<PAGE>
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, AS AMENDED (THE "1933 ACT")
POST-EFFECTIVE AMENDMENT NO. 19
AND
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 22
VAN ECK WORLDWIDE INSURANCE TRUST
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
99 PARK AVENUE, NEW YORK, NEW YORK 10016
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE)
212-687-5200
(REGISTRANT'S TELEPHONE NUMBER INCLUDING AREA CODE)
THOMAS ELWOOD, ESQ. - VAN ECK ASSOCIATES CORPORATION
99 PARK AVENUE, NEW YORK, NEW YORK 10016
(NAME AND ADDRESS OF AGENT FOR SERVICE)
COPY TO: PHILIP NEWMAN, ESQ., GOODWIN, PROCTER & HOAR
EXCHANGE PLACE, BOSTON, MASSACHUSETTS 02109
____________________________________________________________________
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (CHECK APPROPRIATE BOX):
[ ] IMMEDIATELY UPON FILING PURSUANT [ ] ON MAY 1, 1998 PURSUANT TO
TO PARAGRAPH (b) PARAGRAPH (b)
[X] 60 DAYS AFTER FILING PURSUANT TO [ ] [DATE] PURSUANT
PARAGRAPH (a)(1) TO PARAGRAPH (a)(1)
[ ] 75 DAYS AFTER FILING PURSUANT TO [ ] ON (DATE) PURSUANT TO
PARAGRAPH (a)(2) PARAGRAPH (a)(2) OF RULE 485
IF APPROPRIATE, CHECK THE FOLLOWING BOX:
[ ] THIS POST-EFFECTIVE AMENDMENT DESIGNATES A NEW EFFECTIVE DATE FOR A
PREVIOUSLY FILED POST-EFFECTIVE AMENDMENT
______________________________________________________________________
Title of securities being registered: Shares of Beneficial Interest, $.001 par
value, of Worldwide Bond Fund, Worldwide Emerging Markets Fund, Worldwide Hard
Assets Fund and Worldwide Real Estate Fund.
<PAGE>
VAN ECK WORLDWIDE INSURANCE TRUST
CROSS-REFERENCE PAGE
PURSUANT TO RULE 501 (B) OF REGULATION S-K
UNDER THE SECURITIES ACT OF 1933, AS AMENDED
FORM N-1A
PART A
ITEM NO. LOCATION IN PROSPECTUS
- -------- ----------------------
1. Cover Page Cover Page
2. Synopsis N/A
3. Condensed Financial Information Financial Highlights
4. General Description of Registrant The Trust; Investment Objectives and
Policies; Risk Factors; Limiting
Investment Risks; Description of the
Trust
5. Management of the Fund Management of the Funds;
5A. Management's Discussion of Fund
Performance Not Applicable
6. Capital Stock and Other Securities Dividends and Capital Gain; Taxes;
7. Purchase of Securities Being
Offered How Fund shares are brought and
sold
8. Redemption or Repurchase How Fund shares are brought and
sold
9. Pending Legal Proceedings N/A
PART B LOCATION IN STATEMENT
ITEM NO. ADDITIONAL INFORMATION
- -------- ----------------------
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History N/A
13. Investment Objectives and Policies Investment Objectives and Policies;
Risk Factors; Investment Restrictions;
Portfolio Transactions and Brokerage
14. Management of the Fund Trustees and Officers
15. Control Persons and Principal Principal Shareholders
Holders of Securities
<PAGE>
PART B LOCATION IN STATEMENT
ITEM NO. ADDITIONAL INFORMATION
- -------- ----------------------
16. Investment Advisory and Other Investment Advisory Services;The
Services Distributor; Trustees and Officers;
Additional Information
17. Brokerage Allocation and Other Portfolio Transactions and Brokerage
Practices
18. Capital Stock and Other Securities General Information
19. Purchase, Redemption and Pricing Valuation of Shares; Redemptions
of Securities Being Offered in Kind
20. Tax Status Taxes
21. Underwriters The Distributor
22. Calculation of Performance Data Performance
23. Financial Statements Financial Statements
<PAGE>
YOUR INVESTMENT DEALER IS:
For more detailed information, see the Statement of Additional Information
(SAI), which is incorporated by reference into this prospectus.
For free copies of SAIs, annual or semi-annual reports...
* Call Van Eck at 1-800-826-2333, or visit the Van Eck website at
www.vaneck.com.
* Go to the Public Reference Room of the Securities and Exchange Commission.
* Call the SEC at 1-800-SEC-0330, or write to them at the Public Reference
Room, Washington, D.C. 20549-6009, and ask them to send you a copy. There is
a fee for this service.
* Download documents from the SEC's website at http://www.sec.gov
* The Funds' annual report (other than US Government Money Fund) includes a
discussion of market conditions and investment strategies that significantly
affected the Funds' last year.
Van Eck Global [LOGO]
Transfer Agent: DST Systems, Inc.
P.O. Box 418407
Kansas City, Missouri 64141
1-800-544-4653
SEC REGISTRATION NUMBER: 811-05083
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Van Eck Global
Worldwide Insurance Trust
- --------------------------------------------------------------------------------
PROSPECTUS
May 1, 1999
[GRAPHIC]
Worldwide Bond fund
Worldwide Emerging Markets Fund
Worldwide Hard Assets Fund
Worldwide Real Estate Fund
These securities have not been approved or disapproved either by the Securities
and Exchange Commission (SEC) or by any State Securities Commission. Neither the
SEC nor any State Commission has endorsed the accuracy or adequacy of this
prospectus. Any claim to the contrary is against the law.
- --------------------------------------------------------------------------------
GLOBAL INVESTMENTS SINCE 1955
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Table of Contents
- --------------------------------------------------------------------------------
I. THE FUNDS
INCLUDES A PROFILE OF EACH FUND, ITS INVESTMENT STYLE AND PRINCIPAL RISKS;
HISTORIC PERFORMANCE; PERFORMANCE MEASURED AGAINST A RELEVANT BENCHMARK; HIGHEST
AND LOWEST PERFORMING QUARTERS; AND EXPENSES.
WORLDWIDE BOND FUND 2
WORLDWIDE EMERGING MARKETS FUND 5
WORLDWIDE HARD ASSETS FUND 8
WORLDWIDE REAL ESTATE FUND 12
II. ADDITIONAL INVESTMENT STRATEGIES 15
OTHER INVESTMENTS, INVESTMENT POLICIES, INVESTMENT TECHNIQUES AND RISKS.
III.HOW THE FUNDS ARE MANAGED 24
MANAGEMENT OF THE FUNDS; FUND EXPENSES; TAXES; AND SHAREHOLDER INQUIRES.
IV. FINANCIAL HIGHLIGHTS 27
THE FINANCIAL HIGHLIGHTS TABLES WILL HELP YOU UNDERSTAND A FUND'S FINANCIAL
PERFORMANCE FOR THE PAST FIVE YEARS, OR FOR THE SHORTER LIFE OF THE FUND.
<PAGE>
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I. The Funds
- --------------------------------------------------------------------------------
INCLUDES A PROFILE OF EACH FUND, ITS INVESTMENT STYLE AND PRINCIPAL RISKS;
HISTORIC PERFORMANCE; PERFORMANCE MEASURED AGAINST A RELEVANT BENCHMARK; HIGHEST
AND LOWEST PERFORMING QUARTERS; AND EXPENSES.
1. WORLDWIDE BOND FUND PROFILE
OBJECTIVE
The Worldwide Bond Fund seeks high total return--income plus capital
appreciation--by investing globally, primarily in a variety of debt securities.
PRINCIPAL POLICIES
The Fund's long-term assets will consist of debt securities rated B or better by
Standard & Poor's (S&P) or Moody's Investor's Service (Moody's). The Fund may
also invest in unrated securities of comparable quality in the Adviser's
opinion. The Fund intends to invest no more than 25% of assets in lower-rated
debt ("junk bonds"), and then only in lower-rated debt issued by governments or
government agencies.
During normal economic conditions, the Fund intends to invest in debt issued by
domestic and foreign governments (and their agencies and subdivisions), multi-
national entities like the World Bank, the Asian Development Bank, the European
Investment Bank, and the European Community. The Fund will also invest in
corporate bonds, debentures, notes, commercial paper, time deposits,
certificates of deposit, and repurchase agreements, as well as debt obligations
which may have a call on a common stock or commodity by means of a conversion
privilege or attached warrants.
The Adviser expects the Fund's average maturity to range between three and 10
years. There is no limit on the amount the Fund may invest in one country or in
securities denominated in one currency. Normally, the Fund will be invested in
at least three countries besides the United States.
PRINCIPAL RISKS
The Fund's share value will tend to fall when interest rates go up and to rise
when interest rates fall. Foreign investments may be subject to volatility from
political or economic factors or from changing currency values. An investment in
the Fund involves the risk of losing money.
2 VAN ECK WORLDWIDE INSURANCE TRUST PROSPECTUS
<PAGE>
I. THE FUNDS / WORLDWIDE BOND FUND
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Worldwide Bond Fund Performance
- --------------------------------------------------------------------------------
This chart shows the historic annual total return of Van Eck Worldwide Bond Fund
since Fund inception on 9/1/89. This chart describes past performance only, and
should not be understood as a prediction for future results.
During the period covered, the Fund's highest performing quarter (ended 12/31/94
to 3/31/95) was 11.07%. The lowest performing quarter (ended 9/30/92 to
12/31/92) was -6.74%.
- --------------------------------------------------------------------------------
Worldwide Bond Fund
Annual Total Returns (%)
As of December 31, 1998
12.75% 2.38% 2.53% 17.30% -1.32% 7.79% -5.25% 18.39% 11.25% 0.70%
30% _______________________________________________________________________
20% _______________________________________________________________________
10% _______________________________________________________________________
98 97 96 95 94 93 92 91 90 89*
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* Inception 9/1/89 to 12/31/89
Fund and Index performance are shown with dividends reinvested. Past performance
does not guarantee or predict future results.
- --------------------------------------------------------------------------------
Worldwide Bond Fund
1-, 5-Year and Life-of-Fund Performance
Plus a Comparison to the SSB World Government Bond*
As of December 31, 1998
1 Year 5 Years Life-of-Fund**
Fund 12.75% 6.50% 6.85%
Index 15.31% 7.85% 9.71%
- --------------------------------------------------------------------------------
* The Salomon Smith Barney (SSB) World Government Bond Index is a market
capitalization weighted benchmark that tracks the performance of 18 world
government bond markets. Each has a total market capitalization of eligible
issues of at least US $20 billion and Euro 15 billion. The issues are fixed
rate, greater than one-year maturity and subject to a minimum amount
outstanding that varies by local currency. Bonds must be sovereign debt
issued in the domestic market in local currency.
VAN ECK WORLDWIDE INSURANCE TRUST PROSPECTUS 3
<PAGE>
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Worldwide Bond Fund Expenses
- --------------------------------------------------------------------------------
This table shows certain expenses you will incur as a Fund investor, either
directly or indirectly. The Adviser may sometimes waive fees and/or reimburse
certain expenses of the Fund.
- --------------------------------------------------------------------------------
Worldwide Bond Fund
Shareholder Transaction Expenses
Annual Fund Operating Expenses (% of net assets)
Management/Administration Fees 1.00%
Other Expenses .15%
Total Fund Operating Expenses 1.15%
- --------------------------------------------------------------------------------
The table above shows the expenses you would pay on a hypothetical $10,000
investment. The example presumes an average annual return of 5% with redemption
at the end of each time period. This illustration is hypothetical. For a real
investment, your actual expenses may be higher or lower than those shown.
- --------------------------------------------------------------------------------
Expense Example
What a $10,000 investment would actually cost
- --------------------------------------------------------------------------------
1 year $ 117
3 years $ 365
5 years $ 633
10 years $ 1,398
- --------------------------------------------------------------------------------
4 VAN ECK WORLDWIDE INSURANCE TRUST PROSPECTUS
<PAGE>
I. THE FUNDS / WORLDWIDE EMERGING MARKETS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2. WORLDWIDE EMERGING MARKETS FUND PROFILE
OBJECTIVE
The Worldwide Emerging Markets Fund seeks long-term capital appreciation by
investing in equity securities in emerging markets around the world.
PRINCIPAL POLICIES
The Fund emphasizes investment in countries that have relatively low gross
national product per capita, as well as the potential for rapid economic growth.
Under normal conditions, the Fund will invest at least 65% of its assets in
emerging countries or emerging market equity securities. These include issues of
companies in emerging countries, issues denominated in currencies of emerging
countries, investment companies (like country funds) that invest in emerging
countries, and in American Depositary Receipts (ADRs), American Depositary
Shares (ADSs), European Depositary Receipts (EDRs) and Global Depositary
Receipts (GDRs) representing emerging markets securities.
The Fund generally invests in common stocks; preferred stocks (either
convertible or non-convertible); rights; warrants; direct equity interests in
trusts, partnerships, joint ventures and other unincorporated entities or
enterprises; convertible debt instruments and special classes of shares
available only to foreigners in markets that restrict ownership of certain
shares or classes to their own nationals or residents.
The Fund emphasizes equities, but may also invest in debt securities of any
quality, as long as not more than 25% of assets are held in debt securities
rated below investment grade ("junk bonds").
The Fund may sometimes invest indirectly by investing in other investment
companies. These investments may involve payments of premiums above the
company's net asset values. The law may also restrict these indirect investments
in additional ways. The Fund's investment adviser has agreed to waive its
management fee with respect to the portion of Fund assets invested in shares of
other open-end investment companies.
PRINCIPAL RISKS
An emerging markets fund involves above-average risk. Many emerging markets are
much less liquid and much more changeable than the U.S. market. Foreign
investments may be subject to volatility from political or economic factors or
from changing currency values. The Fund is designed for long-term investing. An
investment in the Fund involves the risk of losing money.
VAN ECK WORLDWIDE INSURANCE TRUST PROSPECTUS 5
<PAGE>
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Worldwide Emerging Markets Fund Performance
- --------------------------------------------------------------------------------
This chart shows the historic annual total return of Van Eck Worldwide Emerging
Markets Fund since Fund inception on 12/21/95. This chart describes past
performance only, and should not be understood as a prediction for future
results.
During the period covered, the Fund's highest performing quarter (ended
12/31/98) was 20.88%. The lowest performing quarter (ended 09/30/98) was-29.46%.
- --------------------------------------------------------------------------------
Worldwide Emerging Markets Fund
Annual Total Returns (%)
As of December 31, 1998
-34.15% -11.61% 26.82%
-------------------------------------------------------------------
30%
-------------------------------------------------------------------
20%
-------------------------------------------------------------------
10%
-------------------------------------------------------------------
0%
===================================================================
98 97 96
- --------------------------------------------------------------------------------
Fund and Index performance are shown with dividends reinvested. Past performance
does not guarantee or predict future results.
- --------------------------------------------------------------------------------
Worldwide Emerging Markets Fund
1-Year and Life of Fund Performance
Plus a Comparison to the MSCI Emerging Markets Free Index*
As of December 31, 1998
1 Year Life of Fund
Class A Shares -34.15% -9.89%
MSCI Emerging Market Free Index -25.34% -11.20%+
- --------------------------------------------------------------------------------
+ Calculated from nearest month end (12/31/95).
* The Morgan Stanley Capital International (MSCI) Emerging Markets Free Index
is a market capitalization weighted index that captures 60% of the publicly
traded equities in each industry for 26 emerging markets. The index includes
only stocks available for purchase by foreign investors.
6 VAN ECK WORLDWIDE INSURANCE TRUST PROSPECTUS
<PAGE>
I. THE FUNDS / WORLDWIDE EMERGING MARKETS
- --------------------------------------------------------------------------------
Worldwide Emerging Markets Fund
- --------------------------------------------------------------------------------
This table shows certain expenses you will incur as a Fund investor, either
directly or indirectly. The Adviser may sometimes waive fees and/or reimburse
certain expenses of the Fund.
- --------------------------------------------------------------------------------
Worldwide Emerging Markets Fund
Shareholder Transaction Expenses
Annual Fund Operating Expenses (% of net assets)
Management/Administration Fees 1.00%
Other Expenses .61%
Total Fund Operating Expenses* 1.61%
- --------------------------------------------------------------------------------
The table above shows the expenses you would pay on a hypothetical $10,000
investment. The example presumes an average annual return of 5% with redemption
at the end of each time period. This illustration is hypothetical. In a real
investment, your actual expenses may be higher or lower than those shown.
- --------------------------------------------------------------------------------
Expense Example
What a $10,000 investment would actually cost
- --------------------------------------------------------------------------------
1 year $ 164
3 years $ 508
5 years $ 876
10 years $ 1,911
- --------------------------------------------------------------------------------
VAN ECK WORLDWIDE INSURANCE TRUST PROSPECTUS 7
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
3. WORLDWIDE HARD ASSETS FUND PROFILE
OBJECTIVE
The Worldwide Hard Assets Fund seeks long-term capital appreciation by investing
primarily in "hard asset securities." Income is a secondary consideration.
PRINCIPAL POLICIES
Under normal conditions, the Fund will invest at least 65% of its assets in
"hard asset securities," at least 5% of its assets in the "hard asset" sectors
(listed below) and the Fund may concentrate as much as 50% of its assets in a
single "hard asset" sector.
Hard asset securities are the stocks, bonds, and other securities of companies
that derive at least 50% of gross revenue or profit from exploration,
development, production or distribution of:
1. Precious metals
2. Natural resources
3. Real estate
4. Commodities
The Fund may invest up to 50% of assets in equity securities of real estate
investment trusts (REITs), not directly in real estate.
Under normal circumstances, the Fund will invest in at least three countries
including the United States. However, there is no limit on the amount the Fund
may invest in any one country, developed or underdeveloped.
Hard asset securities can produce long-term capital appreciation and help
protect capital against inflation during cyclical economic expansions. Hard
asset security values may move independently of industrial shares, so a hard
asset portfolio can offset the fluctuations -- and perhaps increase the
return --of an industrial equity portfolio.
Worldwide Hard Assets Fund invests in a number of securities, and utilizes a
number of techniques, that are covered in detail in Chapter II "Investment
Policies and Risks."
8 VAN ECK WORLDWIDE INSURANCE TRUST PROSPECTUS
<PAGE>
1. THE FUNDS / WORLDWIDE HARD ASSETS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund may invest in common stocks; preferred stocks (either convertible or
non-convertible); debt securities; asset loaded securities; rights; warrants;
derivatives, directly and indirectly in commodities; direct equity interests in
trusts; partnerships, joint ventures and other unincorporated entities or
enterprises; convertible debt instruments and special classes of shares that are
restricted to nationals or residents of a given country. Direct investments are
generally considered illiquid and will be lumped together with other illiquid
investments; this total will be subject to the Fund's limits on illiquid
investing.
The Fund may invest up to 10% of its assets in precious metals, either bullion
or coins.
PRINCIPAL RISKS
An investment in the Fund may involve greater risk than an investment in other
funds. Hard asset prices may move independently of the trends of industrial
companies. The energy and basic materials sectors are volatile. Inflation can
drive down stock prices, and stock prices can influence hard assets; so
inflation may also make hard asset security prices go down. An investment in the
Fund should be considered part of an overall investing program, not a complete
investment in itself. An investment in the Fund involves the risk of losing
money.
VAN ECK WORLDWIDE INSURANCE TRUST PROSPECTUS 9
<PAGE>
- --------------------------------------------------------------------------------
Worldwide Hard Assets Fund Performance
- --------------------------------------------------------------------------------
This chart shows the historic annual total return of Van Eck Worldwide Hard
Assets Fund since Fund inception on 9/1/89. This chart describes past
performance only, and should not be understood as a prediction for future
results.
During the period covered, the Fund's highest performing quarter (ended
12/31/93) was 23.52%. The lowest performing quarter (ended 9/30/98) was -19.05%.
- --------------------------------------------------------------------------------
Worldwide Hard Assets Fund
Annual Total Returns (%)
As of December 31, 1998
-30.93% -1.67% 18.04% 10.99% -4.78% 64.83% -4.09% -2.93% -14.11% -0.70%
30% _________________________________________________________________________
20% _________________________________________________________________________
10% _________________________________________________________________________
98 97 96 95 94 93 92 91 90 89(*)
- --------------------------------------------------------------------------------
* Partial year performance from inception, 9/1/89 to 12/31/89.
Fund and Index performance are shown with dividends reinvested. Past performance
does not guarantee or predict future results.
- --------------------------------------------------------------------------------
Worldwide Hard Assets Fund
1-Year, 5-Year and Life-of-Fund Performance
Plus a Comparison to the Ibbotson Hard Assets Index*
As of December 31, 1998
1 Year 5 Year Life-of-Fund**
Fund -30.93% -3.26% 2.10%
Ibbotson Hard Assets Index -11.10% 1.37% 3.05%
- --------------------------------------------------------------------------------
* The Ibbotson Hard Assets Index is 75% equities of global companies whose
primary business is linked to hard assets, and 25% commodity futures. The
equity component consists of equal weightings of the MSCI Gold Mines, Non-
Ferrous Metals, Energy Sources, Forest Products and Paper Indexes, and
the National Association of Real Estate Investment Trusts Equity Index. The
commodity component consists of equal weightings of the Goldman Sachs
Energy, Precious Metals and Industrial Metals Indexes, with the exceptions
noted in the following paragraph.
The index is entirely equity for 1970-72 because there were no commodity
contracts before 1973 with sufficient liquidity to qualify for inclusion in
the Goldman Sachs indexes. The real estate index did not exist and is not
included before 1972. The precious metals commodity sub-index was first
available in 1973, and until 1977 represented the entire commodity
component. The industrial metals sub-index began in 1977, and until 1983,
when the energy-related commodities index began, these two sub-indexes each
represented 50% of the commodity component.
10 VAN ECK WORLDWIDE INSURANCE TRUST PROSPECTUS
<PAGE>
I. THE FUNDS / WORLDWIDE HARD ASSETS
- --------------------------------------------------------------------------------
Worldwide Hard Assets Fund Expenses
- --------------------------------------------------------------------------------
This table shows certain expenses you will incur as a Fund investor, either
directly or indirectly. The Adviser may sometimes waive fees and/or reimburse
certain expenses of the Fund.
- --------------------------------------------------------------------------------
Worldwide Hard Assets Fund
Shareholder Transaction Expenses
Annual Fund Operating Expenses (% of net assets)
Management/Administration Fees 100%
Other Expenses .20%
Total Fund Operating Expenses* 1.20%
- --------------------------------------------------------------------------------
* Expense is reduced to 1.16% by the directed brokerage and custodian fee
arrangement.
The table above shows the expenses you would pay on a hypothetical $10,000
investment. The example presumes an average annual return of 5% with redemption
at the end of each time period. This illustration is hypothetical. In a real
investment, your actual expenses may be higher or lower than those shown.
- --------------------------------------------------------------------------------
Expense Example
What a $10,000 investment would actually cost
- --------------------------------------------------------------------------------
1 year $ 122
3 years $ 381
5 years $ 660
10 years $ 1,455
- --------------------------------------------------------------------------------
VAN ECK WORLDWIDE INSURANCE TRUST PROSPECTUS 11
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. WORLDWIDE REAL ESTATE FUND PROFILE
OBJECTIVE
The Worldwide Real Estate Fund seeks a high total return by investing in equity
securities of companies that own significant real estate or that principally do
business in real estate.
PRINCIPAL POLICIES
Under normal conditions, the Fund will invest at least 65% of its assets in
equity securities of domestic and foreign companies that own significant
property or principally do business in real estate. At times, the Fund may
invest nearly all its assets in such securities.
The Fund may also invest up to 35% of assets in debt securities of its real
estate companies or in equity or debt securities of non-real estate companies.
The Fund will not invest more than 25% of assets in debt securities rated lower
than "Baa" (junk bonds) by Moody's. The Fund may invest up to 10% of assets in
unrated debt securities backed by real estate assets.
Normally, the Fund will invest in at least three countries, including the United
States. The Adviser expects to concentrate on investments in the U.S., Canada,
Hong Kong, Singapore, Malaysia, Japan, Australia, France, the Netherlands, and
the United Kingdom. The Fund may also invest in other non-U.S. markets,
including emerging markets in Asia, Latin America, and Eastern Europe.
PRINCIPAL RISKS
Real estate investing can be risky by definition, and the Fund takes on
additional risk by investing in real estate companies in emerging markets. If
certain investment vehicles fail, the Fund may end up holding actual real estate
in settlement of investment claims, and this property may be hard to sell. In
addition, the Fund is subject to all the risks associated with companies in the
real estate industry such as declines in property values, adverse economic
conditions, overbuilding and competition. An investment in the Fund involves the
risk of losing money.
12 VAN ECK WORLDWIDE INSURANCE TRUST PROSPECTUS
<PAGE>
I. THE FUNDS / WORLDWIDE REAL ESTATE
- --------------------------------------------------------------------------------
Worldwide Real Estate Fund Performance
- --------------------------------------------------------------------------------
This chart shows the historic annual total return of Van Eck Worldwide Real
Estate Fund since Fund inception on 6/23/97. This chart describes past
performance only, and should not be understood as a prediction for future
results.
During the period covered, the Fund's highest performing quarter (ended 9/30/97)
was 22.27%. The lowest performing quarter (ended 9/30/98) was -14.45%.
- --------------------------------------------------------------------------------
Worldwide Real Estate Fund
Annual Total Returns (%)
As of December 31
-11.35% 19.60%
----------------------------------------------------------------------
30%
----------------------------------------------------------------------
20%
----------------------------------------------------------------------
10%
======================================================================
98 97*
- --------------------------------------------------------------------------------
* Partial year performance from inception, 6/23/97 to 12/31/97.
Fund and Index performance are shown with dividends reinvested. Past performance
does not guarantee or predict future results.
- --------------------------------------------------------------------------------
Worldwide Real Estate Fund
1-Year and Life of Fund Performance
Plus a Comparison to the NAREIT Equity and
Salomon Smith Barney World Property Index*
As of December 31
1 Year Life of Fund
Fund 11.35% 3.9%
NARIET Equity Index -17.51 -4.14+
SSB World Property Index -13.25 -17.85+
- --------------------------------------------------------------------------------
* The NAREIT Equity Index A is made up of U.S. real estate investment trusts
that trade publicly as stock (equity) issues, weighted by capitalization
(i.e., total value of shares). The index excludes REITs made up of
mortgages. The Salomon Smith Barney Brothers World Property Equity Index is
made up of approximately 380 real estate companies in 19 countries, weighted
according to each country's total "float" (share value) of companies
eligible for the index.
+ Calculated from nearest month end (6/30/97).
VAN ECK WORLDWIDE INSURANCE TRUST PROSPECTUS 13
<PAGE>
- --------------------------------------------------------------------------------
Worldwide Real Estate Fund Expenses
- --------------------------------------------------------------------------------
This table shows certain expenses you will incur as a Fund investor, either
directly or indirectly. The Adviser may sometimes waive fees and/or reimburse
certain expenses of the Fund.
- --------------------------------------------------------------------------------
Worldwide Real Estate Fund
Shareholder Transaction Expenses
Annual Fund Operating Expenses (% of net assets)
Management/Administration Fees 1.00%
Other Expenses 4.32%
Total Fund Operating Expenses* 5.32%
- --------------------------------------------------------------------------------
* Expenses reduced 8.9% by reimbursement.
The table above shows the expenses you would pay on a hypothetical $10,000
investment. The example presumes an average annual return of 5% with redemption
at the end of each time period. This illustration is hypothetical. In a real
investment, your actual expenses may be higher or lower than those shown.
- --------------------------------------------------------------------------------
Expense Example
What a $10,000 investment would actually cost
- --------------------------------------------------------------------------------
1 year $ 531
3 years $ 1,588
5 years $ 2,639
10 years $ 5,236
- --------------------------------------------------------------------------------
14 VAN ECK WORLDWIDE INSURANCE TRUST PROSPECTUS
<PAGE>
INVESTMENT POLICIES AND RISKS
- --------------------------------------------------------------------------------
II. Additional Investment Strategies
- --------------------------------------------------------------------------------
OTHER INVESTMENTS, INVESTMENT POLICIES, INVESTMENT TECHNIQUES AND RISKS.
MARKET RISK
An investment in any of the Funds involves "market risk"--the risk that
securities prices may go up or down.
OTHER INVESTMENT TECHNIQUES AND RISK
ASSET-BACKED SECURITIES
Funds All
Definition Represent pools of consumer loans unrelated to mortgages.
Risk Principal and interest payments depend on payment of the
underlying loans, though issuers may support
creditworthiness via letters of credit or other instruments.
BORROWING
Funds All
Definition Borrowing to invest more is called "leverage." The Funds
may borrow up to 30% of their net assets to buy more
securities. The Funds must maintain assets equal to 300% of
its borrowings, and must sell securities to maintain that
margin, even if the sale hurts the Fund's investment
positions.
Risk Leverage exaggerates the effect of rises or falls in prices
of securities bought with borrowed money. Borrowing also
costs money, including fees and interest. The Funds expect
only to borrow only via negotiated loan agreements with
commercial banks or other institutional lenders.
VAN ECK WORLDWIDE INSURANCE TRUST PROSPECTUS 15
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COLLATERALIZED MORTGAGE OBLIGATIONS (CMOs)
Funds All
Definition Asset-backed securities backed by pools of mortgages. CMOs are
fixed-income securities, rated by agencies like other fixed-
income securities. The Funds invest in CMOs rated A or better by
S&P and Moody's. CMOs "pass through" payments made by individual
mortgage holders.
Risk Mortgage holders often refinance when interest rates fall;
reinvestment of prepayments at lower rates can reduce the yield
of the CMO. Issuers of CMOs may support interest and principal
payments with insurance or guarantees. The Funds may buy
uninsured or non-guaranteed CMOs equal in creditworthiness to
insured or guaranteed CMOs.
DEBT SECURITIES
Funds All
Definition Debt securities are usually thought of as bonds, but debt may be
issued in other forms of debentures or obligations. When an
issuer sells debt securities, it sells them for a certain price,
and for a certain term. Over the term of the security, the
issuer promises to pay the buyer a certain rate of interest,
then to repay the principal at maturity. Debt securities are
also bought and sold in the "secondary market" -- that is, they
are traded by people other than their original issuers.
Risk The market value of debt securities tends to go up when interest
rates fall, and go down when the rates rise. Debt securities come
in different qualities, as established by ratings agencies such
as S&P or Moody's. Any debt security may default (fail to pay
interest) or fail (fail to repay principal at maturity). Low-
quality issues are considered more likely to default or fail than
high-quality issues. Some debt securities are unrated. Their
likely performance has to be evaluated by a Fund Adviser.
16 VAN ECK WORLDWIDE INSURANCE TRUST PROSPECTUS
<PAGE>
INVESTMENT POLICIES AND RISKS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DEFENSIVE INVESTING
Funds All
Definition A deliberate, temporary shift in portfolio strategy which may be
undertaken when markets start behaving in volatile or unusual
ways. A Fund may, for temporary defensive purposes, invest a
substantial part of its assets in bonds of U.S. or foreign
governments, certificates of deposit, bankers' acceptances, high
grade commercial paper, and repurchase agreements. At such
times, a Fund may have all of its assets invested in a single
country or currency.
Risk Opportunity cost -- i.e., when a Fund has invested defensively
in low risk, low return securities, it may miss an opportunity
for profit in its normal investing areas.
DERIVATIVES
Funds All
Definition A derivative is a security that derives its present value from
the current value of another security. It can also derive its
value from a commodity, a currency, or a securities index. The
Funds use derivatives, either on their own, or in combination
with other derivatives, to offset other investments with the aim
of reducing risk--called "hedging." The Funds also invest in
derivatives for their investment value.
Kinds of derivatives include (but are not limited to): forward
contracts, futures contracts, options and swaps. The Funds will
not commit more than 5% of its assets to initial margin deposits
on futures contracts and premiums on options for futures
contracts (leverage). Hedging, as defined by the Commodity
Exchange Act, is excluded from this 5% limit.
Risk Derivatives bear special risks, by their very nature. First, the
Fund Advisers must correctly predict the price movements, during
the life of a derivative, of the underlying asset in order to
realize the desired results from the investment. Then price
swings of an underlying security tend to be magnified in the
price swing of its derivative. If a Fund invests in a derivative
with "leverage" (by borrowing), an unanticipated price move
might result in the Fund losing more than its original
investment.
For a complete discussion of the kinds of derivatives the Funds
use, and of their risks, please see the SAI.
VAN ECK WORLDWIDE INSURANCE TRUST PROSPECTUS 17
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
Fund Policies:
Basic Risk Management Rules
- ---------------------------
1. Illiquid securities rules:
Worldwide Bond Fund will not invest more than 10% of its assets in illiquid
securities, including repurchase agreements which mature in more than seven days
and in over-the-counter foreign currency options. Worldwide Emerging Markets
Fund and Worldwide Real Estate Fund will not invest more than 15% of their
assets in such securities. It is a non-fundamental policy (it may be changed by
the Board of Trustees) of the Worldwide Hard Assets Fund to invest in illiquid
securities to the extent permitted by the SEC. This limit is currently 15% of
assets.
================================================================================
DIRECT INVESTMENTS
Funds All except Worldwide Bond Fund
Definition Investments made directly with an enterprise via a shareholder or
similar agreements--not via publicly traded shares or interests.
Direct investments may involve high risk of substantial loss.
Such positions may be hard to sell because they are not listed on
an exchange, and prices of such positions may be unpredictable.
Risk A direct investment price as stated for valuation may not be the
price the Fund could actually get if it had to sell. Private
issuers do not have to follow all the rules of public issuers.
Tax rates on realized gains from selling private issue holdings
may be higher than taxes on gains from listed securities. The
Board of Trustees considers direct investments illiquid, and
will aggregate direct investments with other illiquid investments
under the illiquid investing limits of each Fund.
The Funds will not invest more than 10% of its assets in direct
investments; the Funds do not intend to invest more than 5% of
assets in direct investments.
EMERGING MARKETS SECURITIES
Funds All
Definition Securities of companies which are primarily in developing
countries. (See "Foreign Securities," below, for basic
information on foreign investing risks.)
Risk Investments in emerging markets securities are exposed to a
number of risks that may make these investments volatile in
price, or difficult to trade. Political risks may include
unstable governments, nationalization, restrictions on foreign
ownership, laws that prevent investors from getting their money
out of a country and legal systems that do not protect property
rights as well as the laws of the U.S. Market risks may include
economies that only concentrate in a few industries, securities
issues that are held by a few investors, limited trading capacity
in local exchanges, and the possibility that markets or issues
may be manipulated by foreign nationals who have inside
information.
18 VAN ECK WORLDWIDE INSURANCE TRUST PROSPECTUS
<PAGE>
INVESTMENT POLICIES AND RISKS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSACTIONS
Funds All
Definition The money issued by foreign governments; the contracts involved
in buying and selling foreign money in order to buy and sell
foreign securities denominated in that money.
Risk Foreign currencies shift in value against U.S. currency. These
relative price swings can make the return on an investment go up
or down, entirely apart from the quality or performance of the
investment itself. The Funds enter into various hedging contracts
to buy and sell foreign currency, including futures contracts
(see "Derivatives," above). Except for the Worldwide Bond Fund,
the Funds may buy currency as an investment. Successful hedging
or investing in currency requires successful predicting of
currency prices, which is not always possible.
FOREIGN SECURITIES
Funds All
Definition Securities issued by foreign companies, traded in foreign
currencies, or issued by companies with most of their business
interests in foreign countries.
Risk Foreign investing involves greater risks than investing in U.S.
securities. These risks include: exchange rate fluctuations and
exchange controls; less publicly available information; more
volatile or less liquid securities markets; and the possibility
of expropriation, confiscatory taxation, or political, economic
or social instability. Foreign accounting can be different--and
less revealing--than American accounting practice. Foreign
regulation of stock exchanges may be inadequate or irregular.
Some of these risks may be reduced when Funds invest indirectly
in foreign issues via American Depositary Receipts (ADRs),
European Depositary Receipts (EDRs), American Depositary Shares
(ADSs), Global Depositary Shares (GDSs), and securities of
foreign investment funds or trusts, including passive foreign
investment companies. These vehicles are traded on larger,
recognized exchanges and in stronger, more recognized currencies.
================================================================================
2. Concentration and diversification rules:
The Funds, except Worldwide Real Estate Fund, are not allowed to buy more than
10% of any class of securities of any single issuer. That includes outstanding
voting securities. The Worldwide Emerging Markets Fund may buy more than 10% of
a single issuer's non-voting securities. Worldwide Emerging Markets Fund will
not invest more than 25% of its assets in any single industry.
3. Other investment companies:
The Funds will not invest more than 10% of their assets in securities of other
investment companies.
================================================================================
VAN ECK WORLDWIDE INSURANCE TRUST PROSPECTUS 19
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Russia: The Funds invest only in those Russian companies whose
registrars have contracted to allow the Funds' Russian sub-
custodian to inspect share registers and to obtain extracts of
share registers through regular audits. These procedures may
reduce the risk of loss, but there can be no assurance that
they will be effective.
INDEXED COMMERCIAL PAPER
Funds All
Definition These Funds, for hedging purposes only, invest in commercial
paper with the principal amount indexed to the difference, up
or down, in value between two foreign currencies. The Funds
segregate asset accounts with an equivalent amount of cash,
U.S. government securities, or other highly liquid securities
equal in value to this commercial paper.
Risk Principal may be lost, but the potential for gains in principal
and interest may help the Funds cushion against the potential
decline of the U.S. dollar value of foreign-denominated
investments. At the same time, this commercial paper provides
an attractive money market rate of return.
LOANS OF PORTFOLIO SECURITIES
Funds All
Definition The Funds may lend their securities, up to one-third of the
value of their portfolios, to broker/dealers. Broker/dealers
must collateralize (secure) these borrowings in full with cash,
U.S. Government securities, or high-quality letters of credit.
Risk If a broker/dealer breaches its agreement either to pay for the
loan, to pay for the securities, or to return the securities,
the Fund may lose money.
20 VAN ECK WORLDWIDE INSURANCE TRUST PROSPECTUS
<PAGE>
INVESTMENT POLICIES AND RISKS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LOW RATED OR UNRATED DEBT SECURITIES
Funds All
Definition Debt securities, foreign and domestic, rated "below investment
grade" by ratings services.
Risk These securities are also called "junk bonds." In the market,
they can behave somewhat like stocks, with prices that can
swing widely in response to the health of their issuers and to
changes in interest rates. By definition, they involve more
risk of default than do higher-rated issues.
PARTLY-PAID SECURITIES
Funds All
Definition Securities paid for on an installment basis. A partly-paid
security trades net of outstanding installment payments. The
buyer "takes over payments," as it were.
Risk The buyer's rights are typically restricted until the security
is fully paid. If the value of a partly-paid security declines
before a Fund finishes paying for it, the Fund will still owe
the payments, but may find it hard to sell.
================================================================================
Year 2000
- -----------------
The Funds could be adversely affected if the Adviser's computer system or the
systems of other service providers do not properly process and calculate
date-related information from and after January 1, 2000. This is commonly known
as the "Year 2000 Problem." The Adviser is taking steps that it believes are
reasonably designed to address the problem in its own computers and to obtain
assurances that comparable steps are being taken by its service providers.
However, there can be no assurance that these steps will avoid any adverse
impact on the Funds' performance.
================================================================================
VAN ECK WORLDWIDE INSURANCE TRUST PROSPECTUS 21
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PRECIOUS METALS
Funds Worldwide Hard Assets Fund
Definition Gold and silver in the form of bullion and coins, which have no
numismatic (collectible) value. There is a well-established
world market for precious metals.
Risk Precious metals prices can swing sharply in response to
cyclical economic conditions, political events or the monetary
policies of various countries. Under current U.S. tax law, the
Fund may not receive more than 10% of its yearly income from
selling precious metals or any other physical commodity. That
law may require a Fund, for example, to hold precious metals
when it would rather sell, or to sell other securities when it
would rather hold them. Both may cause investment losses or
lost opportunities for profit. The Fund also incurs storage
costs for gold bullion and coins.
REAL ESTATE SECURITIES
Funds Worldwide Hard Assets Fund, Worldwide Real Estate Fund
Definition The Funds may not invest in real estate directly, but the
Worldwide Hard Assets Fund may invest up to 50% of assets and
the Worldwide Real Estate Fund, 100% of assets in real estate
investment trusts (REITs) and other real estate industry
companies or companies with substantial real estate
investments.
Risk All general risks of real estate investing apply to REITs (for
example, illiquidity and volatile prices), plus special risks
of REITs in particular. See "Real Estate Securities" in the
SAI.
22 VAN ECK WORLDWIDE INSURANCE TRUST PROSPECTUS
<PAGE>
INVESTMENT POLICIES AND RISKS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS
Funds All
Definition In a repurchase agreement, a Fund acquires a security for a
short time while agreeing to sell it back at a designated price
and time. The agreement creates a fixed rate of return not
subject to market fluctuations. The Funds enter into these
agreements generally with member banks of the Federal Reserve
System or certain non-bank dealers; these counterparties
collateralize the transaction.
Risk There is a risk of a counterparty defaulting on a "repo," but
it is generally small.
SHORT SALES
Funds All except Worldwide Bond Assets Fund
Definition In a short sale, the Fund borrows an equity security from a
broker, then sells it. If the value of the security goes down,
the Fund can buy it back and return it to the broker, making a
profit.
Risk If the value of the security goes up, the Fund will have to buy
it back at a loss to make good the borrowing. The Fund is
required to "cover" its short sales with collateral by
depositing liquid high-quality securities in an account. (See
the SAI for a complete definition of this account's liability.)
This account cannot exceed 50% of the Fund's net assets.
WHEN-ISSUED DEBT SECURITIES
Funds All
Definition Debt securities issued at a fixed price and interest rate, but
delivered and paid for some time later.
Risk Principal and interest of a when-issued security may vary
during the waiting period so that its value, when the Fund
takes possession of it, may be different than when the Fund
committed to buy it. The Funds maintain reserves of cash or
high quality securities to offset purchases of when-issued
securities.
VAN ECK WORLDWIDE INSURANCE TRUST PROSPECTUS 23
<PAGE>
- --------------------------------------------------------------------------------
III. How The Funds Are Managed
- --------------------------------------------------------------------------------
FUND MANAGEMENT, INCLUDING A DESCRIPTION OF THE ADVISER, THE PORTFOLIO MANAGERS,
THE CUSTODIAN, AND THE TRANSFER AGENT. HOW THE FUNDS SELL SHARES TO INSURANCE
COMPANY SEPARATE ACCOUNTS. FUND EXPENSES AND TAX TREATMENT OF THE FUNDS.
1. MANAGEMENT OF THE FUNDS
DISTRIBUTOR
Van Eck Securities Corporation,99 Park Avenue, New York, NY 10016 (the
"Distributor"), a wholly-owned subsidiary of Van Eck Associates Corporation, has
entered into a Distribution Agreement with the Trust. The Distributor receives
no compensation for share sales of the Funds.
INVESTMENT ADVISER
Van Eck Associates Corporation,99 Park Avenue, New York, NY 10016 (the
"Adviser") serves as investment adviser to each of the Funds. Van Eck has been
an investment adviser since 1955 and also acts as adviser or sub-adviser to
other mutual funds registered with the SEC as well as managing and advising
other accounts and pension plans.
John C. van Eck, Chairman and President of the Trust, and members of his
immediate family, own 100% of the voting stock of the Adviser. As of March 31,
1998, total aggregate assets under the management of the Adviser were
approximately $1.1 billion.
THE ADVISER, THE FUNDS, AND INSURANCE
COMPANY SEPARATE ACCOUNTS
The Funds sell shares to various insurance company variable annuity and variable
life insurance separate accounts as a funding vehicle for those accounts. The
Funds do not foresee any disadvantages to shareholders from their offering the
Funds to various companies. However, the Board of Trustees will monitor any
potential conflicts of interest. If conflicts arise, the Board may require an
insurance company to withdraw its investments in one Fund, and place them in
another. This might force a Fund to sell securities at a disadvantageous price.
The Board of Trustees may refuse to sell shares of a Fund to any separate
accounts. It may also suspend or terminate the offering of shares of a Fund if
required to do so by law or regulatory authority, or if such an action is in the
best interests of Fund shareholders.
FEES PAID TO THE ADVISER
Worldwide Bond Fund and Worldwide Hard Assets Fund each pay the Adviser a
monthly fee at the annual rate of 1% of the first $500 million of the average
daily net assets of the Fund, .90 of 1% of the next $250 million, and .70 of the
assets in excess of $750 million.
Worldwide Emerging Markets Fund and Worldwide Hard Assets Fund each pay the
Adviser a monthly fee at the annual rate of 1.00% of average daily net assets.
This includes the fee paid to the Adviser for accounting and administrative
services.
PORTFOLIO MANAGERS
Worldwide Bond Fund:
GREGORY KRENZER, CHARLES CAMERON Mr. Krenzer serves as a research analyst for
the Adviser specializing in global fixed income securities and is the co-
portfolio manager of the Worldwide Bond Fund series of Van Eck Worldwide
Insurance Trust. He joined Van Eck in 1993 and has 6 years of experience in the
investment business. Mr. Cameron serves as chief trader for the Adviser, and is
an officer of the Trust and of another of the Adviser's mutual fund. Mr. Cameron
joined Van Eck in 1995, and has 15 years of experience in trading and investing.
Worldwide Emerging Markets Fund:
GARY GREENBERG Mr. Greenberg is also an officer and/or portfolio manager of
other of the Adviser's mutual fund. Mr. Greenberg joined Van Eck in 1998. He has
12 years of experience in investing.
24 VAN ECK WORLDWIDE INSURANCE TRUST PROSPECTUS
<PAGE>
SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Worldwide Hard Assets Fund:
DEREK S. VAN ECK, KEVIN REID Mr. van Eck is Director of Global Investments and
President of the Adviser. Mr. van Eck serves as a Trustee and officer of the
Trust and a trustee, officer and/or portfolio manager of other mutual funds
advised or sub-advised by the Adviser. He has 13 years of experience in
investing. Mr. Reid serves as Director of Real Estate Research for the Adviser
and is an officer of the Trust, as well as an officer and/or portfolio manager
of other funds advised by the Adviser. Mr. Reid joined Van Eck in 1995. He has
12 years of experience in investing.
Worldwide Real Estate Fund:
KEVIN REID Mr. Reid serves as Director of Real Estate Research for the Adviser
and is an officer of the Trust, as well as an officer and/or portfolio manager
of other funds advised by the Adviser. Mr. Reid joined Van Eck in 1995. He has
12 years of experience in investing.
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 started operations
on September 7, 1989. On April 12, 1995, Van Eck Investment Trust changed its
name to Van Eck Worldwide Insurance Trust.
THE CUSTODIAN
Chase Manhattan Bank, Chase Metrotech Center,
Brooklyn, New York 11245
THE TRANSFER AGENT
The Trust, 99 Park Avenue New York,
New York 10016
acts as its own transfer agent.
INDEPENDENT ACCOUNTS
PricewaterhouseCoopers LLP,
1177 Avenue of the Americas,
New York, New York 10036
COUNSEL
Goodwin, Procter & Hoar LLP, One Exchange Place,
Boston, Massachusetts 02109
2. FUND EXPENSES
Each Fund bears all expenses of its own operations, other than those incurred by
the Adviser or its affiliate under its Advisory Agreement with the Trust. The
Adviser paid organizational expenses for the Funds at their inception; these
fees are being reimbursed to the Adviser by the Funds over sixty equal monthly
installments. The Adviser may, from time to time, waive the management fee
and/or agree to pay some or all expenses of the Funds. This has the effect of
increasing the yield and total return of the Funds.
3. TAXES
Each Fund qualifies, and intends to continue to qualify, as a "regulated
investment company" under the Internal Revenue Code (the Code). As such, the
Funds will not pay federal income tax to the extent that it distributes its
income and capital gains.
The Code requires funds used by insurance company variable annuity and life
insurance contracts to be adequately diversified, because annuities and life
insurance enjoy special tax privileges. The Funds intend to invest so as to
qualify for this proviso.
Tax matters for insurance contract holders are described in the Contract
prospectus.
4. SHAREHOLDER INQUIRIES
For further information about the Funds, please call or write your insurance
company, or call (800) 221-2220 (in New York, (212) 687-5200), or write to the
Funds at the address on the cover page.
VAN ECK WORLDWIDE INSURANCE TRUST PROSPECTUS 25
<PAGE>
IV. Financial Highlights
The financial highlights table will help you understand a Fund's financial
performance for the past five years, or for a shorter period if the Fund is
newer. Some parts of the table show financial results for a single Fund share.
The "total return" line on the table shows the rate an investor would have
earned or lost on an investment in the Fund, assuming reinvestment of all
dividends and distributions. This information has been audited by
PricewaterhouseCoopers LLP whose report, along with the Fund's financial
statements, is included in the annual report incorporated by reference
(available on request).
1. VAN ECK WORLDWIDE BOND FUND
Financial Highlights
<TABLE>
<CAPTION>
YEAR ENDED DEC. 31 EIGHT MONTHS YEAR ENDED APR 30
ENDED DEC. 31
1998 1997 1996 1996 1995 1994
--------------------- -------------- -----------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
beginning of period $10.99 $11.10 $10.88 $11.46 $10.05 $10.62
------- ------- ------- ------- ------- ------
- ----------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment Income 0.57 0.48 0.36 0.58 0.68* 0.63
Net Gains (Loss) on
Investments (both realized and unrealized) 0.82 (0.23) 0.17 (0.34) 0.77 (0.37)
- ----------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 1.39 0.25 0.53 0.24 1.45 0.26
- ----------------------------------------------------------------------------------------------------------------------------------
LESS DIVIDENDS AND DISTRIBUTIONS
Dividends from Net
Investment Income (0.10) (0.36) (0.31) (0.82) (0.04) (0.72)
Distributions from
Capital Gains - - - - - (0.11)
- ----------------------------------------------------------------------------------------------------------------------------------
Total Dividends and Distributions (0.10) (0.36) (0.31) (0.82) (0.04) (0.83)
- ----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value,
end of period $12.28 $10.99 $11.10 $10.88 $11.46 $10.05
======= ======= ======= ======= ======= ======
Total Return (a) 12.75% 2.38% 4.98% 2.07% 14.51% 2.49%
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Period (000) $119,283 $112,461 $118,676 $107,541 $113,466 $80,908
Ratios of Gross Expenses
to Average Net Assets (b) 1.15% 1.12% 1.17%(b) 1.10% 0.99% -
Ratio of Net Expenses
to Average Net Assets 1.15% 1.12% 1.16%(b) 1.08% 0.98% 0.93%
Ratio of Net Investment Income
to Average Net Assets 4.72% 4.31% 4.99%(b) 5.26% 6.24% 6.47%
Portfolio Turnover Rate 30.59% 135.36% 73.95% 208.05% 265.87% 37.59%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
a) Total return is calculated assuming an initial investment at the net
asset value at the beginning of the period, reinvestment of dividends and
distribution at net asset value during the period, and a redemption on
the last day of the period. Total return for a period of less than a
year is not annualized.
(b) Annualized
* Based on average shares outstanding.
26 VAN ECK WORLDWIDE INSURANCE TRUST PROSPECTUS
<PAGE>
The financial highlights table will help you understand a Fund's financial
performance for the past five years, or for a shorter period if the Fund is
newer. Some parts of the table show financial results for a single Fund share.
The "total return" line on the table shows the rate an investor would have
earned or lost on an investment in the Fund, assuming reinvestment of all
dividends and distributions. This information has been audited by
PricewaterhouseCoopers LLP whose report, along with the Fund's financial
statements, is included in the annual report incorporated by reference
(available on request).
2. VAN ECK WORLDWIDE EMERGING MARKETS FUND
Financial Highlights
<TABLE>
<CAPTION>
FOR THE PERIOD
YEAR ENDED DEC. 31 EIGHT MONTHS DEC. 21, 1995-
ENDED DEC. 31 APR. 30, 1996 (a)
1998 1997 1996 1996
-------------------------- ------------- -----------------
<S> <C> <C> <C> <C>
Net Asset Value,
beginning of period $11.00 $12.49 $10.95 $10.00
------- ------- ------- -------
- --------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment Income 0.09 0.14 0.01 (b) 0.07 (b)
Net Gains (Loss) on
Investments (both realized and unrealized) (3.80) (1.58) 1.59 0.88
- --------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations (3.71) (1.44) 1.60 0.95
- --------------------------------------------------------------------------------------------------------------------------
LESS DIVIDENDS AND DISTRIBUTIONS
Dividends from Net
Investment Income (0.09) (0.05) (0.06) -
Distributions from
Capital Gains (0.08) - - -
- --------------------------------------------------------------------------------------------------------------------------
Total Dividends and Distributions (0.17) (0.05) (0.06) -
- --------------------------------------------------------------------------------------------------------------------------
Net Asset Value,
end of period $7.12 $11.00 $12.49 $10.95
======= ======= ======= =======
Total Return (c) (34.15%) (11.61%) 14.66% 9.50%
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Period (000) $54,513 $92,433 $15,355 $597
Ratios of Gross Expenses
to Average Net Assets 1.61% 1.34% 2.64% (d) 2.06% (d)
Ratio of Net Expenses
to Average Net Assets 1.50% 0.80% 0.00% (d) 0.00% (d)
Ratio of Net Investment Income
to Average Net Assets 1.02% 0.91% 0.74% (d) 1.89% (d)
Portfolio Turnover Rate 117.16% 142.39% 29.53% 45.89%
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Commencement of operations.
(b) Based on average shares outstanding.
(c) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of dividends and
distributions at net asset value during the period and a redemption on the
last day of the period. Total returns for periods of less than one year is
not annualized.
(d) Annualized.
VAN ECK WORLDWIDE INSURANCE TRUST PROSPECTUS 27
<PAGE>
The financial highlights table will help you understand a Fund's financial
performance for the past five years, or for a shorter period if the Fund is
newer. Some parts of the table show financial results for a single Fund share.
The "total return" line on the table shows the rate an investor would have
earned or lost on an investment in the Fund, assuming reinvestment of all
dividends and distributions. This information has been audited by
PricewaterhouseCoopers LLP whose report, along with the Fund's financial
statements, is included in the annual report incorporated by reference
(available on request).
3. VAN ECK WORLDWIDE HARD ASSETS FUND
Financial Highlights
<TABLE>
<CAPTION>
YEAR ENDED DEC. 31 EIGHT MONTHS YEAR ENDED APR 30
ENDED DEC. 31
1998 1997 1996 1996 1995 1994
--------------------- ------------ -------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
beginning of period $15.72 $16.72 $16.92 $13.49 $13.11 $10.61
------- ------- ------- ------- ------- ------
- -------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment Income 0.21 0.09 0.02 0.12 0.08 0.07
Net Gains (Loss) on
Investments (both realized and unrealized) (4.43) (0.36) 0.09 3.44 0.37 2.47
- -------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations (4.22) (0.27) 0.11 3.56 0.45 2.54
- -------------------------------------------------------------------------------------------------------------------------------
LESS DIVIDENDS AND DISTRIBUTIONS
Dividends from Net
Investment Income (0.09) (0.31) (0.16) (0.13) (0.07) (0.04)
Distributions from
Capital Gains (2.21) (0.42) (0.15) - - -
- -------------------------------------------------------------------------------------------------------------------------------
Total Dividends and Distributions (2.30) (0.73) (0.31) (0.13) (0.07) (0.04)
- -------------------------------------------------------------------------------------------------------------------------------
Net Asset Value,
end of period $9.20 $15.72 $16.72 $16.92 $13.49 $13.11
======= ======= ======= ======= ======= ======
Total Return (a) (30.93%) (1.67%) 0.60% 26.66% 3.43% 23.96%
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Period (000) $85,813 $155.933 $167,417 $186,370 $127,320 $81,248
Ratios of Gross Expenses
to Average Net Assets (b) 1.20% 1.18% 1.24% * 1.08% - -
Ratio of Net Expenses
to Average Net Assets 1.16% 1.17% 1.23% * 1.08% (b) 0.96% 0.96%
Ratio of Net Investment Income
to Average Net Assets 1.64% 0.64% 0.10% * 0.81% 0.71% 0.64%
Portfolio Turnover Rate 153.25% 102.82% 46.14% 26.37% 23.30% 15.84%
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of dividends and
distributions at net asset value during the period and a redemption on the
last day of the period. Total returns for periods of less than one year is
not annualized.
(b) The ratio was not impacted by the directed brokerage agreement.
* Annualized.
28 VAN ECK WORLDWIDE INSURANCE TRUST PROSPECTUS
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights table will help you understand a Fund's financial
performance for the past five years, or for a shorter period if the Fund is
newer. Some parts of the table show financial results for a single Fund share.
The "total return" line on the table shows the rate an investor would have
earned or lost on an investment in the Fund, assuming reinvestment of all
dividends and distributions. This information has been audited by
PricewaterhouseCoopers LLP whose report, along with the Fund's financial
statements, is included in the annual report incorporated by reference
(available on request).
4. VAN ECK WORLDWIDE REAL ESTATE FUND
Financial Highlights
<TABLE>
<CAPTION>
YEAR ENDED DEC. 31 JUN. 23, 1997-
DEC. 31,, 1997 (a)
1998 1997
------------------ --------------
<S> <C> <C>
Net Asset Value,
beginning of period $11.96 $10.00
------- -------
- -----------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment Income 0.22 0.18
Net Gains (Loss) on
Investments (both realized and unrealized) (1.45) 1.78
- -----------------------------------------------------------------------------------------------
Total from Investment Operations (1.23) 1.96
- -----------------------------------------------------------------------------------------------
LESS DIVIDENDS AND DISTRIBUTIONS
Dividends from Net
Investment Income (0.19) -
Distributions from
Capital Gains (1.00) -
- -----------------------------------------------------------------------------------------------
Total Dividends and Distributions (1.19) -
- -----------------------------------------------------------------------------------------------
Net Asset Value,
end of period $9.54 $11.96
======= =======
Total Return (b) (11.35%) 19.60%
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Period (000) $1,906 $844
Ratios of Gross Expenses
to Average Net Assets 5.32% 4.92% (c)
Ratio of Net Expenses
to Average Net Assets 0.89% 0.00% (c)
Ratio of Net Investment Income
to Average Net Assets 3.33% 3.62% (c)
Portfolio Turnover Rate 107% 123%
- -----------------------------------------------------------------------------------------------
</TABLE>
(a) Commencement of operations.
(b) Total return is calculated by assuming an initial investment at net asset
value at the beginning of the period, reinvestment of dividends and
distributions at net asset value during the period, and a redemption on the
last day of the period. Total returns are not annualized.
(c) Annualized
VAN ECK WORLDWIDE INSURANCE TRUST PROSPECTUS 29
<PAGE>
VAN ECK WORLDWIDE INSURANCE TRUST
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 four separate series: Worldwide Bond
Fund, Worldwide Emerging Markets Fund, Worldwide Hard Assets Fund and Worldwide
Real Estate 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........................................................................... 2
Risk Factors................................................................................................. 7
Asset Backed Securities.................................................................................. 7
Borrowing................................................................................................ 7
Collateralized Mortgage Obligation ...................................................................... 8
Foreign Securities....................................................................................... 8
Emerging Markets Securities.............................................................................. 10
Foreign Currency Transactions............................................................................ 10
Futures and Options Transactions......................................................................... 12
Repurchase Agreements.................................................................................... 14
Mortgage-Backed Securities............................................................................... 14
Real Estate Securities................................................................................... 14
Commercial Paper......................................................................................... 15
Debt Securities.......................................................................................... 15
Derivatives.............................................................................................. 16
Short Sales.............................................................................................. 17
Direct Investments....................................................................................... 17
Loan on Portfolio Securities............................................................................. 18
Precious Metals.......................................................................................... 18
Investment Restrictions...................................................................................... 18
Investment Advisory Services................................................................................. 21
The Distributor.............................................................................................. 23
Portfolio Transactions and Brokerage......................................................................... 23
Trustees and Officers........................................................................................ 25
Principal Shareholders....................................................................................... 29
Purchase of Shares........................................................................................... 29
Valuation of Shares.......................................................................................... 30
Taxes........................................................................................................ 30
Redemptions in Kind.......................................................................................... 31
Performance.................................................................................................. 31
Description of the Trust..................................................................................... 33
Additional Information....................................................................................... 34
Financial Statements......................................................................................... 34
Appendix..................................................................................................... 35
</TABLE>
This Statement of Additional Information is not a prospectus and should be read
in conjunction with the Trust's current Prospectus, dated May 1, 1999 (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
May 1, 1999
<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 four series of the Trust: Worldwide Bond Fund, Worldwide Emerging
Markets Fund, Worldwide Hard Assets Fund and Worldwide Real Estate Fund (the
"Funds"). Worldwide Emerging Markets Fund and Worldwide Hard Assets Fund are
classified as diversified funds and Worldwide Bond Fund and Worldwide Real
Estate Fund are classified as non-diversified funds under the Investment Company
Act of 1940, as amended (the "1940 Act").
INVESTMENT OBJECTIVES AND POLICIES
WORLDWIDE BOND FUND
Worldwide Bond Fund seeks high total return through a flexible policy of
investing globally, primarily in debt securities.
During normal market conditions, the Fund expects to invest in debt securities,
such as obligations issued or guaranteed by a government or any of its political
subdivisions, agencies or instrumentalities, or by a supranational organization
chartered to promote economic development such as the World Bank or European
Economic Community, bonds, debentures, notes, commercial paper, time deposits,
certificates of deposit and repurchase agreements, as well as debt obligations
which may have a call on a common stock or commodity by means of a conversion
privilege or attached warrants. The Fund may invest in debt instruments of the
U.S. Government and its agencies having varied maturities, consisting of
obligations issued or guaranteed as to both principal and interest by the U.S.
Government or backed by the "full faith and credit" of the United States. In
addition to direct obligations of the U.S. Treasury such as Treasury bonds,
notes and bills, these include securities issued or guaranteed by different
agencies such as the Federal Housing Administration, the Government National
Mortgage Association and the Small Business Association.
The average maturity of the debt securities in the Fund's portfolio will be
based on the Adviser's judgment as to future interest rate changes. The Adviser
expects the average maturity to be between three and ten years. There is no
limit on the amount the Fund may invest in any one country or in securities
denominated in the currency of any one country. Normally the Fund will invest
in three countries besides the United States.
Total return is comprised of current income and capital appreciation. The Fund
attempts to achieve its objective by taking advantage of investment
opportunities in the United States as well as in other countries throughout the
world where opportunities may be more rewarding and may emphasize either
component of total return. Normally, the Fund will have at least 65% of its
total assets invested in bonds of varying maturities.
The Fund may invest in any type of security including, but not limited to,
common stocks and equivalents (such as convertible debt securities and
warrants), preferred stocks and bonds and debt obligations of domestic and
foreign companies, governments (including their political subdivisions) and
international organizations. The Fund may buy and sell financial futures
contracts and options on financial futures contracts, which may include bond and
stock index futures contracts and foreign currency futures contracts. The Fund
may write, purchase or sell put or call options on securities and foreign
currencies.
2
<PAGE>
In addition, the Fund may lend its portfolio securities and borrow money for
investment purposes (i.e. leverage its portfolio).
The Fund may invest in "when-issued" securities and collateralized mortgage
obligations. The Appendix to this Statement of Additional Information contains
an explanation of the rating categories of Moody's Investors Service, Inc.
("Moody's") and Standard & Poor's Corporation ("S&P") relating to the fixed-
income securities and preferred stocks in which the Fund may invest, including a
description of the risks associated with each category.
In addition, the Fund may invest solely in the securities of one country such as
the United States when economic conditions warrants, such as an extreme
undervaluation of the currency and exceptionally high returns of that country's
currency relative to other currencies. 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.
WORLDWIDE EMERGING MARKETS FUND
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.
The Fund may invest indirectly in emerging markets by investing in other
investment companies due to restrictions on direct investment by foreign
entities in certain emerging market countries. Such investments may involve the
payment of premiums above the net asset value of the companies' portfolio
securities; are subject to limitations under the Act and the Internal Revenue
code; are constrained by market availability; and would have the Fund bearing
its ratable share of that investment company's expenses, including its advisory
and administration fees. The Fund's investment adviser has agreed to waive its
management fee with respect to the portion of the Fund's assets invested in
shares of other open-end investment companies. The Fund would continue to pay
its own management fees and other expenses with respect to any investments in
shares of closed-end investment companies.
3
<PAGE>
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 floating rate bonds, notes, debentures, commercial paper, loans, convertible
securities and other debt securities issued or guaranteed by governments,
agencies or instrumentalities, central banks or private issuers.
The Fund may invest in derivatives. Derivatives in which the Fund may invest
include futures contracts, forward contracts, options, swaps, structured notes
and other similar securities as may become available in the market. These
instruments offer certain opportunities and additional risks that are described
below.
The Fund may, for temporary defensive purposes, invest more than 35% of its
total assets in securities which are not emerging market securities, such as
high grade, liquid debt securities of foreign and United States companies,
foreign governments and the U.S. Government, and their respective agencies,
instrumentalities, political subdivisions and authorities, as well as in money
market instruments denominated in U.S. dollars or a foreign currency. These
money market instruments include, but are not limited to, negotiable or short-
term deposits with domestic or foreign banks with total surplus and undivided
profits of at least $50 million; high quality commercial paper; and repurchase
agreements maturing within seven days with domestic or foreign dealers, banks
and other financial institutions deemed to be creditworthy under guidelines
approved by the Board of Trustees of the Trust. The commercial paper in which
the Fund may invest will, at the time of purchase, be rated P-1 or better by
Moody's; A-1 or better by S&P; Fitch-1 by Fitch; Duff-1 by Duff & Phelps
("D&P"), or if unrated, will be of comparable high quality as determined by the
Adviser.
WORLDWIDE HARD ASSETS FUND
(Formerly, Gold and Natural Resources Fund)
The Fund will, under normal market conditions, invest at least 65% of its total
assets in "Hard Asset Securities." Hard Assets Securities include equity
securities of "Hard Asset Companies" and securities, including structured notes,
whose value is linked to the price of a commodity or a commodity index. The
term "Hard Asset Companies" includes companies that are directly or indirectly
(whether through supplier relationships, servicing agreements or otherwise)
engaged to a significant extent in the exploration, development, production or
distribution of one or more of the following: (i) precious metals, (ii) ferrous
and non-ferrous metals, (iii) gas, petroleum, petrochemicals or other
hydrocarbons, (iv) forest products, (v) real estate and (vi) other basic non-
agricultural commodities which, historically, have been produced and marketed
profitably during periods of significant inflation. Under normal market
conditions, the Fund will invest at least 5% of its assets in each of the first
five sectors listed above. The Fund has a fundamental policy of concentrating
in such industries and up to 50% of the Fund's assets may be invested in any one
of the above sectors. Therefore, it may be subject to greater risks and market
fluctuations than other investment companies with more diversified portfolios.
Some of these risks include: volatility of energy and basic materials prices;
possible instability of the supply of various Hard Assets; the risks generally
associated with extraction of natural resources; actions and changes in
government which could affect the production and marketing of Hard Assets; and
greater price
4
<PAGE>
fluctuations that may be experienced by Hard Asset Securities than the
underlying Hard Asset. Precious metal and natural resource securities are at
times volatile and there may be sharp fluctuations in prices even during periods
of rising prices. Since the market action of Hard Asset Securities may move
against or independently of the market trend of industrial shares, the addition
of such securities to an overall portfolio may increase the return and reduce
the price fluctuations of such a portfolio. There can be no assurance that an
increased rate of return or a reduction in price fluctuations of a portfolio
will be achieved. Hard Asset Securities are affected by many factors, including
movement in the stock market. Inflation may cause a decline in the market,
include Hard Asset Securities. An investment in the Fund's shares should be
considered part of an overall investment program rather than a complete
investment program.
The Fund may invest in equity securities. Equity securities include common and
preferred stocks; equity and equity index swap agreements; direct equity
interests in trusts, partnerships, joint ventures and other unincorporated
entities or enterprises; special classes of shares available only to foreign
persons in such markets that restrict the ownership of certain classes of equity
to nationals or residents of the country; convertible preferred stocks and
convertible debt instruments. The Fund may also invest in fixed-income
securities which include obligations issued or guaranteed by a government or any
political subdivisions, agencies, instrumentalities, or by a supranational
organization such as the World Bank or European Economic Community (or other
organizations which are chartered to promote economic development and are
supported by various governments and government entities), adjustable-rate
preferred stock, interest rate swaps, corporate bonds, debentures, notes,
commercial paper, certificates of deposit, time deposits, repurchase agreements,
and debt obligations which may have a call on a common stock or commodity by
means of a conversion privilege or attached warrants. The Fund may invest in
debt instruments of the U.S. Government and its agencies having varied
maturities.
High grade debt securities are those that are rated A or better by S&P or
Moody's, Fitch-1 by Fitch or Duff-1 by Duff and Phelps ("D&P") or if unrated, of
comparable quality in the judgment of the Adviser, subject to the supervision of
the Board of Trustees. The assets of the Fund invested in short-term
instruments will consist primarily of securities rated in the highest category
(for example, commercial paper rated "Prime-1" or "A-1" by Moody's and S&P,
respectively) or if unrated, in instruments that are determed to be of
comparable quality in the judgment of the Adviser, subject to the supervision of
the Board of Trustees, or are insured by foreign or U.S. governments, their
agencies or instrumentalities as to payment of principal and interest.
The Fund may purchase securities, including structured notes, whose value is
linked to the price of a commodity or a commodity index. When the Fund
purchases a structured note (a non-publicly traded indexed security entered into
directly between two parties) it will make a payment of principal to the
counterparty. The Fund will purchase structured notes only from counterparties
rated A or better by S&P, Moody's or another nationally recognized statistical
rating organization. The Adviser will monitor the liquidity of structured notes
under the supervision of the Board of Trustees and structured notes determined
to be illiquid will be aggregated with other illiquid securities and limited to
15% of the net assets of the Fund. Indexed securities may be more volatile than
the underlying instrument itself, and present many of the same risks as
investing in futures and options. Indexed securities are also subject to credit
risks associated with the issuer of the security with respect to both principal
and interest. The Fund may purchase and sell financial futures and commodity
futures contracts and may also write, purchase or sell put or call options on
securities, foreign currencies, commodities and commodity indices. The Fund may
invest in asset-backed securities such as collateralized mortgage obligations
and other mortgage and non-mortgage asset-backed securities. The Fund may also
lend its portfolio securities and borrow money for investment purposes (i.e.
leverage its portfolio).
5
<PAGE>
The Fund may also invest in "when-issued" securities and "partly paid"
securities. The Appendix to this Statement of Additional Information contains
an explanation of the rating categories of Moody's and S&P relating to the
fixed-income securities and preferred stocks in which the Funds may invest,
including a description of the risks associated with each category. Although
the Fund will not invest in real estate directly, it may invest up to 50% of
its assets in equity securities of real estate investment trusts ("REITs") and
other real estate industry companies or companies with substantial real estate
investments. REITs are pooled investment vehicles whose assets generally
consist primarily of interest in real estate and real estate loans. REITs and
other real estate investments of the Fund are subject to certain risks. The
Fund may therefore be subject to certain risks associated with direct ownership
of real estate and with the real estate industry in general.
The Fund may invest up to 10% of its assets in asset-backed securities such as
collaterilized mortgage obligation sand other mortgage and non-mortgage asset-
backed securities. Asset-backed securities backed by Hard Assets and whose
value is expected to be linked to underlying Hard Assets are excluded from the
10% limitation.
WORLDWIDE REAL ESTATE FUND
Worldwide Real Estate Fund seeks to maximize total return by investing primarily
in equity securities of domestic and foreign companies which are principally
engaged in the real estate industry or which own significant real estate assets.
The Fund will, under normal conditions, invest at least 65% (and at times nearly
all) of its total assets in equity securities of domestic and foreign companies
which are principally engaged in the real estate industry or which own
significant real estate assets ("Real Estate Companies"). Equity securities
include common stocks, rights or warrants to purchase common stocks, securities
convertible into common stocks, preferred shares and real estate investment
trusts ("REITs"), American Depositary Receipts (ADRs), American Depositary
Shares (ADSs), European Depositary Receipts (EDRs), Global Depositary Receipts
(GDRs), equity swaps, indexed securities and similar instruments whose values
are tied to one or more equity securities are considered to be equity
securities. These securities may be listed on securities exchanges or traded
over-the-counter. A Real Estate Company is one that has at least 50% of its
assets in, or derives at least 50% of its revenues or net profits from, the
ownership, construction, financing, management or sale of residential,
commercial, industrial or hospitality real estate. Real Estate Companies may
include, among others: equity REITs; mortgage REITs; hybrid REITs; hotel
companies; real estate brokers or developers; and companies which own
significant real estate assets.
A REITs assets generally consist primarily of interest in real estate and real
estate loans. REITs are often classified as equity, mortgage or hybrids. An
equity REIT owns interests in property and realizes income from rents and gain
or loss from the sale of real estate interest. A mortgage REIT invests in real
estate mortgage loans and realizes income from interests payments on the loans.
A hybrid REIT invest in both equity and debt. An equity REIT may be an
operating or financing company. An operating company provides operational and
management expertise to and exercises control over, many if not most operational
aspects of the property.
The Fund may invest up to 35% of its assets in debt securities of Real Estate
Companies and in equity and debt securities of non-Real Estate Companies, which
may include issuers whose products and services are related to the real estate
industry or which own real estate assets.
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,
6
<PAGE>
instrumentalities, political subdivisions and authorities, as well as in money
market instruments denominated in U.S. dollars or a foreign currency. These
money market instruments include, but are not limited to, negotiable or short-
term deposits with domestic or foreign banks with total surplus and undivided
profits of at least $50 million; high quality commercial paper; and repurchase
agreements maturing within seven days with domestic or foreign dealers, banks
and other financial institutions deemed to be creditworthy under guidelines
approved by the Board of Trustees of the Trust. The commercial paper in which
the Fund may invest will, at the time of purchase, be rated P-1 or better by
Moody's; ; A-1 or better by S&P; Fitch-1 by Fitch; Duff-1 by D&P, or if unrated,
will be of comparable high qualify as determined by the Adviser.
The Fund may invest more then 25% of its total assets in any one sector of the
real estate industry or any real estate related industry. Because the Fund
concentrates in a single industry, an investment in the Fund can be expected to
more volatile than an investment in funds that invest in many industries. Risk
associates with investment in securities of companies in the real estate
industry include: declines in the value of the real estate, risks related to
general and local economic conditions, overbuilding and increased competition,
increases in property taxes and operating expenses, changes in zoning and other
laws, casualty or condemnation losses, variations or limitations in rental
income, changes in neighborhood values, the appeal of properties to tenants,
governmental actions, the ability of borrowers and tenants to make loan payments
to rents, and increase in interest rates. In addition, equity REITs may be
affected by changes in the value of the underlying property owned by the REITs,
while mortgage REITs may be affected by the quality of credit extended. Equity
and mortgage REITs are dependent upon management skills, may not be diversified
and are subject to the risks of financing projects. They are also subject to
heavy cash flow dependency, defaults by borrowers self liquidation and the
possibility of failing to qualify for tax-free pass-through of income under the
Internal Revenue Code of 1986, as amended (the "Code") and failing to maintain
exemption from the Act.
The Fund may also invest in derivatives. Derivatives in which the Fund may
invest include futures contracts, forward contracts, options, swaps, indexed
securities, currency exchange contracts and other similar securities as may be
available in the market. The Fund may also invest up to 10% of its total assets
in direct investments. For more information, see "Risk Factors Direct
Investments."
RISK FACTORS
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 securities. Interest and
principal payments ultimately depend on payment of the underlying loans,
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.
BORROWING
The Funds may borrow up to 30% of the value of its net assets to increase their
holding of portfolio securities. Under the Act, each Fund is required to
maintain continuous asset coverage of 300% with respect to these borrowings and
to sell (within three days) sufficient portfolio holdings to restore this asset
coverage if it should decline to less than 300% 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 a Fund's net asset value, and money borrowed will be subject to
interest and other costs which may or may not exceed the investment return
received from the
7
<PAGE>
securities purchased with borrowed funds. It is anticipated that any borrowings
would be pursuant to a negotiated loan agreement with a commercial bank or other
institutional lender.
COLLATERILIZED MORTGAGE OBLIGATIONS
The Funds may invest in collaterilized mortgage obligations ("CMOs"). CMOs are
fixed-income securities which are collaterilized 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.
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. Timely payment of interest and principal (but not the market value) of
these pools is supported by various forms of insurance or guarantees. The Funds
may buy CMOs without insurance or guarantees if, in the opinion of the 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. In
the event that any CMOs are determined to be investment companies, the Funds
will be subject to certain limitations under the Act.
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 Funds may hold
securities and funds in foreign currencies, the Funds may be affected favorably
or unfavorably by changes in currency rates and in exchange control regulations,
if any, and may incur costs in connection with conversions between various
currencies. Most foreign stock markets, while growing in volume of trading
activity, have less volume than the New York Stock Exchange ("NYSE"), 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 Funds endeavor to achieve the most
favorable net results on their portfolio transactions. There is generally less
government supervision and regulation of securities exchanges, brokers and
listed companies in foreign countries than in the United States. In addition,
with respect to certain foreign countries, there is the possibility of exchange
control restrictions, expropriation or confiscatory taxation, political,
economic or social instability, which could affect investments in those
countries. Foreign securities such as those purchased by the Funds may be
subject to foreign government taxes, higher custodian fees, higher brokerage
commissions and dividend collection fees which could reduce the yield on such
securities, although a shareholder of a Fund may, subject to certain
limitations, be entitled to claim a credit or deduction for United States
federal income tax purposes for his or her proportionate share of such foreign
taxes paid by the Fund.
The Fund may invest in South Africa issuers. Political and social conditions in
South Africa and its neighboring countries, as well as changes in United States
or South Africa laws or regulations, may pose certain risks to the Funds'
investments, and, under certain conditions, on the liquidity of the Funds'
portfolios and their ability to meet shareholder redemption requests. Worldwide
Emerging Markets Fund may invest in Russian issuers. Settlement, clearing and
registration of securities in Russia is in an underdeveloped state. Ownership
of shares (except those held through depositories that meet the requirements of
the Act) is defined according to entries in the issuer's share register and
normally evidenced by extracts from that register, which have no legal
enforceability. Furthermore, share registration is carried out either by the
issuer or registrars located throughout Russia, which are not
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necessarily subject to effective government supervision. To reasonably ensure
that its ownership interest continues to be appropriately recorded, the Fund
will invest only in those Russian companies whose registrars have entered into a
contract with the Fund's Russian sub-custodian, which gives the sub-custodian
the right, among others, to inspect the share register and to obtain extracts of
share registers through regular audits. While these procedures reduce the risk
of loss, there can be no assurance that they will be effective. This limitation
may prevent the Fund from investing in the securities of certain Russian issuers
otherwise deemed suitable by the Fund's investment adviser.
In addition to investing directly in the securities of United States and foreign
issuers, the Funds 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).
Investments may be made from time to time by Worldwide Emerging Markets Fund,
Worldwide Hard Assets Fund and Worldwide Real Estate Fund in companies in
developing countries as well as in developed countries. Worldwide Emerging
Markets Fund and Worldwide Hard Assets Fund may have a substantial portion of
their assets in developing countries. Although there is no universally accepted
definition, a developing country is generally considered by the Adviser 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 developing countries do not have comprehensive
systems of law. 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 judgment by a court of another jurisdiction. Certain
countries in the Asia region, including Cambodia, China, Laos, Indonesia,
Malaysia, the Philippines, Thailand and Vietnam are either comparatively
underdeveloped or are in the process of becoming developed. Investments
typically involve greater potential for gain or loss than investments in
securities of issuers in developed countries.
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 regarding 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.
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Political and economic structures in many of such countries may be undergoing
significant evolution and rapid development, and such countries may lack the
social, political and economic stability characteristic of the United States.
Certain of such countries have in the past failed to recognize private property
rights and have at times nationalized or expropriated the assets of private
companies. As a result, the risks described above, including the risks of
nationalization or expropriation of assets, may be heightened. In addition,
unanticipated political or social developments may affect the value of the
Funds' investments in those countries and the availability to the Funds of
additional investments in those countries.
Economies 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 judgment 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.
EMERGING MARKETS SECURITIES
Investments of the Funds may be made from time to time in companies in
developing countries as well as in developed countries. Shareholders should be
aware that investing in the equity and fixed income markets of developing
countries involves exposure to potentially unstable governments, the risk of
nationalization of businesses, restrictions on foreign ownership, prohibitions
on repatriation of assets and a system if laws that may offer less protection of
property rights. Emerging market economies may be based on only a few
industries, may be highly vulnerable to changes in local or global trade
conditions, and may suffer from extreme and volatile debt burdens or inflation
rates.
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
Funds, with regard to overall diversification strategies. Although the Funds
value their assets daily in terms of U.S. dollars, they do not intend physically
to convert their holdings of foreign currencies into U.S. dollars on a daily
basis. The Funds will do so from time to time, and investors should be aware of
the costs of currency conversion. Although foreign exchange dealers do not
charge a fee for conversion, they do realize a profit based on the difference
(the "spread") between the prices at which they are buying and selling various
currencies. Thus, a dealer may offer to sell a foreign currency to the Funds at
one rate, while offering a lesser rate of exchange should the Funds desire to
resell that currency to the dealer. The Funds will use forward contracts, along
with futures contracts and put and call options, to "lock in" the U.S. dollar
price of a security bought or sold and as part of their overall hedging
strategy. The Funds will conduct their foreign currency exchange transactions,
either on a spot (i.e., cash) basis at the spot rate prevailing in the foreign
currency exchange market, or through purchasing put and call options on, or
entering into futures
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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 any Fund to deliver under forward contracts an
amount of foreign currency in excess of the value of the Fund's portfolio
securities or other assets or obligations denominated in that currency. The
Funds' Custodian will place the securities being hedged, cash or U.S. Government
securities or debt or equity securities into a segregated account of the Fund in
an amount equal to the value of the Fund's total assets committed to the
consummation of forward foreign currency contracts to ensure that the Fund is
not leveraged beyond applicable limits. If the value of the securities placed
in the segregated account declines, additional cash or securities will be placed
in the account on a daily basis so that the value of the account will equal the
amount of the Funds' commitments with respect to such contracts. At the
maturity of a forward contract, the Funds may either sell the portfolio security
and make delivery of the foreign currency, or they may retain the security and
terminate their contractual obligation to deliver the foreign currency prior to
maturity by purchasing an "offsetting" contract with the same currency trader
obligating it to purchase, on the same maturity date, the same amount of the
foreign currency. There can be no assurance, however, that the Funds will be
able to effect such a closing purchase transaction.
It is impossible to forecast the market value of a particular portfolio security
at the expiration of the contract. Accordingly, it may be necessary for the
Funds 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 Funds are obligated to deliver and if a
decision is made to sell the security and make delivery of the foreign currency.
Changes in currency exchange rates may affect the Funds' net asset value and
performance. There can be no assurance that the Funds' investment adviser will
be able to anticipate currency fluctuations in exchange rates accurately. The
Funds may invest in a variety of derivatives and enter into hedging transactions
to attempt to moderate the effect of currency fluctuations. The Funds may
purchase and sell put and call options on, or enter into futures contracts or
forward contracts to purchase or sell, foreign currencies. This may reduce a
Fund's losses on a security when a foreign currency's value changes. Hedging
against a change in the value of a foreign currency does not eliminate
fluctuations in the prices of portfolio securities or prevent losses if the
prices of such securities decline. Furthermore, such hedging transactions
reduce or preclude the opportunity for gain if the value of the hedged currency
should change relative to the other currency. Last, when the Funds use options
and futures in anticipation of the purchase of a portfolio security to hedge
against adverse movements in the security's underlying currency, but the
purchase of such security is subsequently deemed undesirable, the Fund may incur
a gain or loss on the option or futures contract.
The Fund will enter into forward contracts to duplicate a cash market
transaction. Worldwide Bond Fund will not purchase or sell foreign currency as
an investment. Worldwide Emerging Markets Fund, Worldwide Hard Asset Fund and
Worldwide Real Estate Fund may enter into currency swaps. See also "Foreign
Currency Transactions" and "Futures and Options Transactions".
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In those situations where foreign currency options of futures contracts, or
options on futures contracts may not be readily purchased (or where they may be
deemed illiquid) in the primary currency in which the hedge is desired, the
hedge may be obtained by purchasing or selling an option, or futures contract or
forward contract on a secondary currency. The secondary currency will be
selected based upon the investment adviser's belief that there exists a
significant correlation between the exchange rate movements of the two
currencies. However, there can be no assurances that the exchange rate or the
primary and secondary currencies will move as anticipated or that the
relationship between the hedged security and the hedging instrument will
continue. If the do not move as anticipated or the relationship does not
continue, a loss may result to the Funds on their investments in the hedging
positions.
If the Funds retain the portfolio security and engage in an offsetting
transaction, the Funds 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 Funds may buy and sell financial futures contracts which may include
security and interest-rate futures, stock and bond index futures contracts and
foreign currency futures contracts. Worldwide Hard Assets Fund may also buy and
sell commodities futures contracts, which may include futures on natural
resources and natural resource indices. A security or interest-rate futures
contract is an agreement between two parties to buy or sell a specified security
at a set price on a future date. An index futures contract is an agreement to
take or make delivery of an amount of cash based in the difference between the
value of the index at the beginning and at the end of the contract period. A
foreign currency futures contract is an agreement to buy or sell a specified
amount of currency for a set price on a future date. A commodity futures
contract is an agreement to take or make delivery of a specified amount of a
commodity, such as gold, at a set price on a future date.
A 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,
except that margin deposits for futures positions entered into for bona fide
hedging purposes, as that term is defined in the Commodity Exchange Act, are
excluded from the 5% limitation. As the value of the underlying asset
fluctuates, either party to the contract is required to make additional margin
payments, known as "variation margin", to cover any additional obligation it may
have under the contract. In addition, cash or high quality securities equal in
value to the current value of the underlying securities less the margin
requirement will be segregated, as may be required, with the Fund's custodian to
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.
Worldwide Hard Assets Fund may invest in commodity futures contracts and in
options on commodity futures contracts, which involves numerous risks such as
leverage, high volatility illiquidity, governmental intervention designed to
influence commodity prices and the possibility of delivery of the underlying
commodities. If the Fund were required to take delivery of a commodity, it
would be deemed illiquid and the Fund would bear the cost of storage and might
incur substantial costs in its disposition. The Fund will not use commodity
futures contracts for leveraging purposes in excess of applicable limitations.
Certain exchanges do not permit trading in particular commodities at prices in
excess of daily price fluctuation limits set by the exchange, and thus Worldwide
Hard Assets Fund could be prevented from liquidating its position and thus be
subject 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".
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The Funds may also invest in options on futures contracts. Compared to the
purchase or sale of futures contracts, the purchase and sale of options on
futures contracts involves less potential risk to the Funds because the maximum
exposure is the amount of the premiums paid for the options.
The Funds' use of financial futures contracts and options on such futures
contracts, and Worldwide Hard Assets Fund and Worldwide Real Estate Fund's use
of commodity futures contracts and options on such futures contracts may reduce
a Fund's exposure to fluctuations in the prices of portfolio securities and may
prevent losses if the prices of such securities decline. Similarly, such
investments may protect a Fund against fluctuation in the value of securities in
which a Fund is about to invest. Because the financial markets in the
developing countries are not as developed in the United States, these financial
investments may not be available to the Funds and the Funds may be unable to
hedge certain risks.
The use of financial futures and/or commodity 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 Funds may incur a loss on their
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 Funds to meet the requirements of the Internal Revenue
Code of 1986, as amended (the "Code"), to qualify as a regulated investment
company to prevent double taxation of the Funds and their shareholders. One of
these requirements is that at least 90% of a Fund's gross income be derived from
dividends, interest, payment with respect to securities loans and gains from the
sale or other disposition of stocks or other securities. Gains from commodity
futures contracts do not currently qualify as income for purposes of the 90%
test. The extent to which the Funds may engage in options and futures contracts
transactions may be materially limited by this test.
The Funds may write, purchase or sell covered call or put options. Any options
transaction involves the writer of the option, upon receipt of a premium, giving
the right to sell (call option) or buy (put option) an underlying asset at an
agreed-upon exercise price. The holder of the option has the right to purchase
(call option) or sell (put option) the underlying assets at the exercise price.
If the option is not exercised or sold, it becomes worthless at its expiration
date and the premium payment is lost to the option holder. As the writer of an
option, the Fund keeps the premium whether or not the option is exercised. When
a Fund sells a covered call option, which is a call option with respect to which
the Fund owns the underlying asset, the Fund may lose the opportunity to realize
appreciation in the market price of the underlying asset or may have to hold the
underlying asset, which might otherwise have been sold to protect against
depreciation. A covered put option written by the Fund exposes it during the
term of the option to a decline in the price of the underlying asset. A put
option sold by the Fund is covered when, among other things, cash or short-term
liquid securities are placed in a segregated account to fulfill the obligations
undertaken. Covering a put option sold does not reduce the risk of loss.
The Funds may invest in options which are either listed on a domestic securities
exchange or traded on a recognized foreign exchange. In addition, the Funds may
purchase or sell over-the-counter options 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-
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counter options are two party contracts with price and terms negotiated by the
buyer and seller, are generally considered illiquid securities.
REPURCHASE AGREEMENTS
A Fund will only enter into a repurchase agreement where (i) the underlying
securities are of the type which the Fund's investment policies would allow it
to purchase directly, (ii) the market value of the underlying security,
including accrued interest, will be at all times equal to or exceed the value of
the repurchase agreement, and (iii) payment for the underlying securities is
made only upon physical delivery or evidence of book-entry transfer to the
account of the custodian or a bank acting as agent.
MORTGAGE-BACKED SECURITIES
The Funds may invest in mortgage-backed securities. A mortgage-backed security
may be an obligation of the issuer backed by a mortgage or pool of mortgages or
a direct interest in an underlying pool of mortgages. The value of mortgage-
backed securities may change due to shifts in the market's perception of
issuers. In addition, regulatory or tax changes may adversely affect the
mortgage securities market as a whole. Stripped mortgage-backed securities are
created when a U.S. governmental agency or a financial institution separates the
interest and principal components of a mortgage-backed security and sells them
as individual securities. The holder of the "principal-only" security ("PO")
receives the principal payments made by the underlying mortgage-backed security,
while the holder of the "interest-only" security ("IO") receives interest
payments from the same underlying security. The prices of stripped mortgage-
backed securities may be particularly affected by change in interest rates. As
interest rates fall, prepayment rates tend to increase, which tends to reduce
the price of IOs and increase prices of POs. Rising interest rates can have the
opposite effect. Changes in interest rates may also affect the liquidity of IOs
and POs.
REAL ESTATE SECURITIES
Although Worldwide Hard Assets Fund will not invest in real estate directly, the
Fund may invest up to 50% of its assets in equity securities of REITs and other
real estate industry companies or companies with substantial real estate
investments. Worldwide Hard Assets Fund and Worldwide Real Estate Fund are
therefore subject to certain risks associated with ownership of real estate and
with the real estate industry in general. These risks include, among others:
possible declines in the value of real estate; possible lack of availability of
mortgage funds; extended vacancies of properties; risks related to general and
local economic conditions; overbuilding; increases in competition, property
taxes and operating expenses; changes in zoning laws; costs resulting from the
clean-up of, and liability to third parties for damages resulting from,
environmental problems; casualty or condemnation losses; uninsured damages from
floods, earthquakes or other natural disasters; limitations on and variations in
rents; and changes in interest rates.
REITs are pooled investment vehicles whose assets consist primarily of interest
in real estate and real estate loans. REITs are generally classified as equity
REITs, mortgage REITs or hybrid REITs. Equity REITs own interest in property
and realize income from the rents and gain or loss from the sale of real estate
interests. Mortgage REITs invest in real estate mortgage loans and realize
income from interest payments on the loans. Hybrid REITs invest in both equity
and debt. Equity REITs may be operating or financing companies. An operating
company provides operational and management expertise to and exercises control
over, many if not most operational aspects of the property.
REITs are not taxed on income distributed to shareholders provided they comply
with several requirements of the Code.
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Investing in REITs involves certain unique risks in addition to those risks
associated with investing in the real estate industry in general. Equity REITs
may be affected by changes in the value of the underlying property owned by the
REITs, while mortgage REITs may be affected by the quality of any credit
extended. REITs are dependent upon management skills, are not diversified, and
are subject to the risks of financing projects. REITs are subject to heavy cash
flow dependency, default by borrowers, self-liquidation and the possibilities of
failing to qualify for the exemption from tax for distributed income under the
Code. REITs (especially mortgage REITs) are also subject to interest rate risk
(i.e., as interest rates rise, the value of the REIT may decline).
COMMERCIAL PAPER
The Funds may invest in commercial paper which is indexed to certain specific
foreign currency exchange rates. The terms of such commercial paper provide
that its principal amount is adjusted upwards or downwards (but not below zero)
at maturity to reflect changes in the exchange rate between two currencies while
the obligation is outstanding. The Funds will purchase such commercial paper
with the currency in which it is denominated and, at maturity, will receive
interest and principal payments thereon in that currency, but the amount or
principal payable by the issuer at maturity will change in proportion to the
change (if any) in the exchange rate between two specified currencies between
the date the instrument is issued and the date the instrument matures. While
such commercial paper entails the risk of loss of principal, the potential for
realizing gains as a result of changes in foreign currency exchange rate enables
the Funds to hedge or cross-hedge against a decline in the U.S. dollar value of
investments denominated in foreign currencies while providing an attractive
money market rate of return. The Funds will purchase such commercial paper for
hedging purposes only, not for speculation. The staff of the Securities and
Exchange Commission has been considering whether the purchase of this type of
commercial paper would result in the issuance of a "senior security" within the
meaning of the 1940 Act. The Funds believe that such investments do not involve
the creation of such a senior security, but nevertheless will establish a
segregated account with respect to its investments in this type of commercial
paper and to maintain in such account cash not available for investment or U.S.
Government securities or other liquid high quality securities having a value
equal to the aggregate principal amount of outstanding commercial paper of this
type.
DEBT SECURITIES
The Funds may invest in debt securities. The market value of debt securities
generally varies in response to changes in interest rates, the financial
condition of each issuer and the value of a Hard Asset if linked to the value of
a Hard Asset. Debt securities with similar maturities may have different
yields, depending upon several factors, including the relative financial
condition of the issuers. 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 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. During periods of
declining interest rates, the value of debt securities generally increases.
Conversely, during periods of rising interest rates, the value of such
securities generally declines. These changes in market value will be reflected
in the Fund's net asset value. Debt securities with similar maturities may have
different yields, depending upon several factors. including the relative
financial condition of the issuers. For example, higher yields are generally
available from securities in the lower rating categories of S&P or Moody's.
However, the values of lower-rated securities generally fluctuate more than
those of high grade securities. Many securities of foreign issuers are not
rated by these services. Therefore the selection of such issuers depends to a
large extent on the credit analysis performed by the Adviser.
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New issues of certain debt securities are often offered on a when-issued basis,
that is, the payment obligation and the interest rate are fixed at the time the
buyer enters into the commitment, but delivery and payment for the securities
normally take place after the date of the commitment to purchase. The value of
when-issued securities may vary prior to and after delivery depending on market
conditions and changes in interest rate levels. However, the Funds do not
accrue any income on these securities prior to delivery. The Funds will
maintain in a segregated account with their Custodian an amount of cash or high
quality securities equal (on a daily marked-to-market-basis) to the amount of
its commitment to purchase the when-issued securities.
The Fund may also invest in low rated or unrated debt securities. Low rated
debt securities present a significantly greater risk of default than do higher
rated securities, in times of poor business or economic conditions, the Funds
may lose interest and/or principal on such securities.
DERIVATIVES
To protect against anticipated declines in the value of the Funds; investment
holdings, the Funds may use options, forward and futures contracts, swaps and
structured notes (Worldwide Emerging Markets Fund, Worldwide Hard Assets Fund
and Worldwide Real Estate Fund), and similar investments (commonly referred to
as derivatives) as a defensive technique to protect the value of an asset the
Funds' investment adviser deems it desirable to hold for tax or other
considerations or for investment reasons. 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, put option or swap. The premium paid for the put option
would reduce any capital gain otherwise available for distribution when the
security is eventually sold.
The Funds may also use futures contracts and options, forward contracts and
swaps as part of various investment techniques and strategies, such as creating
non-speculative "synthetic" positions (covered by segregation of liquid assets)
or implementing "cross-hedging" strategies. A "synthetic position" is the
duplication of cash market transaction when deemed advantageous by the Funds'
adviser for cost, liquidity or transactional efficiency reasons. A cash market
transaction is the purchase or sale of a security or other asset for cash.
"Cross-hedging" involves the use of one currency to hedge against the decline in
the value of another currency. The use of such instruments as described herein
involves several risks. First, there can be no assurance that the prices of
such instruments and the hedged security or the cash market position will move
as anticipated. If prices do not move as anticipated, a Fund may incur a loss
on its investment, may not achieve the hedging protection it anticipated and/or
may incur a loss greater than if it had entered into a cash market position.
Second, investments in such instruments may reduce the gains which would
otherwise be realized from the sale of the underlying securities or assets which
are being hedged. Third, positions in such instruments can be closed out only
on an exchange that provides a market for those instruments. There can be no
assurance that such a market will exist for a particular futures contract or
option. If the Fund cannot close out an exchange traded futures contract or
option which it holds, it would have to perform its contract obligation or
exercise its option to realize any profit and would incur transaction costs on
the sale of the underlying assets.
When the Funds intend to acquire securities (or gold bullion or coins in the
case of Worldwide Hard Assets Fund) for the portfolios, they may use call
options or futures contracts as a means of fixing the price of the security (or
gold) they intend to purchase at the exercise price (in the case of an option)
or contract price (in the case of 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 contract requiring delivery of a security
may also be useful to the Funds in purchasing a large block of securities that
would be more difficult to acquire by direct market purchases. If the Funds
hold a call option rather than the underlying security itself, the Funds are
partially protected from any unexpected decline in the market price of the
underlying security and in such event could allow the call option to expire,
incurring a loss only to the
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extent of the premium paid for the option. Using a futures contract would
not offer such partial protection against market declines and the Funds would
experience a loss as if they had owned the underlying security.
CURRENCY SWAPS
Except for Worldwide Bond Fund, the Funds may enter into currency swaps for
hedging purposes. Currency swaps involve the exchange of rights to make or
receive payments of the entire principal value in specified currency. Since
currency swaps are individually negotiated, a Fund may expect to achieve an
acceptable degree of correlation between its portfolio investments and its
currency swap positions. The entire principal value of a currency swap is
subject to the risk that the other party to the swap will default on its
contractual delivery obligations. Worldwide Hard Assets may also enter into
other asset swaps. Asset swaps are similar to currency swaps in that the
performance of one Hard Asset (e.g., gold) may be "swapped" for another (e.g.,
energy).
The use of swaps is a highly specialized activity which involves investment
techniques and risks different from those associated with ordinary portfolio
transactions. If the Funds' investment advise is incorrect in its forecast of
market values and currency exchange rates and/or Hard Assets values, the
investment performance of the Fund would be less favorable than it would have
been if this investment technique were not used. Swaps are generally considered
illiquid and will be aggregated with other illiquid positions for purposes of
the limitation on illiquid investments.
SHORT SALES
Worldwide Emerging Markets Fund, Worldwide Hard Assets Fund and Worldwide Real
Estate Fund may make short sales of equity securities. The Funds will establish
a segregated account with respect to their short sales and maintain in the
account cash not available for investment or US Government securities or other
liquid, high-quality securities having a value equal to the difference between
(i) the market value of the securities sold short at the time they were sold
short and (ii) any cash, US Government securities or other liquid, high-quality
securities required to be deposited as collateral with the broker in connection
with the short sale (not including the proceeds from the short sale). The
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.
DIRECT INVESTMENTS
Worldwide Emerging Markets Fund, Worldwide Hard Assets Fund and Worldwide Real
Estate Fund may invest up to 10% of their total assets in direct investments.
Direct investments include (i) the private purchase from an enterprise of an
equity interest in the enterprise in the form of shares of common stock or
equity interests in trusts, partnerships, joint ventures or similar enterprises,
and (ii) the purchase of such an equity interest in an enterprise from a
principal investor in the enterprise. In each case, the Funds will, at the time
of making the investment, enter into a shareholder or similar agreement with the
enterprise and one or more other holders of equity interests in the enterprise.
The Adviser anticipates that these agreements will, in appropriate
circumstances, provide the Funds with the ability to appoint a representative to
the board of directors or similar body of the enterprise and for eventual
disposition of the Funds' investment in the enterprise. Such a representative
of the Funds will be expected to provide the
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<PAGE>
Funds with the ability to monitor its investment and protect its rights in the
investment and will not be appointed for the purpose of exercising management or
control of the enterprise.
Certain of the Funds' direct investments will include investments in smaller,
less seasoned companies. These companies may have limited product lines,
markets or financial resources, or they may be dependent on a limited management
group. The Funds do not anticipate making direct investments in start-up
operations, although it is expected that in some cases the Funds' direct
investments will fund new operations for an enterprise which itself is engaged
in similar operations or is affiliated with an organization that is engaged in
similar operations.
Direct investments may involve a high degree of business and financial risk that
can result in substantial losses. Because of the absence of any public trading
market for these investments, the Funds may take longer to liquidate these
positions than would be the case for publicly traded securities. Although these
securities may be resold in privately negotiated transactions, the prices on
these sales could be less than those originally paid by the Funds. Furthermore,
issuers whose securities are not publicly traded may not be subject to public
disclosure and other investor protection requirements applicable to publicly
traded securities. If such securities are required to be registered under the
securities laws of one or more jurisdictions before being resold, the Funds may
be required to bear the expense of the registration. In addition, in the event
the Funds sell unlisted foreign securities, any capital gains realized on such
transactions may be subject to higher rates of taxation than taxes payable on
the sale of listed securities. Direct investments are generally considered
illiquid and will be aggregated with other illiquid investments for purposes of
the limitation on illiquid investments. Direct investments can be difficult to
price and will be valued at fair value as determined in good faith by the Board
of Trustees. The pricing of direct investments may not be reflective of the
price at which these assets could be liquidated.
LOANS OF PORTFOLIO SECURITIES
The Funds may lend to broker-dealers portfolio securities with an aggregate
market value of up to one-third of their total assets. These 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 Funds may terminate the loans at any time and obtain the return of
the securities loaned within one business day. The Funds 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 Funds might
experience a loss if the borrowing broker-dealer breaches its agreement with the
Funds.
PRECIOUS METALS
Precious metal trading is a speculative activity and its markets at times
volatile. There may be sharp fluctuations in prices, even during periods of
rising prices. Prices of precious metals are affected by factors such as
cyclical economic conditions, political events and monetary policies of various
countries. Under current U.S. tax law, the Fund may not receive more than 10%
of its yearly income from gains resulting from the sale of precious metals or
any other physical commodity. The Fund may be required, therefore, to hold its
precious metals or sell them at a loss, or to sell its portfolio securities at a
gain, when it would not otherwise do so for investment reasons. The Fund incurs
additional costs in storing gold bullion and coins, which are generally higher
than custodian costs for securities.
INVESTMENT RESTRICTIONS
The following restrictions are fundamental policies which cannot be changed
without the approval of the holders of a majority of a Fund's outstanding
shares. Such majority is defined by the 1940 Act as the
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<PAGE>
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 a Fund's outstanding shares.
A Fund may not:
1. Purchase or sell real estate, although the Funds 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 commodity or commodity contract) except that the Worldwide
Emerging Markets Fund may, for hedging and other purposes, and the
Worldwide Hard Assets Fund, Worldwide Bond Fund and Worldwide Real Estate
Fund may, for hedging purposes only, buy and sell financial futures
contracts which may include stock and bond index futures contracts and
foreign currency futures contracts. The Worldwide Hard Assets Fund and
Worldwide Real Estate Fund may, for hedging purposes only, buy and sell
commodity futures contracts on gold and other natural resources or on an
index thereon. A Fund may not commit more than 5% of its total assets to
initial margin deposits on futures contracts not used for hedging purposes
(except that with respect to Worldwide Emerging Markets Fund, Worldwide
Hard Assets Fund and Worldwide Real Estate Fund margin deposits for futures
positions entered into for bona fide hedging purposes are excluded from the
5% limitation). In addition, Worldwide Hard Assets Fund and Worldwide Real
Estate Fund may invest in gold bullion and coins;
3. Make loans, except by (i) purchase of marketable bonds, debentures,
commercial paper and similar marketable evidences of indebtedness (such as
structured notes, indexed securities and swaps with respect to Worldwide
Hard Assets Fund and Worldwide Real Estate Fund) and (ii) repurchase
agreements. The Funds may lend to broker-dealers portfolio securities with
an aggregate market value up to one-third of its total assets;
4. As to 75% of the total assets of the Worldwide Hard Assets Fund and
Worldwide Emerging Markets Fund purchase securities of any issuer, if
immediately thereafter (i) more than 5% of a Fund's total assets (taken at
market value) would be invested in the securities of such issuer, or (ii)
with respect to the Worldwide Hard Assets Fund, more than 10% of the
outstanding securities of any class of such issuer would be held by a Fund;
and in the case of Worldwide Emerging Markets Fund more than 10% of the
outstanding voting securities of such issuer would be held by a Fund
(provided that these limitations do not apply to obligations of the United
States Government, its agencies or instrumentalities). This limitation does
not apply to the Worldwide Bond Fund and Worldwide Real Estate Fund;
5. Underwrite any issue of securities (except to the extent that a Fund may be
deemed to be an underwriter within the meaning of the Securities Act of
1933, as amended, in the disposition of restricted securities);
6. Borrow money, except that each of the Funds may borrow up to 30% of the
value of its net assets to increase its holding of portfolio securities;
7. Issue senior securities except insofar as a Fund may be deemed to have
issued a senior security by reason of (i) borrowing money in accordance
with restrictions described above; (ii) entering into forward foreign
currency contracts; (iii) financial futures contracts purchased on margin
(iv)
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<PAGE>
commodity futures contracts purchased on margin (Worldwide Hard Assets
Fund) and; (v) foreign currency swaps (Worldwide Emerging Markets Fund,
Worldwide Hard Assets Fund and Worldwide Real Estate Fund);
8. Invest more than 25 percent of the value of a Fund's total assets in the
securities of issuers having their principal business activities in the
same industry, except the Worldwide Emerging Markets Fund, Worldwide Hard
Assets Fund and Worldwide Real Estate Fund, and provided that this
limitation does not apply to obligations issued or guaranteed by the United
States Government, its agencies or instrumentalities;
9. Make investments for the purpose of exercising control or management;
10. Invest in real estate limited partnerships (except Worldwide Real Estate
Fund) or in oil, gas or other mineral leases.
The following policies have been adopted by the Board of Trustees with respect
to each Fund and may be changed without shareholder approval.
A Fund may not:
11. Exclusive of Worldwide Emerging Markets Fund, Worldwide Hard Assets Fund
and Worldwide Real Estate Fund, purchase securities of other open-end
investment companies except as part of a merger, consolidation,
reorganization or acquisition of assets; (i) purchase more than 3% of the
total outstanding voting stock of any investment company, (ii) invest more
than 5% of any of the Fund's total assets in securities of any one
investment company or (iii) invest more than 10% of such value in
investment companies in general. In addition, the Fund may not invest in
the securities of closed-end investment companies, except by purchase in
the open market involving only customary broker's commissions.
12. 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 10% of its total net assets would be
invested in such securities, except that Worldwide Emerging Markets Fund,
Worldwide Hard Assets Fund and Worldwide Real Estate Fund will not invest
more than 15% of the value of their total net assets in such securities
and; (ii) with respect to Worldwide Emerging Markets Fund, Worldwide Hard
Assets Fund and Worldwide Real Estate Fund "illiquid" securities, including
repurchase agreements maturing in more than 7 days and options traded over-
the-counter if the result is that more than 15% of its total net assets
would be invested in such securities;
13. Invest more than 5 percent of the value of its total assets in securities
of companies having together with their predecessors, a record of less than
three years of continuous operation (this restriction does not apply to the
Worldwide Emerging Markets Fund, and Worldwide Real Estate Fund);
14. Write, purchase or sell puts, calls, straddles, spreads or combinations
thereof, except that the Funds may purchase or sell puts and calls on
foreign currencies and on securities as described under "Futures and
Options Transactions" herein and in the Prospectus and that these Funds may
write, purchase or sell put and call options on financial futures
contracts, which include bond and stock index futures contracts and
Worldwide Hard Assets Fund and Worldwide Real Estate Fund may write,
purchase, or sell put and call options on gold or other natural resources
or an index
20
<PAGE>
thereon and on commodity futures contracts on gold or other natural
resources or an index thereon;
15. Purchase participations or other interests (other than equity stock
interests) in oil, gas or other mineral exploration or development
programs;
16. Invest more than 5% of its total assets in warrants, whether or not the
warrants are listed on the New York or American Stock Exchanges or more
than 2% of the value of the assets of a Fund (except Worldwide Emerging
Markets Fund and Worldwide Real Estate Fund) in warrants which are not
listed. Warrants acquired in units or attached to securities are not
included in this restriction;
17. Mortgage, pledge or otherwise encumber its assets except to secure
borrowings effected within the limitations set forth in restriction (6);
18. Except for Worldwide Emerging Markets Fund, Worldwide Hard Assets Fund and
Worldwide Real Estate Fund, make short sales of securities, except that the
Worldwide Bond Fund may engage in the transactions specified in
restrictions (1), (2) and (14);
19. 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 (6);
20. Participate on a joint or joint and several basis in any trading account in
securities, although transactions for the Funds and any other account under
common or affiliated management may be combined or allocated between the
Funds and such account;
21. Purchase or retain a security of any issuer if any of the officers,
directors or Trustees of a Fund or its investment adviser owns beneficially
more than 1/2 of 1% of the securities of such issuer, or if such persons
taken together own more than 5% of the securities of such issuer.
If a percentage restriction is adhered to at the time of investment, a later
increase or decrease in percentage resulting from a change in values of
portfolio securities or amount of net assets will not be considered a violation
of any of the foregoing restrictions.
INVESTMENT ADVISORY SERVICES
The investment adviser and manager of the Funds is Van Eck Associates
Corporation (the "Adviser"), a Delaware corporation, pursuant to an Advisory
Agreement with the Trust dated as of August 30, 1989. The Adviser furnishes an
investment program for the Funds and determines, subject to the overall
supervision and review of the Board of Trustees, what investments should be
purchased, sold or held. The Adviser, which has been an investment adviser
since 1955, also acts as investment adviser or sub-investment adviser to other
mutual funds registered with the SEC under the Act and manager or advises
managers of portfolios of pension plans and others.
The Adviser or its affiliates provides the Funds with office space, facilities
and simple business equipment and provides the services of consultants,
executive and clerical personnel for administering the affairs of the Funds.
Except as provided for in the Advisory Agreements, the Adviser or its affiliate
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.
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<PAGE>
The Advisory Agreements provide that they shall each continue in effect from
year to year with respect to a Fund as long as it is approved at least annually
both (i) by a vote of a majority of the outstanding voting securities of the
Fund (as defined in the 1940 Act) 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
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 Agreements for each of the Funds were last reapproved by the Board
of Trustees on April 22, 1998.
The expenses borne by each of the Funds 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 employees of the
Adviser or its affiliate 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 each Fund, and any other
charges and fees not specifically enumerated as an obligation of the Distributor
or Adviser.
The management fee for each of Worldwide Bond Fund and Worldwide Hard Assets
Fund is based on an annual rate of 1% of the first $500 million of average daily
net assets, .90 of 1% on the next $250 million and .70 of 1% in excess of $750
million. Prior to September 29, 1995, the management fee for each of Worldwide
Bond Fund and Worldwide Hard Assets Fund was based on an annual rate of .75 of
1% of the first $500 million of average daily net assets, .65 of 1% on the next
$250 million and .50 of 1% in excess of $750 million. The management fee for
Worldwide Emerging Markets Fund and Worldwide Real Estate Fund are 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.
For the fiscal years ended April 30, 1995, April 30, 1996, the eight months
ended December 31, 1996, for the full year ended December 31, 1997 and December
31, 1998, the Adviser earned fees with respect to Worldwide Bond Fund of
$641,065, $985,741, $755,274, $1,117,119 and $1,180,505, respectively. The
Adviser earned fees for the same period with respect to Worldwide Hard Assets
Fund, of $837,780, $1,251,773, $1,127,303, $1,736,208 and $1,185,714,
respectively. There were no fee waivers or expense reimbursements with respect
to these two Funds for this period. The Adviser of Worldwide Emerging Markets
Fund waived advisory fees from the date of the Fund's commencement of operations
(December 21, 1995) to December 31, 1996. For the year ended December 31, 1997
and December 31, 1998, the Adviser earned fees for Worldwide Emerging Markets
Fund in the amount of $1,062,413 and $683,102, respectively. In addition,
during the same time period the Adviser assumed the operating expenses of
Worldwide Emerging Markets Fund. Commencing January 11, 1997 through February
3, 1997, the Adviser waived and assumed all fees and expenses, to the extent
they exceeded 1% of Worldwide Emerging Markets Fund's average daily net assets.
From February 4 to December 31, 1997, the Adviser agreed to limit all expenses
to 1.5% of the average daily net assets. For the year ended December 31, 1997,
the Adviser waived expenses in the amount of $18,137. The Adviser of Worldwide
Real Estate Fund waived advisory fees from the date of the Fund's commencement
of operations (June 23, 1997) to February 28, 1998; in addition, during the same
time period, the Adviser assumed the operating expenses of Worldwide Real Estate
Fund. From March 1, 1998, the Adviser agreed to limit all expenses to 1% of
average daily net assets. For the year ended December 31, 1998, the Adviser
earned fees with respect to Worldwide Real Estate Fund of $12,340.
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<PAGE>
Under the Advisory Agreements, the Adviser is responsible for determining the
net asset value per share and maintaining the accounting records of the Funds.
For these services the agreements provide 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.
THE DISTRIBUTOR
Shares of the Funds are offered on a continuous basis and are distributed
through Van Eck Securities Corporation, 99 Park Avenue, New York, New York (the
"Distributor"), a wholly-owned subsidiary of Van Eck Associates Corporation. The
Trustees of the Trust have approved a Distribution Agreement appointing the
Distributor as distributor of shares of the Funds. The Distribution Agreements
for each of the Funds were last reapproved by action of the Trustees on April
22, 1998.
The Distribution Agreement provides that the Distributor will pay all fees and
expenses in connection with printing and distributing prospectuses and reports
for use in offering and selling shares of the Funds and preparing, printing and
distributing advertising or promotional materials. The Funds will pay all fees
and expenses in connection with registering and qualifying their shares under
federal and state securities laws.
PORTFOLIO TRANSACTIONS AND BROKERAGE
The Adviser is responsible for decisions to buy and sell securities and other
investments for the Funds, the selection of brokers and dealers to effect the
transactions and the negotiation of brokerage commissions, if any. In
transactions on stock and commodity exchanges in the United States, these
commissions are negotiated, whereas on foreign stock and commodity exchanges
these commissions are generally fixed and are generally higher than brokerage
commissions in the United States. In the case of securities traded on the over-
the-counter markets, there is generally no stated commission, but the price
usually includes an undisclosed commission or markup. In underwritten
offerings, the price includes a disclosed, fixed commission or discount. Most
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 Funds' portfolio investments, it is the Adviser's
policy to obtain quality execution at the most favorable prices through
responsible broker-dealers. In selecting broker-dealers, the Adviser 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 may cause the Funds to pay a broker-dealer who furnishes brokerage
and/or research services a commission that is in excess of the commission
another broker-dealer would have received for executing the transaction if it is
determined that such commission is reasonable in relation to the value of the
brokerage and/or research services as defined in Section 28(e) of the Securities
Exchange Act of 1934, as amended, 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
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<PAGE>
strategy. Any such research and other information provided by brokers to the
Adviser is considered to be in addition to and not in lieu of services required
to be performed by the Adviser under its Advisory Agreement with the Trust. The
research services provided by broker-dealers can be useful to the Adviser in
serving its other clients or clients of the Adviser's affiliates.
The Trustees periodically review the Adviser's performance of its
responsibilities in connection with the placement of portfolio transactions on
behalf of the Funds and review the commissions paid by the Funds over
representative periods of time to determine if they are reasonable in relation
to the benefits to the Funds.
Investment decisions for the Funds are made independently from those of the
other investment accounts managed by the Adviser 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 to allocate such
purchases or sales insofar as feasible among its several clients or the clients
of its affiliates in a manner it deems equitable. The principal factors which
the Adviser considers in making such allocations are the relative investment
objectives of the clients, the relative size of the portfolio holdings of the
same or comparable securities and the then availability in the particular
account of funds for investment. Portfolio securities held by one client of the
Adviser may also be held by one or more of its other clients or by clients of
its affiliates. When two or more of its clients or clients of its affiliates
are engaged in the simultaneous sale or purchase of securities, transactions are
allocated as to amount in accordance with formulae deemed to be equitable as to
each client. There may be circumstances when purchases or sales of portfolio
securities for one or more clients will have an adverse effect on other clients.
While it is the policy of the Funds generally not to engage in trading for
short-term gains, the Funds will effect portfolio transactions without regard to
the holding period if, in the judgment of the Adviser, 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 portfolio turnover rates of all the Funds may vary greatly from
year to year.
Worldwide Emerging Markets Fund and Worldwide Hard Assets Fund anticipate that
their annual portfolio turnover rates will not exceed 100%. For the period from
commencement of operations (December 21, 1995) to April 30, 1996, the eight
months ended December 31, 1996 and the full year ended December 31 1997 and
December 31, 1998, the portfolio turnover rates for Worldwide Emerging Markets
Fund were 45.89%, 29.53%, 142.39%,* and 117.16%* respectively. For fiscal years
ended April 30, 1995, April 30, 1996, the eight months ended December 31, 1996
and the full year ended December 31, 1997 and December 31, 1998, the portfolio
turnover rates for Worldwide Hard Assets Fund were 23.30%, 26.37%, 46.14%,
102.82% and 153.25%*, respectively.
The annual portfolio turnover rate of the Worldwide Bond Fund and Worldwide Real
Estate Fund may exceed 100%. For fiscal years ended April 30, 1995, April 30,
1996, the eight months ended December 31, 1996, the full year ended December 31,
1997 and December 31, 1998, the portfolio turnover rates for Worldwide Bond Fund
were 265.87%, 208.05%, 73.95%, 135.36% and 30.59%, respectively, and the Adviser
anticipates the turnover rate for the current fiscal year will also exceed 100%.
For the period from June 23 to December 31, 1997 and December 31, 1998, the
portfolio turnover rate of Worldwide
_______________________
* The portfolio turnover rate normally does not exceed 100%. Extraordinary
volatile conditions do, however, occasionally require high levels of turnover in
order to preserve capital. These conditions were in evidence during the third
and fourth quarters of 1997 while the Asian markets were in crisis. This crisis
resulted in high levels of volatility throughout global emerging markets. The
high level of turnover reflected a switch to more defensive issues with the goal
of preserving shareholder capital. It is not anticipated that future yeas will
show a repeat of this level of volatility or turnover.
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<PAGE>
Real Estate Fund was 123% and 107%. Due to the high rate of turnover, the Fund
will pay a greater amount in brokerage commissions than a similar size fund with
a lower turnover rate, though commissions are not generally charged in fixed-
income transactions. In addition, since the Fund may have a high rate of
portfolio turnover, the Fund may realize capital gains or losses. Capital gains
will be distributed annually to the shareholders. Capital losses cannot be
distributed to shareholders but may be used to offset capital gains at the Fund
level. See "Taxes" in the Prospectus and the Statement of Additional
Information.
The Adviser does not consider sales of shares of the Funds as a factor in the
selection of broker-dealers to execute portfolio transactions for the Funds. For
the fiscal year or period ended April 30, 1995, Worldwide Balanced Fund did not
pay any brokerage commissions, Worldwide Bond Fund paid $24,354 and Worldwide
Hard Assets Fund paid $250,357 in brokerage commissions. For the fiscal year or
period ended December 31, 1996, Worldwide Balanced Fund paid $1,892, Worldwide
Bond Fund paid $7,340, Worldwide Emerging Markets Fund paid $39,037 and
Worldwide Hard Assets Fund paid $457,007 in brokerage commissions. For the
fiscal period or year ended December 31, 1997, Worldwide Real Estate Fund paid
$4,317, Worldwide Emerging Markets Fund paid $1,000,327 and Worldwide Hard
Assets Fund paid $663,946 in brokerage commissions. For the fiscal year or
period ended December 31, 1998, Worldwide Hard Assets Fund paid $889,272,
Worldwide Emerging Markets Fund paid $681,222 and Worldwide Real Estate Fund
paid $8,836.
For the fiscal year or period ended December 31, 1998, Worldwide Hard Assets
Fund paid $137,867.48, Worldwide Real Estate Fund paid $1,222.50 and Worldwide
Emerging Markets Fund paid $45,247.46 in commissions to broker-dealers providing
research and certain other services, representing 15.5%, 13.8% and 6.6%,
respectively, of total commissions paid by such Funds.
TRUSTEES AND OFFICERS
The Trustees and officers of the Trust, their address, position with the Trust,
age and principal occupations during the past five years are set forth below.
Trustees of the Trust:
@*JOHN C. van ECK, C.F.A. (83) - Chairman of the Board and President
- -------------------------
575 Park Avenue, New York, New York 10021; Chairman of the Board and President
of another investment company advised by the Adviser; Chairman, Van Eck
Associates Corporation (investment adviser) and Van Eck Securities Corporation
(broker-dealer); Director, Eclipse Financial Asset Trust (mutual fund); Former
President of the Adviser and its affiliated companies; 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 (63) - Trustee
- ------------------
1220 Park Avenue, New York, New York 10128; Trustee of another investment
company advised by the Adviser; Vice Chairman, Director and Chief Investment
Officer, Fiduciary Trust Company International (investment manager), parent
company of Fiduciary International, Inc.; Chairman of Davis Funds Group
(mutual fund management company); Treasurer and Director of the Royal Oak
Foundation (the UK National Trust); Director and former chairman of the Union
Settlement Association (the community service organization); First Vice
President, Trustee and Chairman of the
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Finance Committee of Saint James School, St. James, Maryland; Former Director,
International Investors Incorporated (1990-1991).
#+RICHARD C. COWELL (71) - Trustee
- -------------------
240 El Vedado Way, Palm Beach, Florida 33480; Trustee of another investment
company advised by the Adviser; Private Investor; Director, West Indies &
Caribbean Development Ltd. (real estate); Former Director, Compo Industries,
Inc. (machinery manufacturer); Former Director, International Investors
Incorporated (1957-1991); Former Director (1978-1981), American Eagle
Petroleums, Ltd. (oil and gas exploration); Former President and Director
(1968-1976), 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.
@PHILIP D. DEFEO (53) Trustee
----------------
99 Park Avenue, New York, NY 10016; Trustee of another investment company
advised by the Adviser; President, Chief Executive Officer and Director of Van
Eck Associates Corporation (invest-ment adviser) and Van Eck Securities
Corporation (broker-dealer) since September 1996; Former Executive Vice
President and Director of Marketing and Customer Services (June 1994 - August
1996), Cedel International (finance and settlements); Former Managing Director
(July 1992 - April 1994); Lehman Brothers (investment bank and broker-dealer);
Former Senior Vice President, Fidelity Investments and Former President,
Fidelity Services Company (financial services) (1987 - 1992).
#+WESLEY G. McCAIN (56) - Trustee
- ------------------
144 East 30th Street, New York, New York 10016; Trustee of two other
investment companies advised or administered by the Adviser; Chairman and
Owner, Towneley Capital Management, Inc., (investment adviser, since 1971);
Chairman, Eclipse Funds (mutual fund, since 1986); Chairman and Owner, Eclipse
Financial Services, Inc. (since 1986); General Partner, Pharaoh Partners, L.P.
(since 1992); Principal, Pharaoh Partners (Cayman) LDC (since 1996); President
and Owner, Millbrook Associates, Inc. (economic and marketing consulting,
since 1989); Trustee, Libre Group Trust (since 1994); Director, Libre
Investments (Cayman) Ltd. (since 1996); Former Director, International
Investors Incorporated.
#DAVID J. OLDERMAN (63) - Trustee
- -----------------
40 East 52nd Street, New York, New York 10022; Trustee of another investment
company advised by the Adviser; Chairman of the Board, Chief Executive Officer
and Owner, Carret & Company, Inc. (since 1988); Chairman of the Board,
American Copy Equipment Co. (1991-present); Chairman of the Board, Brighton
Partners, Inc. (1993-present); Principal, Olderman & Raborn, Inc., (investment
advisers-1984-1988); Chairman of the Board, Railoc, 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 (70) - Trustee
- -----------------
66 Strimples Mill Road, Stockton, New Jersey 08559-1703; Trustee of another
investment company advised by the Adviser; Former Chairman of the Board,
Former Chairman of the Executive
26
<PAGE>
Committee and Chief Executive Officer of Discount Corporation of New York
(dealer in U.S. Treasury and Federal Agency Securities) (1981-1988); 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 D. STAMBERGER (39) - Trustee
- ------------------
888 17th Street, N.W., Washington, D.C. 20006; Trustee of two other investment
companies advised or administered by the Adviser; Principal, National
Strategies, Inc., a public policy firm in Washington, D.C.; Partner and Co-
founder, Quest Partners, L.L.C. (management consulting firm/since 1988);
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).
@**JAN F. van ECK (35) Trustee
- ------------------
99 Park Avenue, New York, New York 10016; Director of Van Eck Associates
Corporation; Executive Vice President and Director of Van Eck Securities
Corporation and other affiliated companies; President and Director of Van Eck
Capital Inc.; President and Director of Van Eck Absolute Return Advisers
Corporation; Co-President and Director of Shenyin Wanguo Van Eck Asset
Management (Asia) Limited and President, Chief Executive Officer and Director
of Van Eck Global Asset Management (Asia) Ltd.
@**DEREK S. van ECK (33) Trustee and Executive Vice President
- ----------------
99 Park Avenue, New York, New York 10016; President of the Worldwide Hard
Assets Fund series of Van Eck Worldwide Insurance Trust and the Global Hard
Assets Fund series of Van Eck Funds; Vice President of another investment
company advised by the Adviser; Executive Vice President, Director, Global
Investments and Director of Van Eck Associates Corporation and Executive Vice
President and Director of Van Eck Securities Corporation and other affiliated
companies.
Officers of the Trust:
BRUCE J. SMITH (44) - Vice President and Treasurer
- --------------
99 Park Avenue, New York, New York 10016; Officer of two other investment
companies advised or administered by the Adviser; Senior Managing Director,
Portfolio Accounting of Van Eck Associates Corporation and Senior Managing
Director of Van Eck Securities Corporation.
THOMAS H. ELWOOD (51)- Vice President and Secretary
- -------------------
99 Park Avenue, New York, New York 10016; Officer of three other investment
companies advised or administered by the Adviser; Vice President, Secretary
and General Counsel of Van Eck Associates Corporation, Van Eck Securities
Corporation and other affiliated companies. Former Assistant Counsel of
Jefferson Pilot Insurance Company and officer of other investment companies
distributed by Jefferson Pilot and its affiliates. Former Associate Counsel
of New York Life Insurance Company.
27
<PAGE>
JOSEPH P. DiMAGGIO (42) - Controller
- ------------------
99 Park Avenue, New York, New York 10016; Controller of another investment
company advised by the Adviser; Director of Portfolio Accounting of Van Eck
Associates Corporation (since 1993); Former Accounting Manager with Alliance
Capital Management (1985-1993).
CHARLES CAMERON (39) - Vice President
- ------------------
99 Park Avenue, New York, New York 10016; Vice President of another investment
company advised by the Adviser; Director of Trading of Van Eck Securities
Corporation; currently, has primary responsibility for the Worldwide Balanced
Fund series of the Trust, in consultation with Fiduciary International Inc.
SUSAN C. LASHLEY (44) - Vice President
- ------------------
99 Park Avenue, New York, New York 10016; Vice President of another investment
company advised by the Adviser; Managing Director, Mutual Fund Operations of
Van Eck Securities Corporation.
KEVIN REID (36) - Vice President
- ------------------
99 Park Avenue, New York, New York 10016; President of the Global Real Estate
Fund series and Vice President of the Global Hard Assets Fund series of Van
Eck Funds and President of Worldwide Real Estate Fund and Vice President of
the Worldwide Hard Assets Fund series of Van Eck Worldwide Insurance Trust;
officer of another investment company advised by the Adviser; Director, Real
Estate Research, of Van Eck Associates Corporation; Former Chief Financial
Officer of E.P. Reid, Inc. (construction-1993 to 1994); Former Chief Financial
Officer and Chief Operating Officer (1991 - 1993) and Former Vice President
and portfolio manager (1988 - 1991) of Trammell Crow Company (real estate).
GREGORY KRENZER (26) President of Van Eck U.S. Government Money Fund
- ------------------
99 Park Avenue, New York, New York 10016; Research Analyst and Portfolio
Assistant (Global Fixed Income) of Van Eck Associates Corporation since 1994.
_______________________
@ An "interested person" as defined in the 1940 Act.
* Member of Executive Committee - exercises general powers of Board of
Trustees between meetings of the Board.
** Son of Mr. John C. van Eck.
# Member of the Nominating Committee.
+ Member of the Audit Committee - reviews fees, services, procedures,
conclusions and recommendations of independent auditors.
28
<PAGE>
1998
Compensation Table
------------------
<TABLE>
<CAPTION>
Van Eck Worldwide Van Eck Worldwide
Insurance Trust Insurance Trust Total Fund Complex
(Current Trustees Fees) (Deferred Compensation) Compensation (a)
<S> <C> <C> <C>
John C. van Eck $ 0 $ 0 $ 0
Jeremy H. Biggs $ 0 $13,033 $39,250
Richard C. Cowell $13,033 $ 0 $33,500
Philip D. DeFeo $ 0 $ 0 $ 0
Wesley G. McCain $ 0 $13,033 $39,250
David J. Olderman $ 0 $10,504 $31,250
Ralph F. Peters $12,060 $ 0 $31,000
Richard D. Stamberger $ 6,030 $ 6,030 $15,500
Derek S. van Eck N/A N/A N/A
Jan F. van Eck N/A N/A N/A
</TABLE>
___________________________________________________________________________
(a) The term "fund complex" refers to the Funds of the Trust, the series of the
Van Eck Funds, which are also managed by the Adviser and the series of Van
Eck/Chubb Funds, Inc., which are administered by the Adviser. The Trustees
are paid a fee for their services to the Trust. No other compensation,
including pension or other retirement benefits, is paid to the Trustees by
the fund complex.
PRINCIPAL SHAREHOLDERS
As of December 31, 1998, shareholders of record of 5% or more of the
outstanding shares of the Funds were as follows: Approximately 89.12% of
Worldwide Bond Fund, approximately 78.99 % of Worldwide Emerging Markets Fund
and approximately 86.22% of Worldwide Hard Assets, respectively, was owned by
Nationwide Life Insurance Company, One Nationwide Plaza, Columbus, Ohio 43216 to
fund the benefits of the separate account's variable annuity contractowners.
Approximately 15.68% of Worldwide Emerging Markets Fund, approximately 6.79% of
Worldwide Bond Fund and 42.85% of Worldwide Real Estate Fund, respectively, was
owned by Provident Mutual Life and Annuity Company, 1050 Westlake Drive, Brewyn,
Pennsylvania 19312. Approximately, 13.46% of Worldwide Real Estate Fund was
owned by Conseco Variable Insurance Company, 11815 N. Pennsylvania Street,
Carmel, IN 46032. Approximately, 39.63% of Worldwide Real Estate Fund was owned
by Van Eck Associates Corporation, the Adviser.
PURCHASE OF SHARES
The Funds may invest in securities or futures contracts listed on foreign
exchanges which trade on Saturdays or other customary United States notional
business holidays (i.e., days on which the Funds are not open for business).
Consequently, since the Funds will compute their net asset values only Monday
through Friday, exclusive of national business holidays, the net asset values of
shares of the Funds may be significantly affected on days when an investor has
no access to the Funds. 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 a Fund's best interest to
do so. Certificates for shares of the Funds will not be issued.
29
<PAGE>
VALUATION OF SHARES
The net asset value per share of each of the Funds is computed by dividing the
value of all of a Fund's securities plus cash and other assets, less
liabilities, by the number of shares outstanding. The net asset value per share
is computed as of the close of the New York Stock Exchange, Monday through
Friday, exclusive of national business holidays. The Funds will be closed on
the following national business holidays: New Year's Day, Martin Luther King
Jr.'s birthday, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas (or the days on which these holidays
are observed).
Shares of the Funds are sold at the public offering price which is determined
once each day the Funds are open for business and is the net asset value per
share.
The net asset values need not be computed on a day in which no orders to
purchase, sell or redeem shares of the Funds have been received.
The value of a financial futures or commodity futures contract equals the
unrealized gain or loss on the contract that is determined by marking it to the
current settlement price for a like contract acquired on the day on which the
commodity futures contract is being valued. A settlement price may not be used
if the market makes a limit move with respect to a particular commodity.
Securities or futures contracts for which market quotations are readily
available are valued at market value, which is currently determined using the
last reported sale price. If no sales are reported as in the case of most
securities traded over-the-counter, securities are valued at the mean of their
bid and asked prices at the close of trading on the NYSE. 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 NYSE. The values of such securities used in determining the net
asset value of the shares of the Funds may be computed as of such times.
Foreign currency exchange rates are also generally determined prior to the close
of the NYSE. Occasionally, events affecting the value of such securities and
such exchange rates may occur between such times and the close of the NYSE which
will not be reflected in the computation of the Fund's net asset values. If
events materially affecting the value of such securities occur during such
period, then these securities will be valued at their fair value as determined
in good faith by the Trustees.
TAXES
Each Fund intends to qualify and elect to be treated each taxable year as a
"regulated investment company" under Subchapter M of the Code. To so qualify, a
Fund must, among other things, (a) derive at least 90% of its gross income from
dividends, interest, payments with respect to securities loans, gains from the
sale or other disposition of stock, securities or foreign currencies, or other
income (including gains from options, futures or forward contracts) derived with
respect to its business of investing in such stock, securities or currencies and
(b) satisfy certain diversification requirements.
30
<PAGE>
As a regulated investment company, a Fund will not be subject to federal income
tax on its net investment income and capital gain net income (capital gains in
excess of its capital losses) that it distributes to shareholders if at least
90% of its investment company taxable income for the taxable year is
distributed. However, if for any taxable year a Fund does not satisfy the
requirements of Subchapter M of the Code, all of its taxable income will be
subject to tax at regular corporate rates without any deduction for distribution
to shareholders, and such distributions will be taxable to shareholders as
ordinary income to the extent of the Fund's current or accumulated earnings or
profits.
REDEMPTIONS IN KIND
The Trust has elected to have the ability to redeem its shares in kind,
committing itself to pay in cash all requests for redemption by any shareholder
of record limited in amount with respect to each shareholder of record during
any ninety-day period 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 Funds may advertise performance in terms of average annual total return for
1, 5 and 10 year periods, or for such lesser periods as any of such Funds have
been in existence. Average annual total return is computed by finding the
average annual compounded rates of return over the periods that would equate the
initial amount invested to the ending redeemable value, according to the
following formula:
P(1+T)/to the nth power/ = ERV
Where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV ending redeemable value of a hypothetical $1,000 payment
made at the beginning of the 1, 5, or 10 year periods at
the end of the year or period;
The calculation assumes the maximum sales load (or other charges deducted from
payments) is deducted from the initial $1,000 payment and assumes all dividends
and distributions by the fund are reinvested at the price stated in the
prospectus on the reinvestment dates during the period, and includes all
recurring fees that are charged to all shareholder accounts.
Average annual total returns for the Funds for various periods ended December
31, 1998 are as follows:
<TABLE>
<CAPTION>
1 Year 5 Years 10 Years Life
<S> <C> <C> <C> <C>
Worldwide Bond Fund 12.75% 6.50% -- 6.85%
Worldwide Emerging
Markets Fund (34.15)% -- -- (9.89)%
Worldwide Hard Assets
Fund (30.93)% (3.26)% -- 2.10%
Worldwide Real Estate
Fund (11.35)% -- -- 3.92%
</TABLE>
31
<PAGE>
The Funds 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 sixth 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 Funds may also advertise performance in terms of aggregate total return.
Aggregate total return for a specified period of time is determined by
ascertaining the percentage change in the net asset value of shares of the Fund
initially acquired assuming reinvestment of dividends and distributions and
without giving effect to the length of time of the investment according to the
following formula:
[(B-A)/A](100)=ATR
Where: A = initial investment
B = value at end of period
ATR = aggregate total return
The calculation assumes the maximum sales charge is deducted from the initial
payment and assumes all distributions by the Funds are reinvested at the price
stated in the Prospectus on the reinvestment dates during the period, and
includes all recurring fees that are charged to all shareholder accounts.
Aggregate Total Return for the period ended December 31, 1998 (after maximum
sales charge).
<TABLE>
<CAPTION>
1 Year 5 Years 10 Years Life
<S> <C> <C> <C> <C>
Worldwide Bond Fund 12.75% 37.01% -- 85.58%
Worldwide Emerging
Markets Fund (35.15)% -- -- (26.91)%
Worldwide Hard Assets
Fund (30.93)% (15.27)% -- 21.38%
Worldwide Real Estate
Fund (11.35)% -- -- 6.02%
</TABLE>
Performance figures of a Fund are not useful for comparison purposes because
they do not reflect the charges and deductions at the separate account level.
32
<PAGE>
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. On April 12, 1995, Van Eck Investment Trust
changed its name to Van Eck Worldwide Insurance Trust.
The Trustees of the Trust have authority to issue an unlimited number of shares
of beneficial interest of each Fund, $.001 par value. Currently, four Funds of
the Trust are being offered, which shares constitute the interests in Worldwide
Bond Funds, Worldwide Emerging Markets Fund, Worldwide Hard Assets Fund and
Worldwide Real Estate Fund, described herein.
Worldwide Emerging Markets Fund and Worldwide Hard Assets Fund are classified as
diversified funds and Worldwide Bond Fund and Worldwide Real Estate Fund are
classified as non-diversified funds under the Act. 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 non-
diversified fund is any fund other than a diversified fund. This means that the
Fund at the close of each quarter of its taxable year, must, in general, limit
its investment in the securities of a single issuer to (i) no more than 25% of
its assets, (ii) with respect to 50% of the Fund's asset, no more than 5% of its
assets, and (iii) the Fund will not own more then 10% of outstanding voting
securities. A Fund is a separate pool of assets of the Trust which is
separately managed and which may have different investment objectives from those
of another Fund. The Trustees have the authority, without the necessity of a
shareholder vote, to create any number of new Funds.
Each share of a 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. On April 9, 1997, shareholders of Gold and Natural Resources Fund
approved changes in the Fund's investment objective, policies and restrictions
which, together with changes approved by the Board of Trustees, resulted in the
Worldwide Hard Assets Fund as described in the Prospectus. The Trustees are a
self-perpetuating body unless and until fewer that 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 all Funds are entitled to vote matters
affecting all of the Funds (such as the election of Trustees and ratification of
the selection of the Trust's independent accountants). On matters affecting an
individual Fund, a separate vote of that Fund is required. Shareholders of a
Fund are not entitled to vote on any matter not affecting that Fund. 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 shareholder of the Funds, have the right to vote Fund shares at any
meeting of shareholders. However, the Contracts may provide that the separate
accounts will vote Funds shares in accordance with instructions received from
Contract holders.
33
<PAGE>
Under Massachusetts law, the shareholders of the Trust could, under certain
circumstances, be held personally liability for the obligations of the Trust.
However, the Master Trust Agreement of the Trust disclaims shareholder liable
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 of 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 Adviser believes that, in view of the above, the
risk of personal liability to shareholders is remote.
ADDITIONAL INFORMATION
Custodian. The Chase Manhattan Bank, Chase Metrotech Center, Brooklyn, New York
- ---------
11245, serves as 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 a Fund to be held by its overseas branches or subsidiaries, and
foreign banks and foreign securities depositories which qualify as eligible
foreign custodians under the rules adopted by the Securities and Exchange
Commission.
Transfer Agent. Van Eck Associates Corporation, 99 Park Avenue, New York, New
- ---------------
York 10016, serves as the Funds' transfer agent.
Independent Accountants. PricewaterhouseCoopers, 1177 Avenue of the Americas,
- -----------------------
New York, New York 10036, serves as the Trust's independent accountants.
Counsel. Goodwin, Procter & Hoar, Exchange Place, Boston, Massachusetts 02109,
- -------
serves as counsel to the Trust.
FINANCIAL STATEMENTS
The financial statements of Worldwide Bond Fund, Worldwide Emerging Markets
Fund, Worldwide Hard Assets Fund and Worldwide Real Estate Fund for the fiscal
year or period ended December 31, 1998, are incorporated by reference from the
Funds' Annual Reports to Shareholders which are available at no charge upon
written or telephone request to the Trust at the address or telephone number set
forth on the first page of this Statement of Additional Information.
34
<PAGE>
APPENDIX
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 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 B. The modifier 1 indicates that the security
ranks in the higher end of its generic rating category; the modifier 2 indicates
a mid-range ranking; and the modifier 3 indicates that the issue ranks in the
lower end of its generic rating category.
Description of Standard & Poor's Corporation Corporate Bond Ratings:
AAA -- Bonds rated AAA have the highest rating assigned by S&P to a debt
obligation. Capacity to pay interest and repay principal is extremely strong.
35
<PAGE>
AA -- Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the higher rated issues only in small degree.
A -- Bonds rated A have a strong capacity to pay interest and repay principal
although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than bonds in higher rated categories.
BBB -- Bonds rated BBB are regarding as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
bonds in this category than for bonds in higher rated categories.
BB--Bonds rated BB have less near-term vulnerability to default than other
speculative issues. However, they face 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 have a current identifiable vulnerability to default, and
are 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, they are 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
- -----------------------
Description of Moody's Investors Service, Inc. Preferred Stock Ratings:
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.
36
<PAGE>
ba - An issue which is rated ba is considered to have speculative elements, and
its future cannot be considered well assured. Earnings and asset protection may
be very moderate and not well safe-guarded during adverse periods. Uncertainty
of position characterizes preferred stocks in this class.
b - An issue which is rated b generally lacks the characteristics of a desirable
investment. Assurance of dividend payments and maintenance of other terms of
the issue over any long period of time may be small.
caa - An issue which is rated caa is likely to be in arrears on dividend
payments. This rating designation does not purport to indicate the future
status of payment.
ca - An issue which is rated ca is speculative in a high degree and is likely to
be in arrears on dividends with little likelihood of eventual payment.
c - This is the lowest rated class of preferred or preference stock. Issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
Description of Standard & Poor's Corporation Preferred Stock Ratings:
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 pay
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 Investors Service, Inc. Short-Term Debt Ratings:
Prime-1--Issuers rated Prime-1 (or supporting institutions) have a superior
ability for repayment of senior short-term debt obligations. Prime-1 repayment
ability will often be evidenced by many of the following characteristics:
leading market positions in well-established industries, higher rates of return
of funds employed, conservative capitalization structure with moderate reliance
on debt and ample asset protection, broad margins in earnings coverage of fixed
financial charges and high internal cash generation and well-established access
to range of financial markets and assured sources of alternate liquidity.
37
<PAGE>
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 by external conditions. Ample alternate liquidity is maintained.
Prime-3--Issuers rated Prime-3 (or supporting institutions) have an acceptable
ability for repayment of senior short-term obligations. The effect of industry
characteristics and market compositions may be more pronounced. Variability in
earnings and profitability may result in changes in the level of debt protection
measurements and may require relatively high financial leverage. Adequate
alternate liquidity is maintained.
38
<PAGE>
PART C
OTHER INFORMATION
ITEM 24. Financial Statements and Exhibits
---------------------------------
a) Financial Statements included in Prospectus (Part A)
Financial Highlights or Selected per Share Data and Ratios of Worldwide
Bond Fund for the period from September 1, 1989 to April 30, 1990, for the
six years ended April 30, 1996, for the 8 months ended December 31, 1996
and for the year ended December 31, 1997 (audited) for the year ended
December 31, 1998 (audited); Worldwide Emerging Markets Fund for the period
from December 21, 1995 to December 31, 1996 and for the year ended December
31, 1997 (audited) for the year ended December 31, 1998 (audited);
Worldwide Hard Assets Fund for the period from August 21, 1995 to April 30,
1996, for the 8 months ended December 31, 1996 and for the year ended
December 31, 1997 (audited) for the year ended December 31, 1998 (audited);
Worldwide Hard Assets Fund (formerly Gold and Natural Resources Fund) for
the period from September 1, 1989 to April 30, 1990, for the six years
ended April 30, 1996 (audited), for the 8 months ended December 31, 1996
and for the year ended December 31, 1997 (audited) for the year ended
December 31, 1998 (audited); and Worldwide Real Estate Fund for the period
from June 23, 1997 to December 31, 1997 (audited) for the year ended
December 31, 1998 (audited).
The following audited financial statements of the Registrant are included
in the Registrant's Annual Reports to Shareholders for the fiscal year or
period ended December 31, 1998, filed with the Securities and Exchange
Commission under Section 30(b)(1) of the 1940 Act, and have been
incorporated in Part B hereof by reference:
Worldwide Bond Fund -- Investment Portfolio at December 31, 1998;
Worldwide Bond Fund -- Statement of Assets and Liabilities at December
31, 1998;
Worldwide Bond Fund -- Statement of Operations for the year ended
December 31, 1998.
Worldwide Bond Fund -- Statement of Changes in Net Assets for the year
ended December 31, 1997 and for the year ended December 31, 1998.
Worldwide Bond Fund -- Financial Highlights for the years ended April
30, 1996, 1995 and 1994; for the 8 months ended December 31,
1996, for the year ended December 31, 1997 and for the year ended
December 31, 1998.
Worldwide Bond Fund -- Notes to Financial Statements -- Report of
Independent Accountants dated February 12, 1999.
Worldwide Emerging Markets Fund -- Investment Portfolio at December
31, 1998;
Worldwide Emerging Markets Fund -- Statement of Assets and Liabilities
at December 31, 1998;
Worldwide Emerging Markets Fund -- Statement of Operations for the
year ended December 31, 1998.
Worldwide Emerging Markets Fund -- Statement of Changes in Net Assets,
for the year ended December 31, 1997 and for the year ended December
31, 1998.
Worldwide Emerging Markets Fund -- Financial Highlights for the period
December 21, 1995 to April 30, 1996; for the eight months ended
December 31, 1996, for the year ended December 31, 1997 and for the
year ended December 31, 1998.
Worldwide Emerging Markets Fund -- Notes to Financial Statements
Report of Independent Accountants dated February 12, 1999;
Worldwide Hard Assets Fund -- Investment Portfolio at December 31,
1998;
Worldwide Hard Assets Fund -- Statement of Assets and Liabilities at
December 31, 1998;
Worldwide Hard Assets Fund -- Statement of Operations for the year
ended December 31, 1998.
Worldwide Hard Assets Fund -- Statement of Changes in Net Assets, for
the year ended December 31, 1997 and for the year ended December 31,
1998.
- 1 -
<PAGE>
Worldwide Hard Assets Fund -- Financial Highlights for the years ended
April 30, 1996, 1995 and 1994; for the 8 months ended December
31, 1996, for the year ended December 31, 1997 and for the year ended
December 31, 1998 .
Worldwide Hard Assets Fund -- Notes to Financial Statements -- Report
of Independent Accountants dated February 12, 1999;
Worldwide Real Estate Fund -- Investment Portfolio at December 31,
1998;
Worldwide Real Estate Fund Fund -- Statement of Assets and Liabilities
at December 31, 1998;
Worldwide Real Estate Fund Fund -- Statement of Operations at December
31, 1998.
Worldwide Real Estate Fund -- Statement of Changes in Net Assets for
the period June 23, 1997 to December 31, 1997 and for the year ended
1998 Worldwide Real Estate Fund -- Financial Highlights for
the period June 23, 1997 to December 31, 1997 and for the year ended
December 31, 1998. Worldwide Real Estate Fund -- Notes to
Financial Statements --Report of Independent Accountants dated
February 12, 1999;
b) Exhibits (An * denotes inclusion in this filing)
(1)(a) Master Trust Agreement (incorporated by reference to Registration
Statement No. 33-13019); Form of First Amendment to Declaration of
Trust (incorporated by reference to Registration Statement No. 2-
97596). Second Amendment to Master Trust Agreement (incorporated by
reference to Post-Effective Amendment No. 1). Third Amendment to
Master Trust Agreement adding Worldwide Balanced Fund (incorporated by
reference to 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 to Post-Effective Amendment No. 9). Fifth Amendment to the
Master Trust Agreement adding Worldwide Hard Assets Fund (incorporated
by reference to 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 to 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 to Post-Effective Amendment No.
14). Eighth Amendment to the Master Trust Agreement adding Worldwide
Emerging Markets Fund as a series of the Trust (incorporated by
reference to Post-Effective Amendment No. 15).
(2) By-laws of Registrant (incorporated by reference to Pre-Effective
Amendment No. 1).
(3) Not Applicable.
- 2 -
<PAGE>
(4)(a) Form of certificate of shares of beneficial interest of Worldwide
Bond Fund and Gold and Natural Resources Fund (incorporated by
reference to Pre-Effective Amendment No. 1). Form of certificate of
shares of beneficial interest of Worldwide Emerging Markets Fund
(incorporated by reference to Post-Effective Amendment No. 15).
(4)(b) Instruments defining rights of security holders (See Exhibits (1)
and (2) above).
(5) Form of Advisory Agreement (incorporated by reference to Post-
Effective Amendment No. 15 ).
(5)(a) Form of Sub-Advisory Agreement (incorporated by reference to Post-
Effective Amendment No. 15).
(6)(a) Form of Distribution Agreement (incorporated by reference to Pre-
Effective Amendment No. 1).
(6)(b) Form of Participation Agreement (incorporated by reference to Pre-
Effective Amendment No. 2).
(7) Not Applicable.
(8) Global Custody Agreement, as amended. (to be filed by amendment)
(9) Forms of Procedural Agreement, Customer Agreement and Safekeeping
Agreement with Merrill Lynch Futures Inc. and Morgan Stanley utilized
by Worldwide Bond Fund and Gold and Natural Resources Fund
(incorporated by reference to Pre-Effective Amendment No. 2). Forms of
Procedural Agreement, Customer Agreement and Safekeeping Agreement
with Merrill Lynch Futures Inc. and Morgan Stanley utilized by
Worldwide Emerging Markets Fund (incorporated by reference to Post-
Effective Amendment No. 15).
(10) Opinions of Goodwin, Procter & Hoar, including consents (incorporated
by reference to Pre-Effective Amendment No. 2 and Post-Effective
Amendment Nos. 14 and 15).
(11)* Consent of Independent Accountants.
(12) Not Applicable.
(13) Subscription Agreement (incorporated by reference to Pre-Effective
Amendment No. 2).
(14) Not Applicable.
(15) Not Applicable.
(16)* Computation of Performance Quotation.
(17)* Financial Data Schedule.
(18) Powers of Attorney (incorporated by reference to Exhibit 17 of Post-
Effective Amendment No. 1).
- 3 -
<PAGE>
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 December 31, 1998 of
each series of the Registrant:
Class and Title Number of Record Holders
--------------- ------------------------
<TABLE>
<CAPTION>
<S> <C>
Worldwide Emerging Markets Fund 24
Worldwide Hard Assets Fund 34
Worldwide Bond Fund 17
Worldwide Real Estate Fund 8
</TABLE>
ITEM 27. Indemnification
---------------
Reference is made to Article VI of the Master Trust Agreement of the Registrant,
as amended, previously filed as Exhibit (1) to the Registration Statement.
Insofar as indemnification by the Registrant for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers, underwriters and
controlling persons of the Registrant, pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification is against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted against the Registrant by such trustee, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question of whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
ITEM 28. Business and Other Connections of Investment Adviser
----------------------------------------------------
Reference is made to Form ADV of Van Eck Associates Corporation (File No. 801-
21340), as currently on file with the Securities and Exchange Commission, and to
the caption "Management" in the Registrant's Prospectus and to the captions "The
Distributor", "Investment Advisory Services" and "Trustees and Officers" in the
Registrant's Statement of Additional Information.
ITEM 29. Principal Underwriters
----------------------
(a) Van Eck Securities Corporation, principal underwriter for the Registrant,
also distributes shares of Van Eck Funds and Van Eck/Chubb Funds, Inc.
(b) The following table presents certain information with respect to each
director and officer of Van Eck Securities Corporation:
- 4 -
<PAGE>
<TABLE>
<CAPTION>
Name and Principal Position and Offices Position and Office
Business Address with Underwriter with Registrant
- ---------------------- --------------------------- ------------------------
<S> <C> <C>
John C. van Eck Chairman and Director Chairman and President
99 Park Avenue
New York, NY
Jan van Eck Executive Vice President Trustee
99 Park Avenue and Director
New York, NY
Sigrid S. van Eck Vice President None
575 Park Avenue and Assistant Treasurer
New York, NY and Director
Fred M. van Eck Director None
99 Park Avenue
New York, NY
Derek van Eck Director Trustee and Executive Vice
99 Park Avenue President
New York, NY
Bruce J. Smith Vice President and Chief Vice President and
99 Park Avenue Financial Officer, Treasurer
New York, NY Treasurer, Controller
Thomas Elwood Vice President, General Vice President and
99 Park Avenue Counsel and Secretary Secretary
New York, NY
Susan C. Lashley Managing Director, Vice President
99 Park Avenue Operations
New York, NY
Keith Fletcher Senior Managing Director None
99 Park Avenue
New York, NY
</TABLE>
-5-
<PAGE>
<TABLE>
<S> <C> <C>
Robin Kunhardt Director, None
99 Park Avenue Product Management
New York, NY
</TABLE>
(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.
<TABLE>
<CAPTION>
Accounts, books and
documents listed by
reference to specific
subsection of 17 CFR
270 31a-1 to 31a-3 Person in Possession and Address
- ------------------ --------------------------------
<S> <C>
31a-1(b)(1) Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-1(b)(2)(i) Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-1(b)(2)(ii) Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-1(b)(2)(iii) Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-1(b)(2)(iv) DST Systems, Inc.
21 West Tenth Street
Kansas City, MO 64105
31a-1(b)(3) Not Applicable
31a-1(b)(4) Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-1(b)(5) Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
</TABLE>
- 6 -
<PAGE>
<TABLE>
<CAPTION>
Accounts, books and
documents listed by
reference to specific
subsection of 17 CFR
270 31a-1 to 31a-3 Person in Possession and Address
- ------------------ --------------------------------
<S> <C>
31a-1(b)(6) Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-1(b)(7) Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-1(b)(8) Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-1(b)(9) Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-1(b)(10) Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-1(b)(11) Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
</TABLE>
- 7 -
<PAGE>
<TABLE>
<CAPTION>
Accounts, books and
documents listed by
reference to specific
subsection of 17 CFR
270 31a-1 to 31a-3 Person in Possession and Address
- ------------------ --------------------------------
<S> <C>
31a-1(b)(12) Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-1(c) Not Applicable
31a-1(d) Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-1(e) Not Applicable
31a-1(f) Van Eck Associates Corporation
99 Park Avenue
New York NY 10016
31a-2(a)(1) Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
DST Systems, Inc.
21 West Tenth Street
Kansas City, MO 64105
</TABLE>
- 8 -
<PAGE>
<TABLE>
<CAPTION>
Accounts, books and
documents listed by
reference to specific
subsection of 17 CFR
270 31a-1 to 31a-3 Person in Possession and Address
- ------------------ --------------------------------
<S> <C>
31a-2(b) Not Applicable
31a-2(c) Van Eck Securities Corporation
99 Park Avenue
New York, NY 10016
31a-2(d) Not Applicable
31a-2(e) Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-3 Not Applicable
All Other Records Van Eck Worldwide Insurance Trust
pursuant to the Rule 99 Park Avenue
New York, NY 10016
</TABLE>
ITEM 31. Management Services
- ----------------------------
None
ITEM 32. Undertakings
------------
Registrant undertakes to furnish each person to whom a prospectus is
delivered, with a copy of the Registrant's latest annual reports to shareholders
upon request and without charge.
- 9 -
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this Post-Effective Amendment to the
Registration Statement pursuant to Rule 485(a) under the Securities Act of 1933
and has duly caused this Amendment to the Registration Statement on Form N-1A to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of New York, State of New York, on the 22nd day of February, 1999.
VAN ECK WORLDWIDE INSURANCE TRUST
By: /s/ John C. van Eck
--------------------
John C. van Eck, President
Pursuant to the requirements of the Securities Act of 1933, this Amendment to
the Registration Statement has been signed below by the following persons in the
capacities and on the date indicated:
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ John C. van Eck Chairman and President
- --------------------------
John C. van Eck 2/22/99
/s/ Bruce J. Smith Chief Financial Officer
- -------------------------- 2/22/99
Bruce J. Smith
/s/ Jeremy Biggs
- --------------------------
Jeremy Biggs Trustee 2/22/99
/s/ Richard Cowell
- --------------------------
Richard Cowell Trustee 2/22/99
/s/ Philip DeFeo Trustee 2/22/99
- --------------------------
Philip DeFeo
/s/ Wesley G. McCain
- --------------------------
Wesley G. McCain Trustee 2/22/99
/s/ Ralph F. Peters
- --------------------------
Ralph F. Peters Trustee 2/22/99
/s/ David J. Olderman
- --------------------------
David J. Olderman Trustee 2/22/99
/s/ Richard Stamberger
- --------------------------
Richard Stamberger Trustee 2/22/99
/s/ Derek S. van Eck
- --------------------------
Derek S. van Eck Trustee 2/22/99
/s/ Jan F. van Eck
- --------------------------
Jan F. van Eck Trustee 2/22/99
</TABLE>
<PAGE>
Exhibit Index
-------------
<TABLE>
<CAPTION>
Exhibit No. Item
- ----------- ----
<S> <C>
Exhibit 11 Consent of Independent Accountants
Exhibit 16 Computation of Performance Quotations
Exhibit 17 Financial Data Schedules
</TABLE>
<PAGE>
VAN ECK VARIABLE INSURANCE PRODUCTS TRUST
MASTER TRUST AGREEMENT
January 7, 1987
1987 Goodwin, Procter & Hoar
All Rights Reserved
<PAGE>
VAN ECK VARIABLE INSURANCE PRODUCTS TRUST
MASTER TRUST AGREEMENT
----------------------
Page
----
ARTICLE I. NAME AND DEFINITIONS 1
- --------- --------------------
Section 1.1 Name............................................ 1
Section 1.2 Definitions..................................... 1
(a) "By-laws"................................... 1
(b) "Commission"................................ 1
(c) "Declaration of Trust"...................... 2
(d) "1940 Act".................................. 2
(e) "Shareholder"............................... 2
(f) "Shares".................................... 2
(g) "Sub-Trust" or "Series"..................... 2
(h) "Trust"..................................... 2
(i) "Trustees".................................. 2
ARTICLE II. PURPOSE OF TRUST 2
- ---------- ----------------
ARTICLE III. THE TRUSTEES 2
- ----------- ------------
Section 3.1 Number, Designation, Election, Term, etc....... 2
(a) Initial Trustees........................... 2
(b) Number..................................... 3
(c) Election and Term.......................... 3
(d) Resignation and Retirement................. 3
(e) Removal.................................... 3
(f) Vacancies.................................. 3
(g) Effect of Death, Resignation, etc.......... 4
(h) No Accounting.............................. 4
Section 3.2 Powers of Trustees............................. 4
(a) Investments................................ 5
(b) Disposition of Assets...................... 5
(c) Ownership Powers........................... 5
(d) Subscription............................... 6
(e) Form of Holding............................ 6
(f) Reorganization, etc........................ 6
(g) Voting Trusts, etc......................... 6
(h) Compromise................................. 6
(i) Partnerships, etc.......................... 6
(j) Borrowing and Security..................... 6
(k) Guarantees, etc............................ 6
(1) Insurance.................................. 7
(m) Pensions, etc.............................. 7
(i)
<PAGE>
Paqe
----
Section 3.3 Certain Contracts............................. 7
(a) Advisory.................................. 8
(b) Administration............................ 8
(c) Distribution.............................. 8
(d) Custodian and Depository.................. 8
(e) Transfer and Dividend Disbursing Agency... 8
(f) Shareholder Servicing..................... 8
(g) Accounting................................ 8
Section 3.4 Payment of Trust Expenses and Compensation of
Trustees................................... 10
Section 3.5 Ownership of Assets of the Trust.............. 10
ARTICLE IV. SHARES 10
- ---------- ------
Section 4.1 Description of Shares......................... 10
Section 4.2 Establishment and Designation of Sub-Trusts... 12
(a) Assets Belonging to Sub-Trusts............ 12
(b) Liabilities Belonging to Sub-Trusts....... 12
(c) Dividends................................. 13
(d) Liquidation............................... 13
(e) Voting.................................... 14
(f) Redemption by Shareholder................. 14
(g) Redemption by Trust....................... 14
(h) Net Asset Value........................... 15
(i) Transfer.................................. 15
(j) Equality.................................. 15
(k) Fractions................................. 16
(1) Conversion Rights......................... 16
Section 4.3 Ownership of Shares........................... 16
Section 4.4 Investments in the Trust...................... 16
Section 4.5 No Pre-emptive Rights......................... 17
Section 4.6 Status of Shares and Limitation of
Personal Liability........................... 17
ARTICLE V. SHAREHOLDERS' VOTING POWERS AND MEETINGS 17
- --------- ----------------------------------------
Section 5.1 Voting Powers................................. 17
Section 5.2 Meetings...................................... 18
(ii)
<PAGE>
Page
----
Section 5.3 Record Dates............................ 18
Section 5.4 Quorum and Required Vote................ 19
Section 5.5 Action by Written Consent............... 19
Section 5.6 Inspection of Records................... 19
Section 5.7 Additional Provisions................... 19
Section 5.8 Shareholder Communications.............. 19
ARTICLE VI. LIMITATION OF LIABILITY; INDEMNIFICATION 20
- ----------- ----------------------------------------
Section 6.1 Trustees, Shareholders, etc. Not
Personally Liable; Notice............. 20
Section 6.2 Trustee's Good Faith Action; Expert
Advice; No Bond or Surety............. 21
Section 6.3 Indemnification of Shareholders......... 21
Section 6.4 Indemnification of Trustees, officers,
etc................................... 22
Section 6.5 Compromise Payment...................... 23
Section 6.6 Indemnification Not Exclusive, etc...... 23
Section 6.7 Liability of Third Persons Dealing with
Trustees.............................. 24
ARTICLE VII. MISCELLANEOUS 24
- ----------- -------------
Section 7.1 Duration and Termination of Trust........ 24
Section 7.2 Reorganization........................... 24
Section 7.3 Amendments............................... 25
Section 7.4 Filing of Copies; References; Headings... 26
Section 7.5 Applicable Law........................... 26
Section 7.6 Name of Trust............................ 27
(iii)
<PAGE>
VAN ECK VARIABLE INSURANCE PRODUCTS TRUST
MASTER TRUST AGREEMENT
----------------------
AGREEMENT AND DECLARATION OF TRUST made at Boston, Massachusetts this 7th
day of January, 1987, by the Trustees hereunder, and by the holders of shares of
beneficial interest to be issued hereunder as hereinafter provided.
WITNESSETH
WHEREAS this Trust has been formed to carry on the business of an investment
company; and
WHEREAS this Trust is authorized to issue its shares of beneficial interest
in separate series, each separate series to be a Sub-Trust hereunder, all in
accordance with the provisions hereinafter set forth; and
WHEREAS the Trustees have agreed to manage all property coming into their
hands as trustees of a Massachusetts business trust in accordance with the
provisions hereinafter set forth.
NOW, THEREFORE, the Trustees hereby declare that they will hold all cash,
securities and other assets which they may from time to time acquire in any
manner as Trustees hereunder IN TRUST to manage and dispose of the same upon the
following terms and conditions for the benefit of the holders from time to time
of shares of beneficial interest in this Trust or SubTrusts (as hereinafter
defined) created hereunder as hereinafter set forth.
ARTICLE I
---------
NAME AND DEFINITIONS
--------------------
Section 1.1 Name. This Trust shall be known as "VAN ECK VARIABLE INSURANCE
----
PRODUCTS TRUST" and the Trustees shall conduct the business of the Trust under
that name or any other name or names as they may from time to time determine.
Section 1.2 Definitions. Whenever used herein, unless otherwise required by
-----------
the context or specifically provided:
(a) "By-Laws" shall mean the By-Laws of the Trust as amended from time to
time;
<PAGE>
(b) "Commission" shall have the meaning given it in the 1940 Act;
(c) "Declaration of Trust" shall mean this Agreement and Declaration of
Trust as amended or restated from time to time;
(d) "1940 Act" refers to the Investment Company Act of 1940 and the Rules
and Regulations thereunder, all as amended from time to time;
(e) "Shareholder" means a record owner of Shares;
(f) "Shares" refers to the transferable units of interest into which the
beneficial interest in the Trust and each Sub-Trust of the Trust (as the context
may require) shall be divided from time to time;
(g) "Sub-Trust" or "Series" refers to a series of Shares established and
designated under or in accordance with the provisions of Article IV;
(h) "Trust" refers to the Massachusetts business trust established by this
Declaration of Trust, as amended from time to time, inclusive of each and every
Sub-Trust established hereunder; and
(i) "Trustees" refers to the Trustees of the Trust and of each Sub-Trust
hereunder named herein or elected in accordance with Article III.
ARTICLE II
----------
PURPOSE OF TRUST
----------------
The purpose of the Trust is to operate as an investment company and to offer
Shareholders of the Trust and each Sub-Trust of the Trust one or more investment
programs primarily in securities and debt instruments.
ARTICLE III
-----------
THE TRUSTEES
------------
Section 3.1 Number, Designation, Election, Term, etc.
----------------------------------------
(a) Initial Trustees. The initial Trustee hereof and of each Sub-Trust
----------------
hereunder shall be Michael G. Doorley.
2
<PAGE>
(b) Number. The Trustees serving as such, whether named above or hereafter
------
becoming Trustees, may increase or decrease (to not less than two) the number of
Trustees to a number other than the number theretofore determined. No decrease
in the number of Trustees shall have the effect of removing any Trustee from
office prior to the expiration of his term, but the number of Trustees may be
decreased in conjunction with the removal of a Trustee pursuant to subsection
(e) of this Section 3.1.
(c) Election and Term. The Trustees shall be elected by the Shareholders of
-----------------
the Trust at the first meeting of the Shareholders following the initial public
offering of shares of the Trust. Each Trustee, whether named above or hereafter
becoming a Trustee, shall serve as a Trustee of the Trust and of each sub-Trust
hereunder during the lifetime of this Trust and until its termination as
hereinafter provided except as such Trustee sooner dies, resigns or is removed.
Subject to Section 16(a) of the 1940 Act, the Trustees may elect their own
successors and may, pursuant to Section 3.1(f) hereof, appoint Trustees to fill
vacancies.
(d) Resignation and Retirement. Any Trustee may resign his trust or retire
--------------------------
as a Trustee, by written instrument signed by him and delivered to the other
Trustees or to any officer of the Trust, and such resignation or retirement
shall take effect upon such delivery or upon such later date as is specified in
such instrument and shall be effective as to the Trust and each Sub-Trust
hereunder.
(e) Removal. Any Trustee may be removed with or without cause at any time:
-------
(i) by written instrument, signed by at least two-thirds of the number of
Trustees in office immediately prior to such removal, specifying the date upon
which such removal shall become effective; or (ii) by vote of Shareholders
holding not less than two-thirds of the Shares then outstanding, cast in person
or by proxy at any meeting called for the purpose; or (iii) by a written
declaration signed by Shareholders holding not less than two-thirds of the
Shares then outstanding and filed with the Trust's custodian. Any such removal
shall be effective as to the Trust and each Sub-Trust hereunder.
(f) Vacancies. Any vacancy or anticipated vacancy resulting from any reason,
---------
including without limitation the death, resignation, retirement, removal or
incapacity of any of the Trustees, or resulting from an increase in the number
of Trustees by the other Trustees may (but so long as there are at least two
remaining Trustees, need not unless required by the 1940 Act) be filled by a
majority of the remaining Trustees, subject to the provisions of Section 16(a)
of the 1940 Act, through the appointment in writing of such other person as such
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remaining Trustees in their discretion shall determine and such appointment
shall be effective upon the written acceptance of the person named therein to
serve as a Trustee and agreement by such person to be bound by the provisions
of this Declaration of Trust, except that any such appointment in anticipation
of a vacancy to occur by reason of retirement, resignation or increase in number
of Trustees to be effective at a later date shall become effective only at or
after the effective date of said retirement, resignation or increase in number
of Trustees. As soon as any Trustee so appointed shall have accepted such
appointment and shall have agreed in writing to be bound by this Declaration of
Trust and the appointment is effective, the Trust estate shall vest in the new
Trustee, together with the continuing Trustees, without any further act or
conveyance.
(g) Effect of Death, Resignation, etc. The death, resignation, retirement,
---------------------------------
removal or incapacity of the Trustees, or any one of them, shall not operate to
annul or terminate the Trust or any Sub-Trust hereunder or to revoke or
terminate any existing agency or contract created or entered into pursuant to
the terms of this Declaration of Trust.
(h) No Accounting. Except to the extent required by the 1940 Act or under
-------------
circumstances which would justify his removal for cause, no person ceasing to be
a Trustee as a result of his death, resignation, retirement, removal or
incapacity (nor the estate of any such person) shall be required to make an
accounting to the Shareholders or remaining Trustees upon such cessation.
Section 3.2 Powers of Trustees. Subject to the provisions of this
------------------
Declaration of Trust, the business of the Trust shall be managed by the
Trustees, and they shall have all powers necessary or convenient to carry out
that responsibility and the purpose of the Trust. Without limiting the
foregoing, the Trustees may adopt By-Laws not inconsistent with this Declaration
of Trust providing for the conduct of the business and affairs of the Trust and
may amend and repeal them to the extent that such By-Laws do not reserve that
right to the Shareholders; they may from time to time in accordance with the
provisions of Section 4.1 hereof establish Sub-Trusts, each such Sub-Trust to
operate as a separate and distinct investment medium and with separately defined
investment objectives and policies and distinct investment purposes; they may as
they consider appropriate elect and remove officers and appoint and terminate
agents and consultants and hire and terminate employees, any one or more of the
foregoing of whom may be a Trustee, and may provide for the compensation of all
of the foregoing; they may appoint from their own number, and terminate, any one
or more committees consisting of two or more Trustees, including without implied
limitation an executive committee, which may, when the Trustees are not in
session and
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subject to the 1940 Act, exercise some or all of the power and authority of the
Trustees as the Trustees may determine; in accordance with Section 3.3 they may
employ one or more advisers, administrators, depositories and custodians and may
authorize any depository or custodian to employ subcustodians or agents and to
deposit all or any part of such assets in a system or systems for the central
handling of securities and debt instruments, retain transfer, dividend,
accounting or Shareholder servicing agents or any of the foregoing, provide for
the distribution of Shares by the Trust through one or more distributors,
principal underwriters or otherwise, and set record dates or times for the
determination of Shareholders or various of them with respect to various
matters; they may compensate or provide for the compensation of the Trustees,
officers, advisers, administrators, custodians, other agents, consultants and
employees of the Trust or the Trustees on such terms as they deem appropriate;
and in general they may delegate to any officer of the Trust, to any committee
of the Trustees and to any employee, adviser, administrator, distributor,
depository, custodian, transfer and dividend disbursing agent, or any other
agent or consultant of the Trust such authority, powers, functions and duties as
they consider desirable or appropriate for the conduct of the business and
affairs of the Trust, including without implied limitation the power and
authority to act in the name of the Trust and any Sub-Trust and of the Trustees,
to sign documents and to act as attorney-in-fact for the Trustees.
Without limiting the foregoing and to the extent not inconsistent with the
1940 Act or other applicable law, the Trustees shall have power and authority
for and on behalf of the Trust and each separate Sub-Trust established
hereunder:
(a) Investments. To invest and reinvest cash and other property, and to hold
-----------
cash or other property uninvested without in any event being bound or limited by
any present or future law or custom in regard to investments by trustees;
(b) Disposition of Assets. To sell, exchange, lend, pledge, mortgage,
---------------------
hypothecate, write options on and lease any or all of the assets of the Trust;
(c) Ownership Powers. To vote or give assent, or exercise any rights of
----------------
ownership, with respect to stock or other securities, debt instruments or
property; and to execute and deliver proxies or powers of attorney to such
person or persons as the Trustees shall deem proper, granting to such person or
persons such power and discretion with relation to securities, debt instruments
or property as the Trustees shall deem proper;
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(d) Subscription. To exercise powers and rights of subscription or otherwise
------------
which in any manner arise out of ownership of securities or debt instruments;
(e) Form of Holding. To hold any security, debt instrument or property in a
---------------
form not indicating any trust, whether in bearer, unregistered or other
negotiable form, or in the name of the Trustees or of the Trust or of any Sub-
Trust or in the name of a custodian, subcustodian or other depository or a
nominee or nominees or otherwise;
(f) Reorganization, etc. To consent to or participate in any plan for the
-------------------
reorganization, consolidation or merger of any corporation or issuer, any
security or debt instrument of which is or was held in the Trust; to consent to
any contract, lease, mortgage, purchase or sale of property by such corporation
or issuer, and to pay calls or subscriptions with respect to any security or
debt instrument held in the Trust;
(g) Voting Trusts, etc. To join with other holders of any securities or debt
------------------
instruments in acting through a committee, depositary, voting trustee or
otherwise, and in that connection to deposit any security or debt instrument
with, or transfer any security or debt instrument to, any such committee,
depositary or trustee, and to delegate to them such power and authority with
relation to any security or debt instrument (whether or not so deposited or
transferred) as the Trustees shall deem proper, and to agree to pay, and to pay,
such portion of the expenses and compensation of such committee, depositary or
trustee as the Trustees shall deem proper;
(h) Compromise. To compromise, arbitrate or otherwise adjust claims in favor
----------
of or against the Trust or any Sub-Trust or any matter in controversy, including
but not limited to claims for taxes;
(i) Partnerships, etc. To enter into joint ventures, general, or limited
-----------------
partnerships and any other combinations or associations;
(j) Borrowing and Security. To borrow funds and to mortgage and pledge the
----------------------
assets of the Trust or any part thereof to secure obligations arising in
connection with such borrowing;
(k) Guarantees, etc. To endorse or guarantee the payment of any notes or
---------------
other obligations of any person; to make contracts of guaranty or suretyship, or
otherwise assume liability for payment thereof; and to mortgage and pledge the
Trust property or any part thereof to secure any of or all such obligations;
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(1) Insurance. To purchase and pay for entirely out of Trust property such
---------
insurance as they may deem necessary or appropriate for the conduct of the
business, including, without limitation, insurance policies insuring the assets
of the Trust and payment of distributions and principal on its portfolio
investments, and insurance policies insuring the Shareholders, Trustees,
officers, employees, agents, consultants, investment advisers, managers,
administrators, distributors, principal underwriters, or independent
contractors, or any thereof (or any person connected therewith), of the Trust
individually against all claims and liabilities of every nature arising by
reason of holding, being or having held any such office or position, or by
reason of any action alleged to have been taken or omitted by any such person in
any such capacity, including any action taken or omitted that may be determined
to constitute negligence, whether or not the Trust would have the power to
indemnify such person against such liability; and
(m) Pensions, etc. To pay pensions for faithful service, as deemed
-------------
appropriate by the Trustees, and to adopt, establish and carry out pension,
profit-sharing, share bonus, share purchase, savings, thrift and other
retirement, incentive and benefit plans, trusts and provisions, including the
purchasing of life insurance and annuity contracts as a means of providing such
retirement and other benefits, for any or all of the Trustees, officers,
employees and agents of the Trust.
Except as otherwise provided by the 1940 Act or other applicable law, this
Declaration of Trust or the By-Laws, any action to be taken by the Trustees on
behalf of the Trust or any Sub-Trust may be taken by a majority of the Trustees
present at a meeting of Trustees (a quorum, consisting of at least one-half of
the Trustees then in office, being present), within or without Massachusetts,
including any meeting held by means of a conference telephone or other
communications equipment by means of which all persons participating in the
meeting can hear each other at the same time, and participation by such means
shall constitute presence in person at a meeting, or by written consents of a
majority of the Trustees then in office (or such larger or different number as
may be required by the 1940 Act or other applicable law).
Section 3.3 Certain Contracts. Subject to compliance with the provisions of
-----------------
the 1940 Act, but notwithstanding any limitations of present and future law or
custom in regard to delegation of powers by trustees generally, the Trustees
may, at any time and from time to time and without limiting the generality of
their powers and authority otherwise set forth herein, enter into one or more
contracts with any one or more corporations, trusts, associations, partnerships,
limited partnerships, other type of organizations, or individuals (a
"Contracting Party"), to provide for the performance and
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assumption of some or all of the following services, duties and responsibilities
to, for or on behalf of the Trust and/or any Sub-Trust, and/or the Trustees, and
to provide for the performance and assumption of such other services, duties and
responsibilities in addition to those set forth below as the Trustees may
determine appropriate:
(a) Advisory. Subject to the general supervision of the Trustees and in
--------
conformity with the stated policy of the Trustees with respect to the
investments of the Trust or of the assets belonging to any Sub-Trust of the
Trust (as that phrase is defined in subsection (a) of Section 4.2), to manage
such investments and assets, make investment decisions with respect thereto, and
to place purchase and sale orders for portfolio transactions relating to such
investments and assets;
(b) Administration. Subject to the general supervision of the Trustees and
--------------
in conformity with any policies of the Trustees with respect to the operations
of the Trust and each Sub-Trust, to supervise all or any part of the operations
of the Trust and each Sub-Trust, and to provide all or any part of the
administrative and clerical personnel, office space and office equipment and
services appropriate for the efficient administration and operations of the
Trust and each Sub-Trust;
(c) Distribution. To distribute the Shares of the Trust and each Sub-Trust,
------------
to be principal underwriter of such Shares, and/or to act as agent of the Trust
and each Sub-Trust in the sale of Shares and the acceptance or rejection of
orders for the purchase of Shares;
(d) Custodian and Depository. To act as depository for and to maintain
------------------------
custody of the property of the Trust and each Sub-Trust and accounting
records in connection therewith;
(e) Transfer and Dividend Disbursing Agency. To maintain records of the
---------------------------------------
ownership of outstanding Shares, the issuance and redemption and the transfer
thereof, and to disburse any dividends declared by the Trustees and in
accordance with the policies of the Trustees and/or the instructions of any
particular Shareholder to reinvest any such dividends;
(f) Shareholder Servicing. To provide service with respect to the
---------------------
relationship of the Trust and its Shareholders, records with respect to
Shareholders and their Shares, and similar matters; and
(g) Accounting. To handle all or any part of the accounting
----------
responsibilities, whether with respect to the Trust's properties, Shareholders
or otherwise.
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The same person may be the Contracting Party for some or all of the services,
duties and responsibilities to, for and of the Trust and/or the Trustees, and
the contracts with respect thereto may contain such terms interpretive of or in
addition to the delineation of the services, duties and responsibilities
provided for, including provisions that are not inconsistent with the 1940 Act
relating to the standard of duty of and the rights to indemnification of the
Contracting Party and others, as the Trustees may determine. Nothing herein
shall preclude, prevent or limit the Trust or a Contracting Party from entering
into sub-contractual arrangements relating to any of the matters referred to in
Sections 3.3(a) through (g) hereof.
The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust is a
shareholder, director, officer, partner, trustee, employee, manager,
adviser, principal underwriter or distributor or agent of or for any
Contracting Party, or of or for any parent or affiliate of any Contracting
Party or that the Contracting Party or any parent or affiliate thereof is a
Shareholder or has an interest in the Trust or any Sub-Trust, or that
(ii) any Contracting Party may have a contract providing for the
rendering of any similar services to one or more other corporations, trusts,
associations, partnerships, limited partnerships or other organizations, or
have other business or interests,
shall not affect the validity of any contract for the performance and assumption
of services, duties and responsibilities to, for or of the Trust or any Sub-
Trust and/or the Trustees or disqualify any Shareholder, Trustee or officer of
the Trust from voting upon or executing the same or create any liability or
accountability to the Trust, any Sub-Trust or its Shareholders, provided that in
the case of any relationship or interest referred to in the preceding clause (i)
on the part of any Trustee or officer of the Trust either (x) the material facts
as to such relationship or interest have been disclosed to or are known by the
Trustees not having any such relationship or interest and the contract involved
is approved in good faith by a majority of such Trustees not having any such
relationship or interest (even though such unrelated or disinterested Trustees
are less than a quorum of all of the Trustees), (y) the material facts as to
such relationship or interest and as to the contract have been disclosed to or
are known by the Shareholders entitled to vote thereon and the contract involved
is specifically approved in good faith by vote of the Shareholders, or (z) the
specific contract involved is fair to the Trust as of the time it is authorized,
approved or ratified by the Trustees or by the Shareholders.
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Section 3.4 Payment of Trust Expenses and Compensation of Trustees. The
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Trustees are authorized to pay or to cause to be paid out of the principal or
income of the Trust or any Sub-Trust, or partly out of principal and partly out
of income, and to charge or allocate the same to, between or among such one or
more of the Sub-Trusts that may be established and designated pursuant to
Article IV, as the Trustees deem fair, all expenses, fees, charges, taxes and
liabilities incurred or arising in connection with the Trust or any Sub-Trust,
or in connection with the management thereof, including, but not limited to, the
Trustees' compensation and such expenses and charges for the services of the
Trust's officers, employees, investment adviser, administrator, distributor,
principal underwriter, auditor, counsel, depository, custodian, transfer agent,
dividend disbursing agent, accounting agent, Shareholder servicing agent, and
such other agents, consultants, and independent contractors and such other
expenses and charges as the Trustees may deem necessary or proper to incur.
Without limiting the generality of any other provision hereof, the Trustees
shall be entitled to reasonable compensation from the Trust for their services
as Trustees and may fix the amount of such compensation.
Section 3.5 Ownership of Assets of the Trust. Title to all of the assets of
--------------------------------
the Trust shall at all times be considered as vested in the Trustees.
ARTICLE IV
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SHARES
------
Section 4.1 Description of Shares. The beneficial interest in the Trust
---------------------
shall be divided into Shares, all with $.001 par value and of one class, but the
Trustees shall have the authority from time to time to divide the class of
Shares into two or more Series of Shares (each of which Series of Shares shall
be a separate and distinct Sub-Trust of the Trust, including without limitation
those Sub-Trusts specifically established and designated in Section 4.2), as
they deem necessary or desirable. Each Sub-Trust established hereunder shall be
deemed to be a separate trust under Massachusetts General Laws Chapter 182. The
Trustees shall have exclusive power without the requirement of shareholder
approval to establish and designate such separate and distinct Sub-Trusts, and
to fix and determine the relative rights and preferences as between the shares
of the separate Sub-Trusts as to right of redemption and the price, terms and
manner of redemption, special and relative rights as to dividends and other
distributions and on liquidation, sinking or purchase fund provisions,
conversion rights, and conditions under which the
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several Sub-Trusts shall have separate voting rights or not voting rights.
The number of authorized Shares and the number of Shares of each Sub-Trust
that may be issued is unlimited, and the Trustees may issue Shares of any Sub-
Trust for such consideration and on such terms as they may determine (or for no
consideration if pursuant to a Share dividend or split-up), all without action
or approval of the Shareholders. All Shares when so issued on the terms
determined by the Trustees shall be fully paid and non-assessable (but may be
subject to mandatory contribution back to the Trust as provided in subsection
(h) of Section 4.2). The Trustees may classify or reclassify any unissued Shares
or any Shares previously issued and reacquired of any Sub-Trust into one or more
Sub-Trusts that may be established and designated from time to time. The
Trustees may hold as treasury Shares, reissue for such consideration and on such
terms as they may determine, or cancel, at their discretion from time to time,
any Shares of any Sub-Trust reacquired by the Trust.
The Trustees may from time to time close the transfer books or establish
record dates and times for the purposes of determining the holders of Shares
entitled to be treated as such, to the extent provided or referred to in Section
5.3.
The establishment and designation of any Sub-Trust in addition to those
established and designated in Section 4.2 shall be effective (i) upon the
execution by a majority of the then Trustees of an instrument setting forth such
establishment and designation of the relative rights and preferences of the
Shares of such Sub-Trust, (ii) upon the execution of an instrument in writinq
by an officer of the Trust pursuant to the vote of a majority of the Trustees,
or (iii) as otherwise provided in either such instrument. At any time that there
are no Shares outstandinq of any particular Sub-Trust previously established and
designated the Trustees may by an instrument executed by a majority of their
number abolish that Sub-Trust and the establishment and designation thereof.
Each instrument referred to in this paragraph shall have the status of an
amendment to this Declaration of Trust.
Any Trustee, officer or other agent of the Trust, and any organization in
which any such person is interested may acquire, own, hold and dispose of Shares
of any Sub-Trust of the Trust to the same extent as if such person were not a
Trustee, officer or other agent of the Trust; and the Trust may issue and sell
or cause to be issued and sold and may purchase Shares of any Sub-Trust from any
such person or any such organization subject only to the general limitations,
restrictions
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or other provisions applicable to the sale or purchase of Shares of such Sub-
Trust generally.
Section 4.2 Establishment and Designation of Sub-Trusts. Without limiting
-------------------------------------------
the authority of the Trustees set forth in Section 4.1 to establish and
designate any further Sub-Trusts, the Trustees hereby establish and designate
two Sub-Trusts: "Van Eck Gold Fund" and "Van Eck Global 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:
(a) Assets Belonging to Sub-Trusts. All consideration received by the Trust
------------------------------
for the issue or sale of Shares of a particular Sub-Trust, together with all
assets in which such consideration is invested or reinvested, all income,
earnings, profits, and proceeds thereof, including any proceeds derived from the
sale, exchange or liquidation of such assets, and any funds or payments derived
from any reinvestment of such proceeds in whatever form the same may be, shall
be held by the Trustees in trust for the benefit of the holders of Shares of
that Sub-Trust and shall irrevocably belong to that Sub-Trust for all purposes,
and shall be so recorded upon the books of account of the Trust. Such
consideration, assets, income, earnings, profits, and proceeds thereof,
including any proceeds derived from the sale, exchange or liquidation of such
assets, and any funds or payments derived from any reinvestment of such
proceeds, in whatever form the same may be, together with any General Items (as
hereinafter defined) allocated to that Sub-Trust as provided in the following
sentence, are herein referred to as "assets belonging to" that Sub-Trust. In the
event that there are any assets, income, earnings, profits, and proceeds
thereof, funds, or payments which are not readily identifiable as belonging to
any particular Sub-Trust (collectively "General Items"), the Trustees shall
allocate such General Items to and among any one or more of the Sub-Trusts
established and designated from time to time in such manner and on such basis as
they, in their sole discretion, deem fair and equitable; and any General Items
so allocated to a particular Sub-Trust shall belong to that Sub-Trust. Each such
allocation by the Trustees shall be conclusive and binding upon the Shareholders
of all Sub-Trusts for all purposes.
(b) Liabilities Belonging to Sub-Trusts. The assets belonging to each
-----------------------------------
particular Sub-Trust shall be charged with the liabilities in respect of that
Sub-Trust and all expenses, costs, charges and reserves belonging to that Sub-
Trust, and any general liabilities, expenses, costs, charges or reserves of the
Trust which are not readily identifiable as belonging to
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any particular Sub-Trust shall be allocated and charged by the Trustees to and
among any one or more of the Sub-Trusts established and designated from time to
time in such manner and on such basis as the Trustees in their sole discretion
deem fair and equitable. The liabilities, expenses, costs, charges and reserves
allocated and so charged to a Sub-Trust are herein referred to as "liabilities
belonging to" that Sub-Trust. Each allocation of liabilities, expenses, costs,
charges and reserves by the Trustees shall be conclusive and binding upon the
Shareholders of all Sub-Trusts for all purposes. Any creditor of any Sub-Trust
may look only to the assets of that Sub-Trust to satisfy such creditor's debt.
The Trustees shall have full discretion, to the extent not inconsistent with
the 1940 Act, to determine which items shall be treated as income and which
items as capital; and each such determination and allocation shall be conclusive
and binding upon the Shareholders.
(c) Dividends. Dividends and distributions on Shares of a particular Sub-
---------
Trust may be paid with such frequency as the Trustees may determine, which may
be daily or otherwise pursuant to a standing resolution or resolutions adopted
only once or with such frequency as the Trustees may determine, to the holders
of Shares of that Sub-Trust, from such of the income and capital gains, accrued
or realized, from the assets belonging to that Sub-Trust, as the Trustees may
determine, after providing for actual and accrued liabilities belonging to that
Sub-Trust. All dividends and distributions on Shares of a particular Sub-Trust
shall be distributed pro rata to the holders of Shares of that Sub-Trust in
proportion to the number of Shares of that Sub-Trust held by such holders at the
date and time of record established for the payment of such dividends or
distributions, except that in connection with any dividend or distribution
program or procedure the Trustees may determine that no dividend or distribution
shall be payable on Shares as to which the Shareholder's purchase order and/or
payment have not been received by the time or times established by the Trustees
under such program or procedure. Such dividends and distributions may be made in
cash or Shares of that Sub-Trust or a combination thereof as determined by the
Trustees or pursuant to any program that the Trustees may have in effect at the
time for the election by each Shareholder of the mode of the making of such
dividend or distribution to that Shareholder. Any such dividend or distribution
paid in Shares will be paid at the net asset value thereof as determined in
accordance with subsection (h) of Section 4.2.
(d) Liquidation. In the event of the liquidation or dissolution of the
-----------
Trust, the Shareholders of each Sub-Trust that has been established and
designated shall be entitled to receive, when and as declared by the Trustees,
the excess of
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the assets belonging to that Sub-Trust over the liabilities belonging to that
Sub-Trust. The assets so distributable to the Shareholders of any particular
Sub-Trust shall be distributed among such Shareholders in proportion to the
number of Shares of that Sub-Trust held by them and recorded on the books of the
Trust. The liquidation of any particular Sub-Trust may be authorized at any time
by vote of a majority of the Trustees then in office subject to the approval of
a majority of the outstanding voting Shares of that Sub-Trust, as defined in the
1940 Act.
(e) Voting. On each matter submitted to a vote of the Shareholders, each
------
holder of a Share of each Sub-Trust shall be entitled to one vote for each whole
Share and to a proportionate fractional vote for each fractional Share standing
in his name on the books of the Trust and all Shares of each Sub-Trust shall
vote as a separate class except as to voting for Trustees and as otherwise
required by the 1940 Act. As to any matter which does not affect the interest of
a particular Sub-Trust, only the holders of Shares of the one or more affected
Sub-Trusts shall be entitled to vote.
(f) Redemption by Shareholder. Each holder of Shares of a particular Sub-
-------------------------
Trust shall have the right at such times as may be permitted by the Trust, but
no less frequently than once each week, to require the Trust to redeem all or
any part of his Shares of that Sub-Trust at a redemption price equal to the net
asset value per Share of that Sub-Trust next determined in accordance with
subsection (h) of this Section 4.2 after the Shares are properly tendered for
redemption, subject to any contingent deferred sales charge in effect at the
time of redemption. Payment of the redemption price shall be in cash; provided,
however, that if the Trustees determine, which determination shall be
conclusive, that conditions exist which make payment wholly in cash unwise or
undesirable, the Trust may, subject to the requirements of the 1940 Act, make
payment wholly or partly in securities or other assets belonging to the Sub-
Trust of which the Shares being redeemed are part at the value of such
securities or assets used in such determination of net asset value.
Notwithstanding the foregoing, the Trust may postpone payment of the
redemption price and may suspend the right of the holders of Shares of any Sub-
Trust to require the Trust to redeem Shares of that Sub-Trust during any period
or at any time when and to the extent permissible under the 1940 Act.
(g) Redemption by Trust. Each Share of each Sub-Trust that has been
-------------------
established and designated is subject to redemption by the Trust at the
redemption price which would be applicable if such Share was then being redeemed
by the Shareholder pursuant to subsection (f) of this Section 4.2: (a) at
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any time, if the Trustees determine in their sole discretion and by majority
vote that failure to so redeem may have materially adverse consequences to the
holders of the Shares of the Trust or any Sub-Trust thereof, or (b) upon such
other conditions as may from time to time be determined by the Trustees and set
forth in the then current Prospectus of the Trust with respect to maintenance of
Shareholder accounts of a minimum amount. Upon such redemption the holders of
the Shares so redeemed shall have no further right with respect thereto other
than to receive payment of such redemption price.
(h) Net Asset Value. The net asset value per Share of any Sub-Trust shall be
---------------
the quotient obtained by dividing the value of the net assets of that Sub-Trust
(being the value of the assets belonging to that Sub-Trust less the liabilities
belonging to that Sub-Trust) by the total number of Shares of that Sub-Trust
outstanding, all determined in accordance with the methods and procedures,
including without limitation those with respect to rounding, established by the
Trustees from time to time.
The Trustees may determine to maintain the net asset value per Share of any
Sub-Trust at a designated constant dollar amount and in connection therewith may
adopt procedures not inconsistent with the 1940 Act for the continuing
declarations of income attributable to that Sub-Trust as dividends payable in
additional Shares of that Sub-Trust at the designated constant dollar amount and
for the handling of any losses attributable to that Sub-Trust. Such procedures
may provide that in the event of any loss each Shareholder shall be deemed to
have contributed to the capital of the Trust attributable to that Sub-Trust his
pro rata portion of the total number of Shares required to be cancelled in order
to permit the net asset value per Share of that Sub-Trust to be maintained,
after reflecting such loss, at the designated constant dollar amount. Each
Shareholder of the Trust shall be deemed to have agreed, by his investment in
any Sub-Trust with respect to which the Trustees shall have adopted any such
procedure, to make the contribution referred to in the preceding sentence in the
event of any such loss.
(i) Transfer. All Shares of each particular Sub-Trust shall be transferable,
--------
but transfers of Shares of a particular Sub-Trust will be recorded on the Share
transfer records of the Trust applicable to that Sub-Trust only at such times as
Shareholders shall have the right to require the Trust to redeem Shares of that
Sub-Trust and at such other times as may be permitted by the Trustees.
(j) Equality . All Shares of each particular Sub-Trust shall represent an
--------
equal proportionate interest in the assets belonging to that Sub-Trust (subject
to the liabilities
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belonging to that Sub-Trust), and each Share of any particular Sub-Trust shall
be equal to each other Share of that Sub-Trust; but the provisions of this
sentence shall not restrict any distinctions permissible under subsection (c) of
this Section 4.2 that may exist with respect to dividends and distributions on
Shares of the same Sub-Trust. The Trustees may from time to time divide or
combine the Shares of any particular Sub-Trust into a greater or lesser number
of Shares of that Sub-Trust without thereby changing the proportionate
beneficial interest in the assets belonging to that Sub-Trust or in any way
affecting the rights of Shares of any other Sub-Trust.
(k) Fractions. Any fractional Share of any Sub-Trust, if any such fractional
---------
Share is outstanding, shall carry proportionately all the rights and obligations
of a whole Share of that Sub-Trust, including rights and obligations with
respect to voting, receipt of dividends and distributions, redemption of Shares,
and liquidation of the Trust.
(1) Conversion Rights. Subject to compliance with the requirements of the
-----------------
1940 Act, the Trustees shall have the authority to provide that holders of
Shares of any Sub-Trust shall have the right to convert said Shares into Shares
of one or more other Sub-Trust in accordance with such requirements and
procedures as may be established by the Trustees.
(m) Termination of Sales. The Trustees shall have the authority to terminate
--------------------
the sales of Shares of any Sub-Trust at any time or for such periods as the
Trustees may from time to time decide.
Section 4.3 Ownership of Shares. The ownership of Shares shall be recorded
-------------------
on the books of the Trust or of a transfer or similar agent for the Trust, which
books shall be maintained separately for the Shares of each Sub-Trust that has
been established and designated. No certificates certifying the ownership of
Shares need be issued except as the Trustees may otherwise determine from time
to time. The Trustees may make such rules as they consider appropriate for the
issuance of Share certificates, the use of facsimile signatures, the transfer of
Shares and similar matters. The record books of the Trust as kept by the Trust
or any transfer or similar agent, as the case may be, shall be conclusive as to
who are the Shareholders and as to the number of Shares of each Sub-Trust held
from time to time by each such Shareholder.
Section 4.4 Investments in the Trust. The Trustees may accept investments
------------------------
in the Trust and each Sub-Trust thereof from such persons and on such terms and
for such consideration, not inconsistent with the provisions of the 1940 Act, as
they from time to time authorize. The Trustees may authorize any distributor,
principal underwriter, custodian, transfer agent or
16
<PAGE>
other person to accept orders for the purchase of Shares that conform to such
authorized terms and to reject any purchase orders for Shares whether or not
conforming to such authorized terms.
Section 4.5 No Pre-emptive Rights. Shareholders shall have no pre-emptive or
---------------------
other right to subscribe to any additional Shares or other securities issued by
the Trust.
Section 4.6 Status of Shares and Limitation of Personal Liability. Shares
-----------------------------------------------------
shall be deemed to be personal property giving only the rights provided in this
instrument. Every Shareholder by virtue of having become a Shareholder shall be
held to have expressly assented and agreed to the terms hereof and to have
become a party hereto. The death of a Shareholder during the continuance of the
Trust shall not operate to terminate the Trust or any Sub-Trust thereof nor
entitle the representative of any deceased Shareholder to an accounting or to
take any action in court or elsewhere against the Trust or the Trustees, but
only to the rights of said decedent under this Trust. Ownership of Shares shall
not entitle the Shareholder to any title in or to the whole or any part of the
Trust property or right to call for a partition or division of the same or for
an accounting, nor shall the ownership of Shares constitute the Shareholders
partners. Neither the Trust nor the Trustees, nor any officer, employee or agent
of the Trust shall have any power to bind personally any Shareholder, nor except
as specifically provided herein to call upon any Shareholder for the payment of
any sum of money or assessment whatsoever other than such as the Shareholder may
at any time personally agree to pay.
ARTICLE V
---------
SHAREHOLDERS' VOTING POWERS AND MEETINGS
----------------------------------------
Section 5.1 Voting Powers. The Shareholders shall have power to vote only
-------------
(i) for the election or removal of Trustees as provided in Section 3.1, (ii)
with respect to any contract with a Contracting Party as provided in Section 3.3
as to which Shareholder approval is as required by the 1940 Act, (iii) with
respect to any termination or reorganization of the Trust or any Sub-Trust to
the extent and as provided in Sections 7.1 and 7.2, (iv) with respect to any
amendment of this Declaration of Trust to the extent and as provided in Section
7.3, (v) to the same extent as the stockholders of a Massachusetts business
corporation as to whether or not a court action, proceeding or claim should or
should not be brought or maintained derivatively or as a class action on behalf
of the Trust or any Sub-Trust thereof or the Shareholders (provided, however,
that a Shareholder of a particular Sub-Trust shall not be entitled
17
<PAGE>
to a derivative or class action on behalf of any other Sub-Trust (or Shareholder
of any other Sub-Trust) of the Trust) and (vi) with respect to such additional
matters relating to the Trust as may be required by the 1940 Act, this
Declaration of Trust, the By-Laws or any registration of the Trust with the
Commission (or any successor agency) or any state, or as the Trustees may
consider necessary or desirable. There shall be no cumulative voting in the
election of Trustees. Shares may be voted in person or by proxy. A proxy with
respect to Shares held in the name of two or more persons shall be valid if
executed by any one of them unless at or prior to exercise of the proxy the
Trust receives a specific written notice to the contrary from any one of them. A
proxy purporting to be executed by or on behalf of a Shareholder shall be deemed
valid unless challenged at or prior to its exercise and the burden of proving
invalidity shall rest on the challenger. Until Shares are issued, the Trustees
may exercise all rights of Shareholders and may take any action required by law,
this Declaration of Trust or the By-Laws to be taken by Shareholders.
Section 5.2 Meetings. No annual or regular meeting of Shareholders is
--------
required. Special meetings of Shareholders may be called by the Trustees from
time to time for the purpose of taking action upon any matter requiring the vote
or authority of the Shareholders as herein provided or upon any other matter
deemed by the Trustees to be necessary or desirable. Written notice of any
meeting of Shareholders shall be given or caused to be given by the Trustees by
mailing such notice at least seven days before such meeting, postage prepaid,
stating the time, place and purpose of the meeting, to each Shareholder at the
Shareholder's address as it appears on the records of the Trust. The Trustees
shall promptly call and give notice of a meeting of Shareholders for the purpose
of voting upon removal of any Trustee of the Trust when requested to do so in
writing by Shareholders holding not less than 10% of the Shares then
outstanding. If the Trustees shall fail to call or give notice of any meeting of
Shareholders for a period of 30 days after written application by Shareholders
holding at least 10% of the Shares then outstanding requesting a meeting be
called for any other purpose requiring action by the Shareholders as provided
herein or in the By-Laws, then Shareholders holding at least 10% of the Shares
then outstanding may call and give notice of such meeting, and thereupon the
meeting shall be held in the manner provided for herein in case of call thereof
by the Trustees.
Section 5.3 Record Dates. For the purpose of determining the Shareholders
------------
who are entitled to vote or act at any meeting or any adjournment thereof, or
who are entitled to participate in any dividend or distribution, or for the
purpose of any other action, the Trustees may from time to time close the
transfer books for such period, not exceeding 30 days (except
18
<PAGE>
at or in connection with the termination of the Trust), as the Trustees may
determine; or without closing the transfer books the Trustees may fix a date and
time not more than 60 days prior to the date of any meeting of Shareholders or
other action as the date and time of record for the determination of
Shareholders entitled to vote at such meeting or any adjournment thereof or to
be treated as Shareholders of record for purposes of such other action, and any
Shareholder who was a Shareholder at the date and time so fixed shall be
entitled to vote at such meeting or any adjournment thereof or to be treated as
a Shareholder of record for purposes of such other action, even though he has
since that date and time disposed of his Shares, and no Shareholder becoming
such after that date and time shall be so entitled to vote at such meeting or
any adjournment thereof or to be treated as a Shareholder of record for purposes
of such other action.
Section 5.4 Quorum and Required Vote. A majority of the Shares entitled to
------------------------
vote shall be a quorum for the transaction of business at a Shareholders'
meeting, but any lesser number shall be sufficient for adjournments. Any
adjourned session or sessions may be held, within a reasonable time after the
date set for the original meeting without the necessity of further notice. A
majority of the Shares voted, at a meeting of which a quorum is present shall
decide any questions and a plurality shall elect a Trustee, except when a
different vote is required or permitted by any provision of the 1940 Act or
other applicable law or by this Declaration of Trust or the By-Laws.
Section 5.5 Action by Written Consent. Subject to the provisions of the
-------------------------
1940 Act and other applicable law, any action taken by Shareholders may be taken
without a meeting if a majority of Shareholders entitled to vote on the matter
(or such larger proportion thereof as shall be required by the 1940 Act or by
any express provision of this Declaration of Trust or the By-Laws) consent to
the action in writing and such written consents are filed with the records of
the meetings of Shareholders. Such consent shall be treated for all purposes as
a vote taken at a meeting of Shareholders.
Section 5.6 Inspection of Records. The records of the Trust shall be open
---------------------
to inspection by Shareholders to the same extent as is permitted stockholders of
a Massachusetts business corporation under the Massachusetts Business
Corporation Law.
Section 5.7 Additional Provisions. The By-Laws may include further
---------------------
provisions for Shareholders' votes and meetings and related matters not
inconsistent with the provisions hereof.
Section 5.8 Shareholder Communications. Whenever ten or more Shareholders of
--------------------------
record who have been such for at least six months preceding the date of
application, and who hold in the
19
<PAGE>
aggregate either Shares having a net asset value of at least $25,000 or at least
1% of the outstanding Shares, whichever is less, shall apply to the Trustees in
writing, stating that they wish to communicate with other Shareholders with a
view to obtaining signatures to a request for a Shareholder meeting and
accompanied by a form of communication and request which they wish to transmit,
the Trustees shall within five business days after receipt of such application
either (1) afford to such applicants access to a list of the names and addresses
of all Shareholders as recorded on the books of the Trust or Sub-Trust, as
applicable; or (2) inform such applicants as to the approximate number of
Shareholders of record, and the approximate cost of mailing to them the proposed
communication and form of request.
If the Trustees elect to follow the course specified in clause (2) above,
the Trustees, upon the written request of such applicants, accompanied by a
tender of the material to be mailed and of the reasonable expenses of mailing,
shall, with reasonable promptness, mail such material to all Shareholders
of record at their addresses as recorded on the books, unless within five
business days after such tender the Trustees shall mail to such applicants and
file with the Commission, together with a copy of the material to be mailed, a
written statement signed by at least a majority of the Trustees to the effect
that in their opinion either such material contains untrue statements of fact or
omits to state facts necessary to make the statements contained therein not
misleading, or would be in violation of applicable law, and specifying the basis
of such opinion. The Trustees shall thereafter comply with any order entered by
the Commission and the requirements of the 1940 Act and the Securities Exchange
Act of 1934.
ARTICLE VI
----------
LIMITATION OF LIABILITY; INDEMNIFICATION
----------------------------------------
Section 6.1 Trustees, Shareholders, etc. Not Personally Liable; Notice. All
----------------------------------------------------------
persons extending credit to, contracting with or having any claim against the
Trust shall look only to the assets of the Sub-Trust with which such person
dealt for payment under such credit, contract or claim; and neither the
Shareholders of any Sub-Trust nor the Trustees, nor any of the Trust's officers,
employees or agents, whether past, present or future, nor any other Sub-Trust
shall be personally liable therefor. Every note, bond, contract, instrument,
certificate or undertaking and every other act or thing whatsoever executed or
done by or on behalf of the Trust, any Sub-Trust or the Trustees or any of them
in connection with the Trust shall be conclusively deemed to have been executed
or done only by or for the Trust (or the Sub-Trust) or the Trustees and not per-
20
<PAGE>
sonally. Nothing in this Declaration of Trust shall protect any Trustee or
officer against any liability to the Trust or the Shareholders to which such
Trustee or officer would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of the office of Trustee or of such officer.
Every note, bond, contract, instrument, certificate or undertaking made or
issued by the Trustees or by any officers or officer shall give notice that this
Declaration of Trust is on file with the Secretary of The Commonwealth of
Massachusetts and shall recite to the effect that the same was executed or made
by or on behalf of the Trust or by them as Trustees or Trustee or as officers or
officer and not individually and that the obligations of such instrument are not
binding upon any of them or the Shareholders individually but are binding only
upon the assets and property of the Trust, or the particular Sub-Trust in
question, as the case may be, but the omission thereof shall not operate to bind
any Trustees or Trustee or officers or officer or Shareholders or Shareholder
individually.
Section 6.2 Trustee's Good Faith Action; Expert Advice; No Bond or Surety.
-------------------------------------------------------------
The exercise by the Trustees of their powers and discretion hereunder shall be
binding upon everyone interested. A Trustee shall be liable for his own willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of the office of Trustee, and for nothing else, and
shall not be liable for errors of judgment or mistakes of fact or law. Subject
to the foregoing, (a) the Trustees shall not be responsible or liable in any
event for any neglect or wrongdoing of any officer, agent, employee, consultant,
adviser, administrator, distributor or principal underwriter, custodian or
transfer, dividend disbursing, Shareholder servicing or accounting agent of the
Trust, nor shall any Trustee be responsible for the act or omission of any other
Trustee; (b) the Trustees may take advice of counsel or other experts with
respect to the meaning and operation of this Declaration of Trust and their
duties as Trustees, and shall be under no liability for any act or omission in
accordance with such advice or for failing to follow such advice; and (c) in
discharging their duties, the Trustees, when acting in good faith, shall be
entitled to rely upon the books of account of the Trust and upon written reports
made to the Trustees by any officer appointed by them, any independent public
accountant, and (with respect to the subject matter of the contract involved)
any officer, partner or responsible employee of a Contracting Party appointed by
the Trustees pursuant to Section 3.3. The Trustees as such shall not be required
to give any bond or surety or any other security for the performance of their
duties.
21
<PAGE>
Section 6.3 Indemnification of Shareholders. In case any Shareholder (or
-------------------------------
former Shareholder) of any Sub-Trust of the Trust shall be charged or held to be
personally liable for any obligation or liability of the Trust solely by reason
of being or having been a Shareholder and not because of such Shareholder's acts
or omissions or for some other reason, said Sub-Trust (upon proper and timely
request by the Shareholder) shall assume the defense against such charge and
satisfy any judgment thereon, and the Shareholder or former Shareholder (or his
heirs, executors, administrators or other legal representatives or in the case
of a corporation or other entity, its corporate or other general successor)
shall be entitled out of the assets of said Sub-Trust estate to be held harmless
from and indemnified against all loss and expense arising from such liability.
Section 6.4 Indemnification of Trustees, Officers, etc. The Trust shall
------------------------------------------
indemnify (from the assets of the Sub-Trust or Sub-Trusts in question) each of
its Trustees and officers (including persons who serve at the Trust's request as
directors, officers or trustees of another organization in which the Trust has
any interest as a shareholder, creditor or otherwise [hereinafter referred to as
a "Covered Person"]) against all liabilities, including but not limited to
amounts paid in satisfaction of judgments, in compromise or as fines and
penalties, and expenses, including reasonable accountants' and counsel fees,
incurred by any Covered Person in connection with the defense or disposition of
any action, suit or other proceeding, whether civil or criminal, before any
court or administrative or legislative body, in which such Covered Person may be
or may have been involved as a party or otherwise or with which such person may
be or may have been threatened, while in office or thereafter, by reason of
being or having been such a Trustee or officer, director or trustee, except with
respect to any matter as to which it has been determined that such Covered
Person (i) did not act in good faith in the reasonable belief that such Covered
Person's action was in or not opposed to the best interests of the Trust or (ii)
had acted with willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of such Covered Person's office
(either and both of the conduct described in (i) and (ii) being referred to
hereafter as "Disabling Conduct"). A determination that the Covered Person is
entitled to indemnification may be made by (i) a final decision on the merits by
a court or other body before whom the proceeding was brought that the person to
be indemnified was not liable by reason of Disabling Conduct, (ii) dismissal of
a court action or an administrative proceeding against a Covered Person for
insufficiency of evidence of Disabling Conduct, or (iii) a reasonable
determination, based upon a review of the facts, that the indemnitee was not
liable by reason of Disabling Conduct by (a) a vote of a majority of a quorum
of Trustees who are neither "interested
22
<PAGE>
persons" of the Trust as defined in section 2(a)(19) of the 1940 Act nor parties
to the proceeding, or (b) an independent legal counsel in a written opinion.
Expenses, including accountants' and counsel fees so incurred by any such
Covered Person (but excluding amounts paid in satisfaction of judgments, in
compromise or as fines or penalties), may be paid from time to time by the Sub-
Trust in question in advance of the final disposition of any such action, suit
or proceeding, provided that the Covered Person shall have undertaken to repay
the amounts so paid to the Sub-Trust in question if it is ultimately determined
that indemnification of such expenses is not authorized under this Article VI
and (i) the Covered Person shall have provided security for such undertaking,
(ii) the Trust shall be insured against losses arising by reason of any lawful
advances, or (iii) a majority of a quorum of the disinterested Trustees who are
not a party to the proceeding, or an independent legal counsel in a written
opinion, shall have determined, based on a review of readily available facts (as
opposed to a full trial-type inquiry), that there is reason to believe that the
Covered Person ultimately will be found entitled to indemnification.
Section 6.5 Compromise Payment. As to any matter disposed of by a compromise
------------------
payment by any such Covered Person referred to in Section 6.4, pursuant to a
consent decree or otherwise, no such indemnification either for said payment or
for any other expenses shall be provided unless such indemnification shall be
approved (a) by a majority of the disinterested Trustees who are not parties to
the proceeding or (b) by an independent legal counsel in a written opinion.
Approval by the Trustees pursuant to clause (a) or by independent legal counsel
pursuant to clause (b) shall not prevent the recovery from any Covered Person of
any amount paid to such Covered Person in accordance with any of such clauses as
indemnification if such Covered Person is subsequently adjudicated by a court of
competent jurisdiction not to have acted in good faith in the reasonable belief
that such Covered Person's action was in or not opposed to the best interests of
the Trust or to have been liable to the Trust or its Shareholders by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such Covered Person's office.
Section 6.6 Indemnification Not Exclusive, etc. The right of indemnification
----------------------------------
provided by this Article VI shall not be exclusive of or affect any other rights
to which any such Covered Person may be entitled. As used in this Article VI,
"Covered Person" shall include such person's heirs, executors and
administrators, an "interested Covered Person" is one against whom the action,
suit or other proceeding in question or another action, suit or other proceeding
on the same or similar grounds is then or has been pending or threatened, and
23
<PAGE>
a "disinterested" person is a person against whom none of such actions, suits or
other proceedings or another action, suit or other proceeding on the same or
similar grounds is then or has been pending or threatened. Nothing contained in
this Article shall affect any rights to indemnification to which personnel of
the Trust, other than Trustees and officers, and other persons may be entitled
by contract or otherwise under law, nor the power of the Trust to purchase and
maintain liability insurance on behalf of any such person.
Section 6.7 Liability of Third Persons Dealing with Trustees. No person
--------------------------------------------------
dealing with the Trustees shall be bound to make any inquiry concerning the
validity of any transaction made or to be made by the Trustees or to see to the
application of any payments made or property transferred to the Trust or upon
its order.
ARTICLE VII
-----------
MISCELLANEOUS
-------------
Section 7.1 Duration and Termination of Trust. Unless terminated as provided
---------------------------------
herein, the Trust shall continue without limitation of time and, without
limiting the generality of the foregoing, no change, alteration or modification
with respect to any Sub-Trust shall operate to terminate the Trust. The Trust or
any Sub-Trust may be terminated at any time by a majority of the Trustees then
in office subject to a favorable vote of a majority of the outstanding voting
securities, as defined in the 1940 Act, Shares of each Sub-Trust voting
separately by Sub-Trust.
Upon termination, after paying or otherwise providing for all charges,
taxes, expenses and liabilities, whether due or accrued or anticipated as may be
determined by the Trustees, the Trust shall in accordance with such procedures
as the Trustees consider appropriate reduce the remaining assets to
distributable form in cash, securities or other property, or any combination
thereof, and distribute the proceeds to the Shareholders, in conformity with the
provisions of subsection (d) of Section 4.2.
Section 7.2 Reorganization. The Trustees may sell, convey, merge and
----------------
transfer the assets of the Trust, or the assets belonging to any one or more
Sub-Trusts, to another trust, partnership, association or corporation organized
under the laws of any state of the United States, or to the Trust to be held as
assets belonging to another Sub-Trust of the Trust, in exchange for cash, shares
or other securities (including, in the case of a transfer to another Sub-Trust
of the Trust, Shares of such other Sub-Trust) with such transfer either (1)
24
<PAGE>
being made subject to, or with the assumption by the transferee of, the
liabilities belonging to each Sub-Trust the assets of which are so transferred,
or (2) not being made subject to, or not with the assumption of, such
liabilities; provided, however, that no assets belonging to any particular Sub-
Trust shall be so transferred unless the terms of such transfer shall have first
been approved at a meeting called for the purpose by the affirmative vote of the
holders of a majority of the outstanding voting Shares, as defined in the 1940
Act, of that Sub-Trust. Following such transfer, the Trustees shall distribute
such cash, shares or other securities (giving due effect to the assets and
liabilities belonging to and any other differences among the various Sub-Trusts
the assets belonging to which have so been transferred) among the Shareholders
of the Sub-Trust the assets belonging to which have been so transferred; and if
all of the assets of the Trust have been so transferred, the Trust shall be
terminated.
The Trust, or any one or more Sub-Trusts, may, either as the successor,
survivor, or non-survivor, (1) consolidate with one or more other trusts,
partnerships, associations or corporations organized under the laws of the
Commonwealth of Massachusetts or any other state of the United States, to form a
new consolidated trust, partnership, association or corporation under the laws
of which any one of the constituent entities is organized, or (2) merge into one
or more other trusts, partnerships, associations or corporations organized under
the laws of the Commonwealth of Massachusetts or any other state of the United
States, or have one or more such trusts, partnerships, associations or
corporations merged into it, any such consolidation or merger to be upon such
terms and conditions as are specified in an agreement and plan of reorganization
entered into by the Trust, or one or more Sub-Trusts as the case may be, in
connection therewith. The terms "merge" or "merger" as used herein shall also
include the purchase or acquisition of any assets of any other trust,
partnership, association or corporation which is an investment company organized
under the laws of the Commonwealth of Massachusetts or any other state of the
United States. Any such consolidation or merger shall require the affirmative
vote of the holders of a majority of the outstanding voting Shares, as defined
in the 1940 Act, of each Sub-Trust affected thereby.
Section 7.3 Amendments. All rights granted to the Shareholders under this
------------
Declaration of Trust are granted subject to the reservation of the right to
amend this Declaration of Trust as herein provided, except that no amendment
shall repeal the limitations on personal liability of any Shareholder or Trustee
or repeal the prohibition of assessment upon the Shareholders without the
express consent of each Shareholder or Trustee involved. Subject to the
foregoing, the provisions of this Declaration of Trust (whether or not related
to the rights of
25
<PAGE>
Shareholders) may be amended at any time, so long as such amendment does not
adversely affect the rights of any Shareholder with respect to which such
amendment is or purports to be applicable and so long as such amendment is not
in contravention of applicable law, including the 1940 Act, by an instrument in
writing signed by a majority of the then Trustees (or by an officer of the Trust
pursuant to the vote of a majority of such Trustees). Any amendment to this
Declaration of Trust that adversely affects the rights of Shareholders may be
adopted at any time by an instrument in writing signed by a majority of the then
Trustees (or by an officer of the Trust pursuant to a vote of a majority of such
Trustees) when authorized to do so by the vote in accordance with subsection (e)
of Section 4.2 of Shareholders holding a majority of the Shares entitled to
vote. Subject to the foregoing, any such amendment shall be effective as
provided in the instrument containing the terms of such amendment or, if there
is no provision therein with respect to effectiveness, upon the execution of
such instrument and of a certificate (which may be a part of such instrument)
executed by a Trustee or officer of the Trust to the effect that such amendment
has been duly adopted.
Section 7.4 Filing of Copies; References; Headings. The original or a copy
--------------------------------------
of this instrument and of each amendment hereto shall be kept at the office of
the Trust where it may be inspected by any Shareholder. A copy of this
instrument and of each amendment hereto shall be filed by the Trust with the
Secretary of The Commonwealth of Massachusetts and with the Boston City Clerk,
as well as any other governmental office where such filing may from time to time
be required, but the failure to make any such filing shall not impair the
effectiveness of this instrument or any such amendment. Anyone dealing with the
Trust may rely on a certificate by an officer of the Trust as to whether or not
any such amendments have been made, as to the identities of the Trustees and
officers, and as to any matters in connection with the Trust hereunder; and,
with the same effect as if it were the original, may rely on a copy certified by
an officer of the Trust to be a copy of this instrument or of any such
amendments. In this instrument and in any such amendment, references to this
instrument, and all expressions like "herein", "hereof" and "hereunder" shall be
deemed to refer to this instrument as a whole as the same may be amended or
affected by any such amendments. The masculine gender shall include the feminine
and neuter genders. Headings are placed herein for convenience of reference only
and shall not be taken as a part hereof or control or affect the meaning,
construction or effect of this instrument. This instrument may be executed in
any number of counterparts each of which shall be deemed an original.
Section 7.5 Applicable Law. This Declaration of Trust is made in The
--------------
Commonwealth of Massachusetts, and it is created
26
<PAGE>
under and is to be governed by and construed and administered according to the
laws of said Commonwealth, including the Massachusetts Business Corporation Law
as the same may be amended from time to time, to which reference is made with
the intention that matters not specifically covered herein or as to which an
ambiguity may exist shall be resolved as if the Trust were a business
corporation organized in Massachusetts, but the reference to said Business
Corporation Law is not intended to give the Trust, the Trustees, the
Shareholders or any other person any right, power, authority or responsibility
available only to or in connection with an entity organized in corporate form.
The Trust shall be of the type referred to in Section 1 of Chapter 182 of the
Massachusetts General Laws and of the type commonly called a Massachusetts
business trust, and without limiting the provisions hereof, the Trust may
exercise all powers which are ordinarily exercised by such a trust.
Section 7.6 Name of Trust. It is understood that the name "Van Eck", and
-------------
any logo associated with that name, is the valuable property of Van Eck
Management Corporation and Van Eck Associates Corporation and that the Trust or
any Sub-Trust has the right to include "Van Eck" as a part of its name only
through permission of Van Eck Management Corporation and Van Eck Associates
Corporation. If Van Eck Management Corporation or Van Eck Associates Corporation
withdraws the right to the use of the name, the Trust (and any Sub-Trust shall
forthwith cease to use the Van Eck Name and logo and shall take such action as
may be necessary to change its name (or the name of any Sub-Trust) to eliminate
all use of or reference to the word "Van Eck". The Trust hereby stipulates that
companies or trusts other than the Trust may be formed with the word "Van Eck"
in their titles.
IN WITNESS WHEREOF, the undersigned hereunto set his hand and seal in the
City of Boston, Massachusetts for himself and his assigns, as of the day and
year first above written.
---------------------------------
Michael G. Doorley
27
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
Suffolk County, ss.
Then personally appeared the within-named Michael G. Doorley of
, who acknowledged the execution of the
foregoing instrument to be his free act and deed, before me, this 7th day of
January, 1987.
/s/ SIGNATURE ILLEGIABLE ^^
---------------------------------
Notary Public
[Notarial Seal]
My commission expires: October 22, 1993.
28
<PAGE>
VAN ECK VARIABLE INSURANCE PRODUCTS TRUST
AMENDMENT NO. 1 TO MASTER TRUST AGREEMENT
AMENDMENT NO. 1 to the Master Trust Agreement of VAN ECK VARIABLE INSURANCE
PRODUCTS TRUST made in New York, New York as of this 11th day of July, 1989 by
the sole Trustee of said trust.
WITNESSETH:
WHEREAS, Section 7.3 of the Master Trust Agreement dated January 7, 1987
(the "Agreement") of Van Eck Variable Insurance Products Trust (the "Trust")
provides that the Agreement may be amended at any time, so 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 a majority
of the then Trustees; and
WHEREAS, the undersigned, being the sole Trustee of the Trust, desires to
amend the Agreement to (i) change the name of the Trust, as set forth in Section
1.1 of the Agreement, from "Van Eck Variable Insurance Products Trust" to "Van
Eck Investment Trust"; (ii) change the name of the sub-trusts designated in
Section 4.2 of the Agreement from "Van Eck Gold Fund" and "Van Eck Global Fund"
to "Van Eck Gold and Natural Resources Fund" and "Van Eck Global Growth Fund,"
respectively, and (iii) establish and designate an additional sub-trust of
<PAGE>
the Trust in Section 4.2 of the Agreement is "Van Eck Global Bond Fund."
NOW, THEREFORE, the sole Trustee hereby states:
1. That Section 1.1 of the Agreement and all other appropriate references
in the Agreement are amended to change the name of the Trust from "Van Eck
Variable Insurance Products Trust" to "Van Eck Investment Trust," and that
Section 1.1 of the Agreement, as heretofore in effect, is amended in its
entirety to read as follows:
"Section 1.1 Name. This Trust shall be known as "VAN ECK
----
INVESTMENT TRUST" and the Trustees shall conduct the business
of the Trust under that name or any other name or names as
they may from time to time determine."
2. That Section 4.2 of the Agreement and all other appropriate references
in the Agreement are amended to (i) change the names of the Sub-Trusts
previously established and designated as "Van Eck Gold Fund" and "Van Eck Global
Fund" to "Van Eck Gold and Natural Resources Fund" and "Van Eck Global Growth
Fund," respectively, and (ii) establish and designate an additional sub-trust as
"Van Eck Global Bond Fund," and that the initial paragraph of Section 4.2 of
the Agreement, as heretofore in effect, is amended to read as follows:
"Section 4.2 Establishment and Designation of Sub-Trusts. Without
-------------------------------------------
limiting the authority of the Trustees set forth in Section 4.1 to
establish and designate any further Sub-Trusts, the Trustees hereby
establish and designate three Sub-Trusts:
2
<PAGE>
"Van Eck Gold and Natural Resources Fund," "Van Eck Global
Growth Fund," and "Van Eck Global Bond 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 such further Sub-Trust at the time of establishing
and designating the same) have the following relative rights
and preferences:"
IN WITNESS WHEREOF, the undersigned hereunto sets his hand and seal for
himself and his assigns as of this 11th day of July, 1989.
/s/ Michael G. Doorley
--------------------------------------------
Michael G. Doorley,
Sole Trustee
3
<PAGE>
STATE OF NEW YORK )
) SS.
COUNTY OF NEW YORK)
Then personally appeared the above-named Michael G. Doorley and acknowledged
this instrument to be his free act and deed in his capacity as sole Trustee of
Van Eck Variable Insurance Products Trust this 11th day of July, 1989.
/s/ Thaddeus Leszczynski
------------------------------------
Notary Public
My commission expires:3/30/90
----------
(SEAL)
4
<PAGE>
VAN ECK INVESTMENT TRUST
Amendment No.2 to Master Trust Agreement
Amendment No. 2 to the Master Trust Agreement of VAN ECK INVESTMENT TRUST
made in New York this First day of November, 1989 by the Majority of the
Trustees of said Trust:
WITNESSETH:
WHEREAS, Section 7.3 of the Master Trust Agreement dated January 7, 1987 (the
"Agreement") of VAN ECK INVESTMENT TRUST (the "Trust") provides that the
Agreement may be amended at any time, so 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 a majority of the then Trustees; and
WHEREAS, the undersigned, being the Majority Trustees of the Trust, desire to
amend Section 4.2 of the Agreement by changing the name of the two Sub-Trusts
from "Van Eck Gold Fund" and "Van Eck Global Fund" to "Gold and Natural
Resources Fund" and "Global Bond Fund," respectively.
<PAGE>
NOW THEREFORE, the Majority of the Trustees hereby state:
That the initial paragraph of Section 4.2 of the Agreement, as heretofore in
effect, is amended to read as follows:
"Section 4.2. Establishment and Designation of Sub-Trusts. Without limiting the
-------------------------------------------
authority of the Trustees set forth in Section 4.1 to establish and designate
any further Sub-Trusts, the Trustees hereby establish and designate two Sub-
Trusts: 'Gold and Natural Resources Fund' and 'Global Bond 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:"
<PAGE>
IN WITNESS WHEREOF, the undersigned hereunto set their hand and seal for
themselves and their assigns as of this 1/st/ day of November, 1989.
/s/ John C. Van Eck
- --------------------------
John C. Van Eck, Trustee
/s/ Fred M. Van Eck
- --------------------------
Fred M. Van Eck, Trustee
- --------------------------
Philip L. Carret, Trustee
- --------------------------
James C. Dudley, Trustee
/s/ Wesley G. McCain
- --------------------------
Wesley G. McCain, Trustee
<PAGE>
IN WITNESS WHEREOF, the undersigned hereunto set their hand and seal for
themselves and their assigns as of this 1/st/ day of November, 1989.
/s/ Harvey E. Mole'
- --------------------------
Harvey E. Mole', Trustee
- -------------------------
Ralph Peters, Trustee
- -------------------------
Richard Cowell, Trustee
/s/ Alling Woodruff
- -------------------------
Alling Woodruff, Trustee
<PAGE>
STATE OF NEW YORK)
)SS.
COUNTY OF NEW YORK)
Then personally appeared the above Trustees of Van Eck Investment Trust and
acknowledged this instrument to be their free act and deed in their capacity as
Trustees of Van Eck Investment Trust this first day of November, 1989.
Notary Public: /s/ LINDA S. COLE
--------------------------
[NOTARIAL SEAL]
My Commission Expires: 1/31/91
------------------------------
<PAGE>
VAN ECK INVESTMENT TRUST
AMENDMENT NO. 3
TO MASTER TRUST AGREEMENT
Amendment No. 3 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 21/st/ day of April, 1994.
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 Balanced
Fund; and
WHEREAS, a majority of the Trustees have voted to change section 7.2 of the
Agreement with respect to all Sub-Trusts other than Global Bond Fund and Gold
and Natural Resources 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.
<PAGE>
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 further Sub-Trusts, the Trustees hereby
establish and designate three Sub-Trusts: Gold and Natural Resources
Fund, Global Bond Fund and Worldwide Balanced 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:"
and hereby declares that the second paragraph of Section 7.2 of the Agreement is
amended to read as follows:
The Trust or any one or more Sub-Trusts may, either as the successor,
or survivor, or non-survivor, (1) consolidate with one or more other
trusts, partnerships, associations or corporations organized under the
laws of the Commonwealth of Massachusetts or any other state of the
United States, to form a new consolidated trust, partnership,
association or corporation under the laws of which any one of the
constituent entities is organized, or (2) merge into one or more other
trusts, partnerships, associations or corporations organized under the
laws of the Commonwealth of Massachusetts or any other state of the
United States, or have one or more such trusts, partnerships,
associations or corporations merged into it, any such consolidation
or merger to be upon such terms and conditions as are specified in an
agreement and plan of reorganization entered into by the Trust, or one
or more such Sub-Trusts as the case may be, in connection therewith.
The terms "merge" or "merger" as used herein shall also include the
purchase or acquisition of any assets of any other trust, partnership,
association or corporation which is an investment company organized
under the laws of the Commonwealth of Massachusetts or any other state
of the United States. With respect to the Global Bond Fund and Gold
and Natural Resources Fund only, any such consolidation or merger
shall require the affirmative vote of the holders of a majority of the
outstanding voting Shares, as defined in the 1940 Act, of the Sub-
Trust so affected thereby; and with respect to all other Sub-Trusts,
such affirmative vote shall only be required if the Sub-Trust is not
the successor or survivor of such consolidation or merger.
<PAGE>
WITNESS my hand and seal this 21st day of April, 1994.
/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 21st day of
April, 1994.
/s/ Henry G. Neger
- -------------------
Notary Public
HENRY G. NEGER
NOTARY PUBLIC, State of New York
No. 30-4654092
Qualified in Nassau County
Commission Expires 12-31-95
<PAGE>
VAN ECK INVESTMENT TRUST
AMENDMENT NO. 4
TO MASTER TRUST AGREEMENT
Amendment No. 4 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 20th day of September, 1994.
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
new series of the Trust, which series are designated as the Asia Region
Infrastructure Fund, Asia Region Growth Fund and Worldwide SmallCap 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 additional Sub-Trusts 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, Asia Region Infrastructure Fund, Asia Region
Growth Fund and Worldwide SmallCap 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 20th day of September, 1994.
/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 20th day of
September, 1994.
/s/ Henry G. Neger
- -------------------
Notary Public
[NOTARIAL SEAL]
<PAGE>
VAN ECK INVESTMENT TRUST
AMENDMENT NO. 5
TO MASTER TRUST AGREEMENT
Amendment No. 5 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 12th day of January, 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 Hard Assets
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 further Sub-Trusts, the Trustees hereby
establish and designate seven Sub-Trusts:
<PAGE>
Gold and Natural Resources Fund, Global Bond Fund, Worldlwide Balanced
Fund, Asia Region Infrastructure Fund, Asia Region Growth Fund,
Worldwide SmallCap Fund and Worldwide Hard Assets 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 12th day of January, 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 12th day of
January, 1995.
/s/ Henry G. Neger
- ---------------------------------
Notary Public
(SEAL)
<PAGE>
VAN ECK INVESTMENT TRUST
AMENDMENT NO. 6
TO MASTER TRUST AGREEMENT
Amendment No. 6 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 13th day of March, 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 change the
name of the Trust, as set forth in Section 1.1 of the Agreement, from "Van Eck
Investment Trust" to "Van Eck Worldwide Insurance Trust"; and
WHEREAS, a majority of the Trustees of the Trust have voted to change the
name of the sub-trust designated in Section 4.2 of the Agreement from "Global
Bond Fund" to "Worldwide Bond 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.
<PAGE>
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 Section 1.1 of the Agreement is amended to read as
follows:
"Section 1.1 Name. This Trust shall be known as "VAN ECK WORLDWIDE
----
INSURANCE TRUST" and the Trustees shall conduct business of the Trust
under that name or any other name or names as they may from time to
time determine."
and hereby declares that the initial paragraph of Section 4.2 of the Agreement
is amended to add an additional sub-trust and to change the name of an existing
sub-trust 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 further Sub-Trusts, the Trustees hereby
establish and designate eight Sub-Trusts: Gold and Natural Resources
Fund, Worldwide Bond Fund, Worldwide Balanced Fund, Asia Region
Infrastructure Fund, Asia Region Growth Fund, Worldwide SmallCap Fund
and Worldwide Hard Assets 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 13th day of March, 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 13th day of March,
1995.
/s/ Henry G. Neger
- ---------------------------------
Notary Public
[NOTARIAL SEAL]
<PAGE>
VAN ECK WORLDWIDE INSURANCE TRUST
AMENDMENT NO. 7
TO MASTER TRUST AGREEMENT
Amendment No. 7 to the Master Trust Agreement dated January 7, 1987 (the
"Agreement"), of Van Eck Worldwide Insurance Trust (the "Trust"), made at New
York, New York this 29th day of August, 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 amend
Article IV, Section 4.2 of the Agreement in order to terminate Asia Region
Infrastructure Fund and Asia Region Growth Fund as Sub-Trusts of the Trust; and
WHEREAS, a majority of Trustees of the Trust 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 terminate Asia Region Infrastructure Fund and Asia
Region Growth Fund as Sub-Trusts of the Trust 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 five
Sub-Trusts: Gold and Natural Resources Fund, Worldwide Bond Fund,
Worldwide Balanced Fund, Worldwide SmallCap Fund and Worldwide Hard
Assets 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 29th day of August, 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 29th day of
August, 1995.
/s/ Peter J. Carbone
- ------------------------------------------
Notary Public
[NOTARIAL SEAL]
<PAGE>
VAN ECK WORLDWIDE INSURANCE 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 Worldwide Insurance Trust (the "Trust"), made at
New York, New York this 9th day of October, 1995.
WITNESSETH:
----------
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/ SIGNATURE ILLEGIBLE ^^
- -----------------------------
Notary Public
[NOTARIAL SEAL]
<PAGE>
VAN ECK WORLDWIDE INSURANCE TRUST
AMENDMENT NO. 9
TO MASTER TRUST AGREEMENT
Amendment No. 8 to the Master Trust Agreement dated January 7, 1987 (the
"Agreement"), of Van Eck Worldwide Insurance Trust (the "Trust"), made at New
York, New York this 30th day of November, 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, a majority of the Trustees of the Trust have voted to amend
Article IV, Section 4.2 of the Agreement in order to terminate Worldwide
SmallCap Fund as Sub-Trusts of the Trust; and
WHEREAS, a majority of the outstanding shares of each Sub-Trust have voted
to amend Article IV, Section 4.2(d) of the Agreement; and
WHEREAS, a majority of the outstanding shares of each Sub-Trust have voted
to amend Article VII, Section 7.2 of the Agreement; and
WHEREAS, a majority of the outstanding shares of each Sub-Trust have voted
to amend Article IV, Section 4.2(e) of the Agreement; and
WHEREAS, a majority of the outstanding shares of each Sub-Trust have voted
to amend Article VII, Section 7.3 of the Agreement; and
<PAGE>
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 further Sub-Trusts, the Trustees hereby
establish and designate five Sub-Trusts: Gold and Natural Resources
Fund, Global Bond Fund, Worldwide Balanced 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:"
and hereby declares that Article IV, Section 4.2(d) of the Agreement is amended
to read as follows:
"Section 4.2(d) Liquidation. The liquidation of any particular Sub-
-----------
Trust may be authorized by vote of a majority of the Trustees then in
office without the approval of shareholders of such Sub-Trust."
and hereby declares that Article VII, Section 7.2 of the Agreement is amended
to read as follows:
"Section 7.2 Reorganization. The Trust, or any one or more Sub-Trusts,
--------------
may, either as the successor, survivor, or non-survivor, (1)
consolidate or merge with one or more other trusts, sub-trusts,
partnerships, limited liability companies, associations or
corporations organized under the laws of the Commonwealth of
Massachusetts or any other state of the United States, to form a
consolidated or merged trust, sub-trusts, partnership, limited
liability company, association or corporation under the laws of which
any one of the constituent entities is organized, with the Trust to be
the survivor or non-survivor of such consolidation or merger or (2)
transfer a substantial portion of its assets to one or more other
trusts, sub-trusts, partnerships, limited liability companies,
associations or corporations organized under the laws of the
Commonwealth of Massachusetts or any other state of the United States,
or have one or more such trusts, subtrusts, partnerships, limited
liability companies, associations or corporations transfer a
substantial portion of its assets to it, any such consolidation,
merger or
<PAGE>
transfer to be upon such terms and conditions as are specified in an
agreement and plan of reorganization authorized and approved by the
Trustees and entered into by the Trust, or one or more Sub-Trusts, as
the case may be, in connection therewith. Any such consolidation,
merger or transfer may be authorized by vote of a majority of the
Trustees then in office without the approval of shareholders of any
Sub-Trust."
and hereby declares that Article IV, Section 4.2(e) of the Agreement is amended
to read as follows:
"Section 4.2(e) Voting. On each matter submitted to a vote of the
------
shareholders, each holder of a Share of each Sub-Trust shall be
entitled to one vote for each whole Share and to a proportionate
fractional vote for each fractional Share standing in his name on the
books of the Trust irrespective of the Sub-Trust thereof and all
Shares of all Sub-Trusts shall vote together as a single class;
provided, however, that as to any matter (i) with respect to which a
separate vote of one or more Sub-Trusts thereof is required by the
1940 Act or the provisions of the writing or vote establishing and
designating the Sub-Trust, such requirements as to a separate vote by
such Sub-Trust thereof shall apply in lieu of all Shares of all Sub-
Trusts thereof voting together; and (ii) as to any matter which
affects the interests of one or more particular Sub-Trust thereof,
only the holders of Shares of the one or more affected Sub-Trusts
shall be entitled to vote, and each such Sub-Trust shall vote as a
separate class.
and hereby declares that Article VII, Section 7.3 of the Agreement is amended
to read as follows:
"Section 7.3 Amendments. All rights granted to the Shareholders under
----------
this Declaration of Trust are granted subject to the reservation of
the right to amend this Declaration of Trust as herein provided,
except that no amendment shall repeal the limitations on personal
liability of any Shareholder or Trustee or repeal the prohibition of
assessment upon the Shareholders without the express consent of each
Shareholder or Trustee involved. Subject to the foregoing, the
provisions of this Declaration of Trust (whether or not related to the
rights of Shareholders) may be amended at any time, so long as such
amendment does not adversely affect the rights of any Shareholder with
respect to which such amendment is or purports to be applicable and so
long as such amendment is not in contravention of applicable law,
including the 1940 Act, by an instrument in writing signed by a
majority of the then Trustees (or by an officer of the Trust pursuant
to the vote of a majority of such Trustees). Any amendment to this
Declaration of Trust that adversely affects the rights of Shareholders
may be adopted at any time by an instrument in writing signed by a
majority of the then Trustees (or by an officer of the Trust pursuant
to a vote of a majority of such Trustees) when authorized to do so by
the vote in accordance with subsection (e) of Section 4.2 of
Shareholders holding a majority of the outstanding voting securities
entitled to vote (as defined in the 1940 Act). Subject to the
foregoing, any such amendment shall be effective as provided in the
instrument containing the terms of such amendment or, if there is no
provision therein with respect to effectiveness, upon the execution of
such instrument and of a certificate (which may be a part of such
instrument) executed
<PAGE>
by a Trustee or officer of the Trust to the effect that such amendment
has been duly adopted.
WITNESS my hand and seal this 30th day of November, 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 30th day of
November, 1995.
/s/ Peter J. Carbone
- ----------------------------
Notary Public
[SEAl]
<PAGE>
VAN ECK WORLDWIDE INSURANCE TRUST
AMENDMENT NO. 10
TO MASTER TRUST AGREEMENT
Amendment No. 10 to the Master Trust Agreement dated January 7, 1987 (the
"Agreement"), of Van Eck Worldwide Insurance Trust (the "Trust"), made at New
York, New York this 29th day of April, 1997.
WITNESSETH:
-----------
WHEREAS, Article VII, 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, Article IV, Section 4.2 of the Agreement provides that the
Trustees of the Trust may establish and designate series of shares ("Sub-
Trusts") of the Trust; and
WHEREAS, a majority of the Trustees of the Trust have duly voted to
authorize the officers of the Trust to take any and all actions necessary or
appropriate to effectuate the liquidation of the Sub-Trust currently entitled
Worldwide Hard Assets Fund and the officers of the Trust have determined that it
is appropriate for this purpose to change the name of said Sub-Trust to
Worldwide Natural Resources Fund; and
WHEREAS, a majority of the Trustees of the Trust have duly voted to change
the name of the Sub-Trust currently entitled Gold and Natural Resources Fund, to
be renamed Worldwide Hard Assets Fund, and to amend the Agreement accordingly;
and
<PAGE>
-2-
WHEREAS, a majority of Trustees have duly authorized these amendments to
the Agreement 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 authorizations described
above, hereby declares that the initial paragraph of Section 4.2 of the
Agreement is amended accordingly, and shall read in its entirety 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 further Sub-Trusts, the Trustees hereby
establish and designate five Sub-Trusts: Worldwide Balanced Fund,
Worldwide Bond Fund, Worldwide Emerging Markets Fund, Worldwide Hard
Assets Fund and Worldwide Natural Resources 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 29th day of April, 1997.
(SEAL)
/s/ Thaddeus Leszczynski
- -----------------------------------
Thaddeus Leszczynzik, Vice President
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
Then personally appeared the above-named Thaddeus Leszczynski and
acknowledged this instrument to his free act and deed this 29th day of April,
1997.
/s/ Lisa R. Grosswirth
- ------------------------
Notary Public
[NOTARIAL SEAL]
<PAGE>
VAN ECK WORLDWIDE INSURANCE TRUST
AMENDMENT NO. 11
TO MASTER TRUST AGREEMENT
Amendment No. 11 to the Master Trust Agreement dated January 7, 1987, as
amended (the "Agreement"), of Van Eck Worldwide Insurance Trust (the "Trust"),
made at New York, New York, this 6th day of January, 1998.
WITNESSETH:
-----------
WHEREAS, Article VII, 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 as long as such amendment is
not in contravention of applicable law, including the Investment Company Act of
1940, as amended, 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, Article IV, Section 4.1 of the Agreement provides that the
Trustees of the Trust may establish and designate series of Shares ("Sub-
Trusts") of the Trust; and
WHEREAS, a majority of the Trustees have voted to establish a new Sub-Trust
of the Trust, which is designated as Worldwide Real Estate Fund; and
WHEREAS, Article IV, Section 4.1 (d) of the Agreement provides that the
Trustees of the Trust may liquidate any particular Sub-Trust of the Trust, by
vote of a majority of the Trustees then in office; and
WHEREAS, a majority of the Trustees of the Trust have duly voted to
authorize the officers of the Trust to take any and all actions necessary or
appropriate to effectuate the liquidation of the Sub-Trust currently entitled
Worldwide Natural Resources Fund; and
1
<PAGE>
WHEREAS, a majority of Trustees have duly authorized these amendments to
the Agreement and authorized the same to be filed with the Secretary of State of
the Commonwealth of Massachusetts.
NOW, THEREFORE, the undersigned, Susan I. Grant, a duly elected and serving
Assistant Secretary of the Trust, pursuant to the authorizations described
above, hereby declares that the initial paragraph of Article IV, Section 4.2 of
the Agreement is amended to read in its entirety as follows:
"Section 4.2 Establishment and Desimation of Sub-Trusts. Without
--------------------------------------------
limiting the authority of the Trustees set forth in Section 4.1 to
establish and designate any further Sub-Trusts, the Trustees hereby
establish and designate five Sub-Trusts: Worldwide Balanced Fund,
Worldwide Bond Fund, Worldwide Emerging Markets Fund, Worldwide Hard
Assets Fund and Worldwide Real Estate 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 6th day of January, 1998.
(SEAL)
/s/ Susan I. Grant, Assistant Secretary
- ---------------------------------------
Susan I. Grant, Assistant Secretary
STATE OF NEWYORK )
)
COUNTY OF NEWYORK )
Then personally appeared the above-named Susan I. Grant and acknowledged
this instrument to be her free act and deed this 6th day of January, 1998.
/s/ Alison Y. Emanuel
- -------------------------
Notary Public
[NOTARIAL SEAL]
2
<PAGE>
VAN ECK WORLDWIDE INSURANCE TRUST
AMENDMENT NO.12
TO MASTER TRUST AGREEMENT
Amendment No. 12 to the Master Trust Agreement dated January 7, 1987, as
amended (the "Agreement") of Van Eck Worldwide Insurance Trust (the "Trust"),
made at New York, New York, this 29th day of June, 1998.
WITNESSETH:
-----------
WHEREAS, Article VII, 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 as long as such amendment is
not in contravention of applicable law, including the Investment Company Act of
1940, as amended, 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, Article IV, Section 4.1 (d) of the Agreement provides that the
Trustees of the Trust may liquidate any particular Sub-Trust of the Trust, by
vote of a majority of the Trustees then in office; and
WHEREAS, a majority of the Trustees approved the submission to shareholders
of a proposal to liquidate one of the Sub-Trusts, Worldwide Balanced Fund, and,
at a meeting held on June 29, 1998, a majority of the outstanding voting Shares
of that Sub-Trust approved the liquidation of Worldwide Balanced Fund; and
WHEREAS, a majority of Trustees have duly authorized this amendment to the
Agreement and authorized the same to be filed with the Secretary of State of the
Commonwealth of Massachusetts.
1
<PAGE>
NOW, THEREFORE, the undersigned, Susan I. Grant, a duly elected and serving
Assistant Secretary of the Trust, pursuant to the authorization described above,
hereby declares that the initial paragraph of Article IV, Section 4.2 of the
Agreement is amended to read in its entirety as follows:
"Section 4.2 Establishment and Designation of Sub-Trusts. Without
---------------------------------------------
limiting the authority of the Trustees set forth in Section 4.1 to
establish and designate any further Sub-Trusts, the Trustees hereby
establish and designate four Sub-Trusts: Worldwide Bond Fund,
Worldwide Emerging Markets Fund, Worldwide Hard Assets Fund and
Worldwide Real Estate 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 29th day of June, 1998.
(SEAL)
/s/ Susan I. Grant
- ---------------------------------
Susan I. Grant, Assistant Secretary
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
Then personally appeared the above-named Susan I. Grant and acknowledged
this instrument to be her free act and deed this 29th day of June, 1998.
/s/ Alison Y. Emanuel
- -------------------------
Notary Public
[NOTARIAL SEAL]
2
<PAGE>
EXHIBIT 2
BY-LAWS
OF
VAN ECK VARIABLE INSURANCE PRODUCTS TRUST
ARTICLE 1
---------
Aqreement and Declaration
-------------------------
of Trust and Principal Office
-----------------------------
1.1 Agreement and Declaration of Trust. These By-Laws shall be subject to
----------------------------------
the Declaration of Trust, as from time to time in effect (the "Declaration of
Trust"), of Van Eck Variable Insurance Products Trust, the Massachusetts
business trust established by the Declaration of Trust (the "Trust").
1.2 Principal office of the Trust. The principal office of the Trust shall
-----------------------------
be located in New York, New York.
ARTICLE 2
---------
Meetings of Trustees
--------------------
2.1 Regular Meetings. Regular meetings of the Trustees may be held without
----------------
call or notice at such places and at such times as the Trustees may from time to
time determine, provided that notice of the first regular meeting following any
such determination shall be given to absent Trustees.
2.2 Special Meetings. Special meetings of the Trustees may be held at any
----------------
time and at any place designated in the call of the meeting when called by
the Chairman of the Trustees, the President or the Treasurer or by two or
more Trustees, sufficient notice thereof being given to each Trustee by the
Secretary or an Assistant Secretary or by the officer of the Trustees calling
the meeting.
2.3 Notice. It shall be sufficient notice to a Trustee of a special meeting
------
to send notice by mail at least forty-eight hours or by telegram at least
twenty-four hours before the meeting addressed to the Trustee at his or her
usual or last known business or residence address or to give notice to him or
her in person or by telephone at least twenty-four hours before the meeting.
Notice of a meeting need not be given to any Trustee if a written waiver of
notice, executed by him or her before or after the meeting, is filed with the
records of the meeting, or to any Trustee who attends the meeting without pro-
<PAGE>
testing prior thereto or at its commencement the lack of notice to him or her.
Neither notice of a meeting nor a waiver of a notice need specify the purposes
of the meeting.
2.4 Quorum. At any meeting of the Trustees a majority of the Trustees then
------
in office shall constitute a quorum. Any meeting may be adjourned from time to
time by a majority of the votes cast upon the question, whether or not a
quorum is present, and the meeting may be held as adjourned without further
notice.
2.5 Participation by Telephone. One or more of the Trustees or of any
--------------------------
committee of the Trustees may participate in a meeting thereof by means of a
conference telephone or similar communications equipment allowing all persons
participating in the meeting to hear each other at the same time. Participation
by such means shall constitute presence in person at a meeting.
ARTICLE 3
---------
Officers
--------
3.1 Enumeration: Qualification. The officers of the Trust shall be a
--------------------------
Chairman of the Trustees, a President, a Treasurer, a Secretary and such other
officers, including Vice Presidents, if any, as the Trustees from time to time
may in their discretion elect. The Trust may also have such agents as the
Trustees from time to time may in their discretion appoint. The Chairman of the
Trustees shall be a Trustee and may but need not be a shareholder; and any other
officer may be but none need be a Trustee or shareholder. Any two or more
offices may be held by the same person.
3.2 Election. The Chairman of the Trustees, the President, the Treasurer,
--------
and the Secretary shall be elected annually by the Trustees at a meeting held
within the first four months of the Trust's fiscal year. The meeting at which
the officers are elected shall be known as the annual meeting of Trustees. Other
officers, if any, may be elected or appointed by the Trustees at said meeting or
at any other time. Vacancies in any office may be filled at any time.
3.3 Tenure. The Chairman of the Trustees, the President, the Treasurer,
------
and the Secretary shall hold office until the next annual meeting of the
Trustees and until their respective successors are chosen and qualified, or in
each case until he or she sooner dies, resigns, is removed or becomes
disqualified. Each other officer shall hold office and each agent shall retain
authority at the pleasure of the Trustees.
2
<PAGE>
3.4 Powers. Subject to the other provisions of these By-Laws, each officer
------
shall have, in addition to the duties and powers herein and in the Declaration
of Trust set forth, such duties and powers as are commonly incident to the
office occupied by him or her as if the Trust were organized as a Massachusetts
business corporation and such other duties and powers as the Trustees may from
time to time designate.
3.5 Chairman; President. Unless the Trustees otherwise provide, the
-------------------
Chairman of the Trustees, or, if there is none, or in the absence of the
Chairman, the President shall preside at all meetings of the shareholders and
of the Trustees. The President shall be the chief executive officer.
3.6 Vice President. The Vice President, or if there be more than one Vice
--------------
President, the Vice Presidents in the order determined by the Trustees (or if
there be no such determination, then in the order of their election) shall in
the absence of the President or in the event of his inability or refusal to act,
perform the duties of the President, and when so acting, shall have all the
powers of and be subject to all the restrictions upon the President. The Vice
Presidents shall perform such other duties and have such other powers as the
Board of Trustees may from time to time prescribe.
3.7 Treasurer. The Treasurer shall be the chief financial officer of the
---------
Trust, and shall, subject to the provisions of the Declaration of Trust and to
any arrangement made by the Trustees with a custodian, investment adviser or
manager, or transfer, shareholder servicing or similar agent, be in charge of
the valuable papers, and shall have such other duties and powers as may be
designated from time to time by the Trustees or by the President.
3.8 Controller. The Controller, or if there shall be more than one, the
----------
Controllers in the order determined by the Trustees (or if there be no such
determination, then in the order of their election), shall, in the absence of
the Treasurer or in the event of his inability or refusal to act, perform the
duties and exercise the power of the Treasurer and shall perform such other
duties and have such other powers as the Board of Trustees may from time to time
prescribe. The Controller shall be responsible for books of account and
accounting records of the Trust.
3.9. Secretary. The Secretary shall record all proceedings of the
---------
shareholders and the Trustees in books be kept therefor, which books or a copy
thereof shall be kept at the principal office of the Trust. In the absence of
the Secretary from any meeting of the shareholders or Trustees, an assistant
3
<PAGE>
secretary, or if there be none or if he or she is absent, a temporary secretary
chosen at such meeting shall record the proceedings thereof in the aforesaid
books.
3.10 Assistant Secretary. The Assistant Secretary, or if there be more than
-------------------
one, the Assistant Secretaries in the order determined by the Trustees (or if
there be no determination, then in the order of their election), shall, in the
absence of the Secretary or in the event of his inability or refusal to act,
perform the duties and exercise the powers of the Secretary and shall perform
such other duties and have such other powers as the Board of Trustees may from
time to time prescribe.
3.11 Resignations and Removals. Any Trustee or officer may resign at any
-------------------------
time by written instrument signed by him or her and delivered to the Chairman,
the President or the Secretary or to a meeting of the Trustees. Such resignation
shall be effective upon receipt unless specified to be effective at some other
time. The Trustees may remove any officer elected by then with or without cause.
Except to the extent expressly provided in a written agreement with the Trust,
no Trustee or officer resigning and no officer removed shall have any right to
any compensation for any period following his or her resignation or removal, or
any right to damages on account of such removal.
ARTICLE 4
---------
COMMITTEES
----------
4.1 General. The Trustees, by vote of a majority of the Trustees then in
-------
office, may elect from their number an Executive Committee or other committees
and may delegate thereto some or all of their powers except those which by law,
by the Declaration of Trust, or by these By-Laws may not be delegated. Except as
the Trustees may otherwise determine, any such committee may make rules for the
conduct of its business, but unless otherwise provided by the Trustees or in
such rules, its business shall be conducted so far as possible in the same
manner as is provided by these By-Laws for the Trustees themselves. All members
of such committees shall hold such offices at the pleasure of the Trustees. The
Trustees may abolish any such committee at any time. Any committee to which the
Trustees delegate any of their powers or duties shall keep records of its
meetings and shall report its action to the Trustees. The Trustees shall have
power to ^xxxx^ any action of any committee, but no such rescission shall have
retroactive effect.
4
<PAGE>
ARTICLE 5
---------
Reports
-------
5.1 General. The Trustees and officers shall render reports at the time
-------
and in the manner required by the Declaration of Trust or any applicable law.
Officers and Committees shall tender such additional reports as they may deem
desirable or as may from time to time be required by the Trustees.
ARTICLE 6
---------
Fiscal Year
-----------
6.1 General. The fiscal year of the Trust shall be fixed by resolution of
-------
the Trustees.
ARTICLE 7
---------
Seal
----
7.1 General. The seal of the Trust shall consist of a flat-faced die with
-------
the word "Massachusetts", together with the name of the Trust and the year of
its organization cut or engraved thereon, but, unless otherwise required by the
Trustees, the seal shall not be necessary to be placed on, and its absence shall
not impair the validity of, any document, instrument or other paper executed and
delivered by or on behalf of the Trust.
ARTICLE 8
---------
Execution of Papers
-------------------
8.1 General. Except as the Trustees may generally or in particular cases
-------
authorize the execution thereof in some other manner, all deeds, leases,
contracts, notes and other obligations made by the Trustees shall be signed by
the President, any Vice President, or by the Treasurer and need not bear the
seal of the Trust.
ARTICLE 9
---------
Issuance of Share Certificates
------------------------------
9.1 Share Certificates. In lieu of issuing certificates for shares, the
------------------
Trustees or the transfer agent may either issue
5
<PAGE>
receipts therefor or may keep accounts upon the books of the Trust for the
record holders of such shares, who shall in either case be deemed, for all
purposes hereunder to be accepted such certificates and shall be held to have
expressly assented and agreed to the terms hereof.
The Trustees may at any time authorize the issuance of share certificates
either in limited cases or to all shareholders. In that event, a shareholder may
receive a certificate starting the number of shares owned by him, in such form
as shall be prescribed from time to time by the Trustees. Such certificate shall
be signed by the president or a vice president and by the treasurer or assistant
treasurer. Such signatures may be facsimiles if the certificate is signed by a
transfer agent, or by registrar, other than a Trustee, officer or employee of
the Trust. In case any officer who has signed or whose facsimile signature has
been placed on such certificate shall cease to be such officer before such
certificate is issued, it may be issued by the Trust with he same effect as if
he were such officer at the time of its issue.
9.2 Loss of Certificates. In case of the alleged loss or destruction or
--------------------
the mutation of a share certificate, a duplicate certificate may be issued in
place thereof, upon such terms as the Trustees shall prescribe.
9.3 Issuance of New Certificate to Pledgee. A Pledgee of shares
--------------------------------------
transferred as collateral security shall be entitled to a new certificate if
the instrument of transfer substantially describes the debt or duty that is
intended to be secured thereby. Such new certificate shall express on its face
that shall be stated thereon, who alone shall be liable of the pledgor
shareholder, and entitled to vote thereon.
9.4 Discontinuance of Issuance of Certificates. The Trustees may at any
------------------------------------------
time discontinue the issuance of share certificates and may, by written notice
to each shareholder, require the surrender of shares certificates to the Trust
for cancellation. Such surrender and cancellation shall not affect the ownership
of shares in the Trust.
ARTICLE 10
----------
Dealings with Trustees and Officers
-----------------------------------
10.1 General. Any Trustee, officer or other agent of the Trust may acquire,
-------
own and dispose of shares of the Trust to the same extent as if he were not a
Trustee, officer or agent;
6
<PAGE>
and the Trustees may accept subscriptions to shares or repurchase shares from
any firm or company in which any Trustee, officer or other agent of the Trust
may have an interest.
ARTICLE 11
----------
Amendments to the By-Laws
-------------------------
11.1 General. These By-Laws may be amended or repealed, in whole or in
-------
part, by a majority of the Trustees then in office at any meeting of the
Trustees, or by one or more writings signed by such a majority.
7
<PAGE>
VAN ECK INVESTMENT TRUST
(A Massaschusetts Business Trust)
GOLD AND NATURAL RESOURCE FUND
SHARES OF BENEFICIAL INTEREST
ACCOUNT NO. ALPHA CODE
-----------------------------------
THIS CERTIFIES THAT
-----------------------------------
SEE REVERSE FOR CERTAIN DEFINITIONS
is the registered owner of
FULLY PAID AND NON-ASSESSABLE SHARES .001 PAR VALUE) OF
GOLD AND NATURAL RESOURCE FUND
A Series of Shares established and designated under the Master Trust Agreement
of the Van Eck INVESTMENT TRUST, Massachusetts business trust (the "Trust")
dated, January 7, 1987 as recorded from time to time (the "Trust Agreement").
The Terms of the Trust Agreement, a copy of which is on file with the Secretary
of the Commonwealth of Massachusetts, are hereby incorporated by reference as
fully as if set down here in their entirety. As provided to the Trust
Agreement the beneficial interest in the Trust has been divided into Shares of
each series as may be by established and designated from time to time and the
shares evidenced hereby represents the beneficial interest is an undivided
proportionate part of the assets belonging to the above designated Series
subject to the liabilities belonging to such Series. Such Series and other
Series have the relative rights preferences set forth in the Trust Agreements
and the Trust will furnish the holder of this certificate upon written request
and without charge to customer of such relative rights and preferences. THE
SHARES EVIDENCED HEREBY ARE SUBJECT TO REDEMPTION BY THE TRUST pursuant to the
procedure that may be determined by the Trustee in accordance with the Trust
Agreement. This certificate is issued by the Trustee of VAN ECK INVESTMENT TRUST
not individually as Trustees under the Trust Agreement and represents Shares of
the above designated Series and does not bind any of the Trustees, Shareholders,
Officers, Employees or Agents of the Trust personally but only the assets and
property of the Trust Subject to the provisions of the Trust Agreement: the
shares represented by this certificate are transferable upon the books of the
trust by the registered holder hereof in person or by his duly authorised
attorney upon surrender of this certificate.
Witness the facsimile signature of the President and Treasurer of the Trust
and the signature of its duly authorised Agent.
TREASURER PRESIDENT
SEAL
Countersigned:
Transfer Agent
By
Authorised Signature
<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(a)
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>
DISTRIBUTION AGREEMENT
----------------------
THIS AGREEMENT made as of the 31st day of July, 1989 by and between Van Eck
Investment Trust (the "Trust"), a business trust established and existing under
the laws of the Commonwealth of Massachusetts and VAN ECK SECURITIES CORPORATION
(the "Distributor"), a corporation organized and existing under the laws of the
State of Delaware.
WHEREAS, the Trust proposes to offer shares of beneficial interest in the
Gold and Natural Resources Fund, Global Bond Fund and Global Growth Fund series
of the Trust and from time to time hereafter establish additional different
series representing interests in different portfolios of assets (each series
being referred to herein as a "Fund" or collectively as the "FUNDS").
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, the parties hereto agree as follows:
Section 1. Appointment of the Distributor. The Trust hereby appoints the
------------------------------
Distributor as its exclusive agent to sell and distribute shares of each Fund of
the Trust then in existence (the "Shares") for the account and risk of the Trust
during the continuous offering of such Shares, on the terms and hereby accepts
such appointment and agrees to act hereunder. It is understood that purchases of
Shares of any Fund may be made through Insurance Companies in connection with
the offering and sale of the Shares, in which case the Distributor shall enter
into Selling Group Agreements ("Selling Group Agreements") in substantially the
form attached hereto or amend existing Selling Group Agreements with such
Insurance Companies to conform herewith and directly through the Trust's
Transfer Agent in the manner set forth in a Fund's Prospectus.
Section 2. Services and Duties of the Distributor.
---------------------------------------
(a) The Distributor agrees to arrange to sell, as exclusive agent for
the Trust, from time to time during the term of this Agreement, Shares of any
Fund upon the terms described in a Fund's Prospectus. As used in this Agreement,
the term "Prospectus" shall mean a prospectus and the term "Statement of
Additional Information" shall mean the statement of additional information
included in the Trust's Registration Statement and the term "Registration
Statement" shall mean the Registration Statement, including exhibits and
financial statements, most recently filed by the Trust with the Securities and
Exchange Commission and effective under the Securities Act of 1933, as amended
(the "1933 Act") and the Investment Company Act of 1940, as amended by any
amendments thereto at the time in effect.
<PAGE>
(b) Upon commencement of the continuous public offering of Shares of
any Fund of the Trust, the Distributor will hold itself available to receive
orders, satisfactory to the Distributor, for the purchase of Shares of that Fund
and will accept such orders on behalf of the Trust as of the time of receipt of
such orders and will transmit such orders as are so accepted to the Trust's
Transfer Agent as promptly as practicable. Purchase orders shall be deemed
effective at the time and in the manner set forth in a Fund's Prospectus.
(c) The Distributor, as agent for the Trust and in its discretion,
may enter into Selling Group Agreements (or amend existing Selling Group
Agreements to conform therewith) with such registered and qualified Insurance
Companies as it may select pursuant to which such Insurance Company may also
arrange for the sale or sell Shares of any Fund.
(d) The offering price of the Shares of a Fund shall be the net asset
value (as described in the Master Trust Agreement of the Trust, as amended from
time to time and determined as set forth in the Prospectus of such Fund and the
Statement of Additional Information) per Share for that Fund next determined
following receipt of an order plus the maximum sales charge, if any, calculated
in the manner set forth in the Fund's Prospectus. The Distributor shall receive
the entire amount of the sales charge if any as compensation under this
Agreement; however, the Distributor may reallow all or any portion of such sales
charge to insurance companies entering into Selling Group Agreements (or
amending existing Selling Group Agreements) with the Distributor, with all
possible promptness, advice of each computation of the net asset value of a
Fund. The Distributor shall also be entitled, subject to the terms and
conditions of the Trust's Plan of Distribution pursuant to Rule 12b-1 under the
Investment Company Act of 1940, if any, to amounts payment by a Fund thereunder.
(e) The Distributor shall use its best efforts and shall not be
obligated to arrange for sales of any certain number of Shares of a Fund and the
services of the Distributor to the Trust hereunder shall not be deemed to be
exclusive, and the Distributor shall be free to (i) render similar services to,
and act as underwriter or distributor in connection with the distribution of
shares of other investment companies, and (ii) engage in any other businesses
and activities from time to time.
(f) The Distributor is authorized on behalf of the Trust to
repurchase Shares of a Fund presented to it by Insurance Companies at the price
determined in accordance with, and in the manner set forth in, the Prospectus of
such Fund.
<PAGE>
Section 3. Duties of the Trust.
-------------------
(a) The Trust agrees to sell Shares of its Funds so long as it has
Shares available for sale and to cause its Transfer Agent to issue, if requested
by the purchaser, certificates for Shares of its Funds, registered in such names
and amounts as promptly as practicable after receipt by the Trust of the net
asset value thereof.
(b) The Trust shall keep the Distributor fully informed with regard
to its affairs and shall furnish to the Distributor copies of all information,
financial statements and other papers which the Distributor may reasonably
request for use in connection with the distribution of Shares of the Funds. This
shall include, without limitation, one certified copy of all financial
statements of the Funds prepared by independent accountants and such reasonable
number of copies of a Fund's most current Prospectus, the Statement of
Additional Information and annual and interim reports as the Distributor may
request. The Trust shall cooperate fully in the efforts of the Distributor to
arrange for the sale of Shares of the Funds and in the performance of the
Distributor under this Agreement.
(c) The Trust shall take, from time to time, all necessary action to
register the Shares of the Funds under the 1933 Act, including payments of the
related filing fees, so that there will be available for sale such number of
Shares of the Trust as the Distributor may be expected to sell. The Trust agrees
to file from time to time such amendments, reports and other documents as may be
necessary in order that there may be no untrue statement of a material fact in
the Registration Statement or Prospectus of a Fund, or necessary in order that
there may be no omission to state a material fact in the Registration Statement
or Prospectus of a Fund which omission would make the statements therein, in
light of the circumstances under which they were made, misleading.
(d) The Trust shall use its best efforts to qualify and maintain the
registration and qualification of an appropriate number of Shares of the Funds
and the Trust for sale under the securities laws of such states as the
Distributor shall designate, and, if necessary or appropriate in connection
therewith, to qualify and maintain the qualification of the Trust as a broker-
dealer in such states. The Distributor shall furnish such information and other
material relating to its affairs and activities as may be requested by the Trust
in connection with such qualifications.
Section 4. Expenses.
--------
(a) The Trust shall bear all costs and expenses of the continuous
offering of Shares of the Funds in connection with: (i) fees and disbursements
of its counsel and auditors, (ii) the preparation, filing and printing of any
registration statements and/or Prospectuses and Statements of Additional
Information
<PAGE>
required by and under the federal and state securities laws, (iii) the
preparation and mailing of annual and interim reports and proxy materials, if
any, to shareholders and (iv) the qualification of the Shares of the Funds for
sale and of the Trust as a broker-dealer under the securities laws of such
states or other jurisdictions as shall be selected by the Distributor pursuant
to Section 3(d) hereof and the cost and expenses payable to each such state for
continuing qualification therein.
(b) The Distributor shall bear (i) the costs and expenses of
preparing, printing and distributing any materials not prepared by the Trust and
other materials used by the Distributor in connection with its offering of
Shares of the Funds for sale to the public (including the additional cost of
printing copies of the Prospectus and of annual and interim reports) to
shareholders other than copies thereof required for distribution to existing
shareholders or for filing with any federal and state securities authorities,
(ii) any expenses of advertising incurred by the Distributor in connection with
such offering and (iii) the expenses of registration or qualification of the
Distributor as an broker-dealer under federal or state laws, if necessary, and
the expenses of continuing such registration or qualification. It is understood
and agreed that so long as the Trust's Plan of Distribution as to a Fund
pursuant to Rule 12b-1 under the Investment Company Act of 1940, if any,
continues in effect, any expenses incurred by the Distributor hereunder may be
paid from amounts received by it from a Fund under such Plan.
Section 5. Indemnification.
---------------
The Trust agrees to indemnify, defend and hold the Distributor, its
officers, directors, employees and agents and any person who controls the
Distributor within the meaning of Section 15 of the 1933 Act or Section 20 of
the Securities Exchange Act of 1934, as amended (the "1934 Act"), free and
harmless from and against any and all losses, claims, damages, liabilities and
expenses (including the cost of investigating or defending such claims, damages
or liabilities and any counsel fees incurred in connection therewith) which the
Distributor, its officers, directors, employees and agents or any such
controlling person may incur under the 1933 Act, the 1934 Act, or under common
law or otherwise, arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement, a
Prospectus, or the Statement of Additional Information or arising out of or
based upon the omission or any alleged omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such claims, damages, liabilities or expenses
arise out of or are based upon any such untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
information furnished in writing by the Distributor to the Trust for use in the
Registration Statement, a Prospectus or the Statement of Additional Information.
The Distributor agrees to promptly notify
<PAGE>
the Trust of any event giving rise to rights of Indemnification hereunder,
including any action brought against the Distributor, its officers, directors,
employees and agents or any such controlling person, such notification to be
given by letter or telegram addressed to the Trust at its principal business
office, but the Distributor's failure so to notify the Trust shall not relieve
the Trust from any obligation it may have to indemnify the Distributor hereunder
or otherwise.
The Distributor agrees to indemnify, defend and hold the Trust, its
Trustees and officers and any person who controls the Trust, if any, within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, free and
harmless from and against any and all losses, claims, damages, liabilities and
expenses (including the cost of investigating or defending such claims, damages
or liabilities and any counsel fees incurred in connection therewith) which the
Trust, its Trustees or officers or any such controlling person may incur under
the 1933 Act, the 1934 Act, or under common law or otherwise, but only to the
extent that such liability or expense incurred by the Trust, its Trustees or
officers or such controlling person arises out of or is based upon any untrue
statement or alleged untrue statement of a material fact contained in
information furnished in writing by the Distributor to the Trust for use in the
Registration Statement, a Prospectus or the Statement of Additional Information.
The Trust agrees to promptly notify the Distributor of any event giving rise to
rights of indemnification hereunder, including any action brought against the
Trust, its Trustees or officers or any such controlling person, such
notification being given to the Distributor at its principal business office,
but the Trust's failure so to notify the Distributor shall not relieve the
Distributor from any obligation it may have to indemnify the Trust hereunder or
otherwise.
Section 6. Contribution. In order to provide for just and equitable
------------
contribution in circumstances in which the indemnification provided for in the
first paragraph of Section 5 is for any reason held to be unavailable from the
Trust, the Trust and the Distributor shall contribute to the aggregate losses,
claims, damages, liabilities or expenses (including the reasonable costs of
investigating or defending such claims, damages or liabilities but after
deducting any contribution received by the Trust from persons other than
Distributor who may also be liable for contribution, such as persons who
control the Trust within the meaning of the 1933 Act, officers of the Trust who
signed the Registration Statement and Trustees) to which the Trust and the
Distributor may be subject in such proportion so that the Distributor is
responsible for that portion represented by the percentage that the Sales Charge
appearing in the Prospectus of the Fund bears to the public offering price
appearing therein and the Trust is responsible for the balance: provided,
however, that (i) in no case shall the Distributor be responsible for any amount
in excess of the portion of the Sales Charge received and retained by it in
respect of the Shares of a Fund purchased through it hereunder and (ii) no
person guilty of fraudulent
<PAGE>
misrepresentation (within the meaning of Section 11(f) of the 1933 (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 6, each person, if any, who controls the Distributor
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
shall have the same rights to contribution as the Distributor. Each party who
may seek contribution under this Section 6 shall, promptly after receipt of
notice of commencement of any action, suit or proceeding against such party in
respect of which a claim for contribution may be made against another party or
parties under this Section 6, give written notice of the commencement of such
action, suit or proceeding to the party or parties from whom such contribution
may be sought, but the omission so to notify such contributing party or parties
shall not relieve the party or parties from whom contribution may be sought from
any other obligation it or they may have otherwise than on account of this
Section 6.
Section 7. Compliance with Securities Laws. The Trust represents that it is
-------------------------------
registered as a diversified, open-end management investment company under the
1940 Act, and agrees that it will comply with all of the applicable terms and
provisions of the 1940 Act, the 1933 Act and, subject to the provisions of
Section 3(d), all applicable state "Blue Sky" laws. The Distributor agrees to
comply with all of the applicable terms and provisions of the 1934 Act.
Section 8. Term of Contract. This Agreement shall go into effect on the
----------------
date hereof and shall continue in effect until July 30, 1990, and thereafter for
successive periods of one year each if such continuance is approved at least
annually thereafter (i) either by an affirmative vote of a majority or the
outstanding shares of the Trust or by the Board of Trustees of the Trust, and
(ii) in either case by a majority of the Trustees of the Trust who are not
interested persons of the Distributor or (otherwise than as Trustees) of the
Trust, cast in person at a meeting called for the purpose of voting on such
approval. This Agreement may be terminated at any time by one party hereto to
the other on sixty (60) days' written notice to the other party.
Section 9. Assignment.
----------
This Agreement may not be assigned by the Distributor and shall
automatically terminate in the event of an attempted assignment by the
Distributor; provided, however, that the Distributor may employ or enter into
agreements with such other person, persons, corporation, or corporations, as it
shall determine in order to assist it in carrying out this Agreement.
Section 10. Amendment.
---------
This Agreement may be amended at any time by mutual agreement in
writing of the parties hereto, provided that any
<PAGE>
such amendment is approved by a majority of the Trustees of the Trust who are
not interested persons of the Distributor or by the holders of a majority of the
outstanding shares of the Trust.
Section 11. Governing Law.
-------------
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
Section 12. Non-Liability of Shareholders, Trustees, Officers, Employees,
------------------------------------------------------------
Representatives and Agents.
- --------------------------
Copies of the Master Trust Agreement, as amended, establishing the
Trust are on file with the Secretary of the Commonwealth of Massachusetts, and
notice is hereby given that this Agreement is executed on behalf of the Trust by
officers of the Trust as officers and not individually and that the obligations
of or arising out of this Agreement are not binding upon any of the Trustees,
officers, shareholders, employees or agents of the Trust individually but are
binding only upon the assets and property of the Trust.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
VAN ECK INVESTMENT TRUST
By ______________________________
VAN ECK SECURITIES CORPORATION
By ______________________________
<PAGE>
FUND PARTICIPATION AGREEMENT
----------------------------
Nationwide Life Insurance Company ("Nationwide"), and Van Eck Investment Trust
("Trust") and the Trust's investment adviser, Van Eck Associates Corporation
("Adviser") hereby agree that shares of the Gold and Natural Resources Fund and
Global Bond Fund ("Portfolios") shall be made available to serve as an
underlying investment medium for Individual Deferred Variable Annuity Contracts
("Contracts") to be offered by Nationwide subject to the following provisions:
1. Nationwide represents that it has established the Nationwide Variable
Account-II (the "Variable Account"), a separate account under Ohio law, and
has registered it as a unit investment trust under the Investment Company
Act of 1940 ("1940 Act") to serve as an investment vehicle for the
Contracts. The Contracts provide for the allocation of net amounts received
by Nationwide to separate series of the Variable Account for investment in
the shares of specified investment companies selected among those companies
available through the Variable Account to act as underlying investment
media. Selection of a particular investment company is made by the Contract
owner who may change such selection from time to time in accordance with
the terms of the applicable Contract.
2. Nationwide agrees to make every reasonable effort to market its Contracts.
It will use its best efforts to give equal emphasis and promotion to shares
of the Trust as is given to other underlying investments of the Variable
Account. In marketing its Contracts, Nationwide will comply with all
applicable state or Federal laws.
3. The Trust or the Adviser will provide closing net asset value, dividend and
capital gain information at the close of trading each business day to
Nationwide. Nationwide will use this data to calculate unit values, which
will in turn be used to process that same business day's Variable Account
unit value. The Variable Account processing will be done the same evening,
and orders will be placed the morning of the following business day. Orders
will be sent directly to the Trust or its specified agent, and payment for
purchases will be wired to a custodial account designated by the Trust or
the Adviser, so as to coincide with the order for Trust shares. The Trust
will execute the orders at the net asset value as determined as of the
close of trading on the prior day. Dividends and capital gains
distributions shall be reinvested in additional shares at the ex-date net
asset value.
4. All expenses incident to the performance by the Trust under this Agreement
shall be paid by the Trust. The Trust shall pay the cost of registration of
Trust shares with the Securities and Exchange Commission ("SEC"). The
Trust shall distribute, to the Variable Account, their proxy material,
<PAGE>
periodic Trust reports to shareholders and other material the Trusts may
require to be sent to Contract owners. The Trust shall pay the cost of
qualifying Trust shares in states where required. The Trust will provide
Nationwide with a reasonable quantity of the Trust's Prospectus and the
reports to be used in contemplation of this Agreement. The Trust will
provide Nationwide a copy of the Statement of Additional Information
suitable for duplication.
5. Nationwide and its agents shall make no representations concerning the
Trust or Trust shares except those contained in the then current
prospectuses of the Trust and in current printed sales literature of the
Trust.
6. Administrative services to Contract owners shall be the responsibility of
Nationwide, and shall not be the responsibility of the Trust or the
Adviser. The Trust and Adviser recognize that Nationwide will be the sole
shareholder of Trust shares issued pursuant to the Contracts. Such
arrangement will result in multiple share orders. Trust and Adviser
recognize that they will derive a savings of administrative expense such as
significant reductions in postage expense, qualified plan administrative
services and shareholder communication, by virtue of having a sole
shareholder rather than multiple shareholders. In consideration of the
administrative savings resulting from such arrangement, Adviser agrees to
pay to Nationwide $.50 per month per individual contract owner who has
allocated purchase payments to the Trust. Said reimbursement reflects the
difference between expense to the Trust or Adviser of maintaining the
accounts of individual shareholders and the expense of maintaining the
account of Nationwide as sole shareholder, and no portion thereof
constitutes distribution expense.
7. The Trust shall comply with Sections 817(h) and 851 of the Internal Revenue
Code of 1986, if applicable, and the regulations thereunder, and the
applicable provisions of the 1940 Act relating to the diversification
requirements for variable annuity, endowment, and life insurance contracts.
The Trust shall provide Nationwide each quarter with a letter from the
appropriate Trust officer certifying the Trust's compliance with the
diversification requirements and qualification as a regulated investment
company.
8. Nationwide agrees to inform the Board of Trustees of the Trust of the
existence of or any potential for any material irreconcilable conflict of
interest between the interests of the Contract owners of the Variable
Account investing in the Trust and/or any other separate account of any
other insurance company investing in the Trust.
<PAGE>
Any material irreconcilable conflict may arise for a variety of reasons,
including:
(a) an action by any state insurance or other regulatory authority;
(b) a change in applicable federal or state insurance, tax or securities laws
or regulations, or a public ruling, private letter ruling, or any similar
action by insurance, tax or securities regulatory authorities;
(c) an administrative or judicial decision in any relevant proceeding;
(d) the manner in which the investments of any Portfolio are being managed;
(e) a difference in voting instructions given by Contract owners and variable
life insurance contract owners or by contract owners of different life
insurance companies utilizing the Trust; or
(f) a decision by Nationwide to disregard the voting instructions of contract
owners.
Nationwide will be responsible for assisting the Board of Trustees of the Trust
in carrying out its responsibilities by providing the Board with all information
reasonably necessary for the Board to consider any issue raised, including
information as to a decision by Nationwide to disregard voting instructions of
Contract owners.
It is agreed that if it is determined by a majority of the members of the Board
of Trustees of the Trust or a majority of its disinterested Trustees that a
material irreconcilable conflict exists affecting Nationwide, Nationwide shall,
at its own expense, take whatever steps are necessary to remedy or eliminate the
irreconcilable material conflict, which steps may include, but are not limited
to,
(a) withdrawing the assets allocable to some or all of the separate accounts
from the Trust or any Portfolio and reinvesting such assets in a different
investment medium, including another Portfolio of the Trust or submitting
the questions of whether such segregation should be implemented to a vote
of all affected Contract owners and, as appropriate, segregating the assets
of any particular group (i.e., annuity Contract owners, life insurance
Contract owners or qualified Contract owners) that votes in favor of such
segregation, or offering to the affected Contract owners the option of
making such a change;
(b) establishing a new registered management investment company or managed
separate account.
<PAGE>
If a material irreconcilable conflict arises because of Nationwide's
decision to disregard Contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote,
Nationwide may be required, at the Trust's election, to withdraw the
Variable Account's investment in the Trust. No charge or penalty will be
imposed against the Variable Account as a result of such withdrawal.
Nationwide agrees that any remedial action taken by it in resolving any
material conflicts of interest will be carried out with a view only to the
interests of Contract owners.
For purposes hereof, a majority of the disinterested members of the Board
of Trustees of the Trust shall determine whether any proposed action
adequately remedies any material irreconcilable conflict. In no event will
the Trust be required to establish a new funding medium for any Contracts.
Nationwide shall not be required by the terms hereof to establish a new
funding medium for any Contracts if an offer to do so has been declined by
vote of a majority of affected Contract owners.
The Trust will undertake to promptly make known to Nationwide the Board of
Trustees' determination of the existence of a material irreconcilable
conflict and its implications.
9. This Agreement shall terminate as to the sale and issuance of new
Contracts:
(a) at the option of Nationwide, the Adviser or the Trust upon six months'
advance written notice to the other;
(b) at the option of Nationwide if Trust shares are not available for any
reason to meet the requirements of Contracts as determined by
Nationwide. Reasonable advance notice of election to terminate shall
be furnished by Nationwide;
(c) at the option of Nationwide, the Adviser or the Trust, upon
institution of formal proceedings against the Broker-Dealer or Broker-
Dealers marketing the Contracts, the Variable Account, Nationwide or
the Trust by the National Association of Securities Dealers ("NASD"),
the SEC or any other regulatory body;
(d) upon a decision by Nationwide, in accordance with regulations of the
SEC, to substitute such Trust shares with the shares of another
investment company for Contracts for which the Trust shares have been
selected to serve as the underlying investment medium. Nationwide will
give 60 days' written notice to the Trust and the Adviser of any
proposed vote to replace Trust shares;
(e) upon assignment of this Agreement unless made with the written consent
of each other party;
<PAGE>
(f) in the event Trust shares are not registered, issued or sold in
conformance with Federal law or such law precludes the use of Trust
shares as an underlying investment medium of Contracts issued or to be
issued by Nationwide. Prompt notice shall be given by either party to
the other in the event the conditions of this provision occur.
10. Termination as the result of any cause listed in the preceding paragraph
shall not affect the Trust's obligation to furnish Trust shares for
Contracts then in force for which the shares of the Trust serve or may
serve as an underlying medium, unless such further sale of Trust shares is
proscribed by law or the SEC or other regulatory body.
11. Each notice required by this Agreement shall be given by wire and confirmed
in writing to:
Nationwide Life Insurance Company
One Nationwide Plaza
Columbus, Ohio 43216
Van Eck Investment Trust
122 East 42nd Street
New York, New York 10168
Attn:
Van Eck Associates Corporation
122 East 42nd Street
New York, New York 10168
Attn:
12. Advertising and sales literature with respect to the Trust prepared by
Nationwide or its agents for use in marketing its Contracts will be
submitted to the Trust for review before such material is submitted to the
SEC or NASD for review.
13. Nationwide will distribute all proxy material furnished by the Trust and
will vote Trust shares in accordance with instructions received from the
Contract owners of such Trust shares. Nationwide shall vote the Trust
shares for which no instructions have been received in the same proportion
as Trust shares for which said instructions have been received from
Contract owners. Nationwide and its agents will in no way recommend action
in connection with or oppose or interfere with the solicitation of proxies
for the Trust shares held for such Contract owners.
14. (a) Nationwide agrees to indemnify and hold harmless the Trust and each of
its directors, officers, employees, agents and each person, if any,
who controls the Trust within the meaning of the Securities Act of
1933 (the "Act") against any losses, claims, damages or liabilities to
which the Trust or any such director, officer, employee, agent or
controlling person may
<PAGE>
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material
fact contained in information furnished by Nationwide for use in the
Registration Statement or prospectus of the Trust or in the Registration
Statement or prospectus for the Variable Account, or arise out of or are
based upon the omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, or arise out of or as a result of conduct,
statements or representations (other than statements or representations
contained in the prospectus and sales literature of the Trust) of Nationwide
or its agents, with respect to the sale and distribution of Contracts for
which Trust shares are an underlying investment; and Nationwide will
reimburse any legal or other expenses reasonably incurred by the Trust or
any such director, officer, employee, agent or controlling person in
connection with investigating or defending any such loss, claim, damage,
liability or action. This indemnity agreement will be in addition to any
liability which Nationwide may otherwise have.
(b) The Trust agrees to indemnify and hold harmless Nationwide and each of its
directors, officers, employee, agents and each person, if any, who controls
Nationwide within the meaning of the Act against any losses, claims, damages
or liabilities to which Nationwide or any such director, officer, employee,
agent or controlling person may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement or prospectus or sales literature of the Trust, or arise out of or
are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, or arise out of or are based upon the
Trust's failure to keep each of the Trust options fully diversified and
qualified as a regulated investment company as required by the applicable
provisions of the Internal Revenue Code, the Investment Company Act of 1940,
and any other law or regulation, and the Trust will reimburse any legal or
other expenses reasonably incurred by Nationwide or any such director,
officer, employee, agent or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the Trust will not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out
of or is based upon an untrue statement or omission or alleged omission made
in such Registration
<PAGE>
Statement or prospectus in conformity with written information furnished to
the Trust by Nationwide specifically for use therein. This indemnity
agreement will be in addition to any liability which the Trust may otherwise
have.
(c) The Adviser agrees to indemnify and hold harmless Nationwide and each of its
directors, officers, employee, agents and each person, if any, who controls
Nationwide within the meaning of the Act against any losses, claims, damages
or liabilities to which Nationwide or any such director, officer, employee,
agent or controlling person may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement or prospectus or sales literature of the Trust, or arise out of or
are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, or arise out of or are based upon the
Adviser's failure to keep each of the Trust and its Portfolios fully
diversified and qualified as a regulated investment company as required by
the applicable provisions of the Internal Revenue Code, the 1940 Act, and
any other law or regulation, and the Adviser will reimburse any legal or
other expenses reasonably incurred by Nationwide or any such director,
officer, employee, agent or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the Adviser will not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out
of or is based upon an untrue statement or omission or alleged omission made
in such Registration Statement or prospectus in conformity with written
information furnished to the Adviser by Nationwide specifically for use
therein. This indemnity agreement will be in addition to any liability which
the Trust may otherwise have.
(d) The Trust and the Adviser shall indemnify and hold Nationwide harmless
against any and all liability, loss, damages, costs or expenses which
Nationwide may incur, suffer or be required to pay due to the Trust's, or
Adviser's (or their designated agent's) (1) incorrect calculation of the
daily net asset value, dividend rate or capital gain distribution rate; (2)
incorrect reporting of the daily net asset value, dividend rate or capital
gain distribution rate; or (3) untimely reporting of the net asset value,
dividend rate or capital gain distribution rate. Any gain to Nationwide
attributable to the Trust's, or Adviser's (or their designated agent's)
incorrect calculation or
<PAGE>
reporting of the daily net asset value shall be immediately returned
to the Trust.
(e) Promptly after receipt by an indemnified party under this paragraph of
notice of the commencement of action, such indemnified party will, if
a claim in respect thereof is to be made against the indemnifying
party under this paragraph, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying
party will not relieve it from any liability which it may have to any
indemnified party otherwise than under this paragraph. In case any
such action is brought against any indemnified party, and it notified
the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that
it may wish, assume the defense thereof, with counsel satisfactory to
such indemnified party, after notice from the indemnifying party to
such indemnified party under this paragraph for any legal or other
expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation.
15. If, in the course of future marketing of the Contracts, Nationwide or its
agents shall request the continued assistance of the Trust's sales
personnel, compensation (which will be negotiated by the Trust and
Nationwide) shall be paid by Nationwide to the Trust.
NATIONWIDE LIFE INSURANCE COMPANY
__________________________ By ___________________________________
Date
VAN ECK INVESTMENT TRUST
__________________________ By ___________________________________
Date
VAN ECK ASSOCIATES CORPORATION
___________________________ By ___________________________________
Date
<PAGE>
PROCEDURAL AGREEMENT
AMONG MERRILL LYNCH FUTURES INC.
and Citibank
WHEREAS the undersigned
("Customer") has opened a trading account with the undersigned Merrill
Lynch Futures Inc. ("Merrill"), a registered futures commission merchant, for
the purpose of trading futures contracts traded on duly registered boards of
trade, including options on such futures contracts ("Contracts") through said
firm; and
WHEREAS, in connection with the opening of the trading account, Customer
and Merrill have entered into a Customer Agreement which requires Customer to
deposit as Collateral the initial margin (including any additional original
margin requirements for Customer's short option positions) ("Initial Margin")
with respect to each Contract as required by the rules and regulations of the
Chicago Mercantile Exchange, the Chicago Board of Trade, the Commodity
Exchange, and such other exchanges on which Merrill may effect or cause to be
effected transactions as broker for Customer; and
WHEREAS Customer, Merrill, and the undersigned Citibank ("Custodian") have
entered into a Safekeeping Agreement establishing an account entitled "Merrill
Lynch Futures Inc. Customer Funds for the benefit of
(Customer Segregated
Account)" pursuant to which Custodian agrees to maintain a Safekeeping Account
(which for its general conditions is governed by the Custodian Agreement between
the Custodian and Customer) for the custody of the Initial Margin which Customer
is required to deposit and maintain, and
<PAGE>
WHEREAS the Customer Agreement and the Safekeeping Agreement both provide
that the rights and duties of the parties thereto are subject to the provisions
of this Agreement.
NOW, THEREFORE, IT IS AGREED THAT:
1. Customer shall deposit and maintain as collateral in the Safekeeping
Account such Initial Margin as shall be required from time to time by the
exchange on which transactions are effected or caused to be effected by Merrill
as broker for Customer. Customer may deposit amounts in excess of such
requirements. The designation "Customer Funds" in the account title is intended
to indicate the status of the account under the Commodity Exchange Act and
Commodity Futures Trading Commission regulations; however, the provisions of
this agreement shall be controlling as to the rights of the parties in the
collateral deposited in the account.
2. The Initial Margin deposited and maintained in the Safekeeping
Account, created pursuant to the Safekeeping Agreement, shall be in the form,
as Customer elects, of cash or of eligible securities of the U.S. Government
(valued at the current market value less 10% of the principal value thereof) or
of a combination thereof. Customer may substitute U.S. Government securities of
equal or greater value upon prior approval by Merrill, which approval shall not
be unreasonably withheld. Upon receipt of such substitute securities, Merrill
agrees to give instructions to Custodian to release from the Safekeeping Account
cash or eligible U.S. Government securities of an equal value, or such lesser
amount as may be directed by Customer. Any separate interest payments thereon
shall be automatically credited by Custodian in Federal funds to such demand
deposit accounts designated in instructions from
-2-
<PAGE>
Customer on the date that such interest becomes due and payable unless notice
has been provided to Custodian pursuant to Paragraph 5 (a) below, and such
interest is required to meet additional Variation Margin requirements in
accordance with the procedure provided in Paragraphs 5 (a), (b) and (c). Amounts
due on securities which mature or are redeemed will be credited to the
Safekeeping Account in Federal funds on the date such amounts are received.
Amounts due to Customer as a result of the variation in value of Customer's
short option positions shall be credited to Customer by reducing the amount of
the collateral required to be maintained in the Safekeeping Account.
3. With respect to the deposit of Initial Margin, Custodian shall be
directed by Customer's custodian order to segregate specified assets in the
Safekeeping Account, and Custodian shall promptly provide Merrill and Customer
with a written confirmation of each transfer into or out of the Safekeeping
Account.
4. Withdrawals of Initial Margin from the Safekeeping Account shall be
effected upon receipt by the Custodian of Customer's custodian order and
Merrill's prior written verification of such withdrawal. Merrill shall, upon
request of the Customer, inform Customer of the amount of any excess Initial
Margin In the Safekeeping Account.
5. Merrill shall have access to the collateral only in accordance with the
following, and only at such times as conditions set forth hereafter are complied
with:
(a) If notice by Merrill Is given to Customer that additional margin
is required by Merrill as broker for the Customer due to variation in the
value of one or more futures contracts held in the trading account or
otherwise pursuant to the Customer Agreement
-3-
<PAGE>
("Variation Margin"), and such notice is given prior to 9:00 A.M. New York
time on a day on which the Customer is open for business, which Variation
Margin shall first have been satisfied from any amounts currently credited
to the Customer's trading account with Merrill in connection with which the
Variation Margin is required, the Customer shall transfer to Merrill such
Variation Margin not later than 3:00 P.M. on the same day. If Notice by
Merrill to the Customer is given of the need for Variation Margin
subsequent to 9:00 A.M. but prior to 4:00 P.M. New York time on a day on
which the Customer is open for business, the Customer shall provide such
Variation Margin to Merrill not later than 10:30 A.M. New York time on the
next succeeding day on which the Customer is open for business. Notice by
Merrill to the Customer of the receipt of Variation Margin shall be given
promptly.
(b) If Merrill has not received the requested Variation Margin within
the time period as provided In Paragraph 5(a), Notice by Merrill to
Customer of the failure to receive the Variation Margin shall be given
immediately.
(c) If Merrill does not receive the Variation Margin in accordance
with Paragraph 5(a), Merrill may give (i) Notice to Custodian of the
Customer's failure to provide Variation Margin and the amount of Variation
Margin required; and (ii) Notice to the Customer that such Notice has been
given to Custodian. Promptly upon receipt by Custodian as such Notice but
without prejudice to any rights of Merrill hereunder, Custodian shall give
Notice to the Customer of its receipt of such Notice.
-4-
<PAGE>
(d) In the event Customer has failed to transfer the required
Variation Margin to Merrill during the time period as provided in Paragraph
5 (a), Merrill may give Notice to Custodian of the Customer's failure to
provide Variation Margin and that all conditions precedent to Merrill's
right to direct disposition hereunder have been satisfied, and may give
instructions to Custodian (i) to transfer eligible U.S. Government
securities to Merrill, (ii) to sell at the prevailing market price such of
the collateral in the Safekeeping Account relating to the trading account
in which the Variation Margin is required, in each case as necessary to
provide for payment to Merrill of the amount of Variation Margin that
Merrill shall have specified in the Notice, or (iii) with respect to
collateral in the form of cash, Merrill may give instructions to Custodian
to immediately transfer cash in the amount of the Variation Margin that
Merrill shall have specified in the Notice from such Safekeeping Account to
the account of Merrill. Custodian shall promptly give Notice to Customer of
its receipt of such instructions from Merrill and, upon taking any action
pursuant to such instructions, shall immediately give Notice to Customer of
such action. Subject to the notice provisions of Paragraph 5 set forth
above, which include Merrill giving Custodian a statement that all
conditions precedent to Merrill's right to direct disposition hereunder
have been satisfied, Custodian shall take instructions solely from Merrill
with respect to the sale of securities and/or the transfer of cash to
Merrill. In the event such statement is not given in writing, Merrill will
confirm the statement thereafter in writing to Custodian by the most
expeditious means which may be
-5-
<PAGE>
by telecopy. In the event that Merrill receives eligible U.S. Government
securities pursuant to this Paragraph 5(d), it shall have the right to sell
or otherwise dispose of such securities and shall remit to Customer any
proceeds of such sale or disposition in excess of the amount of Variation
Margin specified in instructions from Merrill to Custodian.
(e) Custodian shall retain in the Safekeeping Account any collateral
in excess of the amount of Variation Margin specified in instructions from
Merrill to Custodian including any proceeds from the sale of securities in
excess of such amount. Custodian shall give consideration to any timely
request by Customer with respect to particular securities to be sold and
shall sell any securities in the principal market for such securities or,
in the event such principal market is closed, sell them in a manner
commercially reasonable for such securities.
6. Merrill shall promptly credit to the trading account of Customer any
Variation Margin resulting from the variation in value of one or more Contracts
purchased or sold by Customer in accordance with the rules of any contract
market, exchange or board of trade on which Contract transactions are effected
by Merrill for Customer. At Customer's direction, Merrill shall transfer trading
account balances to Customer in Federal funds to the Custodian or such bank
account in Customer's name as Customer shall otherwise direct. Customer may give
such directions to Merrill by telephone, confirmed thereafter in writing.
7. Custodian shall act only upon receipt of instructions from Merrill
regarding release of collateral. Custodian shall indemnify Customer from any
loss incurred by reasons of Custodian's negligence or
-6-
<PAGE>
willful misconduct in acting on those instructions; provided that the
instructions are given in a timely fashion and comply in all other respects with
the provisions of this Agreement.
8. Unless otherwise provided, all notices or other communications called
for by this Agreement shall be given by the most expeditious means possible and
may be given by telephone. If a notice is not given in writing, a written
confirmation shall be provided to appropriate parties within a reasonable time
after the notice is given.
9. Any and all expenses of establishing, maintaining, or terminating the
Safekeeping Account, including without limitation any and all expenses incurred
by Custodian in connection with the Safekeeping Account, shall be borne by
Customer.
10. This Agreement and the Safekeeping Account, except as provided in the
Safekeeping Agreement, shall terminate only upon written consent of Customer and
Merrill, neither of which shall unreasonably withhold their consent, at which
time Custodian shall transfer to Customer, or to a substitute custodian
designated by Customer, all property held in the Safekeeping Account.
11. This Agreement shall be construed according to, and the rights and
liabilities of the parties hereto shall be governed by, the laws of the State of
New York.
12. Except as specifically provided herein, this Agreement does not in any
way affect any other agreements entered into among the parties hereto and any
actions taken or omitted by any party hereunder shall not affect any rights of
any other party hereunder.
13. No amendment of this Agreement shall be effective unless in writing and
signed by persons thereunto duly authorized.
-7-
<PAGE>
14. Written communications hereunder shall be, except as otherwise required
hereunder, hand-delivered or mailed first class postage prepaid, except that
written notice of termination shall be sent by certified mail addressed:
(a) if to Custodian, to:
Citibank
One CitiCorp Center
New York, New York 10043
Attention: Deia Capella
-8-
<PAGE>
(b) (1) if to Customer, to:
122 East 42nd Street, 42nd Floor
New York, New York 10168
Attention: Shirley L. Osborne;
(2) with copies to:
122 East 42nd Street, 42nd Floor,
New York, New York 10168
Attention: Michael Doorley
(c) if to Merrill, to:
New York Futures Sales Office
One Liberty Plaza, 21st Floor
New York, New York 10080
Attention: Mr. John Emptage;
15. This Agreement is executed on behalf of the Trustees of the Fund as
Trustees and not individually, and the obligations of this Agreement are not
binding upon any of the Trustees but are binding only upon the assets and
property of the Customer.
-9-
<PAGE>
Attachment A
Date: November , 1987
Citibank
One Citicorp Center
New York, New York 10043
Attention: Dela Capella
Gentlemen:
We refer to the account with your bank designated as a "Morgan Stanley &
Co., Inc. Customer Funds for the benefit of (Customer
Segregated Account)" account number ____________ (the "Account"), opened
pursuant to a Safekeeping Agreement among ("Depositor"),
Morgan Stanley & Co., Inc. ("MS & Co") and your bank, as custodian, dated
_______________.
The Account is being maintained by us in compliance with the provisions of
the Commodity Exchange Act and as a subaccount under the custodian agreement
between Depositor and you. Depositor will form time to time deposit with you in
such Account monies or obligations of the United States, or obligations fully
guaranteed as to principal and interest by the United States (collectively
referred to as "securities"). All such securities and monies will be treated
either as investments of our commodity and commodity option customer's funds or
as obligations belonging to such customer. Under the provisions of the Commodity
Exchange Act and regulations promulgated thereunder, these deposits are required
to be segregated and treated as belonging to the customer. By signing and
returning to us the enclosed copy of this letter, you acknowledge that you
understand the nature of the securities and monies deposited in the account.
You further acknowledge that the funds and securities held in the above
Account are those of a commodity or commodity option customer and are being held
by the bank subject to the requirements of the Commodity Exchange Act and
regulations promulgated thereunder. Such funds and securities will not be
treated by the bank as the funds or securities of any person other than such
depositor customer of MS & Co and will not be used by the bank in connection
with the obligations of any person other than Depositor, except as provided in
the Safekeeping Agreement and Procedural Agreement.
You also acknowledge that the above Account is a
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<PAGE>
Dated
Page Two
special deposit, and you agree that, in providing services to us or to any of
our affiliates, including but not limited to the extending credit or granting
accommodations or services relating to uncollected, target, compensating or
other balances to us or to any of our affiliates, the bank acknowledges that it
has no claim, and will seek no lien, right of set off or any other claim or
interest in the funds or securities held in said Account, and-that it will not
use the funds and securities in the above-described Account to margin,
collateralize, secure or to extend credit to Depositor, to any of its
affiliates, to us, to any of our affiliates or to any persons for such
activities or otherwise. You hereby agree that the obligations and records
accounting for the monies and securities held in the Account may be examined by
an authorized employee of the Commodity Futures Trading Commission.
Sincerely yours,
Morgan Stanley & Co., Inc.
_____________________________
Citibank
AGREED AND ACKNOWLEDGED
_______________________
(title)
Dated ______________, 19__
<PAGE>
interest and service charges on any Customer deficit balances at the rates
customarily charged by Merrill, together with Merrill's costs and attorney's
fees incurred in collecting such deficit. Such payments shall be made in Federal
funds to Merrill at such address as Merrill may designate.
3. A detailed statement of all transactions for or on the Customer's behalf
shall be furnished to Customer on a daily and a monthly basis. Such statements
shall be conclusive and binding on the Customer unless the Customer notifies
Merrill of any objection within five business days from the day the Customer
receives such statement; provided however that with respect to monthly
statements only the Customer may make such objection within ten business days.
4. Customer shall timely deposit and maintain in the Safekeeping Account
at all times Initial Margin (including any additional original margin
requirements for Customer's short option positions) ("Initial Margin") for
Customer's account in accordance with the Procedural Agreement. Customer shall
timely pay to Merrill the amount of any additional or Variation Margin with
respect to Customer's open positions on Contracts in accordance with the
Procedural Agreement. If, upon notice given by Merrill as set forth in the
Procedural Agreement, Customer fails to provide additional or Variation Margin
or if Customer fails to deposit or maintain in the Safekeeping Account required
Initial Margin, Merrill may without further notice to Customer take any action
set forth in Paragraphs 12 and 14 hereof.
5. Customer shall make timely delivery of or payment for financial
instruments in compliance with the terms of the Contracts purchased or sold by
Customer through Merrill unless such Contracts have been
-2-
<PAGE>
terminated by an offsetting purchase or sale prior to the delivery date.
Customer shall advise Merrill of its intentions with respect to the delivery of
or payment for such financial instruments, and Merrill shall be entitled to
receive appropriate assurances with respect thereto.
6. Customer acknowledges that (a) any trading recommendations and market or
other information communicated to Customer by Merrill are incidental to the
conduct of Merrill's business as a futures commission merchant and do not
constitute an offer to sell or the solicitation of an offer to buy any Contracts
or instrument that is the subject of any Contract; (b) such recommendation
and information, although based upon information obtained from sources believed
by Merrill to be reliable, may be incomplete, may not be verified, and may be
changed without notice to Customer; and (c) Merrill makes no representation,
warranty or guarantee as to the accuracy or completeness of any market or other
information or trading recommendation furnished to Customer. Customer
understands that officers, employees, or affiliates of Merrill may have a
position in, may intend to, and may, buy or sell, Contracts or instruments that
are the subject of Contracts, including Contracts which are the subject of
information or recommendations furnished to Customer, and that the position or
transactions of any such officer, employee, or affiliate may or may not be
consistent with the recommendations furnished by Merrill to Customer.
7. All transactions by Merrill on Customer's behalf shall be subject to the
applicable constitution, by-laws, rules, regulations, customs, usages, rulings,
and interpretations of the contract market and its clearinghouse on which such
transactions are executed or cleared by Merrill or its agents for Customer's
account, and to all applicable
-3-
<PAGE>
governmental acts and statutes (such as the Commodity Exchange Act) and to
rules and regulations made thereunder; Merrill shall not be liable to Customer
as a result of any action taken by Merrill or its agents to comply with any such
constitution, by-law, rule, regulation, custom, usage, ruling, interpretation,
act, or statute.
8. Merrill shall have no responsibility for delays in the transmission of
orders due to (a) breakdown or failure of transmission or communication
facilities, or (b) any other cause beyond Merrill's control.
9. Merrill shall have no responsibility for compliance by Customer with any
law or regulation governing Customer's conduct as a fiduciary.
10. Merrill shall have no responsibility for compliance by any investment
adviser or commodity trading advisor of Customer with any law or regulation
governing the conduct of such investment adviser or commodity trading advisor as
a fiduciary to Customer.
11. Customer represents that (a) Customer is duly registered under the
Investment Company Act of 1940, as amended, and is validly existing and
empowered to enter into this agreement and to effectuate transactions in
financial futures contracts, and options on futures or cash contracts as
contemplated hereby; (b) Customer has reviewed the registration requirements
pertinent to commodity pool operators and commodity trading advisors of the
Commodity Futures Trading Commission and the National Futures Association in
accordance with the requirements of the Commodity Exchange Act and the
regulations of the Commodity Futures Trading Commission and has determined that
Customer and any investment adviser or commodity trading advisor of Customer are
in compliance with such requirements to the extent applicable.
-4-
<PAGE>
12. In the event that (a) Customer shall be dissolved, become insolvent or
in any other way terminate; (b) fail to deposit or maintain Initial Margin or
make payment of additional or Variation Margin, as set forth in Paragraph 4
hereof; or (c) in the event Merrill reasonably feels that it is necessary for
its protection, after having made reasonable attempts to notify Customer,
Merrill may close out Customer's open Contracts in whole or in part, sell any or
all of Customer's property held by Merrill, buy any securities or other property
for Customer's account, and cancel any outstanding orders and commitments made
by Merrill on behalf of Customer. Subject to Merrill's obligation to use best
efforts to obtain a fair and reasonable price, any such sale, purchase, or
cancellation may be made at Merrill's discretion on the contract or other market
or through the clearinghouse where such business is then transacted without
advertising the same and without notice to Customer, and without prior tender,
demand or call upon Customer. Customer shall remain liable for and shall pay to
Merrill the amount of any deficiency resulting from any transaction described
above.
13. As used herein, the term insolvent means that (a) an order, judgment or
decree has been entered under the bankruptcy, reorganization, compromise,
arrangement, insolvency, readjustment or debt, dissolution of liquidation or
similar law (herein called the "Bankruptcy Law") or any jurisdiction
adjudicating the Customer insolvent; or (b) the Customer has petitioned or
applied to any tribunal for, or consented to, the appointment of, or taking
possession by, a trustee, receiver, liquidator or similar official, of the
Customer, or commenced a voluntary case under the Bankruptcy Law of the
United
-5-
<PAGE>
20. The rights and remedies conferred upon the parties hereto shall be
cumulative, and the exercise or waiver of any thereof shall not preclude or
inhibit the exercise of additional rights and remedies.
21. This Agreement is executed on behalf of the Trustees of the Customer as
Trustees and not individually and the obligations of this Agreement are not
binding upon any of the Trustees but are binding only upon the assets and
property of the Customer.
22. Customer represents that (a) Customer will promptly notify Merrill in
writing if any of the above representations shall materially change or cease to
be true and correct; (b) Customer has read and understands the Commodity Futures
Trading Commission Risk Disclosure Statement, the Options on Futures Risk
Disclosure Statement (under separate cover) and the Margin Disclosure Statement;
and (c) no person or entity has any interest in or control of the account to
which this Agreement pertains other than Customer and the persons designated by
Customer as set forth in Paragraph 1 hereof.
23. Customer and Merrill agree to promptly furnish appropriate financial
statements to each other to show any material changes in their financial
positions and to furnish such other information concerning each other as each
may reasonably request.
24. Where the context hereof requires, the singular shall import the plural
and the masculine shall import the feminine and neuter.
25. Merrill shall be entitled to rely on any instruction received from any
person identified in writing to Merrill by Customer and such instruction shall
bind Customer. Customer agrees to hold Merrill harmless against any action
taken by Merrill in reliance upon this provision.
-8-
<PAGE>
This brief statement cannot, of course, disclose all the risks and other
significant aspects of the commodity markets. You should therefore carefully
study futures trading before you trade.
HAS RECEIVED AND THAT IT
UNDERSTANDS THE RISK DISCLOSURE DOCUMENT PROVIDED TO IT IN COMPLIANCE WITH
REGULATION 1.55 OF THE COMMODITY FUTURES TRADING COMMISSION.
By:_______________________
Title:____________________
PLEASE SIGN AND RETURN ONE COPY TO MERRILL LYNCH FUTURES INC.
RETAIN THE DUPLICATE COPY FOR YOUR RECORDS.
-11-
<PAGE>
TO:
Account No. _________________
FROM: MERRILL LYNCH FUTURES INC.
MARGIN DISCLOSURE STATEMENT
This statement is furnished to you because Regulation 190.10(c) of the Commodity
Futures Trading Commission requires it for reasons of fair notice unrelated to
Merrill Lynch's current financial condition.
1. You should know that in the unlikely event of Merrill Lynch's bankruptcy,
property, including property specifically traceable to you, will be
returned, transferred or distributed to you, or on your behalf, only to the
extent of your pro rata share of all property available for distribution to
customers.
2. Notice concerning the terms for the return of specifically identifiable
property will be by publication in a newspaper of general circulation.
3. The Commission's regulations concerning bankruptcies of commodity brokers
can be found at 17 Code of Federal Regulations Part 190.
HAS RECEIVED THE MARGIN
DISCLOSURE STATEMENT IN ACCORDANCE WITH REGULATION 190.10(c) OF THE COMMODITY
FUTURES TRADING COMMISSION.
Dated: 8-5, 1987 By:
Title:
PLEASE SIGN AND RETURN ONE COPY TO MERRILL LYNCH FUTURES INC. RETAIN THE
DUPLICATE COPY FOR YOUR RECORDS.
-13-
<PAGE>
TO:
Account No. __________________
FROM: MERRILL LYNCH FUTURES INC.
HEDGE AGREEMENT
(To be signed by hedge customers only)
The undersigned represents that all transactions in this account are for hedging
purposes only and shall be entered into solely for the purpose of protecting
against losses which may be incurred in a cash position in a specific commodity,
or with respect to interest rate futures or stock index futures to protect
against losses that may be incurred in an existing securities portfolio.
These transactions are not for speculation. In the event that the undersigned
intends to enter into any transactions in this account for speculative purposes,
we shall notify Merrill Lynch in writing prior to the entry of such
transactions.
The undersigned is familiar with all laws, rules and regulations concerning
hedging in such contracts.
By:_______________________________
Title:____________________________
Dated:____________________________
CFTC Regulation 190.06 requires that in the unlikely event of Merrill Lynch's
bankruptcy, you be given the opportunity to give instructions to the bankruptcy
trustee regarding the disposition of your open futures positions. Unless you
indicate a contrary preference in the space provided below, the trustee would be
authorized to liquidate your open positions, without seeking further
instructions from you.
[ ] would prefer to be
contacted by the bankruptcy trustee for instructions regarding the disposition
of its open futures positions.
PLEASE SIGN AND RETURN ONE COPY TO MERRILL LYNCH FUTURES INC. RETAIN THE
DUPLICATE COPY FOP YOUR RECORDS.
-14-
<PAGE>
T-2
SAFEKEEPING AGREEMENT
("Depositor") and Merrill
Lynch Futures Inc. ("Merrill") have interests in the subject Safekeeping Account
pursuant to a certain Procedural Agreement among Merrill, Depositor, and
Citibank ("Custodian") which Procedural Agreement governs over any inconsistent
provisions in this Safekeeping Agreement.
- --------------------------------------------------------------------------------
Citibank
One CitiCorp Center
New York, New York 10043
Attention: Deia Capella
Gentlemen:
The Depositor hereby requests the Custodian to open and maintain a
Safekeeping Account, which shall be a subaccount under the Custodian Agreement
dated as of between Depositor and Custodian, and in the name
of "Merrill Lynch Futures Inc. Customer Funds for the benefit of
(Customer Segregated Account)" for all monies and securities now or hereafter
deposited with and accepted by you for the initial margin in futures and option
contracts thereon including any additional original margin requirements for
Customer's short option positions.
In such custodial capacity you are limited to holding the securities in
safekeeping for the Depositor and dealing with them as herein expressed unless
otherwise mutually agreed in writing.
You shall make purchases, sales, and deliveries of securities only as the
Depositor may direct, and you are authorized and directed to:
1. Collect income and principal on bearer securities in the account;
2. Dispose of the monies received from income collections, ^?????^
redemption sale or other disposition of the securities
<PAGE>
3. Send a daily confirmation of receipts and disbursements to the
Depositor and to Merrill;
4. Provide a monthly list of securities to the Depositor and to Merrill;
5. On request, confirm to Merrill and Depositor all account charges and
positions.
The general conditions of the Safekeeping Agreement shall be those of the
Custodian Agreement between Depositor and Custodian.
The compensation of the Custodian for its services hereunder shall be
payable monthly and shall be as the parties shall agree. No change in
compensation shall be applicable to this account except upon written notice to
Depositor.
The Custodian will acknowledge for Merrill by letter, Attachment A hereto,
that Custodian was informed that the monies and securities on deposit belong to
Depositor and are being held by Custodian, in the name of Merill Lynch Futures
Inc., in accordance with the Commodity Exchange Act and the regulations
thereunder.
All communications from the Custodian shall be to the Depositor pursuant to
the Custodian Agreement, and to Merrill at the address shown below, or at such
other address as the Depositor or Merrill shall from time to time direct.
The Depositor is not a foreign citizen; if this citizenship status changes,
the Depositor will promptly notify the Custodian in writing.
This Agreement is executed on behalf of the Trustees of the Depositor as
Trustees and not individually and the obligations of this Agreement are not
binding upon any of the Trustees but are binding only upon the assets and
property of the Depositor.
-2-
<PAGE>
Attachment A
-----------
Date: August 4, 1987
Citibank
One CitiCorp Center
New York, New York 10043
Attention: Deia Capella
Gentlemen:
We refer to the account with your bank designated as "Merrill Lynch
Futures Inc. Customer Funds for the benefit of (Customer Segregated
Account)" account number ________ (the "Account"), opened pursuant to a
Safekeeping Agreement among ("Depositor"), Merrill Lynch Futures Inc.
("Merrill") and your bank, as custodian, dated ___________.
The Account is being maintained by us in compliance with the provisions of
the Commodity Exchange Act and as a subaccount under the custodian agreement
between Depositor and you. Depositor will from time to time deposit with you in
such Account monies or obligations of the United States, general obligations of
any state or of any political subdivision thereof, or obligations fully
guaranteed as to principal and interest by the United States (collectively
referred to as "securities"). All such securities and monies will be treated
either as investments of our commodity and commodity option customer's funds or
as obligations belonging to such customer. Under the provisions of the Commodity
Exchange Act and regulations promulgated thereunder, these deposits are required
to be segregated and treated as belonging to the customer. By signing and
returning to us the enclosed copy of this letter, you acknowledge that you
understand the nature of the securities and monies deposited in the account.
You further acknowledge that the funds and securities held in the above
Account are those of a commodity or commodity option customer and are being held
by the bank subject to the requirements of the Commodity Exchange Act and
regulations promulgated thereunder. Such funds and securities will not be
treated by the bank as the funds or securities of any person other than such
depositor customer of Merrill, and will not be used by the bank in connection
with the obligations of any person other than Depositor, except as provided in
the Safekeeping Agreement and the Procedural Agreement.
You also acknowledge that the above Account is a special deposit, and you
agree that, in providing services to us or to any of our affiliates, including
but not limited to extending credit or granting accommodations or services
relating to uncollected, target, compensating or other balances to us or to any
of our affiliates, the bank
<PAGE>
or of eligible securities of the U.S. Government (Treasury Bills shall be valued
at 90% of face value and Treasury Bonds and Notes shall be valued at 70% of face
value) or a combination thereof. Customer may substitute U.S. Government
securities of equal or greater value upon prior approval by MS & Co which
approval shall not be unreasonably withheld. Upon receipt of such substitute
securities, MS & Co agrees to give instructions to Custodian to release from the
Safekeeping Account cash or eligible U.S. Government securities of an equal
value, or such lesser amount as may be directed by Customer. Any separate
interest payments thereon shall be automatically credited by Custodian in
Federal funds to such demand deposit accounts designated in instructions from
Customer on the date that such interest becomes due and payable unless notice
has been provided to Custodian pursuant to Paragraph 5 (a) below, and such
interest is required to meet additional Variation Margin requirements in
accordance with the procedure provided in Paragraphs 5 (a), (b) and (c). Amounts
due on securities which mature or are redeemed will be credited to the
Safekeeping Account in Federal funds on the date such amounts are received.
Amounts due to Customer as a result of the variation in value of Customer's
short positions shall be credited to Customer by reducing the amount of the
collateral required to be maintained in the Safekeeping Account with prior
notice to MS & Co.
3. With respect to the deposit of Initial Margin,
<PAGE>
Custodian Agreement between the Custodian and Customer, except in the event of a
conflict between the Custodian Agreement and this Procedural Agreement, in which
case this Procedural Agreement shall govern) for the custody of the Initial
Margin which Customer is required to deposit and maintain, and
WHEREAS the Customer Agreement and the Safekeeping Agreement both provide
that the rights and duties of the parties thereto are subject to the provisions
of this Agreement.
NOW, THEREFORE IT IS AGREED THAT:
1. Customer shall deposit and maintain as collateral in the Safekeeping
Account such Initial Margin as shall be required from time to time by MS & Co or
by the exchange on which transactions are effected or caused to be effected by
MS & Co as broker for Customer. Customer may deposit amounts in excess of such
requirements. The designation "Customer Funds" in the account title is intended
to indicate the status of the account under the Commodity Exchange Act and
Commodity Futures Trading Commission regulations; however, the provisions of
this agreement to the extent not in conflict with the CEA and CFTC regulations
shall be controlling as to the rights of the parties in the collateral deposited
in the account.
2. The Initial Margin deposited and maintained in the Safekeeping
Account, created pursuant to the Safekeeping Agreement, shall be in the form,
as Customer elects, of cash
<PAGE>
for Variation Margin subsequent to 10:00 A.M. but prior to 4:00 P.M. New York
time on a day on which the Customer is open for business, the Customer shall
provide such Variation Margin to MS & Co not later than 10:30 A.M. New York time
on the next succeeding day on which the Customer is open for business. Notice by
MS & Co to the Customer of the receipt of Variation Margin shall be given
promptly.
(b) If MS & Co has not received the requested Variation Margin within
the time period as provided in Paragraph 5(a), Notice by MS & Co to Customer of
the failure to receive the Variation Margin shall be given immediately.
(c) If MS & Co does not receive the Variation Margin in accordance
with Paragraph 5(a), MS & Co may give (i) Notice to Custodian of the Customer's
failure to provide Variation Margin and the amount of Variation Margin required;
and (ii) Notice to the Customer that such Notice has been given to Custodian.
Promptly upon receipt by Custodian of such Notice but without prejudice to any
rights of MS & Co hereunder, Custodian shall give Notice to the Customer of its
receipt of such Notice.
(d) In the event Customer has failed to transfer the
required Variation Margin to MS & Co during the time period as provided in
Paragraph 5(a), MS & Co may give Notice to Custodian of the Customer's failure
to provide Variation Margin which Notice shall be the same Notice as in
Paragraph 5(c) and that all conditions precedent to MS & Co's right to direct
disposition hereunder have been
<PAGE>
Custodian shall be directed by Customer's custodian order to segregate specified
assets in the Safekeeping Account, and Custodian shall promptly provide MS & Co
and Customer with a written confirmation of each transfer into or out of the
Safekeeping Account.
4. Withdrawals of Initial Margin from the Safekeeping Account shall be
effected upon receipt by the Custodian of Customer's custodian order and MS &
Co's prior written verification of such withdrawal. MS & Co shall, upon request
of the Customer, inform Customer of the amount of any excess Initial Margin in
the Safekeeping Account.
5. MS & Co shall have access to the collateral only in accordance with
the following, and only at such times as conditions set forth hereafter are
complied with:
(a) If notice by MS & Co is given to Customer that additional margin
is required by MS & Co as broker for the Customer due to variation in the value
of one or more Contracts held in the trading account or otherwise pursuant to
the Customer Agreement ("Variation Margin"), and such notice is given prior to
10:00 A.M. New York time on a day on which the Customer is open for business,
which Variation Margin shall first have been satisfied from any amounts
currently credited to the Customer's trading account with MS & Co in connection
with which the Variation Margin is required, the Customer shall transfer to MS &
Co such Variation Margin not later than 3:30 P.M. on the same day. If Notice by
MS & Co to the Customer is given of the need
<PAGE>
satisfied, and may give instructions to Custodian (i) to transfer eligible U.S.
Government securities to MS & Co (ii) to sell at the prevailing market price
such of the collateral in the Safekeeping Account relating to the trading
account in which the Variation Margin is required, in each case as necessary to
provide for payment to MS & Co of the amount of Variation Margin that MS & Co
shall have specified in the Notice, or (iii) with respect to collateral in the
form of cash, MS & Co may give instructions to Custodian to immediately transfer
cash in the amount of the Variation Margin that MS & Co shall have specified in
the Notice from such Safekeeping Account to the account of MS & Co. Custodian
shall promptly give Notice to Customer of its receipt of such instructions from
MS & Co and, upon taking any action pursuant to such instructions, shall
immediately give Notice to Customer of such action. Subject to the notice
provisions of Paragraph 5 set forth above, which include MS & Co giving
Custodian a statement that all conditions precedent to MS & Co's right to direct
disposition hereunder have been satisfied, Custodian shall take instructions
solely from MS & Co with respect to the sale of securities and/or the transfer
of cash to MS & Co. In the event such statement is not given in writing, MS & Co
will confirm the statement thereafter in writing to Custodian by the most
expeditions means which may be by telecopy. In the event that MS & Co receives
eligible U.S. Government securities pursuant to this Paragraph 5(d), it
<PAGE>
shall have the right to sell or otherwise dispose of such securities and shall
remit to Customer any proceeds of such sale or disposition in excess of the
amount of Variation Margin specified in instructions from MS & Co to Custodian.
(e) Custodian shall retain in the Safekeeping Account any collateral
in excess of the amount of Variation Margin specified in instructions from MS &
Co to Custodian including any proceeds from the sale of securities in excess of
such amount. Custodian shall give consideration to any timely request by
Customer with respect to particular securities to be sold and shall sell any
securities in the principal market for such securities or, in the event such
principal amount is closed, sell them in manner commercially reasonable for such
securities.
6. MS & Co shall promptly credit to the trading account of Customer any
Variation Margin resulting from the variation in value of one or more Contracts
purchased or sold by Customer in accordance with the rules of any contract
market, exchange or board of trade on which Contract transactions are effected
by MS & Co for Customer. At Customer's direction, MS & Co shall transfer trading
account balances to Customer in Federal funds to the Custodian or such bank
account in Customer's name as Customer shall otherwise direct. Customer may give
such directions to MS & Co by telephone, confirmed thereafter in writing.
7. Custodian shall act only upon receipt of
<PAGE>
instructions from MS & Co regarding release of collateral. Custodian shall
indemnify Customer from any loss incurred by reasons of Custodian's negligence
or willful misconduct in acting on those instructions; provided that the
instructions are given in a timely fashion and comply in all other respects with
the provisions of this Agreement.
8. Unless otherwise provided, all notice or other communications called
for by this Agreement shall be given by the most expeditious means possible and
may be given by telephone. If a notice is not given in writing, a written
confirmation shall be provided to appropriate parties within a reasonable time
after the notice is given.
9. Any and all expenses of establishing, maintaining, or terminating the
Safekeeping Account, including without limitation any and all expenses incurred
by Custodian in connection with the Safekeeping Account, shall be borne by
Customer.
10. This Agreement and the Safekeeping Account, except as provided in the
Safekeeping Agreement, shall terminate only upon written consent of Customer and
MS & Co, neither of which shall unreasonably withhold their consent, at which
time Custodian shall transfer to Customer, or to a substitute custodian
designated by Customer, all property held in the Safekeeping Account.
11. This Agreement shall be construed according to, and the rights and
liabilities of the parties hereto shall be governed by, the laws of the State of
New York.
<PAGE>
12. Except as specifically provided herein, this Agreement does not in any
way affect any other agreements entered into among the parties hereto and any
actions taken or omitted by any party hereunder shall not affect any rights of
any other party hereunder.
13. No amendment of this Agreement shall be effective unless in writing
and signed by persons thereunto duly authorized.
14. Written communications hereunder shall be, except as otherwise
required hereunder, hand-delivered or mailed first class postage prepaid,
except that written notice of termination shall be sent by certified mail
addressed:
(a) if to Custodian, to:
Citibank
One CitiCorp Center
New York, New York 10043
Attention: Dela Capella
(b) (1) if to Customer, to:
New York, New York 10168
Attention: Shirley L. Osborne;
(2) with copies to:
122 East 42nd Street, 42nd Floor,
New York, New York 10168
Attention: Michael Doorley
(c) Morgan Stanley & Co., Inc.
55 Water Street
New York, New York 10041
Attention: Commodity Operations Manager
<PAGE>
15. This Agreement is executed on behalf of the Trustees of the Fund as
Trustees and not individually, and the obligations of this Agreement are not
binding upon any of the Trustees but are binding only upon the assets and
property of the Customer.
By:________________________
Authorized Signature
Date:_____________ Title:_____________________
Morgan Stanley & Co., Inc.
By:________________________
Authorized Signature
Date:_____________ Title:_____________________
Citibank
By:________________________
Authorized Signature
Date:_____________ Title:______________________
<PAGE>
CUSTOMER AGREEMENT BETWEEN
Morgan Stanley & Co., Inc. AND
In consideration of acceptance by Morgan Stanley & Co., Inc. ("MS & Co") of
an account for World Income Fund Series of Van Eck Funds ("Customer") MS & Co
and Customer agree as follows:
1. Customer authorizes MS & Co to purchase and sell futures contracts and
option contracts thereon ("Contracts") traded on duly registered boards of trade
for Customer's account in accordance with Customer's oral or written
instructions from persons designated by Customer by resolution of Customer's
Board of Directors, Managing Partner, Board of Trustees, or person(s)
responsible for the management of Customer's account, duly certified and
delivered to MS & Co. Customer hereby waives any defense that any such
instruction was not in writing as may be required by the Statue of Frauds or any
other law, rule or regulation.
2. Customer shall in connection with Contract transactions pay Ms & Co (1)
brokerage and commission charges as agreed upon by MS & Co and Customer from
time to time, (2) any charges imposed on any transaction undertaken for Customer
by the contract market, exchange or clearinghouse through which it is executed
and any tax or fee imposed on such transactions by any competent authority or
self-regulatory organization, (3) any margin required by MS & Co for Customer
due to the variation in value of one or
<PAGE>
more outstanding Contracts purchased or sold by Customer ("Variation Margin") in
accordance with Paragraph 7 hereof, or as required by MS & Co due to an increase
in margin requirements for new or existing positions, and (4) interest and
service charges on any Customer deficit balances at the rates customarily
charged by MS & Co together with MS & Co's costs and attorney's fees incurred in
collecting such deficit. Such payments shall be made in Federal funds to MS & Co
at such addresses as MS & Co may designate.
3. A detailed statement of all transactions for or on the Customer's behalf
shall be furnished to Customer on a daily and a monthly basis. Such statements
shall be conclusive and binding on the Customer unless the Customer notifies MS
& Co of any objection within five business days from the day the Customer
receives such statement; provided however that with respect to monthly
statements only the Customer may make such objection within ten business days.
4. Customer shall timely deposit and maintain in the Safekeeping Account at
all times Initial Margin (including any additional original margin requirements
for Customer's short option positions) ("Initial Margin") for Customer's
account in accordance with the Procedural Agreement. Customer shall timely pay
to MS & Co the amount of any additional or Variation Margin with respect to
Customer's open positions on Contracts in accordance with the Procedural
Agreement. If, upon notice given by MS & Co as set forth in the Procedural
Agreement, Customer fails to
<PAGE>
provide additional or Variation Margin or if Customer fails to deposit or
maintain in the Safekeeping Account required Initial Margin, MS & Co may without
further notice to Customer take any action set forth in Paragraphs 12 and 14
hereof.
5. Customer shall make timely delivery of or payment for financial
instruments in compliance with the terms of the Contracts purchased or sold by
Customer through MS & Co unless such Contracts have been terminated by an
offsetting purchase or sale prior to the delivery date. Customer shall advise MS
& Co of its intentions with respect to the delivery of or payment for such
financial instruments, and MS & Co shall be entitled to receive appropriate
assurances with respect thereto.
6. Customer acknowledges that (a) any trading recommendations and market or
other information communicated to Customer by MS & Co are incidental to the
conduct of MS & Co's business as a futures commission merchant and do not
constitute an offer to sell or the solicitation of an offer to buy any Contracts
or instrument that is the subject of any Contract; (b) such recommendation and
information, although based upon information obtained from sources believed by
MS & Co to be reliable, may be incomplete, may not be verified, and may be
changed without notice to Customer; and (c) MS & Co makes no representation,
warranty or guarantee as to the accuracy or completeness of any market or other
information or trading recommendation
<PAGE>
furnished to Customer. Customer understands that officers, employees, or
affiliates of MS & Co may have a position in, may intend to, and may, buy or
sell, Contracts or instruments that are the subject of Contracts, including
Contracts which are the subject of information or recommendations furnished to
Customer, and that the position or transactions of any such officer, employee,
or affiliate may or may not be consistent with the recommendations furnished by
MS & Co to Customer.
7. All transactions by MS & Co on Customer's behalf shall be subject to the
applicable constitution, by-laws, rules, regulations, customs, usages, rulings,
and interpretations of the contract market and its clearinghouse on which such
transactions are executed or cleared by MS & Co or its agents for Customer's
account, and to all applicable governmental acts and statutes (such as the
Commodity Exchange Act) and to rules and regulations made thereunder; MS & Co
shall not be liable to Customer as a result of any action taken by MS & Co or
its agents to comply with any such constitution, by-law, rule, regulation,
custom, usage, ruling, interpretation, act, or statute.
8. MS & Co shall have no responsibility for delays in the transmission of
orders due to (a) breakdown or failure of transmission or communication
facilities, or (b) any other cause beyond MS & Co's control.
9. MS & Co shall have no responsibility for compliance by Customer with
any law or regulation governing
<PAGE>
Customer's conduct as a fiduciary.
10. MS & Co shall have no responsibility for compliance by any investment
adviser or commodity trading advisor of Customer with any law or regulation
governing the conduct of such investment adviser or commodity trading advisor as
a fiduciary to Customer.
11. Customer represents that (a) Customer is duly registered under the
Investment Company Act of 1940, as amended, and is validly existing and
empowered to enter into this Agreement and to effectuate transactions in futures
contracts which may include stock index, foreign currency and debt instrument
futures, and options on such futures or cash contracts as contemplated hereby;
(b) Customer has reviewed the registration requirements pertinent to commodity
pool operators and commodity trading advisors of the Commodity Futures Trading
Commission and the National Futures Association in accordance with the
requirements of the Commodity Exchange Act and the regulations of the Commodity
Futures Trading Commission and has determined that Customer and any investment
adviser or commodity trading advisor of Customer are in compliance with such
requirements to the extent applicable.
12. In the event that (a) Customer shall be dissolved, become insolvent or
in any other way terminate; (b) fail to deposit or maintain Initial Margin or
make payment of additional or Variation Margin, as set forth in Paragraph 4
hereof; or (c) in the event MS & Co reasonably feels that it
<PAGE>
Customer under the Bankruptcy Law of any other jurisdiction, whether now or
hereafter in effect; or (c) any such petition or application has been filed, or
any such proceedings commenced, against the Customer and the Customer by any act
has indicated its approval thereof, consent thereto or acquiescence therein, or
an order for relief has been entered in an involuntary case against Customer
under the Bankruptcy Law of the United States, as now or hereafter constituted,
or an order, judgement or decree has been entered therein appointing any such
trustee, receiver, liquidator or similar official, or approving the petition in
any such proceedings, and such order, judgement or decree remains unstayed and
in effect for more than 30 days.
14. If at any time Customer fails to deliver to MS & Co any property
previously sold by MS & Co on Customer's behalf or fails to deliver financial
instruments in compliance with Contracts, Customer authorizes MS & Co in its
discretion to borrow or to buy any property necessary to make delivery thereof,
and Customer shall pay MS & Co for any cost, loss and damage which MS & Co may
sustain from its inability to borrow or buy any such property.
15. All communications to Customer shall be to:
,122 East 42nd Street, 42nd Floor, New York, New York
10168, Attention: Shirley L. Osborne; with copies to
,122 East 42nd Street, 42nd Floor, New York, New York 10168, Attention:
Michael Doorley; or to such other
<PAGE>
addresses as Customer may hereafter direct MS & Co in writing to use. All
communications to MS & Co shall be to the offices at Morgan Stanley & Co., Inc.,
55 Water Street, New York, New York, 10041, Attn: Commodities Operations
Manager; or at such other addresses as the parties may designate.
16. This Agreement, the Procedural Agreement, and the Safekeeping
Agreement referred to in the Procedural Agreement contain the entire agreement
between the parties and supersede any prior agreements between the parties as to
the subject matter of this Agreement. Subject to Paragraph 7 hereof, no
provision of this Agreement shall in any respect be waived, altered, modified,
or amended unless such waiver, alteration, modification, or amendment be
committed to in writing and signed by Customer and a duly authorized officer of
MS & Co.
17. This Agreement shall be construed according to, and the rights and
liabilities of the parties hereto shall be governed by, the laws of the State of
New York.
18. This Agreement shall inure to the benefit of MS & Co and Customer and
their respective successors and assigns, only upon prior written consent other
than assignment by MS & Co to an affiliate.
19. If any term or provision hereof, or the application thereof to any
person or circumstances, shall to any extent be contrary to any contract market,
exchange or government regulation or otherwise invalid or unenforceable,
<PAGE>
the remainder of this Agreement or the application of such term or provision to
persons or circumstances other than those as to which it is contrary, invalid,
or unenforceable, shall not be affected thereby, and it shall be enforced to the
fullest extent permitted by regulation and law.
20. The rights and remedies conferred upon the parties hereto shall be
cumulative, and the exercise or waiver of any thereof shall not preclude or
inhibit the exercise of additional rights and remedies.
21. This Agreement is executed on behalf of the Trustees of the Customer
as Trustees and not individually and the obligations of this Agreement are not
binding upon any of the Trustees but are binding only upon the assets and
property of the Customer.
22. Customer represents that (a) Customer will promptly notify MS & Co in
writing if any of the above representations shall materially change or cease to
be true and correct; (b) Customer has read and understands the Commodity
Futures Trading Commission Risk Disclosure Statement, the Options on Futures
Risk Disclosure Statement (under separate cover) and the Margin Disclosure
Statement; and (c) no person or entity has any interest in or control of the
account to which this Agreement pertains other than Customer and the persons
designated by Customer as set forth in Paragraph 1 hereof.
23. Customer and MS & Co agree to promptly furnish appropriate financial
statements to each other to show any
<PAGE>
material changes in their financial positions and to furnish such other
information concerning each other as each may reasonably request.
24. Where the context hereof requires, the singular shall import the plural
and the masculine shall import the feminine and neuter.
25. MS & Co shall be entitled to rely on any instruction received from any
person identified in writing to MS & Co by Customer and such instruction shall
bind Customer. Customer agrees to hold MS & Co harmless against any action taken
by MS & Co in reliance upon this provision.
<PAGE>
26. This Agreement shall become a binding contract between Customer and MS
& Co when signed by both parties.
By:_____________________
Title:__________________
The undersigned Secretary of, or person serving in a similar capacity with
respect to Funds the Customer which is party to this Agreement, the Procedural
Agreement and the Safekeeping Agreement, hereby certifies that the individual
whose name appears above as the signatory of this Agreement, the Procedural
Agreement and the Safekeeping Agreement on behalf of the Customer holds the
position with the Customer as identified above and is authorized to execute this
Agreement on behalf of the Customer.
By:_____________________
Name:___________________
Secretary
Approved:
Morgan Stanley & Co., Inc.
By:_______________________
Title:____________________
<PAGE>
Custodian Agreement between the Custodian and Customer, except in the event of a
conflict between the Custodian Agreement and this Procedural Agreement, in
which case this Procedural Agreement shall govern) for the custody of the
Initial Margin which Customer is required to deposit and maintain, and
WHEREAS the Customer Agreement and the Safekeeping Agreement both provide
that the rights and duties of the parties thereto are subject to the provisions
of this Agreement.
NOW, THEREFORE IT IS AGREED THAT:
1. Customer shall deposit and maintain as collateral in the Safekeeping
Account such Initial Margin as shall be required from time to time by MS & Co or
by the exchange on which transactions are effected or caused to be effected by
MS & Co as broker for Customer. Customer may deposit amounts in excess of such
requirements. The designation "Customer Funds" in the account title is intended
to indicate the status of the account under the Commodity Exchange Act and
Commodity Futures Trading Commission regulations; however, the provisions of
this agreement to the extent not in conflict with the CEA and CFTC regulations
shall be controlling as to the rights of the parties in the collateral deposited
in the account.
2. The Initial Margin deposited and maintained in the Safekeeping Account,
created pursuant to the Safekeeping Agreement, shall be in the form, as
Customer elects, of cash
<PAGE>
for Variation Margin subsequent to 10:00 A.M. but prior to 4:00 P.M. New York
time on a day on which the Customer is open for business, the Customer shall
provide such Variation Margin to MS & Co not later than 10:30 A.M. New York time
on the next succeeding day on which the Customer is open for business. Notice by
MS & Co to the Customer of the receipt of Variation Margin shall be given
promptly.
(b) If MS & Co has not received the requested Variation Margin within
the time period as provided in Paragraph 5(a), Notice by MS & Co to Customer of
the failure to receive the Variation Margin shall be given immediately.
(c) If MS & Co does not receive the Variation Margin in accordance
with Paragraph 5(a), MS & Co may give (i) Notice to Custodian of the Customer's
failure to provide Variation Margin and the amount of Variation Margin required;
and (ii) Notice to the Customer that such Notice has been given to Custodian.
Promptly upon receipt by Custodian of such Notice but without prejudice to any
rights of MS & Co hereunder, Custodian shall give Notice to the Customer of
its receipt of such Notice.
(d) In the event Customer has failed to transfer the required
Variation Margin to MS & Co during the time period as provided in Paragraph
5(a), MS & Co may give Notice to Custodian of the Customer's failure to provide
Variation Margin which Notice shall be the same Notice as in Paragraph 5(c) and
that all conditions precedent to MS & Co's right to direct disposition hereunder
have been
<PAGE>
Custodian shall be directed by Customer's custodian order to segregate specified
assets in the Safekeeping Account, and Custodian shall promptly provide MS & Co
and Customer with a written confirmation of each transfer into or out of the
Safekeeping Account.
4. Withdrawals of Initial Margin from the Safekeeping Account shall be
effected upon receipt by the Custodian of Customer's custodian order and MS &
Co's prior written verification of such withdrawal. MS & Co shall, upon request
of the Customer, inform Customer of the amount of any excess Initial Margin in
the Safekeeping Account.
5. MS & Co shall have access to the collateral only in accordance with the
following, and only at such times as conditions set forth hereafter are
complied with:
(a) If notice by MS & Co is given to Customer that additional margin is
required by MS & Co as broker for the Customer due to variation in the value
of one or more Contracts held in the trading account or otherwise pursuant to
the Customer Agreement ("Variation Margin"), and such notice is given prior to
10:00 A.M. New York time on a day on which the Customer is open for business,
which Variation Margin shall first have been satisfied from any amounts
currently credited to the Customer's trading account with MS & Co in connection
with which the Variation Margin is required, the Customer shall transfer to MS &
Co such Variation Margin not later than 3:30 P.M. on the same day. If Notice by
MS & Co to the Customer is given of the need
<PAGE>
satisfied, and may give instructions to Custodian (i) to transfer eligible U.S.
Government securities to MS & Co (ii) to sell at the prevailing market price
such of the collateral in the Safekeeping Account relating to the trading
account in which the Variation Margin is required, in each case as necessary to
provide for payment to MS & Co of the amount of Variation Margin that MS & Co
shall have specified in the Notice, or (iii) with respect to collateral in the
form of cash, MS & Co may give instructions to Custodian to immediately transfer
cash in the amount of the Variation Margin that MS & Co shall have specified in
the Notice from such Safekeeping Account to the account of MS & Co. Custodian
shall promptly give Notice to Customer of its receipt of such instructions from
MS & Co and, upon taking any action pursuant to such instructions, shall
immediately give Notice to Customer of such action. Subject to the notice
provisions of Paragraph 5 set forth above, which include MS & Co giving
Custodian a statement that all conditions precedent to MS & Co's right to direct
disposition hereunder have been satisfied, Custodian shall take instructions
solely from MS & Co with respect to the sale of securities and/or the transfer
of cash to MS & Co. In the event such statement is not given in writing, MS & Co
will confirm the statement thereafter in writing to Custodian by the most
expeditions means which may be by telecopy. In the event that MS & Co receives
eligible U.S. Government securities pursuant to this Paragraph 5(d), it
<PAGE>
shall have the right to sell or otherwise dispose of such securities and shall
remit to Customer any proceeds of such sale or disposition in excess of the
amount of Variation Margin specified in instructions from MS & Co to Custodian.
(e) Custodian shall retain in the Safekeeping Account any collateral in
excess of the amount of Variation Margin specified in instructions from MS & Co
to Custodian including any proceeds from the sale of securities in excess of
such amount. Custodian shall give consideration to any timely request by
Customer with respect to particular securities to be sold and shall sell any
securities in the principal market for such securities or, in the event such
principal market is closed, sell them in a manner commercially reasonable for
such securities.
6. MS & Co shall promptly credit to the trading account of Customer any
Variation Margin resulting from the variation in value of one or more Contracts
purchased or sold by Customer in accordance with the rules of any contract
market, exchange or board of trade on which Contract transactions are effected
by MS & Co for Customer. At Customer's direction, MS & Co shall transfer trading
account balances to Customer in Federal funds to the Custodian or such bank
account in Customer's name as Customer shall otherwise direct. Customer may give
such directions to MS & Co by telephone, confirmed thereafter in writing.
7. Custodian shall act only upon receipt of
<PAGE>
instructions from MS & Co regarding release of collateral. Custodian shall
indemnify Customer from any loss incurred by reasons of Custodian's negligence
or willful misconduct in acting on those instructions; provided that the
instructions are given in a timely fashion and comply in all other respects with
the provisions of this Agreement.
8. Unless otherwise provided, all notice or other communications called
for by this Agreement shall be given by the most expeditious means possible and
may be given by telephone. If a notice is not given in writing, a written
confirmation shall be provided to appropriate parties within a reasonable time
after the notice is given.
9. Any and all expenses of establishing, maintaining, or terminating the
Safekeeping Account, including without limitation any and all expenses incurred
by Custodian in connection with the Safekeeping Account, shall be borne by
Customer.
10. This Agreement and the Safekeeping Account, except as provided in the
Safekeeping Agreement, shall terminate only upon written consent of Customer and
MS & Co, neither of which shall unreasonably withhold their consent, at which
time Custodian shall transfer to Customer, or to a substitute custodian
designated by Customer, all property held in the Safekeeping Account.
11. This Agreement shall be construed according to, and the rights and
liabilities of the parties hereto shall be governed by, the laws of the State of
New York.
<PAGE>
12. Except as specifically provided herein, this Agreement does not in any
way affect other agreements entered into among the parties hereto and any
actions taken or omitted by any party hereunder shall not affect any rights of
any other party hereunder.
13. No amendment of this Agreement shall be effective unless in writing and
signed by persons thereunto duly authorized.
14. Written communications hereunder shall be, except as otherwise required
hereunder, hand-delivered or mailed first class postage prepaid, except that
written notice of termination shall be sent by certified mail addressed:
(a) if to Custodian, to:
Citibank
One Citicorp Center
New York, New York 10043
Attention: Dela Capella
(b) (1) if to Customer, to:
New York, New York 10168
Attention: Shirley L. Osborne;
(2) with copies to:
122 East 42nd Street, 42nd Floor,
New York, New York 10168
Attention: Michael Doorley
(c) Morgan Stanley & Co., Inc.
55 Water Street
New York, New York 10041
Attention: Commodity Operations Manager
<PAGE>
15. This Agreement is executed on behalf of the Trustees of the Fund as
Trustees and not individually, and the obligations of this Agreement are not
binding upon any of the Trustees but are binding only upon the assets and
property of the Customer.
By:_________________________
Authorized Signature
Date:_________________ Title:_______________________
Morgan Stanley & Co., Inc.
By:__________________________
Authorized Signature
Date:_________________ Title:_______________________
Citibank
By:___________________________
Authorized Signature
Date:__________________ Title:_________________________
<PAGE>
CUSTOMER AGREEMENT BETWEEN
Morgan Stanley & Co., Inc. AND
In consideration of acceptance by Morgan Stanley & Co., Inc. ("MS & Co") of
an account for World Income Fund Series of Van Eck Funds ("Customer")
MS & Co and Customer agree as follows:
1. Customer authorizes MS & Co to purchase and sell futures contracts and
option contracts thereon ("Contracts") traded on duly registered boards of trade
for Customer's account in accordance with Customer's oral or written
instructions from persons designated by Customer by resolution of Customer's
Board of Directors, Managing Partner, Board of Trustees, or person(s)
responsible for the management of Customer's account, duly certified and
delivered to MS & Co. Customer hereby waives any defense that any such
instruction was not in writing as may be required by the Statue of Frauds or any
other law, rule or regulation.
2. Customer shall in connection with Contract transactions pay MS & Co (1)
brokerage and commission charges as agreed upon by MS & Co and Customer from
time to time, (2) any charges imposed on any transaction undertaken for Customer
by the contract market, exchange or clearinghouse through which it is executed
and any tax or fee imposed on such transactions by any competent authority or
self -regulatory organization, (3) any margin required by MS & Co for Customer
due to the variation in value of one or
<PAGE>
more outstanding Contracts purchased or sold by Customer ("Variation Margin") in
accordance with Paragraph 7 hereof, or as required by MS & Co due to an increase
in margin requirements for new or existing positions, and (4) interest and
service charges on any Customer deficit balances at the rates customarily
charged by MS & Co together with MS & Co's costs and attorney's fees incurred in
collecting such deficit. Such payments shall be made in Federal funds to MS & Co
at such addresses as MS & Co may designate.
3. A detailed statement of all transactions for or on the Customer's behalf
shall be furnished to Customer on a daily and a monthly basis. Such statements
shall be conclusive and binding on the Customer unless the Customer notifies MS
& Co of any objection within five business days from the day the Customer
receives such statement; provided however that with respect to monthly
statements only the Customer may make such objection within ten business days.
4. Customer shall timely deposit and maintain in the Safekeeping Account at
all times Initial Margin (including any additional original margin requirements
for Customer's short option positions) '("Initial Margin") for Customer's
account in accordance with the Procedural Agreement. Customer shall timely pay
to MS & Co the amount of any additional or Variation Margin with respect to
Customer's open positions on Contracts in accordance with the Procedural
Agreement. If, upon notice given by MS & Co as set forth in the Procedural
Agreement, Customer fails to
<PAGE>
provide additional or Variation Margin or if Customer fails to deposit or
maintain in the Safekeeping Account required Initial Margin, MS & Co may without
further notice to Customer take any action set forth in Paragraphs 12 and 14
hereof.
5. Customer shall make timely delivery of or payment for financial
instruments in compliance with the terms of the Contracts purchased or sold by
Customer through MS & Co unless such Contracts have been terminated by an
offsetting purchase or sale prior to the delivery date. Customer shall advise MS
& Co of its intentions with respect to the delivery of or payment for such
financial instruments, and MS & Co shall be entitled to receive appropriate
assurances with respect thereto.
6. Customer acknowledges that (a) any trading recommendations and market or
other information communicated to Customer by MS & Co are incidental to the
conduct of MS & Co's business as a futures commission merchant and do not
constitute an offer to sell or the solicitation of an offer to buy any Contracts
or instrument that is the subject of any Contract; (b) such recommendation and
information, although based upon information obtained from sources believed by
MS & Co to be reliable, may be incomplete, may not be verified, and may be
changed without notice to Customer; and (c) MS & Co makes no representation,
warranty or guarantee as to the accuracy or completeness of any market or other
information or trading recommendation
<PAGE>
furnished to Customer. Customer understands that officers, employees, or
affiliates of MS & Co may have a position in, may intend to, and may, buy or
sell, Contracts or instruments that are the subject of Contracts, including
Contracts which are the subject of information or recommendations furnished to
Customer, and that the position or transactions of any such-officer, employee,
or affiliate may or may not be consistent with the recommendations furnished by
MS & Co to Customer.
7. All transactions by MS & Co on Customer's behalf shall be subject to the
applicable constitution, by-laws, rules, regulations, customs, usages, rulings,
and interpretations of the contract market and its clearinghouse on which such
transactions are executed or cleared by MS Co or its agents for Customer's
account, and to all applicable governmental acts and statutes (such as the
Commodity Exchange Act) and to rules and regulations made thereunder; MS & Co
shall not be liable to Customer as a result of any action taken by MS & Co or
its agents to comply with any such constitution, by-law, rule, regulation,
custom, usage, ruling, interpretation, act, or statute.
8. MS & CO shall have no responsibility for delays in the transmission of
orders due to (a) breakdown or failure of transmission or communication
facilities, or (b) any other cause beyond MS & Co's control.
9. MS & Co shall have no responsibility for compliance by Customer with
any law or regulation governing
<PAGE>
Customer's conduct as a fiduciary.
10. MS & Co shall have no responsibility for compliance by any investment
adviser or commodity trading advisor of Customer with any law or regulation
governing the conduct of such investment adviser or commodity trading advisor as
a fiduciary to Customer.
11. Customer represents that (a) Customer is duly registered under the
Investment Company Act of 1940, as amended, and is validly existing and
empowered to enter into this Agreement and to effectuate transactions in futures
contracts which may include stock index, foreign currency and debt instrument
futures, and options on such futures or cash contracts as contemplated hereby;
(b) Customer has reviewed the registration requirements pertinent to commodity
pool operators and commodity trading advisors of the Commodity Futures Trading
Commission and the National Futures Association in accordance with the
requirements of the Commodity Exchange Act and the regulations of the Commodity
Futures Trading Commission and has determined that Customer and any investment
adviser or commodity trading advisor of Customer are in compliance with such
requirements to the extent applicable.
12. In the event that (a) Customer shall be dissolved, become insolvent or
in any other way terminate; (b) fail to deposit or maintain Initial Margin or
make payment of additional or Variation Margin, as set forth in Paragraph 4
hereof; or (c) in the event MS & Co reasonably feels that it
<PAGE>
Customer under the Bankruptcy Law of any other jurisdiction, whether now or
hereafter in effect; or (c) any such petition or application has been filed, or
any such proceedings commenced, against the Customer and the Customer by any act
has indicated its approval thereof, consent thereto or acquiescence therein, or
an order for relief has been entered in an involuntary case against Customer
under the Bankruptcy Law of the United States, as now or hereafter constituted,
or an order, judgement or decree has been entered therein appointing any such
trustee, receiver, liquidator or similar official, or approving the petition in
any such proceedings, and such order, judgement or decree remains unstayed and
in effect for more than 30 days.
14. If at any time Customer fails to deliver to MS & Co any property
previously sold by MS & Co on Customer's behalf or fails to deliver financial
instruments in compliance with Contracts, Customer authorizes MS & Co in its
discretion to borrow or to buy any property necessary to make delivery thereof,
and Customer shall pay MS & Co for any cost, loss and damage which MS & Co may
sustain from its inability to borrow or buy any such property.
15. All communications to Customer shall be to:
,122 East 42nd Street, 42nd Floor, New York,
New York 10168, Attention: Shirley L. Osborne; with copies to
,122 East 42nd Street, 42nd Floor, New York, New York 10168, Attention:
Michael Doorley; or to such other
<PAGE>
addresses as Customer may hereafter direct MS & Co in writing to use. All
communications to MS & Co shall be to the offices at Morgan Stanley & Co., Inc.,
55 Water Street, New York, New York, 10041, Attn: Commodities Operations
Manager; or at such other addresses as the parties may designate.
16. This Agreement, the Procedural Agreement, and the Safekeeping
Agreement referred to in the Procedural Agreement contain the entire agreement
between the parties and supersede any prior agreements between the parties as to
the subject matter of this Agreement. Subject to Paragraph 7 hereof, no
provision of this Agreement shall in any respect be waived, altered, modified,
or amended unless such waiver, alteration, modification, or amendment be
committed to in writing and signed by Customer and a duly authorized officer of
MS & Co.
17. This Agreement shall be construed according to, and the rights and
liabilities of the parties hereto shall be governed by, the laws of the State of
New York.
18. This Agreement shall inure to the benefit of MS & Co and Customer and
their respective successors and assigns, only upon prior written consent other
than assignment by MS & Co to an affiliate.
19. If any term or provision hereof, or the application thereof to any
person or circumstances, shall to any extent be contrary to any contract market,
exchange or government regulation or otherwise invalid or unenforceable,
<PAGE>
the remainder of this Agreement or the application of such term or provision to
persons or circumstances other than those as to which it is contrary, invalid,
or unenforceable, shall not be affected thereby, and it shall be enforced to the
fullest extent permitted by regulation and law.
20. The rights and remedies conferred upon the parties hereto shall be
cumulative, and the exercise or waiver of any thereof shall not preclude or
inhibit the exercise of additional rights and remedies.
21. This Agreement is executed on behalf of the Trustees of the Customer
as Trustees and not individually and the obligations of this Agreement are not
binding upon any of the Trustees but are binding only upon the assets and
property of the Customer.
22. Customer represents that (a) Customer will promptly notify MS & Co in
writing if any of the above representations shall materially change or cease to
be true and correct; (b) Customer has read and understands the Commodity
Futures Trading Commission Risk Disclosure Statement, the Options on Futures
Risk Disclosure Statement (under separate cover) and the Margin Disclosure
Statement; and (c) no person or entity has any interest in or control of the
account to which this Agreement pertains other than Customer and the persons
designated by Customer as set forth in Paragraph 1 hereof.
23. Customer and MS & Co agree to promptly furnish appropriate financial
statements to each other to show any
<PAGE>
material changes in their financial positions and to furnish such other
information concerning each other as each may reasonably request.
24. Where the context hereof requires, the singular shall import the plural
and the masculine shall import the feminine and neuter.
25. MS & Co shall be entitled to rely on any instruction received from any
person identified in writing to MS & Co by Customer and such instruction shall
bind Customer. Customer agrees to hold MS & Co harmless against any action taken
by MS & Co in reliance upon this provision.
<PAGE>
26. This Agreement shall become a binding contract between Customer and MS
& Co when signed by both parties.
By:_____________________
Title:__________________
The undersigned Secretary of, or person serving in a similar capacity with
respect to Funds the Customer which is party to this Agreement, the Procedural
Agreement and the Safekeeping Agreement, hereby certifies that the individual
whose name appears above as the signatory of this Agreement, the Procedural
Agreement and the Safekeeping Agreement on behalf of the Customer holds the
position with the Customer as identified above and is authorized to execute this
Agreement on behalf of the Customer.
By:_____________________
Name:___________________
Secretary
Approved:
Morgan Stanley & Co., Inc.
By:_______________________
Title:____________________
<PAGE>
SAFEKEEPING AGREEMENT
, ("Depositor") and Morgan Stanley & Co., Inc. ("MS & Co.") have
interests in the subject Safekeeping Account pursuant to a certain Procedural
Agreement among MS & Co, Depositor, and Citibank ("Custodian") which Procedural
Agreement governs over any inconsistent provisions in this Safekeeping
Agreement.
_______________________________________________________________________________
Citibank
One Citicorp Center
New York, New York 10043
Attention: Dela Capella
Gentlemen:
The Depositor hereby requests the Custodian to open and maintain a
Safekeeping Account, which shall be a subaccount under the Custodian Agreement
dated as of ___________ between Depositor and Custodian, and in the name of
"Morgan Stanley & Co., Inc. Customer Funds for the benefit of
(Customer
Segregated Account)" for all monies and securities now or hereafter deposited
with and accepted by you for the initial margin in futures and option contracts
thereon including any additional original margin requirements for Customer's
short option positions.
In such custodial capacity you are limited to holding the securities in
safekeeping for the Depositor and dealing with them as herein expressed unless
otherwise mutually agreed in writing.
You shall make purchases, sales, and deliveries of securities only as the
Depositor may direct, and you are authorized and directed to:
1. Collect income and principal on bearer securities
<PAGE>
in the account;
2. Dispose of the monies received from income collections, maturity,
redemption, sale or other disposition of the securities pursuant to said
Procedural Agreement;
3. Send a daily confirmation of receipts and disbursements to the
Depositor and to MS & Co;
4. Provide a monthly list of securities to the Depositor and to MS & Co;
5. On request, confirm to MS & Co and Depositor all account charges and
positions.
The general conditions of the Safekeeping Agreement shall be those of the
Custodian Agreement between Depositor and Custodian, except in the event of a
conflict between the Custodian Agreement and this Safekeeping Agreement, in
which case this Safekeeping Agreement shall govern.
The compensation of the Custodian for its services hereunder shall be
payable monthly and shall be as the parties shall agree. No change in
compensation shall be applicable to this account except upon written notice to
Depositor.
The Custodian will acknowledge for MS & Co by letter, Attachment A hereto,
that Custodian was informed that the monies and securities on deposit belong to
Depositor and are being held by Custodian, in the name of Morgan Stanley & Co.,
Inc., in accordance with the Commodity Exchange Act and the regulations
thereunder.
All communications from the Custodian shall be sent to
<PAGE>
the Depositor pursuant to the Custodian Agreement, and to MS & Co at the address
shown below, or at such other address as the Depositor or MS & Co shall from
time to time direct.
The Depositor is not a foreign citizen; if this citizenship status changes,
the Depositor will promptly notify the Custodian in writing.
This Agreement is executed on behalf of the Trustees of the Depositor as
Trustees and not individually and the obligations of this Agreement are not
binding upon any of the Trustees but are binding only upon the assets and
property of the Depositor.
Either the Depositor or the Custodian, subject to the Procedural Agreement,
may close this account at any time upon 60 days prior notice.
Accepted: Very truly yours,
Citibank
By:_____________________ By:____________________
Acknowledged and Approved:
on behalf of
Morgan Stanley & Co., Inc.
By:______________________
Dated:___________________
<PAGE>
[LETTERHEAD OF GOODWIN, PROCTER & HOAR APPEARS HERE]
August 30, 1989
Van Eck Investment Trust
122 East 42nd Street
New York, New York 10163
Gentlemen:
As counsel to Van Eck Investment Trust (the "Trust"), we have been asked to
render our opinion in connection with the proposed issuance by the Trust of an
indefinite number of shares of beneficial interest, $.001 par value, of the Gold
and Natural Resources Fund and Global Bond Fund (the "Shares"), separate series
of the Trust which have been established and designated in Section 4.2 of
Article IV of the Trust's Master Trust Agreement dated January 7, 1987, as
amended, all as more fully described in the Prospectus (the "Prospectus") and
Statement of Additional Information ("Statement of Additional Information")
contained in Pre-Effective Amendment No. 2 ("Pre-Effective Amendment No. 211")
to Registration Statement No. 33-13019 filed by the Trust.
We have examined the Master Trust Agreement of the Trust, as amended, the
By-Laws of the Trust, the minutes of meetings and written consents of the Board
of Trustees of the Trust, the Prospectus, Statement of Additional Information
and such other documents, records and certificates as we deemed necessary for
the purposes of this opinion.
Based upon the foregoing, we are of the opinion that the Trust has been duly
organized and is validly existing pursuant to the laws of The Commonwealth of
Massachusetts, and that the Shares, when 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.
We consent to being named in the Prospectus and Statement of Additional
Information and to the filing of this opinion as an exhibit to Pre-Effective
Amendment No. 2.
Very truly yours,
/s/ Goodwin, Procter & Hoar
GOODWIN, PROCTER & HOAR
<PAGE>
[LETTERHEAD OF GOODWIN, PROCTER & HOAR APPEARS HERE]
August 30, 1989
Van Eck Investment Trust
122 East 42nd Street
New York, New York 10168
Gentlemen:
As counsel to Van Eck Investment Trust (the "Trust"), we have been asked to
render our opinion in connection with the proposed issuance by the Trust of an
indefinite number of shares of beneficial interest, $.001 par value, of the Gold
and Natural Resources Fund and Global Bond Fund (the "Shares"), separate series
of the Trust which have been established and designated in Section 4.2 of
Article IV of the Trust's Master Trust Agreement dated January 7, 1987, as
amended, all as more fully described in the Prospectus (the "Prospectus") and
Statement of Additional Information ("Statement of Additional Information")
contained in Pre-Effective Amendment No. 2 ("Pre-Effective Amendment No. 211")
to Registration Statement No. 33-13019 filed by the Trust.
We have examined the Master Trust Agreement of the Trust, as amended, the
By-Laws of the Trust, the minutes of meetings and written consents of the Board
of Trustees of the Trust, the Prospectus, Statement of Additional Information
and such other documents, records and certificates as we deemed necessary for
the purposes of this opinion.
Based upon the foregoing, we are of the opinion that the Trust has been duly
organized and is validly existing pursuant to the laws of The Commonwealth of
Massachusetts, and that the Shares, when 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.
We consent to being named in the Prospectus and Statement of Additional
Information and to the filing of this opinion as an exhibit to Pre-Effective
Amendment No. 2.
Very truly yours,
/s/ Goodwin, Procter & Hoar
GOODWIN, PROCTER & HOAR
<PAGE>
[LETTERHEAD OF GOODWIN, PROCTER & HOAR APPEARS HERE]
August 30, 1989
Van Eck Investment Trust
122 East 42nd Street
New York, New York 10168
Gentlemen:
As counsel to Van Eck Investment Trust (the "Trust"), we have been asked to
render our opinion in connection with the proposed issuance by the Trust of an
indefinite number of shares of beneficial interest, $.001 par value, of the Gold
and Natural Resources Fund and Global Bond Fund (the "Shares"), separate series
of the Trust which have been established and designated in Section 4.2 of
Article IV of the Trust's Master Trust Agreement dated January 7, 1987, as
amended, all as more fully described in the Prospectus (the "Prospectus") and
Statement of Additional Information ("Statement of Additional Information")
contained in Pre-Effective Amendment No. 2 ("Pre-Effective Amendment No. 2")
to Registration Statement No. 33-13019 filed by the Trust.
We have examined the Master Trust Agreement of the Trust, as amended, the
By-Laws of the Trust, the minutes of meetings and written consents of the Board
of Trustees of the Trust, the Prospectus, Statement of Additional Information
and such other documents, records and certificates as we deemed necessary for
the purposes of this opinion.
Based upon the foregoing, we are of the opinion that the Trust has been duly
organized and is validly existing pursuant to the laws of The Commonwealth of
Massachusetts, and that the Shares, when 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.
We consent to being named in the Prospectus and Statement of Additional
Information and to the filing of this opinion as an exhibit to Pre-Effective
Amendment No. 2.
Very truly yours,
/s/ Goodwin, Procter & Hoar
GOODWIN, PROCTER & HOAR
<PAGE>
[LETTERHEAD OF GOODWIN, PROCTER & HOAR APPEARS HERE]
August 30, 1989
Van Eck Investment Trust
122 East 42nd Street
New York, New York 10168
Gentlemen:
As counsel to Van Eck Investment Trust (the "Trust"), we have been asked to
render our opinion in connection with the proposed issuance by the Trust of an
indefinite number of shares of beneficial interest, $.001 par value, of the Gold
and Natural Resources Fund and Global Bond Fund (the "Shares"), separate series
of the Trust which have been established and designated in Section 4.2 of
Article IV of the Trust's Master Trust Agreement dated January 7, 1987, as
amended, all as more fully described in the Prospectus (the "Prospectus") and
Statement of Additional Information ("Statement of Additional Information")
contained in Pre-Effective Amendment No. 2 ("Pre-Effective Amendment No. 2") to
Registration Statement No. 33-13019 filed by the Trust.
We have examined the Master Trust Agreement of the Trust, as amended, the
By-Laws of the Trust, the minutes of meetings and written consents of the Board
of Trustees of the Trust, the Prospectus, Statement of Additional Information
and such other documents, records and certificates as we deemed necessary for
the purposes of this opinion.
Based upon the foregoing, we are of the opinion that the Trust has been duly
organized and is validly existing pursuant to the laws of The Commonwealth of
Massachusetts, and that the Shares, when 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.
We consent to being named in the Prospectus and Statement of Additional
Information and to the filing of this opinion as an exhibit to Pre-Effective
Amendment No. 2.
Very truly yours,
/s/ Goodwin, Procter & Hoar
GOODWIN, PROCTER & HOAR
<PAGE>
[LETTERHEAD OF GOODWIN, PROCTER & HOAR APPEARS HERE]
August 25, 1995
Van Eck Worldwide Insurance Trust
99 Park Avenue
New York, New York 10016
Gentlemen:
As counsel to Van Eck Worldwide Insurance Trust (the "Trust"), a
Massachusetts business trust, we have been asked to render our 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
Smallcap Fund, Worldwide Balanced Fund, Worldwide Hard Assets Fund, Gold and
Natural Resources Fund, and Worldwide Bond Fund series of the Trust, as more
fully described in the prospectuses and statements of additional information
contained in Post-Effective Amendment No. 14 (the "Amendment") to the
Registration Statement on Form N-lA (Registration No. 33-13019) of the Trust to
be filed with the Securities and Exchange Commission.
We 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 prospectuses and statements of additional
information contained in the Amendment, and such other documents, records and
certificates as we have deemed necessary for the purposes of this opinion.
Based upon the foregoing, we are of the opinion that the Shares, when
issued and sold in accordance with the terms of the applicable 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.
We hereby consent to the reference to this firm in the prospectuses
contained in the Amendment under the heading "Counsel" and in the statements of
additional information under the heading "Additional Information-Counsel" which
form a part of the Amendment and to the filing of this opinion as an exhibit to
the Amendment
Very truly yours,
/s/ Goodwin, Procter & Hoar
GOODWIN, PROCTER & HOAR
<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
<PAGE>
EXHIBIT 99.11
[LETTERHEAD OF PRICEWATERHOUSECOOPERS]
CONSENT OF INDEPENDENT ACCOUNTANTS
_______________________________________________________________
We consent to the incorporation by reference in Post-Effective Amendment No. 20
to the Registration Statement of Van Eck Worldwide Insurance Trust on Form N-1A
of our reports dated February 12, 1999, on our audits of the financial
statements and financial highlights of the Worldwide Bond Fund, Worldwide
Emerging Markets Fund, Van Eck Worldwide Hard Assets Fund, and Van Eck Worldwide
Real Estate Fund, which reports are included in the respective Annual Reports to
Shareholders for the year ended December 31, 1998 which are incorporated by
reference in the Statement of Additional Information. We also consent to the
reference in the Statement of Additional information to our firm under the
caption "Counsel and Auditors".
/s/ PricewaterhouseCoopers
PRICEWATERHOUSECOOPERS
New York, New York
February 26, 1999
<PAGE>
[LETTERHEAD OF VAN ECK APPEARS HERE]
August 29, 1989
The Trustees of Van Eck Investment Trust
122 East 42nd Street
New York, New York 10168
Gentlemen:
The undersigned hereby subscribes to 5,000 shares of the Gold and Natural
Resources series (the "Shares"), $.001 par value, of Van Eck Investment Trust
(the "Trust") at a price of $10.00 per share and agrees to pay therefor upon
demand in cash the amount of $50,000.00.
The undersigned agrees and acknowledges that the Shares are being purchased
for investment with no present intention of reselling or redeeming said Shares
when additional funds are provided to the Trust from the public sale of the
Shares. The undersigned acknowledges and agrees that the Shares hereby
subscribed for will not be resold, except through redemption or repurchase by
the Trust on its behalf.
Very truly yours,
VAN ECK ASSOCIATES CORPORATION
BY: /s/ John C. Van Eck
------------------------------
John C. Van Eck
President
<PAGE>
[LETTERHEAD OF VAN ECK APPEARS HERE]
August 29, 1989
The Trustees of Van Eck Investment Trust
122 East 42nd Street
New York, New York 10168
Gentlemen:
The undersigned hereby subscribes to 5,000 shares of the Global Bond Fund
series (the "Shares"), $.001 par value, of Van Eck Investment Trust (the
"Trust") at a price of $10.00 per share and agrees to pay therefor upon demand
in cash the amount of $50,000.00.
The undersigned agrees and acknowledges that the Shares are being purchased
for investment with no present intention of reselling or redeeming said Shares
when additional funds are provided to the Trust from the public sale of the
Shares. The undersigned acknowledges and agrees that the Shares hereby
subscribed for will not be resold, except through redemption or repurchase by
the Trust on its behalf.
Very truly yours,
VAN ECK ASSOCIATES CORPORATION
BY: /s/ John C. Van Eck
-------------------------------
John C. Van Eck
President
<PAGE>
POWER OF ATTORNEY
-----------------
I, the undersigned Trustee of Van Eck Investment Trust (the "Trust") hereby
appoint John C. van Eck and Michael G. Doorley, and either of them, my true and
lawful attorneys to execute in my name, place and stead, the Trust's
Registration Statement for the purpose of filing the Trust's Registration
Statement on Form N-1A, which Registration Statement shall be filed pursuant to
the requirements of the Securities Act of 1933 and the Investment Company Act of
1940, any and all amendments to the Trust's Registration Statement on Form N-
1A, and all other instruments necessary or incidental in connection therewith,
with the Securities and Exchange Commission; and John C. van Eck and Michael G.
Doorley shall have the power to act hereunder and have full power and authority
to do and perform in my name and on my behalf every act whatsoever requisite
or necessary to be done, as fully and to all intents and purposes as I, the
undersigned, might or could do in person. Either of said attorneys shall have
full power and authority to do and act hereunder with or without the other.
/s/ Jeremy H. Biggs
- ----------------------
Jeremy H. Biggs
Date: April 12, 1990
<PAGE>
POWER OF ATTORNEY
-----------------
We, the undersigned Trustees of Van Eck Investment Trust (the "Trust") hereby
appoint John C. Van Eck and Michael G. Doorley, and either of them, our true and
lawful attorneys to execute in our name, place and stead, the Trust's
Registration Statement for the purpose of filing the Trust's Registration
Statement on Form N-1A, which Registration Statement shall be filed pursuant to
the requirements of the Securities Act of 1933 and the Investment Company Act of
1940, any and all amendments to the Trust's Registration Statement on Form N-1A,
and all other instruments necessary or incidental in connection therewith, with
the Securities and Exchange Commission; and John C. Van Eck and Michael G.
Doorley shall have the power to act hereunder and have full power and
authority to do and perform in our name and on our behalf every act whatsoever
requisite or necessary to be done, as fully and to all intents and purposes as
we, the undersigned, might or could do in person. Either of said attorneys shall
have full power and authority to do and act hereunder with or without the other.
/s/ Philip L. Carret
- ----------------------
Philip L. Carret
/s/ Richard C. Cowell
- ----------------------
Richard C. Cowell
/s/ James C. Dudley
- ----------------------
James C. Dudley
/s/ Wesley G. McCain
- ----------------------
Wesley G. McCain
/s/ Harvey E. Mole'
- ----------------------
Harvey E. Mole'
/s/ Ralph F. Peters
- ----------------------
Ralph F. Peters
/s/ Fred M. Van Eck
______________________
Fred M. Van Eck
/s/ Alling Woodruff
- ----------------------
Alling Woodruff
Date: October 10, 1989
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<PAGE>
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<NAME> WORLDWIDE INSURANCE TRUST
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<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
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<INVESTMENTS-AT-VALUE> 117,204,479
<RECEIVABLES> 4,140,154
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<SENIOR-LONG-TERM-DEBT> 171,289
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<OVERDISTRIBUTION-GAINS> 0
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<EXPENSES-NET> 815,624
<NET-INVESTMENT-INCOME> 812,330
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<APPREC-INCREASE-CURRENT> (24,229,654)
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<DISTRIBUTIONS-OF-INCOME> 892,481
<DISTRIBUTIONS-OF-GAINS> 21,915,374
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<INVESTMENTS-AT-VALUE> 110,215,932
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<SHARES-REINVESTED> 1,020,300
<NET-CHANGE-IN-ASSETS> (280,493)
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<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (649,174)
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<GROSS-EXPENSE> 674,764
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<PERIOD-END> JUN-30-1998
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</TABLE>
