<PAGE> 1
VAN ECK WORLDWIDE HARD ASSETS FUND
- --------------------------------------------------------------------------------
1997 ANNUAL REPORT
Dear Fellow Shareholder:
As you know, in the first half of the year the Fund's investment strategy
changed from a focus on gold to a more diversified focus on hard assets,
including natural resources and real estate equities. This helped protect the
Fund from the poor performance of precious metals in the second half of the
year. Gold bullion and gold shares declined 13% and 22%, respectively, in the
second half as measured by the Bloomberg Gold Spot Index and the Philadelphia
Gold & Silver Index (XAU). As reported to you at midyear, the Fund had declined
0.3% through June 30, and for the full year, the Fund fell 1.7%*. The long-term
performance of the Fund is more favorable as shown in the chart on page 3.
REVIEW OF HARD ASSET MARKETS
Although the year began with the expectation that hard assets would outperform
financial assets in 1997, based on forecasts of healthy global economic growth
and strong demand for commodities, events in Asia intervened. What started as a
small crisis among the Southeast Asian countries spread throughout Asia as the
year progressed, engulfing South Korea and Japan and causing a global equity
sell-off. The Fund, despite minimal exposure to Asian equities, was hurt by the
crisis' dampening effect on Asia's economic growth and, hence, its demand for
hard assets, particularly in the fourth quarter.
Asia is extremely important to the investment outlook of hard assets. The region
accounts for some 50% of the world's growth since 1990, and 50% of the growth in
demand for many primary commodities.+ Thus, changes in Asia's growth rate have a
major impact on commodity prices and the demand for natural resources. This was
clearly demonstrated in the fourth quarter when commodity indices fell more than
13% and shares of natural resource companies declined more than 15%.++
In the U.S., events in Asia caused the inflation-to-deflation economic debate to
shift dramatically over the course of the year. In March, concerns over an
over-heating economy and the potential for rising inflation prompted the Federal
Reserve to increase short-term interest rates by 0.25% (from 5.25% to 5.50%).
However, these fears were unfounded and, by the spring, the economy appeared to
have moved into a new era, one characterized by steady economic growth and
benign inflation. In the final quarter, however, deflation became the hot topic
as Asia's crisis unfolded and caused concern over shrinking Asian demand and
global overcapacity.
FUND REVIEW
The shifting economic picture was critical to the performance of hard asset
securities and commodities in 1997, particularly in the second half. While
strong economic growth fueled the outperformance of natural resource companies
in the third quarter, the more interest-rate-sensitive real estate sector led in
the fourth quarter as Asia's plight dampened economic growth expectations and
caused interest rates to fall. Reflecting this shift, your Fund's allocation to
real estate shares was increased from 16% of assets at June 30 to 34% of assets
by year end; at the same time, the Fund's cash position was reduced from 21% to
8%.
The Fund's leading performers in 1997 included equity holdings in oil service
and drilling companies, real estate companies, and selected energy exploration
and production companies. Oil service and drilling was the best performing
industry in the alternative investment universe. Positive fundamentals drove
performance as continued strong demand for rigs and other equipment, combined
with limited supply, resulted in higher equipment-leasing prices. This demand/
supply imbalance resulted in strong earnings and cash flow growth for the group;
the Fund's holdings in BJ Services and Gulf Island Fabrication performed
particularly well. Real estate holdings in the U.S. and Canada also helped the
Fund; holdings were concentrated in full-service hotels, such as Patriot
American Hospitality, and in the office and industrial sectors. Positive
fundamentals, which provided catalysts for earnings and cash flow growth, helped
these groups outperform the broader real estate indices.
In the second half, the Fund's gold position was maintained at approximately
5% -- in hindsight, a very prudent decision given that gold and gold-mining
shares suffered their worst performance in decades. Our rationale to limit our
gold exposure was supported by high real interest rates, continued confidence in
<PAGE> 2
central bank policies, the strengthening U.S. dollar, and the trend toward
continuing central bank sales of gold. In the past, all of these factors have
worked against gold and this past year was no exception. Gold prices fell to
$289.05 an ounce by year end, down 21% from the previous year.
THE OUTLOOK
The long-term outlook for hard assets remains very favorable. In the near term,
Asia's crisis, while it has caused concern over demand, is providing good value
in many markets. Markets have already begun to price in the expected slowdown in
global growth, predicted to decline from approximately 4% to 2.5% in 1998.
Further out, we see the possibility of renewed vigor in worldwide growth and
increased demand for hard assets, particularly as Asian countries solve their
serious economic and structural problems.
In the short term, we have positioned the Fund's portfolio to take advantage of
lower interest rates, which should persist through the first quarter of 1998. We
anticipate weaker oil prices, given rising supply and reduced demand based on
increased OPEC production, lower demand from Asia, and the probability of a warm
winter. The bulk of this decline has already been priced into oil equities and
we anticipate that energy equities will rebound in the spring.
Real estate remains our second largest investment, and we believe that this
sector, with its positive fundamentals, will outperform financial assets in the
year ahead. Our projections suggest that funds from operations will rise nearly
15% in 1998, almost double that of the broad equity market. We see good value
currently in other hard asset sectors, including forest products and paper, as
well as mining and metals, but catalysts are necessary for this value to be
recognized. Thus, we have started to re-enter the natural resource markets with
caution and are hopeful that value will be recognized later this year. Our
allocation to gold remains low, but we do see the potential for gold to enjoy a
reasonable second half.
At year end, the Fund had 91.2% equity exposure, 0.8% commodity exposure and 8%
in cash. The Fund's geographic allocations continue to favor North America, but
we also see opportunities in Western Europe, which is benefiting from the steady
march toward European Monetary Union and its positive impact on economies.
We would like to thank you for your investment in the Worldwide Hard Assets Fund
and look forward to helping you meet your investment objectives in the future.
<TABLE>
<S> <C> <C>
[PHOTO] [PHOTO] [PHOTO]
/s/ JOHN C. VAN ECK /s/ DEREK S. VAN ECK /s/ KEVIN L. REID
John C. van Eck Derek S. van Eck Kevin L. Reid
Chairman Co-Portfolio Co-Portfolio
Manager Manager
January 30, 1998
</TABLE>
+Source: Everen Securities, David Hale; BP Statistical Review, Department of
Energy, WBMS, INSG, ILZG, IWCC.
++Commodities measured by the Goldman Sachs Commodity Index; natural resources
measured by the Morgan Stanley Commodity-Related Equity Index.
<PAGE> 3
VAN ECK WORLDWIDE HARD ASSETS FUND
vs. Ibbotson Hard Assets Index(2)
and S&P 500 Index
<TABLE>
<CAPTION>
VAN ECK WORLDWIDE IBBOTSON S&P 500
HARD ASSETS FUND HARD ASSETS INDEX(2) INDEX
<S> <C> <C>
Sep 1, 89 10000 10000 10000
Sep-89 10000 10172 9959
Oct-89 10000 9967 9728
Nov-89 10750 10363 9927
Dec-89 10870 10796 10165
Jan-90 11160 10641 9482
Feb-90 10770 10336 9605
Mar-90 10340 10132 9859
Apr-90 9510 9669 9613
May-90 10070 10113 10550
Jun-90 9556 10009 10479
Jul-90 10363 10720 10446
Aug-90 10242 10822 9502
Sep-90 10262 10593 9039
Oct-90 8931 10024 9001
Nov-90 8870 9889 9582
Dec-90 9336 10098 9849
Jan-91 8373 9911 10278
Feb-91 9113 10429 11013
Mar-91 9073 10425 11280
Apr-91 8971 10523 11307
May-91 9134 10710 11795
Jun-91 9503 10638 11254
Jul-91 9637 10862 11779
Aug-91 8980 10557 12058
Sep-91 9031 10616 11856
Oct-91 9391 10855 12015
Nov-91 9226 10499 11531
Dec-91 9062 10546 12850
Jan-92 9216 10728 12611
Feb-92 9185 10597 12774
Mar-92 8641 10365 12525
Apr-92 8467 10526 12893
May-92 8970 10890 12956
Jun-92 9330 10750 12764
Jul-92 9733 10800 13285
Aug-92 9423 10556 13013
Sep-92 9372 10442 13166
Oct-92 8990 10000 13211
Nov-92 8341 9852 13661
Dec-92 8691 10016 13829
Jan-93 8588 10146 13944
Feb-93 9176 10577 14135
Mar-93 10186 11147 14433
Apr-93 10939 11611 14084
May-93 12331 11980 14461
Jun-93 12568 11976 14503
Jul-93 13796 12331 14445
Aug-93 13012 12262 14993
Sep-93 11598 11772 14878
Oct-93 12785 12197 15186
Nov-93 12619 11815 15041
Dec-93 14325 12369 15223
Jan-94 15080 13108 15740
Feb-94 14243 12950 15313
Mar-94 14305 12614 14645
Apr-94 13560 12728 14833
May-94 14181 13065 15077
Jun-94 13548 13062 14707
Jul-94 13693 13370 15190
Aug-94 14316 13655 15813
Sep-94 15146 13828 15426
Oct-94 14544 13841 15773
Nov-94 13287 13140 15198
Dec-94 13640 13454 15424
Jan-95 12403 12851 15824
Feb-95 12788 13011 16440
Mar-95 13806 13675 16926
Apr-95 14025 13926 17424
May-95 13942 14007 18120
Jun-95 14109 14008 18541
Jul-95 14735 14516 19156
Aug-95 14892 14364 19204
Sep-95 15237 14459 20015
Oct-95 13691 13930 19943
Nov-95 14867 14449 20819
Dec-95 15140 14796 21220
Jan-96 16935 15299 21942
Feb-96 17282 15444 22145
Mar-96 17408 15858 22359
Apr-96 17765 16251 22688
May-96 18171 16192 23273
Jun-96 16728 15624 23362
Jul-96 16076 15375 22330
Aug-96 17017 15748 22801
Sep-96 16664 15661 24084
Oct-96 17316 15908 24748
Nov-96 17701 16592 26619
Dec-96 17872 16602 26092
Jan-97 17797 16396 27722
Feb-97 17808 16651 27939
Mar-97 17160 16236 26791
Apr-97 16556 15987 28391
May-97 17897 16840 30119
Jun-97 17819 16757 31469
Jul-97 18512 17220 33973
Aug-97 19026 16838 32069
Sep-97 20424 17737 33826
Oct-97 19261 16114 32696
Nov-97 17640 15049 34210
Dec-97 17573 14858 34797
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------
*AVERAGE ANNUAL
TOTAL RETURN 12/31/97 1 YEAR 5 YEARS INCEPTION(1)
- ----------------------------------------------------------------
<S> <C> <C> <C>
Van Eck Worldwide Hard
Assets Fund -1.7% 15.1% 7.0%
- ----------------------------------------------------------------
Ibbotson Hard Assets Index 10.5% 8.2% 4.9%
- ----------------------------------------------------------------
S&P 500 Index 33.4% 20.3% 16.1%
- ----------------------------------------------------------------
</TABLE>
Past performance is not indicative of future results. Performance data quoted
represents past performance and the investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than the original cost. These returns do not take variable
annuity/life fees and expenses into account.
The graph shows month-end net asset values; however, the net asset value
fluctuates daily.
1. Inception date for the Van Eck Worldwide Hard Assets Fund is 9/1/89.
2. The Ibbotson Hard Assets Index is 75% equities of global companies whose
primary business is linked to hard assets and 25% commodity futures. The
equity component consists of equal weightings of the MSCI Gold Mines,
Non-Ferrous Metals, Energy Sources, and Forest Products and Paper Indices,
and the National Association of Real Estate Investment Trust Equity Index.
The commodity component consists of equal weightings of the Goldman Sachs
Energy, Precious Metals and Industrial Metals Indices.
This graph compares an initial $10,000 investment in the Van Eck Worldwide Hard
Assets Fund made at its inception with a similar investment in the Ibbotson Hard
Assets Index and the S&P 500 Index.
THE IBBOTSON HARD ASSETS INDEX AND THE S&P 500 INDEX ARE UNMANAGED INDICES AND
INCLUDE THE REINVESTMENT OF ALL DIVIDENDS, BUT DO NOT REFLECT THE PAYMENT OF
TRANSACTION COSTS, ADVISORY FEES OR EXPENSES THAT ARE ASSOCIATED WITH AN
INVESTMENT IN THE FUND.
SECTOR WEIGHTINGS**
------------------------------------------------
AS OF DECEMBER 31, 1997
<TABLE>
<S> <C>
Energy 35.9%
Real Estate 33.6%
Cash/Other 9.6%
Precious Metals 8.3%
Industrial Metals 8.0%
Forest Products &
Paper 4.6%
</TABLE>
** Sector weightings are shown as percentage of total net assets.
NOTE:
At a Special Meeting of Shareholders of the Fund (then called Gold and Natural
Resources Fund) held on April 9, 1997, shareholders voted to approve (1) a
change in the Fund's investment objective and concentration policy, (2) a
change in the Fund's investment restrictions to permit the Fund to invest in
indexed notes and swaps and (3) a change in the Fund's investment restriction
regarding illiquid securities. The votes cast for, against and abstaining from
these proposals are as follows:
<TABLE>
<CAPTION>
PROPOSAL VOTED FOR VOTED AGAINST ABSTAINED
------------------------------------------------------------
<S> <C> <C> <C>
Change in
investment
objective and
concentration
policy.......... 9,115,825 531,169 447,380
Change in
investment
restriction to
permit
investment in
indexed notes
and swaps....... 8,623,381 828,359 542,633
Change in
investment
restriction
regarding
illiquid
securities...... 8,706,776 873,862 513,735
</TABLE>
<PAGE> 4
VAN ECK WORLDWIDE HARD ASSETS FUND
- --------------------------------------------------------------------------------
REPRESENTATIVE EQUITY HOLDINGS AS OF DECEMBER 31, 1997
PATRIOT AMERICAN HOSPITALITY, INC.
(U.S., 2.5%)
Patriot American Hospitality, Inc. is based in Dallas, Texas, and is the
nation's second-largest hotel REIT. Its portfolio is comprised of 197 owned,
managed, leased or franchised upscale hotels and resorts with more than 48,000
rooms. Its properties include Wyndham Hotels, Carefree Resorts, Grand Bay
Hotels, Registry Resorts and ClubHouse Inns, among others. Patriot also provides
management services for third-party owned hotels and resorts. (At the time of
this writing, Patriot's acquisition of Interstate Hotels was pending.)
MACK-CALI REALTY CORPORATION
(U.S., 2.4%)
Mack-Cali Realty Corporation (formerly Cali Realty Corporation) provides
leasing, management, acquisition, development, construction and tenant-related
services for its 213 properties, which are primarily office and office/flex
buildings, and total approximately 23.2 million square feet. These properties
serve more than 2,300 tenants and are located in 10 states, primarily in the
Northeast and Southwest.
ALUMINUM COMPANY OF AMERICA
(U.S., 2.0%)
Alcoa is the largest aluminum producer in the world, with over 170 operating
locations in 28 countries. Alcoa is one of the lowest-cost producers of aluminum
in the world. Alcoa plans to grow through acquisition while retaining its
low-cost advantages.
BRITISH PETROLEUM COMPANY PLC
(U.K., 1.8%)
British Petroleum produces, refines and retails oil products and manufactures
chemicals. The company produces and retails petroleum products throughout the
world and owns and operates approximately 18,000 gasoline stations. Its key
chemical products are acetic acid, acrylonitrile and polyethylene.
BUCKEYE TECHNOLOGIES INC.
(U.S., 1.8%)
Buckeye Technologies manufactures and markets specialty cellulose pulps
worldwide, including both wood-based and cotton-based specialty cellulose
products. End-use markets for Buckeye's products include food casings, high
performance auto filters, automobile tires, diapers and other consumer products.
CAPSTAR HOTEL COMPANY
(U.S., 1.8%)
Washington, D.C.-based CapStar Hotel Company owns and manages upscale,
full-service hotels throughout the U.S. and Canada under such internationally
known names as Hilton, Sheraton, Marriott, Embassy Suites, Westin and
Doubletree. CapStar's hotel portfolio includes 121 properties, containing 24,821
rooms. CapStar continues to actively seek acquisitions and management contracts
in major markets and resort destinations throughout North America.
TUBOS DE ACERO DE MEXICO S.A.
(MEXICO, 1.7%)
TAMSA is one of the largest producers of OFTG (Oil Field Tubular Goods) products
in Latin America. Products include seamless drill pipe, casing, tubing and steel
ingots/bars. Its main operations are located in Veracruz, Mexico.
PACALTA RESOURCES LTD.
(CANADA, 1.7%)
Pacalta is a mid-sized Canadian oil exploration and production company. Its
primary production properties are in Ecuador, Canada and Latin America.
Pacalta's success exemplifies the opportunities available as countries around
the world allow increased activity by foreign oil companies.
ROYAL DUTCH PETROLEUM COMPANY
(NETHERLANDS, 1.4%)
Royal Dutch Petroleum owns 60% of the Royal Dutch/Shell Group of companies,
which are involved in all phases of the petroleum industry, from exploration to
final processing and delivery. Royal Dutch Petroleum has no operations of its
own, and virtually the whole of its income is derived from its 60% interest.
PRENTISS PROPERTIES TRUST
(U.S., 1.3%)
Prentiss Properties Trust is headquartered in Dallas, Texas, and acquires, owns,
manages, leases, develops and builds office and industrial properties throughout
the U.S. Prentiss' diversified portfolio includes 82 office buildings containing
8.7 million square feet, and 76 industrial buildings containing 7.3 million
square feet, located in 18 major markets. With offices in Los Angeles, Dallas,
Chicago, Washington, D.C., Atlanta and Philadelphia, Prentiss has approximately
750 employees and benefits from its in-house expertise in acquisitions,
development, facilities management, property management and leasing.
<PAGE> 5
WORLDWIDE HARD ASSETS FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NO. OF SHARES
OR PRINCIPAL VALUE
AMOUNT SECURITIES (a) (NOTE 1)
- -----------------------------------------------------------------
<S> <C>
AUSTRALIA: 2.1%
ENERGY: 1.1%
1,193,000 Portman Mining Ltd. $ 1,708,615
------------
INDUSTRIAL METALS: 0.1%
250,800 Western Metals Ltd. 138,780
------------
PRECIOUS METALS: 0.9%
840,000 Acacia Resources Ltd.+ 765,576
380,000 Delta Gold NL 399,766
1,700,000 Gullewa Gold NL+ 14,387
130,000 Ranger Minerals NL+ 279,279
------------
1,459,008
------------
3,306,403
------------
CANADA: 31.5%
ENERGY: 18.8%
75,000 Baytex Energy Ltd. - Class A+ 786,961
647,000 Black Sea Energy Ltd.+ 855,395
240,000 Bonus Resource Services Corp.+ 990,251
800,000 Bromley-Marr Ecos, Inc.+ 867,406
250,600 Canadian Fracmaster Ltd.+ 2,103,599
58,200 Canadian Natural Resources Ltd.+ 1,245,791
97,100 CE Franklin Ltd.+ 939,042
90,000 Chieftain International Inc.+ 1,912,500
425,000 Cypress Energy Inc. (Special
Warrants expiring 10/15/98)+(b)* 1,099,194
199,500 Hurricane Hydrocarbons Ltd.+
Class A 1,549,054
170,000 Interoil Corp.+ 1,445,000
550,000 Kappa Energy Company, Inc.+ 1,115,736
275,000 Kappa Energy Company, Inc.
(Warrants expiring 1/07/98)+* 96,184
162,100 NQL Drilling Tools Inc.+ 1,389,056
1,000,000 Oxbow Exploration Inc. (Special
Warrants expiring 10/21/98)+(b)* 752,125
222,500 Pacalta Resources Ltd.+ 2,607,027
375,000 Pacalta Resources Ltd. Sr. Notes
Series B 10.75% 6/15/04 365,625
120,000 Plains Energy Inc. (Special
Warrants expiring 10/08/98)+(b)* 832,491
252,000 Prudential Steel Ltd. 2,467,909
175,000 Startech Energy Inc.+ 1,420,027
205,000 Ulster Petroleums Ltd.+ 1,978,944
600,000 Windsor Energy Corp.+ 2,497,289
------------
29,316,606
------------
FOREST PRODUCTS: 1.9%
100,000 Abitibi-Price Inc. 1,395,544
123,500 St. Laurent Paperboard, Inc.+ 1,589,591
------------
2,985,135
------------
<CAPTION>
NO. OF SHARES
OR PRINCIPAL VALUE
AMOUNT SECURITIES (a) (NOTE 1)
- -----------------------------------------------------------------
<S> <C>
INDUSTRIAL METALS: 2.1%
1,126,000 Auspex Minerals Ltd. (Special
Warrants expiring 9/08/98)+(b)* $ 436,758
51,000 Cameco Corp. 1,655,346
1,467,600 International Uranium Corp.+ 1,026,617
110,000 Miramar Mining Corp.+ 219,300
------------
3,338,021
------------
PRECIOUS METALS: 4.3%
130,000 Antares Mining & Exploration
Corp.+ 41,377
115,000 Barrick Gold Corp. 2,141,875
1,613,800 Brazilian Resources Inc. (Special
Warrant expiring 9/11/98)+(b)* 149,916
1,000 Brazilian Resources Inc.+ 91
62,500 Canarc Resources Corp.+ 32,790
23,600 Euro-Nevada Mining Corp.+ 319,443
50,000 Meridian Gold Inc.+ 139,904
80,000 Minefinders Corp. 118,079
400,000 Namibian Minerals Corp.+ 1,189,185
27,500 Pacific Rim Mining Corp.+ 32,895
180,000 Placer Dome Inc. 2,283,750
16,500 Queenstake Resources Ltd.+ 10,157
43,500 Rio Narcea Gold Mines Ltd.+ 129,324
300,000 Vista Gold Corp.+ 69,253
------------
6,658,039
------------
REAL ESTATE: 4.4%
35,000 Brookfield Properties Corp. 583,925
50,000 Cadillac Fairview Corp.+ 1,175,000
40,000 Cambridge Shopping Centres, Ltd. 401,525
35,000 Four Seasons Hotels, Inc. 1,106,875
175,000 Legacy Hotels REIT 1,187,437
75,000 TrizecHahn Corp. 1,739,063
100,000 UniHost Corp.+ 689,028
------------
6,882,853
------------
49,180,654
------------
GHANA: 0.2%
PRECIOUS METALS: 0.2%
50,000 Ashanti Goldfields Ltd. (GDR) 375,000
------------
ITALY: 1.6%
ENERGY: 1.6%
45,000 Ente Nazionale Idrocaburi S.p.A.
(ADR) 2,567,813
------------
MEXICO: 2.9%
ENERGY: 1.7%
123,900 Tubos de Acero de Mexico S.A.+ 2,679,338
------------
INDUSTRIAL METALS: 1.2%
587,350 Grupo Mexico S.A. Ser. L 1,856,629
------------
4,535,967
------------
</TABLE>
See Notes to Financial Statements.
<PAGE> 6
WORLDWIDE HARD ASSETS FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
DECEMBER 31, 1997 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NO. OF SHARES
OR PRINCIPAL VALUE
AMOUNT SECURITIES (a) (NOTE 1)
- -----------------------------------------------------------------
<S> <C>
NETHERLANDS: 1.4%
ENERGY: 1.4%
40,000 Royal Dutch Petroleum Company
(NY Registry Shares) $ 2,167,500
------------
RUSSIA: 1.0%
ENERGY: 1.0%
4,230 Ural Petroleum Corp.* 1,621,509
------------
SOUTH AFRICA: 0.5%
PRECIOUS METALS: 0.5%
135,000 Western Areas Gold Mining (ADR)+ 706,725
------------
UNITED KINGDOM: 2.6%
ENERGY: 1.8%
36,000 British Petroleum Company plc
(ADR) 2,868,750
------------
INDUSTRIAL METALS: 0.8%
500,000 Billiton PLC+ 1,243,311
------------
4,112,061
------------
UNITED STATES: 47.6%
CHEMICALS: 1.7%
100,500 General Chemical Group, Inc. 2,688,375
------------
ENERGY: 8.5%
30,000 BJ Services Co.+ 2,158,125
83,600 Dailey Petroleum Services Corp.+ 909,150
58,000 Denali Inc.+ 768,500
120,000 KCS Energy, Inc. 2,490,000
29,200 Key Energy Inc.+ 633,275
82,000 Louis Dreyfus Natural Gas Corp.+ 1,532,375
24,500 Mobil Corp. 1,768,594
32,000 Pride International, Inc.+ 808,000
60,000 Snyder Oil Corp. 1,095,000
31,000 Stone Energy Corp.+ 1,038,500
------------
13,201,519
------------
FOREST PRODUCTS & PAPER: 2.7%
59,700 Buckeye Technologies Inc.+ 2,761,125
34,600 Rayonier Inc. 1,472,663
------------
4,233,788
------------
INDUSTRIAL METALS: 3.8%
44,000 Aluminum Company of America 3,096,500
28,200 Reynolds Metals Co. 1,692,000
69,300 Steel Dynamics, Inc.+ 1,108,800
------------
5,897,300
------------
INSURANCE: 0.1%
3,000 Highlands Insurance Group+ 85,125
------------
<CAPTION>
NO. OF SHARES
OR PRINCIPAL VALUE
AMOUNT SECURITIES (a) (NOTE 1)
- -----------------------------------------------------------------
PRECIOUS METALS: 1.6%
11,600 Getchell Gold Corp.+ $ 278,400
50,250 Newmont Mining Corp. 1,476,094
42,000 Stillwater Mining Co.+ 703,500
------------
2,457,994
------------
REAL ESTATE: 29.2%
50,000 AMB Property Corp. 1,256,250
53,000 Arden Realty Group, Inc. 1,629,750
25,000 Bedford Property Investors, Inc. 546,875
43,500 Boston Properties, Inc. 1,438,219
80,000 CapStar Hotel Company+ 2,745,000
47,100 CarrAmerica Realty Corp. 1,492,481
45,000 Colonial Properties Trust 1,355,625
22,500 Cornerstone Properties, Inc. 431,719
50,000 Entertainment Properties Trust 968,750
20,000 Equity Office Properties Trust 631,250
35,000 Equity Residential Properties Trust 1,769,688
65,000 Excel Realty Trust Inc. 2,047,500
22,500 Felcor Suite Hotels Inc. 798,750
20,000 Great Lakes REIT Inc. 388,750
60,000 Highwoods Properties, Inc. 2,231,250
32,300 Interstate Hotels Co.+ 1,132,519
15,000 ITT Corp.+ 1,243,125
54,900 Kilroy Realty Corp. 1,578,375
25,000 Macerich Co. (The) 712,500
90,000 Mack-Cali Realty Corporation 3,690,000
31,000 Pan Pacific Retail Properties Inc. 662,625
60,000 Parkway Properties, Inc. 2,058,750
137,801 Patriot American Hospitality, Inc. 3,970,656
75,000 Prentiss Properties Trust 2,095,313
42,000 Public Storage Inc. 1,233,750
32,727 Security Capital Industrial Trust 814,084
1,523 Security Capital Industrial Trust
(Special Warrants expiring
9/18/98)+ 7,425
90,000 Servico, Inc.+ 1,518,750
17,500 S.L. Green Realty Corp. 453,906
40,000 Starwood Lodging 2,315,000
20,000 Storage Trust Realty 526,250
35,000 Tower Realty Trust, Inc. 861,875
11,000 Trammell Crow Co.+ 283,250
35,000 Westfield America Inc. 595,000
------------
45,485,010
------------
74,049,111
------------
</TABLE>
See Notes to Financial Statements.
<PAGE> 7
WORLDWIDE HARD ASSETS FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
DECEMBER 31, 1997 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NO. OF SHARES
OR PRINCIPAL VALUE
AMOUNT SECURITIES (a) (NOTE 1)
- -----------------------------------------------------------------
<S> <C>
OPTION PURCHASED: 0.0%
21,500 Philadelphia Stock Exchange Gold
and Silver Index (strike @
$70.00 expiring 1/17/98)
(Cost: $105,458)+ $ 24,188
------------
TOTAL STOCKS AND OTHER INVESTMENTS: 91.4%
(Cost: $131,243,444) 142,646,931
------------
<CAPTION>
PRINCIPAL
AMOUNT SHORT-TERM OBLIGATIONS: 11.3%
- -----------------------------------------------------------------
<S> <C>
$ 3,685,000 General Electric Capital Corp.
1/02/98 5.65% 3,684,422
14,000,000 U.S. Treasury Bill Due 2/26/98
5.18% 13,887,191
------------
TOTAL SHORT-TERM OBLIGATIONS: 11.3%
(Amortized Cost: $17,571,613) 17,571,613
------------
TOTAL INVESTMENTS: 102.7% (Cost: $148,815,057) 160,218,544
OTHER ASSETS LESS LIABILITIES: (2.7%) (4,285,858)
------------
NET ASSETS: 100% $155,932,686
============
</TABLE>
- ---------------
(a) Unless otherwise indicated, securities owned are shares of common stock.
(b) Restricted security, See Note 6.
* Fair value as determined by the Board of Trustees.
+ Non-income producing.
Glossary:
ADR--American Depositary Receipt
GDR--Global Depositary Receipt
<TABLE>
<CAPTION>
SUMMARY OF % OF SUMMARY OF % OF
NET ASSETS NET NET ASSETS NET
BY INDUSTRY ASSETS BY INDUSTRY ASSETS
- --------------------------------------------------------------
<S> <C> <C> <C>
Energy 35.9% Chemicals 1.7%
Real Estate 33.6% Insurance 0.1%
Forest Products &
Paper 4.6% U.S. Treasury Bill 8.9%
Industrial Metals 8.0% Commercial Paper 2.4%
Precious Metals 8.3% Other assets less
liabilities (3.5%)
-----
100.0%
=====
</TABLE>
See Notes to Financial Statements.
<PAGE> 8
WORLDWIDE HARD ASSETS FUND
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<TABLE>
<S> <C>
ASSETS:
Investments at value (identified cost, $148,815,057) (Note 1)................................................. $160,218,544
Cash.......................................................................................................... 2,074,525
Cash-initial margins for futures (Note 5)..................................................................... 56,700
Receivables:
Securities sold............................................................................................. 1,887,818
Dividends and interest...................................................................................... 327,879
Capital shares sold......................................................................................... 84,907
Other assets.................................................................................................. 64,073
------------
Total assets.................................................................................................. 164,714,446
------------
LIABILITIES:
Payables:
Securities purchased........................................................................................ 7,794,469
Capital shares repurchased.................................................................................. 915,647
Due to broker-variation margin (Note 5)..................................................................... 11,250
Accounts payable.............................................................................................. 60,394
------------
Total liabilities....................................................................................... 8,781,760
------------
Net assets.................................................................................................... $155,932,686
============
Shares outstanding............................................................................................ 9,917,008
============
Net asset value, redemption and offering price per share ($155,932,686 / 9,917,008)........................... $15.72
============
Net assets consist of:
Aggregate paid in capital................................................................................... $125,033,926
Unrealized appreciation of investments, futures, forward currency contracts and foreign currency............ 11,364,421
Undistributed net investment income......................................................................... 853,417
Undistributed realized gain................................................................................. 18,680,922
------------
$155,932,686
============
</TABLE>
See Notes to Financial Statements
<PAGE> 9
WORLDWIDE HARD ASSETS FUND FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1997
------------------------------
<S> <C> <C>
INCOME:
Dividends (less foreign taxes withheld of $92,030)......................................... $ 2,332,940
Interest................................................................................... 810,680
-----------
Total income......................................................................... 3,143,620
EXPENSES:
Management (Note 2)........................................................................ $1,736,208
Reports to shareholders.................................................................... 70,612
Professional............................................................................... 62,125
Custody.................................................................................... 51,203
Trustees fees and expenses................................................................. 31,566
Registration............................................................................... 752
Miscellaneous.............................................................................. 101,624
----------
Total expenses....................................................................... 2,054,090
Expenses reduced by a directed brokerage arrangement (Note 2).............................. (16,150)
----------
Net expenses......................................................................... 2,037,940
-----------
Net investment income................................................................ 1,105,680
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (Note 3):
Realized gain from security transactions................................................... 19,469,353
Realized loss from foreign currency transactions........................................... (156,861)
Realized gain from options................................................................. 405,632
Change in unrealized appreciation of foreign currency receivables, payables and forward
currency contracts....................................................................... (31,422)
Change in unrealized appreciation of investments and futures............................... (22,921,982)
-----------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS....................................... $(2,129,600)
===========
</TABLE>
See Notes to Financial Statements
<PAGE> 10
WORLDWIDE HARD ASSETS FUND
FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE
EIGHT MONTHS
ENDED
YEAR ENDED DECEMBER 31, YEAR ENDED
DECEMBER 31, 1997 1996 APRIL 30, 1996
----------------- ------------- --------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income.............................................. $ 1,105,680 $ 112,021 $ 1,122,903
Realized gain from security transactions........................... 19,469,353 7,578,337 3,080,740
Realized loss from foreign currency transactions................... (156,861) (301) (4,602)
Realized gain from options......................................... 405,632 -- --
Change in unrealized appreciation (depreciation) of foreign
currency receivables, payables, and forward currency contracts... (31,422) (8,184) 899
Change in unrealized appreciation (depreciation) of investments and
futures.......................................................... (22,921,982) (7,051,157) 28,055,575
------------- ------------ -------------
Increase (Decrease) in net assets resulting from operations........ (2,129,600) 630,716 32,255,515
------------- ------------ -------------
Dividends to shareholders from:
Net investment income.............................................. (3,252,318) (1,668,458) (1,119,954)
Net realized gain.................................................. (4,406,366) (1,636,166) --
------------- ------------ -------------
(7,658,684) (3,304,624) (1,119,954)
------------- ------------ -------------
CAPITAL SHARE TRANSACTIONS*:
Net proceeds from sales of shares.................................. 217,010,487 168,572,106 248,311,248
Reinvestment of dividends.......................................... 7,658,684 3,304,624 1,119,954
------------- ------------ -------------
224,669,171 171,876,730 249,431,202
Cost of shares reacquired.......................................... (226,365,559) (188,155,190) (221,516,726)
------------- ------------ -------------
Increase (decrease) in net assets resulting from capital share
transactions....................................................... (1,696,388) (16,278,460) 27,914,476
------------- ------------ -------------
Total increase (decrease) in net assets........................ (11,484,672) (18,952,368) 59,050,037
NET ASSETS:
Beginning of period.................................................. 167,417,358 186,369,726 127,319,689
------------- ------------ -------------
End of period (including undistributed net investment income of
$853,417, $34,126 and $1,632,405, respectively).................... $ 155,932,686 $167,417,358 $ 186,369,726
============= ============ =============
*SHARES OF BENEFICIAL INTEREST ISSUED AND REDEEMED (WITH AN UNLIMITED
NUMBER OF $.001 PAR VALUE SHARES AUTHORIZED):
Shares sold........................................................ 13,234,532 10,473,085 16,491,600
Reinvestment of dividends.......................................... 481,073 194,390 84,822
------------- ------------ -------------
13,715,605 10,667,475 16,576,422
Shares reacquired.................................................. (13,811,497) (11,667,614) (15,001,769)
------------- ------------ -------------
Net increase (decrease)............................................ (95,892) (1,000,139) 1,574,653
============= ============ =============
</TABLE>
See Notes to Financial Statements
<PAGE> 11
WORLDWIDE HARD ASSETS FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period
<TABLE>
<CAPTION>
FOR THE
EIGHT MONTHS
FOR THE ENDED YEAR ENDED APRIL 30,
YEAR ENDED DECEMBER 31, --------------------------------------------
DECEMBER 31, 1997 1996 1996 1995 1994 1993
------------------ ------------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.......... $16.72 $16.92 $13.49 $13.11 $10.61 $8.25
-------- -------- -------- -------- -------- --------
Income from Investment Operations:
Net Investment Income....................... 0.09 0.02 0.12 0.08 0.07 0.01
Net Gains (Loss) on Securities (both
realized and unrealized).................. (0.36) 0.09 3.44 0.37 2.47 2.39
-------- -------- -------- -------- -------- --------
Total from Investment Operations.............. (0.27) 0.11 3.56 0.45 2.54 2.40
-------- -------- -------- -------- -------- --------
Less Distributions:
Dividends from net investment income........ (0.31) (0.16) (0.13) (0.07) (0.04) (0.04)
Dividends from net realized gain............ (0.42) (0.15) -- -- -- --
-------- -------- -------- -------- -------- --------
Total Distributions........................... (0.73) (0.31) (0.13) (0.07) (0.04) (0.04)
-------- -------- -------- -------- -------- --------
Net Asset Value, End of Period................ $15.72 $16.72 $16.92 $13.49 $13.11 $10.61
======== ======== ======== ======== ======== ========
Total Return (a).............................. (1.67%) 0.60% 26.66% 3.43% 23.96% 29.19%
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Period (000)............... $155,933 $167,417 $186,370 $127,320 $81,248 $30,896
Ratio of Gross Expenses to Average Net
Assets...................................... 1.18% 1.24%* 1.08% -- -- --
Ratio of Net Expenses to Average Net Assets... 1.17% 1.23%* 1.08%(b) 0.96% 0.96% 1.61%
Ratio of Net Income to Average Net Assets..... 0.64% 0.10%* 0.81% 0.71% 0.64% 0.25%
Portfolio Turnover Rate....................... 102.82% 46.14% 26.37% 23.30% 15.84% 14.61%
Average Commission Rate Paid (c).............. $0.0594 $0.0305 $0.0310
</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 at
net asset value during the period and a redemption on the last day of the
period. Total return for the period less than one year was not annualized.
(b) The ratio was not impacted by the directed brokerage arrangement.
(c) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for trades in
which a commission is charged.
* Annualized.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Van Eck Worldwide Insurance Trust (the "Trust"), organized as a Massachusetts
business trust on January 7, 1987, is registered under the Investment Company
Act of 1940. The following is a summary of significant accounting policies
consistently followed by the Worldwide Hard Assets Fund series, a diversified
fund, (the "Fund") of the Trust in the preparation of its financial statements.
The Fund's name changed from the Gold and Natural Resources Fund on May 1, 1997.
The policies are in conformity with generally accepted accounting principles.
The preparation of financial statements in conformity with generally accepted
accounting principles requires the use of management's estimates and the actual
amounts could differ.
A. SECURITY VALUATION--Securities traded on national exchanges and traded on the
NASDAQ National Market System are valued at the last sales prices reported at
the close of business on the last business day of the year. Over-the-counter
securities not included in the NASDAQ National Market System and listed
securities for which no sale was reported are valued at the mean of the bid and
asked prices. Short-term obligations purchased with more than sixty days
remaining to maturity are valued at market. Short-term obligations purchased
with sixty days or less to maturity are valued at amortized cost which with
accrued interest approximates value. Futures are valued using the closing price
reported at the close of the Chicago Board of Trade. Forward currency contracts
are valued at the spot currency rate plus an amount ("points") which reflects
the differences in interest rates between the U.S. and the foreign markets.
Securities for which quotations are not available are stated at fair value as
determined by the Board of Trustees.
<PAGE> 12
WORLDWIDE HARD ASSETS FUND
- --------------------------------------------------------------------------------
B. FEDERAL INCOME TAXES--It is the Fund's policy to comply with the provisions
of the Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to its shareholders. Therefore, no federal
income tax provision is required.
C. CURRENCY TRANSLATION--Assets and liabilities denominated in foreign
currencies and commitments under forward currency contracts are translated into
U.S. dollars at the mean of the quoted bid and asked prices of such currencies
on the last business day of the period. Purchases and sales of investments are
translated at the exchange rates prevailing when such investments were acquired
or sold. Income and expenses are translated at the exchange rates prevailing
when accrued. The portion of realized and unrealized gains and losses on
investments that result from fluctuations in foreign currency exchange rates is
not separately disclosed. Recognized gains or losses attributable to foreign
currency fluctuations on foreign currency denominated assets and liabilities are
recorded as net realized gains and losses from foreign currency transactions.
D. DIVIDENDS AND DISTRIBUTIONS--Dividend income and distributions to
shareholders are recorded on the ex-dividend date. Income and capital gain
distributions are determined in accordance with income tax regulations which may
differ from generally accepted accounting principles. These differences are
primarily due to differing treatments for short term capital gains. The effect
of these differences for the year ended December 31, 1997 increased
undistributed net investment income and decreased undistributed realized gain by
$2,965,929.
E. OTHER--Security transactions are accounted for on the date the securities are
purchased or sold. Interest income is accrued as earned.
NOTE 2--Van Eck Associates Corporation (the "Adviser") earned fees of $1,736,208
for the year ended December 31, 1997 for investment management and advisory
services. The fee 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% on
the excess over $750 million which includes the fee paid to the Adviser for
accounting and administrative services. Certain of the officers and trustees of
the Trust are officers, directors or stockholders of Van Eck Associates
Corporation and Van Eck Securities Corporation.
The Fund directs certain portfolio trades to a broker that, in turn, pays a
portion of the Fund's operating expenses. For the year ended December 31, 1997,
the Fund's expenses were reduced by $16,150 under this arrangement. The Fund
could have invested the assets used in connection with the directed brokerage
arrangement in an income producing asset if it had not entered into such an
arrangement.
NOTE 3--Purchases and sales of securities other than short-term obligations
aggregated $163,234,298 and $176,575,280, respectively, for the year ended
December 31, 1997. For federal income tax purposes, the identified cost of
investments owned at December 31, 1997 was $150,112,065. As of December 31,
1997, net unrealized appreciation for federal income tax purposes aggregated
$10,106,479, of which $24,249,877, related to appreciated securities and
$14,143,398 related to depreciated securities.
NOTE 4--The Fund invests in foreign securities. Investments in foreign
securities may involve a greater degree of risk than investments in domestic
securities due to political, economic or social instability. In addition, some
foreign companies are not generally subject to the same uniform accounting,
auditing and financial reporting rules as are American companies and there may
be less government supervision and regulation. Foreign investments may also be
subject to foreign taxes, dividend collection fees and settlement delays.
The Fund may concentrate its investments in companies which are significantly
engaged in the exploration, development, production and distribution of gold and
other natural resources such as strategic and other metals, minerals, forest
products, oil, natural gas and coal and by investing in gold bullion and coins.
Since the Fund may so concentrate, it may be subject to greater risks and market
fluctuations than other more diversified portfolios. The production and
marketing of gold and other natural resources may be affected by actions and
changes in governments.
NOTE 5--FUTURES CONTRACTS:
As of December 31, 1997, the Fund was long futures contracts. The long gold
contracts were acquired in lieu of a direct acquisition of the commodity. The
Adviser believes these synthetic positions are a duplication of the purchases of
the commodities and believes the futures contracts are more advantageous for
operational and liquidity reasons than a direct acquisition of the commodi-
