<PAGE>
Van Eck Global
Worldwide Insurance Trust
[GRAPHIC]
SEMI-ANNUAL REPORT
June 30, 1999
discipline
Worldwide Bond Fund
allocation
diversify
GLOBAL INVESTMENTS SINCE 1955
<PAGE>
Van Eck Worldwide Bond Fund
- --------------------------------------------------------------------------------
Dear Shareholder:
The economic events of the first six months of 1999 exerted considerable
negative pressures on the world's major bond markets. The first quarter was
especially difficult, with February being the worst month for U.S. bonds in
twenty-six years. The fears of financial turmoil and slowing global growth that
boosted world bond markets in 1998 subsided as the U.S. economy pushed forward
and the outlook for global growth began to improve. Global government bond
markets suffered as investor confidence improved and the appetite for riskier
securities began to increase. For the six months ended June 30, the Worldwide
Bond Fund had a total return of -7.1%. The Fund did outperform the benchmark
index, the Salomon Smith Barney World Government Bond Index, which fell by 7.2%
over the same time period.
Bond Market Review
During the first half of 1999, sentiment surrounding global growth dramatically
improved. The U.S. economy remained strong with annualized growth of 4.3%
during the first quarter. The Japanese economy finally began to show the
effects of the government's 1998 stimulus spending program and turned in a
surprising 7.9% growth rate for the first quarter. The Asian economies that had
been plagued by financial turmoil in 1997 and 1998 continued to see
improvements in economic activity during the first half of 1999, also having a
positive effect on the global growth outlook. Europe was the exception, with
the Euro-economies continuing to plod along at relatively low growth rates. In
sum, global government bond yields rose (and prices fell) on the back of a
robust U.S. economy, an improving global growth environment, and a reversal of
"flight-to-quality" trades implemented during the crisis-plagued latter half of
1998. Thus, the same high-quality, global government bonds that benefited from
nervousness in global financial markets during 1998, suffered during the first
half of 1999.
The U.S. bond market had a difficult six months with 30-year yields rising 90
basis points (0.90%) during the first half to end the period at 6.00%. This
backup in yields occurred as U.S. economic growth continued to surprise on the
upside and inflation concerns reappeared. The Federal Reserve moved from a
neutral stance to a tightening bias and raised rates by 25 basis points at
their June 30 meeting. Throughout the year, we held an overweight position in
the U.S., which hurt relative performance early in the year. We did reduce the
weighting from approximately 45% at December 31, 1998 to 36% during the first
quarter, but chose to hold our remaining positions due to the high yields
available in this market. During the last two months, we have been rebuilding
the exposure (by increasing bond duration) to this market due to encouraging
interest rate differentials between the U.S. and Europe.
European bond markets suffered the same plight as U.S. bonds during the first
half and ended the period down 12% on average (in U.S. dollar terms). While
European bonds outperformed their American counterparts on a local currency
basis, the weakness of the euro was the major contributing factor to their poor
performance in U.S. dollar terms. The introduction of the euro has been
disappointing, falling 11.3% against the dollar during its first six months of
existence. The euro has been plagued by weak economic growth, a deteriorating
fiscal outlook, and concerns over the credibility of the newly formed European
Central Bank. The Fund began the year with a European bond weighting (including
the UK) that was approximately equal to the Index. By reducing the average
duration of these holdings, we managed to cut our exposure to this market by
the end of the second quarter. At June 30, your Fund had a total exposure of
37% to European bonds--16% in the UK with the remaining holdings in Germany,
Sweden, France and Ireland. We reduced exposure to the euro dramatically
throughout the second quarter (to 18%), but this did not alleviate the losses
resulting from the portfolio's high exposure of 44% at the beginning of 1999.
During the first half of the year, we increased the Fund's allocations to the
higher-yielding bond markets of South Africa, Mexico, and Brazil, which helped
<PAGE>
Van Eck Worldwide Bond Fund
- --------------------------------------------------------------------------------
Fund performance. The yield spreads of these markets widened following the
economic turmoil of late last year and the devaluation of the Brazilian real in
January. Following these events, the outlook for these countries improved as
the commodity markets recovered, the global growth outlook improved, and
investor nervousness began to dissipate. In this environment, the higher-
yielding markets began to look more attractive. We added to Fund exposure in
South Africa and Mexico late in the first quarter and took a position in Brazil
during the second quarter. Our combined exposure to these markets at June 30
was approximately 12%.
The continued strength of the North American economies, combined with the
turnaround in Asian economies that began this year, helped to improve the
global demand picture. This improvement in demand seemed to be the news that
commodity markets had been looking for. As a result, a rally in commodity
prices such as energy products and industrial metals ensued. The turnaround in
economic activity and industrial-related commodity prices helped to boost the
performance of commodity-related currencies versus the U.S. dollar. Your
portfolio was able to benefit from this strong performance through its
increased exposure to the currencies of New Zealand, Canada, Australia and
South Africa. As of year-end 1998, these currencies represented 5% of the
portfolio; by June 30, the allocation had grown to 18%.
It has been another volatile year for the Japanese bond market. We continued to
avoid exposure to Japan, believing that other markets offered better investment
opportunities. This both hurt and helped us during the past six months; the net
result being neutral on Fund performance. Japanese bonds rallied from February
to May and finished the half-year up 2.5%. In U.S. dollars, however, the market
lost 4.5% due to the depreciation of the yen versus the dollar during this
period.
The Outlook
For the second half of 1999, the outlook for the Fund appears to be much more
favorable than the performance encountered during the first half of the year.
As the outlook for global growth continues to improve, the Fund will continue
to look for investment opportunities in markets that will benefit in such an
environment. While the U.S. economy continues to grow at a robust pace, U.S.
Treasury yields look attractive as long as the Fed maintains a proactive stance
and assures investors that it is there to keep any inflationary pressures in
check. Commodity-related currencies appear poised to continue their
outperformance versus the dollar in the second half and evidence of economic
improvement in Europe could lead to attractive investment opportunities (on a
total return basis) for U.S. dollar-based investors.
We appreciate your participation in the Van Eck Worldwide Bond Fund and look
forward to helping you meet your investment goals in the future.
[PHOTO]
[PHOTO]
/s/ Charles
T. Cameron /s/ Gregory
Charles T. F. Krenzer
Cameron Gregory F.
Co- Krenzer
Portfolio Co-Portfolio
Manager Manager
July 12, 1999
<PAGE>
Van Eck Worldwide Bond Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Performance Record as of 6/30/99
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Average Annual
Total Return
- -------------------------
<S> <C>
Life (since 9/1/89) 5.7%
- -------------------------
5 years 6.0%
- -------------------------
1 year 1.4%
- -------------------------
</TABLE>
The performance data represents past performance and is not indicative of
future results. Investment return and principal value of an investment in the
Fund will vary so that shares, when redeemed, may be worth more or less than
their original cost.
At certain times in the past, the Adviser waived certain or all expenses on the
Fund. Had the Fund incurred all expenses, investment returns would have been
reduced.
The Fund is only available as an option under various insurance contracts
issued by life insurance and annuity companies. These contracts offer life and
tax benefits to the beneficial owners of the Fund. Your insurance or annuity
company charges fees and expenses for these benefits which are not reflected in
this report or in the Fund's performance, since they are not direct expenses of
the Fund. Had these fees been included, returns would have been lower. A review
of your particular life and/or annuity contract will provide you with much
greater detail regarding these costs and benefits.
Geographical Weightings
as of June 30, 1999
[PIE CHART]
Australia 4.0%
Canada 5.5%
France 5.2%
Sweden 5.7%
United Kingdom 16.4%
Brazil 1.9%
United States 36.1%
Cash/Equivalents 3.4%
Germany 7.6%
Ireland 2.2%
Mexico 4.1%
New Zealand 2.0%
South Africa 5.9%
<PAGE>
Worldwide Bond Fund
Schedule of Portfolio Investments
June 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Value
Country Amount Bonds and Notes (Note 1)
- ------------------------------------------------------------------------------
<C> <C> <S> <C>
AUSTRALIA: 4.0%
AUD 1,714,1460 Australia Government Bond
8.75% due 8/15/08 $ 3,865,635
-----------
BRAZIL: 1.9%
USD 2,000,000 Republic of Brazil Bond
11.625% due 4/15/04 1,860,000
-----------
CANADA: 5.5%
CAD 7,500,000 Government of Canada Bond 7.00% due
9/01/01 5,286,681
-----------
FRANCE: 5.2%
EUR 4,649,694 French Government Bond BTAN 5.50% due
10/12/01* 5,016,420
-----------
GERMANY: 7.6%
Bundesrepublik Deutschland Bonds
EUR 3,579,043 7.375% due 1/03/05* 4,265,466
2,709,847 6.00% due 1/04/07* 3,065,664
-----------
7,331,130
-----------
IRELAND: 2.2%
EUR 1,714,146 Irish Government Bond
8.00% due 8/18/06 2,153,360
-----------
MEXICO: 4.1%
USD 4,000,000 United Mexican States Bond 9.75% due
4/06/05 3,990,000
-----------
NEW ZEALAND: 2.0%
NZD 3,350,000 New Zealand Government Bond 10.00% due
3/15/02 1,960,970
-----------
SOUTH AFRICA: 5.9%
ZAR 35,000,000 South African Government Bond 12.50% due
1/15/02 5,628,394
-----------
SWEDEN: 5.7%
Swedish Government Bonds
SEK 14,000,000 10.25% due 5/05/03 1,983,674
28,000,000 6.00% due 2/09/05 3,511,779
-----------
5,495,453
-----------
</TABLE>
<TABLE>
<CAPTION>
Principal Value
Country Amount Bonds and Notes (Note 1)
- ---------------------------------------------------------------------------
<C> <C> <S> <C>
UNITED KINGDOM: 16.4%
Great Britain Government Bonds
GBP 1,500,000 8.00% due 6/07/21 $ 3,365,374
2,250,000 8.00% due 6/10/03 3,866,369
4,800,000 7.50% due 12/07/06 8,539,997
-----------
15,771,740
-----------
UNITED STATES: 36.1%
U.S. Treasury Notes
USD 8,600,000 6.50% due 8/15/05* 8,868,750
3,000,000 6.00% due 8/15/00 3,019,689
5,000,000 5.875% due 9/30/02 5,031,250
5,000,000 5.50% due 5/15/09 4,884,375
U.S. Treasury Bonds
8,600,000 6.625% due 2/15/27* 8,425,000
5,000,000 5.25% due 2/15/29 4,489,068
-----------
34,718,132
-----------
Total Bonds and Notes: 96.6%
(Cost: $94,557,189) 93,077,915
-----------
<CAPTION>
Short-Term Obligation
- ---------------------------------------------------------------------------
<C> <C> <S> <C>
UNITED STATES: 1.0%
USD 1,000,000 American Express Co.
Commercial Paper due 7/01/99 Interest
Yield 5.58%
(Amortized Cost: $1,000,000) 1,000,000
-----------
Total Investments: 97.6%
(Cost: $95,557,189) 94,077,915
Other assets less liabilities: 2.4% 2,279,882
-----------
Net Assets: 100% $96,357,797
===========
</TABLE>
- -------
* These securities are segregated as collateral for forward foreign currency
contracts.
See Notes to Financial Statements
<PAGE>
Worldwide Bond Fund Financial Statements
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
<TABLE>
<S> <C>
June 30, 1999 (Unaudited)
Assets:
Investments at value (cost, $95,557,189) (Note 1).................. $94,077,915
Receivables:
Interest.......................................................... 2,115,308
Capital shares sold............................................... 216,996
Unrealized appreciation on forward foreign currency contracts (Note
4)................................................................ 64,413
-----------
Total assets...................................................... 96,474,632
-----------
Liabilities:
Payables:
Capital shares redeemed........................................... 2,142
Due to custodian.................................................. 26,260
Accounts payable.................................................. 22,367
Unrealized depreciation on forward foreign currency contracts (Note
4)................................................................ 66,066
-----------
Total liabilities................................................. 116,835
-----------
Net assets......................................................... $96,357,797
===========
Shares outstanding................................................. 8,938,452
===========
Net asset value, redemption price and offering price per share
($96,357,797 / 8,938,452)......................................... $10.78
======
Net assets consist of:
Aggregate paid in capital......................................... $98,345,594
Unrealized depreciation of investments, forward foreign currency
contracts and foreign currencies................................. (1,514,409)
Undistributed net investment income............................... 1,793,544
Accumulated realized loss......................................... (2,266,932)
-----------
$96,357,797
===========
</TABLE>
<TABLE>
<S> <C> <C>
Statement of Operations
Six Months Ended June 30, 1999 (Unaudited)
Interest income (Note 1)............................... $ 3,166,731
Expenses:
Management (Note 2).................................... $530,288
Administration (Note 2)................................ 2,146
Custodian.............................................. 19,841
Professional fees...................................... 17,632
Reports to shareholders................................ 15,789
Trustees' fees and expenses............................ 15,397
Other.................................................. 17,792
--------
Total expenses........................................ 618,885
--------
Net investment income................................. 2,547,846
------------
Realized and Unrealized Gain (Loss) on Investments
(Note 3):
Realized gain from security transactions............... 1,137,158
Realized loss from foreign currency transactions....... (2,979,753)
Change in unrealized appreciation of investments....... (8,423,250)
Change in unrealized depreciation of forward foreign
currency contracts and foreign currencies............. (250,970)
------------
Net loss on investments and foreign currencies......... (10,516,815)
------------
Net Decrease in Net Assets Resulting from Operations... $ (7,968,969)
============
</TABLE>
See Notes to Financial Statements
<PAGE>
Worldwide Bond Fund Financial Statements
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months
Ended
June 30, Year Ended
1999 December 31,
(Unaudited) 1998
------------ ------------
<S> <C> <C>
Increase (Decrease) in Net Assets:
Operations:
Net investment income............................. $ 2,547,846 $ 5,574,632
Realized gain from security transactions.......... 1,137,158 1,940,736
Realized loss from foreign currency transactions.. (2,979,753) (109,729)
Change in unrealized appreciation of investments.. (8,423,250) 6,508,262
Change in unrealized depreciation of forward
foreign currency contracts and foreign
currencies....................................... (250,970) 452,900
------------ ------------
Increase (decrease) in net assets resulting from
operations....................................... (7,968,969) 14,366,801
------------ ------------
Dividends and Distributions to shareholders from:
Net investment income............................. (4,563,103) (1,020,300)
Net realized gains................................ (2,038,833) --
------------ ------------
Total dividends and distribiutions................ (6,601,936) (1,020,300)
Capital share transactions*:
Net proceeds from sales of shares................. 31,549,015 83,615,224
Reinvestment of dividends......................... 6,601,936 1,020,300
------------ ------------
38,150,951 84,635,524
Cost of shares reacquired......................... (46,504,758) (91,160,172)
------------ ------------
Decrease in net assets resulting from capital
share transactions............................... (8,353,807) (6,524,648)
------------ ------------
Total increase (decrease) in net assets........... (22,924,712) 6,821,853
Net Assets:
Beginning of period................................ 119,282,509 112,460,656
------------ ------------
End of period (including undistributed net
investment income of $1,793,544 and $4,450,964,
respectively)..................................... $ 96,357,797 $119,282,509
============ ============
*Shares of Beneficial Interest Issued and Redeemed
(Unlimited number of $.001 par value shares
authorized)
Shares sold....................................... 2,782,861 7,092,902
Reinvestment of dividends......................... 571,596 92,755
------------ ------------
3,354,457 7,185,657
Shares reacquired................................. (4,130,631) (7,699,622)
------------ ------------
Net decrease...................................... (776,174) (513,965)
============ ============
</TABLE>
See Notes to Financial Statements
<PAGE>
Worldwide Bond Fund
- -------------------------------------------------------------------------------
Financial Highlights
For a share outstanding throughout each period
<TABLE>
<CAPTION>
Six Months For the
Ended Year Ended Eight Months
June 30, December 31, Ended Year Ended April 30,
1999 ------------------ December 31, ----------------------
(Unaudited) 1998 1997 1996 1995 1994
----------- -------- -------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 12.28 $ 10.99 $ 11.10 $ 10.88 $ 11.46 $ 10.05
------- -------- -------- -------- ---------- ----------
Income From Investment
Operations:
Net Investment Income.. 0.28 0.57 0.48 0.36 0.58 0.68*
Net Gain (Loss) on
Investments (both
realized and
unrealized)........... (1.10) 0.82 (0.23) 0.17 (0.34) 0.77
------- -------- -------- -------- ---------- ----------
Total from Investment
Operations............. (0.82) 1.39 0.25 0.53 0.24 1.45
------- -------- -------- -------- ---------- ----------
Less Dividends and
Distributions:
Dividends from Net
Investment Income..... (0.47) (0.10) (0.36) (0.31) (0.82) (0.04)
Distributions from
Capital Gains......... (0.21) -- -- -- -- --
------- -------- -------- -------- ---------- ----------
Total Dividends and
Distributions.......... (0.68) (0.10) (0.36) (0.31) (0.82) (0.04)
------- -------- -------- -------- ---------- ----------
Net Asset Value, End of
Period................. $ 10.78 $ 12.28 $ 10.99 $ 11.10 $ 10.88 $ 11.46
======= ======== ======== ======== ========== ==========
Total Return (a)........ (7.05%) 12.75% 2.38% 4.98% 2.07% 14.51%
- ------------------------------------------------------------------------------------------------
Ratios/Supplementary
Data
Net Assets, End of
Period (000)........... $96,358 $119,283 $112,461 $118,676 $ 107,541 $ 113,466
Ratio of Gross Expenses
to Average Net Assets.. 1.17%(b) 1.15% 1.12% 1.17%(b) 1.10% 0.99%
Ratio of Net Expenses to
Average Net Assets..... 1.17%(b) 1.15% 1.12% 1.16%(b) 1.08% 0.98%
Ratio of Net Investment
Income to Average Net
Assets................. 4.80%(b) 4.72% 4.31% 4.99%(b) 5.26% 6.24%
Portfolio Turnover Rate. 33.20% 30.59% 135.36% 73.95% 208.05% 265.87%
</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 return for periods less than one year is not
annualized.
(b) Annualized.
* Based on average shares outstanding.
See Notes to Financial Statements
- -------------------------------------------------------------------------------
Notes To Financial Statements (Unaudited)
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 Bond Fund (the "Fund"), a non-
diversified series of the Trust, in the preparation of its financial
statements. The policies are in conformity with generally accepted accounting
principles. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that effect the reported amounts in the financial statements.
Actual results could differ from those estimates.
A. Security Valuation--Securities traded on national exchanges or 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 period. 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 foreign
currency contracts are valued at the spot currency rate plus an amount
("points") which reflects the differences in interest rates between the U.S.
and the foreign markets. Securities for which quotations are not available are
stated at fair value as determined by the Board of Trustees.
B. Federal Income Taxes--It is 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 foreign 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 results 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. Dividend and Distributions--Dividend income and distributions to
shareholders are recorded on the ex-dividend date. Income distributions and
capital gain distributions are determined in accordance with income tax
regulations which may differ from such amounts reported in accordance with
generally accepted accounting principles.
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 for
investment management and advisory services. The fee is based on an annual
rate of 1% on the first $500 million of average daily net assets, .90 of 1% on
the next $250 million and .70 of 1% on the
<PAGE>
Worldwide Bond Fund
- -------------------------------------------------------------------------------
excess over $750 million. Certain of the officers and trustees of the Trust
are officers, directors or stockholders of the adviser and Van Eck Securities
Corporation. In accordance with the advisory agreement, the Fund paid the
Adviser for costs incurred in connection with certain administrative
functions.
Note 3--Purchases and proceeds from sales of securities, other than short-term
obligations, aggregated $34,722,514 and $47,931,509, respectively, for the six
months ended June 30, 1999. For federal income tax purposes, the identified
cost of investments owned at June 30, 1999 was $95,557,189. At June 30, 1999,
net unrealized depreciation for federal income tax purposes aggregated
$1,479,274, of which $1,790,930 related to appreciated securities and
$3,270,204 related to depreciated securities.
Note 4--Forward Foreign Currency Contracts-The Fund may buy and sell forward
foreign currency contracts to settle purchases and sales of foreign
denominated securities. In addition, the Fund may enter into forward foreign
currency contracts to hedge foreign denominated assets. Realized gains and
losses from forward foreign currency contracts are included in realized gain
(loss) from foreign currency transactions. At June 30, 1999, the Fund had the
following outstanding forward foreign currency contracts:
<TABLE>
<CAPTION>
Value At Unrealized
Settlement Current Appreciation
Contracts Date Value (Depreciation)
--------- ---------- ---------- --------------
<C> <S> <C> <C> <C>
Forward Foreign Currency Buy Contracts:
CAD 1,100,000 expiring 9/15/99 $ 753,941 $ 751,354 $ (2,587)
EUR 7,300,000 expiring 9/15/99 7,655,679 7,592,200 (63,479)
Forward Foreign Currency Sell Contract:
EUR 5,000,000 expiring 9/15/99 5,264,550 5,200,137 64,413
--------
$ (1,653)
========
</TABLE>
The Fund may incur additional risk from investments in forward foreign
currency contracts if the counterparty is unable to fulfill its obligation or
there are unanticipated movements of the foreign currency relative to the U.S.
dollar.
Note 5--Option Contracts--The Fund may invest, for hedging and other purposes,
in call and put options on securities, currencies and commodities. Call and
put options give the Fund the right but not the obligation to buy (calls) or
sell (puts) the instrument underlying the option at a specified price. The
premium paid on the option, should it be exercised, will, on a call, increase
the cost of the instrument acquired and, on a put, reduce the proceeds
received from the sale of the instrument underlying the option. If the options
are not exercised, the premium paid will be recorded as a capital loss upon
expiration. The Fund may incur additional risk to the extent the value of the
underlying instrument does not correlate with the movement of the option
value.
The Fund may also write call or put options. As the writer of an option, the
Fund receives a premium. The Fund keeps the premium whether or not the option
is exercised. The premium will be recorded, upon expiration of the option, as
a short-term capital gain. If the option is exercised, the Fund must sell, in
the case of a written call, or buy, in the case of a written put, the
underlying instrument at the exercise price. The Fund may write only covered
puts and calls. A covered call option is an option in which the Fund owns the
instrument underlying the call. A covered call sold by the Fund exposes it
during the term of the option to possible loss of opportunity to realize
appreciation in the market price of the underlying instrument or to possible
continued holding of an underlying instrument which might otherwise have been
sold to protect against a decline in the market price of the underlying
instrument. A covered put exposes the Fund during the term of the option to a
decline in price of the underlying instrument. 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. The Fund
may incur additional risk from investments in written currency options if
there are unanticipated movements in the underlying currencies.
Note 6--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. Foreign
investments may also be subject to foreign taxes and settlement delays. Since
the Fund may have significant investments in foreign debt securities it may be
subject to greater credit and interest risks and greater currency fluctuations
than portfolios with significant investments in domestic debt securities.
Note 7--Trustee Deferred Compensation Plan--The Trust established a Deferred
Compensation Plan (the "Plan") for Trustees. Commencing January 1, 1996, the
Trustees can elect to defer receipt of their Trustee fees until retirement,
disability or termination from the board. The Fund's contributions to the Plan
are limited to the amount of fees earned by the participating Trustees. The
fees otherwise payable to the participating Trustees are invested in shares of
the Van Eck Funds as directed by the Trustees. The Plan has been approved by
the Internal Revenue Service.
The Fund has elected to show the deferred liability net of the asset for
financial statement purposes.
As of June 30,1999, the total value of the assets and corresponding liability
of the Fund's portion of the Plan is $41,952.
Note 8--Change of Independent Accountant--During the fiscal period the Board
of Trustees of the Fund approved a change of the Fund's independent
accountants to Ernst & Young LLP.
<PAGE>
[LOGO] Van Eck Global
Investment Adviser: Van Eck Associates Corporation
Distributor: Van Eck Securities Corporation
99 Park Avenue, New York, NY 10016 www.vaneck.com
This report must be accompanied or preceded by a prospectus, which includes more
complete information, such as charges and expenses and the risks associated with
international investing, including currency fluctuation or controls,
expropriation, nationalization and confiscatory taxation. Please read the
prospectus carefully before investing.
