<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PRE-EFFECTIVE AMENDMENT NO.
_____
POST-EFFECTIVE AMENDMENT NO. 1 X
_____
VAN ECK/CHUBB FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
99 Park Avenue, 8th Floor, New York, New York 10016
(Address of Principal Executive Offices)
212-687-5200
(Area Code and Telephone Number)
Thaddeus Leszczynski, Esq.
Van Eck Associates Corporation
99 Park Avenue, 8th Floor, New York, New York 10016
(Name and Address of Agent for Service)
Copy to: Philip H. Newman, Esq., Goodwin Procter & Hoar, LLP
Exchange Place, Boston, Massachusetts 02109
__________________________________________________________________
No filing fee is required because the Registrant has heretofore declared
its intention to register an indefinite number of shares of beneficial interest,
$.01 par value, of the Van Eck/Chubb Global Income Fund series, pursuant to Rule
24f-2.
<PAGE>
VAN ECK/CHUBB FUNDS, INC.
Cross-Reference Sheet
Pursuant to Rule 481(a) under the Securities Act of 1933
Form N-14 Item No. Location in Proxy Statement/Prospectus
- ----------------- --------------------------------------
PART A
1. Cover Page of Registration Statement; Prospectus Cover
Page
2. Table of Contents
3. Synopsis; Special Considerations and Risk Factors
4. Synopsis, The Reorganization
5. Prospectus Cover Page; Synopsis; and Additional
Information*
6. Prospectus Cover Page; Synopsis; Additional Information*
7. Notice of Special Meeting; Introduction; Synopsis; The
Reorganization; Van Eck/Chubb Global Income Fund; Global
Income Fund; Information Concerning Special Meeting;
Additional Information
8. Not Applicable
9. Not Applicable
PART B
10. Cover Page of Statement of Additional Information
11. Table of Contents
12. General Information*
13. General Information*
14. Financial Statement
- -------------
* Reference is also made to the sections of the Registrant's currently effective
Registration Statement on Form N-1A, as amended, required by these Items to
the Form N-14.
<PAGE>
LOGO VAN ECK GLOBAL
March 20, 1998
Dear Van Eck Global Income Fund Shareholder:
At this time, we are asking our shareholders to consider voting for the
reorganization of the Van Eck Global Income Fund by means of a tax-free
reorganization into the Van Eck/Chubb Global Income Fund, which we believe to
be in shareholders' best interests. The reorganization is being proposed in
part because both the Van Eck and Van Eck/Chubb Global Income Funds are
marketed through the same distribution channels. Having two affiliated global
income funds with substantially similar investment objectives and policies
diffuses the distribution effort and confuses financial advisors and the
investing public. In addition, by combining the two Funds the expenses on a
per share basis will likely decrease to some extent for shareholders of the
Fund.
Attached are the Notice and Proxy Statement/Prospectus for a Special Meeting
of Shareholders of Global Income Fund to be held on Thursday, April 16, 1998
for the purpose of considering the proposed Agreement and Plan of
Reorganization and Liquidation.
PLEASE READ THE PROXY STATEMENT/PROSPECTUS CAREFULLY--IT DISCUSSES THE
PROPOSAL AS WELL AS THE REASONS WHY THE BOARD OF TRUSTEES RECOMMENDS THAT YOU
VOTE FOR THE PROPOSAL.
Please take a moment now to sign and return the proxy card in the enclosed
postage-paid envelope. Your prompt attention in this matter benefits all
shareholders. Thank you.
Sincerely,
/s/ John C. van Eck
John C. van Eck
President
Van Eck Global, 99 Park Avenue, New York, NY 10016 tel. 212.687.5200 or
800.826.2333 fax 212.687.5248
<PAGE>
VAN ECK FUNDS
GLOBAL INCOME FUND
99 Park Avenue, New York, New York 10016
(212) 687-5200 . 1-800-826-2333
----------------------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
APRIL 16, 1998
----------------------------------------
A SPECIAL MEETING OF SHAREHOLDERS OF GLOBAL INCOME FUND (THE "FUND" or "GIF"),
A SERIES OF VAN ECK FUNDS (THE "TRUST"), will be held at 99 Park Avenue, 8th
Floor, New York, New York, on Thursday, April 16, 1998 at 3:00 p.m., New York
Time, for the following purposes:
(1) To consider approval of the Agreement and Plan of Reorganization and
Liquidation involving the exchange of substantially all of the Fund's
assets for shares of Van Eck/Chubb Global Income Fund, a series of Van
Eck/Chubb Funds, Inc., the assumption of the liabilities of the Fund by
Van Eck/Chubb Global Income Fund, the distribution of Van Eck/Chubb
Global Income Fund shares to the Fund's shareholders and the
liquidation of the Fund; and
(2) To act upon such other matters as may properly come before the meeting
or any adjournment or adjournments thereof.
Shareholders of record at the close of business on February, 13, 1998 are
entitled to notice of, and to vote at, the meeting or any adjournment thereof.
By order of the Board of Trustees
/s/ Thaddeus M. Leszczynski
Thaddeus M. Leszczynski
Secretary
March 20, 1998
----------------------------------------
YOUR VOTE IS IMPORTANT!
----------------------------------------
WHETHER YOU EXPECT TO ATTEND THE MEETING OR NOT, PLEASE COMPLETE,
DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY.
<PAGE>
INVESTORS ARE ADVISED TO READ AND RETAIN THIS PROXY STATEMENT/PROSPECTUS FOR
FUTURE REFERENCE.
---------------------------
VAN ECK FUNDS
99 Park Avenue, New York, New York 10016
(212) 687-5200 . 1-800-826-2333
---------------------------
PROXY STATEMENT/PROSPECTUS
---------------------------
Van Eck/Chubb Funds, Inc. has filed a Registration Statement with the
Securities and Exchange Commission (the "SEC") for the registration of the
shares of Van Eck/Chubb Global Income Fund ("VE/CGIF"), a series of Van
Eck/Chubb Funds, Inc., to be offered to the shareholders of Global Income Fund
(the "Fund" or "GIF"), a series of Van Eck Funds (the "Trust"), pursuant to an
Agreement and Plan of Reorganization and Liquidation of the Trust and Van
Eck/Chubb Funds, Inc. involving the exchange of GIF's assets for shares of
VE/CGIF, the assumption of the liabilities of GIF by VE/CGIF, the distribution
of VE/CGIF shares to GIF's shareholders and the subsequent liquidation of GIF
(the "Reorganization").
VE/CGIF is a series of Van Eck/Chubb Funds, Inc., an open-end investment
company, whose objective is to seek high current income and capital
appreciation by investing primarily in debt securities of domestic and foreign
issuers. VE/CGIF attempts to achieve its investment objective by investing its
assets primarily in debt securities of domestic and foreign issuers. There can
be no guarantee that VE/CGIF will achieve its investment objective.
The Prospectus and Statement of Additional Information for VE/CGIF dated May
1, 1997 and the Prospectus and Statement of Additional Information for GIF
dated April 30, 1997 are incorporated by reference into this Proxy
Statement/Prospectus.
A Statement of Additional Information relating to the Reorganization (the
"Reorganization Statement of Additional Information") dated March 20, 1998,
which follows this Proxy Statement/Prospectus, is incorporated by reference
into this Proxy Statement/Prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED ON THE
ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
This Proxy Statement/Prospectus is dated March 20, 1998
<PAGE>
TABLE OF CONTENTS PAGE
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Introduction................................................................ 1
Synopsis.................................................................... 2
The Reorganization......................................................... 2
Investment Objectives and Policies......................................... 2
Reasons for the Transaction................................................ 4
Investment Advisory and Administrative Fees................................ 4
Other Fees and Benefits.................................................... 5
Purchase Procedures/Sales Charges.......................................... 6
Exchange Privileges........................................................ 6
Redemption Procedures...................................................... 7
Dividends and Distributions................................................ 7
Net Asset Value............................................................ 7
Tax Consequences........................................................... 7
Special Considerations and Risk Factors..................................... 8
The Reorganization.......................................................... 9
Procedures................................................................. 9
Terms of the Agreement and Plan of Reorganization and Liquidation.......... 9
Benefits to GIF as a Result of the Reorganization.......................... 10
Tax Consequences of the Reorganization..................................... 10
Capitalization............................................................. 11
Management................................................................. 11
Shares of VE/CGIF to be Issued in the Reorganization and Shares of GIF..... 12
Other Matters.............................................................. 13
Information Concerning the Meeting.......................................... 13
Date, Time and Place of Meeting............................................ 13
Solicitation, Revocation and Use of Proxies................................ 13
Record Date and Outstanding Shares......................................... 13
Security Ownership of Certain Beneficial Owners and Management............. 14
Voting Rights and Required Vote............................................ 14
Additional Information...................................................... 14
Agreement and Plan of Reorganization and Liquidation........................ A-1
</TABLE>
<PAGE>
VAN ECK FUNDS
GLOBAL INCOME FUND
99 Park Avenue, 8th Floor, New York, New York 10016
(212) 687-5200 . 1-800-826-2333
---------------------------------------
PROXY STATEMENT/PROSPECTUS
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON THURSDAY, APRIL 16, 1998
99 PARK AVENUE, 8TH FLOOR, NEW YORK, NEW YORK 10016
---------------------------------------
INTRODUCTION
This proxy statement is furnished to the shareholders of Global Income Fund
(the "Fund" or "GIF") in connection with the solicitation by the Board of
Trustees of Van Eck Funds, of which GIF is a series, of proxies to be used at
a special meeting of shareholders of GIF to be held on April 16, 1998 at 3:00
p.m., New York Time, or any adjournments thereof (the "Meeting"), to approve
or disapprove an Agreement and Plan of Reorganization and Liquidation (the
"Plan") which contemplates the exchange of assets from GIF for shares of Van
Eck/Chubb Global Income Fund ("VE/CGIF") (the "Reorganization Shares"), the
assumption of certain liabilities of GIF by VE/CGIF, the distribution of such
Reorganization Shares to the shareholders of GIF and the subsequent
liquidation of GIF, as set forth in the Plan (the "Reorganization"). As of
February 13, 1998, the record date, there were outstanding 4,728,230.866
shares of GIF and 5,420,275.922 shares of VE/CGIF. Each shareholder of GIF
will be entitled to one vote for each share and a fractional vote for each
fractional share held on the record date. It is expected that the mailing of
this proxy statement will commence on or about March 26, 1998. VE/CGIF and GIF
each may be referred to herein individually as a "Fund" and collectively as
the "Funds."
The enclosed form of proxy, if properly executed and returned, will be voted
in accordance with the choice specified thereon. The proxy will be voted in
favor of the proposal unless a choice is indicated to vote against the
proposal. Proxies properly executed and returned, but which fail to specify
how the shares are to be voted, will be voted FOR the proposal.
The proxy may be revoked at any time prior to the voting thereof by executing
a superseding proxy, by giving written notice to the secretary of the Trust at
the address listed on the first page of this Proxy Statement/Prospectus or by
voting in person at the Meeting.
In the event there are not sufficient votes to approve the proposal at the
time of the Meeting, the Meeting may be adjourned in order to permit further
solicitations of proxies by GIF. If GIF proposes to adjourn the Meeting by a
vote of the shareholders, the persons named in the enclosed proxy card will
vote all shares for which they have voting authority in favor of such
adjournment.
To the knowledge of GIF, as of February 13, 1998, no shareholder owned of
record or beneficially 5% or more of the outstanding shares of that Fund.
In addition, as of January 2, 1998, all Trustees and officers of the Trust as
a group owned less than 1% of GIF and less than 1% of VE/CGIF. Van Eck
Associates Corporation (the "Adviser") owned .03% of GIF's shares, as of that
date.
To the knowledge of VE/CGIF, as of December 31, 1997, no shareholder owned of
record or beneficially 5% or more of the outstanding shares of that Fund,
except as follows:
1
<PAGE>
VE/CGIF
<TABLE>
<S> <C>
Federal Insurance Company 4,114,837.615 shares
Attn: Michael O'Reilly or 76.14%
15 Mountain View Road
Warren, NJ 07059
Chubb Corporation 733,489.798 shares
Attn: Investment Department or 13.57%
15 Mountain View Road
Warren, NJ 07059
Vigilant Insurance Company 458,191.441 shares
Attn: Investment Department or 8.48%
c/o Chubb and Son, Inc.
15 Mountain View Road
Warren, NJ 07059
</TABLE>
Legal and printing expenses and expenses of holding the Meeting (such as proxy
tabulation and the expense of a solicitor, if any) will be borne by Van Eck
Associates Corporation and Chubb Asset Managers, Inc., for which each shall be
jointly and severally liable. Any registration fee payable to the Securities
and Exchange Commission in connection with the registration of shares under
the Securities Act of 1933 or any filing or notification fee payable to the
Commission or state securities commission, in connection with the transactions
contemplated by the Plan, shall be payable by the Fund required to pay such
fee. All fees payable by any party as described herein are payable regardless
of whether the transactions contemplated by the Plan are consummated. In
addition to the solicitation of proxies by mail, proxies may be solicited by
officers and/or employees of the Trust, the Adviser, DST Systems, Inc., GIF's
Transfer Agent and Dividend Paying Agent (the "Transfer Agent" or "DST"),
and/or Shareholder Communications Corporation, a proxy solicitation firm,
personally or by telephone, telegraph, facsimile or other means. Brokerage
houses, banks and other fiduciaries will be requested to forward soliciting
material to the beneficial owners of the shares of the Fund and to obtain
authorization for the execution of proxies.
See also "Information Concerning the Meeting" below.
SYNOPSIS
The following is a synopsis of the information contained in or incorporated by
reference in this Proxy Statement/Prospectus regarding the Reorganization, and
presents key considerations for shareholders of GIF to assist them in
determining whether to approve the Reorganization. See also "Special
Considerations and Risk Factors" below.
The Reorganization
The Trustees of the Trust, of which GIF is a series, have determined that the
Reorganization (as described herein) is in the best interests of the
shareholders of GIF and have given their approval to the transactions
contemplated in the Plan associated with the Reorganization. The result of the
Reorganization, if it is consummated, will be the exchange of assets from GIF
for Reorganization Shares, the assumption of the liabilities of GIF by
VE/CGIF, the distribution of such Reorganization Shares to the shareholders of
GIF and the subsequent liquidation of GIF. For more information, see "The
Reorganization" below.
Investment Objectives and Policies
Summary Comparison between GIF and VE/CGIF. Although GIF and VE/CGIF differ in
some respects, they have many similarities in their investment objectives,
policies and portfolios.
Both VE/CGIF and GIF are non-diversified, as such term is defined in the
Investment Company Act of 1940, as amended (the "1940 Act"). The investment
objectives of VE/CGIF and GIF are substantially the same. Except as stated
below, the Funds'
2
<PAGE>
investment policies and restrictions are also substantially similar. One
difference is that VE/CGIF must invest at least 65% of its assets in bonds and
debentures, rather than all types of debt instruments meeting its investment
objective. Another difference is that VE/CGIF may borrow only 5% of assets for
temporary emergency or extraordinary purposes, while GIF may borrow up to 30%
of its assets for investment purposes. Further, VE/CGIF may concentrate its
investments in a single industry and make short sales against the box, which
GIF cannot.
GIF. GIF is a non-diversified series of the Trust. Van Eck Associates
Corporation acts as investment adviser to GIF. This Fund seeks high total
return through a flexible policy of investing globally, primarily in debt
securities. Under normal market conditions, the Fund invests at least 65% of
its total assets in debt securities. Such securities include obligations
issued or guaranteed by a government or any of its political subdivisions,
agencies or instrumentalities or by a supranational organization such as the
World Bank or European Economic Community, bonds, debentures, notes,
commercial paper, 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 conversion privilege or attached warrants. The long-term assets of
the Fund consists of debt securities rated B or better by Standard & Poor's
Corporation ("S&P") or Moody's Investors Services Inc. ("Moody's"), or if
unrated, of comparable quality in the judgment of the Adviser. Debt securities
rated BBB (investment grade), BB or B will not exceed 25% of total net assets.
Debt rated BB or B is lower quality debt (commonly referred to as "junk
bonds"). Lower rated debt may offer higher returns, but also presents a
greater risk of default than do higher rated securities. As to debt securities
rated BBB, BB or B, it is the Adviser's current intention to invest only in
debt issued by a government or one of its agencies, instrumentalities,
political subdivisions or authorities.
There is no limit on the amount the Fund may invest in any one country or in
securities denominated in the currency of any country. Normally, the Fund will
invest in at least three countries besides the United States. GIF may invest
in debt instruments having varied maturities, although the Adviser expects the
average maturity to be between three and ten years.
The Fund may invest 5% of its assets in options on equity securities and up to
5% of its net assets in warrants, including options and warrants traded in
over-the-counter markets. Not more than 2% may be invested in warrants that
are not listed on the New York Stock Exchange or American Stock Exchange. The
Fund may invest up to 5% of its assets at the time of purchase in preferred
stocks and preferred stocks which may be convertible into common stock. The
Fund may buy and sell financial futures contracts and options on financial
futures contracts and may purchase or sell puts and calls on foreign
currencies and securities. The Fund may invest in "when-issued" securities,
"partly paid" securities (securities paid for over a period of time) and
securities of foreign issuers. In addition, the Fund may lend its portfolio
securities and borrow money for investment purposes (i.e., leverage its
portfolio).
When the Adviser determines that a temporary defensive strategy is warranted,
the Fund may invest in securities maturing in 13 months or less, and most or
all of its investments may be in the United States or another country.
VE/CGIF. VE/CGIF is a non-diversified series of Van Eck/Chubb Funds, Inc.
Chubb Asset Managers, Inc. acts as investment adviser to VE/CGIF. The Fund
seeks high current income and capital appreciation by investing primarily in
debt securities of domestic and foreign issuers. VE/CGIF invests at least 65%
of its assets in bonds and debentures. Such securities include securities
issued by domestic and foreign governments and their agencies and political
subdivisions, corporations and financial institutions, and supranational
entities, such as the International Bank for Reconstruction and Development
("World Bank"), the Asian Development Bank, the European Development Bank and
the European Community. No more than 25% of the Fund's total assets may be
invested in debt that is rated lower than investment grade (junk bonds).
The Fund will allocate its assets among debt securities of issuers in three
separate investment areas: (1) the United States, (2) developed foreign
countries, and (3) emerging markets. Under normal conditions, the Fund will
invest at least 65% of its total assets in at least three different countries
(one of which may be the United States). The average maturity of debt
securities in VE/CGIF's portfolio will fluctuate depending on the investment
adviser's judgment as to future interest rates and market conditions.
VE/CGIF may also buy and sell derivatives such as financial futures contracts,
bond index futures contracts and foreign currency futures contracts. In
addition, VE/CGIF may invest in options on foreign currency exchange
contracts, options on foreign currencies, including cross currency hedges,
"when issued" securities and collaterized mortgage obligations and lend up to
30% of its portfolio securities.
3
<PAGE>
For temporary defensive purposes, the Fund may invest in high quality domestic
money market instruments, high quality domestic short term debt securities or
may hold the Fund's assets in cash or cash equivalents without limitation.
Reasons for the Transaction
On October 1, 1997, the Adviser became the investment administrator of Van
Eck/Chubb Funds, Inc. (formerly Chubb Investment Funds, Inc.), and Van Eck
Securities Corporation (the "Distributor") began serving as distributor of the
shares of the Van Eck/Chubb Funds, including VE/CGIF. The Distributor also
serves as distributor of the Van Eck Funds, including GIF. Both the Van Eck
Funds and the Van Eck/Chubb Funds are marketed through the same distribution
channels. Therefore, there is an overlap between the two Funds. Having two
affiliated global income funds with substantially similar investment
objectives and policies will diffuse the distribution effort and confuse
financial advisors and the investing public. In addition, the performance of
VE/CGIF is comparable to that of GIF and expenses based on a percentage of net
assets should come down to some extent as a result of an increased asset base.
The Board of Trustees determined that participation in the Reorganization, as
described herein, is in the best interests of GIF and that the interests of
existing GIF shareholders will not be diluted as a result of such
participation. The Board also considered a number of factors and alternatives
in addition to the ones stated in the preceding paragraph. The Trustees
determined that the Reorganization provided greater benefits to shareholders
than other options, such as the liquidation of GIF. Liquidating GIF would have
required most shareholders to recognize either gains or losses in the current
tax year when many shareholders might have preferred to defer such gains or
losses. An exchange into VE/CGIF would force the shareholder to recognize a
gain or loss for tax purposes, whereas the Reorganization will achieve the
same result, but on a tax-free basis. The redemption procedure and exchange
privilege, which are described below, allow any shareholder not desiring to
participate in the Reorganization to achieve the same results as liquidation
of GIF. The Board also considered the compatibility of the Funds' investment
objectives, policies, restrictions and portfolios; any factors which might
require an adjustment to the exchange price or formula, such as costs or tax
and other benefits to be derived by the Funds; tax consequences of the
Reorganization; relative benefits to be derived by the Adviser, Chubb Asset
Managers, Inc. and/or their affiliates or other persons; and other factors.
Investment Advisory and Administrative Fees
Van Eck Associates Corporation acts as the investment adviser to GIF. Total
aggregate assets under management of the Adviser on December 31, 1997 were
approximately $1.1 billion. The Adviser also acts as investment adviser or
sub-investment adviser to other mutual funds registered with the Securities
and Exchange Commission under the 1940 Act and manages or advises managers of
portfolios of pension plans and others. John C. van Eck, Chairman and
President of Van Eck Funds and Van Eck Worldwide Insurance Trust and a
Director of Van Eck/Chubb Funds, Inc., together with members of his immediate
family, own 100% of the voting stock of the Adviser.
Chubb Asset Managers Inc. acts as the investment adviser to VE/CGIF. Total
aggregate assets under management of Chubb Asset Managers Inc. on March 20,
1998 were approximately $300 million.
Van Eck Associates Corporation also acts as investment administrator to
VE/CGIF. For the three years beginning October 1, 1997 or until assets in all
of the Van Eck/Chubb Funds reach $500 million, whichever occurs first, Van Eck
Associates Corporation will receive the advisory as well as the administrative
fees paid by VE/CGIF.
GIF pays investment advisory fees according to the following schedule (1):
<TABLE>
<CAPTION>
NET ASSETS ADVISORY FEE
- ---------- ------------
<S> <C>
$0-$500 million.................................................... 0.75 of 1%
Next $250 million.................................................. 0.65 of 1%
Over $750 million.................................................. 0.50 of 1%
</TABLE>
4
<PAGE>
VE/CGIF pays investment advisory fees and investment administrative fees
according to the following schedule (1):
<TABLE>
<CAPTION>
NET ASSETS ADVISORY FEE ADMINISTRATIVE FEE TOTAL FEES
- ---------- ------------ ------------------ ----------
<S> <C> <C> <C>
$0- $200 million..................... .20% .45% .65%
Next $1.1 billion.................... .19% .41% .60%
Over $1.3 billion.................... .18% .37% .55%
</TABLE>
- --------
(1) The advisory and administrative fees are payable monthly, computed at the
indicated average daily net assets.
Other Fees and Benefits
VE/CGIF has adopted a Plan of Distribution pursuant to Rule 12b-1 under the
1940 Act. Pursuant to this Plan, VE/CGIF pays a 12b-1 fee to the Distributor
or securities dealers and others at an annual rate of .50% of its average
daily net assets or actual distribution expenses, whichever is less. Of that
amount, the Board of Directors of Van Eck/Chubb Funds, Inc. has determined
that the maximum payable under the Plan should be allocated so that 0.25% per
annum will be used to finance sales or promotional activities and 0.25% per
annum will be paid to securities dealers and others as a service fee. No
service fee is paid to a dealer unless the dealer has sold shares of the Van
Eck/Chubb Funds (excluding the Money Market Fund) in excess of $1 million. For
the fiscal year ended December 31, 1997, the then-distributor of VE/CGIF's
shares, Chubb Securities Corporation, and the Distributor waived payment of
distribution fees in excess of .25% of average daily net assets. No decision
has been made as to the amount of any future expense waiver. The Plan does not
provide for the carry-forward of reimbursable or payable amounts under the
Plan to subsequent years. The Plan of Distribution in effect for VE/CGIF is
described in more detail in the Prospectus for VE/CGIF under "Distribution
Plan."
GIF has also adopted a Plan of Distribution pursuant to which GIF pays a 12b-1
fee at an annual rate of .25% of average daily net assets, all or some of
which is used for payments to agents or brokers who service shareholder
accounts of GIF and the remainder of which is used for other actual
promotional and distribution expenses incurred by the Distributor. Any Rule
12b-1 Plan fee accrued by GIF in excess of payments to brokers and agents and
reimbursement to the Distributor for its actual expenses will be retained by
GIF. The Plan does not provide for the payment of interest as a distribution
expense or for the carry-forward of reimbursable or payable amounts under the
Plan to subsequent years.
Neither Fund will recognize any gain or loss on the transaction. VE/CGIF will
have the same basis and holding period in the assets received as GIF. As of
December 31, 1997, GIF had capital loss carryforwards available to offset
future capital gains of $4,212,408 expiring December 31, 2002 and December 31,
2004, in the amounts of $2,731,357 and $1,481,051, respectively. Under the
Internal Revenue Code, the utilization of these losses in future years may be
limited.
VE/CGIF's total operating expenses for the year ended December 31, 1997 were
1.35% of average daily net assets, net of fees and expenses subsidized by the
Adviser, Chubb Asset Managers, Inc. and/or their affiliates. Had certain fees
and expenses for VE/CGIF not been waived and assumed, VE/CGIF's expenses for
the year would have been 1.56%. Certain fees and expenses are being waived or
assumed to the extent they exceed 1.25% of average daily net assets until
April 30, 1998. No decision has been made as to the amount of any future
expense waivers. GIF's total operating expenses for the year ended December
31, 1997 were 1.66%.
The following table provides a comparison of the transaction and operating
expenses paid by VE/CGIF and GIF. It is intended to assist an investor in
understanding the various direct and indirect costs and expenses borne by an
investor in the Funds. The sales charges are the maximum sales charges an
investor would incur. Sales charges decline depending on the amount of the
purchase, the number of shares an investor already owns or use of various
investment programs. See "Purchase of Shares" in the Prospectuses. The
investment adviser, the administrator and/or the Distributor of each Fund may
from time to time waive fees and/or reimburse certain expenses of either Fund.
5
<PAGE>
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<CAPTION>
VE/CGIF
POST-
VE/CGIF* GIF MERGER
-------- ----- -------
<S> <C> <C> <C>
Maximum Sales Charge Imposed on Purchases (as a percent
of offering price).................................... 3.00% 4.75% 4.75%
<CAPTION>
VE/CGIF
ANNUAL FUND OPERATING EXPENSES POST-
(AS A PERCENTAGE OF AVERAGE NET ASSETS) VE/CGIF GIF MERGER
- --------------------------------------- -------- ----- -------
<S> <C> <C> <C>
Management Fee......................................... .20% .75% .20%
12b-1 Fee/Shareholder Servicing Fee**.................. .50% .25% .50%
Other Expenses......................................... .65% .66% .65%
----- ----- -----
Total Fund Operating Expenses.......................... 1.56%*** 1.66% 1.44%
===== ===== =====
</TABLE>
- --------
* Effective April 6, 1998, VE/CGIF's maximum sales charge will be 4.75%.
** Long-term shareholders in the Funds may pay more than the economic
equivalent of the maximum front-end sales charge permitted by the NASD.
The shareholder servicing fee will not exceed .25%.
*** Affiliates voluntarily assumed or waived .21% in expenses and fees during
1997, so that VE/CGIF's net expenses for the year were 1.35%. No decision
has been made as to the amount of any expense waiver beyond April 30,
1998.
Example: You would bear the following expenses on a $1,000 investment,
including maximum sales load, assuming (1) 5% annual return and (2)
redemption at the end of each time period.
<TABLE>
<CAPTION>
VE/CGIF
POST-
VE/CGIF GIF MERGER
------- ---- -------
<S> <C> <C> <C>
1 Year..................................................... $ 43 $ 63 $ 43
3 Years.................................................... $ 71 $ 97 $ 71
5 Years.................................................... $102 $133 $102
10 Years................................................... $188 $234 $188
</TABLE>
This table should not be considered a representation of past or future
expenses which may be more or less than those shown. The assumed 5% annual
return is hypothetical and should not be considered a representation of past
or future annual return. Actual return may be greater or less than the assumed
amount.
Purchase Procedures/Sales Charges
After the Reorganization, shareholders of GIF will be shareholders of VE/CGIF,
and therefore subsequent purchases of shares of VE/CGIF will be subject to the
applicable initial sales charge as described in "Synopsis-Shareholder
Transaction Expenses" above.
Exchange Privileges
Shareholders of VE/CGIF (except for those with fiduciary retirement plan
accounts, who must effect a "transfer of assets" to the Van Eck Funds' plan
custodian) may exchange shares into U.S. Government Money Fund and into Class
A shares of a Van Eck Fund at net asset value. Shareholders of VE/CGIF may
also exchange shares into any of the other Van Eck/Chubb Funds at net asset
value.
Shareholders of GIF (except for those with Investors Fiduciary Trust Company
fiduciary retirement plan accounts, who must effect a "transfer of assets" to
the Van Eck/Chubb Funds' plan custodian) may exchange into a Van Eck/Chubb
Fund at net asset value. Shareholders of GIF may also exchange shares, at net
asset value, for shares of U.S. Government Money Fund and for Class A shares
of the other Van Eck Funds.
6
<PAGE>
Shareholders of most of the Van Eck Funds are generally limited to six
exchanges per calendar year. Each Fund reserves the right to terminate, modify
or impose a fee in connection with the exchange privilege as described in more
detail in their Prospectuses and Statements of Additional Information under
"Exchange Privilege."
Exchanges out of GIF will be accepted up to the business day prior to the
Exchange Date, as defined in "The Reorganization."
Redemption Procedures
Shares of GIF may be redeemed at any time. Shares may be redeemed by writing
to DST Systems, Inc., P.O. Box 418407, Kansas City, Missouri 64141, the Fund's
transfer agent, through the shareholder's broker or agent (although they may
charge a fee for their services) or, if the shareholder has so elected, by
contacting DST by telephone. See also "Redemption of Shares" in the GIF
Prospectus for more information.
Shares of VE/CGIF may be redeemed at any time. Shares may be redeemed by
forwarding a written request to the Fund's transfer agent. Prior to April 6,
1998, write to Firstar Trust Company, Mutual Fund Services, Third Floor, P.O.
Box 701, Milwaukee, WI 53201-0701 or by overnight courier write to Van
Eck/Chubb Global Income Fund, c/o Firstar Trust Company, 615 East Michigan
Street, Milwaukee, WI 53202-5207. Beginning April 6, 1998, write to DST
Systems, Inc. at the address above. See also "Redemption or Repurchase" in the
VE/CGIF Prospectus for more information.
Redemptions of GIF shares will be accepted up to the business day prior to the
Exchange Date.
Dividends and Distributions
If the Reorganization is approved by shareholders, GIF intends to declare any
applicable dividends and distributions prior to the Exchange Date. VE/CGIF
generally declares and distributes dividends from ordinary income on a monthly
basis and distributes net capital gains if any, annually. GIF generally
declares and pays dividends monthly and any net realized capital gains
resulting from investment activity annually.
Net Asset Value
The net asset value of VE/CGIF and GIF is determined at the close of business
on each day the New York Stock Exchange is open for trading. Each Fund
computes net asset value by dividing the value of its securities, plus cash
and other assets (including interest and dividends accrued but not yet
received), less all liabilities (including accrued expenses), by the number of
shares outstanding. Expenses, including fees paid to the investment adviser
and/or administrator, are accrued daily for the Funds.
Tax Consequences
Prior to or upon the closing of the Reorganization, counsel to GIF and
VE/CGIF, Goodwin, Procter & Hoar LLP, must opine substantially to the effect
that, subject to the customary assumptions and representations, on the basis
of the existing provisions of the Internal Revenue Code of 1986 as amended
(the "Code"), the Treasury regulations promulgated thereunder and current
administrative and judicial interpretations thereof, for Federal income tax
purposes: (i) the transfer of all or substantially all of the assets of GIF to
VE/CGIF solely in exchange for VE/CGIF shares and the assumption by VE/CGIF of
some of GIF's liabilities and the distribution of such shares to the
shareholders of GIF, as provided in the Plan, will constitute a reorganization
within the meaning of Section 368(a)(1)(C) of the Code, and VE/CGIF and GIF
will each be a "party to a reorganization" within the meaning of Section
368(b); (ii) GIF will not recognize a gain or loss on the transfer of its
assets to VE/CGIF in the Reorganization; (iii) GIF will not recognize a gain
or loss upon its distribution to its shareholders of the VE/CGIF shares
received in the Reorganization; (iv) VE/CGIF will not recognize a gain or loss
upon the receipt of the assets of GIF in exchange for the VE/CGIF shares; (v)
shareholders of GIF will not recognize a gain or loss on the exchange of
shares of GIF for shares of VE/CGIF provided that such shareholders receive
solely VE/CGIF shares (including fractional shares) in exchange for their GIF
shares; (vi) the tax basis of the GIF assets acquired by VE/CGIF will be the
same to VE/CGIF as the tax basis of such assets to GIF immediately prior to
the Reorganization and the holding period of the assets of GIF in the hands of
VE/CGIF will include the period during which those assets were held by GIF;
(vii) the aggregate tax basis of the VE/CGIF shares received by the
shareholders of GIF will be the same as the aggregate tax basis of GIF shares
exchanged by such shareholder immediately prior to the Reorganization; and
7
<PAGE>
(viii) the holding period of the VE/CGIF shares (including fractional shares)
received by shareholders of GIF will include the holding period that the GIF
shares exchanged were held (provided that the GIF shares exchanged were held
as a capital asset on the date of the Reorganization). For a discussion of
additional tax considerations, see "The Reorganization--Tax Consequences of
the Reorganization" below.
As a condition to closing, counsel to GIF and VE/CGIF must opine in part to
the effect that, subject to customary assumptions and representations, upon
consummation of the Reorganization and the transfer of substantially all of
the assets of GIF to VE/CGIF, neither the Trust, Van Eck/Chubb Funds, Inc. nor
any Fund shareholder will recognize a gain or loss in the exchange of their
shares.
SPECIAL CONSIDERATIONS AND RISK FACTORS
Except as stated herein, the Funds' investment objectives, policies and
restrictions are substantially similar, and therefore the related special
considerations and risk factors are substantially similar. One difference is
that VE/CGIF must invest at least 65% of its assets in bonds and debentures,
rather than all types of debt instruments meeting its investment objective.
Another difference is that VE/CGIF may borrow only 5% of assets and not for
investment purposes. Further, VE/CGIF may concentrate its investments in a
single industry and make short sales against the box, which GIF cannot.
VE/CGIF may concentrate (i.e., invest more than 25% of its assets) in a single
industry. Because of this, together with the fact that both VE/CGIF and GIF
are non-diversified funds (i.e., the Funds are not limited in how much they
can invest in a single issuer), the value of the shares of VE/CGIF may be more
susceptible to any single economic, political or regulatory event than would
the shares of a diversified fund or a fund that is not permitted to
concentrate.
A short sale occurs when VE/CGIF sells a security which it does not own by
borrowing from a broker. In the event that the value of the security
increases, the Fund will suffer a loss as it will have to repurchase the
security at the higher price. Short sales also may incur higher transaction
costs than regular transactions.
Since both VE/CGIF and GIF invest extensively in debt securities, any risks
inherent in such investments are applicable to both Funds. The market value of
debt securities generally varies in direct response to changes in interest
rates and the financial condition of the issuer. During periods of declining
interest rates, the value of debt securities generally increases. Conversely,
during periods of rising interest rates, the value of such securities
generally declines. Debt securities with similar maturities may have different
yields, depending upon several factors, including the relative financial
condition of the issuers. Both Funds may invest in high yield or "junk" bonds
and in bonds of issuers in emerging market countries. Such low rated and
unrated securities and investments in emerging market debt securities
generally involve greater volatility of price and risk of principal and
income, including the possibility of default by, or bankruptcy of, the issuers
of the securities. The existence of limited markets for particular low rated
or emerging market securities may reduce liquidity and may also make it more
difficult for a Fund to obtain accurate market quotations for the purpose of
valuing the Fund's portfolio.
VE/CGIF and GIF both invest in securities issued by foreign issuers. As a
result, each Fund may from time to time hold foreign currencies, and
therefore, the value of the assets of each Fund (and thus their net asset
values) may be affected by changes in currency exchange rates. To the extent
such currencies are held by a Fund, such Fund's performance will be less
favorable if foreign currency exchange rates move adversely relative to the
U.S. dollar. Investments in foreign securities may involve a greater degree of
risk than investments in domestic securities due to the possibility of
exchange controls, less publicly available information, and the possibility of
expropriation, confiscatory taxation or political, economic or social
instability. In addition, some foreign companies are not generally subject to
the same uniform accounting, auditing and financial reporting standards as are
American companies, and there may be less government supervision and
regulation of foreign stock exchanges, brokers and companies. Foreign
securities may also be subject to foreign taxes, higher custodian fees and
dividend collection fees which could reduce the yield on such securities.
For investment purposes, both VE/CGIF and GIF may enter into currency,
options, futures and other derivatives transactions. Among the risks of
effecting transactions in derivatives for investment purposes are market risk,
in that the Fund has market exposure to instruments it would otherwise not be
permitted to invest in (excessive exposure to low credits), and settlement
(both legal and operation) risk with the various counterparties. The use of
derivatives is a highly specialized activity which
8
<PAGE>
involves investment techniques and risks different from those associated with
ordinary portfolio transactions. If the investment adviser is incorrect in its
forecasts about market values and currency exchange rates, the investment
performance of a Fund would be less favorable than it would have been if this
investment technique were not used. In addition, transactions costs may be
greater.
While it is the policy of GIF and VE/CGIF generally not to engage in trading
for short-term gains, both GIF and VE/CGIF may effect portfolio transactions
without regard to the holding period if, in the judgment of the investment
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. This may lead to a higher
portfolio turnover ratio. The annual portfolio turnover rate for GIF for the
fiscal year ended December 31, 1996 was 157.5% while VE/CGIF's portfolio
turnover rate for the same period was 80.7%. The portfolio turnover rate for
GIF for the year ended December 31, 1997 was 129.8% while VE/CGIF's portfolio
rate for the same period was 185.9%. The portfolio turnover rate of the Funds
may vary greatly from year to year. The higher a Fund's portfolio turnover
rate the higher a Fund's overall expenses may be, due to certain transactional
costs incurred as a result of effecting a securities trade (such as brokerage
commissions) and/or possible tax consequences.
See "Risk Factors" in the GIF Prospectus and "Investment Objectives and
Policies" in the GIF Statement of Additional Information and "Additional Risk
Factors" in the VE/CGIF Prospectus and "Description of Certain Investments" in
the VE/CGIF Statement of Additional Information for a more detailed discussion
of the risks involved with each Fund's investment practices and strategies.
THE REORGANIZATION
Procedures
Management is hereby soliciting shareholders of GIF to vote for the approval
of the Reorganization. It is anticipated that the Meeting will be held on
April 16, 1998 at 99 Park Avenue, 8th Floor, New York, New York at 3:00 p.m.,
New York Time. If GIF's shareholders approve the Reorganization, the
Reorganization will take place on or about April 24, 1998.
Terms of the Agreement and Plan of Reorganization and Liquidation
The following is a summary of the significant terms of the Plan which has been
considered and approved by the Trustees of the Trust at a meeting held on
December 10, 1997 and by the Directors of Van Eck/Chubb Funds, Inc. at a
meeting held on December 9, 1997. A copy of the Plan is attached to this Proxy
Statement/Prospectus as Exhibit A. This summary is qualified in its entirety
by reference to the Plan.
Valuation of Assets and Liabilities. The assets of VE/CGIF and GIF will be
valued on the business day prior to the date on which the Reorganization will
take place (the "Exchange Date"). The assets in each portfolio will be valued
according to the procedures set forth under "Determination of Net Asset Value"
in VE/CGIF's Prospectus and Statement of Additional Information and "Purchase
of Shares" in GIF's Prospectus and "Valuation of Shares" in GIF's Statement of
Additional Information (a summary of that method appears above under
"Synopsis--Net Asset Value"). Redemption requests for GIF which have not been
settled as of the Exchange Date will be treated as liabilities for purposes of
the Reorganization. Exchange requests as to GIF shares received on the
Exchange Date will be treated and processed as exchanges from VE/CGIF and will
be effected as of the close of business on the Exchange Date.
Distribution of Shares and Transfer of Assets. On the Exchange Date, VE/CGIF
will issue to GIF a number of Class A shares, the aggregate net asset value of
which will equal the aggregate net asset value of the assets transferred to
VE/CGIF by GIF on the Exchange Date. Each shareholder of GIF will receive a
number of Class A shares of VE/CGIF having an aggregate net asset value equal
to the value of his or her shares of GIF. No sales charge or fee of any kind
will be charged to the shareholders of GIF in connection with their receipt of
Class A shares of VE/CGIF in the Reorganization.
Expenses. Legal and printing expenses and expenses of holding the Meeting
(such as proxy tabulation and the expense of a solicitor, if any) will be
borne by Van Eck Associates Corporation and Chubb Asset Managers, Inc., for
which each shall be jointly and severally liable. Any registration fee payable
to the Securities and Exchange Commission in connection with the registration
of shares under the Securities Act of 1933 or any filing or notification fee
payable to the Commission or state
9
<PAGE>
securities commission, in connection with the transactions contemplated by the
Plan, shall be payable by the Fund required to pay such fee. All fees payable
by any party as described herein are payable regardless of whether the
transactions contemplated by the Plan are consummated.
Required Approvals. Approval of the Plan requires approval of a majority of
GIF's outstanding voting shares, as defined in the 1940 Act. Such majority is
defined as the lesser of (i) 67% or more of the outstanding shares present at
the meeting, provided the holders of 50% or more of the outstanding shares are
present in person or by proxy, or (ii) more than 50% of the outstanding
shares.
Amendments and Conditions. The Plan may be amended at any time prior to the
Exchange Date with respect to any of the terms therein except that following
the meeting of the shareholders of GIF, no such amendment may have the effect
of changing the provisions of the Plan determining the number of VE/CGIF
shares to be issued to GIF shareholders to their detriment without their
further approval. The obligations of VE/CGIF and GIF are subject to various
conditions, including a registration statement on Form N-14 being declared
effective by the Securities and Exchange Commission, approval of the
Reorganization by the shareholders of GIF, receipt of a tax opinion from
Goodwin, Procter & Hoar LLP and the continuing accuracy of various
representations and warranties of VE/CGIF and GIF being confirmed by the
respective parties.
BENEFITS TO GIF AS A RESULT OF THE REORGANIZATION
1. GIF and VE/CGIF are affiliated funds, marketed through the same
distribution channels. Having two affiliated global income funds with
substantially similar investment objectives and policies will diffuse the
distribution effort and confuse financial advisors and the investing
public. Performance of VE/CGIF is comparable to that of GIF. By combining
the Funds, expenses based on a percentage of net assets are likely to
decrease as a result of an increased asset base.
2. The Reorganization allows shareholders of GIF to defer recognition of gains
or losses on their shares until they choose to recognize them. As more
fully explained in "The Reorganization--Tax Consequences of the
Reorganization" below, as of the Exchange Date, GIF will obtain an opinion
from Fund counsel that the Reorganization has been structured to be
consummated, for Federal income tax purposes, on a tax-free basis. Thus, a
shareholder of GIF will be able to defer the recognition of any gains or
losses on his or her shares of GIF until shares of VE/CGIF received
pursuant to the Reorganization are exchanged or sold. If GIF were
liquidated rather than reorganized, a shareholder would have no choice but
to recognize any gains or losses in the current tax year.
Tax Consequences of the Reorganization
The Reorganization has been structured with the intention that it will qualify
for Federal income tax purposes as a tax-free reorganization under Section
368(a)(1)(C) of the Code. VE/CGIF and GIF have both elected to qualify as a
regulated investment company under the Code, and VE/CGIF intends to continue
to elect to so qualify. Upon the closing of the Reorganization, counsel to GIF
and VE/CGIF, Goodwin, Procter & Hoar LLP, must opine substantially to the
effect that, subject to the customary assumptions and representations, on the
basis of the existing provisions of the Code, the Treasury regulations
promulgated thereunder and current administrative and judicial interpretations
thereof, for Federal income tax purposes: (i) the transfer of all or
substantially all of the assets of GIF to VE/CGIF solely in exchange for
VE/CGIF shares and the assumption by VE/CGIF of some of GIF's liabilities and
the distribution of such shares to the shareholders of GIF, as provided in the
Plan, will constitute a "reorganization" within the meaning of Section
368(a)(1)(C) of the Code, and VE/CGIF and GIF will each be a "party to a
reorganization" within the meaning of Section 368(b); (ii) GIF will not
recognize a gain or loss on the transfer of its assets to VE/CGIF in the
Reorganization; (iii) GIF will not recognize a gain or loss upon its
distribution to its shareholders of the VE/CGIF shares received in the
Reorganization; (iv) VE/CGIF will not recognize a gain or loss upon the
receipt of the assets of GIF in exchange for the VE/CGIF shares; (v)
shareholders of GIF will not recognize a gain or loss on the exchange of
shares of GIF for shares of VE/CGIF provided that such shareholders receive
solely VE/CGIF shares (including fractional shares) in exchange for their GIF
shares; (vi) the tax basis of the GIF assets acquired by VE/CGIF will be the
same to VE/CGIF as the tax basis of such assets to GIF immediately prior to
the Reorganization and the holding period of the assets of GIF in the hands of
VE/CGIF will include the period during which those assets were held by GIF;
(vii) the aggregate tax basis of the VE/CGIF shares received by the
shareholders of GIF will be the same as the aggregate tax basis of GIF shares
exchanged by such shareholder immediately prior to the Reorganization; and
(viii) the holding period of the VE/CGIF shares (including fractional shares)
received by
10
<PAGE>
shareholders of GIF will include the holding period that the GIF shares
exchanged were held (provided that the GIF shares exchanged were held as a
capital asset on the date of the Reorganization). The receipt of such opinions
upon the closing of the transaction is a condition to the closing of the
Reorganization. If the transfer of assets of GIF in exchange for VE/CGIF
shares and the assumption by VE/CGIF of the liabilities of GIF were deemed not
to constitute a tax-free reorganization, each GIF shareholder would recognize
gain or loss equal to the difference between the value of the VE/CGIF shares
such shareholder acquires and the tax basis of such shareholder's GIF shares.
As a condition to closing, counsel to GIF and VE/CGIF must opine in part to
the effect that, subject to customary assumptions and representations, upon
consummation of the Reorganization and the transfer of substantially all of
the assets of GIF to VE/CGIF, neither the Trust, Van Eck/Chubb Funds, Inc. nor
any Fund shareholder will recognize a gain or loss in the exchange of their
shares.
Shareholders should consult their tax advisors regarding the effect, if any,
of the Reorganization in light of their individual circumstances. Since the
foregoing relates only to Federal income tax consequences, shareholders should
also consult with their tax advisors as to the foreign, state and local tax
consequences, if any, of the Reorganization.
Capitalization
The following table sets forth, as of December 31, 1997, the capitalization of
VE/CGIF and GIF (Class A shares).
CAPITALIZATION
<TABLE>
<CAPTION>
PRO FORMA
REORGANIZATION
VE/CGIF GIF VE/CGIF
----------- ----------- --------------
<S> <C> <C> <C>
Total Net Assets......................... $52,087,567 $41,924,752 $94,012,319
Shares Outstanding....................... 5,404,248 4,936,240 9,753,289
----------- ----------- -----------
Net Asset Value Per Share................ $ 9.64 $ 8.49 $ 9.64
</TABLE>
Management
Directors/Trustees. The management of the business and affairs of GIF is the
responsibility of the Board of Trustees of Van Eck Funds. The Board of
Trustees of Van Eck Funds (of which GIF is a series) consists of nine persons,
five of whom are not "interested persons" as defined in the 1940 Act. The
management of the business and affairs of VE/CGIF is the responsibility of the
Board of Directors of Van Eck/Chubb Funds, Inc. The Board of Directors of Van
Eck/Chubb Funds, Inc. (of which VE/CGIF is a series) consists of five persons,
three of whom are not "interested persons" as defined in the 1940 Act.
Investment Adviser and Administrator. Van Eck Associates Corporation, 99 Park
Avenue, New York, New York 10016, serves as the investment adviser and manager
to GIF. Chubb Asset Managers, Inc., 15 Mountain View Road, Warren, New Jersey
07061, serves as the investment adviser to VE/CGIF and Van Eck Associates
Corporation serves as investment administrator to the Fund.
Under the Investment Advisory Agreement applicable to GIF, the Adviser
provides GIF with a continuous investment program which includes determining
which securities should be bought, sold or held. The Adviser also manages the
business and affairs of GIF. Pursuant to the Investment Management Agreement
for VE/CGIF, Chubb Asset Managers, Inc. is responsible for the investment of
VE/CGIF's portfolio, consistent with the Fund's investment objective, policies
and restrictions. The Adviser also manages the business and affairs of
VE/CGIF.
GIF and VE/CGIF pay advisory fees at the rates indicated under "Synopsis-
Investment Advisory Fees" above. VE/CGIF pays a separate fee for
administrative services. For additional information, see "Management" in the
GIF Prospectus, "Management of the Company" and "Management Fees and Expenses"
in the VE/CGIF Prospectus, "Investment Advisory Services" in the GIF Statement
of Additional Information and "Investment Advisory and Other Services" in the
VE/CGIF Statement of Additional Information.
Portfolio Managers. Messrs. Charles Cameron and Gregory Krenzer are Co-
Portfolio Managers of GIF. Mr. Cameron, who has been with the Adviser since
1995, is also Chief Trader for the Adviser and an officer of the Trust and
another mutual fund
11
<PAGE>
advised by the Adviser. Mr. Krenzer, who has been with the Adviser since 1994,
is also the portfolio manager of the U.S. Government Money Fund series of the
Trust and a global fixed income analyst for the Adviser. Both Messrs. Cameron
and Krenzer also serve as co-portfolio managers of another global income fund
advised by the Adviser. The Portfolio Managers of VE/CGIF are: Marjorie
Raines, who serves as Senior Vice-President of Chubb Asset Managers Inc. and
has been employed by Chubb Asset Managers, Inc. since before 1987; Roger
Brookhouse, who as Senior Vice-President of Chubb Asset Managers Inc., has
been with Chubb Asset Managers since 1995, and who is also President and Chief
Investment Officer of Chubb Investment Services Limited since 1993; and Emma
Fishwick, employed by Chubb Asset Managers and a Director of Chubb Investment
Services Limited since 1997.
Transfer Agent. The Transfer Agent and Dividend Paying Agent for GIF is DST
Systems, Inc., P.O. Box 418407, Kansas City, Missouri 64141. The Transfer
Agent and Dividend Paying Agent for VE/CGIF until April 6, 1998 is Firstar
Trust Company, Mutual Fund Service, Third Floor, P.O. Box 701, Milwaukee, WI
53201-0701. Thereafter, DST Systems Inc. will assume that function.
Shares of VE/CGIF to be Issued in the Reorganization and Shares of GIF
Shares. On the Exchange Date, all shareholders of GIF will be given a number
of Class A shares of common stock, par value $.01, of VE/CGIF having an
aggregate net asset value equal to the net asset value of his or her shares of
GIF. The shares of VE/CGIF to be issued in the Reorganization will be
identical in all material respects to all Class A shares of VE/CGIF then
outstanding.
Voting Rights. Shareholders of VE/CGIF and GIF are entitled to one vote for
each share and a fractional vote for each fractional share held with respect
to the election of Directors/Trustees (to the extent hereafter provided) and
other matters submitted to a vote of shareholders. With respect to the Rule
12b-1 Plans in effect for VE/CGIF and GIF, the Plans may not be amended to
increase materially the amount of expenditures unless such amendment is
approved by a vote of the majority of the outstanding voting securities of
that Fund. Thus, there will ordinarily be no shareholder meeting unless
required by the 1940 Act. The Boards of Van Eck/Chubb Funds, Inc. and the
Trust are self-perpetuating bodies until fewer than 50% of their members were
elected by the shareholders. Under the Trust's Amended and Restated Master
Trust Agreement, any Trustee may be removed by a vote of two-thirds of the
outstanding Trust shares (outstanding Trust shares include shares of all
series of the Trust and not solely shares of GIF); 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. Under the Bylaws of Van Eck/Chubb Funds, Inc., any Director may be
removed by a vote of a majority of the votes entitled to be cast for the
election of Directors at any meeting of stockholders duly called and at which
a quorum is present. Subject to contrary provision in Maryland law, holders of
ten percent or more of the outstanding shares of Van Eck/Chubb Funds, Inc. can
require Directors to call a meeting of shareholders for purposes of voting on
the removal of one or more Directors. With respect to each of GIF and VE/CGIF,
each issued and outstanding share is entitled to participate equally in
dividends and distributions declared by such Fund and, upon liquidation or
dissolution, in the net assets of such Fund remaining after satisfaction of
outstanding liabilities.
Shareholder Liability. Under Massachusetts law, the shareholders of the Trust
could, under certain circumstances, be held personally liable for the
obligations of the Trust. However, the Amended and Restated Master Trust
Agreement of the Trust disclaims shareholder liability for acts or obligations
of the Trust and requires that notice of such disclaimer be given in each
agreement, obligation or instrument entered into or executed by the Trust or
the Trustees. The Amended and Restated Master Trust Agreement provides for
indemnification out of the Trust's property for all losses and expenses of any
shareholder held personally liable for the obligations of the Trust. Thus, the
risk of a shareholder incurring financial loss on account of shareholder
liability is limited to circumstances in which the Trust itself would be
unable to meet its obligations. The Adviser believes that, in view of the
above, the risk of personal liability to shareholders is remote.
Control. As of February 13, 1998, there were no persons who exercised
"control" over GIF as "control" is defined in the 1940 Act. As of December 31,
1997, Federal Insurance Company, 15 Mountain View Road, Warren, NJ 07059, an
affiliate of Chubb Asset Managers Inc., exercised "control" over VE/CGIF as
"control" is defined in the 1940 Act.
Other Classes. As of the date hereof, neither GIF nor VE/CGIF has any classes
of securities outstanding as defined in the 1940 Act other than the shares
described herein.
Shareholder Inquiries. Shareholder inquiries with respect to VE/CGIF or GIF
should be addressed to the Funds by telephone at (800) 826-2333 or in writing
at the address set forth on the first page of the Proxy Statement/Prospectus.
12
<PAGE>
Dividends and Distributions. Any dividends and capital gains paid by GIF may
be received by the shareholder in cash or may be reinvested in that Fund at
the net asset value (without imposition of a sales charge) on the day so
determined by the Board of Trustees. In addition, dividends and capital gains
paid in cash may also be reinvested in Class A shares of any other series of
Van Eck Funds. Any dividends and capital gains paid by VE/CGIF will be
automatically reinvested in additional shares of the Fund at the Fund's net
asset value at the close of business on the payment date of the dividend or
distribution unless the shareholder elects to receive all dividends and/or
distributions either in cash or to invest them, without imposition of any
sales charge, in any other Van Eck/Chubb Fund at such fund's net asset value
at the close of business on the payment date.
Tax Consequences. For a discussion of the tax consequences associated with an
investment in GIF, see "Taxes" in Van Eck Funds' Statement of Additional
Information and see "Taxes and Dividends" in the Van Eck/Chubb Funds, Inc.
Statement of Additional Information. Shareholders are urged to consult their
tax advisors regarding specific questions as to Federal, foreign, state and
local taxes.
Purchase of Shares. Both prior to and subsequent to the Reorganization, shares
of VE/CGIF and GIF will be offered continuously for sale by the Distributor or
by brokers and agents that have entered into selling group or selling agency
agreements with the Distributor, 99 Park Avenue, New York, New York 10016. The
Reorganization will have no effect on the purchase procedures for shares of
VE/CGIF or GIF. See "Purchase of Shares" in the Prospectuses. For more
information on the Distributor, see "The Distributor" in the Statement of
Additional Information for Van Eck Funds.
VE/CGIF and GIF have adopted Rule 12b-1 Plans in accordance with the 1940 Act.
The Rule 12b-1 Plans are described in "Synopsis-Other Fees" above. Each Rule
12b-1 Plan must be approved annually by the Board of Directors/Trustees. For
more discussion of the Rule 12b-1 Plans, see "Plan of Distribution" in the GIF
Prospectus and "Distribution Plan" in the VE/CGIF Prospectus.
Redemption Procedures. While shares of each Fund will be redeemed on the day
on which proper instructions are received by its transfer agent, redemption
procedures for VE/CGIF are not identical to those for GIF. See "Redemption of
Shares" in the Van Eck Funds' Prospectuses and "Redemption or Repurchase" in
the VE/CGIF Prospectus.
Other Matters
It is not anticipated that any matters other than the adoption of the Plan
described above will be brought before the Meeting. If, however, any other
business is properly brought before the Meeting, proxies will be voted in
accordance with the judgment of the persons designated on such proxies.
INFORMATION CONCERNING THE MEETING
Date, Time and Place of Meeting
The Meeting for shareholders of GIF will be held on April 16, 1998 at 99 Park
Avenue, 8th Floor, New York, New York 10016 at 3:00 p.m., New York Time.
Solicitation, Revocation and Use of Proxies
A shareholder executing and returning a proxy has the power to revoke it at
any time prior to its exercise by executing a superseding proxy or by
submitting a notice of revocation to the Secretary of the Trust at 99 Park
Avenue, 8th Floor, New York, New York 10016. Although mere attendance at the
Meeting will not revoke a proxy, a shareholder present at the Meeting may
withdraw his or her proxy and vote in person.
All shares represented by properly executed proxies, unless such proxies have
previously been revoked, will be voted at the Meeting in accordance with the
directions on the proxies; if no direction is indicated, the shares will be
voted "FOR" the approval of the Plan and any other proposals.
Record Date and Outstanding Shares
Only holders of record of GIF's shares of beneficial interest, par value $.001
per share, at the close of business on February 13, 1998 (the "Record Date")
are entitled to vote at the Meeting and any adjournment thereof. At the close
of business on the Record Date, there were 4,728,230.866 shares of GIF
outstanding and entitled to vote.
13
<PAGE>
Security Ownership of Certain Beneficial Owners and Management
No person or entity owns beneficially 5% or more of the shares of GIF or
VE/CGIF except as stated in "Introduction" above.
Voting Rights and Required Vote
Voting procedures are described under "The Reorganization-Terms of the
Agreement and Plan of Reorganization" above.
A proxy that is properly executed by a client and returned to his or her
broker, which holds GIF shares for the client in its own name, and that is
accompanied by the client's instructions to withhold authority to vote with
respect to the reorganization proposal, represents a broker "non-vote" (that
is, a proxy from a broker or nominee indicating that such person has not
received instructions from the beneficial owner or other person entitled to
vote shares on the particular matter with respect to which the broker or
nominee does not have discretionary power). The shares represented thereby
will be considered not to be present at the Special Meeting for purposes of
determining the existence of a quorum for the transaction of business for that
proposal and will be deemed not cast with respect to such proposal. A properly
executed and returned proxy marked with an abstention will be considered
present at the Meeting for purposes of determining the existence of a quorum
for the transaction of business. However, abstentions and broker "non-votes"
do not constitute a vote "for" or "against" the matter, and, therefore, have
the effect of a negative vote on matters which require approval by a requisite
percentage of the outstanding shares.
In the event a quorum is not present at the Meeting or in the event that a
quorum is present but sufficient votes to approve the Plan are not received,
the persons named as proxies may propose one or more adjournments of such
Meeting to permit further solicitation of proxies. Any such adjournment will
require the affirmative vote of a majority of those shares voted at the
Meeting in person or by proxy. The persons named as proxies will vote those
proxies that they are entitled to vote in such manner as they determine to be
in the best interest of shareholders with respect to any proposal to adjourn
the Meeting. A shareholder vote may be taken on the Reorganization prior to
such adjournment if sufficient votes have been received for approval.
Under Massachusetts law, shareholders of a registered investment company are
not entitled to demand fair value of the shares and will be bound by the terms
of the Reorganization if the Plan is approved at the Meeting. Any shareholder
in GIF may, however, either redeem his or her shares at net asset value or
exchange his or her shares into another Van Eck Fund or a Van Eck/Chubb Fund
prior to the date of the Reorganization.
ADDITIONAL INFORMATION
This Proxy Statement/Prospectus and the related Statement of Additional
Information do not include all the information set forth in the registration
statements and exhibits relating thereto which Van Eck Funds and Van Eck/Chubb
Funds, Inc., respectively, have filed with the Securities and Exchange
Commission, Washington, DC 20549, under the Securities Act of 1933 and the
Investment Company Act of 1940, to which reference is hereby made.
Reports, proxy statements, registration statements and other information filed
by Van Eck Funds and Van Eck/Chubb Funds, Inc., can be inspected and copied at
the public reference facilities of the Securities and Exchange Commission in
Washington, DC and Regional Offices of the Commission located at 7 World Trade
Center, New York, New York 10048 and Suite 1400, 500 West Madison Street,
Chicago, Illinois 60621. Copies of such material can also be obtained by mail
from the Public Reference Branch, Office of Consumer Affairs and Information
Services, Securities and Exchange Commission, 450 Fifth Street, N.W.,
Washington, DC 20549 and its public reference facilities in New York, New York
and Chicago, Illinois, at prescribed rates.
14
<PAGE>
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION AND LIQUIDATION
AGREEMENT AND PLAN OF REORGANIZATION AND LIQUIDATION dated as of December 10,
1997 (the "Plan") by and between Van Eck Funds, a Massachusetts business trust
(the "Trust"), on behalf of Global Income Fund ("Global Income Fund"), a
series of the Trust, and Van Eck/Chubb Funds, Inc., a Maryland corporation
(the "Corporation"), on behalf of Van Eck/Chubb Global Income Fund, a series
of the Corporation. Global Income Fund and Van Eck/Chubb Global Income Fund
are collectively referred to as the "Funds" and individually as a "Fund".
WITNESSETH:
WHEREAS, the Trust and the Corporation are each an open-end management
investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act");
WHEREAS, this Plan is intended to be and is adopted as a plan of
reorganization and liquidation within the meaning of Section 368(a)(1)(C) of
the Internal Revenue Code of 1986, as amended, such reorganization to consist
of the transfer of all of the assets of Global Income Fund in exchange solely
for Class A shares of common stock, par value $0.01 per share, of Van
Eck/Chubb Global Income Fund ("Van Eck/Chubb Global Income Fund Shares") and
the assumption by Van Eck/Chubb Global Income Fund of all of the stated
liabilities of Global Income Fund and the distribution, after the Closing
hereinafter referred to, of Van Eck/Chubb Global Income Fund Shares to the
shareholders of Global Income Fund in liquidation of Global Income Fund, all
upon the terms and conditions hereinafter set forth in this Plan; and
WHEREAS, the Trustees of the Trust, including a majority of the Trustees who
are not interested persons, and the Directors of the Corporation, including a
majority of the Directors who are not interested persons, have determined with
regard to its constituent Fund that participating in the transactions
contemplated by this Plan is in the best interests of that Fund.
NOW, THEREFORE, the Trust and the Corporation hereby agree as follows:
1. Transfer of Assets. Subject to the terms and conditions set forth herein,
at the closing provided for in Section 5 (herein referred to as the
"Closing"), the Trust shall transfer all of the assets of Global Income Fund,
and assign all Assumed Liabilities (as hereinafter defined), to Van Eck/Chubb
Global Income Fund, and the Company, on behalf of Van Eck/Chubb Global Income
Fund, shall acquire all such assets, and shall assume all such Assumed
Liabilities, upon delivery to the Trust of Van Eck/Chubb Global Income Fund
Shares having a net asset value equal to the value of the net assets of Global
Income Fund transferred (the "New Shares"). "Assumed Liabilities" shall mean
all liabilities, expenses, costs, charges and reserves reflected in an
unaudited statement of assets and liabilities of Global Income Fund as of the
close of business on the Valuation Date (as hereinafter defined), determined
in accordance with generally accepted accounting principles consistently
applied from the prior audited period. The net asset value of the New Shares
and the value of the net assets of Global Income Fund to be transferred shall
be determined as of the close of regular trading on the New York Stock
Exchange on the business day next preceding the Closing (the "Valuation Date")
using the valuation procedures set forth in the then-current prospectus and
statement of additional information of Van Eck/Chubb Global Income Fund.
All Assumed Liabilities of Global Income Fund, to the extent that they exist
at or after the Closing, shall after the Closing attach to Van Eck/Chubb
Global Income Fund and may be enforced against Van Eck/Chubb Global Income
Fund to the same extent as if the same had been incurred by Van Eck/Chubb
Global Income Fund.
2. Liquidation of Global Income Fund. At or as soon as practicable after the
Closing, Global Income Fund will be liquidated and the New Shares delivered to
the Trust on behalf of Global Income Fund will be distributed to shareholders
of Global Income Fund, each shareholder to receive the number of New Shares
equal to the pro rata portion of shares of beneficial interest of Global
Income Fund held by such shareholder as of the close of business on the
Valuation Date. Such liquidation and distribution will be accompanied by the
establishment of an open account on the stock records of Van Eck/Chubb Global
Income Fund in the name of each shareholder of Global Income Fund and
representing the respective pro rata number of New Shares due such
shareholder. As soon as practicable after the Closing, the Trust shall file on
behalf of Global Income Fund such instruments of
A-1
<PAGE>
dissolution, if any, as are necessary to effect the dissolution of Global
Income Fund and shall take all other steps necessary to complete liquidation
and dissolution of Global Income Fund. As of the Closing, each outstanding
certificate which, prior to the Closing, represented shares of Global Income
Fund will be deemed for all purposes to evidence ownership of the number of
Van Eck/Chubb Global Income Fund Shares issuable with respect thereto pursuant
to the Reorganization. After the Closing, certificates of originally
represented shares of Global Income Fund will be rendered nonnegotiable; upon
special request and surrender of such certificates to the Corporation's
transfer agent, holders of these non-negotiatble certificates shall be
entitled to receive certificates representing the number of Van Eck/Chubb
Global Income Fund shares issuable with respect thereto.
3. Representations and Warranties.
(a) The Trust, on behalf of Global Income Fund, hereby represents and
warrants to the Corporation on behalf of Van Eck/Chubb Global Income
Fund as follows:
(i) the Trust is duly organized, validly existing and in good standing
under the laws of the Commonwealth of Massachusetts and has full
power and authority to conduct its business as presently conducted;
(ii) the Trust has full power and authority to execute, deliver and
carry out the terms of this Plan on behalf of Global Income Fund;
(iii) the execution and delivery of this Plan on behalf of the Global
Income Fund and the consummation of the transactions contemplated
hereby are duly authorized and no other proceedings on the part
of the Trust or the shareholders of the Global Income Fund (other
than as contemplated in Section 4(i)) are necessary to authorize
this Plan and the transactions contemplated hereby;
(iv) this plan has been duly executed by the Trust on behalf of Global
Income Fund and constitutes its valid and binding obligations,
enforceable in accordance with its terms, subject to applicable
bankruptcy, reorganization, insolvency, moratorium and other
rights affecting creditors' rights generally, and general
equitable principles;
(v) neither the execution and delivery of this Plan by the Trust on
behalf of Global Income Fund, nor the consummation by the Trust on
behalf of Global Income Fund of the transactions contemplated
hereby will conflict with, or result in a breach of or default
under, the Amended and Restated Master Trust Agreement (the "Master
Trust Agreement") or By-Laws of the Trust, as each may be amended,
or any statute, regulation, order, judgment or decree, or any
instrument, contract or other plan to which the Trust is a party or
by which the Trust or any of its assets is subject or bound; and
(vi) no authorization, consent or approval of any governmental or other
public body or authority or any other party is necessary for the
execution an delivery of this Plan by the Trust on behalf of
Global Income Fund or the consummation of any transactions
contemplated hereby by the Trust, other than as shall be obtained
at or prior to the Closing.
(b) The Corporation, on behalf of Van Eck/Chubb Global Income Fund, hereby
represents and warrants to the Trust on behalf of Global Income Fund as
follows:
(i) the Corporation is duly organized, validly existing and in good
standing under the laws of the State of Maryland and has full power
and authority to conduct its business as presently conducted;
(ii) the Corporation has full power and authority to execute, deliver
and carry out the terms of this Plan on behalf of Van Eck/Chubb
Global Income Fund;
(iii) the execution and delivery of this Plan on behalf of Van
Eck/Chubb Global Income Fund and the consummation of the
transactions contemplated hereby are duly authorized and no other
proceedings on the part of the Corporation or the shareholders of
Van Eck/Chubb Global Income Fund are necessary to authorize this
Plan and the transactions contemplated hereby;
(iv) this Plan has been duly executed by the Corporation on behalf of
Van Eck/Chubb Global Income Fund and constitutes its valid and
binding obligation, enforceable in accordance with its terms,
subject to applicable bankruptcy, reorganization, insolvency,
moratorium and other rights affecting creditors' rights generally,
and general equitable principles;
A-2
<PAGE>
(v) neither the execution and delivery of this Plan by the Corporation
on behalf of Van Eck/Chubb Global Income Fund, nor the consummation
by the Corporation on behalf of Van Eck/Chubb Global Income Fund of
the transaction contemplated hereby will conflict with, or result
in a breach of or default under, the Articles of Amendment and
Restatement or By-Laws of the Corporation, as each may be amended,
or any statute, regulation, order, judgment or decree, or any
instrument, contract or other plan to which the Corporation is a
party or by which the Corporation or any of its assets is subject
or bound; and
(vi) no authorization, consent or approval of any governmental or other
public body or authority or any other party is necessary for the
execution and delivery of this Plan by the Corporation on behalf
of Van Eck/Chubb Global Income Fund or the consummation of any
transactions contemplated hereby by the Corporation, other than as
shall be obtained at or prior to the Closing.
4. Conditions Precedent. The obligations of the Trust and/or the Corporation,
as the case may be, to effectuate the Plan of Reorganization and Liquidation
hereunder shall be subject to the satisfaction of the following conditions:
(a) At or immediately prior to the Closing, the Trust shall have declared
and paid a dividend or dividends which, together with all previous such
dividends, shall have the effect of distributing to the shareholders of
Global Income Fund all of the Fund's investment company taxable income,
if any, for taxable years ending at or prior to the Closing (computed
without regard to any deduction for dividends paid) and all of its net
capital gain, if any, realized in taxable years ending at or prior to
the Closing (after reduction for any capital loss carry-forward);
(b) Such authority and orders from the Securities and Exchange Commission
(the "Commission") and state securities commissions as may be necessary
to permit the Trust and the Corporation to carry out the transactions
contemplated by this Plan shall have been received;
(c) A registration statement of the Corporation on Form N-14 under the
Securities Act of 1933, as amended (the "Securities Act"), registering
the New Shares under the Securities Act, and such amendment or
amendments thereto as are determined by the officers of the Corporation
to be necessary or appropriate to effect such registration of the New
Shares (the "Registration Statement"), shall have been filed with the
Commission and the Registration Statement shall have become effective,
and no stop-order suspending the effectiveness of such Registration
Statement shall have been issued, and no proceeding for that purpose
shall have been initiated or threatened by the Commission (and not
withdrawn or terminated);
(d) All necessary actions shall have been taken in order to enable Van
Eck/Chubb Global Income Fund to offer the New Shares to the public in
all states in which the ability to offer such New Shares is required
for consummation of the transactions contemplated hereunder;
(e) All representations and warranties of the Trust on behalf of Global
Income Fund contained in this Plan shall be true and correct in all
material respects as of the date hereof and as of the Closing, with the
same force and effect as if then made, and the Corporation on behalf of
Van Eck/Chubb Global Income Fund shall have received a certificate of
an officer of the Trust acting on behalf of Global Income Fund to that
effect in form and substance reasonably satisfactory to the Corporation
on behalf of Van Eck/Chubb Global Income Fund;
(f) All representations and warranties of the Corporation on behalf of Van
Eck/Chubb Global Income contained in this Plan shall be true and
correct in all material respects as of the date hereof and as of the
Closing, with the same force and effect as if then made, and the Trust
on behalf of Global Income Fund shall have received a certificate of an
officer of the Corporation acting on behalf of Van Eck/Chubb Global
Income Fund to that effect in form and substance reasonably
satisfactory to the Trust on behalf of Global Income Fund;
(g) The Trust and the Corporation shall have received a legal opinion from
counsel, in form and substance reasonably satisfactory to the Trustees
of the Trust and the Directors of the Corporation, as to the tax
consequences of the reorganization;
(h) The Corporation on behalf of Van Eck/Chubb Global Income Fund shall
have certain agreed upon procedures performed by independent auditors,
selected by the Corporation, on the unaudited statement of assets and
liabilities described in Section 1 of this Plan, and shall have
received a report thereon in accordance with established accounting
standards;
A-3
<PAGE>
(i) A vote approving this Plan and the reorganization contemplated hereby
shall have been adopted by at least a majority (as defined in the 1940
Act) of the outstanding shares of beneficial interest of Global Income
Fund entitled to vote at a Meeting of Shareholders of Global Income
Fund duly called for such purpose.
5. Closing. The Closing shall be held at the offices of the Trust and shall
occur (a) as of the close of business on or about April 24, 1998, (b) if all
regulatory or shareholder approvals shall not have been received as of that
date, then on the first business day following receipt of all necessary
regulatory approvals and the final adjournment of meetings of shareholders of
Global Income Fund at which this Plan is considered or (c) such later time as
the parties may agree. All acts taking place at the Closing shall be deemed to
take place simultaneously unless otherwise provided. At, or as soon as may be
practicable following the Closing, the Trust shall distribute the New Shares
to Global Income Fund Record Holders (as herein defined) by instructing Van
Eck/Chubb Global Income Fund to register the appropriate number of New Shares
in the names of Global Income Fund's shareholders and Van Eck/Chubb Global
Income Fund will promptly comply with said instruction. The shareholders of
record of the Global Income Fund as of the close of business on the Valuation
Date shall be certified by the Trust's transfer agent (the "Global Income Fund
Record Holders").
6. Expenses. Legal and printing expenses and expenses of holding the meeting
of shareholders of Global Income Fund (such as proxy tabulation and the
expense of a solicitor, if any) will be borne by Chubb Asset Managers, Inc.
and Van Eck Associates Corporation, for which each shall be jointly and
severally liable. Any registration fee payable to the Commission in connection
with the registration of New Shares under the Securities Act or any filing or
notification fee payable to the Commission or state securities commission in
connection with the transactions contemplated by this Plan shall be payable by
such Fund required to pay such fee. All fees payable by any party as described
herein shall be payable by such party regardless of whether the transactions
contemplated hereby are consummated.
7. Termination. This Plan and the transactions contemplated hereby may be
terminated and abandoned by resolution of the Board of Trustees of the Trust
or the Board of Directors of the Corporation with respect to either of Global
Income Fund or Van Eck/Chubb Global Income Fund, at any time prior to the
Closing, if circumstances should develop that, in the opinion of the Board, in
its sole discretion, make proceeding with this Plan inadvisable for either
Fund. In the event of any such termination, there shall be no liability for
damages on the part of either Global Income Fund or Van Eck/Chubb Global
Income Fund, or their respective Trustees/Directors or officers, to the other
party, except with respect to the payment of expenses as contemplated in
Section 6 hereof.
8. Amendments. This Plan may be amended, waived or supplemented in such manner
as may be mutually agreed upon in writing by the authorized officers of the
Trust and the Corporation; provided, however, that following the meeting of
Global Income Fund shareholders called by the Trust pursuant to Section 4(i)
of this Plan, no such amendment, waiver or supplement may have the effect of
changing the provisions for determining the number of Van Eck/Chubb Global
Income Fund Shares to be issued to the Global Income Fund shareholders under
this Plan to the detriment of such shareholders without their further
approval.
9. Governing Law. This Plan shall be governed and construed in accordance with
the laws of the Commonwealth of Massachusetts, without giving effect to the
conflict of laws provisions thereof.
10. Further Assurances. Unless the Plan has been terminated pursuant to
Section 7 hereof, the Trust with respect to Global Income Fund, and the
Corporation with respect to Van Eck/Chubb Global Income Fund, shall take such
further actions, prior to, at, and after the Closing as may be necessary or
desirable and proper to consummate the transactions contemplated hereby.
11. Limitations of Liability. The term "Van Eck Funds" means and refers to the
Trustees from time to time serving under the Master Trust Agreement, as the
same may subsequently thereto have been, or subsequently hereto may be,
amended. It is expressly agreed that the obligations of the Trust hereunder
shall not be binding upon any of the Trustees, shareholders, nominees,
officers, agents or employees of the Trust, personally, but bind only the
assets and property of the Global Income Fund series of the Trust, as provided
in the Master Trust Agreement. The execution and delivery of this Plan has
been authorized by the Trustees of the Trust and signed by an authorized
officer of the Trust, acting as such, and neither such authorization nor such
execution and delivery shall be deemed to have been made individually or to
impose any personal liability, but shall bind
A-4
<PAGE>
only the Trust property of the Global Income Fund series of the Trust as
provided in the Van Eck Funds Master Trust Agreement. The Master Trust
Agreement of the Trust provides, and it is expressly agreed, that Global
Income Fund shall be solely and exclusively responsible for the payment of its
debts, liabilities and obligations, and that no other series of the Trust
shall be responsible for the same.
IN WITNESS WHEREOF, the Trustees of the Trust and the Directors of the
Corporation have caused this Plan to be executed on behalf of its constituent
Fund as of the date first set forth above by their duly authorized
representatives.
Attest:
Van Eck Funds-- Global Income Fund
/s/ Thaddeus Leszczynski
_____________________________________ /s/ John C. van Eck
Thaddeus Leszczynski, By:__________________________________
Secretary John C. van Eck,
President
Attest:
Van Eck/Chubb Funds, Inc.-- Van
Eck/Chubb Global Income Fund
/s/ Thaddeus Leszczynski
_____________________________________ /s/ Michael O'Reilly
Thaddeus Leszczynski, By:__________________________________
Secretary Michael O'Reilly
President
We acknowledge our obligations under Section 6 of this Plan and agree to
perform those obligations in accordance with the terms of this Plan.
Chubb Asset Managers, Inc. Van Eck Associates Corporation
/s/ Michael O'Reilly /s/ John C. van Eck
By: _________________________________ By: _________________________________
Michael O'Reilly, John C. van Eck,
President Chairman
A-5
<PAGE>
VAN ECK/CHUBB FUNDS, INC.
99 PARK AVENUE, 8TH FLOOR
NEW YORK, NEW YORK 10016
(212) 687-5200 . 1-800-826-2333
-----------------------------------
STATEMENT OF ADDITIONAL INFORMATION
-----------------------------------
This Statement of Additional Information is not a prospectus and should be
read in conjunction with the Proxy Statement/Prospectus of Global Income Fund
(the "Fund" or "GIF"), a series of Van Eck Funds, dated March 20, 1998, which
is enclosed. This Statement of Additional Information has been incorporated by
reference into the Proxy Statement/Prospectus.
Further information about Van Eck/Chubb Global Income Fund ("VE/CGIF"), a
series of Van Eck/Chubb Funds, Inc., is contained in and incorporated by
reference to its latest Prospectus and Statement of Additional Information,
dated May 1, 1997, and its Annual Report to Shareholders for the year ended
December 31, 1997, all of which are incorporated by reference herein and are
available at no cost by either calling Van Eck/Chubb Funds, Inc. at the phone
number listed above or by writing to the above address.
Further information about GIF is contained in and incorporated by reference to
its latest Prospectus and Statement of Additional Information, dated April 30,
1997, and its Annual Report to Shareholders for the year ended December 31,
1997, all of which are incorporated by reference herein and are available at
no cost by either calling GIF at the phone number listed above or by writing
to the above address.
The following is general information and pro-forma financial information for
VE/CGIF and GIF.
THIS STATEMENT OF ADDITIONAL INFORMATION IS DATED MARCH 20, 1998.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS PAGE
- --------------------------------------------------------------------------------
<S> <C>
General Information........................................................ 2
Pro Forma Information...................................................... 3
</TABLE>
GENERAL INFORMATION
The shareholders of GIF are being asked to approve an Agreement and Plan of
Reorganization and Liquidation (the "Plan") which contemplates the exchange of
substantially all of the assets of GIF for shares of VE/CGIF, the assumption
of the liabilities of GIF by VE/CGIF, the distribution of VE/CGIF shares to
the shareholders of GIF and the liquidation of GIF. VE/CGIF is an open-end
management investment company registered under the Investment Company Act of
1940 and a series of Van Eck/Chubb Funds, Inc., which is organized as a
Maryland corporation. A Special Meeting of Shareholders to consider the Plan
and other matters described in the Proxy Statement/Prospectus will be held at
99 Park Avenue, 8th Floor, New York, New York on Thursday, April 16, 1998 at
3:00 p.m., New York Time.
For detailed information about the Plan, shareholders of GIF should refer to
the Proxy Statement/Prospectus.
2
<PAGE>
PRO FORMA INFORMATION
COMBINED SCHEDULE OF INVESTMENTS FOR
VAN ECK/CHUBB GLOBAL INCOME FUND AND
VAN ECK GLOBAL INCOME FUND
PRO FORMA SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
MARKET VALUE
---------------------------------------
VAN ECK/ VAN ECK PRO FORMA
LOCAL PAR CHUBB GLOBAL GLOBAL INCOME FOR COMBINED
CURRENCY VALUE INCOME FUND FUND FUND
-------- ---------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
COMMON STOCK--0.19%
Russia--0.19%
Vimpel-Communications,
ADR.................... USD 5,000 $ 178,125 $ 0 $ 178,125
---------- -----------
TOTAL COMMON STOCK
(Cost $150,000)...... 178,125 0 178,125
---------- -----------
GOVERNMENT AND AGENCY
OBLIGATIONS--92.24%
Australia--0.69%
Australian Government
Bond, 9.50%, due
08/15/03............... AUD 650,000 497,553 0 497,553
New South Wales Trea-
sury, 9.250%, due
06/20/05............... AUD 200,000 151,846 0 151,846
---------- ---------- -----------
649,399 0 649,399
---------- ---------- -----------
Belgium--1.05%
Kingdom of Belgium,
6.500%, due 03/31/05... BEF 4,000,000 115,770 0 115,770
Kingdom of Belgium,
7.000%, due 05/15/06... BEF 29,000,000 866,811 0 866,811
---------- ---------- -----------
982,581 0 982,581
---------- ---------- -----------
Canada--3.35%
Government of Canada,
9.500%, due 06/01/10... CAD 1,000,000 931,552 0 931,552
Government of Canada,
6.500%, due 06/01/04... CAD 575,000 424,270 0 424,270
Government of Canada,
8.000%, due 06/01/27... CAD 2,000,000 0 1,793,432 1,793,432
---------- ---------- -----------
1,355,822 1,793,432 3,149,254
---------- ---------- -----------
Denmark--0.80%
Kingdom of Denmark,
7.000%, due 11/15/07... DKK 1,160,000 186,253 0 186,253
Kingdom of Denmark,
7.000%, due 12/15/04... DKK 3,600,000 572,855 0 572,855
---------- ---------- -----------
759,108 0 759,108
---------- ---------- -----------
France--12.44%
Caisse Centrale, 5.768%,
due 06/27/04........... FRF 6,000,000 5,978,100 0 5,978,100
France O.A.T., 5.50%,
due 04/25/07........... FRF 13,500,000 2,274,840 0 2,274,840
France O.A.T., 7.250%,
due 04/25/06........... FRF 3,740,000 705,344 0 705,344
BTNS, 5.50%, due
10/12/01............... FRF 16,000,000 0 2,734,118 2,734,118
---------- ---------- -----------
$8,958,284 $2,734,118 $11,692,402
---------- ---------- -----------
</TABLE>
SEE NOTES TO PRO FORMA FINANCIAL STATEMENTS
3
<PAGE>
<TABLE>
<CAPTION>
MARKET VALUE
---------------------------------------
VAN ECK/ VAN ECK PRO FORMA
LOCAL PAR CHUBB GLOBAL GLOBAL INCOME FOR COMBINED
CURRENCY VALUE INCOME FUND FUND FUND
-------- ------------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
Germany--9.66%
Bundesobligation, 6.00%,
due 07/04/07........... DEM 1,900,000 $1,104,884 $ 0 $1,104,884
Bundesobligation, 6.75%,
due 07/15/04........... DEM 6,500,000 3,939,647 0 3,939,647
International Bank for
Reconstruction &
Development,
6.125% due 09/27/02.... DEM 1,050,000 614,178 0 614,178
International Bank for
Reconstruction &
Development,
5.875% due 11/10/03.... DEM 1,050,000 606,005 0 606,005
Federal Republic of Ger-
many, 7.375%, due
01/03/05............... DEM 4,500,000 0 2,816,122 2,816,122
---------- ---------- ----------
6,264,714 2,816,122 9,080,836
---------- ---------- ----------
Ireland--1.15%
Government of Ireland,
8.00%, due 8/18/06..... IRE 650,000 0 1,082,063 1,082,063
---------- ---------- ----------
Italy--4.79%
BTPS, 10.00%, due
08/01/03............... ITL 2,200,000,000 1,529,286 0 1,529,286
BTPS, 8.250%, due
07/01/99............... ITL 625,000,000 370,453 0 370,453
BTPS, 6.75%, due
07/01/07............... ITL 2,500,000,000 1,536,751 0 1,536,751
BTPS, 7.50%, due
10/01/99............... ITL 1,800,000,000 0 1,062,062 1,062,062
---------- ---------- ----------
3,436,490 1,062,062 4,498,552
---------- ---------- ----------
Japan--4.45%
Government of Japan,
6.30%, due 09/20/01.... JPY 275,000,000 2,517,110 0 2,517,110
Government of Japan,
2.60%, due 09/20/07.... JPY 205,000,000 1,668,926 0 1,668,926
---------- ---------- ----------
4,186,036 0 4,186,036
---------- ---------- ----------
Mexico--0.35%
United Mexican State,
7.00%, due 06/02/03.... CAD 500,000 327,900 0 327,900
---------- ---------- ----------
Netherlands--3.48%
Hermes Euro Railtel BV
Series 144A, 11.50%,
due 08/15/07........... USD 750,000 798,750 0 798,750
Government of Nether-
lands, 8.250%, due
02/15/07............... NLG 550,000 327,826 0 327,826
Government of Nether-
lands, 8.250%, due
09/15/07............... NLG 550,000 329,859 0 329,859
Government of Nether-
lands, 6.00%, due
01/15/06............... NLG 3,500,000 1,813,074 0 1,813,074
---------- ---------- ----------
3,269,509 0 3,269,509
---------- ---------- ----------
New Zealand--3.22%
Government of New Zea-
land, 8.00%, due
11/15/06............... NZD 1,500,000 0 927,127 927,127
Government of New Zea-
land, 10.00%, due
03/15/02............... NZD 3,300,000 0 2,100,694 2,100,694
---------- ---------- ----------
$ 0 $3,027,821 $3,027,821
---------- ---------- ----------
</TABLE>
SEE NOTES TO PRO FORMA FINANCIAL STATEMENTS
4
<PAGE>
<TABLE>
<CAPTION>
MARKET VALUE
---------------------------------------
VAN ECK/ VAN ECK PRO FORMA
LOCAL PAR CHUBB GLOBAL GLOBAL INCOME FOR COMBINED
CURRENCY VALUE INCOME FUND FUND FUND
-------- ----------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
Spain--2.70%
Government of Spain,
9.40%, due 04/30/99.... ESP 28,000,000 $ 194,938 $ 0 $ 194,938
Government of Spain,
8.80%, due 04/30/06.... ESP 77,000,000 615,196 0 615,196
Government of Spain,
8.80%, due 05/30/04.... ESP 50,000,000 375,859 0 375,859
Government of Spain,
5.25%, due 01/31/03.... ESP 45,000,000 295,684 0 295,684
Kingdom of Spain,
4.750%, due 03/14/05... JPY 40,000,000 369,683 0 369,683
Government of Spain,
7.40%, due 07/30/99.... ESP 100,000,000 0 683,746 683,746
----------- ----------- -----------
1,851,360 683,746 2,535,106
----------- ----------- -----------
Sweden--3.74%
Sweden Government Bond,
6.000%, due 02/09/05... SEK 16,300,000 546,867 1,526,141 2,073,008
Sweden Government Bond,
10.25%, due 05/05/03... SEK 9,500,000 227,916 1,215,552 1,443,468
----------- ----------- -----------
774,783 2,741,693 3,516,476
----------- ----------- -----------
United Kingdom--13.80%
U.K. Gilt, 8.00%,
06/07/21............... GBP 600,000 1,202,792 0 1,202,792
U.K. Treasury, 7.500%,
due 12/07/06........... GBP 2,098,000 3,720,200 3,019,733 6,739,933
U.K. Treasury, 7.75%,
due 09/08/06........... GBP 2,800,000 0 5,031,411 5,031,410
----------- ----------- -----------
4,922,992 8,051,144 12,974,135
----------- ----------- -----------
United States--23.38%
U.S. Treasury Note,
6.13%, due 08/15/07.... USD 1,400,000 1,439,376 0 1,439,376
U.S. Treasury Note,
6.63%, due 05/15/07.... USD 4,750,000 5,030,549 0 5,030,549
U.S. Treasury Bond,
8.75%, due 08/15/2020.. USD 800,000 0 1,067,001 1,067,001
U.S. Treasury Bond,
6.63%, due 02/15/2027.. USD 1,500,000 0 1,628,438 1,628,439
U.S. Treasury Note,
5.63%, due 01/31/1998.. USD 1,000,000 0 1,000,313 1,000,313
U.S. Treasury Note,
6.50%, due 08/15/2005.. USD 3,700,000 0 3,861,879 3,861,879
U.S. Treasury Note,
6.25%, due 02/15/2007.. USD 2,000,000 0 2,065,002 2,065,002
U.S. Treasury Note,
6.00%, due 08/15/2000.. USD 4,750,000 0 4,785,630 4,785,630
U.S. Treasury Bond,
6.75%, due 08/15/2026.. USD 1,000,000 0 1,101,251 1,101,251
----------- ----------- -----------
6,469,925 15,509,514 21,979,439
----------- ----------- -----------
TOTAL GOVERNMENT AND
AGENCY OBLIGATIONS
(Cost $84,888,382)... $44,208,903 $39,501,714 $83,710,617
----------- ----------- -----------
</TABLE>
SEE NOTES TO PRO FORMA FINANCIAL STATEMENTS
5
<PAGE>
<TABLE>
<CAPTION>
MARKET VALUE
---------------------------------------
VAN ECK/ VAN ECK PRO FORMA
LOCAL PAR CHUBB GLOBAL GLOBAL INCOME FOR COMBINED
CURRENCY VALUE INCOME FUND FUND FUND
-------- ---------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
CORPORATE BONDS--7.11%
BRAZIL--0.52%
Comtel Brasileira, Se-
ries 144A, 10.75%, due
09/26/04............... USD 500,000 $ 486,250 $ 0 $ 486,250
JAPAN--0.51%
Export-Import Bank of
Japan, 4.63%, due
02/26/04............... JPY 54,000,000 479,789 0 479,789
MEXICO--0.53%
PanAmerica Beverage,
7.25%, due 07/01/09.... USD 500,000 500,000 0 500,000
SWEDEN--3.19%
Swiss Bank Corp. cd
5.770%, due 03/17/98... SEK 3,000,000 3,000,000 0 3,000,000
UNITED STATES--0.54%
Global Telesyst, 8.75%,
due 06/30/00........... USD 500,000 505,000 0 505,000
UNITED KINGDOM--1.82%
J.P. Morgan, 7.75%, due
12/30/03............... GBP 1,000,000 0 1,714,687 1,714,688
----------- ----------- -----------
TOTAL CORPORATE BONDS
(cost $16,678,472)..... 4,971,039 1,714,688 6,685,727
----------- ----------- -----------
SHORT-TERM OBLIGATIONS--
0.45%
GE Capital Corp. Commer-
cial Paper, 5.65%, due
01/02/98............... USD 425,000 0 424,933 424,933
----------- ----------- -----------
TOTAL SHORT-TERM OBLI-
GATIONS (Amortized
Cost $424,933)....... 0 424,933 424,933
----------- ----------- -----------
Options purchased--0.04%
1,500,000 DEM/USD Cur-
rency Opt. 98 Feb.
(cost $26,250)......... 25,256 0 25,256
650,000 DEM/USD Currency
Opt. 98 Feb. (cost
$12,350)............... 15,514 0 15,514
----------- ----------- -----------
40,770 0 40,770
TOTAL INVESTMENTS (cost
$92,030,387)........... 96.84% 49,398,837 41,641,335 91,040,172
Other assets less lia-
bilities............... 3.16% 2,688,730 283,417 2,972,147
------ ----------- ----------- -----------
TOTAL NET ASSETS........ 100.00% $52,087,567 $41,924,752 $94,012,319
====== =========== =========== ===========
</TABLE>
CURRENCY CLASSIFICATION
<TABLE>
<S> <C>
Australian dollar..................................................... AUD
Belgian franc......................................................... BEF
Canadian dollar....................................................... CAD
Danish krone.......................................................... DKK
French franc.......................................................... FRF
British pound......................................................... GBP
German deutsche mark.................................................. DEM
Irish punt............................................................ IRE
Italian lira.......................................................... ITL
Japanese yen.......................................................... JPY
Mexican peso.......................................................... MXP
Netherlands guilder................................................... NLG
New Zealand dollar.................................................... NZD
Spanish peseta........................................................ ESP
Swedish krona......................................................... SEK
United States dollar.................................................. USD
</TABLE>
- --------
* Aggregate cost for Federal income tax purposes.
SEE NOTES TO PRO FORMA FINANCIAL STATEMENTS
6
<PAGE>
The following unaudited pro forma Combined Statement of Assets, Liabilities
and Capital for the Combined Fund has been derived from the Statements of
Assets, Liabilities and Capital of the respective Funds at December 31, 1997
and such information has been adjusted to give effect to the Reorganization as
if the Reorganization had occurred at December 31, 1997. The pro forma
Combined Statements of Assets, Liabilities and Capital is presented for
informational purposes only and does not purport to be indicative of the
financial condition that actually would have resulted if the Reorganization
had been consummated at December 31, 1997. The pro forma Combined Statement of
Assets, Liabilities and Capital should be read in conjunction with the Funds'
financial statements and related notes thereto which are included in the
accompanying Proxy Statement/Prospectus.
PRO FORMA COMBINED STATEMENT OF ASSETS, LIABILITIES AND CAPITAL
AS OF DECEMBER 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
VAN ECK VAN ECK/
GLOBAL INCOME CHUBB GLOBAL PRO FORMA PRO FORMA FOR
FUND INCOME FUND ADJUSTMENT COMBINED FUND.
------------- ------------ ---------- --------------
<S> <C> <C> <C> <C>
ASSETS:
Investments at Cost..... $42,299,187 $49,731,200 $ 0 $92,030,387
Investments at Value.... $41,641,335 $49,398,837 $ 0 $91,040,172
Receivables:
Cash and currencies... 0 1,536,648 0 1,536,648
Interest.............. 1,042,831 1,023,237 0 2,066,068
Due from Administra-
tor.................. 0 4,143 132,497 136,640
From Broker........... 0 158,899 0 158,899
Unrealized apprecia-
tion on forward for-
eign currency con-
tracts............... 80,183 5,871 0 86,054
Capital shares sold... 2,504 50 0 2,554
Deferred organizational
costs.................. 0 7,118 0 7,118
----------- ----------- -------- -----------
Total Assets........ 42,766,853 52,134,803 132,497 95,034,153
----------- ----------- -------- -----------
LIABILITIES:
Payables:
Due to custodian...... 134,738 0 0 134,738
Capital shares repur-
chased............... 358,344 0 0 358,344
Unrealized deprecia-
tion on forward for-
eign currency con-
tracts............... 180,694 9,022 0 189,716
Dividends payable..... 56,076 45 0 56,121
Accounts payable...... 112,249 38,169 (38,718) 111,700
----------- ----------- -------- -----------
Total Liabilities... 842,101 47,236 (38,718) 850,619
----------- ----------- -------- -----------
Net Assets.............. $41,924,752 $52,087,567 $171,215 $94,183,534
=========== =========== ======== ===========
Capital:
Capital Stock-Global In-
come Fund an unlimited
number of $.001 par
value shares authorized
and Van Eck/Chubb
Global Income Fund
$0.01 par value,
100,000,000 shares au-
thorized per share
(4,936,240 shares of
Global Income Fund and
5,404,248 shares of Van
Eck/Chubb Global Income
Fund issued and out-
standing, and
9,753,288** shares for
the Combined Fund, as
adjusted............... $ 4,936 $ 54,042 $ 38,555 (a)* $ 97,533
Capital paid in excess
of par................. 46,808,725 52,501,342 (38,555)(a)* 99,271,512
Overdistributed invest-
ment income -- net..... -- (118,123) (171,215) 53,092
Accumulated realized
capital losses on in-
vestments -- net....... (4,112,436) (150,670) (4,263,106)
Unrealized depreciation
of investments and
foreign currency
transactions-- net..... (776,473) (199,024) (975,497)
----------- ----------- -------- -----------
Total -- Equivalent to
$8.49 net asset value
per share of Van
Eck/Chubb Global Fund
Common Stock, and $9.64
net asset value per
share of Global Income
Fund Common Stock and
$9.64 net asset value
per share for the Com-
bined Fund, as adjusted
Total Capital........... $41,924,752 $52,087,567 $171,215 $94,183,534
=========== =========== ======== ===========
</TABLE>
- --------
* Represents the effect of capital stock due to the difference in par value
between the Funds.
** Reflects the issuance of 4,349,040 shares of Van Eck/Chubb Global Income
Fund to the shareholders of Van Eck Global Income Fund.
(a) Reflects new shares issued.
SEE NOTES TO PRO FORMA FINANCIAL STATEMENTS
7
<PAGE>
The following unaudited pro forma Combined Statement of Operations for the
Combined Fund has been derived from the statements of operations of the
respective Funds for the year ended December 31, 1997, and such information
has been adjusted to give effect to the Reorganization as if the
Reorganization had occurred on December 31, 1997. The pro forma Combined
Statement of Operations is presented for informational purposes only and does
not purport to be indicative of the results of operations that actually would
have resulted if the Reorganization had been consummated on December 31, 1997
nor which may result from future operations. The pro forma Combined Statement
of Operations should be read in conjunction with the Funds' financial
statements and related notes thereto which are included in the accompanying
Proxy Statement/Prospectus.
PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
VAN ECK VAN ECK/
GLOBAL INCOME CHUBB GLOBAL PRO FORMA PRO FORMA FOR
FUND INCOME FUND ADJUSTMENT COMBINED FUND
------------- ------------ ---------- -------------
<S> <C> <C> <C> <C>
INCOME:
Interest................... $ 3,416,453 $ 872,782 $0 $ 4,289,234
----------- --------- -------- -----------
Total Income........... 3,416,453 872,782 0 4,289,234
----------- --------- -------- -----------
EXPENSES:
Advisory fee............... 419,471 29,248 (307,612) 141,107
Distribution............... 139,815 73,120 139,832 352,767
Custodian.................. 9,897 5,647 0 15,544
Transfer agency............ 119,157 12,161 0 131,318
Administrative fee......... 115,620 65,808 164,062 345,490
Registration............... 18,867 11,397 0 30,264
Professional............... 38,715 15,628 (35,000) 19,343
Reports to shareholders.... 30,129 5,904 0 36,033
Directors fees and ex-
penses.................... 1,437 1,289 0 2,726
Amortization of deferred
organizational costs...... 0 2,690 0 2,690
Other...................... 33,155 5,624 0 38,779
----------- --------- -------- -----------
Total Expenses......... 926,263 228,516 (38,718) 1,116,061
----------- --------- -------- -----------
Expenses waived by the Ad-
visor..................... 0 (31,092) (132,497) (163,589)
NET EXPENSES........... 926,263 197,424 (171,215) 952,472
----------- --------- -------- -----------
NET INVESTMENT INCOME.. 2,490,190 675,358 171,215 3,336,762
----------- --------- -------- -----------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVEST-
MENTS:
Net Realized Gain on In-
vestments................. 444,917 192,757 0 637,674
Net Realized Loss from For-
eign Currency Transac-
tions..................... (1,268,288) (184,281) 0 (1,452,569)
Change in Unrealized Appre-
ciation of Investments.... (1,467,637) (679,647) 0 (2,147,284)
Change in Unrealized
Depreciation of Foreign
Currency Denominated
Receivables and Payables
and Forward Currency
Contracts................. (122,810) 140,666 0 17,857
----------- --------- -------- -----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS. $ 76,372 $ 144,853 $171,215 $ 392,440
=========== ========= ======== ===========
</TABLE>
SEE NOTES TO PRO FORMA FINANCIAL STATEMENTS
8
<PAGE>
PRO FORMA FOOTNOTES OF REORGANIZATION BETWEEN
VAN ECK/CHUBB GLOBAL INCOME FUND AND VAN ECK GLOBAL INCOME FUND
DECEMBER 31, 1997 (UNAUDITED)
1. GENERAL
The accompanying pro forma financial statements are presented to show the
effect of the proposed reorganization of Global Income Fund into Van Eck/Chubb
Global Income Fund, as if such reorganization had taken place as of December
31, 1997.
Under the terms of the Plan of Reorganization and Liquidation, the
reorganization of Van Eck/Chubb Global Income Fund and Global Income Fund will
be taxed as a tax-free business combination and accordingly will be accounted
for by a method of accounting for tax free combinations of investment
companies (sometimes referred to as the pooling without restatement method).
The reorganization would be accomplished by an acquisition of the net assets
of Global Income Fund in exchange for shares of Van Eck/Chubb Global Income
Fund at net asset value. The statement of assets and liabilities and the
related statement of operations of Van Eck/Chubb Global Income Fund and Global
Income Fund have been combined as of and for the year ended December 31, 1997.
The accompanying pro forma financial statements should be read in conjunction
with the financial statements and schedule of investments of Global Income
Fund and Van Eck/Chubb Global Income Fund which are included in their
respective annual reports dated December 31, 1997.
The following notes refer to the accompanying pro forma financial statements
as if the above mentioned reorganization of Global Income Fund and Van
Eck/Chubb Global Income Fund had taken place as of December 31, 1997.
2. SIGNIFICANT ACCOUNTING POLICIES
Van Eck/Chubb Funds, Inc., of which Van Eck/Chubb Global Income Fund is a
series, is a Maryland corporation. Van Eck/Chubb Global Income Fund is
registered under the Investment Company Act of 1940, as amended, as a non-
diversified, open-end management investment company.
The significant accounting policies consistently followed by Van Eck/Chubb
Global Income Fund are (a) securities transactions are accounted for on the
trade date (b) debt instruments are valued on the basis of quotes provided by
a pricing service; short-term investments that have a maturity of more than 60
days are valued at prices based on market quotations; short-term investments
that have a maturity of 60 days or less are valued at cost plus accreted
discount, or minus amortized premiums, as applicable (c) interest income is
recorded on the accrual basis (d) gains or losses on the sale of securities
are calculated by using the first-in, first-out method (e) direct expenses are
charged to the fund (f) dividends and distributions to shareholders are
recorded on the ex-dividend date (g) Van Eck/Chubb Global Income Fund intends
to comply with the requirements of the Internal Revenue Code pertaining to
regulated investment companies and to make the required distributions to
shareholders; therefore, no provision for Federal income taxes has been made.
3. PRO FORMA ADJUSTMENTS
The accompanying pro forma financial statements reflect changes in fund shares
as if the reorganization had taken place on December 31, 1997. Adjustments
have been made to expenses for the combined fund expense structure and
elimination of duplicated services that would not have been incurred if the
reorganization had taken place on December 31, 1997.
4. MANAGEMENT AGREEMENT AND TRANSACTIONS WITH AFFILIATED PERSONS
Chubb Asset Managers, Inc. acts as investment manager and Van Eck Associates
Corporation acts as investment administrator of Van Eck/Chubb Global Income
Fund. Van Eck/Chubb Global Income Fund pays a management fee calculated at the
annual rate of 0.20% of the first $200 million of average daily net assets,
.19% of the next $1.1 billion of average daily net assets and .18% of average
daily net assets in excess of $1.3 billion. Van Eck/Chubb Global Income Fund
pays an administration fee calculated at an annual rate of 0.45% of the first
$200 million of average daily net assets, .41% of the next $1.1 billion of
average daily net assets and .37% of average daily net assets in excess of
$1.3 billion. The 12b-1 fees are accrued daily at an annual rate of .25% of
average daily net assets. All fees are calculated daily and paid monthly.
9
<PAGE>
PART C
OTHER INFORMATION
Item 15. Indemnification
Reference is made to Article VII, Section 10 of the Registrant's Amended and
Restated Articles of Incorporation filed herein as Exhibit 1 to this
Registration Statement and to Article V of the Registrant's By-Laws filed herein
as Exhibit 2 to this Registration Statement. The Articles of Incorporation
provide that neither an officer nor director of the Registrant will be liable to
the Registrant or its shareholders for monetary damages for breach of fiduciary
duty as an officer or director, except to the extent such limitation of
liability is not otherwise permitted by law. The By-Laws provide that the
Registrant will indemnify its directors and officers to the extent permitted or
required by Maryland law. A resolution of the Board of Directors specifically
approving payment or advancement of expenses to an officer is required by the
By-Laws. Indemnification may not be made if the director or officer has
incurred liability by reason or willful misfeasance, bad faith, gross negligence
or reckless disregard of duties in the conduct of his/her office ("Disabling
Conduct"). The means of determining whether indemnification shall be made are
(1) a final decision by a court or other-body before
WHOM THE PROCEEDING IS BROUGHT THAT THE DIRECTOR OR OFFICER WAS NOT LIABLE BY
reason of Disabling Conduct, or (2) in the absence of such a decision, a
reasonable determination, based on a review of the facts, that the director or
officer was not liable by reason of Disabling Conduct. Such latter
determination may be made either by (a) vote of a majority of directors who are
neither interested persons (as defined in the Investment Company Act of 1940)
nor parties to the proceeding or (b) independent legal counsel in a written
opinion. The advancement of legal expenses may not occur unless the director or
officer agrees to repay the advance (if it is determined that he/she is not
entitled to the indemnification) and one of three other conditions is satisfied:
(1) the director or officer provides security for his/her agreement to repay,
(2) the Registrant is insured against loss by reason of lawful advances, or (3)
the directors who are not interested persons and are not parties to the
proceedings, or independent counsel in a written opinion, determine that there
is reason to believe that the director or officer will be found entitled to
indemnification. The directors and officers are currently covered for
liabilities incurred in their capacities as such directors and officers under
the terms of a joint liability insurance policy. This policy also covers the
directors and officers of Chubb Investment Advisory, Chubb Asset and Chubb
America Fund, Inc. The policy also insures the Registrant, Chubb Investment
Advisory, Chubb Asset and Chubb America Fund, Inc. for errors and omissions
liabilities.
Insofar as indemnification for liability arising under the Securities
Act of 1933 (the "Securities Act") may be permitted to directors, officers 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 Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, 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 whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
ITEM 16: Exhibits
1. a. Amended and Restated Articles of Incorporation./7/
b. Articles Supplementary to the Amended and Restated Articles of
Incorporation./8/
c. Articles Supplementary to the Amended and Restated Articles of
Incorporation./1//4/
2. Amended and Restated By-Laws/6/
3. Not applicable.
4. Not Applicable. Reference is made to Exhibit A of the Proxy
Statement/Prospectus filed herewith.
<PAGE>
5. a. Specimen of Certificate of Stock of the Chubb Money Market Fund./2/
b. Specimen of Certificate of Stock of the Chubb Government Securities
Fund./2/
c. Specimen of Certificate of Stock of the Chubb Total Return Fund./2/
d. Specimen of Certificate of Stock of the Chubb Tax-Exempt Fund./2/
e. Specimen of Certificate of Stock of the Chubb Growth and Income
Fund./3/
f. Specimen of Certificate of Stock of the Chubb Capital Appreciation
Fund./4/
g. Specimen of Certificate of Stock of the Chubb Global Income Fund./4/
6. a. Investment Management Agreement between Chubb Investment Funds, Inc.,
Chubb Investment Advisory Corporation and Chubb Asset Managers, Inc. with
respect to Chubb Money Market Fund./2/
b. Technical Amendment to Investment Management Agreement between Chubb
Investment Funds, Inc., Chubb Investment Advisory Corporation and Chubb
Asset Managers, Inc. with respect to Chubb Money Market Fund./5/
c. Investment Management Agreement between Chubb Investment Funds, Inc.,
Chubb Investment Advisory Corporation and Chubb Asset Managers, Inc.
with respect to Chubb Government Securities Fund./2/
d. Technical Amendment to Investment Management Agreement between Chubb
Investment Funds, Inc., Chubb Investment Advisory Corporation and Chubb
Asset Managers, Inc. with respect to Chubb Government Securities
Fund./5/
e. Investment Management Agreement between Chubb Investment Funds, Inc.,
Chubb Investment Advisory Corporation and Chubb Asset Managers, Inc.
with respect to Chubb Total Return Fund./2/
f. Technical Amendment to Investment Management Agreement between Chubb
Investment Funds, Inc., Chubb Investment Advisory Corporation and Chubb
Asset Managers, Inc. with respect to Chubb Total Return Fund./5/
g. Investment Management Agreement between Chubb Investment Funds, Inc.,
Chubb Investment Advisory Corporation and Chubb Asset Managers, Inc.
with respect to Chubb Tax-Exempt Fund./2/
h. Technical Amendment to Investment Management Agreement between Chubb
Investment Funds, Inc., Chubb Investment Advisory Corporation and Chubb
Asset Managers, Inc. with respect to Chubb Tax-Exempt Fund./5/
i. Investment Management Agreement between Chubb Investment Funds, Inc.,
Chubb Investment Advisory Corporation and Chubb Asset Managers, Inc.
with respect to Chubb Growth Fund, (now known as the Chubb Growth and
Income Fund)./2/
j. Technical Amendment to Investment Management Agreement between Chubb
Investment Funds, Inc., Chubb Investment Advisory Corporation and Chubb
Asset Managers, Inc. with respect to Chubb Growth Fund./5/
k. Investment Management Agreement between Chubb Investment Funds, Inc.,
Chubb Investment Advisory Corporation and Chubb Asset Managers, Inc.
with respect to Chubb Capital Appreciation Fund./4/
l. Investment Management Agreement between Chubb Investment Funds, Inc.,
Chubb Investment Advisory Corporation and Chubb Asset Managers, Inc.
with respect to Chubb Global Income Fund./4/
<PAGE>
7.a. Fund Distribution Agreement between Chubb Investment Funds, Inc.
and Chubb Securities Corporation./2/
b. Specimen Copy of Selected Dealers Agreement./2//1/
8. Not applicable.
9. Custodial Services Agreement between Chubb Investment Funds, Inc. and
Citibank, N.A./2/
10.Rule 12b-1Plan./1/
11. Opinion and Consent of counsel as to legality of the securities
being registered.
a. Opinion and Consent of Counsel as to legality of the
securities being registered.
12. To be filed by subsequent post-effective amendment.
13. a. Shareholder Services Agreement between Chubb Investment Funds,
Inc. and Firstar Trust Company.
b. Agreement for Waiver of Fees and Assumption of Expenses between
Chubb Investment Funds, Inc., Chubb Investment Advisory Corporation,
Chubb Asset Managers, Inc., Chubb Securities Corporation, and Chubb
Life Insurance Company of New Hampshire./6/
14. Consent of Ernst & Young LLP.*
15. Not Applicable.
16. Power of Attorney.
17. Not Applicable.
- ---------------
/1/ Incorporated by reference to Form N-1A Post-Effective Amendment No. 13.
/2/ Incorporated by reference to earlier filing on September 17, 1987, SEC File
No. 33-147367, to the exhibit number indicated on that Form N-1A
Registration Statement.
/3/ Incorporated by reference to earlier filing on April 22, 1992, SEC File No.
33-14737, to the exhibit number indicated on that Form N-1A Registration
Statement.
/4/ Incorporated by reference to earlier filing on June 16, 1995. SEC File No.
33-147367, to the exhibit number indicated on that Form N-1A Registration
Statement.
/5/ Incorporated by reference to earlier filing on April 17, 1989, SEC File No.
33-147367, to the exhibit number indicated on that Form N-1A Registration
Statement.
/6/ Incorporated by reference to earlier filing on April 15, 1991, SEC File No.
33-147367, to the exhibit number indicated on that Form N-1A Registration
Statement.
/7/ Incorporated by reference to earlier filing on April 28, 1988, SEC File No.
33-147367, to the exhibit number indicated on that Form N-1A Registration
Statement.
/8/ Incorporated by reference to earlier filing on April 23, 1994, SEC File No.
33-14737, to the exhibit number indicated on that Form N-1A Registration
Statement.
* Filed herewith.
ITEM 17. UNDERTAKINGS
------------
(1) The undersigned Registrant agrees that prior to any public
reoffering of the securities registered through the use of a prospectus
which is part of this registration statement by any person or party who
is deemed to be an underwriter within the meaning of Rule 145(c) of the
Securities Act of 1933, as amended, the reoffering prospectus will
contain the information called for by the applicable registration form
for reofferings by persons who may be deemed underwriters, in addition
to the information called for by the other items of applicable form.
(2) The undersigned Registrant agrees that every prospectus that is
filed under paragraph (1) above will be filed as a part of an amendment
to the registration statement and will not be used until the amendment
is effective, and that, in determining liability under the Securities
Act of 1933, as amended, each post-effective amendment shall be deemed
to be a new registration statement for the securities offered herein,
and the offering of the securities at that time shall be deemed to be
the initial bona fide offering of them.
(3) The Registrant undertakes to file, by post-effective amendment, an
opinion of counsel supporting the tax consequences of the proposed
reorganization within a reasonable time after receipt of such opinion.
<PAGE>
SIGNATURES
----------
As required by the Securities Act of 1933, the post-effective amendment to the
registration statement on Form N-14 has been signed on behalf of the Registrant
by the undersigned, thereunto duly authorized, in the City of New York, State of
New York, on the 26th day of March, 1998.
Van Eck/Chubb Funds, Inc.
By: /s/ Michael O'Reilly
---------------------------
Michael O'Reilly, President
Pursuant to the requirements of the Securities Act of 1933, this post-effective
amendment to the registration statement has been signed below by the following
persons in the capacities and on the date indicated:
Signature Title Date
/s/ Michael O'Reilly President, Director 3/26/98
- ----------------------
Michael O'Reilly
/s/ Bruce J. Smith Chief Financial Officer 3/26/98
- ----------------------
Bruce J. Smith
/s/ Jeremy H. Biggs Director 3/26/98
- ----------------------
Jeremy H. Biggs
/s/ Wesley G. McCain Director 3/26/98
- ----------------------
Wesley G. McCain
/s/ David J. Olderman Director 3/26/98
- ----------------------
David J. Olderman
/s/ John C. van Eck Director 3/26/98
- ----------------------
John C. van Eck
<PAGE>
VAN ECK FUNDS
GLOBAL INCOME FUND
PROXY FOR SPECIAL SHAREHOLDERS MEETING TO BE HELD APRIL 16, 1998
The undersigned shareholder of GLOBAL INCOME FUND, (the "Fund"), a series
of Van Eck Funds (the "Trust"), having received Notice of the Meeting of
Shareholders of the Fund to be held on April 16, 1998 and the Proxy
Statement/Prospectus accompanying such Notice, hereby constitutes and appoints
Barbara Allen and Susan Grant and each of them, true and lawful attorneys or
attorney for the undersigned, with several powers of substitution, for and in
the name, place and stead of the undersigned, to attend and vote all shares of
the Fund which the undersigned would be entitled to vote at the Meeting to be
held at 99 Park Avenue, 8th Floor, New York, New York, on April 16, 1998, at
3:00 New York Time, and at any and all adjournments thereof, with all powers the
undersigned would possess if personally present.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE PROPOSAL BELOW. THE
SHARES REPRESENTED HERBY WILL BE VOTED AS INDICATED BELOW OR FOR THE PROPOSAL
IF NO CHOICE IS INDICATED.
PLEASE MARK YOUR PROXY, DATE AND SIGN IT ON THE REVERSE SIDE AND RETURN IT
PROMPTLY IN THE ACCOMPANYING ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES.
Please vote by filling in the boxes below.
1. To approve the Agreement and Plan of Reorganization and Liquidation involving
the exchange of substantially all of the Fund's assets for shares of Van
Eck/Chubb Global Income Fund, a series of the Van Eck/Chubb Funds, Inc., the
assumption of liabilities of the Fund by Van Eck/Chubb Global Income Fund,
the distribution of such shares to the shareholders of the Fund and the
subsequent liquidation of the Fund.
FOR _________ AGAINST ___________ ABSTAIN __________
Dated: ______________________ 1998
________________________
Signature of shareholder
_______________________
Signature of Co-owner
For joint accounts, all co-owners must
sign. Executors, administrators,
trustees,etc. should so indicate when
signing.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> MONEY MARKET FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 9,192,411
<INVESTMENTS-AT-VALUE> 9,192,411
<RECEIVABLES> 27,312
<ASSETS-OTHER> 239,663
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 9,459,386
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 51,980
<TOTAL-LIABILITIES> 51,980
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 9,408,413
<SHARES-COMMON-STOCK> 9,408,416
<SHARES-COMMON-PRIOR> 8,854,862
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 1,007
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 9,407,406
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 473,466
<OTHER-INCOME> 0
<EXPENSES-NET> 45,032
<NET-INVESTMENT-INCOME> 428,434
<REALIZED-GAINS-CURRENT> (164)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 428,270
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 428,434
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 12,985,547
<NUMBER-OF-SHARES-REDEEMED> 12,852,215
<SHARES-REINVESTED> 420,222
<NET-CHANGE-IN-ASSETS> 553,390
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 843
<GROSS-ADVISORY-FEES> 13,510
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 133,624
<AVERAGE-NET-ASSETS> 9,006,420
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.05
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0.05
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 2
<NAME> GOVERNMENT SECURITIES FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 30,486,916
<INVESTMENTS-AT-VALUE> 31,095,312
<RECEIVABLES> 450,711
<ASSETS-OTHER> 240,999
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 31,787,022
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 48,032
<TOTAL-LIABILITIES> 48,032
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 31,543,263
<SHARES-COMMON-STOCK> 2,933,808
<SHARES-COMMON-PRIOR> 1,22,744
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 412,669
<ACCUM-APPREC-OR-DEPREC> 608,396
<NET-ASSETS> 31,738,990
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,108,024
<OTHER-INCOME> 0
<EXPENSES-NET> 163,527
<NET-INVESTMENT-INCOME> 944,497
<REALIZED-GAINS-CURRENT> 7,015
<APPREC-INCREASE-CURRENT> 569,084
<NET-CHANGE-FROM-OPS> 576,099
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 944,497
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,006,126
<NUMBER-OF-SHARES-REDEEMED> 373,997
<SHARES-REINVESTED> 78,935
<NET-CHANGE-IN-ASSETS> 18,920,540
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 419,684
<GROSS-ADVISORY-FEES> 32,706
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 253,499
<AVERAGE-NET-ASSETS> 16,353,000
<PER-SHARE-NAV-BEGIN> 10.48
<PER-SHARE-NII> 0.62
<PER-SHARE-GAIN-APPREC> 0.34
<PER-SHARE-DIVIDEND> 0.62
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.82
<EXPENSE-RATIO> 1.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 3
<NAME> TOTAL RETURN
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 39,823,178
<INVESTMENTS-AT-VALUE> 49,183,270
<RECEIVABLES> 369,843
<ASSETS-OTHER> 2,386,533
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 51,939,646
<PAYABLE-FOR-SECURITIES> 1,920,160
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 85,851
<TOTAL-LIABILITIES> 2,006,011
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 40,585,602
<SHARES-COMMON-STOCK> 2,470,042
<SHARES-COMMON-PRIOR> 1,784,176
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 4,588
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 7,470
<ACCUM-APPREC-OR-DEPREC> 9,360,091
<NET-ASSETS> 49,933,635
<DIVIDEND-INCOME> 466,762
<INTEREST-INCOME> 672,658
<OTHER-INCOME> 0
<EXPENSES-NET> 449,944
<NET-INVESTMENT-INCOME> 689,476
<REALIZED-GAINS-CURRENT> 2,025,968
<APPREC-INCREASE-CURRENT> 4,260,078
<NET-CHANGE-FROM-OPS> 6,975,522
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 700,327
<DISTRIBUTIONS-OF-GAINS> 2,208,188
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 971,037
<NUMBER-OF-SHARES-REDEEMED> 430,994
<SHARES-REINVESTED> 145,823
<NET-CHANGE-IN-ASSETS> 18,869,536
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 181,013
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 71,991
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 543,874
<AVERAGE-NET-ASSETS> 35,995,530
<PER-SHARE-NAV-BEGIN> 17.41
<PER-SHARE-NII> 0.37
<PER-SHARE-GAIN-APPREC> 3.78
<PER-SHARE-DIVIDEND> 0.37
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.97
<PER-SHARE-NAV-END> 20.22
<EXPENSE-RATIO> 1.25
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 4
<NAME> TAX-EXEMPT FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 29,102,434
<INVESTMENTS-AT-VALUE> 30,582,839
<RECEIVABLES> 438,862
<ASSETS-OTHER> 312,025
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 31,333,726
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 45,233
<TOTAL-LIABILITIES> 45,233
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 29,818,764
<SHARES-COMMON-STOCK> 2,490,289
<SHARES-COMMON-PRIOR> 1,239,556
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 10,660
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 16
<ACCUM-APPREC-OR-DEPREC> 1,480,405
<NET-ASSETS> 31,288,493
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 999,445
<OTHER-INCOME> 0
<EXPENSES-NET> 174,256
<NET-INVESTMENT-INCOME> 825,189
<REALIZED-GAINS-CURRENT> 88,323
<APPREC-INCREASE-CURRENT> 731,502
<NET-CHANGE-FROM-OPS> 1,645,014
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 825,189
<DISTRIBUTIONS-OF-GAINS> 98,961
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,618,059
<NUMBER-OF-SHARES-REDEEMED> 441,704
<SHARES-REINVESTED> 74,378
<NET-CHANGE-IN-ASSETS> 16,227,111
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 748,903
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 37
<GROSS-ADVISORY-FEES> 34,851
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 271,124
<AVERAGE-NET-ASSETS> 17,425,580
<PER-SHARE-NAV-BEGIN> 12.15
<PER-SHARE-NII> 0.58
<PER-SHARE-GAIN-APPREC> 0.45
<PER-SHARE-DIVIDEND> 0.58
<PER-SHARE-DISTRIBUTIONS> 0.04
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 12.56
<EXPENSE-RATIO> 1.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 5
<NAME> GROWTH & INCOME FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 52,984,534
<INVESTMENTS-AT-VALUE> 67,464,259
<RECEIVABLES> 107,496
<ASSETS-OTHER> 2,500,548
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 70,072,303
<PAYABLE-FOR-SECURITIES> 2,327,425
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 982,558
<TOTAL-LIABILITIES> 3,309,983
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 52,293,114
<SHARES-COMMON-STOCK> 2,718,500
<SHARES-COMMON-PRIOR> 1,914,289
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 5,904
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 4,615
<ACCUM-APPREC-OR-DEPREC> 14,479,725
<NET-ASSETS> 66,762,320
<DIVIDEND-INCOME> 841,356
<INTEREST-INCOME> 34,235
<OTHER-INCOME> 0
<EXPENSES-NET> 628,972
<NET-INVESTMENT-INCOME> 246,619
<REALIZED-GAINS-CURRENT> 3,953,219
<APPREC-INCREASE-CURRENT> 6,037,252
<NET-CHANGE-FROM-OPS> 10,237,090
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 258,304
<DISTRIBUTIONS-OF-GAINS> 4,401,950
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,017,154
<NUMBER-OF-SHARES-REDEEMED> 401,518
<SHARES-REINVESTED> 188,575
<NET-CHANGE-IN-ASSETS> 26,480,471
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 449,897
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 100,635
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 748,803
<AVERAGE-NET-ASSETS> 50,317,315
<PER-SHARE-NAV-BEGIN> 21.04
<PER-SHARE-NII> 0.10
<PER-SHARE-GAIN-APPREC> 5.29
<PER-SHARE-DIVIDEND> 0.10
<PER-SHARE-DISTRIBUTIONS> 1.76
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 24.56
<EXPENSE-RATIO> 1.25
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 6
<NAME> CAPITAL APPRECIATION
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 39,217,304
<INVESTMENTS-AT-VALUE> 39,963,176
<RECEIVABLES> 805,204
<ASSETS-OTHER> 941,533
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 41,709,913
<PAYABLE-FOR-SECURITIES> 165,336
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 62,496
<TOTAL-LIABILITIES> 227,832
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 40,741,423
<SHARES-COMMON-STOCK> 2,661,350
<SHARES-COMMON-PRIOR> 495,668
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 82
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 5,132
<ACCUM-APPREC-OR-DEPREC> 745,872
<NET-ASSETS> 41,4822,081
<DIVIDEND-INCOME> 181,626
<INTEREST-INCOME> 26,675
<OTHER-INCOME> 0
<EXPENSES-NET> 195,844
<NET-INVESTMENT-INCOME> 12,457
<REALIZED-GAINS-CURRENT> 2,023,906
<APPREC-INCREASE-CURRENT> (118,155)
<NET-CHANGE-FROM-OPS> 1,918,208
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 25,300
<DISTRIBUTIONS-OF-GAINS> 2,129,529
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,137,853
<NUMBER-OF-SHARES-REDEEMED> 111,756
<SHARES-REINVESTED> 139,585
<NET-CHANGE-IN-ASSETS> 35,041,510
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 105,557
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 31,335
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 237,723
<AVERAGE-NET-ASSETS> 15,667,550
<PER-SHARE-NAV-BEGIN> 12.99
<PER-SHARE-NII> 0.01
<PER-SHARE-GAIN-APPREC> 3.57
<PER-SHARE-DIVIDEND> 0.01
<PER-SHARE-DISTRIBUTIONS> 0.97
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 15.59
<EXPENSE-RATIO> 1.25
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 7
<NAME> GLOBAL INCOME FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 49,731,200
<INVESTMENTS-AT-VALUE> 49,398,837
<RECEIVABLES> 1,139,430
<ASSETS-OTHER> 1,596,536
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 52,134,803
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 47,236
<TOTAL-LIABILITIES> 47,236
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 52,555,384
<SHARES-COMMON-STOCK> 5,404,248
<SHARES-COMMON-PRIOR> 1,193,895
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 118,123
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 150,670
<ACCUM-APPREC-OR-DEPREC> (199,024)
<NET-ASSETS> 52,087,567
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 872,782
<OTHER-INCOME> 0
<EXPENSES-NET> 197,424
<NET-INVESTMENT-INCOME> 675,358
<REALIZED-GAINS-CURRENT> 8,476
<APPREC-INCREASE-CURRENT> (538,981)
<NET-CHANGE-FROM-OPS> 144,853
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 548,912
<DISTRIBUTIONS-OF-GAINS> 401,993
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4,153,429
<NUMBER-OF-SHARES-REDEEMED> 53,640
<SHARES-REINVESTED> 110,564
<NET-CHANGE-IN-ASSETS> 39,860,689
<ACCUMULATED-NII-PRIOR> 969
<ACCUMULATED-GAINS-PRIOR> 10,017
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 29,248
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 228,516
<AVERAGE-NET-ASSETS> 14,624,015
<PER-SHARE-NAV-BEGIN> 10.24
<PER-SHARE-NII> 0.47
<PER-SHARE-GAIN-APPREC> 0.48
<PER-SHARE-DIVIDEND> 0.40
<PER-SHARE-DISTRIBUTIONS> 0.12
<RETURNS-OF-CAPITAL> 0.07
<PER-SHARE-NAV-END> 9.64
<EXPENSE-RATIO> 1.35
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<PAGE>
EXHIBIT 14
CONSENT OF INDEPENDENT AUDITORS
We consent to the use of our report dated February 20, 1998 on the Van Eck/Chubb
Funds, Inc., which is included in the Annual Report to Shareholders for the year
ended December 31, 1997, and is incorporated by reference, in this Registration
Statement (Form N-14 No. 33-14737) of Van Eck/Chubb Funds, Inc.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
New York, New York
March 17, 1998
<PAGE>
EXHIBIT 14A
[LETTERHEAD OF COOPERS & LYBRAND L.L.P.]
CONSENT OF INDEPENDENT ACCOUNTANTS
---------------------
We consent to the incorporation by reference in the Registration Statement on
Form N-14 of the Van Eck/Chubb Funds, Inc. of our report dated February 23,
1998, on our audit of the financial statements and financial highlights of the
Global Income Fund, which report is included in the Annual Report to
Shareholders for the year ended December 31, 1997, which is also incorporated by
reference in this registration statement.
/s/ Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
New York, New York
March 19, 1998
