As filed with the Securities and Exchange Commission on December 1, 1999.
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. 53
-AND-
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 54
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
- --------------------------------------------------------------------------------
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (CHECK APPROPRIATE BOX):
|_| IMMEDIATELY UPON FILING PURSUANT [_] 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)
|X| 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.
- --------------------------------------------------------------------------------
<PAGE>
VAN ECK FUNDS
CROSS-REFERENCE PAGE
PURSUANT TO RULE 501 (B) OF REGULATION S-K
UNDER THE SECURITIES ACT OF 1933, AS AMENDED
FORM N-1A
PART A
ITEM NO. LOCATION IN PROSPECTUS
- -------- ----------------------
1. Cover Page Cover Page
2. Synopsis The Funds
3. Condensed Financial Information Financial Highlights
4. General Description of Registrant Other Investments, Investment Policies,
Investment Techniques and Risks.
5. Management of the Fund Management of the Funds;
6. Capital Stock and Other Securities Dividends and Capital Gains; Taxes;
7. Purchase of Securities Being
Offered How to buy, sell, exchange or transfer
shares.
8. Redemption or Repurchase How to buy, sell, exchange or transfer
shares.
9. Pending Legal Proceedings N/A
PART B LOCATION IN STATEMENT
ITEM NO. ADDITIONAL INFORMATION
- -------- ----------------------
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History N/A
13. Investment Objectives and Policies Investment Objectives and Policies;
Risk Factors; Investment Restrictions;
Portfolio Transactions and Brokerage
14. Management of the Fund Trustees and Officers
15. Control Persons and Principal Trustees and Officers
Holders of Securities
<PAGE>
PART B LOCATION IN STATEMENT
ITEM NO. ADDITIONAL INFORMATION
- -------- ----------------------
16. Investment Advisory and Other Investment Advisory Services; The
Services Distributor; Trustees and Officers;
Additional Information
17. Brokerage Allocation and Other Portfolio Transactions and Brokerage
Practices
18. Capital Stock and Other Securities General Information
19. Purchase, Redemption and Pricing Valuation of Shares; Exchange
of Securities Being Offered Privilege; Tax-Sheltered Retirement
Plans; Investment Programs;
Redemptions in Kind
20. Tax Status Taxes
21. Underwriters The Distributor
22. Calculation of Performance Data Performance
23. Financial Statements Financial Statements
<PAGE>
================================================================================
Van Eck Global
- --------------------------------------------------------------------------------
PROSPECTUS
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.
- --------------------------------------------------------------------------------
GLOBAL INVESTMENTS SINCE 1955
================================================================================
<PAGE>
================================================================================
Table of Contents
================================================================================
<TABLE>
<S> <C>
I. THE FUNDS 2
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 FUND
GLOBAL HARD ASSETS FUND 5
GLOBAL LEADERS FUND 9
INTERNATIONAL INVESTORS GOLD FUND 15
NATURAL RESOURCES FUND 12
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 41
TABLES THAT SHOW PER SHARE EARNINGS, EXPENSES,
AND PERFORMANCE OF EACH FUND.
</TABLE>
<PAGE>
================================================================================
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 as much as 25% of total assets in one country. The Fund attempts to
purchase securities with a high relative value to their share prices with
excellent growth prospects. The Fund currently invests more than 25% of its
total assets in Hong Kong.
PRINCIPAL RISKS
By definition, an Asian emerging markets fund involves above-average risk. Many
emerging markets are much less liquid and much more volatile than the U.S.
market. Asian countries, in particular, may have different or ineffective
securities regulation. Their economies and politics can be extremely volatile.
An investment in the Fund involves the risk of losing money.
2 VAN ECK GLOBAL PROSPECTUS
<PAGE>
I. THE FUNDS / ASIA DYNASTY
================================================================================
Asia Dynasty Fund Performance
================================================================================
This chart illustrates the historic variability of risk of the Fund from year to
year for a share of Asia Dynasty Fund (before sales charges) since Fund
inception on 3/22/93. This chart describes past performance only, and should not
be understood as a prediction for future results.
During the period covered, the Fund's highest performing quarter (ended
x/x/xx) was xx%. The lowest performing quarter (ended x/x/xx) was xx%.
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
Asia Dynasty Fund
Class A Shares Annual Total Returns (%)
As of December 31, 1999
<TABLE>
<S> <C>
1995 ................................. 3.13
1996 ................................. 6.53
1997 ................................. -32.10
1998 ................................. -0.26
1999 .................................
</TABLE>
Fund performance is shown with sales charges subtracted. This chart compares the
Fund's performance with a broad measure of market performance. Past performance
does not guarantee or predict future results.
Asia Dynasty Fund
1-, 5-Year and Life-of-Fund Performance
Plus a Comparison to the MSCI Far East Ex-Japan Free Index*
As of December 31, 1999
<TABLE>
<CAPTION>
1 Year 5 Year Life-of-Fund
<S> <C> <C> <C>
Class A Shares
Class B Shares
MSCI Far East
Ex-Japan Free Index
- --------------------------------------------------------------------------------
</TABLE>
* The Morgan Stanley Capital International (MSCI) Far East Ex-Japan Free
Index is a market capitalization weighted index that captures the largest
60% of the publicly traded securities in each industry for nine Asian
markets (excluding Japan); the index includes only shares available for
purchase by foreign investors.
+ Life of Class A Shares; calculated from nearest month end (3/31/93).
VAN ECK GLOBAL PROSPECTUS 3
<PAGE>
================================================================================
Asia Dynasty Fund Expenses
================================================================================
This table shows certain fees and expenses you will incur as a Fund investor if
you buy and hold shares. You pay sales charges directly.
Asia Dynasty Fund
Shareholder Expenses (fees paid directly from your investment)
<TABLE>
<CAPTION>
CLASS A CLASS B
<S> <C> <C>
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
Administration Fees
Distribution (12b-1) Fees
Other Expenses
Total Annual Fund Operating Expenses*
</TABLE>
* After custody fee arrangement: Class A- 2.43%, Class B- 3.14%
The adjacent table shows the expenses you would pay on a hypothetical $10,000
investment. The example presumes an average annual return of 5% with redemption
at the end of each time period. This illustration is hypothetical and assumes
that expenses remain the same and you reinvest dividends and distributions. For
a real investment, your actual expenses may be higher or lower than those shown.
Expense Example
What a $10,000 investment would actually cost
1 YEAR 3 YEAR 5 YEAR 10 YEAR
- --------------------------------------------------------------------------------
Class A $873 $1,485 $2,121 $3,816
Class B $885 $1,569 $2,172 $4,062
- --------------------------------------------------------------------------------
4 VAN ECK GLOBAL PROSPECTUS
<PAGE>
I. THE FUNDS / EMERGING MARKETS
================================================================================
================================================================================
2. EMERGING MARKETS FUND PROFILE
OBJECTIVE
The Emerging Markets 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. These include issues of
companies in emerging countries, issues denominated in currencies of emerging
countries, investment companies (like country funds) that invest in emerging
countries, and in American Depositary Receipts (ADRs), Americal 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; direct equity interests in
trusts, partnerships, joint ventures and other unincorporated entities or
enterprises; 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 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. The
Fund may borrow up to 30% of its net assets to buy more securities. An
investment in the Fund involves the risk of losing money.
The bar chart illustrating annual total returns has been omitted because
Emerging Markets Fund is a new fund.
VAN ECK GLOBAL PROSPECTUS 5
<PAGE>
================================================================================
Emerging Markets Fund Expenses
================================================================================
This table shows estimates of 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.
Emerging Markets Fund
Shareholder Transaction Expenses
*(footnote)
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%
<TABLE>
<CAPTION>
CLASS A CLASS B
<S> <C>
Annual Fund Operating Expenses (% of net assets)
Management/Administration Fees ....................
Other Expenses ....................................
Total Fund Operating Expenses .....................
</TABLE>
*Based on estimated expense amounts for the current fiscal year.
The adjacent table shows the expenses you would pay on a hypothetical $10,000
investment. The example presumes an average annual return of 5% with redemption
at the end of each time period. This illustration is hypothetical. In a real
investment, your actual expenses may be higher or lower than those shown.
CLASS A CLASS B
Expenses Example
What a $10,000 investment would actually cost
- -------------------------------------------------------------
1 year ..................................
3 year ..................................
6 VAN ECK GLOBAL PROSPECTUS
<PAGE>
I. THE FUNDS / GLOBAL HARD ASSETS
================================================================================
================================================================================
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 the first
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.
Hard asset securities can produce long-term capital appreciation and help
protect capital against inflation during cyclical economic expansions. Hard
asset security values may move independently of industrial shares, so a hard
asset portfolio can offset the fluctuations -- and perhaps increase the return
- -- of an industrial equity portfolio.
VAN ECK GLOBAL PROSPECTUS 7
<PAGE>
================================================================================
================================================================================
Global Hard Assets Fund 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, joint ventures and other unincorporated entities or enterprises;
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 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 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'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.
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.
8 VAN ECK GLOBAL PROSPECTUS
<PAGE>
I. THE FUNDS / GLOBAL HARD ASSETS
================================================================================
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. 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 x/x/xx)
was xx%. The lowest performing quarter (ended x/x/xx) was xx%.
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
- --------------------------------------------------------------------------------
Global Hard Assets Fund
Class A Shares Annual Total Returns (%)
As of December 31, 1999
1996 .............................. 45.61
1997 .............................. 14.29
1998 .............................. -32.25
1999 ..............................
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
1-Year and Life-of-Fund Performance
Plus a Comparison to the Ibbotson Hard Assets Index*
As of December 31, 1999
1 Year Life-of-Fund
- --------------------------------------------------------------------------------
Class A Shares
Class B Shares
Class C Shares
Ibbotson Hard Assets Index
- --------------------------------------------------------------------------------
* 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, with the exceptions
noted in the following paragraph.
The Index is entirely equity for 1970-72 because there were no commodity
contracts before 1973 with sufficient liquidity to qualify for inclusion in
the Goldman Sachs indexes. The real estate index did not exist and is not
included before 1972. The precious metals commodity sub-index was first
available in 1973, and until 1977 represented the entire commodity
component. The industrial metals sub-index began in 1977, and, until 1983,
when the energy-related commodities index began, these two sub-indexes each
represented 50% of the commodity component.
+ Life of Class A Shares; calculated from nearest month end (10/31/94).
VAN ECK GLOBAL PROSPECTUS 9
<PAGE>
================================================================================
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.
Global Hard Assets Fund
Shareholder Expenses (fees paid directly from your investment)
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <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
Distribution (12b-1) Fees
Other Expenses
Total Annual Fund Operating Expenses*
</TABLE>
* After Advisory fee waiver: Class A: 2.0%, Class B: 2.5%, Class C: 2.5%.
These fee waivers are not contractual and may be discontinued at the
discretion of the Adviser.
The adjacent table shows the expenses you would pay on a hypothetical $10,000
investment. The example presumes an average annual return of 5% with redemption
at the end of each time period. This illustration is hypothetical and assumes
that expenses remain the same and you reinvest dividends and distributions. For
a real investment, your actual expenses may be higher or lower than those shown.
Expense Example
What a $10,000 investment would actually cost
<TABLE>
<CAPTION>
1 Year 3 year 5 year 10 year
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Class B
Class C
- --------------------------------------------------------------------------------
</TABLE>
10 VAN ECK GLOBAL PROSPECTUS
<PAGE>
I. THE FUNDS / GLOBAL LEADERS
================================================================================
================================================================================
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.
VAN ECK GLOBAL PROSPECTUS 11
<PAGE>
================================================================================
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. 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
x/x/xx) was xx%. The lowest performing quarter (ended x/x/xx) was xx%.
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
- --------------------------------------------------------------------------------
Global Leaders Fund
Class A Shares Annual Total Returns (%)
As of December 31, 1998
1995 ........................... 15.30
1996 ........................... 12.28
1997 ........................... 14.77
1998 ........................... 20.65
1999 ...........................
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
1-, 5-Year, and Life-of-Fund 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
Class B Shares
MSCI World Stock Index
- --------------------------------------------------------------------------------
* The MSCI World Stock Index is a market capitalization weighted benchmark
that tracks the performance of 24 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.
+ Life of Class A Shares; calculated from nearest month end (12/31/93).
12 VAN ECK GLOBAL PROSPECTUS
<PAGE>
I. THE FUNDS / GLOBAL LEADERS
================================================================================
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.
Global Leaders Fund
Shareholder Expenses (fees paid directly from your investment)
<TABLE>
<CAPTION>
CLASS A CLASS B
<S> <C> <C>
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
Administration Fees
Distribution (12b-1) Fees
Other Expenses
Total Annual Fund Operating Expenses*
</TABLE>
* After advisory fee waiver: Class A: 2.0%, Class B: 2.5%. These fee waivers
are contractual and may be discontinued at the discretion of the Adviser.
The adjacent table shows the expenses you would pay on a hypothetical $10,000
investment. The example presumes an average annual return of 5% with redemption
at the end of each time period. This illustration is hypothetical and assumes
that expenses remain the same and you reinvest dividends and distributions. For
a real investment, your actual expenses may be higher or lower than those shown.
Expense Example
What a $10,000 investment would actually cost
<TABLE>
<CAPTION>
1 Year 3 year 5 year 10 year
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Class B
- --------------------------------------------------------------------------------
</TABLE>
VAN ECK GLOBAL PROSPECTUS 13
<PAGE>
================================================================================
================================================================================
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 invest up to 12 1/2% 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,
foreign security risk and gold risk.
14 VAN ECK GLOBAL PROSPECTUS
<PAGE>
I. THE FUNDS / INTERNATIONAL INVESTORS GOLD
================================================================================
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).
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 x/x/xx)
was xx%. The lowest performing quarter (ended x/x/xx) was xx%.
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
- --------------------------------------------------------------------------------
International Investors Gold Fund
Class A Shares Annual Total Returns (%)
As of December 31, 1999
<TABLE>
<CAPTION>
<S> <C>
1990 -27.02
1991 2.56
1992 -29.08
1993 113.14
1994 -1.05
1995 -8.93
1996 -9.37
1997 -36.00
1998 -11.87
1999
</TABLE>
Fund performance is shown with sales charges subtracted. This chart compares the
Fund's performance with a broad measure of market performance. Past performance
does not guarantee or predict future results.
International Investors Gold Fund
1-, 5-, and 10-Year Performance
Plus a Comparison to the FT Gold Mines Index*
As of December 31, 1999
<TABLE>
<CAPTION>
1 Year 5 Year 10 Year
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Class A Shares
FT Gold Mines Index
- --------------------------------------------------------------------------------
</TABLE>
* The Financial Times Gold Mines Index is a market capitalization weighted
global index of gold mining shares.
VAN ECK GLOBAL PROSPECTUS 15
<PAGE>
================================================================================
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.
International Investors Gold Fund
Shareholder Expenses (fees paid directly from your investment)
<TABLE>
<CAPTION>
CLASS A
<S> <C>
Maximum Sales Charge Sales (imposed on purchases as
a percentage of offering price) 5.75%
Maximum Deferred Sales Charge (load)
(as a percentage) 0.00%
Annual fund operating expenses
(Expenses that are deducted from Fund assets)
Management
Administration Fees
Distributions (12b-1) Fees
Other Expenses
Total Annual Fund Operating Expenses*
- --------------------------------------------------------------------------------
</TABLE>
* After a direct brokerage arrangement: 2.01%
The adjacent table shows the expenses you would pay on a hypothetical $10,000
investment. The example presumes an average annual return of 5% with redemption
at the end of each time period. This illustration is hypothetical and assumes
that expenses remain the same and you reinvest dividends and distributions. For
a real investment, your actual expenses may be higher or lower than those shown.
Expense Example
What a $10,000 investment would actually cost
<TABLE>
<CAPTION>
1 Year 3 year 5 year 10 year
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
- --------------------------------------------------------------------------------
</TABLE>
16 VAN ECK GLOBAL PROSPECTUS
<PAGE>
I. THE FUNDS / NATURAL RESOURCES
================================================================================
================================================================================
6. NATURAL RESOURCES FUND PROFILE
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 resources 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.
VAN ECK GLOBAL PROSPECTUS 17
<PAGE>
================================================================================
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). 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 x/x/xx)
was xx%. The lowest performing quarter (ended x/x/xx) was xx%.
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
- --------------------------------------------------------------------------------
Natural Resources Fund
Class A Shares Annual Total Returns (%)
As of December 31, 1999
1990 ............................ -26.36
1991 ............................ -4.08
1992 ............................ -4.50
1993 ............................ 78.09
1994 ............................ -15.62
1995 ............................ 4.30
1996 ............................ 2.51
1997 ............................ -39.34
1998 ............................ -12.39
1999 ............................ 18.89
- --------------------------------------------------------------------------------
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-, 5-, and 10-Year Performance
Plus a Comparison to FT Gold Mines Index*
As of December 31, 1998
<TABLE>
<CAPTION>
1 Year 5 Year 10 Year
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Class A Shares -17.39% -14.70% -4.28%
FT Gold Mines -11.07% -13.95% -6.21%
- --------------------------------------------------------------------------------
</TABLE>
* The Financial Times Gold Mines Index is a market capitalization-weighted
global index of gold mining shares.
18 VAN ECK GLOBAL PROSPECTUS
<PAGE>
I. THE FUNDS / NATURAL RESOURCES
================================================================================
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.
<TABLE>
<CAPTION>
Natural Resources Fund Shareholder Expenses
(fees paid directly from your investment) CLASS A
<S> <C>
Maximum Sales Charge (imposed on purchases as
a percentage of offering price) 5.75%
Maximum Deferred Sales Charge (load)
(as a percentage) 0.00%
Annual fund operating expenses
(Expenses that are deducted from Fund assets)
Management
Administration Fees
Distributions (12b-1) Fees
Other Expenses
Total Annual Fund Operating Expenses*
- --------------------------------------------------------------------------------
</TABLE>
* After a direct brokerage arrangement: 2.21%
The adjacent table shows the expenses you would pay on a hypothetical $10,000
investment. The example presumes an average annual return of 5% with redemption
at the end of each time period. This illustration is hypothetical and assumes
that expenses remain the same and you reinvest dividends and distributions. For
a real investment, your actual expenses may be higher or lower than those shown.
Expense Example
What a $10,000 investment would actually cost
<TABLE>
<CAPTION>
1 Year 3 year 5 year 10 year
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
- --------------------------------------------------------------------------------
</TABLE>
VAN ECK GLOBAL PROSPECTUS 19
<PAGE>
================================================================================
================================================================================
7. U.S. GOVERNMENT MONEY 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. The Adviser selects only
investment grade securities for the Fund.
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.
20 VAN ECK GLOBAL PROSPECTUS
<PAGE>
I. THE FUNDS / U.S. GOVERNMENT MONEY
================================================================================
U.S. Government Money 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.
U.S. Government Money Fund
Shareholder Expenses (fees paid directly from your investment)
<TABLE>
<CAPTION>
CLASS A
<S> <C>
Maximum Sales Charge (imposed on purchases as
a percentage of offering price) 0.00%
Maximum Deferred Sales Charge (load)
(as a percentage) 0.00%
Annual fund operating expenses
(Expenses that are deducted from Fund assets)
Management/Administration Fees
Distributions (12b-1) Fees
Other Expenses
Total Annual Fund Operating Expenses*
- --------------------------------------------------------------------------------
</TABLE>
The adjacent table shows the expenses you would pay on a hypothetical $10,000
investment. The example presumes an average annual return of 5% with redemption
at the end of each time period. This illustration is hypothetical and assumes
that expenses remain the same and you reinvest dividends and distributions. For
a real investment, your actual expenses may be higher or lower than those shown.
Expense Example
What a $10,000 investment would actually cost
<TABLE>
<CAPTION>
1 Year 3 year 5 year 10 year
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
- --------------------------------------------------------------------------------
</TABLE>
VAN ECK GLOBAL PROSPECTUS 21
<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
<TABLE>
<S> <C>
Funds Emerging Markets 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
credit-worthiness via letters of credit or other
instruments.
BORROWING
Funds Asia Dynasty Fund, Emerging Markets Fund, Global Hard Assets
Fund, Global Leaders Fund, Natural Resources 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. The Natural Resources Fund
and 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
commercials banks or other institutional lenders.
</TABLE>
22 VAN ECK GLOBAL PROSPECTUS
<PAGE>
II. ADDITIONAL INVESTMENT STRATEGIES
================================================================================
================================================================================
COLLATERALIZED MORTGAGE OBLIGATIONS (CMOS)
<TABLE>
<S> <C>
Funds Asia Dynasty Fund, Emerging Markets 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 Fund, Gloal Hard Assets
Fund, Global Leaders Fund, Natural Resources 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.
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.
</TABLE>
VAN ECK GLOBAL PROSPECTUS 23
<PAGE>
================================================================================
================================================================================
Fund Policies:
Basic Risk Management Rules
- -------------------------------------------------------------------------------
Asia Dynasty Fund
Emerging Markets Fund
Global Hard Assets Fund
Global Leaders Fund
Natural Resources Fund
U.S. Government
Money Fund
1. Natural Resources Fund and U.S. Government Money Fund will not invest more
than 10% and Asia Dynasty Fund, Emerging Markets 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.
<TABLE>
<S> <C>
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.
DIRECT INVESTMENTS
Funds Asia Dynasty Fund, Emerging Markets 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.
</TABLE>
24 VAN ECK GLOBAL PROSPECTUS
<PAGE>
II. ADDITIONAL INVESTMENT STRATEGIES
================================================================================
================================================================================
Risk A direct investment price as stated for valuation may not be
the price the Fund could actually get if it had to sell.
Private issuers do not have to follow all the rules of
public issuers. Tax rates on realized gains from selling
private issue holdings may be higher than taxes on gains
from listed securities. The Board of Trustees considers
direct investments illiquid, and will aggregate direct
investments with other illiquid investments under the
illiquid investing limits of each Fund.
The Funds will not invest more than 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 foreign nationals who have inside
information.
2. Asia Dynasty Fund, Emerging Markets Fund, Global Hard Assets Fund, Global
Leaders Fund, Natural Resources 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 Fund,
Global Hard Assets Fund, Global Leaders Fund and Natural Resources Fund may
purchase more than 10% of any non-voting class of securities. Asia Dynasty Fund,
Emerging Markets 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 these Funds ever borrow more
than 5% of such assets, they may not buy securities for investment.
VAN ECK GLOBAL PROSPECTUS 25
<PAGE>
================================================================================
================================================================================
Fund Policies:
Basic Risk Management Rules International Investors Gold Fund
- --------------------------------------------------------------------------------
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.
<TABLE>
<S> <C>
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 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.
</TABLE>
26 VAN ECK GLOBAL PROSPECTUS
<PAGE>
II. ADDITIONAL INVESTMENT STRATEGIES
================================================================================
================================================================================
<TABLE>
<S> <C>
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.
LOANS OF PORTFOLIO SECURITIES
Funds Asia Dynasty Fund, Emerging Markets 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 Funds, 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 Global Hard Assets Fund, Emerging Markets 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 to 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.
</TABLE>
VAN ECK GLOBAL PROSPECTUS 27
<PAGE>
================================================================================
================================================================================
NON-DIVERSIFICATION
<TABLE>
<S> <C>
Funds Global Hard Assets Fund, Global Leaders Fund, International
Investors Gold Fund, Natural Resources 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, Natural Resources 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.
</TABLE>
28 VAN ECK GLOBAL PROSPECTUS
<PAGE>
================================================================================
================================================================================
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 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.
VAN ECK GLOBAL PROSPECTUS 29
<PAGE>
================================================================================
================================================================================
<TABLE>
<S> <C>
SHORT SALES
Funds Emerging Markets 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.
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 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.
</TABLE>
30 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.
VAN ECK GLOBAL PROSPECTUS 31
<PAGE>
================================================================================
================================================================================
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:
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.
32 VAN ECK GLOBAL PROSPECTUS
<PAGE>
III. SHAREHOLDER INFORMATION
================================================================================
================================================================================
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" on the preceding page.
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.
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.
VAN ECK GLOBAL PROSPECTUS 33
<PAGE>
================================================================================
================================================================================
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 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.
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.
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.
34 VAN ECK GLOBAL PROSPECTUS
<PAGE>
III. SHAREHOLDER INFORMATION
================================================================================
================================================================================
3. SALES CHARGES
Class A Shares Sales Charges
Asia Dynasty Fund, Emerging Markets Fund, Global Hard Assets Fund, Global
Leaders Fund, Natural Resources Fund and International Investors Gold Fund
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
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.
VAN ECK GLOBAL PROSPECTUS 35
<PAGE>
================================================================================
================================================================================
- --------------------------------------------------------------------------------
Class B Shares Sales Charges
Asia Dynasty Fund, Emerging Markets Fund, Global Hard Assets Fund and Global
Leaders Fund
Shareholders time of redemption Contingent Deferred Sales Charge (CDSC)+
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
- --------------------------------------------------------------------------------
Class B Broker/Agent Compensation: 4% of the amount purchased at time of
investment.
+ Shares purchased before April 30, 1997 remain subject to the contingent
deferred sales charge 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.
- --------------------------------------------------------------------------------
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.
36 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 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.
VAN ECK GLOBAL PROSPECTUS 37
<PAGE>
================================================================================
================================================================================
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 70 1/2. It is also waived for distributions from qualified
pension or profit sharing plans after termination of employment after age 55. In
addition, it is waived for shares redeemed as a tax-free return of an excess
contribution.
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 ("SSB") 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.
38 VAN ECK GLOBAL PROSPECTUS
<PAGE>
III. SHAREHOLDER INFORMATION
================================================================================
================================================================================
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.
- -------------------------------------------------------------------------------
Dividend and Capital Gain Schedule
<TABLE>
<CAPTION>
Fund Dividends and Short-Term Long-Term
Capital Gains Capital Gains
<S> <C> <C>
Asia Dynasty Fund June/December December
Emerging Markets Fund June/December December
Global Hard Assets Fund June/December December
Global Leaders Fund June/December December
Natural Resources 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.
VAN ECK GLOBAL PROSPECTUS 39
<PAGE>
================================================================================
================================================================================
7. MANAGEMENT OF THE FUNDS
==============================
SUB-ADVISER
Fiduciary International, Inc.,
Two World Trade Center, New
York, NY 10048, serves as
sub-investment adviser to
Global Leaders Fund. FII is an
indirect subsidiary of
Fiduciary Trust Company
International, a New York
State chartered bank.
==============================
==============================
INVESTMENT ADVISER
and Administrator
Van Eck Associates
Corporation, 99 Park Avenue
New York, NY 10016, manages
investment operations of the
Funds.
==============================
==============================
INDEPENDENT ACCOUNTANTS
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.
==============================
==============================
THE TRUST
"The Trust" is a
Massachusetts business trust
consisting of the Van Eck
Funds listed in this
prospectus ("Funds"). The
Board of Trustees manages the
Funds' business and affairs.
==============================
==============================
DISTRIBUTOR
Van Eck Securities
Corporation, 99 Park Ave., New
York, NY 10016 distributes the
Funds and is wholly owned by
the Adviser.
==============================
==============================
TRANSFER AGENT
DST Systems, Inc., 210 West
10th Street, 8th Flr., Kansas
City, MO 64105 serves as the
Funds' transfer agent.
==============================
==============================
CUSTODIAN
State Street Bank and
Trust Company
225 Franklin Street
Boston, MA 02110
holds Fund securities
and settles trades.
==============================
40 VAN ECK GLOBAL PROSPECTUS
<PAGE>
SHAREHOLDER INFORMATION
================================================================================
================================================================================
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. Global
Hard Assets Fund pays 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. Gold/Resources and International Investors Gold Funds each pay 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. US 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, Gold/Resources, 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
million in Gold/Resources and International Investors Gold Funds (then .2% per
year of the average daily net assets in excess of $750 million in the two Gold
Funds).
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 Fund: David A. Semple, David M. Hulme
Mr. Semple is an Investment Director of Van Eck. He joined Van Eck in 1998, and
has been in the investing business for 9 years as a manager and analyst. Mr.
Hulme is co-portfolio manager of the Asia Dynasty Fund and the Emerging Markets
Fund. Mr. Hulme has been in investing for 5 years as a manager and analyst.
Global Leaders Fund: Sheila Coco, Anne Tatlock, E. Alexandra von Stackelberg
Ms. Coco, Ms. Tatlock and Ms. Stackelberg 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 23 years of experience in investing. Ms. Stackelberg joined FTCI in
1993, where she is Vice President. She has 7 years of experience in investing.
Global Hard Assets Fund: Derek S. van Eck, Kevin Reid
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 13 years of experience in investing as a manager and analyst.
Mr. Reid serves as Director of Real Estate Research for the Adviser and is an
officer of the Trust. Mr. Reid joined Van Eck in 1995. He has 12 years of
experience in investing.
Natural Resources Fund, International Investors Gold Fund: are 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 5 years of experience in the
investment business as an analyst.
VAN ECK GLOBAL PROSPECTUS 41
<PAGE>
================================================================================
================================================================================
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 XX% was paid to Brokers and
Agents who sold shares or serviced accounts of Fund shareholders. The remaining
XX% was retained by the Distributor to repay 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)*
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FEE TO FUND PAYMENT
TO DEALER
<S> <C> <C>
Asia Dynasty Fund-A 50 bps 25 bps
Asia Dynasty Fund-B 100 bps 25 bps
Emerging Markets Fund-A 50 bps 25 bps
Emerging Markets 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
Natural Resources Fund-A 25 bps 25 bps
International Investors
Gold Fund-A 25 bps 25 bps
U.S. Government
Money Fund 25 bps 25 bps
- --------------------------------------------------------------------------------
</TABLE>
* 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.# Van eck global prospectus
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.
42 VAN ECK GLOBAL PROSPECTUS
<PAGE>
IV. FINANCIAL HIGHLIGHTS
The financial highlights tables are intended to help you
understand the Funds financial performance for the past five
years. Certain information reflects financial results for a
single Fund share. The total returns in the table represent the
rate that an investor would have earned or lost on an investment
in the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by Ernst &
Young, 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 $7.82 $13.21 $12.40 $12.13
===================================================================================================================================
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) (0.01) (0.28) (0.20) (0.02)
Net Gain (Loss) on
Investments (both Realized and Unrealized) (0.01) (3.82) 1.01 0.40
===================================================================================================================================
Total from Investment Operations (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 -- (1.15) -- --
From Tax Return of Capital -- (0.14) -- (0.02)
===================================================================================================================================
Total Dividends & Distributions -- (1.29) -- (0.11)
===================================================================================================================================
Net Asset Value,
End of Year $7.80 $7.82 $13.21 $12.40
===================================================================================================================================
Total Return (a) (0.26%) (32.10%) 6.53% 3.13%
===================================================================================================================================
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Period (000) $10,685 $12,873 $44,351 $64,275
Ratio of Gross Expenses
to Average Net Assets 3.13% 2.38% 2.42% 2.03%
Ratio of Net Expenses
to Average Net Assets 2.43%(b) 2.38% 2.42% 2.03%
Ratio of Net Investment Income (Loss)
to Average Net Assets (0.09%) (0.76%) (0.73%) (0.08%)
Portfolio Turnover Rate 121.96% 200.45% 52.99% 57.06%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Total return is calculated assuming an initial investment made at net asset
value at the beginning of the year, reinvestment of dividends and
distributions at net asset value during the year and a redemption on the
last day of the year. A sales charge is not reflected in the calculation of
total dividends and return.
(b) After expenses reduced by a custodian fee arrangement.
VAN ECK GLOBAL PROSPECTUS 43
<PAGE>
The financial highlights tables are intended to help you
understand the Funds financial performance for the past five
years. Certain information reflects financial results for a
single Fund share. The total returns in the table represent the
rate that an investor would have earned or lost on an investment
in the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by Ernst &
Young, whose report, along with the Fund's financial statements
are included in the Fund's annual report which is available upon
request.
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 $7.63 $13.08 $12.33 $12.09
===================================================================================================================================
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) (0.07) (0.30) (0.24) (0.08)
Net Gains (Loss) on
Investments (both Realized and Unrealized) (0.02) (3.86) 0.99 0.40
===================================================================================================================================
Total from Investment Operations (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 -- (1.15) -- --
From Tax Return of Capital -- (0.14) -- (0.02)
===================================================================================================================================
Total Dividends & Distributions -- (1.29) -- (0.08)
===================================================================================================================================
Net Asset Value,
End of Year $7.54 $7.63 $13.08 $12.33
===================================================================================================================================
Total Return (a) (1.18%) (32.87%) 6.08% 2.65%
===================================================================================================================================
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Year (000) $4,942 $6,914 $20,296 $27,234
Ratio of Gross Expenses
to Average Net Assets 3.83% 3.00% 2.86% 2.41%
Ratio of Net Expenses
to Average Net Assets 3.14%(b) 3.00% 2.86% 2.41%
Ratio of Net Investment Income (Loss)
to Average Net Assets 0.79% (1.36%) (1.14%) (0.52%)
Portfolio Turnover Rate 121.96% 200.45% 52.99% 57.06%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Total return is calculated assuming an initial investment made at net asset
value at the beginning of the year, reinvestment of dividends and
distributions at net asset value during the year and a redemption on the
last day of the year. A sales charge is not reflected in the calculation of
total dividends and return.
(b) After expenses reduced by a custodian fee arrangement.
44 VAN ECK GLOBAL PROSPECTUS
<PAGE>
IV. FINANCIAL HIGHLIGHTS
The financial highlights tables are intended to help you
understand the Funds financial performance for the past five
years. Certain information reflects financial results for a
single Fund share. The total returns in the table represent the
rate that an investor would have earned or lost on an investment
in the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by Ernst &
Young, whose report, along with the Fund's financial statements
are included in the Fund's annual report which is available upon
request.
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 $15.50 $14.42 $10.68 $9.41
==================================================================================================================================
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) 0.10 0.05 0.15 0.32
Net Gain (Loss) on
Investments (both Realized and Unrealized) (5.09) 2.01 4.70 1.57
==================================================================================================================================
Total from Investment Operations (4.99) 2.06 4.85 1.89
==================================================================================================================================
LESS DIVIDENDS AND DISTRIBUTIONS
From Dividends from
Net Investment Income (0.15) 0.02) (0.14) (0.62)
From Distributions from
Capital Gains (0.02) (0.96) (0.95) --
From Tax Return of Capital -- -- (0.02) --
==================================================================================================================================
Total Dividends & Distributions (0.17) (0.98) (1.11) (0.62)
==================================================================================================================================
Net Asset Value,
End of Period $10.34 $15.50 $14.42 $10.68
==================================================================================================================================
Total Return (b) (32.25%) 14.29% 45.61% 20.09%
==================================================================================================================================
Net Assets, End of Year (000) $22,969 $61,341 $27,226 $3,820
Ratio of Gross Expenses
to Average Net Assets (c)(d) 2.11% 2.00% 2.63% 4.05%
Ratio of Net Expenses
to Average Net Assets 2.00% 1.97% 0.72% 0.00%
Ratio of Net Investment Income (Loss)
to Average Net Assets 0.58% 0.36% 1.45% 3.08%
Portfolio Turnover Rate 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
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.
(b) Had the Advisor not assumed expenses or had expenses not been reduced by
custodian fee and directed brokerage arrangement.
(c) Annualized.
(d) Based on average shares outstanding.
VAN ECK GLOBAL PROSPECTUS 45
<PAGE>
The financial highlights tables are intended to help you
understand the Funds financial performance for the past five
years. Certain information reflects financial results for a
single Fund share. The total returns in the table represent the
rate that an investor would have earned or lost on an investment
in the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by Ernst &
Young, whose report, along with the Fund's financial statements
are included in the Fund's annual report which is available upon
request.
GLOBAL HARD ASSETS FUND
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Financial Highlights
For a Class B Share outstanding throughout each period:
Year ended December 31, For the period
Apr. 24,1996 (a)
1999 1998 1997 Dec. 31, 1996
--------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year $15.60 $14.50 $12.55
===================================================================================================================================
Net Investment Income (Loss) 0.01 (0.01) 0.11
Net Gain (Loss) on
Investments (both Realized and Unrealized) (5.08) 2.00 2.95
===================================================================================================================================
Total from Investment Operations (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 $10.37 $15.60 $14.50
===================================================================================================================================
Total Return (b) (32.55%) 13.72% 24.55%
===================================================================================================================================
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Year (000) $5,580 $10,541 $1,806
Ratio of Gross Expenses
to Average Net Assets (c) 2.81% 2.73% 3.27%
Ratio of Net Expenses
to Average Net Assets 2.50% 2.50% 1.64%(d)
Ratio of Net Investment Income (Loss)
to Average Net Assets 0.12% (0.13%) 0.53%(d)
Portfolio Turnover Rate 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
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) Had the Advisor not assumed expenses or had expenses not been reduced by
custodian fee and directed brokerage arrangement.
(d) Annualized.
(e) Based on average shares outstanding.
46 VAN ECK GLOBAL PROSPECTUS
<PAGE>
IV. FINANCIAL HIGHLIGHTS
The financial highlights tables are intended to help you
understand the Funds financial performance for the past five
years. Certain information reflects financial results for a
single Fund share. The total returns in the table represent the
rate that an investor would have earned or lost on an investment
in the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by Ernst &
Young, whose report, along with the Fund's financial statements
are included in the Fund's annual report which is available upon
request.
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 $15.64 $14.52 $10.76 $9.41
===================================================================================================================================
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) 0.01 (0.01) 0.11 0.34
Net Gain (Loss) on
Investments (both Realized and Unrealized) (5.09) 2.00 4.73 1.63 (0.12)
===================================================================================================================================
Total from Investment Operations (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 Period $10.40 $15.64 $14.52 $10.76
===================================================================================================================================
Total Return (b) (32.53%) 13.71% 45.18% 20.94%
===================================================================================================================================
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Year (000) $4,011 $8,698 $1,935 $181
Ratio of Gross Expenses
to Average Net Assets (c) 3.00% 2.94% 6.02% 37.88%
Ratio of Net Expenses
to Average Net Assets 2.50% 2.50% 1.31% 0.00%
Ratio of Net Investment Income (Loss)
to Average Net Assets 0.11% (0.15%) 0.84% 3.30%
Portfolio Turnover Rate 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
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.
(b) Had the Advisor not assumed expenses or had expenses not been reduced by
custodian fee and directed brokerage arrangement.
(c) Annualized.
(d) Based on average shares outstanding.
VAN ECK GLOBAL PROSPECTUS 47
<PAGE>
The financial highlights tables are intended to help you
understand the Funds financial performance for the past five
years. Certain information reflects financial results for a
single Fund share. The total returns in the table represent the
rate that an investor would have earned or lost on an investment
in the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by Ernst &
Young, whose report, along with the Fund's financial statements
are included in the Fund's annual report which is available upon
request.
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 $10.38 $10.37 $10.31 $9.07
=================================================================================================================================
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) 0.02 0.10 0.12 0.07(a)
Net Gain (Loss) on
Investments (both Realized and Unrealized) 2.07 1.43 1.15 1.31
=================================================================================================================================
Total from Investment Operations 2.09 1.53 1.27 1.38
=================================================================================================================================
LESS DIVIDENDS AND DISTRIBUTIONS
From Dividends from
Net Investment Income (d) 0.00 (0.08) (0.11) (0.14)
From Distributions from
Capital Gains (1.61) (1.43) (1.10) --
From Tax Return of Capital (0.08) (0.01) -- --
=================================================================================================================================
Total Dividends & Distributions (1.69) (1.52) (1.21) (0.14)
=================================================================================================================================
Net Asset Value,
End of Year $10.78 $10.38 $10.37 $10.31
=================================================================================================================================
Total Return (b) 20.65% 14.77% 12.28% 15.30%
=================================================================================================================================
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Year (000) $27,461 $24,630 $29,331 $30,632
Ratio of Gross Expenses
to Average Net Assets (c) 2.32% 2.45% 2.54% 2.69%
Ratio of Net Expenses
to Average Net Assets 2.00%(c) 2.00%(c) 2.17%(c) 2.69%
Ratio of Net Investment Income (Loss)
to Average Net Assets 0.85% 0.85% 1.05% 0.68%
Portfolio Turnover Rate 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 dividends and return.
(c) After expenses reduced by a custodian fee, directed brokerage or a 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.
48 VAN ECK GLOBAL PROSPECTUS
<PAGE>
IV. FINANCIAL HIGHLIGHTS
The financial highlights tables are intended to help you
understand the Funds financial performance for the past five
years. Certain information reflects financial results for a
single Fund share. The total returns in the table represent the
rate that an investor would have earned or lost on an investment
in the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by Ernst &
Young, whose report, along with the Fund's financial statements
are included in the Fund's annual report which is available upon
request.
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 $10.31 $10.32 $10.28 $9.02
===================================================================================================================================
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) 0.00 0.04 0.06 0.01
Net Gain (Loss) on
Investments (both Realized and Unrealized) 2.02 1.43 1.14 1.28
===================================================================================================================================
Total from Investment Operations 2.02 1.47 1.20 1.29
===================================================================================================================================
LESS DIVIDENDS AND DISTRIBUTIONS
From Dividends from
Net Investment Income (d) 0.00 (0.03) (0.06) (0.03)
From Distributions from
Capital Gains (1.61) (1.45) (1.10) --
From Tax Return of Capital (0.05) -- -- --
===================================================================================================================================
Total Dividends & Distributions (1.66) (1.48) (1.16) (0.03)
===================================================================================================================================
Net Asset Value,
End of Year $10.67 $10.31 $10.32 $10.28
===================================================================================================================================
Total Return (b) 20.07% 14.26% 11.49% 14.54%
===================================================================================================================================
RATIOS/SUPPLEMENTARY DATA
Assets, End of Year (000) $6,039 $5,055 $4,932 $6,151
Ratio of Gross Expenses
to Average Net Assets 3.25% 2.51% 3.19% 3.20%
Ratio of Net Expenses
to Average Net Assets 2.50%(c) 2.50%(c) 2.71%(c) 3.20%
Ratio of Net Investment Income (Loss)
to Average Net Assets 0.36% 0.36% 0.51% 0.14%
Portfolio Turnover Rate 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 dividends and return.
(c) After expenses reduced by a custodian fee, directed brokerage or a 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.
VAN ECK GLOBAL PROSPECTUS 49
<PAGE>
The financial highlights tables are intended to help you
understand the Funds financial performance for the past five
years. Certain information reflects financial results for a
single Fund share. The total returns in the table represent the
rate that an investor would have earned or lost on an investment
in the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by Ernst &
Young, whose report, along with the Fund's financial statements
are included in the Fund's annual report which is available upon
request.
NATURAL RESOURCES 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 $3.47 $5.72 $5.58 $5.35
====================================================================================================================================
INCOME FROM INVESTMENT OPERATIONS
Net investment Income (Loss) (0.04) (0.04) (0.06) (0.03)
Net Gain (Loss) on
Investments (both Realized and Unrealized) (0.39) (2.21) 0.20 0.26 (0.97)
====================================================================================================================================
Total from Investment Operations (0.43) (2.25) 0.14 0.23
====================================================================================================================================
Net Asset Value,
End of Year $3.04 $3.47 $5.72 $5.58
====================================================================================================================================
Total Return (a) (12.39%) (39.34%) 2.51% 4.30%
====================================================================================================================================
RATIOS / SUPPLEMENTARY DATA
Net Assets, End of Year (000) $53,397 $66,151 $132,298 $155,974
Ratio of Gross Expenses
to Average Net Assets 2.24% 1.87% 1.71% 1.81%
Ratio of Net Expenses
to Average Net Assets 2.21%(b) 1.87% 1.71% 1.81%
Ratio of Net Investment (Loss)
to Average Net Assets (0.98%) (0.57%) (0.75%) (0.44%)
Portfolio Turnover Rate 79.03% 32.46% 12.95% 6.16%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Total return is calculated by assuming an intial investment at net asset
value at the beginning of the period, reinvestment of all dividends and
distirbutions at net asset value during 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.
50 VAN ECK GLOBAL PROSPECTUS
<PAGE>
IV. FINANCIAL HIGHLIGHTS
The financial highlights tables are intended to help you
understand the Funds financial performance for the past five
years. Certain information reflects financial results for a
single Fund share. The total returns in the table represent the
rate that an investor would have earned or lost on an investment
in the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by Ernst &
Young, whose report, along with the Fund's financial statements
are included in the Fund's annual report which is available upon
request.
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 $7.54 $11.90 $13.35 $15.21
===================================================================================================================================
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.06 0.09 0.05 0.08
Net Gain (Loss) on
Investments (both Realized and Unrealized) (0.95) (4.36) (1.29) (1.44)
===================================================================================================================================
Total from Investment Operations (0.89) (4.27) (1.24) (1.36)
===================================================================================================================================
LESS DIVIDENDS AND DISTRIBUTIONS
From Dividends from
Net Investment Income (a) (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 (0.06) (0.09) (0.21) (0.50)
===================================================================================================================================
Net Asset Value,
End of Year $6.59 $7.54 $11.90 $13.35
===================================================================================================================================
Total Return (b) (12.39%) (39.34%) 2.51% 4.30%
===================================================================================================================================
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Year (000) $238,639 $232,944 $409,331 $519,795
Ratio of Gross Expenses
to Average Net Assets 1.78% 1.52% 1.43% 1.42%
Ratio of Net Expenses
to Average Net Assets 1.76%(c) 1.47%(c) 1.43% 1.42%
Ratio of Net Investment Income (Loss)
to Average Net Assets 0.99% 0.90% 0.36% 0.55%
Portfolio Turnover Rate 86.65% 19.99% 12.45% 4.10%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Net of foreign taxes withheld (to be included in income and claimed as a
tax credit by the shareholder for federal income tax purposes) of $0 for
1998 and 1997, $0.01 for 1996, $0.03 for 1995, and $0.07 for 1994.
(b) Total return is calculated by assuming an intial investment at net asset
value at the beginning of the period, reinvestment of all dividends and
distirbutions at net asset value during the year and a redemption on the
last day of the year. A Sales charge is not reflected in calculation of
total return.
(c) After expenses by custodian fee and directed brokerage arrangement.
VAN ECK GLOBAL PROSPECTUS 51
<PAGE>
The financial highlights tables are intended to help you
understand the Funds financial performance for the past five
years. Certain information reflects financial results for a
single Fund share. The total returns in the table represent the
rate that an investor would have earned or lost on an investment
in the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by Ernst &
Young, whose report, along with the Fund's financial statements
are included in the Fund's annual report which is available upon
request.
U.S. GOVERNMENT MONEY FUND
- --------------------------------------------------------------------------------
Financial Highlights
For a share outstanding throughout each year:
<TABLE>
<CAPTION>
Year ended December 31,
1999 1998 1997 1996 1995
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year $1.00 $1.00 $1.00 $1.00
===================================================================================================================================
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.0388 0.0377 0.0385 0.0456
===================================================================================================================================
LESS DISTRIBUTIONS
From Net Investment Income (0.0388) (0.0377) (0.0385) (0.0456)
===================================================================================================================================
Net Asset Value,
End of Year $1.00 $1.00 $1.00 $1.00
===================================================================================================================================
Total Return (b) 3.88% 3.77% 3.85% 4.56%
===================================================================================================================================
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Year(000) $47,222 $76,650 $107,698 $70,130
Ratio of Gross Expenses
to Average Net Assets 1.20% 1.28% 1.23% 1.25%
Ratio of Net Investment Income
to Average Net Assets 3.89% 3.91% 4.02% 4.45%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
52 VAN ECK GLOBAL PROSPECTUS
<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 1-800-SEC-0330, or write to them at the Public Reference
Room, Washington, D.C. 20549-6009, and ask them to send you a copy. There
is a duplicating fee for this service.
o Download documents from the SEC's website at www.sec.gov
o The Funds' annual report (other than U.S. Government Money Fund) includes a
discussion of market conditions and investment strategies that
significantly affected the Funds' performance last year.
[LOGO] Van Eck Global
Transfer Agent: DST Systems, Inc.
P.O. Box 218407
Kansas City, Missouri 64121-8407
1-800-544-4653
SEC registration number: 811-04297
VEM 507042
<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 Fund (Class
A), 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 ............................................. 2
INVESTMENT OBJECTIVES AND POLICIES .............................. 2
RISK FACTORS .................................................... 6
INVESTING IN FOREIGN SECURITIES ........................ 6
EMERGING MARKETS SECURITIES ............................ 9
FOREIGN CURRENCY TRANSACTIONS .......................... 9
FUTURES AND OPTIONS TRANSACTIONS ....................... 11
INDEXED SECURITIES AND STRUCTURED NOTES ................ 13
MORTGAGE-BACKED SECURITIES ............................. 13
REAL ESTATE SECURITIES ................................. 14
COMMERCIAL PAPER ....................................... 14
DEBT SECURITIES ........................................ 15
DERIVATIVES ............................................ 15
CURRENCY SWAPS ......................................... 16
SHORT SALES ............................................ 16
DIRECT INVESTMENTS ..................................... 16
REPURCHASE AGREEMENTS .................................. 17
RULE 144A SECURITIES ................................... 17
INVESTMENT RESTRICTIONS ......................................... 18
INVESTMENT ADVISORY SERVICES .................................... 23
THE DISTRIBUTOR ................................................. 24
PORTFOLIO TRANSACTIONS AND BROKERAGE ............................ 26
TRUSTEES AND OFFICERS ........................................... 29
VALUATION OF SHARES ............................................. 34
EXCHANGE PRIVILEGE .............................................. 36
TAX-SHELTERED RETIREMENT PLANS .................................. 37
INVESTMENT PROGRAMS ............................................. 41
TAXES ........................................................... 42
REDEMPTIONS IN KIND ............................................. 45
PERFORMANCE ..................................................... 45
ADDITIONAL INFORMATION .......................................... 47
FINANCIAL STATEMENTS ............................................ 48
APPENDIX ........................................................ 49
MARKET INDEX DESCRIPTIONS ....................................... 52
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.
Shareholders are advised to read and retain this Statement of Additional
Information for future reference.
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 Fund (Class A), 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
is a diversified fund.
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 lease 50% of their assets in one or more countries
located in the Asian Region or (ii) derive at least 50% of their gross sales
revenues or profits from providing goods or services to, from or within one or
more countries located in the Asian Region or (c) have manufacturing or other
operations in China that are significant to such companies. These investments
are typically listed on stock exchanges or traded in the over-the-counter
markets in Asian Region countries, but may be traded on exchanges or in markets
outside the Asian Region. Similarly, the principal offices of these countries
may be located outside these countries. These countries include Burma, Peoples
Republic of China ("China"), Cambodia, Hong Kong, India, Indonesia, Korea, Laos,
Malaysia, Pakistan, the Philippines, Singapore, Sri Lanka, Taiwan, Thailand and
Vietnam and, when the Fund is in a defensive posture, Australia, Japan and New
Zealand. Currently, the Fund does not consider Australia, Japan and New Zealand
to be part of the Asian Region. The countries constituting the Asian Region may
be changed by the Board without shareholder approval. Equity securities for
purposes of the 65% policy, include common and preferred stocks, direct equity
interests in trusts, partnerships, joint ventures and other unincorporated
entities or enterprises, special classes of shares available only to foreign
persons in those markets that restrict ownership of certain classes of equity to
nationals or residents of that country, convertible preferred stocks and
convertible debt instruments. Debt securities issued by Asia Growth Companies
are typically unrated. The Fund may buy and sell financial futures contracts and
options on financial futures contracts, forward currency contracts and put or
call options on securities, securities indices and foreign currencies and
foreign currency swaps. The Fund may also lend its portfolio securities and
borrow money for investment purposes (i.e. leverage its portfolio).
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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 Fund
Emerging Markets Fund seeks long-term capital appreciation by investing
primarily in equity securities in emerging markets around the world.
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
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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.
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 that
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
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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 stork 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.
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
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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
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its investments in common stocks of gold mining companies. 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 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 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, and 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.
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RISK FACTORS
Investing In Foreign Securities
ASIA DYNASTY FUND, EMERGING MARKETS 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 Fund, Global Leaders Fund, Global Hard Assets Fund, Natural Resources
Fund and International Investors Gold Fund, and are not so restricted by their
fundamental investment policies.
Global Hard Assets Fund and Emerging Markets 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 Fund and Asia Dynasty Fund in
companies in developing countries as well as in developed countries. Asia
Dynasty Fund, Emerging Markets Fund and Global Hard Assets Fund may have a
substantial portion of their assets in developing countries. Although there is
no universally accepted definition, a developing country is generally considered
by the Adviser ( FII) or to be a country which is in the initial stages of
industrialization. Shareholders should be aware that investing in the equity and
fixed income markets of developing countries involves exposure to unstable
governments, economies based on
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only a few industries, and securities markets which trade a small number of
securities. Securities markets of developing countries tend to be more volatile
than the markets of developed countries; however, such markets have in the past
provided the opportunity for higher rates of return to investors.
Since the Asia Dynasty Fund will invest at least 65% and Emerging
Markets 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
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 liquidity 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 Funds'
inabilities 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 Fund will invest in Asian and
other countries with emerging economies or securities markets. Political and
economic structures in many of such countries may be undergoing significant
evolution and rapid development, and such countries may lack the social,
political and economic stability characteristic of the United States. Certain of
such countries have in the past failed to recognize private property rights and
have at times nationalized or expropriated the assets of private companies. As a
result, the risks described above, including the risks of nationalization or
expropriation of assets, may be heightened. In addition, unanticipated political
or social developments may affect the value
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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 law exists in China, it may be impossible to obtain swift and equitable
enforcement of such law, or to obtain enforcement of the judgment by a court of
another jurisdiction. The bankruptcy laws pertaining to state enterprises have
rarely been used and are untried in regard to an enterprise with foreign
shareholders, and there can be no assurance that such shareholders, including
the Funds, would be able to realize the value of the assets of the enterprise or
receive payment in convertible currency. As the changes to the Chinese legal
system develop, the promulgation of new laws, existing laws and the preemption
of local laws by national laws may adversely affect foreign investors, including
the Funds. The uncertainties faced by foreign investors in China are exacerbated
by the fact that many laws, regulations and decrees of China are not publicly
available, but merely circulated internally. Similar risks exist in other Asian
region countries.
Trading in futures contracts traded on foreign commodity exchanges may
be subject to the same or similar risks as trading in foreign securities.
Emerging Markets Securities
Investments of the Funds (except U.S. Government Money Fund) may be
made from time to time in companies in developing countries as well as in
developed countries. Shareholders should be aware that investing in the equity
and fixed income markets of developing countries involves exposure to
potentially unstable governments, the risk of nationalization of businesses,
restrictions on foreign ownership, prohibitions on repatriation of assets and a
system of laws that may offer less protection of property rights. Emerging
market economies may be based on only a few industries, may be highly vulnerable
to changes in local and global trade conditions, and may suffer from extreme and
volatile debt burdens or inflation rates.
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Securities markets in these countries may trade a small number of
securities, may have a limited number of issuers and a high proportion of shares
of may issuers may be held by a relatively small number of persons or
institutions. Local securities markets may be unable to respond effectively to
increases in trading volume, potentially making prompt liquidation of
substantial holdings difficult or impossible at times. Securities of issuers
located in developing markets may have limited marketability and may be subject
to more abrupt or erratic price movements. Many of these stock markets are
undergoing a period of growth and change which may result in trading volatility,
and in difficulties in the settlement and recording of transactions and in
interpreting and applying the relevant law and regulations. In addition,
stockbrokers and other intermediaries in emerging markets may not perform in the
way their counterparts in the United States and other more developed securities
markets do. The prices at which a Fund may acquire investments may be affected
by trading by persons with material non-public information and by securities
transactions by brokers in anticipation of transactions by the Fund in
particular securities. Limited liquidity may impair a Fund's ability to
liquidate a position at the time and price it wishes to do so. In addition, a
Fund's ability to participate fully in the smaller, less liquid emerging markets
may be limited by the policy restricting its investments in illiquid securities.
Foreign Currency Transactions
ASIA DYNASTY FUND, EMERGING MARKETS 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 Fund, Global Leaders Fund, Global Hard Assets Fund only)
and put and call options (all types of derivatives), to "lock in" the U.S.
Dollar price of a security bought or sold and as part of their overall hedging
strategy. The Funds will conduct their foreign currency exchange transactions,
either on a spot (i.e., cash) basis at the spot rate prevailing in the foreign
currency exchange market, or through purchasing put and call options on, or
entering into futures contracts or forward contracts to purchase or sell foreign
currencies. See "Futures and Options Transactions."
Changes in currency exchange rates may affect the Funds' net asset
value and performance. There can be no assurance that the Funds' investment
adviser (or Sub-Adviser) will be able to anticipate currency fluctuations in
exchange rates accurately. The Funds may invest in a variety of derivatives and
enter into hedging transactions to attempt to moderate the effect of currency
fluctuations. The Funds may purchase and sell put and call options on, or enter
into futures contracts or forward contracts to purchase or sell, foreign
currencies. This may reduce a Fund's losses on a security when a foreign
currency's value changes. Hedging against a change in the value of a foreign
currency does not eliminate fluctuations in the prices of portfolio securities
or prevent losses if the prices of such securities decline. Furthermore, such
hedging transactions reduce or preclude the opportunity for gain if the value of
the hedged currency should change relative to the other currency. Last, when the
Funds use options and futures in anticipation of the purchase of a portfolio
security to hedge against adverse movements in the security's underlying
currency, but the
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purchase of such security is subsequently deemed undesirable, the Fund may incur
a gain or loss on the option or futures contract.
The Funds will enter into forward contracts to duplicate a cash market
transaction. The Funds will not purchase or sell foreign currency as an
investment, except that Asia Dynasty Fund, Emerging Markets 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, or
futures contract or forward contract on a secondary currency. The secondary
currency will be selected based upon the investment adviser's (or Sub-Adviser's)
belief that there exists a significant correlation between the exchange rate
movements of the two currencies. However, there can be no assurances that the
exchange rate or the primary and secondary currencies will move as anticipated
or that the relationship between the hedged security and the hedging instrument
will continue. If they do not move as anticipated or the relationship does not
continue, a loss may result to the Funds on their investments in the hedging
positions.
A forward foreign currency contract, like a futures contract, involves
an obligation to purchase or sell a specific amount of currency at a future
date, which may be any fixed number of days from the date of the contract agreed
upon by the parties, at a price set at the time of the contract. Unlike foreign
currency futures contracts which are standardized exchange-traded contracts,
forward currency contracts are usually traded in the interbank market conducted
directly between currency traders (usually large commercial banks) and their
customers. A forward contract generally has no deposit requirement, and no
commissions are charged at any stage for such trades.
The Adviser (or FII) will not commit any Fund to deliver under forward
contracts an amount of foreign currency in excess of the value of the Fund's
portfolio securities or other assets or obligations denominated in that
currency. The Funds' Custodian will place the securities being hedged, cash or
U.S. government securities or debt or equity securities into a segregated
account of the Fund in an amount equal to the value of the Fund's total assets
committed to the consummation of forward foreign currency contracts to ensure
that the Fund is not leveraged beyond applicable limits. If the value of the
securities placed in the segregated account declines, additional cash or
securities will be placed in the account on a daily basis so that the value of
the account will equal the amount of the Funds' commitments with respect to such
contracts. At the maturity of a forward contract, the Funds may either sell the
portfolio security and make delivery of the foreign currency, or they may retain
the security and terminate their contractual obligation to deliver the foreign
currency prior to maturity by purchasing an "offsetting" contract with the same
currency trader obligating it to purchase, on the same maturity date, the same
amount of the foreign currency. There can be no assurance, however, that the
Funds will be able to effect such a closing purchase transaction.
It is impossible to forecast the market value of a particular portfolio
security at the expiration of the contract. Accordingly, if a decision is made
to sell the security and make delivery of the foreign currency it may be
necessary for a Fund to purchase additional foreign currency on the spot market
(and bear the expense of such purchase) if the market value of the security is
less than the amount of foreign currency that a Fund is obligated to deliver.
If a Fund retains the portfolio security and engages in an offsetting
transaction, the Fund will incur a gain or a loss to the extent that there has
been movement in forward contract prices. Additionally, although such contracts
tend to minimize the risk of loss due to a decline in the value of the hedged
currency, at the same time, they tend to limit any potential gain which might
result should the value of such currency increase.
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Futures And Options Transactions
ASIA DYNASTY FUND, EMERGING MARKETS 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 contract is an agreement between
two parties to buy or sell a specified security at a set price on a future date.
An index futures contract is an agreement to take or make delivery of an amount
of cash based on the difference between the value of the index at the beginning
and at the end of the contract period. A foreign currency futures contract is an
agreement to buy or sell a specified amount of a currency for a set price on a
future date. A commodity futures contract is an agreement to take or make
delivery of a specified amount of a commodity, such as gold, at a set price on a
future date.
A Fund will not commit more then 5% of its total assets to initial
margin deposits on futures contracts and premiums on options on futures
contracts, except that margin deposits for futures positions entered into for
bona fide hedging purposes, as that term is defined in the Commodity Exchange
Act, are 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 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 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
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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 lost the
opportunity to realize appreciation in the market price of the underlying asset
or may have to hold the underlying asset, which might otherwise have been sold
to protect against depreciation. A covered put option written by the Fund
exposes it during the term of the option to a decline in the price of the
underlying asset. A put option sold by the Fund is covered when, among other
things, cash or short-term liquid securities are placed in a segregated account
to fulfill the obligations undertaken. Covering a put option sold does not
reduce the risk of loss.
The 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 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 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
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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 and notes determined to be illiquid
will be aggregated with other illiquid securities and 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 an U.S. governmental agency or a financial institution separates
the interest and principal components of a mortgage-backed security and sells
them as individual securities. The holder of the "principal-only" security
("PO") receives the principal payments made by the underlying mortgage-backed
security, while the holder of the "interest-only" security ("IO") receives
interest payments from the same underlying security. The prices of stripped
mortgage-backed securities may be particularly affected by change in interest
rates. As interest rates fall, prepayment rates tend to increase, which tends to
reduce the price of IOs and increase prices of POs. Rising interest rates can
have the opposite effect. Changes in interest rates may also affect the
liquidity of IOs and POs.
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.
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.
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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 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 rate 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 and to 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
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by these services. Therefore the selection of such issuers depends to a large
extent on the credit analysis performed by the Adviser (or FII).
New issues of certain debt securities are often offered on a
when-issued basis, that is, the payment obligation and the interest rate are
fixed at the time the buyer enters into the commitment, but delivery and payment
for the securities normally take place after the date of the commitment to
purchase. The value of when-issued securities may vary prior to and after
delivery depending on market conditions and changes in interest rate levels.
However, the Funds do not accrue any income on these securities prior to
delivery. The Funds will maintain in a segregated account with their Custodian
an amount of cash or high quality securities equal (on a daily marked-to-market
basis) to the amount of its commitment to purchase the when-issued securities.
Derivatives
The Funds may also use futures contracts and options, forward contracts
and swaps as part of various investment techniques and strategies, such as
creating non-speculative "synthetic" positions (covered by segregation of liquid
assets) or implementing "cross-hedging" strategies. A "synthetic position" is
the duplication of cash market transaction when deemed advantageous by the
Funds' Adviser (or Sub-Adviser) for cost, liquidity or transactional efficiency
reasons. A cash market transaction is the purchase or sale of the security or
other asset for cash. "Cross-hedging" involves the use of one currency to hedge
against the decline in the value of another currency. The use of such
instruments as described herein involves several risks. First, there can be no
assurance that the prices of such instruments and the hedge security or the cash
market position will move as anticipated. If prices do not move as anticipated,
a Fund may incur a loss on its investment, may not achieve the hedging
protection it anticipated and/or may incur a loss greater than if it had entered
into a cash market position. Second, investments in such instruments may reduce
the gains which would otherwise be realized from the sale of the underlying
securities or assets which are being hedged. Third, positions in such
instruments can be closed out only on an exchange that provides a market for
those instruments. There can be no assurance that such a market will exist for a
particular futures contract or option. If the Fund cannot close out an exchange
traded futures contract or option which it holds, it would have to perform its
contract obligation or exercise its option to realize any profit and would incur
transaction cost on the sale of the underlying assets.
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 contact). An increase in the acquisition cost would be
offset, in whole or part, by a gain on the option or futures contract. Options
and futures contracts requiring delivery of a security may also be useful to the
Funds in purchasing a large block of securities that would be more difficult to
acquire by direct market purchases. If the Funds hold a call option rather than
the underlying security itself, the Funds are partially protected from any
unexpected decline in the market price of the underlying security and in such
event could allow the call option to expire, incurring a loss only to the extent
of the premium paid for the option. Using a futures contract would not offer
such partial protection against market declines and the Funds wold experience a
loss as if they had owned the underlying security.
Currency Swaps
Asia Dynasty Fund, Emerging Markets Fund, Global Leaders Fund, 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
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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 associates 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 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 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 Fund's or the Global Hard Assets Fund's net
assets.
Direct Investments
Emerging Markets 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 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
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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
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.
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
19
<PAGE>
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 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 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 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
Fund, Global Leaders Fund, Global Hard Assets Fund and Asia
Dynasty Fund and are "illiquid" securities, including
repurchase agreements maturing in more than 7 days and options
traded over-the-counter if the result is that more than 15% of
Emerging Markets 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
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 be a
commodity or commodity contract) except that Emerging Markets
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 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
20
<PAGE>
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 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 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 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 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 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 companies having, together with their
predecessors, a record of less than three years of continuous
operation. This restriction does not apply to Emerging Markets
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 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 not borrow for the purpose of leveraging its
portfolio, but will borrow only for temporary or emergency
purposes.
10. Mortgage, pledge or otherwise encumber its assets except to
secure borrowing effected within the limitations set forth in
restriction (9).
21
<PAGE>
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 Fund and Natural Resources Fund); (iii)
financial futures contracts purchased on margin (Global
Leaders Fund, Global Hard Assets Fund, Asia Dynasty Fund,
Emerging Markets 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 Fund,
Asia Dynasty Fund and Emerging Markets Fund); and (vi) issuing
multiple classes of shares (Global Leaders Fund, Global Hard
Assets Fund, Asia Dynasty Fund and Emerging Markets Fund).
12. Except for Emerging Markets 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 Fund, Natural Resources Fund and 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 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 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 Fund and
Natural Resources Fund) in oil, gas or other mineral
exploration or development programs.
22
<PAGE>
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 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 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.
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.
23
<PAGE>
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.
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
24
<PAGE>
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 pays
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. 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 Fund pays the Adviser 1% of average daily net
assets and Asia Dynasty Fund pays the Adviser .75% of daily net assets.
The net assets of the Funds at December 31, 1999, December 31, 1998,
December 31, 1997, and 1996 were approximately: International Investors Gold
Fund (Class A) - ______________, $238,638,669, $232,944,326, and $409,330,944,
respectively; Natural Resources Fund (Class A) - _______________, $53,397,003,
$66,150,715, and $132,298, respectively; U.S. Government Money Fund -
______________, $47,222,172, $76,649,948, and $107,697,508, respectively; Asia
Dynasty Fund (Class A) - _____________, $10,684,887, $12,872,516, and
$44,351,438, respectively; Asia Dynasty Fund (Class B) - _____________,
$4,941,920, $6,913,723, and $20,296,022, respectively; Global Leaders Fund
(Class A) - _____________, $27,461,279, $24,630,386, and $24,399,362,
respectively; Global Leaders Fund (Class B) - _____________, $6,038,877,
$5,054,706, and $4,931,669, respectively; Global Hard Assets Fund (Class A) -
____________, $22,968,552, $61,341,105, and $27,226,101, respectively; Global
Hard Assets Fund (Class B) - ____________, $5,579,734, $10,541,237, and $62,429,
respectively, and Global Hard Assets Fund (Class C) - _______________,
$4,011,385, $8,698,296, and $1,934,906, respectively.
In 1999, 1998, 1997, and 1996, the aggregate remuneration received by
the Adviser from International Investors Gold Fund was ____________, $1,710,779,
$2,619,794, and $4,087,710, respectively; from Natural Resources Fund was
____________, $449,221, $752,214, and $1,198,836, respectively; from U.S.
Government Money Fund was ____________, $373,387, $386,515, and $382,786,
respectively; from Global Leaders Fund was _____________, $234,574, $219,469,
and $242,447, respectively; from Global Hard Assets Fund was ___________,
$559,994, $660,306, and $121,846, respectively; from Asia Dynasty Fund was
____________, $116,529, $339,096, and $621,605, 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
25
<PAGE>
"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 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 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.
26
<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:
<TABLE>
<CAPTION>
Van Eck Securities Reallowance to
Corporation Dealers
------------------ --------------
<S> <C> <C> <C>
International 1999
Investors Gold Fund 1998 $ 60,882 $195,989
1997 122,745 401,483
Natural Resources Fund 1999
1998 $ 24,848 $ 97,646
1997 38,280 156,899
Asia Dynasty Fund 1999
1998 $ 787 $ 5,621
1997 2,455 13,752
Global Leaders Fund 1999
1998 $ 1,470 $ 5,608
1997 1,726 5,635
Global Hard 1999
Assets Fund 1998 $ 26,039 $162,148
1997 151,014 629,428
</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 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 Fund (Class A), 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
27
<PAGE>
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; and Emerging Markets Fund
(Class A) on _______________.
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-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.
28
<PAGE>
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 Global Hard Assets
Fund paid $_________, the Natural Resources Fund paid $__________ and the
International Investors Gold Fund paid $__________ in commissions to broker
dealers providing research and other services to the Adviser or its affiliates
representing ____ %, ____%, and ____%, 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.
<TABLE>
<CAPTION>
Fund (fiscal year end) 1999
Commissions
<S> <C>
International Investors Gold Fund (Class A and C) (12/31) $
Natural Resources Fund (Class A) (12/31) $
Asia Dynasty Fund (Class A and B) (12/31) $
Global Leaders Fund (Class A and B) (12/31) $
Global Hard Assets Fund (Class A, B and C) (12/31) $
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
</TABLE>
The Trustees periodically review the Adviser's and FII's performance of
its responsibilities in connection with the placement of portfolio transactions
on behalf of the Funds and review the commissions paid by the Funds over
representative periods of time to determine if they are reasonable in relation
to the benefits to the Funds.
29
<PAGE>
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 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, it is
determined that the trading activity will not have a negative or appreciable
impact on the price or market of the security or the activity is of such a
nature that it does not present the dangers or potential for abuses or likely to
result in harm or detriment to a client account. At the end of each calendar
quarter, all related personnel of the Adviser are required to file a report of
all transactions entered into during the quarter. These reports are reviewed by
a senior officer of the Adviser.
TRUSTEES AND OFFICERS
The Trustees and Officers of the Van Eck Funds, their address, position
with the Trust and principal occupations during the past five years are set
forth below.
30
<PAGE>
<TABLE>
<CAPTION>
Trustees of Van Eck Funds:
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
John C. van Eck @* Chairman of the Board and Trustee Chairman of the Board and Director and
575 Park Avenue President of other Investment Companies
New York, NY 10021 advised by the Adviser, Chairman, Van
Eck Associates Corporation (investment
adviser) and Van Eck Securities
Corporation (broker-dealer); Director,
Eclipse Financial Assets Trust (Mutual
Fund) Former director of Abex Inc.
(aerospace).
- -----------------------------------------------------------------------------------------------------------------------
Jeremy Biggs @#+ Trustee Trustee of other investment companies
1220 Park Avenue advised by the Adviser, Vice Chairman,
New York, NY 10128 Director, and Chief Investment Officer
of Fiduciary Trust Company International
(investment manager), parent company of
Fiduciary International, inc., Chairman
of the Davis Funds Group (mutual funds
management company) Treasurer and
Director of Royal Oak Foundation (the UK
National Trust); Director and former of
the Union Settlement Association (the
community service organization); First
Vice President , Trustee and Chairman of
Finance Committee of the St. James
School, St. James Maryland.
- -----------------------------------------------------------------------------------------------------------------------
Richard Cowell #+ Trustee Trustee of other investment companies
240 El Vedado Way advised by the Adviser; Private
Palm Beach, FL 33480 Investor; Director West Indies &
Caribbean Development Ltd. (real
estate).
- -----------------------------------------------------------------------------------------------------------------------
Philip DeFeo Trustee Trustee of other investment companies
301 Pine Street advised by the Adviser; Former
San Francisco, CA 94104 President of Van Eck Associates
Corporation and Van Eck Securities
Corporation; Former Executive Vice
President of Cedel International.
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
31
<PAGE>
<TABLE>
<CAPTION>
Trustees of Van Eck Funds:
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Wesley G. McCain #+ Trustee Trustee of other affiliated
40 East 30th Street investment companies advised or
New York, NY administered by the Adviser; Chairman
and Owner, Towneley Capital
Management, Inc.; Chairman, Eclipse
Funds; Chairman and Owner, Eclipse
Financial Services Inc.; General
Partner, Pharaoh Partners, L.P.;
Principal, Pharaoh Partners, (Cayman)
LDC; President and Owner, Millbrook
Associates, Imc.; Trustee, Libre
Group Trust, Director, Libre
Investments (Cayman) Ltd.; Former
Director, International Investors
Incorporated.
David Olderman # Trustee Trustee of other investment companies
40 East 52nd Street advised by the Adviser; Chairman of
New York, NY 10022 the Board, American Copy Equipment
Company; Chairman of the Board
Brighton Partners Inc.
Ralph Peters #* Trustee Trustee of other investment companies
66 Strimples Road advised by the Adviser; Director Sun
Stockton, NJ 08559 Life Insurance and Annuity Company of
New York; Director U.S. Life Income
Fund.
Richard Stamberger # Trustee Trustee of another investment companies
888 17th Street, N.W. 12th Fl. advised by the Adviser; Principal,
Washington, D.C. 20006 National Strategies, Inc., Partner and
Co-Founder, Quest partners, LLC,
Executive Vice President, Chief
Operating Officer and a Director of
NuCable Resources Corporation.
Jan F. van Eck @** Trustee Officer and Director of Van Eck
99 Park Avenue Associates Corporation Van Eck
New York, NY 10016 Securities and other affiliated
companies.
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
32
<PAGE>
<TABLE>
<CAPTION>
Trustees of Van Eck Funds:
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Derek S. van Eck @** Trustee and Officer Officer and Director of Van Eck
99 Park Avenue Associates Corporation Van Eck
New York, NY 10016 Securities and other affiliated companies.
Officer of the Trust:
Bruce J. Smith Vice President and Treasurer Officer of other investment companies
99 Park Avenue advised by the Administrator; Senior
New York, NY 10016 Vice President and Chief Financial
Officer of Van Eck Associates
Corporation and Senior Managing
Director of Van Eck Securities.
Thomas H. Elwood Vice President and Secretary Officer of other investment companies
99 Park Avenue advised by the Administrator; Vice
New York, NY 10016 President, Secretary and General
Counsel of Van Eck Associates
Corporation and Van Eck Securities;
former Assistant Counsel Jefferson Pilot
Financial Insurance Company and officer
of other investment companies advised by
Jefferson Pilot Financial Insurance and
its affiliates.
Joseph P. DiMaggio Controller Officer of other investment companies
99 Park Avenue advised by the Adviser; Managing
New York, NY 10016 Director of Portfolio Administration
of Van Eck Associates Corporation.
Charles T. Cameron Vice President Vice President of another investment
99 Park Avenue company advised by the Adviser;
New York, NY 10016 Director of Trading of Van Eck
Associates Corporation.
Susan C. Lashley Vice President Officer of other investment companies
99 Park Avenue advised by the Administrator;
New York, NY 10016 Managing Director of Mutual Fund
Operations of Van Eck Associates
Corporation.
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
33
<PAGE>
<TABLE>
<CAPTION>
Trustees of Van Eck Funds:
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Kevin Reid Vice President Officer of other investment companies
99 Park Avenue advised by the Administrator;
New York, NY 10016 Director, Real Estate of Van Eck
Associates Corporation.
Gregory F. Krenzer President of U.S. Government Money Co-Director, Global Fixed Income of Van Eck
99 Park Avenue Fund Associates Corporation.
New York, NY 10016
Dina C. Lee Assistant Secretary Assistant Secretary of other
99 Park Avenue investment companies advised or
New York, NY 10016 administered by the Adviser; Staff
Attorney of Van Eck Associates
Corporation.
Alex W. Bogaenko Assistant Controller Assistant Controller of other
99 Park Avenue investment companies advised or
New York, NY 10016 administered by the Adviser;
Director of Portfolio Administration
of Van Eck Associates 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
Name of Person Aggregate Compensation Pension or Retirement Total Compensation From Fund and
Position From Fund Benefits Accrued As Part Fund Complex (a) Paid to Directors
of Fund Expenses
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
John C. van Eck $0 $0 $0
Jeremy Biggs $0 $20,467 $39,250
Richard Cowell $20,467 $0 $33,500
Philip DeFeo $0 $0 $0
Wesley McCain $0 $20,467 $39,250
David Olderman $0 $16,496 $31,250
Ralph Peters $18,940 $0 $31,000
Richard Stamberger $9,469 $9,469 $31,000
Jan F. van Eck $0 $0 $0
Derek S. van Eck $0 $0 $0
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
34
<PAGE>
(a) The term "fund complex" refers to the Funds of the Trust, the series of the
Van Eck Worldwide Insurance Trust and the Van Eck/Chubb, Funds, Inc., which are
also managed by the Adviser. The Trustees are paid a fee for their services to
the Trust. No other compensation, including pension or other retirement
benefits, is paid to the Trustees by the fund complex.
As of February ___, 2000, all of the Officers and Trustees of the Trust
as a group owned the number of shares indicated of each Fund: ________ shares of
Asia Dynasty Fund - Class A, equal to approximately ____% of the shares
outstanding; __________ shares of Global Leaders Fund - Class A, equal to
approximately _____% of shares outstanding; ____________ shares of the U.S.
Government Money Fund, equal to approximately _____ % of the shares outstanding.
As of February ____, 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 February ____, 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>
Donaldson Lufkin Jenrette _____ % MLPF&S for the sole benefit _____ %
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
MLPF&S for the sole benefit _____ %
of its customers First Clearing Corporation _____ %
4800 Deer Lake Drive East A/C 3955-3795
3rd Floor Harbor Associates
Jacksonville, FL 32246-6484 230 Normandy Circle
Palm Harbor, FL 34683
U.S. Government Money Fund Global Leaders Fund (Class B shares)
- -------------------------- ------------------------------------
Nation Asset Management Ltd. _____ % MLPF&S for the sole benefit _____ %
Washington Mall West of its customers
Reid Street FL 4 4800 Deer Lake Drive East
Hamilton JM 11 Bermuda 3rd Floor
Jacksonville, FL 32246-6484
Edward M. Miller & Edward W. _____ %
101 Montgomery St.
Rodier & Michael Reddington TR M. Club Foundation _____ %
Meridian Venture Partners II LTD University of Maryland Inc
c/o Meridian Venture Group P.O. Box 273
57 Plandome Rd College Park, MD 20741-0273
Manhasset, NY 11030-2330
</TABLE>
35
<PAGE>
<TABLE>
<S> <C>
LLT Limited _____ % Global Hard Assets Fund (Class A shares)
Washington Mall ----------------------------------------
4th Floor
Hamilton HM 11 MLPF&S for the sole benefit _____ %
Bermuda of its customers
3rd Floor
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
Natural Resources Fund (Class A Shares)
MLPF&S for the sole benefit _____ % KAS Associate NV _____ %
of its customers Stitching Vermogensgiro
4800 Deer Lake Drive East Beleggingsrekening
Jacksonville, FL 32246-6484 c/o RAJ Sporri/Internal Code 24893
P.O. Box 178/1000 AD Amsterdam
The Netherlands
Asia Dynasty Fund (Class A shares)
MLPF&S for the sole benefit _____ % Charles Schwab & Co. Inc. _____ %
of its customers Special Custody Acct FEBO
4800 Deer Lake Drive East Customers Intl One Source
3rd Floor Attn Mutual Funds
Jacksonville, FL 32246-6484 101 Montgomery Street
San Francisco, CA 94104-4122
Global Hard Assets Fund (Class B shares)
MLPF&S for the sole benefit _____ %
of its customers
4800 Deer Lake Drive East
3rd Floor
Jacksonville, FL 32246-6484
Global Hard Assets Fund (Class C shares)
MLPF&S for the sole benefit _____ %
of its customers
4800 Deer Lake Drive East
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 Years Day, Martin Luther King Jr.'s
birthday, President's Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas. The net asset values need not be computed
on a day in which no orders to purchase, sell or redeem shares of the Funds have
been received.
Dividends paid by a Fund with respect to Class A, Class B and Class C
shares will be calculated in the same manner, at the same time and on the same
day and will be in the same amount, except that the higher distribution services
fee and any incremental transfer agency costs relating to Class B or Class C
36
<PAGE>
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 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, 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 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 $____ $____ $____ $____ $____
price per share on $.001 par
value capital shares
outstanding
Maximum sales charge (as .___ .___ .___ .___ .___
described in the Prospectus)
Maximum offering price
per share $____ $____ $____ $____ $____
</TABLE>
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
37
<PAGE>
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, 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
38
<PAGE>
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 and
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.
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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 purchase 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 and 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.
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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.
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.
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"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 a 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, they may be a penalty on contributions in excess of the contribution
limits.
Simplified Employee Pension Plan. A 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 a SEP. Subject to certain limitations, an
employer may also make contributions to a SEP-IRA under a salary reduction
arrangement by which the employee elects contributions to a 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 existence on
December 31, 1996. The maximum contribution to a 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 a 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.
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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's 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 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.
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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, 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 as 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.
TAXES
Taxation of the Fund - In General
Each of the Funds intends to continue to continue to qualify and elect
to be treated each taxable year as a "regulated investment company" under
Subchapter M of the Code. To so qualify, each Fund must, among other things, (a)
derive at least 90% of its gross income from dividends, interest, payments with
respect to securities loans, gains from the sale or other disposition of stock,
securities or foreign currencies,
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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 the it makes 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
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to which the Funds make such investments may be materially limited by these
provisions of the Code.
Foreign Currency Transactions. Under Section 988 of the Code, special
rules are provided for certain foreign currency transactions. Foreign currency
gains or losses from foreign currency contracts (whether or not traded in the
interbank market), from futures contracts that are not "regulated futures
contracts," and from unlisted options are treated as ordinary income or loss
under Section 988. The Funds may elect to have foreign currency-related
regulated futures contracts and listed options subject to ordinary income or
loss treatment under Section 988. In addition, in certain circumstances, the
Funds may elect capital gain or loss for foreign currency transactions. The
rules under Section 988 may also affect the timing of income recognized by the
Funds.
Taxation of the Shareholders
Distributions of net investment income and the excess of net short-term
capital gain over net long-term capital loss are taxable as ordinary income to
shareholders. Distributions of net capital gain (the excess of net long-term
capital gain over net short-term capital loss) are taxable to shareholders as
long-term capital gain, regardless of the length of time the shares of the Fund
have been held by such shareholders. Any loss realized upon a taxable
disposition of shares within six months from the date of their purchase will be
treated as a long-term capital loss to the extent of any long-term capital gain
distributions received by shareholders during such period.
Distributions of net investment income and capital gain net income will
be taxable as described above whether received in cash or reinvested in
additional shares. When distributions are received in the form of shares issued
by the Funds, the amount of the distribution deemed to have been received by
participating shareholders is the fair market value of the shares received
rather than the amount of cash which would otherwise have been received. In such
case, participating shareholders will have a basis for federal income tax
purposes in each share received from the Funds equal to the fair market value of
such share on the payment date.
Distributions by the Funds result in a reduction in the net asset value
of the Funds' shares. Should a distribution reduce the net asset value below a
shareholder's cost basis, such distribution nevertheless would be taxable to the
shareholder as ordinary income or long-term capital gain as described above,
even though, from an investment standpoint, it may constitute a partial return
of capital. In particular, investors should be 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
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credit (or, if more advantageous, a deduction) for foreign income taxes paid by
the Funds, subject to limitations contained in the Code. As an investor, you
would then include in gross income both dividends paid to you and the foreign
taxes paid by the Funds on their foreign investments.
The Funds cannot assure investors that they will be eligible for the
foreign tax credit. The Funds will advise shareholders annually of their share
of any creditable foreign taxes paid by the Funds.
The Funds may be required to withhold federal income tax at a rate of
31% from dividends made to any shareholder who fails to furnish a certified
taxpayer identification number ("TIN") or who fails to certify that he or she is
exempt from such withholding or who the Internal Revenue Service notifies the
Funds as having provided the Funds with an incorrect TIN or failed to properly
report for federal income tax purposes. Any such withheld amount will be fully
creditable on each shareholder's individual federal income tax return.
The foregoing discussion is a general summary of certain of the current
federal income tax laws affecting the Funds and investors in the shares. The
discussion does not purport to deal with all of the federal income tax
consequences applicable to the Funds, or to all categories of investors, some of
which may be subject to special rules. Investors should consult their own
advisors regarding the tax consequences, including state and local tax
consequences, to them of investment in the Funds.
REDEMPTIONS IN KIND
Each Fund has elected to have the ability to redeem its shares in kind,
committing itself to pay in cash all requests for redemption by any shareholder
of record limited in amount with respect to each shareholder of record during
any ninety-day period to the lesser of (i) $250,000 or (ii) 1% of the net asset
value of such company at the beginning of such period.
PERFORMANCE
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
47
<PAGE>
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, 1998 was 2.49% and 2.52%, respectively.
ASIA DYNASTY FUND, EMERGING MARKETS 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
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.
Average Annual Total Return for the Period ended December 31, 1999
(after maximum sales charge).
<TABLE>
<CAPTION>
1 Year 5 Years 10 Years Life
<S> <C> <C> <C>
International Investors
Gold Fund (Class A)
Natural Resources Fund (Class A)
Asia Dynasty Fund (Class A)
Asia Dynasty Fund (Class B)
Global Leaders Fund (Class A)
Global Leaders Fund (Class B)
Global Hard Assets Fund (Class A)
Global Hard Assets Fund (Class B)
Global Hard Assets Fund (Class C)
The Global Leaders Fund, Asia Dynasty Fund, Emerging Markets 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:
</TABLE>
48
<PAGE>
-----------------------------------------------------------------------
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 were entitled to receive dividends
D = the maximum offering price per share on the last day
of the period after adjustment for payment of dividends
within 30 days thereafter
=======================================================================
The Global Leaders Fund, Global Hard Assets Fund, Asia Dynasty Fund,
Emerging Markets 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 recurring fees that are charged to all shareholder accounts.
Aggregate Total Return for the period ended December 31, 1999 (after maximum
sales charge).
<TABLE>
<CAPTION>
1 Year 5 Years 10 Years Life
<S> <C> <C> <C>
International Investors
Gold Fund (Class A)
Natural Resources Fund (Class A)
Asia Dynasty Fund (Class A)
Asia Dynasty Fund (Class B)
Global Leaders Fund (Class A)
Global Leaders Fund (Class B)
Global Hard Assets Fund (Class A)
Global Hard Assets Fund (Class B)
Global Hard Assets Fund (Class C)
</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
49
<PAGE>
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 Accountants.
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, Emerging Markets 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.
50
<PAGE>
APPENDIX
PART A.
Corporate Bond Ratings
Description of Moody's Investors Service, Inc. corporate bond ratings:
Aaa--Bonds which are rated Aaa are judged to be the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt-edge". Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa--Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater or there may be other elements present which make the
long-term risks appear somewhat larger than in Aaa securities.
A--Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors given
security to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment sometime in the future.
Baa--Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
Moody's applies the numerical modifiers 1, 2 and 3 to each generic
rating classification from Aa through B. The modifier 1 indicates that the
security ranks in the higher end of its generic rating category; the modifier 2
indicates a mid-range ranking; and the modifier 3 indicates that the issue ranks
in the lower end of its generic rating category.
Description of Standard & Poor's Corporation corporate bond ratings;
AAA --Bonds rated AAA have the highest rating assigned by S&P to a debt
obligations. Capacity to pay interest and repay principal is extremely strong.
AA --Bonds rated AA have a very strong capacity to pay interest and
repay principal and differ from the higher rated issues only in small degree.
A --Bonds rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than bonds in higher rated
categories.
BBB --Bonds rated BBB are regarding as having an adequate capacity to
pay interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to pay interest and repay principal
for bonds in this category than for bonds in higher rated categories.
51
<PAGE>
Preferred Stock Ratings
Moody's Investors Service, Inc. describes its preferred stock ratings
as:
aaa -An issue which is rated aaa is considered to be a top-quality
preferred stock. This rating indicates good asset protection and the least risk
of dividend impairment within the universe of convertible preferred stocks.
aa -An issue which is rated aa is considered a high-grade preferred
stock. This rating indicates that there is reasonable assurance that earnings
and asset protection will remain relatively well maintained in the foreseeable
future.
a -An issue which is rated a is considered to be an upper-medium grade
preferred stock. While risks are judged to be somewhat greater than in the aaa
and aa classifications, earnings and asset protection are, nevertheless,
expected to be maintained at adequate levels.
baa -An issue which is rated baa is considered to be medium-grade,
neither highly protected nor poorly secured. Earnings and asset protection
appear adequate at present but may be questionable over any great length of
time.
ba -An issue which is rated ba is considered to have speculative
elements, and its future cannot be considered well assured. Earnings and asset
protection may be very moderate and not well safe-guarded during adverse
periods. Uncertainty of position characterizes preferred stocks in this class.
b -An Issue which is rated b generally lacks the characteristics of a
desirable investment. Assurance of dividend payments and maintenance of other
terms of the issue over any long period of time may be small.
caa -An issue which is rated caa is likely to be in arrears on dividend
payments. This rating designation does not purport to indicate the future status
of payment.
ca -An issue which is rated ca is speculative in a high degree and is
likely to be in arrears on dividends with little likelihood of eventual payment.
c -This is the lowest rated class of preferred or preference stock.
Issues so rated can be regarded as having extremely poor prospects of every
attaining any real investment standing.
Standard & Poor's Corporation describes its preferred stock ratings as:
AAA -This is the highest rating that may be assigned by Standard &
Poor's to a preferred stock issue and indicates an extremely strong capacity to
pay the preferred stock obligations.
AA -A preferred stock issue rated AA also qualifies as a high-quality
fixed income security. The capacity to pay preferred stock obligations is very
strong, although not as overwhelming as for issues rated AAA.
A -An issue rated A is backed by a sound capacity to pay the preferred
stock obligations, although it is somewhat more susceptible to the adverse
effect of changes in circumstances and economic conditions.
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
52
<PAGE>
changing circumstances are more likely to lead to a weakened capacity to make
payments for a preferred stock in this category than for issues in the A
category.
BB,B,CCC -Preferred stocks rated BB,B, and CCC are regarded, on
balance, as predominantly speculative with respect to the issuer's capacity to
pay preferred stock obligations. BB indicates the lowest degree of speculation
and CCC the highest degree of speculation. While such issues will likely have
some quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.
Short-Term Debt Ratings
Description of Moody's short-term debt ratings:
Prime-1--Issuers rated Prime-1 (or supporting institutions) have a
superior ability for repayment of senior short-term debt obligations. Prime-1
repayment ability will often be evidenced by may of the following
characteristics: leading market positions in well-established industries, higher
rates of return of funds employed, conservative capitalization structure with
moderate reliance on debt and ample asset protection, broad margins in earnings
coverage of fixed financial charges and high internal cash generation and
well-established access to a range of financial markets and assured sources of
alternate liquidity.
Prime-2--Issuers rated Prime-2 (or supporting institutions) have a
strong ability for repayment of senior short-term debt obligations. This will
normally be evidenced by many of the characteristics cited above but to a lesser
degree. Earnings trends and coverage ratios, while sound, may be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected be external conditions. Ample alternate liquidity is maintained.
Prime-3--Issuers rated Prime-3 (or supporting institutions) have an
acceptable ability for repayment of senior short-term obligations. The effect of
industry characteristics and market compositions may be more pronounced.
Variability in earnings and profitability may result in changes in the level of
debt protection measurements and may require relatively high financial leverage.
Adequate alternate liquidity is maintained.
Not Prime--Issuers rated Not Prime do not fall within any of the Prime
rating categories.
Description of Standard & Poor's short-term debt ratings:
A-1--This highest category indicates that the degree of safety
regarding timely payment is strong. Those issues determined to possess extremely
strong safety characteristics are denoted with a plus sign (+) designation.
A-2--Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated `A-1'.
A-3--Issues carrying this designation have adequate capacity for timely
payment. They are, however, more vulnerable to the adverse effects of changes in
circumstances than obligations carrying the higher designations.
B--Issues rated B are regarded as having only speculative capacity for
timely payment.
C--This rating is assigned to short-term debt obligations with a
doubtful capacity for payment.
53
<PAGE>
D--Debt rated D is in payment default. The D rating category is used
when interest payments or principal payments are not made on the date due, even
if the applicable grace period has not expired, unless S&P believes that such
payments will be made during such grace period.
PART B
The publications and services from which the Funds will quote
performance are: Micropal, Ltd. (an international investment fund information
service), Fortune, Changing Times, Money, U.S. News & World Report, Money Fund
Scorecard, Morningstar, Inc., Business Week, Institutional Investor, The Wall
Street Journal, Wall Street Transcripts, New York Post, Investment Company
Institute publications, The New York Times, Barron's, Forbes magazine, Research
magazine, Donaghues Money Fund Report, Donaghue's Money Letter, The Economist,
FACS, FACS of the Week, Financial Planning, Investment Daily, Johnson's Charts,
Mutual Fund Profiles (S&P), Powell Monetary Analysis, Sales & Marketing
Management Magazine, Life magazine, Black Enterprise, Fund Action, Speculators
Magazine, Time, NewsWeek, U.S.A Today, Wiesenberger Investment Service, Mining
Journal Quarterly, Mining Journal Weekly, Northern = 0Miner, Gold Gazette,
George Cross Newsletter, Engineering and Mining Journal, Weekly Stock
Charts-Canadian Resources, Jeweler's Circular Keystone, Financial Times, Journal
of Commerce, Mikuni's Credit Ratings, Money Market Directory of Pension Funds,
Oil and Gas Journal, Pension Funds and Their Advisers, Investment Company Data,
Inc., Mutual Funds Almanac, Callan Associates, Inc., Media General Financial
Services, Financial World, Pensions & Investment Age, Registered Investment
Advisors, Aden Analysis, Baxter Weekly, Congressional Yellow Book, Crain's New
York Business, Survey of Current Business, Treasury Bulletin, U.S. Industrial
Outlook, Value Line Survey, Bank Credit Analyst, S&P Corporation Records,
Euromoney, Moody's, Investment Dealer's Digest, Financial Mail, Financial Post,
Futures, Grant's Interest Rate Observer, Institutional Investor, International
Currency Review, International Bank Credit Analyst, Investor's Daily, German
Business Weekly, GATT Trade Annual Report, and Dimensional Fund Advisers, Inc.
MARKET INDEX DESCRIPTIONS
MORGAN STANLEY CAPITAL INTERNATIONAL 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
54
<PAGE>
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 market capitalization of
eligible issues falls below half of all of the entry levels for six consecutive
months. Once again, the market will be removed at the end of the following
quarter. In addition, market entry barriers are a reason for exclusion despite
meeting the size criteria (for example, if a market discourages foreign investor
participation).
SALOMON BROTHERS WORLD PROPERTY EQUITY INDEX: A top-down, float
capitalization-weighted index that includes shares of approximately 380
companies in 19 countries.
WILSHIRE REIT SECURITIES INDEX: A capitalization-weighted index
comprised of publicly traded equity real estate investment trusts excluding
mortgages REITS.
GPR - LIFE GLOBAL REAL ESTATE SECURITIES INDEX: A market
capitalization-weighted index of property companies in 33 countries.
GROSS DOMESTIC PRODUCT: The market value of all final goods and
services produced by labor and property supplied by residents of the United
States in a given period of time, usually one year. Gross Domestic Product
comprises (1) purchases of persons (2) purchases of governments (Federal, State
& Local) (3) gross private domestic investment (includes change in business
inventories) and (4) international trade balance from exports. Nominal GDP is
expressed in 1993 dollars. Real GDP is adjusted for inflation and is currently
expressed in 1987 dollars.
55
<PAGE>
PART C
OTHER INFORMATION
ITEM 24. Financial Statements and Exhibits
a.) Financial Statements included in Prospectus (Part A):
Financial Highlights or Selected per Share Data and Ratios of Asia
Dynasty Fund for the fiscal period ended December 31, 1993, and for
the years ended December 31, 1994, 1995 and 1996, for the year ended
December 31, 1997 (audited) for the year ended December 31, 1998
(audited); of Global Balanced Fund for the fiscal period ended
December 31, 1993 and for the years ended December 31, 1994, 1995 and
1996, for the year ended December 31, 1997 (audited) for the year
ended December 31, 1998 (audited); of Global Hard Assets Fund for the
fiscal period ended December 31, 1994 and for the years ended
December 31, 1995 and 1996, for the year ended December 31, 1997
(audited) for the year ended December 31, 1998 (audited); for
Gold/Resources Fund for the years ended December 31, 1987, 1988, 1989
and 1990 (not audited by Coopers & Lybrand LLP, the Fund's current
auditors), and for the years ended December 31, 1991, 1992, 1993,
1994, 1995 and 1996, for the year ended December 31, 1997 for the
year ended December 31, 1998 (audited); for International Investors
Gold Fund for the years ended December 31, 1992 and 1993, for the
fiscal period or year ended December 31, 1994 and for the years ended
December 31, 1995 and 1996, for the year ended December 31, 1997 for
the year ended December 31, 1998 (audited); and for U.S. Government
Money Fund for the years ended December 31, 1992, 1993, 1994, 1995
and 1996, for the year ended December 31, 1997 for the year ended
December 31, 1998 (audited);
The audited financial statements of the Registrant are included in Registrant's
Annual Reports to Shareholders for the fiscal year or period ended December 31,
1998, filed with the Securities and Exchange Commission under Section 30(b)(1)
of the Investment Company Act of 1940, and have been incorporated in Part B
hereof by reference:
Asia Dynasty Fund - Investment Portfolio at December 31, 1998;
Asia Dynasty Fund - Statement of Assets and Liabilities at December 31, 1998;
Asia Dynasty Fund - Statement of Operations for the year ended December 31,
1998;
Asia Dynasty Fund - Statement of Change in Net Assets for the year ended
December 31, 1997 and 1998;
Asia Dynasty Fund - Financial Highlights for the period September 1, 1993 to
December 31, 1993, the year ended December 31, 1994, 1995, 1996, 1997 and 1998;
Asia Dynasty Fund - Notes to Financial Statements Report of Independent
Accountants February 22, 1999.
Global Leaders Fund - Investment Portfolio at December 31, 1998;
Global Leaders Fund - Statement of Assets and Liabilities at December 31, 1998;
Global Leaders Fund - Statement of Operations for the year ended December 31,
1998;
Global Leaders Fund - Statement of Change in Net Assets for the year ended
December 31, 1997 and 1998;
Global Leaders Fund - Financial Highlights for the period December 20, 1993 to
December 31, 1993, the year ended December 31, 1994, 1995, 1996, 1997 and 1998;
Global Leaders Fund - Notes to Financial Statements Report of Independent
Accountants February 22, 1999.
Global Hard Assets Fund - Investment Portfolio at December 31, 1998;
Global Hard Assets Fund - Statement of Assets and Liabilities at December 31,
1998;
Global Hard Assets Fund - Statement of Operations for the year ended December
31, 1998;
Global Hard Assets Fund - Statement of Change in Net Assets for the year ended
December 31, 1997 and 1998;
Global Hard Assets Fund - Financial Highlights for the period from November 2,
1994 to December 31, 1994, for the period from April 24, 1996 to December 31,
1996, the year ended December 31, 1995, 1996, 1997 and 1998;
<PAGE>
Global Hard Assets Fund - Notes to Financial Statements Report of Independent
Accountants February 22, 1999.
Natural Resources Fund - Investment Portfolio at December 31, 1998;
Natural Resources Fund - Statement of Assets and Liabilities at December 31,
1998;
Natural Resources Fund - Statement of Operations for the year ended December 31,
1998;
Natural Resources Fund - Statement of Change in Net Assets for the year ended
December 31, 1997 and 1998;
Natural Resources Fund - Financial Highlights for the year ended December 31,
1993, 1994, 1995, 1996, 1997 and 1998;
Natural Resources Fund - Notes to Financial Statements Report of Independent
Accountants February 22, 1999.
International Investors Gold Fund - Investment Portfolio at December 31, 1998;
International Investors Gold Fund - Statement of Assets and Liabilities at
December 31, 1998;
International Investors Gold Fund - Statement of Operations for year ended
December 31, 1998;
International Investors Gold Fund - Statement of Change in Net Assets for the
year ended December 31, 1997 and 1998;
International Investors Gold Fund - Financial Highlights for the year ended
December 31, 1993, 1994, 1995, 1996, 1997 and 1998;
International Investors Gold Fund - Notes to Financial Statements Report of
Independent Accountants February 22, 1999.
U.S. Government Money Fund - Investment Portfolio at December 31, 1998;
U.S. Government Money Fund - Statement of Assets and Liabilities at December 31,
1998;
U.S. Government Money Fund - Statement of Operations for year ended December 31,
1998;
U.S. Government Money Fund - Statement of Change in Net Assets for the year
ended December 31, 1997 and 1998;
U.S. Government Money Fund - Financial Highlights for the year ended December
31, 1993, 1994, 1995, 1996, 1997 and 1998;
U.S. Government Money Fund - Notes to Financial Statements Report of Independent
Accountants February 22, 1999.
<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 Fund (to be filed
by Amendment).
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 Market Fund (to be filed by
amendment).
(7) Form of Deferred Compensation Plan (incorporated by reference to
Post-Effective Amendment No. 40).
(8) Global Custody Agreement, as amended (to be filed by amendment).
(9)(a) Forms of Procedural Agreement, Customer Agreement and Safekeeping
Agreement with Merrill Lynch Futures Inc. utilized by World Income
Fund, and Forms of Procedural Agreement, Customer Agreement and Safe
Keeping Agreement with Morgan Stanley & Co. utilized by World Income
Fund (incorporated by reference to Post-Effective Amendment No. 9).
(9)(b) Commodity Customer's Agreement between World Income Fund and Morgan
Stanley & Co. (incorporated by reference to Post-Effective Amendment
No. 10 ).
(9)(c) Agreement and Plan of Redomicile and Reorganization between the Trust
and International Investors Incorporated respecting the reorganization
of International Investors Incorporated into the Trust as its fifth
series, International Investors. (incorporated by reference to
Post-Effective Amendment No. 17).
(9)(d) Form of Accounting and Administrative Services Agreement with respect
to Asia Dynasty Fund (Incorporated by reference to Post-effective
Amendment No. 23).
(9)(e) Accounting and Administrative Services Agreement with respect to Global
Balanced Fund (incorporated by reference to Post-effective Amendment
No. 31).
(9)(f) Letter Agreement to add Global SmallCap Fund and Asia Infrastructure
Fund (incorporated by reference to Post-effective Amendment No. 31) and
Letter Agreement to add Gold/Resources Fund and International Investors
Gold Fund (incorporated by reference to Post-effective Amendment No.
34). Letter Agreement to add Global Hard Assets
3
<PAGE>
Fund (incorporated by reference to Post-effective Amendment No. 36).
Letter Agreement to add Gold Opportunity Fund (incorporated by
reference to Post-effective Amendment No. 37).
(9)(g) Form of Accounting and Administrative Services Agreement with respect
to Global Emerging Markets Fund (incorporated by reference to Post-
Effective Amendment No. 36).
(9)(h) Letter Agreement to add Emerging Markets Growth Fund (to be filed by
amendment).
(9)(i) Letter Agreement adding Emerging Markets Fund (to be filed by
amendment).
(10) Opinion of Goodwin, Procter & Hoar, including consent, with regard to
World Trends Fund (incorporated by reference to Pre-Effective Amendment
No. 1); Opinion Of Fund (incorporated by reference to Post- Effective
Amendment No. 1); Opinion of Goodwin, Procter & Hoar with regard to
World Income Fund (incorporated by reference to Post- Effective
Amendment No. 7); Opinion of Goodwin, Procter & Hoar and consent with
regard to International Investors (incorporated by reference to
Post-Effective Amendment No. 17); Opinion of Goodwin, Procter and Hoar
with regard to Asia Dynasty Fund (incorporated by reference to
Post-effective Amendment No. 24); Opinion of Goodwin, Procter & Hoar
with respect to the issuance of Class B shares of Asia Dynasty Fund and
with respect to the issuance of Class A and Class B shares of Global
Balanced Fund (incorporated by reference to Post- effective Amendment
No. 27); Opinion of Goodwin, Procter & Hoar with respect to the
issuance of Class A and Class B shares of Asia Infrastructure Fund and
Global SmallCap Fund (incorporated by reference to Post-effective
Amendment No. 31) and Opinion of Goodwin, Procter & Hoar, including
consent, with regard to the issuance of Class A and Class C shares of
Global Hard Assets Fund (incorporated by reference to Post-effective
Amendment No. 36). Opinion of Goodwin, Procter & Hoar, including
consent, with regard to the issuance of Class A and Class C shares of
Gold Opportunity Fund (incorporated by reference to Post-Effective
Amendment No. 37). Opinion of Goodwin, Proctor & Hoar including
consent, with regard to the issuance of Class B shares of Asia
Infrastructure Fund, Gold Opportunity Fund and Global Hard Assets Fund
(incorporated by reference to Post-Effective Amendment No. 40).
(10)(b) Opinion of Goodwin, Procter & Hoar, with respect to issuance of Class
A, Class B and Class C shares of Emerging Markets Growth Fund (to be
filed by amendment).
(11)* Consent of Independent Accountants (to be filed by amendment).
(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 Fund (Class A/Class B) (to be
filed by amendment).
(16) Computation of Performance Quotation (incorporated by reference to
Post-Effective Amendment No. 51).
(17) Financial Data Schedule (to be filed by Amendment).
(18) Powers of Attorney (incorporated by reference from Post-Effective
Amendment No. 5).
(19) Not Applicable.
ITEM 25. Persons controlled by or under common control with Registrant
Not Applicable.
ITEM 26. Number of Holders of Securities
Set forth below are the number of Record Holders as of February 19, 1999 of each
series of the Registrant:
FUND
NAME NUMBER OF RECORD HOLDERS
---- ------------------------
CLASS A CLASS B CLASS C
------- ------- -------
Global Balanced Fund..... 2,392 306
Asia Dynasty Fund........ 1,780 548
International Investors
Gold Fund............... 35,179
Gold/Resources Fund...... 11,845
Global Hard Assets Fund.. 2,602 582 448
U.S. Government Money
Fund.................... 1,842
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.
