may also affect the timing of income recognized by the
Funds.
Taxation of the Shareholders
- ----------------------------
Distributions of net investment income and the excess of net short-term
capital gain over net long-term capital loss are taxable as ordinary income to
shareholders. Distributions of net capital gain (the excess of net long-term
capital gain over net short-term capital loss) are taxable to shareholders as
long-term capital gain, regardless of the length of time the shares of the Fund
have been held by such shareholders. Any loss realized upon a taxable
disposition of shares within six months from the date of their purchase will be
treated as a long-term capital loss to the extent of any long-term capital gain
distributions received by shareholders during such period.
Distributions of net investment income and capital gain net income will
be taxable as described above whether received in cash or reinvested in
additional shares. When distributions are received in the form of shares issued
by the Funds, the amount of the distribution deemed to have been received by
participating shareholders is the fair market value of the shares received
rather than the amount of cash which would otherwise have been received. In such
case, participating shareholders will have a basis for federal income tax
purposes in each share received from the Funds equal to the fair market value of
such share on the payment date.
Distributions by the Funds result in a reduction in the net asset value
of the Funds' shares. Should a distribution reduce the net asset value below a
shareholder's cost basis, such distribution nevertheless would be taxable to the
shareholder as ordinary income or long-term capital gain as described above,
even though, from an investment standpoint, it may constitute a partial return
of capital. In particular, investors should be
30
<PAGE>
careful to consider the tax implications of buying shares just prior to a
distribution. The price of shares purchased at that time includes the amount of
any forthcoming distribution. Those investors purchasing shares just prior to a
distribution will then receive a return of their investment upon distribution
which will nevertheless be taxable to them.
If a shareholder (i) incurs a sales load in acquiring shares in the
Funds, and (ii) by reason of incurring such charge or making such acquisition
acquires the right to acquire shares of one or more regulated investment
companies without the payment of a load or with the payment of a reduced load
("reinvestment right"), and (iii) disposes of the shares before the 91st day
after the date on which the shares were acquired, and (iv) subsequently acquires
shares in that regulated investment company or in another regulated investment
company and the otherwise applicable load charge is reduced pursuant to the
reinvestment right, then the load charge will not be taken into account for
purposes of determining the shareholder's gain or loss. To the extent such
charge is not taken into account in determining the amount of gain or loss, the
charge will be treated as incurred in connection with the subsequently acquired
shares and will have a corresponding effect on the shareholder's basis in such
shares.
Income received by the Funds may give rise to withholding and other
taxes imposed by foreign countries. If more than 50% of the value of the Funds'
assets at the close of a taxable year consists of securities of foreign
corporations, the Funds may make an election that will permit an investor to
take a credit (or, if more advantageous, a deduction) for foreign income taxes
paid by the Funds, subject to limitations contained in the Code. As an investor,
you would then include in gross income both dividends paid to you and the
foreign taxes paid by the Funds on their foreign investments.
The Funds cannot assure investors that they will be eligible for the
foreign tax credit. The Funds will advise shareholders annually of their share
of any creditable foreign taxes paid by the Funds.
The Funds may be required to withhold federal income tax at a rate of
31% from dividends made to any shareholder who fails to furnish a certified
taxpayer identification number ("TIN") or who fails to certify that he or she is
exempt from such withholding or who the Internal Revenue Service notifies the
Funds as having provided the Funds with an incorrect TIN or failed to properly
report for federal income tax purposes. Any such withheld amount will be fully
creditable on each shareholder's individual federal income tax return.
The foregoing discussion is a general summary of certain of the current
federal income tax laws affecting the Funds and investors in the shares. The
discussion does not purport to deal with all of the federal income tax
consequences applicable to the Funds, or to all categories of investors, some of
which may be subject to special rules. Investors should consult their own
advisors regarding the tax consequences, including state and local tax
consequences, to them of investment in the Funds.
REDEMPTIONS IN KIND
-------------------
Each Fund has elected to have the ability to redeem its shares in kind,
committing itself to pay in cash all requests for redemption by any shareholder
of record limited in amount with respect to each shareholder of record during
any ninety-day period to the lesser of (i) $250,000 or (ii) 1% of the net asset
value of such company at the beginning of such period.
PERFORMANCE
-----------
31
<PAGE>
The Fund may advertise performance in terms of average annual total
return for 1, 5 and 10 year periods, or for such lesser periods as any of such
Funds have been in existence. Average annual total return is computed by finding
the average annual compounded rates of return over the periods that would equate
the initial amount invested to the ending redeemable value, according to the
following formula:
=======================================================================
P(1+T)/to the power of n/ = ERV
Where: P=A hypothetical initial payment of $1,000
T=Average annual total return
n=Number of years
ERV=Ending redeemable value of a hypothetical $1,000
payment made at the beginning of the 1, 5, or 10 year
periods at the end of the year or period;
=======================================================================
The calculation assumes the maximum sales load (or other charges
deducted from payments) is deducted from the initial $1,000 payment and assumes
all dividends and distributions by the Fund are reinvested at the price stated
in the prospectus on the reinvestment dates during the period, and includes all
recurring fees that are charged to all shareholder accounts.
32
<PAGE>
Average Annual Total Return for the Period ended December 31, 1998
(after maximum sales charge).
<TABLE>
<CAPTION>
1 Year 5 Years 10 Years Life
<S> <C> <C> <C> <C>
Asia Dynasty Fund (Class A) (4.99)% (10.44)% -- (1.28)%
Asia Dynasty Fund (Class B) (6.12)% (10.50)% -- (4.49)%
</TABLE>
The Asia Dynasty Fund may advertise performance in terms of a 30-day
yield quotation. The 30-day yield quotation is computed by dividing the net
investment income per share earned during the period by the maximum offering
price per share on the last day of the period, according to the following
formula:
========================================================================
YIELD = 2[(A-B/CD + 1)/to the power of 6/-1]
Where: A = dividends and interest earned during the
period
B = expenses accrued for the period (net of
reimbursement)
C = the average daily number of shares
outstanding during the period that were
entitled to receive dividends
D = the maximum offering price per share on
the last day of the period after
adjustment for payment of dividends
within 30 days thereafter
========================================================================
The Asia Dynasty Fund may also advertise performance in terms of
aggregate total return. Aggregate total return for a specified period of time is
determined by ascertaining the percentage change in the net asset value of
shares of the Fund initially acquired assuming reinvestment of dividends and
distributions and without giving effect to the length of time of the investment
according to the following formula:
=======================================================
[(B-A)/A](100)=ATR
Where: A=initial investment
B=value at end of period
ATR=aggregate total return
=======================================================
The calculation assumes the maximum sales charge is deducted from the initial
payment and assumes all distributions by the Funds are reinvested at the price
stated in the Prospectus on the reinvestment dates during the period, and
includes all recurring fees that are charged to all shareholder accounts.
33
<PAGE>
Advertising Performance
- -----------------------
ADDITIONAL INFORMATION
----------------------
Custodian. State Street Bank and Trust Company, 225 Franklin Street,
---------
Boston, NA 02710 is the custodian of the Trust's portfolio securities, cash,
coins and bullion. The Custodian is authorized, upon the approval of the Trust,
to establish credits or debits in dollars or foreign currencies with, and to
cause portfolio securities of a Fund to be held by its overseas branches or
subsidiaries, and foreign banks and foreign securities depositories which
qualify as eligible foreign custodians under the rules adopted by the Securities
and Exchange Commission.
Independent Accountants. Ernst & Young LLP, 787 Seventh Avenue, New
-----------------------
York, New York 10019, serve as the independent accountants for the Trust.
Counsel. Goodwin, Procter & Hoar, LLP Exchange Place, Boston,
-------
Massachusetts 02109 serves as counsel to the Trust.
FINANCIAL STATEMENTS
--------------------
The financial statements of Asia Dynasty Fund for the fiscal year ended
December 31, 1998, are hereby incorporated by reference from the Funds' Annual
Reports to Shareholders, which are available at no charge upon written or
telephone request to the Trust at the address or telephone numbers set forth on
the first page of this Statement of Additional Information.
34
<PAGE>
APPENDIX
--------
PART A.
Corporate Bond Ratings
- ----------------------
Description of Moody's Investors Service, Inc. corporate bond ratings:
Aaa--Bonds which are rated Aaa are judged to be the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt-edge". Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa--Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater or there may be other elements present which make the
long-term risks appear somewhat larger than in Aaa securities.
A--Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors given
security to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment sometime in the future.
Baa--Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
Moody's applies the numerical modifiers 1, 2 and 3 to each generic
rating classification from Aa through B. The modifier 1 indicates that the
security ranks in the higher end of its generic rating category; the modifier 2
indicates a mid-range ranking; and the modifier 3 indicates that the issue ranks
in the lower end of its generic rating category.
Description of Standard & Poor's Corporation corporate bond ratings;
AAA --Bonds rated AAA have the highest rating assigned by S&P to a debt
obligations. Capacity to pay interest and repay principal is extremely strong.
AA --Bonds rated AA have a very strong capacity to pay interest and
repay principal and differ from the higher rated issues only in small degree.
A --Bonds rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than bonds in higher rated
categories.
BBB --Bonds rated BBB are regarding as having an adequate capacity to
pay interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to pay interest and repay principal
for bonds in this category than for bonds in higher rated categories.
35
<PAGE>
Preferred Stock Ratings
- -----------------------
Moody's Investors Service, Inc. describes its preferred stock ratings
as:
aaa -An issue which is rated aaa is considered to be a top-quality
preferred stock. This rating indicates good asset protection and the least risk
of dividend impairment within the universe of convertible preferred stocks.
aa -An issue which is rated aa is considered a high-grade preferred
stock. This rating indicates that there is reasonable assurance that earnings
and asset protection will remain relatively well maintained in the foreseeable
future.
a -An issue which is rated a is considered to be an upper-medium grade
preferred stock. While risks are judged to be somewhat greater than in the aaa
and aa classifications, earnings and asset protection are, nevertheless,
expected to be maintained at adequate levels.
baa -An issue which is rated baa is considered to be medium-grade,
neither highly protected nor poorly secured. Earnings and asset protection
appear adequate at present but may be questionable over any great length of
time.
ba -An issue which is rated ba is considered to have speculative
elements, and its future cannot be considered well assured. Earnings and asset
protection may be very moderate and not well safe-guarded during adverse
periods. Uncertainty of position characterizes preferred stocks in this class.
b -An Issue which is rated b generally lacks the characteristics of a
desirable investment. Assurance of dividend payments and maintenance of other
terms of the issue over any long period of time may be small.
caa -An issue which is rated caa is likely to be in arrears on dividend
payments. This rating designation does not purport to indicate the future status
of payment.
ca -An issue which is rated ca is speculative in a high degree and is
likely to be in arrears on dividends with little likelihood of eventual payment.
c -This is the lowest rated class of preferred or preference stock.
Issues so rated can be regarded as having extremely poor prospects of every
attaining any real investment standing.
Standard & Poor's Corporation describes its preferred stock ratings as:
AAA -This is the highest rating that may be assigned by Standard &
Poor's to a preferred stock issue and indicates an extremely strong capacity to
pay the preferred stock obligations.
AA -A preferred stock issue rated AA also qualifies as a high-quality
fixed income security. The capacity to pay preferred stock obligations is very
strong, although not as overwhelming as for issues rated AAA.
A -An issue rated A is backed by a sound capacity to pay the preferred
stock obligations, although it is somewhat more susceptible to the adverse
effect of changes in circumstances and economic conditions.
36
<PAGE>
BBB -An issue rated BBB is regarded as backed by an adequate capacity
to play the preferred stock obligations. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to make payments for a preferred
stock in this category than for issues in the A category.
BB,B,CCC -Preferred stocks rated BB,B, and CCC are regarded, on
balance, as predominantly speculative with respect to the issuer's capacity to
pay preferred stock obligations. BB indicates the lowest degree of speculation
and CCC the highest degree of speculation. While such issues will likely have
some quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.
Short-Term Debt Ratings
- -----------------------
Description of Moody's short-term debt ratings:
Prime-1--Issuers rated Prime-1 (or supporting institutions) have a
superior ability for repayment of senior short-term debt obligations. Prime-1
repayment ability will often be evidenced by may of the following
characteristics: leading market positions in well-established industries, higher
rates of return of funds employed, conservative capitalization structure with
moderate reliance on debt and ample asset protection, broad margins in earnings
coverage of fixed financial charges and high internal cash generation and well-
established access to a range of financial markets and assured sources of
alternate liquidity.
Prime-2--Issuers rated Prime-2 (or supporting institutions) have a
strong ability for repayment of senior short-term debt obligations. This will
normally be evidenced by many of the characteristics cited above but to a lesser
degree. Earnings trends and coverage ratios, while sound, may be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected be external conditions. Ample alternate liquidity is maintained.
Prime-3--Issuers rated Prime-3 (or supporting institutions) have an
acceptable ability for repayment of senior short-term obligations. The effect of
industry characteristics and market compositions may be more pronounced.
Variability in earnings and profitability may result in changes in the level of
debt protection measurements and may require relatively high financial leverage.
Adequate alternate liquidity is maintained.
Not Prime--Issuers rated Not Prime do not fall within any of the Prime
rating categories.
Description of Standard & Poor's short-term debt ratings:
A-1--This highest category indicates that the degree of safety
regarding timely payment is strong. Those issues determined to possess extremely
strong safety characteristics are denoted with a plus sign (+) designation.
A-2--Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated `A-1'.
A-3--Issues carrying this designation have adequate capacity for timely
payment. They are, however, more vulnerable to the adverse effects of changes in
circumstances than obligations carrying the higher designations.
B--Issues rated B are regarded as having only speculative capacity for
timely payment.
C--This rating is assigned to short-term debt obligations with a
doubtful capacity for payment.
37
<PAGE>
D--Debt rated D is in payment default. The D rating category is used
when interest payments or principal payments are not made on the date due, even
if the applicable grace period has not expired, unless S&P believes that such
payments will be made during such grace period.
PART B
- ------
The publications and services from which the Funds will quote
performance are: Micropal, Ltd. (an international investment fund information
service), Fortune, Changing Times, Money, U.S. News & World Report, Money Fund
Scorecard, Morningstar, Inc., Business Week, Institutional Investor, The Wall
Street Journal, Wall Street Transcripts, New York Post, Investment Company
Institute publications, The New York Times, Barron's, Forbes magazine, Research
magazine, Donaghues Money Fund Report, Donaghue's Money Letter, The Economist,
FACS, FACS of the Week, Financial Planning, Investment Daily, Johnson's Charts,
Mutual Fund Profiles (S&P), Powell Monetary Analysis, Sales & Marketing
Management Magazine, Life magazine, Black Enterprise, Fund Action, Speculators
Magazine, Time, NewsWeek, U.S.A Today, Wiesenberger Investment Service, Mining
Journal Quarterly, Mining Journal Weekly, Northern = 0Miner, Gold Gazette,
George Cross Newsletter, Engineering and Mining Journal, Weekly Stock Charts-
Canadian Resources, Jeweler's Circular Keystone, Financial Times, Journal of
Commerce, Mikuni's Credit Ratings, Money Market Directory of Pension Funds, Oil
and Gas Journal, Pension Funds and Their Advisers, Investment Company Data,
Inc., Mutual Funds Almanac, Callan Associates, Inc., Media General Financial
Services, Financial World, Pensions & Investment Age, Registered Investment
Advisors, Aden Analysis, Baxter Weekly, Congressional Yellow Book, Crain's New
York Business, Survey of Current Business, Treasury Bulletin, U.S. Industrial
Outlook, Value Line Survey, Bank Credit Analyst, S&P Corporation Records,
Euromoney, Moody's, Investment Dealer's Digest, Financial Mail, Financial Post,
Futures, Grant's Interest Rate Observer, Institutional Investor, International
Currency Review, International Bank Credit Analyst, Investor's Daily, German
Business Weekly, GATT Trade Annual Report, and Dimensional Fund Advisers, Inc.
MARKET INDEX DESCRIPTIONS
Morgan Stanley Capital International Europe, Australia, Far East Index
(US$ terms): An arithmetic, market value-weighted average of the performance of
over 1,079 companies listed on the stock exchanges of Europe, Australia, New
Zealand and the Far East. The index is calculated on a total return basis, which
includes reinvestment of gross dividends before deduction of withholding taxes.
Morgan Stanley Capital International Real Estate Index: An arithmetic,
market value-weighted average of the performance of property shares worldwide.
Morgan Stanley REIT Index: A capitalization-/weighted index with
dividends reinvested of most actively traded real estate invest trusts.
NAREIT Equity Index: A capitalization-weighted index comprised of
publicly traded equity real estate investment trusts excluding mortgages REITS.
Morgan Stanley Capital International World Index (US$ terms): An
arithmetic, market value-weighted average of the performance of over 1,515
companies listed on the stock exchanges of the following countries: Australia,
Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland,
Italy, Japan, Malaysia, the Netherlands, New Zealand, Norway, Singapore, Spain,
Sweden, Switzerland, the United Kingdom and the United States. The index is
calculated on a total return basis, which includes reinvestment of gross
dividends before deduction of withholding taxes. The combined
38
<PAGE>
market capitalization of these countries represents approximately 60% of the
aggregate market value of the stock exchanges of the above 22 countries.
Morgan Stanley Capital International Combined Far East ex-Japan Free
Index: An arithmetic, market value-weighted average of the performance of
companies listed on the stock exchanges of the following countries: Hong Kong,
Indonesia, Korea (Korea is included at 20% of its market capitalization in the
Combined Free Index), Malaysia, Philippines Free, Singapore Free and Thailand.
The combined market capitalization of these countries represents approximately
60% of the aggregate market value of the stock exchanges of the above seven
countries.
Salomon Brothers World Bond Index (US$ terms): Measures the total
return performance of high quality securities in major sectors of the
international bond market. The index covers approximately 600 bonds from 10
currencies: Australian Dollars, Canadian Dollars, European Currency Units,
French Francs, Japanese Yen, Netherlands Guilder, Swiss Francs, UK pounds
Sterling, US Dollars and German Deutsche Marks. Only high-quality, straight
issues are included. The index is calculated on both a weighted basis and an
unweighted basis. Generally, index samples for each market are restricted to
bonds with at least five years' remaining life.
Salomon Brothers World Government Bond Index (US$ terms): The WGBI
includes the Government bonds markets of the United States, Japan, Germany,
France, the United Kingdom, Canada, Italy, Australia, Belgium, Denmark, the
Netherlands, Spain, Sweden and Austria. Country eligibility is determined based
on market capitalization and investability criteria. A market's eligible issues
must total at least US$20 billion, Y2.5 trillion and DM30 billion for three
consecutive months for the market to be considered eligible for inclusion. Once
a market satisfies this criteria, it will be added at the end of the following
quarter. Guidelines by which a market may be excluded from the index have also
been established. A market will be excluded if the market capitalization of
eligible issues falls below half of all of the entry levels for six consecutive
months. Once again, the market will be removed at the end of the following
quarter. In addition, market entry barriers are a reason for exclusion despite
meeting the size criteria (for example, if a market discourages foreign investor
participation).
Salomon Brothers World Property Equity Index: A top-down, float
capitalization-weighted index that includes shares of approximately 380
companies in 19 countries.
Wilshire REIT Securities Index: A capitalization-weighted index
comprised of publicly traded equity real estate investment trusts excluding
mortgages REITS.
GPR - Life Global Real Estate Securities Index: A market
capitalization-weighted index of property companies in 33 countries.
Gross Domestic Product: The market value of all final goods and
services produced by labor and property supplied by residents of the United
States in a given period of time, usually one year. Gross Domestic Product
comprises (1) purchases of persons (2) purchases of governments (Federal, State
& Local) (3) gross private domestic investment (includes change in business
inventories) and (4) international trade balance from exports. Nominal GDP is
expressed in 1993 dollars. Real GDP is adjusted for inflation and is currently
expressed in 1987 dollars.
39
<PAGE>
PART C
OTHER INFORMATION
ITEM 24. Financial Statements and Exhibits
a.) Financial Statements included in Prospectus (Part A):
Financial Highlights or Selected per Share Data and Ratios of Asia
Dynasty Fund for the fiscal period ended December 31, 1993, and for
the years ended December 31, 1994, 1995 and 1996, for the year ended
December 31, 1997 (audited) for the year ended December 31, 1998
(audited); of Global Balanced Fund for the fiscal period ended
December 31, 1993 and for the years ended December 31, 1994, 1995 and
1996, for the year ended December 31, 1997 (audited) for the year
ended December 31, 1998 (audited); of Global Hard Assets Fund for
the fiscal period ended December 31, 1994 and for the years ended
December 31, 1995 and 1996, for the year ended December 31, 1997
(audited) for the year ended December 31, 1998 (audited); for
Gold/Resources Fund for the years ended December 31, 1987, 1988, 1989
and 1990 (not audited by Coopers & Lybrand LLP, the Fund's current
auditors), and for the years ended December 31, 1991, 1992, 1993,
1994, 1995 and 1996, for the year ended December 31, 1997 for the
year ended December 31, 1998 (audited); for International Investors
Gold Fund for the years ended December 31, 1992 and 1993, for the
fiscal period or year ended December 31, 1994 and for the years ended
December 31, 1995 and 1996, for the year ended December 31, 1997 for
the year ended December 31, 1998 (audited); and for U.S. Government
Money Fund for the years ended December 31, 1992, 1993, 1994, 1995
and 1996, for the year ended December 31, 1997 for the year ended
December 31, 1998 (audited);
The audited financial statements of the Registrant are included in Registrant's
Annual Reports to Shareholders for the fiscal year or period ended December 31,
1998, filed with the Securities and Exchange Commission under Section 30(b)(1)
of the Investment Company Act of 1940, and have been incorporated in Part B
hereof by reference:
Asia Dynasty Fund - Investment Portfolio at December 31, 1998;
Asia Dynasty Fund - Statement of Assets and Liabilities at December 31,
1998;
Asia Dynasty Fund - Statement of Operations for the year ended December 31,
1998;
Asia Dynasty Fund - Statement of Change in Net Assets for the year ended
December 31, 1997 and 1998;
Asia Dynasty Fund - Financial Highlights for the period September 1, 1993 to
December 31, 1993, the year ended December 31, 1994, 1995,
1996, 1997 and 1998;
Asia Dynasty Fund - Notes to Financial Statements Report of Independent
Accountants February 22, 1999.
Global Balanced Fund - Investment Portfolio at December 31, 1998;
Global Balanced Fund - Statement of Assets and Liabilities at December 31,
1998;
Global Balanced Fund - Statement of Operations for the year ended December 31,
1998;
Global Balanced Fund - Statement of Change in Net Assets for the year ended
December 31, 1997 and 1998;
Global Balanced Fund - Financial Highlights for the period December 20, 1993 to
December 31, 1993, the year ended December 31, 1994,
1995, 1996, 1997 and 1998;
Global Balanced Fund - Notes to Financial Statements Report of Independent
Accountants February 22, 1999.
Global Hard Assets Fund - Investment Portfolio at December 31, 1998;
Global Hard Assets Fund - Statement of Assets and Liabilities at December 31,
1998;
Global Hard Assets Fund - Statement of Operations for the year ended December
31, 1998;
Global Hard Assets Fund - Statement of Change in Net Assets for the year ended
December 31, 1997 and 1998;
Global Hard Assets Fund - Financial Highlights for the period from November 2,
1994 to December 31, 1994, for the period from April
24, 1996 to December 31, 1996, the year ended
December 31, 1995, 1996, 1997 and 1998;
Global Hard Assets Fund - Notes to Financial Statements Report of Independent
Accountants February 22, 1999.
Gold/Resources Fund - Investment Portfolio at December 31, 1998;
Gold/Resources Fund - Statement of Assets and Liabilities at December 31,
1998;
Gold/Resources Fund - Statement of Operations for the year ended December 31,
1998;
Gold/Resources Fund - Statement of Change in Net Assets for the year ended
December 31, 1997 and 1998;
Gold/Resources Fund - Financial Highlights for the year ended December 31,
1993, 1994, 1995, 1996, 1997 and 1998;
Gold/Resources Fund - Notes to Financial Statements Report of Independent
Accountants February 22, 1999.
International Investors Gold Fund - Investment Portfolio at December 31,
1998;
International Investors Gold Fund - Statement of Assets and Liabilities at
December 31, 1998;
International Investors Gold Fund - Statement of Operations for year ended
December 31, 1998;
International Investors Gold Fund - Statement of Change in Net Assets for the
year ended December 31, 1997 and 1998;
International Investors Gold Fund - Financial Highlights for the year ended
December 31, 1993, 1994, 1995, 1996, 1997
and 1998;
International Investors Gold Fund - Notes to Financial Statements Report of
Independent Accountants February 22,
1999.
U.S. Government Money Fund - Investment Portfolio at December 31, 1998;
U.S. Government Money Fund - Statement of Assets and Liabilities at December 31,
1998;
U.S. Government Money Fund - Statement of Operations for year ended December 31,
1998;
U.S. Government Money Fund - Statement of Change in Net Assets for the year
ended December 31, 1997 and 1998;
U.S. Government Money Fund - Financial Highlights for the year ended December
31, 1993, 1994, 1995, 1996, 1997 and 1998;
U.S. Government Money Fund - Notes to Financial Statements Report of Independent
Accountants February 22, 1999.
b) Exhibits (An * denotes inclusion in this filing)
(1)(a) Master Trust Agreement (incorporated by reference to Registration
Statement No. 2-97596); Form of First Amendment to Master Trust
Agreement (incorporated by reference to Registration Statement No. 2-
97596). Form of Second Amendment to Master Trust Agreement
(incorporated by reference to Pre-Effective Amendment No. 1). Form of
Third Amendment to Master Trust Agreement (incorporated by reference to
Post-Effective Amendment No. 1). Form of Fourth Amendment to Master
Trust Agreement (incorporated by reference to Post-Effective Amendment
No. 3). Form of Fifth Amendment to the Master Trust Agreement, adding
World Income Fund as a series to the trust (incorporated by reference
to Post-Effective Amendment No. 7). Form of Sixth Amendment to Master
Trust Agreement, adding International Investors Fund as a series of the
Trust and establishing investment limitations therefore, respectively,
(incorporated by reference to Post-Effective Amendment No. 17). Form of
Seventh Amendment to the Master Trust Agreement, adding Short-Term
World Income Fund and International Equities Fund as series of the
Trust (incorporated by reference to Post-Effective Amendment No. 19).
(1)(b) Form of Amended and Restated Master Trust Agreement (incorporated by
reference to Post-Effective Amendment No. 20); Form of Amendment to the
Master Trust Agreement changing the name of Short-Term World Income
Fund to Short-Term World Income Fund-C and changing the name of
International Equities Fund to International Growth Fund (incorporated
by reference to Post-Effective Amendment No. 20); Form of Second
Amendment to the Amended and Restated Master Trust Agreement adding
Asia Dynasty Fund as a series of the Trust (incorporated by reference
to Post-Effective Amendment No. 23); Third Amendment to the Amended and
Restated Master Trust Agreement adding Global Balanced Fund as a series
of the Trust and changing the name of International Investors Fund to
International Investors Gold Fund (incorporated by reference to Post-
Effective Amendment No. 29); Fourth Amendment to the Amended and
Restated Master Trust Agreement adding Global SmallCap Fund and Asia
Infrastructure Fund as series of the Trust (incorporated by reference
to Post-Effective Amendment No. 30); Form of Fifth Amendment to the
Amended and Restated Master Trust Agreement (incorporated by reference
to Post-Effective Amendment No. 35); Form of Sixth Amendment to the
Amended and Restated Master Trust Agreement (incorporated by reference
to Post-Effective Amendment No. 35); Seventh Amendment to Amended and
Restated Master Trust Agreement adding Global Hard Assets Fund as a
series of the Trust (incorporated by reference to Post-Effective
Amendment No. 36); Eighth Amendment to Amended and Restated Master
Trust Agreement adding Gold Opportunity Fund as a series of the Trust
(incorporated by reference to Post-Effective Amendment No. 37); Ninth
Amendment to the Amended and Restated Master Trust Agreement adding
Class B shares to Asia Infrastructure Fund, Global Hard Assets Fund and
Gold Opportunity Fund series of the Trust (incorporated by reference to
Post-Effective Amendment No. 39).
(1)(c) Tenth Amendment to Amended and Restated Master Trust Agreement adding
Emerging Markets Growth Fund (to be filed by Amendment).
(2) By-laws of Registrant (incorporated by reference to Registration
Statement No. 2-97596).
(3) Not Applicable.
(4)(a) Form of certificate of shares of beneficial interest of the World Trend
Fund (incorporated by reference to Pre-Effective Amendment No. 1).
Forms of certificates of shares of beneficial interest of
Gold/Resources Fund and
<PAGE>
U.S. Government Money Fund (incorporated by reference to Post-Effective
Amendment No. 1); Form of certificate of shares of beneficial interest
of the World Income Fund (incorporated by reference to Post-Effective
Amendment No. 6); Forms of certificates of shares of beneficial
interest of the Short-Term World Income Fund-C and International Growth
Fund (incorporated by reference to Post-Effective Amendment No. 23);
Form of certificate of shares of beneficial interest of Asia Dynasty
Fund (incorporated by reference to Post-Effective Amendment No. 23);
Form of certificate of Class B shares of beneficial interest of Asia
Dynasty Fund (incorporated by reference to Post-Effective Amendment No.
26); Form of certificate of Class A and Class B shares of beneficial
interest of Global Balanced Fund (incorporated by reference to Post-
Effective Amendment No. 26); Form of certificate of Class B shares of
beneficial interest of the World Income Fund (incorporated by reference
to Post-Effective Amendment No. 29); Certificate of Class A shares of
beneficial interest of the World Income Fund; Form of certificate of
Class A and Class B shares of beneficial interest of Global SmallCap
Fund and Asia Infrastructure Fund (incorporated by reference to Post-
Effective Amendment No. 30); Form of certificate of Class A and Class C
shares of beneficial interest of Global Hard Assets Fund (incorporated
by reference to Post-Effective Amendment No. 33); Form of certificate
of Class A and Class C shares of beneficial interest of Gold
Opportunity Fund (incorporated by reference to Post-Effective Amendment
No. 35); Form of certificate of Class B shares of beneficial interest
of Asia Infrastructure Fund, Global Hard Assets Fund and Gold
Opportunity Fund (incorporated by reference to Post-Effective Amendment
No. 39.
(4)(b) Instruments defining rights of security holders (See Exhibits (1) and
(2) above).
(5)(a) Advisory Agreement (incorporated by reference to Post-Effective
Amendment No. 1).
(5)(b) Letter Agreement to add Gold/Resources Fund and U.S. Government Money
Fund (incorporated by reference to Post-Effective Amendment No. 1);
Letter Agreement to add World Income Fund (incorporated by reference to
Post-Effective Amendment No. 6)
(5)(c) Form of Advisory Agreement between Van Eck Associates Corporation and
Van Eck Funds with respect to Asia Dynasty Fund (incorporated by
reference to Post-Effective Amendment No. 23).
(5)(d) Advisory Agreement between Van Eck Associates Corporation and Van Eck
Funds with respect to Global Balanced Fund (incorporated by reference
to Post-Effective Amendment No. 31).
(5)(e) Letter Agreement to add Global SmallCap Fund and Asia Infrastructure
Fund (incorporated by reference to Post-Effective Amendment No. 31);
and. Letter Agreement to add Gold/Resources Fund and International
Investors Gold Fund (incorporated by reference to Post-Effective
Amendment No. 34)
(5)(f) Advisory Agreement between Van Eck Associates Corporation and Global
Hard Assets Fund (incorporated by reference to Post-Effective Amendment
No. 36).
(5)(g) Form of Letter Agreement to add Gold Opportunity Fund (incorporated by
reference to Post-Effective Amendment No. 37).
(5)(h) Sub-Advisory Agreement among Fiduciary International, Inc., Van Eck
Associates Corporation and Van Eck Funds with respect to Global
Balanced Fund (incorporated by reference to Post-Effective Amendment
No. 27).
(5)(i) Form of Advisory Agreement between Van Eck Associates Corporation and
Van Eck Funds with respect to Emerging Markets Growth Fund (originally
called Global Emerging Markets Fund) (incorporated by reference to
Post-Effective Amendment No. 36).
(5)(k) Form of Sub-Advisory Agreement among Peregrine Asset Management (Hong
Kong) Limited, Van Eck Associates Corporation and Van Eck Funds with
respect to Emerging Markets Growth Fund (originally called Global
Emerging Markets Fund) (incorporated by reference to Post-Effective
Amendment No.46).
2
<PAGE>
(6)(a) Distribution Agreement (incorporated by reference to Post-Effective
Amendment No. 1).
(6)(b) Letter Agreement to add Gold/Resources Fund and U.S. Government Money
Fund (incorporated by reference to Post-Effective Amendment No. 1);
Letter Agreement to add World Income Fund (incorporated by reference
to Post-Effective Amendment No. 6); and Letter Agreement to add Asia
Dynasty Fund (incorporated by reference to Post-Effective Amendment
No. 23)
(6)(c) Letter Agreement to add Global SmallCap Fund and Asia Infrastructure
Fund (incorporated by reference to Post-Effective Amendment No. 31);
Letter Agreement to add Gold/Resources Fund-C, International
Investors Gold Fund-C, Global SmallCap Fund-C and Asia Infrastructure
Fund-C (incorporated by reference to Post-Effective Amendment No.
34); Letter Agreement to add Global Hard Assets Fund (incorporated by
reference to Post-Effective Amendment No. 36); Form of Letter
Agreement to add Gold Opportunity Fund (incorporated by reference to
Post-Effective Amendment No. 37); Form of Letter Agreement adding
Asia Select Portfolios (incorporated by reference to Post-Effective
Amendment No. 41); and Form of Letter Agreement adding Core
International Index Fund (incorporated by reference to Post-Effective
Amendment No. 42)
(6)(d) Amendment to Form of Selling Group Agreement (incorporated by
reference to Post-Effective Amendment No. 9).
(6)(e) Selling Group Agreement (incorporated by reference to Post-Effective
Amendment No. 12).
(6)(f) Letter Agreement to add Emerging Markets Growth Fund (to be filed by
amendment).
(7) Form of Deferred Compensation Plan (incorporated by reference to
Post-Effective Amendment No. 40).
(8) Global Custody Agreement, as amended (to be filed by amendment).
(9)(a) Forms of Procedural Agreement, Customer Agreement and Safekeeping
Agreement with Merrill Lynch Futures Inc. utilized by World Income
Fund, and Forms of Procedural Agreement, Customer Agreement and Safe
Keeping Agreement with Morgan Stanley & Co. utilized by World Income
Fund (incorporated by reference to Post-Effective Amendment No. 9).
(9)(b) Commodity Customer's Agreement between World Income Fund and Morgan
Stanley & Co. (incorporated by reference to Post-Effective Amendment
No. 10 ).
(9)(c) Agreement and Plan of Redomicile and Reorganization between the Trust
and International Investors Incorporated respecting the
reorganization of International Investors Incorporated into the Trust
as its fifth series, International Investors. (incorporated by
reference to Post-Effective Amendment No. 17).
(9)(d) Form of Accounting and Administrative Services Agreement with respect
to Asia Dynasty Fund (Incorporated by reference to Post-effective
Amendment No. 23).
(9)(e) Accounting and Administrative Services Agreement with respect to
Global Balanced Fund (incorporated by reference to Post-effective
Amendment No. 31).
(9)(f) Letter Agreement to add Global SmallCap Fund and Asia Infrastructure
Fund (incorporated by reference to Post-effective Amendment No. 31)
and Letter Agreement to add Gold/Resources Fund and International
Investors Gold Fund (incorporated by reference to Post-effective
Amendment No. 34). Letter Agreement to add Global Hard Assets
3
<PAGE>
Fund (incorporated by reference to Post-effective Amendment No. 36).
Letter Agreement to add Gold Opportunity Fund (incorporated by
reference to Post-effective Amendment No. 37).
(9)(g) Form of Accounting and Administrative Services Agreement with respect
to Global Emerging Markets Fund (incorporated by reference to Post-
Effective Amendment No. 36).
(9)(h) Letter Agreement to add Emerging Markets Growth Fund (to be filed by
amendment).
(10) Opinion of Goodwin, Procter & Hoar, including consent, with regard to
World Trends Fund (incorporated by reference to Pre-Effective
Amendment No. 1); Opinion Of Fund (incorporated by reference to Post-
Effective Amendment No. 1); Opinion of Goodwin, Procter & Hoar with
regard to World Income Fund (incorporated by reference to Post-
Effective Amendment No. 7); Opinion of Goodwin, Procter & Hoar and
consent with regard to International Investors (incorporated by
reference to Post-Effective Amendment No. 17); Opinion of Goodwin,
Procter and Hoar with regard to Asia Dynasty Fund (incorporated by
reference to Post-effective Amendment No. 24); Opinion of Goodwin,
Procter & Hoar with respect to the issuance of Class B shares of Asia
Dynasty Fund and with respect to the issuance of Class A and Class B
shares of Global Balanced Fund (incorporated by reference to Post-
effective Amendment No. 27); Opinion of Goodwin, Procter & Hoar with
respect to the issuance of Class A and Class B shares of Asia
Infrastructure Fund and Global SmallCap Fund (incorporated by
reference to Post-effective Amendment No. 31) and Opinion of Goodwin,
Procter & Hoar, including consent, with regard to the issuance of
Class A and Class C shares of Global Hard Assets Fund (incorporated
by reference to Post-effective Amendment No. 36). Opinion of Goodwin,
Procter & Hoar, including consent, with regard to the issuance of
Class A and Class C shares of Gold Opportunity Fund (incorporated by
reference to Post-Effective Amendment No. 37). Opinion of Goodwin,
Proctor & Hoar including consent, with regard to the issuance of
Class B shares of Asia Infrastructure Fund, Gold Opportunity Fund and
Global Hard Assets Fund (incorporated by reference to Post-Effective
Amendment No. 40).
(10)(b) Opinion of Goodwin, Procter & Hoar, with respect to issuance of Class
A, Class B and Class C shares of Emerging Markets Growth Fund (to be
filed by amendment).
(11)* Consent of Independent Accountants
(12) Not Applicable.
(13) Not Applicable.
(14)(a) Forms of prototype "Keogh" and 403(b)(7) Plans utilized by registrant
(incorporated by reference to Post-Effective Amendment No. 10).
(14)(b) Registrant's revised form of IRA Plan (incorporated by reference to
Post-Effective Amendment No. 10).
(14)(c) Registrant's form of Simplified Employee Plan (incorporated by
reference to Post-Effective Amendment No. 10).
(14)(d) Amendments to the Retirement Plan for Self-Employed Individuals,
Partnerships and Corporation using shares of Van Eck Funds and
International Investors Incorporated; Profit Sharing Plan Adoption
Agreement. (incorporated by reference to Post-Effective Amendment No.
14).
(15)(a) Plan of Distribution with respect to International Growth Fund and
Asia Dynasty Fund Incorporated by reference to Post-Effective
Amendment No. 23). Form of Plan of Distribution with respect to Class
B shares of Asia Dynasty Fund (Incorporated by reference to Post-
Effective Amendment No. 25). Form of Plan of Distribution with
respect to Global Balanced Fund (Class A and B) and World Income Fund
(Class B) (incorporated by reference to Post-Effective Amendment No.
26). Letter Agreement to add Global SmallCap Fund (Class A) and Asia
Infrastructure Fund (Class A) (incorporated by reference to
Gold/Resources Fund (Class C), International Investors Gold Fund
(Class C), Global (Class A) (incorporated by reference to Post-
Effective Amendment No. 36). Form of Letter Agreement to add Gold
Opportunity Fund (Class A and Class C) and Letter Agreement to add
Global Hard Assets Fund (Class C) (incorporated by reference to Post-
Effective Amendment No. 37. Form of Plan of Distribution with respect
to Asia Infrastructure Fund (Class B), Global Hard Assets Fund (Class
B) and Gold Opportunity Fund
4
<PAGE>
(Class B) (incorporated by reference to Post-Effective Amendment No.
39).
(15)(b) Letter Agreement to add Emerging Markets Growth Fund (Class A/Class
B/Class C).
(16) Computation of Performance Quotation.
(17) Financial Data Schedule.
(18) Powers of Attorney (incorporated by reference from Post-Effective
Amendment No. 5).
(19) Not Applicable.
ITEM 25. Persons controlled by or under common control with Registrant
Not Applicable.
ITEM 26. Number of Holders of Securities
Set forth below are the number of Record Holders as of February 19, 1999 of
each series of the Registrant:
<TABLE>
<CAPTION> FUND
NAME NUMBER OF RECORD HOLDERS
---- ------------------------
CLASS A CLASS B CLASS C
------- ------- -------
<S> <C>
Global Balanced Fund..... 2,392 306
Asia Dynasty Fund........ 1,780 548
International Investors
Gold Fund............... 35,179
Gold/Resources Fund...... 11,845
Global Hard Assets Fund.. 2,602 582 448
U.S. Government Money
Fund.................... 1,842
</TABLE>
ITEM 27. Indemnification
Reference is made to Article VI of the Master Trust Agreement of the
Registrant, as amended, previously filed as Exhibit (1) to the Registration
Statement.
Insofar as indemnification by the Registrant for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers, underwriters
and controlling persons of the Registrant, pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification is against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a trustee,
officer or controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted against the Registrant by such
trustee, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
ITEM 28. Business and other Connections of Investment Adviser
Reference is made to Form ADV of Van Eck Associates Corporation (File No. 801-
21340), as currently on file with the Securities and Exchange Commission, and
to the caption "Management" in the Registrant's Prospectus and to the captions
"The Distributor", "Investment Advisory Services" and "Trustees and Officers"
in the Registrant's Statement of Additional Information.
5
<PAGE>
ITEM 29. Principal Underwriters
(a) Van Eck Securities Corporation, principal underwriter for the Registrant,
also distributes shares of Van Eck Worldwide Insurance Trust and Van Eck/Chubb
Funds, Inc.
(b) The following table presents certain information with respect to each
director and officer of Van Eck Securities Corporation:
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITION AND OFFICES POSITION AND OFFICE
BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT
- ------------------ -------------------- -------------------
<S> <C> <C>
John C. van Eck Chairman and Director Chairman and President
99 Park Avenue
New York, NY 10016
Jan van Eck President and Director Trustee
99 Park Avenue
New York, NY 10016
Sigrid S. van Eck Vice President and Assistant Treasurer and Director None
270 River Road
Briarcliff Manor,
NY
Fred M. van Eck Director None
99 Park Avenue
New York, NY 10016
Derek van Eck Director Trustee and Executive Vice President
99 Park Avenue
New York, NY 10016
Bruce J. Smith Vice President, Chief Financial Officer, Treasurer and Controller Vice President and Treasurer
99 Park Avenue
New York, NY 10016
Thomas Elwood Vice President, General Counsel and Secretary Vice President and Secretary
99 Park Avenue
New York, NY 10016
Susan C. Lashley Managing Director, Operations Vice President
99 Park Avenue
New York, NY 10016
Keith Fletcher Senior Managing Director None
99 Park Avenue
New York, NY 10016
</TABLE>
(c) Not Applicable
6
<PAGE>
ITEM 30. Location of Accounts and Records
The following table sets forth information as to the location of accounts,
books and other documents required to be maintained pursuant to Section 31(a)
of the Investment Company Act of 1940, as amended, and the Rules promulgated
thereunder.
<TABLE>
<CAPTION>
ACCOUNTS, BOOKS AND DOCUMENTS LISTED BY
REFERENCE TO SPECIFIC SUBSECTION OF
17 CFR 270 31A-1 TO 31A-3 PERSON IN POSSESSION AND ADDRESS
--------------------------------------- --------------------------------
<S> <C>
31a-1(b)(1) Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-1(b)(2)(i) Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-1(b)(2)(ii) Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-1(b)(2)(iii) Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-1(b)(2)(iv) DST Systems, Inc.
21 West Tenth Street
Kansas City, Missouri 64105
31a-1(b)(3) Not Applicable
31a-1(b)(4) Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-1(b)(5) Fiduciary International, Inc.
Two World Trade Center
New York, New York 10048
Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-1(b)(6) Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-1(b)(7) Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-1(b)(8) Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
ACCOUNTS, BOOKS AND DOCUMENTS LISTED BY
REFERENCE TO SPECIFIC SUBSECTION OF
17 CFR 270 31A-1 TO 31A-3 PERSON IN POSSESSION AND ADDRESS
--------------------------------------- --------------------------------
<S> <C>
31a-1(b)(9) Fiduciary International, Inc.
Two World Trade Center
New York, New York 10048
Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-1(b)(10) Fiduciary International, Inc.
Two World Trade Center
New York, New York 10048
Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-1(b)(11) Fiduciary International, Inc.
Two World Trade Center
New York, New York 10048
Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-1(b)(12) Fiduciary International, Inc.
Two World Trade Center
New York, New York 10048
Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-1(c) Not Applicable
31a-1(d) Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-1(e) Not Applicable
31a-1(f) Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-2(a)(1) Van Eck Associate's Corporation
99 Park Avenue
New York, NY 10016
DST Systems, Inc.
21 West Tenth Street
Kansas City, MO 64105
Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
Fiduciary International, Inc.
Two World Trade Center
New York, NY 10048
31a-2(b) Not Applicable
31a-2(c) Van Eck Securities Corporation
99 Park Avenue
New York, NY 10016
31a-2(d) Not Applicable
31a-2(e) Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-3 Not Applicable
All Other Records Van Eck Funds
pursuant to the Rule 99 Park Avenue
New York, NY 10016
</TABLE>
ITEM 31. Management Services
- ----------------------------
None
ITEM 32. Undertakings
------------
Registrant undertakes to file a post-effective amendment using
financial statements which need not be certified within four to six months from
the effective date of Global Real Estate Fund.
8
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this Post-Effective Amendment to the
Registration Statement pursuant to Rule 485(a) under the Securities Act of 1933
and has duly caused this Amendment to the Registration Statement on Form N-1A to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of New York, State of New York, on the 9th day of August, 1999.
VAN ECK FUNDS
By: /s/ John C. van Eck
----------------------------------
John C. van Eck, President
Pursuant to the requirements of the Securities Act of 1933, this Amendment to
the Registration Statement has been signed below by the following persons in the
capacities and on the date indicated:
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ John C. van Eck
___________________ Chairman and President 8/9/99
John C. van Eck
/s/ Bruce J. Smith
___________________ Chief Financial Officer 8/9/99
Bruce J. Smith
/s/ Jeremy Biggs*
___________________ Trustee 8/9/99
Jeremy Biggs
/s/ Richard Cowell*
___________________ Trustee 8/9/99
Richard Cowell
/s/ Philip DeFeo Trustee 8/9/99
- -------------------
Philip DeFeo
/s/ Wesley G. McCain*
___________________ Trustee 8/9/99
Wesley G. McCain
/s/ David J. Olderman*
___________________ Trustee 8/9/99
David J. Olderman
/s/ Ralph F. Peters*
___________________ Trustee 8/9/99
Ralph F. Peters
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
/s/ Richard Stamberger*
_______________________ Trustee 8/9/999
Richard Stamberger
/s/ Derek S. van Eck
_______________________ Trustee 8/9/999
Derek S. van Eck
/s/ Jan F. van ECK
_______________________ Trustee 8/9/999
Jan F. van Eck
/s/ John C. van Eck
_________________________
</TABLE>
* Executed on behalf of Trustee by John C. van Eck, as attorney-in-fact.
<PAGE>
EXHIBIT 99.11
[LETTERHEAD OF PRICEWATERHOUSECOOPERS]
CONSENT OF INDEPENDENT ACCOUNTANTS
--------------------------------------
We consent to the incorporation by reference in Post-Effective Amendment No. 52
to the Registration Statement of Van Eck Funds on Form N-1A of our report dated
February 19, 1999 on our audits of financial statements and financial highlights
of the Asia Dynasty Fund (one of the Funds comprising the Van Eck Funds) which
report is included in the Annual Report to Shareholders for the year ended
December 31, 1998 which is incorporated by reference in the Statement of
Additional Information.
We also consent to the reference in the Statement of Additional Information
under the caption "Counsel and Auditors".
/s/ PriewaterhouseCoopers
PRICEWATERHOUSECOOPERS
New York, New York
August 16, 1999
