As filed with the Securities and Exchange Commission on April 28, 2000.
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. 54
-AND-
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 55
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 PROCESS)
COPY TO: PHILIP NEWMAN, ESQ., GOODWIN PROCTER & HOAR
EXCHANGE PLACE, BOSTON, MASSACHUSETTS 02109
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IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (CHECK APPROPRIATE BOX):
|X| IMMEDIATELY UPON FILING PURSUANT [X] ON MAY 1, 2000 PURSUANT TO
TO PARAGRAPH (B) PARAGRAPH (B)
|_| 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.
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<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
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PROSPECTUS
May 1, 2000
[GRAPHIC]
VAN ECK FUNDS
Asia Dynasty Fund
Emerging Markets Fund
Global Hard Assets Fund
Global Leaders Fund
International Investors Gold Fund
Natural Resources Fund
U.S. Government Money 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.
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GLOBAL INVESTMENTS SINCE 1955
================================================================================
<PAGE>
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Van Eck Global
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PROSPECTUS
May 1, 2000
[GRAPHIC OMITTED]
VAN ECK FUNDS
Asia Dynasty Fund
Emerging Markets Vision Fund
Global Hard Assets Fund
Global Leaders Fund
International Investors Gold Fund
U.S. Government Money 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.
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GLOBAL INVESTMENTS SINCE 1955
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<PAGE>
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Table of Contents
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I. THE FUNDS
INCLUDES A PROFILE OF EACH 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
EMERGING MARKETS VISION FUND 5
GLOBAL HARD ASSETS FUND 8
GLOBAL LEADERS FUND 12
INTERNATIONAL INVESTORS GOLD FUND 15
U.S. GOVERNMENT MONEY FUND 18
II. ADDITIONAL INVESTMENT STRATEGIES 20
OTHER INVESTMENTS, INVESTMENT POLICIES, INVESTMENT TECHNIQUES AND RISKS.
III. SHAREHOLDER INFORMATION 29
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 FUNDS.
IV. FINANCIAL HIGHLIGHTS 42
TABLES THAT SHOW PER SHARE EARNINGS, EXPENSES, AND PERFORMANCE OF EACH FUND.
<PAGE>
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I. The Funds
- --------------------------------------------------------------------------------
INCLUDES A PROFILE OF EACH 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: Cambodia, Hong Kong, India, Indonesia,
Korea, Laos, Malaysia, Myanmar, Pakistan, Peoples Republic of China ("China"),
the Philippines, Singapore, Sri Lanka, Taiwan, Thailand, and Vietnam. The Fund
may invest more than 25% of its total assets in one country. The Fund utilizes a
growth strategy attempting 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 and Taiwan.
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.
The Fund is subject to foreign investment risk, emerging markets risk and equity
risk. An investment in the Fund involves the risk of losing money.
2 VAN ECK GLOBAL PROSPECTUS
<PAGE>
I. THE FUNDS / ASIA DYNASTY
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Asia Dynasty Fund Performance
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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. Sales loads or account fees are not reflected; if these
amounts were reflected, returns would be less than those shown. 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 6/30/99)
was 55.71%. The lowest performing quarter (ended 6/30/98) was -23.96%.
Fund performance is shown with sales charges subtracted. If sales charges were
included returns would be less than shown. This chart compares the Fund's
performance with a broad measure of market performance. Past performance does
not guarantee or predict future results.
- --------------------------------------------------------------------------------
Asia Dynasty Fund
Class A Shares Annual Total Returns (%)
As of December 31,
[The following table was depicted as a line graph in the printed material].
'94 -18.72
'95 3.13
'96 6.53
'97 -32.10
'98 -0.26
'99 118.46
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Asia Dynasty Fund
1-Year, 5-Year and Life-of-Fund Annualized Performance Plus a Comparison to the
MSCI Far East Ex-Japan Free Index*
As of December 31, 1999
1 Year 5 Year Life-of-Fund+
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Class A Shares 105.80% 8.91% 10.82%
Class B Shares 111.71% 9.10% 8.86%
MSCI Far East Ex-Japan Free Index 62.11% 0.78% 7.16%
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* 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 approximately
ten Asian markets (excluding Japan); the index includes only shares
available for purchase by foreign investors.
+ Class A Shares: 3/22/93; Class B shares: 9/1/93; Index calculated from
Class A inception date nearest month end (3/31/93).
VAN ECK GLOBAL PROSPECTUS 3
<PAGE>
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Asia Dynasty Fund Expenses
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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.
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that the
Fund's operating expenses remain the same. Although your account cost may be
higher or lower, based upon these assumptions your cost would be as shown.
- --------------------------------------------------------------------------------
Asia Dynasty Fund
Shareholder Expenses (fees paid directly from your investment)
CLASS A CLASS B
Maximum Sales Charge (imposed on purchases as
a percentage of offering price) 5.75% 0.00%
Maximum Deferred Sales Charge (load)
(as a percentage) 0.00% 5.00%
Annual Fund Operating Expenses (Expenses that are deducted from Fund assets)
Management 0.75% 0.75%
Administration Fees 0.25% 0.25%
Distribution (12b-1) Fees 0.50% 1.00%
Other Expenses 1.32% 1.89%
Total Annual Fund Operating Expenses 2.82% 3.89%
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- --------------------------------------------------------------------------------
Expense Example
What a $10,000 investment would actually cost
1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------------
Class A $ 844 $1,399 $1,978 $3,541
Class B $ 891 $1,587 $2,200 $4,113*
You would pay the following expenses if you did not redeem your shares
Class A $ 844 $1,399 $1,978 $3,541
Class B $ 391 $1,187 $2,000 $4,113*
- --------------------------------------------------------------------------------
* Class B shares automatically convert to Class A shares after year eight.
4 VAN ECK GLOBAL PROSPECTUS
<PAGE>
I. THE FUNDS / EMERGING MARKETS VISION
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2. EMERGING MARKETS VISION FUND PROFILE
OBJECTIVE
The Emerging Markets Vision Fund seeks long-term capital appreciation by
investing in equity securities in emerging markets around the world.
PRINCIPAL STRATEGIES
The Fund emphasizes investment in countries that have relatively low gross
national product per capita, as well as the potential for rapid economic growth.
Under normal conditions, the Fund will invest at least 65% of its assets in
emerging countries or emerging market equity securities. Emerging Market
Countries are countries so defined by the World Bank, International Finance
Corporation or by the United Nations. Emerging market securities are securities
which are primarily traded in Emerging Countries or which derive 50% of their
revenue in Emerging Countries or which are organized in Emerging Countries.
These include issues of companies in emerging countries, investment companies
(like country funds) that invest in emerging countries, and in American
Depositary Receipts (ADRs), American Depositary Shares (ADSs), European
Depositary Receipts (EDRs) and Global Depositary Receipts (GDRs) representing
emerging markets securities.
The Fund generally invests in common stocks; preferred stocks (either
convertible or non-convertible); rights; warrants; options; direct equity
interests in trusts, partnerships; convertible debt instruments and special
classes of shares available only to foreigners in markets that restrict
ownership of certain shares or classes to their own nationals or residents.
The Fund emphasizes equities, but may also invest in debt securities of any
quality, as long as not more than 25% of assets are held in debt securities
rated below investment grade ("junk bonds").
The Fund may borrow up to 30% of its net assets to buy more securities.
The Fund may sometimes invest indirectly by investing in other investment
companies. Such investments are commonly used when direct investment in certain
countries are not permitted to foreign entities. At times these investments may
involve payments of premiums above the company's net asset values. Investment in
other investment companies may involve additional fees such as management and
other fees. The law may also restrict these indirect investments in additional
ways. The Fund's investment adviser has agreed to waive its management fee with
respect to the portion of Fund assets invested in shares of other open-end
investment companies.
PRINCIPAL RISKS
An emerging markets fund involves above-average risk. Many emerging markets are
much less liquid and much more changeable than the U.S. market. Foreign
investments may be subject to volatility from political or economic factors or
from changing currency values. The Fund is designed for long-term investing. An
investment in the Fund involves the risk of losing money. The Fund is subject to
interest rate risk, junk bond risk and leverage risk.
VAN ECK GLOBAL PROSPECTUS 5
<PAGE>
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Emerging Markets Vision Fund Performance
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*The Emerging Markets Vision Fund follows a similar investment approach and is
managed by the same team as the Van Eck Worldwide Emerging Markets Fund, an
insurance trust fund offered by Van Eck Global. This chart illustrates the
historic variability of risk of the Van Eck Worldwide Emerging Markets Fund from
year to year since that Fund's inception (12/21/95). This chart describes past
performance of the Worldwide Emerging Markets Fund only and does not represent
actual returns of the Emerging Markets Vision Fund. The returns should not be
understood as a prediction for future results.
During the period covered, the Worldwide Emerging Markets Fund's highest
performing quarter (ended 12/31/99) was 56.88%. The lowest performing quarter
(ended 9/30/98) was -29.46%.
Fund and Index performance are shown with dividends reinvested. Past performance
does not guarantee or predict future results.
- --------------------------------------------------------------------------------
Worldwide Emerging Markets Fund*
Annual Total Returns (%)
As of December 31,
[The following table was depicted as a line graph in the printed material].
'96 26.82
'97 -11.61
'98 -34.15
'99 100.28
- --------------------------------------------------------------------------------
The inception date of the Emerging Markets Vision Fund is 4/7/00.
- --------------------------------------------------------------------------------
Worldwide Emerging Markets Fund*
1-Year, 3-Year and Life-of-Fund Annualized Performance Plus a Comparison to the
MSCI Emerging Markets Free Index**
As of December 31, 1999
1 Year 3 Year Life-of-Fund+
- --------------------------------------------------------------------------------
Fund 100.28% 5.25% 9.92%
MSCI Emerging Markets Free Index 66.41% 3.18% 3.89%
- --------------------------------------------------------------------------------
** The Morgan Stanley Capital International (MSCI) Emerging Markets Free
Index is a market capitalization-weighted index that captures 60% of the
publicly traded equities in each industry for approximately 25 emerging
markets. The index includes only stocks available for purchase by foreign
(e.g., U.S.) investors.
The MSCI Emerging Markets Free Index is an unmanaged index and includes
the reinvestment of all dividends, but does not reflect the payment of
transaction costs, advisory fees or expenses that are associated with an
investment in the Fund. The Index's performance is not illustrative of the
Fund's performance. Indices are not securities in which investments can be
made.
+ 12/21/95; Index return calculated from nearest month end (12/31/95).
6 VAN ECK GLOBAL PROSPECTUS
<PAGE>
I. THE FUNDS / EMERGING MARKETS VISION
- --------------------------------------------------------------------------------
Emerging Markets Vision Fund Expenses
- --------------------------------------------------------------------------------
This table shows certain expenses you will incur as a Fund investor, either
directly or indirectly. The Adviser may sometimes waive fees and/or reimburse
certain expenses of the Fund.
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that the
Fund's operating expenses remain the same. Although your account cost may be
higher or lower, based upon these assumptions your cost would be as shown.
- --------------------------------------------------------------------------------
Emerging Markets Vision Fund
Shareholder Transaction Expenses
CLASS A CLASS B
Maximum Sales Charge (imposed on purchases
as a percent of offering price) 5.75% 0.00%
Maximum Deferred Sales Charge
(load as a percentage) 0.00% 5.00%
Annual Fund Operating Expenses (Expenses that are deducted from Fund assets)
Management/Administration Fees1.00% 1.00%
Distribution (12b-1) Fees 0.50% 1.00%
Other Expenses* 0.93% 0.93%
Total Fund Operating Expenses 2.43% 2.93%
- --------------------------------------------------------------------------------
*Based on estimated expense amounts for the current fiscal year.
- --------------------------------------------------------------------------------
Expense Example
What a $10,000 investment would actually cost
1 Year 3 Years
- --------------------------------------------------------------------------------
Class A $ 807 $1,289
Class B $ 796 $1,307
You would pay the following expenses if you did not redeem your shares
Class A $ 807 $1,289
Class B $ 296 $ 907
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VAN ECK GLOBAL PROSPECTUS 7
<PAGE>
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- --------------------------------------------------------------------------------
3. GLOBAL HARD ASSETS FUND PROFILE
OBJECTIVE
The Global Hard Assets Fund seeks long-term capital appreciation by investing
primarily in "Hard Asset Securities." Income is a secondary consideration.
PRINCIPAL STRATEGIES
Under normal conditions, the Fund will invest at least 65% of total assets in
"hard asset securities." The Fund will invest at least 5% of assets in each of
the four "hard asset" sectors listed below.
"Hard asset securities" are the stocks, bonds, and other securities of companies
that derive at least 50% of gross revenue or profit from exploration,
development, production or distribution of:
o Commodities
o Natural resources
o Precious metals
o Real estate
Under normal circumstances, the Fund will invest in at least three countries
including the United States. However, there is no limit on the amount the Fund
may invest in any one country, developed or underdeveloped.
Global Hard Assets Fund, using a value strategy, invests in a number of
securities, and utilizes a number of techniques, that are covered in detail in
Chapter II "Investment Policies and Risks." These include "Derivatives," which
are discussed in Chapter II. The Fund may invest up to 5% of assets in
1) premiums for options on equity securities and equity indexes, and in
2) warrants, including options and warrants traded in over-the-counter markets.
The Fund may invest in common stocks; preferred stocks (either convertible or
non-convertible); rights; warrants; direct equity interests in trusts;
partnerships; convertible debt instruments; and special classes of shares that
are restricted to nationals or residents of a given country. The Fund seeks to
purchase securities with a high value relative to their share price. Direct
investments are generally considered illiquid and will be lumped together with
other illiquid investments; this total will be subject to the Fund's limits on
illiquid investing. The Fund may
8 VAN ECK GLOBAL PROSPECTUS
<PAGE>
I.THE FUNDS / GLOBAL HARD ASSETS
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- --------------------------------------------------------------------------------
invest up to 10% of its assets in precious metals, either bullion or coins. The
Fund may invest up to 10% of assets in asset-backed securities such as
collateralized mortgage obligations ("CMOs") and other mortgage and non-mortgage
asset-backed securities. Asset-backed securities backed by hard assets are
excluded from this 10% limitation. The Fund uses derivatives to gain exposure to
hard asset securities and to hedge exposure to hard asset securities.
The Fund may invest up to 35% of assets in debt securities not linked to hard
assets. These securities include those either rated in the higher grades, or
believed (by its Adviser) to be equivalent to higher-rated securities, for
example, A or better by Standard & Poor's (S&P). The Fund has a flexible
investment strategy regarding its investments in debt instruments seeking to
take advantage of the yield curve.
The Fund's investments in short-term instruments will consist primarily of
securities rated in the highest category, or, if unrated, in comparable quality
instruments or instruments insured by the U.S or foreign governments, their
agencies and instrumentalities. The Fund seeks high-credit quality debt
securities with maturities of 10 years or less and a portfolio of 3 to 4 years.
The Fund may borrow up to 30% of its assets to buy more securities.
PRINCIPAL RISKS
An investment in the Fund may involve greater risk than an investment in other
funds. Hard asset prices may move independently of the trends of industrial
companies. The energy and basic materials sectors are volatile. Inflation can
drive down stock prices, and stock prices can influence hard assets; so
inflation may also make hard asset security prices go down. An investment in the
Fund should be considered part of an overall investing program, not a complete
investment in itself. An investment in the Fund may lose money. The Fund is
subject to real estate risk, non-diversification risk, precious metal risk,
foreign risk, emerging market risk, junk bond risk, CMO risk, leverage risk,
interest rate risk and credit risk.
VAN ECK GLOBAL PROSPECTUS 9
<PAGE>
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Global Hard Assets Fund Performance
- --------------------------------------------------------------------------------
This chart illustrates the historic variability of risk of the Fund from year to
year for a share of Global Hard Assets Fund (before sales charges) since Fund
inception on 11/2/94. Sales loads or account fees are not reflected; if these
amounts were reflected, returns would be less than those shown. 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 9/30/97)
was 19.14%. The lowest performing quarter (ended 9/30/98) was -19.77%.
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.
- --------------------------------------------------------------------------------
Global Hard Assets Fund
Class A Shares Annual Total Returns (%)
As of December 31,
[The following table was depicted as a line graph in the printed material].
'95 20.08
'96 45.61
'97 14.29
'98 -32.25
'99 16.64
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- --------------------------------------------------------------------------------
Global Hard Assets Fund
1-Year, 5-Year and Life-of-Fund Annualized Performance Plus a Comparison to the
S&P 500 Index and the Ibbotson Hard Assets Index*
As of December 31, 1999
1 Year 5 Year Life-of-Fund+
- --------------------------------------------------------------------------------
Class A Shares 9.94% 8.29% 7.78%
Class B Shares 10.72% N/A 2.03%
Class C Shares 14.77% 9.29% 8.74%
S&P 500 Index 21.04% 28.56% 26.97%
Ibbotson Hard 26.39% 4.43% 3.72%
Assets Index
- --------------------------------------------------------------------------------
* The Standard & Poor's 500 Index consists of 500 widely held common stocks,
covering four broad sectors (industry, utilities, financials and
transportation). It is a market-value weighted index (stock price times
shares outstanding), with each stock affecting the index in proportion to
its market value.
The Ibbotson Hard Assets Index is 75% equities of global companies whose
primary business is linked to hard assets, and 25% commodity futures. The
equity component consists of equal weightings of the MSCI Gold Mines,
Non-Ferrous Metals, Energy Sources, and Forest Products and Paper Indexes,
and the National Association of Real Estate Investment Trusts Equity
Index. The commodity component consists of equal weightings of the Goldman
Sachs Energy, Precious Metals and Industrial Metals Indexes.
The S&P 500 Index and the Ibbotson Hard Assets Index are unmanaged indices
and include the reinvestment of all dividends, but do not reflect the
payment of transaction costs, advisory fees or expenses that are
associated with an investment in the Fund. The Indices' performance is not
illustrative of the Fund's performance. Indices are not securities in
which investments can be made.
+ Class A Shares: 11/2/94; Class B Shares: 4/24/96; Class C Shares: 11/2/94;
Indices: calculated from life of Class A shares nearest month end
(10/31/94).
10 VAN ECK GLOBAL PROSPECTUS
<PAGE>
I.THE FUNDS / GLOBAL HARD ASSETS
- --------------------------------------------------------------------------------
Global Hard Assets Fund Expenses
- --------------------------------------------------------------------------------
This table shows certain fees and expenses you will incur as a Fund investor,
either directly or indirectly if you buy and hold shares.
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that the
Fund's operating expenses remain the same. Although your account cost may be
higher or lower, based upon these assumptions your cost would be as shown.
- --------------------------------------------------------------------------------
Global Hard Assets Fund
Shareholder Expenses (fees paid directly from your investment)
CLASS A CLASS B CLASS C
Maximum Sales Charge (imposed on purchases as
a percentage of offering price) 5.75% 0.00% 0.00%
Maximum Deferred Sales Charge (load)
(as a percentage) 0.00% 5.00% 1.00%
Annual Fund Operating Expenses (Expenses that are deducted from Fund assets)
Management/Administration Fees 1.00% 1.00% 1.00%
Distribution (12b-1) Fees 0.50% 1.00% 1.00%
Other Expenses 1.39% 1.79% 2.15%
Total Annual Fund Operating Expenses* 2.89% 3.79% 4.15%
- --------------------------------------------------------------------------------
* After Advisory fee waiver and directed brokerage arrangement: Class A:
2.0%, Class B: 2.71%, Class C: 2.71%. These fee waivers are not
contractual and may be discontinued at the discretion of the Adviser.
- --------------------------------------------------------------------------------
Expense Example
What a $10,000 investment would actually cost
1 Year 3 years 5 years 10 years
- --------------------------------------------------------------------------------
Class A $ 850 $1,418 $2,011 $3,604
Class B $ 881 $1,558 $2,153 $4,027*
Class C $ 517 $1,261 $2,120 $4,331*
You would pay the following expenses if you did not redeem your shares
Class A $ 850 $1,418 $2,011 $3,604
Class B $ 381 $1,158 $1,953 $4,027*
Class C $ 417 $1,261 $2,120 $4,331*
- --------------------------------------------------------------------------------
* Class B and Class C shares automatically convert to Class A shares after
year eight.
VAN ECK GLOBAL PROSPECTUS 11
<PAGE>
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- --------------------------------------------------------------------------------
4. GLOBAL LEADERS FUND PROFILE
OBJECTIVE
Global Leaders Fund seeks long-term capital appreciation.
PRINCIPAL STRATEGIES
The Fund will allocate its assets among primarily common stocks and other equity
securities of large cap global growth companies (global leaders). Under normal
conditions, the Fund will invest in at least three countries including the
United States. There is no limit on the amount the Fund may invest in any one
asset class or country. However, the Fund will not invest more than 10% of
assets in the securities of developing countries with emerging economies or
securities markets.
PRINCIPAL RISKS
However, a global equity fund can be more volatile than a bond fund and provide
lower returns than a domestic stock fund. There can be no assurance that
allocation of assets globally will reduce risks, or that the Fund will achieve
its investment objective. An investment in the Fund involves a risk of losing
money. The Fund is subject to credit risk, interest risk, non-diversification
risk, leverage risk and foreign securities risk.
12 VAN ECK GLOBAL PROSPECTUS
<PAGE>
I. THE FUNDS / GLOBAL LEADERS
- --------------------------------------------------------------------------------
Global Leaders Fund Performance
- --------------------------------------------------------------------------------
This chart illustrates the historic variability of risk of the Fund from year to
year for a share of Global Leaders Fund (before sales charges) since Fund
inception on 12/20/93. Sales loads or account fees are not reflected; if these
amounts were reflected, returns would be less than those shown. 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
12/31/99) was 27.61%. The lowest performing quarter (ended 9/30/98) was -6.56%.
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.
- --------------------------------------------------------------------------------
Global Leaders Fund
Class A Shares Annual Total Returns (%)
As of December 31,
[The following table was depicted as a line graph in the printed material].
'94 -3.90
'95 15.30
'96 12.28
'97 14.77
'98 20.65
'99 32.83
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Global Leaders Fund
1-Year, 5-Year and Life-of-Fund Annualized Performance Plus a Comparison to the
MSCI World Stock Index*
As of December 31, 1999
1 Year 5 Year Life-of-Fund+
- --------------------------------------------------------------------------------
Class A Shares 25.17% 17.56% 13.60%
Class B Shares 27.27% 18.10% 14.01%
MSCI World Stock Index 24.93% 19.76% 17.18%
- --------------------------------------------------------------------------------
* The MSCI World Stock Index is a market capitalization-weighted benchmark
that tracks the performance of approximately 25 world stock markets. The
Index is based on the reinvestment of dividends less any withholding taxes
on foreigners who do not benefit from a double taxation treaty ("net
dividends").
The Index aims for 60% of the total market capitalization for each market
that is represented in the Index. The companies included in the Index
replicate the industry composition of each global market. The chosen list
of stock includes a representative sampling of large, medium, and small
capitalization companies and investment funds are not eligible. Companies
with restricted float due to dominant shareholders or cross ownership are
avoided.
+ Class A Shares: 12/20/93; Class B Shares: 12/20/93; Index calculated from
nearest month end (12/31/93).
VAN ECK GLOBAL PROSPECTUS 13
<PAGE>
- --------------------------------------------------------------------------------
Global Leaders Fund Expenses
- --------------------------------------------------------------------------------
This table shows certain fees and expenses you will incur as a Fund investor,
either directly or indirectly if you buy and hold your shares.
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that the
Fund's operating expenses remain the same. Although your account cost may be
higher or lower, based upon these assumptions your cost would be as shown.
- --------------------------------------------------------------------------------
Global Leaders Fund
Shareholder Expenses (fees paid directly from your investment)
CLASS A CLASS B
Maximum Sales Charge (imposed on purchases as
a percentage of offering price) 5.75% 0.00%
Maximum Deferred Sales Charge (load)
(as a percentage) 0.00% 5.00%
Annual Fund Operating Expenses (Expenses that are deducted from Fund assets)
Management 0.75% 0.75%
Administration Fees 0.25% 0.25%
Distribution (12b-1) Fees 0.50% 1.00%
Other Expenses 0.70% 1.21%
Total Annual Fund Operating Expenses* 2.20% 3.21%
- --------------------------------------------------------------------------------
* After advisory fee waiver: Class A: 2.0%, Class B: 2.5%. These fee waivers
are not contractual and may be discontinued at the discretion of the
Adviser.
- --------------------------------------------------------------------------------
Expense Example
What a $10,000 investment would actually cost
1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------------
Class A $ 785 $1,224 $1,687 $2,963
Class B $ 824 $1,389 $1,878 $3,512*
You would pay the following expenses if you did not redeem your shares
Class A $ 785 $1,224 $1,687 $2,963
Class B $ 324 $ 989 $1,678 $3,512*
- --------------------------------------------------------------------------------
*Class B shares automatically convert to Class A Shares after year eight.
14 VAN ECK GLOBAL PROSPECTUS
<PAGE>
I. FUNDS / INTERNATIONAL INVESTORS GOLD
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5. INTERNATIONAL INVESTORS GOLD FUND PROFILE
OBJECTIVE
The Fund seeks long-term capital appreciation by investing in common stocks of
gold mining companies. The Fund may take current income into consideration in
picking investments.
PRINCIPAL STRATEGIES
Under normal conditions, the Fund will invest at least 65% of total assets in
the gold mining industry, with at least 25% of assets invested in gold mining
stocks (companies with greater than 50% of revenues from gold mining). The Fund
may invest up to 100% of its assets, or, for temporary defensive purposes, less
than 25% of its assets in gold stocks.
Kinds of securities in which the Fund invests: The Fund invests primarily in
securities of companies whose properties, products, or services are
international in scope or substantially outside the U.S., plus U.S. Treasury
securities. An investment in gold stocks can offer an opportunity to achieve
long-term capital appreciation and to protect wealth against inflation. The
accelerating growth of monetary reserves and credit in major industrial markets
may help gold and gold mining share prices go up. Gold share values may move
independently of industrial shares, so adding gold to an industrial equity
portfolio may offset that portfolio's fluctuations -- and perhaps increase its
return. The Fund may borrow up to 50% of its assets to buy more securities.
The Fund may invest up to 121/2% of its assets in gold and silver coins as well
as gold, silver, platinum and palladium bullion. The sole source of return to
the Fund from coins is from gains or losses realized on their sale. The Fund
pays custody costs to store its bullion and coins.
PRINCIPAL RISKS
An investment in the Fund should be considered part of an overall investment
program, not a complete investment in itself. An investment in the Fund may lose
money. The Fund is subject to non-diversification risk, precious metals risk,
industry concentration risk, leverage risk, foreign security risk and gold risk.
VAN ECK GLOBAL PROSPECTUS 15
<PAGE>
- --------------------------------------------------------------------------------
International Investors Gold Fund Performance
- --------------------------------------------------------------------------------
This chart illustrates the historic variability of risk of the Fund from year to
year for a share of International Investors Gold Fund (before sales charges).
Sales loads or account fees are not reflected; if these amounts were reflected,
returns would be less than those shown. 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 6/30/93)
was 39.07%. The lowest performing quarter (ended 12/31/97) was -24.96%.
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.
- --------------------------------------------------------------------------------
International Investors Gold Fund
Class A Shares Annual Total Returns (%)
As of December 31,
'90 -27.02
'91 2.56
'92 -29.08
'93 113.14
'94 -1.05
'95 -8.93
'96 -9.37
'97 -36.00
'98 -11.87
'99 -12.37
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
International Investors Gold Fund
1-Year, 5-Year, and 10-Year Annualized Performance Plus a Comparison to the S&P
500 Index and the FT Gold Mines Index*
As of December 31, 1999
1 Year 5 Year 10 Year
- --------------------------------------------------------------------------------
Class A Shares -17.38% -17.40% -8.07%
S&P 500 Index 21.04% 28.56% 18.21%
FT Gold Mines Index -0.66% -14.01% -11.32%
- --------------------------------------------------------------------------------
* The Standard & Poor's 500 Index consists of 500 widely held common stocks,
covering four broad sectors (industry, utilities, financials and
transportation). It is a market-value weighted index (stock price times
shares outstanding), with each stock affecting the index in proportion to
its market value.
The Financial Times Gold Mines is a market capitalization-weighted global
index of gold mining shares.
The S&P 500 Index and the Financial Times Gold Mines Index are unmanaged
indices and include the reinvestment of all dividends, but do not reflect
the payment of transaction costs, advisory fees or expenses that are
associated with an investment in the Fund. The Indices' performance is not
illustrative of the Fund's performance. Indices are not securities in
which investments can be made.
16 VAN ECK GLOBAL PROSPECTUS
<PAGE>
I. THE FUNDS / INTERNATIONAL INVESTORS GOLD
- --------------------------------------------------------------------------------
International Investors Gold Fund Expenses
- --------------------------------------------------------------------------------
This table shows certain fees and expenses you will incur as a Fund investor,
either directly or indirectly if you buy and hold shares.
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that the
Fund's operating expenses remain the same. Although your account cost may be
higher or lower, based upon these assumptions your cost would be as shown.
- --------------------------------------------------------------------------------
International Investors Gold Fund
Shareholder Expenses (fees paid directly from your investment)
CLASS A
Maximum Sales Charge Sales (imposed on purchases as
a percentage of offering price) 5.75%
Annual fund operating expenses (Expenses that are deducted from Fund assets)
Management 0.75%
Administration Fees 0.25%
Distributions (12b-1) Fees 0.25%
Other Expenses 0.93%
Total Annual Fund Operating Expenses* 2.18%
- --------------------------------------------------------------------------------
* After expense reimbursement agreements with brokers 2.17%.
- --------------------------------------------------------------------------------
Expense Example
What a $10,000 investment would actually cost
1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------------
Class A $783 $1,218 $1,677 $2,944
- --------------------------------------------------------------------------------
VAN ECK GLOBAL PROSPECTUS 17
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
6. U.S. GOVERNMENT MONEY MARKET FUND PROFILE
OBJECTIVE
U.S. Government Money Fund seeks safety of principal, daily liquidity and
current income.
KINDS OF SECURITIES IN WHICH THE FUND INVESTS
As a matter of fundamental policy, at least 80% of the Fund's total assets will
at all times be maintained in U.S. Government securities and repurchase
agreements collateralized by such securities.
PRINCIPAL STRATEGIES
The Fund follows an operating policy, pursuant to a Securities and Exchange
Commission ("SEC") rule, designed to maintain a constant net asset value of
$1.00 per share by investing in U.S. Treasury bills, notes, bonds and other
obligations guaranteed by the full faith and credit of the U.S. Government.
All securities in which the Fund invests have remaining maturities of 397 days
or less at the date of purchase. The Fund maintains an average-weighted
portfolio maturity of 90 days or less.
PRINCIPAL RISKS
An investment in the Fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. There is no guarantee that the Fund can maintain a constant $1.00 per
share price. An investment in the Fund may lose money.
18 VAN ECK GLOBAL PROSPECTUS
<PAGE>
I. THE FUNDS / U.S. GOVERNMENT MONEY MARKET
- --------------------------------------------------------------------------------
U.S. Government Money Market Fund Expenses
- --------------------------------------------------------------------------------
This table shows certain fees and expenses you will incur as a Fund investor,
either directly or indirectly if you buy and hold shares.
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that the
Fund's operating expenses remain the same. Although your account cost may be
higher or lower, based upon these assumptions your cost would be as shown.
- --------------------------------------------------------------------------------
U.S. Government Money Fund
Shareholder Expenses (fees paid directly from your investment)
CLASS A
Maximum Sales Charge (imposed on purchases as
a percentage of offering price) 0.00%
Annual Fund Operating Expenses (Expenses that are deducted from Fund assets)
Management/Administration Fees 0.50%
Distribution (12b-1) Fees 0.25%
Other Expenses 0.40%
Total Annual Fund Operating Expenses 1.15%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Expense Example
What a $10,000 investment would actually cost
1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------------
Class A $117 $365 $633 $1,398
- --------------------------------------------------------------------------------
VAN ECK GLOBAL PROSPECTUS 19
<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
ASSET-BACKED SECURITIES
Funds Emerging Markets Vision Fund, Global Hard Assets Fund,
Global Leaders Fund
Definition Represent pools of consumer loans unrelated to
mortgages.
Risk Principal and interest payments depend on payment of the
underlying loans, though issuers may support
creditworthiness via letters of credit or other
instruments.
BORROWING
Funds Asia Dynasty Fund, Emerging Markets Vision Fund, Global
Hard Assets Fund, Global Leaders Fund, International
Investors Gold Fund
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. International Investors
Gold Fund 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 commercial banks or other institutional
lenders.
20 VAN ECK GLOBAL PROSPECTUS
<PAGE>
II. ADDITIONAL INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COLLATERALIZED MORTGAGE OBLIGATIONS (CMOS)
Funds Asia Dynasty Fund, Emerging Markets Vision Fund, Global
Hard Assets Fund, Global Leaders Fund
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.
DEBT SECURITIES
Funds Asia Dynasty Fund, Emerging Markets Vision Fund, Global
Hard Assets Fund, Global Leaders Fund, and U.S.
Government Money Fund
Definition Debt securities are usually thought of as bonds, but
debt may be issued in other forms of debentures or
obligations. When an issuer sells debt securities, it
sells them for a certain price, and for a certain term.
Over the term of the security, the issuer promises to
pay the buyer a certain rate of interest, then to repay
the principal at maturity. Debt securities are also
bought and sold in the "secondary market" -- that is,
they are traded by people other than their original
issuers.
Risk The market value of debt securities tends to go up when
interest rates fall, and go down when the rates rise.
Debt securities come in different qualities, as
established by ratings agencies such as S&P or Moody's.
Any debt security may default (fail to pay interest) or
fail (fail to repay principal at maturity). Low-quality
issues are considered more likely to default or fail
than high-quality issues. Some debt securities are
unrated. Their likely performance has to be evaluated by
a Fund Adviser.
VAN ECK GLOBAL PROSPECTUS 21
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Fund Policies:
Basic Risk Management Rules
- ----------------
Asia Dynasty Fund
Emerging Markets Vision Fund
Global Hard Assets Fund
Global Leaders Fund
U.S. Government Money Market Fund
1. U.S. Government Money Fund will not invest more than 10% and Asia Dynasty
Fund, Emerging Markets Vision Fund, Global Hard Assets Fund, and Global Leaders
Fund will not invest more than 15% of net assets in securities which are not
readily marketable.
DEFENSIVE INVESTING
Funds All except U.S. Government Money Fund
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.
DERIVATIVES
Funds All except U.S Government Money Fund
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.
22 VAN ECK GLOBAL PROSPECTUS
<PAGE>
II. ADDITIONAL INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DIRECT INVESTMENTS
Funds Asia Dynasty Fund, Emerging Markets Vision Fund, Global
Hard Assets Fund, Global Leaders Fund
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.
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 15% of assets in
direct investments.
EMERGING MARKETS SECURITIES
Funds All except U.S. Government Money Fund
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
2. Asia Dynasty Fund, Emerging Markets Vision Fund, Global Hard Assets Fund,
Global Leaders Fund, and U.S. Government Money 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, Emerging Markets Vision Fund, Global
Hard Assets Fund, and Global Leaders Fund may purchase more than 10% of any
non-voting class of securities. Asia Dynasty Fund, Emerging Markets Vision Fund
and Global Leaders Fund will not invest more than 25% of the value of their
total assets in any one industry.
3. The Funds will not invest more than 10% of their total assets in other
investment companies.
4. U.S. Government Money Fund may borrow money for temporary or emergency
purposes up to 10% of the value of its assets. If the Fund ever borrows more
than 5% of such assets, it may not buy securities for investment.
VAN ECK GLOBAL PROSPECTUS 23
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Fund Policies:
Basic Risk Management Rules
- ----------------------------
International Investors Gold
1. The Fund will not buy securities of other investment companies except in the
open market where no commissions or broker fees apply to a sponsor or dealer,
and then not in excess of 10% of assets (mergers or acquisitions excepted).
2. The Fund will not invest more than 5% of assets in companies with less than 3
years continuous operation.
FOREIGN SECURITIES
Funds All except U.S. Government Money Fund
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.
INDEXED COMMERCIAL PAPER
Funds Emerging Markets Vision Fund, Global Hard Assets Fund,
Global Leaders Fund
Definition These Funds, for hedging purposes only, invest in
commercial paper with the principal amount indexed to
the difference, up or down, in value between two foreign
currencies. The Funds segregate asset accounts with an
equivalent amount of cash, U.S. government securities,
or other highly liquid securities equal in value to this
commercial paper.
24 VAN ECK GLOBAL PROSPECTUS
<PAGE>
II. ADDITIONAL INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Risk Principal may be lost, but the potential for gains in
principal and interest may help the Funds cushion against the
potential decline of the U.S. dollar value of
foreign-denominated investments. At the same time, this
commercial paper provides an attractive money market rate of
return.
INDUSTRY CONCENTRATION
Funds International Investors Gold Fund
Definition The Fund will invest at least 65% of its assets in the
gold mining industry.
Risk Concentration of investments in a single industry may
make the Fund more volatile than funds which are more
diversified.
LOANS OF PORTFOLIO SECURITIES
Funds Asia Dynasty Fund, Emerging Markets Vision Fund, Global
Hard Assets Fund, Global Leaders Fund
Definition The Funds may lend their securities, up to one-third of
the value of their portfolios, or in the case of
Emerging Markets Vision Fund, one-half of the value of
its portfolio, 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.
LOW RATED DEBT SECURITIES
Funds Asia Dynasty Fund, Global Hard Assets Fund, Emerging
Markets Vision Fund
Definition Debt securities, foreign and domestic, rated "below
investment grade" by ratings services.
Risk These securities are also called "junk bonds." In the
market, they can behave somewhat like stocks, with
prices that can swing widely in response to the health
of their issuers and
VAN ECK GLOBAL PROSPECTUS 25
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
changes in interest rates. They also bear the risk of
untimely payment. By definition, they involve more risk
of default than do higher-rated issues.
NON-DIVERSIFICATION
Funds Global Hard Assets Fund, Global Leaders Fund,
International Investors Gold Fund
Definition Under a definition provided by the Investment Company
Act of 1940, non-diversified funds may invest in fewer
assets, or in larger proportions of the assets of single
companies or industries.
Risk Greater concentration of investments in non-diversified
funds may make those funds more volatile than
diversified funds.
PARTLY PAID SECURITIES
Funds All
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.
PRECIOUS METALS
Funds Global Hard Assets Fund, International Investors Gold
Fund
Definition Gold, silver, platinum and palladium in the form of
bullion and coins which have no numismatic (collectable)
value. There is a well-established world market for
precious metals.
Risk Precious metals prices can swing sharply in response to
cyclical economic conditions, political events or the
monetary policies of various countries. Under current
U.S. tax law, the Funds may not receive more than 10% of
their yearly income from selling
26 VAN ECK GLOBAL PROSPECTUS
<PAGE>
II. ADDITIONAL INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
precious metals or any other physical commodity. That
law may require a Fund, for example, to hold precious
metals when it would rather sell, or to sell other
securities when it would rather hold them -- both may
cause investment losses or lost opportunities for
profit. The Funds also incur storage costs for bullion
and coins.
REAL ESTATE SECURITIES
Funds Global Hard Assets Fund
Definition The Fund may not invest in real estate directly, but may
invest up to 50% of assets in real estate investment
trusts ("REITs") and other real estate industry
companies or companies with substantial real estate
investments.
Risk All general risks of real estate investing apply to
REITs (for example, illiquidity and volatile prices),
plus special risks of REITs in particular. See "Real
Estate Securities" in the SAI.
REPURCHASE AGREEMENTS
Funds All
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.
SHORT SALES
Funds Emerging Markets Vision Fund, Global Hard Assets Fund
Definition In a short sale, the Fund borrows an equity security
from a broker, then sells it. If the value of the
security goes down, the Fund can buy it back and return
it to the broker, making a profit.
VAN ECK GLOBAL PROSPECTUS 27
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Risk If the value of the security goes up, the Fund will
have to buy it back at a loss to make good on the
borrowing. The Fund is required to "cover" its short
sales with collateral by depositing liquid high-quality
securities in an account. (See the SAI for a complete
definition of this account's liability.) This account
cannot exceed 50% of the Fund's net assets.
WHEN-ISSUED DEBT SECURITIES
Funds Emerging Markets Vision Fund
Definition Debt securities issued at a fixed price and interest
rate, but delivered and paid for some time later.
Risk Principal and interest of a when-issued security may
vary during the waiting period so that its value, when
the Fund takes possession of it, may be different than
when the Fund committed to buy it. The Funds maintain
reserves of cash or high quality securities to offset
purchases of when-issued securities.
28 VAN ECK GLOBAL PROSPECTUS
<PAGE>
- --------------------------------------------------------------------------------
III. Shareholder Information
- --------------------------------------------------------------------------------
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 FUNDS. (SEE THE SAI FOR
ADDITIONAL INFORMATION).
1. HOW TO BUY, SELL, EXCHANGE OR TRANSFER SHARES
Through a Broker or Agent
We recommend that you use a broker or agent to buy, sell, exchange, or transfer
shares for you. The applicable sales charge will be the same, whether you buy
indirectly through a broker or agent or directly through the transfer agent.
Contact your broker or agent for details.
Through the Transfer Agent, DST Systems, Inc. (DST)
You may buy (purchase), sell (redeem), exchange, or transfer ownership of shares
directly through DST by mail or telephone, as stated below.
The Funds' mailing address at DST is:
Van Eck Global
P.O. Box 218407
Kansas City, MO 64121-8407
For overnight delivery:
Van Eck Global
210 W. 10th St., 8th Fl.
Kansas City, MO 64105-1802
To telephone the Funds at DST, call Van Eck's Account Assistance at
1-800-544-4653.
PURCHASE BY MAIL
To make an initial purchase, complete the Van Eck Account Application and mail
it with your check made payable to Van Eck Funds. Subsequent purchases can be
made by check with the remittance stub of your account statement. You cannot
make a purchase by telephone. We cannot accept third party checks, checks drawn
on a foreign bank, or checks not in U.S. Dollars. There are separate
applications for Van Eck retirement accounts (see "Retirement Plans" for
details). For further details, see the application or call Account Assistance.
TELEPHONE REDEMPTION-- PROCEEDS BY CHECK 1-800-345-8506
If your account has the optional Telephone Redemption Privilege, you can redeem
up to $50,000 per day. The redemption check must be payable to the registered
owner(s) at the address of record (which cannot have been changed within the
past 30 days). You automatically get the Telephone Redemption Privilege (for
eligible accounts) unless you specifically refuse it on your Account
Application, on broker/agent settlement instructions, or by written notice to
DST. All accounts are eligible for the privilege except those registered in
street, nominee, or corporate name and custodial accounts held by a financial
institution, including Van Eck sponsored retirement plans.
EXPEDITED REDEMPTION-- PROCEEDS BY WIRE 1-800-345-8506
If your account has the optional Expedited Redemption Privilege, you can redeem
a minimum of $1,000 or more per day by telephone or written request with the
proceeds wired to your designated bank account. This privilege must be
established in advance by Application. For further details, see the Application
or call Account Assistance.
VAN ECK GLOBAL PROSPECTUS 29
<PAGE>
WRITTEN REDEMPTIONS
Your written redemption (sale) request must include:
o Fund and account number.
o Number of shares or dollar amount to be redeemed, or a request to sell
"all shares."
o Signatures of all registered account holders, exactly as those names
appear on the account registration, including any additional documents
concerning authority and related matters in the case of estates, trusts,
guardianships, custodianships, partnerships and corporations, as requested
by DST.
o Special instructions, including bank wire information or special payee or
address.
A signature guarantee for each account holder will be required if:
o The redemption is for $50,000 or more.
o The redemption amount is wired.
o The redemption amount is paid to someone other than the registered owner.
o The redemption amount is sent to an address other than the address of
record.
o The address of record has been changed within the past 30 days.
Institutions eligible to provide signature guarantees include banks, brokerages,
trust companies, and some credit unions.
CHECK WRITING
If your account has the optional Redemption by Check Privilege, you can write
checks against your account for a minimum of $250 and a maximum of $5 million.
This privilege is only available to U.S. Government Money Fund shareholders and
must be established in advance by Application. For further details, see the
Application or call Account Assistance.
TELEPHONE EXCHANGE 1-800-345-8506
If your account has the optional Telephone Exchange Privilege, you can exchange
between Van Eck Funds and Van Eck/Chubb Funds of the same Class without any
additional sales charge. (Shares originally purchased into the U.S. Government
Money Fund, which paid no sales charge, may pay an initial sales charge the
first time they are exchanged into another Class A fund.)
Exchanges of Class B and C shares are exempt from the redemption sales charge.
All accounts are eligible except for those registered in street name and certain
custodial retirement accounts held by a financial institution other than Van
Eck. For further details regarding exchanges, please see the application,
"Market Timing Limits" and "Unauthorized Telephone Requests" below, or call
Account Assistance.
WRITTEN EXCHANGES
Written requests for exchange must include:
o The fund and account number to be exchanged out of.
o The fund to be exchanged into.
o Directions to exchange "all shares" or a specific number of shares or
dollar amount.
o Signatures of all registered account holders, exactly as those names
appear on the account registration, including any additional documents
concerning authority and related matters in the case of estates, trusts,
guardianships, custodianships, partnerships and corporations, as requested
by DST.
For further details regarding exchanges, please see the applicable information
in "Telephone Exchange."
TRANSFER OF OWNERSHIP
Requests must be in writing and provide the same information and legal
documentation necessary to redeem and establish an account, including the social
security or tax identification number of the new owner.
30 VAN ECK GLOBAL PROSPECTUS
<PAGE>
III. SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LIMITS AND RESTRICTIONS
Market Timing Limits
Van Eck has a policy of discouraging short-term trading, particularly by
market-timers, and may limit or reject purchase orders and exchanges at its
discretion. Shareholders are limited to six exchanges per calendar year.
Currently, limits are being waived for exchanges out of International Investors
Gold Fund and the U.S. Government Money Fund as long as Van Eck believes that
shareholders will not be materially disadvantaged. Although not generally
imposed, each Fund has the ability to redeem its shares "in kind" by making
payment in securities instead of dollars. For further details, contact Account
Assistance.
Unauthorized Telephone Requests
Like most financial organizations, Van Eck, the Funds and DST may only be liable
for losses resulting from unauthorized transactions if reasonable procedures
designed to verify the caller's identity and authority to act on the account are
not followed.
If you do not want to authorize the Telephone Exchange or Redemption privilege
on your eligible account, you must refuse it on the Account Application,
broker/agent settlement instructions, or by written notice to DST. Van Eck, the
Funds, and DST reserve the right to reject a telephone redemption, exchange, or
other request without prior notice either during or after the call. For further
details, contact Account Assistance.
AUTOMATIC SERVICES
Automatic Investment Plan
You may authorize DST to periodically withdraw a specified dollar amount from
your bank account and buy shares in your Fund account. For further details and
to request an Application, contact Account Assistance.
Automatic Exchange Plan
You may authorize DST to periodically exchange a specified dollar amount for
your account from one Fund to another Fund. The Plan is available to Class A
shares only. For further details and to request an Application, contact Account
Assistance.
Automatic Withdrawal Plan
You may authorize DST to periodically withdraw (redeem) a specified dollar
amount from your Fund account and mail a check to you for the proceeds. Your
Fund account must be valued at $10,000 or more at the current offering price to
establish the Plan. The Plan is available to Class A shares only. For further
details and to request an Application, contact Account Assistance.
MINIMUM PURCHASE AND ACCOUNT SIZE
An initial purchase of $1,000 and subsequent purchases of $100 dollars or more
are required for non-retirement accounts. There are no minimums for any
retirement or pension plan account, for any account using the Automatic
Investment Plan, or for any other periodic purchase program.
If the size of your account falls below 50 shares after the initial purchase,
each Fund reserves the right to redeem your shares after 30 days notice to you.
This does not apply to accounts exempt from purchase minimums as described
above.
HOW FUND SHARES ARE PRICED
The Funds buy or sell their shares at their net asset value, or NAV, per share
next determined after receipt of a purchase or redemption plus applicable sales
charge. The Funds calculate NAV every day the New York Stock Exchange (NYSE) is
open, as of the close of the NYSE, which is normally 4:00 p.m. Eastern Time.
There are some exceptions, including these:
o You may enter a buy or sell order when the NYSE is closed for weekends or
holidays. If that happens, your price will be the NAV calculated on the
next available open day of the NYSE.
VAN ECK GLOBAL PROSPECTUS 31
<PAGE>
o The Funds have certain securities which are listed on foreign exchanges
that trade on weekends or other days when the Fund does not price its
shares. As a result, the net asset value of the Funds' shares may change
on days when shareholders will not be able to purchase or redeem shares.
Except for the U.S. Government Money Fund, the Funds value their assets at fair
market value, when price quotes are available. Otherwise, the Funds' Board of
Trustees determines fair market value in good faith. The U.S. Government Money
Fund is valued at the amortized cost of its assets, no matter what the quoted
prices of the Fund's securities may be.
2. HOW TO CHOOSE A SHARE CLASS
Some Funds offer Class A, B, or C Shares. Separate share classes allow you to
choose the type of sales charge and 12b-1 fee schedule that is best for you.
Please note that no money market fund is available for exchange with Class B and
C Shares. Class B and C Shares automatically convert to Class A Shares eight
years after each individual purchase. You, with your broker or agent, should
review "Sales Charges," "Plan of Distribution (12b-1 Plan)," and the Fund's per
share expenses in "Chapter I. The Funds" and "Chapter IV. Financial Highlights"
in this prospectus before choosing a share class.
o Class A Initial sales charge at time of purchase.
o Class B Contingent Deferred Sales Charge (CDSC) at time of redemption. The
CDSC decreases yearly until it becomes zero in the seventh year.
o Class C Contingent Deferred Redemption Charge (CDRC) of 1% is charged on
all redemptions during the first 12 months after purchase.
32 VAN ECK GLOBAL PROSPECTUS
<PAGE>
III. SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
3. SALES CHARGES
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Class A Shares Sales Charges
Asia Dynasty Fund, Emerging Markets Vision Fund, Global Hard Assets Fund, Global
Leaders Fund, and International Investors Gold Fund
Sales Charge as a Percentage of
Dollar Amount of Purchase Offering Price Net Amount Invested Percentage to Brokers or Agents*
<S> <C> <C> <C>
Less than $25,000 5.75% 6.10% 5.00%
$25,000 to $50,000 5.00% 5.30% 4.25%
$50,000 to $100,000 4.50% 4.70% 3.90%
$100,000 to $250,000 3.00% 3.10% 2.60%
$250,000 to $500,000 2.50% 2.60% 2.20%
$500,000 to $1,000,000 2.00% 2.00% 1.75%
$1,000,000 and over None**
- --------------------------------------------------------------------------------------------------------------
</TABLE>
* Brokers or Agents who receive substantially all of the sales charge for
shares they sell may be deemed to be statutory underwriters.
** For any single purchase of $1 Million or more of Class A shares, the
Distributor may pay a finder's fee to eligible brokers and agents. For
details, contact the Distributor.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Class B Shares Sales Charges
Asia Dynasty Fund, Emerging Markets Vision Fund, Global Hard Assets Fund and
Global Leaders Fund
Shareholders time of redemption Contingent Deferred Sales Charge (CSDC) +
<S> <C>
During Year One 5.0% of the lesser of NAV or purchase price
During Year Two 4.0% of the lesser of NAV or purchase price
During Year Three 4.0% of the lesser of NAV or purchase price
During Year Four 3.0% of the lesser of NAV or purchase price
During Year Five 2.0% of the lesser of NAV or purchase price
During Year Six 1.0% of the lesser of NAV or purchase price
Thereafter None
- --------------------------------------------------------------------------------------------------------------
</TABLE>
Class B Broker/Agent Compensation: 4% of the amount purchased at time of
investment.
+ Shares purchased before April 30, 1997 remain subject to the CDSC schedule
in effect at the time of purchase. Shares will be redeemed in the
following order (1) shares not subject to the CDSC (dividend reinvestment,
etc.) (2) first in, first out.
VAN ECK GLOBAL PROSPECTUS 33
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class C Shares Sales Charges
Global Hard Assets Fund
Shareholders time of redemption Contingent Deferred Redemption Charge (CDRC) +
During Year One 1.0% of the lesser of NAV or purchase price
Thereafter None
- --------------------------------------------------------------------------------
Class C Broker/Agent Compensation: 1% (.75 of 1% distribution fee and .25 of 1%
service fee) of the amount purchased at time of investment.
+ Shares will be redeemed in the following order (1) shares not subject to the
CDRC (dividend reinvestment, etc.) (2) first in, first out.
U.S. Government Money Fund
There is no sales charge on purchases of the U.S. Government Money Fund.
34 VAN ECK GLOBAL PROSPECTUS
<PAGE>
III. SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REDUCED OR WAIVED SALES CHARGES
You may qualify for a reduced or waived sales charge as stated below, or under
other appropriate circumstances. You (or your broker or agent) must notify DST
or Van Eck at the time of each purchase or redemption whenever a reduced or
waived sales charge is applicable. The term "purchase" refers to a single
purchase by an individual (including spouse and children under age 21),
corporation, partnership, trustee, or other fiduciary for a single trust,
estate, or fiduciary account. The value of shares owned by an individual in
Class A, B, and C of each of the Van Eck Funds and Van Eck/Chubb Funds (except
for the U.S. Government Money Fund) may be combined for a reduced sales charge
in Class A shares only.
FOR CLASS A SHARES
Right of Accumulation
When you buy shares, the amount you purchase will be combined with the value, at
current offering price, of any existing Fund shares you own. This total will
determine the sales charge level you qualify for.
Combined Purchases
The combined amounts of your multiple purchases in the Funds on a single day
determines the sales charge level you qualify for.
Letter of Intent
If you plan to make purchases in the Funds within a 13 month period that total
an amount equal to a reduced sales charge level, you can establish a Letter of
Intent (LOI) for that amount. Under the LOI, your initial and subsequent
purchases during that period receive the sales charge level applicable to that
total amount. For escrow provisions and details, see the Application.
Group Purchases
If you are a member of a "qualified group," you may purchase shares of the Funds
at the reduced sales charge applicable to the group as a whole. A qualified
group (1) has more than 10 members, (2) has existed over six months, (3) has a
purpose other than acquiring fund shares at a discount, (4) and has satisfied
certain other criteria, including the use of the Automatic Investment Plan. For
details, contact the Distributor.
Persons Affiliated with Van Eck
Trustees, officers, and full-time employees (and their families) of the Funds,
Adviser or Distributor may buy without a sales charge. Also, employees (and
their spouses and children under age 21) of a brokerage firm or bank that has a
selling agreement with Van Eck, and other affiliates and agents, may buy without
a sales charge.
Investment Advisers, Financial Planners and Bank Trust Departments
Investment advisers, financial planners and bank trust departments that meet
certain requirements and are compensated by asset-based fees may buy without a
sales charge on behalf of their clients.
Foreign Financial Institutions
Certain foreign financial institutions that have agreements with Van Eck may buy
shares with a reduced or waived sales charge for their omnibus accounts on
behalf of foreign investors.
Institutional Retirement Programs
Certain financial institutions who have agreements with Van Eck may buy shares
without a sales charge for their omnibus accounts on behalf of investors in
retirement plans and deferred compensation plans other than IRAs.
Buy-back Privilege
You have the one-time right to reinvest proceeds of a redemption from a Class A
Fund into that Fund or another Class A Fund within 30 days without a sales
charge, excluding the U.S. Government Money Fund. Reinvestment into the same
Fund within 30 days is considered a "wash sale" by the IRS and cannot be
declared as a capital loss or gain for tax purposes.
Moving Assets from Another Mutual Fund Group
You may purchase shares without a sales charge with the
VAN ECK GLOBAL PROSPECTUS 35
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
proceeds of a redemption made within three months from another mutual fund group
not managed by Van Eck or its affiliates. The shares redeemed must have paid an
initial sales charge in a Class A fund. Also, the financial representative of
record must be the same on the Van Eck Fund account as for the other mutual fund
redeemed.
FOR CLASS B AND C SHARES
Death or Disability
The redemption sales charge may be waived upon (1) death or (2) disability as
defined by the Internal Revenue Code.
Certain Retirement Distributions
The redemption sales charge may be waived for lump sum or other distributions
from IRA, Keogh, and 403(b) accounts following retirement or at age 701/2. It is
also waived for distributions from qualified pension or profit sharing plans
after employment termination after age 55. In addition, it is waived for shares
redeemed as a tax-free return of an excess contribution.
36 VAN ECK GLOBAL PROSPECTUS
<PAGE>
III. SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. RETIREMENT PLANS
Fund shares may be invested in tax-advantaged retirement plans sponsored by Van
Eck or other financial organizations. Retirement plans sponsored by Van Eck use
State Street Bank and Trust Company (formerly known as Investors Fiduciary Trust
Company) as custodian and must receive investments directly by check or wire
using the appropriate Van Eck retirement plan application. Confirmed trades
through a broker or agent cannot be accepted. To obtain applications and helpful
information on Van Eck retirement plans, contact your broker or agent or Account
Assistance.
Retirement Plans Sponsored by Van Eck:
IRA
Roth IRA
Education IRA
SEP IRA
403(b)(7)
Qualified (Pension and Profit Sharing) Plans
5. TAXES
TAXATION OF DIVIDEND OR CAPITAL GAIN DISTRIBUTIONS YOU RECEIVE
For tax-reportable accounts, distributions are normally taxable even if they are
reinvested. Distributions of dividends and short-term capital gains are taxed as
ordinary income. Distributions of long-term capital gains are taxed at capital
gain rates.
TAXATION OF SHARES YOU SELL
For tax-reportable accounts, when you redeem your shares you may incur a capital
gain or loss on the proceeds. The amount of gain or loss, if any, is the
difference between the amount you paid for your shares (including reinvested
distributions) and the amount you receive from your redemption. Be sure to keep
your regular statements; they contain the information necessary to calculate the
capital gain or loss. If you redeem shares from an eligible account, you will
receive an Average Cost Statement in February to assist you in your tax
preparations.
An exchange of shares from one Fund to another will be treated as a sale of Fund
shares. It is therefore a taxable event.
NON-RESIDENT ALIENS
Distributions of dividends and short-term capital gains, if any, made to
non-resident aliens are subject to a 30% withholding tax (or lower tax treaty
rates for certain countries). The Internal Revenue Service considers these
distributions U.S. source income. Currently, the Funds are not required to
withhold tax from long-term capital gains or redemption proceeds.
VAN ECK GLOBAL PROSPECTUS 37
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
6. DIVIDENDS AND CAPITAL GAINS
If declared, dividend and capital gain distributions are generally paid on the
last business day of the month of declaration. See your tax adviser for details.
Short-term capital gains are treated like dividends and follow that schedule.
Occasionally, a distribution may be made outside of the normal schedule.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Dividend and Capital Gain Schedule
Fund Dividends and Short-Term Long-Term
Capital Gains Capital Gains
<S> <C> <C>
Asia Dynasty Fund June/December December
Emerging Markets Vision Fund June/December December
Global Hard Assets Fund June/December December
Global Leaders Fund June/December December
International Investors Gold Fund March/June/September/December December
U.S. Government Money Fund Daily Accrual, paid monthly December
- -------------------------------------------------------------------------------------------------------
</TABLE>
Dividend and Capital Gain Reinvestment Plan Dividends and/or capital gains are
automatically reinvested into your account without a sales charge, unless you
elect a cash payment. You may elect cash payment either on your original Account
Application, or by calling Account Assistance at 1-800-544-4653.
Divmove
You can have your cash dividends from a Class A Fund automatically invested in
another Class A fund. Dividends are invested on the payable date, without a
sales charge. For details and an Application, call Account Assistance.
38 VAN ECK GLOBAL PROSPECTUS
<PAGE>
III. SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
7. MANAGEMENT OF THE FUNDS
<TABLE>
<S> <C> <C> <C>
=============================== ==================================
INVESTMENT ADVISER SUB-ADVISER
AND ADMINISTRATOR Fiduciary International, Inc.,
Van Eck Associates Corporation, Two World Trade Center,
99 Park Avenue New York, NY 10048, serves as
New York, NY 10016, <------ sub-investment adviser to
manages investment Global Leaders Fund. FII is an
operations of the Funds. indirect subsidiary of
=============================== Fiduciary Trust Company
| International, a New York
| State chartered bank.
| ==================================
|
V ==================================
INDEPENDENT AUDITORS
=============================== Ernst & Young LLP,
THE TRUST 787 South Avenue,
"The Trust" is a New York, NY 10016,
Massachusetts provides audit services,
business trust consisting consultation and advice with
of the Van Eck <-------- respect to financial
Funds listed in this information in the Trust's
prospectus ("Funds"). The filings with the Securities
Board of Trustees and Exchange Commission,
manages the Funds' consults with the Trust on
business and affairs. accounting and financial
=============================== reporting matters and prepares
/ | \ the Trust's tax returns.
/ | \ ==================================
/ | \
/ | \
V | V
============================================= | ===========================================
DISTRIBUTOR | TRANSFER AGENT
Van Eck Securities Corporation, 99 Park Ave., | DST Systems, Inc., 210 West 10th Street,
New York, NY 10016 distributes the Funds | 8th Floor, Kansas City, MO 64105,
and is wholly owned by the Adviser. | serves as the Funds' transfer agent.
============================================= | ===========================================
V
=========================================
CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
holds Fund securities and settles trades.
=========================================
</TABLE>
VAN ECK GLOBAL PROSPECTUS 39
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INFORMATION ABOUT FUND MANAGEMENT
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.
Fees paid to the Adviser: Asia Dynasty Fund and Global Leaders Fund each pay the
Adviser a monthly fee at the rate of 0.75% of average daily net assets. Emerging
Markets Vision Fund and Global Hard Assets Fund pay the Adviser a monthly fee at
the rate of 1% of average daily net assets, which includes accounting and
administrative services provided to the Fund. International Investors Gold Fund
pays the Adviser a monthly fee at the rate of 0.75 of 1% of the first $500
million of the average daily net assets of the Fund; 0.65 of 1% of the next $250
million of the average daily net assets and 0.50 of 1% of the average daily net
assets in excess of $750 million. U.S. Government Money Fund pays the Advisor a
monthly fee at the annual rate of 0.50 of 1% of the first $500 million of
average daily net assets, 0.40 of 1% of the next $250 million and .375 of 1% of
average daily net assets in excess of $750 million.
The Adviser also performs accounting and administrative services for Asia
Dynasty, Global Leaders, and International Investors Gold Funds. For these
services, the Adviser is paid a monthly fee at the rate of .25% per year of the
average daily net assets on the first $500 million in Asia Dynasty and Global
Leaders Fund, or at the rate of .25% per year on the first $750 in International
Investors Gold Fund, and .20% per year of the average daily net assets in excess
of $750 million in International Investors Gold Fund.
Sub-investment Adviser: Fiduciary International Inc. (FII), Two World Trade
Center, New York, NY 10048, serves as sub-investment adviser to the Global
Leaders Fund and manages its investment operations. FII is a wholly owned
subsidiary of Fiduciary Investment Corporation, which is in turn a wholly owned
subsidiary of Fiduciary Trust Company International. The Adviser pays FII a
monthly fee of .50% per year of the average daily net assets of the Fund.
Portfolio Managers
Asia Dynasty Fund, Emerging Markets Vision Fund: David A. Semple, David M.
Hulme.
Mr. Semple is an Investment Director of Van Eck. He is also co-portfolio
manager of another mutual fund advised by the Adviser. He joined Van Eck in
1998, and has been in the investing business for 10 years as a manager and
analyst. Mr. Hulme is an Investment Director of Van Eck. Mr. Hulme is
co-portfolio manager of the Asia Dynasty Fund and the Emerging Markets Vision
Fund, and co-portfolio manager of another mutual fund advised by the Adviser. He
joined Van Eck in 1998, and has been in the investing business for 6 years as a
manager and analyst.
Global Leaders Fund: Sheila Coco, Anne Tatlock, William Y. Yun, Joshua A.
Rosenthal.
Ms. Coco, Ms. Tatlock, Mr. Yun and Mr. Rosenthal are employed by FII, which
serves as sub-adviser to the Fund. FII is an indirect subsidiary of Fiduciary
Trust Company International ("FTCI"). Ms. Coco joined Fiduciary Trust Company in
1980. She has 24 years of experience in investing. Ms. Tatlock joined FTCI in
1984. She is its President. Mr. Yun joined Fll in 1992. He is an Executive Vice
President. He has 10 years of investment experience. Mr. Rosenthal joined Fll in
1997. He is a Senior Vice President. He has seven years of investment
experience.
Global Hard Assets Fund: Derek S. van Eck.
Mr. van Eck is Director of Global Investments and President of the Adviser. Mr.
van Eck serves as a Trustee and officer of the Trust and a Trustee, officer
and/or portfolio manager of other mutual funds advised or sub-advised by the
Adviser. He has 14 years of experience in investing as a manager and analyst.
International Investors Gold Fund: is managed by a team of advisers, analysts
and strategists.
U.S. Government Money Fund: Gregory F. Krenzer.
Mr. Krenzer serves as a research analyst for the Adviser specializing in global
fixed income securities and is the co-portfolio manager of another Fund advised
by Van Eck. He joined Van Eck in 1994 and has 6 years of experience in the
investment business as an analyst.
40 VAN ECK GLOBAL PROSPECTUS
<PAGE>
III. SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Plan of Distribution (12b-1 Plan)
Each of the Funds has adopted a Plan of Distribution pursuant to Rule 12b-1
under the Act. Of the amounts expended under the plan for the fiscal year ended
December 31, 1999 for all Funds, approximately 71% was paid to Brokers and
Agents who sold shares or serviced accounts of Fund shareholders. The remaining
29% was retained by the Distributor to pay expenses such as printing and mailing
prospectuses and sales material. Because these fees are paid out of the Fund's
assets on an on-going basis over time, these fees may cost you more than paying
other types of sales charges.
For a complete description of the Plan of Distribution, please see "Plan of
Distribution" in the SAI.
- --------------------------------------------------------------------------------
Van Eck Funds Annual 12b-1 Schedule
expressed in basis points (bps)*
FEE TO FUND PAYMENT
TO DEALER
Asia Dynasty Fund-A 50 bps 25 bps
Asia Dynasty Fund-B 100 bps 25 bps
Emerging Markets Vision Fund-A 50 bps 25 bps
Emerging Markets Vision Fund-B 100 bps 25 bps
Global Hard Assets Fund-A 50 bps 25 bps
Global Hard Assets Fund-B 100 bps 25 bps
Global Hard Assets Fund-C 100 bps 100 bps**
Global Leaders Fund-A 50 bps 25 bps
Global Leaders Fund-B 100 bps 25 bps
International Investors
Gold Fund-A 25 bps 25 bps
U.S. Government Money Fund 25 bps 25 bps
- --------------------------------------------------------------------------------
* A basis point (bp) is a unit of measure in the financial industry. One bp
equals .01 of 1% (1% = 100 bps).
** Class C payment to brokers or agents begins to accrue after the 12th month
following the purchase trade date. Each purchase must age that long or
there is no payment.
The Trust
For more information on the Trust, the Trustees and the officers of the Trust,
see "The Trust" and "Trustees and Officers" in the SAI.
Expenses
Each Fund bears all expenses of its operations other than those incurred by the
Adviser or its affiliate under the Advisory Agreement with the Trust. Many of
these expenses are shown in tables in Chapter I, "The Funds," or in Chapter IV,
"Financial Highlights." For a more complete description of Fund expenses, please
see "Expenses" in the SAI.
VAN ECK GLOBAL PROSPECTUS 41
<PAGE>
IV. Financial Highlights
The financial highlights tables are intended to help you understand
the Fund's 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 Ernst & Young LLP+, 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,
1999 1998 1997 1996 1995
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year $ 7.80 $ 7.82 $ 13.21 $ 12.40 $ 12.13
- --------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) (0.11)(c) (0.01) (0.28) (0.20) (0.02)
Net Gain (Loss) on
Investments (both Realized and Unrealized) 9.35 (0.01) (3.82) 1.01 0.40
- --------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 9.24 (0.02) (4.10) 0.81 0.38
- --------------------------------------------------------------------------------------------------------------------------
LESS DIVIDENDS AND DISTRIBUTIONS
From Dividends from
Net Investment Income -- -- -- -- (0.09)
From Distributions from
Capital Gains (2.44) -- (1.15) -- --
From Tax Return of Capital -- -- (0.14) -- (0.02)
- --------------------------------------------------------------------------------------------------------------------------
Total Dividends & Distributions (2.44) -- (1.29) -- (0.11)
- --------------------------------------------------------------------------------------------------------------------------
Net Asset Value,
End of Year $ 14.60 $ 7.80 $ 7.82 $ 13.21 $ 12.40
- --------------------------------------------------------------------------------------------------------------------------
Total Return (a) 118.46% (0.26%) (32.10%) 6.53% 3.13%
- --------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Period (000) $ 31,385 $ 10,685 $ 12,873 $ 44,351 $ 64,275
Ratio of Gross Expenses
to Average Net Assets 2.82% 3.13% 2.38% 2.42% 2.03%
Ratio of Net Expenses
to Average Net Assets 2.82% 2.43%(b) 2.38% 2.42% 2.03%
Ratio of Net Investment Income (Loss)
to Average Net Assets (1.03%) (0.09%) (0.76%) (0.73%) (0.08%)
Portfolio Turnover Rate 172.18% 121.96% 200.45% 52.99% 57.06%
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the year, reinvestment of dividends and
distributions at net asset value during the period 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.
(c) Based on average shares outstanding.
+ Ernst & Young LLP are auditors for the Fund for the year ended December 31,
1999; PricewaterhouseCoopers LLP were auditors for the Fund for 1998, 1997, 1996
and 1995.
42 VAN ECK GLOBAL PROSPECTUS
<PAGE>
IV. FINANCIAL HIGHLIGHTS
The financial highlights tables are intended to help you understand
the Fund's 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 Ernst & Young 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 B Share outstanding throughout each year:
Year Ended December 31,
1999 1998 1997 1996 1995
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year $ 7.54 $ 7.63 $ 13.08 $ 12.33 $ 12.09
- --------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) (0.24)(c) (0.07) (0.30) (0.24) (0.08)
Net Gains (Loss) on
Investments (both Realized and Unrealized) 9.04 (0.02) (3.86) 0.99 0.40
- --------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 8.80 (0.09) (4.16) 0.75 0.32
- --------------------------------------------------------------------------------------------------------------------------
LESS DIVIDENDS AND DISTRIBUTIONS
From Dividends from
Net Investment Income -- -- -- -- (0.06)
From Distributions from
Capital Gains (2.44) -- (1.15) -- --
From Tax Return of Capital -- -- (0.14) -- (0.02)
- --------------------------------------------------------------------------------------------------------------------------
Total Dividends & Distributions (2.44) -- (1.29) -- (0.08)
- --------------------------------------------------------------------------------------------------------------------------
Net Asset Value,
End of Year $ 13.90 $ 7.54 $ 7.63 $ 13.08 $ 12.33
- --------------------------------------------------------------------------------------------------------------------------
Total Return (a) 116.71% (1.18%) (32.87%) 6.08% 2.65%
- --------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Year (000) $ 12,019 $ 4,942 $ 6,914 $ 20,296 $ 27,234
Ratio of Gross Expenses
to Average Net Assets 3.89% 3.83% 3.00% 2.86% 2.41%
Ratio of Net Expenses
to Average Net Assets 3.89% 3.14%(b) 3.00% 2.86% 2.41%
Ratio of Net Investment Income (Loss)
to Average Net Assets (2.21%) 0.79% (1.36%) (1.14%) (0.52%)
Portfolio Turnover Rate 172.18% 121.96% 200.45% 52.99% 57.06%
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the year, reinvestment of dividends and
distributions at net asset value during the period 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.
(c) Based on average shares outstanding.
+ Ernst & Young LLP are auditors for the Fund for the year ended December 31,
1999; PricewaterhouseCoopers LLP were auditors for the Fund for 1998, 1997, 1996
and 1995.
VAN ECK GLOBAL PROSPECTUS 43
<PAGE>
The financial highlights tables are intended to help you understand
the Fund's 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 Ernst & Young LLP+, whose report, along with the
Fund's financial statements, are included in the Fund's annual
report, which is available upon request.
2. GLOBAL HARD ASSETS FUND
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Financial Highlights
For a Class A Share outstanding throughout each period:
Year Ended December 31,
1999 1998 1997 1996 1995
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year $ 10.34 $ 15.50 $ 14.42 $ 10.68 $ 9.41
- ---------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) 0.07 0.10 0.05 0.15 0.32(c)
Net Gain (Loss) on
Investments (both Realized and Unrealized) 1.65 (5.09) 2.01 4.70 1.57
- ---------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 1.72 (4.99) 2.06 4.85 1.89
- ---------------------------------------------------------------------------------------------------------------------
LESS DIVIDENDS AND DISTRIBUTIONS
From Dividends from
Net Investment Income (0.01) (0.15) (0.02) (0.14) (0.62)
From Distributions from
Capital Gains -- (0.02) (0.96) (0.95) --
From Tax Return of Capital (0.04) -- -- (0.02) --
- ---------------------------------------------------------------------------------------------------------------------
Total Dividends & Distributions (0.05) (0.17) (0.98) (1.11) (0.62)
- ---------------------------------------------------------------------------------------------------------------------
Net Asset Value,
End of Period $ 12.01 $ 10.34 $ 15.50 $ 14.42 $ 10.68
- ---------------------------------------------------------------------------------------------------------------------
Total Return (a) 16.64% (32.25%) 14.29% 45.61% 20.09%
- ---------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Period (000) $ 17,757 $ 22,969 $ 61,341 $ 27,226 $ 3,820
Ratio of Gross Expenses
to Average Net Assets 2.89% 2.11% 2.00% 2.63% 4.05%
Ratio of Net Expenses
to Average Net Assets (b) 2.00% 2.00% 1.97% 0.72% 0.00%
Ratio of Net Investment Income (Loss)
to Average Net Assets 0.49% 0.58% 0.36% 1.45% 3.08%
Portfolio Turnover Rate 195.00% 167.79% 118.10% 163.91% 179.33%
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the year, reinvestment of dividends and
distributions at net asset value during the period 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, directed brokerage and/or
Advisory fee waiver arrangement.
(c) Based on average shares outstanding.
+ Ernst & Young LLP are auditors for the Fund for the year ended December 31,
1999; PricewaterhouseCoopers LLP were auditors for the Fund for 1998, 1997, 1996
and 1995.
44 VAN ECK GLOBAL PROSPECTUS
<PAGE>
IV. FINANCIAL HIGHLIGHTS
The financial highlights tables are intended to help you understand the Fund's
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 Ernst & Young LLP+, whose report, along with the
Fund's financial statements are included in the Fund's annual report, which is
available upon request.
2. GLOBAL HARD ASSETS FUND
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Financial Highlights
For a Class B Share outstanding throughout each period: For the period
Year Ended December 31, April 24, 1996(a)
1999 1998 1997 Dec. 31, 1996
-----------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year $ 10.37 $ 15.60 $ 14.50 $ 12.55
- ----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) (0.03) 0.01 (0.01) 0.11
Net Gain (Loss) on
Investments (both Realized and Unrealized) 1.66 (5.08) 2.00 2.95
- ----------------------------------------------------------------------------------------------------------
Total from Investment Operations 1.63 (5.07) 1.99 3.06
- ----------------------------------------------------------------------------------------------------------
LESS DIVIDENDS AND DISTRIBUTIONS
From Dividends from
Net Investment Income -- (0.14) -- (0.14)
From Distributions from
Capital Gains -- (0.02) (0.89) (0.95)
From Tax Return of Capital -- -- -- (0.02)
- ----------------------------------------------------------------------------------------------------------
Total Dividends & Distributions -- (0.16) (0.89) (1.11)
- ----------------------------------------------------------------------------------------------------------
Net Asset Value,
End of Period $ 12.00 $ 10.37 $ 15.60 $ 14.50
- ----------------------------------------------------------------------------------------------------------
Total Return (b) 15.72% (32.55%) 13.72% 24.55%
- ----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Year (000) $ 5,029 $ 5,580 $ 10,541 $ 1,806
Ratio of Gross Expenses
to Average Net Assets 3.79% 2.81% 2.73% 3.27%(d)
Ratio of Net Expenses
to Average Net Assets (c) 2.71% 2.50% 2.50% 1.64%(d)
Ratio of Net Investment Income (Loss)
to Average Net Assets (0.23%) 0.12% (0.13%) 0.53%(d)
Portfolio Turnover Rate 195.00% 167.79% 118.10% 163.91%
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(a) Commencement of operations.
(b) Total return is calculated by assuming that an initial investment made at
net asset value at the beginning of the period, reinvestment of dividends and
distributions at net asset value during the period and a redemption on the last
day of the period. A sales charge is not reflected in the calculation of total
return. Total return periods of less than one year are not annualized.
(c) After expenses reduced by a custodian fee, directed brokerage and/or
Advisory fee waiver arrangement.
(d) Annualized.
+ Ernst & Young LLP are auditors for the Fund for the year ended December 31,
1999; PricewaterhouseCoopers LLP were auditors for the Fund for 1998, 1997, 1996
and 1995.
VAN ECK GLOBAL PROSPECTUS 45
<PAGE>
The financial highlights tables are intended to help you understand
the Fund's 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 Ernst & Young LLP+, whose report, along with the
Fund's financial statements, are included in the Fund's annual
report, which is available upon request.
2. GLOBAL HARD ASSETS FUND
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Financial Highlights
For a Class C Share outstanding throughout each period:
Year Ended December 31,
1999 1998 1997 1996 1995
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 10.40 $ 15.64 $ 14.52 $ 10.76 $ 9.41
- ----------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) (0.03) 0.01 (0.01) 0.11 0.34
Net Gain (Loss) on
Investments (both Realized and Unrealized) 1.67 (5.09) 2.00 4.73 1.63
- ----------------------------------------------------------------------------------------------------------------
Total from Investment Operations 1.64 (5.08) 1.99 4.84 1.97
- ----------------------------------------------------------------------------------------------------------------
LESS DIVIDENDS AND DISTRIBUTIONS
From Dividends from
Net Investment Income -- (0.14) -- (0.11) (0.62)
From Distributions from
Capital Gains -- (0.02) (0.87) (0.95) --
From Tax Return of Capital -- -- -- (0.02) --
- ----------------------------------------------------------------------------------------------------------------
Total Dividends & Distributions -- (0.16) (0.87) (1.08) (0.62)
- ----------------------------------------------------------------------------------------------------------------
Net Asset Value,
End of Year $ 12.04 $ 10.40 $ 15.64 $ 14.52 $ 10.76
- ----------------------------------------------------------------------------------------------------------------
Total Return (a) 15.77% (32.53%) 13.71% 45.18% 20.94%
- ----------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Year (000) $ 3,223 $ 4,011 $ 8,698 $ 1,935 $ 181
Ratio of Gross Expenses
to Average Net Assets 4.15% 3.00% 2.94% 6.02% 37.88%
Ratio of Net Expenses
to Average Net Assets (b) 2.71% 2.50% 2.50% 1.31% 0.00%
Ratio of Net Investment Income (Loss)
to Average Net Assets (0.22%) 0.11% (0.15%) 0.84% 3.30%
Portfolio Turnover Rate 195.00% 167.79% 118.10% 163.91% 179.33%
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Total return is calculated by assuming that an initial investment made at
net asset value at the beginning of the period, reinvestment of dividends and
distributions at net asset value during the period and a redemption on the last
day of the period. A sales charge is not reflected in the calculation of total
return.
(b) After expenses reduced by a custodian fee, directed brokerage and/or
Advisory fee waiver arrangement.
+ Ernst & Young LLP are auditors for the Fund for the year ended December 31,
1999; PricewaterhouseCoopers LLP were auditors for the Fund for 1998, 1997, 1996
and 1995.
46 VAN ECK GLOBAL PROSPECTUS
<PAGE>
IV. FINANCIAL HIGHLIGHTS
The financial highlights tables are intended to help you understand
the Fund's 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 Ernst & Young LLP+, whose report, along with the
Fund's financial statements are included in the Fund's annual
report, which is available upon request.
3. GLOBAL LEADERS FUND
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Financial Highlights
For a Class A Share outstanding throughout each year:
Year Ended December 31,
1999 1998 1997 1996 1995
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year $ 10.78 $ 10.38 $ 10.37 $ 10.31 $ 9.07
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) (0.06) 0.02 0.10 0.12 0.07(a)
Net Gain (Loss) on
Investments (both Realized and Unrealized) 3.59 2.07 1.43 1.15 1.31
- ---------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 3.53 2.09 1.53 1.27 1.38
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DIVIDENDS AND DISTRIBUTIONS
From Dividends from
Net Investment Income -- 0.00 (0.08)(d) (0.11) (0.14)
From Distributions from
Capital Gains (0.82) (1.61) (1.43) (1.10) --
From Tax Return of Capital -- (0.08) (0.01) -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Total Dividends & Distributions (0.82) (1.69) (1.52) (1.21) (0.14)
- ---------------------------------------------------------------------------------------------------------------------------------
Net Asset Value,
End of Year $ 13.49 $ 10.78 $ 10.38 '$ 10.37 $ 10.31
- ---------------------------------------------------------------------------------------------------------------------------------
Total Return (b) 32.83% 20.65% 14.77% 12.28% 15.30%
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Year (000) $ 33,070 $ 27,461 $ 24,630 $ 29,331 $ 30,632
Ratio of Gross Expenses
to Average Net Assets 2.20% 2.32% 2.45% 2.54% 2.69%
Ratio of Net Expenses
to Average Net Assets 2.00%(c) 2.00%(c) 2.00%(c) 2.17%(c) 2.69%
Ratio of Net Investment Income (Loss)
to Average Net Assets (0.48%) 0.85% 0.85% 1.05% 0.68%
Portfolio Turnover Rate 86.14% 87.79% 78.07% 114.30% 196.69%
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Based on average shares outstanding.
(b) 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 return.
(c) After expenses reduced by a custodian fee, directed brokerage or Advisory
fee waiver arrangement.
(d) Net of foreign taxes withheld (to be included in income and claimed as a tax
credit on deduction by the shareholder for federal income tax purposes) of $0.01
for 1997.
+ Ernst & Young LLP are auditors for the Fund for the year ended December 31,
1999; PricewaterhouseCoopers LLP were auditors for the Fund for 1998, 1997, 1996
and 1995.
VAN ECK GLOBAL PROSPECTUS 47
<PAGE>
The financial highlights tables are intended to help you understand
the Fund's 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 Ernst & Young LLP+, along with the Fund's
financial statements are included in the Fund's annual report, which
is available upon request.
3. GLOBAL LEADERS FUND
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Financial Highlights
For a Class B Share outstanding throughout each year:
Year Ended December 31,
1999 1998 1997 1996 1995
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year $ 10.67 $ 10.31 $ 10.32 $ 10.28 $ 9.02
- ----------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) (0.12) 0.00 0.04 0.06 0.01
Net Gain (Loss) on
Investments (both Realized and Unrealized) 3.56 2.02 1.43 1.14 1.28
- ----------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 3.44 2.02 1.47 1.20 1.29
- ----------------------------------------------------------------------------------------------------------------------------
LESS DIVIDENDS AND DISTRIBUTIONS
From Dividends from
Net Investment Income -- 0.00 (0.03)(c) (0.06) (0.03)
From Distributions from
Capital Gains (0.80) (1.61) (1.45) (1.10) --
From Tax Return of Capital -- (0.05) -- -- --
- ----------------------------------------------------------------------------------------------------------------------------
Total Dividends & Distributions (0.80) (1.66) (1.48) (1.16) (0.03)
- ----------------------------------------------------------------------------------------------------------------------------
Net Asset Value,
End of Year $ 13.31 $ 10.67 $ 10.31 $ 10.32 $ 10.28
- ----------------------------------------------------------------------------------------------------------------------------
Total Return (a) 32.27% 20.07% 14.26% 11.49% 14.54%
- ----------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY DATA
Assets, End of Year (000) $ 6,442 $ 6,039 $ 5,055 $ 4,932 $ 6,151
Ratio of Gross Expenses
to Average Net Assets 3.21% 3.25% 2.51% 3.19% 3.20%
Ratio of Net Expenses
to Average Net Assets 2.50%(b) 2.50%(b) 2.50%(b) 2.71%(b) 3.20%
Ratio of Net Investment Income (Loss)
to Average Net Assets (0.94%) 0.36% 0.36% 0.51% 0.14%
Portfolio Turnover Rate 86.14% 87.79% 78.07% 114.30% 196.69%
- ----------------------------------------------------------------------------------------------------------------------------
</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 return.
(b) After expenses reduced by a custodian fee, directed brokerage or Advisory
fee waiver arrangement.
(c) Net of foreign taxes withheld (to be included in income and claimed as a tax
credit on deduction by the shareholder for federal income tax purposes) of $0.01
for 1997.
+ Ernst & Young LLP are auditors for the Fund for the year ended December 31,
1999; PricewaterhouseCoopers LLP were auditors for the Fund for 1998, 1997, 1996
and 1995.
48 VAN ECK GLOBAL PROSPECTUS
<PAGE>
IV. FINANCIAL HIGHLIGHTS
The financial highlights tables are intended to help you understand
the Fund's 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 Ernst & Young LLP+, along with the Fund's
financial statements are included in the Fund's annual report, which
is available upon request.
4. INTERNATIONAL INVESTORS GOLD FUND
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Financial Highlights
For a Class A Share outstanding throughout each year:
Year Ended December 31,
1999 1998 1997 1996 1995
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year $ 6.59 $ 7.54 $ 11.90 $ 13.35 $ 15.21
- ----------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.03 0.06 0.09 0.05 0.08
Net Gain (Loss) on
Investments (both Realized and Unrealized) (0.84) (0.95) (4.36) (1.29) (1.44)
- ----------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations (0.81) (0.89) (4.27) (1.24) (1.36)
- ----------------------------------------------------------------------------------------------------------------------------------
LESS DIVIDENDS AND DISTRIBUTIONS
From Dividends from
Net Investment Income (0.05) (0.06) (0.09) (0.07) (0.10)
From Distributions from
Capital Gains -- -- -- (0.14) (0.38)
From Tax Returns of Capital -- -- -- -- (0.02)
- ----------------------------------------------------------------------------------------------------------------------------------
Total Dividends & Distributions (0.05) (0.06) (0.09) (0.21) (0.50)
- ----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value,
End of Year $ 5.73 $ 6.59 $ 7.54 $ 11.90 $ 13.35
- ----------------------------------------------------------------------------------------------------------------------------------
Total Return (a) (12.37)% (11.87%) (36.00%) (9.37%) (8.93%)
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Year (000) $ 169,045 $ 238,639 $ 232,944 $ 409,331 $ 519,795
Ratio of Gross Expenses
to Average Net Assets 2.09% 1.78% 1.52% 1.43% 1.42%
Ratio of Net Expenses
to Average Net Assets 2.08%(b) 1.76%(b) 1.47%(b) 1.43% 1.42%
Ratio of Net Investment Income (Loss)
to Average Net Assets 0.46% 0.99% 0.90% 0.36% 0.55%
Portfolio Turnover Rate 94.67% 86.65% 19.99% 12.45% 4.10%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Total return is calculated by assuming an initial investment 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 return.
(b) After expenses by custodian fees and directed brokerage arrangement.
+ Ernst & Young LLP are auditors for the Fund for the year ended December 31,
1999; PricewaterhouseCoopers LLP were auditors for the Fund for 1998, 1997, 1996
and 1995.
VAN ECK GLOBAL PROSPECTUS 49
<PAGE>
The financial highlights tables are intended to help you understand
the Fund's 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 Ernst & Young LLP+, whose report, along with the
Fund's financial statements are included in the Fund's annual
report, which is available upon request.
5. U.S. GOVERNMENT MONEY FUND
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
Financial Highlights
For a share outstanding throughout each year:
Year Ended December 31,
1999 1998 1997 1996 1995
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.03 0.04 0.04 0.04 0.05
LESS DISTRIBUTIONS
From Net Investment Income (0.03) (0.04) (0.04) (0.04) (0.05)
- ------------------------------------------------------------------------------------------------------------
Net Asset Value,
End of Year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------------------------------------------------------------------------------------
Total Return 3.43% 3.88% 3.77% 3.85% 4.56%
- ------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Year(000) $ 97,443 $ 47,222 $ 76,650 $ 107,698 $ 70,130
Ratio of Expenses
to Average Net Assets 1.15% 1.20% 1.28% 1.23% 1.25%
Ratio of Net Investment Income
to Average Net Assets 3.68% 3.89% 3.91% 4.02% 4.45%
- ------------------------------------------------------------------------------------------------------------
</TABLE>
+ Ernst & Young LLP are auditors for the Fund for the year ended December 31,
1999; PricewaterhouseCoopers LLP were auditors for the Fund for 1998, 1997, 1996
and 1995.
50 VAN ECK GLOBAL PROSPECTUS
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
This page Intentionally
Left Blank.
<PAGE>
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 1-202-942-8090, 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. You may also
make an electronic request of the SEC for documents at the following
e-mail address: [email protected].
o The Funds' annual report (other than U.S. Government Money Fund) includes
a discussion of market conditions and investment strategies that
significantly affected the Funds' performances last year.
VAN ECK GLOBAL [LOGO]
Transfer Agent: DST Systems, Inc.
P.O. Box 218407
Kansas City, Missouri 64121-8407
1-800-544-4653
SEC REGISTRATION NUMBER: 811-04297
VEM 513503
<PAGE>
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Van Eck Global
- --------------------------------------------------------------------------------
PROSPECTUS
May 1, 2000
Van Eck Natural Resources 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...
^ Call Van Eck at 1-800-826-1115, or visit the Van Eck website at
www.vaneck.com.
^ Go to the Public Reference Room of the Securities and Exchange Commission.
^ Call the SEC at 1-202-942-8090, 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.
^ Download documents from the SEC's website at www.sec.gov. You may also make
an electronic request of the SEC for documents at the following e-mail
address: [email protected].
^ The Fund's annual report includes a discussion of market conditions and
investment strategies that significantly affected the Fund's performance
last year.
[LOGO]
Transfer Agent: DST
Systems, Inc.
P.O. Box 218407
Kansas City, Missouri 64121-8407
1-800-544-4653
SEC REGISTRATION NUMBER: 811-04297
VEM 513505
<PAGE>
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Table of Contents
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I. NATURAL RESOURCES FUND 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.
II. ADDITIONAL INVESTMENT STRATEGIES 5
OTHER INVESTMENTS, INVESTMENT POLICIES, INVESTMENT TECHNIQUES AND RISKS.
III. SHAREHOLDER INFORMATION 10
HOW TO BUY, SELL, EXCHANGE, OR TRANSFER SHARES; AUTOMATIC SERVICES; MINIMUM
PURCHASE AND ACCOUNT SIZE; YOUR PRICE PER SHARE; SALES CHARGES; RETIREMENT
PLANS; DIVIDENDS AND CAPITAL GAINS; TAXES; AND MANAGEMENT OF THE FUND.
IV. FINANCIAL HIGHLIGHTS 19
TABLES THAT SHOW PER SHARE EARNINGS, EXPENSES, AND PERFORMANCE OF THE FUND.
<PAGE>
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I. NATURAL RESOURCES 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.
OBJECTIVE
Natural Resources Fund seeks long-term capital appreciation by investing in
equity and debt securities of companies that explore, develop, produce or
distribute gold and other strategic or precious metals, minerals, oil, natural
gas and coal. Although current income may result from these investments, income
is not an investment objective.
PRINCIPAL STRATEGIES
Under normal conditions, the Fund will invest at least 65% of total assets in
securities of gold mining (greater than 50% of revenues from gold mining) and
natural resource companies. The Fund may invest up to 35% of assets in: common
stock of companies not in gold mining or natural resources, corporate debt
securities, obligations issued or guaranteed by U.S. or foreign governments, and
repurchase agreements. In addition, the Fund may invest up to 10% of assets in
gold, silver, platinum and palladium bullion and gold or silver coins.
PRINCIPAL RISKS
An investment in the Fund should be considered part of an overall investing
program, not a complete investment in itself. An investment in the Fund may lose
money. The Fund is subject to gold risk, foreign securities risk, precious
metals risk, non-diversification risk, leverage risk and interest rate risk.
2 VAN ECK NATURAL RESOURCES FUND PROSPECTUS
<PAGE>
I. THE FUND / NATURAL RESOURCES
================================================================================
Natural Resources Fund Performance
================================================================================
This chart illustrates the historic variability of risk of the Fund from year to
year for a share of Natural Resources Fund (before sales charges). Sales loads
or account fees are not reflected; if these amounts were reflected, returns
would be less than those shown. This chart describes past performance only, and
should not be understood as a prediction of future results.
During the period covered, the Fund's highest performing quarter (ended 6/30/93)
was 35.90%. The lowest performing quarter (ended 12/31/97) was -28.45%.
- --------------------------------------------------------------------------------
Natural Resources Fund
Class A Shares Annual Total Returns (%)
As of December 31,
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL]
'90 -26.36
'91 - 4.08
'92 - 4.50
'93 78.09
'94 -15.62
'95 4.30
'96 2.51
'97 -39.34
'98 -12.39
'99 -10.20
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
Natural Resources Fund
1-Year, 5-Year, and 10-Year Annualized Performance
Plus a Comparison to FT Gold Mines Index and the S&P 500 Index*
As of December 31, 1999
1 Year 5 Year 10 Year
- --------------------------------------------------------------------------------
Class A Shares -15.48% -13.63% -6.94%
S&P 500 Index 21.04% 28.56% 18.21%
FT Gold Mines Index - 0.66% -14.01% -11.32%
- --------------------------------------------------------------------------------
* The S&P 500 Index and the Financial Times Gold Mines Index are unmanaged
indices and include the reinvestment of all dividends, but do not reflect
the payment of transaction costs, advisory fees or expenses that are
associated with an investment in the Fund. The Indices' performance is not
illustrative of the Fund's performance. Indices are not securities in which
investments can be made.
The Financial Times Gold Mines Index is a market capitalization-weighted
global index of gold mining shares.
The Standard & Poor's 500 Index consists of 500 widely held common stocks,
covering four broad sectors (industrials, utilities, financials and
transportation). It is a market-value weighted index (stock price times
shares outstanding), with each stock affecting the index in proportion to
its market value.
VAN ECK NATURAL RESOURCES FUND PROSPECTUS 3
<PAGE>
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Natural Resources Fund Expenses
================================================================================
This table shows certain fees and expenses you will incur as a Fund investor,
either directly or indirectly if you buy and hold shares.
- --------------------------------------------------------------------------------
Natural Resources Fund
Shareholder Expenses (fees paid directly from your investment)
CLASS A
Maximum Sales Charge (imposed on purchases as
a percentage of offering price) 5.75%
Annual Fund Operating Expenses (Expenses that are deducted from Fund assets)
Management 0.75%
Administration Fees 0.25%
Distribution (12b-1) Fees 0.50%
Other Expenses 0.70%
Total Annual Fund Operating Expenses* 2.52%
- --------------------------------------------------------------------------------
* After expense reimbursement from brokers: 2.51%
This Example is intended to help you compare the cost of investing
in the Fund with the cost of investing in other mutual funds. The example
assumes that you invest $10,000 in the Fund for the time periods indicated and
then redeem all of your shares at the end of those periods. The Example also
assumes that your investment has a 5% return each year and that the Fund's
operating expenses remain the same. Although your account cost may be higher or
lower, based upon these assumptions your cost would be as shown.
- --------------------------------------------------------------------------------
Expense Example
What a $10,000 investment would actually cost
1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------------
Class A $815 $1,314 $1,838 $3,266
- --------------------------------------------------------------------------------
4 VAN ECK NATURAL RESOURCES FUND PROSPECTUS
<PAGE>
================================================================================
II. Additional Investment Strategies
================================================================================
OTHER INVESTMENTS, INVESTMENT POLICIES, INVESTMENT TECHNIQUES AND RISKS.
MARKET RISK
An investment in the Fund involves "market risk" -- the risk that securities
prices may go up or down.
OTHER INVESTMENT TECHNIQUES AND RISK
BORROWING
Definition The Natural Resources Fund may borrow up to 50% of net assets in
emergencies. The Fund must maintain assets equal to 300% of
borrowings, and must sell securities to maintain that margin, even
if the sale hurts the Fund's 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 Fund expects to borrow only via
negotiated loan agreements with commercial banks or other
institutional lenders.
DEBT SECURITIES
Definition Debt securities are usually thought of as bonds, but debt may be
issued in other forms of debentures or obligations. When an issuer
sells debt securities, it sells them for a certain price, and for
a certain term. Over the term of the security, the issuer promises
to pay the buyer a certain rate of interest, then to repay the
principal at maturity. Debt securities are also bought and sold in
the "secondary market" -- that is, they are traded by people other
than their original issuers.
Risk The market value of debt securities tends to go up when interest
rates fall, and go down when the rates rise. Debt securities come
in different qualities, as established by ratings agencies such as
S&P or Moody's. Any debt security may default (fail to pay
interest) or fail (fail to repay principal at maturity).
Low-quality issues are considered more likely to default or fail
than high-quality issues. Some debt securities are unrated. Their
likely performance has to be evaluated by a Fund Adviser.
VAN ECK NATURAL RESOURCES FUND PROSPECTUS 5
<PAGE>
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================================================================================
Fund Policies:
Basic Risk Management
Rules
- --------------------------------------------------------------------------------
1. Natural Resources Fund will not invest more than 10% of net assets in
securities which are not readily marketable.
2. Natural Resources 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.
Natural Resources Fund may purchase more than 10% of any non-voting class of
securities.
3. The Fund will not invest more than 10% of its total assets in other
investment companies.
DEFENSIVE INVESTING
Definition A deliberate, temporary shift in portfolio strategy which may be
undertaken when markets start behaving in volatile or unusual
ways. The 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,
the Fund may have all of its assets invested in a single country
or currency.
Risk "Opportunity cost" -- i.e., when the Fund has invested defensively
in low-risk, low-return securities, it may miss an opportunity for
profit in its normal investing areas. The Fund may not achieve its
investment objective during periods of defensive investing.
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 Fund uses
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 Fund also invests 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 the 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 Fund
uses, and of their risks, please see the Statement of Additional
Information.
6 VAN ECK NATURAL RESOURCES FUND PROSPECTUS
<PAGE>
II. ADDITIONAL INVESTMENT STRATEGIES
================================================================================
================================================================================
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.
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 the Fund invests
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 Fund invests only in those Russian companies whose
registrars have contracted to allow the Fund's Russian
sub-custodian to inspect share registers and to obtain extracts of
VAN ECK NATURAL RESOURCES FUND PROSPECTUS 7
<PAGE>
================================================================================
================================================================================
share registers through regular audits. These procedures may
reduce the risk of loss, but there can be no assurance that they
will be effective.
NON-DIVERSIFICATION
Definition Under a definition provided by the Investment Company Act of 1940,
non-diversified funds may invest in fewer assets, or in larger
proportions of the assets of single companies or industries.
Risk Greater concentration of investments in non-diversified funds may
make those funds more volatile than diversified funds.
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
the Fund finishes paying for it, the Fund will still owe the
payments, but may find it hard to sell.
PRECIOUS METALS
Definition Gold, silver, platinum and palladium in the form of bullion and
coins which have no numismatic (collectable) value. There is a
well-established world market for precious metals.
Risk Precious metals prices can swing sharply in response to cyclical
economic conditions, political events or the monetary policies of
various countries. Under current U.S. tax law, the Fund may not
receive more than 10% of its yearly income from selling precious
metals or any other physical commodity. That law may require the
Fund, for example, to hold precious metals when it would rather
sell, or to sell other securities when it would rather hold them
-- both may cause investment losses or lost opportunities for
profit. The Fund also incurs storage costs for bullion and coins.
8 VAN ECK NATURAL RESOURCES FUND PROSPECTUS
<PAGE>
================================================================================
================================================================================
REPURCHASE AGREEMENTS
Definition In a repurchase agreement, the 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 Fund enters 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.
VAN ECK NATURAL RESOURCES FUND PROSPECTUS 9
<PAGE>
================================================================================
III. SHAREHOLDER INFORMATION
================================================================================
HOW TO BUY, SELL, EXCHANGE, OR TRANSFER SHARES; AUTOMATIC SERVICES; MINIMUM
PURCHASE AND ACCOUNT SIZE; YOUR PRICE PER SHARE; SALES CHARGES; RETIREMENT
PLANS; DIVIDENDS AND CAPITAL GAINS; TAXES AND MANAGEMENT OF THE FUNDS. (SEE THE
SAI FOR ADDITIONAL INFORMATION).
1. HOW TO BUY, SELL, EXCHANGE, OR TRANSFER SHARES
Through a Broker or Agent
We recommend that you use a broker or agent to buy, sell, exchange, or transfer
shares for you. The applicable sales charge will be the same, whether you buy
indirectly through a broker or agent or directly through the transfer agent.
Contact your broker or agent for details.
Through the Transfer Agent, DST Systems, Inc. (DST)
You may buy (purchase), sell (redeem), exchange, or transfer ownership of shares
directly through DST by mail or telephone, as stated below.
The Fund's mailing address at DST is:
Van Eck Global
P.O. Box 218407
Kansas City, MO 64121-8407
For overnight delivery:
Van Eck Global
210 W. 10th St., 8th Fl.
Kansas City, MO 64105-1802
To telephone the Fund at DST, call Van Eck's Account Assistance at
1-800-544-4653.
PURCHASE BY MAIL
To make an initial purchase, complete the Van Eck Account Application and mail
it with your check made payable to Van Eck Funds. Subsequent purchases can be
made by check with the remittance stub of your account statement. You cannot
make a purchase by telephone. We cannot accept third party checks, checks drawn
on a foreign bank or checks not in U.S. Dollars. There are separate applications
for Van Eck retirement accounts (see "Retirement Plans" for details). For
further details, see the application or call Account Assistance.
TELEPHONE REDEMPTION--PROCEEDS BY CHECK 1-800-345-8506
If your account has the optional Telephone Redemption Privilege, you can redeem
up to $50,000 per day. The redemption check must be payable to the registered
owner(s) at the address of record (which cannot have been changed within the
past 30 days). You automatically get the Telephone Redemption Privilege (for
eligible accounts) unless you specifically refuse it on your Account
Application, on broker/agent settlement instructions, or by written notice to
DST. All accounts are eligible for the privilege except those registered in
street, nominee, or corporate name and custodial accounts held by a financial
institution, including Van Eck sponsored retirement plans.
EXPEDITED REDEMPTION--PROCEEDS BY WIRE 1-800-345-8506
If your account has the optional Expedited Redemption Privilege, you can redeem
a minimum of $1,000 or more per day by telephone or written request with the
proceeds wired to your designated bank account. This privilege must be
established in advance by Application. For further details, see the Application
or call Account Assistance.
WRITTEN REDEMPTIONS
Your written redemption (sale) request must include:
^ Fund and account number
^ Number of shares or dollar amount to be redeemed, or a request to sell "all
shares."
10 VAN ECK NATURAL RESOURCES FUND PROSPECTUS
<PAGE>
III. SHAREHOLDER INFORMATION
================================================================================
================================================================================
^ Signatures of all registered account holders, exactly as those names appear
on the account registration, including any additional documents concerning
authority and related matters in the case of estates, trusts,
guardianships, custodianships, partnerships and corporations, as requested
by DST.
^ Special instructions, including bank wire information or special payee or
address.
A signature guarantee for each account holder will be required if:
^ The redemption is for $50,000 or more.
^ The redemption amount is wired.
^ The redemption amount is paid to someone other than the registered owner.
^ The redemption amount is sent to an address other than the address of
record.
^ The address of record has been changed within the past 30 days.
Institutions eligible to provide signature guarantees include banks, brokerages,
trust companies, and some credit unions.
TELEPHONE EXCHANGE 1-800-345-8506
If your account has the optional Telephone Exchange Privilege, you can exchange
between Van Eck Funds and Van Eck/Chubb Funds of the same Class without any
additional sales charge.
All accounts are eligible except for those registered in street name and certain
custodial retirement accounts held by a financial institution other than Van
Eck. For further details regarding exchanges, please see the application,
"Market Timing Limits" and "Unauthorized Telephone Requests" below, or call
Account Assistance.
WRITTEN EXCHANGES
Written requests for exchange must include:
^ The fund and account number to be exchanged out of.
^ The fund to be exchanged into.
^ Directions to exchange "all shares" or a specific number of shares or
dollar amount.
^ Signatures of all registered account holders, exactly as those names appear
on the account registration, including any additional documents concerning
authority and related matters in the case of estates, trusts,
guardianships, custodianships, partnerships and corporations, as requested
by DST.
For further details regarding exchanges, please see the applicable information
in "Telephone Exchange."
TRANSFER OF OWNERSHIP
Requests must be in writing and provide the same information and legal
documentation necessary to redeem and establish an account, including the social
security or tax identification number of the new owner.
VAN ECK NATURAL RESOURCES FUND PROSPECTUS 11
<PAGE>
================================================================================
================================================================================
LIMITS AND RESTRICTIONS
Market Timing Limits
Van Eck has a policy of discouraging short-term trading, particularly by
market-timers, and may limit or reject purchase orders and exchanges at its
discretion. Shareholders are limited to six exchanges per calendar year.
Although not generally imposed, the Fund has the ability to redeem its shares
"in kind" by making payment in securities instead of dollars. For further
details, contact Account Assistance.
Unauthorized Telephone Requests
Like most financial organizations, Van Eck, the Fund and DST may only be liable
for losses resulting from unauthorized transactions if reasonable procedures
designed to verify the caller's identity and authority to act on the account are
not followed.
If you do not want to authorize the Telephone Exchange or Redemption privilege
on your eligible account, you must refuse it on the Account Application,
broker/agent settlement instructions, or by written notice to DST. Van Eck, the
Fund, and DST reserve the right to reject a telephone redemption, exchange, or
other request without prior notice either during or after the call. For further
details, contact Account Assistance.
AUTOMATIC SERVICES
Automatic Investment Plan
You may authorize DST to periodically withdraw a specified dollar amount from
your bank account and buy shares in your Fund account. For further details and
to request an Application, contact Account Assistance.
Automatic Exchange Plan
You may authorize DST to periodically exchange a specified dollar amount for
your account from one Fund to another Fund. The Plan is available to Class A
shares only. For further details and to request an Application, contact Account
Assistance.
Automatic Withdrawal Plan
You may authorize DST to periodically withdraw (redeem) a specified dollar
amount from your Fund account and mail a check to you for the proceeds. Your
Fund account must be valued at $10,000 or more at the current offering price to
establish the Plan. The Plan is available to Class A shares only. For further
details and to request an Application, contact Account Assistance.
MINIMUM PURCHASE AND ACCOUNT SIZE
An initial purchase of $1,000 and subsequent purchases of $100 dollars or more
are required for non-retirement accounts. There are no minimums for any
retirement or pension plan account, for any account using the Automatic
Investment Plan, or for any other periodic purchase program.
If the size of your account falls below 50 shares after the initial purchase,
the Fund reserves the right to redeem your shares after 30 days notice to you.
This does not apply to accounts exempt from purchase minimums as described
above.
HOW FUND SHARES ARE PRICED
The Fund buys or sells its shares at their net asset value, or NAV, per share.
The Fund calculates NAV every day the New York Stock Exchange (NYSE) is open, as
of the close of the NYSE, which is normally 4:00 p.m. Eastern Time. There are
some exceptions, including these:
^ You may enter a buy or sell order when the NYSE is closed for weekends or
holidays. If that happens, your price will be the NAV calculated on the
next available open day of the NYSE.
^ The Fund has certain securities which are listed on foreign exchanges that
trade on weekends or other days when the Fund does not price its shares. As
a result, the net asset value of the Fund's shares may change on days when
shareholders will not be able to purchase or redeem shares.
The Fund values its assets at fair market value, when price quotes are
available. Otherwise, the Fund's Board of Trustees determines fair market value
in good faith.
12 VAN ECK NATURAL RESOURCES FUND PROSPECTUS
<PAGE>
III. SHAREHOLDER INFORMATION
================================================================================
================================================================================
2. SALES CHARGES
- --------------------------------------------------------------------------------
Class A Shares Sales Charges
Sales Charge as a Percentage of
Dollar Amount Offering Net Amount Percentage to
of Purchase Price Invested Brokers or Agents*
Less than $25,000 5.75% 6.10% 5.00%
$25,000 to $50,000 5.00% 5.30% 4.25%
$50,000 to $100,000 4.50% 4.70% 3.90%
$100,000 to $250,000 3.00% 3.10% 2.60%
$250,000 to $500,000 2.50% 2.60% 2.20%
$500,000 to $1,000,000 2.00% 2.00% 1.75%
$1,000,000 and over None**
- --------------------------------------------------------------------------------
* Brokers or Agents who receive substantially all of the sales charge for
shares they sell may be deemed to be statutory underwriters.
** For any single purchase of $1 Million or more of Class A shares, the
Distributor may pay a finder's fee to eligible brokers and agents.
For details, contact the Distributor.
VAN ECK NATURAL RESOURCES FUND PROSPECTUS 13
<PAGE>
================================================================================
================================================================================
REDUCED OR WAIVED SALES CHARGES
You may qualify for a reduced or waived sales charge as stated below, or under
other appropriate circumstances. You (or your broker or agent) must notify DST
or Van Eck at the time of each purchase or redemption whenever a reduced or
waived sales charge is applicable. The term "purchase" refers to a single
purchase by an individual (including spouse and children under age 21),
corporation, partnership, trustee, or other fiduciary for a single trust,
estate, or fiduciary account. The value of shares owned by an individual in
Class A , B and C of each of the Van Eck Funds and Van Eck/Chubb Fund (except
for the U.S. Government Money Fund.) may be combined for a reduced sales charge
in Class A shares only.
FOR CLASS A SHARES
Right of Accumulation
When you buy shares, the amount you purchase will be combined with the value, at
current offering price, of any existing Fund shares you own. This total will
determine the sales charge level you qualify for.
Combined Purchases
The combined amounts of your multiple purchases in the Fund on a single day
determines the sales charge level you qualify for.
Letter of Intent
If you plan to make purchases in the Fund within a 13 month period that total an
amount equal to a reduced sales charge level, you can establish a Letter of
Intent (LOI) for that amount. Under the LOI, your initial and subsequent
purchases during that period receive the sales charge level applicable to that
total amount. For escrow provisions and details, see the Application.
Group Purchases
If you are a member of a "qualified group," you may purchase shares of the Fund
at the reduced sales charge applicable to the group as a whole. A qualified
group (1) has more than 10 members, (2) has existed over six months, (3) has a
purpose other than acquiring fund shares at a discount, (4) and has satisfied
certain other criteria, including the use of the Automatic Investment Plan. For
details, contact the Distributor.
Persons Affiliated with Van Eck
Trustees, officers, and full-time employees (and their families) of the Fund,
Adviser or Distributor may buy without a sales charge. Also, employees (and
their spouses and children under age 21) of a brokerage firm or bank that has a
selling agreement with Van Eck, and other affiliates and agents, may buy without
a sales charge.
Investment Advisers, Financial Planners and Bank Trust Departments
Investment advisers, financial planners and bank trust departments that meet
certain requirements and are compensated by asset-based fees may buy without a
sales charge on behalf of their clients.
Foreign Financial Institutions
Certain foreign financial institutions that have agreements with Van Eck may buy
shares with a reduced or waived sales charge for their omnibus accounts on
behalf of foreign investors.
Institutional Retirement Programs
Certain financial institutions who have agreements with Van Eck may buy shares
without a sales charge for their omnibus accounts on behalf of investors in
retirement plans and deferred compensation plans other than IRAs.
Buy-back Privilege
You have the one-time right to reinvest proceeds of a redemption from a Class A
Fund into that Fund or another Class A Fund within 30 days without a sales
charge, excluding the U.S. Government Money Fund. Reinvestment into the same
Fund within 30 days is considered a "wash sale" by the IRS and cannot be
declared as a capital loss or gain for tax purposes.
Moving Assets from Another Mutual Fund Group
You may purchase shares without a sales charge with the proceeds of a redemption
made within three months from another mutual fund group not managed by Van Eck
or its affiliates. The shares redeemed must have paid an initial
14 VAN ECK NATURAL RESOURCES FUND PROSPECTUS
<PAGE>
III. SHAREHOLDER INFORMATION
================================================================================
================================================================================
sales charge in a Class A Fund. Also, the financial representative of record
must be the same on the Van Eck Fund account as for the other mutual fund
redeemed.
3. RETIREMENT PLANS
Fund shares may be invested in tax-advantaged retirement plans sponsored by Van
Eck or other financial organizations. Retirement plans sponsored by Van Eck use
State Street Bank and Trust Company ("SSB"), formerly known as Investors
Fiduciary Trust Company, as custodian and must receive investments directly by
check or wire using the appropriate Van Eck retirement plan application.
Confirmed trades through a broker or agent cannot be accepted. To obtain
applications and helpful information on Van Eck retirement plans, contact your
broker or agent or Account Assistance.
Retirement Plans Sponsored by Van Eck:
IRA
Roth IRA
Education IRA
SEP IRA
403(b)(7)
Qualified (Pension and Profit Sharing) Plans
4. TAXES
TAXATION OF DIVIDEND OR CAPITAL GAIN DISTRIBUTIONS YOU RECEIVE
For tax-reportable accounts, distributions are normally taxable even if they are
reinvested. Distributions of dividends and short-term capital gains are taxed as
ordinary income. Distributions of long-term capital gains are taxed at capital
gain rates.
TAXATION OF SHARES YOU SELL
For tax-reportable accounts, when you redeem your shares you may incur a capital
gain or loss on the proceeds. The amount of gain or loss, if any, is the
difference between the amount you paid for your shares (including reinvested
distributions) and the amount you receive from your redemption. Be sure to keep
your regular statements; they contain the information necessary to calculate the
capital gain or loss. If you redeem shares from an eligible account, you will
receive an Average Cost Statement in February to assist you in your tax
preparations.
An exchange of shares from one Fund to another will be treated as a sale of Fund
shares. It is therefore a taxable event.
NON-RESIDENT ALIENS
Distributions of dividends and short-term capital gains, if any, made to
non-resident aliens are subject to a 30% withholding tax (or lower tax treaty
rates for certain countries). The Internal Revenue Service considers these
distributions U.S. source income. Currently, the Fund is not required to
withhold tax from long-term capital gains or redemption proceeds.
VAN ECK NATURAL RESOURCES FUND PROSPECTUS 15
<PAGE>
================================================================================
================================================================================
5. DIVIDENDS AND CAPITAL GAINS
If declared, dividend and capital gain distributions are generally paid on the
last business day of the month of declaration. See your tax adviser for details.
Short-term capital gains are treated like dividends and follow that schedule.
Occasionally, a distribution may be made outside of the normal schedule.
- --------------------------------------------------------------------------------
Dividend and Capital Gain Schedule
Fund Dividends and Short-Term Long-Term
Capital Gains Capital Gains
Natural Resources Fund-A June/December December
- --------------------------------------------------------------------------------
Dividend and Capital Gain Reinvestment Plan
Dividends and/or capital gains are automatically reinvested into your account
without a sales charge, unless you elect a cash payment. You may elect cash
payment either on your original Account Application, or by calling Account
Assistance at 1-800-544-4653.
Divmove
You can have your cash dividends from a Class A Fund automatically invested in
another Class A Fund. Dividends are invested on the payable date, without a
sales charge. For details and an Application, call Account Assistance.
16 VAN ECK NATURAL RESOURCES FUND PROSPECTUS
<PAGE>
III. SHAREHOLDER INFORMATION
================================================================================
================================================================================
6. MANAGEMENT OF THE FUND
===============================
INVESTMENT ADVISER
AND ADMINISTRATOR
Van Eck Associates Corporation,
99 Park Avenue,
New York, NY 10016,
manages investment
operations of the Fund.
===============================
=========================
THE TRUST
"The Trust" is a
Massachusetts
business trust consisting
of the Van Eck
Fund listed in this
prospectus ("Fund"). The
Board of Trustees
manages the Fund's
business and affairs.
=========================
===============================
INDEPENDENT AUDITORS
Ernst & Young LLP,
787 South Avenue,
New York, NY 10016,
provides audit services,
consultation and advice with
respect to financial
information in the Trust's
filings with the Securities
and Exchange Commission,
consults with the Trust on
accounting and financial
reporting matters and prepares
the Trust's tax returns.
===============================
========================================
DISTRIBUTOR
Van Eck Securities Corporation,
99 Park Avenue,
New York, NY 10016 distributes the Fund
and is wholly owned by the Adviser.
========================================
========================================
TRANSFER AGENT
DST Systems, Inc., 210 West 10th Street,
8th Floor, Kansas City, MO 64105,
serves as the Fund's transfer agent.
========================================
===================================
CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
holds Fund securities and settles
trades.
===================================
VAN ECK NATURAL RESOURCES FUND PROSPECTUS 17
<PAGE>
================================================================================
================================================================================
INFORMATION ABOUT FUND MANAGEMENT
Investment Adviser
Van Eck Associates Corporation, 99 Park Avenue, New York, NY 10016, (the
"Adviser") serves as investment adviser to the Fund. 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.
Fees paid to the Adviser
Natural Resources Fund pays the Adviser a monthly fee at the rate of 0.75 of 1%
of the first $500 million of the average daily net assets of the Fund; 0.65 of
1% of the next $250 million of the average daily net assets and 0.50 of 1% of
the average daily net assets in excess of $750 million.
The Adviser also performs accounting and administrative services for the Natural
Resources Fund. For these services, the Adviser is paid a monthly fee at the
rate of .25% per year of the average daily net assets on the first $750 million,
and .20% per year of the average daily net assets in excess of $750 million in
the Natural Resources Fund.
Portfolio Managers
Natural Resources Fund is managed by a team of advisers, analysts and
strategists.
Plan of Distribution (12b-1 Plan)
The Fund has adopted a Plan of Distribution pursuant to Rule 12b-1 under the
Act. Of the amounts expended under the plan for the fiscal year ended December
31, 1999 for the Fund, approximately 71% was paid to Brokers and Agents who sold
shares or serviced accounts of Fund shareholders. The remaining 29% was retained
by the Distributor to pay expenses such as printing and mailing prospectuses and
sales material. Because these fees are paid out of the Fund's assets on an
on-going basis over time, these fees may cost you more than paying other types
of sales charges.
For a complete description of the Plan of Distribution, please see "Plan of
Distribution" in the SAI.
- --------------------------------------------------------------------------------
Annual 12b-1 Schedule
expressed in basis points (bps)*
FEE TO FUND PAYMENT
TO DEALER
Natural Resources Fund-A 25 bps 25 bps
- --------------------------------------------------------------------------------
* A basis point (bp) is a unit of measure in the financial industry. One bp
equals .01 of 1% (1% = 100 bps).
The Trust
For more information on the Trust, the Trustees and the officers of the Trust,
see "The Trust" and "Trustees and Officers" in the SAI.
Expenses
The Fund bears all expenses of its operations other than those incurred by the
Adviser or its affiliate under the Advisory Agreement with the Trust. Many of
these expenses are shown in tables in Chapter I, "The Fund," or in Chapter IV,
"Financial Highlights." For a more complete description of Fund expenses, please
see "Expenses" in the SAI.
18 VAN ECK NATURAL RESOURCES FUND PROSPECTUS
<PAGE>
IV. Financial highlights
The financial highlights table is intended to help you understand the Fund's
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 Ernst & Young LLP+, along with the Fund's
financial statements are included in the Fund's annual report, which is
available upon receipt.
<TABLE>
<CAPTION>
NATURAL RESOURCES FUND
- ----------------------------------------------------------------------------------------------------------------------------
Financial Highlights
For a Class A Share outstanding throughout each year:
Year Ended December 31,
1999 1998 1997 1996 1995
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year $3.04 $3.47 $5.72 $5.58 $5.35
- -----------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) (0.03) (0.04) (0.04) (0.06) (0.03)
Net Gain (Loss) on
Investments (both Realized and Unrealized) (0.28) (0.39) (2.21) 0.20 0.26
- -----------------------------------------------------------------------------------------------------------------------
Total from Investment Operations (0.31) (0.43) (2.25) 0.14 0.23
- -----------------------------------------------------------------------------------------------------------------------
Net Asset Value,
End of Year $2.73 $3.04 $3.47 $5.72 $5.58
- -----------------------------------------------------------------------------------------------------------------------
Total Return (a) (10.20)% (12.39%) (39.34%) 2.51% 4.30%
- -----------------------------------------------------------------------------------------------------------------------
ratios/supplementary data
Net Assets, End of Year (000) $39,389 $53,397 $66,151 $132,298 $155,974
Ratio of Gross Expenses
to Average Net Assets 2.52% 2.24% 1.87% 1.71% 1.81%
Ratio of Net Expenses
to Average Net Assets 2.51%(b) 2.21%(b) 1.87% 1.71% 1.81%
Ratio of Net Investment (Loss)
to Average Net Assets (0.84%) (0.98%) (0.57%) (0.75%) (0.44%)
Portfolio Turnover Rate 95.44% 79.99% 32.46% 12.95% 6.16%
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Total return is calculated by assuming an initial investment at net asset
value at the beginning of the year and a redemption on the last day of the year.
A sales charge is not reflected in calculation of total return.
(b) After expenses reduced by a custodian fee and directed brokerage
arrangement.
+ Ernst & Young LLP are auditors for the Fund for the year ended December 31,
1999; PricewaterhouseCoopers LLP were auditors for the Fund for 1998, 1997, 1996
and 1995.
VAN ECK NATURAL RESOURCES FUND PROSPECTUS 19
<PAGE>
VAN ECK FUNDS
99 Park Avenue, New York, N.Y. 10016
Shareholder Services: Toll Free (800) 544-4653
www.vaneck.com
Van Eck Funds (the "Trust") is a mutual fund consisting of seven separate
series: Asia Dynasty Fund (Class A and B), Emerging Markets Vision Fund (Class A
and B), Global Leaders Fund (Class A and B), Global Hard Assets Fund (Class A, B
and C), Natural Resources Fund (Class A), International Investors Gold Fund
(Class A), and U.S. Government Money Fund (the "Funds").
TABLE OF CONTENTS
Page
General Information .................................................... 1
Investment Objectives And Policies ..................................... 1
Risk Factors ........................................................... 5
Investing In Foreign Securities ..................................... 5
Emerging Markets Securities ......................................... 8
Foreign Currency Transactions ....................................... 8
Futures And Options Transactions .................................... 9
Indexed Securities And Structured Notes ............................. 11
Mortgage-Backed Securities .......................................... 11
Real Estate Securities .............................................. 11
Commercial Paper .................................................... 12
Debt Securities ..................................................... 12
Derivatives ......................................................... 13
Currency Swaps ...................................................... 13
Short Sales ......................................................... 13
Direct Investments .................................................. 14
Repurchase Agreements ............................................... 14
Rule 144a Securities ................................................ 14
Investment Restrictions ................................................ 15
Investment Advisory Services ........................................... 19
The Distributor ........................................................ 20
Portfolio Transactions And Brokerage ................................... 22
Trustees And Officers .................................................. 25
Valuation Of Shares .................................................... 29
Exchange Privilege ..................................................... 31
Tax-Sheltered Retirement Plans ......................................... 31
Investment Programs .................................................... 34
Taxes .................................................................. 36
Redemptions In Kind .................................................... 38
Performance ............................................................ 38
Additional Information ................................................. 40
Financial Statements ................................................... 40
Appendix ............................................................... 41
Market Index Descriptions .............................................. 44
This Statement of Additional Information is not a prospectus and should be
read in conjunction with the Funds' current Prospectus, dated May 1, 2000 (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.
STATEMENT OF ADDITIONAL INFORMATION
May 1, 2000
<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 seven series of Van Eck Funds: Asia Dynasty Fund (Class A
and B), Emerging Markets Vision Fund (Class A and B), Global Leaders Fund (Class
A and B), Natural Resources Fund (Class A), International Investors Gold Fund
(Class A), Global Hard Assets Fund (Class A, B and C), and U.S. Government Money
Fund, each of which commenced operations as a series of Van Eck Funds.
International Investors Gold Fund was formerly a mutual fund incorporated
under the laws of the state of Delaware under the name of International
Investors Incorporated. International Investors Incorporated was reorganized as
a series of the Trust on April 30, 1991. International Investors Incorporated
had been in continuous existence since 1955, and had been concentrating in gold
mining shares since 1968.
The Global Leaders Fund, Global Hard Assets Fund, Natural Resources Fund
and International Investors Gold Fund are classified as non-diversified funds
under the Investment Company Act of 1940 ("1940 Act"). Asia Dynasty Fund and
Emerging Markets Vision Fund are diversified funds.
Van Eck Associates Corporation (the "Adviser") serves as investment
adviser to the Funds. Fiduciary International, Inc. ("FII") serves as
sub-investment adviser to the Global Leaders Fund.
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 least 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 Peoples Republic
of China ("China"), Cambodia, Hong Kong, India, Indonesia, Korea, Laos,
Malaysia, Myanmar, 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.
Emerging Markets Vision Fund
Emerging Markets Vision Fund seeks long-term capital appreciation by
investing primarily in equity securities in emerging markets around the world.
1
<PAGE>
Under normal conditions, at least 65% of the Fund's total assets will be
invested in Emerging Country and emerging market equity securities. An "emerging
market" or "Emerging Country" is any country that the World Bank, the
International Finance Corporation or the United Nations or its authorities has
determined to have a low or middle-income economy. Emerging Countries can be
found in regions such as Asia, Latin America, Africa and Eastern Europe. The
countries that will not be considered Emerging Countries include the United
States, Australia, Canada, Japan, New Zealand, and most countries located in
Western Europe such as Austria, Belgium, Denmark, Finland, France, Germany,
Great Britain, Ireland, Italy, the Netherlands, Norway, Spain, Sweden and
Switzerland.
The Fund considers emerging market securities to include securities which
are (i) principally traded in the capital markets of an emerging market country;
(ii) securities of companies that derive at least 50% of their total revenues
from either goods produced or services performed in Emerging Countries or from
sales made in Emerging Countries, regardless of where the securities of such
companies are principally traded; (iii) securities of companies organized under
the laws of, and with a principal office in an Emerging Country; (iv) securities
of investment companies (such as country funds) that principally invest in
emerging market securities; and (v) American Depositary Receipts (ADRs),
American Depositary shares (ADSs), European Depositary Receipts (EDRs) and
Global Depositary Receipts (GDRs) with respect to the securities of such
companies.
The Fund may invest indirectly in emerging markets by investing in other
investment companies due to restrictions on direct investment by foreign
entities in certain emerging market countries. Such investments may involve the
payment of premiums above the net asset value of the companies' portfolio
securities; are subject to limitation under the Act and the Internal Revenue
code; are constrained by market availability; and would have the Fund bearing
its ratable share of the investment company's expenses, including its advisory
and administration fees. The Fund's investment adviser has agreed to waive its
management fee with respect to the portion of the Fund's assets invested in
shares of other open-end investment companies. The Fund would continue to pay
its own management fees and other expenses with respect to any investments in
shares of closed-end investment companies.
Equity securities in which the Fund may invest include common stocks,
preferred stock (either convertible or non-convertible), rights, warrants,
direct equity interests in trust, partnerships, joint ventures and other
unincorporated entities or enterprises, convertible debt instruments, and
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. These securities may be listed on securities exchanges or
traded over-the-counter. Direct investments are generally considered illiquid
and will be aggregated with other illiquid investments for purposes of the
limitation on illiquid investments.
The Adviser expects that the Fund will normally invest in at least three
different countries. The Fund emphasizes equity securities, but may also invest
in other types of instruments, including debt securities of any quality (other
than commercial paper as described herein). Debt securities may include fixed or
floating rate bonds, notes, debentures, commercial paper, loans, convertible
securities and other debt securities issued or guaranteed by governments,
agencies or instrumentalities, central banks or private issuers.
The Fund may invest in derivatives. Derivatives in which the Fund may
invest include futures contracts, forward contracts, options, swaps, structured
notes and other similar securities as may become available in the market. These
instruments offer certain opportunities and additional risks that are described
below.
The Fund may, for temporary defensive purposes, invest more than 35% of
its total assets in securities which are not emerging market securities, such as
high grade, liquid debt securities of foreign and United States companies,
foreign governments and the U.S. Government, and their respective agencies,
instrumentalities, political subdivisions and authorities, as well as in money
market instruments denominated in U.S. dollars or a foreign currency. These
money market instruments include, but are not limited to, negotiable or
short-term deposits with domestic or foreign banks with total surplus and
undivided profits of at least $50 million, high quality commercial paper, and
repurchase agreements maturing within seven days with domestic or foreign
dealers, banks and other financial institutions deemed to be creditworthy under
guidelines approved by the Board of Trustees of the Trust. The commercial paper
in which the Fund may invest will, at the time of purchase, be rated P-1 or
better by Moody's, A-1 or better by S&P, Fitch-1 by Fitch, Duff-1 by Duff &
Phelps ("D&P"), or if unrated, will be of comparable high quality as determined
by the Adviser.
2
<PAGE>
Global Leaders Fund
Global Leaders Fund may invest in equity securities. Equity securities
include common and preferred stocks, equity and equity index swap agreements;
direct equity interests in trusts, partnerships, joint ventures and other
unincorporated entities or enterprises, special classes of shares available only
to foreign persons in such markets that restrict the ownership of certain
classes of equity to nationals or residents of the country, convertible
preferred stocks and convertible debt instruments, financial futures contracts
and options on financial futures contracts, forward currency contracts and put
and call options on securities, securities indices and foreign currencies and
foreign currency swaps.
The Adviser believes that allocation of assets into many countries and
across asset classes can, over the long-term, provide higher returns than
portfolios invested solely in bonds with lower risk or volatility or than
portfolios invested entirely in stocks. Thus, the "risk-adjusted return" of a
diversified portfolio has the potential to be more attractive than some other,
more concentrated portfolios. In addition, the balanced approach reduces the
risk where events in any one country may adversely affect the entire portfolio.
Investors should note, however, that a balanced portfolio will generally be more
volatile than a portfolio consisting solely of bonds and may provide lower
returns than a portfolio consisting solely of stocks. Investors should also be
aware that although the Fund diversifies across more investment types than most
mutual funds, no one mutual fund can provide a complete investment program for
all investors. There can be no assurance that allocation of assets both globally
and across asset classes will reduce these risks or that the Fund will achieve
its investment objective.
The Fund may also invest in fixed-income securities which include
obligations issued or guaranteed by a government or any of its political
subdivisions, agencies, instrumentalities, or by a supranational organization
such as the World Bank or European Economic Community (or other organizations
which are chartered to promote economic development and are supported by various
governments and government entities), adjustable-rate preferred stock, interest
rate swaps, corporate bonds, debentures, notes, commercial paper, certificates
of deposit, time deposits, repurchase agreements, and debt obligations which may
have a call on a common stock or commodity by means of a conversion privilege or
attached warrants. The Fund may invest in debt instruments of the U.S.
government and its agencies having varied maturities. The Fund may invest in
asset-backed securities such as collateralized mortgage obligations and other
mortgage and non-mortgage asset-backed securities. The Fund may also lend its
portfolio securities and borrow money for investment purposes (i.e. leverage its
portfolio).
Global Hard Assets Fund
Global Hard Assets Fund will, under normal market conditions, invest at
least 65% of its total assets in "Hard Asset Securities." Therefore, it may be
subject to greater risks and market fluctuations than other investment companies
with more diversified portfolios. Some of these risks include: volatility of
energy and basic materials prices; possible instability of the supply of various
Hard Assets; the risks generally associated with extraction of natural
resources; actions and changes in government which could affect the production
and marketing of Hard Assets; and greater price fluctuations that may be
experienced by Hard Asset Securities than the underlying Hard Assets.
The Adviser believes Hard Asset Securities offer an opportunity to achieve
long-term capital appreciation and to protect wealth against eroding monetary
values during periods of cyclical economic expansions. Since the market action
of Hard Asset Securities may move against or independently of the market trend
of industrial shares, the addition of such securities to an overall portfolio
may increase the return and reduce the price fluctuations of such a portfolio.
There can be no assurance that an increased rate of return or a reduction in
price fluctuations of a portfolio will be achieved. Hard Asset Securities are
affected by many factors, including movement in the stock market. Inflation may
cause a decline in the market, including Hard Asset Securities. An investment in
the Fund's shares should be considered part of an overall investment program
rather than a complete investment program. Hard Asset Securities include equity
securities of "Hard Asset Companies" and securities, including structured notes,
whose value is linked to the price of a commodity or a commodity index. The term
"Hard Asset Companies" includes companies that are directly or indirectly
(whether through supplier relationships, servicing agreements or otherwise)
engaged to a significant extent in the exploration, development, production or
distribution of one or more of the following: (i) precious metals, (ii) ferrous
and non-ferrous metals, (iii) gas, petroleum, petrochemicals or other
hydrocarbons, (iv) forest products, (v) real estate and (vi) other basic
non-agricultural commodities which, historically, have been produced and
marketed profitably during periods of significant inflation. Under normal market
conditions, the Fund will invest at least 5% of its assets in each of the first
five sectors listed above. The Fund has a fundamental policy of concentrating in
such industries, and up to 50% of the Fund's assets may be invested in any one
of the above sectors. Precious metal and natural resource securities are at
times volatile and there may be sharp fluctuations in prices, even during
periods of rising prices.
3
<PAGE>
The Fund may invest in equity securities. Equity securities include common
and preferred stocks; equity and equity index swap agreements; direct equity
interests in trusts, partnerships, joint ventures and other unincorporated
entities or enterprises; special classes of shares available only to foreign
persons in such markets that restrict the ownership of certain classes of equity
to nationals or residents of the country; convertible preferred stocks and
convertible debt instruments. The Fund may also invest in fixed-income
securities which include obligations issued or guaranteed by a government or any
of its political subdivisions, agencies, instrumentalities, or by a
supranational organization such as the World Bank or European Economic Community
(or other organizations which are chartered to promote economic development and
are supported by various governments and government entities), adjustable-rate
preferred stock, interest rate swaps, corporate bonds, debentures, notes,
commercial paper, certificates of deposit, time deposits, repurchase agreements,
and debt obligations which may have a call on a common stock or commodity by
means of a conversion privilege or attached warrants. Warrants received as
dividends on securities held by the Fund and warrants acquired in units or
attached to securities are not included in this restriction. The Fund may invest
in "when-issued" securities, "partly paid" securities (securities paid for over
a period of time) and securities of foreign issuers; and may lend its portfolio
securities and borrow money for investment purposes. The Fund may invest in debt
instruments of the U.S. government and its agencies having varied maturities.
The Fund seeks investment opportunities worldwide. Under normal
conditions, the Fund will invest its assets in at least three countries
including the United States. There is no limitation or restriction on the amount
of assets to be invested in any one country, developed or underdeveloped. Global
investing involves economic and political considerations not typically
applicable to the U.S. markets.
The Fund may purchase securities, including structured notes, whose value
is linked to the price of a commodity or a commodity index. The Fund may
purchase and sell financial and commodity futures contracts and options on
financial futures and commodity futures contracts and may also write, purchase
or sell put or call options on securities, foreign currencies, commodities and
commodity indices. The Fund may invest in asset-backed securities such as
collateralized mortgage obligations and other mortgage and non-mortgage
asset-backed securities. The Fund may also lend its portfolio securities and
borrow money for investment purposes (i.e. leverage its portfolio).
The Fund may invest up to 35% of its total assets in debt securities whose
value is not linked to the value of a Hard Asset or a Hard Asset Company and in
other securities of companies which are not Hard Asset Companies. Non-Hard Asset
debt securities include high grade, liquid debt securities of foreign companies,
foreign governments and the U.S. Government and their respective agencies,
instrumentalities, political subdivisions and authorities, as well as in money
market instruments denominated in U.S. dollars or a foreign currency. High grade
debt securities are those that are rated A or betted by S&P or Moody's, Fitch-1
by Fitch or Duff-1 by D&P or if unrated, of comparable quality in the judgment
of the Adviser, subject to the supervision of the Board of Trustees. The assets
of the Fund invested in short-term instruments will consist primarily of
securities rated in the highest category (for example, commercial paper rated
"Prime-1" or "A-1" by Moody's and S&P, respectively) or if unrated, in
instruments that are determined to be of comparable quality in the judgment of
the Adviser, subject to the supervision of the Board of Trustees, or are insured
by foreign or U.S. governments, their agencies or instrumentalities as to
payment of principal and interest.
Natural Resources Fund
Natural Resources Fund may invest in debt and equity securities of
companies engaged in the exploration, development and production of gold and
other natural resources. Gold, other precious metals and natural resources
securities are at times volatile, and there may be sharp fluctuations in prices,
even during periods of rising prices.
The Fund may invest in any type of security including, but not limited to,
common stocks and equivalents (such as convertible debt securities and
warrants), preferred stocks and bonds and debt obligations of domestic and
foreign companies, governments (including their political subdivisions) and
international organizations. The Fund may purchase and sell financial and
commodity futures contracts and options on financial futures and commodity
futures contracts and may also write, purchase or sell put or call options on
securities, foreign currencies, commodities and commodity indices.
International Investors Gold Fund
The Fund's primary objective is long-term capital appreciation, while
retaining freedom to take current income into consideration in selecting
investments. The Fund's fundamental policy is to concentrate its investments in
common stocks of gold mining com-
4
<PAGE>
panies. It may invest in that industry up to 100% of the value of its assets. In
some future period or periods, due to adverse conditions in that industry, the
Fund may, for temporary defensive purposes, have less than 25% of the value of
its assets invested in that industry. However, under normal circumstances, the
Fund will have at least 65% of its total assets invested in that industry.
The Fund's policy is to invest primarily in securities of companies,
wherever organized, whose properties, products or services are international in
scope or substantially in countries outside the United States, of foreign
governments, and in United States Treasury securities.
Certain Policies Applicable to Global Leaders Fund, Global Hard Assets
Fund, Asia Dynasty Fund, Emerging Markets Vision Fund, International Investors
Gold Fund, and Natural Resources Fund.
The above Funds may invest in "when issued" securities and "partly paid"
securities. Additionally, Emerging Markets Vision Fund, Global Leaders Fund,
Global Hard Assets Fund, and Asia Dynasty Fund may invest in collateralized
mortgage obligations. The Appendix to this Statement of Additional Information
contains an explanation of the rating categories of Moody's Investors Service
and Standard & Poor's Corporation relating to the fixed-income securities and
preferred stocks in which the Funds may invest, including a description of the
risks associated with each category.
U.S. Government Money Fund
U.S. Government Money Fund seeks safety of principal, daily liquidity and
current income through investments in short-term U.S. Treasury securities and
other securities carrying the "full faith and credit" guarantee of the U.S.
Government. The Fund invests in U.S. Treasury bills, notes, bonds and other
obligations guaranteed by the full faith and credit of the U.S. Government and
repurchase agreements collateralized by such obligations (at least 80% of its
assets will be so invested). All securities mature within thirteen months from
the date of purchase, although repurchase agreements may be collateralized by
securities maturing in more than one year.
Direct obligations issued by the U.S. Treasury include bills, notes and
bonds which differ from each other only in interest rates, maturities and times
of issuance: Treasury bills have maturities of thirteen months or less, Treasury
notes have maturities of one to ten years, and Treasury bonds generally have
maturities of greater than ten years. Securities guaranteed by the U.S.
Government include such obligations as securities issued by the General Services
Administration and the Small Business Administration.
U.S. Government Money Fund may also invest in other short-term instruments
(up to 20% of its assets), in all cases subject to the credit quality
requirements of the 1940 Act, including commercial paper, banker's acceptances,
and certificates of deposit. Commercial paper consists of short-term, unsecured
promissory notes issued principally by banks and corporations to finance
short-term credit needs. The commercial paper purchased by the Fund will consist
only of direct obligations of the issuer. Banker's acceptances are drafts or
bills of exchange that have been guaranteed as to payment by a bank or trust
company. Banker's acceptances are used to effect payment of merchandise sold in
import-export transactions, and are backed by the credit strength of the bank
which assumes the obligation. Time deposits are credit instruments evidencing
the obligation of a bank to repay funds deposited with it for a specified period
of time. Certificates of deposit are certificates evidencing the obligation of a
bank to repay funds deposited with it for a specific period of time.
RISK FACTORS
Investing In Foreign Securities
Asia Dynasty Fund, Emerging Markets Vision Fund, Global Leaders Fund,
Global Hard Assets Fund, Natural Resources Fund and International Investors Gold
Fund.
U.S. Government Money Fund, as a fundamental investment policy, may not
invest in securities of South African issuers; Asia Dynasty Fund, Emerging
Markets Vision Fund, Global Leaders Fund, Global Hard Assets Fund, Natural
Resources Fund and International Investors Gold Fund are not so restricted by
their fundamental investment policies.
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Global Hard Assets Fund and Emerging Markets Vision Fund may invest in
Russian issuers. Settlement, clearing and registration of securities in Russia
is in an underdeveloped state. Ownership of shares (except those held through
depositories that meet the requirements of the Act) is defined according to
entries in the issuer's share register and normally evidenced by extracts from
that register, which have no legal enforceability. Furthermore, share
registration is carried out either by the issuer or registrars located
throughout Russia, which are not necessarily subject to effective government
supervision. To reasonably ensure that its ownership interest continues to be
appropriately recorded, the Funds will invest only in those Russian companies
whose registrars have entered into a contract with the Funds' Russian
sub-custodian, which gives the sub-custodian the right, among others, to inspect
the share register and to obtain extracts of share registers through regular
audits. While these procedures reduce the risk of loss, there can be no
assurance that they will be effective. This limitation may prevent the Funds
from investing in the securities of certain Russian issuers otherwise deemed
suitable by the Funds' investment adviser.
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 by Global Leaders Fund, Global
Hard Assets Fund, Emerging Markets Vision Fund and Asia Dynasty Fund in
companies in developing-market countries as well as in developed markets. Asia
Dynasty Fund, Emerging Markets Vision 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) 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 industrial (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% and Emerging Markets
Vision Fund may invest a portion of their total assets in Asian region
investments, their 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 in these
countries typically involve greater potential for gain or loss than investments
in securities of issuers in developed countries. Given the Funds' investments,
the Funds 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 and in emerging markets as a
whole 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 Asia and other emerging
markets 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 Asian and
emerging market securities markets may represent a disproportionately large
percentage of market capitalization and trading value. The limited liq-
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uidity of securities markets in these regions may also affect the Funds' 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
regions' securities markets, the Funds' abilities to participate fully in such
price increases may be limited by their investment policies of investing not
more than 15% of their net assets in illiquid securities. Conversely, the
inability of the Funds to dispose fully and promptly of positions in declining
markets will cause the Funds' net asset values to decline as the values of the
unsold positions are marked to lower prices. In addition, these 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 and Emerging Markets Vision Fund will invest in Asian
and other countries with emerging economies or securities markets. Political and
economic structures in many 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
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 Asian and emerging markets 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 these regions are 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 emerging market 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 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 laws exist in China, it may be impossible to obtain swift and equitable
enforcement of such laws, or to obtain enforcement of a 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.
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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, or 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
Asia Dynasty Fund, Emerging Markets Vision Fund, Global Leaders Fund,
Global Hard Assets Fund, Natural Resources Fund and International Investors Gold
Fund.
Under normal circumstances, consideration of the prospects for currency
exchange rates will be incorporated into the long-term investment decisions made
for the above Funds with regard to overall diversification strategies. Although
the Funds value their 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, Emerging Markets Vision 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. Finally, 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.
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The Funds will enter into forward contracts to duplicate a cash market
transaction. The Funds will not purchase or sell foreign currency as an
investment, except that Asia Dynasty Fund, Emerging Markets Vision Fund, Global
Leaders Fund and Global Hard Assets 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, 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.
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,
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 Fund's 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
Asia Dynasty Fund, Emerging Markets Vision Fund, Global Leaders Fund,
Global Hard Assets Fund, and Natural Resources Fund.
These Funds 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 (except for Natural Resources Fund) for other purposes.
Global Hard Assets Fund may also buy and sell commodity futures contracts, which
may include futures on natural resources and natural resources indices. A
security or interest-rate futures con-
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tract 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
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.
The use of financial futures contracts and commodity futures contracts,
options on such futures contracts and commodities (Emerging Markets Vision Fund,
Global Hard Assets Fund, Natural Resources Fund and International Investors Gold
Fund), may reduce a Fund's exposure to fluctuations in the prices of portfolio
securities and may prevent losses if the prices of such securities decline.
Similarly, such investments may protect a Fund against fluctuation in the value
of securities in which a Fund is about to invest. Because the financial markets
in the Asian region countries and other developing countries are not as
developed as in the United States, these financial investments may not be
available to the Funds, and the Funds may be unable to hedge certain risks.
The use of financial futures and commodity futures contracts and options
on such futures contracts and commodities (Emerging Markets Vision Fund, Global
Hard Assets Fund, Natural Resources Fund and International Investors Gold Fund)
as hedging instruments involves several risks. First, there can be no assurance
that the prices of the futures contracts or options and the hedged 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 anticipated and/or incur a loss greater than if it had
entered into a cash market position. Second, investments in options, futures
contracts and options on futures contracts 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 futures contracts and options can be
closed out only on an exchange that provides a market for those instruments.
There can be no assurances that such a market will exist for a particular
futures contract or option. If a Fund cannot close out an exchange traded
futures contract or option which it holds, it would have to perform its
contractual obligation or exercise its option to realize any profit, and would
incur transaction costs on the sale of the underlying assets.
For hedging purposes, each Fund, and for other purposes (such as creating
synthetic positions), each Fund except Natural Resources 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 Funds 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 lose 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 Funds may invest in options which are either listed on a domestic
securities exchange or traded on a recognized foreign exchange. In addition, the
Funds 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,
exchange traded options are third party contracts with standardized prices
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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 Funds 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.
Indexed Securities And Structured Notes
Emerging Markets Vision Fund, Global Hard Assets Fund, International
Investors Gold Fund and Natural Resources Fund may invest in indexed securities,
(structured notes securities and index options) whose value is linked to one or
more currencies, interest rates, commodities, or financial or commodity indices.
An indexed security enables the investor to purchase a note whose coupon and/or
principal redemption is linked to the performance of an underlying asset.
Indexed securities may be positively or negatively indexed (i.e., their value
may increase or decrease if the underlying instrument appreciates). Indexed
securities may have return characteristics similar to direct investments in the
underlying instrument or to one or more options on the underlying instrument.
Indexed securities may be more volatile than the underlying instrument itself,
and present many of the same risks as investing in futures and options. Indexed
securities are also subject to credit risks associated with the issuer of the
security with respect to both principal and interest. Only securities linked to
one or more non-agriculture commodities or commodity indices will be considered
a Hard Asset Security.
Indexed securities may be publicly traded or may be two-party contracts
(such two-party agreements are referred to here collectively as structured
notes). When a Fund purchases a structured note, it will make a payment of
principal to the counterparty. Some structured notes have a guaranteed repayment
of principal while others place a portion (or all) of the principal at risk. The
Funds will purchase structured notes only from counterparties rated A or better
by S&P, Moody's or another nationally recognized statistical rating
organization. The Adviser will monitor the liquidity of structured notes under
the supervision of the Board of Trustees. Notes determined to be illiquid will
be aggregated with other illiquid securities and will be subject to the Funds'
limitations on illiquid securities.
Mortgage-Backed Securities
The Funds 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 a 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.
Real Estate Securities
Natural Resources Fund and Global Hard Assets Fund cannot invest in real
estate directly. However, each of these Funds 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. Global Hard Assets Fund may
invest up to 50% of its assets in such securities. Natural Resources Fund and
Global Hard Assets Fund are therefore subject to certain risks associated with
direct ownership of real estate and with the real estate industry in general.
These risks include, among others: possible declines in the value of real
estate; possible lack of availability of mortgage funds; extended vacancies of
properties; risks related to general and local economic conditions;
overbuilding; increases in competition, property taxes and operating expenses;
changes in zoning laws; costs resulting from the clean-up of, and liability to
third parties for damages resulting from, environmental problems; casualty or
condemnation losses; uninsured damages from floods, earthquakes or other natural
disasters; limitations on and variations in rents; and changes in interest
rates.
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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).
Commercial Paper
Emerging Markets Vision Fund, Global Leaders Fund and Global Hard Assets
Fund may invest in commercial paper which is indexed to certain specific foreign
currency exchange rates. The terms of such commercial paper provide that its
principal amount is adjusted upwards or downwards (but not below zero) at
maturity to reflect changes in the exchange rate between two currencies while
the obligation is outstanding. The Funds will purchase such commercial paper
with the currency in which it is denominated and, at maturity, will receive
interest and principal payments thereon in that currency, but the amount or
principal payable by the issuer at maturity will change in proportion to the
change (if any) in the exchange rate between two specified currencies between
the date the instrument is issued and the date the instrument matures. While
such commercial paper entails the risk of loss of principal, the potential for
realizing gains as a result of changes in foreign currency exchange rates
enables the Funds to hedge or cross-hedge against a decline in the U.S. dollar
value of investments denominated in foreign currencies, while providing an
attractive money market rate of return. The Funds will purchase such commercial
paper for hedging purposes only, not for speculation. The staff of the
Securities and Exchange Commission is currently considering whether the purchase
of this type of commercial paper would result in the issuance of a "senior
security" within the meaning of the 1940 Act. The Funds believe that such
investments do not involve the creation of such a senior security, but
nevertheless will establish a segregated account with respect to its investments
in this type of commercial paper. The Funds will maintain in such account cash
not available for investment or U.S. Government securities or other liquid high
quality debt securities having a value equal to the aggregate principal amount
of outstanding commercial paper of this type.
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 depend-
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ing 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.
When the Funds intend 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 contracts). 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 would experience a
loss as if they had owned the underlying security.
Currency Swaps
Asia Dynasty Fund, Emerging Markets Vision Fund, Global Leaders Fund and
Global Hard Assets 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.
Global Hard Assets may also enter into other asset swaps. Asset swaps are
similar to swaps in that the performance of one Hard Asset (e.g., gold) may be
"swapped" for another (e.g., energy).
The use of swaps is a highly specialized activity which involves
investment techniques and risks different from those associated with ordinary
portfolio transactions. If the Funds' 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.
Short Sales
Currently, Emerging Markets Vision Fund and Global Hard Assets Fund are
the only Funds that can engage in short sales. A Fund will establish an account
with respect to its short sales and maintain in the account cash not available
for investment or US Government securities or other liquid, high-quality
securities having a value equal to the difference between (i) the market value
of the securities sold short at the time they were sold short and (ii) any cash,
US Government Securities or other liquid, high-quality securities required to be
deposited as collateral with the broker in connection with the short sale (not
including the proceeds from the short sale). The account will be marked to
market daily, so that (i) the amount in the account plus the amount deposited
with the broker as collateral equals the current market value of the securities
sold short and (ii) in no event will the amount in the
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account plus the amount deposited with the broker as collateral fall below the
original value of the securities at the time they were sold short. The total
value of the assets deposited as collateral with the broker and deposited in the
account will not exceed 50% of the Emerging Market Vision Fund's or the Global
Hard Assets Fund's net assets.
Direct Investments
Emerging Markets Vision Fund, Global Leaders Fund and Global Hard Assets
Fund may invest up to 10% of their total assets in direct investments. Direct
investments include (i) the private purchase from an enterprise of an equity
interest in the enterprise in the form of shares of common stock or equity
interests in trusts, partnerships, joint ventures or similar enterprises, and
(ii) the purchase of such an equity interest in an enterprise from a principal
investor in the enterprise. In each case the Funds will, at the time of making
the investment, enter into a shareholder or similar agreement with the
enterprise and one or more other holders of equity interests in the enterprise.
The Adviser (or FII) anticipates that these agreements may, in appropriate
circumstances, provide the Funds with the ability to appoint a representative to
the board of directors or similar body of the enterprise and for eventual
disposition of the Funds' investment in the enterprise. Such a representative of
the Funds will be expected to provide the Funds with the ability to monitor its
investment and protect its rights in the investment, and will not be appointed
for the purpose of exercising management or control of the enterprise.
Certain of the Funds' 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 and
Emerging Markets Vision Fund, such direct investments may be made in entities
that are reasonably expected in the foreseeable future to become Growth
Companies, either by expanding current operations or establishing significant
operations.
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
None of the Funds will enter into a repurchase agreement with a maturity
of more than seven business days if, as a result, more than 10% of the value of
a Fund's total assets would then be invested in such repurchase agreements and
other illiquid securities (Asia Dynasty Fund, Emerging Markets Vision Fund,
Global Leaders Fund and Global Hard Assets Fund may invest no more than 15% of
their total assets in 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 unregistered securities of domestic and foreign issuers, such
as the PORTAL System sponsored by the National Association of Securities
Dealers.
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The Adviser (or FII) 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 (except the U.S.
Government Money Fund) 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.
Asia Dynasty Fund, Emerging Markets Vision Fund, Global Leaders Fund,
Global Hard Assets Fund, Natural Resources Fund, and U.S. Government Money Fund.
With respect to Natural Resources Fund and U.S. Government Money Fund, all
of the following restrictions are fundamental policies except restriction 21,
unless otherwise indicated. With respect to Emerging Markets Vision Fund, Global
Leaders Fund, Global Hard Assets Fund and 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, Emerging Markets Vision Fund, Global Leaders Fund,
Global Hard Assets Fund, Natural Resources Fund, and U.S. Government Money Fund
may not:
1. Invest in securities which (i) with respect to Natural Resources
Fund and U.S. Government Money Fund, are subject to legal or
contractual restrictions on resale ("restricted securities"), 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, and (ii) with respect
to Emerging Markets Vision Fund, Global Leaders Fund, Global Hard
Assets Fund and Asia Dynasty Fund 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%
of Emerging Markets Vision Fund's, Global Leaders Fund's, Global
Hard Assets Fund's or Asia Dynasty Fund's net assets would be
invested in such securities.
2. Purchase or sell real estate, although the Emerging Markets Vision
Fund, Global Leaders Fund, Global Hard Assets Fund, Asia Dynasty
Fund and Natural Resources 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. The Funds may not purchase or sell commodities (non-Hard Asset
commodities with respect to Global Hard Assets) or commodity futures
contracts (for the purpose of this restriction, forward foreign
exchange contracts are not deemed to
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be a commodity or commodity contract) except that Emerging Markets
Vision Fund and Natural Resources Fund may, for hedging purposes
only, buy and sell financial futures contracts which may include
stock and bond index futures contracts and foreign currency futures
contracts and Emerging Markets Vision Fund and Natural Resources
Fund may, for hedging purposes only, buy and sell commodity futures
contracts on gold and other natural resources or on an index
thereon. The Funds may not commit more than 5% of their total assets
to initial margin deposits on futures contracts. In addition,
Natural Resources Fund, International Investors Gold Fund and Global
Hard Assets Fund may invest in gold and silver bullion, palladium
and platinum group metals bullion and coins.
4. Exclusive of the Emerging Markets Vision Fund, Global Leaders Fund,
Global Hard Assets Fund and 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, Emerging Markets Vision Fund, Global Leaders Fund, Global Hard
Assets Fund or Natural Resources 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, Global Leaders Fund, Global Hard Assets Fund,
Asia Dynasty Fund, Emerging Markets Vision Fund or Natural Resources
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. The Funds may not make loans, except by (i) purchase of marketable
bonds, debentures, commercial paper and similar marketable evidences
of indebtedness and (ii) repurchase agreements. Global Leaders Fund,
Global Hard Assets Fund, Natural Resources Fund, and Asia Dynasty
Fund may lend to broker-dealers portfolio securities with an
aggregate market value up to one-third of its total assets, and
Emerging Markets Vision Fund may lend to broker-dealers portfolio
securities with an aggregate market value up to one-half of its
total assets.
6. As to 75% of the total assets of each of the Asia Dynasty Fund,
Emerging Markets Vision Fund, and U.S. Government Money 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). This limitation does not apply to the Global
Leaders Fund, Global Hard Assets Fund, International Investors Gold
Fund and Natural Resources Fund.
7. Invest more than 5 percent of the value of its total assets in
securities of companieshaving, together with their predecessors, a
record of less than three years of continuous operation. This
restriction does not apply to Emerging Markets Vision Fund, Global
Leaders Fund, Global Hard Assets Fund or 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 that the U.S. Government Money
Fund may borrow up to 10% of its total assets and Natural Resources
Fund may borrow up to 50% valued at cost for temporary or emergency
purposes. The Fund will not purchase securities for investment while
borrowings equaling 5% or more of their total assets are
outstanding. In addition, Global Leaders Fund, Global Hard Assets
Fund, Asia Dynasty Fund and Emerging Markets Vision Fund may borrow
up to 30%, and Natural Resources Fund up to 50% of the value of
their respective net assets to increase their holdings of portfolio
securities. The Funds 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 (Global Leaders Fund, Global Hard
Assets Fund, Asia Dynasty Fund, Emerging Markets Vision Fund and
Natural Resources Fund); (iii) financial futures contracts purchased
on margin (Global Leaders Fund, Global Hard Assets Fund, Asia
Dynasty Fund, Emerging Markets Vision Fund and Natural Resources
Fund), (iv) commodity futures contracts purchased on margin (Natural
Resources Fund and Global Hard Assets Fund); (v) foreign currency
swaps (Global Leaders Fund, Global Hard Assets
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Fund, Asia Dynasty Fund and Emerging Markets Vision Fund); and (vi)
issuing multiple classes of shares (Global Leaders Fund, Global Hard
Assets Fund, Asia Dynasty Fund and Emerging Markets Vision Fund).
12. Except for Emerging Markets Vision Fund and Global Hard Assets Fund,
make short sales of securities, except that Global Leaders Fund,
Asia Dynasty Fund and Natural Resources 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 Global Leaders Fund, Global Hard
Assets Fund, Asia Dynasty Fund, Emerging Markets Vision Fund,
Natural Resources Fund, may make initial or maintenance margin
payments in connection 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 Global Leaders Fund, Global Hard
Assets Fund, Asia Dynasty Fund, Emerging Markets Vision Fund and
Natural Resources 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 Global Leaders
Fund, Global Hard Assets Fund, Asia Dynasty Fund, Emerging Markets
Vision Fund and Natural Resources Fund may write, purchase or sell
put and call options on financial futures contracts, which include
bond and stock index futures contracts, and Natural Resources Fund
may write, purchase, or sell put and call options on gold or other
natural resources or an index thereon and on commodity futures
contracts on gold or other natural resources or an index thereon.
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 Natural Resources Fund and Global
Hard Assets Fund and as otherwise stated in any Fund's fundamental
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 (other than equity stock
interests in the case of the Global Leaders Fund, Global Hard Assets
Fund, Asia Dynasty Fund, Emerging Markets Vision Fund and Natural
Resources 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 Global
Leaders Fund, Global Hard Assets Fund, Asia Dynasty Fund and
Emerging Markets Vision 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. The U.S. Government Money Fund will not invest in
warrants.
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,
Emerging Markets Vision Fund, Global Leaders Fund and Global Hard Assets 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.
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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.
International Investors Gold Fund
Restrictions 1 through 9 are fundamental policies of International
Investors Gold Fund and may not be changed without shareholder approval.
Restrictions 10 through 16 are not fundamental policies and may be changed
without shareholder approval.
International Investors Gold Fund may not:
1. Underwrite securities of other issuers.
2. The Fund may not invest in real estate, commodity contracts or
commodities (except that, subject to applicable state laws, the Fund
may invest up to 12.5% of the value of its total assets as of the
date of investment in gold and silver coins which are legal tender
in the country of issue and gold and silver bullion, palladium and
platinum group metals bullion).
3. Make loans to other persons, except through repurchase agreements or
the purchase of publicly distributed bonds, debentures and other
debt securities.
4. Purchase securities on margin or make short sales.
5. Purchase or retain a security of any issuer if any of the officers
or directors of the Company or its investment adviser own
beneficially as much as 1/2 of 1%, or if such persons taken together
own over 5%, of the issuer's securities.
6. The Fund may not lend its funds or assets, except through the
purchase of securities the Fund would otherwise be authorized to
purchase, provided, however, that the Fund may lend to
broker-dealers and other financial institutions portfolio
securities.
7. Purchase any restricted securities which may not be sold to the
public without registration under the Securities Act of 1933, if by
reason of such purchase the value of the Company's aggregate
holdings in all such securities would exceed 10% of total assets.
8. Issue senior securities. The Fund may (i) borrow money in accordance
with restrictions described above, (ii) enter into forward
contracts, (iii) purchase futures contracts on margin, (iv) issue
multiple classes of securities, and (v) enter into swap agreement or
purchase or sell structured notes or similar instruments.
9. Invest in interests (other than equity stock interests) in oil, gas
or other mineral exploration or development programs or in oil, gas
or other mineral leases.
10. Invest in real estate limited partnerships.
11. Make investments in companies for the purpose of exercising control
or management.
12. Invest more than 10% of its assets in repurchase agreements having
maturities of greater than seven days or in a combination of such
agreements together with restricted securities and securities for
which market quotations are not readily available.
13. Purchase securities for investment while borrowings equal to 30% or
more of the Fund's assets are outstanding.
If a percentage restriction is adhered to at the time of investment, a
later increase or decrease in percentage resulting from a change in values of
portfolio securities or amount of net assets will not be considered a violation
of any of the foregoing restrictions.
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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.
Fiduciary International, Inc. ("FII"), a New York corporation, is
sub-adviser to the Global Leaders Fund pursuant to a Sub-Investment Advisory
Agreement dated October 30, 1993.
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, FII, or its affiliates. The advisory
fee is computed daily and paid monthly at the following annual rates:
International Investors Gold Fund and Natural Resources Fund pay a fee equal to
.75 of 1% of the first $500 million of average daily net assets, .65 of 1% of
the next $250 million of average daily net assets and .50 of 1% of the average
daily net assets in excess of $750 million. Asia Dynasty Fund and Global Leaders
Fund pay the Adviser a fee of .75 of 1% of average daily net assets. From this
fee, the Adviser pays FII a fee of .50 of 1% of average daily net assets. Global
Hard Assets Fund pays the Adviser 1% of average daily net assets. The U.S.
Government Money Fund pays a monthly fee at the annual rate of .50 of 1% for the
first $500 million of average daily net assets, .40 of 1% on the next $250
million of average daily net assets, and .375 of 1% of the average daily net
assets in excess of $750 million.
The Adviser also performs administrative services for Asia Dynasty Fund,
Global Leaders Fund, Natural Resources Fund and International Investors Gold
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 and Global Leaders Fund each pays .25
of 1% of its respective average daily net assets on the first $500 million.
Natural Resources Fund and International Investors Gold Fund pay an annual rate
of .25 of 1% of the first $750 million of their respective average daily net
assets, and .20 of 1% of their respective average daily net assets in excess of
$750 million.
The Emerging Markets Vision Fund pays the Adviser 1% of average daily net
assets and Asia Dynasty Fund pays the Adviser .75% of daily net assets.
In 1999, 1998, and 1997, the aggregate remuneration received by the
Adviser from International Investors Gold Fund was $1,416,607, $1,710,779,
$2,619,794, respectively; from Natural Resources Fund was $332,187, $449,221,
and $752,214, respectively; from U.S. Government Money Fund was $411,479,
$373,387, and $386,515, respectively; from GlobalLeaders Fund was $248,902,
$234,574, and $219,469, respectively; from Global Hard Assets Fund, was
$313,782, $559,994, and $660,306, respectively; from Asia Dynasty Fund was
$204,932, $116,529, and $339,096, respectively.
The expenses borne by each of the Funds include: all the charges and
expenses of the transfer and dividend disbursing agent, custodian fees and
expenses, legal, auditors' and accountants' fees and expenses, brokerage
commissions for portfolio transactions, taxes, if any, the advisory fee (and
accounting and administrative services fees, if any), extraordinary expenses (as
determined by the Trustees of the Trust), expenses of shareholders' and
Trustees' meetings, and of preparing, printing and mailing proxy statements,
reports and other communications to shareholders, expenses of preparing and
setting in type prospectuses and periodic reports and expenses of mailing them
to current shareholders, legal and accounting expenses and expenses of
registering and qualifying shares for sale (including compensation of the
employees of the Adviser or its affiliates in relation to the time spent on such
matters), expenses relating to the Plan of Distribution (Rule 12b-1 Plan)
exclusive of International Investors Gold Fund, fees of Trustees who are not
"interested persons" of the Adviser (or FII), membership dues of the Investment
Company Institute, fidelity bond and errors and omissions insurance premiums,
cost of maintaining the books and records of each Fund, and any other charges
and fees not specifically enumerated as an obligation of the Distributor or
Adviser or FII.
The Advisory Agreement with respect to Global Hard Assets Fund was
approved at a meeting of the Board of Trustees held on October 18, 1994. The
Advisory Agreement and Sub-Advisory Agreement with respect to Global Leaders
Fund were approved at a meeting of the Board of Trustees held on October 12,
1993. The Advisory Agreement with respect to Natural Resources Fund and
International Investors Gold Fund was approved at a meeting of the Board of
Trustees held on May 24, 1994. Advisory Agreements
19
<PAGE>
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 U.S. Government
Money Fund on January 23, 1987; and Natural Resources Fund and International
Investors Gold Fund on July 25, 1994. The Advisory Agreements and Sub-Investment
Advisory Agreements were approved by shareholders of Global Leaders Fund on
December 17, 1993. 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.
The Advisory Agreement with respect to Emerging Markets Vision Fund was
approved at a meeting of the Board of Trustees on April 18, 2000.
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 21, 1999.
The Trust has authorized one or more brokers (who are authorized to
designate other intermediaries) to accept purchase and redemption orders on the
Trust's behalf. The Trust will be deemed to have received a purchase or
redemption order when the authorized broker or its designee accepts the order.
Orders will be priced at the net asset value next computed after they are
accepted by the authorized broker or its designee.
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.
20
<PAGE>
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:
Van Eck Securities Reallowance to
Corporation Dealers
------------------ --------------
International 1999 $ 21,548 $ 71,340
Investors Gold Fund 1998 60,882 195,989
1997 122,745 401,483
Natural Resources Fund 1999 $ 16,528 $ 80,311
1998 24,848 97,646
1997 38,280 156,899
Asia Dynasty Fund 1999 $ 1,190 $ 51,659
1998 787 5,621
1997 2,455 13,752
Global Leaders Fund 1999 $ 10,190 $ 54,001
1998 1,470 5,608
1997 1,726 5,635
Global Hard Assets Fund 1999 $ 7,529 $ 47,723
1998 26,039 162,148
1997 151,014 629,428
- --------------------------------------------------------------------------------
VAN ECK SECURITIES CORPORATION
12B-1 ACCOUNTING-VE FUNDS
TWELVE MOS. ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
IIGF USGMF GRF-A ADF-A ADF-B GLF-A
---- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
TOTAL 12B-1 EXPENSE
PER BOOKS 265,641 203,688 113,065 93,185 68,058 136,054
PAYMENT TO
SECURITIES DEALERS 223,073 137,901 103,077 43,007 16,470 56,826
------- ------- ------- ------ ------ ------
NET 12B-1 FEES TO VESC 42,568 65,787 9,988 50,178 51,588 79,228
------- ------- ------- ------ ------ ------
DISTRIBUTION EXPENDITURES:
General Printing 4,236 3,902 4,058 12,657 12,576 8,532
Reports 7,044 3,789 6,527 2,714 2,714 2,714
Dealer Fact Sheets 1,310 1,310 1,310 3,642 3,643 5,343
Prospectus 1,522 1,453 1,522 1,304 1,305 1,238
Dealer postage 5,622 104 5,527 9,661 9,661 14,222
Marketing Support Telephone 10,863 13,222 7,135 3,226 1,177 4,560
Marketing Dept. Expenses 188,978 105,542 123,904 61,500 28,788 82,793
Telemarketing Dept. Expenses 56,247 0 36,885 16,688 6,079 23,568
------- ------- ------- ------ ------ ------
TOTAL EXPENDITURES 275,821 129,322 186,868 111,392 65,943 142,970
------- ------- ------- ------ ------ ------
EXCESS EXPENSES OVER
PAYMENTS TO VESC ($) (233,253) (63,535) (176,880) (61,215) (14,355) (63,742)
======= ======= ======= ======= ====== =======
<CAPTION>
GLF-B H A-A H A-B H A-C TOTAL
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
TOTAL 12B-1 EXPENSE
PER BOOKS 56,161 114,606 52,662 7,766 1,110,886
PAYMENT TO
SECURITIES DEALERS 13,495 49,514 13,123 7,593 664,078
------ ------ ------ ----- -------
NET 12B-1 FEES TO VESC 42,666 65,092 39,539 173 446,808
------ ------ ------ ----- -------
DISTRIBUTION EXPENDITURES:
General Printing 8,532 2,075 2,047 2,048 60,663
Reports 2,714 1,263 1,263 1,266 32,008
Dealer Fact Sheets 5,343 1,429 1,429 859 25,618
Prospectus 1,238 484 484 486 11,036
Dealer postage 14,222 35 35 33 59,122
Marketing Support Telephone 909 3,613 840 605 46,149
Marketing Dept. Expenses 24,514 77,689 33,409 9,652 736,769
Telemarketing Dept. Expenses 4,683 18,681 4,342 3,116 170,291
------ ------ ------ ----- -------
TOTAL EXPENDITURES 62,155 105,269 43,850 18,065 1,141,655
------ ------ ------ ----- -------
EXCESS EXPENSES OVER
PAYMENTS TO VESC ($) (19,489) (40,177) (4,311) (17,892) (694,847)
====== ======= ====== ====== =========
</TABLE>
To compensate the Distributor for the services it provides and for the
expenses it bears under the Distribution Agreement, each of Natural Resources
Fund (Class A) and U.S. Government Money Fund has adopted a Plan of Distribution
pursuant to Rule
21
<PAGE>
12b-1 (the "Plan") under the Act. Fees paid by the Funds under the Plan will be
used for servicing and/or distribution expenses incurred only during the
applicable year. Additionally, International Investors Gold Fund, Global Leaders
Fund (Class A and B), Asia Dynasty Fund (Class A and B), Emerging Markets Vision
Fund (Class A and B), and Global Hard Assets Fund (Class A, B and C) 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. Global
Leaders Fund (Class A and Class B), International Investors Gold Fund, Asia
Dynasty Fund (Class B), and Global Hard Assets Fund (Class A, B and C) 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
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 Plans were 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 21, 1999. The Plan was approved by shareholders of the
Natural Resources Fund (Class A) and U.S. Government Money Fund on January 23,
1987; Asia Dynasty Fund (Class B) on August 31, 1993; Global Leaders Fund (Class
A and B) on December 17, 1993; Asia Dynasty Fund (Class A) on July 25, 1994;
International Investors Gold Fund on April 21, 1999.
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 or FII is responsible for decisions to buy and sell securities
and other investments for the Funds, 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 Funds' portfolio investments, it is the
Adviser's or FII'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
broker-
22
<PAGE>
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 or FII may cause the Funds 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 and FII under the relevant
Advisory Agreement or Sub-Advisory Agreement with the Trust. The research
services provided by broker-dealers can be useful to the Adviser and FII in
serving its other clients or clients of the Adviser, FII or their affiliates.
For the fiscal year ended December 31, 1999, the Asia Dynasty Fund paid
$467,933, the Global Hard Assets Fund paid $404,645, the Global Leaders Fund
paid $95,135, the Natural Resources Fund paid $287,155 and the International
Investors Gold Fund paid $1,055,437 in commissions to broker dealers providing
research and other services to the Adviser or its affiliates representing
92.48%, 91.59%, 99.10%, 92.48%, and 95.00%, respectively, of the total
commissions paid by such Funds.
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. The U.S.
Government Money Fund did not pay brokerage commissions.
Fund (fiscal year end) 1999
Commissions
-----------
International Investors Gold Fund (Class A and C) (12/31) $1,058,345
Natural Resources Fund (Class A) (12/31) $ 321,327
Asia Dynasty Fund (Class A and B) (12/31) $ 490,251
Global Leaders Fund (Class A and B) (12/31) $ 96,000
Global Hard Assets Fund (Class A, B and C) (12/31) $ 441,794
1998
Commissions
-----------
International Investors Gold Fund (Class A and C) (12/31) $1,209,362
Natural Resources Fund (Class A) (12/31) $ 467,628
Asia Dynasty Fund (Class A and B) (12/31) $ 145,182
Global Leaders Fund (Class A and B) (12/31) $ 49,176
Global Hard Assets Fund (Class A, B and C) (12/31) $ 639,995
1997
Commissions
-----------
International Investors Gold Fund (Class A and C) (12/31) $ 611,085
Natural Resources Fund (Class A) (12/31) $ 327,261
Asia Dynasty Fund (Class A and B) (12/31) $ 675,167
Global Leaders Fund (Class A and B) (12/31) $ 63,682
Global Hard Assets Fund (Class A, B and C) (12/31) $ 505,063
23
<PAGE>
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 Funds are made independently from those of
the other investment accounts managed by the Adviser, FII 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 and FII 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 or FII 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 Funds 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 or FII 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 Global Hard Assets Fund, Asia Dynasty Fund, Emerging
Markets Vision Fund and Natural Resources Fund anticipate that their annual
portfolio turnover rates will not exceed 100%.
The annual portfolio turnover rate of the Global Leaders Fund may exceed
100%. Due to the high rate of turnover, the Fund may pay a greater amount in
brokerage commissions than a similar size fund with a lower turnover rate. The
portfolio turnover rates of all Funds 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 client account within seven days, or if the security has been
purchased or sold or recommended for purchase or sale by a client account, or 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.
24
<PAGE>
TRUSTEES AND OFFICERS
The Trustees and Officers of the Van Eck Funds, their addresses, ages,
positions with the Trust and principal occupations during the past five years
are set forth below.
<TABLE>
<CAPTION>
Trustees of Van Eck Funds:
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
John C. van Eck @* (84) Chairman of the Board Chairman of the Board and Director and President of other
575 Park Avenue and Trustee Investment Companies advised by the Adviser; Chairman,
New York, NY 10021 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 @#+ (64) Trustee Trustee of other investment companies advised by the
1220 Park Avenue Adviser; Vice Chairman, Director, and Chief Investment
New York, NY 10128 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 of the Union Settlement Association (the community
service organization); First Vice President, Trustee and Chairman
of the Finance Committee of the St. James School, St. James,
Maryland.
- ------------------------------------------------------------------------------------------------------------------------------------
Richard Cowell #+ (72) Trustee Trustee of other investment companies advised by the
240 El Vedado Way Adviser; Private Investor; Director West Indies &
Palm Beach, FL 33480 Caribbean Development Ltd. (real estate).
- ------------------------------------------------------------------------------------------------------------------------------------
Philip D. DeFeo @ (54) Trustee Trustee of other investment companies advised by the
301 Pine Street Adviser; Former President of Van Eck Associates
San Francisco, CA 94104 Corporation and Van Eck Securities Corporation; Former Executive
Vice President of Cedel International.
- ------------------------------------------------------------------------------------------------------------------------------------
Wesley G. McCain #+ (57) Trustee Trustee of other affiliated investment companies advised or
470 Park Avenue South, administered by the Adviser; Chairman and Owner,
16th Floor Towneley Capital Management, Inc.; New York, NY 10016 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,
Inc.; Trustee, Libre Group Trust, Director, Libre Investments
(Cayman) Ltd.; Former Director, International Investors
Incorporated.
- ------------------------------------------------------------------------------------------------------------------------------------
David J. Olderman # (64) Trustee Trustee of other investment companies advised by the
40 East 52nd Street Adviser; Chairman of the Board, American Copy
New York, NY 10022 Equipment Company; Chairman of the Board Brighton Partners Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Ralph F. Peters #* (71) Trustee Trustee of other investment companies advised by the
66 Strimples Road Adviser; Director Sun Life Insurance and Annuity Company
Stockton, NJ 08559 of New York; Director U.S. Life Income Fund.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
25
<PAGE>
<TABLE>
<S> <C> <C> <C>
Richard D. Stamberger # (41) Trustee Trustee of other investment companies advised by the
888 17th Street, N.W. 12th Fl. Adviser; Principal, National Strategies, Inc., Partner and
Washington, D.C. 20006 Co-Founder, Quest partners, LLC, Executive Vice President, Chief
Operating Officer and a Director of NuCable Resources Corporation.
- ------------------------------------------------------------------------------------------------------------------------------------
Jan F. van Eck @** (36) Trustee Officer and Director of Van Eck Associates Corporation, Van
99 Park Avenue Eck Securities and other affiliated companies.
New York, NY 10016
- ------------------------------------------------------------------------------------------------------------------------------------
Derek S. van Eck @** (35) Trustee and Officer Officer and Director of Van Eck Associates Corporation, Van
99 Park Avenue Eck Securities Corporation and other affiliated companies.
New York, NY 10016
- ------------------------------------------------------------------------------------------------------------------------------------
Officers of the Trust:
- ------------------------------------------------------------------------------------------------------------------------------------
Bruce J. Smith (45) Vice President and Treasurer Officer of other investment companies advised by the
99 Park Avenue Administrator; Senior Vice President and Chief Financial
New York, NY 10016 Officer of Van Eck Associates Corporation and Senior Managing
Director of Van Eck Securities Corporation.
- ------------------------------------------------------------------------------------------------------------------------------------
Thomas H. Elwood (52) Vice President and Secretary Officer of other investment companies advised by the
99 Park Avenue Administrator; Vice President, Secretary and General
New York, NY 10016 Counsel of Van Eck Associates Corporation and Van Eck Securities
Corporation; former Assistant Counsel Jefferson Pilot Financial
Insurance Company and officer of other investment companies advised
by Jefferson Pilot Financial Insurance and its affiliates.
- ------------------------------------------------------------------------------------------------------------------------------------
Joseph P. DiMaggio (43) Controller Officer of other investment companies advised by the
99 Park Avenue Adviser; Managing Director of Portfolio Administration
New York, NY 10016 of Van Eck Associates Corporation.
- ------------------------------------------------------------------------------------------------------------------------------------
Charles T. Cameron (40) Vice President Vice President of another investment company advised by the
99 Park Avenue Adviser; Director of Trading of Van Eck Associates
New York, NY 10016 Corporation.
- ------------------------------------------------------------------------------------------------------------------------------------
Susan C. Lashley (45) Vice President Officer of other investment companies advised by the
99 Park Avenue Administrator; Managing Director of Mutual Fund
New York, NY 10016 Operations of Van Eck Associates Corporation and Van Eck
Securities Corporation.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
Trustees of Van Eck Funds:
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Kevin Reid (37) Vice President Officer of other investment companies advised by the
99 Park Avenue Administrator; Director, Real Estate of Van Eck
New York, NY 10016 Associates Corporation.
- ------------------------------------------------------------------------------------------------------------------------------------
Gregory F. Krenzer (27) President of U.S. Government Co-Director, U.S. Government Money Fund of Van Eck
99 Park Avenue Money Fund Associates Corporation.
New York, NY 10016
- ------------------------------------------------------------------------------------------------------------------------------------
Dina C. Lee (29) Assistant Secretary Assistant Secretary of other investment companies advised
99 Park Avenue or administered by the Adviser; Staff Attorney of Van Eck
New York, NY 10016 Associates Corporation and Van Eck Securities Corporation.
- ------------------------------------------------------------------------------------------------------------------------------------
Alex W. Bogaenko (37) Assistant Controller Assistant Controller of other investment companies advised
99 Park Avenue or administered by the Adviser; Director of Portfolio
New York, NY 10016 Administration of Van Eck Associates Corporation and Van Eck
Securities Corporation.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
@ 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.
<TABLE>
<CAPTION>
Compensation Table
Aggregate Pension or Retirement Total Compensation From Fund
Name of Person Compensation Benefits Accrued As Part and Fund Complex (a)
Position From Fund of Fund Expenses Paid to Directors
- --------- ------------- ------------------------ ----------------------------
<S> <C> <C> <C>
John C. van Eck $ 0 $ 0 $ 0
Jeremy Biggs $ 0 $19,940 $42,500
Richard Cowell $19,940 $ 0 $36,000
Philip DeFeo $ 7,980 $ 8,306 $29,750
Wesley McCain $ 0 $19,940 $42,500
David Olderman $ 0 $15,046 $33,500
Ralph Peters $17,023 $ 0 $31,000
Richard Stamberger $ 5,266 $ 9,780 $27,500
Jan F. van Eck $ 0 $ 0 $ 0
Derek S. 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 March 2, 2000, all of the Officers and Trustees of the Trust as a
group owned the number of shares indicated of each Fund: 16,895.96 shares of
Asia Dynasty Fund - Class A, equal to approximately 58.26% of the shares
outstanding; 49,217.92 shares of Global Leaders Fund - Class A, equal to
approximately 91.98% of shares outstanding; 3,890,356.27 shares of the U.S.
27
<PAGE>
Government Money Fund, equal to approximately 99.97% of the shares outstanding.
As of March 2, 2000, 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 March 2, 2000, the following persons owned 5% or more of the shares
of the Fund(s) indicated below:
<TABLE>
<CAPTION>
International Investors Gold Fund (Class A shares) Asia Dynasty Fund (Class B shares)
- -------------------------------------------------- ----------------------------------
<S> <C> <C> <C>
Edward M. Miller & 6.35% MLPF&S for the sole benefit 38.52%
Edward W. Rodier & of its customers
Michael Reddington JR 4800 Deer Lake Drive East
Meridian Venture Partners II Ltd. 3rd Floor
2 Park Avenue, Suite 204 Jacksonville, FL 32246-6484
Manhasset, NY 11030-2410
MLPF&S for the sole benefit 5.24%
of its customers
4800 Deer Lake Drive East
3rd Floor
Jacksonville, FL 32246-6484
U.S. Government Money Fund Global Leaders Fund (Class B shares)
- -------------------------- ------------------------------------
Donaldson Lufkin Jenrette 17.96% MLPF&S for the sole benefit 19.66%
Securities Corporation Inc. of its customers
P.O. Box 2052 4800 Deer Lake Drive East
Jersey City, NJ 07303-2052 3rd Floor
Jacksonville, FL 32246-6484
E. D. & F. Man International 8.07%
Customer Omnibus Account 4490
440 South La Salle Street, Fl. 20
Chicago, IL 60605-1028
Trust Co. of America 5.91%
FBO QED
P.O. Box 6503
Englewood, CO 80155-6503
Global Hard Assets Fund (Class A shares)
---------------------------------------
LLT Limited 5.07% MLPF&S for the sole benefit 9.06%
Washington Mall of its customers
4th Floor 3rd Floor
Hamilton HM 11 4800 Deer Lake Drive East
Bermuda Jacksonville, FL 32246-6484
Natural Resources Fund (Class A Shares) Bank Labouchere NV 6.01%
- --------------------------------------- Attn: Ron L. Roemer
MLPF&S for the sole benefit 5.51% Keizersgracht 617
of its customers 1000 Avenue Amsterdam
4800 Deer Lake Drive East The Netherlands
Jacksonville, FL 32246-6484
</TABLE>
28
<PAGE>
<TABLE>
<CAPTION>
Asia Dynasty Fund (Class A shares) Global Hard Assets Fund (Class B shares)
- ------------------------------- ------------------------------------
<S> <C> <C> <C>
MLPF&S for the sole benefit 15.98% MLPF&S for the sole benefit 19.38%
of its customers of its customers
4800 Deer Lake Drive East 4800 Deer Lake Drive East
3rd Floor 3rd Floor
Jacksonville, FL 32246-6484 Jacksonville, FL 32246-6484
Charles Schwab & Co. Inc. 5.51% Global Hard Assets Fund (Class C shares)
Special Custody Acct. FEBO ----------------------------------------
Customers INSTL OneSource MLPF&S for the sole benefit 6.91%
Attn: Mutual Funds of its customers
101 Montgomery Street 4800 Deer Lake Drive East
San Francisco, CA 94104-4122 3rd Floor
Jacksonville, FL 32246-6484
</TABLE>
VALUATION OF SHARES
The net asset value per share of each of the Funds 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 Year's Day, Martin Luther King Jr.
Day, 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 of International Investors Gold Fund-A, Natural Resources Fund-A,
Global Hard Assets Fund-A, Asia Dynasty Fund-A, Emerging Markets Vision Fund-A
and Global Leaders Fund-A 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 plus a sales charge in accordance with the schedule set forth in
the Prospectus. Shares of the U.S. Government Money Fund are sold without a
sales charge. Shares of Asia Dynasty Fund-B, Emerging Markets Vision Fund-B,
Global Leaders Fund-B, and Global Hard Assets Fund-B are sold with a contingent
deferred sales charge. Shares of Global Hard Assets Fund were sold with a
redemption fee.
Set forth below is an example of the computation of the public offering
price for shares of the International Investors Gold Fund-A, Natural Resources
Fund-A, Asia Dynasty Fund-A, Emerging Markets Vision Fund-A, Global Hard Assets
Fund-A and Global Leaders Fund-A on December 31, 1999, under the then-current
maximum sales charge:
<TABLE>
<CAPTION>
Natural/ Global International Asia Global
Resources Hard Investors Dynasty Leaders
Fund-A Assets Gold Fund-A Fund-A Fund-A
--------- ------ ------------ ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value and repurchase $2.73 $13.49 $ 5.73 $14.60 $12.01
price per share on $.001 par
value capital shares outstanding
Maximum sales charge (as 0.17 0.82 0.35 0.89 0.73
described in the Prospectus)
Maximum offering price per share $2.90 $14.31 $ 6.08 $15.49 $12.74
</TABLE>
29
<PAGE>
In determining whether a contingent deferred sales charge is applicable to
a redemption of Class B shares or a redemption charge is applicable to Class C
shares, the calculation will be determined in the manner that results in the
lowest possible rate being charged. Therefore, it will be assumed that the
redemption is first of any Class A shares in the shareholder's Fund account
(unless a specific request is made to redeem a specific class of shares), second
of Class B shares held for over six years, Class C shares held for over one
year, shares attributable to appreciation or shares acquired pursuant to
reinvestment, and third of any Class C shares or Class B held longest during the
applicable period.
To provide two examples, assume an investor purchased 100 Class B shares
of Global Hard Assets Fund at $10 per share (at a cost of $1,000) and in the
second year after purchase, the net asset value per share is $12 and, during
such time, the investor has acquired 10 additional shares upon dividend
reinvestment. If at such time the investor makes his first redemption of 50
shares (proceeds $600), 10 shares or $120 will not be subject to charge because
of dividend reinvestment. With respect to the remaining 40 shares, the charge is
not applied to the $80 attributable to appreciation, but is applied only to the
original cost of $10 per share, and not to the increase in net asset value of $2
per share. Therefore, $200 of the $600 redemption proceeds will be charged at a
rate of 4% (the applicable rate in the second year after purchase). Instead,
assume an investor purchased 100 Class C shares of Global Hard Assets Fund at
$10 per share (at a cost of $1,000) and six months after purchase, the net asset
value per share is $12 and, during such time, the investor has acquired 10
additional shares upon dividend reinvestment. If at such time the investor makes
his first redemption of 50 shares (proceeds $600), 10 shares or $120 will not be
subject to charge because of dividend reinvestment. With respect to the
remaining 40 shares, the charge is not applied to the $80 attributable to
appreciation but is applied only to the original cost of $10 per share, and not
to the increase in net asset value of $2 per share. Therefore, $400 of the $600
redemption proceeds will be charged at a rate of 1%.
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.
U.S. GOVERNMENT MONEY FUND
It is the policy of the U.S. Government Money Fund to use its best efforts
to maintain a constant per share price equal to $1.00.
The portfolio instruments of the U.S. Government Money Fund are valued on
the basis of amortized cost. This involves valuing an instrument at its cost
initially and, thereafter, assuming a constant amortization to maturity of any
discount or premium, regardless of the impact of fluctuating interest rates on
the market value of the instrument. While this method provides certainty in
valuation, it may result in periods during which the value, as determined by
amortized cost, is higher or lower than the price the Fund would receive if it
sold the instrument.
The valuation of the Fund's portfolio instruments based upon their
amortized cost and simultaneous maintenance of the Fund's per share net asset
value at $1.00 are permitted by a rule adopted by the Securities and Exchange
Commission. Under this rule,
30
<PAGE>
the Fund must maintain a dollar-weighted average portfolio maturity of 90 days
or less, purchase only instruments having remaining maturities of thirteen
months or less, and invest only in securities determined by the Trustees to be
of high quality with minimal credit risks. In accordance with the rule, the
Trustees have established procedures designed to stabilize, to the extent
reasonably practicable, the Fund's price per share as computed for the purpose
of sales and redemptions at $1.00. Such procedures include review of the Fund's
portfolio holdings by the Trustees, at such intervals as they may deem
appropriate, to determine whether the net asset value of the Fund calculated by
using available market quotations or market equivalents deviates from $1.00 per
share based on amortized cost. The rule also provides that the extent of any
deviation between the Fund's net asset value based upon available market
quotations or market equivalents and $1.00 per share net asset value based on
amortized cost must be examined by the Trustees. In the event the Trustees
determine that a deviation exists which may result in material dilution or is
otherwise unfair to investors or existing shareholders, they must cause the Fund
to take such corrective action as they regard as necessary and appropriate,
including: selling portfolio instruments prior to maturity to realize capital
gains or losses or to shorten average portfolio maturity; withholding dividends
or paying distributions from capital or capital gains; redeeming shares in kind;
or establishing a net asset value per share by using available market
quotations.
EXCHANGE PRIVILEGE
Class A, Class B and Class C shareholders of a Fund may exchange their
shares for shares of the same class of other funds in the Van Eck Global Group
of Funds. The Exchange Privilege will not be available if the proceeds from a
redemption of shares of a Fund whose shares qualify are paid directly to the
shareholder. The Exchange Privilege is not available for shares which are not on
deposit with DST or State Street Bank ("SSB"), or shares which are held in
escrow pursuant to a Letter of Intent. If certificates representing shares of a
Fund accompany a written exchange request, such shares will be deposited into an
account with the same registration as the certificates upon receipt by DST.
The Funds each reserve the right to (i) charge a fee of not more than
$5.00 per exchange payable to a Fund or charge a fee reasonably intended to
cover the costs incurred in connection with the exchange; (ii) establish a limit
on the number and amount of exchanges made pursuant to the Exchange Privilege
and (iii) terminate the Exchange Privilege without written notice. In the event
of such termination, shareholders who have acquired their shares pursuant to the
Exchange Privilege will be afforded the opportunity to re-exchange such shares
for shares of the Fund originally purchased without sales charge, for a period
of not less than three (3) months.
By exercising the Exchange Privilege, each shareholder whose shares are
subject to the Exchange Privilege will be deemed to have agreed to indemnify and
hold harmless the Trust and each of its series, their investment adviser,
sub-investment adviser (if any), distributor, transfer agent, IFTC and the
officers, directors, employees and agents thereof against any liability, damage,
claim or loss, including reasonable costs and attorneys' fees, resulting from
acceptance of, or acting or failure to act upon, or acceptance of unauthorized
instructions or non-authentic telephone instructions given in connection with,
the Exchange Privilege, so long as reasonable procedures are employed to confirm
the authenticity of such communications. (For more information on the Exchange
Privilege, see the Prospectus).
TAX-SHELTERED RETIREMENT PLANS
The Trust offers several prototype tax-sheltered retirement plans through
which shares of a Fund may be purchased. These plans are more fully described
below. State Street Bank, P.O. Box 218407, Kansas City, Missouri, acts as the
trustee and/or custodian (the "Trustee") under the retirement plans offered by
the Trust. Persons who wish to establish a tax-sheltered retirement plan should
consult their own tax advisors or attorneys regarding their eligibility to do so
and the laws applicable thereto, such as the employee coverage and
nondiscrimination rules, fiduciary responsibility provisions, diversification
requirements and the reporting and disclosure obligations under the Employee
Retirement Income Security Act of 1974 and applicable state tax laws. The Trust
is not responsible for compliance with such laws. Further information regarding
the retirement plans, including applications and fee schedules, may be obtained
upon request to the Trust.
Regular Individual Retirement Account and Spousal Individual Retirement
Account. The Regular IRA is available to all individuals under age 70 1/2,
including self-employed individuals, who receive compensation for services
rendered and wish to pur-
31
<PAGE>
chase shares of a Fund. Spousal Individual Retirement Accounts ("SPIRA") are
available to individuals who are otherwise eligible to establish a Regular IRA
for themselves and whose spouses are treated as having no compensation of their
own.
The amount an individual contributes to a Regular IRA reduces the amount
the individual can contribute to a Roth IRA for the same year.
In general, the maximum deductible contribution to an IRA which may be
made for any one year is $2,000 or 100% of annual compensation includible in
gross income, whichever is less. If an individual establishes a SPIRA, the
maximum aggregate deductible amount that the individual may contribute annually
is the lesser of $4000 or 100%. However, that no more than $2,000 per year for
either the individual or the spouse may be contributed to either the IRA or
SPIRA.
In the case of a taxpayer who is deemed to be an active participant in an
employer-sponsored retirement plan, no deduction is available for contributions
to a Regular IRA or SPIRA if his adjusted gross income exceeds the annual
maximum. For 1998, the annual maximum is $60,000 for married taxpayers filing
jointly, $40,000 for single taxpayers, and $10,000 for married taxpayers filing
separately. For each year after 1998, the annual maximum for married taxpayers
filing jointly and single taxpayers is increased $1,000. In 2006, the annual
maximum filing jointly increases $5,000 and in 2007 increases $15,000. (Married
taxpayers who file joint tax returns will not be deemed to be active
participants solely because their spouse is an active participant under an
employer-sponsored retirement plan. However, when one spouse is an active
participant and the other is not, no deduction is available for contributions to
a Regular IRA by the nonactive participant spouse if the spouses' combined
adjusted gross income exceeds $160,000.) Taxpayers who are active participants
in employer-sponsored retirement plans will be able to make fully deductible IRA
contributions at the same levels discussed above, if their adjusted gross income
is less than the annual minimum. For 1998, the annual minimum is $50,000 for
married taxpayers filing jointly and $30,000 for single taxpayers. For married
taxpayers filing jointly and single taxpayers, the annual minimum is increased
at the same rate as the annual maximum through the year 2005. After 2005, the
annual minimum for married taxpayers filing jointly is increased $5,000 in 2006
and for 2007.
In the case of taxpayers who are active participants in employer-sponsored
retirement plans and who have adjusted gross income between the applicable
annual minimum and maximum, deductible IRA contributions will be phased out. In
general and before 2007, the $2,000 IRA deduction is reduced by $200 for each
$1,000 of adjusted gross income in excess of the applicable minimum. In general,
in the case of a taxpayer who contributes to an IRA and a SPIRA, the $4000 IRA
deduction is reduced by $400 for each $1,000 of adjusted gross income in excess
of the applicable minimum.
Individuals who are ineligible to make fully deductible contributions may
make nondeductible contributions up to an aggregate of $2,000 in the case of
contributions (deductible and nondeductible) to a Regular IRA and up to an
aggregate of $4,000 in the case of contributions (deductible and nondeductible)
to a Regular IRA and SPIRA. The income upon all such contributions will
accumulate tax free until distribution.
In addition, a separate rollover' IRA may be established by a "rollover"
contribution, which may permit the tax-free transfer of assets from qualified
retirement plans under specified circumstances. A "rollover contribution" from a
qualified retirement plan includes a lump sum distribution received by an
individual, because of severance of employment, from a qualified plan and paid
into an individual retirement account within 60 days after receipt or
transferred directly in a trust-to-trust transfer. A rollover IRA can be
established even if the individual is over age 70 1/2.
Dividends and capital gains earned on amounts invested in either an IRA or
SPIRA are automatically reinvested by the Trustee in shares of a Fund and
accumulate tax-free until distribution. Distributions from a Regular IRA, SPIRA
or rollover IRA, to the extent taxable, are taxable as ordinary income.
Distributions from either an IRA or SPIRA prior to age 59-1/2 may result in
adverse tax consequences and penalties. In addition, there may be a penalty on
contributions in excess of the contribution limits and other penalties are
imposed on insufficient payouts after age 70-1/2.
Roth Individual Retirement Account and Spousal Individual Retirement
Account. The Roth IRA is available to all individuals who wish to purchase Fund
shares regardless of their age, including self-employed individuals, and whose
adjusted gross income is less than $160,000 for married taxpayers filing
jointly, $10,000 for married taxpayers filing jointly, $10,000 for married
taxpayers filing separately, and $110,000 for single taxpayers. Spousal Roth
IRA's ("SPRIRA") are available to individuals who are otherwise eligible to
establish a Roth IRA for themselves and whose spouses are treated as having no
compensation of their own.
32
<PAGE>
Contributions to a Roth IRA or SPRIRA are not deductible. In general, the
maximum annual contribution to a Roth IRA which may be made for any one year is
$2,000 or 100% of annual compensation includible in gross income, whichever is
less, minus any contributions made for the year to a Regular IRA. If an
individual establishes a SPRIRA, the aggregate maximum amount that the
individual may contribute annually is the lesser of $4,000 or 100% of the
combined compensation of individual and spouse, minus any deductible Regular IRA
or Roth IRA contributions made by the individual to his own Regular or Roth IRA
for the taxable year. The amount an individual contributes to a Roth IRA reduces
the amount such individual can contribute to a Regular IRA for the same year.
Taxpayers can make the full annual contribution to a Roth IRA if their
adjusted gross income for the year is less than $150,000 if married filing
jointly, or less than $95,000 if single.
Taxpayers who are eligible to establish a Roth IRA, but whose adjusted
gross incomes exceed the amount for making a full annual contribution, can make
a reduced contribution to the Roth IRA. In general, to determine the reduced
contribution: (i) subtract the base amount ($95,000 for single, $150,000 for
married filing jointly, $0 for married filing separately) from adjusted gross
income; (ii) subtract the amount in (i) above from $15,000 ($10,000 if married
filing jointly or married filing separately); (iii) divide the amount in (ii) by
$15,000 ($10,000 if married filing jointly or married filing separately); and
(iv) multiply the fraction from (iii) by $2,000 ($4,000 for a SPRIRA).
In addition, if the adjusted gross income of married taxpayers who file
joint returns or a single taxpayer is less than $100,000, they may convert a
non-Roth IRA to a Roth IRA. Married couples filing separate returns cannot make
such a conversion. A taxpayer converts a non Roth IRA into a Roth IRA by
withdrawing the funds from his non Roth IRA and rolling them over into a Roth
IRA within 60 days, or by directing his non Roth IRA trustee or custodian to
convert the existing non Roth IRA with such custodian or trustee. Except for
conversions made during 1998, the amount rolled over from the non Roth IRA to
the Roth IRA is includible in income and subject to income tax in the year of
conversion. For non Roth IRAs converted into Roth Conversion IRAs during 1998,
special rules apply. The amount rolled over is includible in Federal gross
income (and subject to Federal income taxes) over a four year period.
In addition, an individual can rollover a Roth IRA into another Roth IRA
within 60 days after receipt of the funds (or directly in a trustee-to-trustee
transfer).
Dividends and capital gains earned on amounts invested in either a Roth
IRA or SPRIRA are automatically reinvested by the Trustee in shares of a Fund
and accumulate tax free until distribution.
"Qualified distribution" from either a Roth IRA or SPIRA are not included
in federal gross income and not subject to federal income tax. Any non-qualified
distribution is includible in federal gross income and subject to federal income
tax only to the extent it is a distribution of earnings. These earnings are
taxable as ordinary income. To be a "qualified distribution" the amounts must be
withdrawn after the "5-year holding period" and must be withdrawn when you are
age 59 1/2 or older, because of death or permanent disability, or to pay for
qualifying "first-time homebuyer expenses." For Roth IRAs, SPRIRAs and rollover
Roth IRAs, the "5-year holding period" is the five tax year period beginning
with the first tax year for which the taxpayer made a contribution to his or her
Roth IRA. For non Roth IRAs converted into Roth IRAs, the "5-year holding
period" is the five tax year period beginning with the first tax year in which
the non Roth IRA was converted to a Roth IRA.
Withdrawals are deemed to be made first from contributions to the Roth IRA
and then from earnings. Thus, until the full amount contributed has been
withdrawn, withdrawals are not includible for federal gross income. Special
rules apply to withdrawals from Regular IRAs converted in 1998 to a Roth IRA.
The taxable portion of distributions from either a Roth IRA or SPRIRA
prior to age 59 1/2 may result in adverse tax consequences and penalties. In
addition, there may be a penalty on contributions in excess of the contribution
limits.
Simplified Employee Pension Plan. An SEP may be utilized by employers to
provide retirement income to employees by making contributions to employee SEP
IRAs. Owners and partners may qualify as employees. The employee is always 100%
vested in contributions made under an SEP. Subject to certain limitations, an
employer may also make contributions to an SEP-IRA under a salary reduction
arrangement, by which the employee elects contributions to an SEP-IRA in lieu of
immediate cash compensation. After December 31, 1996, contributions under a
salary reduction arrangement are permitted only into SEP plans in exis-
33
<PAGE>
tence on December 31, 1996. The maximum contribution to an SEP-IRA (an IRA
established to receive SEP contributions) is the lesser of $30,000 or 15% of
taxable compensation from the employer, excluding contributions made pursuant to
a salary reduction arrangement.
Contributions by employers under an SEP arrangement up to the maximum
permissible amounts are deductible by employers for federal income tax purposes.
Contributions up to the maximum permissible amounts are not includible in the
gross income of the employee. Dividends and capital gains on amounts invested in
SEP-IRAs are automatically reinvested by the Trustee in shares of the mutual
fund that paid such amounts, and accumulate tax-free until distribution.
Withdrawals of amounts prior to age 59 1/2 may result in adverse tax
consequences. In addition, there may be a penalty on contributions in excess of
the contribution limits, and other penalties are imposed on insufficient payouts
after age 70 1/2.
Qualified Pension Plans. International Investors Fund offers forms of
prototype profit sharing and money purchase pension plans (together, the
"Qualified Pension Plans") that can be utilized by self-employed individuals,
partnerships and corporations (for this purpose called "Employers") and their
employees who wish to purchase shares of a Fund under a retirement program.
The maximum combined contribution which may be made to all Qualified
Pension Plans in any one year on behalf of a participant is, depending on the
types of plans and benefit formula selected by the Employer, up to the lesser of
$30,000 or 25 percent of compensation (net earned income in the case of a
self-employed individual). Contributions by Employers to Qualified Pension Plans
up to the maximum permissible amounts are deductible for Federal income tax
purposes. Amounts contributed by employers on behalf of employees are not taxed
to the employees until the time of distribution, except that contributions in
excess of permissible amounts may result in adverse tax consequences and
penalties to the Employer. Dividends and capital gains earned on amounts
invested in Qualified Pension Plans are automatically reinvested by the Trustee
in shares of a Fund and accumulate tax-free until distribution.
Amounts contributed by employers on behalf of employees are not taxed to
the employees until the time of distribution, except that withdrawals of
contributions prior to age 59-1/2 may result in adverse tax consequences and
penalties.
403(b)(7) Program. The Tax-Deferred Annuity Program and Custodial Account
offered by the Fund (the "403(b)(7) Program") allows employees of certain tax
exempt organizations and schools to have a portion of their compensation set
aside for their retirement years in shares held in an investment company
custodial account.
In general, the maximum limit on annual contributions for each employee is
the lesser of $30,000 per year (as adjusted by the IRS for cost-of-living
increases), 25% of the employee's compensation, or the employee's exclusion
allowance specified in Section 403(b) of the Code. However, an employee's salary
reduction contributions to a 403(b)(7) Program may not exceed $9,500 a year (as
adjusted for cost of living expenses). Amounts contributed by employers on
behalf of employees are not taxed to the employees until the time of
distribution, except that contributions in excess of permissible amounts may
result in adverse tax consequences and penalties. Dividends and capital gains on
amounts invested in the 403(b)(7) Program are automatically reinvested in shares
of a Fund. It is intended that dividends and capital gains on amounts invested
in the 403(b)(7) Program will accumulate tax-free until distribution.
Employees will receive distributions from their accounts under the
403(b)(7) Program following termination of employment by retirement or at such
other time as the employer shall designate, but in no case later than an
employee reaching age 65. Withdrawals of contributions prior to age 59-1/2 may
result in adverse tax consequences and penalties. Employees will also receive
distributions from their accounts under the 403(b)(7) Program in the event they
become disabled.
INVESTMENT PROGRAMS
Dividend Reinvestment Plan. Reinvestments of dividends of the Funds,
except for U.S. Government Money Fund, will occur on a date selected by the
Board of Trustees. Reinvestment of U.S. Government Money Fund will occur on the
last day of the month.
Automatic Exchange Plan. Investors may arrange under the Exchange Plan to
have DST collect a specified amount once a month or quarter from the investor's
account in one of the Funds and purchase full and fractional shares of another
Fund at the
34
<PAGE>
public offering price next computed after receipt of the proceeds. Further
details of the Automatic Exchange Plan are given in the application which is
available from DST or the Funds. This does not apply to Class B or Class C
shares.
An investor should realize that he is investing his funds in securities
subject to market fluctuations, and accordingly the Automatic Exchange Plan does
not assure a profit or protect against depreciation in declining markets. The
Automatic Exchange Plan contemplates the systematic purchase of securities at
regular intervals regardless of price levels.
The expenses of the Automatic Exchange Plan are general expenses of a Fund
and will not involve any direct charge to the participating shareholder. The
Automatic Exchange Plan is completely voluntary and may be terminated on fifteen
days' notice to DST.
Automatic Investment Plan. Investors may arrange under the Automatic
Investment Plan to have DST collect a specified amount once a month or quarter
from the investor's checking account and purchase full and fractional shares of
a Fund at the public offering price next computed after receipt of the proceeds.
Further details of the Automatic Investment Plan are given in the application
which is available from DST or the Funds.
An investor should realize that he is investing his funds in securities
subject to market fluctuations, and accordingly the Automatic Investment Plan
does not assure a profit or protect against depreciation in declining markets.
The Automatic Investment Plan contemplates the systematic purchase of securities
at regular intervals regardless of price levels.
The expenses of the Automatic Investment Plan are general expenses of a
Fund and will not involve any direct charge to the participating shareholder.
The Automatic Investment Plan is completely voluntary. The Automatic Investment
Plan may be terminated on thirty days' notice to DST.
Automatic Withdrawal Plan. The Automatic Withdrawal Plan is designed to
provide a convenient method of receiving fixed redemption proceeds at regular
intervals from shares of a Fund deposited by the investor under this Plan. This
Plan is not available to Class B or Class C shareholders. Further details of the
Automatic Withdrawal Plan are given in the application, which is available from
DST or the Funds.
In order to open an Automatic Withdrawal Plan, the investor must complete
the Application and deposit or purchase for deposit, with DST, the agent for the
Automatic Withdrawal Plan, shares of a Fund having a total value of not less
than $10,000 based on the offering price on the date the Application is
accepted.
Income dividends and capital gains distributions on shares under an
Automatic Withdrawal Plan will be credited to the investor's Automatic
Withdrawal Plan account in full and fractional shares at the net asset value in
effect on the reinvestment date.
Periodic checks for a specified amount will be sent to the investor, or
any person designated by him, monthly or quarterly (January, April, July and
October). A Fund will bear the cost of administering the Automatic Withdrawal
Plan.
Redemption of shares of a Fund deposited under the Automatic Withdrawal
Plan may deplete or possibly use up the initial investment plus income dividends
and distributions reinvested, particularly in the event of a market decline. In
addition, the amounts received by an investor cannot be considered an actual
yield or income on his investment, since part of such payments may be a return
of his capital. The redemption of shares under the Automatic Withdrawal Plan may
give rise to a taxable event.
The maintenance of an Automatic Withdrawal Plan concurrently with
purchases of additional shares of a Fund would be disadvantageous because of the
sales charge payable with respect to such purchases. An investor may not have an
Automatic Withdrawal Plan in effect and at the same time have in effect an
Automatic Investment Plan or an Automatic Exchange Plan. If an investor has an
Automatic Investment Plan or an Automatic Exchange Plan, such service must be
terminated before an Automatic Withdrawal Plan may take effect.
The Automatic Withdrawal Plan may be terminated at any time (1) on 30 days
notice to DST or from DST to the investor, (2) upon receipt by DST of
appropriate evidence of the investor's death or (3) when all shares under the
Automatic Withdrawal Plan have been redeemed. Upon termination, unless otherwise
requested, certificates representing remaining full shares, if any, will be
delivered to the investor or his duly appointed legal representatives.
35
<PAGE>
TAXES
Taxation of the Fund -- In General
Each of the Funds intends 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.
Each 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
Original issue discount. For federal income tax purposes, debt securities
purchased by the Funds may be treated as having an original issue discount.
Original issue discount represents interest for federal income tax purposes and
can generally be defined as the excess of the stated redemption price at
maturity of a debt obligation over the issue price. Original issue discount is
treated for federal income tax purposes as income earned by the Funds, whether
or not any income is actually received, and therefore is subject to the
distribution requirements of the Code. Generally, the amount of original issue
discount included in the income of the Funds each year is determined on the
basis of a constant yield to maturity which takes into account the compounding
of accrued interest.
Debt securities may be purchased by the Funds at a discount which exceeds
the original issue discount remaining on the securities, if any, at the time the
Funds purchased the securities. This additional discount represents market
discount for income tax purposes. In the case of any debt security issued after
July 18, 1984, having a fixed maturity date of more than one year from the date
of issue and having market discount, the gain realized on disposition will be
treated as interest to the extent it does not exceed the accrued market discount
on the security (unless the Funds elect to include such accrued market discount
in income in the tax year to which it is attributable). Generally, market
discount is accrued on a daily basis. The Funds may be required to capitalize,
rather than deduct currently, part or all of any direct interest expense
incurred or continued to purchase or carry any debt security having market
discount, unless they make the election to include market discount currently.
Because the Funds must include original issue discount in income, it will be
more difficult for the Funds to make the distributions required for them to
maintain their status as a regulated investment company under Subchapter M of
the Code or to avoid the 4% excise tax described above.
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.
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<PAGE>
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 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
37
<PAGE>
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
U.S. GOVERNMENT MONEY FUND
The U.S. Government Money Fund may advertise performance in terms of yield
based on a seven-day yield or an effective yield. Seven-day yield is computed by
determining the net change, exclusive of capital changes, in the value of a
hypothetical pre-existing account having a balance of one share at the beginning
of the period, subtracting a hypothetical charge reflecting deductions from
shareholder accounts, and dividing the difference by the value of the account at
the beginning of the base period to obtain the base period return, and then
multiplying the base period return by (365/7) with the resulting yield figure
carried to at least the nearest hundredth of one percent.
Effective yield quotation is based on the seven days ended on the date of
the calculation and is computed by determining the net change, exclusive of
capital changes, in the value of a hypothetical pre-existing account having a
balance of one share at the beginning of the period, subtracting a hypothetical
charge reflecting deductions from shareholder accounts, and dividing the
difference by the value of the account at the beginning of the base period to
obtain the base period return, and then compounding the base period return by
adding 1, raising the sum to a power equal to 365 divided by 7, and subtracting
1 from the result, according to the following formula: EFFECTIVE YIELD = [(BASE
PERIOD RETURN + 1)365/7]-1 with the resulting yield figure carried to at least
the nearest hundredth of one percent.
In calculating yield or effective yield quotations, the net change in an
account value includes: (a) the value of additional shares purchased with
dividends from the original share and dividends declared on both the original
share and any such additional shares; (b) all fees, other than nonrecurring
account or sales charges, that are charged to all shareholder accounts in
proportion to the length of the base period. The calculation excludes realized
gains and losses from the sale of securities and unrealized appreciation and
depreciation.
The seven day yield and seven day effective yield for the U.S. Government
Money Fund at December 31, 1999 was 2.49% and 2.52%, respectively.
Asia Dynasty Fund, Emerging Markets Vision Fund, Global Leaders Fund,
Global Hard Assets Fund, Natural Resources Fund and International Investors Gold
Fund
The above Funds 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)^n = ERV
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<PAGE>
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. Certain expenses
were subsidized/waived; returns would be lower without those reimbursements.
Average Annual Total Return for the Period ended December 31, 1999 (after
maximum sales charge).
Fund 1 Year 5 Years 10 Years Life
- ---- ------ ------- -------- ----
International Investors Gold Fund
(Class A) (17.38)% (17.40)% (8.07)% 8.55%
Natural Resources Fund (Class A) (15.48) (13.63) (6.94) -1.17
Asia Dynasty Fund (Class A) 105.80 8.91 -- 10.82
Asia Dynasty Fund (Class B) 111.71 9.10 -- 8.86
Global Leaders Fund (Class A) 25.17 17.56 -- 13.60
Global Leaders Fund (Class B) 27.27 18.10 -- 14.01
Global Hard Assets Fund (Class A) 9.94 8.29 -- 7.78
Global Hard Assets Fund (Class B) 10.72 -- -- 2.03
Global Hard Assets Fund (Class C) 14.77 9.29 -- 8.74
The Global Leaders Fund, Asia Dynasty Fund, Emerging Markets Vision Fund,
Natural Resources Fund, Global Hard Assets Fund, and International Investors
Gold 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)^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 was 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 Global Leaders Fund, Global Hard Assets Fund, Asia Dynasty Fund,
Emerging Markets Vision Fund, Natural Resources Fund, and International
Investors Gold 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 recur-
39
<PAGE>
ring fees that are charged to all shareholder accounts. Certain expenses were
subsidized/waived; returns would be lower without those reimbursements.
Aggregate Total Return for the period ended December 31, 1999 (after
maximum sales charge).
<TABLE>
<CAPTION>
Fund 1 Year 5 Years 10 Years Life
- ---- ------ ------- -------- ----
<S> <C> <C> <C> <C>
International Investors Gold Fund
(Class A) (17.38)% (61.55)% (56.89)% 3,602.98%
Natural Resources Fund (Class A) (15.48) (51.94) (51.29) (15.11)
Asia Dynasty Fund (Class A) 105.80 53.22 -- 100.63
Asia Dynasty Fund (Class B) 111.71 54.54 -- 71.13
Global Leaders Fund (Class A) 25.17 124.50 -- 115.71
Global Leaders Fund (Class B) 27.27 129.72 -- 120.51
Global Hard Assets Fund (Class A) 9.94 48.91 -- 47.23
Global Hard Assets Fund (Class B) 10.72 -- -- 7.68
Global Hard Assets Fund (Class C) 14.77 55.92 -- 54.12
</TABLE>
Advertising Performance
As discussed in the Funds' Prospectus, the Funds may quote performance
results from recognized publications which monitor the performance of mutual
funds, and the Funds may compare their performance to various published
historical indices. These publications are listed in Part B of the Appendix. In
addition, the Funds may quote and compare their performance to the performance
of various economic and market indices and indicators, such as the S&P 500,
Financial Times Index, Morgan Stanley Capital International Europe, Australia,
Far East Index, Saloman Brothers World Property Index, Morgan Stanley Capital
International Emerging Markets Free Index, Morgan Stanley Capital International
World Index, Morgan Stanley Capital International Real Estate Index, NAREIT
Equity Index, Wilshire Real Estate Securities Index, Morgan Stanley REIT Index,
Saloman Brothers World Property Index, Morgan Stanley Capital International
Combined Far East (ex-Japan) Free Index, Salomon Brothers World Bond Index,
Salomon Brothers World Government Bond Index, GNP and GDP data. Descriptions of
these indices are provided in Part B of the Appendix.
ADDITIONAL INFORMATION
Custodian. State Street Bank and Trust Company, 225 Franklin Street,
Boston, MA 02110 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 Auditors. Ernst & Young LLP, 787 Seventh Avenue, New York, NY
10019 serves as independent auditors 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, Global Hard Assets Fund,
Global Leaders Fund, International Investors Gold Fund, Natural Resources Fund
and U.S. Government Money Fund for the fiscal year ended December 31, 1999, 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.
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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 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.
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<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 ever 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.
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.
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<PAGE>
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 many 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, high internal cash generation, 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.
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 Miner, 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,
43
<PAGE>
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 Emerging Markets Free Index: A market
capitalization-weighted index that captures 60% of the publicly traded equities
in each industry for 26 emerging markets. "Free" indicates that the Index
includes only those securities available to foreign (e.g., U.S.) investors.
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 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 mar-
44
<PAGE>
ket 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.
45
<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 for the
years ended December 31, 1995, 1996, 1997, 1998 and 1999.
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,
1999, 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:
<PAGE>
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).
(1)(d) Eleventh Amendment to Amended and Restated Master Trust Agreement
deleting Emerging Market Growth Fund and Real Estate Fund and changing
the name of Global Balanced Fund to Global Leaders 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).
15(l) Form of Advisory Agreement between Van Eck Associates Corporation
and Van Eck Funds with respect to Emerging Markets Vision Fund.
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).
(6)(g) Letter Agreement to add Emerging Markets Vision Fund.
(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).
(9)(i) Letter Agreement adding Emerging Markets Fund (to be filed by
amendment).
(10)(a) 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, LLP with respect to issuance of
Class A and Class B shares of Emerging Markets Vision Fund.
(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) (to be filed by Amendment).
(15)(c)* Letter Agreement to add Emerging Markets Vision Fund (Class A/Class B).
(16) Computation of Performance Quotation (incorporated by reference to
Post-Effective Amendment No. 51).
(17)* Financial Data Schedule).
(18) Powers of Attorney (incorporated by reference from Post-Effective
Amendment No. 5).
(19) Code of Ethics.
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 March 2, 2000 of each
series of the Registrant:
FUND
NAME NUMBER OF RECORD HOLDERS
---- ------------------------
CLASS A CLASS B CLASS C
------- ------- -------
Global Leaders Fund...... 3,238 505
Asia Dynasty Fund........ 3,640 1,040
International Investors
Gold Fund............... 42,574
Gold/Resources Fund...... 14,574
Global Hard Assets Fund.. 3,604 831 584
U.S. Government Money
Fund.................... 2,792
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 None
270 River Road and Director
Briarcliff Manor, NY
Derek van Eck Director Trustee and Executive Vice President
99 Park Avenue
New York, NY 10016
Bruce J. Smith Vice President, Chief Financial Officer, Vice President and Treasurer
99 Park Avenue Treasurer and Controller
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 Executive Vice President 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.
ACCOUNTS, BOOKS AND DOCUMENTS LISTED BY
REFERENCE TO SPECIFIC SUBSECTION OF
17 CFR 270 31A-1 TO 31A-3 PERSON IN POSSESSION AND ADDRESS
- --------------------------------------- --------------------------------
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
7
<PAGE>
ACCOUNTS, BOOKS AND DOCUMENTS LISTED BY
REFERENCE TO SPECIFIC SUBSECTION OF
17 CFR 270 31A-1 TO 31A-3 PERSON IN POSSESSION AND ADDRESS
- --------------------------------------- --------------------------------
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
ITEM 31. Management Services
- ----------------------------
None
ITEM 32. Undertakings
------------
None
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 16th day of February 2000.
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:
Signature Title Date
- --------- ----- ----
/s/ John C. van Eck Chairman and President 2/16/00
- ----------------------
John C. van Eck
/s/ Bruce J. Smith Chief Financial Officer 2/16/00
- ----------------------
Bruce J. Smith
/s/ Jeremy Biggs* Trustee 2/16/00
- ----------------------
Jeremy Biggs
/s/ Richard Cowell* Trustee 2/16/00
- ----------------------
Richard Cowell
/s/ Philip DeFeo* Trustee 2/16/00
- ----------------------
Philip DeFeo
/s/ Wesley G. McCain* Trustee 2/16/00
- ----------------------
Wesley G. McCain
/s/ David J. Olderman* Trustee 2/16/00
- ----------------------
David J. Olderman
/s/ Ralph F. Peters* Trustee 2/16/00
- ----------------------
Ralph F. Peters
<PAGE>
Signature Title Date
- --------- ----- ----
/s/ Richard Stamberger* Trustee 2/16/00
- -----------------------
Richard Stamberger
/s/ Derek S. van Eck Trustee 2/16/00
- -----------------------
Derek S. van Eck
/s/ Jan F. van ECK Trustee 2/16/00
- -----------------------
Jan F. van Eck
/s/ John C. van Eck Trustee 2/16/00
- -----------------------
* Executed on behalf of Trustee by John C. van Eck, as attorney-in-fact.
April 28, 2000
Van Eck Funds
99 Park Avenue
New York, NY 10016
Gentlemen:
As counsel to Van Eck Funds (the "Trust"), a Massachusetts business
trust, we have been asked to render our opinion with respect to the issuance of
an indefinite number of Class A and Class B shares of beneficial interest, $.001
par value per share, of the Trust (the "Shares") representing interests in the
Emerging Markets Vision Fund series of the Trust, as more fully described in the
prospectus and statement of additional information contained in Post-Effective
Amendment No. 53 (the "Amendment") to the Trust"s Registration Statement No.
2-97596 on Form N-1A.
We have examined the Amended and Restated Master Trust Agreement of the
Trust dated February 6, 1992, as amended, the By-Laws of the Trust, as amended,
the records of certain meetings and written consents of the Trustees of the
Trust, the prospectus and statement of additional information relating to the
Shares contained in the Amendment, and such other documents, records and
certificates as we have deemed necessary for the purposes of this opinion.
Based upon the foregoing, we are of the opinion that the Shares, when
issued and sold in accordance with the terms of the prospectus and statement of
additional information relating to the Shares in effect at the time of such
issuance and sale, will be legally issued, fully paid and non-assessable by the
Trust.
We also hereby consent to the reference to this firm in the statement
of additional information under the heading "Additional Information--Counsel"
which forms a part of the Amendment and to the filing of this opinion as an
exhibit to the Amendment.
Very truly yours,
/s/ Goodwin, Procter & Hoar LLP
-------------------------------
GOODWIN, PROCTER & HOAR LLP
We consent to the reference to our firm under the captions "Financial
Highlights" and "Independent Auditors" and to the incorporation by reference of
our report dated February 10, 2000 in this Registration Statement (From N-1A No.
2-97596) of Van Eck Funds.
/s/ ERNST & YOUNG LLP
---------------------
ERNST & YOUNG LLP
New York, New York
April 24, 2000
PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
(Class A Shares)
WHEREAS, VAN ECK FUNDS, an unincorporated business trust organized
under the laws of the Commonwealth of Massachusetts (hereinafter called the
"Trust"), is engaged in business as an open-end management investment company
and is registered as such under the Investment Company Act of 1940, as amended
(the "Act");
WHEREAS, the Trust is authorized to issue shares of beneficial
interest, in separate series, with each such series representing the interests
in a separate portfolio of securities and other assets (any series, currently
existing or hereafter established by the Trust offering two or more classes of
its shares adopting this plan, as set forth in Exhibit A hereto as it may be
amended from time to time, being referred to hereafter, individually or
collectively as the context may require, as "Series");
WHEREAS, shares of beneficial interest of series of the Trust may be
divided into two or more classes;
WHEREAS, the class of shares of a Series offered to the public at net
asset value plus a sales charge equal to a specified percentage of the public
offering price on the terms and conditions set forth in the Trust's then-current
prospectus shall be designated as Class A shares (the "Shares");
WHEREAS, Van Eck Securities Corporation (the "Underwriter") serves as
principal underwriter of Shares of each Series pursuant to a written agreement;
WHEREAS, the Trust hereby intends to act as a distributor of Shares in
accordance with Rule 12b-1 under the Act, as it may from time to time be amended
("Rule 12b-1"), and desires to adopt a Plan of Distribution pursuant to such
Rule on the terms and conditions as hereinafter set forth, in respect of the
Shares (the "Plan");
WHEREAS, the Trustees as a whole, and the Trustees who are not
"interested persons" of the Trust (as defined in the Act) and who have no direct
or indirect financial interest in the operation of the Plan and any agreements
relating to it (the "Qualified Trustees"), having determined, in the exercise of
their reasonable business judgment and in light of their fiduciary duties under
state law and under Sections 36(a) and (b) of the Act, that there is a
reasonable likelihood that the Plan will benefit the Series and the holders of
the Shares of such Series, have approved the Plan by vote cast in person at a
meeting called for the purpose of voting on the Plan and agreements related
thereto; and
WHEREAS, Van Eck Associates Corporation, as the sole shareholder of the
Shares of the Initial Series, has approved the Plan.
NOW, THEREFORE, the Trust hereby adopts the Plan in accordance with
Rule 12b-1:
Section 1. DISTRIBUTION ACTIVITIES
Subject to the supervision of the Trustees, the Trust or the
Underwriter on behalf of the Trust for the compensation set forth herein may,
directly or indirectly, engage in any activities primarily intended to result in
the sale of Shares, which activities may include, but are not limited to, one or
more of the following: (1) making payments to securities dealers and others
engaged in the sale of Shares, including making payments of fees to the broker
of record for servicing shareholder accounts ("Maintenance Fees"); (2) paying
compensation to and expenses of personnel (including personnel of the
Underwriter and organizations with which the Trust or the Underwriter has
entered into agreements pursuant to this Plan) who engage in or support
distribution of Shares or who render shareholder support services, including but
not limited to, office space and equipment, telephone facilities and expenses,
answering routine inquiries regarding the Trust, processing shareholder
transactions and providing such other shareholder services, other than those
<PAGE>
provided by the transfer agent and other agents of the Trust, as the Trust may
reasonably request; (3) formulating and implementing marketing and promotional
activities, including but not limited to direct mail promotions and television,
radio, newspaper, magazine and other mass media advertising; (4) preparing,
printing and distributing sales literature; (5) preparing, printing and
distributing prospectuses of the Trust and reports for recipients other than
existing shareholders of the Trust; and (6) obtaining such information, analyses
and reports with respect to marketing and promotional activities as the Trust
may, from time to time, deem advisable. The Underwriter on behalf of the Trust
is authorized to engage in the activities listed above, and in any other
activities primarily intended to result in the sale of Shares, either directly
or through other persons with which the Trust or the Underwriter has entered
into agreements pursuant to the Plan (all such activities hereafter
"Distribution Activities"). The Underwriter is not obligated to perform all of
the Distribution Activities enumerated above or maintain any level of services
or expenditures, but shall in its sole discretion, determine which Distribution
Activities to engage in and the resources to be committed to such activities.
Section 2. FEES, MAXIMUM EXPENDITURES
(a) PAYMENT FOR DISTRIBUTION ACTIVITIES - The Trust is authorized to
pay the Underwriter for the Distribution Activities performed under the Plan, a
fee at the annual rate set forth in Exhibit A ("Annual Fee"). Such Series shall
calculate daily amounts payable by it in respect of Shares hereunder and shall
pay such amounts monthly or at such other intervals as the Trustees may
determine. In the event the Plan is terminated, the Underwriter shall be
entitled to recoup amounts expended on Distribution Activities on behalf of the
Series in excess of the Annual Fees and any other compensation received in
connection with the distribution of the Shares ("Unrecouped Amounts"). The
payment of Unrecouped Amounts in the case of a Series shall not exceed, on an
annual basis, the Annual Fee ("Annual Limitation"). Unrecouped Amounts payable
under the Plan that are not paid because they exceed the Annual Fee ("Carry
Forward Amounts") shall be carried forward by a Series and shall be paid within
the Annual Limitation in accordance with this Plan. Carry Forward Amounts
attributable to commissions advanced by, or on behalf of, the Underwriter in
respect of Shares pursuant to Section 1(1) hereof are "Carry Forward
Commissions."
APPLICATION OF PROCEEDS - The excess of amounts received by the
Underwriter under Section 2(a) hereof over amounts paid by it as Maintenance
Fees to third parties which are not "affiliated persons" (as defined in the Act)
of the Trust shall be applied toward reducing the Unrecouped Amounts.
(c) ______ Any Unrecouped Carry Forward Amounts under Section 2(a)
attributable to a fiscal year of a Series shall be paid by the Trust in respect
of Shares in a subsequent year within the limitations set forth herein.
Expenditures made by one class under the Plan may not be used to subsidize the
sale of shares of another class of a Series.
Section 3. TERM AND TERMINATION
(a) SERIES. The Plan shall become effective on June 2, 1997 with
respect to the Series listed in Schedule A hereto.
(b) ADDITIONAL SERIES. As additional Series are established, the Plan
shall become effective with respect to each such Series listed in Exhibit A at
the Annual Fee set forth in such Exhibit upon the initial public offering of
such new Series, provided that the Plan has previously been approved for
continuation, together with any related agreements, by votes of a majority of
both (a) the Trustees of the Trust and (b) the Qualified Trustees of the Trust,
cast in person at a meeting held before the initial public offering of such new
Series and called for the purpose of voting on such approval.
(c) CONTINUATION OF THE PLAN. The Plan and any related agreements shall
continue in effect with respect to a Series for so long as such continuance is
specifically approved at least annually by votes of a
<PAGE>
majority of both (a) the Trustees of the Trust and (b) the Qualified Trustees,
cast in person at a meeting called for the purpose of voting on this Plan and
any related agreements.
(d) TERMINATION OF THE PLAN. The Plan may be terminated at any time
with respect to any Series by vote of a majority of the Qualified Trustees of
the Trust, or by vote of a majority of the outstanding Shares of that Series.
The Underwriter shall not be entitled to payments or reimbursement in respect of
costs incurred in performing Distribution Activities which occur after
termination of the Plan. However, the Underwriter shall be entitled to
reimbursement of all Unrecouped Amounts and other costs properly incurred in
respect of Shares prior to termination, and the Trust shall continue to make any
required payments to the Underwriter pursuant to Section 2 subject to the Annual
Limitation until such time as all such amounts have been reimbursed. The Plan
may remain in effect with respect to a Series even if it has been terminated in
accordance with this Section 3(d) with respect to one or more other Series.
Section 4. AMENDMENTS
The Plan may not be amended to increase materially the amount of
distribution expenditures provided for in Section 2 hereof unless such amendment
is approved by a vote of the majority of the outstanding voting securities of
each of the affected classes of a Series and no material amendment to the Plan
shall be made unless approved in the manner provided for annual continuation in
Section 3(c) hereof.
Section 5. INDEPENDENT TRUSTEES
While the Plan is in effect, the selection and nomination of Trustees
who are not interested persons (as defined in the Act) of the Trust shall be
committed to the discretion of the Trustees who are not interested persons.
Section 6. QUARTERLY REPORTS; ANNUAL REPORTS
The Treasurer of the Trust shall provide to the Trustees and the
Trustees shall review, at least quarterly, a written report of the amounts
expended for Distribution Activities and the purpose for which such expenditures
were made. The Treasurer shall review, at least annually the revenues received
and expenses incurred by the Underwriter pursuant to the Plan.
Section 7. RECORDKEEPING
The Trust shall preserve copies of the Plan and any related agreements
and all reports made pursuant to Section 6 hereof, for a period of not less than
six years from the date of the Plan, or the agreements and such report, as the
case may be, the first two years in an easily accessible place.
Section 8. LIMITATION OF LIABILITY
The term "Van Eck Funds" means and refers to the Trustees from time to
time serving under the Amended and Restated Master Trust Agreement dated
February 6, 1992, as the same may subsequently thereto have been, or
subsequently hereto may be, amended. It is expressly agreed that the obligations
of the Trust hereunder shall not be binding upon any of the Trustees,
shareholders, nominees, officers, agents or employees of the Trust, personally,
but bind only the assets and property of the Trust, as provided in the Amended
and Restated Master Trust Agreement of the Trust. The execution and delivery of
the Plan have been authorized by the Trustees of the Trust and signed by an
authorized officer of the Trust, acting as such, and neither such authorization
by such Trustees nor such execution and delivery by such officer shall be deemed
to have been made by any of them individually or to impose any liability on any
of them personally, but shall bind only the assets and property of the Trust as
provided in its Amended and Restated Master
<PAGE>
Trust Agreement.
IN WITNESS WHEREOF, the Trust has executed this Plan of Distribution on
the day and year set forth below in New York, New York.
Date: May 1, 2000
VAN ECK FUNDS
----------------------------
President
ATTEST:
- ---------------------------
Secretary
<PAGE>
PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
(Class B Shares)
WHEREAS, VAN ECK FUNDS, an unincorporated business trust organized
under the laws of the Commonwealth of Massachusetts (hereinafter called the
"Trust"), is engaged in business as an open-end management investment company
and is registered as such under the Investment Company Act of 1940, as amended
(the "Act");
WHEREAS, the Trust is authorized to issue shares of beneficial
interest, in separate series, with each such series representing the interests
in a separate portfolio of securities and other assets (any series, currently
existing or hereafter established by the Trust offering two or more classes of
its shares adopting this plan, as set forth in Exhibit A hereto as it may be
amended from time to time, being referred to hereafter, individually or
collectively as the context may require, as "Series");
WHEREAS, shares of beneficial interest of series of the Trust may be
divided into two or more classes;
WHEREAS, the class of shares of a Series offered to the public at net
asset value plus a sales charge equal to a specified percentage of the public
offering price on the terms and conditions set forth in the Trust's then-current
prospectus shall be designated as Class B shares (the "Shares");
WHEREAS, Van Eck Securities Corporation (the "Underwriter") serves as
principal underwriter of Shares of each Series pursuant to a written agreement;
WHEREAS, the Trust hereby intends to act as a distributor of Shares in
accordance with Rule 12b-1 under the Act, as it may from time to time be amended
("Rule 12b-1"), and desires to adopt a Plan of Distribution pursuant to such
Rule on the terms and conditions as hereinafter set forth, in respect of the
Shares (the "Plan");
WHEREAS, the Trustees as a whole, and the Trustees who are not
"interested persons" of the Trust (as defined in the Act) and who have no direct
or indirect financial interest in the operation of the Plan and any agreements
relating to it (the "Qualified Trustees"), having determined, in the exercise of
their reasonable business judgment and in light of their fiduciary duties under
state law and under Sections 36(a) and (b) of the Act, that there is a
reasonable likelihood that the Plan will benefit the Series and the holders of
the Shares of such Series, have approved the Plan by vote cast in person at a
meeting called for the purpose of voting on the Plan and agreements related
thereto; and
WHEREAS, Van Eck Associates Corporation, as the sole shareholder of the
Shares of the Initial Series, has approved the Plan.
NOW, THEREFORE, the Trust hereby adopts the Plan in accordance with
Rule 12b-1:
Section 1. DISTRIBUTION ACTIVITIES
Subject to the supervision of the Trustees, the Trust or the
Underwriter on behalf of the Trust for the compensation set forth herein may,
directly or indirectly, engage in any activities primarily intended to result in
the sale of Shares, which activities may include, but are not limited to, one or
more of the following: (1) making payments to securities dealers and others
engaged in the sale of Shares, including making payments of fees to the broker
of record for servicing shareholder accounts ("Maintenance Fees"); (2) paying
<PAGE>
compensation to and expenses of personnel (including personnel of the
Underwriter and organizations with which the Trust or the Underwriter has
entered into agreements pursuant to this Plan) who engage in or support
distribution of Shares or who render shareholder support services, including but
not limited to, office space and equipment, telephone facilities and expenses,
answering routine inquiries regarding the Trust, processing shareholder
transactions and providing such other shareholder services, other than those
provided by the transfer agent and other agents of the Trust, as the Trust may
reasonably request; (3) formulating and implementing marketing and promotional
activities, including but not limited to direct mail promotions and television,
radio, newspaper, magazine and other mass media advertising; (4) preparing,
printing and distributing sales literature; (5) preparing, printing and
distributing prospectuses of the Trust and reports for recipients other than
existing shareholders of the Trust; and (6) obtaining such information, analyses
and reports with respect to marketing and promotional activities as the Trust
may, from time to time, deem advisable. The Underwriter on behalf of the Trust
is authorized to engage in the activities listed above, and in any other
activities primarily intended to result in the sale of Shares, either directly
or through other persons with which the Trust or the Underwriter has entered
into agreements pursuant to the Plan (all such activities hereafter
"Distribution Activities"). The Underwriter is not obligated to perform all of
the Distribution Activities enumerated above or maintain any level of services
or expenditures, but shall in its sole discretion, determine which Distribution
Activities to engage in and the resources to be committed to such activities.
Section 2. FEES, MAXIMUM EXPENDITURES
(a) PAYMENT FOR DISTRIBUTION ACTIVITIES - The Trust is authorized to
pay the Underwriter for the Distribution Activities performed under the Plan, a
fee at the annual rate set forth in Exhibit A ("Annual Fee"). Such Series shall
calculate daily amounts payable by it in respect of Shares hereunder and shall
pay such amounts monthly or at such other intervals as the Trustees may
determine. In the event the Plan is terminated, the Underwriter shall be
entitled to recoup amounts expended on Distribution Activities on behalf of the
Series in excess of the Annual Fees and any other compensation received in
connection with the distribution of the Shares ("Unrecouped Amounts"). The
payment of Unrecouped Amounts in the case of a Series shall not exceed, on an
annual basis, the Annual Fee ("Annual Limitation"). Unrecouped Amounts payable
under the Plan that are not paid because they exceed the Annual Fee ("Carry
Forward Amounts") shall be carried forward by a Series and shall be paid within
the Annual Limitation in accordance with this Plan. Carry Forward Amounts
attributable to commissions advanced by, or on behalf of, the Underwriter in
respect of Shares pursuant to Section 1(1) hereof are "Carry Forward
Commissions."
APPLICATION OF PROCEEDS - The excess of amounts received by the
Underwriter under Section 2(a) hereof over amounts paid by it as Maintenance
Fees to third parties which are not "affiliated persons" (as defined in the Act)
of the Trust shall be applied toward reducing the Unrecouped Amounts.
(c) ______ Any Unrecouped Carry Forward Amounts under Section 2(a)
attributable to a fiscal year of a Series shall be paid by the Trust in respect
of Shares in a subsequent year within the limitations set forth herein.
Expenditures made by one class under the Plan may not be used to subsidize the
sale of shares of another class of a Series.
Section 3. TERM AND TERMINATION
(a) SERIES. The Plan shall become effective on June 2, 1997 with
respect to the Series listed in Schedule A hereto.
(b) ADDITIONAL SERIES. As additional Series are established, the Plan
shall become effective with respect to each such Series listed in Exhibit A at
the Annual Fee set forth in such Exhibit upon the initial public offering of
such new Series, provided that the Plan has previously been approved for
continuation, together with any related agreements, by votes of a majority of
both (a) the Trustees of the Trust and (b) the
<PAGE>
Qualified Trustees of the Trust, cast in person at a meeting held before the
initial public offering of such new Series and called for the purpose of voting
on such approval.
(c) CONTINUATION OF THE PLAN. The Plan and any related agreements shall
continue in effect with respect to a Series for so long as such continuance is
specifically approved at least annually by votes of a majority of both (a) the
Trustees of the Trust and (b) the Qualified Trustees, cast in person at a
meeting called for the purpose of voting on this Plan and any related
agreements.
(d) TERMINATION OF THE PLAN. The Plan may be terminated at any time
with respect to any Series by vote of a majority of the Qualified Trustees of
the Trust, or by vote of a majority of the outstanding Shares of that Series.
The Underwriter shall not be entitled to payments or reimbursement in respect of
costs incurred in performing Distribution Activities which occur after
termination of the Plan. However, the Underwriter shall be entitled to
reimbursement of all Unrecouped Amounts and other costs properly incurred in
respect of Shares prior to termination, and the Trust shall continue to make any
required payments to the Underwriter pursuant to Section 2 subject to the Annual
Limitation until such time as all such amounts have been reimbursed. The Plan
may remain in effect with respect to a Series even if it has been terminated in
accordance with this Section 3(d) with respect to one or more other Series.
Section 4. AMENDMENTS
The Plan may not be amended to increase materially the amount of
distribution expenditures provided for in Section 2 hereof unless such amendment
is approved by a vote of the majority of the outstanding voting securities of
each of the affected classes of a Series and no material amendment to the Plan
shall be made unless approved in the manner provided for annual continuation in
Section 3(c) hereof.
Section 5. INDEPENDENT TRUSTEES
While the Plan is in effect, the selection and nomination of Trustees
who are not interested persons (as defined in the Act) of the Trust shall be
committed to the discretion of the Trustees who are not interested persons.
Section 6. QUARTERLY REPORTS; ANNUAL REPORTS
The Treasurer of the Trust shall provide to the Trustees and the
Trustees shall review, at least quarterly, a written report of the amounts
expended for Distribution Activities and the purpose for which such expenditures
were made. The Treasurer shall review, at least annually the revenues received
and expenses incurred by the Underwriter pursuant to the Plan.
Section 7. RECORDKEEPING
The Trust shall preserve copies of the Plan and any related agreements
and all reports made pursuant to Section 6 hereof, for a period of not less than
six years from the date of the Plan, or the agreements and such report, as the
case may be, the first two years in an easily accessible place.
Section 8. LIMITATION OF LIABILITY
The term "Van Eck Funds" means and refers to the Trustees from time to
time serving under the Amended and Restated Master Trust Agreement dated
February 6, 1992, as the same may subsequently thereto have been, or
subsequently hereto may be, amended. It is expressly agreed that the obligations
of the Trust hereunder shall not be binding upon any of the Trustees,
shareholders, nominees, officers, agents or employees of the Trust, personally,
but bind only the assets and property of the Trust, as provided in the
<PAGE>
Amended and Restated Master Trust Agreement of the Trust. The execution and
delivery of the Plan have been authorized by the Trustees of the Trust and
signed by an authorized officer of the Trust, acting as such, and neither such
authorization by such Trustees nor such execution and delivery by such officer
shall be deemed to have been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the assets and property
of the Trust as provided in its Amended and Restated Master Trust Agreement.
IN WITNESS WHEREOF, the Trust has executed this Plan of Distribution on
the day and year set forth below in New York, New York.
Date: May 1, 2000
VAN ECK FUNDS
----------------------------
President
ATTEST:
- ---------------------------
Secretary
<PAGE>
VAN ECK FUNDS
PLAN OF DISTRIBUTION PURSUANT TO RULE
12b-1 (CLASS A and CLASS B))
EXHIBIT A
Name of Series Maximum 12b-1 Fees/Annual Limitation
(Annually as a % of average daily net assets)
Emerging Markets Vision Fund-Class A .50%
Emerging Markets Vision Fund Class B 1.00%
<PAGE>
VAN ECK FUNDS
99 Park Avenue
New York, New York 10016
April 28, 2000
Van Eck Securities Corporation
99 Park Avenue
New York, New York 10168
Ladies and Gentlemen:
Pursuant to Section 1 of the Distribution Agreement, dated July 30,
1985 (the "Agreement"), between Van Eck Funds (the "Trust") and Van Eck
Securities Corporation (the "Distributor"), please be advised an additional
series if the Trust, namely Emerging Markets Vision Fund (the "Fund") has
adopted the Agreement and retained the Distributor to render services
contemplated by the Agreement for the Fund. The Fund will issue two classes of
shares, namely Class A, and Class B shares. Class A shares will be sold at "net
asset value per share" plus a front-end sales charge, Class B shares will be
sold at "net asset value" subject to a contingent deferred sales charge.
Please confirm below your willingness to render such services.
VAN ECK FUNDS
ATTEST:___________________________ BY:__________________________
President
Confirmed, Agreed to and Accepted this April 28, 2000.
VAN ECK SECURTIIES CORPORATION
ATTEST:____________________________ BY:___________________________
President
<PAGE>
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of this 1st day of MAY, 2000 between VAN ECK
ASSOCIATES CORPORATION, a corporation organized under the laws of the State of
Delaware and having its principal place of business in New York, New York (the
"Adviser"), and VAN ECK FUNDS, a Massachusetts business trust (THE "Trust")
having its principal place of business in New York, New York (the "Trust").
WHEREAS, the Trust is engaged in business as an open-end investment
company and is so registered under the Investment Company Act of 1940, as
amended (the "1940 Act"); and
WHEREAS, the Adviser is engaged principally in the business of
rendering investment management services and is registered under the Investment
Advisers Act of 1940, as amended; and
WHEREAS, the Trust is authorized to issue shares of beneficial interest
in separate series, each representing interests in a separate portfolio of
securities and other assets;
WHEREAS, the Trust intends to offer shares ("Shares") in one of those
series, Emerging Markets Vision Fund (the "Fund"), and invest the proceeds in
securities, the Trust desires to retain the Adviser to render investment
advisory and accounting and administrative services hereunder and with respect
to which the Adviser is willing so to do;
NOW, THEREFORE, WITNESSETH: That it is hereby agreed between the
parties hereto as follows:
1. APPOINTMENT OF ADVISER
The Trust hereby appoints the Adviser to act as investment adviser and
administrator to the Fund for the period and on the terms herein set forth. The
Adviser accepts such appointment and agrees to render the services herein set
forth, for the compensation herein provided.
2. DUTIES OF ADVISER
The Adviser, at its own expense, shall be responsible for furnishing the
following services and facilities to the Trust:
(a) INVESTMENT PROGRAM
The Adviser will (i) furnish continuously an investment program for the
Fund (ii) determine (subject to the overall supervision and review of
the Board of Trustees of the Trust) what investments shall be
purchased, held, sold or exchanged and what portion, if any, of the
assets of the Fund shall be held uninvested, and (iii) make changes on
behalf of the Fund in the investments. The Adviser also will manage,
supervise and conduct such other affairs and business of the Fund and
matters incidental thereto, as the Adviser and the Trust agree, subject
always to the control of the Board of Trustees of the Trust and to the
provisions of the Master Trust Agreement of the Trust, the Trust's
By-Laws and the 1940 Act.
1
<PAGE>
(b) ACCOUNTING AND ADMINISTRATIVE SERVICES
(i) The Adviser, at its own expense, will provide or arrange for the
performance of the following accounting functions on an ongoing basis:
(1) Journalize the Fund's investment, capital share and income and
expense activities;
(2) Verify investment buy/sell trade tickets when received from
the Fund and transmit trades to the Trust's custodian for
proper settlement;
(3) Maintain individual ledgers for investment securities;
(4) ______ Reconcile cash and investment balances with the Trust's
custodian, and provide the Fund with the beginning cash
balance available for investment purposes;
(5) Update the cash availability throughout the day as required b
the Fund;
(6) Post to and prepare the Fund's Statement of Assets and
Liabilities and the Statement of Operations;
(7) Calculate various contractual expenses (E.G., transfer agency
fees); ----
(8) Control all disbursements and authorize such disbursements
upon written instructions from authorized officers and agents;
(9) Calculate capital gains and losses;
(10) Determine the net income;
(11) _____ Obtain security market quotes, at the Fund's expense, or
if such quotes are unavailable, obtain such prices from the
investment adviser, and in either case calculate the market
value of the Fund's investments;
(12) Deliver a copy of the daily portfolio valuation to the Fund;
(13) Compute the net asset value;
(14) Compute the Fund's yields, total return, expense ratios,
portfolio turnover rate;
(15) Monitor the expense accruals and notify the Fund of any
proposed adjustments; and
(16) Prepare periodic unaudited financial statements.
(ii) _____ In addition to the accounting services described in the foregoing
Paragraph 2(b)(i), the Adviser will provide or arrange for the
provision of the following services for the Fund:
(1) Prepare periodic audited financial statements;
(2) Supply various statistical data as requested by the Board of
Trustees of the Trust on an ongoing basis;
(3) Prepare for execution and file the Federal and state tax
returns;
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(4) Prepare and file the Semi-Annual Reports with the Securities
and Exchange Commission on Form N-SAR;
(5) Prepare and file with the Securities and Exchange Commission
the Fund's annual, semi-annual and quarterly shareholder
reports;
(6) Prepare and file registration statements on Form N-1A and
other filings relating to the registration of Shares;
(7) Monitor the Fund's status as a regulated investment company
under Sub-Chapter M of the Internal Revenue Code of 1986, as
amended;
(8) Maintain the Fund's fidelity bond as required by the 1940 Act;
(9) Prepare materials for and record the proceedings of, in
conjunction with the officers of the Trust, the meetings of
the Trust's Board of Trustees; and
(10) Prepare any other regulatory reports to and for any Federal,
state or local agency as may be required.
In carrying out its duties hereunder, as well as any other activities
undertaken on behalf of the Fund pursuant to this Agreement, the
Adviser shall at all times be subject to the control and direction of
the Board of Trustees of the Trust.
(c) OFFICE SPACE AND FACILITIES
The Adviser will arrange to furnish the Trust office space in the
offices of the Adviser, or in such other place or places as may be
agreed upon from time to time, and all necessary office facilities,
simple business equipment, supplies, utilities and telephone service
required for managing the investments of the Trust.
(d) PERSONNEL
The Adviser shall provide executive and clerical personnel for managing
the investments of the Fund, and shall compensate officers and Trustees
of the Trust if such persons are also employees of the Adviser or its
affiliates, except as otherwise provided herein.
(e) PORTFOLIO TRANSACTIONS
The Adviser shall place all orders for the purchase and sale of
portfolio securities for the account of the Fund with brokers or
dealers selected by the Adviser, although the Fund will pay the actual
brokerage commissions on portfolio transactions in accordance with
Paragraph 3(d). In executing portfolio transactions and selecting
brokers or dealers, the Adviser will use its best efforts to seek on
behalf of the Fund the best overall terms available. In assessing the
best overall terms available for any transaction, the Adviser shall
consider all factors it deems relevant, including, without limitation,
the breadth of the market in the security, the price of the security,
the financial condition and execution capability of the broker or
dealer, and the reasonableness of the commission, if any (for the
specific transaction and on a continuing basis). In evaluating the best
overall terms available, and in selecting the broker or dealer to
execute a particular transaction, the Adviser may also consider the
brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934) provided to the Fund
and/or the other accounts over which the Adviser or an affiliate of the
Adviser exercises investment discretion. The
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Adviser is authorized to pay to a broker or dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction which is in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction if
the Adviser determines in good faith that such commission was
reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer, viewed in terms of that
particular transaction or in terms of all of the accounts over which
investment discretion is so exercised by the Adviser or its affiliates.
Nothing in this Agreement shall preclude the combining of orders for
the sale or purchase of securities or other investments with other
accounts managed by the Adviser or its affiliates provided that the
Adviser does not favor any account over any other account and provided
that any purchase or sale orders executed contemporaneously shall be
allocated in a manner the Adviser deems equitable among the accounts
involved.
(f) RIGHT TO RECEIVE ADVICE
(i) ______ ADVICE OF FUND If the Adviser shall be in doubt as to any action
to be taken or omitted by it, it may request, and shall receive, from
the Fund directions or advice.
(ii) _____ ADVICE OF COUNSEL If the Adviser or the Fund shall be in doubt as
to any question of law involved in any action to be taken or omitted by
the Adviser, it may request advice at the Fund's cost from counsel of
its own choosing (which may be counsel for the Adviser or the Fund, at
the option of the Adviser).
(iii) PROTECTION OF THE ADVISER The Adviser shall be protected in any action
or inaction which it takes in -------------------------- reliance on
any directions or advice received pursuant to subsections (i) or (ii)
of this paragraph which the Adviser, after receipt of any such
directions or advice in, good faith believes to be consistent with such
directions or advice as the case may be. However, nothing in this
paragraph shall be construed as imposing upon the Adviser any
obligation (i) to seek such directions or advice or (ii) to act in
accordance with such directions or advice when received. Nothing in
this subsection shall excuse the Adviser when an action or omission on
the part of the Adviser constitutes willful misfeasance, bad faith,
gross negligence or reckless disregard by the Adviser of its duties
under this Agreement.
3. EXPENSES OF TRUST
The Adviser shall not bear the responsibility for or expenses associated with
operational, accounting or administrative services on behalf of the Fund not
expressly assumed by the Adviser hereunder. The expenses to be borne by the
Trust include, without limitation:
(a) ______ charges and expenses of any registrar, stock, transfer or
dividend disbursing agent, custodian, depository or other agent
appointed by the Trust for the safekeeping of the Fund's cash,
portfolio securities and other property;
(b) ______ general operational, administrative and accounting costs, such
as the costs of calculating the Fund's net asset value, the preparation
of the Fund's tax filings with relevant authorities and of compliance
with any and all regulatory authorities;
(c) charges and expenses of auditors and outside accountants;
(d) brokerage commissions for transactions in the portfolio securities of
the Fund;
(e) all taxes, including issuance and transfer taxes, and corporate fees
payable by the Fund to Federal, state or other U.S. or foreign
governmental agencies;
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(f) the cost of stock certificates representing shares of the Fund;
(g) expenses involved in registering and maintaining registrations of the
Fund and of its shares with the Securities and Exchange Commission and
various states and other jurisdictions, if applicable;
(h) ______ all expenses of shareholders' and Trustees' meetings, including
meetings of committees, and of preparing, setting in type, printing and
mailing proxy statements, quarterly reports, semi-annual reports,
annual reports and other required communications to shareholders;
(i) ______ all expenses of preparing and setting in type offering
documents, and expenses of printing and mailing the same to
shareholders (but not expenses of printing and mailing offering
documents and literature used for any promotional purposes);
(j) compensation and travel expenses of Trustees who are not "interested
persons" of the Adviser within the meaning of the 1940 Act;
(k) the expense of furnishing, or causing to be furnished, to each
shareholder statements of account;
(l) ______ charges and expenses of legal counsel in connection with matters
relating to the Fund, including, without limitation, legal services
rendered in connection with the Trust's corporate and financial
structure, day to day legal affairs of the Trust and relations with its
shareholders, issuance of Fund shares, and registration and
qualification of securities under Federal, state and other laws;
(m) ______ the expenses of attendance at professional and other meetings of
organizations such as the Investment Company Institute and other trade
groups by officers and Trustees of the Trust, and the membership or
association dues of such organizations;
(n) the cost and expense of maintaining the books and records of the Fund;
(o) the expense of obtaining and maintaining a fidelity bond as required by
Section 17(g) of the 1940 Act and the expense of obtaining and
maintaining an errors and omissions policy;
(p) interest payable on Fund borrowing;
(q) postage; and
(r) ______ any other costs and expenses incurred by the Adviser for Fund
operations and activities, including but not limited to the
organizational costs of the Fund if initially paid by the Adviser.
4. COMPENSATION
For the services and facilities to be provided to the Trust by the Adviser as
provided in Paragraph 2 hereof, the Trust shall pay the Adviser a fee at the
annual rate set forth in Exhibit A ("Annual Fee"). The Trust shall pay such
amounts monthly, based on the Fund's average daily net assets, as reflected in
the books and records of the Trust in accordance with procedures established
from time to time by or under the direction of the Board of Trustees of the
Trust.
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5. TRUST TRANSACTIONS
The Adviser agrees that neither it nor any of its officers, directors, employees
or agents will take any long- or short-term position in the shares of the Trust;
provided, however, that such prohibition shall not prevent the purchase of
shares of the Trust by any of the persons above described for their account and
for investment at the price (net asset value) at which such shares are available
to the public at the time of purchase or as part of the initial capital of the
Fund.
6. RELATIONS WITH TRUST
Subject to and in accordance with the Master Trust Agreement and By-Laws of the
Trust and the Articles of Incorporation and By-Laws of the Adviser,
respectively, it is understood (i) that Trustees, officers, agents and
shareholders of the Trust are or may be interested in the Adviser (or any
successor thereof) as directors, officers or otherwise; (ii) that directors,
officers, agents and shareholders of the Adviser are or may be interested in the
Trust as Trustees, officers, shareholders or otherwise; and (iii) that the
Adviser (or any such successor) is or may be interested in the Trust as a
shareholder or otherwise and that the effect of any such adverse interests shall
be governed by said Master Trust Agreement and By-Laws.
7. LIABILITY OF ADVISER AND OFFICERS AND TRUSTEES OF TRUST
Neither the Adviser nor its officers, directors, employees, agents or
controlling persons or assigns shall be liable for any error of judgment or law,
or for any loss suffered by the Trust or its shareholders in connection with the
matters to which this Agreement relates, except that no provision of this
Agreement shall be deemed to protect the Adviser or such persons against any
liability to the Trust or its shareholders to which the Adviser might otherwise
be subject by reason of any willful misfeasance, bad faith or gross negligence
in the performance of its duties or the reckless disregard of its obligations
and duties under this Agreement.
8. DURATION AND TERMINATION OF AGREEMENT
(a) DURATION
This Agreement shall become effective on the date hereof for the Fund.
Unless terminated as herein provided, this Agreement shall remain in
full force and effect until April 30, 1999 and shall continue in full
force and effect for periods of one year thereafter so long as such
continuance is approved at least annually (i) by either the Trustees of
the Trust or by vote of a majority of the outstanding voting shares (as
defined in the 1940 Act) of the Fund, and (ii) in either event by the
vote of a majority of the Trustees of the Trust who are not parties to
this Agreement or "interested persons" (as defined in the 1940 Act) of
any such party, cast in person at a meeting called for the purpose of
voting on such approval.
(b) TERMINATION
This Agreement may be terminated at any time, without payment of any
penalty, by vote of the Trustees of the Trust or by vote of a majority
of the outstanding shares (as defined in the 1940 Act) of the Fund, or
by the Adviser, on sixty (60) days written notice to the other party.
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(c) AUTOMATIC TERMINATION
This Agreement shall automatically and immediately terminate in the
event of its assignment.
9. PRIOR AGREEMENT SUPERSEDED
This Agreement supersedes any prior agreement relating to the subject matter
hereof between the parties.
10. SERVICES NOT EXCLUSIVE
The services of the Adviser to the Trust hereunder are not to be deemed
exclusive, and the Adviser shall be free to render similar services to others
and to engage in other activities.
11. MISCELLANEOUS
(a) This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
(b) ______ If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
12. LIMITATION OF LIABILITY
The term Van Eck Worldwide Insurance Trust means and refers to the Trustees from
time to time serving under the Master Trust Agreement of the Trust dated January
7, 1987, as the same may subsequently thereto have been, or subsequently hereto
may be, amended. It is expressly agreed that the obligations of the Trust
hereunder shall not be binding upon any Trustees, shareholders, nominees,
officers, agents or employees of the Trust, personally, but bind only the assets
and property of the Trust, as provided in the Master Trust Agreement of the
Trust. The execution and delivery of this Agreement have been authorized by the
Trustees of the Trust, acting as such, and no such authorization by such officer
shall be deemed to have been made by any of them personally, but shall bind only
the assets and property of the Trust as provided in its Master Trust Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first set forth above.
[SEAL] VAN ECK FUNDS
Attest:____________________________ By: ______________________________
Secretary President
[SEAL] VAN ECK ASSOCIATES CORPORATION
Attest:_____________________________ By : ______________________________
Secretary President
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EXHIBIT A
Annual Advisory Fee
NAME OF FUND (AS A % OF AVERAGE DAILY NET ASSETS)
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Emerging Market Vision Fund 1% of average daily net assets
8
CODE OF ETHICS
INTRODUCTION
BACKGROUND
This memorandum sets forth the provisions of the Code of Ethics adopted by Van
Eck Associates Corporation, Van Eck Global Asset Management (Asia), Van Eck
Securities Corporation, Van Eck Capital, Inc., Shenyin Wanguo Van Eck Asset
Management and Absolute Return Advisers Corporation, (formerly Van Eck Hedge
Advisers, Inc). (together, the "Van Eck Companies"), and the registered
investment companies and other accounts for which a Van Eck Company acts as
investment adviser and/or principal underwriter (the "Funds") pursuant to Rule
17j-1 under the Investment Company Act of 1940 (the "Act") and Rules
204-2(a)(12) and 204-2(a)(13) under the Investment Advisers Act of 1940
(collectively, the "Rules"). An "Index to Defined Terms" may be found at the end
of this Code.
Section 17(j) of the Act makes it unlawful for certain persons to engage in any
fraudulent, deceptive or manipulative act, practice or course of business in
connection with personal transactions in any security held or to be acquired by
an investment company. Rule 17j-1 requires each investment company, its
investment adviser and principal underwriter to adopt a written code of ethics
designed to prevent "access persons" (as defined in this Code) from engaging in
the acts prohibited by section 17(j) of the Act, and to use reasonable
diligence, and to institute procedures reasonably necessary, to prevent
violations of the code. Further, the Rules require fund personnel to file
reports, and each investment company, its investment adviser and principal
underwriter to maintain records of securities transactions covered under the
Rules, as well as certain other information.
PURPOSE AND SCOPE OF THIS CODE
This Code is broad and general in its application both in terms of the persons
and the activities covered. It is based upon the basic precept that ALL
officers, directors and employees of the Van Eck Companies and the Trustees of
the Funds owe a fiduciary duty to the Funds, the Funds' shareholders, the
privately managed accounts ("Accounts") and the beneficial owners of Accounts to
conduct their personal securities transactions in a manner which does not
interfere with Fund or Account transactions and which does not otherwise take
unfair advantage of the relationship with the Funds or Accounts. This Code sets
forth the minimum standard of conduct believed appropriate for persons having
knowledge of Fund and Account securities transactions, and you should view it as
such. Technical compliance with the provisions of the Code will not insulate
your transactions from scrutiny for evidence of abuse of the fiduciary
relationship. If you are confronted with a potential or seeming conflict of
interest situation you would be well advised to consult the Compliance Officer
or the Legal Department for advice concerning the propriety of the transaction,
and obtain prior approval if required. Lastly, given the nature of the Van Eck
Companies' business and our commitment to integrity and fair dealing, even the
appearance of self-dealing or a conflict of interest is to be avoided.
The intent of the Code is not to prohibit or inhibit responsible personal
investment activity by professional investment personnel and others; rather, it
is to ensure that the portfolios managed by the Van Eck Companies receive the
full benefit of the legal protections and safeguards from unethical practices to
which they are entitled. This Code has been designed with these thoughts in
mind. It is worth repeating and cautioning that persons who have any questions
regarding the applicability of the Code to, or the propriety
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of, a particular transaction should consult with the Compliance Officer or the
Legal Department who will treat all discussions as confidential.
PERSONS TO WHOM THIS CODE APPLIES
The General Prohibitions and Substantive Restrictions on Personal Trading
Activities of the Code in the next section apply to ALL employees, officers,
directors, and trustees of the Van Eck Companies and the Funds. The Reporting
Requirements, Preclearance Requirements, the requirements to provide duplicate
copies of broker confirmations and periodic reports and the requirement to
disclose all securities holdings on an annual basis, apply to all employees.
There is a special rule for persons who are non-interested Trustees of the
Funds. (See below).
You are an "access person" if you are an employee, director, trustee, officer or
"advisory person" of a Fund or a Van Eck Company. You are also an access person
if you are in a control(1) relationship to a Van Eck Company that obtains
information about recommendations made to a Fund or Account regarding the
purchase or sale of securities. The Compliance Officer will notify you if you
are an access person and are, therefore, subject to certain restrictions and
requirements detailed below.
You are an "advisory person" if as part of your regular duties you make,
participate in, or obtain information regarding the purchase or sale of any
security by a Fund or Account. Similarly, if as part of your regular duties you
are involved in making, or have information concerning, recommendations
regarding Fund or Account transactions, you are an advisory person.
A security is "considered for purchase or sale" when a recommendation to
purchase or sell a security has been made and communicated and is "recommended"
when the person making the recommendation seriously considers making the
recommendation.
WHAT ARE YOUR DUTIES UNDER THIS CODE
This Code has three basic requirements: first, that your conduct conforms to the
ethical standards set forth in the General Prohibitions; second, that your
personal securities transactions comply with the Substantive Restrictions on
Personal Investing Activities; and third, that you obtain prior approval for all
securities transactions and file reports where required.
GENERAL PROHIBITIONS
If you are an employee, officer, director or trustee of a Van Eck Company or a
Fund, these General Prohibitions apply to the purchase or sale by you of any
security that, within the 7 days before or after the transaction, (i) a Fund or
an Account, is holding or was holding, or (ii) a Fund or an Account, or a Van
Eck Company on behalf of a Fund or Account, is considering or has considered
purchasing. In connection with these transactions, you may not -
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(1) "Control" has the same meaning as that set forth in Section 2(a)(9) of
the Act. Generally, it means the power to exercise a controlling influence over
the management or policies of a company, unless such power is solely the result
of an official position with such company.
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o Use any scheme to defraud a Fund or Account, or to engage in any
act which operates, or would operate, as a fraud or deceit upon a
Fund or Account.
o Make to the Fund any untrue statement of a material fact, or fail
to state a material fact necessary in order to make the statement
made, in light of the circumstance under which it is made, not
misleading.
o Engage in any manipulative practice.
These General Prohibitions do not refer to specific practices for good reason:
no code can cover all possible circumstances. Instead, a code should guide you
in determining appropriate conduct and should instill in you the duty of fair
dealing and honesty implicit in the fiduciary relationship. In the final
analysis, your conduct will ultimately be guided by your personal and
professional integrity and honesty.
The General Prohibitions should be read very broadly, for they are more
encompassing than a narrow interpretation would indicate. "You" means you,
personally, and any account which is "beneficially owned" by you. The term
"beneficial ownership" would include, for example, securities held in the name
of a spouse, minor children, or relative sharing your home or under other
circumstances indicating a sharing of financial interest.
"Security" includes all securities, rights or other interests, as well as
futures and options, and has the same meaning as set forth in Section 2(a)(36)
of the Act except that it does not include securities issued by the Government
of the United States or any of its agencies or instrumentalities (including all
short-term debt securities which are "government securities" within the meaning
of Section 2(a)(16) of the Act), bankers' acceptances, bank certificates of
deposit and commercial paper. Futures and options may not be used to evade the
restrictions of this Code; and a "purchase or sale" includes writing put and
call options on a security.
SUBSTANTIVE RESTRICTIONS ON PERSONAL INVESTING ACTIVITIES
INITIAL PUBLIC OFFERINGS. Purchasing securities in an initial public offering
("IPO") is prohibited. Purchases of IPO's pose potential conflicts of interest.
Investing in IPO's may suggest that access persons have taken inappropriate
advantage of their positions for personal profit, as the opportunity to invest
in an IPO may be available to only a limited number of investors. It may then
appear that an investment opportunity that should have been available to a Fund
or Account was diverted to the benefit of an individual employee.
PRIVATE PLACEMENTS. All purchases of securities in a private placement ARE
PROHIBITED.
BLACKOUT PERIODS. All portfolio managers, advisory persons and access persons
are subject to a seven- day blackout period, i.e., individuals are prohibited
from buying or selling a security within seven calendar days before and after a
Fund trades in that security. Any profits realized on trades within the
proscribed seven day period will be paid to the Fund or Account or to charity.
BAN ON SHORT-TERM TRADING PROFITS. NO EMPLOYEE IS PERMITTED TO PROFIT FROM
SHORT-TERM TRADING. Short-term trading is the purchase and sale or sale and
purchase of an asset within 60 days. (This would include selling and/or closing
a position with futures or options contracts). This trading will be monitored.
Whether profits will be required to be paid to the Fund or Account or to charity
will be left to the discretion of management.
GIFTS
All gifts must be reported, with the exception of DE MINIMIS advertising items
such as inexpensive (less than $50 market value) pens, T-shirts and the like.
GIFTS MAY NOT EXCEED $50 PER PERSON PER YEAR. The receipt of
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dinners, tickets to theatrical and sporting events and the like is acceptable,
so long as they are not so frequent as to raise questions of impropriety.
SERVICE AS A DIRECTOR
Service as a director of a public company is prohibited.
OPENING NEW BROKERAGE ACCOUNTS
All employees must obtain the permission of the Compliance Officer prior to
opening any new brokerage accounts with an exchange or National Association of
Securities Dealers ("NASD") registered broker-dealer. A Letter of Permission
will be provided to the broker-dealer once the employee has been granted
permission to open the new account. All employees must open accounts in the Van
Eck Funds or the Van Eck/Chubb Funds through the Mutual Fund Operations
Department. Duplicate confirmations will be sent to the Compliance Officer for
all employee accounts in the Van Eck Funds.
DISCRETIONARY ACCOUNTS
Access and non-access persons may maintain discretionary brokerage accounts.
However, in order to be exempt from the preclearance and other requirements of
this Code, the employee must provide the Compliance Officer with a
representation, or other proof, from the account broker stating that the account
is managed on a discretionary basis and that the employee does not make any
investment decisions for the account. This report must be provided at the time
of commencement of employment and at any time a discretionary account is opened
or terminated. In addition, employees who maintain discretionary accounts must
provide, on a quarterly basis, a statement that he or she has not made any
investment decisions for the account during that quarter.
PRECLEARANCE; COMPLIANCE OFFICER
You must obtain prior approval for every securities transaction subject to this
Code from the Compliance Officer or her designee. Preclearance is effective for
a period of 24 hours. If the trade is not executed within that period, the
preclearance process must be repeated. PRIOR APPROVAL FOR TRANSACTIONS IN SHARES
OF OPEN-END MUTUAL FUNDS IS NOT REQUIRED.
Thomas Elwood is the Compliance Officer for purposes of the Reporting and
Preclearance Requirements. In the event he is not available to approve a
transaction, the individuals listed on Exhibit "A" shall be authorized to
approve such transaction.
REPORTING REQUIREMENTS
A report of all transactions subject to this Code must be filed with the
Compliance Officer no later than 10 days after the end of each calendar quarter
and must provide the following information for each transaction during that
quarter:
(a) the date of the transaction, the title of and the number of
shares, and the principal amount of each security involved;
(b) the nature of the transaction (i.e., purchase, sale or any other
type of acquisition or disposition);
(c) the price at which the transaction was effected; and
(d) the name of the broker, dealer or bank with or through which the
transaction was effected.
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If you file a report with respect to any transaction it will not be considered
an admission by you that you have any direct or indirect beneficial interest in
that security.
You must report to the Compliance Officer or his designee all transactions in
which you have, or acquire, a beneficial interest in a security. If you are a
non-interested Trustee of a Fund see "Special Rules."
Any transactions in unaffiliated open-end mutual fund shares (i.e., funds that
are not advised by Van Eck or its affiliates) do not need to be reported.
However, if you have had any transactions in any of the Van Eck family of funds,
you must report these. In addition, you must report transactions in closed-end
mutual fund shares and unit investment trusts. All other types of securities
transactions, with the exception of those involving U.S. Government securities,
must be reported.
All personnel must have duplicate copies of trade confirmations and periodic
account statements sent to the Company by their broker.
All personnel must submit an annual listing of all securities holdings.
All personnel must sign an acknowledgment that they have read and agree to be
subject to this Code of Ethics on an annual basis.
All personnel must submit a listing of all brokerage accounts at the time of
initial employment and at any time accounts are added or terminated.
SPECIAL RULES
NON-INTERESTED TRUSTEES
If you are a non-interested Trustee of a Fund,(2) you are not required to obtain
prior approval of your personal securities transactions or to file a report with
the Compliance Officer unless at the time of the transaction you knew or, in the
ordinary course of fulfilling your official duties as Trustee of a Fund, you
should have known that (i) the security is or was purchased or sold by a Fund,
or (ii) purchase or sale of this security is or was considered by a Van Eck
Company for a Fund during the 15-day period immediately preceding or following
the date of your transaction.
EXEMPT SECURITIES
The Code generally applies to ALL securities. However, the following securities
are considered exempt securities and are not subject to the above requirements:
o Shares of open-end investment companies that are not managed by a
Van Eck Company
o U.S. Government securities o Money market instruments
o Life insurance contracts and annuity contracts
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(2) "Interested person" has the same meaning as contained in Section
2(a)(19) of the Act. A "non-interested Trustee" is any Trustee who is not an
interested person.
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EXEMPT TRANSACTIONS
The Code does not apply to the following transactions:
(a) purchases or sales which you cannot, directly or indirectly,
control or influence;
(b) purchases which are part of an automatic dividend reinvestment
plan;
(c) purchases effected upon the exercise of rights issued by an
issuer PRO RATA to all holders of a class of its securities, to
the extent such rights were acquired from such issuer, and sales
of such rights so acquired;
(d) sales of securities held in a margin account to the extent
necessary in order to meet margin requirements.
WHAT WILL HAPPEN IF YOU VIOLATE THIS CODE
VIOLATIONS
You should endeavor to comply with this Code both in letter and spirit. However,
in adopting Rule 17j-1, the Securities and Exchange Commission specifically
noted that a violation of any provision of a code of ethics, such as this Code,
would not be considered a PER SE unlawful act prohibited by the general
anti-fraud provisions of the Rule as stated in the General Prohibitions. In
adopting this Code of Ethics, it is not intended that a violation of this Code
is or should be considered to be a violation of Rule 17j-1. Whether you have
violated the Code materially and the General Prohibitions will be determined on
the basis of the available facts and circumstances.
If a determination has been made that a material violation has occurred,
sanctions may be imposed. Before making any determination that you have
committed a material violation, you will be given an opportunity to supply
additional explanatory material. If the Compliance Officer determines that a
material violation of this Code has or may have occurred, he shall submit his
written determination and a recommendation of appropriate sanctions, together
with the transaction report and any additional explanatory material you provide,
to the Board of the Van Eck Company of which you are an access person and, if
applicable, to the Board of the Fund with respect to which the violation
occurred.
SANCTIONS
Sanctions may include any or all of the following:
1. Caution.
2. Warning by Senior Management.
3. Fine or returning any profit or benefit derived.
4. Dismissal.
5. Civil referral to the SEC or other civil regulatory authorities.
6. Criminal referral.
WHAT WILL BE DONE WITH THE REPORTS
Every reasonable effort will be made to keep confidential all reports of
securities transactions and any other information you file with the Compliance
Officer or you furnish to any person under this Code. The reports and
information are subject to review as provided in this Code and by
representatives of the Securities and Exchange Commission. In the event there is
a determination that you have violated the Code, records and information may be
made available, as directed by the appropriate Board of the Van Eck Company or
Fund, in their sole discretion, to any federal or state regulatory or law
enforcement agency or to any self regulatory
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organization, including the National Association of Securities Dealers, or to
any other party as is deemed consistent with the Van Eck Company's or Fund's
duty to that other party.
The Compliance Officer shall review or supervise the review of your personal
securities transactions and those of others under this Code. As part of that
review, each securities transaction reported by you shall be compared against
completed and contemplated portfolio transactions of Fund or Account to
determine whether a violation of this Code may have occurred. Records under this
Code shall be maintained in the manner and to the extent set forth below, and,
as required by Rule 17j-1, shall be available for examination by representatives
of the Securities and Exchange Commission:
(a) A copy of this Code and any other code which is, or was at any
time within the past five years, in effect, shall be preserved in
an easily accessible place.
(b) A record of any violation of this Code and of any action taken as
a result of such violation shall be preserved in an easily
accessible place for a period of not less than five years
following the end of the fiscal year in which the violation
occurs.
(c) A copy of each report made by an officer, director or trustee of
a Fund or Van Eck Company pursuant to this Code shall be
preserved for a period of not less than five years from the end
of the fiscal year in which it is made, the first two years in an
easily accessible place.
(d) A list of all persons who are, or within the past five years have
been, required to make reports pursuant to this Code shall be
maintained in an easily accessible place.
~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
7
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> International Investors Fund
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<INVESTMENTS-AT-COST> 136,167,526
<INVESTMENTS-AT-VALUE> 149,120,815
<RECEIVABLES> 25,724,931
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 174,845,746
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 5,800,757
<TOTAL-LIABILITIES> 5,800,757
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 166,331,056
<SHARES-COMMON-STOCK> 29,510,566
<SHARES-COMMON-PRIOR> 36,194,281
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (47)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (10,239,493)
<ACCUM-APPREC-OR-DEPREC> 12,953,473
<NET-ASSETS> 169,044,989
<DIVIDEND-INCOME> 2,672,425
<INTEREST-INCOME> 2,120,092
<OTHER-INCOME> 0
<EXPENSES-NET> 3,928,374
<NET-INVESTMENT-INCOME> 864,143
<REALIZED-GAINS-CURRENT> 10,237,029
<APPREC-INCREASE-CURRENT> (12,426,887)
<NET-CHANGE-FROM-OPS> (1,325,715)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4,300,307,346
<NUMBER-OF-SHARES-REDEEMED> (4,368,210,994)
<SHARES-REINVESTED> 1,093,636
<NET-CHANGE-IN-ASSETS> (69,593,680)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (20,257,396)
<GROSS-ADVISORY-FEES> 1,416,607
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,956,843
<AVERAGE-NET-ASSETS> 188,880,933
<PER-SHARE-NAV-BEGIN> 6.59
<PER-SHARE-NII> 0.03
<PER-SHARE-GAIN-APPREC> (0.84)
<PER-SHARE-DIVIDEND> (0.05)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 5.73
<EXPENSE-RATIO> 2.08
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 2
<NAME> Gold Resources Fund
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<INVESTMENTS-AT-COST> 38,283,691
<INVESTMENTS-AT-VALUE> 39,712,103
<RECEIVABLES> 92,582
<ASSETS-OTHER> 6,534
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 39,811,219
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 422,361
<TOTAL-LIABILITIES> 422,361
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 72,503,881
<SHARES-COMMON-STOCK> 39,388,858
<SHARES-COMMON-PRIOR> 17,550,582
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (34,197,947)
<ACCUM-APPREC-OR-DEPREC> 1,082,924
<NET-ASSETS> 39,388,858
<DIVIDEND-INCOME> 516,288
<INTEREST-INCOME> 222,267
<OTHER-INCOME> 0
<EXPENSES-NET> 1,112,771
<NET-INVESTMENT-INCOME> (374,216)
<REALIZED-GAINS-CURRENT> (7,020,245)
<APPREC-INCREASE-CURRENT> 2,360,158
<NET-CHANGE-FROM-OPS> (5,034,303)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 14,708,878
<NUMBER-OF-SHARES-REDEEMED> 23,682,720
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (14,008,145)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (640,056)
<OVERDIST-NET-GAINS-PRIOR> (58,874,291)
<GROSS-ADVISORY-FEES> 332,187
<INTEREST-EXPENSE> 488
<GROSS-EXPENSE> 1,116,496
<AVERAGE-NET-ASSETS> 44,291,600
<PER-SHARE-NAV-BEGIN> 3.04
<PER-SHARE-NII> (0.03)
<PER-SHARE-GAIN-APPREC> (0.28)
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 2.73
<EXPENSE-RATIO> 2.51
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 5
<NAME> Asia Dynasty Fund
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<INVESTMENTS-AT-COST> 26,128,642
<INVESTMENTS-AT-VALUE> 42,618,273
<RECEIVABLES> 2,769,099
<ASSETS-OTHER> 946,337
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 46,333,709
<PAYABLE-FOR-SECURITIES> 273,073
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,656,433
<TOTAL-LIABILITIES> 2,929,506
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 27,316,505
<SHARES-COMMON-STOCK> 3,014,668
<SHARES-COMMON-PRIOR> 1,370,232
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (7,035)
<ACCUMULATED-NET-GAINS> (66,113)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 16,160,846
<NET-ASSETS> 43,404,203
<DIVIDEND-INCOME> 434,345
<INTEREST-INCOME> 47,395
<OTHER-INCOME> 0
<EXPENSES-NET> 849,115
<NET-INVESTMENT-INCOME> (367,375)
<REALIZED-GAINS-CURRENT> 9,053,689
<APPREC-INCREASE-CURRENT> 13,579,124
<NET-CHANGE-FROM-OPS> 22,265,438
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (6,383,383)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 52,170,156
<NUMBER-OF-SHARES-REDEEMED> 44,674,765
<SHARES-REINVESTED> 4,399,950
<NET-CHANGE-IN-ASSETS> 27,777,396
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (79,734)
<OVERDIST-NET-GAINS-PRIOR> (2,266,524)
<GROSS-ADVISORY-FEES> 204,932
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 849,115
<AVERAGE-NET-ASSETS> 27,324,267
<PER-SHARE-NAV-BEGIN> 0.00
<PER-SHARE-NII> 0.00
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 0.00
<EXPENSE-RATIO> 2.82
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 6
<NAME> Global Leaders Fund
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<INVESTMENTS-AT-COST> 23,087,795
<INVESTMENTS-AT-VALUE> 39,277,849
<RECEIVABLES> 221,214
<ASSETS-OTHER> 492,358
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 39,991,421
<PAYABLE-FOR-SECURITIES> 48,159
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 431,180
<TOTAL-LIABILITIES> 479,339
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 22,480,576
<SHARES-COMMON-STOCK> 2,935,231
<SHARES-COMMON-PRIOR> 3,114,275
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (98,760)
<ACCUMULATED-NET-GAINS> 937,142
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 16,193,124
<NET-ASSETS> 39,512,082
<DIVIDEND-INCOME> 217,853
<INTEREST-INCOME> 288,736
<OTHER-INCOME> 0
<EXPENSES-NET> 691,912
<NET-INVESTMENT-INCOME> (185,323)
<REALIZED-GAINS-CURRENT> 3,043,327
<APPREC-INCREASE-CURRENT> 7,134,146
<NET-CHANGE-FROM-OPS> 9,992,150
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 9,091,004
<NUMBER-OF-SHARES-REDEEMED> 12,766,535
<SHARES-REINVESTED> 1,976,033
<NET-CHANGE-IN-ASSETS> (1,342,461)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 47,614
<OVERDISTRIB-NII-PRIOR> (171,441)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 248,902
<INTEREST-EXPENSE> 14
<GROSS-EXPENSE> 786,607
<AVERAGE-NET-ASSETS> 33,186,933
<PER-SHARE-NAV-BEGIN> 0.00
<PER-SHARE-NII> 0.00
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 0.00
<EXPENSE-RATIO> 2.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 7
<NAME> Global Hard Assets Fund
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<INVESTMENTS-AT-COST> 25,975,924
<INVESTMENTS-AT-VALUE> 26,550,470
<RECEIVABLES> 111,619
<ASSETS-OTHER> 138,990
<OTHER-ITEMS-ASSETS> 80,864
<TOTAL-ASSETS> 26,881,943
<PAYABLE-FOR-SECURITIES> 2,817
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 26,005,928
<TOTAL-LIABILITIES> 26,008,745
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 39,352,403
<SHARES-COMMON-STOCK> 2,165,547
<SHARES-COMMON-PRIOR> 3,144,485
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 45,571
<ACCUMULATED-NET-GAINS> (13,932,422)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 543,193
<NET-ASSETS> 873,198
<DIVIDEND-INCOME> 665,416
<INTEREST-INCOME> 130,571
<OTHER-INCOME> 294,362
<EXPENSES-NET> 1,000,296
<NET-INVESTMENT-INCOME> 90,053
<REALIZED-GAINS-CURRENT> (3,200,390)
<APPREC-INCREASE-CURRENT> 7,408,066
<NET-CHANGE-FROM-OPS> 4,297,729
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 107,853
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 12,089,759
<NUMBER-OF-SHARES-REDEEMED> 22,921,100
<SHARES-REINVESTED> 90,539
<NET-CHANGE-IN-ASSETS> 2,271,447
<ACCUMULATED-NII-PRIOR> 6,744
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (10,839,126)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 313,782
<INTEREST-EXPENSE> 15,000
<GROSS-EXPENSE> 1,000,296
<AVERAGE-NET-ASSETS> 31,378,200
<PER-SHARE-NAV-BEGIN> 0.00
<PER-SHARE-NII> 0.00
<PER-SHARE-GAIN-APPREC> 1.00
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 0.00
<EXPENSE-RATIO> 2.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 8
<NAME> U.S. Government Money Fund
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<INVESTMENTS-AT-COST> 123,023,149
<INVESTMENTS-AT-VALUE> 123,023,149
<RECEIVABLES> 113,137
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 123,136,286
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 25,693,077
<TOTAL-LIABILITIES> 25,693,077
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 97,443,209
<SHARES-COMMON-PRIOR> 47,222,172
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (9,873)
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 97,443,209
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 3,969,679
<OTHER-INCOME> 0
<EXPENSES-NET> 942,772
<NET-INVESTMENT-INCOME> 3,026,907
<REALIZED-GAINS-CURRENT> (11,580)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 3,015,327
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 3,026,907
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4,365,984,087
<NUMBER-OF-SHARES-REDEEMED> 4,317,461,360
<SHARES-REINVESTED> 1,709,890
<NET-CHANGE-IN-ASSETS> (22,123,265)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 411,479
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 942,772
<AVERAGE-NET-ASSETS> 82,295,800
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.03
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> (0.03)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 1.15
</TABLE>
