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1933 ACT REGISTRATION NO. 33-13019
1940 ACT REGISTRATION NO. 811-5083
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 15
-AND-
REGISTRATION STATEMENT
UNDER THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 17
VAN ECK WORLDWIDE INSURANCE TRUST
(EXACT NAME AND TITLE OF REGISTRANT)
99 PARK AVENUE, NEW YORK, NEW YORK 10016
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE)
212-687-5200
(REGISTRANT'S TELEPHONE NUMBER INCLUDING AREA CODE)
THADDEUS LESZCZYNSKI, ESQ. - VAN ECK ASSOCIATES CORPORATION
99 PARK AVENUE, NEW YORK, NEW YORK 10016
(NAME AND ADDRESS OF AGENT FOR SERVICE)
COPY TO: PHIL NEWMAN, ESQ., GOODWIN, PROCTER & HOAR
EXCHANGE PLACE, BOSTON, MA. 02109
__________________________________________________________________
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
[X] IMMEDIATELY UPON FILING PURSUANT [_] ON _____ PURSUANT
TO PARAGRAPH (B), OR TO PARAGRAPH (B), OR
[_] 75 DAYS AFTER FILING PURSUANT TO [_] ON _____ PURSUANT TO
PARAGRAPH (A), OR PARAGRAPH (A) OF RULE 485
____________________________________________________
REGISTRANT HAS HERETOFORE DECLARED ITS INTENTION TO REGISTER AN INDEFINITE
NUMBER OF SHARES OF BENEFICIAL INTEREST, $.001 PAR VALUE, OF THE WORLDWIDE BOND
FUND, GOLD AND NATURAL RESOURCES FUND, WORLDWIDE BALANCED FUND, WORLDWIDE
SMALLCAP FUND AND WORLDWIDE HARD ASSETS FUND AND HEREBY DECLARES ITS INTENTION
TO REGISTER AN INDEFINITE NUMBER OF SHARES OF BENEFICIAL INTEREST, $.001 PAR
VALUE, OF WORLDWIDE EMERGING MARKETS FUND SERIES, PURSUANT TO RULE 24f-2(a)(1)
UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE "ACT"). A RULE 24f-2
NOTICE WAS FILED ON OR ABOUT JUNE 8, 1995 FOR ALL SERIES EXCEPT WORLDWIDE
SMALLCAP FUND AND WORLDWIDE HARD ASSETS FUND.
___________________________________________
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VAN ECK INVESTMENT TRUST
CROSS-REFERENCE PAGE
PURSUANT TO RULE 501(B) OF REGULATION S-K
UNDER THE SECURITIES ACT OF 1933
FORM N-1A
PART A
ITEM NO. LOCATION IN PROSPECTUS
- -------- ----------------------
1 Cover Page
2 N/A
3 N/A
4 Investment Objectives and Policies; Description of the
Trust; Risk Factors; Limiting Investment Risks;
Advertising
5 Management
6 Description of the Trust; Taxes; Dividends and
Distributions
7 How to Buy Shares
8 How to Redeem Shares
9 N/A
PART B LOCATION IN STATEMENT OF ADDITIONAL INFORMATION
- ------ -----------------------------------------------
10 Cover Page
11 Table of Contents
12 N/A
13 Investment Objectives and Policies; Risk Factors;
Investment Restrictions
14 Trustees and Officers
15 N/A
16 Investment Advisory Services; Distributor; Additional
Information
17 Portfolio Transactions and Brokerage
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18 General Information
19 Valuation of Shares
20 Taxes
21 The Distributor
22 Performance
23 The Fund has not yet commenced operations; The
Registrant hereby undertakes to file audited financial
statments with the Commission within 4 to 6 months of
the commencement of operation of the Worldwide Emerging
Markets Fund.
<PAGE>
PROSPECTUS
October 10, 1995
VAN ECK WORLDWIDE EMERGING MARKETS FUND
----------------------------------------
The Van Eck Worldwide Emerging Markets Fund is a series of Van Eck Worldwide
Insurance Trust, a Massachusetts business trust. The Fund is managed by Van Eck
Associates Corporation (the "Adviser").
99 Park Avenue, New York, New York 10016
(212) 687-5200
----------------------------------------
Van Eck Worldwide Insurance Trust (the "Trust") is an open-end management
investment company. Shares of the Worldwide Emerging Markets Fund (the "Fund")
are offered only to separate accounts of various insurance companies to fund the
benefits of variable life policies and variable annuity contracts (the
"Contracts").
WORLDWIDE EMERGING MARKETS FUND ---- seeks long-term capital appreciation by
investing primarily in equity securities in emerging markets around the world.
Peregrine Asset Management (Hong Kong) Limited ("PAM") or ("Sub-Adviser") serves
as sub-investment adviser to this Fund.
The Fund is managed by Van Eck Associates Corporation (the "Adviser"), 99 Park
Avenue, New York, New York 10016. See "Management." Van Eck Securities
Corporation (the "Distributor"), a wholly-owned subsidiary of the Adviser,
serves as Distributor of the Fund's shares.
This Prospectus sets forth concisely information about the Trust and Fund that
you should know before investing. It should be read in conjunction with the
prospectus for the Contract which accompanies this Prospectus and should be
retained for future reference. For further information about the Fund, please
call the Fund or the Distributor at the above telephone number.
The Contracts involve certain expenses not described in this Prospectus and also
may involve certain restrictions or limitations on the allocation of purchase
payments or Contract values to the Fund. See the applicable Contract prospectus
for information regarding expenses of the Contract and any applicable
restrictions or limitations with respect to the Fund.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, A BANK, AND THE SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
A Statement of Additional Information, dated October 10, 1995, which further
discusses the Trust and the Fund has been filed with the Securities and Exchange
Commission and is incorporated herein by reference. It is available without
charge upon request to the Fund or the Distributor at the above address or by
calling the telephone number listed above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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TABLE OF CONTENTS PAGE
The Fund 3
Financial Highlights 5
Investment Objective and Policies of the Fund 3
Risk Factors 5
Limiting Investment Risks 14
Management 14
How to Buy Shares 16
Dividends and Distributions 16
How to Redeem Shares 17
Federal Taxation 17
Description of the Trust 17
Additional Information 18
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THE FUND
Worldwide Emerging Markets Fund (the "Fund") is an open-end management
investment company. The Fund is a series of Van Eck Worldwide Insurance Trust, a
business trust organized under the laws of the Commonwealth of Massachusetts on
January 7, 1987. The Fund is classified as diversified under the Investment
Company Act of 1940, as amended (the "Act").
INVESTMENT OBJECTIVE AND POLICIES OF THE FUND
A description of the investment objective and policies of the Fund is set forth
below. The investment objective of the Fund may not be changed without the
affirmative vote of a majority of the outstanding voting securities of the Fund.
As a result of the market risk inherent in any investment, there is no assurance
that the Fund will achieve its objective. For further information about the
Fund's investment policies, see "Investment Objective and Policies" in the
Statement of Additional Information.
WORLDWIDE EMERGING MARKETS FUND
OBJECTIVE:
Worldwide Emerging Markets Fund seeks long-term capital appreciation by
investing primarily in equity securities in emerging markets around the world.
POLICIES:
In pursuit of its investment objective, the Fund emphasizes countries that
compared to the world's major economies exhibit relatively low gross national
product per capita as well as the potential for rapid economic growth.
Specifically, an "emerging market" or "Emerging Country" is any country that the
World Bank, the International Finance Corporation, the United Nations or its
authorities has determined to have a low or middle income economy. Emerging
Countries can be found in regions such as Asia, Latin America, Eastern Europe
and Africa. The countries that will not be considered Emerging Countries include
the United States, Australia, Canada, Japan, New Zealand and most countries
located in Western Europe such as Austria, Belgium, Denmark, Finland, France,
Germany, Great Britain, Ireland, Italy, the Netherlands, Norway, Spain, Sweden
and Switzerland.
Under normal conditions, at least 65% of the Fund's total assets will be
invested in Emerging Country and emerging market equity securities. The Fund
considers emerging market securities to include securities which are (i)
principally traded in the capital markets of an emerging market country;
securities of companies that derive at least 50% of their total revenues from
(ii) either goods produced or services performed in emerging market countries or
from sales made in Emerging Countries, regardless of where the securities of
such companies are principally traded; (iii) securities of companies organized
under the laws of, and with a principal office in an Emerging Country; (iv)
securities of investment companies (such as country funds) that principally
invest in emerging market securities, and (v) American Depositary Receipts
(ADRs), American Depositary Shares (ADSs), European Depositary Receipts (EDRs),
and Global Depositary Receipts (GDRs) with respect to the securities of such
companies.
Equity securities in which the Fund may invest include common stocks; preferred
stocks (either convertible or non-convertible); rights; warrants; direct equity
interests in trusts, partnerships, joint ventures and other unincorporated
entities or enterprises; convertible debt instruments; and special classes of
shares available only to foreign persons in those markets that restrict
ownership of certain classes of equity to nationals or residents of that
country. These securities may be listed on securities exchanges or traded over-
the-counter. Direct investments are generally considered illiquid and will be
aggregated with other illiquid investments for purposes of the limitation on
illiquid investments. See "Risk Factors - Emerging Market Securities".
The Fund may invest indirectly in emerging markets by investing in other
investment companies. Due to restrictions on direct investment by foreign
entities in certain emerging market countries, investment in other investment
companies may be the most practical or only manner in which the Fund can invest
in the securities markets of certain emerging market countries. Such
investments may involve the payment of premiums above the net asset value of
such issuers' portfolio securities, are subject to limitations under the Act,
are constrained by market availability and may constitute passive foreign
investment companies for Federal income tax purposes. As a shareholder in an
investment company, the Fund would bear its ratable share of that investment
company's expenses, including its advisory and administration fees. The
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Adviser and Sub-Adviser have agreed to waive their management fees with respect
to the portion of the Fund's assets invested in shares of other open-end
investment companies. The Fund would continue to pay its own management fees
and other expenses with respect to its investments in shares of closed-end
investment companies.
The Fund may, as described below in "Risk Factors" beginning on page 5, invest
in derivatives. Derivatives are instruments whose value is "derived" from an
underlying asset. Derivatives in which the Fund may invest include futures
contracts, forward contracts, options, swaps and structured notes and other
similar securities as may become available in the market. These instruments
offer certain opportunities and are subject to additional risks that are
described below.
The Fund may, for temporary defensive purposes, invest more than 35% of its
total assets in securities which are not emerging market securities, such as
high grade, liquid debt securities of foreign and United States companies
foreign governments and the U. S. Government, and their respective agencies,
instrumentalities, political subdivisions and authorities, as well as in money
market instruments denominated in U.S. dollars or a foreign currency. These
money market instruments include, but are not limited to, negotiable or short-
term deposits with domestic or foreign banks with total surplus and undivided
profits of at least $50 million; high quality commercial paper; and repurchase
agreements maturing within seven days with domestic or foreign dealers, banks
and other financial institutions deemed to be creditworthy under guidelines
approved by the Board of Trustees of the Fund. The commercial paper in which
the Fund may invest will, at the time of purchase, be rated P-1 or better by
Moody's; A-1 or better by S&P; Fitch-1 by Fitch; Duff-1 by D&P, or if unrated,
will be of comparable high quality as determined by the Adviser or Sub-Adviser.
The Adviser expects that the Fund will normally invest in at least three
different countries. The Fund emphasizes equity securities, but may also invest
in other types of instruments, including debt securities of any quality (other
than commercial paper as described herein). Debt securities may include fixed
or floating rate bonds, notes, debentures, commercial paper, loans, convertible
securities and other debt securities issued or guaranteed by governments,
agencies or instrumentalities, central banks, commercial banks or private
issuers. See "Risk Factors - Debt Securities" and "Risk Factors - "Low Rated
or Unrated Debt Securities".
The Adviser believes that the economies of emerging markets will continue to
have among the world's fastest rates of growth over the next decade. In many
instances, the growth in these countries is brought on by a move away from
governmental intervention in the marketplace, and an aggressive move towards
free market capitalism. While many emerging markets are experiencing rapid
growth by U.S. standards, such markets are still developing and considerably
less liquid. Investors can expect there will be periods of volatility and
reduced liquidity in these markets. The Fund involves above-average risk, and
as such, is designed as a long-term investment. There can be no assurance that
the Fund will achieve its investment objective. See "Risk Factors-Foreign
Securities" and "Risk Factors-Emerging Markets Securities" below.
Peregrine Asset Management (Hong Kong) Limited ("PAM" or the "Sub-Adviser") will
serve as sub-adviser to the Fund. PAM has been registered with the SEC as an
investment adviser since April 17, 1995. PAM was incorporated in Hong Kong in
1991 and is a 100% owned subsidiary of Peregrine Asset Management Holdings
Limited which is a 75% owned subsidiary of Peregrine Investments Holdings
Limited ("Peregrine"). Peregrine and its affiliates comprise the largest
independent Asian based investment bank located outside of Japan and Korea.
Established in 1988, Peregrine and its affiliates have offices in thirteen Asian
countries as well as in Europe and the United States. Investment professionals
at PAM collectively have over forty years experience in managing funds which
invest in emerging markets. The Adviser believes PAM has unique knowledge and
experience in global emerging market investing. See "Management".
<PAGE>
There is no limitation on the amount the Fund can invest in emerging markets.
Investors should consider carefully the substantial risks involved in investing
in securities issued by companies and governments of foreign nations, which are
in addition to the usual risks inherent in domestic investment. Global investing
involves economic and political considerations not typically applicable to the
U.S. markets. These considerations, which may favorably or unfavorably affect
the Fund's performance, include changes in exchange rates and exchange rate
controls (which may include suspension of the ability to transfer currency from
a given country), cost incurred in conversion between currencies, non-negotiable
brokerage commissions, default in foreign government securities, lower trading
volume and greater market volatility, the difficulty of enforcing obligations in
other countries, war, expropriation, nationalization, confiscatory taxation,
taxation of income earned in foreign nations or other taxes imposed with respect
to investments in foreign nations, political and social instability and
diplomatic developments which could affect investments in securities of issuers
in foreign nations.
In addition, there is typically less publicly available information concerning
foreign companies than for domestic companies. Foreign companies are not
generally subject to uniform accounting, auditing and financial reporting
standards, and the Fund may encounter difficulty or be unable to pursue legal
remedies and obtain judgments in foreign courts. Further, the settlement period
of securities transactions in foreign markets may be longer than in domestic
markets. In many foreign countries there is less government supervision and
regulation of business and industry practices, stock exchanges, brokers and
listed companies than in the U.S. The foreign securities markets of many of the
countries in which the Fund may invest may also be smaller, less liquid, and
subject to greater price volatility than those in the U.S. See "Risk Factors-
Foreign Securities" and "Risk Factors-Emerging Markets Securities" below.
PAM will select investments for the Fund based on its assessment of where
emerging market opportunities for long-term capital appreciation are most
attractive. When making investment decisions, PAM will evaluate characteristics
of various Emerging Countries such as the outlook for economic growth and
inflation and government monetary and fiscal policies. In selecting specific
companies for investment, PAM will analyze such factors as growth potential,
financial strength and management experience.
FINANCIAL HIGHLIGHTS
As the Fund has not yet commenced operation, financial information with respect
to the Fund is not available at this time.
RISK FACTORS
Assets of the Fund are subject to market fluctuations and risks inherent in all
securities. In addition, assets of the Fund may be subject to other special
considerations, such as those listed below.
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FOREIGN SECURITIES
the Fund may purchase securities of foreign issuers including foreign investment
companies. Investments in foreign securities may involve a greater degree of
risk than investments in domestic securities due to the possibility of exchange
rate fluctuations and exchange controls, less publicly available information,
more volatile or less liquid securities markets, and the possibility of
expropriation, confiscatory taxation or political, economic or social
instability. In addition, some foreign companies are not generally subject to
the same uniform accounting, auditing and financial reporting standards as are
American companies and there may be less government supervision and regulation
of foreign stock exchanges, brokers and companies. Foreign securities may be
subject to foreign taxes, higher custodian fees, higher brokerage commissions
and higher dividend collection fees which could reduce the yield or return on
such securities, although a shareholder of the Fund may, subject to certain
limitations, be entitled to claim a credit or deduction for United States
federal income tax purposes for his proportionate share of such foreign taxes
paid by the Fund. In addition, some foreign securities in which the Fund may
invest may be denominated in foreign currencies, and since the Fund may
temporarily hold funds in foreign currencies, the value of the assets of the
Fund (and thus its net asset value) will be affected by changes in currency
exchange rates. See "Foreign Currency and Foreign Currency Transactions" below.
Transactions in the securities of foreign issuers may be subject to settlement
delays. See "Taxes" in the Prospectus and "Risks Factors-Foreign Securities" in
the Statement of Additional Information. However, the Sub-Adviser believes that
diversification of assets on an international basis decreases the degree to
which events in any one country will adversely affect an entire portfolio.
In addition to investing directly in the securities of United States and foreign
issuers, the Fund may also invest in American Depositary Receipts (ADRs),
European Depositary Receipts (EDRs), American Depositary Shares (ADSs), Global
Depositary Shares (GDSs) and securities of foreign investment funds or trusts
(including passive foreign investment companies). ADRs are certificates that are
issued by a United States bank or trust company representing the right to
receive securities of a foreign issuer deposited in a foreign subsidiary, branch
or correspondent of that bank. Generally, ADRs, in registered form, are designed
for use in United States securities markets.
Foreign brokerage commissions and custodial expenses are generally higher than
in the United States. Dividend collection fees on foreign securities and ADRs
are generally higher than on United States securities and dividends and interest
may be subject to foreign withholding tax at their source which may not be
permitted to be passed through to shareholders.
EMERGING MARKETS SECURITIES
Investments of the Fund will be made in companies in developing countries.
Shareholders should be aware that investing in the equity and fixed income
markets of developing countries involves exposure to potentially unstable
governments, economies based on only a few industries, and securities markets
which trade a small number of securities and may therefore at times be illiquid.
Securities markets of developing countries tend to be more volatile than the
markets of developed countries. Countries with developing markets may present
the risk of nationalization of businesses, restrictions on foreign ownership, or
prohibitions of repatriation of assets, and may have less protection of property
rights than more developed countries. The economies of countries with developing
markets may be highly vulnerable to change in local or global trade conditions,
and may suffer from extreme and volatile debt burdens or inflation rates. Local
securities markets may be unable to respond effectively to increases in trading
volume, potentially making prompt liquidation of substantial holdings difficult
or impossible at times. Securities of issuers located in developing markets may
have limited marketability and may be subject to more abrupt or erratic price
movements. However, such markets have in the past provided the opportunity for
higher rates of return to investors. There is no assurance that these markets
will offer such opportunity in the future.
For example, political and social conditions in a developing country caused by
an unstable government may pose certain risks to the Fund's investments. If
aggravated by local or international developments, such
<PAGE>
risks could have an adverse affect on investments in such developing country,
including the Fund's investments and, under certain conditions, on the liquidity
of the Fund's portfolio and its ability to meet shareholder redemption requests.
The ability of the Fund to invest, or hold its investments, in companies
situated in developing countries may be further affected by changes in United
States or such countries' laws or regulations.
Many of these emerging markets limit the percentage foreign investors, such as
the Fund, may own of their domestic issuers by requiring that such issuers issue
two classes of shares-"local" and "foreign" shares. Foreign shares may be held
only by investors that are not considered nationals or residents of that country
and generally are convertible into local shares. Foreign shares may be subject
to restrictions on the right to receive dividends and other distributions, have
limited voting and other rights, to name a few. Local shares are intended for
ownership by nationals or residents of the country. The market for foreign
shares is generally less liquid than the market for local shares, although in
most cases foreign shares may be converted into local shares. In addition,
foreign shares often trade at a premium to local shares, while at other times
there is no premium. If the Fund were to purchase foreign shares at a time when
there is a premium and sell when there is a lower or no premium, the Fund could
realize a loss on its investment. Ownership by foreign investors of local shares
may be illegal in some jurisdictions and, in others, foreign owners of local
shares may not be entitled, among other things, to participate in certain
corporate actions such as stock dividends, rights and warrant offerings or to
vote at stockholders' meetings (while foreign holders of foreign shares would
participate). If the Fund were to own local shares and could not participate in
a stock, warrant or other distribution, the Fund could suffer material dilution
of its interest in that issuer and the value of its holdings could decline
dramatically causing a loss on its investment. Generally, it is expected that
the Fund will hold foreign shares. However, because of their limited number
foreign shares may, at times, not be available for purchase by the Fund or, if
available, the premiums may be, in the opinion of the Adviser or Sub-Adviser,
unjustified or prohibitively high. In order to participate in these markets, the
Fund may deem it advisable to purchase local shares which may expose the Fund to
the additional risks described above. The Fund will only purchase local shares
where foreign shares are not available for purchase and, when in the opinion of
the Adviser, the potential for gain in these markets outweighs the risks that
issuers will take corporate actions which may result in dilution to the Fund.
Where permitted by local law, the Fund will attempt to convert local shares to
foreign shares promptly. There can be no assurance that the Adviser will be able
to assess these risks accurately or that the Fund will be able to convert its
local shares to foreign shares or that dilution will not result.
The securities markets in the emerging markets are substantially smaller, less
liquid and more volatile than the major securities markets in the United States.
A high proportion of the shares of many issuers may be held by a limited number
of persons and financial institutions, a limited number of issuers may represent
a disproportionately large percentage of market capitalization and trading value
and the securities markets are susceptible to being influenced by large
investors trading significant blocks of securities. The Fund's ability to
participate fully in the markets may be limited by its investment policy of
investing not more than 15% of its total net assets in illiquid securities. In
addition, limited liquidity may impair the Fund's ability to liquidate a
position at the time and price it wishes to do so. Many of these stock markets
are undergoing a period of growth and change which may result in trading
volatility and difficulties in the settlement and recording of transactions, and
in interpreting and applying the relevant law and regulations. Certain
developing countries do not have a comprehensive system of laws, although
substantial changes have occurred in many developing countries in this regard in
recent years. Even where adequate law exists in certain developing countries, it
may be impossible to obtain swift and equitable enforcement of such law, or to
obtain enforcement of the judgment by a court of another jurisdiction.
In addition, stockbrokers and other intermediaries in emerging markets may not
perform as well as their counterparts in the United States and other more
developed securities markets. The prices at which the Fund may acquire
investments may be affected by trading by persons with material non-public
information and by securities transactions by brokers in anticipation of
transactions by the Fund in particular securities.
<PAGE>
FOREIGN CURRENCY AND FOREIGN CURRENCY TRANSACTIONS
Since some foreign securities in which the Fund may invest may be denominated in
foreign currencies, and since the Fund may temporarily hold foreign currencies,
the value of the assets of the Fund (and thus its net asset value) may be
affected by changes in currency exchange rates. The Fund's performance will be
less favorable if foreign currency exchange rates move adversely, relative to
the U.S. dollar. Foreign exchange rates are affected by actual and anticipated
Balance of Payments accounts, central bank policy, political concerns and
changes in interest rates, to name a few factors. There can be no assurance that
the Adviser will be able to anticipate currency fluctuations in exchange rates
accurately. The Fund may invest in a variety of derivatives. The Fund may
purchase and sell put and call options on, or enter into futures contracts or
forward contracts to purchase or sell, foreign currencies. The Fund will enter
into foreign currency contracts for hedging purposes only and not for
speculation. The Fund may also use foreign currency contracts to hedge the U.S.
dollar value of a security which it already owns or anticipates purchasing. A
forward currency contract may thus help reduce the Fund's losses on a security
when a foreign currency's value changes. The Fund will enter into forward
contracts to duplicate a cash market transaction. However, the Fund will invest
in securities including short-term obligations, denominated in a range of
foreign currencies and the value of the Fund will be affected by changes in
currency exchange rates. The Fund will not purchase or sell foreign currency as
an investment. See "Options," "Futures Contracts" and "Hedging and Other
Investment Techniques and Strategies" below and "Foreign Currency Transactions"
and "Futures and Options Transactions" in the Statement of Additional
Information.
CURRENCY SWAPS
The Fund may enter into currency swaps solely for hedging purposes. Currency
swaps involve the exchange of rights to make or receive payments in specified
currencies. Since currency swaps are individually negotiated, the Fund may
expect to achieve an acceptable degree of correlation between its portfolio
investments and its currency swap positions. Currency swaps usually involve the
delivery of the entire principal value of one designated currency in exchange
for the other designated currency. Therefore, the entire principal value of a
currency swap is subject to the risk that the other party to the swap will
default on its contractual delivery obligations.
The use of swaps is a highly specialized activity which involves investment
techniques and risks different from those associated with ordinary portfolio
transactions. If the Sub-Adviser is incorrect in its forecasts of market values
and currency exchange rates, the investment performance of the Fund would be
less favorable than it would have been if this investment technique were not
used. Swaps are generally considered illiquid and will be aggregated with other
illiquid positions for purposes of the limitation on illiquid investments.
OPTIONS
For hedging and other purposes (such as creating synthetic positions), the Fund
may invest up to 5% of its total assets, taken at market value at the time of
investment, in premiums on call and put options on domestic and foreign
securities, foreign currencies, stock and bond indices and financial futures
contracts. This policy may be changed without shareholder approval.
As the holder of a call or put option, the Fund pays a premium and has the right
(for generally 3 to 9 months) to purchase (in the case of a call option) or sell
(in the case of a put option) the underlying asset at the exercise price at any
time during the option period. An option on a futures contract gives the
purchaser the right, but not the obligation, in return for the premium paid, to
assume a position in a specified underlying futures contract (which position may
be a long or short position) at a specified exercise price during the option
exercise period. If the call or put is not exercised or sold (whether or not at
a profit), it will become worthless at its expiration date and the Fund will
lose its premium payment. The Fund may, with respect to options it has
purchased, sell them, exercise them or permit them to expire.
The Fund may write call or put options. As the writer of an option, the Fund
receives a premium. The Fund
<PAGE>
keeps the premium whether or not the option is exercised. If the call or put
option is exercised, the Fund must sell (in the case of a written call option)
or buy (in the case of a written put option) the underlying asset at the
exercise price. The Fund may write only covered put and call options. A covered
call option, which is a call option with respect to which the Fund owns the
underlying asset, sold by the Fund exposes it during the term of the option to
possible loss of opportunity to realize appreciation in the market price of the
underlying asset or to possible continued holding of an underlying asset which
might otherwise have been sold to protect against depreciation in the market
price of the underlying asset. A covered put option written by the Fund exposes
it during the term of the option to a decline in price of the underlying asset.
A put option sold by the Fund is covered when, among other things, cash or
short-term liquid securities are placed in a segregated account to fulfill the
obligations undertaken. Covering a put option sold does not reduce the risk of
loss.
The Fund may invest in options which are either listed on a domestic securities
exchange or traded on a recognized foreign exchange. In addition, the Fund may
purchase or sell over-the-counter options from dealers or banks to hedge
securities or currencies as approved by the Board of Trustees. In general,
exchange traded options are third party contracts with standardized prices and
expiration dates. Over-the-counter options are two party contracts with price
and terms negotiated by the buyer and seller, are generally considered illiquid,
and will be limited to 15% of net assets of the Fund.
FUTURES CONTRACTS
The 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. A security or interest-rate futures contract is an
agreement between two parties to buy or sell a specified security at a set price
on a future date. An index futures contract is an agreement to take or make
delivery of an amount of cash based on the difference between the value of the
index at the beginning and at the end of the contract period. A foreign currency
futures contract is an agreement to buy or sell a specified amount of a currency
for a set price on a future date.
When the Fund enters into a futures contract, it must make an initial deposit,
known as "initial margin," as a partial guarantee of its performance under the
contract. As the value of the underlying asset fluctuates, either party to the
contract is required to make additional margin payments, known as "variation
margin," to cover any additional obligation it may have under the contract. The
Fund will not commit more than 5% of its total assets to initial margin deposits
on futures contracts and premiums on options on futures contracts; however,
margin deposits for futures positions entered into for bona fide hedging
purposes, as such term is defined in the Commodity Exchange Act, are excluded
from the 5% limitation. The Fund may write, purchase or sell put and call
options on financial futures contracts. The Fund may write only covered put and
call options. An option on a futures contract gives the purchaser the right, but
not the obligation, in return for the premium paid, to assume a position in a
specified underlying futures contract (which position may be a long or short
position) at a specified exercise price during the option exercise period. The
writer of an option is obligated to assume a position in a specified futures
contract if the option is exercised.
In establishing a position in a futures contract, which may be a long or short
position, cash or high quality debt instruments equal in value to the current
value of the underlying securities less the margin requirement will be
segregated, as may be required, with the Fund's Custodian to ensure that the
Fund's position is unleveraged. This segregated account will be marked-to-market
daily to reflect changes in the value of the underlying futures contract.
Certain exchanges do not permit trading in particular commodities at prices in
excess of daily price fluctuation limits set by the exchange, and thus the Fund
could be prevented from liquidating its position and thus be subjected to
losses. Trading in futures contracts traded on foreign commodity exchanges may
be subject to the same or similar risks as trading in foreign securities. See
"Risk Factors-Foreign Securities."
SHORT SALES
The 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.
Following the short sale, the Fund must deposit collateral with the 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.
The Fund will establish a segregated account with respect to its short sales and
maintain in such account cash not available for investment or U.S. Government
securities or other liquid, high-quality debt securities having a value equal to
the difference between (i) the market value of the securities sold short at the
time they were sold short and (ii) any cash, U.S. Government Securities or other
liquid, high-quality debt securities required to be deposited as collateral with
the broker in connection with the short sale (not including the proceeds from
the short sale). Such segregated account will be marked to market daily, so
that (i) the amount in the segregated account plus the amount deposited with the
broker as collateral equals the current market value of the securities sold
short and (ii) in no event will the amount in the segregated account plus the
amount deposited with the broker as collateral fall below the original value of
the securities at the time they were sold short. The total value of the assets
deposited as collateral with the broker and deposited in the segregated account
will not exceed 50% of the Fund's net assets. The Fund's ability to engage in
short sales may be limited by the requirements of current U.S. tax law that the
Fund derive less than 30% of its gross income from the sale or other disposition
of securities held less than three months. Securities sold short and then
repurchased, regardless of the actual time between the two transactions, are
considered to have been held for less than three months.
<PAGE>
HEDGING AND OTHER INVESTMENT TECHNIQUES AND STRATEGIES
Options and futures contracts can be used by the Fund as part of various hedging
techniques and strategies.
When the Fund intends to acquire securities for its portfolio it may use call
options or futures contracts as a means of fixing the price of the security it
intends to purchase at the exercise price (in the case of an option) or contract
price (in the case of a futures contract). An increase in the acquisition cost
would be offset, in whole or part, by a gain on the option or futures contract.
Options and futures contracts requiring delivery of a security may also be
useful to the Fund in purchasing a large block of securities that would be more
difficult to acquire by direct market purchases. If the Fund holds a call option
rather than the underlying security itself, the Fund is partially protected from
any unexpected decline in the market price of the underlying security and in
such event could allow the call option to expire, incurring a loss only to the
extent of the premium paid for the option. Using a futures contract would not
offer such partial protection against market declines and the Fund would
experience a loss as if it had owned the underlying security.
To protect against anticipated declines in the value of the Fund's investment
holdings the Fund may use options, forward and futures contracts, and similar
investments (commonly referred to as derivatives) as a defensive technique to
protect the value of an asset the Sub-Adviser deems desirable to hold for tax or
other considerations or for investment reasons. One defensive technique involves
selling a futures or forward contract or purchasing a put option whose value is
expected to be inversely related to the security or asset being hedged. If the
anticipated decline in the value of the asset occurs, it would be offset, in
whole or part, by a gain on the futures contract or put option. The premium paid
for the put option would reduce any capital gain otherwise available for
distribution when the security is eventually sold.
The Fund may hedge against changes in the value of the U.S. dollar in relation
to a foreign currency in which portfolio securities of the Fund may be
denominated. The Fund may employ hedging strategies with options and futures
contracts on foreign currencies before the Fund purchases a foreign security,
during the period the Fund holds the foreign security, or between the date the
foreign security is purchased or sold and the date on which payment therefore is
made or received. Hedging against a change in the value of a foreign currency in
the foregoing manner does not eliminate fluctuations in the prices of portfolio
securities or prevent losses if the prices of such securities decline.
Furthermore, such hedging transactions reduce or preclude the opportunity for
gain if the value of the hedged currency should change relative to the U.S.
dollar. Last, where the Fund uses options and futures in anticipation of the
purchase of a portfolio security to hedge against adverse movements in the
security's underlying currency, but where the purchase of such security is
subsequently deemed undesirable, the Fund may incur a gain or loss on the option
or futures contract.
The Fund may use futures contracts, options and forward contracts as part of
various investment techniques and strategies, such as creating non-speculative
"synthetic" positions or implementing "cross-hedging" strategies. A synthetic
position is deemed not to be speculative if the position is covered by
segregation of short-term liquid assets. However, since the financial markets in
the developing countries are not as developed as in the United States, these
financial investments may not be available to the Fund and the Fund may be
unable to hedge certain risks or enter into certain transactions. A "synthetic
position" is the duplication of a cash market transaction when deemed
advantageous by the Adviser for cost, liquidity or transactional efficiency
reasons. A cash market transaction is the purchase or sale of a security or
other asset for cash. For example, from time to time, the Fund experiences large
cash inflows which may be redeemed from the Fund in a relatively short period.
In this case, the Fund currently can leave the amounts uninvested in
anticipation of the redemption or the Fund can invest in securities for a
relatively short period, incurring transaction costs on the purchase and
subsequent sale. Alternatively, the Fund may create a synthetic position by
investing in a futures contract on a security or on a securities index gaining
investment exposure to the relevant market while incurring lower overall
transaction costs. The Fund would enter into such transactions if the markets
for these instruments were sufficiently
<PAGE>
liquid and there was an acceptable degree of correlation to the cash market. By
segregating cash, the Fund's futures contract position would generally be no
more leveraged or riskier than if it had invested in the cash market-i.e.,
purchased securities.
Consistent with the hedging strategy described above, the Fund may invest in
options and futures contracts and options on futures contracts on foreign
currencies for the purpose of hedging against a decline in the value of certain
U.S. dollar denominated securities or other "cross-hedging" strategies. "Cross-
hedging" involves the use of one currency to hedge against the decline in the
value of another currency. For example, the Fund could hedge against a currency-
related decline in the value of a security denominated in Deutschemark by taking
a short position in the Swiss franc. The Sub-Adviser believes that the value of
certain U.S. dollar denominated debt securities is affected by fluctuations in
the value of the U.S. Dollar relative to foreign currencies. Furthermore, the
Sub-Adviser believes it can identify those currencies whose value is likely to
move inversely with the value of the U.S. dollar. By investing a portion of the
Fund's assets in options or futures contracts on those identified currencies,
the Sub-Adviser believes that it may be able to reduce the Fund's exposure to
declines in the value of U.S. dollar denominated securities attributable to
currency value fluctuations. The use of such instruments as described herein
involves several risks. First, there can be no assurance that the prices of such
instruments and the hedged security or the cash market position will move as
anticipated. If prices do not move as anticipated the Fund may incur a loss on
its investment, may not achieve the hedging protection it anticipated and/or
incur a loss greater than if it had entered into a cash market position. Second,
investments in such instruments may reduce the gains which would otherwise be
realized from the sale of the underlying securities or assets which are being
hedged. Third, positions in such instruments can be closed out only on an
exchange that provides a market for those instruments. There can be no assurance
that such a market will exist for a particular futures contract or option. If
the Fund cannot close out an exchange traded futures contract or option which it
holds, it would have to perform its contract obligation or exercise its option
to realize any profit and would incur transaction costs on the sale of the
underlying assets.
Over-the-counter options, together with repurchase agreements maturing in more
than seven days and other investments which do not have readily available market
quotations are, because of liquidity considerations, limited to 15% of total net
assets of the Fund.
In those situations where foreign currency options or futures contracts, or
options on futures contracts may not be readily purchased (or where such options
or contracts may be deemed illiquid) in the primary currency in which the hedge
is desired, the hedge may be obtained by purchasing or selling an option or
futures contract or forward contract on a secondary currency. The secondary
currency will be selected based upon the Adviser's (or Sub-Adviser's) belief
that there exists a significant correlation between the exchange rate movements
of the primary and secondary currencies. However, there can be no assurances
that in the case of foreign currencies the exchange rate or the primary and
secondary currencies will move as anticipated or, in the case of other
securities, or generally, that the relationship between the hedged security and
the hedging instrument will continue. If they do not move as anticipated or the
relationship does not continue, a loss may result to the Fund on its investments
in the hedging positions.
See "Futures and Options Transactions" in the Statement of Additional
Information for further information about futures contracts and options,
including tax effects and risks to the Fund.
REPURCHASE AGREEMENTS
The Fund may engage in repurchase agreement transactions. Under the terms of a
typical repurchase agreement, the Fund would acquire an underlying debt
obligation for a relatively short period (usually not more than one week)
subject to an obligation of the seller to repurchase, and the Fund to resell,
the obligation at an agreed upon price and time, thereby determining the yield
during the Fund's holding period. The agreement results in a fixed rate of
return that is not subject to market fluctuations during the Fund's holding
period. The Fund will enter into repurchase agreements with respect to
securities in which it may invest with member banks of the Federal Reserve
System or certain non-bank dealers. Under each
<PAGE>
repurchase agreement the selling institution will be required to maintain the
value of the securities subject to the repurchase agreement at not less than
their repurchase price. Repurchase agreements could involve certain risks in the
event of default or insolvency of the other party, including possible delays or
restrictions upon the Fund's ability to dispose of the underlying securities.
The Adviser acting under the supervision of the Board of Trustees, reviews the
creditworthiness of those non-bank dealers with which the Fund enters into
repurchase agreements to evaluate these risks. See "Repurchase Agreements" in
the Statement of Additional Information.
DEBT SECURITIES
The Fund may invest in debt securities. The market value of debt securities
generally varies in response to changes in interest rates and the financial
condition of each issuer. During periods of declining interest rates, the value
of debt securities generally increases. Conversely, during periods of rising
interest rates, the value of such securities generally declines. These changes
in market value will be reflected in the Fund's net asset value.
Debt securities with similar maturities may have different yields, depending
upon several factors, including the relative financial condition of the issuers.
For example, higher yields are generally available from securities in the lower
rating categories of S&P's or Moody's. However, the values of lower-rated
securities generally fluctuate more than those of high grade securities and
lower-rated securities present greater risk of default. Low rated and unrated
securities are especially subject to changes in the financial condition of their
issuers and to price fluctuation in response to changes in interest rates. A
description of debt securities ratings is contained in the Appendix to the
Statement of Additional Information. High grade means a rating of A or better
by Moody's or S&P's, or of comparable quality in the judgment of the Adviser (or
Sub-Adviser) if no rating has been given by either service. Many securities of
foreign issuers are not rated by these services. Therefore, the selection of
such issuers depends to a large extent on the credit analysis performed by the
Adviser (or Sub-Adviser).
New issues of certain debt securities are often offered on a when-issued basis,
that is, the payment obligation and the interest rate are fixed at the time the
buyer enters into the commitment, but delivery and payment for the securities
normally take place after the date of the commitment to purchase. The value of
when-issued securities may vary prior to and after delivery depending on market
conditions and changes in interest rate levels. However, the Fund will not
accrue any income on these securities prior to delivery. The Fund will maintain
in a segregated account with its Custodian an amount of cash or high quality
debt securities equal (on a daily marked-to-market basis) to the amount of its
commitment to purchase the when-issued securities.
LOW RATED OR UNRATED DEBT SECURITIES
The Fund may invest in lower quality, high-yielding debt securities, including
high-yielding foreign debt securities (commonly referred to as "junk bonds")
which are (i) rated as low as CCC by Standard & Poor's Corporation ("S&P") or
Caa by Moody's Investors Service, inc. ("Moody's") or (ii) unrated. Lower rated
and unrated debt securities have some "equity" characteristics and are
considered speculative and involve greater risk of loss than higher rated debt
securities and are more sensitive to changes in the issuer's capacity to pay.
Debt rated Caa or CCC presents a significantly greater risk of default than do
higher rated securities and, in times of poor business or economic conditions,
the Fund may lose interest and/or principal on such securities. In addition,
like investment grade debt, low rated or unrated debt securities are sensitive
to interest rate fluctuations. The Fund will not invest more than 25% of its
assets in debt securities rated below BBB by S&P or Baa by Moody's.
ASSET-BACKED SECURITIES
The Fund may invest in asset-backed securities. Asset-backed securities
represent interests in pools of consumer loans (generally unrelated to mortgage
loans) and most often are structured as pass-through
<PAGE>
securities. Interest and principal payments ultimately depend on payment of the
underlying loans by individuals, although the securities may be supported by
letters of credit or other credit enhancements. The value of asset-backed
securities may also depend on the creditworthiness of the servicing agent for
the loan pool, the originator of the loans, or the financial institution
providing the credit enhancement. The issuer of asset-backed securities may
not, in certain instances, be able to perfect its security interest in the
underlying collateral.
COLLATERALIZED MORTGAGE OBLIGATIONS ("CMOS")
The Fund may invest in CMOs. CMOs are fixed-income securities which are
collateralized by pools of mortgage loans created by commercial banks, savings
and loan institutions, private mortgage insurance companies and mortgage
bankers. In effect, CMOs "pass through" the monthly payments made by individual
borrowers on their mortgage loans. Timely payment of interest and principal
(but not the market value) of these pools is supported by various forms of
insurance or guarantees issued by U.S. Government agencies, private issuers and
the mortgage poolers. The Fund may buy CMOs without insurance or guarantees if,
in the opinion of the Sub-Adviser, the pooler is creditworthy or if rated A or
better by S&P or Moody's. S&P and Moody's assign the same rating
classifications to CMOs as they do to bonds. Prepayments of the mortgages
included in the mortgage pool may influence the yield of the CMO. In addition,
prepayments usually increase when interest rates are decreasing, thereby
decreasing the life of the pool. As a result, reinvestment of prepayments may
be at a lower rate than that on the original CMO. In the event that any CMOs
are determined to be investment companies, the Funds will be subject to certain
limitations under the Act.
LOANS OF PORTFOLIO SECURITIES
The Fund may lend to broker-dealers portfolio securities with an aggregate
market value of up to one-third of its total assets. Such loans must be secured
by collateral (consisting of any combination of cash, U.S. Government securities
or irrevocable letters of credit) in an amount at least equal (on a daily
marked-to-market basis) to the current market value of the securities loaned.
The Fund may terminate the loans at any time and obtain the return of the
securities loaned within one business day.
The Fund will continue to receive any interest or dividends paid on the loaned
securities and will continue to have voting rights with respect to the
securities. The Fund might experience risk of loss if the broker-dealer with
which it has engaged in a portfolio loan transaction breaches its agreement with
the Fund.
BORROWING
The Fund may borrow up to 30% of the value of its net assets to increase its
holdings of portfolio securities. Under the Act, the Fund is required to
maintain continuous asset coverage of 300% with respect to such borrowings and
to sell (within three days) sufficient portfolio holdings to restore such
coverage if it should decline to less than 300% because of market fluctuations
or other factors, even if the sale would be disadvantageous from an investment
standpoint. Leveraging by means of borrowing will exaggerate the effect of any
increase or decrease in the value of portfolio securities on the Fund's net
asset value, and money borrowed will be subject to interest and other costs
(which may include commitment fees and/or the cost of maintaining minimum
average balances) which may or may not exceed the investment return received
from the securities purchased with borrowed funds. It is anticipated that such
borrowings would be pursuant to a negotiated loan agreement with a commercial
bank or other institutional lender.
COMMERCIAL PAPER
The Fund may invest in commercial paper which is indexed to certain specific
foreign currency exchange rates. See "Risk Factors-Commercial Paper" in the
Statement of Additional information.
<PAGE>
DIRECT INVESTMENTS
The Fund may invest up to 10% of its total assets in direct investments;
however, the Fund does not currently intend to invest more than 5% of its net
assets in direct investments. For more information, see "Risk Factors-Direct
Investments" in the Statement of Additional information.
TEMPORARY DEFENSIVE STRATEGIES
During periods of less favorable economic and/or market conditions, the Fund may
make substantial investments for temporary defensive purposes in obligations of
the U.S. Government, debt obligations of one or more foreign governments,
certificates of deposit, time deposits, bankers' acceptances, high grade
commercial paper and repurchase agreements.
LIMITING INVESTMENT RISKS
While an investment in the Fund is not without risk, the Fund follows certain
policies in managing its investments which may help to reduce risk. These
policies may not be changed without shareholder approval. The following are some
of the more significant investment limitations:
1. The Fund will not invest more than 15% of the value of its total net assets
in securities which are "illiquid" (including repurchase agreements which
mature in more than seven days and over-the-counter foreign currency
options).
2. The Fund will not purchase more than 10% of any class of securities of any
issuer, including more than 10% of its outstanding voting securities,
except that the Fund may purchase more than 10% of any non-voting class of
securities.
3. The Fund will not invest more than 10% of its total assets in securities of
other investment companies.
Further information regarding these and other of the Fund's investment policies
and restrictions is provided in the Statement of Additional Information.
MANAGEMENT
TRUSTEES
The management of the Fund's business and affairs is the responsibility of the
Board of Trustees. The Board of Trustees sets and reviews policies regarding
the operation of the Trust whereas the Officers perform the daily functions of
the Trust. For information on the Trustees and Officers of the Fund, see
"Trustees and Officers" in the Statement of Additional Information.
INVESTMENT ADVISER, MANAGER AND ADMINISTRATOR
Van Eck Associates Corporation, located at 99 Park Avenue, New York, New York
10016, serves as investment adviser and manager to the Fund pursuant to an
Advisory Agreement with the Trust. The Adviser manages the investment operations
of the Fund and furnishes the Fund with a continuous investment program which
includes determining which securities should be bought, sold or held.
Peregrine Asset Management (Hong Kong) Limited ("PAM"), 1704 New World Tower,
16-18 Queen's Road Central, Hong Kong, serves as sub-investment adviser to the
Worldwide Emerging Markets Fund pursuant to a Sub-Investment Advisory Agreement
with the Adviser. PAM manages the investment operations of the Worldwide
Emerging Markets Fund and furnishes the Fund with a continuous investment
program that includes which securities should be bought, sold or held. The
Adviser manages and administers the
<PAGE>
business and affairs of the Fund. As compensation for its services, PAM is paid
a monthly fee at an annual rate of .50% of average daily net assets by the
Adviser from the advisory fees it receives from the Fund. While PAM serves as an
adviser to foreign funds, it does not currently serve as an investment adviser
or sub-adviser to other registered investment companies. PAM is a 100% owned
subsidiary of Peregrine Asset Management Holdings Limited which is a 75% owned
subsidiary of Peregrine Investments Holdings Limited ("Peregrine") which was
founded in 1988 and is, along with its affiliates, the largest independent Asian
based investment bank outside of Japan and Korea. Peregrine and its affiliates
have offices in fifteen Asian countries as well as in Europe and the United
States. As of April 30, 1995, total assets under management by Peregrine and its
affiliates, including PAM, exceed $650 million.
The primary portfolio manager responsible for the day-to-day management of the
Worldwide Emerging Markets Fund is listed below:
Gary Greenberg, C.F.A. - Manager of the Fund has been serving in such capacity
since the Fund commenced operations. Mr. Greenberg, Deputy Managing Director of
PAM, joined PAM in July, 1994 and is responsible for PAM's investment strategy
in various regions of the world including portfolio manager for a fund which
invests in smaller companies in India. Prior to joining PAM, Mr. Greenberg
served as co-manager of the Acorn International Fund from 1992 to 1994. During
that time period he was principal and portfolio manager of Wanger Asset
Management, an asset management company which manages over U.S. $4 billion,
including approximately U.S. $2 billion in non-U.S. companies. Mr. Greenberg was
employed by Harris Associates as an analyst from 1989 until 1992.
Other investment professionals at PAM who are expected to have significant input
with respect to the Fund's investments include:
Bruce Seton - Chief Investment Officer of PAM has been serving in such capacity
since the Fund commenced operations. Mr. Seton serves as Chief Executive
Officer of PAM and is responsible for establishing PAM's overall investment
guidelines and strategies. Prior to joining PAM in 1994, Mr. Seton spent twenty-
two years at Gartmore Investment Limited managing funds emphasizing Asian
emerging market investments.
Aureole Foong - Senior Fund Manager of the Fund has been serving in this
capacity since the Fund commenced operations. Mr. Foong joined PAM in 1994 as a
fund manager. His responsibilities at PAM include managing a fund which invests
in equities and derivatives in the Asia region. Prior to joining PAM, Mr. Foong
worked from 1990 to 1994 at Unifund S.A., a Geneva based private investment
company, where he served as a Senior Vice President.
With respect to the Fund, the Adviser and/or Sub-Adviser may from time to time,
at its discretion, waive the management fee and/or agree to pay some or all
expenses of the Fund. This has the effect of increasing the yield and total
return of the Fund during this period.
The Adviser also acts as investment adviser or sub-investment adviser to other
mutual funds registered with the Securities and Exchange Commission under the
Act and manages or advises managers of portfolios of pension plans and others.
John C. van Eck, Chairman and President of the Trust, and members of his
immediate family own 100% of the voting stock of the Adviser. At December 31,
1994 total aggregate assets under the management of Van Eck Associates
Corporation were approximately $1.8 billion.
The Fund sells its shares to various insurance company variable annuity and
variable life insurance separate accounts as a funding vehicle for such separate
accounts. The Fund currently does not foresee any disadvantages to variable
annuity and variable life contract owners arising out of the fact that the Fund
offers its shares to separate accounts of various insurance companies to serve
as the investment medium for their variable products. Nevertheless, the Board of
Trustees intends to monitor events in order to identify any material
irreconcilable conflicts which may possibly arise, and to determine what action,
if any, should
<PAGE>
be taken in response to such conflicts. If such a conflict were to occur, one or
more insurance companies' separate accounts might be required to withdraw
its/their investments in the Fund and shares of another fund may be substituted.
This might force the Fund to sell securities at disadvantageous prices. In
addition, the Board of Trustees may refuse to sell shares of the Fund to any
separate account or may suspend or terminate the offering of shares of the Fund
if such action is required by law or regulatory authority or is in the best
interests of the shareholders of the Fund.
EXPENSES
The Fund bears all expenses of its operation other than those incurred by the
Adviser under its Advisory Agreement with the Trust. In particular, the Fund
pays: investment advisory fees, custodian fees and expenses, legal, accounting
and auditing fees, brokerage fees, taxes, expenses of preparing prospectuses and
shareholder reports for existing shareholders, registration fees and expenses
(including compensation of the Adviser's employees in relation to the time spent
on such matters), expenses of the transfer and dividend disbursing agent, the
compensation and expenses of Trustees who are not otherwise affiliated with the
Trust, the Adviser or Sub-Adviser or any of their affiliates, and any
extraordinary expenses. Under the Advisory Agreement, the Adviser provides the
Fund with office space, facilities and simple business equipment and provides
the services of executive and clerical personnel for administering the affairs
of the Fund. The Adviser compensates Trustees of the Trust if such persons are
employees or affiliates of the Adviser or their affiliates. The Adviser will,
pursuant to the Advisory Agreement, require the Fund to reimburse it for its
costs for trading portfolio securities and maintaining books and records of the
Fund, including general ledger and daily net asset value accounting.
HOW TO BUY SHARES
Shares of the Fund are offered only for purchase by separate accounts of
insurance companies as an investment medium for Contracts.
Van Eck Securities Corporation (the "Distributor"), located at 99 Park Avenue,
New York, New York 10016, a wholly-owned subsidiary of Van Eck Associates
Corporation, has entered into a Distribution Agreement with the Trust. The
Distributor receives no compensation in connection with the sale of shares of
the Fund.
Shares of the Fund are sold at the public offering price which is net asset
value next computed after receipt of a purchase order, provided that the
purchase order is received by the Trust or the insurance company before 4:00
p.m. Eastern time. The net asset value for the Fund is computed as of the close
of business on the New York Stock Exchange which is normally 4:00 p.m. Monday
through Friday, exclusive of national business holidays. The assets of the Fund
are valued at market value or, if market value is not ascertainable, at fair
market value as determined in good faith by the Board of Trustees.
The Fund may invest in securities or futures contracts listed on foreign
exchanges which trade on Saturdays or other customary United States national
business holidays (i.e., days on which the Fund is not open for business).
Consequently, since the Fund will compute its net asset value only Monday
through Friday, exclusive of national business holidays, the net asset value of
shares of the Fund may be significantly affected on days when an investor has no
access to the Fund.
The sale of shares will be suspended during any period when the determination of
net asset value is suspended and may be suspended by the Board of Trustees
whenever the Board judges it in the Fund's best interest to do so. Certificates
for shares of the Fund will not be issued.
DIVIDENDS AND DISTRIBUTIONS
The Fund intends to distribute its net investment income in May and November and
any net realized capital gains resulting from the investment activity annually
in May.
<PAGE>
All dividends and capital gains distributions paid on shares of the Fund are
automatically reinvested in additional shares of the Fund on the dividend
payable date at the net asset value determined at the close of business on the
reinvestment price date. The fiscal year of the Fund ends on April 30.
HOW TO REDEEM SHARES
Shares of the Fund are redeemed at their net asset value next determined after
receipt of the order to redeem without the imposition of any sales commission or
redemption charge. However, certain deferred sales charges and other charges may
apply under the terms of the Contracts, which charges are described in the
Contract prospectus. Payment for the redemption of shares is made by the Fund to
the separate account in cash within seven days (or three business days effective
June 1, 1995) after tender in proper form, except under unusual circumstances as
determined by the SEC. The redemption price will be the net asset value next
determined after the receipt by the Trust or insurance company of a request in
proper form provided the request is received prior to 4:00 p.m. Eastern time.
The market value of the securities in the Fund is subject to daily fluctuations
and the net asset value of the Fund's shares will fluctuate accordingly.
Therefore, the redemption value may be more or less than the original purchase
price for such shares.
FEDERAL TAXATION
The Fund intends to qualify as a "regulated investment company" ("RIC") under
the Internal Revenue Code (the "Code") and will not pay federal income tax to
the extent that it distributes its net taxable investment income and capital
gains.
Section 817(h) of the Code provides that certain variable contracts, based upon
one or more segregated asset accounts of a life insurance company, will not be
treated as annuity, endowment or life insurance contracts for any period during
which the investments made by such accounts are not adequately diversified. The
regulations promulgated under section 817(h) of the Code, specify various
investment diversification requirements. In addition, the regulations provide
that an investment by a segregated asset account of a life insurance company in
a qualifying RIC is not treated as a single investment. Instead, a pro rata
portion of each asset of the RIC is treated as an asset of the segregated asset
account. The Fund intends to invest so as to enable the Contracts to satisfy the
diversification requirements imposed by Section 817(h) of the Code and the
applicable regulations.
The tax treatment of payments made by a separate account to a Contract holder is
described in the Contract prospectus.
DESCRIPTION OF THE TRUST
Van Eck Worldwide Insurance Trust (the "Trust") is an open-end management
investment company organized as a "business trust" under the laws of the
Commonwealth of Massachusetts on January 7, 1987. The Trust commenced operations
on September 7, 1989.
The Trustees of the Trust have authority to issue an unlimited number of shares
of beneficial interest of the Fund, $.001 par value. To date, six series or
Funds of the Trust have been authorized, which shares constitute the interests
in the Worldwide Emerging Markets Fund, Gold and Natural Resources Fund,
Worldwide Bond Fund, Worldwide SmallCap Fund, Worldwide Hard Assets Fund and
Worldwide Balanced Fund.
The Fund is classified as a diversified fund. A diversified fund is a fund which
meets the following requirements: At least 75% of the value of its total assets
is represented by cash and cash items (including receivables), Government
securities, securities of other investment companies and other securities for
the purpose of this calculation limited in respect of any one issuer to an
amount not greater than 5% of the value of the Fund's total assets and to not
more than 10% of the outstanding voting securities of such issuer. A "series"
is a separate pool of assets of the Trust which is separately managed and which
may
<PAGE>
have different investment objectives from those of another series. The Trustees
have the authority, without the necessity of a shareholder vote, to create any
number of new series.
Each share of the Fund has equal dividend, redemption and liquidation rights and
when issued is fully paid and non-assessable by the Trust. Under the Trust's
Master Trust Agreement, no annual or regular meeting of shareholders is
required. Thus, there will ordinarily be no shareholder meetings unless required
by the Act. The Trust held an initial meeting of shareholders on April 1, 1991,
at which shareholders elected the Board of Trustees, approved the Advisory
Agreement and ratified the selection of the Trust's independent accountants.The
Trustees are a self-perpetuating body unless and until fewer than 50% of the
Trustees, then serving as Trustees, are Trustees who were elected by
shareholders. At that time another meeting of shareholders will be called to
elect additional Trustees. On any matter submitted to the shareholders, the
holder of each Trust share is entitled to one vote per share (with proportionate
voting for fractional shares). Under the Master Trust Agreement, any Trustee may
be removed by vote of two-thirds of the outstanding Trust shares; and holders of
ten percent or more of the outstanding shares of the Trust can require Trustees
to call a meeting of shareholders for purposes of voting on the removal of one
or more Trustees. Shareholders of the Fund are entitled to vote on matters
affecting the Fund (such as the elections of Trustees and ratification of the
selection of the Trust's independent accountants). In accordance with the Act,
under certain circumstances the Trust will assist shareholders in communicating
with other shareholders in connection with calling a special meeting of
shareholders. The insurance company separate accounts, as the sole shareholders
of the Fund, have the right to vote Fund shares at any meeting of shareholders.
However, the Contracts may provide that the separate accounts will vote Fund
shares in accordance with instructions received from Contract holders. See the
applicable Contract prospectus for information regarding Contract holders'
voting rights.
Under Massachusetts law, the shareholders of the Trust could, under certain
circumstances, be held personally liable for the obligations of the Trust.
However, the Master Trust Agreement of the Trust disclaims shareholder liability
for acts or obligations of the Trust and requires that notice of such disclaimer
be given in each agreement, obligation or instrument entered into or executed by
the Trust or the Trustees. The Master Trust Agreement provides for
indemnification out of the Trust's property for all losses and expenses of any
shareholder held personally liable for the obligations of the Trust. Thus, the
risk of a shareholder incurring financial loss on account of shareholder
liability is limited to circumstances in which the Trust itself would be unable
to meet its obligations. The Fund's Adviser believes that, in view of the above,
the risk of personal liability to shareholders is remote.
ADDITIONAL INFORMATION
ADVERTISING
From time to time the Fund may use various media to advertise performance. Past
performance is not necessarily indicative of future performance.
The Fund may advertise performance in terms of average annual total return,
which is computed by finding the average annual compounded rates of return over
a period that would equate the initial amount invested to the ending redeemable
value. The calculation assumes the maximum sales charge (currently, the Fund
does not impose a sales charge on investments) is deducted from the initial
$1,000 payment and assumes all dividends and distributions by the Fund are
reinvested on the reinvestment dates during the period, and includes all
recurring fees that are charged to all shareholder accounts. In addition, the
Fund may advertise aggregate total return for a special period of time which is
determined by ascertaining the percentage change in the net asset value of
shares of the Fund initially purchased assuming reinvestment of dividends and
capital gains distribution on such shares without giving effect to the length of
time of the investment. Sales loads and other non-recurring expenses may be
excluded from the calculation of rates of return with the result that such rates
may be higher than if such expenses and sales loads were included. All other
fees will be included in the calculation of rates of return.
<PAGE>
The Fund may quote performance results from recognized services and publications
which monitor the performance of mutual funds and the Fund may compare its
performance to various published historical indices. Micropal, Ltd., a worldwide
mutual fund performance evaluation service, is one such rating agency. Lipper
Analytical Services is another such rating agency. The Lipper performance
analysis assumes reinvestment of capital gains and distributions, but does not
give effect to sales charges or taxes. The Fund may be compared to indices such
as the I.F.C. Investable Index and the following Morgan Stanley Capital
International Indices: World Index, World Index Free, Kokusai Index, Emerging
Markets Global Index and Emerging Markets free Index.
For a further discussion of advertising see "Performance" in the Statement of
Additional Information.
For further information about the Fund, please call or write to your insurance
company or call toll free (800) 221-2220 (in New York call (212) 687-5200 or
write to the Fund at the cover page address.
CUSTODIAN
The Custodian of the assets of the Trust is Bankers Trust Company, New York, New
York.
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P., New York, New York provides audit services,
consultation and advice with respect to financial information in the Trust's
filings with the Securities and Exchange Commission, consults with the Trust on
accounting and financial report matters and prepares the Trust's tax return.
COUNSEL
Goodwin, Procter & Hoar, One Exchange Place, Boston, Massachusetts acts as
Counsel for the Trust.
<PAGE>
VAN ECK WORLDWIDE INSURANCE TRUST
VAN ECK WORLDWIDE EMERGING MARKETS FUND
99 PARK AVENUE, NEW YORK, N.Y. 10016
(212) 687-5200
---------------------------------------
Van Eck Worldwide Insurance Trust (the "Trust") is an open-end management
investment company currently consisting of six separate funds: Worldwide
Emerging Markets Fund, Gold and Natural Resources Fund, Worldwide Bond Fund,
Worldwide SmallCap Fund, Worldwide Hard Assets Fund and Worldwide Balanced Fund
(the "Funds"). Shares of the Funds are offered only to separate accounts of
various insurance companies to fund the benefits of variable life insurance and
variable annuity policies ("Contracts"). Each Fund has specific investment
objectives.
---------------------------------------
TABLE OF CONTENTS
<TABLE>
<S> <C>
General Information...................................................... 2
Investment Objectives and Policies....................................... 3
Risk Factors............................................................. 3
Foreign Securities....................................................... 3
Foreign Currency Transactions............................................ 4
Futures and Options Transactions......................................... 5
Repurchase Agreements.................................................... 6
Investment Restrictions.................................................. 8
Investment Advisory Services............................................. 10
The Distributor.......................................................... 11
Portfolio Transactions and Brokerage..................................... 11
Trustees and Officers.................................................... 12
Valuation of Shares...................................................... 15
Taxes.................................................................... 16
Redemptions in Kind...................................................... 16
Performance.............................................................. 16
Additional Information................................................... 18
Financial Statements..................................................... 18
Appendix................................................................. 19
</TABLE>
This Statement of Additional Information is not a prospectus and should be read
in conjunction with the Trust's current Prospectus, dated October 10, 1995 (the
"Prospectus"), which is available at no charge upon written or telephone request
to the Trust at the address or telephone number set forth at the top of this
page.
Shareholders are advised to read and retain this Statement
of Additional Information for future reference.
STATEMENT OF ADDITIONAL INFORMATION
October 10, 1995
<PAGE>
GENERAL INFORMATION
Van Eck Worldwide Insurance Trust (the "Trust") is an open-end management
investment company organized as a "business trust" under the laws of the
Commonwealth of Massachusetts on January 7, 1987 as Van Eck Variable Insurance
Products Trust. The Board of Trustees has authority to create additional series
or funds, each of which may issue a separate class of shares. There are
currently six series of the Trust: Worldwide Emerging Markets Fund, Gold and
Natural Resources Fund, Worldwide Bond Fund, Worldwide SmallCap Fund, Worldwide
Hard Assets Fund and Worldwide Balanced Fund (the "Funds"). The Funds are
offered through a separate prospectus and statement of additional information.
The Worldwide Emerging Markets Fund (the "Fund") is classified as a diversified
fund under the Investment Company Act of 1940, as amended (the "Act").
Van Eck Associates Corporation (the "Adviser") serves as investment adviser to
the Fund.
INVESTMENT OBJECTIVE AND POLICIES OF THE FUND
WORLDWIDE EMERGING MARKETS FUND
The Worldwide Emerging Markets Fund seeks long-term capital appreciation by
investing primarily in equity securities in emerging markets around the world.
Under normal conditions, at least 65% of the Fund's total assets will be
invested in Emerging Country and emerging market equity securities. An
"emerging market" or "Emerging Country" is any country that the World Bank, the
International Finance Corporation or the United Nations or its authorities has
determined to have a low or middle income economy. Emerging Countries can be
found in regions such as Asia, Latin America, Africa and Eastern Europe. The
countries that will not be considered Emerging Countries include the United
States, Australia, Canada, Japan, New Zealand and most countries located in
Western Europe such as Austria, Belgium, Denmark, Finland, France, Germany,
Great Britain, Ireland, Italy, the Netherlands, Norway, Spain, Sweden and
Switzerland.
The Fund considers emerging market securities to include securities which are
(i) principally traded in the capital markets of an emerging market country;
(ii) securities of companies that derive at least 50% of their total revenues
from either goods produced or services performed in Emerging Countries or from
sales made in Emerging Countries, regardless of where the securities of such
companies are principally traded; (iii) securities of companies organized under
the laws of, and with a principal office in an Emerging Country; (iv) securities
of investment companies (such as country funds) that principally invest in
emerging market securities, and (v) American Depositary Receipts (ADRs),
American Depositary Shares (ADSs), European Depositary Receipts (EDRs) and
Global Depositary Receipts (GDRs) with respect to the securities of such
companies.
Equity securities in which the Fund may invest include common stocks; preferred
stocks (either convertible or non-convertible); rights; warrants; direct equity
interests in trusts, partnerships, joint ventures and other unincorporated
entities or enterprises; convertible debt instruments; and special classes of
shares available only to foreign persons in those markets that restrict
ownership of certain classes of equity to nationals or residents of that
country. These securities may be listed on securities exchanges or traded over-
the-counter. Direct investments are generally considered illiquid and will be
aggregated with other illiquid investments for purposes of the limitation on
illiquid investments.
The Adviser expects that the Fund will normally invest in at least three
different countries. The Fund emphasizes equity securities, but may also invest
in other types of instruments, including debt securities of any quality (other
than commercial paper as described herein). Debt securities may include fixed
or
<PAGE>
floating rate bonds, notes, debentures, commercial paper, loans, convertible
securities and other debt securities issued or guaranteed by governments,
agencies or instrumentalities, central banks or private issuers.
The Fund may, for temporary defensive purposes, invest more than 35% of its
total assets in securities which are not emerging market securities, such as
high grade, liquid debt securities of foreign and United States companies
foreign governments and the U. S. Government, and their respective agencies,
instrumentalities, political subdivisions and authorities, as well as in money
market instruments denominated in U.S. dollars or a foreign currency. These
money market instruments include, but are not limited to, negotiable or short-
term deposits with domestic or foreign banks with total surplus and undivided
profits of at least $50 million; high quality commercial paper; and repurchase
agreements maturing within seven days with domestic or foreign dealers, banks
and other financial institutions deemed to be creditworthy under guidelines
approved by the Board of Trustees of the Fund. The commercial paper in which
the Fund may invest will, at the time of purchase, be rated P-1 or better by
Moody's; A-1 or better by S&P; Fitch-1 by Fitch; Duff-1 by D&P, or if unrated,
will be of comparable high quality as determined by the Adviser.
RISK FACTORS
FOREIGN SECURITIES
Investors should recognize that investing in foreign securities involves certain
special considerations which are not typically associated with investing in
United States securities. Since investments in foreign companies will
frequently involve currencies of foreign countries, and since the Fund may hold
securities and funds in foreign currencies, the Fund may be affected favorably
or unfavorably by changes in currency rates and in exchange control regulations,
if any, and may incur costs in connection with conversions between various
currencies. Most foreign stock markets, while growing in volume of trading
activity, have less volume than the New York Stock Exchange, and securities of
some foreign companies are less liquid and more volatile than securities of
comparable domestic companies. Similarly, volume and liquidity in most foreign
bond markets are less than in the United States and at times, volatility of
price can be greater than in the United States. Fixed commissions on foreign
securities exchanges are generally higher than negotiated commissions on United
States exchanges, although the Fund endeavors to achieve the most favorable net
results on its portfolio transactions. There is generally less government
supervision and regulation of securities exchanges, brokers and listed companies
in foreign countries than in the United States. In addition, with respect to
certain foreign countries, there is the possibility of exchange control
restrictions, expropriation or confiscatory taxation, political, economic or
social instability, which could affect investments in those countries. Foreign
securities such as those purchased by the Fund may be subject to foreign
government taxes, higher custodian fees and dividend collection fees which could
reduce the yield on such securities.
The Fund expects to have a substantial portion of its assets invested in
developing countries. Although there is no universally accepted definition, a
developing country is generally considered by the Adviser (or Sub-Adviser) to be
a country which is in the initial stages of industrialization. Shareholders
should be aware that investing in the equity and fixed income markets of
developing countries involves exposure to unstable governments, economies based
on only a few industries, and securities markets which trade a small number of
securities. Securities markets of developing countries tend to be more volatile
than the markets of developed countries; however, such markets have in the past
provided the opportunity for higher rates of return to investors.
The value and liquidity of investments in developing countries may be affected
favorably or unfavorably by political, economic, fiscal, regulatory or other
developments in the particular countries or neighboring regions. The extent of
economic development, political stability and market depth of different
countries varies widely. Certain countries in the Asia region, including
Cambodia, China, Laos, Indonesia,
<PAGE>
Malaysia, the Philippines, Thailand, and Vietnam are either comparatively
underdeveloped or are in the process of becoming developed. Investments
typically involve greater potential for gain or loss than investments in
securities of issuers in developed countries.
The securities markets in developing countries are substantially smaller, less
liquid and more volatile than the major securities markets in the United States.
A high proportion of the shares of many issuers may be held by a limited number
of persons and financial institutions, which may limit the number of shares
available for investment by the portfolio. Similarly, volume and liquidity in
the bond markets in developing countries are less than in the United States and,
at times, price volatility can be greater than in the United States. A limited
number of issuers in developing countries' securities markets may represent a
disproportionately large percentage of market capitalization and trading value.
The limited liquidity of securities markets in developing countries may also
affect the Fund's ability to acquire or dispose of securities at the price and
time it wishes to do so. Accordingly, during periods of rising securities
prices in the more illiquid securities markets, the Fund's ability to
participate fully in such price increases may be limited by its investment
policy of investing not more than 15% of its total net assets in illiquid
securities. Conversely, the Fund's inability to dispose fully and promptly of
positions in declining markets will cause the Fund's net asset value to decline
as the value of the unsold positions is marked to lower prices. In addition,
securities markets in developing countries are susceptible to being influenced
by large investors trading significant blocks of securities.
Political and economic structures in many of such countries may be undergoing
significant evolution and rapid development, and such countries may lack the
social, political and economic stability characteristic of the United States.
Certain of such countries have in the past failed to recognize private property
rights and have at times nationalized or expropriated the assets of private
companies. As a result, the risks described above, including the risks of
nationalization or expropriation of assets, may be heightened. In addition,
unanticipated political or social developments may affect the value of the
Fund's investments in those countries and the availability to the Fund of
additional investments in those countries.
Economies of developing countries may differ favorably or unfavorably from the
United States economy in such respects as rate of growth of gross national
product, rate of inflation, capital reinvestment, resource self-sufficiency and
balance of payments position. As export-driven economies, the economies of
countries in the Asia region are affected by developments in the economies of
their principal trading partners. Hong Kong, Japan and Taiwan have limited
natural resources, resulting in dependence on foreign sources for certain raw
materials and economic vulnerability to global fluctuations of price and supply.
Certain developing countries do not have comprehensive systems of laws, although
substantial changes have occurred in many such countries in this regard in
recent years. Laws regarding fiduciary duties of officers and directors and the
protection of shareholders may not be well developed. Even where adequate law
exists in such developing countries, it may be impossible to obtain swift and
equitable enforcement of such law, or to obtain enforcement of the judgement by
a court of another jurisdiction.
Trading in futures contracts traded on foreign commodity exchanges may be
subject to the same or similar risks as trading in foreign securities.
FOREIGN CURRENCY TRANSACTIONS
Under normal circumstances, consideration of the prospects for currency exchange
rates will be incorporated into the long-term investment decisions made for the
Fund, with regard to overall diversification strategies. Although the Fund
values its assets daily in terms of U.S. dollars, it does not intend physically
to convert its holdings of foreign currencies into U.S. dollars on a daily
basis. The
<PAGE>
Fund will do so from time to time, and investors should be aware of the costs of
currency conversion. Although foreign exchange dealers do not charge a fee for
conversion, they do realize a profit based on the difference (the "spread")
between the prices at which they are buying and selling various currencies.
Thus, a dealer may offer to sell a foreign currency to the Fund at one rate,
while offering a lesser rate of exchange should the Fund desire to resell that
currency to the dealer. The Fund will use forward contracts, along with futures
contracts and put and call options, to "lock in" the U.S. dollar price of a
security bought or sold and as part of its overall hedging strategy. The Fund
will conduct its foreign currency exchange transactions, either on a spot (i.e.,
cash) basis at the spot rate prevailing in the foreign currency exchange
market, or through purchasing put and call options on, or entering into futures
contracts or forward contracts to purchase or sell foreign currencies. See
"Futures and Options Transactions."
A forward foreign currency contract, like a futures contract, involves an
obligation to purchase or sell a specific amount of currency at a future date,
which may be any fixed number of days from the date of the contract agreed upon
by the parties, at a price set at the time of the contract. Unlike foreign
currency futures contracts which are standardized exchange-traded contracts,
forward currency contracts are usually traded in the interbank market conducted
directly between currency traders (usually large commercial banks) and their
customers. A forward contract generally has no deposit requirement, and no
commissions are charged at any stage for such trades.
The Adviser will not commit the Fund to deliver under forward contracts an
amount of foreign currency in excess of the value of the Fund's portfolio
securities or other assets or obligations denominated in that currency. The
Fund's Custodian will place the securities being hedged, cash or U.S. government
securities or debt securities into a segregated account of the Fund in an amount
equal to the value of the Fund's total assets committed to the consummation of
forward foreign currency contracts to ensure that the Fund is not leveraged
beyond applicable limits. If the value of the securities placed in the
segregated account declines, additional cash or securities will be placed in the
account on a daily basis so that the value of the account will equal the amount
of the Fund's commitments with respect to such contracts. At the maturity of a
forward contract, the Fund may either sell the portfolio security and make
delivery of the foreign currency, or it may retain the security and terminate
its contractual obligation to deliver the foreign currency prior to maturity by
purchasing an "offsetting" contract with the same currency trader obligating it
to purchase, on the same maturity date, the same amount of the foreign currency.
There can be no assurance, however, that the Fund will be able to effect such a
closing purchase transaction.
It is impossible to forecast the market value of a particular portfolio security
at the expiration of the contract. Accordingly, it may be necessary for the
Fund to purchase additional foreign currency on the spot market (and bear the
expense of such purchase) if the market value of the security is less than the
amount of foreign currency that the Fund is obligated to deliver and if a
decision is made to sell the security and make delivery of the foreign currency.
If the Fund retains the portfolio security and engages in an offsetting
transaction, the Fund will incur a gain or a loss to the extent that there has
been movement in forward contract prices. Additionally, although such contracts
tend to minimize the risk of loss due to a decline in the value of the hedged
currency, at the same time, they tend to limit any potential gain which might
result should the value of such currency increase.
FUTURES AND OPTIONS TRANSACTIONS
The Fund may invest in options on futures contracts. Compared to the purchase
or sale of futures contracts, the purchase and sale of options on futures
contracts involves less potential risk to the Fund because the maximum exposure
is the amount of the premiums paid for the options.
<PAGE>
The use of financial futures contracts, options on such futures contracts, may
reduce the Fund's exposure to fluctuations in the prices of portfolio securities
and may prevent losses if the prices of such securities decline. Similarly, such
investments may protect the Fund against fluctuation in the value of securities
in which the Fund is about to invest. Because the financial markets in the
developing countries are not as developed in the United States, these financial
investments may not be available to the Fund and the Fund may be unable to hedge
certain risks.
The use of financial futures contracts and options on such futures contracts as
hedging instruments involves several risks. First, there can be no assurance
that the prices of the futures contracts or options and the hedged security or
the cash market position will move as anticipated. If prices do not move as
anticipated, the Fund may incur a loss on its investment, may not achieve the
hedging protection anticipated and/or incur a loss greater than if it had
entered into a cash market position. Second, investments in options, futures
contracts and options on futures contracts may reduce the gains which would
otherwise be realized from the sale of the underlying securities or assets which
are being hedged. Third, positions in futures contracts and options can be
closed out only on an exchange that provides a market for those instruments.
There can be no assurances that such a market will exist for a particular
futures contract or option. If the Fund cannot close out an exchange traded
futures contract or option which it holds, it would have to perform its contract
obligation or exercise its option to realize any profit and would incur
transaction costs on the sale of the underlying assets.
It is the policy of the Fund to meet the requirements of the Internal Revenue
Code of 1986, as amended, to qualify as a regulated investment company to
prevent double taxation of the Fund and its shareholders. One of these
requirements is that less than 30% of the Fund's gross income must be derived
from gains from the sale or other disposition of securities held for less than
three months. Another test requires that at least 90% of the Fund's gross
income be derived from dividends, interest, payment with respect to securities
loans and gains from the sale or other disposition of stocks or other
securities. Gains from commodity futures contracts do not currently qualify as
income for purposes of the 90% test. The extent to which the Fund may engage in
options and futures contracts transactions may be materially limited by these
tests.
REPURCHASE AGREEMENTS
The Fund will not enter into a repurchase agreement with a maturity of more than
seven business days if, as a result, more than 15% of the value of the Fund's
total net assets would then be invested in such repurchase agreements and other
illiquid securities. The Fund will only enter into a repurchase agreement where
(i) the underlying securities are of the type which the Fund's investment
policies would allow it to purchase directly, (ii) the market value of the
underlying security, including accrued interest, will be at all times equal to
or exceed the value of the repurchase agreement, and (iii) payment for the
underlying securities is made only upon physical delivery or evidence of book-
entry transfer to the account of the custodian or a bank acting as agent.
MORTGAGE-BACKED SECURITIES
The Fund may invest in mortgage-backed securities. A mortgage-backed security
may be an obligation of the issuer backed by a mortgage or pool of mortgages or
a direct interest in an underlying pool of mortgages. The value of mortgage-
backed securities may change due to shifts in the market's perception of
issuers. In addition, regulatory or tax changes may adversely affect the
mortgage securities market as a whole. Stripped mortgage-backed securities are
created when a U.S. governmental agency or a financial institution separates the
interest and principal components of a mortgage-backed security and sells them
as individual securities. The holder of the "principal-only" security ("PO")
receives the principal payments made by the underlying mortgage-backed security,
while the holder of the "interest-only" security ("IO") receives interest
payments from the same
<PAGE>
underlying security. The prices of stripped mortgage-backed securities may be
particularly affected by change in interest rates. As interest rates fall,
prepayment rates tend to increase, which tends to reduce the price of IOs and
increase prices of POs. Rising interest rates can have the opposite effect.
Changes in interest rates may also affect the liquidity of IOs and POs.
COMMERCIAL PAPER
The Fund may invest in commercial paper which is indexed to certain specific
foreign currency exchange rates. The terms of such commercial paper provide
that its principal amount is adjusted upwards or downwards (but not below zero)
at maturity to reflect changes in the exchange rate between two currencies while
the obligation is outstanding. The Fund will purchase such commercial paper
with the currency in which it is denominated and, at maturity, will receive
interest and principal payments thereon in that currency, but the amount or
principal payable by the issuer at maturity will change in proportion to the
change (if any) in the exchange rate between two specified currencies between
the date the instrument is issued and the date the instrument matures. While
such commercial paper entails the risk of loss of principal, the potential for
realizing gains as a result of changes in foreign currency exchange rate enables
the Fund to hedge or cross-hedge against a decline in the U.S. Dollar value of
investments denominated in foreign currencies while providing an attractive
money market rate of return. The Fund will purchase such commercial paper for
hedging purposes only, not for speculation. The staff of the Securities and
Exchange Commission is currently considering whether the purchase of this type
of commercial paper would result in the issuance of a "senior security" within
the meaning of the Act. The Fund believes that such investments do not involve
the creation of such a senior security, but nevertheless will establish a
segregated account with respect to its investments in this type of commercial
paper and to maintain in such account cash not available for investment or U.S.
Government securities or other liquid high quality debt securities having a
value equal to the aggregate principal amount of outstanding commercial paper of
this type.
DIRECT INVESTMENTS
The Fund may invest up to 10% of its total assets in direct investments. Direct
investments include (i) the private purchase from an enterprise of an equity
interest in the enterprise in the form of shares of common stock or equity
interests in trusts, partnerships, joint ventures or similar enterprises, and
(ii) the purchase of such an equity interest in an enterprise from a principal
investor in the enterprise. In each case the Fund will, at the time of making
the investment, enter into a shareholder or similar or similar agreement with
the enterprise and one or more other holders of equity interests in the
enterprise. The Sub-Adviser anticipates that these agreements will, in
appropriate circumstances, provide the Fund with the ability to appoint a
representative to the board of directors or similar body of the enterprise and
for eventual disposition of the Fund's investment in the enterprise. Such a
representative of the Fund will be expected to provide the Fund with the ability
to monitor its investment and protect its rights in the investment and will not
be appointed for the purpose of exercising management or control of the
enterprise.
Certain of the Fund's direct investments will include investments in smaller,
less seasoned companies. These companies may have limited product lines,
markets or financial resources, or they may be dependent on a limited management
group. The Fund does not anticipate making direct investments in start-up
operations, although it is expected that in some cases the Fund's direct
investments will fund new operations for an enterprise which itself is engaged
in similar operations or is affiliated with an organization that is engaged in
similar operations.
Direct investments may involve a high degree of business and financial risk that
can result in substantial losses. Because of the absence of any public trading
market for these investments, the Fund may take longer to liquidate these
positions than would be the case for publicly traded securities. Although these
securities may be resold in privately negotiated transactions, the prices on
these sales could be less than those originally paid by the Fund. Furthermore,
issuers whose securities are not
<PAGE>
publicly traded may not be subject to public disclosure and other investor
protection requirements applicable to publicly traded securities. If such
securities are required to be registered under the securities laws of one or
more jurisdictions before being resold, the Fund may be required to bear the
expense of the registration. In addition, in the event the Fund sells unlisted
foreign securities, any capital gains realized on such transactions may be
subject to higher rates of taxation than taxes payable on the sale of listed
securities. Direct investments are generally considered illiquid and will be
aggregated with other illiquid investments for purposes of the limitation on
illiquid investments.
INVESTMENT RESTRICTIONS
The following restrictions are fundamental policies which cannot be changed
without the approval of the holders of a majority of the Fund's outstanding
shares. Such majority is defined as the vote of the lesser of (i) 67% or more
of the outstanding shares present at a meeting, if the holders of more than 50%
of the outstanding shares are present in person or by proxy or (ii) more than
50% of the Fund's outstanding shares.
The Fund may not:
1. Purchase or sell real estate, although the Fund may purchase securities of
companies which deal in real estate, including securities of real estate
investment trusts, and may purchase securities which are secured by
interests in real estate;
2. Purchase or sell commodities or commodity futures contracts (for the
purpose of this restriction, forward foreign exchange contracts are not
deemed to be a commodities or commodity contracts) except that the Fund may
buy and sell financial futures contracts which may include stock and bond
index futures contracts and foreign currency futures contracts.
3. As to 75% of the total assets of the Fund purchase securities of any
issuer, if immediately thereafter (i) more than 5% of the Fund's total
assets (taken at market value) would be invested in the securities of such
issuer, or (ii) more than 10% of the outstanding voting securities of such
issuer would be held by the Fund;
4. Underwrite any issue of securities (except to the extent that the Fund may
be deemed to be an underwriter within the meaning of the Securities Act of
1933, as amended in the disposition of restricted securities);
5. Borrow money, except that the Fund may borrow up to 30% of the value of its
net assets to increase its holding of portfolio securities;
6. Issue senior securities except insofar as the Fund may be deemed to have
issued a senior security by reason of (i) borrowing money in accordance
with restrictions described above; (ii) entering into forward foreign
currency contracts; (iii) financial futures contracts purchased on margin;
(iv) currency swaps and (v) similar instruments;
<PAGE>
7. Make investments for the purpose of exercising control or management;
8. Invest in real estate limited partnerships or in oil, gas or other mineral
leases.
The following policies have been adopted by the Board of Trustees with respect
to the Fund and may be changed without shareholder approval.
The Fund may not:
9. Invest in securities which are (i) subject to legal or contractual
restrictions on resale ("restricted securities"), or in securities for
which there is no readily available market quotation or engage in a
repurchase agreement maturing in more than seven days with respect to any
security, if as a result, more than 15% of its total net assets would be
invested in such securities; and (ii) "illiquid" securities including
repurchase agreements maturing in more than seven days and options traded
over-the-counter if the result is that more than 15% of its net assets
would be invested in such securities;
10. Write, purchase or sell puts, calls, straddles, spreads or combinations
thereof, except that the Fund may purchase or sell puts and calls on
foreign currencies and on securities as described under "Futures and
Options Transactions" herein and "Options" in the Prospectus and that the
Fund may write, purchase or sell put and call options on financial futures
contracts, which include bond and stock index futures contracts;
11. Purchase participations or other interests (other than equity stock
interests) in oil, gas or other mineral exploration or development
programs;
12. Invest more than 5% of its total assets in warrants, whether or not the
warrants are listed on the New York or American Stock Exchanges. Warrants
acquired in units or attached to securities are not included in this
restriction;
13. Mortgage, pledge or otherwise encumber its assets except to secure
borrowings effected within the limitations set forth in restriction (6);
14. Purchase any security on margin, except that it may obtain such short-term
credits as are necessary for clearance of securities transactions and, may
make initial or maintenance margin payments in connection with options and
futures contracts and related options and borrowing effected within the
limitations set forth in restriction (5);
15. Participate on a joint or joint and several basis in any trading account in
securities, although transactions for the Fund and any other account under
common or affiliated management may be combined or allocated between the
Fund and such account;
16. Commit more than 5% of its total assets to initial margin deposits on
futures contracts not used for hedging purposes. (Margin deposits for
futures positions entered into for bona fide hedging purposes are excluded
from the 5% limitation.)
17. Make loans, except by (i) purchase of marketable bonds, debentures,
commercial paper and similar marketable evidences of indebtedness and (ii)
repurchase agreements. The Fund may lend to broker-dealers portfolio
securities with an aggregate market value up to one-third of its total
assets;
If a percentage restriction is adhered to at the time of investment, a later
increase or decrease in percentage resulting from a change in values of
portfolio securities or amount of net assets will not be considered a violation
of any of the foregoing restrictions.
<PAGE>
INVESTMENT ADVISORY SERVICES
The investment adviser and manager of the Fund is Van Eck Associates Corporation
(the "Adviser"), a Delaware corporation, pursuant to an Advisory Agreement with
the Trust dated as of August 30, 1989. The Adviser furnishes an investment
program for the Fund and determines, subject to the overall supervision and
review of the Board of Trustees, what investments should be purchased, sold or
held.
Peregrine Asset Management (Hong Kong) Limited ("PAM" or the "Sub-Adviser"), a
Hong Kong Corporation, is Sub-Advisor to the Worldwide Emerging Markets Fund
pursuant to a Sub-Investment Advisory Agreement dated October 9, 1995.
The Adviser (and Sub-Adviser) provide the Fund with office space, facilities and
simple business equipment and provide the services of consultants, executive and
clerical personnel for administering the affairs of the Fund. Except as provided
for in the Advisory Agreement and Sub-Advisory Agreement, the Adviser
compensates all executive and clerical personnel and Trustees of the Trust if
such persons are employees or affiliates of the Adviser or its affiliates. The
advisory fee is computed daily and paid monthly.
The Advisory and Sub-Advisory Agreements provide that they shall continue in
effect from year to year with respect to the Fund as long as they are approved
at least annually (i) by a vote of a majority of the outstanding voting
securities of the Fund (as defined in the Investment Company Act of 1940) or by
the Trustees of the Trust, and (ii) in either event a vote of a majority of the
Trustees who are not parties to the Advisory Agreement or "interested persons"
of any party thereto, cast in person at a meeting called for the purpose of
voting on such approval. The Advisory and Sub-Advisory Agreements may be
terminated on 60 days' written notice by either party and will terminate
automatically if they are assigned within the meaning of the 1940 Act. The
Advisory and Sub-Advisory Agreements for the Fund were approved by the Board of
Trustees on July 18, 1995.
The expenses borne by the Fund include the charges and expenses of the transfer
and dividend disbursing agent, custodian fees and expenses, legal, auditors'
fees and expenses, brokerage commissions for portfolio transactions, taxes, (if
any), the advisory and administrative fees, extraordinary expenses (as
determined by the Trustees of the Trust), expenses of shareholder and Trustee
meetings, and of preparing, printing and mailing proxy statements, reports and
other communications to shareholders, expenses of preparing and setting in type
prospectuses and periodic reports and expenses of mailing them to current
shareholders, legal and accounting expenses, expenses of registering and
qualifying shares for sale (including compensation of the Adviser's employees in
relation to the time spent on such matters), fees of Trustees who are not
"interested persons" of the Adviser, membership dues of the Investment Company
Institute, fidelity bond and errors and omissions insurance premiums, cost of
maintaining the books and records of the Fund, and any other charges and fees
not specifically enumerated as an obligation of the Distributor or Adviser.
The management fee for the Fund is computed daily and paid monthly at an annual
rate of 1% of average daily net assets, which includes the fee paid to the
Adviser for accounting and administrative services. From this fee the Adviser
pays the Sub-Adviser a fee of .50 of 1% of average daily net assets.
Under the Advisory Agreement, the Adviser determines the net asset value per
share and maintains the accounting records of the Fund. For these services the
agreement provides for reimbursement to the Adviser.
Mr. John C. van Eck is Chairman of the Board of Directors of the Adviser as well
as President and Trustee of the Trust.
<PAGE>
THE DISTRIBUTOR
Shares of the Fund are offered on a continuous basis and are distributed through
Van Eck Securities Corporation, 99 Park Avenue, New York, New York (the
"Distributor"), a wholly-owned subsidiary of Van Eck Associates Corporation.
The Trustees of the Trust have approved a Distribution Agreement appointing the
Distributor as distributor of shares of the Fund. The Distribution Agreement
for the Fund was approved by action of the Trustees on July 18, 1995.
The Distribution Agreement provides that the Distributor will pay all fees and
expenses in connection with printing and distributing prospectuses and reports
for use in offering and selling shares of the Fund and preparing, printing and
distributing advertising or promotional materials. The Fund will pay all fees
and expenses in connection with registering and qualifying its shares under
federal and state securities laws.
PORTFOLIO TRANSACTIONS AND BROKERAGE
The Adviser (or Sub-Adviser) is responsible for decisions to buy and sell
securities and other investments for the Fund, the selection of brokers and
dealers to effect the transactions and the negotiation of brokerage commissions,
if any. In transactions on stock and commodity exchanges in the United States,
these commissions are negotiated, whereas on foreign stock and commodity
exchanges these commissions are generally fixed and are generally higher than
brokerage commissions in the United States. In the case of securities traded on
the over-the-counter markets, there is generally no stated commission, but the
price usually includes an undisclosed commission or markup. In underwritten
offerings, the price includes a disclosed, fixed commission or discount. Most
short term obligations are normally traded on a "principal" rather than agency
basis. This may be done through a dealer (e.g. securities firm or bank) who
buys or sells for its own account rather than as an agent for another client, or
directly with the issuer. A dealer's profit, if any, is the difference, or
spread, between the dealer's purchase and sale price for the obligation.
In purchasing and selling the Fund's portfolio investments, it is the Adviser's
(and Sub-Adviser's) policy to obtain quality execution at the most favorable
prices through responsible broker-dealers. In selecting broker-dealers, the
Adviser (or Sub-Adviser) will consider various relevant factors, including, but
not limited to, the size and type of the transaction; the nature and character
of the markets for the security or asset to be purchased or sold; the execution
efficiency, settlement capability, and financial condition of the broker-
dealer's firm; the broker-dealer's execution services rendered on a continuing
basis; and the reasonableness of any commissions.
The Adviser (or Sub-Adviser) may cause the Fund to pay a broker-dealer who
furnishes brokerage and/or research services a commission that is in excess of
the commission another broker-dealer would have received for executing the
transaction if it is determined that such commission is reasonable in relation
to the value of the brokerage and/or research services as defined in Section
28(e) of the Securities Exchange Act of 1934 which have been provided. Such
research services may include, among other things, analyses and reports
concerning issuers, industries, securities, economic factors and trends, and
portfolio strategy. Any such research and other information provided by brokers
to the Adviser (or Sub-Adviser) is considered to be in addition to and not in
lieu of services required to be performed by the Adviser (or Sub-Adviser) under
its Advisory Agreement (or Sub-Advisory Agreement) with the Trust. The research
services provided by broker-dealers can be useful to the Adviser (or Sub-
Adviser) in serving its other clients or clients of the Adviser's (or Sub-
Adviser's) affiliates.
The Trustees periodically review the Adviser's (or Sub-Adviser's) performance of
its responsibilities in connection with the placement of portfolio transactions
on behalf of the Fund and review the commissions paid by the Fund over
representative periods of time to determine if they are reasonable in relation
to the benefits to the Fund.
<PAGE>
Investment decisions for the Fund are made independently from those of the other
investment accounts managed by the Adviser (or Sub-Adviser) or affiliated
companies. Occasions may arise, however, when the same investment decision is
made for more than one client's account. It is the practice of the Adviser (or
Sub-Adviser) to allocate such purchases or sales insofar as feasible among its
several clients or the clients of its affiliates in a manner it deems equitable.
The principal factors which the Adviser (or Sub-Adviser) considers in making
such allocations are the relative investment objectives of the clients, the
relative size of the portfolio holdings of the same or comparable securities and
the then availability in the particular account of funds for investment.
Portfolio securities held by one client of the Adviser (or Sub-Adviser) may also
be held by one or more of its other clients or by clients of its affiliates.
When two or more of its clients or clients of its affiliates are engaged in the
simultaneous sale or purchase of securities, transactions are allocated as to
amount in accordance with formulae deemed to be equitable as to each client.
There may be circumstances when purchases or sales of portfolio securities for
one or more clients will have an adverse effect on other clients.
While it is the policy of the Fund generally not to engage in trading for short-
term gains, the Fund will effect portfolio transactions without regard to the
holding period if, in the judgment of the Adviser (or Sub-Adviser) such
transactions are advisable in light of a change in circumstances of a particular
company, within a particular industry or country, or in general market, economic
or political conditions. The Fund anticipates that its annual portfolio
turnover rate will not exceed 100%.
The Adviser does not consider sales of shares of the Fund as a factor in the
selection of broker-dealers to execute portfolio transactions for the Fund.
TRUSTEES AND OFFICERS
The Trustees and Officers of the Trust, their addresses, positions with the
Trust and principal occupations during the past five years are set forth below.
Trustees of Van Eck Worldwide Insurance Trust:
*.JOHN C. van ECK, C.F.A. - Chairman of the Board and President
- -------------------------
270 River Road, Briarcliff Manor, New York; Chairman of the Board and
President of other affiliated investment companies advised by the Adviser;
Chairman, Van Eck Associates Corporation (Investment Adviser), Van Eck
Securities Corporation (broker-dealer); Director, Eclipse Financial Asset
Trust (mutual fund); Former Director (1992 - 1995) Abex Inc. (aerospace);
Former Director (1983-1986), The Signal Companies, Inc. (high technology
and engineering); Former Director (1982-1984), Pullman Transportation Co.,
Inc. (transportation equipment). Former Director (1986-1992) The Henley
Group, Inc. (technology and health).
.#+JEREMY H. BIGGS - Trustee
- ------------------
1220 Park Avenue, New York, New York 10128; Trustee of other affiliated
investment companies advised by the Adviser; Vice Chairman, Director and
Chief Investment Officer, Fiduciary Trust Company International (investment
manager), parent company of Fiduciary International, Inc., which serves as
Sub-Adviser to the Worldwide Balanced Fund; Director to all funds of
Ventures Advisers Group (mutual fund management company); Former Director,
International Investors Incorporated (1990-1991).
#+RICHARD C. COWELL - Trustee
- -------------------
121 El Bravo Way, Palm Beach, Florida; Trustee of other affiliated
investment companies advised by the Adviser; Private Investor; Director,
West Indies & Caribbean Development Ltd. (real estate); Director, Compo
Industries, Inc. (machinery manufacturer); Former Director (1978-1981),
American Eagle Petroleums, Ltd. (oil and gas exploration); Former President
and Director (1968-1976),
<PAGE>
Minerals and Industries, Inc. (petroleum products); Former Director (1978-
1983), Duncan Gold Resources Inc. (oil exploration and gold mining); Former
Director (1981-1984), Crested Butte Silver Mining Co.; Former Chairman and
Member of Executive Committee (1974-1981), Allerton Resources, Inc. (oil
and gas exploration); Former Director (1976-1982), Western World Insurance
Co; Former Director, International Investors Incorporated (mutual fund).
.RODGER A. LAWSON - Trustee
- -----------------
330 East 38th Street, New York, New York 10016; Trustee of other affiliated
investment companies advised by the adviser; President of the Adviser;
President of Van Eck Securities Corporation; Former Managing Director and
Head of Global Private banking and Mutual Funds, Bankers Trust Company
(1992-1994); Former Managing Director, Member of the Management Committee,
and President/CEO of Fidelity Investments Retail Group, FMR Corp. (1985-
1991); Former Corporate Officer, Member of the Management Committee, and
Head of Retail and Institutional Businesses, Dreyfus Corporation (1982-
1985).
#+WESLEY G. McCAIN - Trustee
- ------------------
144 East 30th Street, New York, New York; Chairman, Towneley Capital
Management, Inc., (investment adviser); Chairman, Eclipse Financial Asset
Trust (mutual fund); Trustee of other affiliated investment companies
advised by the Adviser; General Partner, Pharoah Partners, L.P.; President,
Millbrook Associates, Inc.; Trustee, Libre Group Trust; Chairman, Eclipse
Financial Services, Inc.; Former Director, International Investors
Incorporated (mutual fund); and Former Secretary and Treasurer, Millbrook
Advisers, Inc. (investment adviser) Former Chairman, Finacor, Inc.
(financial services).
DAVID J. OLDERMAN - Trustee
- -----------------
560 Lexington Avenue, New York, New York 10022; Chairman of the Board,
Chief Executive Officer and Owner, Carret & Company, Inc. (since 1988);
Chairman of the Board, American Copy Equipment Co. (1991-present);
Principal, Olderman & Raborn, Inc., (investment advisers-1984-1988);
Chairman of the Board, Railock, Inc., (farm equipment manufacturing-1979-
1984); Head of Corporate Finance, Halsey Stuart (investment Banking-1974-
1975); Vice Chairman of the Board, Stone and Webster Securities Corp.
(investment banking, retail sales and investment advisory divisions-1964 to
1974).
#*RALPH F. PETERS - Trustee
- -----------------
55 Strimples Mill Road, Stockton, New Jersey 08559; Trustee of other
affiliated investment companies advised by the Adviser; Former Chairman of
the Board and Chief Executive Officer of Discount Corporation of New York
(dealer in U.S. Treasury and Federal Agency Securities); Director, Sun Life
Insurance and Annuity Company of New York; Director, U.S. Life Income Fund
Inc., New York; Former Director, International Investors Incorporated.
RICHARD STAMBERGER - Trustee
- ------------------
888 17th Street, N.W., Washington, D.C. 20006; Principal, National
Strategies, Inc., a public policy firm in Washington, D.C.; Executive Vice
President, Chief Operating Officer, and a Director of NuCable Resources
Corporation (technology firm/since 1988); associated with Anderson Benjamin
& Reed, a regulatory consulting firm based in Washington, D.C. (1985-1986);
White House Fellow-Office of Vice President (1984-1985); Director of
Special Projects, National Cable Television Association (1983-1984).
**.FRED M. van ECK - Trustee
- ------------------
99 Park Avenue, New York, New York; Private Investor; Trustee of other
affiliated investment companies advised by the Adviser; Director, Van Eck
Associates Corporation; Director, Van Eck Securities Corporation; Former
General Partner (1950-1976) J. H. Whitney & Co. (venture capital).
<PAGE>
Officers of the Trust:
HENRY J. BINGHAM - Executive Vice President
- ----------------
99 Park Avenue, New York, New York; President, International Investors Gold
Fund series of Van Eck Funds; Executive Managing Director, Van Eck
Associates Corporation; Executive Vice President of other affiliated
investment companies advised by the Adviser; Former Director and Vice
President (1978-1983), United Services Gold Shares Inc., United Services
Group of Funds, Inc. and The Good and Bad Times Fund, Inc. (mutual funds)
and Growth Research and Management, Inc. (investment adviser). Formerly
General Partner and Director of Spencer Trask & Co.
MADIS SENNER - Executive Vice President
- ------------
99 Park Avenue, New York, New York; President of Worldwide Bond Fund;
Director, Global Fixed Income of the Adviser; Executive Vice President of
other affiliated investment companies of the Adviser; President of World
Income Fund series of Van Eck Funds; Former Global Bond Manager, Chase
Manhattan Private Bank (1992-1994); Former President and founder, Sunray
Securities, Inc. 1989-1992).
MICHAEL G. DOORLEY - Vice President
- ------------------
99 Park Avenue, New York, New York; Vice President, Treasurer, Controller
and Chief Financial Officer, Van Eck Associates Corporation and Van Eck
Securities Corporation, Vice President and Treasurer of other affiliated
investment companies advised by the Adviser.
BRUCE J. SMITH - Vice President and Treasurer
- --------------
99 Park Avenue, New York, New York; Senior Managing Director, Portfolio
Accounting of the Adviser and Senior Managing Director, Operations of the
Distributor. Vice President and Controller of other affiliated investment
companies advised by the Adviser.
JOSEPH P. DiMAGGIO - Controller
- ------------------
99 Park Avenue, New York, New York; Controller of the Trust; Director of
Portfolio Accounting of the Adviser (since 1993); Controller of other
affiliated investment companies advised by the Adviser; Accounting Manager
with Alliance Capital Management (1985-1993).
THADDEUS M. LESZCZYNSKI - Vice President and Secretary
- -----------------------
99 Park Avenue, New York, New York; Vice President and Secretary of other
affiliated investment companies advised by the Adviser; Vice President and
General Counsel of the Adviser and Distributor.
<PAGE>
_______________________
. An "interested person" as defined in the Act.
* Member of Executive Committee - exercises general powers of Board of
Trustees between meetings of the Board.
** Brother of Mr. John C. van Eck.
# Member of the Nominating Committee
+ Member of Audit Committee - reviews fees, services, procedures, conclusions
and recommendations of independent auditors.
VALUATION OF SHARES
The net asset value per share of the Fund is computed by dividing the value of
all of the Fund's securities plus cash and other assets, less liabilities, by
the number of shares outstanding. The net asset value per share is computed as
of the close of the New York Stock Exchange, Monday through Friday, exclusive of
national business holidays. The Fund will be closed on the following national
business holidays: New Years Day, Washington's Birthday, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day and Christmas (or the days on
which these holidays are observed).
Shares of the Fund are sold at the public offering price which is determined
once each day the Fund is open for business and is the net asset value per
share.
The net asset value need not be computed on a day in which no orders to
purchase, sell or redeem shares of the Fund have been received.
The value of a financial futures contract equals the unrealized gain or loss on
the contract that is determined by marking it to the current settlement price
for a like contract acquired on the day on which the commodity futures contract
is being valued. A settlement price may not be used if the market makes a limit
move with respect to a particular commodity. Securities or futures contracts for
which market quotations are readily available are valued at market value, which
is currently determined using the last reported sale price. If no sales are
reported as in the case of most securities traded over-the-counter, securities
are valued at the mean of their bid and asked prices at the close of trading on
the New York Stock Exchange (the "Exchange"). In cases where securities are
traded on more than one exchange, the securities are valued on the exchange
designated by or under the authority of the Board of Trustees as the primary
market. Short-term investments having a maturity of 60 days or less are valued
at amortized cost, which approximates market. Options are valued at the last
sales price unless the last sales price does not fall within the bid and ask
prices at the close of the market, at which time the mean of the bid and ask
prices is used. All other securities are valued at their fair value as
determined in good faith by the Trustees. Foreign securities or futures
contracts quoted in foreign currencies are valued at appropriately translated
foreign market closing prices or as the Board of Trustees may prescribe.
Generally, trading in foreign securities and futures contracts, as well as
corporate bonds, United States Government securities and money market
instruments, is substantially completed each day at various times prior to the
close of the Exchange. The values of such securities used in determining the
net asset value of the shares of the Fund may be computed as of such times.
Foreign currency exchange rates are also generally determined prior to the close
of the Exchange. Occasionally, events affecting the value of such securities
and such exchange rates may occur between such times and the close of the
Exchange which will not be reflected in the computation of the Fund's net asset
value. If events materially affecting the value of such securities occur during
such period, then these securities will be valued at their fair value as
determined in good faith by the Trustees.
<PAGE>
TAXES
The Fund intends to qualify and elects to be treated each taxable year as a
"regulated investment company" under Subchapter M of the Internal Revenue Code
of 1986, as amended (the"Code"). To so qualify, the Fund must, among other
things, (a) derive at least 90% of its gross income from dividends, interest,
payments with respect to securities loans, gains from the sale or other
disposition of stock, securities or foreign currencies, or other income
(including gains from options, futures or forward contracts) derived with
respect to its business of investing in such stock, securities or currencies;
(b) derive less than 30% of its gross income from the sale or other disposition
of any of the following which was held less than three months (the "30% test"):
(i) stock or securities; (ii) options, futures or forward contracts (other than
on foreign currencies) or (iii) foreign currencies (or options, futures or
forward contracts on foreign currencies) but only if such currencies (or
options, futures or forward contracts) are not directly related to the Fund's
principal business of investing in stock or securities; and (c) satisfy certain
diversification requirements.
As a regulated investment company, the Fund will not be subject to federal
income tax on its net investment income and capital gain net income (capital
gains in excess of its capital losses) that it distributes to shareholders if at
least 90% of its investment company taxable income for the taxable year is
distributed. However, if for any taxable year the Fund does not satisfy the
requirements of Subchapter M of the Code, all of its taxable income will be
subject to tax at regular corporate rates without any deduction for distribution
to shareholders, and such distributions will be taxable to shareholders as
ordinary income to the extent of the Fund's current or accumulated earnings or
profits.
The Fund will be liable for a nondeductible 4% excise tax on amounts not
distributed on a timely basis in accordance with a calendar year distribution
requirement. To avoid the tax, during each calendar year the Fund must
distribute (i) at least 98% of its ordinary income (not taking into account any
capital gains or losses) for the calendar year, (ii) at least 98% of its capital
gain net income for the twelve month period ending on October 31 (or December
31, if the Fund so elects), and (iii) any portion (not taxed to the Fund) of the
2% balance from the prior year. The Fund intends to make sufficient
distributions to avoid this 4% excise tax.
REDEMPTIONS IN KIND
The Fund elects to have the ability to redeem its shares in kind, committing
itself to pay in cash all requests for redemption by any shareholder of record
limited in amount with respect to each shareholder of record during any
ninety-day period in the lesser of (i) $250,000 or (ii) 1% of the net asset
value of such company at the beginning of such period.
PERFORMANCE
The Fund may advertise performance in terms of average annual total return for
1, 5 and 10 year periods, or for such lesser periods as the Fund has been in
existence. Average annual total return is computed by finding the average
annual compounded rates of return over the periods that would equate the initial
amount invested to the ending redeemable value, according to the following
formula:
<PAGE>
P(1+T)to the power of n = ERV
Where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 payment made at
the beginning of the 1, 5, or 10 year periods at the end of the
year or period;
The calculation assumes the maximum sales load (or other charges deducted from
payments) is deducted from the initial $1,000 payment and assumes all dividends
and distributions by the fund are reinvested at the price stated in the
prospectus on the reinvestment dates during the period, and includes all
recurring fees that are charged to all shareholder accounts.
The Fund may advertise performance in terms of a 30-day yield quotation. The
30-day yield quotation is computed by dividing the net investment income per
share earned during the period by the maximum offering price per share on the
last day of the period, according to the following formula:
YIELD = 2[(A-B/CD + 1)to the 6th power -1]
Where: A = dividends and interest earned during the period
B = expenses accrued for the period (net of reimbursement)
C = the average daily number of shares outstanding during the period
that were entitled to receive dividends
D = the maximum offering price per share on the last day of the
period after adjustment for payment of dividends within 30 days
thereafter
The Fund may also advertise performance in terms of aggregate total return.
Aggregate total return for a specified period of time is determined by
ascertaining the percentage change in the net asset value of shares of the Fund
initially acquired assuming reinvestment of dividends and distributions and
without giving effect to the length of time of the investment according to the
following formula:
[(B-A)/A](100)=ATR
Where: A = initial investment
B = value at end of period
ATR = aggregate total return
The calculation assumes the maximum sales charge is deducted from the initial
payment and assumes all distributions by the Fund are reinvested at the price
stated in the Prospectus on the reinvestment dates during the period, and
includes all recurring fees that are charged to all shareholder accounts.
Performance figures of the Fund are not useful for comparison purposes because
they do not reflect the charges and deductions at the separate account level.
<PAGE>
ADDITIONAL INFORMATION
Custodian. Bankers Trust Company, New York, New York is the custodian of the
- ---------
Trust's portfolio securities and cash. The Custodian is authorized, upon the
approval of the Trust, to establish credits or debits in dollars or foreign
currencies with, and to cause portfolio securities of the Fund to be held by its
overseas branches or subsidiaries, and foreign banks and foreign securities
depositories which qualify as eligible foreign custodians under the rules
adopted by the Securities and Exchange Commission.
Independent Accountants. Coopers & Lybrand L.L.P., New York, New York serves as
- -----------------------
the Trust's independent accountants.
Counsel. Goodwin, Procter & Hoar, Exchange Place, Boston, Massachusetts 02109.
- -------
FINANCIAL STATEMENTS
As the Fund has not yet commenced investment.
<PAGE>
APPENDIX
PART A.
Corporate Bond Ratings
- ----------------------
Description of Moody's Investors Service, Inc. corporate bond ratings:
Aaa--Bonds which are rated Aaa are judged to be the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt-edge". Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.
Aa--Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known
as high grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.
A--Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors given security
to principal and interest are considered adequate but elements may be present
which suggest a susceptibility to impairment sometime in the future.
Baa--Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba--Bonds which are rated Ba are judged to have speculative elements.
Their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B--Bonds which are rated B generally lack the characteristics of the
desirable investment. Assurance of interest and principal payments or
maintenance of other terms of the contract over any long period of time may be
small.
Caa-Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
Moody's applies the numerical modifiers 1, 2 and 3 to each generic rating
classification from Aa through Caa. The modifier 1 indicates that the security
ranks in the higher end of its generic rating category; the modifier 2 indicates
a mid-range ranking; and the modifier 3 indicates that the issue ranks in the
lower end of its generic rating category.
Description of Standard & Poor's Corporation corporate bond ratings;
AAA -- Bonds rated AAA have the highest rating assigned by S&P to a debt
obligations. Capacity to pay interest and repay principal is extremely strong.
AA -- Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the higher rated issues only in small degree.
<PAGE>
A -- Bonds rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than bonds in higher rated
categories.
BBB -- Bonds rated BBB are regarding as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
bonds in this category than for bonds in higher rated categories.
BB -- Bonds rated BB has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure
to adverse business, financial or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments.
B -- Bonds rated B have a greater vulnerability to default but currently
have the capacity to meet interest payments and principal repayments. Adverse
business, financial or economic conditions will likely impair capacity or
willingness to pay interest and repay principal. The B rating is also used for
debt subordinated to senior debt that is assigned an actual or implied BB
rating.
CCC -- Bonds rated CCC has a current identifiable vulnerability to
default, and is dependent upon favorable business, financial and economic
conditions to meet timely payment of interest and repayment of principal. In
the event of adverse business, financial or economic conditions, it is not
likely to have the capacity to pay interest and repay principal.
The ratings from AA to CCC may be modified by the addition of a plus or
minus to show relative standing within the major rating categories.
Preferred Stock Ratings
- -----------------------
Moody's Investors Service, Inc. describes its preferred stock ratings as:
aaa - An issue which is rated aaa is considered to be a top-quality
preferred stock. This rating indicates good asset protection and the least risk
of dividend impairment within the universe of convertible preferred stocks.
aa - An issue which is rated aa is considered a high-grade preferred
stock. This rating indicates that there is reasonable assurance that earnings
and asset protection will remain relatively well maintained in the foreseeable
future.
a - An issue which is rated a is considered to be an upper-medium grade
preferred stock. While risks are judged to be somewhat greater than in the aaa
and aa classifications, earnings and asset protection are, nevertheless,
expected to be maintained at adequate levels.
baa - An issue which is rated baa is considered to be medium-grade, neither
highly protected nor poorly secured. Earnings and asset protection appear
adequate at present but may be questionable over any great length of time.
ba - An issue which is rated ba is considered to have speculative elements,
and its future cannot be considered well assured. Earnings and asset protection
may be very moderate and not well safe-guarded during adverse periods.
Uncertainty of position characterizes preferred stocks in this class.
b - An Issue which is rated b generally lacks the characteristics of a
desirable investment. Assurance of dividend payments and maintenance of other
terms of the issue over any long period of time may be small.
<PAGE>
caa - An issue which is rated caa is likely to be in arrears on dividend
payments. This rating designation does not purport to indicate the future
status of payment.
ca - An issue which is rated ca is speculative in a high degree and is
likely to be in arrears on dividends with little likelihood of eventual payment.
c - This is the lowest rated class of preferred or preference stock.
Issues so rated can be regarded as having extremely poor prospects of every
attaining any real investment standing.
Standard & Poor's Corporation describes its preferred stock ratings as:
AAA - This is the highest rating that may be assigned by Standard & Poor's
to a preferred stock issue and indicates an extremely strong capacity to pay the
preferred stock obligations.
AA - A preferred stock issue rated AA also qualifies as a high-quality
fixed income security. The capacity to pay preferred stock obligations is very
strong, although not as overwhelming as for issues rated AAA.
A - An issue rated A is backed by a sound capacity to pay the preferred
stock obligations, although it is somewhat more susceptible to the adverse
effect of changes in circumstances and economic conditions.
BBB - An issue rated BBB is regarded as backed by an adequate capacity to
play the preferred stock obligations. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to make payments for a preferred
stock in this category than for issues in the A category.
BB,B,CCC - Preferred stocks rated BB,B, and CCC are regarded, on balance,
as predominantly speculative with respect to the issuer's capacity to pay
preferred stock obligations. BB indicates the lowest degree of speculation and
CCC the highest degree of speculation. While such issues will likely have some
quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.
Short-Term Debt Ratings
- -----------------------
Description of Moody's short-term debt ratings:
Prime-1--Issuers rated Prime-1 (or supporting institutions) have a superior
ability for repayment of senior short-term debt obligations. Prime-1 repayment
ability will often be evidenced by may of the following characteristics:
leading market positions in well-established industries, higher rates of return
of funds employed, conservative capitalization structure with moderate reliance
on debt and ample asset protection, broad margins in earnings coverage of fixed
financial charges and high internal cash generation and well-established access
to a range of financial markets and assured sources of alternate liquidity.
Prime-2--Issuers rated Prime-2 (or supporting institutions) have a strong
ability for repayment of senior short-term debt obligations. This will normally
be evidenced by many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, may be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected be external conditions. Ample alternate liquidity is maintained.
Prime-3--Issuers rated Prime-3 (or supporting institutions) have an acceptable
ability for repayment of senior short-term obligations. The effect of industry
characteristics and market compositions may be more pronounced. Variability in
earnings and profitability may result in changes in the level of deb protection
measurements and may require relatively high financial leverage. Adequate
alternate liquidity is maintained.
<PAGE>
Not Prime--Issuers rated Not Prime do not fall within any of the Prime rating
categories.
Description of Standard & Poor's short-term debt ratings:
A-1--This highest category indicates that the degree of safety regarding timely
payment is strong. Those issues determined to possess extremely strong safety
characteristics are denoted with a plus sign (+) designation.
A-2--Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated 'A-1'.
A-3--Issues carrying this designation have adequate capacity for timely payment.
They are, however, more vulnerable to the adverse effects of changes in
circumstances than obligations carrying the higher designations.
B--Issues rated B are regarded as having only speculative capacity for timely
payment.
C--This rating is assigned to short-term debt obligations with a doubtful
capacity for payment.
D--Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due, even if
the applicable grace period has not expired, unless S&P believes that such
payments will be made during such grace period.
PART B
- ------
The publications and services from which the Fund will quote performance are:
Micropal, Ltd. (an international investment fund information service), Fortune,
Changing Times, Money, U.S. News & World Report, Money Fund Scorecard,
Morningstar, Inc., Business Week, Institutional Investor, The Wall Street
Journal, Wall Street Transcripts, New York Post, Investment Company Institute
publications, The New York Times, Barron's, Forbes magazine, Research magazine,
Donaghues Money Fund Report, Donaghue's Money Letter, The Economist, FACS, FACS
of the Week, Financial Planning, Investment Daily, Johnson's Charts, Mutual Fund
Profiles (S&P), Powell Monetary Analysis, Sales & Marketing Management Magazine,
Life magazine, Black Enterprise, Fund Action, Speculators Magazine, Time,
NewsWeek, U.S.A Today, Wiesenberger Investment Service, Financial Times, Journal
of Commerce, Mikuni's Credit Ratings, Money Market Directory of Pension Funds,
Pension Funds and Their Advisers, Investment Company Data, Inc., Mutual Funds
Almanac, Callan Associates, Inc., Media General Financial Services, Financial
World, Pensions & Investment Age, Registered Investment Advisors, Aden Analysis,
Baxter Weekly, Congressional Yellow Book, Crain's New York Business, Survey of
Current Business, Treasury Bulletin, U.S. Industrial Outlook, Value Line Survey,
Bank Credit Analyst, S&P Corporation Records, Euromoney, Moody's, Investment
Dealer's Digest, Financial Mail, Financial Post, Futures, Grant's Interest Rate
Observer, Institutional Investor, International Currency Review, International
Bank Credit Analyst, Investor's Daily, German Business Weekly, GATT Trade Annual
Report, and Dimensional Fund Advisers, Inc.
<PAGE>
PART C
OTHER INFORMATION
ITEM 24. Financial Statements and Exhibits
---------------------------------
a) Financial Statements - Not applicable as Worldwide Emerging Markets Fund has
not yet commenced operations. Van Eck Worldwide Insurance Trust meets the
capitalization requirements pursuant to Section 14 of the Investmemt Company Act
of 1940, as amended.
b) EXHIBITS (An * denotes inclusion in this filing; an + denotes to be filed by
subsequent amendment)
(1)(a) Master Trust Agreement (incorporated by reference from Registration
Statement No. 33-13019); Form of First Amendment to Declaration of
Trust (incorporated by reference from Registration Statement No. 2-
97596). Second Amendment to Master Trust Agreement. Third Amendment
to Master Trust Agreement adding Worldwide Balanced Fund
(incorporated by reference from Post-effective Amendment No. 9).
Fourth Amendment to Master Trust Agreement adding Asia Region
Growth Fund, Asia Region Infrastructure Fund and Worldwide SmallCap
Fund (incorporated by reference Post-Effective Amendment No. 9).
Fifth Amendment to the Master Trust Agreement adding Worldwide Hard
Assets Fund (incorporated by reference from Post-effective
Amendment No. 10). Sixth Amendment to Master Trust Agreement
renaming Van Eck Investment Trust as Van Eck Worldwide Insurance
Trust and renaming Global Bond Fund as Worldwide Bond Fund
(incorporated by reference from Post-Effective Amendment No. 12).
Seventh Amendment to the Master Trust Agreement deleting Asia
Region Growth Fund and Asia Region Infrastructure Fund as series of
the Trust (incorporated by reference from Post-Effective Amendment
No. 14).
* (1)(b) Eigth Amendment to the Master Trust Agreement adding Worldwide
Emerging Markets Fund as a series of the Trust.
(2) By-laws of Registrant (incorporated by reference to Pre-effective
Amendment No. 1).
(3) Not Applicable.
<PAGE>
(4)(a) Form of certificate of shares of beneficial interest of Worldwide
Bond Fund and Gold and Natural Resources Fund (incorporated by
reference from Pre-effective Amendment No. 1).
(4)(b) Form of certificate of shares of beneficial interest of Worldwide
Emerging Markets Fund - description - stock certificate bearing
Worldwide Emerging Market Fund's name.
(4)(c) Instruments defining rights of security holders (See Exhibit (1)
and (2) above).
* (5)(a) Form of Advisory Agreement.
* (5)(b) Form of Sub-Advisory Agreement.
(6)(a) Form of Distribution Agreement (incorporated by reference from Pre-
effective Amendment No. 1).
(6)(b) Form of Participation Agreement (incorporated by reference from
Pre-effective Amendment No. 2).
(7) Not Applicable.
(8) Custodian Agreement (incorporated by reference from Pre-Effective
Amendment No. 1).
(9) Forms of Procedural Agreement, Customer Agreement and Safekeeping
Agreement with Merrill Lynch Futures Inc. and Morgan Stanley
utilized by Worldwide Bond Fund, Gold and Natural Resources Fund
and Worldwide Emerging Markets Fund (incorporated by reference from
Pre-effective Amendment No. 2).
(10) Opinion of Goodwin, Procter & Hoar, including consent (incorporated
by reference from Pre-effective Amendment No. 2).
* (10)(a) Opinion of Counsel as to legal issuance of shares.
* (10)(b) Opinion of Counsel as to Post-Effective Amendment's eligibility to
become effective pursuant to Rule 485(b).
(11) Not Applicable.
(12) Not Applicable.
(13) Subscription Agreement (incorporated by reference to Pre-effective
Amendment No. 2).
(14) Not Applicable.
(15) Not Applicable.
(16) Not Applicable.
(17) Not Applicable.
ITEM 25. Persons controlled by or under common control with Registrant
-------------------------------------------------------------
Not Applicable.
ITEM 26. Number of Record Holders of Securities
--------------------------------------
Set forth below are the number of Record holders, as of April 30, 1995
of each series of the Registrant:
<PAGE>
Class and Title Number of Record Holders
--------------- ------------------------
Worldwide Bond Fund 6
Gold and Natural Resources Fund 8
Worldwide Balanced Fund 3
Worldwide SmallCap Fund 0
Worldwide Emerging Markets Fund 0
Worldwide Hard Assets Fund 0
ITEM 27. Indemnification
---------------
Reference is made to Article VI of the Master Trust Agreement of the Registrant,
as amended, previously filed as Exhibit (1) to the Registration Statement.
Insofar as indemnification by the Registrant for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers, underwriters and
controlling persons of the Registrant, pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification is against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted against the Registrant by such trustee, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question of whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
ITEM 28. Business and other Connections of Investment Adviser
----------------------------------------------------
Reference is made to the caption "Management" in the Prospectus and to the
captions "The Distributor" "Investment Advisory Services" and "Trustees and
Officers" in the Statement of Additional Information.
ITEM 29. Principal Underwriters
----------------------
(a) Van Eck Securities Corporation, principal underwriter for the Registrant,
also distributes shares of International Investors Incorporated.
(b) The following table presents certain information with respect to each
director and officer of Van Eck Securities Corporation:
Name and Principal Position and Offices Position and Office
Business Address with Underwriter with Registrant
- -------------------- ---------------------- ----------------------
John C. van Eck Chairman Chairman and President
99 Park Avenue
New York, NY
Jan van Eck Director and Executive None
99 Park Avenue Vice President
New York, NY
<PAGE>
Name and Principal Position and Office Position and Office
Business Address with Underwriter with Registrant
- ---------------------- --------------------------- ---------------------------
Sigrid S. van Eck Director, Vice President None
270 River Road and Assistant Treasurer
Briarcliff Manor, NY
Fred M. van Eck Director Trustee
99 Park Avenue
New York, NY
Derek van Eck Director None
99 Park Avenue
New York, NY
Rodger A. Lawson President & Chief Executive None
99 Park Avenue Officer
New York, NY
Michael G. Doorley Vice President, Treasurer, Vice President
99 Park Avenue Controller and Chief
New York, NY Financial Officer
Thaddeus Leszczynski Vice President, General Vice President and
99 Park Avenue Counsel and Secretary Secretary
New York, NY
Stephen Ilnitzki Chief Operating Officer None
99 Park Avenue
New York, New York
Bruce J. Smith Sr. Managing Director, Vice President and
99 Park Avenue Portfolio Accounting Treasurer
New York, NY
Joseph P. DiMaggio None Controller
99 Park Avenue
New York, NY
Susan C. Lashley Managing Director, None
99 Park Avenue Operations
New York, NY
Keith Fletcher Senior Managing Director None
99 Park Avenue
New York, NY
Edward C. Wilson Senior Managing Director None
99 Park Avenue
New York, New York
Tom Keffer Senior Managing Director None
99 Park Avenue
New York, New York
<PAGE>
Name and Principal Position and Office Position and Office
Business Address with Underwriter with Registrant
- ---------------------- --------------------------- ---------------------------
David Pinto Senior Managing Director None
99 Park Avenue
New York, New York
Walter Cotumaccio Managing Director None
99 Park Avenue
New York, NY
Robin Kunhardt Asst. Managing Director None
99 Park Avenue
New York, NY
(c) Not Applicable
Item 30. Location of Accounts and Records
--------------------------------
The following table sets forth information as to the location of accounts, books
and other documents required to be maintained pursuant to Section 31(a) of the
Investment Company Act of 1940 and the Rules promulgated thereunder.
Accounts, books and
documents listed by
reference to specific
subsection of 17 CFR 270 31a-1 Person in Possession and
to 31a-3 Address
- -------- -------
31a-1(b)(1) Bruce J. Smith
Van Eck
99 Park Avenue
New York, NY 10016
31a-1(b)(2)(i) Bruce J. Smith
Van Eck
99 Park Avenue
New York, NY 10016
31a-1(b)(2)(ii) Bruce J. Smith
Van Eck
99 Park Avenue
New York, NY 10016
31a-1(b)(2)(iii) Bruce J. Smith
Van Eck
99 Park Avenue
New York, NY 10016
<PAGE>
Accounts, books and Person in Possession and
documents listed by Address
reference to specific -------
subsection of 17 CFR 270 31a-1
to 31a-3
- --------
31a-1(b)(2)(iv) DST Systems, Inc.
21 West Tenth Street
Kansas City, Missouri 64105
31a-1(b)(3) Not Applicable
31a-1(b)(4) Thaddeus Leszczynski
Van Eck
99 Park Avenue
New York, NY 10016
31a-1(b)(5) AIG Investment Corp. (Asia) Ltd.
A.I.A. Building
1 Stubbs Road
Wanchai, Hong Kong
Fiduciary International, Inc.
Two World Trade Center
New York, New York 10048
Pictet International Management Ltd.
Cutlers Garden
5 Devonshire Square
London EC2M 4LD, England
31a-1(b)(6) Bruce Smith
Van Eck
99 Park Avenue
New York, NY 10016
31a-1(b)(7) Bruce Smith
Van Eck
99 Park Avenue
New York, N.Y. 10016
31a-1(b)(8) Bruce Smith
Van Eck
99 Park Avenue
New York, NY 10016
31a-1(b)(9) AIG Investment Corp. (Asia) Ltd.
A.I.A. Building
1 Stubbs Road
Wanchai, Hong Kong
Fiduciary International, Inc.
Two World Trade Center
New York, New York 10048
<PAGE>
Accounts, books and Person in Possession and
documents listed by Address
reference to specific -------
subsection of 17 CFR 270 31a-1
to 31a-3
- --------
31a-1(b)(9) Pictet International
Management Ltd.
Cutlers Garden
5 Devonshire Square
London EC2M 4LD, England
Peregrine Asset Management
(Hong Kong) Limted,
1704 New World Tower
16-18 Queen's Road Central
Hong Kong
31a-1(b)(10) AIG Investment Corp. (Asia) Ltd.
A.I.A. Building
1 Stubbs Road
Wanchai, Hong Kong
Fiduciary International, Inc.
Two World Trade Center
New York, New York 10048
Pictet International
Management Ltd.
Cutlers Garden
5 Devonshire Square
London EC2M 4LD, England
Peregrine Asset Management
(Hong Kong) Limted
1704 New World Tower
16-18 Queen's Road Central
Hong Kong
31a-1(b)(11) AIG Investment Corp. (Asia) Ltd.
A.I.A. Building
1 Stubbs Road
Wanchai, Hong Kong
Fiduciary International, Inc.
Two World Trade Center
New York, New York 10048
Pictet International
Management Ltd.
Cutlers Garden
5 Devonshire Square
London EC2M 4LD, England
Peregrine Asset Management
(Hong Kong) Limted
1704 New World Tower
16-18 Queen's Road Central
Hong Kong
31a-1(b)(12) Bruce J. Smith
Van Eck
99 Park Avenue
New York, NY 10016
AIG Investment Corp. (Asia) Ltd.
A.I.A. Building
1 Stubbs Road
Wanchai, Hong Kong
<PAGE>
Accounts, books and Person in Possession and
documents listed by Address
reference to specific -------
subsection of 17 CFR 270 31a-1
to 31a-3
- --------
31a-1(b)(12) Fiduciary International, Inc.
Two World Trade Center
New York, New York 10048
Pictet International Management Ltd.
Cutlers Garden
5 Devonshire Square
London EC2M 4LD, England
Peregrine Asset Management
(Hong Kong) Limted
1704 New World Tower
16-18 Queen's Road Central
Hong Kong
31a-1(c) Not Applicable
31a-1(d) Bruce J. Smith
Van Eck
99 Park Avenue
New York, NY 10016
31a-1(e) Not Applicable
31a-1(f) Michael G. Doorley
Van Eck
99 Park Avenue
New York NY 10016
31a-2(a)(1) Bruce J. Smith
Van Eck
99 Park Avenue
New York, New York 10016
DST Systems, Inc.
21 West Tenth Street
Kansas City, Missouri 64105
AIG Investment Corp. (Asia) Ltd.
A.I.A. Building
1 Stubbs Road
Wanchai, Hong Kong
Fiduciary International, Inc.
Two World Trade Center
New York, New York 10048
Pictet International
Management Ltd.
Cutlers Garden
5 Devonshire Square
London EC2M 4LD, England
Peregrine Asset Management
(Hong Kong) Limted,
1704 New World Tower,
16-18 Queen's Road Central,
Hong Kong
31a-2(b) Not Applicable
<PAGE>
Accounts, books and Person in Possession and
documents listed by Address
reference to specific -------
subsection of 17 CFR 270 31a-1
to 31a-3
- --------
31a-2(c) Bruce J. Smith
Van Eck Securities Corporation
99 Park Avenue
New York, NY 10016
31a-2(d) Not Applicable
31a-2(e) Michael G. Doorley
Van Eck
99 Park Avenue
New York, NY 10016
31a-3 Not Applicable
All Other Records c/o Bruce Smith
pursuant to the Rule Van Eck Investment Trust
99 Park Avenue
New York, NY 10016
Item 31. Management Services
-------------------
None
Item 32. Undertakings
------------
None.
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant hereby certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Amendment to
the Registration Statement on Form N-1A to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 9th day of October, 1995.
VAN ECK INVESTMENT TRUST
/s/ John C. van Eck
By:_________________________________
John C. van Eck, President and CEO
Pursuant to the requirements of the Securities Act of 1933, this Amendment to
the Registration Statement has been signed below by the following persons in the
capacities and on the date indicated:
Signature Title Date
/s/ John C. van Eck
___________________ President, Chairman 10/9/95
John C. van Eck and Chief Exec. Officer
/s/ Bruce J. Smith
___________________ Vice President and 10/9/95
Bruce J. Smith Treasurer
/s/ Jeremy Biggs*
___________________ Trustee / /
Jeremy Biggs
/s/ Richard Cowell*
___________________ Trustee / /
Richard Cowell
/s/ Wesley G. McCain*
___________________ Trustee / /
Wesley G. McCain
/s/ Ralph F. Peters*
___________________ Trustee / /
Ralph F. Peters
/s/ Rodger A. Lawson*
___________________ Trustee / /
Rodger A. Lawson
/s/ David J. Olderman*
___________________ Trustee / /
David J. Olderman
<PAGE>
/s/ Richard Stamberger*
___________________ Trustee / /
Richard Stamberger
/s/ Fred M. van Eck*
___________________ Trustee / /
Fred M. van Eck
/s/ John C. van Eck
_________________________
*Executed on behalf of Trustee by John C. van Eck, attorney-in-fact.
<PAGE>
EXHIBIT 99.1(b)
VAN ECK INVESTMENT TRUST
AMENDMENT NO. 8
TO MASTER TRUST AGREEMENT
Amendment No. 8 to the Master Trust Agreement dated January 7, 1987 (the
"Agreement"), of Van Eck Investment Trust (the "Trust"), made at New York, New
York this 9th day of October, 1995.
W I T N E S S E T H:
--------------------
WHEREAS, Section 7.3 of the Agreement provides that the Agreement may be
amended from time to time, as long as such amendment does not adversely affect
the rights of any shareholder and so long as such amendment is not in
contravention of applicable law, including the Investment Company Act of 1940,
by an instrument in writing, signed by an officer of the Trust pursuant to a
vote of a majority of the Trustees of the Trust; and
WHEREAS, Section 4.1 of the Agreement provides that the Trustees of the
Trust may establish and designate series of Shares of the Trust; and
WHEREAS, a majority of the Trustees of the Trust have voted to establish a
new series of the Trust, which series is designated as the Worldwide Emerging
Markets Fund; and
WHEREAS, a majority of Trustees have duly approved this amendment to the
Agreement and authorized the same to be filed with the Secretary of State of the
Commonwealth of Massachusetts.
NOW, THEREFORE, the undersigned Thaddeus Leszczynski, the duly elected and
serving Vice President of the Trust, pursuant to the authorization described
above, hereby declares that the initial paragraph of Section 4.2 of the
Agreement is amended to add an additional Sub-Trust and to read as follows:
"Section 4.2 Establishment and Description of Sub-Trusts. Without limiting
-------------------------------------------
the authority of the Trustees set forth in Section 4.1 to establish and
designate any
<PAGE>
further Sub-Trusts, the Trustees hereby establish and designate six Sub-Trusts:
Gold and Natural Resources Fund, Global Bond Fund, Worldwide Balanced Fund,
Worldwide SmallCap Fund, Worldwide Hard Assets Fund and Worldwide Emerging
Markets Fund. The Shares of such Sub-Trusts and any Shares of any further Sub-
Trusts that may from time to time be established and designated by the Trustees
shall (unless the Trustees otherwise determine with respect to some further Sub-
Trust at the time of establishing and designating the same) have the following
relative rights and preferences:"
WITNESS my hand and seal this 9th day of October, 1995.
/s/ Thaddeus Leszczynski
Thaddeus Leszczynski, Vice President
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
Then personally appeared the above-named Thaddeus Leszczynski and
acknowledged this instrument to be his free act and deed this 9th day of
October, 1995.
/s/ Peter Carbone
Notary Public
<PAGE>
EXHIBIT 99.5(a)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of the 28th day of September, 1995 between VAN ECK ASSOCIATES
CORPORATION, a corporation organized under the laws of the State of Delaware and
having its principal place of business in New York, New York (the "Advisor"),
and VAN ECK WORLDWIDE INSURANCE TRUST,a Massachusetts Business trust having its
principal place of business in New York, New York (the "Trust").
WHEREAS, the Trust is engaged in business as an open-end investment company and
is so registered under the Investment Company Act of 1940 (the "1940 Act"); and
WHEREAS, the Advisor is engaged principally in the business of rendering
investment management services and is registered under the Investment Advisers
Act of 1940; and
WHEREAS, the Trust is authorized to issue shares of beneficial interest with
each series; and in separate series representing interests in a separate
portfolio of securities and other assets:
WHEREAS, the Trust intends to offer its shares in one or more such series, as
listed in Exhibit A hereto (each a "Fund"), and invest the proceeds in
securities, the Trust desires to retain the Advisor to render investment
advisory and accounting and administrative services hereunder and with respect
to which the Advisor is willing so to do;
NOW, THEREFORE, WITNESSETH: That it is hereby agreed between the parties hereto
as follows:
1. APPOINTMENT OF ADVISOR.
The Trust hereby appoints the Advisor to act as investment advisor and
administrator to the Fund for the period and on the terms herein set forth. The
Advisor accepts such appointment and agrees to render the services herein set
forth, for the compensation herein provided.
2. DUTIES OF ADVISOR.
The Advisor, at its own expense, shall furnish the following services and
facilities to the Trust:
(a) Investment Program.
------------------
The Advisor will (i) furnish continuously an investment program for the Fund
(ii) determine (subject to the overall supervision and review of the Board of
Trustees of the Trust) what investments shall be purchased, held, sold or
exchanged and what portion, if any, of the assets of the Trust shall be held
uninvested, and (iii) make changes on behalf of the Trust in the investments.
The Advisor also will manage, supervise and conduct such other affairs and
business of the Trust and matters incidental thereto, as the Advisor and the
Trust agree, subject always to the control of the Board of Trustees of the Trust
and to the provisions of the Master Trust Agreement of the Trust, the Trust's
By-laws and the 1940 Act.
<PAGE>
(b) Accounting and Administrative Services
--------------------------------------
(i) The Advisor, at its own expense, will perform the following accounting
functions on an ongoing basis:
(1) Journalize the Fund's investment, capital share and income and expense
activities;
(2) Verify investment buy/sell trade tickets when received from the Fund
and transmit trades to the Trust's custodian for proper settlement;
(3) Maintain individual ledgers for investment securities;
(4) Reconcile cash and investment balances with the Trust's custodian, and
provide the Fund with the beginning cash balance available for
investment purposes;
(5) Update the cash availability throughout the day as required by the
Fund;
(6) Post to and prepare the Fund's Statement of Assets and Liabilities and
the Statement of Operations;
(7) Calculate various contractual expenses (e.g., transfer agency fees);
----
(8) Control all disbursements and authorize such disbursements upon
written instructions from authorized officers and agents;
(9) Calculate capital gains and losses;
(10) Determine the net income;
(11) Obtain security market quotes, at the Fund's expense, or if such
quotes are unavailable, obtain such prices from the investment
advisor, and in either case calculate the market value of the Fund's
investments;
(12) Deliver a copy of the daily portfolio valuation to the Fund;
(13) Compute the net asset value;
(14) Compute the Fund's yields, total return, expense ratios, portfolio
turnover rate;
(15) Monitor the expense accruals and notify the Fund of any proposed
adjustments; and
(16) Prepare periodic unaudited financial statements.
(ii) In addition to the accounting services described in the foregoing Paragraph
2(b)(i), the Advisor will provide or arrange for the following services for
each Fund:
(1) Prepare periodic audited financial statements;
<PAGE>
(2) Supply various statistical data as requested by the Board of Trustees
of the Trust on an ongoing basis;
(3) Prepare for execution and file the Federal and state tax returns;
(4) Prepare and file the Semi-Annual Reports with the SEC on Form N-SAR;
(5) Prepare and file with the Securities and Exchange Commission the
Trust's annual, semi-annual, and quarterly shareholder reports;
(6) File registration statements on form N-1A and other filings relating
to the registration of Shares;
(7) Monitor the Initial Series' status as a regulated investment company
under Sub-Chapter M of the Internal Revenue Code of 1986, as amended;
(8) Maintain the Initial Series' fidelity bond as required by the 1940
Act;
(9) Prepare materials for and record the proceedings of, in conjunction
with the officers of the Trust, the meetings of the Trust's Board of
Trustees; and
(10) Prepare any other regulatory reports to and for any federal, local or
state agency as may be required.
In carrying out its duties hereunder, as well as any other activities undertaken
on behalf of the Fund pursuant to this Agreement, the Advisor shall at all times
be subject to the control and direction of the Board of Trustees of the Trust.
(c) Office Space and Facilities.
---------------------------
The Advisor will arrange to furnish the Trust office space in the offices of the
Advisor, or in such other place or places as may be agreed upon from time to
time, and all necessary office facilities, simple business equipment, supplies,
utilities, and telephone service required for managing the investments of the
Trust.
(d) Personnel.
---------
The Advisor shall provide executive and clerical personnel for managing the
investments of the Trust, and shall compensate officers and Trustees of the
Trust if such persons are also employees of the Advisor or its affiliates,
except as otherwise provided herein.
(e) Portfolio Transactions.
----------------------
The Advisor shall place all orders for the purchase and sale of portfolio
securities for the account of the Trust with brokers or dealers selected by the
Advisor, although the Trust will pay the actual brokerage commissions on
portfolio transactions in accordance with Paragraph 3(d). In executing
portfolio transactions and selecting brokers or dealers, the Advisor will use
its best efforts to seek on behalf of the Trust the best overall terms
available. In assessing the best overall terms available for any transaction,
the Advisor shall consider all factors it deems relevant, including, without
limitation, the breadth of the market in the security, the price of the
security, the financial
<PAGE>
condition and execution capability of the broker or dealer, and the
reasonableness of the commission, if any (for the specific transaction and on a
continuing basis). In evaluating the best overall terms available, and in
selecting the broker or dealer to execute a particular transaction, the Advisor
may also consider the brokerage and research services (as those terms are
defined in Section 28(e) of the Securities Exchange Act of 1934) provided to the
Trust and/or the other accounts over which the Advisor or an affiliate of the
Advisor exercises investment discretion. The Advisor is authorized to pay to a
broker or dealer who provides such brokerage and research services a commission
for executing a portfolio transaction which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if the Advisor determines in good faith that such commission was
reasonable in relation to the value of the brokerage and research services
provided by such broker or dealer, viewed in terms of that particular
transaction or in terms of all of the accounts over which investment discretion
is so exercised by the Advisor or its affiliates. Nothing in this Agreement
shall preclude the combining of orders for the sale or purchase of securities or
other investments with other accounts managed by the Advisor or its affiliates
provided that the Advisor does not favor any account over any other account and
provided that any purchase or sale orders executed contemporaneously shall be
allocated in a manner the Advisor deems equitable among the accounts involved.
(f) Right to Receive Advice.
-----------------------
(i) Advice of Initial Series. If the Advisor shall be in doubt as to any
------------------------
action to be taken or omitted by it, it may request, and shall receive,
from the Initial Series directions or advice.
(ii) Advice of Counsel. If the Advisor or the Initial Series shall be in doubt
-----------------
as to any question of law involved in any action to be taken or omitted by
the Advisor, it may request advice at the Initial Series' cost from
counsel of its own choosing (who may be counsel for the Advisor or the
Initial Series, at the option of the Advisor).
(iii) Protection of the Advisor. The Advisor shall be protected in any action
-------------------------
or inaction which it takes in reliance on any directions or advice
received pursuant to subsections (i) or (ii) of this paragraph which the
Advisor, after receipt of any such directions or advice in good faith
believes to be consistent with such directions or advice as the case may
be. However, nothing in this paragraph shall be construed as imposing upon
the Advisor any obligation (i) to seek such directions, or advice or (ii)
to act in accordance with such directions or advice when received. Nothing
in this subsection shall excuse the Advisor when an action or omission on
the part of the Advisor constitutes willful misfeasance, bad faith, gross
negligence or reckless disregard by the Advisor of its duties under this
Agreement.
3. EXPENSES OF THE TRUST
The Advisor shall not bear the responsibility for or expenses associated with
operational, accounting or administrative services on behalf of the Trust not
expressly assumed by the Advisor hereunder. The expenses to be borne by the
Trust include, without limitation:
(a) charges and expenses of any registrar, stock, transfer or dividend
disbursing agent, custodian, depository or other agent appointed by
the Trust for the safekeeping of its cash, portfolio securities and
other property;
<PAGE>
(b) general operational, administrative and accounting costs, such as the costs
of calculating the Trust's net asset value, the preparation of the Trust's
tax filings with relevant authorities and of compliance with any and all
regulatory authorities;
(c) charges and expenses of auditors and outside accountants;
(d) brokerage commissions for transactions in the portfolio securities of
the Trust;
(e) all taxes, including issuance and transfer taxes, and corporate fees
payable by the Trust to Federal, state or other U.S. or foreign
governmental agencies;
(f) the cost of stock certificates representing shares of the Trust;
(g) expenses involved in registering and maintaining registrations of the
Trust and of its shares with the Securities and Exchange Commission
and various states and other jurisdictions, if applicable;
(h) all expenses of shareholders' and Trustees' meetings, including
meetings of committees, and of preparing, setting in type, printing
and mailing proxy statements, quarterly reports, semi-annual reports,
annual reports and other communications to shareholders;
(i) all expenses of preparing and setting in type offering documents, and
expenses of printing and mailing the same to shareholders (but not
expenses of printing and mailing of offering documents and literature
used for any promotional purposes);
(j) compensation and travel expenses of Trustees who are not "interested
persons" of the Advisor within the meaning of the 1940 Act;
(k) the expense of furnishing, or causing to be furnished, to each
shareholder statements of account;
(l) charges and expenses of legal counsel in connection with matters
relating to the Trust, including, without limitation, legal services
rendered in connection with the Trust's corporate and financial
structure, day to day legal affairs of the Trust and relations with
its shareholders, issuance of Trust shares, and registration and
qualification of securities under Federal, state and other laws;
(m) the expenses of attendance at professional meetings of organizations
such as the Investment Company Institute by officers and Trustees of
the Trust, and the membership or association dues of such
organizations;
(n) the cost and expense of maintaining the books and records of the
Trust;
(o) the expense of obtaining and maintaining a fidelity bond as required
by Section 17(g) of the 1940 Act and the expense of obtaining and
maintaining an errors and omissions policy;
(p) interest payable on Trust borrowing;
<PAGE>
(q) postage; and
(r) any other costs and expenses incurred by the Advisor for Trust
operations and activities, including but not limited to the
organizational costs of the Trust if initially paid by the Advisor.
4. COMPENSATION
For the services and facilities to be provided to the Trust by the Advisor as
provided in Paragraph 2 hereof, the Trust shall pay the Advisor a fee at the
annual rate set forth in Exhibit A ("Annual Fee"). The Trust shall pay such
amounts monthly, based on the Fund's average daily net assets, as reflected in
the books and records of the Trust in accordance with procedures established
from time to time by or under the direction of the Board of Trustees of the
Trust.
5. TRUST TRANSACTIONS.
The Advisor agrees that neither it nor any of its officers, directors, employees
or agents will take any long- or short-term position in the shares of the Trust;
provided, however, that such prohibition shall not prevent the purchase of
shares of the Trust by any of the persons above described for their account and
for investment at the price (net asset value) at which such shares are available
to the public at the time of purchase or as part of the initial capital of the
Trust.
6. RELATIONS WITH TRUST.
Subject to and in accordance with the Amended and Restated Master Trust
Agreement and By-Laws of the Trust and the Articles of Incorporation and By-Laws
of the Advisor, respectively, it is understood (i) that Trustees, officers,
agents and shareholders of the Trust are or may be interested in the Advisor (or
any successor thereof) as directors, officers, or otherwise; (ii) that
directors, officers, agents and shareholders of the Advisor are or may be
interested in the Trust as Trustees, officers, shareholders or otherwise; and
(iii) that the Advisor (or any such successor) is or may be interested in the
Trust as a shareholder or otherwise and that the effect of any such adverse
interests shall be governed by said Master Trust Agreement and By-laws.
7. LIABILITY OF ADVISOR AND OFFICERS AND TRUSTEES OF THE TRUST.
Neither the Advisor nor its officers, directors, employees, agents or
controlling persons or assigns shall be liable for any error of judgment or law,
or for any loss suffered by the Trust or its shareholders in connection with the
matters to which this Agreement relates, except that no provision of this
Agreement shall be deemed to protect the Advisor or such persons against any
liability to the Trust or its shareholders to which the Advisor might otherwise
be subject by reason of any willful misfeasance, bad faith or gross negligence
in the performance of its duties or the reckless disregard of its obligations
and duties under this Agreement.
<PAGE>
8. DURATION AND TERMINATION OF THIS AGREEMENT.
(a) Duration.
--------
This Agreement shall become effective on the date hereof for the Initial Series.
Unless terminated as herein provided, this Agreement shall remain in full force
and effect until May 1, 1996 and shall continue in full force and effect for
periods of one year thereafter so long as such continuance is approved at least
annually (i) by either the Trustees of the Trust or by vote of a majority of the
outstanding voting shares (as defined in the 1940 Act) of the Trust, and (ii) in
either event by the vote of a majority of the Trustees of the Trust who are not
parties to this Agreement or "interested persons" (as defined in the 1940 Act)
of any such party, cast in person at a meeting called for the purpose of voting
on such approval.
(b) Additional Series.
-----------------
As additional series, other than the Fund, are established, the Agreement shall
become effective with respect to each such series listed in Exhibit A at the
Annual Fee set forth in such Exhibit upon the initial public offering of such
new series, provided that the Agreement has previously been approved for
continuation as provided in subsection (a) above.
(c) Termination.
-----------
This Agreement may be terminated at any time, without payment of any penalty, by
vote of the Trustees of the Trust or by vote of a majority of the outstanding
shares (as defined in the 1940 Act), or by the Advisor, on sixty (60) days
written notice to the other party.
(d) Automatic Termination.
---------------------
This Agreement shall automatically and immediately terminate in the event of its
assignment.
9. PRIOR AGREEMENT SUPERSEDED.
This Agreement supersedes any prior agreement relating to the subject matter
hereof between the parties.
10. SERVICES NOT EXCLUSIVE.
The services of the Advisor to the Trust hereunder are not to be deemed
exclusive, and the Advisor shall be free to render similar services to others
and to engage in other activities.
11. MISCELLANEOUS.
(a) This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
(b) If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
<PAGE>
12. LIMITATION OF LIABILITY.
The Term Van Eck Worldwide Insurance Trust means and refers to the Trustees from
time to time serving under the Amended and Restated Master Trust Agreement of
the Trust dated January 7, 1987, as the same may subsequently thereto have been,
or subsequently hereto be amended. It is expressly agreed that the obligations
of the Trust hereunder shall not be binding upon any Trustees, shareholders,
nominees, officers, agents or employees of the Trust, personally, but bind only
the assets and property of the Trust, as provided in the Amended and Restated
Master Trust Agreement of the Trust. The execution and delivery of this
Agreement have been authorized by the Trustees and the Trust, acting as such,
and neither such authorization by such officer shall be deemed to have been made
by any of them personally, but shall bind only the assets and property of the
Trust as provided in its Amended and Restated Master Trust Agreement.
In WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first set forth above.
[SEAL] VAN ECK WORLDWIDE INSURANCE TRUST
Attest:____________________ By____________________________
President
[SEAL] VAN ECK ASSOCIATES CORPORATION
Attest:_____________________ By_____________________________
President
<PAGE>
EXHIBIT A
Annual Advisory Fee
Name of Series (as a % of average daily net assets)
- -------------- ------------------------------------
Worldwide Bond Fund 1.0% of the first $500 million of the average daily
net assets of the Fund, .90 of 1% of the next $250
million of the average daily net assets and .70 of 1%
of the average daily net assets in excess of $750
million.
Gold and Natural Resources Fund 1.0% of the first $500 million of the average
daily net assets of the Fund, .90 of 1% of the next
$250 million of the average daily net assets and .70
of 1% of the average daily net assets in excess of
$750 million.
Worldwide Emerging Markets Fund 1.0%
<PAGE>
EXHIBIT 99.5(b)
SUB-INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of the 9th day of October 1995 by and among PEREGRINE ASSET
MANAGEMENT (HONG KONG) LIMITED a corporation organized under the laws of Hong
Kong and having its principal place of business in Hong Kong (the "Sub-Adviser")
and VAN ECK ASSOCIATES CORPORATION, a corporation organized under the laws of
the State of Delaware and having its principal place of business in New York,
New York (the "Adviser") and VAN ECK WORLDWIDE INSURANCE TRUST, a Massachusetts
business trust, having its principal place of business in New York, New York
(the "Trust").
WHEREAS, the Trust is engaged in business as an open-end investment company and
is so registered under the Investment Company Act of 1940 ("1940 Act"); and
WHEREAS, the Sub-Adviser is engaged principally in the business of rendering
investment management services and is registered under the Investment Advisers
Act of 1940 ("Advisers Act"); and
WHEREAS, the Trust is authorized to issue shares of beneficial interest in
separate series with each such series representing interests in a separate
portfolio of securities and other assets; and
WHEREAS, the Trust intends to offer shares in one of such series, namely,
Worldwide Emerging Markets Fund (the "Fund") and in order to invest the
proceeds of the Fund in securities and other assets, the Trust has retained the
Adviser to render management and advisory services; and
WHEREAS, the Adviser desires to retain the Sub-Adviser to render investment
advisory and other services hereunder to the Fund and the Sub-Adviser is willing
to do so.
NOW, THEREFORE, WITNESSETH:
That it is hereby agreed among the parties hereto as follows:
1. APPOINTMENT OF SUB-ADVISER
The Adviser hereby appoints the Sub-Adviser to act as investment advisor to the
Fund for the period and on the terms herein set forth. The Sub-Adviser accepts
such appointment and agrees to render the services herein set forth, for the
compensation herein provided. So long as the Sub-Adviser serves as investment
advisor to the Fund pursuant to this Agreement the obligation of the Adviser
under this Agreement with respect to the Fund shall be, subject in any event to
the control of the Trustees of the Trust, to determine and review with the Sub-
Adviser investment policies of the Fund, and the Sub-Adviser shall have the
obligation of furnishing continuously an investment program and making
investment decisions for the Fund, adhering to applicable investment objectives,
policies and restrictions and placing all orders for the purchase and sale of
portfolio securities for the Fund and such other services set forth in Section 2
hereof. The Adviser will compensate the Sub-Adviser of the Fund for its
services to the Fund. The Adviser or the Fund, subject to the terms of this
Agreement, may terminate the services of the Sub-Adviser at any time in its sole
discretion, and the Adviser shall at such time assume the responsibilities of
the Sub-Adviser unless and until a successor investment advisor is selected.
<PAGE>
2. DUTIES OF SUB-ADVISER.
The Sub-Adviser, at its own expense, shall furnish the following services and
facilities to the Trust:
(a) Investment Program. The Sub-Adviser will (i) furnish continuously an
------------------
investment program for the Fund, (ii) determine (subject to the overall
supervision and review of the Board of Trustees of the Trust and the
Adviser) what investments shall be purchased, held, sold or exchanged and
what portion, if any, of the assets of the Fund shall be held uninvested,
and (iii) make changes on behalf of the Fund in the investments. The Sub-
Adviser will provide the services hereunder in accordance with the Fund's
investment objectives, policies and restrictions as stated in the then-
current prospectus and statement of additional information which is part of
the Trust's Registration Statement filed with the Securities and Exchange
Commission, as amended from time to time, copies of which shall be sent to
the Sub-Adviser by the Adviser. The Sub-Adviser also will manage,
supervise and conduct such other affairs and business of the Trust and
matters incidental thereto as the Sub-Adviser and the Trust agree, subject
always to the control of the Board of Trustees of the Trust and to the
provisions of the Master Trust Agreement of the Trust, the Trust's By-laws
and the 1940 Act. The Sub-Adviser will manage the Fund so that it will
qualify as a regulated investment company under sub-chapter M of the
Internal Revenue Code of 1986, as it may be amended from time to time; and,
with respect to the services provided by the Sub-Adviser under this
Agreement, it shall be responsible for compliance with all applicable laws,
rules and regulations. The Sub-Adviser will adopt procedures reasonably
designed to ensure compliance.
(b) Office Space and Facilities. The Sub-Adviser will arrange to furnish office
---------------------------
space, all necessary office facilities, simple business equipment,
supplies, utilities, and telephone service required for managing the
investments of the Fund.
(c) Personnel. The Sub-Adviser shall provide executive and clerical personnel
---------
for managing the investments of the Fund, and shall compensate officers and
Trustees of the Fund or Trust if such persons are also employees of the
Sub-Advisor or its affiliates, except as otherwise provided herein.
(d) Portfolio Transactions. The Sub-Adviser shall place all orders for the
----------------------
purchase and sale of portfolio securities for the account of the Fund with
brokers or dealers selected by the Sub-Adviser, although the Fund will pay
the actual transaction costs, including without limitation brokerage
commissions on portfolio transactions in accordance with this Paragraph
2(d). The Fund shall provide the Sub-Adviser with a list of broker/dealers
which are affiliated persons of the Trust and its other Sub-Advisers. An
affiliated broker may transmit, clear and settle transactions for the Fund
that are executed on a securities exchange provided that the affiliated
broker arranges for unaffiliated brokers to execute the transactions. In
executing portfolio transactions and selecting brokers or dealers, the Sub-
Adviser will use its best efforts to seek on behalf of the Fund the best
overall terms available. In assessing the best overall terms available for
any transaction, the Sub-Adviser shall consider all factors it deems
relevant, including, without limitation, the breadth of the market in the
security, the price of the security, the financial condition and execution
capability of the broker or dealer, and the reasonableness of the
commission, if any (for the specific transaction and on a continuing
basis). In evaluating the best overall terms available, and in selecting
the broker or dealer to execute a particular
<PAGE>
transaction, the Sub-Adviser may also consider the brokerage and research
services (as those terms are defined in Section 28(e) of the Securities
Exchange Act of 1934) provided to Sub-Adviser or an affiliate of the Sub-
Adviser in respect of accounts over which it exercises investment
discretion. The Sub-Adviser is authorized to pay to a broker or dealer who
provides such brokerage and research services a commission for executing a
portfolio transaction which is in excess of the amount of commission
another broker or dealer would have charged for effecting that transaction
if the Sub-Adviser determines in good faith that such commission was
reasonable in relation to the value of the brokerage and research services
provided by such broker or dealer, viewed in terms of that particular
transaction or in terms of all of the accounts over which investment
discretion is so exercised by the Sub-Adviser or its affiliates. Nothing
in this Agreement shall preclude the combining of orders for the sale or
purchase of securities or other investments with other accounts managed by
the Sub-Adviser or its affiliates provided that the Sub-Adviser does not
favor any account over any other account and provided that any purchase or
sale orders executed contemporaneously shall be allocated in an equitable
manner among the accounts involved in accordance with procedures adopted by
the Sub-Adviser.
(e) In connection with the purchase and sale of securities for the Fund, the
Sub-Adviser will arrange for the transmission to the custodian and
recordkeeping agent for the Trust on a daily basis, such confirmation,
trade tickets, and other documents and information, including, but not
limited to, Cusip, Sedol, or other numbers that identify securities to be
purchased or sold on behalf of the Fund, as may be reasonably necessary to
enable the custodian and recordkeeping agent to perform its administrative
and recordkeeping responsibilities with respect to the Fund. With respect
to portfolio securities to be purchased or sold through the Depository
Trust Company, the Sub-Adviser will arrange for the automatic transmission
of the confirmation of such trades to the Fund's custodian and
recordkeeping agent.
(f) The Sub-Adviser will monitor on a daily basis the determination by the
custodian and recordkeeping agent for the Fund of the valuation of
portfolio securities and other investments of the Fund. The Sub-Adviser
will assist the custodian and recordkeeping agent for the Fund in
determining or confirming, consistent with the procedures and policies
stated in the Registration Statement for the Trust, the value of any
portfolio securities or other assets of the Fund for which the custodian
and recordkeeping agent seeks assistance from, or identifies for review by,
the Sub-Adviser. The Sub-Adviser shall assist the Board in determining
fair value of such securities or assets for which market quotations are not
readily available.
(g) The Sub-Adviser will provide the Trust or the Adviser with copies (or, if
required for regulatory purposes) of all of the Fund's investment records
and ledgers maintained by the Sub-Adviser (which shall not include the
records and ledgers maintained by the custodian and recordkeeping agent for
the Trust) as are necessary to assist the Trust and the Adviser to comply
with requirements of the 1940 Act and the Advisers Act as well as other
applicable laws. The Sub-Adviser will furnish to regulatory authorities
having the requisite authority any information, reports or investment
records and ledgers maintained by the Sub-Adviser in connection with such
services which may be requested in order to ascertain whether the
operations of the Trust are being conducted in a manner consistent with
applicable laws and regulations.
<PAGE>
(h) The Sub-Adviser will provide reports to the Trust's Board of Trustees for
consideration at meetings of the Board on the investment program for the
Fund and the issues and securities represented in the Fund's portfolio, and
will furnish the Trust's Board of Trustees with respect to the Fund such
periodic and special reports as the Trustees or the Adviser may reasonably
request.
3. EXPENSES OF THE TRUST
Except as provided in sections 2(d) above, the Sub-Adviser shall assume and pay
all of its own costs and expenses related to providing an investment program for
the Fund. The Trust shall pay all of its expenses and liabilities, including
compensation of its independent Trustees; taxes and governmental fees; interest
charges; fees and expenses of the Trust's independent auditors and legal
counsel; trade association membership dues; fees and expenses of any custodian
(including safekeeping of funds and securities, maintenance of books and
accounts and calculation of the net asset value of beneficial interests of each
series of the Trust), transfer agent and registrar and dividend disbursing agent
of the Trust; expenses of preparing and mailing reports to investors nd
regulatory agencies; expenses relating to issuance, registration and
qualification of charges of each series, and the preparation, printing and
mailing of prospectuses for such purposes; insurance premiums; brokerage and
other expenses of executing portfolio transactions; expenses of investors' and
trustees' meetings; organization expenses; and extraordinary expenses.
4. SUB-ADVISORY FEE.
For the services and facilities to be provided to the Fund by the Sub-Adviser as
provided in Paragraph 2 hereof, the Adviser shall pay the Sub-Adviser a fee,
payable monthly, at the annual rate of .50 of 1% of the Fund's average daily net
assets from the Advisory fee it receives from the Fund, as set forth in the
Trust's charter documents for the computation of the value of the Fund's net
assets as determined by the Trust or its third party administrator in accordance
with procedures established, from time to time, by or under the direction of the
Board of Trustees of the Trust. The Trust shall not be liable for the
obligation of the Adviser to make payment to the Sub-Adviser.
5. REPRESENTATIONS AND COVENANTS
(a) The Adviser hereby represents and warrants as follows:
(1) That it is registered in good standing with the Securities and
Exchange Commission as an investment adviser under the Advisers Act,
and such registration is current, complete and in full compliance with
all applicable provisions of the Advisers Act and the rules and
regulations thereunder;
(2) That it has all the requisite authority to enter into, execute,
deliver and perform its obligations under this Agreement; and
(3) Its performance of its obligations under this Agreement does not
conflict with any law, regulation or order to which it is subject.
(b) The Adviser hereby covenants and agrees that, so long as this Agreement
shall remain in effect:
<PAGE>
(1) It shall maintain its registration in good standing as an investment
adviser under the Advisers Act, and such registration shall at all
times remain current, complete and in full compliance with all
applicable provisions of the Advisers Act and the rules and
regulations thereunder;
(2) Its performance of its obligations under this Agreement does not
conflict with any law, regulation or order to which it is subject;
and
(3) It shall at all times fully comply with the Advisers Act, the 1940
Act, all applicable rules and regulations under such Acts and all
other applicable law; and
(4) It shall promptly notify the Sub-Adviser upon occurrence of any event
that might disqualify or prevent it from performing its duties under
this Agreement.
(c) The Sub-Adviser hereby represents and warrants as follows:
(1) That it is registered in good standing with the Securities and
Exchange Commission as an investment adviser under the Advisers Act,
and such registration is current, complete and in full compliance
with all applicable provisions of the Advisers Act and the rules and
regulations thereunder;
(2) That it has all the requisite authority to enter into, execute,
deliver and perform its obligations under this Agreement; and
(3) Its performance of its obligations under this Agreement does not
conflict with any law, regulation or order to which it is
subject.
(d) The Sub-Adviser hereby covenants and agrees that, so long as this Agreement
shall remain in effect:
(1) It shall maintain its registration in good standing as an investment
adviser under the Advisers Act, and such registration shall at all
times remain current, complete and in full compliance with all
applicable provisions of the Advisers Act and the rules and
regulations thereunder;
(2) Its performance of its obligations under this Agreement does not
conflict with any law, regulation or order to which it is subject;
(3) It shall at all times fully comply with the Advisers Act, the 1940
Act, all applicable rules and regulations under such Acts and all
other applicable law; and
(4) It shall promptly notify the Adviser upon occurrence of any event
that might disqualify or prevent it from performing its duties under
this Agreement.
6. TRUST TRANSACTIONS.
The Adviser and Sub-Adviser each agrees that neither it nor any of its
officers, directors, employees or agents will take any long- or short-term
position in the shares of the Trust; provided, however, that such
prohibition shall not prevent the purchase of shares of the Trust by any of
the persons above described for their account and for investment at the
<PAGE>
price (net asset value) at which such shares are available at the time of
purchase or as part of the initial capital of the Trust.
7. RELATIONS WITH TRUST.
Subject to and in accordance with the Declaration of Trust and By-Laws of
the Trust and the Articles of Incorporation and By-Laws of the Adviser and
Sub-Adviser it is understood (i) that Trustees, officers, agents and
shareholders of the Trust are or may be interested in the Sub-Adviser (or
any successor thereof) as directors, officers, or otherwise; (ii) that
directors, officers, agents and shareholders of the Sub-Advisor are or may
be interested in the Trust as Trustees, officers, shareholders or
otherwise; and (iii) that the Sub-Advisor (or any such successor) is or may
be interested in the Trust as a shareholder or otherwise and that the
effect of any such adverse interests shall be governed by said Declaration
of Trust and By-laws.
8. LIABILITY OF ADVISER, SUB-ADVISER AND OFFICERS AND TRUSTEES OF THE TRUST.
Neither the Adviser, Sub-Adviser nor any of their officers, directors,
employees, agents or controlling persons or assigns or Trustees or officers of
the Trust shall be liable for any error of judgment or law, or for any loss
suffered by the Trust or its shareholders in connection with the matters to
which this Agreement relates, except that no provision of this Agreement shall
be deemed to protect the Adviser, Sub-Adviser or such persons against any
liability to the Trust or its shareholders to which the Adviser or Sub-Adviser
might otherwise be subject by reason of any wilful misconduct, negligence or
actions taken in bad faith in the discharge of its respective obligations and
performance of its respective duties under this Agreement.
9. INDEMNIFICATION
(a) Notwithstanding Section 8 of the Agreement, the Adviser agrees to indemnify
and hold harmless the Sub-Adviser, any affiliated person of the Sub-Adviser
(except the Trust), and each person, if any, who, within the meaning of
Section 15 of the Securities Act of 1933 ("Act") controls ("controlling
person") the Sub-Adviser (all of such persons being referred to as "Sub-
Adviser Indemnified Persons") against any and all losses, claims, damages,
liabilities (excluding salary charges of employees, officers or partners of
the Sub-Adviser), or litigation (including legal and other) expenses to
which a Sub-Adviser Indemnified Person may become subject under the 1933
Act, the 1940 Act, the Advisers Act, any other statute, common law or
otherwise, arising out of the Adviser's responsibilities to the Trust which
(1) may be based upon any untrue statement or alleged untrue statement of a
material fact supplied by, or which is the responsibility of, the Adviser
and contained in the Registration Statement or prospectus or statement of
additional information covering shares of the Fund or any other series, or
any amendment thereof or any supplement thereto, or the omission or alleged
omission or failure to state therein a material fact known or which should
have been known to the Adviser and was required to be stated therein or
necessary to make the statements therein not misleading, unless such
statement or omission was made in reliance upon information furnished to
the Adviser or the Trust or to any affiliated person of the Adviser by a
Sub-Adviser Indemnified Person in writing for inclusion in the Registration
Statement or prospectus or statement of additional information; or (2) may
be based upon a failure by the Adviser to comply with,
<PAGE>
or a breach of, any provision of this Agreement or any other agreement with
the Fund; or (3) may be based upon misfeasance or negligence by the Adviser
in the discharge of its duties and performance of its obligations under
this Agreement or any other agreement with the Fund, provided however, that
in no case shall the indemnity in favor of the Sub-Adviser Indemnified
Person be deemed to protect such person against any liability to which any
such person would otherwise be subject by reason of any misfeasance or
negligence in the discharge of its obligations and the performance of its
duties under this Agreement. The Adviser shall not be liable for any
losses, liabilities or expenses that the Sub-Adviser may incur due to
errors of judgment or omissions of the Adviser.
(b) Notwithstanding Section 8 of this Agreement, the Sub-Adviser agrees to
indemnify and hold harmless the Adviser, any affiliated person of the
Adviser (except the Trust), and each person, if any, who, within the
meaning of Section 15 of the 1933 Act, controls ("controlling person") the
Adviser (all of such persons being referred to as "Adviser Indemnified
Persons") against any and all losses, claims, damages, liabilities
(excluding salary charges of employees, officers or partners of the
Adviser), or litigation (including legal and other) expenses to which an
Adviser Indemnified Person may become subject under the 1933 Act, the 1940
Act, the Advisers Act, any other statute, common law or otherwise, arising
out of the Sub-Adviser's responsibilities as sub-investment adviser to the
Fund which (1) may be based upon any untrue statement or alleged untrue
statement of a material fact supplied by the Sub-Adviser for inclusion in
the Registration Statement or prospectus or statement of additional
information covering shares of the Fund, or any amendment thereof or any
supplement thereto, or, with respect to a material fact supplied by the
Sub-Adviser for inclusion in the Registration Statement or prospectus or
statement of additional information, the omission or alleged omission or
failure to state therein a material fact known or which should have been
known to the Sub-Adviser and was required to be stated therein or necessary
to make the statements therein not misleading, unless such statement or
omission was made in reliance upon information furnished to the Sub-
Adviser, the Trust, or any affiliated person of the Sub-Adviser or Trust by
an Adviser Indemnified Person; or (2) may be based upon a failure by the
Sub-Adviser to comply with, or a breach of, any provision of this Agreement
or any other agreement with the Fund; or (3) may be based upon misfeasance
or negligence by the Sub-Adviser in the discharge of its duties and
performance of its obligations under this Agreement or any other agreement
with the Fund provided however, that in no case shall the indemnity in
favor of an Adviser Indemnified Person be deemed to protect such person
against any liability to which any such person would otherwise be subject
by reason of misfeasance or negligence in the discharge of its obligations
and the performance of its duties under this Agreement.
(c) Neither the Adviser nor the Sub-Adviser shall be liable under this Section
with respect to any claim made against an Indemnified Person unless such
Indemnified Person shall have notified the indemnifying party in writing
within a reasonable time after the summons or other first legal process
giving information of the nature of the claim shall have been served upon
such Indemnified Person (or such Indemnified Person shall have received
notice of such service on any designated agent), but failure to notify the
indemnifying party of any such claim shall not relieve the indemnifying
party from any liability which it may have to the Indemnified Person
against whom such action is brought otherwise than on account of this
Section. In case any such action is brought against the Indemnified
Person, the indemnifying party will be entitled to participate, at its own
expense, in the defense thereof or, after notice to the Indemnified Person,
to assume the defense thereof,
<PAGE>
with counsel satisfactory to the Indemnified Person. If the indemnifying
party assumes the defense and the selection of counsel by the indemnifying
party to represent both the Indemnified Person and the indemnifying party
would result in a conflict of interests and would not, in the reasonable
judgment of the Indemnified Person, adequately represent the interests of
the Indemnified Person, the indemnifying party will at its own expense,
assume the defense with counsel to the indemnifying party and, also at its
own expense, with separate counsel to the Indemnified Person which counsel
shall be satisfactory to the indemnifying party and the Indemnified Person.
The Indemnified Person will bear the fees and expenses of any additional
counsel retained by it, and the indemnifying party shall not be liable to
the Indemnified Person under this Agreement for any legal or other expenses
subsequently incurred by the Indemnified Person independently in connection
with the defense thereof other than reasonable costs of investigation. The
indemnifying party shall not have the right to compromise or settle the
litigation without the prior written consent of the Indemnified Person if
the compromise or settlement results, or may result, in a finding of
wrongdoing on the part of the Indemnified Person.
10. DURATION AND TERMINATION OF THIS AGREEMENT.
(a) Duration. This Agreement shall become effective on the date hereof. Unless
--------
terminated as herein provided, this Agreement shall remain in full force
and effect until May 1, 1996 and shall continue in full force and effect
for periods of one year thereafter so long as such continuance is approved
at least annually (i) by either the Trustees of the Trust or by vote of a
majority of the outstanding voting shares (as defined in the 1940 Act) of
the Trust, and (ii) in either event by the vote of a majority of the
Trustees of the Trust who are not parties to this Agreement or "interested
persons" (as defined in the 1940 Act) of any such party, cast in person at
a meeting called for the purpose of voting on such approval.
(b) Termination. This Agreement may be terminated at any time, without payment
-----------
of any penalty, by vote of the Trustees of the Trust or by vote of a
majority of the outstanding shares (as defined in the 1940 Act), or by the
Adviser or Sub-Adviser, on sixty (60) days written notice to the other
parties.
(c) Automatic Termination. This Agreement shall automatically and immediately
---------------------
terminate in the event of its assignment.
11. PRIOR AGREEMENT SUPERSEDED.
This Agreement supersedes any prior agreement relating to the subject matter
hereof between the parties.
12. SERVICES EXCLUSIVE.
The services of the Sub-Adviser and its affiliates, taken collectively, shall be
exclusive with regards to the Trust as provided in this Section 12. So long as
this Agreement (and any continuation) is in effect, the Sub-Adviser and its
affiliates shall be prohibited from serving as investment adviser to any open-
end investment company offered for sale in the United States as part of a
variable annuity or life insurance contract meeting the requirements of Section
817(h) of the Internal Revenue Code of 1986, as amended, which has (i) the same
investment objective and policies (i.e., to provide long term capital
appreciation by investing primarily in equity securities in emerging markets
around the world) as the Fund or (ii) the word "emerge" or any
<PAGE>
derivative thereof or the word "develop" or any derivative thereof in its name.
The Sub-Adviser and its affiliates shall be permitted to serve as investment
adviser to open-end investment companies offered for sale as part of variable
annuity or life insurance contracts which have investment objectives and
policies to provide long term capital appreciation by investing their assets
primarily in securities of developed (non-emerging market) countries and Asia,
provided that any such investment company does not have the word "emerge" or any
derivative thereof or the word "develop" or any derivative thereof in its name.
The services of the Sub-Adviser (and its affiliates) to the Trust hereunder are
not to be deemed exclusive if this Agreement is terminated by the Fund or
Adviser; and nothing in this Agreement shall preclude the Sub-Adviser or its
affiliates from serving as an investment adviser or sub-adviser with respect to
any mutual funds.
13. EXPENSE LIMITATION.
The Adviser and Sub-Adviser agree that for any fiscal year of the Fund during
which the total of all expenses of the Fund (including investment advisory fees
under the investment advisory agreement, but excluding interest, portfolio
brokerage commissions and expenses, taxes and extraordinary items) exceeds the
lowest expense limitation imposed in any state in which the Fund is then making
sales of its shares or in which its shares are then qualified for sale, the
Adviser and Sub-Adviser will bear expenses on a pro rata basis with respect to
expenses not otherwise excluded from reimbursement by this Paragraph 13 to the
extent that they exceed such expense limitation but in no event shall such
reimbursement exceed the advisory, sub-advisory and administrative fees
retained.
14. MISCELLANEOUS.
(a) This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
(b) If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
15. USE OF NAME
(a) It is understood that the name "Van Eck" or any derivative thereof or
logo associated with that name is the valuable property of the Adviser
and its affiliates, and that the Trust and Sub-Adviser have the right
to use such name (or derivative or logo) only with the approval of the
Adviser and only so long as the Adviser is Adviser to the Fund. Upon
termination of the Investment Advisory and Management Agreement
between the Trust and the Adviser, the Trust and the Sub-Adviser shall
forthwith cease to use such name (or derivative or logo).
(b) It is understood that the name Peregrine Asset Management (Hong Kong)
Limited any derivative thereof or logo associated with that name is
the valuable property of the Sub-Adviser and its affiliates and that
the Trust and/or the Fund have the right to use such name (or
derivative or logo) in offering materials of the Trust only with the
approval of the Sub-Adviser and only for so long as the Sub-Adviser is
investment advisor to the Fund. Upon termination of this Agreement,
the Trust
<PAGE>
and Adviser shall forthwith cease to use such name (or derivative or
logo).
16. LIMITATION OF LIABILITY.
The Term "Van Eck Worldwide Insurance Trust" means and refers to the Trustees
from time to time serving under the Master Trust Agreement of the Trust dated
January 7, 1987 as the same may subsequently thereto have been, or subsequently
hereto be amended. It is expressly agreed that the obligations of the Trust
hereunder shall not be binding upon any Trustees, shareholders, nominees,
officers, agents or employees of the Trust, personally, but bind only the assets
and property of the Trust, as provided in the Amended and Restated Master Trust
Agreement of the Trust. The execution and delivery of this Agreement have been
authorized by the Trustees and the Trust, acting as such, and neither such
authorization by such officer shall be deemed to have been made by any of them
personally, but shall bind only the assets and property of the Trust as provided
in its Amended and Restated Master Trust Agreement.
In WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first set forth above.
Attest: VAN ECK WORLDWIDE INSURANCE TRUST
__________________________ By _________________________________
Name Name
President
Attest: VAN ECK ASSOCIATES CORPORATION
__________________________ By________________________________
Name Name
President
Attest: PEREGRINE ASSET MANAGEMENT (HONG KONG)
LIMITED
___________________________ By________________________________
Name Name
President
<PAGE>
EXHIBIT 99.10(a)
[Letterhead of Van Eck Global]
October 9, 1995
Van Eck Worldwide Insurance Trust
99 Park Avenue
New York, New York 10016
Gentlemen:
As Vice President and Secretary to Van Eck Worldwide Insurance Trust (the
"Trust"), a Massachusetts business trust, I have been asked to render my opinion
with respect to the issuance of shares of beneficial interest, par value $.001
per share, of the Trust (the "Shares") representing interests in the Worldwide
Emerging Markets series of the Trust, as more fully described in the prospectus
and statement of additional information contained in Post-Effective Amendment
No. 15 (the "Amendment") to the Registration Statement on Form N-1A
(Registration No. 33-13019) of the Trust to be filed with the Securities and
Exchange Commission.
I have examined the Master Trust Agreement of the Trust dated January 7, 1987,
as amended, the By-laws of the Trust, the records of certain meetings of the
Trustees of the Trust, the prospectus and statement of additional information
contained in the Amendment, and such other documents, records and certificates
as I have deemed necessary for the purposes of this opinion.
Based upon the foregoing, I am of the opinion that the Shares, when issued and
sold in accordance with the terms of the prospectus and statement of additional
information in effect at the time of sale, will be legally issued, fully paid
and non-assessable by the Trust.
I hereby consent to the filing of this opinion as an exhibit to the Amendment.
Very truly yours,
/s/ Thaddeus Leszczynski
Thaddeus Leszczynski
Vice President and Secretary
<PAGE>
EXHIBIT 99.10(b)
[Letterhead of Van Eck Global]
October 9, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Gentlemen or Ladies:
As counsel to Van Eck Worldwide Insurance Trust, I have reviewed Post-Effective
Amendment No. 15 (the "Amendment") to Registration Statement No. 33-13019. My
review of the Amendment has not revealed any disclosure which would render the
Amendment ineligible to become effective pursuant to Rule 485(b) under the
Securities Act of 1933.
Very truly yours,
/s/ Thaddeus Leszczynski
Thaddeus Leszczynski
Secretary
