V A N E C K G L O B A L
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ANNUAL REPORT
DECEMBER 31, 1999
[GRAPHIC OMITTED]
VAN ECK FUNDS
ASIA DYNASTY FUND
GLOBAL HARD ASSETS FUND
GLOBAL LEADERS FUND
GOLD/RESOURCES FUND
INTERNATIONAL INVESTORS GOLD FUND
U.S. GOVERNMENT MONEY FUND
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GLOBAL INVESTMENTS SINCE 1955
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VAN ECK ASIA DYNASTY FUND
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Dear Fellow Shareholder:
We are pleased to report that the Van Eck Asia Dynasty Fund had an exceptional
year in 1999, gaining 118.46%, compared with an increase of 62.11% for the
Morgan Stanley Capital International Far East Free ex-Japan Index. In fact, the
Fund was the top performing Asia ex-Japan fund for the year among 66 such funds,
according to Standard & Poor's Micropal.1 Reasons for Fund outperformance
included being fully invested early in the year, a heavy allocation to
technology and telecommunications stocks, and significant weightings in India,
Korea and Singapore.
REVIEW
Nineteen ninety-nine was a year of rapid recovery for both economies and stocks
of Asian markets. After the climactic sell-off in August 1998, the recovery has
been both remarkable and lucrative. The rally was broad-based, with all
countries participating. Two broad themes have emerged. First, 1999 was the year
that investors embraced risk again. Second, in common with the rest of the
world, technology and telecommunications stocks were the top performing sectors.
One other remarkable feature of 1999 was how consistently the Asian economies
bettered "street" expectations for growth. Improving economic expectations were
a key reason why analysts spent most of the year revising up their forecasts for
corporate earnings. We took a more bullish view of economic prospects during the
year than most, and had the courage of our convictions to buy stocks that looked
expensive on (then) current consensus forecasts.
In Asia, the top performing market was SOUTH KOREA2 (93% in U.S. dollar terms),
which was one of the earliest economies to show a tangible rebound. The market
did suffer some setbacks, including the bankruptcy of Daewoo3, which had been
one of Korea's "chaebols" or conglomerates. This caused interest rates to rise
and precipitated some outflow from domestic funds. The government stepped in to
reassure the investment community and orchestrate a number of support measures,
which helped the market remain calm. The Fund had a large weighting to the
Korean market throughout the year (22.5% of Fund assets at year end) with a
strong emphasis on the telecom and semiconductor sectors.
The INDONESIAN market nearly matched the Korean market for performance, gaining
92% over the year. The Fund held an overweight position in this market (5.6% of
assets at December 31, 1999) for most of the year. As in Korea, there were some
nervous moments. For Indonesia, this centered on the transition to a post-
Suharto democracy. Although there was a certain amount of disruption, the
transition was actually remarkably smooth given the history, the ethnic tensions
and challenging geography. The election results of Wahid as President and
Megawati as Vice President were among the best possible results in our view. The
next challenge, which is by no means a small one, is economic. Indonesia
suffered greatly during the Asian crisis, and it will be no mean feat to put the
country back on a solid growth track.
A very strong electronics cycle was reflected in the exports of countries such
as SINGAPORE and TAIWAN, where the markets gained 73% and 35%, respectively.
Global demand for electronic goods was very firm during the course of 1999,
making component supply an issue. Taiwan, in particular, with its high exposure
to the electronics industry, benefited from this trend. Significant positions in
both markets (16.0% of Fund assets in Singapore and 8.1% in Taiwan4) and a heavy
emphasis on technology and telecom stocks were key contributors to Fund
performance.
HONG KONG (17.4% of assets) has been slightly slower to emerge from its
recession, but better news from China ought to help the market along in 2000.
Significantly, the threat of a devaluation of the Chinese currency receded
during the course of 1999. Higher interest rates in the United States should
impact Hong Kong interest rates, but reflationary efforts in China ought to be
the dominant theme for this year. The market gained 68% in 1999.
INDIAN stocks (11.4% of assets) performed well, particularly in the period after
election results were announced, gaining 60% over the year. For the first time
in three years, India has a government that has a workable majority in
parliament. It appears that they have the will, as well as the ability, to make
serious progress in some of the structural issues that have held India back. In
this regard, tackling the fiscal deficit must rank as priority number one. The
Fund continues to benefit from the positions that it holds in the software
sector in India.
The MALAYSIAN market (7.1% of assets), although increasing by 39% over the last
twelve months, disappointed our optimistic expectations. Capital controls were
lifted during the year, causing some outflow from the market. That exodus has
now largely stopped. The economy is highly liquid, with interest rates remaining
low. The market does not look overvalued and will be reinstated in the main
benchmark indices as of May 2000. Therefore, we remain optimistic.
The other Southeast Asian markets of THAILAND and the PHILIPPINES produced
relatively disappointing
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VAN ECK ASIA DYNASTY FUND
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results, gaining 33% and 5%, respectively. In Thailand, shares of big banks were
once again active but their performance was disappointing, despite the peaking
of non-performing loans. The Philippines suffered from the growing feeling that
President Estrada and his team of advisers were not addressing the economic
problems of the country with sufficient urgency or direction. At year end, these
markets accounted for 3.6% and 1.9% of assets, respectively.
THE OUTLOOK
In many cases, the first stage of recovery can be said to be over in Asian
markets. The recovery from the deeply oversold levels of 1998 has largely taken
place. Nevertheless, we remain very optimistic as we enter the year 2000.
The major risks for the asset class have diminished. Y2K has come and gone
without significant problems. The Chinese currency appears stable. Significant
political milestones have been achieved in countries such as Indonesia, China
and Malaysia.
Broadly speaking, the global economic environment is positive, with stronger but
less concentrated growth around the world. The Asian economies, with the
possible exception of the Philippines, are moving strongly ahead. There is ample
domestic liquidity, driven by healthy current account surpluses. Returns on
equity should surpass pre-crisis levels as companies adapt, refocus and thrive,
using the lessons learned from the depths of the crisis. Finally, valuations are
simply not demanding, particularly as analysts revise up earnings forecasts to
reflect the better operating environment.
We would like to thank you for your participation in the Van Eck Asia Dynasty
Fund, and we look forward to helping you meet your investment objectives in the
future.
[PHOTO OMITTED] [PHOTO OMITTED]
/s/ DAVID A. SEMPLE /s/ DAVID M. HULME
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DAVID A. SEMPLE DAVID M. HULME
CO-PORTFOLIO MANAGER CO-PORTFOLIO MANAGER
January 20, 2000
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1 Past performance is no guarantee of future results. As of December 31, 1999,
Micropal ranked the Fund first among 66 Asia ex-Japan funds for the one-year
period, second among 26 funds for the five-year period and first among 11 funds
since its inception (3/22/93). Rankings are based on total returns before sales
charges.
2 All individual country returns are in U.S. dollar terms and are based on
country-specific stock markets; for example, South Korea's 93% return is based
on the gain posted by the South Korea Composite Index.
3 The Fund was not invested in Daewoo in 1999.
4 Exposure to Taiwan was in fact higher than the "Schedule of Portfolio
Investments" suggests due to the United Microelectronics Corp. "swaps" listed in
Note 11 of "Notes to Financial Statements."
2
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VAN ECK ASIA DYNASTY FUND
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PERFORMANCE RECORD AS OF 12/31/99
AVERAGE ANNUAL AFTER MAXIMUM BEFORE SALES
TOTAL RETURN SALES CHARGE* CHARGE
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A shares--Life (since 3/22/93) 10.82% 11.79%
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5 year 8.91% 10.21%
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1 year 105.80% 118.46%
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B shares--Life (since 9/1/93) 8.86% 8.86%
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5 year 9.10% 9.38%
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1 year 111.71% 116.71%
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THE PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NOT INDICATIVE OF FUTURE
RESULTS. Investment return and principal value of an investment in the Fund will
vary so that shares, when redeemed, may be worth more or less than their
original cost.
At certain times in the past, the Adviser waived certain or all expenses of the
Fund. Had the Fund incurred all expenses, investment returns would have been
reduced.
* A shares: maximum sales charge is 5.75%
B shares: maximum contingent deferred sales charge is 5.00%
GEOGRAPHICAL WEIGHTINGS+
AS OF DECEMBER 31, 1999
[PIE CHART OMITTED]
[PIE CHART IS REPRESENTED BELOW IN ITS PRINTED FORM.]
Hong Kong ...................... 17.4%
India........................... 11.4%
Philippines..................... 1.9%
Indonesia ...................... 5.6%
Singapore ...................... 16.0%
South Korea..................... 22.5%
Taiwan ......................... 8.1%
Thailand........................ 3.6%
Malaysia........................ 7.1%
Cash/Equivalents................ 5.8%
China........................... 0.6%
+Weightings take options positions into account (see "Schedule of Portfolio
Investments" p. 28).
3
<PAGE>
VAN ECK ASIA DYNASTY FUND
TOP TEN EQUITY HOLDINGS AS OF DECEMBER 31, 1999*
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SK TELECOM CO., LTD.
(SOUTH KOREA, 4.5%)
SK Telecom is Korea's market leader in mobile communications, with over 10
million subscribers and a market share of 43%.
PACIFIC CENTURY REGIONAL DEVELOPMENT LTD.
(SINGAPORE, 4.5%)
Pacific Century is an investment holding and property development and management
company. Pacific Century Cyberworks is its largest subsidiary and is involved in
the provision of venture capital to Asian Internet and technology start-ups.
HAANSOFT, INC.
(SOUTH KOREA, 3.0%)
Haansoft is a software company that develops Korean word processing software and
distributes its products to end users. The company also provides Internet
services such as Internet applications and online transaction infrastructure.
SATYAM COMPUTER SERVICES LTD.
(INDIA, 3.0%)
Satyam is a software services company specializing in IBM, Windows and Unix
platforms. The company undertakes turnkey execution of projects in India and
abroad, and has pioneered offshore software developments in India using its
high-speed satellite data communication. Satyam also provides Internet access
and services through Satyam Infoway.
R.O.C. TAIWAN FUND
(TAIWAN, 2.8%)
The R.O.C. Taiwan Fund is a closed-end mutual fund that invests in publicly
traded securities of Taiwanese companies. At year end, the fund was trading at a
discount to the underlying value of its assets.
SAMSUNG ELECTRONICS
(SOUTH KOREA, 2.7%)
Samsung Electronics manufactures and exports a wide range of consumer and
industrial electronic equipment such as memory chips, semiconductors, personal
computers, telecommunications equipment and televisions.
COMMERCE ASSET HOLDINGS BHD.
(MALAYSIA, 2.5%)
Commerce Asset is a financial services holding company principally engaged in
commercial and investment banking, stockbrokering and fund management.
KOREA TELECOM CORP.
(SOUTH KOREA, 2.5%)
Korea Telecom provides telecommunications services including local telephone,
domestic and international long distance, multimedia, satellite communication,
data network and wireless telephone services in Korea. The company also offers
Internet search and telephone directory services.
DAOU TECHNOLOGIES, INC.
(SOUTH KOREA, 2.4%)
Daou Technologies specializes in systems integration, software development and
computer peripherals.
CHINA TELECOM (HONG KONG) LTD.
(HONG KONG, 2.3%)
China Telecom provides mobile telecommunications in a number of provinces in
China.
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* Portfolio is subject to change.
4
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VAN ECK ASIA DYNASTY FUND
PERFORMANCE COMPARISON
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These graphs compare a hypothetical $10,000 investment in the Van Eck Asia
Dynasty Fund (Classes A and B) made at inception with a similar investment in
the Morgan Stanley Capital International Far East Free ex-Japan Index.
VAN ECK ASIA DYNASTY FUND (CLASS A)
VS. MSCI Far East Free ex-Japan Index
[LINE CHART OMITTED]
[LINE CHART IS REPRESENTED BELOW IN ITS PRINTED FORM.]
Van Eck Asia MSCI Far East
Dynasty Fund-A Free ex-Japan
(with sales charge)(2) Index
------------------- -------------
Mar-22-93 9,421 $10,000
Jun-93 10,386 $11,226
Sep-93 11,454 $12,718
Dec-93 15,183 $18,596
Mar-94 12,391 $14,554
Jun-94 12,431 $15,183
Sep-94 13,712 $17,058
Dec-94 12,341 $15,344
Mar-95 11,670 $15,156
Jun-95 12,626 $16,588
Sep-95 12,555 $16,327
Dec-95 12,728 $16,701
Mar-96 13,580 $18,316
Jun-96 13,323 $18,269
Sep-96 13,149 $18,009
Dec-96 13,559 $18,561
Mar-97 13,015 $17,868
Jun-97 13,631 $18,785
Sep-97 11,896 $15,286
Dec-97 9,207 $10,337
Mar-98 9337 $11,355
Jun-98 7100 $ 7,671
Sep-98 6899 $ 6,985
Dec-98 9184 $ 9,839
Mar-99 9996 $10,400
Jun-99 15565 $14,347
Sep-99 13599 $12,900
Dec-99 20063 $15,950
Since
Average Annual Total Return 12/31/99 1 Year 5 Year Inception1
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VE Asia Dynasty Fund-A (w/o sales charge) 118.46% 10.21% 11.79%
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VE Asia Dynasty Fund-A (w/sales charge)(2) 105.80% 8.91% 10.82%
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MSCI Far East Free ex-Japan Index 62.11% 0.78% 7.16%
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VAN ECK ASIA DYNASTY FUND (CLASS A)
VS. MSCI Far East Free ex-Japan Index
[LINE CHART OMITTED]
[LINE CHART IS REPRESENTED BELOW IN ITS PRINTED FORM.]
Van Eck Asia MSCI Far East
Dynasty Fund-B Free ex-Japan
(with sales charge)(2) Index
------------------- -------------
Sep-1-93 10,000 10,000
Sep-93 10,221 10,386
Dec-93 13,522 15,186
Mar-94 11,012 11,886
Jun-94 11,039 12,399
Sep-94 12,165 13,930
Dec-94 10,933 12,531
Mar-95 10,318 12,377
Jun-95 11,150 13,546
Sep-95 11,059 13,333
Dec-95 11,222 13,639
Mar-96 11,959 14,957
Jun-96 11,723 14,920
Sep-96 11,568 14,707
Dec-96 11,905 15,158
Mar-97 11,386 14,592
Jun-97 11,914 15,341
Sep-97 10,385 12,483
Dec-97 7,991 8,442
Mar-98 8,096 9,273
Jun-98 6148 6,264
Sep-98 5959 5,704
Dec-98 7897 8,035
Mar-99 8588 8493
Jun-99 13332 11716
Sep-99 11625 10535
Dec-99 17113 13026
Since
Average Annual Total Return 12/31/99 1 Year 5 Year Inception1
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VE Asia Dynasty Fund-B (w/o sales charge) 116.71% 9.38% 8.86%
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VE Asia Dynasty Fund-B (w/sales charge)(3) 111.71% 9.10% 8.86%
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MSCI Far East Free ex-Japan Index 62.11% 0.78% 4.26%
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1 INCEPTION DATE FOR THE VAN ECK ASIA DYNASTY FUND WAS 3/22/93 (CLASS A) AND
9/1/93 (CLASS B). Index returns are calculated as of nearest month end.
2 The maximum sales charge is 5.75%.
3 Applicable contingent deferred sales charge taken into account (the maximum is
5.00%).
Returns for the Van Eck Asia Dynasty Fund (Classes A and B) reflect all
recurring expenses and include the reinvestment of all dividends and
distributions. Performance does not fully reflect the impact of the Fund's
expenses, as they have been fully or partially reimbursed by the Fund's Adviser
at certain times since the Fund's inception.
The Morgan Stanley Capital International Far East Free ex-Japan Index is an
unmanaged index and includes the reinvestment of all dividends, but does not
reflect the payment of transaction costs, advisory fees or expenses that are
associated with an investment in the Fund. The Index's performance is not
illustrative of the Fund's performance. Indices are not securities in which
investments can be made.
The MSCI Far East Free ex-Japan Index is a market capitalization-weighted index
that captures the largest 60% of the publicly traded securities in each industry
for approximately ten Asian markets (excluding Japan); the Index includes only
shares available for purchase by foreign (e.g., U.S.) investors.
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Performance data quoted
represents past performance; the investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
5
<PAGE>
VAN ECK GLOBAL HARD ASSETS FUND
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Dear Fellow Shareholder:
Hard assets provided good risk-adjusted returns, in general, in 1999. Both
commodities and related stocks performed well in the first half of the year,
while most stocks had a volatile second half despite the continuing climb of
many commodity prices. The Van Eck Global Hard Assets Fund had a total return of
16.64% for the twelve months ended December 31, 1999.
Two key factors drove hard asset performance in the first half of the year:
unexpectedly strong global economic growth and an increasingly favorable
supply/demand scenario for most hard asset sectors. A year ago, most analysts
were predicting slowing economic growth in the U.S., fair growth in Europe and
continued recession in Asia after a year of extreme market declines and economic
contractions in that region. Instead, the U.S. continued into its ninth year of
expansion, Europe's recovery and restructuring trend gained momentum and Asia
surprised the world with a spectacular recovery. Even Japan, which had been in a
multi-year battle with recession, showed strong signs of recovery. This
worldwide growth pushed commodity demand higher and hard asset-related equities
largely followed suit. However, for most of the second half of the year, despite
a continuation of these positive trends, tech-stock fever took hold and
investors ignored most other market sectors, including cyclical and value
stocks. Most of the gains from hard assets were realized in the first half of
the year. Although some declined a bit in the second half, a late fourth quarter
rebound helped and three of the five sectors provided good performance for the
year.
ENERGY prices rose sharply in 1999, trending upward throughout the year. Crude
oil traded at about $11 a barrel in February and ended the year at $25 a barrel,
primarily the result of an OPEC agreement (announced in March) to limit
supplies. Through the second quarter of the year, energy stocks also rose
sharply. However, for most of the second half of the year, while crude oil
prices held up, most energy stocks declined sharply as investors took profits,
possibly remembering previous crude oil price declines and OPEC "cheating."
Energy stock prices rebounded again late in the fourth quarter, ending the year
up 20% overall. These equities were the Fund's largest weighting in 1999. We
increased the position from about 22% of total Fund assets in January to
approximately 35% in the second quarter, in response to the OPEC agreement, and
maintained nearly a 40% position throughout the rest of the year. While
volatile, this proved beneficial. The Fund also benefited from small positions
in crude oil futures that we traded throughout the year.
THE PAPER AND FOREST PRODUCTS SECTOR turned in a strong gain of 35% in 1999.
Paper stocks were driven by both increased paper demand due to the pickup in
global economic growth and decreased supply as some companies shut down excess
capacity, a trend driven by mergers and acquisitions activity in this industry.
Lumber and building materials companies fared well in the early part of the year
as a result of the strong housing market in the U.S. Pulp prices, the key
commodity driver for most paper grades, moved up all year, but the stocks were
volatile, particularly during the second half. We began the year with under 10%
of total portfolio assets dedicated to this sector. We substantially increased
the weighting to approximately 25%, mostly in the third and fourth quarters, as
we became more convinced that the supply/demand scenario was improving and as
the industry appeared to be truly refocused on shareholder concerns. The Fund's
Canadian holdings in this sector (7.1% of Fund assets at year end) further
boosted performance due to the Canadian dollar's strength. While a larger
position in paper and forest products companies earlier in the year would have
augmented Fund performance, this sector's contribution was very positive.
INDUSTRIAL METALS STOCKS performed exceptionally well during the year, up 77%.
The sector was driven primarily by Aluminum Company of America (Alcoa), the
leading aluminum manufacturer, which announced it was buying Reynolds, the
third-largest aluminum company. Alcoa was the best performing stock in the Dow
Jones Industrial Average last year, gaining over 100%, while Reynolds was up
50%. We held Alcoa in the portfolio for much of the year, although we swapped
into Reynolds in the fourth quarter as a cheaper way to own Alcoa (Reynolds
accounted for 2.7% of assets at December 31). The industrial metals stocks held
up better than other hard assets equities during the periods of investor flight
out of cyclical stocks. Unfortunately, we underweighted the Fund's position in
industrial metals throughout 1999, averaging under 10% of assets, partly due to
the limited number and capitalization of industrial metals stocks available, and
also because metals prices were actually declining through midyear.
REAL ESTATE STOCKS endured a difficult 1999 despite the fact that the real
estate business has been extremely strong in North America. In the U.S., for
example, the real estate business experienced stable occupancies and solid rent
growth, leading to strong cash flow growth and growing dividends.
Underperformance was not based on underlying fundamentals--it was largely due to
the fact that investors continued to view real estate equities as
small-capitalization value stocks, a sector they ignored
6
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VAN ECK GLOBAL HARD ASSETS FUND
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in 1999 as they embraced growth and technology. The NAREIT Equity index declined
4.6% during the year. We began the year with an approximate 30% position in real
estate stocks, but reduced this allocation to approximately 17% by year end.
Seeing better immediate upside potential in paper stocks given market
conditions, we reallocated most of these assets there, a strategy that worked
quite well.
PRECIOUS METALS also had a difficult 1999, particularly gold, which ended the
year flat after some false starts. The most notable event in the gold market was
the European Central Bank (ECB)Washington Agreement at the end of the third
quarter in which the European countries agreed to limit gold sales and forward
gold sales into the market over the next five years. Since central bank sales
had been one of the primary depressants of the gold market in recent years, this
announcement was greeted with immediate price rises and general enthusiasm.
However, it later became apparent that many gold companies had hedged much of
their future gold production forward, expecting continued bullion price
weakness. This strategy not only severely reduced expected profit increases from
rising gold prices, but jeopardized the solvency of a few particularly
aggressive companies. By the end of the year, the metal had also retraced some
of its previous gains, ending the year flat, as did gold stocks. The Fund's
precious metals position, including stocks and bullion, ranged from 5%-20% of
total assets during the year, with the highest emphasis in January and again
during the latter half of the year after the ECBWashington Agreement. We ended
the year with an approximate 10% weighting.
THE OUTLOOK
The western world's continued strength and Asia's surprisingly strong recovery
continue to push global growth to unexpectedly high rates. In fact, there has
been a complete reversal of the economic outlook from one of recession and
deflation a year ago to one of strong growth and even hints of inflation today.
Therefore, as we enter the new millennium, we are optimistic about the prospects
for hard assets.
At this time, we particularly favor paper companies as demand increases, pulp
prices continue to rise around the world and the industry continues to
restructure. However, we are selective in our exposure since certain forest
products, such as lumber and other wood products, may be past their peak, while
others, such as newsprint, are early in their cycle. Energy stocks offer both a
strong commodity story and attractive valuations. Crude oil may not hold at $25
a barrel, but it appears that most energy stocks are discounting oil prices in
the teens, a level we do not expect to see again in the near future. We remain
selective in terms of the industrial metals sector, as some metals, such as
aluminum, have already experienced increases, while others, such as steel,
should continue to rebound. Despite strong real estate business fundamentals and
attractive valuations, investors continue to favor larger-capitalization growth
stocks, and are not willing to pay a premium for the stable income and defensive
characteristics that real estate securities offer. Therefore, we remain cautious
on this sector, but may increase the allocation if market sentiment turns.
Precious metals also offer selective opportunity. The only catalyst to gold
would probably be a meaningful weakening of the dollar and, at this time, we are
not particularly optimistic on either gold or gold equities. Still, certain
metals and related companies, such as platinum and palladium, which tend to have
a strong industrial demand base, look promising. We believe the Fund is well
positioned to take advantage of these near-term positive market conditions as we
enter 2000.
We would like to thank you for your participation in the Van Eck Global Hard
Assets Fund, and we look forward to helping you meet your investment needs in
the future.
[PHOTOGRAPH OMITTED] [PHOTOGRAPH OMITTED]
/s/ DEREK S. VAN ECK /s/ KEVIN L. REID
- -------------------- -----------------
DEREK S. VAN ECK KEVIN L. REID
CO-PORTFOLIO CO-PORTFOLIO
MANAGER MANAGER
January 25, 2000
7
<PAGE>
VAN ECK GLOBAL HARD ASSETS FUND
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- --------------------------------------------------------------------------------
PERFORMANCE RECORD AS OF 12/31/99
- --------------------------------------------------------------------------------
AVERAGE ANNUAL AFTER MAXIMUM BEFORE SALES
TOTAL RETURN SALES CHARGE* CHARGE
- --------------------------------------------------------------------------------
A shares--Life (since 11/2/94) 7.78% 9.03%
- --------------------------------------------------------------------------------
5 year 8.29% 9.57%
- --------------------------------------------------------------------------------
1 year 9.94% 16.64%
- --------------------------------------------------------------------------------
B shares--Life (since 4/24/96) 2.03% 2.76%
- --------------------------------------------------------------------------------
1 year 10.72% 15.72%
- --------------------------------------------------------------------------------
C shares--Life (since 11/2/94) 8.74% 8.74%
- --------------------------------------------------------------------------------
5 year 9.29% 9.29%
- --------------------------------------------------------------------------------
1 year 14.77% 15.77%
- --------------------------------------------------------------------------------
THE PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NOT INDICATIVE OF FUTURE
RESULTS. Investment return and principal value of an investment in the Fund will
vary so that shares, when redeemed, may be worth more or less than their
original cost.
The Adviser is currently waiving certain or all expenses on the Fund. Had the
Fund incurred all expenses, investment returns would have been reduced.
*A shares: maximum sales charge is 5.75%
B shares: maximum contingent deferred sales charge is 5.00%
C shares: 1.00% redemption charge, first year
SECTOR WEIGHTINGS+,++
AS OF DECEMBER 31, 1999
[PIE CHART OMITTED]
[PIE CHART REPRESENTED BELOW IN ITS PRINTED FORM.]
Energy ......................... 39.2%
Industrial Metals............... 10.1%
Precious Metals................. 9.9%
Forest Products and Paper....... 24.8%
Real Estate..................... 16.5%
GEOGRAPHICAL WEIGHTINGS+
AS OF DECEMBER 31, 1999
[PIE CHART OMITTED]
[PIE CHART REPRESENTED BELOW IN ITS PRINTED FORM.]
Australia....................... 5.9%
Canada.......................... 22.9%
Finland......................... 3.9%
United States................... 56.2%
Other........................... 6.9%
Russia.......................... 4.2%
+ Weightings take options positions into account (see "Schedule of Portfolio
Investments," p. 30).
++ Does not reflect a negative cash position of 0.5% (see "Other assets less
liabilities" in "Schedule of Portfolio Investments", p. 30).
8
<PAGE>
VAN ECK GLOBAL HARD ASSETS FUND
REPRESENTATIVE HOLDINGS AS OF DECEMBER 31, 1999*
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EXXON MOBIL CORPORATION
(U.S., 2.8%)
Exxon Mobil operates petroleum and petrochemicals businesses on a worldwide
basis. The company's operations include exploration and production of oil and
gas, electric power generation, and coal and minerals operations. Exxon Mobil
also manufactures and markets fuels, lubes and chemicals.
REYNOLDS METALS COMPANY
(U.S., 2.7%)
Reynolds produces a variety of aluminum, plastic and other products. The company
serves customers in the aluminum fabricating, commercial construction,
distribution, automotive, packaging and consumer markets.
INTERNATIONAL PAPER COMPANY
(U.S., 2.5%)
International Paper produces printing paper, pack-aging and forest products. The
company operates specialty businesses in global markets as well as a broadly
based distribution network. International Paper exports its products worldwide.
AK STEEL HOLDING CORPORATION
(U.S., 2.4%)
AK Steel Holding, through its wholly-owned subsidiary, AK Steel Corporation,
produces flat rolled carbon steel. The company produces coated, cold rolled and
hot rolled carbon steel for the automotive, appliance, construction and
manufacturing markets; it also cold rolls and aluminum coats stainless steel for
automotive industry customers.
ALBERTA ENERGY COMPANY, LTD.
(CANADA, 2.4%)
Alberta Energy is an oil and gas company. The com-pany explores and produces oil
and gas properties, as well as invests in pipelines, natural gas storage and gas
liquids processing.
UPM-KYMMENE OYJ
(Finland, 2.4%)
UPM-Kymmene is an international forest products company created from the merger
of Kymmene Corporation and Repola Ltd. The company manufactures pulp,
publication and fine papers for newspapers and magazines, plywood, timber,
packaging and other forest products. UPM-Kymmene operates worldwide.
TALISMAN ENERGY, INC.
(Canada, 2.4%)
Talisman Energy is an independent oil and gas producer. The company has
operations in Canada, Indonesia, Sudan and the North Sea. Talisman is also
conducting exploration in Algeria and Trinidad.
BOSTON PROPERTIES, INC.
(U.S., 2.2%)
Boston Properties develops, redevelops, acquires, manages, operates and leases
office, industrial and hotel properties. The company has a significant presence
in the Boston, Washington, D.C., San Francisco and midtown Manhattan real estate
markets.
COOPER CAMERON CORPORATION
(U.S., 2.2%)
Cooper Cameron manufactures oil and gas pressure control equipment, including
valves, wellheads, chokes, blowout preventers and assembled systems. The
company's equipment is used for oil and gas drilling, production and
transmission used in onshore, offshore and subsea applications. Cooper also
manufactures gas turbines, centrifugal gas and air compressors, and other
products.
ST. LAURENT PAPERBOARD, INC.
(CANADA, 1.9%)
St. Laurent Paperboard manufactures, supplies and converts paperboard products
worldwide. The company operates mills, converting plants and sales and
administrative offices in Canada and the United States.
- ---------------
* Portfolio is subject to change.
9
<PAGE>
VAN ECK GLOBAL HARD ASSETS FUND
PERFORMANCE COMPARISON
- --------------------------------------------------------------------------------
These graphs compare a hypothetical $10,000 investment in the Van Eck Global
Hard Assets Fund (Classes A, B and C) made at inception with a similar
investment in the Ibbotson Hard Assets Index.
VAN ECK GLOBAL HARD ASSETS FUND (CLASS A)
vs. Ibbotson Hard Assets Index
[LINE CHART OMITTED]
[LINE CHART REPRESENTED BELOW IN ITS PRINTED FORM.]
Van Eck Global
Hard Assets Fund-A Ibbotson Hard
(with sales charge)(2) Assets Index
------------------- -------------
Nov-2-94 9,426 10,000
Dec-94 9,322 9,720
Mar-95 9,838 9,880
Jun-95 10,313 10,120
Sep-95 10,670 10,446
Dec-95 11,195 10,689
Mar-96 12,537 11,457
Jun-96 13,459 11,288
Sep-96 14,135 11,315
Dec-96 16,301 11,994
Mar-97 16,323 11,730
Jun-97 17,680 12,106
Sep-97 21,064 12,805
Dec-97 18,631 10,759
Mar-98 18174 11,304
Jun-98 15794 10,373
Sep-98 12671 9,941
Dec-98 12623 9,553
Mar-99 12794 9729
Jun-99 14625 10963
Sep-99 14490 11696
Dec-99 14723 12074
- --------------------------------------------------------------------------------
Since
Average Annual Total Return 12/31/99 1 Year 5 Year Inception1
- --------------------------------------------------------------------------------
VE Global Hard Assets Fund-A (w/o sales charge) 16.64% 9.57% 9.03%
- --------------------------------------------------------------------------------
VE Global Hard Assets Fund-A (w/sales charge)(2) 9.94% 8.29% 7.78%
- --------------------------------------------------------------------------------
Ibbotson Hard Assets Index 26.39% 4.43% 3.72%
- --------------------------------------------------------------------------------
VAN ECK GLOBAL HARD ASSETS FUND (CLASS B)
vs. Ibbotson Hard Assets Index
[LINE CHART OMITTED]
[LINE CHART REPRESENTED BELOW IN ITS PRINTED FORM.]
Van Eck Global
Hard Assets Fund-B Ibbotson Hard
(with sales charge)(2) Assets Index
------------------- -------------
Apr-24-96 10,000 10,000
Jun-96 10,303 9,614
Sep-96 10,825 9,637
Dec-96 12,455 10,216
Mar-97 12,455 9,991
Jun-97 13,477 10,312
Sep-97 16,037 10,906
Dec-97 14,164 9,164
Mar-98 13,801 9,628
Jun-98 11976 8,835
Sep-98 9599 8,467
Dec-98 9553 8,137
Mar-99 9664 8287
Jun-99 11028 9337
Sep-99 10899 9962
Dec-99 10755 10284
- --------------------------------------------------------------------------------
Since
Average Annual Total Return 12/31/99 1 Year Inception1
- --------------------------------------------------------------------------------
VE Global Hard Assets Fund-B (w/o sales charge) 15.72% 2.76%
- --------------------------------------------------------------------------------
VE Global Hard Assets Fund-B (w/sales charge)(3) 10.72% 2.03%
- --------------------------------------------------------------------------------
Ibbotson Hard Assets Index 26.39% 0.77%
VAN ECK GLOBAL HARD ASSETS FUND (CLASS C)
vs. Ibbotson Hard Assets Index
[LINE CHART OMITTED]
[LINE CHART REPRESENTED BELOW IN ITS PRINTED FORM.]
Van Eck Global
Hard Assets Fund-C Ibbotson Hard
(with sales charge)(2) Assets Index
------------------- -------------
Nov-2-94 10,000 10,000
Dec-94 9,885 9,720
Mar-95 10,420 9,880
Jun-95 10,914 10,120
Sep-95 11,292 10,446
Dec-95 11,954 10,689
Mar-96 13,387 11,457
Jun-96 14,365 11,288
Sep-96 15,092 11,315
Dec-96 17,354 11,994
Mar-97 17,354 11,730
Jun-97 18,776 12,106
Sep-97 22,338 12,805
Dec-97 19,733 10,759
Mar-98 19228 11,304
Jun-98 16692 10,373
Sep-98 13376 9,941
Dec-98 13313 9,553
Mar-99 13467 9729
Jun-99 15361 10963
Sep-99 15195 11696
Dec-99 15412 12074
- --------------------------------------------------------------------------------
Since
Average Annual Total Return 12/31/99 1 Year 5 Year Inception1
- --------------------------------------------------------------------------------
VE Global Hard Assets Fund-C (w/o sales charge) 15.77% 9.29% 8.74%
- --------------------------------------------------------------------------------
VE Global Hard Assets Fund-C (w/sales charge)4 14.77% 9.29% 8.74%
- --------------------------------------------------------------------------------
Ibbotson Hard Assets Index 26.39% 4.43% 3.72%
- --------------------------------------------------------------------------------
1 INCEPTION DATE FOR THE VAN ECK GLOBAL HARD ASSETS FUND WAS 11/2/94 (CLASS A),
4/24/96 (CLASS B), AND 11/2/94 (CLASS C). Index returns are calculated as of
nearest month end.
2 The maximum sales charge is 5.75%.
3 Applicable contingent deferred sales charge taken into account (the maximum is
5.00%).
4 1.00% redemption charge taken into account on total return for one-year time
period.
Returns for the Van Eck Global Hard Assets Fund (Classes A, B and C) reflect all
recurring expenses and include the reinvestment of all dividends and
distributions. Performance does not fully reflect the impact of the Fund's
expenses, as they have been fully or partially reimbursed by the Fund's Adviser
at certain times since the Fund's inception.
The Ibbotson Hard Assets Index is an unmanaged index and includes the
reinvestment of all dividends, but does not reflect the payment of transaction
costs, advisory fees or expenses that are associated with an investment in the
Fund. The Index's performance is not illustrative of the Fund's performance.
Indices are not securities in which investments can be made.
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 Indices, 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 Indices.
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Performance data quoted
represents past performance; the investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
10
<PAGE>
VAN ECK GLOBAL LEADERS FUND
- --------------------------------------------------------------------------------
Dear Fellow Shareholder:
We are pleased to report that the Van Eck Global Leaders Fund had a total return
of 32.83% for the twelve months ended December 31, 1999, substantially
outperforming the Morgan Stanley Capital International (MSCI) World Index, which
gained 24.93% during the same period. Contributing to the Fund's strong
performance was our emphasis on technology stocks and increased weightings to
Japan and the emerging markets.
As you know, both the name and investment approach of your Fund were changed,
effective May 1, 1999, when the Fund's emphasis was shifted from a balanced
portfolio to an equity-oriented one. The Fund is now invested primarily in the
leading companies of growth industries around the world. This change proved very
beneficial to Fund performance in 1999 as world equities had an outstanding year
and world bonds lagged in general.
REVIEW
World equity markets performed exceptionally well in 1999 as most regions either
continued their economic expansions or entered a period of strong economic
recovery, accompanied by few signs of inflation. With economic growth in the
non-U.S. economies in the 2.5%-3% range and earnings growing at double-digit
rates, investors began to view the non-U.S. equity markets favorably for the
first time in several years. Nineteen ninety-nine was also notable as the year
of technology as the sector's stocks emerged as world market leaders.
The U.S. equity market gained 21.9%+ in 1999. This exceptional return masked
several disappointments in segments of the market. Technology was the clear
market leader with over 75% of the rise in the S&P 500 Index attributed to this
sector. Economic growth remained surprisingly strong in this, the ninth year of
economic expansion, and was accompanied by surprisingly low inflation. Continued
gains in productivity have allowed the U.S. to grow at a high rate with an
absence of inflationary pressures. However, given the narrowness of the rise in
the market (most gains have been attributable to a small number of stocks), and
the positive outlook for rising earnings expectations in the international
markets, we have been paring down the Fund's U.S. position. We began the year
with a 53% equity weighting to the U.S. market and ended the year with an
approximate 40% exposure, while maintaining about 30%-35% of total portfolio
assets in U.S. technology and telecommunications stocks.
Continental European markets (up 17.4% in U.S. dollar terms) greeted 1999 with
strong optimism about economic recovery and the outlook for the new currency,
the euro. This optimism was not shared by the rest of the world, with the
recovery slow and the euro continuing to reach new lows during the year. In the
second half of the year, signs of economic recovery emerged and, in particular,
demand for technology-related shares accelerated. European households own fewer
PCs than U.S. households and corporate investment in technology has also lagged
behind. Growth in this area is expected to accelerate as the business cycle
improves, individual income generation accelerates and an increased emphasis on
productivity pervades European corporations. Also positive was increased merger
and acquisition activity in 1999, largely a consequence of a more competitive
environment with the advent of the euro. This is expected to continue into 2000,
along with corporate restructuring, as corporations focus on improving returns
in a more competitive global environment. This trend, coupled with improving
economic and earnings expectations, should support higher equity prices through
the first half of the year. We maintained a consistent weighting of about 20% in
Continental Europe throughout 1999, with an emphasis on technology and consumer
stocks.
Japan surprised much of the world by turning in gains of 61.5% in 1999, making
it one of the best performing equity markets in the world. The market was led
primarily by technology and export shares. The economic recovery in Japan has
largely been fed by additional economic stimulus by the Japanese government,
funded by the issuance of government bonds. This recovery, which has been
coupled with the beginnings of deregulation, corporate restructuring, and the
sales of "cross shareholdings" (i.e., one company's ownership of another
company's equity, the sale of which frees up capital), pushed stock prices
higher. We substantially increased the Fund's Japanese position during the year
to 21% of assets as the recovery there began to solidify, a position that has
benefited Fund performance. Our emphasis on technology stocks further boosted
performance, a trend we expect to continue given the anticipated spending in
technology investment in this country. Currently, PC diffusion in Japan is half
that of the U.S., with Internet usage two years behind. NTT Mobile
Communications Network (NTT DoCoMo), one of the Fund's major holdings (3.1% of
Fund assets at year end), is a prime example of how quickly Japanese technology
companies could again become world leaders. "I-mode," an NTT DoCoMo service,
allows users to send e-mail and access the Internet through mobile telephony.
Recent positive economic and corporate trends should support double-digit
earnings growth this year and Japanese equities should benefit. The Japanese
economy will receive a 14 trillion yen stimulus package in 2000, providing a
real spending equivalent of approximately 1% of GDP, giving
11
<PAGE>
VAN ECK GLOBAL LEADERS FUND
- --------------------------------------------------------------------------------
support to the recovery until it becomes self-sustaining. The only risk to this
outlook would be a further rise in the Japanese yen leading to an interruption
in the economic recovery.
The emerging markets of Latin America and Asia exhibited surprisingly strong
economic recoveries. Latin America began the year with the devaluation of the
Brazilian real. While tight fiscal policies were expected to lead to sluggish
economic growth, the region benefited from the continued strength of its largest
trading partner, the U.S., and a sudden rise in commodity prices. Mexico and
Brazil recorded gains of 80.2% and 73.0%, respectively, in 1999, contributing to
the favorable performance of the Fund. Asian economic growth was powered by a
strong resurgence in demand for electronics, which was partially fueled by
Japan's recovery. Economic growth in 1999 reached 6% in this region and is
expected to remain strong in 2000, reaching approximately 5.5%. We continued to
increase the portfolio's weighting to the emerging markets throughout the year
to about 7% of total assets by year end.
THE OUTLOOK
As we move into the new millennium, we anticipate another favorable year for
equities. Worldwide economic growth is expected to reach 4%. Productivity is
improving worldwide as corporations increasingly focus on information technology
as a way to enhance corporate profitability. Equities are expected to remain the
favored asset class, given the strong earnings outlook and the increasing equity
culture that is developing worldwide.
We anticipate that many of the leaders of the past year will lead the market in
2000, namely technology and telecommunications, given a correction in valuations
which we expect sometime in the first half. Japan could again be one of the best
performing markets, benefiting from its powerful earnings recovery. Japan and
the emerging markets will continue to be overweight positions in the Fund, as
earnings growth rates in these regions remain the strongest. Additionally, Japan
and Asia should continue to benefit from fund flows as investors re-enter these
equity markets. The secular (long-term) changes seen earlier in the U.S. and the
UK continue to evolve around the world. Changing demographics, the increased use
of technology, and industry consolidation and restructuring will be driving
forces for financial assets worldwide as we move through the new year.
We would like to thank you for your participation in the Van Eck Global Leaders
Fund, and we look forward to helping you meet your investment needs in the
future.
[PHOTO OMITTED] [PHOTO OMITTED] [PHOTO OMITTED]
/s/ ANNE M. TATLOCK /s/ SHEILA H. COCO /s/ E. ALEXANDRA VON STACKELBERG
- ------------------- -------------------- --------------------------------
ANNE M. TATLOCK SHEILA H. COCO E. ALEXANDRA VON STACKELBERG
GLOBAL STRATEGIST CO-PORTFOLIO MANAGER CO-PORTFOLIO MANAGER
January 20, 2000
- ---------------------
+All market returns are Morgan Stanley Capital International (MSCI)Indices (with
net dividends reinvested) in U.S. dollar terms.
12
<PAGE>
Van Eck Global Leaders Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PERFORMANCE RECORD AS OF 12/31/99
- --------------------------------------------------------------------------------
AVERAGE ANNUAL AFTER MAXIMUM BEFORE SALES
TOTAL RETURN SALES CHARGE* CHARGE
- --------------------------------------------------------------------------------
A shares--Life (since 12/20/93) 13.60% 14.71%
- --------------------------------------------------------------------------------
5 year 17.56% 18.95%
- --------------------------------------------------------------------------------
1 year 25.17% 32.83%
- --------------------------------------------------------------------------------
B shares--Life (since 12/20/93) 14.01% 14.01%
- --------------------------------------------------------------------------------
5 year 18.10% 18.30%
- --------------------------------------------------------------------------------
1 year 27.27% 32.27%
- --------------------------------------------------------------------------------
THE PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NOT INDICATIVE OF FUTURE
RESULTS. Investment return and principal value of an investment in the Fund will
vary so that shares, when redeemed, may be worth more or less than their
original cost.
The Adviser is currently waiving certain or all expenses on the Fund. Had the
Fund incurred all expenses, investment returns would have been reduced.
* A shares: maximum sales charge is 5.75%
B shares: maximum contingent deferred sales charge is 5.00%
GEOGRAPHICAL WEIGHTINGS
AS OF DECEMBER 31, 1999
[PIE CHART OMITTED]
[PIE CHART REPRESENTED BELOW IN ITS PRINTED FORM.]
United Kingdom................ 7.1%
Cash Equivalents.............. 2.4%
Netherlands................... 3.8%
Germany....................... 2.0%
Finland....................... 2.6%
Other......................... 13.1%
Italy......................... 3.1%
France........................ 4.9%
United States................. 40.0%
Japan......................... 21.0%
13
<PAGE>
VAN ECK GLOBAL LEADERS FUND
REPRESENTATIVE HOLDINGS AS OF DECEMBER 31, 1999*
- --------------------------------------------------------------------------------
CISCO SYSTEMS, INC.
(U.S., 3.3%)
Cisco Systems is recognized globally as the leading supplier of products that
help to build the Internet and corporate intranets. Cisco sells its products in
over 110 countries, with a significant proportion of its sales to Internet
business customers. Selling to the "dot-com" companies of the world, Cisco
represents a low risk way to invest in the Internet's continued growth.
NTT MOBILE COMMUNICATIONS NETWORK, INC.
(NTT DOCOMO)
(JAPAN, 3.1%)
NTT DoCoMo is the world's largest single-market provider of cellular services,
with a customer base of more than 20 million subscribers. Despite Japan's
economic problems, subscriber growth continues to be strong and pricing is
relatively stable. Earnings growth is expected to average greater than 10% over
the next five years.
NOKIA OYJ
(FINLAND, 2.6%)
Nokia is a global leader in the manufacturing and development of wireless
telecommunications equipment. The main driver of Nokia's growth is the explosion
in use of wireless technology as wireless data transmission emerges. Wireless
growth should lead to increased demand for both Nokia's cellular phones and
cellular infrastructure equipment. Nokia should continue to grow more rapidly
than the overall wireless market, given its product-offering strength.
EMC CORP.
(U.S., 1.9%)
EMC designs intelligent enterprise storage and retrieval systems for the
Internet--information access and storage solutions for applications such as
online reservation systems, transaction processing, customer billing, Year 2000
compliance, the Internet, corporate intranets, disaster recovery, data mining
and data warehousing. EMC has a $60 billion market capitalization and is
directly positioned to benefit from Internet growth.
COMPASS GROUP PLC
(UK, 1.5%)
Compass Group is one of the leading international contract caterers, with
operations in the UK, U.S., Continental Europe and Scandinavia. Secular growth
for the industry is very strong as entities continue to outsource in-house
dining services. Compass has made several well-timed acquisitions in the major
markets outside of the UK, and is solidly positioned to deliver strong future
earnings growth.
DEVELOPMENT BANK OF SINGAPORE, LTD. (DBS)
(SINGAPORE, 1.3%)
DBS is the largest of the big four Singapore banks and controls over one-half of
the ATM network in Singapore. DBS has used the strength of Singapore's banking
system to build a strong regional franchise, building exposure in Thailand, Hong
Kong and the Philippines. Under the leadership of its CEO, John Olds (ex-J.P.
Morgan), DBS is carefully integrating its acquisitions and concentrating on
improving its return-on-equity. DBS is likely to become the region's second most
powerful bank behind HSBC.
TYCO INTERNATIONAL LTD.
(U.S., 1.2%)
Tyco is a diversified manufacturing and service company operating in four
segments: Disposable and Specialty Products; Fire and Security Services; Flow
Control Products; and Electrical and Electronic Components. Tyco offers superior
earnings growth potential in each of these segments, both domestically and
internationally, as management has proven its ability to successfully integrate
its numerous acquisitions as well as leverage its existing base.
TAKEDA CHEMICAL INDUSTRIES
(Japan, 1.1%)
Takeda is the largest pharmaceutical company in Japan and the 14th largest in
the world, with a well-diversified line of drugs in the areas of ulcer,
hypertension and diabetes treatments. It stands to benefit from demographic
trends in Japan, a restructuring of costs, investments in promising new drug
areas, and overseas expansion.
- ---------------
* Portfolio is subject to change.
14
<PAGE>
VAN ECK GLOBAL LEADERS FUND
PERFORMANCE COMPARISON
- --------------------------------------------------------------------------------
These graphs compare a hypothetical $10,000 investment in the Van Eck Global
Leaders Fund (Classes A and B) made at inception with a similar investment in
the Morgan Stanley Capital International World Stock Index.
VAN ECK GLOBAL LEADERS FUND (CLASS A)
vs. MSCI World Stock Index
[LINE CHART OMITTED]
[LINE CHART REPRESENTED BELOW IN ITS PRINTED FORM.]
Van Eck Global
Global Leaders Fund-A MSCI World
(with sales charge)(2) Stock Index
--------------------- -------------
Dec-20-93 9,426 $10,000
Mar-94 9,110 $10,061
Jun-94 9,080 $10,363
Sep-94 9,357 $10,585
Dec-94 9,059 $10,508
Mar-95 9,368 $10,999
Jun-95 9,938 $11,468
Sep-95 10,248 $12,109
Dec-95 10,444 $12,685
Mar-96 10626 $13,201
Jun-96 10890 $13,583
Sep-96 11103 $13,764
Dec-96 11727 $14,395
Mar-97 11,716 $14,436
Jun-97 13,142 $16,609
Sep-97 13630 $17,084
Dec-97 13,459 $16,664
Mar-98 14,990 $19,050
Jun-98 15484 $19,437
Sep-98 14468 $17,107
Dec-98 16239 $20,719
Mar-99 16419 $21,459
Jun-99 16691 $22,483
Sep-99 16903 $22,149
Dec-99 21570 $25,886
- --------------------------------------------------------------------------------
Since
Average Annual Total Return 12/31/99 1 Year 5 Year Inception1
- --------------------------------------------------------------------------------
VE Global Leaders Fund-A (w/o sales charge) 32.83% 18.95% 14.71%
- --------------------------------------------------------------------------------
VE Global Leaders Fund-A (w/sales charge)(2) 25.17% 17.56% 13.60%
- --------------------------------------------------------------------------------
MSCI World Stock Index 24.93% 19.76% 17.18%
- --------------------------------------------------------------------------------
VAN ECK GLOBAL LEADERS FUND (CLASS B)
vs. MSCI World Stock Index
[LINE CHART OMITTED]
[LINE CHART REPRESENTED BELOW IN ITS PRINTED FORM.]
Van Eck Global
Global Leaders Fund-B MSCI World
(with sales charge)(2) Stock Index
--------------------- -------------
Dec-20-93 10,000 $10,000
Mar-94 9,654 $10,061
Jun-94 9,591 $10,363
Sep-94 9,864 $10,585
Dec-94 9,516 $10,508
Mar-95 9,833 $10,999
Jun-95 10,424 $11,468
Sep-95 10,741 $12,109
Dec-95 10,899 $12,685
Mar-96 10,069 $13,201
Jun-96 11,323 $13,583
Sep-96 11,524 $13,764
Dec-96 12,152 $14,395
Mar-97 12,128 $14,436
Jun-97 13,590 $16,609
Sep-97 14,074 $17,084
Dec-97 13,885 $16,664
Mar-98 15,447 $19,050
Jun-98 15932 $19,437
Sep-98 14879 $17,107
Dec-98 16571 $20,719
Mar-99 16843 $21,459
Jun-99 17109 $22,483
Sep-99 17297 $22,149
Dec-99 22051 $25,886
- --------------------------------------------------------------------------------
Since
Average Annual Total Return 12/31/99 1 Year 5 Year Inception1
- --------------------------------------------------------------------------------
VE Global Leaders Fund-B (w/o sales charge) 32.27% 18.30% 14.01%
- --------------------------------------------------------------------------------
VE Global Leaders Fund-B (w/sales charge)(3) 27.27% 18.10% 14.01%
- --------------------------------------------------------------------------------
MSCI World Stock Index 24.93% 19.76% 17.18%
- --------------------------------------------------------------------------------
1 INCEPTION DATE FOR THE VAN ECK GLOBAL LEADERS FUND WAS 12/20/93 (CLASSES A AND
B). Index returns are calculated as of nearest month end.
2 The maximum sales charge is 5.75%.
3 Applicable contingent deferred sales charge taken into account (the maximum is
5.00%).
Returns for the Van Eck Global Leaders Fund (Classes A and B) reflect all
recurring expenses and include the reinvestment of all dividends and
distributions. Performance does not fully reflect the impact of the Fund's
expenses, as they have been fully or partially reimbursed by the Fund's Adviser
at certain times since the Fund's inception.
The Morgan Stanley Capital International World Stock Index is an unmanaged index
and includes the reinvestment of all dividends, but does not reflect the payment
of transaction costs, advisory fees or expenses that are associated with an
investment in the Fund. The Index's performance is not illustrative of the
Fund's performance. Indices are not securities in which investments can be made.
The MSCI World Stock Index is a market capitalization-weighted benchmark that
tracks the performance of approximately 25 world stock markets. The Index is
based on the reinvestment of dividends less any withholding taxes on foreigners
who do not benefit from a double taxation treaty ("net dividends"). The Index
aims for 60% of the total market capitalization for each market that is
represented in the Index. The companies included in the Index replicate the
industry composition of each global market. The chosen list of stocks 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.
We will no longer compare the Fund to a global balanced index since the Fund is
no longer considered a balanced fund. Effective May 1, 1999, the Van Eck Global
Balanced Fund changed its name to the Van Eck Global Leaders Fund and changed
its objective from a global balanced fund to a global equity fund. A $10,000
investment in the global balanced index (a composite index made up of 60% MSCI
World Stock Index and 40% Salomon Smith Barney World Government Bond Index,
rebalanced monthly) on 12/31/98 would have grown to $11,259 by 12/31/99, versus
the same investment in the Fund, which would have grown to $12,517 by year end
for Class A shares and $13,227 for Class B shares (after sales charges).
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Performance data quoted
represents past performance; the investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
15
<PAGE>
VAN ECK GOLD/RESOURCES FUND
- --------------------------------------------------------------------------------
Dear Fellow Shareholder:
The world's monetary authorities stepped up the rate of credit expansion in
general in 1999. The Federal Reserve System increased the adjusted monetary base
by some 17%. Consumers, businesses and stock market investors (especially high
tech) responded favorably. Fixed income investors were disappointed.
Two big announcements surprised the gold-mining industry last year. In early
May, the British Treasury unexpectedly announced its decision to sell 415 tonnes
of its gold reserves over "the medium term," thereby cutting the gold portion of
its official reserves from about 16.7% to approximately 7%. In spite of
favorable statements from pro-gold central banks, including the Federal Reserve,
several bullion banks quickly followed the British announcement with a vast
producer-hedging program that was supported by increased central bank gold
loans. It was reported that producer hedging added 350 tonnes or more to the
third quarter supply. This addition to the average global mine output of
approximately 645 tonnes per quarter was undoubtedly responsible for the
twenty-year low price of $254 an ounce last summer.
The second announcement, possibly the most important event in the gold market in
the last 25 years, was the European Central Bank (ECB) Washington Agreement at
the end of September. Fifteen European central banks agreed to limit sales of
gold from official reserves to a maximum of 2,000 tonnes over the next five
years. They also pledged not to increase their gold lending arrangements and
derivative operations above current levels for the next five years. They stated
that "gold will remain an important element of global monetary reserves." The
other major holders of gold in the world--the United States, the International
Monetary Fund, the Bank of Japan and the Bank for International
Settlements--have all associated themselves with the Agreement. This Agreement
represents an unprecedented level of coordination among governments about their
gold reserves and reaffirms their unwaivering commitment to gold as the bedrock
of their reserves. It will reduce dramatically the scope for rumor and
speculation that has been such a damaging feature of the gold market in recent
years and will finally put to rest the fear that central banks have abandoned
gold as a reserve asset.
The Agreement had an immediate bullish effect on the market, and the price
quickly climbed some $80 an ounce. However, several of the mines, which had been
overly mesmerized by the fear of lower prices and had put on excessive short
hedging positions, faced immediate large unrealized losses. This threat affected
the industry and clouded gold mine share prices while an orderly solution to
this problem was being worked out.
The price of gold closed the year at $288.50 an ounce, almost exactly where it
began. Your Fund's net asset value reached $3.37 a share just before the British
announcement and $3.63 a share after the ECB Washington Agreement, but it closed
the year at $2.73 a share, with a total return of -10.20% for 1999.
GOLD-MINING SHARES
The tumultuous combination of bullion's decline to twenty-year lows in August
and the dramatic rally following the ECB Washington Agreement in September
created a difficult environment for producers. The industry panicked as gold
declined toward $250, a level at which many companies cannot cover their
non-cash costs. To establish a price floor and insure survival, many producers
hedged large quantities of gold, which brought an additional 445 tonnes into the
market, according to Gold Fields Mineral Services. Several companies entered
into speculative hedge contracts that were subject to margin calls and contained
derivatives that required the companies to deliver more gold than they could
produce at higher prices. When gold suddenly rallied to unexpected heights in
September, these companies experienced liquidity crises that placed them on the
verge of bankruptcy, even though they remained operationally sound. Investors
feared that other hedged companies would face similar liquidity problems. While
these fears proved to be unfounded, the share prices of other producers suffered
nonetheless. The Canadians were hit especially hard, with Barrick (3.6% of Fund
assets at year end) and Placer Dome (7.4% of assets) posting negative returns in
1999, despite the fact that both companies are financially and operationally two
of the strongest gold producers in the world. These companies are now working to
regain investor confidence by providing fuller disclosure about their hedging
strategies. We also have indications that a number of companies will curtail or
reduce their levels of hedging in the future, thereby removing a significant
source of supply from the market. The beneficiaries of all of this have been
Newmont, Gold Fields Limited and Harmony (9.9%, 3.3% and 3.7% of assets,
respectively). These companies have gained favor among investors due to a
combination of unhedged production, sound management, and a high level of
operational leverage to the gold price.
Events in 1999 have shaped a positive outlook for other top holdings in the
Fund. We were disappointed with
16
<PAGE>
VAN ECK GOLD/RESOURCES FUND
- --------------------------------------------------------------------------------
the share performance of Homestake (8.4% of assets), which we believe was due to
the disposal of a large block of shares from a Malaysian shareholder. With this
"overhang" now gone, we look for the market to reward the company's low cost
structure and unhedged leverage to gold. In Australia, Newcrest (6.4% of assets)
is running the largest "SAG" mill in the world at the Cadia Hill mine. The
company is now ready to apply this new technology to other low-grade/high
tonnage operations in Australia. Canadian producer Meridian Gold (8.8% of
assets) is set to commission its Chilean El Penon mine, which will nearly double
the company's existing production.
Gold-mining companies continued to hold the line on costs during 1999 by mining
above-average grades, curtailing high cost production, and gaining operational
efficiencies. We estimate that global cash costs will average approximately $200
per ounce in 1999, down from $206 in 1998 and $250 in 1997. Due to low gold
prices, exploration spending has been cut to a bare minimum. Without many
development projects in the pipeline, the majors have had to rely on mergers and
acquisitions for global growth. During 1999, Barrick moved into Tanzania with
the acquisition of Sutton, Placer Dome entered into a joint venture with Western
Areas of South Africa+, Anglogold (6.1% of assets) bought Acacia of Australia,
and Homestake acquired Argentina Gold. The Fund benefited from these corporate
activities in 1999, as one of our top holdings was Acacia (6.2% of assets at the
time we sold this position), up 14.3% for the year. Investments in Argentina
Gold and Sutton also paid off, realizing 32.9% and 75.2%, respectively (0.9% and
2.9% of assets at date of sale). The majors also looked to expand on their home
turf, as Placer Dome finalized the Getchell purchase in Nevada, Normandy
acquired fellow Australian Great Central, and Gold Fields Limited merged with
Driefontein in South Africa.++ Once mines from this latest round of acquisitions
are developed and as higher grades are mined out from existing operations, we
estimate that newly mined gold production will begin to decline, possibly as
soon as the first quarter of 2001.
Apartheid-era restrictions had banned the Gold/Resources Fund from investing in
South Africa. In February, the Funds' shareholders voted to allow trading in
South African shares beginning May 1, 1999. Since then, we have accumulated a
South African position that amounted to 14.0% of the Fund at year end. Nearly
half of this is the result of the Anglogold acquisition of Acacia, which was
accepted in December. South Africa was the best performing region in 1999.
Restructuring within the South African gold industry is nearly complete and
these companies are enjoying a re-rating of their share prices as investors look
for better operational performance and expansion outside of Africa.
THE OUTLOOK
THE SHORT-HEDGED GOLD POSITION
A basic imbalance in the gold market, in our opinion, is the estimated 5,000 to
6,000 tonnes of gold leased by certain central banks to big bullion banks on a
relatively short-term basis at low rates. The bullion banks borrowed the gold
over recent years and sold it on the market, putting constant pressure on the
gold price. They either invested the proceeds at LIBOR-related rates and bought
gold forward from mines that were afraid of lower prices and wished to lock in
future longer-term higher contango prices or they loaned the proceeds to
speculative hedge funds. Some central banks thus provided huge amounts of
heavily subsidized credit for financial speculation against gold, an important
asset on all central bank balance sheets! The mines benefited from the higher
contango prices as long as the price of gold was in a stable or declining trend.
However, when the trend turns upward, this benefit disappears.
Following the ECB Washington Agreement on gold and the resulting price spike,
the mines changed direction and began restructuring and buying back hedged
production. In our judgment, producers will continue this policy and more and
more choose to deliver against existing hedges and refrain from replacing these
positions. This could be a bullish factor in the gold market over the coming
years. No one knows when the major gold price trend will turn upward, but when
it does, the first phase might carry the price to its historic real purchasing
power parity with the consumer price index. The record shows that gold has
maintained its value in terms of real purchasing power in the very long run in
the major countries of the world. Despite price fluctuations, gold has
consistently reverted to its historic real purchasing power parity with other
commodities. Using the average purchasing power parity with the basket of goods
represented by the CPI since 1913, the price of gold would have to be
approximately $342 an ounce today. Taking the last twenty-five year average
purchasing power parity with the CPI would give an implied gold price of almost
$530 an ounce. Under these circumstances, the bullion banks may have difficulty
eventually returning the estimated 5,000 to 6,000 tonnes of leased gold to the
central banks.
17
<PAGE>
VAN ECK GOLD/RESOURCES FUND
- --------------------------------------------------------------------------------
INVESTMENT POLICY
The outlook for the gold price in 2000 (and beyond) will, in our judgment,
largely depend on the growth in the investment demand for gold.
Gold today is a default- and currency-risk-free monetary cash asset. Gold's
demand for portfolio diversification rests upon investor confidence in monetary
and credit stability and investor expectations of returns on equity, property
and other assets. History shows that investment demand rises when inflationary
expectations accelerate and also when investment conditions lead to the
expectation of negative returns on stocks (bear market), a credit contraction,
or negative real short-term interest rates.
The Federal Reserve Board has maintained a fluctuating but overall stimulative
monetary policy for years. Credit expansion has consistently exceeded real
growth. Consequently, total U.S. debt as a ratio to GDP has climbed from
approximately 1.5 in 1980 to about 2.7 currently. The annual growth rate of
private debt has recently been averaging approximately 10%, compared to the
almost 6% annual growth of GDP (in current dollars). Household debt has climbed
from 59% of GDP ten years ago to 70% currently. This growth has been supported
by the increase in equity and property wealth, but this is vulnerable.
[FIGURES BELOW REPRESENTS CHART IN ITS PRINTED FORM]
Non-Federal Debt as a % of GDP
Dec-68 1.11
Mar-69 1.11
Jun-69 1.12
Sep-69 1.13
Dec-69 1.15
Mar-70 1.16
Jun-70 1.17
Sep-70 1.17
Dec-70 1.19
Mar-71 1.16
Jun-71 1.17
Sep-71 1.18
Dec-71 1.19
Mar-72 1.18
Jun-72 1.18
Sep-72 1.19
Dec-72 1.19
Mar-73 1.19
Jun-73 1.21
Sep-73 1.23
Dec-73 1.23
Mar-74 1.25
Jun-74 1.26
Sep-74 1.28
Dec-74 1.28
Mar-75 1.28
Jun-75 1.26
Sep-75 1.23
Dec-75 1.22
Mar-76 1.20
Jun-76 1.21
Sep-76 1.21
Dec-76 1.21
Mar-77 1.21
Jun-77 1.21
Sep-77 1.21
Dec-77 1.23
Mar-78 1.25
Jun-78 1.23
Sep-78 1.24
Dec-78 1.25
Mar-79 1.26
Jun-79 1.28
Sep-79 1.29
Dec-79 1.30
Mar-80 1.31
Jun-80 1.33
Sep-80 1.33
Dec-80 1.31
Mar-81 1.28
Jun-81 1.31
Sep-81 1.31
Dec-81 1.33
Mar-82 1.36
Jun-82 1.37
Sep-82 1.38
Dec-82 1.39
Mar-83 1.39
Jun-83 1.38
Sep-83 1.38
Dec-83 1.39
Mar-84 1.38
Jun-84 1.40
Sep-84 1.43
Dec-84 1.46
Mar-85 1.49
Jun-85 1.51
Sep-85 1.54
Dec-85 1.59
Mar-86 1.60
Jun-86 1.65
Sep-86 1.68
Dec-86 1.72
Mar-87 1.75
Jun-87 1.77
Sep-87 1.78
Dec-87 1.78
Mar-88 1.80
Jun-88 1.81
Sep-88 1.81
Dec-88 1.82
Mar-89 1.83
Jun-89 1.84
Sep-89 1.84
Dec-89 1.86
Mar-90 1.86
Jun-90 1.85
Sep-90 1.87
Dec-90 1.90
Mar-91 1.89
Jun-91 1.89
Sep-91 1.88
Dec-91 1.89
Mar-92 1.87
Jun-92 1.86
Sep-92 1.86
Dec-92 1.85
Mar-93 1.85
Jun-93 1.85
Sep-93 1.86
Dec-93 1.86
Mar-94 1.87
Jun-94 1.86
Sep-94 1.87
Dec-94 1.88
Mar-95 1.89
Jun-95 1.92
Sep-95 1.93
Dec-95 1.94
Mar-96 1.95
Jun-96 1.96
Sep-96 1.98
Dec-96 1.99
Mar-97 1.98
Jun-97 2.00
Sep-97 2.01
Dec-97 2.05
Mar-98 2.08
Jun-98 2.12
Sep-98 2.16
Dec-98 2.19
Mar-99 2.23
Jun-99 2.27
Signs are appearing that the U.S. economy is facing a possible cyclical and
speculative credit "bubble" as well as a stock market "bubble." Not only has the
volume increase of domestic financial debt of 20% in 1998 and the same rate in
the first half of 1999 been excessive, but also the quality of this debt is
deteriorating. Quality bond spreads on medium-grade corporates, ten-year swaps
and emerging market issues have widened over the past year. Moody's Investors
Service reported last fall that the level of defaults on bonds globally surged
to its highest level since 1991. The ratio of defaults as a proportion of all
bonds has been climbing steadily since early 1997 to 5.78%. Bank credit is
becoming suspect. The FDIC said recently that bank failures in 1999 were
expected to create the biggest losses to the bank-deposit insurance fund since
the banking crisis in the early 1990s. Regulators have urged the banks to remain
vigilant in their lending standards. The Chairman of the Federal Reserve, Alan
Greenspan, recently stated that the huge banks being formed by consolidations
created the potential "for unusually large systemic risks in the national and
international economy." He warned that lenders could be "underestimating the
credit risk of individual loans, based on the market value of assets." He also
suggested that investors should take "rare panic periods" into account in their
portfolio diversification. He stated, "At a minimum, risk managers need to set
aside somewhat higher contingency resources--reserves or capital--to cover the
losses that will inevitably emerge from time to time when investors suffer a
loss of confidence (bursting of the bubble). These reserves will appear almost
all the time to be a sub-optimal use of capital. So do fire insurance premiums."
Global investors who are concerned about dollar risk may turn to gold as a
monetary cash asset that is an alternative to Treasury bills. The future dollar
quotations continue to sell at discounts from current quotes compared to yen,
Deutsche marks, Sterling, and French and Swiss francs. The U.S. current account
deficit is forecast to rise from 3.7% of GDP in 1999 to almost 4% in 2000 and
2001, well above the 1980s' peak of 3.4%. The continuous growth in foreign
holdings of total privately held U.S. public debt makes the dollar more and more
vulnerable. Monetary policy has been more stimulative in the U.S. than in Europe
or Japan. Monetary policy in the U.S. is based on targeting low CPI, not asset
inflation rates, while in Europe it is based on targeting M3 money supply
growth.
We believe in the school of economics which states that every credit expansion
must unavoidably lead to a process of readjustment (recession). Although the
exact timing is impossible to determine, risk-averse and forward-looking
investors may well, under present circumstances, consider gold portfolio
diversification. This could add up to a significant growth of total investment
demand for gold.
18
<PAGE>
VAN ECK GOLD/RESOURCES FUND
- --------------------------------------------------------------------------------
We appreciate your participation in the Van Eck Gold/Resources Fund and look
forward to helping you meet your investment needs in the future.
[PHOTO OMITTED] [PHOTO OMITTED] [PHOTO OMITTED]
/s/ JOHN C. VAN ECK /s/ JOSEPH M. FOSTER /s/ SAMUEL S. HEWITT
- ------------------- ----------------------- ----------------------
JOHN C. VAN ECK JOSEPH M. FOSTER SAMUEL S. HEWITT
CHAIRMAN MANAGEMENT TEAM MEMBER MANAGEMENT TEAM MEMBER
January 27, 2000
- ---------------
+ Western Areas of South Africa was not a Fund holding in 1999.
++ Getchell accounted for 7.9% of assets at date of sale; Normandy accounted for
3.6% of assets before we began selling the position, ending the year with 0%;
Great Central and Driefontein were not Fund holdings in 1999.
- --------------------------------------------------------------------------------
PERFORMANCE RECORD AS OF 12/31/99
- --------------------------------------------------------------------------------
AFTER MAXIMUM
AVERAGE ANNUAL SALES CHARGE BEFORE SALES
TOTAL RETURN OF 5.75% CHARGE
- --------------------------------------------------------------------------------
Life (since 2/15/86) (1.17)% (0.75)%
- --------------------------------------------------------------------------------
10 year (6.94)% (6.38)%
- --------------------------------------------------------------------------------
5 year (13.63)% (12.59)%
- --------------------------------------------------------------------------------
1 year (15.48)% (10.20)%
- --------------------------------------------------------------------------------
THE PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NOT INDICATIVE OF FUTURE
RESULTS. Investment return and principal value of an investment in the Fund will
vary so that shares, when redeemed, may be worth more or less than their
original cost.
GEOGRAPHICAL WEIGHTINGS
AS OF DECEMBER 31, 1999
[PIE CHART OMITTED]
[PIE CHART REPRESENTED BELOW IN ITS PRINTED FORM.]
Canada ................ 41.3%
Cash Equivalents....... 0.7%
South Africa .......... 14.0%
United States ......... 28.0%
Ghana.................. 1.7%
Australia.............. 14.3%
19
<PAGE>
VAN ECK GOLD/RESOURCES FUND
PERFORMANCE COMPARISON
- --------------------------------------------------------------------------------
This graph compares a hypothetical $10,000 investment in the Van Eck
Gold/Resources Fund made ten years ago with a similar investment in the
Financial Times Gold Mines Index. lnception date for the Van Eck Gold/Resources
Fund was 2/15/86.
VAN ECK GOLD/RESOURCES FUND
vs. Financial Times Gold Mines Index
[LINE GRAPH OMITTED]
[TABLE BELOW REPRESENTS LINE GRAPH IN ITS PRINTED FORM.]
Van Eck
Gold/Resources Fund FT Gold Mines
(with sales charge)1 Index
-------------------- -------------
Dec-89 9,417 10000
Mar-90 8,445 8887.091556
Jun-90 7,403 5719.83177
Sep-90 8,057 6493.044322
Dec-90 6,935 5001.617599
Mar-91 6,543 4477.515367
Jun-91 6,792 6693.626658
Sep-91 6,366 5033.969589
Dec-91 6,652 4532.51375
Mar-92 6,438 3911.355548
Jun-92 6,866 2979.618247
Sep-92 6,919 2400.517632
Dec-92 6,352 2067.292138
Mar-93 7,655 4114.105467
Jun-93 10403 6160.239405
Sep-93 9314 5426.819799
Dec-93 11313 7199.482368
Mar-94 11117 6585.053381
Jun-94 10064 6179.003559
Sep-94 11170 7519.443546
Dec-94 9546 6392.073763
Mar-95 9618 6243.351666
Jun-95 9618 6235.910709
Sep-95 10242 6424.23164
Dec-95 9957 6190.423811
Mar-96 12098 7551.019088
Jun-96 10813 6524.3934
Sep-96 10207 5991.070851
Dec-96 10207 5899.547072
Mar-97 9404 5295.794241
Jun-97 8333 4506.114526
Sep-97 8654 4933.840181
Dec-97 6192 3423.552248
Mar-98 6709 3704.691038
Jun-98 5746 3215.334843
Sep-98 5781 3561.727596
Dec-98 5424 3023.261081
Mar-99 4978 2811.3879
Jun-99 4818 2863.312844
Sep-99 5906 3653.477839
Dec-99 4871 3003.202847
- --------------------------------------------------------------------------------
Average Annual Total Return 12/31/99 1 Year 5 Year 10 Year
- --------------------------------------------------------------------------------
VE Gold/Resources Fund (w/o sales charge) (10.20)% (12.59)% (6.38)%
- --------------------------------------------------------------------------------
VE Gold/Resources Fund (w/sales charge)1 (15.48)% (13.63)% (6.94)%
- --------------------------------------------------------------------------------
FT Gold Mines Index (0.66)% (14.01)% (11.32)%
- --------------------------------------------------------------------------------
1 The maximum sales charge is 5.75%.
Returns for the Van Eck Gold/Resources Fund reflect all recurring expenses and
include the reinvestment of all dividends and distributions.
The Financial Times Gold Mines Index is an unmanaged index and includes the
reinvestment of all dividends, but does not reflect the payment of transaction
costs, advisory fees or expenses that are associated with an investment in the
Fund. The Index's performance is not illustrative of the Fund's performance.
Indices are not securities in which investments can be made.
The Financial Times Gold Mines Index is a market capitalization-weighted global
index of gold-mining shares.
We will no longer compare the Fund to the MSCI Gold Mines Index since that index
does not include South Africa. Effective May 1, 1999, the Fund's investment
parameters were expanded to include South Africa. A $10,000 investment in the
MSCI Gold Mines Index on 12/31/98 would have increased to $10,094 by 12/31/99,
versus the same investment in the Fund, which would have declined to $8,452 by
year end (after sales charge).
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Performance data quoted
represents past performance; the investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
20
<PAGE>
VAN ECK INTERNATIONAL INVESTORS GOLD FUND
- --------------------------------------------------------------------------------
Dear Fellow Shareholder:
The world's monetary authorities stepped up the rate of credit expansion, in
general, in 1999. The Federal Reserve System increased the adjusted monetary
base by some 17%. Consumers, businesses and stock market investors (especially
high tech) responded favorably. Fixed income investors were disappointed.
Two big announcements surprised the gold-mining industry last year. In early
May, the British Treasury unexpectedly announced its decision to sell 415 tonnes
of its gold reserves over "the medium term," thereby cutting the gold portion of
its official reserves from about 16.7% to approximately 7%. In spite of
favorable statements from pro-gold central banks, including the Federal Reserve,
several bullion banks quickly followed the British announcement with a vast
producer-hedging program that was supported by increased central bank gold
loans. It was reported that producer hedging added 350 tonnes or more to the
third quarter supply. This addition to the average global mine output of
approximately 645 tonnes per quarter was undoubtedly responsible for the
twenty-year low price of $254 an ounce last summer.
The second announcement, possibly the most important event in the gold market in
the last 25 years, was the European Central Bank (ECB) Washington Agreement at
the end of September. Fifteen European central banks agreed to limit sales of
gold from official reserves to a maximum of 2,000 tonnes over the next five
years. They also pledged not to increase their gold lending arrangements and
derivative operations above current levels for the next five years. They stated
that "gold will remain an important element of global monetary reserves." The
other major holders of gold in the world--the United States, the International
Monetary Fund, the Bank of Japan and the Bank for International
Settlements--have all associated themselves with the Agreement. This Agreement
represents an unprecedented level of coordination among governments about their
gold reserves and reaffirms their unwaivering commitment to gold as the bedrock
of their reserves. It will reduce dramatically the scope for rumor and
speculation that has been such a damaging feature of the gold market in recent
years and will finally put to rest the fear that central banks have abandoned
gold as a reserve asset.
The Agreement had an immediate bullish effect on the market, and the price
quickly climbed some $80 an ounce. However, several of the mines, which had been
overly mesmerized by the fear of lower prices and had put on excessive short
hedging positions, faced immediate large unrealized losses. This threat affected
the industry and clouded gold mine share prices while an orderly solution to
this problem was being worked out.
The price of gold closed the year at $288.50 an ounce, almost exactly where it
began. Your Fund's net asset value reached $7.30 a share just before the British
announcement and $7.37 a share after the Washington Agreement, but it closed the
year at $5.73 a share, with a total return of -12.37% for 1999.
GOLD-MINING SHARES
The tumultuous combination of bullion's decline to twenty-year lows in August
and the dramatic rally following the ECB Washington Agreement in September
created a difficult environment for producers. The industry panicked as gold
declined toward $250, a level at which many companies cannot cover their
non-cash costs. To establish a price floor and insure survival, many producers
hedged large quantities of gold, which brought an additional 445 tonnes into the
market, according to Gold Fields Mineral Services. Several companies entered
into speculative hedge contracts that were subject to margin calls and contained
derivatives that required the companies to deliver more gold than they could
produce at higher prices. When gold suddenly rallied to unexpected heights in
September, these companies experienced liquidity crises that placed them on the
verge of bankruptcy, even though they remained operationally sound. Investors
feared that other hedged companies would face similar liquidity problems. While
these fears proved to be unfounded, the share prices of other producers suffered
nonetheless. The Canadians were hit especially hard, with Barrick (4.1% of Fund
assets at December 31) and Placer Dome (7.5% of assets) posting negative returns
in 1999, despite the fact that both companies are financially and operationally
two of the strongest gold producers in the world. These companies are now
working to regain investor confidence by providing fuller disclosure about their
hedging strategies. The beneficiaries of all of this have been Newmont, Gold
Fields Limited and Harmony (7.5%, 3.3% and 3.4% of assets, respectively). These
companies have gained favor among investors due to a combination of unhedged
production, sound management, and a high level of operational leverage to the
gold price.
Events in 1999 have shaped a positive outlook for other top holdings in
International Investors. We were disappointed with the share performance of
Homestake (7.9% of assets), which we believe was due to the disposal of a large
block of shares from a Malaysian shareholder. With this "overhang" now gone, we
look for the market to reward the company's low cost structure and unhedged
leverage to gold. In Australia, Newcrest (5.4% of assets) is running the largest
"SAG" mill in the world at the Cadia Hill mine. They are now ready to apply this
new technology to other low-grade/high tonnage operations in Australia. Canadian
producer
21
<PAGE>
VAN ECK INTERNATIONAL INVESTORS GOLD FUND
- --------------------------------------------------------------------------------
Meridian Gold (4.8% of assets) is set to commission its Chilean El Penon mine,
which will nearly double the company's existing production.
Gold-mining companies continued to hold the line on costs during 1999 by mining
above-average grades, curtailing high cost production, and gaining operational
efficiencies. We estimate that global cash costs will average approximately $200
per ounce in 1999, down from $206 in 1998 and $250 in 1997. Due to low gold
prices, exploration spending has been cut to a bare minimum. Without many
development projects in the pipeline, the majors have had to rely on mergers and
acquisitions for global growth. During 1999, Barrick moved into Tanzania with
the acquisition of Sutton, Placer Dome entered into a joint venture with Western
Areas of South Africa+, Anglogold (7.9% of assets) bought Acacia of Australia,
and Homestake acquired Argentina Gold. The Fund benefited from these corporate
activities in 1999, as one of our top holdings was Acacia (3.7% of assets at the
time we sold this position), up 14.3% for the year. Investments in Argentina
Gold and Sutton also paid off, realizing 32.9% and 75.2%, respectively (0.7% and
0.9% of assets at date of sale). The majors also looked to expand in their home
turf, as Placer Dome finalized the Getchell purchase in Nevada, Normandy
acquired fellow Australian Great Central, and Gold Fields Limited merged with
Driefontein in South Africa.++ Once mines from this latest round of acquisitions
are developed and as higher grades are mined out from existing operations, we
estimate that newly mined gold production will begin to decline, possibly as
soon as the first quarter of 2001.
THE OUTLOOK
THE SHORT-HEDGED GOLD POSITION
A basic imbalance in the gold market, in our opinion, is the estimated 5,000 to
6,000 tonnes of gold leased by certain central banks to big bullion banks on a
relatively short-term basis at low rates. The bullion banks borrowed the gold
over recent years and sold it on the market, putting constant pressure on the
gold price. They either invested the proceeds at LIBOR-related rates and bought
gold forward from mines that were afraid of lower prices and wished to lock in
future longer-term higher contango prices or they loaned the proceeds to
speculative hedge funds. Some central banks thus provided huge amounts of
heavily subsidized credit for financial speculation against gold, an important
asset in all central bank balance sheets! The mines benefited from the higher
contango prices as long as the price of gold was in a stable or declining trend.
However, when the trend turns upward, this benefit disappears.
Following the ECB Washington Agreement on gold and the resulting price spike,
the mines changed direction and began restructuring and buying back hedged
production. In our judgment, producers will continue this policy and more and
more choose to deliver against existing hedges and refrain from replacing these
positions. This could be a bullish factor in the gold market over the coming
years. No one knows when the major gold price trend will turn upward, but when
it does, the first phase might carry the price to its historic real purchasing
power parity with the consumer price index. The record shows that gold has
maintained its value in terms of real purchasing power in the very long run in
the major countries of the world. Despite price fluctuations, gold has
consistently reverted to its historic real purchasing power parity with other
commodities. Using the average purchasing power parity with the basket of goods
represented by the CPI since 1913, the price of gold would have to be
approximately $342 an ounce today. Taking the last twenty-five year average
purchasing power parity with the CPI would give an implied gold price of almost
$530 an ounce. Under these circumstances, the bullion banks may have difficulty
eventually returning the estimated 5,000 to 6,000 tonnes of leased gold to the
central banks.
INVESTMENT POLICY
The outlook for the gold price in 2000 (and beyond) will, in our judgment,
largely depend on the growth in the investment demand for gold.
Gold today is a default- and currency-risk-free monetary cash asset. Gold's
demand for portfolio diversification rests upon investor confidence in monetary
and credit stability and investor expectations of returns on equity, property
and other assets. History shows that investment demand rises when inflationary
expectations accelerate and also when investment conditions lead to the
expectation of negative returns on stocks (bear market), a credit contraction,
or negative real short-term interest rates.
The Federal Reserve Board has maintained a fluctuating but overall stimulative
monetary policy for years. Credit expansion has consistently exceeded real
growth. Consequently, total U.S. debt as a ratio to GDP has climbed from
approximately 1.5 in 1980 to about 2.7 currently. The annual growth rate of
private debt has recently been averaging approximately 10%, compared to the
almost 6% annual growth of GDP (in current dollars). Household debt has climbed
from 59% of GDP ten years ago to 70% currently. This growth has been supported
by the increase in equity and property wealth, but this is vulnerable.
22
<PAGE>
VAN ECK INTERNATIONAL INVESTORS GOLD FUND
- -------------------------------------------------------------------------------
[FIGURES BELOW REPRESENTS CHART IN ITS PRINTED FORM]
Non-Federal Debt as a % of GDP
Dec-68 1.11
Mar-69 1.11
Jun-69 1.12
Sep-69 1.13
Dec-69 1.15
Mar-70 1.16
Jun-70 1.17
Sep-70 1.17
Dec-70 1.19
Mar-71 1.16
Jun-71 1.17
Sep-71 1.18
Dec-71 1.19
Mar-72 1.18
Jun-72 1.18
Sep-72 1.19
Dec-72 1.19
Mar-73 1.19
Jun-73 1.21
Sep-73 1.23
Dec-73 1.23
Mar-74 1.25
Jun-74 1.26
Sep-74 1.28
Dec-74 1.28
Mar-75 1.28
Jun-75 1.26
Sep-75 1.23
Dec-75 1.22
Mar-76 1.20
Jun-76 1.21
Sep-76 1.21
Dec-76 1.21
Mar-77 1.21
Jun-77 1.21
Sep-77 1.21
Dec-77 1.23
Mar-78 1.25
Jun-78 1.23
Sep-78 1.24
Dec-78 1.25
Mar-79 1.26
Jun-79 1.28
Sep-79 1.29
Dec-79 1.30
Mar-80 1.31
Jun-80 1.33
Sep-80 1.33
Dec-80 1.31
Mar-81 1.28
Jun-81 1.31
Sep-81 1.31
Dec-81 1.33
Mar-82 1.36
Jun-82 1.37
Sep-82 1.38
Dec-82 1.39
Mar-83 1.39
Jun-83 1.38
Sep-83 1.38
Dec-83 1.39
Mar-84 1.38
Jun-84 1.40
Sep-84 1.43
Dec-84 1.46
Mar-85 1.49
Jun-85 1.51
Sep-85 1.54
Dec-85 1.59
Mar-86 1.60
Jun-86 1.65
Sep-86 1.68
Dec-86 1.72
Mar-87 1.75
Jun-87 1.77
Sep-87 1.78
Dec-87 1.78
Mar-88 1.80
Jun-88 1.81
Sep-88 1.81
Dec-88 1.82
Mar-89 1.83
Jun-89 1.84
Sep-89 1.84
Dec-89 1.86
Mar-90 1.86
Jun-90 1.85
Sep-90 1.87
Dec-90 1.90
Mar-91 1.89
Jun-91 1.89
Sep-91 1.88
Dec-91 1.89
Mar-92 1.87
Jun-92 1.86
Sep-92 1.86
Dec-92 1.85
Mar-93 1.85
Jun-93 1.85
Sep-93 1.86
Dec-93 1.86
Mar-94 1.87
Jun-94 1.86
Sep-94 1.87
Dec-94 1.88
Mar-95 1.89
Jun-95 1.92
Sep-95 1.93
Dec-95 1.94
Mar-96 1.95
Jun-96 1.96
Sep-96 1.98
Dec-96 1.99
Mar-97 1.98
Jun-97 2.00
Sep-97 2.01
Dec-97 2.05
Mar-98 2.08
Jun-98 2.12
Sep-98 2.16
Dec-98 2.19
Mar-99 2.23
Jun-99 2.27
- -------------------------------------------------------------------------------
Signs are appearing that the U.S. economy is facing a possible cyclical and
speculative credit "bubble" as well as a stock market "bubble." Not only has the
volume increase of domestic financial debt of 20% in 1998 and the same rate in
the first half of 1999 been excessive, but also the quality of this debt is
deteriorating. Quality bond spreads on medium-grade corporates, ten-year swaps
and emerging market issues have widened over the past year. Moody's Investors
Service reported last fall that the level of defaults on bonds globally surged
to its highest level since 1991. The ratio of defaults as a proportion of all
bonds has been climbing steadily since early 1997 to 5.78%. Bank credit is
becoming suspect. The FDIC said recently that bank failures in 1999 were
expected to create the biggest losses to the bank-deposit insurance fund since
the banking crisis in the early 1990s. Regulators have urged banks to remain
vigilant in their lending standards. The Chairman of the Federal Reserve, Alan
Greenspan, recently stated that the huge banks being formed by consolidations
created the potential "for unusually large systemic risks in the national and
international economy." He warned that lenders could be "underestimating the
credit risk of individual loans, based on the market value of assets." He also
suggested that investors should take "rare panic periods" into account in their
portfolio diversification. He stated, "At a minimum, risk managers need to set
aside somewhat higher contingency resources--reserves or capital--to cover the
losses that will inevitably emerge from time to time when investors suffer a
loss of confidence (bursting of the bubble). These reserves will appear almost
all the time to be a sub-optimal use of capital. So do fire insurance premiums."
Global investors who are concerned about the dollar risk may turn to gold as a
monetary cash asset that is an alternative to Treasury bills. The future dollar
quotations continue to sell at discounts from current quotes compared to yen,
Deutsche marks, Sterling, and French and Swiss francs. The U.S. current account
deficit is forecast to rise from 3.7% of GDP in 1999 to almost 4% in 2000 and
2001, well above the 1980s' peak of 3.4%. The continuous growth in foreign
holdings of total privately held U.S. public debt makes the dollar more and more
vulnerable. Monetary policy has been more stimulative in the U.S. than in Europe
or Japan. Monetary policy in the U.S. is based on targeting low CPI, not asset
inflation rates, while in Europe it is based on targeting M3 money supply
growth.
We believe in the school of economics which states that every credit expansion
must unavoidably lead to a process of readjustment (recession). Although the
exact timing is impossible to determine, risk-averse and forward-looking
investors may well, under present circumstances, consider gold portfolio
diversification. This could add up to a significant growth of total investment
demand for gold.
We appreciate your participation in the Van Eck International Investors Gold
Fund and look forward to helping you meet your investment needs in the future.
[PHOTOGRAPH OMITTED] [PHOTOGRAPH OMITTED] [PHOTOGRAPH OMITTED]
/s/ JOHN C. VAN ECK /s/ JOSEPH M. FOSTER /s/ SAMUEL S. HEWITT
- ------------------- ----------------------- ----------------------
JOHN C. VAN ECK JOSEPH M. FOSTER SAMUEL S. HEWITT
CHAIRMAN MANAGEMENT TEAM MEMBER MANAGEMENT TEAM MEMBER
January 27, 2000
- ---------------
+ Western Areas of South Africa was not a Fund holding in 1999.
++ Getchell accounted for 8.4% of assets at date of sale; Normandy accounted for
2.1% of assets at year end; Great Central was not a Fund holding in 1999;
Driefontein accounted for 0.8% of assets at date of sale.
23
<PAGE>
VAN ECK INTERNATIONAL INVESTORS GOLD FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PERFORMANCE RECORD AS OF 12/31/99
- --------------------------------------------------------------------------------
AFTER MAXIMUM
AVERAGE ANNUAL SALES CHARGE BEFORE SALES
TOTAL RETURN OF 5.75% CHARGE
- --------------------------------------------------------------------------------
Life (since 2/10/56) 8.55% 8.70%
- --------------------------------------------------------------------------------
20 year 2.08% 2.39%
- --------------------------------------------------------------------------------
15 year (0.71)% (0.31)%
- --------------------------------------------------------------------------------
10 year (8.07)% (7.52)%
- --------------------------------------------------------------------------------
5 year (17.40)% (16.41)%
- --------------------------------------------------------------------------------
1 year (17.38)% (12.37)%
- --------------------------------------------------------------------------------
THE PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NOT INDICATIVE OF FUTURE
RESULTS. Investment return and principal value of an investment in the Fund will
vary so that shares, when redeemed, may be worth more or less than their
original cost.
GEOGRAPHICAL WEIGHTINGS+
DECEMBER 31, 1999
[PIE CHART OMITTED]
[PIE CHART REPRESENTED BELOW IN ITS PRINTED FORM.]
Australia................. 13.3%
South Africa ............. 22.7%
Canada.................... 27.2%
Ghana..................... 1.1%
United Sates.............. 23.9%
Cash/Equivalents.......... 11.8%
+ Weightings take options positions into account (see "Schedule of Portfolio
Investments," p. 34).
24
<PAGE>
VAN ECK INTERNATIONAL INVESTORS GOLD FUND
PERFORMANCE COMPARISON
- --------------------------------------------------------------------------------
This graph compares a hypothetical $10,000 investment in the Van Eck
International Investors Gold Fund made ten years ago with a similar investment
in the Financial Times Gold Mines Index. Inception date for the Van Eck
International Investors Gold Fund was 2/10/56.
VAN ECK INTERNATIONAL INVESTORS GOLD FUND
vs. Financial Times Gold Mines Index
[The following table represents a line chart in the printed piece.]
Van Eck International
Investors Gold Fund FT Gold Mines
(with sales charge)1 Index
---------------------- -------------
Dec-89 9,425 10000
Mar-90 8,412 8887.091556
Jun-90 7,421 5719.83177
Sep-90 7,645 6493.044322
Dec-90 6,878 5001.617599
Mar-91 6,471 4477.515367
Jun-91 7,521 6693.626658
Sep-91 6,865 5033.969589
Dec-91 7,054 4532.51375
Mar-92 6,461 3911.355548
Jun-92 6,436 2979.618247
Sep-92 5,783 2400.517632
Dec-92 5,003 2067.292138
Mar-93 6,585 4114.105467
Jun-93 9158 6160.239405
Sep-93 8248 5426.819799
Dec-93 10676 7199.482368
Mar-94 9674 6585.053381
Jun-94 9634 6179.003559
Sep-94 11936 7519.443546
Dec-94 10565 6392.073763
Mar-95 9641 6243.351666
Jun-95 9314 6235.910709
Sep-95 10151 6424.23164
Dec-95 9622 6190.423811
Mar-96 11222 7551.019088
Jun-96 10045 6524.3934
Sep-96 9293 5991.070851
Dec-96 8720 5899.547072
Mar-97 8215 5295.794241
Jun-97 7216 4506.114526
Sep-97 7437 4933.840181
Dec-97 5581 3423.552248
Mar-98 5914 3704.691038
Jun-98 5009 3215.334843
Sep-98 5239 3561.727596
Dec-98 4919 3023.261081
Mar-99 4598 2811.3879
Jun-99 4523 2863.312844
Sep-99 5138 3653.477839
Dec-99 4311 3003.202847
- -------------------------------------------------------------------------------
Average Annual Total Return 12/31/99 1 Year 5 Year 10 Year
- -------------------------------------------------------------------------------
VE Int'l Investors Gold Fund (w/o sales charge) (12.37)% (16.41)% (7.52)%
- -------------------------------------------------------------------------------
VE Int'l Investors Gold Fund (w/sales charge)1 (17.38)% (17.40)% (8.07)%
- -------------------------------------------------------------------------------
FT Gold Mines Index (0.66)% (14.01)% (11.32)%
- -------------------------------------------------------------------------------
1 The maximum sales charge is 5.75%.
Returns for the Van Eck International Investors Gold Fund reflect all recurring
expenses and include the reinvestment of all dividends and distributions.
The Financial Times Gold Mines Index is an unmanaged index and includes the
reinvestment of all dividends, but does not reflect the payment of transaction
costs, advisory fees or expenses that are associated with an investment in the
Fund. The Index's performance is not illustrative of the Fund's performance.
Indices are not securities in which investments can be made.
The Financial Times Gold Mines Index is a market capitalization-weighted global
index of gold-mining shares.
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Performance data quoted
represents past performance; the investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
25
<PAGE>
VAN ECK U.S. GOVERNMENT MONEY FUND
- --------------------------------------------------------------------------------
Dear Fellow Shareholder:
The Van Eck U.S. Government Money Fund continues to meet its objectives as an
investment that provides a high degree of safety and daily liquidity. It also
serves to assist investors who wish to employ our exchange privileges or to use
our checkwriting privileges. As of December 31,1999, the Fund's seven-day
average yield was 4.35%*, its 30-day average yield was 3.40%, and its total net
assets were $97 million.
During the first half of 1999, the yield on three-month Treasury bills averaged
4.75%. Treasury bill rates declined to their lows of 4.25% toward the end of
January on the back of flight-to-quality buying that was sparked by the
devaluation of the Brazilian real. Three-month bill rates revisited those levels
in mid-April and then headed higher as investor nervousness over recent
financial market turmoil began to abate. Treasury bill rates rose steadily
throughout the rest of 1999 as a robust U.S. economy, a rising stock market, and
mounting concern over a potential resurgence in inflationary pressures caused
investors to discount the switch to a tightening of monetary policy by the
Federal Reserve Board. The Fed began this cycle of tightening by raising the Fed
Funds target rate by 25 basis points (0.25%) to 5.00% on June 30. The Fed raised
rates another 25 basis points in August and again in November. Bill rates
continued to rise through the second half of 1999 as the U.S. economy remained
strong and the U.S. equity market continued to reach new highs. Three-month bill
rates peaked at a rate of 5.58% on December 21, 1999.
The Fund's investment strategy continues to emphasize safety by investing in
short-term U.S. Treasury obligations and repurchase agreements collateralized by
U.S. Treasury obligations. These obligations are the most conservative money
market investments and offer the highest degree of security since they are
backed by the government. Of course, shares of the Fund are not guaranteed by
the United States Government and there can be no guarantee that the price of the
Fund's shares will not fluctuate.** Repurchase agreements allow us to take
advantage of higher yields without significantly increasing risk. The Fund's
repurchase agreements are collateralized 102% by U.S. Treasury obligations with
maturities of less than five years. In addition, your Fund has possession of the
collateral.
We plan to continue our current investment strategy, keeping an equal weighting
between U.S. Treasury bills and repurchase agreements over time. However, when
repurchase agreements offer an attractive yield pick-up over Treasury bills, we
will look to place more emphasis on repurchase agreements.
The Van Eck U.S. Government Money Fund offers daily liquidity and checkwriting
privileges, providing the kind of convenient access to cash not available in
many other types of investments. The Fund also provides an excellent base from
which investors may transfer money into or out of other members of the Van Eck
Family of Funds.***
We appreciate your participation in the U.S. Government Money Fund and look
forward to helping you meet your investment objectives in the future.
[PHOTOGRAPH OMITTED]
/s/ GREGORY F. KRENZER
- ----------------------
GREGORY F. KRENZER
PORTFOLIO MANAGER
January 19, 2000
- ---------------
* Performance data represents past performance and is not indicative of
future results.
** There can be no assurance that the Fund will be able to maintain a stable
net asset value of $1.00 per share.
*** Currently, there is no charge imposed on exchanges or limits as to
frequency of exchanges for this Fund. However, shareholders are limited to
six exchanges per calendar year for other Van Eck and Van Eck/Chubb Funds.
The Funds reserve the right to modify or terminate the terms of the
Exchange Privilege.
26
<PAGE>
ASIA DYNASTY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
DECEMBER 31, 1999
NO. OF SHARES SECURITIES (A) VALUE (NOTE 1)
- --------------------------------------------------------------------------------
CHINA: 0.6%
25,000 Huaneng Power International $ 264,064
-----------
HONG KONG: 17.4%
75,000 Asia Satellite Telecommunications
Holdings Ltd. 236,862
570,000 China Everbright Pacific Ltd. 469,287
350,000 China Merchants China Direst
Investments Ltd. 288,158
161,000 China Telecom (Hong Kong) Ltd.+ 1,006,573
424,000 Cosco Pacific Ltd. 351,811
2,000,000 E-New Media Co. Ltd. 977,681
270,000 Great Eagle Holdings Ltd. 479,321
472,000 Hanny Holdings Ltd. 446,285
573,500 Kerry Properties Ltd. 804,162
275,000 New World Infrastructure Ltd.+ 351,997
1,500,000 Oriental Union Holdings Ltd. 175,597
790,000 Sino Land Co. Ltd. 454,782
50,000 Sino-I.com Ltd.+ 4,631
330,000 Wheelock & Co. Ltd. 345,983
113,000 Wing Hang Bank Ltd. 386,673
1,400,000 Yizheng Chemical Fibre Co. Ltd.+ 391,715
2,000,000 Zhenhai Refining & Chemical Co. Ltd.+ 355,052
-----------
7,526,570
-----------
INDIA: 11.4%
11,200 Citicorp Securities & Investments 177,951
8,000 Dr. Reddy's Laboratories Ltd. 265,195
12,000 HCL Technologies Ltd.*+ 160,000
4,500 Hindustan Lever Ltd. 232,759
67,500 Hindustan Petroleum Corp. Ltd. 283,966
40,000 Housing Development Finance
Corporation Ltd. 262,989
1,800 Infosys Technologies Ltd. 600,672
400 ITC Ltd. 6,115
6,950 NIIT Ltd. 529,726
25,000 Satyam Computer Services Ltd. 1,287,068
12,500 Sonata Software Ltd.+ 606,422
35 Tata Infotech Ltd. 713
12,644 Videsh Sanchar Nigam Ltd. 525,816
-----------
4,939,392
-----------
INDONESIA: 5.6%
565,554 PT Astra International Warrants
(expiring 12/31/01)+* 263,048
4,000,000 PT Bank Panin Indonesia 386,404
750,000 PT Bank Panin Indonesia Warrants
(expiring 7/08/02)+ 26,297
2,309,500 PT Bimantara Citra 545,356
177,500 PT Indofood Sukses Makmur Tbk 222,272
27,600,000 PT Lippo Bank Tbk+ 987,478
-----------
2,430,855
-----------
MALAYSIA: 7.1%
280,000 Berjaya Sports Toto Bhd 604,218
420,000 Commerce Asset Holdings Bhd 1,077,647
248,000 IOI Properties Bhd 558,007
200,000 MAA Holdings Bhd+ 389,479
67,000 Unisem (M) Bhd 430,216
-----------
3,059,567
-----------
PHILIPPINES: 1.9%
115,000 ABS-CBN Broadcasting Corp. 142,680
1,200 Benpres Holdings Corp.+ 3,600
3,000 Benpres Holdings Corp. (GDR) 9,000
4,588,000 International Container Systems, Inc.+ 415,538
10,000 Philippine Long Distance
Telephone Co. 258,750
-----------
829,568
-----------
SINGAPORE: 15.4%
30,000 Creative Technologies Ltd. 543,981
98,000 Datacraft Asia Ltd. 813,400
55,427 DBS Group Holdings Ltd. 908,530
200,000 JIT Holdings Ltd. 696,488
70,000 Natsteel Electronics Ltd. 369,859
136,000 Pacific Century Regional
Development Ltd.+ 1,951,606
150,000 Singapore Land Ltd. 394,476
25,723 Singapore Press Holdings Ltd. 557,550
45,000 Star Cruises PLC 459,000
-----------
6,694,890
-----------
SOUTH KOREA: 22.5%
4,000 Cheil Communications, Inc. 302,598
3,850 Cheil Jedang Corp. 444,166
30,226 Daou Technologies, Inc. 1,051,455
28,261 Haansoft, Inc.+ 1,309,140
18,000 Hanaro Telecom, Inc. 311,493
24,000 Housing & Commercial Bank, Korea 760,898
37,056 Hyundai Electronics Industries Co. 786,481
22,000 Hyundai Motors Co. Ltd. 348,745
6,800 Korea Telecom Corp. 1,071,951
15,000 LG Investment & Securities Co. Ltd. 254,954
4,986 Samsung Electronics 1,168,011
550 SK Telecom Co. Ltd. 1,971,377
-----------
9,781,269
-----------
TAIWAN: 8.1%
51,750 Acer, Inc. (GDR) 737,438
63,840 Asustek Computers, Inc. 888,972
34,500 Evergreen Marine Corp. 293,250
18,000 Powerchip Semiconductor Corp.+ 245,250
146,000 R.O.C. Taiwan Fund+ 1,231,875
5,000 Winbond Electronics Corp.+ 115,625
-----------
3,512,410
-----------
THAILAND: 3.6%
900,000 Golden Land Property Development PLC+ 330,000
1,100,000 National Finance & Securities 462,000
90,800 Regional Container Line Public Co. Ltd.+ 104,723
250,000 Regional Container Line Public Co. Ltd."F"+ 340,000
35,000 Shin Corp. PLC+ 332,266
-----------
1,568,989
-----------
TOTAL STOCKS AND OTHER INVESTMENTS: 93.6%
(Cost: $24,213,875) 40,607,574
-----------
See Notes to Financial Statements
27
<PAGE>
ASIA DYNASTY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
DECEMBER 31, 1999 (continued)
NO. OF
CONTRACTS CALL OPTION PURCHASED: 0.6% VALUE (NOTE 1)
- --------------------------------------------------------------------------------
SINGAPORE: 0.6%
25,000 Singapore Airlines Ltd. Zero Strike
Call Option (expiring 6/08/00)+
(Cost: $187,767) $ 283,699
-----------
SHORT-TERM OBLIGATION: 4.0%
PRINCIPAL INTEREST MATURITY
AMOUNT RATE DATE
- --------------------------------------------------------------------------------
$1,727,000
Repurchase Agreement (Note 10):
Purchased on 12/31/99;
maturity value $1,727,504
(with State Street Bank & Trust
Co.; collateralized by $1,835,000
Federal National Mortgage
Association Discount Note
due 8/31/00 with a value of
$1,761,600)
(Cost: $1,727,000) 3.50% 1/03/00 1,727,000
-----------
TOTAL INVESTMENTS: 98.2%
(Cost: $26,128,642) 42,618,273
OTHER ASSETS LESS LIABILITIES: 1.8% 785,930
-----------
NET ASSETS: 100% $43,404,203
===========
- ---------------
(a) Unless otherwise indicated, securities owned are shares of common stock.
* Fair value as determined by Board of Trustees.
+ Non-income producing.
GLOSSARY:
GDR - Global Depositary Receipt
"F" - Foreign Registry
SUMMARY OF % OF
INVESTMENTS NET
BY INDUSTRY ASSETS
- ----------- ------
Advertising 0.7%
Automotive 0.8%
Chemicals 0.8%
Computer Software & Technology 18.6%
Conglomerates 1.9%
Consumer Products 0.5%
Electrical Equipment & Electronics 15.0%
Engineering & Construction 1.5%
Entertainment & Leisure 2.5%
Financial Services & Insurance 14.6%
Food & Beverages 1.5%
Forest Products 0.8%
Holding Company 1.1%
Investment Funds 2.8%
Manufacturing 0.9%
Media 0.3%
Oil & Gas 0.7%
Packaging & Bottling 1.0%
Pharmaceuticals 0.6%
Publishing 1.3%
Real Estate 5.9%
Telecommunications 17.8%
Transportation 2.0%
Utilities 0.6%
Short-Term Obligation 4.0%
Other assets less liabilities 1.8%
-----
100.0%
=====
See Notes to Financial Statements
28
<PAGE>
GLOBAL HARD ASSETS FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
DECEMBER 31, 1999
NO. OF SHARES SECURITIES (A) VALUE (NOTE 1)
- --------------------------------------------------------------------------------
AUSTRALIA: 5.9%
INDUSTRIAL METALS: 1.8%
85,000 WMC Ltd. $ 468,848
----------
PRECIOUS METALS: 4.1%
8,946 Anglogold Ltd. 449,391
1,800,000 Gullewa Gold NL+ 87,466
315,000 Lihir Gold Ltd.+ 229,598
414,000 Normandy Mining Ltd. 293,601
34,154 Osmere NL+ 1,166
----------
1,061,222
----------
1,530,070
----------
BRAZIL: 1.0%
FOREST PRODUCTS AND PAPER: 1.0%
10,000 Aracruz Celulose S.A. (ADR) 262,500
----------
CANADA: 22.9%
ENERGY: 9.5%
20,200 Alberta Energy Co., Ltd. 629,066
12,000 Canadian Natural Resources Ltd. 292,734
73,100 Cypress Energy, Inc.+ 308,588
7,250 Ensign Resources Service Group, Inc. 168,080
160,000 Kappa Energy Company, Inc. 47,612
20,000 NQL Drilling Tools, Inc.+ 96,886
8,600 Precision Drilling Corp.+ 220,208
24,200 Talisman Energy, Inc. 617,979
333,000 Windsor Energy Corp. (b)(c)+ 89,875
----------
2,471,028
----------
FOREST PRODUCTS AND PAPER: 7.1%
25,000 Abitibi-Consolidated, Inc. 296,875
35,000 Canfor Corp.+ 409,343
37,500 St. Laurent Paperboard, Inc.+ 499,567
37,500 Tembec, Inc.+ 417,820
35,000 Timberwest Forest Corp. 230,104
----------
1,853,709
----------
PRECIOUS METALS: 3.2%
16,500 Barrick Gold Corp. 291,844
707,700 Brazilian Resources, Inc.+ 252,225
26,000 Placer Dome, Inc. 279,500
----------
823,569
----------
REAL ESTATE: 3.1%
25,000 Brookfield Properties Corp. 262,111
30,000 Oxford Properties Group, Inc.+ 289,619
15,000 TrizecHahn Corp. 253,125
----------
804,855
----------
5,953,161
----------
FINLAND: 3.9%
FOREST PRODUCTS AND PAPER: 3.9%
22,500 Stora Enso Oyj 392,396
15,500 UPM-Kymmene Oyj 624,650
----------
1,017,046
----------
FRANCE: 0.1%
REAL ESTATE: 0.1%
3,500 Societe Fonciere Lyonnaise Warrants
(expiring 7/30/02)*+ 1,093
3,000 Unibail S.A. Warrants
(expiring 5/11/04)*+ 16,624
----------
17,717
----------
GREECE: 0.0%
REAL ESTATE: 0.0%
330 Ktima Kostas Lazaridis S.A.
(formerly Lazaridis S.A.)(c)+ 2,817
----------
ITALY: 1.4%
ENERGY: 1.4%
6,500 Ente Nazionale Idrocaburi
S.p.A. (ADR) 358,313
----------
NETHERLANDS: 1.5%
ENERGY: 1.5%
6,400 Royal Dutch Petroleum Co.
(N.Y. Reg. Shares) 386,800
----------
NORWAY: 0.3%
ENERGY: 0.3%
7,000 Stolt Comex Seaway S.A.+ 77,438
----------
RUSSIA: 4.2%
ENERGY: 4.2%
1,679 Khanty-Mansiysk Oil Co. (b)(c)+ 797,525
2,600 Lukoil Holding Corp. (ADR) 104,780
2,600 Lukoil Holding Corp. Pfd. (ADR) 23,837
7,800 Surgutneftegaz, Inc. (ADR) 66,797
7,800 Surgutneftegaz, Inc. Pfd. (ADR) 108,447
----------
1,101,386
----------
SOUTH AFRICA: 0.7%
FOREST PRODUCTS AND PAPER: 0.7%
19,000 Sappi Ltd. (ADR) 182,875
----------
UNITED KINGDOM: 1.7%
ENERGY: 0.9%
3,800 BP Amoco PLC (ADR) 225,388
----------
INDUSTRIAL METALS: 0.8%
36,100 Billiton PLC 214,377
----------
439,765
----------
UNITED STATES: 56.2%
ENERGY: 20.7%
4,000 Amerada Hess Corp. 227,000
9,500 Anadarko Petroleum Corp. 324,188
6,750 Apache Corp. 249,328
3,000 Atlantic Richfield Co. 259,500
3,500 Chevron Corp. 303,188
12,000 Conoco, Inc. 297,000
11,450 Cooper Cameron Corp.+ 560,334
10,000 Ensco International, Inc. 228,750
8,972 Exxon Mobil Corp. 722,807
25,000 Global Marine, Inc. 415,625
4,000 Occidental Petroleum Corp. 86,500
See Notes to Financial Statements
29
<PAGE>
GLOBAL HARD ASSETS FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
DECEMBER 31, 1999 (continued)
NO. OF SHARES SECURITIES (A) VALUE (NOTE 1)
- --------------------------------------------------------------------------------
UNITED STATES: (continued)
ENERGY: (continued)
18,400 Ocean Energy, Inc.+ $ 142,600
10,000 Santa Fe International Corp. 258,750
5,000 Schlumberger Ltd. 281,250
5,880 Smith International, Inc.+ 292,163
4,000 Texaco, Inc. 217,250
968 Transocean Sedco Forex, Inc. 32,610
8,000 USX-Marathon Group 197,500
23,000 Vintage Petroleum, Inc. 277,436
------------
5,373,779
------------
FOREST PRODUCTS AND PAPER: 12.1%
9,000 Bowater, Inc. 488,813
5,000 Champion International Corp. 309,688
11,000 Fort James Corp. 301,125
4,000 Georgia-Pacific Corp. 203,000
11,700 International Paper Co. 660,319
10,000 Plum Creek Timber Co., Inc. 250,000
10,000 Smurfit-Stone Container Corp.+ 245,000
2,000 Temple-Island, Inc. 131,875
4,000 Weyerhaeuser Co. 287,250
6,000 Willamette Industries, Inc. 278,624
------------
3,155,694
------------
INDUSTRIAL METALS: 7.5%
33,501 AK Steel Holding Corp. 632,331
9,600 Alcan Aluminum Ltd.+ 395,400
10,500 Inco Ltd. 246,750
9,020 Reynolds Metals Co. 691,158
------------
1,965,639
------------
PRECIOUS METALS: 2.6%
39,000 Homestake Mining Corp. 304,688
11,375 Stillwater Mining Co.+ 362,578
------------
667,266
------------
REAL ESTATE: 13.3%
8,000 AMB Property Corp. 159,500
4,000 Apartment Investment
& Management Co. 159,250
10,000 Bedford Property Investors, Inc. 170,625
18,500 Boston Properties, Inc. 575,813
15,000 Brandywine Realty Trust 245,625
10,000 Cornerstone Properties, Inc. 146,250
10,000 Crescent Real Estate Equities Co. 183,750
10,000 Equity Office Properties Trust 246,250
5,000 Equity Residential Properties Trust 213,438
20,000 Host Marriott Corp. 165,000
10,200 Kilroy Realty Corp. 224,400
5,000 Macerich Co. (The) 104,063
7,800 Mack-Cali Realty Corp. 203,288
10,000 ProLogis Trust 192,500
10,000 Simon Property Group, Inc. 229,375
78,618 Wyndham International, Inc.+ 230,937
------------
3,450,064
------------
14,612,442
------------
TOTAL STOCKS AND OTHER INVESTMENTS: 99.8%
(Cost: $25,558,470) 25,942,330
------------
NO. OF
CONTRACTS CALL OPTIONS PURCHASED: 2.3% VALUE (Note 1)
- --------------------------------------------------------------------------------
200 Crude Oil (strike price @ $23.25
expiring 1/17/00)+ 504,000
82 Crude Oil (strike price @ $25.00
expiring 1/17/00)+ 104,140
------------
TOTAL CALL OPTIONS PURCHASED: 2.3%
(Cost: $417,454) 608,140
------------
TOTAL INVESTMENTS: 102.1%
(Cost: $25,975,924) 26,550,470
------------
OPTIONS WRITTEN: (1.6)%
- --------------------------------------------------------------------------------
200 Crude Oil Call (strike price @
$24.25 expiring 1/17/00)+ (348,000)
100 Crude Oil Put (strike price @
$17.00 expiring 8/22/00)+ (58,000)
------------
TOTAL OPTIONS WRITTEN: (1.6)%
(Premium received: $349,000) (406,000)
------------
TOTAL INVESTMENTS NET OF OPTIONS WRITTEN: 100.5%
(Cost: $25,626,924) 26,144,470
OTHER ASSETS LESS OTHER LIABILITIES: (0.5)% (135,725)
------------
NET ASSETS: 100% $ 26,008,745
============
------------
(a) Unless otherwise indicated, securities owned are shares of common stock.
(b) Restricted security, see Note 8.
(c) Fair value as determined by Board of Trustees.
+ Non-income producing.
GLOSSARY:
ADR - American Depositary Receipt
SUMMARY OF % OF
INVESTMENTS NET
BY INDUSTRY ASSETS
- ----------- ------
Energy 39.2%
Forest Products and Paper 24.8%
Industrial Metals 10.1%
Precious Metals 9.9%
Real Estate 16.5%
Other assets less liabilities (0.5)%
-----
100.0%
=====
See Notes to Financial Statements
30
<PAGE>
GLOBAL LEADERS FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
DECEMBER 31, 1999
NO. OF SHARES SECURITIES (A) VALUE (NOTE 1)
- --------------------------------------------------------------------------------
AUSTRALIA: 0.6%
8,500 Brambles Industries Ltd. $ 235,111
------------
BRAZIL: 0.6%
2,000 Telecomunicacoes Brasileiras
S.A. (ADR) 257,000
------------
DENMARK: 1.2%
7,100 ISS International Service
Systems A.S. 477,380
------------
FINLAND: 2.6%
5,700 Nokia Oyj (Class A) 1,033,695
------------
FRANCE: 4.9%
1,900 Cap Gemini S.A. 482,391
1,300 Castorama Dubois
Investissements S.A. 395,545
2,000 Havas Advertising S.A. 852,345
1,500 Total S.A. (Class B) 200,241
------------
1,930,522
------------
GERMANY: 2.0%
4,600 Douglas Holding AG 198,125
2,500 Mannesmann AG 609,538
------------
807,663
------------
GREECE: 0.4%
5,200 Stet Hellas Telecommunications
S.A. (ADR) + 158,600
------------
HONG KONG: 1.9%
32,000 Cheung Kong (Holdings) Ltd. 406,509
23,771 HSBC Holdings PLC 333,317
------------
739,826
------------
IRELAND: 1.1%
33,956 Bank of Ireland 270,264
5,400 Elan Corp. PLC 159,300
------------
429,564
------------
ITALY: 3.1%
60,000 Unicredito Italiano S.p.A 294,996
31,000 Ente Nazionale Idrocaburi
S.p.A. (ADR) 170,529
24,000 Mondadori (Arnoldo)
Editore S.p.A 761,670
------------
1,227,195
------------
JAPAN: 21.0%
2,900 Advantest Corp. 765,695
50,000 Bank of Tokyo-Mitsubishi Bank 696,264
18,000 Canon, Inc. 714,649
4,100 Circle K Japan Co. Ltd. 167,993
40 East Japan Railway 215,529
33,000 Fuji Bank Ltd. 320,448
42,000 Hitachi Ltd. 673,577
1,000 Keyence Corp. 405,828
43,000 Komatsu Ltd. 197,633
32 NTT Mobile Communications
Network, Inc. 1,229,806
1,000 Rohm Co. 410,718
18,000 Sharp Corp. 460,297
1,600 Sony Corp.(ADR) 455,600
2,000 Sony Corp. 592,607
9,000 Takeda Chemical Industries 444,455
4,000 TDK Corp. 551,926
------------
8,303,025
------------
MEXICO: 1.5%
93,000 Cifra S.A. de C.V. 185,912
10,500 Coca-Cola Femsa S.A. (ADR) 184,406
3,000 Grupo Televisa S.A. (ADR) 204,750
------------
575,068
------------
NETHERLANDS: 3.8%
4,000 Equant N.V.+ 454,181
10,166 Nutreco Holdings N.V. 313,925
2,800 St. Microelectronics 431,049
2,300 United Pan-Europe Communications N.V.+ 294,291
------------
1,493,446
------------
PORTUGAL: 0.5%
11,400 Telecel-Comunicacoes Pessoasis S.A. 198,814
------------
SINGAPORE: 1.7%
18,000 Datacraft Asia Ltd. 149,400
31,401 Development Bank of Singapore, Ltd. 514,709
------------
664,109
------------
SOUTH KOREA: 0.3%
3,200 Pohang Iron & Steel 112,000
------------
SWEDEN: 1.3%
11,000 Electrolux AB 276,619
13,000 Securitas AB 235,255
------------
511,874
------------
SWITZERLAND: 0.6%
80 Julius Baer Holding Ltd. 241,906
------------
TAIWAN: 1.4%
12,273 Taiwan Semiconductors
Manufacturing Co.+ 552,285
------------
UNITED KINGDOM: 7.1%
3,000 Alliance Unichem PLC 20,000
11,082 British Aerospace PLC 72,982
20,868 BP Amoco PLC 210,724
4,000 Colt Telecom Group PLC+ 205,175
42,200 Compass Group PLC 580,412
13,000 Dixons Group PLC 313,426
12,052 Glaxo Wellcome PLC 342,444
23,000 Hays PLC 367,513
18,129 Misys PLC 281,905
80,530 Vodafone Group PLC 397,472
------------
2,792,053
------------
UNITED STATES: 40.0%
7,500 ADC Telecommunications, Inc. 544,219
2,500 American Express Co. 415,625
4,500 American International Group, Inc. 486,563
7,000 America Online, Inc.+ 528,063
8,000 Cardinal Health, Inc. 383,000
9,000 CBS Corp. 575,438
12,000 Cisco Systems, Inc. 1,285,500
5,000 Clear Channel Communications, Inc. 446,250
See Notes to Financial Statements
31
<PAGE>
GLOBAL LEADERS FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
DECEMBER 31, 1999 (CONTINUED)
NO. OF SHARES SECURITIES (A) VALUE (Note 1)
- --------------------------------------------------------------------------------
UNITED STATES: (continued)
12,000 Coastal Corp. $ 425,250
6,000 Dayton Hudson Corp. 440,625
7,000 EMC Corp. 764,750
5,600 Exxon Mobil Corp. 451,150
7,000 Federal National Mortgage Association 437,063
4,300 General Electric Co. 665,425
7,500 Home Depot, Inc. 514,219
5,625 Honeywell International, Inc. 324,492
6,900 Intel Corp. 567,956
4,000 International Business Machines Corp. 432,000
1,600 JDS Uniphase Corp. 258,100
4,500 Lexmark International 407,250
7,000 Lucent Technologies, Inc. 523,688
14,000 Masco Corp. 355,250
7,931 MCI WorldCom, Inc. 420,812
8,000 Merck & Co., Inc. 536,500
5,000 Microsoft Corp. 583,750
4,000 Procter & Gamble Co. 438,250
5,200 QUALCOMM, Inc.+ 916,500
7,400 Schlumberger Ltd. 416,250
7,000 Solectron Corp.+ 665,875
2,200 StarMedia Network, Inc.+ 88,138
1,433 Transocean Secod Forex, Inc. 48,262
12,000 Tyco International Ltd. 466,500
----------
15,812,713
-----------
TOTAL STOCKS: 97.6%
(Cost: $22,363,495) 38,553,849
-----------
SHORT-TERM OBLIGATION: 1.8%
PRINCIPAL INTEREST MATURITY
AMOUNT RATE DATE
- --------------------------------------------------------------------------------
$724,000
Repurchase Agreement (Note 10):
Purchased on 12/31/99; maturity
value $724,070 (with State Street
Bank & Trust Co.; collateralized
by $740,000 Federal National
Mortgage Association Discount
Note 6.195% due 12/27/00
with a value of $738,758)
(Cost: $724,000) 3.50% 1/03/00 724,000
-----------
TOTAL INVESTMENTS: 99.4%
(Cost: $23,087,495) 39,277,849
OTHER ASSETS LESS LIABILITIES: 0.6% 234,233
-----------
NET ASSETS: 100% $39,512,082
===========
- ---------------
(a) Unless otherwise indicated, securities owned are shares of common stock.
+ Non-income producing.
GLOSSARY:
ADR - American Depositary Receipt
SUMMARY OF % OF
INVESTMENTS NET
BY INDUSTRY ASSETS
- ----------- ------
Advertising 2.2%
Aerospace & Defense 0.2%
Banks 6.5%
Beverages 0.5%
Broadcast Media 1.6%
Building & Construction 1.4%
Commercial Services 1.2%
Communications 1.1%
Computer Services 8.0%
Diversified 1.5%
Drug & Healthcare 1.6%
Electronic Data Processing,
Office Equipment & Supplies 6.5%
Electronics & Electrical Equipment 11.1%
Financial Services 2.9%
Food Services 0.8%
Food & Household Products 2.4%
Holding Companies 3.3%
Insurance 1.2%
Machinery 1.6%
Manufacturing 1.2%
Medical Products & Supplies 0.9%
Natural Gas-Pipelines 1.1%
Office Equipment 1.8%
Oil (Integrated/Services & Products) 3.3%
Pharmaceuticals 2.3%
Publishing & Broadcasting 1.9%
Railroads 0.5%
Real Estate 1.0%
Restaurants 1.5%
Retail 5.6%
Semiconductors 3.9%
Steel 0.3%
Telecommunications 16.7%
Short-Term Obligation 1.8%
Other assets less liabilities 0.6%
-----
100.0%
=====
See Notes to Financial Statements
32
<PAGE>
GOLD/RESOURCES FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
DECEMBER 31, 1999
NO. OF SHARES
PRINCIPAL AMOUNT SECURITIES (A) VALUE (Note 1)
- --------------------------------------------------------------------------------
AUSTRALIA: 14.3%
1,087,189 Delta Gold NL $ 1,659,824
1,871,381 Lihir Gold Ltd.+ 1,364,015
737,215 Newcrest Mining Ltd.+ 2,517,280
500,000 Red Back Mining NL 91,931
------------
5,633,050
------------
CANADA: 41.3%
166,800 Agnico-Eagle Mines Ltd. 1,230,150
80,117 Barrick Gold Corp. 1,417,069
1,600,000 Business Development Bank of Canada
Gold Linked Note,
2.50% due 12/06/00 (c) 1,418,544
200,000 Claude Resources, Inc. 124,567
174,700 Cumberland Resources+ 217,619
44,200 Francisco Gold Corp.+ 178,941
97,852 Franco Nevada Mining Corp. Ltd. 1,499,945
291,600 Geomaque Explorations Ltd. 106,954
172,600 Goldcorp, Inc. (Class A)+ 992,450
182,000 IAMGOLD, International African+ 409,343
155,000 Manhattan Minerals+ 563,149
511,200 Meridian Gold, Inc.+ 3,466,962
271,245 Placer Dome, Inc. 2,915,884
416,200 Richmont Mines, Inc.+ 609,179
239,800 Romarco Minerals, Inc. 162,633
100,000 Teck Corp. (Class A) 941,176
27,000 TVX Gold, Inc.+ 21,938
------------
16,276,503
------------
GHANA: 1.7%
236,000 Ashanti Goldfields Co. Ltd.
(Sponsored GDR) 619,500
30,191 Ashanti GSM Ltd. (Series C) 58,692
------------
678,192
------------
SOUTH AFRICA: 14.0%
47,775 Anglogold Ltd. 2,399,916
479,400 Avgold Ltd. 331,427
272,000 Gold Fields Ltd. 1,316,307
229,800 Harmony Gold Mining Co. 1,476,551
------------
5,524,201
------------
UNITED STATES: 28.0%
16,700 AK Steel Holding Corp. 315,213
187,972 Battle Mountain Canada, Inc.
(Exchangeable Shares) 387,692
56,300 Battle Mountain Gold Co. (Class A) 116,119
228,700 Crown Resources Corp. + 428,813
28,000 Freeport McMoran Copper & Gold, Inc. 591,500
384,000 Glamis Gold Ltd.+ 696,000
100,000 Hecla Mining Co. + 156,250
424,101 Homestake Mining Co. 3,313,289
159,000 Newmont Mining Corp. 3,895,500
60,000 Ocean Energy, Inc. + 465,000
1,000,000 Piedmont Mining Co., Inc. (b)+ 80,000
17,750 Stillwater Mining Co. + 565,781
------------
11,011,157
------------
TOTAL STOCKS AND OTHER INVESTMENTS: 99.3%
(Cost: $37,694,691) 39,123,103
------------
SHORT-TERM OBLIGATION: 1.5%
PRINCIPAL INTEREST MATURITY VALUE
AMOUNT RATE DATE (NOTE 1)
- --------------------------------------------------------------------------------
$ 589,000
Repurchase Agreement (Note 10):
Purchased on 12/31/99; maturity
value $589,172 (with State Street
Bank & Trust Co.; collateralized
by $605,000 Federal Home Loan
Bank 5.685% due 8/12/02 with a
value of $603,488)
(Cost: $589,000) 3.50% 1/03/00 $ 589,000
------------
TOTAL INVESTMENTS: 100.8%
(Cost: $38,283,691) 39,712,103
OTHER ASSETS LESS LIABILITIES: (0.8)% (323,245)
------------
NET ASSETS: 100% $ 39,388,858
============
- ---------------
(a) Unless otherwise indicated, securities owned are shares of common stock.
(b) Affiliated company. See Schedule of Affiliated Company Transactions
(Note 9).
(c) Structured note. See Note 1.
+ Non-income producing.
SUMMARY OF % OF
INVESTMENTS NET
BY INDUSTRY ASSETS
- ----------- ------
Copper 1.5%
Diversified 0.3%
Gold & Silver 93.5%
Mining-Diversified 0.6%
Oil & Gas Exploration 1.2%
Platinum/Palladium/Rhodium 1.4%
Steel 0.8%
Short-Term Obligation 1.5%
Other assets less liabilities (0.8)%
-----
100.0%
=====
See Notes to Financial Statements
33
<PAGE>
INTERNATIONAL INVESTORS GOLD FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
DECEMBER 31,1999
NO. OF SHARES SECURITIES (A) VALUE (Note 1)
- --------------------------------------------------------------------------------
AUSTRALIA: 13.3%
2,837,400 Delta Gold N.L. $ 4,331,891
7,582,102 Lihir Gold Ltd.+ 5,526,454
2,670,750 Newcrest Mining Ltd. 9,119,490
5,044,941 Normandy Mining Ltd. 3,577,781
------------
22,555,616
------------
CANADA: 26.9%
192,300 Agnico-Eagle Mines Ltd. 1,418,213
393,871 Barrick Gold Corp. 6,966,593
6,400,000 Business Development Bank of Canada
Gold Linked Note,
2.50% due 12/06/00 (c) 5,674,176
404,864 Franco Nevada Mining Corp. 6,206,047
197,000 Geomaque Explorations Ltd. 72,256
254,300 GoldCorp, Inc. (Class A)+ 1,462,225
250,000 Manhattan Minerals Corp+ 908,305
1,206,500 Meridian Gold, Inc.+ 8,182,491
1,120,275 Placer Dome, Inc. 12,042,956
350,000 Richmont Mines, Inc.+ 512,284
111,500 Romarco Minerals, Inc. 75,619
180,000 Teck Corp. (Class A) 1,694,118
146,000 TVX Gold, Inc.+ 118,625
------------
45,333,908
------------
GHANA: 1.1%
687,400 Ashanti Goldfields Co. Ltd.
(Sponsored GDR) 1,804,425
------------
SOUTH AFRICA: 22.7%
76,957 Anglo American Platinum Corp. (ADR) 2,327,949
4,630,755 Avgold Ltd. 3,201,417
153,509 Anglogold Ltd. 5,256,117
162,400 Anglogold Ltd.(ADR) 8,157,957
1,240,862 Gold Fields Ltd. (ADR) 5,622,656
847,226 Gold Fields of South Africa Ltd. 4,100,036
901,140 Harmony Gold Mining Co. Ltd. 5,725,142
101,000 Impala Platinum Holdings Ltd. (ADR) 4,065,250
------------
38,456,524
------------
UNITED STATES: 23.6%
111,700 AK Steel Holding Corp. 2,108,338
222,700 Battle Mountain Gold Co.+ 459,319
230,000 Freeport McMoran Copper & Gold, Inc. 4,858,750
1,000,000 Glamis Gold Ltd.+ 1,812,500
1,650,939 Homestake Mining Co. 12,897,961
515,000 Newmont Mining Corp. 12,617,500
220,000 Ocean Energy, Inc.+ 1,705,000
1,270,000 Piedmont Mining Co., Inc. (b)+ 101,600
105,000 Stillwater Mining Co.+ 3,346,874
------------
39,907,842
------------
TOTAL STOCKS AND OTHER INVESTMENTS: 87.6%
(Cost: $133,359,776) 148,058,315
------------
NO. OF
CONTRACTS CALL OPTIONS PURCHASED: 0.6% VALUE (Note 1)
- --------------------------------------------------------------------------------
CANADA: 0.3%
500,000 Placer Dome, Inc. (strike price @
$10.00 expiring 1/22/00)+ $ 562,500
------------
UNITED STATES: 0.3%
800,000 Homestake Mining Co.
(strike price @ $7.50 expiring
1/22/00)+ 500,000
------------
TOTAL CALL OPTIONS PURCHASED: 0.6%
(Cost: $2,807,750) 1,062,500
------------
TOTAL INVESTMENTS: 88.2%
(Cost: $136,167,526) 149,120,815
OTHER ASSETS LESS LIABILITIES: 11.8% 19,924,174
------------
NET ASSETS: 100% $169,044,989
============
- --------------
(a) Unless otherwise indicated, securities owned are shares of common stock.
(b) Affiliated company. See Schedule of Affiliated Company Transactions
(Note 9).
(c) Structured note. See Note 1.
+ Non-income producing.
GLOSSARY:
ADR - American Depositary Receipt
SUMMARY OF % OF
INVESTMENTS NET
BY INDUSTRY ASSETS
- ----------- ------
Copper 2.9%
Gold & Silver 78.1%
Oil & Gas Exploration 1.6%
Platinum/Palladium/Rhodium 4.4%
Steel 1.2%
Other assets less liabilities 11.8%
-----
100.0%
=====
See Notes to Financial Statements
34
<PAGE>
U.S. GOVERNMENT MONEY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
DECEMBER 31, 1999
ANNUALIZED YIELD
AT TIME OF
PRINCIPAL MATURITY PURCHASE OR VALUE
AMOUNT DATE COUPON RATE (NOTE 1)
- --------------------------------------------------------------------------------
U.S. TREASURY BILLS: 114.8%
$ 20,000,000 1/30/00 5.27 $ 19,964,867
22,400,000 1/20/00 4.25 22,349,756
25,000,000 2/03/00 4.25 24,902,604
20,000,000 3/02/00 4.99 19,830,894
25,000,000 3/09/00 4.87 24,770,028
------------
TOTAL U.S. TREASURY BILLS: 114.8%
(Amortized Cost: $111,818,149) 111,818,149
------------
SHORT-TERM OBLIGATION: 11.5%
PRINCIPAL INTEREST MATURITY
AMOUNT RATE DATE
- --------------------------------------------------------------------------------
$11,205,000
Repurchase Agreement (Note 10):
Purchased on 12/31/99;
maturity value $11,206,089
(with State Street Bank and
Trust Co.; collateralized by
$11,330,000 U.S. Treasury
Notes 6.50% due 5/31/01
with a value of $11,433,858)
(Cost: $11,205,000) 3.50% 1/03/00 11,205,000
-------------
TOTAL INVESTMENTS: 126.3%
(Cost: $123,023,149) 123,023,149
OTHER ASSETS LESS LIABILITIES: (26.3)% (25,579,940)
-------------
NET ASSETS: 100% $ 97,443,209
=============
See Notes to Financial Statements
35
<PAGE>
VAN ECK FUNDS
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
<TABLE>
<CAPTION>
ASIA DYNASTY GLOBAL HARD ASSETS
FUND FUND
------------ ------------------
<S> <C> <C>
ASSETS:
Investments at cost ................................................. $ 26,128,642 $ 25,975,924
============ ============
Investments at value (Note 1) ....................................... $ 42,618,273 $ 26,550,470
Cash and foreign currency ........................................... 623,108 --
Cash--initial margin ................................................ 323,229 138,990
Receivables:
Capital shares sold ............................................... 2,617,664 40,240
Due from broker (Note 11) ......................................... 139,580 25,570
Interest and dividends ............................................ 11,855 45,809
Deferred organization costs and other assets (Note 1) ............... -- 80,864
------------ ------------
Total assets .................................................... 46,333,709 26,881,943
------------ ------------
LIABILITIES:
Payables:
Due to custodian .................................................. -- 19,396
Line of Credit (Note 13) .......................................... -- 200,000
Securities purchased .............................................. 273,073 2,817
Dividends payable ................................................. 1,983,434 --
Foreign taxes ..................................................... 467,386 --
Options written (premiums received $349,000) (Note 3) ............. -- 406,000
Capital shares redeemed ........................................... 117,926 159,092
Due to Adviser (Note 2) ........................................... 4,412 4,583
Accounts payable .................................................. 60,014 66,033
Due to Trustees (Note 7) .......................................... -- 621
Due to distributor (Note 4) ....................................... 23,226 14,656
Unrealized depreciation on open forward foreign currency
contracts (Note 6) ................................................ 35 --
------------ ------------
Total liabilities ............................................... 2,929,506 873,198
------------ ------------
NET ASSETS .......................................................... $ 43,404,203 $ 26,008,745
============ ============
CLASS A SHARES+:
Net assets .......................................................... $ 31,384,768 $ 17,756,602
============ ============
Shares outstanding .................................................. 2,149,887 1,478,810
============ ============
Net asset value and redemption price per share ...................... $14.60 $12.01
============ ============
Maximum offering price per share
(NAV/(1--maximum sales commission)) ............................... $15.49 $12.74
============ ============
CLASS B SHARES:
Net assets .......................................................... $ 12,019,435 $ 5,029,108
============ ============
Shares outstanding .................................................. 864,781 418,968
============ ============
Net asset value, maximum offering and redemption price per share
(Redemption may be subject to a contingent deferred sales charge
within the first six years of ownership) .......................... $13.90 $12.00
============ ============
CLASS C SHARES:
Net assets .......................................................... -- $ 3,223,035
============ ============
Shares outstanding .................................................. -- 267,769
============ ============
Net asset value, maximum offering and redemption price per share
(Redemption may be subject to a contingent deferred sales charge
within the first year of ownership) ............................... -- $12.04
============ ============
Net assets consist of:
Aggregate paid in capital ......................................... $ 27,316,505 $ 39,352,403
Unrealized appreciation of investments, options, swaps,
futures forward foreign currency contracts and foreign currencies 16,160,846 543,193
Undistributed (overdistributed) net investment income (loss) ...... (7,035) 45,571
Accumulated realized gain (loss) .................................. (66,113) (13,932,422)
------------ ------------
$ 43,404,203 $ 26,008,745
============ ============
</TABLE>
- ---------------
+ The U.S. Government Money Fund does not have a designated class of shares.
See Notes to Financial Statements
36
<PAGE>
<TABLE>
<CAPTION>
GLOBAL GOLD/RESOURCES INTERNATIONAL INVESTORS U.S. GOVERNMENT
LEADERS FUND FUND GOLD FUND MONEY FUND
-------------- ---------------- ------------------------ -----------------
<S> <C> <C> <C> <C>
$23,087,495 $38,283,691 $136,167,526 $123,023,149
=========== =========== ============ ============
$39,277,849 $39,712,103 $149,120,815 $123,023,149
492,358 6,534 -- --
-- -- -- --
197,150 88,191 25,698,238 112,048
-- -- -- --
24,064 4,391 26,693 1,089
-- -- -- --
----------- ----------- ------------ ------------
39,991,421 39,811,219 174,845,746 123,136,286
----------- ----------- ------------ ------------
-- -- 87,498 1,123
-- -- 5,000,000 --
48,159 -- -- --
295,409 -- 47 56,546
-- -- -- --
61,537 312,702 366,366 25,541,410
4,319 11,896 31,463 17,243
51,830 81,478 257,006 56,908
171 6,303 19,205 --
17,914 9,982 39,172 19,847
-- -- -- --
----------- ----------- ------------ ------------
479,339 422,361 5,800,757 25,693,077
----------- ----------- ------------ ------------
$39,512,082 $39,388,858 $169,044,989 $ 97,443,209
=========== =========== ============ ============
$33,069,596 $39,388,858 $169,044,989 $ 97,443,209
=========== =========== ============ ============
2,451,033 14,412,867 29,510,566 97,454,789
=========== =========== ============ ============
$13.49 $2.73 $5.73 $1.00
=========== =========== ============ ============
$14.31 $2.90 $6.08 --
=========== =========== ============
$6,442,486 -- -- --
===========
484,198 -- -- --
===========
$13.31 -- -- --
===========
-- -- -- --
-- -- -- --
-- -- -- --
$22,480,576 $72,503,881 $166,331,056 $97,454,789
16,193,124 1,082,924 12,953,473 --
(98,760) -- (47) --
937,142 (34,197,947) (10,239,493) (11,580)
----------- ----------- ----------- ------------
$39,512,082 $39,388,858 $169,044,989 $97,443,209
=========== =========== ============ ============
</TABLE>
See Notes to Financial Statements
37
<PAGE>
VAN ECK FUNDS
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
ASIA DYNASTY GLOBAL HARD
FUND ASSETS FUND
-------------- -------------
<S> <C> <C>
INCOME:
Dividends ..................................................... $ 452,005 $ 680,973
Interest ...................................................... 47,395 130,571
Foreign taxes withheld ........................................ (17,660) (15,557)
------------ ------------
Total income .................................................. 481,740 795,987
------------ ------------
EXPENSES:
Management (Note 2) ........................................... 204,932 313,782
Distribution Class A (Note 4) ................................. 100,219 112,148
Distribution Class B (Note 4) ................................. 72,804 52,052
Distribution Class C (Note 4) ................................. -- 37,435
Administration (Note 2) ....................................... 83,176 17,810
Transfer agent ................................................ 130,724 162,220
Professional .................................................. 33,014 51,031
Reports to shareholders ....................................... 16,506 12,168
Registration .................................................. 22,465 27,149
Custodian ..................................................... 171,776 170,127
Trustees' fees and expenses (Note 7) .......................... 8,234 12,152
Amortization of deferred organization costs ................... -- 6,710
Interest expense .............................................. -- 15,000
Other ......................................................... 5,265 10,512
------------ ------------
Total expenses ................................................ 849,115 1,000,296
Expense reduction (Note 2) ................................... -- (294,362)
------------ ------------
Net expenses .................................................. 849,115 705,934
------------ ------------
Net investment income (loss) .................................. (367,375) 90,053
------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 3):
Realized gain (loss) from security transactions
(Asia Dynasty Fund is net of foreign
taxes withheld of $131,268) ................................. 9,088,492 (3,507,118)
Realized gain from futures contracts .......................... 80,166 340,492
Realized gain (loss) from options ............................. 97,496 236,704
Realized gain (loss) from foreign currency transactions ....... (212,465) (46,029)
Realized loss from short sales (Note 1) ....................... -- (224,439)
Change in unrealized appreciation (depreciation) of foreign
currencies and forward foreign currency contracts ........... 25,137 (277,731)
Change in unrealized appreciation (depreciation)
of investments, futures, swaps,
short sales and options (Asia Dynasty Fund is net
of foreign taxes withheld of $467,386) ...................... 13,553,987 7,685,797
------------ ------------
Net gain (loss) on investments and foreign currency ........... 22,632,813 4,207,676
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 22,265,438 $ 4,297,729
============ ============
</TABLE>
See Notes to Financial Statements
38
<PAGE>
<TABLE>
<CAPTION>
GLOBAL LEADERS GOLD/RESOURCES INTERNATIONAL INVESTORS U.S. GOVERNMENT
FUND FUND GOLD FUND MONEY FUND
---------------- ---------------- ------------------------ ------------------
<S><C> <C> <C> <C>
$ 233,643 $ 541,850 $ 2,785,983 $ --
288,736 222,267 2,120,092 3,969,679
(15,790) (25,562) (113,558) --
------------ ------------ ------------ ------------
506,589 738,555 4,792,517 3,969,679
------------ ------------ ------------ ------------
248,902 332,187 1,416,607 411,479
137,779 110,729 304,814 205,739
56,311 -- -- --
-- -- -- --
97,752 168,243 639,221 67,444
111,669 311,513 916,851 74,990
33,734 37,587 77,457 32,683
14,578 28,368 135,384 43,226
16,867 14,915 26,556 17,276
27,772 31,661 206,240 38,940
11,346 17,926 68,234 34,793
-- -- -- --
17 488 1,343 --
29,880 62,879 164,136 16,202
------------ ------------ ------------ ------------
786,607 1,116,496 3,956,843 942,772
(94,695) (3,725) (28,469) --
------------ ------------ ------------ ------------
691,912 1,112,771 3,928,374 942,772
------------ ------------ ------------ ------------
(185,323) (374,216) 864,143 3,026,907
------------ ------------ ------------ ------------
3,110,359 (6,584,236) 12,423,170 (11,580)
-- -- -- --
-- (477,148) (2,405,267) --
(67,032) 41,139 219,126 --
-- -- -- --
12,670 -- -- --
7,121,476 2,360,158 (12,426,887) --
------------ ------------ ------------ ------------
10,177,473 (4,660,087) (2,189,858) (11,580)
------------ ------------ ------------ ------------
$ 9,992,150 $ (5,034,303) $ (1,325,715) $ 3,015,327
============ ============ ============ ============
</TABLE>
See Notes to Financial Statements
39
<PAGE>
VAN ECK FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
ASIA DYNASTY GLOBAL HARD ASSETS
FUND FUND
---------------------------- -----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1999 1998 1999 1998
------------ ------------ ----------- ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income (loss) ................................. $ (367,375) $ (50,259) $ 90,053 $ 254,796
Realized gain (loss) from security transactions .............. 9,088,492 (2,143,295) (3,507,118) (11,838,909)
Realized gain (loss) from futures contracts .................. 80,166 (84,091) 340,492 981,114
Realized gain (loss) from options ............................ 97,496 (150,000) 236,704 29,667
Realized gain (loss) from foreign currency transactions ...... (212,465) (160,175) (46,029) 259,365
Realized loss from short sales ............................... -- -- (224,439) --
Change in unrealized appreciation (depreciation)
of foreign currencies and forward foreign
currency contracts.......................................... 25,137 (48,286) (277,731) (10,926)
Change in unrealized appreciation (depreciation) of
investments, futures, swaps, short sales and options ....... 13,553,987 2,137,795 7,685,797 (12,074,129)
------------ ------------ ------------ ------------
Increase (decrease) in net assets resulting from operations .. 22,265,438 (498,311) 4,297,729 (22,399,022)
------------ ------------ ------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Class A Shares+ ............................................ -- -- (21,571) (351,353)
Class B Shares ............................................. -- -- -- (78,071)
Class C Shares ............................................. -- -- -- (57,310)
Realized gain:
Class A Shares+ ............................................ (4,585,684) -- -- (65,219)
Class B Shares ............................................. (1,797,699) -- -- (13,433)
Class C Shares ............................................. -- -- -- (10,454)
Tax return of capital:
Class A Shares ............................................. -- -- (86,282) --
Class B Shares ............................................. -- -- -- --
Class C Shares ............................................. -- -- -- --
------------ ------------ ------------ ------------
Total dividends and distributions ............................ (6,383,383) -- (107,853) (575,840)
------------ ------------ ------------ ------------
CAPITAL SHARE TRANSACTIONS (NOTE 5):
Net proceeds from sales of shares:
Class A Shares+ ............................................ 47,934,490 12,813,182 10,858,208 10,330,661
Class B Shares ............................................. 4,235,666 574,435 932,899 2,521,220
Class C Shares ............................................. -- -- 298,652 2,088,807
------------ ------------ ------------ ------------
52,170,156 13,387,617 12,089,759 14,940,688
------------ ------------ ------------ ------------
Capital shares issued
in connection with an acquisition (Note 12) ................ -- -- -- --
------------ ------------ ------------ ------------
Reinvestment of dividends:
Class A Shares+ ............................................ 3,345,176 -- 90,539 348,855
Class B Shares ............................................. 1,054,774 -- -- 67,976
Class C Shares ............................................. -- -- -- 48,859
------------ ------------ ------------ ------------
4,399,950 -- 90,539 465,690
------------ ------------ ------------ ------------
Cost of shares reacquired:
Class A Shares+ ............................................ (42,412,204) (14,805,663) (19,101,929) (32,246,447)
Class B Shares ............................................. (2,262,561) (2,243,075) (2,192,358) (4,073,105)
Class C Shares ............................................. -- -- (1,626,813) (4,132,931)
------------ ------------ ------------ ------------
(44,674,765) (17,048,738) (22,921,100) (40,452,483)
------------ ------------ ------------ ------------
Increase (decrease) in net assets resulting from capital
share transactions ......................................... 11,895,341 (3,661,121) (10,740,802) (25,046,105)
------------ ------------ ------------ ------------
Total increase (decrease) in net assets ...................... 27,777,396 (4,159,432) (6,550,926) (48,020,967)
NET ASSETS:
Beginning of year ............................................ 15,626,807 19,786,239 32,559,671 80,580,638
------------ ------------ ------------ ------------
End of year .................................................. $ 43,404,203 $ 15,626,807 $ 26,008,745 $ 32,559,671
============ ============ ============ ============
Undistributed (overdistributed) net investment income (loss).. $ (7,035) $ (79,734) $ 45,571 $ 6,744
============ ============ ============ ============
</TABLE>
- ---------------
+ The U.S. Government Money Fund does not have a designated class of shares.
See Notes to Financial Statements
40
<PAGE>
<TABLE>
<CAPTION>
GLOBAL LEADERS GOLD/RESOURCES INTERNATIONAL INVESTORS GOLD U.S. GOVERNMENT MONEY
FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1999 1998 1999 1998 1999 1998 1999 1998
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$(185,323) $239,560 $(374,216) $(585,706) $864,143 $2,250,149 $3,026,907 $2,902,109
3,110,359 4,374,568 (6,584,236) (13,823,751) 12,423,170 (14,423,140) (11,580) 35,613
-- -- -- -- -- -- -- --
-- (5,335) (477,148) (872,230) (2,405,267) (2,818,392) -- --
(67,032) (163,137) 41,139 (68,135) 219,126 (235,689) -- --
-- -- -- -- -- -- -- --
12,670 (101,957) -- 43,626 -- (2,193) -- --
7,121,476 1,605,960 2,360,158 7,613,527 (12,426,887) 7,266,073 -- --
- ----------- ----------- ----------- ----------- --------------- --------------- --------------- ---------------
9,992,150 5,949,659 (5,034,303) (7,692,669) (1,325,715) (7,963,192) 3,015,327 2,937,722
- ----------- ----------- ----------- ----------- --------------- --------------- --------------- ---------------
-- -- -- -- (1,457,953) (2,107,262) (3,026,907) (2,902,109)
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
(1,912,779) (3,600,593) -- -- -- -- -- (35,613)
(367,947) (787,314) -- -- -- -- -- --
-- -- -- -- -- -- -- --
-- (179,959) -- -- -- -- -- --
-- (24,623) -- -- -- -- -- --
-- -- -- -- -- -- -- --
- ----------- ----------- ----------- ----------- --------------- --------------- --------------- ---------------
(2,280,726) (4,592,489) -- -- (1,457,953) (2,107,262) (3,026,907) (2,937,722)
- ----------- ----------- ----------- ----------- --------------- --------------- --------------- ---------------
7,648,708 3,878,822 14,708,878 20,425,854 4,300,307,346 3,725,426,622 4,365,984,087 3,670,980,599
1,442,296 1,319,201 -- -- -- -- -- --
-- -- -- -- -- -- -- --
- ----------- ----------- ----------- ----------- --------------- --------------- --------------- ---------------
9,091,004 5,198,023 14,708,878 20,425,854 4,300,307,346 3,725,426,622 4,365,984,087 3,670,980,599
- ----------- ----------- ----------- ----------- --------------- --------------- --------------- ---------------
-- -- -- -- -- -- -- 7,517,642
- ----------- ----------- ----------- ----------- --------------- --------------- --------------- ---------------
1,704,064 3,416,709 -- -- 1,093,636 1,512,309 1,709,890 1,495,988
271,969 619,243 -- -- -- -- -- --
-- -- -- -- -- -- -- --
- ----------- ----------- ----------- ----------- --------------- --------------- --------------- ---------------
1,976,033 4,035,952 -- -- 1,093,636 1,512,309 1,709,890 1,495,988
- ----------- ----------- ----------- ----------- --------------- --------------- --------------- ---------------
(10,215,398) (5,624,160) (23,682,720) (25,486,897) (4,368,210,994) (3,711,174,134) (4,317,461,360) (3,709,422,005)
(2,551,137) (1,151,921) -- -- -- -- -- --
-- -- -- -- -- -- -- --
- ----------- ----------- ----------- ----------- --------------- --------------- --------------- ---------------
(12,766,535) (6,776,081) (23,682,720) (25,486,897) (4,368,210,994) (3,711,174,134) (4,317,461,360) (3,709,422,005)
- ----------- ----------- ----------- ----------- --------------- --------------- --------------- ---------------
(1,699,498) 2,457,894 (8,973,842) (5,061,043) (66,810,012) 15,764,797 50,232,617 (29,427,776)
- ----------- ----------- ----------- ----------- --------------- --------------- --------------- ---------------
6,011,926 3,815,064 (14,008,145) (12,753,712) (69,593,680) 5,694,343 50,221,037 (29,427,776)
33,500,156 29,685,092 53,397,003 66,150,715 238,638,669 232,944,326 47,222,172 76,649,948
- ----------- ----------- ----------- ----------- --------------- --------------- --------------- ---------------
$39,512,082 $33,500,156 $39,388,858 $53,397,003 $ 169,044,989 $ 238,638,669 $ 97,443,209 $ 47,222,172
=========== =========== =========== =========== =============== =============== =============== ===============
$ (98,760) $ (171,441) $ (345,603) $ (640,056) $ (47) $ -- $ -- $ --
=========== =========== =========== =========== =============== =============== =============== ===============
</TABLE>
See Notes to Financial Statements
41
<PAGE>
ASIA DYNASTY FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each year:
<TABLE>
<CAPTION>
CLASS A CLASS B
----------------------------------------- ------------------------------------------
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
----------------------------------------- ------------------------------------------
1999 1998 1997 1996 1995 1999 1998 1997 1996 1995
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year ...... $ 7.80 $7.82 $13.21 $12.40 $12.13 $ 7.54 $7.63 $13.08 $12.33 $12.09
------ ----- ------ ------ ------ ------ ----- ------ ------ ------
Income from Investment Operations:
Net Investment Loss ................... (0.11)(c) (0.01) (0.28) (0.20) (0.02) (0.24)(c) (0.07) (0.30) (0.24) (0.08)
Net Gain (Loss) on Investments
(both Realized and Unrealized) ...... 9.35 (0.01) (3.82) 1.01 0.40 9.04 (0.02) (3.86) 0.99 0.40
------ ----- ------ ------ ------ ------ ----- ------ ------ ------
Total from Investment Operations ........ 9.24 (0.02) (4.10) 0.81 0.38 8.80 (0.09) (4.16) 0.75 0.32
------ ----- ------ ------ ------ ------ ----- ------ ------ ------
Less Dividends and Distributions:
Dividends from Net Investment Income... -- -- -- -- (0.09) -- -- -- -- (0.06)
Distributions from Capital Gains ...... (2.44) -- (1.15) -- -- (2.44) -- (1.15) -- --
Tax Return of Capital ................. -- -- (0.14) -- (0.02) -- -- (0.14) -- (0.02)
------ ----- ------ ------ ------ ----- ----- ------ ------ ------
Total Dividends and Distributions ....... (2.44) -- (1.29) -- (0.11) (2.44) -- (1.29) -- (0.08)
------ ----- ------ ------ ------ ----- ----- ------ ------ ------
Net Asset Value, End of Year ............ $14.60 $7.80 $ 7.82 $13.21 $12.40 $13.90 $7.54 $ 7.63 $13.08 $12.33
====== ===== ====== ====== ====== ====== ===== ====== ====== ======
Total Return (a) ........................ 118.46% (0.26)% (32.10)% 6.53% 3.13% 116.71% (1.18)% (32.87)% 6.08% 2.65%
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Year (000) ........... $31,385 $10,685 $12,873 $44,351 $64,275 $12,019 $4,942 $6,914 $20,296 $27,234
Ratio of Gross Expenses to Average
Net Assets ............................ 2.82% 3.13% 2.38% 2.42% 2.03% 3.89% 3.83% 3.00% 2.86% 2.41%
Ratio of Net Expenses to Average
Net Assets ............................ 2.82% 2.43%(b) 2.38% 2.42% 2.03% 3.89% 3.14%(b) 3.00% 2.86% 2.41%
Ratio of Net Investment Loss to
Average Net Assets .................... (1.03)% (0.09)% (0.76)% (0.73)% (0.08)% (2.21)% (0.79)% (1.36)% (1.14)% (0.52)%
Portfolio Turnover Rate ................. 172.18% 121.96% 200.45% 52.99% 57.06% 172.18% 121.96% 200.45% 52.99% 57.06%
</TABLE>
- --------------
(a) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of dividends and
distributions at net asset value during the period and a redemption on the
last day of the period. A sales charge is not reflected in the calculation
of total dividends and return.
(b) After expenses reduced by a custodian fee arrangement.
(c) Based on average shares outstanding.
See Notes to Financial Statements
42
<PAGE>
GLOBAL HARD ASSETS FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period:
<TABLE>
<CAPTION>
CLASS A CLASS B
------------------------------- -------------------------------------
FOR THE PERIOD
APRIL 24,
1996(A) TO
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, DECEMBER 31,
--------------------------------------- -----------------------
1999 1998 1997 1996 1995 1999 1998 1997 1996
---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.. $10.34 $15.50 $14.42 $10.68 $ 9.41 $10.37 $15.60 $14.50 $12.55
------ ------ ------ ------ ------ ------ ------ ------ ------
Income from Investment Operations:
Net Investment Income (Loss) ....... 0.07 0.10 0.05 0.15 0.32(e) (0.03) 0.01 (0.01) 0.11
Net Gain (Loss) on Investments
(both Realized and Unrealized) ... 1.65 (5.09) 2.01 4.70 1.57 1.66 (5.08) 2.00 2.95
------ ------ ------ ------ ------ ------ ------ ------ ------
Total from Investment Operations ..... 1.72 (4.99) 2.06 4.85 1.89 1.63 (5.07) 1.99 3.06
------ ------ ------ ------ ------ ------ ------ ------ ------
Less Dividends and Distributions:
Dividends from Net Investment
Income ........................... (0.01) (0.15) (0.02) (0.14) (0.62) -- (0.14) -- (0.14)
Net Distributions from Capital
Gains .............................. -- (0.02) (0.96) (0.95) -- -- (0.02) (0.89) (0.95)
Tax Return of Capital .............. (0.04) -- -- (0.02) -- -- -- -- (0.02)
------ ------ ------ ------ ------ ------ ------ ------ ------
Total Dividends and Distributions .... (0.05) (0.17) (0.98) (1.11) (0.62) -- (0.16) (0.89) (1.11)
====== ====== ====== ====== ====== ====== ====== ====== ======
Net Asset Value, End of Period ....... $12.01 $10.34 $15.50 $14.42 $10.68 $12.00 $10.37 $15.60 $14.50
====== ====== ====== ====== ====== ====== ====== ====== ======
Total Return (b) ..................... 16.64% (32.25)% 14.29% 45.61% 20.09% 15.72% (32.55)% 13.72% 24.55%
- ----------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Period (000) ......$17,757 $22,969 $61,341 $27,226 $3,820 $5,029 $5,580 $10,541 $1,806
Ratio of Gross Expenses to
Average Net Assets ................... 2.89% 2.11% 2.00% 2.63% 4.05% 3.79% 2.81% 2.73% 3.27%(d)
Ratio of Net Expenses to
Average Net Assets (net of interest
expense) (c) ....................... 2.00% 2.00% 1.97% 0.72% -- 2.71% 2.50% 2.50% 1.64%(d)
Ratio of Net Investment Income (Loss)
to Average Net Assets .............. 0.49% 0.58% 0.36% 1.45% 3.08% (0.23)% 0.12% (0.13)% 0.53%(d)
Portfolio Turnover Rate .............. 195.00% 167.79% 118.10% 163.91% 179.33% 195.00% 167.79% 118.10% 163.91%
<CAPTION>
CLASS C
- -----------------------------------------
YEAR ENDED DECEMBER 31,
- -----------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
$10.40 $15.64 $14.52 $10.76 $ 9.41
------ ------ ------ ------ ------
(0.03) 0.01 (0.01) 0.11 0.34
1.67 (5.09) 2.00 4.73 1.63
------ ------ ------ ------ ------
1.64 (5.08) 1.99 4.84 1.97
------ ------ ------ ------ ------
-- (0.14) -- (0.11) (0.62)
-- (0.02) (0.87) (0.95) --
-- -- -- (0.02) --
------ ------ ------ ------ ------
(0.16) (0.89) (1.11) -- (0.62)
====== ====== ====== ====== ======
$12.04 $10.40 $15.64 $14.52 $10.76
====== ====== ====== ====== ======
(32.55)% 13.72% 24.55% 15.77% (32.53)%
- -------------------------------------------
$3,223 $4,011 $8,698 $1,935 $181
4.15% 3.00% 2.94% 6.02% 37.88%
2.71% 2.50% 2.50% 1.31% --
(0.22)% 0.11% (0.15)% 0.84% 3.30%
195.00% 167.79% 118.10% 163.91% 179.33%
</TABLE>
- ----------
(a) Commencement of offering.
(b) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of dividends and
distributions at net asset value during the period and a redemption on the
last day of the period. A sales charge is not reflected in the calculation
of total return. Total returns for periods of less than one year are not
annualized.
(c) After expenses reduced by a custodian fee, directed brokerage and/or
Advisory fee waiver arrangement.
(d) Annualized.
(e) Based on average shares outstanding.
See Notes to Financial Statements
43
<PAGE>
GLOBAL LEADERS FUND
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each year:
<TABLE>
<CAPTION>
CLASS A
-----------------------------------------------
YEAR ENDED DECEMBER 31,
-----------------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year ............ $10.78 $10.38 $10.37 $10.31 $9.07
------ ------ ------ ------ ------
Income from Investment Operations:
Net Investment Income (loss) ................ (0.06) 0.02 0.10 0.12 0.07(a)
Net Gain on Investments
(both Realized and Unrealized) ............ 3.59 2.07 1.43 1.15 1.31
------ ------ ------ ------ -------
Total from Investment Operations .............. 3.53 2.09 1.53 1.27 1.38
------ ------ ------ ------ -------
Less Dividends and Distributions:
Dividends from Net Investment Income (d) .... -- -- (0.08) (0.11) (0.14)
Distribution from Capital Gains ............. (0.82) (1.61) (1.43) (1.10) --
Tax Return of Capital ....................... -- (0.08) (0.01) -- --
------ ------ ------ ------ ------
Total Dividends and Distributions ............. (0.82) (1.69) (1.52) (1.21) (0.14)
------ ------ ------ ------ ------
Net Asset Value, End of Year .................. $13.49 $10.78 $10.38 $10.37 $10.31
====== ====== ====== ====== ======
Total Return (b) .............................. 32.83% 20.65% 14.77% 12.28% 15.30%
- ----------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Year (000) ................. $33,070 $27,461 $24,630 $29,331 $30,632
Ratio of Gross Expenses To Average Net Assets . 2.20% 2.32% 2.45% 2.54% 2.69%
Ratio of Net Expenses to Average Net Assets ... 2.00%(c) 2.00%(c) 2.00%(c) 2.17%(c) 2.69%
Ratio of Net Investment Income (Loss)
to Average Net Assets ....................... (0.48)% 0.85% 0.85% 1.05% 0.68%
Portfolio Turnover Rate ....................... 86.14% 87.79% 78.07% 114.30% 196.69%
<CAPTION>
CLASS B
--------------------------------------------
YEAR ENDED DECEMBER 31,
--------------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
<C> <C> <C> <C> <C>
$10.67 $10.31 $10.32 $10.28 $ 9.02
------ ------ ------ ------ ------
(0.12) -- 0.04 0.06 0.01
3.56 2.02 1.43 1.14 1.28
------ ------ ------ ------ ------
3.44 2.02 1.47 1.20 1.29
------ ------ ------ ------ ------
-- -- (0.03) (0.06) (0.03)
(0.80) (1.61) (1.45) (1.10) --
-- (0.05) -- -- --
------ ------ ------ ------ ------
(0.80) (1.66) (1.48) (1.16) (0.03)
------ ------ ------ ------ ------
$13.31 $10.67 $10.31 $10.32 $10.28
====== ====== ====== ====== ======
32.27% 20.07% 14.26% 11.49% 14.54%
- ------------------------------------------------
$6,442 $6,039 $5,055 $4,932 $6,151
3.21% 3.25% 2.51% 3.19% 3.20%
2.50%(c) 2.50%(c) 2.50%(c) 2.71%(c) 3.20%
(0.94)% 0.36% 0.36% 0.51% 0.14%
86.14% 87.79% 78.07% 114.30% 196.69%
</TABLE>
- -------------
(a) Based on average shares outstanding.
(b) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of dividends and
distributions at net asset value during the period and a redemption on the
last day of the period. A sales charge is not reflected in the calculation
of total return.
(c) After expenses reduced by a custodian fee, directed brokerage or Advisory
fee waiver arrangement.
(d) Net of foreign taxes withheld (to be included in income and claimed as a tax
credit on deduction by the shareholder for federal income tax purposes) of
$0.01 for 1997.
See Notes to Financial Statements
44
<PAGE>
GOLD/RESOURCES FUND
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each year:
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------------------
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year ....................... $3.04 $3.47 $5.72 $5.58 $5.35
----- ------ ------ ----- -----
Income from Investment Operations
Net Investment Loss .................................... (0.03) (0.04) (0.04) (0.06) (0.03)
Net Gain (Loss) on Investments
(both Realized and Unrealized) ....................... (0.28) (0.39) (2.21) 0.20 0.26
----- ------ ------ ----- -----
Total from Investment Operations ......................... (0.31) (0.43) (2.25) 0.14 0.23
----- ------ ------ ----- -----
Net Asset Value, End of Year ............................. $2.73 $3.04 $3.47 $5.72 $5.58
====== ====== ====== ===== =====
Total Return (a) ......................................... (10.20)% (12.39)% (39.34)% 2.51% 4.30%
- -----------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Year (000) ............................ $39,389 $53,397 $66,151 $132,298 $155,974
Ratio of Gross Expenses to Average Net Assets ............ 2.52% 2.24% 1.87% 1.71% 1.81%
Ratio of Net Expenses to Average Net Assets .............. 2.51%(b) 2.21%(b) 1.87% 1.71% 1.81%
Ratio of Net Investment Loss to Average Net Assets ....... (0.84)% (0.98)% (0.57)% (0.75)% (0.44)%
Portfolio Turnover Rate .................................. 95.44% 79.99% 32.46% 12.95% 6.16%
</TABLE>
- -------------
(a) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period and a redemption on the last day
of the period. A sales charge is not reflected in the calculation of total
return.
(b) After expenses reduced by a custodian fee or directed brokerage arrangement.
See Notes to Financial Statements
45
<PAGE>
INTERNATIONAL INVESTORS GOLD FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each year:
<TABLE>
<CAPTION>
CLASS A
---------------------------------------------------------------
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year ....................... $6.59 $7.54 $11.90 $13.35 $15.21
----- ----- ------ ------ -----
Income from Investment Operations:
Net Investment Income .................................. 0.03 0.06 0.09 0.05 0.08
Net Loss on Investments (both Realized
and Unrealized) ...................................... (0.84) (0.95) (4.36) (1.29) (1.44)
----- ----- ------ ------ ------
Total from Investment Operations ......................... (0.81) (0.89) (4.27) (1.24) (1.36)
----- ----- ------ ------ ------
Less Dividends and Distributions:
Dividends from Net Investment Income ................... (0.05) (0.06) (0.09) (0.07) (0.10)
Distributions from Capital Gains ....................... -- -- -- (0.14) (0.38)
Tax Return of Capital .................................. -- -- -- -- (0.02)
----- ----- ------ ------ ------
Total Dividends and Distributions ........................ (0.05) (0.06) (0.09) (0.21) (0.50)
----- ----- ------ ------ ------
Net Asset Value, End of Year ............................. $5.73 $6.59 $7.54 $11.90 $13.35
===== ====== ===== ====== ======
Total Return (a) ......................................... (12.37)% (11.87)% (36.00)% (9.37)% (8.93)%
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Year (000) ............................ $169,045 $238,639 $232,944 $409,331 $519,795
Ratio of Gross Expenses to Average Net Assets ............ 2.09% 1.78% 1.52% 1.43% 1.42%
Ratio of Net Expenses to Average Net Assets .............. 2.08%(b) 1.76%(b) 1.47%(b) 1.43% 1.42%
Ratio of Net Investment Income to Average Net Assets ..... 0.46% 0.99% 0.90% 0.36% 0.55%
Portfolio Turnover Rate .................................. 94.67% 86.65% 19.99% 12.45% 4.10%
</TABLE>
- -----------------
(a) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of dividends and
distributions at net asset value during the period and a redemption on the
last day of the period. A sales charge is not reflected in the calculation
of total return.
(b) After expenses reduced by a custodian fee or directed brokerage
arrangement.
See Notes to Financial Statements
46
<PAGE>
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> <C>
Net Asset Value, Beginning of Year ................. $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- -----
Income from Investment Operations:
Net Investment Income ............................ 0.03 0.04 0.04 0.04 0.05
Less Distributions to Shareholders:
Dividends from Net Investment Income ............. (0.03) (0.04) (0.04) 0.04) (0.05)
----- ----- ----- ----- -----
Net Asset Value, End of Year ....................... $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== =====
Total Return ....................................... 3.43% 3.88% 3.77% 3.85% 4.56%
- ----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Year (000) ...................... $97,443 $47,222 $76,650 $107,698 $70,130
Ratio of Gross Expenses to Average Net Assets ...... 1.15% 1.20% 1.28% 1.23% 1.25%
Ratio of Net Investment Income to Average Net Assets 3.68% 3.89% 3.91% 4.02% 4.45%
</TABLE>
See Notes to Financial Statements
47
<PAGE>
VAN ECK FUNDS
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES--Van Eck Funds (the "Trust"), organized
as a Massachusetts business trust on April 3, 1985, is registered under the
Investment Company Act of 1940. The Trust operates as a series fund currently
comprised of six portfolios: Asia Dynasty Fund, Global Leaders Fund (name
changed on May 1, 1999 from Global Balanced Fund), Global Hard Assets Fund,
Gold/Resources Fund, International Investors Gold Fund and U.S. Government Money
Fund (the "Funds"). Asia Dynasty Fund and U.S. Government Money Fund are
classified as diversified funds under the Investment Company Act of 1940, as
amended. Global Hard Assets Fund, Global Leaders Fund (formerly Global Balanced
Fund), Gold/Resources Fund and International Investors Gold Fund are
non-diversified funds. The following is a summary of significant accounting
policies consistently followed by the Funds in the preparation of their
financial statements. The policies are in conformity with accounting principles
generally accepted in the United States. The preparation of financial statements
in conformity with accounting principles generally accepted in the United States
requires management to make estimates and assumptions that affect the reported
amounts in the financial statements. Actual results could differ from those
estimates.
A. SECURITY VALUATION--Securities traded on national or foreign exchanges are
valued at the last sales prices reported at the close of business on the
last business day of the year. Over-the-counter securities and listed
securities for which no sale was reported are valued at the mean of the bid
and asked prices. Short-term obligations are valued at amortized cost, which
with accrued interest approximates value. Forward foreign currency contracts
are valued at the spot currency rate plus an amount ("points") which
reflects the differences in interest rates between the U.S. and foreign
markets. Securities for which quotations are not available are stated at
fair value as determined by the Board of Trustees.
B. FEDERAL INCOME TAXES--It is each Fund's policy to comply with the provisions
of the Internal Revenue Code applicable to regulated investment companies
and to distribute all of their taxable income to their shareholders.
Therefore, no federal income tax provision is required.
C. CURRENCY TRANSLATION--Assets and liabilities denominated in foreign
currencies and commitments under forward foreign currency contracts are
translated into U.S. dollars at the mean of the quoted bid and asked prices
of such currencies. Purchases and sales of investments are translated at the
exchange rates prevailing when such investments were acquired or sold.
Income and expenses are translated at the exchange rates prevailing when
accrued. The portion of realized and unrealized gains and losses on
investments that result from fluctuations in foreign currency exchange rates
is not separately disclosed. Realized gains or losses and the appreciation
(depreciation) attributable to foreign currency fluctuations on other
foreign currency denominated assets and liabilities are recorded as net
realized or unrealized gains and losses from foreign currency transactions,
respectively.
D. OTHER--Security transactions are accounted for on the date the securities
are purchased or sold. Dividend income is recorded on the ex-dividend date.
Dividends on foreign securities are recorded when the Fund is informed of
such dividends. Interest income is accrued as earned.
E. DISTRIBUTIONS TO SHAREHOLDERS--Dividends to shareholders from net investment
income and realized gains, if any, are recorded on the ex-dividend date.
Income and capital gains distributions are determined in accordance with
income tax regulations which may differ from such amounts determined in
accordance with accounting principles generally accepted in the United
States.
For the year ended December 31, 1999, the reclassifications arising from
permanent "book/tax" differences resulting in increases (decreases) to the
components of net assets were as follows:
<TABLE>
<CAPTION>
INCREASE
INCREASE (DECREASE)
(DECREASE) ACCUMULATED
UNDISTRIBUTED/ NET REALIZED CAPITAL
(OVERDISTRIBUTED) GAIN/(LOSS) PAID IN
NET INVESTMENT FROM EXCESS
INCOME INVESTMENTS OF PAR
---------------- -------------- ------
<S> <C> <C> <C>
Asia Dynasty Fund .................. $ 440,074 $ (469,895) $ 29,821
Global Hard Assets Fund ............ 56,627 107,094 (163,721)
Global Leaders Fund ................ 339,185 45,746 (384,931)
Gold/Resources Fund ................ 1,014,272 31,696,589 (32,710,861)
International Investors Gold Fund .. 593,763 (219,126) (374,637)
</TABLE>
F. DEFERRED ORGANIZATION COSTS--Deferred organization costs are being
amortized over a period of five years.
USE OF DERIVATIVE INSTRUMENTS
G. OPTION CONTRACTS--The Funds (except U.S. Government Money Fund) may invest,
for hedging and other purposes, in call and put options on securities,
currencies and commodities. Call and put options give the Funds the right
but not the obligation to buy (calls) or sell (puts) the instrument
underlying the option at a specified price. The premium paid on the option,
should it be exercised, will, on a call, increase the cost of the instrument
acquired and, on a put, reduce the proceeds received from the sale of the
instrument underlying the option. If the options are not exercised, the
premium paid will be recorded as a capital loss upon expiration. The Funds
may incur additional risk to the extent the value of the underlying
instrument does not correlate with the movement of the option value.
The Funds (except U.S. Government Money Fund) may also write call or put
options. As the writer of an option, the Funds receive a premium. The Funds
keep the premium whether or not the option is exercised. The premium will be
recorded, upon expiration of the option, as a short-term capital gain. If
the option is exercised, the Funds must sell, in the case of a written call,
or buy, in the case of a written put, the underlying instrument at the
exercise price. The Funds may write only covered puts and calls. A covered
call option is an option in which the Funds own the instrument underlying
the call. A covered call sold by the Funds expose them during the term of
the option to possible loss of opportunity to realize appreciation in the
market price of the underlying instrument or to possible continued holding
of an underlying instrument which might otherwise have been sold to protect
against a decline in the market price of the underlying
48
<PAGE>
VAN ECK FUNDS
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
instrument. A covered put exposes the Funds during the term of the option to
a decline in price of the underlying instrument. A put option sold by the
Funds is covered when, among other things, cash or short-term liquid
securities are placed in a segregated account to fulfill the obligations
undertaken. The Funds may incur additional risk from investments in written
currency options if there are unanticipated movements in the underlying
currencies.
H. SHORT SALES--The Global Hard Assets Fund may make short sales of equity
securities. A short sale occurs when the Fund sells a security which it does
not own by borrowing it from a broker. In the event that the value of the
security that the Fund sold short declines, the Fund will gain as it
repurchases the security in the market at the lower price. If the price of
the security increases, the Fund will suffer a loss as it will have to
repurchase the security at the higher price. Short sales may incur higher
transaction costs than regular securities transactions.
Cash is deposited in a segregated account with brokers, maintained by the
Fund, for its open short sales. Proceeds from securities sold short are
reported as liabilities and are marked to market. Gains and losses are
classified as realized when short positions are closed. At December 31,
1999, the Fund had realized losses of $224,439 and unrealized depreciation
of $0 on short sales of securities. There are no outstanding short sales at
December 31, 1999.
I. FUTURES--The Funds (except U.S. Government Money Fund) 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 Gold/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 resource 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 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.
J. STRUCTURED NOTES--The Funds may invest in indexed securities whose value is
linked to one or more currencies, interest rates, commodities or financial
or commodity indices. When the Fund purchases a structured note (a
non-publicly traded indexed security entered into directly between two
parties) it will make a payment of principal to the counterparty. The Fund
will purchase structured notes only from counterparties rated A or better by
S&P, Moody's or another nationally recognized statistical rating
organization. Van Eck Associates Corporation will monitor the liquidity of
structured notes under supervision of the Board of Trustees and structured
notes determined to be illiquid will be aggre gated with other illiquid
securities and limited to 15% of the net assets of the Fund.
Indexed securities may be more volatile than the underlying instrument
itself, and present many of the same risks as investing in futures and
options. Indexed securities are also subject to credit risks associated with
the issuer of the security with respect to both principal and interest. At
December 31, 1999, the following structured notes were outstanding:
% OF NET
VALUE ASSETS
----- -------
BUSINESS DEVELOPMENT BANK OF CANADA
GOLD LINKED NOTE @ 2.50% DUE 12/06/00
Gold/Resources Fund ................ $1,418,544 3.6%
International Investors Gold Fund .. $5,674,176 3.4%
NOTE 2--MANAGEMENT--Van Eck Associates Corporation (the "Adviser") earns fees
for investment management and advisory services. The Asia Dynasty Fund and
Global Leaders Fund each pay the Adviser a monthly fee at the annual rate of
.75% of average daily net assets. The Global Hard Assets Fund pays the Adviser a
monthly fee at the annual rate of 1% of average daily net assets, a portion of
which is paid to the Adviser for accounting and administrative services it
provides to the Fund. The Gold/Resources and International Investors Gold Funds
each pay the Adviser a monthly fee at the annual rate of .75 of 1% of the first
$500 million of average daily net assets of the Fund, .65 of 1% of the next $250
million of average daily net assets and .50 of 1% of average daily net assets in
excess of $750 million. The U.S. Government Money Fund pays the Adviser a
monthly fee at the annual rate of .50 of 1% of the first $500 million of average
daily net assets, .40 of 1% of the next $250 million of average daily net assets
and .375 of 1% of average daily net assets in excess of $750 million.
In accordance with the advisory agreement, the Funds reimbursed Van Eck
Associates Corporation for costs incurred in connection with certain
administrative and operating functions. The Funds reimbursed costs in the
following amounts: $14,865 Asia Dynasty Fund, $17,810 Global Hard Assets Fund,
$14,785 Global Leaders Fund, $57,514 Gold/Resources Fund, $167,019 International
Investors Gold Fund, and $67,444 U.S. Government Money Fund.
For the year ended December 31, 1999, the Adviser agreed to assume expenses
exceeding 2% of average daily net assets for Class A shares and 2.5% of average
daily net assets for Class B shares for the Global Leaders Fund. Expenses were
reduced by $94,695 (0.29% of average net assets) under this agreement. For the
year ended December 31, 1999, the Adviser agreed to assume expenses exceeding 2%
of average daily net assets for Class A shares and 2.5% of average daily net
assets for the period January 1, 1999 to February 28, 1999 and 2.75% of average
daily net assets for the period March 1, 1999 to December 31, 1999 for Class B
and C shares, for the Global Hard Assets Fund. Expenses were reduced by $279,969
(0.89% of average net assets) under this agreement.
Van Eck Associates Corporation also performs accounting and administrative
services for Asia Dynasty Fund, Global Leaders Fund, Gold/Resources Fund and
International Investors Gold Fund and is paid at an annual rate of .25 of 1% of
average daily net assets (Asia Dynasty Fund and Global Leaders Fund) or at an
49
<PAGE>
VAN ECK FUNDS
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
annual rate of .25 of 1% of the first $750 million of each Fund's average daily
net assets and .20 of 1% of average daily net assets in excess of $750 million
(Gold/Resources Fund and International Investors Gold Fund).
Gold/Resources Fund, Global Hard Assets Fund and International Investors Gold
Fund have directed portfolio trades to brokers who paid a portion of the Funds'
expenses. For the year, the Funds' expenses were reduced by $3,725 (0.01% of
average net assets), $14,393 (0.05% of average net assets) and $28,469 (0.02% of
average net assets), respectively, under this arrangement.
The Funds have a fee arrangement based on cash balances left on deposit with the
custodian which reduces operating expenses. For the year ended December 31,
1999, the portion of expenses reduced under this arrangement amounted to $14,734
for the Global Leaders Fund.
For the year ended December 31, 1999, Van Eck Securities Corporation (the
"Distributor") received $228,510 in sales loads of which $133,509 was reallowed
to broker dealers.
Certain of the officers and trustees of the Trust are officers, directors or
stockholders of Van Eck Associates Corporation and Van Eck Securities
Corporation.
NOTE 3--INVESTMENTS--For federal income tax purposes, the identified cost of
investments owned at December 31, 1999 is $26,147,918, $26,508,215, $23,165,758,
$38,463,847 and $138,338,506 for the Asia Dynasty Fund, Global Hard Assets Fund,
Global Leaders Fund, Gold/Resources Fund and International Investors Gold Fund,
respectively. The U.S. Government Money Fund's identified cost for federal
income taxes is the same for financial reporting purposes. As of December 31,
1999, gross unrealized gains and losses were as follows:
GROSS GROSS NET
UNREALIZED UNREALIZED UNREALIZED
APPRECIATION DEPRECIATION APPRECIATION
------------ ------------ ------------
Asia Dynasty Fund ....... $17,226,944 $ 737,313 $16,489,631
Global Hard Assets Fund . 3,374,735 2,800,189 574,546
Global Leaders Fund ..... 16,601,777 411,423 16,190,354
Gold/Resources Fund ..... 8,979,753 7,551,341 1,428,412
International Investors
Gold Fund ............. 37,495,127 24,541,838 12,953,289
At December 31, 1999 the Funds had the following capital loss carryforward
available to offset future capital gains; Asia Dynasty Fund $2,192,520 expiring
December 31, 2006; Global Hard Assets Fund $13,402,718, of which $10,038,525
expires December 31, 2006 and $3,364,193 expires December 31, 2007;
Gold/Resources Fund $34,017,791, of which $7,559,429 expires December 31, 2000,
$4,289,233 expires December 31, 2005 and $13,306,791 expires December 31, 2006,
and $8,862,338 expires December 31, 2007; International Investors Gold Fund
$8,068,512 expiring December 31, 2006; U.S. Government Money Fund $9,832
expiring December 31, 2007.
Purchases and sales of investment securities for the year ended December 31,
1999, other than short-term obligations, were as follows:
PROCEEDS
COST OF FROM
INVESTMENT INVESTMENT
SECURITIES SECURITIES
PURCHASED SOLD
------------ ------------
Asia Dynasty Fund .................. $ 47,040,325 $ 45,102,334
Global Hard Assets Fund ............ 58,876,224 69,415,057
Global Leaders Fund ................ 28,311,273 33,151,454
Gold/Resources Fund ................ 41,213,870 45,034,814
International Investors Gold Fund .. 144,084,288 159,304,509
Transactions in put/call options written for the year ended December 31, 1999
were as follows:
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- --------
GLOBAL HARD ASSETS FUND:
Options outstanding at beginning of year 0 $ 0
Options written ........................ 300 349,000
---- --------
Options outstanding at end of year ..... 300 $349,000
==== ========
NOTE 4--12B-1 PLANS OF DISTRIBUTION--Pursuant to Rule 12b-1 Plans of
Distribution (the "Plans") all of the Funds are authorized to incur distribution
expenses which will principally be payments to securities dealers who have sold
shares and serviced shareholder accounts and payments to Van Eck Securities
Corporation (VESC), the distributor, for reimbursement of other actual promotion
and distribution expenses incurred by the distributor on behalf of the Funds.
The distribution plan for the International Investors Gold Fund was effective
May 1, 1999. The amount paid under the Plans in any one year is limited to 0.50%
of average daily net assets (except for Gold Resources Fund, International
Investors Gold Fund and U.S. Government Money Fund which is 0.25%) for Class A
shares and 1% of average daily net assets for Classes B and C shares (the
"Annual Limitations"). For Class C shares, the Funds will pay to the selling
broker at the time of sale 1% of the amount of the purchase. Such Class C 12b-1
fees will be expensed by the Funds over the course of the first twelve months
from the time of purchase. Should the payments to the brokers made by the Funds
exceed, on an annual basis, 1% of average daily net assets, VESC will reimburse
the Funds for any excess. Class C shareholders redeeming within one year of
purchase will be subject to a 1% redemption charge which will be retained by the
Funds. After the first year, the 1% 12b-1 fee will be paid to VESC which will
retain a portion of the fee for distribution services and pay the remainder to
brokers.
Distribution expenses incurred under the Plans that have not been paid because
they exceed the Annual Limitation may be carried forward to future years and
paid by the Funds within the Annual Limitation.
VESC has waived its right to reimbursement of the carried forward amounts
incurred through December 31, 1999 in the event the Plans are terminated, unless
the Board of Trustees determines that reimbursement of the carried forward
amounts is appropriate.
The accumulated amount of excess distribution expenses incurred over the Annual
Limitations as of December 31, 1999, were as follows: Asia Dynasty Fund -
$1,252,597 for Class A shares and $1,498,814 for Class B shares; Global Hard
Assets Fund - $897,280 for Class A shares, $97,754 for Class B shares and
$295,044 for Class C shares; Global Leaders Fund - $922,007 for Class A shares
and $432,962 for Class B shares.
50
<PAGE>
VAN ECK FUNDS
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
NOTE 5--SHAREHOLDER TRANSACTIONS--Shares of Beneficial Interest issued and
redeemed (unlimited number of $.001 par value shares authorized):
ASIA DYNASTY FUND
------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1999 1998
-------------- --------------
CLASS A
Shares sold 4,258,905 1,999,713
Shares reinvested 229,122 --
---------- ----------
4,488,027 1,999,713
Shares reacquired (3,708,372) (2,275,305)
---------- ----------
Net increase (decrease) 779,655 (275,592)
========== ==========
CLASS B
Shares sold 350,409 84,734
Shares reinvested 75,883 --
---------- ----------
426,292 84,734
Shares reacquired (216,757) (335,960)
---------- ----------
Net increase (decrease) 209,535 (251,226)
========== ==========
GLOBAL HARD ASSETS FUND
------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1999 1998
-------------- --------------
CLASS A
Shares sold 923,841 738,118
Reinvestment of dividends 7,699 31,509
---------- ----------
931,540 769,627
Shares reacquired (1,673,331) (2,507,005)
---------- ----------
Net decrease (741,791) (1,737,378)
========== ==========
CLASS B
Shares sold 79,508 182,498
Reinvestment of dividends -- 6,161
---------- ----------
79,508 188,659
Shares reacquired (198,644) (326,389)
---------- ----------
Net decrease (119,136) (137,730)
========== ==========
CLASS C
Shares sold 25,965 149,229
Shares reinvested -- 4,414
---------- ----------
25,965 153,643
Shares reacquired (143,976) (323,996)
---------- ----------
Net decrease (118,011) (170,353)
========== ==========
GLOBAL LEADERS FUND
-------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1999 1998
-------------- --------------
CLASS A
Shares sold 658,810 346,394
Shares reinvested 127,531 324,735
---------- ----------
786,341 671,129
Shares reacquired (883,573) (495,431)
---------- ----------
Net increase (decrease) (97,232) 175,698
========== ==========
CLASS B
Shares sold 129,131 117,857
Shares reinvested 20,507 59,495
---------- ----------
149,638 177,352
Shares reacquired (231,450) (101,591)
---------- ----------
Net increase (decrease) (81,812) 75,761
========== ==========
GOLD/RESOURCES FUND
---------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1999 1998
-------------- --------------
CLASS A
Shares sold 5,063,633 6,268,313
Shares reacquired (8,201,348) (7,783,650)
---------- ----------
Net decrease (3,137,715) (1,515,337)
========== ==========
INTERNATIONAL INVESTORS GOLD FUND
---------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1999 1998
-------------- --------------
CLASS A
Shares sold 700,390,969 521,796,216
Shares reinvested 172,459 211,708
------------ ------------
700,563,428 522,007,924
Shares reacquired (707,247,143) (516,717,224)
------------ ------------
Net increase (decrease) (6,683,715) 5,290,700
============ ============
U.S. GOVERNMENT MONEY FUND
--------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1999 1998
-------------- --------------
CLASS A
Shares sold 4,365,984,087 3,670,980,599
Shares issued in connection
with an acquisition -- 7,517,642
Shares reinvested 1,709,890 1,495,988
-------------- --------------
4,367,693,977 3,679,994,229
Shares reacquired (4,317,461,360) (3,709,422,005)
-------------- --------------
Net increase (decrease) 50,232,617 (29,427,776)
============== ==============
NOTE 6--FORWARD FOREIGN CURRENCY CONTRACTS--The Funds (except U.S. Government
Money Fund) may buy and sell forward foreign currency contracts to settle
purchases and sales of foreign denominated securities. In addition, the Funds
(except U.S. Government Money Fund) may enter into forward currency contracts to
hedge foreign denominated assets. Realized gains and losses from forward foreign
currency contracts are included in realized loss from foreign currency
transactions. At December 31,1999, the following forward foreign currency
contract were outstanding:
CURRENT UNREALIZED
CONTRACTS PROCEEDS VALUE DEPRECIATION
- --------------------------------------------------------------------------------
ASIA DYNASTY FUND
Foreign Currency Sale Contract:
THB 245,964 expiring 1/04/00 $6,524 $6,559 $(35)
NOTE 7--TRUSTEE DEFERRED COMPENSATION PLAN--The Trust has a Deferred
Compensation Plan (the "Plan") for Trustees.
51
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VAN ECK FUNDS
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
Commencing January 1, 1996, the Trustees can elect to defer receipt of their
trustee fees until retirement, disability or termination from the board. The
Funds contributions to the Plan are limited to the amount of fees earned by the
participating Trustees. The fees otherwise payable to the participating Trustees
are invested in shares of the Van Eck Funds as directed by the Trustees. The
Funds have elected to show this deferred liability net of the corresponding
asset for financial statement purposes. The Plan has been approved by the
Internal Revenue Service.
As of December 31, 1999, the total liability portion of the Plan is as follows:
Asia Dynasty Fund-$15,361, Global Hard Assets Fund-$18,530, Global Leaders
Fund-$14,884, Gold/Resources Fund-$33,434, International Investors Gold
Fund-$117,179 and U.S. Government Money Fund-$45,082.
NOTE 8--RESTRICTED SECURITIES--The following securities are restricted as to
sale and deemed to be illiquid:
PERCENT OF
DATES NET ASSETS
ACQUIRED COST VALUE AT 12/31/99
-------- -------- ------- -----------
GLOBAL HARD ASSETS FUND
Khanty-Mansiysk
Oil Co. 1/31/97 $549,995 $797,525 3.1%
Windsor Energy
Corp 7/09/96- 1,266,515 89,875
5/27/98 0.3%
-----
3.4%
=====
NOTE 9--SCHEDULE OF AFFILIATED COMPANY
TRANSACTIONS-- Transactions with affiliates (as defined by the Investment
Company Act of 1940) for the year ended December 31, 1999:
GOLD/ INTERNATIONAL
RESOURCES INVESTORS
FUND GOLD FUND
------------ --------------
PIEDMONT MINING CO.
12/31/98 Share Balance 1,000,000 1,270,000
Purchases:
Shares -- --
Cost -- --
Sales:
Shares -- --
Cost -- --
Realized Gain (Loss) -- --
12/31/99 Share Balance 1,000,000 1,270,000
--------- ---------
Market Value $80,000 $101,600
--------- ---------
Dividend Income -- --
NOTE 10--REPURCHASE AGREEMENTS-- Collateral for repurchase agreements, the value
of which must be at least 102% of the underlying debt obligation, plus accrued
interest, is held by the Funds' custodian. In the remote chance the counterparty
should fail to complete the repurchase agreement, realization and retention of
the collateral may be subject to legal proceedings and the Funds would become
exposed to market fluctuation on the collateral.
NOTE 11--EQUITY SWAPS-- The Funds may enter into equity swaps to gain investment
exposure to the relevant market of the underlying security. A swap is an
agreement that obligates the parties to exchange cash flows at specified
intervals. The Fund is obligated to pay the counterparty on trade date an amount
based upon the value of the underlying instrument and, at termination date,
final payment is settled based on the value of the underlying security on trade
date versus the value on termination date plus accrued dividends. Risks may
arise as a result of the failure of the counterparty to the contract to comply
with the terms of the swap contract. The Fund bears the risk of loss of the
amount expected to be received under a swap agreement in the event of the
default of the counterparty. Therefore, the Fund considers the credit worthiness
of each counterparty to a swap contract in evaluating potential credit risk.
Additionally, risks may arise from unanticipated movements in the value of the
swap relative to the underlying securities. The Fund records a net receivable or
payable daily, based on the change in the value of the underlying securities.
The net receivable or payable for financial statement purposes is shown as due
to or from broker. The Fund has collateralized 100% of the notional amount of
the swap. Such amounts are reflected in the Statement of Assets and Liabilities
as Cash-initial margin. At December 31, 1999, the following swaps were
outstanding (stated in U.S. dollars):
UNDERLYING NUMBER OF NOTIONAL TERMINATION UNREALIZED
SECURITY SHARES AMOUNT DATE APPRECIATION
- ----------- ---------- --------- ------------ ------------
ASIA DYNASTY
FUND
United
Microelectronics
Corp. 131,000 $323,229 6/23/00 $139,580
GLOBAL HARD
ASSETS FUND
Gazprom
Oil Co. 239,200 38,990 3/15/00 25,570
NOTE 12--ACQUISITION - U.S. GOVERNMENT MONEY FUND:
As of the close of business on April 24, 1998, the Fund acquired all the net
assets of the Van Eck/Chubb Money Market Fund pursuant to a plan of
reorganization approved by the Van Eck/Chubb Money Market Fund shareholders on
April 16, 1998. The acquisition was accomplished by a tax-free exchange of
7,517,642 shares of U.S. Government Money Fund (valued at $7,517,642) for the
7,517,642 shares of Van Eck/Chubb Money Market Fund outstanding on April 24,
1998. Van Eck/Chubb Money Market Fund's net assets at that date, $7,517,642,
were combined with those of U.S. Government Money Fund. The aggregate net assets
of U.S. Government Money Fund and Van Eck/Chubb Money Market Fund before the
acquisition were $32,921,989 and $7,517,642, respectively.
NOTE 13--BANK LINE OF CREDIT-- The Trust may participate with other funds
managed by Van Eck in a $15 million committed credit facility (the "Facility")
to be utilized for temporary financing until the settlement of sales or
purchases of portfolio securities, the repurchase or redemption of shares of the
Portfolios at the request of the shareholders and other temporary or emergency
purposes. In connection therewith, the Portfolios have agreed to pay commitment
fees, pro rata, based on usage. Interest is charged to the Fund at rates based
on prevailing market rates in effect at the time of borrowings. On December 31,
1999, the Funds made the following borrowings at an interest rate of 6.00%:
Global Hard Assets Fund ................. $ 200,000
International Investors Gold Fund ....... 5,000,000
52
<PAGE>
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS
VAN ECK FUNDS
We have audited the accompanying statement of assets and liabilities, including
the schedules of portfolio of investments, of the Van Eck Funds (comprising,
respectively, Asia Dynasty Fund, Global Leaders Fund, Global Hard Assets Fund,
Gold/Resources Fund, International Investors Gold Fund and U.S. Government Money
Fund (the "Funds"), as of December 31, 1999, and the related statement of
operations, statement of changes in net assets, and the financial highlights for
the periods then ended. These financial statements and the financial highlights
are the responsibility of the Funds' management. Our responsibility is to
express an opinion on these financial statements and the financial highlights
based on our audit. The statements of changes in net assets for the year ended
December 31, 1998 and the financial highlights for each of the periods in the
period then ended, were audited by other auditors whose report dated February
19, 1999, expressed an unqualified opinion on those statements.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures include
confirmation of securities owned as of December 31, 1999, by correspondence with
the custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above, and audited by us, present fairly, in all material respects, the
financial position of each of the Funds constituting Van Eck Funds at December
31, 1999, the results of their operations, the changes in their net assets, and
the financial highlights for the periods then ended, in conformity with
accounting principles generally accepted in the United States.
/s/ Ernst & Young LLP
---------------------
Ernst & Young LLP
New York, New York
February 10, 2000
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[GRAPHIC OMITTED]
VAN ECK GLOBAL
Investment Adviser: Van Eck Associates Corporation
Distributor: Van Eck Securities Corporation
99 Park Avenue, New York, NY 10016 www.vaneck.com
Account Assistance: (800) 544-4653
This report must be accompanied or preceded by a Van Eck Funds Prospectus, which
includes more complete information such as charges and expenses and the risks
associated with international investing, including currency fluctuations or
controls, expropriation, nationalization and confiscatory taxation. Please read
the prospectus carefully before you invest.
