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[VAN ECK CHUBB FUNDS LOGO] Annual Report 1997
Money Market Fund | Government Securities Fund
Total Return Fund | Tax-Exempt Fund | Growth and Income Fund
Capital Appreciation Fund | Global Income Fund
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VAN ECK/CHUBB FUNDS
Dear Fellow Shareholder:
We are pleased to announce that on October 1, 1997, Chubb Asset Managers formed
a strategic alliance with Van Eck Global, a financial services and investment
management firm with more than 40 years of experience. Renamed the Van Eck/Chubb
Funds under the new Van Eck Partnership Series, your Funds will benefit from the
association of two great traditions: the 116-year-old Chubb organization and Van
Eck Global, a leading manager of specialty asset classes. Founded in 1955 by
John van Eck, Van Eck Global offers investors expertise in the areas of global
hard assets, global real estate and emerging markets, among others. Together,
the two firms provide complementary investment approaches and financial products
for investors.
The goal of this partnership is to promote the marketing and sales of your Funds
through Van Eck Global's distribution channels; this should foster broader
investment opportunities for the Funds and ultimately contribute to shareholder
value. Chubb Asset Managers will continue to be responsible for the daily
portfolio management of the Funds and, as always, we will continue to invest
your money as mandated in each Fund's prospectus. We maintain our commitment to
pursuing the consistent, value-oriented, risk-averse investment style that has
been the key to the Funds' success and which helped all seven Funds post
positive results in 1997.
Investors will continue to benefit from our significant presence as a major
institutional investor. In addition to your Funds, we manage Chubb Corporation's
approximately $14 billion in invested assets. In managing all portfolios, we
adhere to the same philosophy: understanding an investment's downside risk is
central to determining its upside potential.
The following is a review of the events that shaped 1997, along with an overview
of the markets in which the Funds invest: the U.S. equity and bond markets, and
global bond markets.
A REVIEW OF FINANCIAL MARKETS
Nineteen ninety-seven was an outstanding year for investors in both the equity
and fixed income markets. This also holds true for shareholders of the seven Van
Eck/Chubb Funds; a comprehensive review of each Fund, including its performance,
is included in the pages that follow.
ASIA'S ECONOMIC AND FINANCIAL TURMOIL
The growing problems in Asia proved to be the dominant investment story of this
past year. What started as isolated local difficulties among the Southeast Asian
countries in early summer spread throughout Asia as the year progressed.
Although the specifics vary by country, one problem common to all was excessive
foreign currency borrowing to fund inefficient capital spending. Throughout
Asia, currencies, equities and economies were battered. By October, the turmoil
had moved north to Hong Kong, South Korea and Japan, causing equities to decline
around the world. Many stock markets were hard hit by Asia's financial crisis in
the fourth quarter, including those of Japan, the Pacific Rim, as well as parts
of Latin America. By contrast, the U.S. and European stock markets were more
resilient and thus able to recover from initial bouts of investor anxiety. Even
with bail-out packages in place from the International Monetary Fund (IMF),
investors have been reluctant to return to Asia; rather, they await positive
signs of economic and fiscal reform, and a move toward freer markets.
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U.S. EQUITY MARKETS
The impact of Asia's troubles aside, U.S. financial markets were supported this
past year by the healthy U.S. economy, which enjoyed its seventh consecutive
year of expansion. This represents the longest period of peacetime prosperity
since World War II. Persistently low inflation buoyed markets; the rate of
inflation, as measured by the consumer price index (CPI), fell to 1.8% by year
end. This marked a new low in this economic cycle, despite robust gross domestic
product (GDP) growth of 4% and the highest level of employment in 24 years. The
long-term global disinflationary trend, coupled with the fourth-quarter crisis
in Asia, helped quell upward pressure on U.S. prices throughout the year. This
combination of steady growth and low inflation enabled the Federal Reserve to
take a more measured approach to monetary policy in 1997; it increased
short-term rates just once, by 0.25% in March.
The U.S. stock market, propelled by strong earnings growth and the favorable
economic environment, reached record highs in 1997, with the S&P 500 Index up
33.4% and the Dow Jones Industrial Average gaining 25.0%. For the three years
ending December 31, 1997, the stock market (S&P 500) gained 125%--more than
doubling in value. Going forward, perhaps some perspective is judicious,
particularly for the great number of investors new to the stock market. These
heady gains are aberrant in this century: the 31.1% compound average annual rate
of return experienced in the past three years, and even the 17.5% annual return
for the past 15 years, far exceed the 10% average annual rise of equities that
investors have experienced in the 60-odd years since the Great Depression. In
addition, last year's extremely strong equity returns were accompanied by
increased volatility, nearly twice as much as in 1996. We expect stock market
gains to be less dramatic and for equities to remain volatile in 1998.
GLOBAL BOND MARKETS
Bond markets around the world--excluding those in Asia--also had a solid year,
benefiting from low inflation, moderate economic growth and supportive monetary
policies from central banks. While the UK and Italian bond markets took top
honors, the U.S. bond market also did well. Asia's crisis precipitated a
flight-to-quality among bond investors and helped push the yield of the
bellwether 30-year U.S. Treasury bond below 6.0% by year end. In addition, both
the U.S. dollar and the UK's sterling gained strength due to the relative
attractiveness of U.S. and UK interest rates in the first half and at year end,
following the flight of capital from beleaguered Asian investors. Also, the
shrinking U.S. federal budget deficit continued to support the U.S. dollar and
to favor the supply/demand fundamentals of bonds. Finally, European bond markets
performed well as the region continued to progress toward European Monetary
Union.
THE OUTLOOK
Although the full impact of Asia's financial crisis has yet to be felt, we
anticipate moderate economic growth of about 2.5% in the U.S., which should
support moderate global economic growth. We are somewhat cautious about the
short-term prospects for financial markets, which will continue to be volatile,
but we believe that the environment of low inflation, slower growth and solid
earnings growth will provide many investment opportunities.
Our bottom-up stock selection process will be particularly important in this
unpredictable environment. In-depth research of each individual company will be
critical in accurately assessing the repercussions of Asia's
troubles--repercussions that cannot be broad-brushed across industry sectors.
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We still remain optimistic about the long-term outlook for financial markets,
both equity and fixed income securities. For equities in particular, a growing
number of American baby-boomers are contributing to the steady flow of money
into common stocks via mutual funds and retirement vehicles, particularly 401(k)
plans. These savings represent long-term commitments to the markets; we believe
this phenomenon has created broad support for financial assets.
All of us at Van Eck/Chubb Funds wish you a healthy and prosperous 1998. If you
have any questions regarding the new partnership with Van Eck Global, please
contact Marketing and Sales Support at (800) 826-2333.
/s/ MICHAEL O'REILLY
Michael O'Reilly
President
Van Eck/Chubb Funds
President and
Chief Operating Officer
[PHOTO] Chubb Asset Managers, Inc.
January 27, 1998
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VAN ECK/CHUBB MONEY MARKET FUND
The Van Eck/Chubb Money Market Fund seeks to provide the highest possible level
of current income as is consistent with the preservation of capital and
maintenance of liquidity by investing primarily in short-term high-grade debt
obligations.
We are pleased to report that in 1997 the Van Eck/Chubb Money Market Fund
continued to meet its objectives as an investment that provides a high degree of
safety and daily liquidity. The Fund's seven-day average yield was 4.94%* and
its 30-day average yield was 4.91% on December 31, 1997; total net assets were
$9.4 million at year end.
THE YEAR IN REVIEW
In 1997, yields on three-month U.S. Treasury bills averaged 5.20%, peaking at
5.40% in late March and at year end, and dipping to 4.85% in early June. In the
first part of the year, the Federal Reserve made a proactive move to combat
signs of accelerating wage inflation by raising the federal funds target rate
from 5.25% to 5.50%. However, shortly thereafter new data indicated that wages
were not accelerating and that economic growth was moderate. In response, money
market yields declined. Lower rates were also supported by the government's
slight reduction in new issuance because of the shrinking U.S. federal budget
deficit.
Events in the second half of the year were dominated by Asia's unfolding
financial crisis. By year end, money market yields were on the rise again as
central banks in Asia sold or redeemed Treasury bills in order to defend their
devalued currencies.
INVESTMENT STRATEGY
The Fund's Manager selects a diversified group of securities for the Fund's
portfolio, including bank certificates of deposit, short-term corporate debt and
U.S. Treasury bills, notes and bonds. Selections are made based on an analysis
of rates, the specific terms of the securities, and the ease with which
securities may be bought and sold. Capitalization, earnings liquidity and other
fundamental conditions of the issuers are also considered when selecting
securities for the Fund.
The objective of the Fund is to provide an investment vehicle that minimizes
credit-quality risk and net asset fluctuations. The Fund continues to meet this
objective by investing in high-quality short-term investment vehicles.
Currently, we continue to feel it is prudent to invest primarily in government
and quasi-government securities (taking into account the narrow yield
differential between U.S. Treasury bills and lesser-quality alternative
investments, such as commercial paper).
The Van Eck/Chubb Money Market Fund offers daily liquidity and checkwriting
privileges, providing the kind of convenient access to cash not available in
many other types of investments. The Fund also provides an excellent base from
which investors may transfer money into or out of other Van Eck/Chubb or Van Eck
Funds.**
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We appreciate your participation in the Van Eck/Chubb Money Market Fund and we
look forward to helping you meet your investment objectives in the future.
/s/ THOMAS J. SWARTZ, III
Thomas J. Swartz, III
Vice President
[PHOTO] Chubb Asset Managers, Inc.
January 27, 1998
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*PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NOT INDICATIVE OF FUTURE
RESULTS.
**Currently, there is no charge imposed on exchanges or limits as to frequency
of exchanges for this Fund. However, shareholders are limited to six exchanges
per calendar year for other Van Eck/Chubb or Van Eck Funds, and the Funds
reserve the right to modify or terminate the terms of the Exchange Privilege.
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VAN ECK/CHUBB GOVERNMENT SECURITIES FUND
The Van Eck/Chubb Government Securities Fund seeks to earn as high a level of
income as is consistent with safety of principal by investing exclusively in
debt obligations issued, guaranteed or collateralized by the U.S. government,
its agencies or instrumentalities.
We are pleased to report that for the year 1997 the Van Eck/Chubb Government
Securities Fund posted a 9.4%* total return, which reflects both the
reinvestment of monthly dividends and share price appreciation. Our conservative
maturity strategy and prudent security selection helped us to outperform both
the Lipper General and Intermediate U.S. Government Fund Indices for the fourth
consecutive year; in 1997, the Indices gained 8.8% and 8.2%, respectively.
THE YEAR IN REVIEW
For U.S. fixed income markets, last year represented another battle between
cyclical and secular forces and, in the end, the secular forces won out.
Cyclical forces refer to those elements that build up as a business cycle
progresses, while secular forces are those influences representing longer-term
trends that appear to occur across more than one business cycle. This past year,
the convergence of these dueling forces created a bewildering environment: a
strong late-cycle economy with high levels of employment, accompanied by
steadily declining--rather than accelerating--inflation and commodity prices.
Based on conventional wisdom, cyclical forces should have exerted upward
pressure on interest rates and inflation in 1997. These included the prolonged
economic expansion (now in its eighth year), the strength of the economy, the
tight labor market, and rising domestic capacity utilization rates. Early in the
year, the Federal Reserve responded to these cyclical inflationary forces by
tightening monetary policy; on March 25, the Fed raised the federal funds target
rate from 5.25% to 5.50%. Shortly thereafter interest rates rose modestly.
However, to the surprise of many economists and market participants, inflation
(which erodes bond values when rising) not only did not rise during the rest of
the year, but continued to drop, reaching a 32-year low of 1.8% by year end.
Rates on fixed income securities along the entire yield curve fell for most of
1997, with the exception of early April. The fourth quarter saw the most
dramatic declines, particularly for long-term bond yields, which fell more than
their short-term counterparts, resulting in a flattening of the yield curve.
In the end, it was the secular forces that proved dominant and helped to move
inflation lower, despite the cyclical influences. These forces included the
disinflationary impact of increased global competition and greater productivity
and capacity worldwide--a trend that has been gathering momentum for most of the
1990s following the fall of communism and the subsequent democratization of
economies and the liberalization of markets. In addition, the slowdown in global
growth resulting from Asia's debt and financial crisis has also helped suppress
global inflation pressures, particularly in the U.S., thus pushing yields lower.
In October, shortly after global stock markets were hard hit by Asia's ills, a
flight-to-quality ensued among bond investors eager to trade high-risk,
high-yielding issues for the relative safety of low-risk, high-quality
government bonds; given this, U.S. long-term bonds enjoyed a strong rally going
into the new year.
THE OUTLOOK
Looking ahead, we continue to see good value in the U.S. bond market. Many of
the supports that were in place this past year remain in place in 1998. These
include low inflation, a shrinking U.S. federal budget deficit (with the
possibility of a surplus), demographic trends that encourage
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savings, a highly valued and volatile stock market that may result in asset
allocation shifts to bonds, and, finally, historically attractive real interest
rates (i.e., nominal rates adjusted for inflation). This final point is the key
to determining whether or not there is value in the bond market. For example, at
year end, trailing twelve-month inflation was 1.8%, as measured by the consumer
price index (CPI), and the bellwether 30-year U.S. Treasury bond yielded 5.9%;
this translates into a real interest rate of 4.1% (5.9% minus 1.8%). Prior to
1980, real interest rates rarely topped 3%, indicating that current real
interest rates have further room to fall; this is true in part because markets
and investors have yet to shake off the residual high-inflation fears of the
1970s, despite more than 18 years of persistently low inflation. Given our
positive outlook, we believe that a core asset allocation to high-quality fixed
income securities continues to make very good sense.
We would like to thank you for your investment in the Van Eck/Chubb Government
Securities Fund and we look forward to helping you meet your investment
objectives in the future.
<TABLE>
<S> <C> <C> <C>
/s/ NED GERTSMAN /s/ PAUL R. GEYER
Ned I. Gerstman Paul R. Geyer
Senior Vice President Vice President
[PHOTO] Chubb Asset Managers, Inc. [PHOTO] Chubb Asset Managers, Inc.
</TABLE>
January 27, 1998
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*VAN ECK/CHUBB GOVERNMENT SECURITIES FUND:
PERFORMANCE COMPARISON
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN 1 YEAR 5 YEARS 10 YEARS
<S> <C> <C> <C>
VE/C GOV'T SECURITIES FUND (w/o sales charge)+ 9.4% 7.0% 9.0%
VE/C GOV'T SECURITIES FUND (w/ sales charge)+ 6.2% 6.3% 8.7%
LEHMAN BROS GOV'T BOND INDEX 9.6% 7.3% 8.9%
LIPPER GENERAL U.S. GOV'T FUND INDEX 8.8% 6.0% 7.8%
</TABLE>
<TABLE>
<CAPTION>
VE/C Lehman Brothers Lipper General
Gov't Securities Fund Gov't Bond U.S. Gov't
(w/ sales charge) Index Fund Index
<S> <C> <C> <C>
9699 10000
1987 9745 10119 10133
10139 10453 10472
10291 10552 10571
10551 10730 10745
1988 10591 10831 10808
10731 10945 10893
11536 11826 11665
11654 11923 11741
1989 12124 12372 12149
11985 12219 11995
12419 12646 12376
12502 12751 12448
1990 13202 13452 13122
13449 13743 13406
13583 13929 13551
14456 14725 14325
1991 15311 15515 15043
14815 15243 14774
15542 15843 15317
16468 16625 15917
1992 16450 16632 15961
17002 17383 16526
17503 17887 16943
17690 18467 17342
1993 17978 18405 17289
17487 17850 16749
17298 17646 16423
17352 17720 16446
1994 17377 17784 16469
18295 18621 17213
19307 19776 18167
19614 20125 18485
1995 20417 21044 19259
20063 20568 18800
20095 20665 18816
20447 21014 19113
1996 21068 21628 19646
20897 21452 19485
21687 22196 20159
22403 22940 20786
1997 23056 23701 21377
</TABLE>
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. COMMENCEMENT OF OPERATIONS
DECEMBER 1, 1987.
+ Returns for the Van Eck/Chubb Government Securities Fund reflect all recurring
expenses and include the reinvestment of all dividends and distributions. The
maximum sales charge is 3.0%.
This graph compares an initial $10,000 investment made in the Van Eck/Chubb
Government Securities Fund at its inception with a similar investment in the
Lehman Brothers Government Bond Index and the Lipper General U.S. Government
Fund Index. The graph shows month-end net asset values; however, the net asset
value fluctuates daily.
THE LEHMAN BROTHERS GOVERNMENT INDEX AND THE LIPPER GENERAL U.S. GOVERNMENT FUND
INDEX ARE UNMANAGED INDICES AND INCLUDE THE REINVESTMENT OF ALL DIVIDENDS, BUT
DO NOT REFLECT THE PAYMENT OF TRANSACTION COSTS, ADVISORY FEES OR EXPENSES THAT
ARE ASSOCIATED WITH AN INVESTMENT IN THE FUND.
Performance data quoted represents past performance; the investment return and
principal value of an investment will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than the original cost.
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VAN ECK/CHUBB TOTAL RETURN FUND
The Van Eck/Chubb Total Return Fund seeks to provide both income and capital
appreciation by investing in a strategic combination of high-quality bonds and
the common stocks of both large-and medium-capitalization companies, selected
with a value approach. The Fund's Managers monitor and adjust the asset mix
based on analysis of the financial markets. In ordinary markets, about 60% to
70% of the Fund's assets will be invested in common stocks.
The Van Eck/Chubb Total Return Fund had an excellent year in 1997, returning
24.1%*. This compares very favorably to its peer group of mutual funds, which
returned on average 20.1% as measured by the Lipper Balanced Fund Index. The
Fund's solid performance reflects the strength of both U.S. equity and fixed
income securities this past year. The U.S. stock market was up 33.4%, as
measured by the S&P 500 Index, and quality U.S. government and corporate bonds
gained 9.6%, as measured by the Salomon Smith Barney Broad Investment-Grade Bond
Index.
REVIEW OF U.S. EQUITY AND BOND MARKETS
It was a good year for U.S. financial assets in 1997, with investors in both
common stocks and bonds enjoying positive results. Inflationary pressures
continued to be non-existent and, in fact, by year end inflation had dipped to
1.8%. This was quite remarkable given the economy's steady growth and the high
levels of employment in what was the seventh year of a record-setting expansion.
The favorable economic environment helped equity markets--for the third year in
a row--reach record highs, but at the cost of significant volatility. Daily
price gyrations of 1% or more occurred on nearly twice as many days last year as
in 1996. In October alone, the U.S. market declined 10% as part of the global
sell-off of equities that followed Asia's meltdown. Nonetheless, many industries
enjoyed robust gains in 1997, particularly the financial services,
pharmaceuticals and technology sectors.
Bond investors were also well rewarded in 1997. Declining interest rates drove
the yield on the bellwether 30-year U.S. Treasury bond below the 6.0% mark by
year end. The Federal Reserve raised short-term rates once during the year,
hiking the federal funds target rate from 5.25% to 5.50% in March in response to
strong economic growth of 4.0%. Thereafter, economic growth was more
subdued--helped in large part by the tempering impact of Asia's problems--and
the Fed left rates unchanged for the remainder of the year.
FUND REVIEW
We began the year with approximately 68% of your Fund's total net assets
invested in common stocks and 30% in U.S. bonds. By the end of 1997, the Fund's
composition had changed to 64% of total net assets invested in common stocks,
26% in U.S. government obligations and 9% in high-grade corporate bonds.
As you can see, we maintained a heavy bias in favor of common stocks last year
as equities continued to outperform bonds--a trend that has been in place for
most of this decade. Within the Fund's fixed income component, we continued to
favor intermediate maturity bonds that offered income and capital appreciation
potential.
Throughout the year, we took advantage of the increased stock market volatility
to make shifts in the portfolio's common stock holdings, seeking out those
companies that were selling at a
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significant discount to the broad market averages on their earnings multiples,
yet with above-average future growth prospects. These included Crown Cork and
Seal, Banc One, AlliedSignal, United Technologies, Columbia/HCA Healthcare, CSX
Corporation, Federated Department Stores and IMC Global. In addition, we
eliminated the Fund's positions in Philip Morris Companies, Ultramar Diamond
Shamrock and Circuit City Stores.
THE OUTLOOK
The underpinnings of the U.S. economy remain sound, with moderate growth, low
interest rates and dormant inflation; this will provide a very supportive
environment for financial assets. We are somewhat cautious going forward, given
that the full impact of Asia's problems has yet to be felt. For equity markets,
we believe that the market will broaden in the coming year to include stocks
across the full capitalization spectrum; the market had narrowed considerably by
year end as nervous investors sought protection from Asia's fallout by shifting
investments to the largest capitalization companies--many with market
capitalizations in excess of $100 billion. Finally, we continue to see good
value in high-quality government and corporate bonds and believe that yields
have additional room to fall, providing opportunities for capital appreciation.
We would like to thank you for your investment in the Van Eck/Chubb Total Return
Fund and we look forward to helping you meet your investment objectives in the
future.
<TABLE>
<S> <C> <C> <C>
/s/ MICHAEL O'REILLY
Michael O'Reilly
President
Van Eck/Chubb Funds /s/ ROBERT WITKOFF
President and Robert Witkoff
Chief Operating Officer Senior Vice President
[PHOTO] Chubb Asset Managers, Inc. [PHOTO] Chubb Asset Managers, Inc.
</TABLE>
January 27, 1998
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*VAN ECK/CHUBB TOTAL RETURN FUND:
PERFORMANCE COMPARISON
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN 1 YEAR 5 YEARS 10 YEARS
<S> <C> <C> <C>
VE/C TOTAL RETURN FUND (w/o sales charge)+ 24.1% 15.6% 14.5%
VE/C TOTAL RETURN FUND (w/ sales charge)+ 17.9% 14.4% 13.9%
S&P 500 INDEX 33.4% 20.3% 18.1%
LIPPER BALANCED FUND INDEX 20.1% 13.2% 12.9%
</TABLE>
<TABLE>
<CAPTION>
VE/C Lipper
Total Return Fund S&P 500 Balanced
(w/ sales charge) Index Fund Index
<S> <C> <C> <C>
$ 9497 10000 10000
Dec 1987 9734 10761 10567
Mar 1988 9990 11373 11021
Jun 1988 10607 12131 11459
Sep 1988 10353 12172 11523
Dec 1988 10546 12548 11748
Mar 1989 10950 12438 12223
Jun 1989 11739 14624 13088
Sep 1989 12797 16190 13861
Dec 1989 13228 16524 14062
Mar 1990 13237 16027 13733
Jun 1990 13868 17035 14367
Sep 1990 12698 14694 13205
Dec 1990 13178 16011 14154
Mar 1991 14346 18337 15628
Jun 1991 14889 18295 15670
Sep 1991 15609 19273 16661
Dec 1991 17034 20889 17810
Mar 1992 16990 20361 17600
Jun 1992 16990 20748 17882
Sep 1992 17363 21402 18445
Dec 1992 18239 22480 19138
Mar 1993 19101 23462 20039
Jun 1993 19382 23576 20449
Sep 1993 20182 24185 21197
Dec 1993 20800 24746 21426
Mar 1994 20221 23807 20772
Jun 1994 20057 23908 20615
Sep 1994 20478 25077 21218
Dec 1994 19918 25073 20988
Mar 1995 21410 27514 22254
Jun 1995 23580 30141 23812
Sep 1995 25104 32536 25090
Dec 1995 25904 34494 26211
Mar 1996 26377 36346 26797
Jun 1996 27210 37977 27341
Sep 1996 27673 39151 28058
Dec 1996 30318 42414 29621
Mar 1997 30479 43551 29749
Jun 1997 34529 51155 32936
Sep 1997 38173 54987 35051
Dec 1997 37623 56565 35559
</TABLE>
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. COMMENCEMENT OF OPERATIONS
DECEMBER 1, 1987.
+ Returns for the Van Eck/Chubb Total Return Fund reflect all recurring expenses
and include the reinvestment of all dividends and distributions. The maximum
sales charge is 5.0%.
This graph compares an initial $10,000 investment made in the Van Eck/Chubb
Total Return Fund at its inception with a similar investment in the S&P 500
Index and the Lipper Balanced Fund Index. The graph shows month-end net asset
values; however, the net asset value fluctuates daily.
THE S&P 500 INDEX AND THE LIPPER BALANCED FUND INDEX ARE UNMANAGED INDICES AND
INCLUDE THE REINVESTMENT OF ALL DIVIDENDS, BUT DO NOT REFLECT THE PAYMENT OF
TRANSACTION COSTS, ADVISORY FEES OR EXPENSES THAT ARE ASSOCIATED WITH AN
INVESTMENT IN THE FUND.
Performance data quoted represents past performance; the investment return and
principal value of an investment will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than the original cost.
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VAN ECK/CHUBB TAX-EXEMPT FUND
The Van Eck/Chubb Tax-Exempt Fund seeks a high level of current income that is
exempt from federal income taxes, consistent with the preservation of capital.
The Fund's Managers apply rigorous credit analysis in selecting tax-exempt bonds
across the U.S., with emphasis on investment-grade issues.
We are pleased to inform you that the Van Eck/Chubb Tax-Exempt Fund posted
positive results for the year, gaining 8.7%*. This total return figure reflects
both the reinvestment of monthly dividends and price appreciation. The Fund's
performance compares favorably both to the benchmark Lehman Brothers Municipal
Bond Index, which had a total return of 9.2%, and to its peer mutual funds, as
measured by the Lipper General Municipal Debt Fund Index, which gained 9.0%.
A REVIEW OF THE MUNICIPAL MARKET
The year was a good one for fixed-income investors, including holders of
municipal bonds. The technical factors that helped propel long-term U.S.
Treasury bond yields to historically low levels by year end also drove down
municipal bond yields, thus boosting prices. Last year's declining interest
rates were the result of a few surprises: the persistently low levels of
inflation, the shrinking U.S. federal budget deficit, and the turmoil in Asia.
Prices continued to be well behaved, despite the backdrop of a buoyant economy,
characterized by high levels of employment and solid gross domestic product
(GDP) growth of 4.0% for the year. Another surprise last year was the unexpected
decline in the U.S. federal budget deficit. While the Congressional Budget
Office predicted a 1997 deficit of $124 billion, this was five times greater
than the actual tally of $22 billion for the 12 months ended September 30.
Finally, few anticipated the extent of Asia's economic and financial crisis and
the volatility it would create in global financial markets. In response to the
crisis, nervous investors precipitated a flight-to-quality in the fourth
quarter, increasing the demand for U.S. Treasuries and helping the yield of the
bellwether 30-year U.S. Treasury bond to fall below 6.0%.
Taking a look at municipal bond activity, for the first nine months of 1997
long-term municipal bond yields fluctuated within a relatively narrow range. At
the beginning of the year, the yield on the Bond Buyer 20-Bond General
Obligation Index (BB20), a benchmark for municipal yields, was 5.66%. The yield
reached a high of 5.88% on April 3, rising in response to reports of a slightly
over-heating U.S. economy--due to perceived wage pressures--and the Federal
Reserve's 0.25% hike in short-term rates on March 25. Municipal bonds rallied
slightly in the spring and early summer, as economic growth continued without
any additional inflation pressures. As with other bonds, the big move for
municipal bonds came in the fourth quarter; prices rose steadily and the BB20
yield declined to 5.14% by year end. Even at these levels, municipals
represented an attractive investment, offering 87% of the yield on Treasuries.
The dramatic decline in interest rates was responsible for another year of solid
gains in municipal bond issuance. Volume in 1997, which grew 14% from 1996, was
far in excess of expectations; outstanding municipal issues now account for some
$1.2 trillion. Demand kept pace with supply throughout the year, particularly
because municipal bonds continued to offer yields attractive relative to taxable
yields (in the maximum 39.6% federal income tax bracket, a 5.00% tax-free
municipal yield is equivalent to an 8.28% taxable yield). Furthermore,
reflecting the strength of the nation's economy and improved fiscal discipline,
the financial health of many of the nation's states has improved dramatically in
recent years and credit ratings in many regions have been upgraded. More than
2,700 municipal issuers received credit-rating upgrades last year, creating the
strongest
12
<PAGE> 14
credit-ratings environment in more than a decade. In addition, many
municipalities have been eager to address their real infrastructure needs,
despite ongoing pressures to keep taxes low.
FUND REVIEW
In managing your Fund, we employ the same disciplined strategy we use in
managing the Chubb Corporation's $7.6 billion tax-exempt bond portfolio (which
is one of the nation's largest municipal bond portfolios). Our position as a
major institutional buyer benefits your Fund, as it gives us superior leverage
and access to the best market-making and research capabilities in the municipal
market. We are credit driven in our approach, closely monitoring leading
economic indicators to help identify those areas of the country where trends are
most favorable. In 1997, we favored the state of Texas and the Midwest region,
particularly Indiana. Both Texas and Indiana enjoyed low tax burdens, favorable
business environments and economic growth rates that continue to outpace other
states. For example, Texas, which has no income tax, now ranks as the
second-most populated state behind California (replacing New York) and has
exceeded the national growth rate for more than seven consecutive years. We also
liked New York State, as it has recently been upgraded and enjoyed a $1.9
billion operating surplus last year. New York City continues to benefit from
improvements under the aegis of Mayor Giuliani, and from very high hotel
occupancy rates and an improving tax environment. In general, many regions
throughout the country are performing well, with solid revenue growth far
exceeding estimates.
Finally, we employed a barbell strategy with regard to maturities toward year
end; that is, we purchased higher-yielding bonds at the short-end of the
maturity curve in order to achieve good incremental yields and acquired
higher-grade bonds with longer maturities with an eye toward boosting total
return performance. Going forward, this combined focus on yield and total return
should help us perform relatively well in both up and down markets.
THE OUTLOOK
Going into 1998, the environment looks favorable for municipal bonds, although
we do not expect returns to be quite as high as in 1997. Municipal bonds may
enjoy increased flows as investors shy away from volatile equity markets,
especially given the instabilities and unpredictability born from Asia's
problems. As always, municipals are one of the few remaining shelters from
income taxes. While marginal tax rates have fallen in the 1990s, overall
effective taxes have increased, as the base for what is taxed has been
broadened. Finally, economic fundamentals point to a continuation of steady,
moderate growth with low inflation. This, along with stable long-term interest
rates, improving credit trends and attractive real rates, bodes well for the
future performance of the municipal bond market.
13
<PAGE> 15
We thank you for your participation in the Van Eck/Chubb Tax-Exempt Fund and we
look forward to helping you meet your investment goals in the future.
<TABLE>
<S> <C> <C> <C>
/s/ FREDERICK GAERTNER /s/ THOMAS J. SWARTZ III
Frederick W. Gaertner Thomas J. Swartz, III
Senior Vice President Vice President
[PHOTO] Chubb Asset Managers, Inc. [PHOTO] Chubb Asset Managers, Inc.
</TABLE>
January 27, 1998
*VAN ECK/CHUBB TAX-EXEMPT FUND:
PERFORMANCE COMPARISON
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN 1 YEAR 5 YEARS 10 YEARS
<S> <C> <C> <C>
VE/C TAX-EXEMPT FUND (w/o sales charge)+ 8.7% 6.7% 8.4%
VE/C TAX-EXEMPT FUND (w/ sales charge)+ 5.4% 6.1% 8.1%
LEHMAN BROS MUNICIPAL BOND INDEX 9.2% 7.4% 8.6%
LIPPER GENERAL MUNICIPAL DEBT FUND INDEX 9.0% 6.9% 8.3%
</TABLE>
<TABLE>
<CAPTION>
VE/C Lehman Brothers Lipper General
Tax-Exempt Fund Municipal Municipal
(w/ sales charge) Bond Index Funds Index
<S> <C> <C> <C>
9699 10000
1987 9842 10145 10194
10101 10494 10505
10434 10697 10769
10837 10972 11087
1988 11214 11176 11383
11222 11250 11449
12151 11916 12137
12004 11924 12081
1989 12513 12382 12517
12343 12437 12491
12680 12728 12775
12520 12735 12716
1990 13151 13284 13268
13415 13585 13541
13620 13875 13818
14147 14414 14365
1991 14559 14897 14866
14650 14942 14885
15226 15508 15520
15611 15920 15872
1992 15897 16210 16189
16585 16811 16840
17073 17361 17409
17676 17948 17996
1993 17872 18200 18201
16997 17201 17201
17042 17391 17300
17079 17510 17381
1994 16805 17259 17103
17926 18479 18316
18328 18925 18669
18654 19470 19145
1995 19473 20273 20064
19268 20028 19707
19351 20182 19814
19781 20646 20260
1996 20253 21172 20725
20271 21122 20632
20853 21849 21345
21404 22508 21983
1997 22021 23119 22597
</TABLE>
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. COMMENCEMENT OF OPERATIONS
DECEMBER 1, 1987.
+ Returns for the Van Eck/Chubb Tax-Exempt Fund reflect all recurring expenses
and include the reinvestment of all dividends and distributions. The maximum
sales charge is 3.0%.
This graph compares an initial $10,000 investment made in the Van Eck/Chubb
Tax-Exempt Fund at its inception with a similar investment in the Lehman
Brothers Municipal Bond Index and the Lipper General Municipal Debt Fund Index.
The graph shows month-end net asset values; however, the net asset value
fluctuates daily.
THE LEHMAN BROTHERS MUNICIPAL BOND INDEX AND THE LIPPER GENERAL MUNICIPAL DEBT
FUND INDEX ARE UNMANAGED INDICES AND INCLUDE THE REINVESTMENT OF ALL DIVIDENDS,
BUT DO NOT REFLECT THE PAYMENT OF TRANSACTION COSTS, ADVISORY FEES OR EXPENSES
THAT ARE ASSOCIATED WITH AN INVESTMENT IN THE FUND.
Performance data quoted represents past performance; the investment return and
principal value of an investment will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than the original cost.
14
<PAGE> 16
VAN ECK/CHUBB GROWTH AND INCOME FUND
The Van Eck/Chubb Growth and Income Fund seeks long-term capital appreciation by
investing primarily in the stocks of leading large- and medium-capitalization
U.S. companies. The Fund's Manager looks for value by investing in established
companies that are selling at a discount to the market in terms of several
valuation measures, including price-earnings multiples, and that have solid
future prospects (future earnings growth above the S&P 500 Index). This strategy
helps keep the Fund's volatility below that of the U.S. stock market. The Fund
secondarily seeks a reasonable level of current income.
We are pleased to report that the Van Eck/Chubb Growth and Income Fund had a
solid year in 1997, posting a total return of 25.9%*. This outpaces the 24.4%
average return of the broader Lipper General Equity Fund Index, but slightly
lags behind the 27.0% average return of the more specific Lipper Growth & Income
Fund Index. At the same time, the unmanaged Dow Jones Industrial Average (DJIA)
rose 25.0% and the S&P 500 Index gained 33.4%.
REVIEW OF U.S. EQUITY MARKETS
For the third consecutive year, U.S. equity markets were buoyed by a positive
economic environment characterized by declining interest rates, steady economic
growth and benign inflation. On average, most companies delivered solid
corporate earnings, reflecting gains from increased productivity. Investors'
voracious appetite for equities also propelled prices higher; this was
particularly notable among baby boomers who continued to pour assets into
retirement vehicles, especially 401(k)s. Financial services was the
best-performing sector, benefiting from industry consolidation and declining
interest rates; other outperforming industries included pharmaceuticals and
technology. For the year, all the major equity indices posted double-digit
returns in excess of 20%. This exuberance, however, was accompanied by greater
price volatility; the DJIA fluctuated 1% or more during 80 trading days in 1997,
compared to 43 days in 1996 and 18 days in 1995.
In 1997, the companies held by your Fund had a median market capitalization of
approximately $4 billion. This placed the Fund at the smaller end of the
large-capitalization spectrum, which ranges from about $2.5 billion to more than
$100 billion. Through September 30, the stocks of smaller large-capitalization
companies kept pace with their larger-capitalization brethren. However, as
Asia's crisis deepened in the fourth quarter, investors gravitated toward the
largest companies--in other words, those blue-chip companies with solid,
household brand names, and some with capitalizations in excess of $100 billion,
such as Coca-Cola and Gillette. Investors believed that these "mega-cap"
companies would provide greater stability and protection from Asia's ills. This
flight-to-perceived-quality helped the higher-capitalization weighted S&P 500
(up 2.9%) outperform its peers in the fourth quarter (and for the year),
including the DJIA (down 0.01%), the mid-cap oriented Nasdaq Composite Index
(down 6.8%), and the small-cap oriented Russell 2000 Stock Index (down 3.4%).
FUND REVIEW
Throughout the year, we took advantage of the increased market volatility to
make shifts in the portfolio, seeking out those companies that were selling at a
significant discount to the broad market averages on their earnings multiples,
yet with above average future growth prospects. These included Crown Cork and
Seal, Hasbro, Columbia/HCA Healthcare, Banc One, Praxair, United Technologies
and IMC Global; in addition, we increased our positions in Black & Decker and
Burlington Northern Santa Fe, among others. We sold those positions that no
longer provided
15
<PAGE> 17
reasonable value, including Philip Morris Companies, Ultramar Diamond Shamrock,
Progressive Corp. and Circuit City Stores.
THE OUTLOOK
Given the events of this past year, the shift in investor bias toward the
mega-capitalization stocks was surprising. The larger-capitalization
multinationals have greater exposure to difficulties abroad and are, therefore,
more likely to be hurt by Asia's financial troubles than more domestically
focused companies. Going forward, the market should broaden with stocks
participating across the full capitalization spectrum as Asia's problems
continue to unfold and investor nervousness abates. The underpinnings of the
U.S. economy remain sound, with moderate growth, low interest rates and dormant
inflation, all very supportive to financial assets.
In 1998, we will continue to follow our consistent investment strategy of
choosing 40 to 50 equally weighted large-capitalization stocks, of staying fully
invested regardless of short-term trends, and of minimizing the portfolio's
overexposure to any one sector or industry. In response to the problems in Asia,
we will selectively choose those multinationals selling at reasonable discounts
that can rely on strong domestic positions to support their overseas growth
initiatives.
We would like to thank you for your investment in the Van Eck/Chubb Growth and
Income Fund and we look forward to helping you meet your investment objectives
in the future.
/s/ ROBERT WITKOFF
Robert Witkoff
Senior Vice President
[PHOTO] Chubb Asset Managers, Inc.
January 27, 1998
16
<PAGE> 18
*VAN ECK/CHUBB GROWTH AND INCOME FUND:
PERFORMANCE COMPARISON
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN 1 YEAR 5 YEARS 10 YEARS
<S> <C> <C> <C>
VE/C GROWTH AND INCOME FUND (w/o sales charge)+ 25.9% 18.2% 15.9%
VE/C GROWTH AND INCOME FUND (w/ sales charge)+ 19.6% 17.0% 15.3%
S&P 500 INDEX 33.4% 20.3% 18.1%
LIPPER GROWTH & INCOME FUND INDEX 27.0% 18.1% 16.0%
</TABLE>
<TABLE>
<CAPTION>
VE/C Lipper
Growth and Income Fund S&P 500 Growth & Income
(w/ sales charge) Index Fund Index
<S> <C> <C> <C>
9497 10000
1987 10067 10761 10661
10219 11373 11489
10980 12131 12246
10247 12172 12348
1988 10519 12548 12618
11221 13438 13478
12028 14624 14462
13479 16190 15665
1989 13885 16524 15613
14038 16027 15211
14744 17035 15782
13034 16694 13660
1990 13462 16011 14677
14859 18337 16771
15626 18295 16712
16427 19273 17697
1991 17980 20889 18751
18250 20361 18731
17806 20748 18953
17941 21402 19489
1992 19182 22480 20556
20107 23462 21773
20271 23576 22053
21171 24185 23033
1993 22115 24746 23562
21472 23807 22799
21228 23908 22918
21971 25077 23865
1994 21163 25073 23464
22918 27514 25305
25838 30141 27362
28071 32536 29422
1995 28652 34494 30771
29439 36346 32538
30827 37977 33374
31459 39151 34451
1996 35100 42414 37137
35454 43551 37762
41458 51155 43053
46232 54987 46657
1997 44174 56565 47149
</TABLE>
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. COMMENCEMENT OF OPERATIONS
DECEMBER 31, 1987.
+ Returns for the Van Eck/Chubb Growth and Income Fund reflect all recurring
expenses and include the reinvestment of all dividends and distributions. The
maximum sales charge is 5.0%.
This graph compares an initial $10,000 investment made in the Van Eck/Chubb
Growth and Income Fund at its inception with a similar investment in the S&P 500
Index and the Lipper Growth & Income Fund Index. The graph shows month-end net
asset values; however, the net asset value fluctuates daily.
THE S&P 500 INDEX AND THE LIPPER GROWTH & INCOME FUND INDEX ARE UNMANAGED
INDICES AND INCLUDE THE REINVESTMENT OF ALL DIVIDENDS, BUT DO NOT REFLECT THE
PAYMENT OF TRANSACTION COSTS, ADVISORY FEES OR EXPENSES THAT ARE ASSOCIATED WITH
AN INVESTMENT IN THE FUND.
Performance data quoted represents past performance; the investment return and
principal value of an investment will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than the original cost.
17
<PAGE> 19
VAN ECK/CHUBB CAPITAL APPRECIATION FUND
The Van Eck/Chubb Capital Appreciation Fund seeks long-term capital appreciation
by investing primarily in equity securities of medium-capitalization U.S.
companies representing sound value. At least 65% of the Fund's assets are
invested in companies with market capitalizations between $500 million and $2.5
billion. These are companies that sell at a discount to the market in terms of
several valuation measures, including price-earnings multiples, and that have
solid future prospects (future earnings growth above the S&P 500 Index). They
may possess one or all of the following characteristics: a strong balance sheet;
new products or markets; streamlined or re-engineered operations; and/or
improved management.
We are pleased to report that the Van Eck/Chubb Capital Appreciation Fund had an
excellent year in 1997, posting a total return of 27.8%*. This far outpaces the
Fund's mutual fund peer group as measured by the Lipper Mid Cap Fund Index,
which returned 17.6%.
EQUITY MARKET REVIEW
U.S. equity markets were supported by a very positive economic environment in
1997, characterized by declining interest rates, steady economic growth and,
paradoxically, benign inflation. On average, most companies delivered solid
corporate earnings, reflecting gains from increased productivity. Investors'
voracious appetite for equities also propelled prices higher. Financial services
was the best performing sector, benefiting from industry consolidation and
declining interest rates; other outperforming industries included
pharmaceuticals and technology. For the year, all the major equity indices
posted double-digit returns in excess of 20%, including the larger-cap oriented
S&P 500 Index (33.4%) and the Dow Jones Industrial Average (DJIA, 25.0%), the
mid-cap oriented Nasdaq Composite Index (22.0%), and the small-cap oriented
Russell 2000 Stock Index (22.4%). This exuberance, however, was accompanied by
greater price volatility; the DJIA fluctuated 1% or more during 80 trading days
in 1997, compared to 43 days in 1996 and 18 days in 1995.
For the first nine months of 1997, the stocks of medium-sized companies kept
pace with their larger-capitalization counterparts, helping your Fund to
outperform its relevant benchmarks through September 30. However, in the fourth
quarter as Asia's crisis deepened, investors gravitated toward larger
companies--in other words, blue-chip companies with solid, household brand names
and some with capitalizations in excess of $100 billion, such as Coca-Cola and
Gillette. Investors believed that these "mega-cap" companies would provide
greater stability and protection from Asia's ills. This
flight-to-perceived-quality helped the higher-capitalization weighted S&P 500
(up 2.9%) outperform its peers in the fourth quarter (and for the year),
including the DJIA (down 0.01%), the Nasdaq (down 6.8%) and the Russell 2000
(down 3.4%).
FUND REVIEW
Throughout the year, we continued to invest in those medium-capitalization
companies that were selling, at minimum, 10% below their peak prices and at a
discount to the market based on their price-earnings multiples, with future
earnings growth above the S&P 500. We took advantage of the market's volatility
to make shifts in the portfolio that contributed to its outperformance. Profits
were taken by selling the Fund's positions in Suiza Food, Dime Bancorp,
GreenPoint Financial and International Game Technology, among others, and
redeployed into select holdings, including Champion Enterprises, Storage
Technology, Brinker International, Echlin and Cleveland-Cliffs.
18
<PAGE> 20
Following October's precipitous fall in equity prices, we aggressively sought
out those attractive companies which had been particularly hard hit and were,
therefore, significantly undervalued.
THE OUTLOOK
Financial assets should continue to be supported by the solid underpinnings of
the U.S. economy, which include steady growth, low interest rates and dormant
inflation. The shift at year end in favor of the stocks of mega-capitalization
companies was surprising, given that the country's largest multinationals are
more exposed to Asia's ills than are more domestically focused companies. Going
forward, companies across the full capitalization spectrum should begin to
participate more fully in the stock market, especially as Asia's problems
continue to unfold and investors gain confidence.
Through our stock selection process we will continue to identify undervalued
companies that may be benefiting from a restructuring and/or other catalysts
that are unearthing its value. Finally, we remain confident that our disciplined
individual stock selection process should continue to reward long-term
investors.
We would like to thank you for your investment in the Van Eck/Chubb Capital
Appreciation Fund and we look forward to helping you meet your investment
objectives in the future.
/s/ ROBERT WITKOFF
Robert Witkoff
Senior Vice President
[PHOTO] Chubb Asset Managers, Inc.
January 27, 1998
19
<PAGE> 21
*VAN ECK/CHUBB CAPITAL APPRECIATION FUND:
PERFORMANCE COMPARISON
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN 1 YEAR SINCE INCEPTION
<S> <C> <C>
VE/C CAPITAL APPRECIATON FUND (w/o sales charge)+ 27.8% 25.6%
VE/C CAPITAL APPRECIATON FUND (w/ sales charge)+ 21.4% 22.9%
S&P 500 INDEX 33.4% 29.0%
LIPPER MID CAP FUND INDEX 17.6% 16.7%
</TABLE>
<TABLE>
<CAPTION>
VE/C Capital Lipper
Appreciation Fund S&P 500 Mid-Cap
(w/ sales charge) Index Fund Index
<S> <C> <C> <C>
9497 10000 10000
Sep 1995 9611 10422 10313
Oct 1995 9525 10385 10066
Nov 1995 9839 10841 10389
Dec 1995 9933 11049 10494
Jan 1996 10086 11426 10528
Feb 1996 10096 11532 10963
Mar 1996 10239 11643 11181
Apr 1996 10526 11814 11804
May 1996 10764 12119 12187
Jun 1996 10946 12165 11781
Jul 1996 10440 11628 10735
Aug 1996 10803 11873 11364
Sep 1996 11137 12541 12069
Oct 1996 11634 12887 11815
Nov 1996 12312 13861 12267
Dec 1996 12668 13586 12202
Jan 1997 12902 14435 12602
Feb 1997 13428 14548 12124
Mar 1997 12970 13951 11394
Apr 1997 13345 14784 11605
May 1997 14480 15684 12772
Jun 1997 15033 16386 13202
Jul 1997 15843 17690 14247
Aug 1997 15823 16699 14161
Sep 1997 16543 17614 15066
Oct 1997 15931 17025 14274
Nov 1997 15852 17813 14231
Dec 1997 16188 18119 14346
</TABLE>
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. COMMENCEMENT OF OPERATIONS
SEPTEMBER 1, 1995.
+ Returns for the Van Eck/Chubb Capital Appreciation Fund reflect all recurring
expenses and include the reinvestment of all dividends and distributions. The
maximum sales charge is 5.0%.
This graph compares an initial $10,000 investment made in the Van Eck/Chubb
Capital Appreciation Fund at its inception with a similar investment in the S&P
500 Index and the Lipper Mid Cap Fund Index. The graph shows month-end net asset
values; however, the net asset value fluctuates daily.
THE S&P 500 INDEX AND THE LIPPER MID CAP FUND INDEX ARE UNMANAGED INDICES AND
INCLUDE THE REINVESTMENT OF ALL DIVIDENDS, BUT DO NOT REFLECT THE PAYMENT OF
TRANSACTION COSTS, ADVISORY FEES OR EXPENSES THAT ARE ASSOCIATED WITH AN
INVESTMENT IN THE FUND.
Performance data quoted represents past performance; the investment return and
principal value of an investment will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than the original cost.
20
<PAGE> 22
VAN ECK/CHUBB GLOBAL INCOME FUND
The Van Eck/Chubb Global Income Fund seeks capital appreciation, while
emphasizing current income, by investing primarily in high-grade U.S. and
international debt securities.
For the world's fixed income markets, 1997 was a year of solid performance in
local currency terms, with the exception of Asian bond markets. The UK and
Italian bond markets took top honors by rising 14.8% and 13.8%, respectively, in
local currency terms. In general, persistent low inflation, moderate economic
growth and supportive monetary policies from central banks buoyed markets. Your
Fund's performance tends to benefit during periods of dollar weakness, thus the
formidable strength of the greenback in 1997 reduced the Fund's results. For the
year, the Van Eck/Chubb Global Income Fund returned 0.02%. This compares to the
0.23% return in U.S. dollar terms posted by the benchmark Salomon Smith Barney
World Government Bond Index (WGBI). Since its inception (9/01/95), your Fund has
matched the Index; both posted average annual returns of 3.9% for the period.
REVIEW OF GLOBAL BOND MARKETS
Four key themes affected fixed income markets in 1997: 1) the convergence of
European interest rates in anticipation of European Monetary Union (EMU); 2) the
turmoil in Asia; 3) the strong U.S. dollar and UK pound sterling; and 4) the
enduring trend of global disinflation.
1. EUROPEAN MONETARY UNION
The interest rate convergence theme dominated the early part of 1997 as Europe
continued its steady march toward EMU, slated by the Maastricht treaty to begin
in January 1999. This event has forced a narrowing in the spreads among European
rates in anticipation of a single currency, the "euro." Higher rates in the
peripheral riskier European countries (such as Spain and Italy) declined
steadily toward the lower core European rates. This helped the Italian bond
market outperform the region.
2. TURMOIL IN ASIA
In the second half of the year, Asia's debt and currency crisis eclipsed the EMU
story. What began as a contained local crisis in Southeast Asia following
Thailand's July decision to let its currency (the baht) float, soon spread
throughout Asia. Currencies in the region plunged as much as 50% against the
U.S. dollar and financial markets were hard hit, including those in Hong Kong,
South Korea and Japan. In response, bond investors moved away from high-risk,
high-yielding issues toward the relative safety of low-risk, high-quality
government bonds, particularly U.S. Treasury bonds. This flight-to-quality
helped push the bellwether 30-year U.S. Treasury bond to near record lows by
year end (5.9%).
3. THE STRONG U.S. DOLLAR AND UK POUND STERLING
The U.S. dollar and the UK pound sterling were the strongest of the major
currencies in 1997, both gaining some 13% against their trading partners'
currencies. Through midyear, the relatively rapid economic growth and high
interest rates of both the U.S. and UK attracted capital flows into their
currencies. In the third quarter, however, expectations changed as investors
mistakenly anticipated accelerating growth in Europe as they had done earlier
with Japan and this caused the dollar and sterling to weaken sharply. In the
final quarter, the dollar and sterling rebounded as mounting evidence showed
that growth, particularly in the U.S., was continuing at a rapid tempo.
Moreover,
21
<PAGE> 23
Asia's serious problems were accompanied by sharply falling exchange rates, most
notably among the former dollar "pegs," reflecting the significant flight of
capital into the government bonds of safer, more developed countries, especially
the U.S. By year end, both the dollar and sterling had recaptured lost ground,
although not enough to attain their midyear peaks against the Deutschemark and
other European currencies. By contrast, the yen reached new lows in the final
weeks of the year as it became clear that a series of fiscal boosts was doing
little to lift Japan out of near recession.
4. THE GLOBAL DISINFLATION TREND
The benign inflation that we have been experiencing in the U.S. reflects a
broader global disinflationary trend that has been going on for much of the
decade. We are in the midst of an historic era of market transformation as free
trade helps open many of the world's formerly closed markets, including those in
the former Soviet Union, parts of Eastern Europe and Asia. As a result, all of
these regions have grown increasingly dependent on outside trading partners.
Declining inflation reflects efficiency gains that are being made around the
world through the deployment of productivity-enhancing technology and increased
competition; excess capacity in many commodities is also exerting downward
pressure on prices. In addition, the fall of communism has provided a ready
supply of low-cost labor in many regions, particularly in Eastern Europe and
Asia. At the same time that costs have stayed low, the quality of services and
goods across the globe has improved greatly.
The dampening impact of Asia's plight added further fuel to this global
disinflationary trend. In the U.S. specifically, it helped offset upward
pressure on prices that had appeared earlier in the year. Although the Federal
Reserve did increase rates once in 1997 (by 0.25% in March), the Fed left rates
unchanged for the balance of the year. We do not expect the Fed to raise rates
again in the near future--this is good news for fixed income markets.
Furthermore, while yields have fallen in the U.S. and elsewhere in the developed
world, bond markets continue to look attractive, as real interest rates (i.e.,
nominal rates adjusted for inflation) remain high and have additional room to
fall.
FUND REVIEW
For the better part of the first three quarters of 1997, the Fund's investments
favored the U.S. dollar, the UK pound sterling and relatively long-bond
maturities, compared to the Salomon Smith Barney WGBI; thus, your Fund benefited
from a strategy that exploited the prevailing trends. Investments were also
selectively made in securities with exposure to the emerging markets of Brazil,
Mexico, Russia and Eastern Europe. The Fund's holdings of Japanese bonds were
kept at a minimum throughout the year given their unattractive yields.
During the fourth quarter, we adjusted our investment strategy in response to
the rapidly changing economic cross-currents and growing uncertainty. Options
were used to earn premium income and to exploit the cloudier currency trends,
whilst retaining some of the gains made earlier in the year. As the year closed,
cash levels were pruned and maturities lengthened, with the investment pattern
favoring UK and U.S. bonds over Japanese, and to a lesser extent European,
bonds.
THE OUTLOOK
In general, bond markets should benefit from the continuing global disinflation
trend and somewhat slower growth precipitated by Asia's problems. The U.S.
dollar is likely to remain strong because of continued rapid economic growth
and, hence, relatively high interest rates. Both Japanese bonds
22
<PAGE> 24
and the yen are likely to remain unattractive, reflecting Japan's difficulty in
resolving its long-term structural problems and a national propensity to
over-save. Slowing growth in the UK, however, is likely to lead to a continuing
rally in high-quality UK government securities. On the other hand, sterling
could weaken as investors look beyond the peak, or near-peak, of UK interest
rates, arguing for hedging sterling holdings into U.S. dollars as appropriate.
In Continental Europe, two influences will be paramount: slowly accelerating
economic growth and EMU. As economic growth gathers steam, bond yields are
likely to resist downward pressure from long-term disinflationary forces.
European short-term interest rates must converge on a single rate by year end if
the euro is to succeed; this, along with accelerated growth, may cause average
interest rates to edge up later in 1998. The core European currencies may
strengthen, given the prospect of firmer short-term rates and re-dispositions of
currency holdings by central banks and major portfolio investors in favor of the
euro. There is a reasonable chance that EMU may be delayed and a smaller
possibility that it could be abandoned. Your Fund currently accommodates either
contingency by emphasizing UK and German bonds and the Deutschemark.
Finally, the Fund's Managers will continue to keep the emerging markets under
review. The recent sharp upward correction in emerging market yields and the
improving external financing imbalances in the Far East imply better risk-return
characteristics for the region.
We would like to thank you for your investment in the Van Eck/Chubb Global
Income Fund and we look forward to helping you meet your investment objectives
in the future.
<TABLE>
<S> <C> <C> <C>
/s/ ROGER C.P. BROOKHOUSE /s/ MARJORIE D. RAINES
Roger C.P. Brookhouse Marjorie D. Raines
Senior Vice President Senior Vice President
[PHOTO] Chubb Asset Managers, Inc. [PHOTO] Chubb Asset Managers, Inc.
/s/ EMMA C. FISHWICK
Emma C. Fishwick
Vice President
[PHOTO] Chubb Asset Managers, Inc.
</TABLE>
January 27, 1998
23
<PAGE> 25
*VAN ECK/CHUBB GLOBAL INCOME FUND:
PERFORMANCE COMPARISON
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN 1 YEAR SINCE INCEPTION
<S> <C> <C>
VE/C GLOBAL INCOME FUND (w/o sales charge)+ 0.02% 3.9%
VE/C GLOBAL INCOME FUND (w/ sales charge)+ -3.0% 2.6%
SALOMON SMITH BARNEY WORLD GOV'T BOND INDEX 0.2% 3.9%
</TABLE>
<TABLE>
<CAPTION>
VE/C Global Salomon
Income Fund Smith Barney World
(w/ sales charge) Gov't Bond Index
<S> <C> <C>
9699 10,000
Sep 1995 9214 10,223
Oct 1995 9748 10,299
Nov 1995 9863 10,415
Dec 1995 10015 10,524
Jan 1996 9948 10,395
Feb 1996 9827 10,342
Mar 1996 9794 10,327
Apr 1996 9833 10,286
May 1996 9845 10,288
Jun 1996 9891 10,369
Jul 1996 10061 10,569
Aug 1996 10107 10,610
Sep 1996 10203 10,653
Oct 1996 10389 10,852
Nov 1996 10626 10,996
Dec 1996 10613 10,907
Jan 1997 10393 10,615
Feb 1997 10431 10,536
Mar 1997 10268 10,456
Apr 1997 10225 10,364
May 1997 10451 10,646
Jun 1997 10590 10,773
Jul 1997 10552 10,689
Aug 1997 10536 10,682
Sep 1997 10836 10,910
Oct 1997 10708 11,136
Nov 1997 10500 10,965
Dec 1997 10614 10,932
</TABLE>
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. COMMENCEMENT OF OPERATIONS
SEPTEMBER 1, 1995.
+ Returns for the Van Eck/Chubb Global Income Fund reflect all recurring
expenses and include the reinvestment of all dividends and distributions. The
maximum sales charge is 3.0%.
This graph compares an initial $10,000 investment made in the Van Eck/Chubb
Global Income Fund at its inception with a similar investment in the Salomon
Smith Barney World Government Bond Index. The graph shows month-end net asset
values; however, the net asset value fluctuates daily.
THE SALOMON SMITH BARNEY WORLD GOVERNMENT BOND INDEX IS AN UNMANAGED INDEX AND
INCLUDES THE REINVESTMENT OF ALL DIVIDENDS, BUT DOES NOT REFLECT THE PAYMENT OF
TRANSACTION COSTS, ADVISORY FEES OR EXPENSES THAT ARE ASSOCIATED WITH AN
INVESTMENT IN THE FUND.
Performance data quoted represents past performance; the investment return and
principal value of an investment will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than the original cost.
24
<PAGE> 26
(This page intentionally left blank)
25
<PAGE> 27
VAN ECK/CHUBB FUNDS
PORTFOLIO COMPOSITION
VAN ECK/CHUBB MONEY MARKET FUND
% OF PORTFOLIO++
<TABLE>
<S> <C>
Short-Term Obligations: 97.71%
Other Net Assets: 2.29%
</TABLE>
PORTFOLIO QUALITY
<TABLE>
<CAPTION>
% OF
RATING PORTFOLIO
<S> <C>
AAA 100.00%
</TABLE>
AVERAGE YIELDS
<TABLE>
<CAPTION>
SEVEN-DAY YIELD 30-DAY SEC YIELD
<S> <C>
4.94% 4.91%
</TABLE>
VAN ECK/CHUBB GOVERNMENT SECURITIES FUND
% OF PORTFOLIO++
<TABLE>
<S> <C>
U.S. Government and Agency Obligations: 97.97%
Other Net Assets: 2.03%
</TABLE>
DOLLAR WEIGHTED AVERAGE LIFE
8.1 YEARS
PORTFOLIO DURATION
4.3 YEARS
30-DAY SEC YIELD
6.70%
++ As a percentage of total net assets at December 31, 1997.
26
<PAGE> 28
VAN ECK/CHUBB FUNDS
PORTFOLIO COMPOSITION-CONTINUED
VAN ECK/CHUBB TOTAL RETURN FUND
% OF PORTFOLIO++
<TABLE>
<S> <C>
Common Stock: 64.13%
U.S. Government Obligations: 25.53%
Corporate Bonds: 8.84%
Other Net Assets: 1.5%
</TABLE>
<TABLE>
<CAPTION>
% OF
TOP TEN EQUITIES PORTFOLIO
<S> <C>
Progressive 2.64%
Crown Cork And Seal 2.21%
Hasbro 2.21%
Banc One 2.17%
AlliedSignal 2.10%
United Technologies 2.04%
YPF Sociedad ADR 2.02%
Mellon Bank 1.99%
Borg-Warner Automotive 1.97%
Columbia/HCA Healthcare 1.96%
</TABLE>
<TABLE>
<CAPTION>
% OF
TOP TEN INDUSTRIES PORTFOLIO
<S> <C>
Banking 7.47%
Financial Services 5.63%
Insurance 5.45%
Manufacturing 4.15%
Electronics 3.97%
Automotive Manufacturing 2.96%
Oil & Gas 2.66%
Mining & Metals 2.31%
Toys 2.21%
Containers, Metals & Glass 2.21%
</TABLE>
VAN ECK/CHUBB TAX-EXEMPT FUND
% OF PORTFOLIO++
<TABLE>
<S> <C>
Municipal Bonds: 97.74%
Other Net Assets: 2.26%
</TABLE>
PORTFOLIO QUALITY
<TABLE>
<CAPTION>
RATING % OF PORTFOLIO
<S> <C>
AAA 39.95%
AA 19.87%
A 25.11%
BBB 6.13%
BB 6.46%
B --
Below B --
Not Available 2.48%
</TABLE>
DOLLAR WEIGHTED AVERAGE MATURITY
14.7 YEARS
PORTFOLIO DURATION
8.0 YEARS
30-DAY SEC YIELD
4.01%
++ As a percentage of total net assets at December 31, 1997.
27
<PAGE> 29
VAN ECK/CHUBB FUNDS
PORTFOLIO COMPOSITION-CONTINUED
VAN ECK/CHUBB GROWTH AND INCOME FUND
% OF PORTFOLIO++
Common Stocks: 101%
Other Net Assets: (1)%
<TABLE>
<CAPTION>
% OF
TOP TEN EQUITIES PORTFOLIO
<S> <C>
Hasbro 3.49%
Crown Cork And Seal 3.45%
Owens-Illinois 3.44%
Praxair Inc. 3.37%
Columbia/HCA Healthcare 3.28%
Banc One 3.25%
Chase Manhattan 3.05%
Ford Motor 3.03%
UCAR International 2.99%
Black & Decker 2.92%
</TABLE>
<TABLE>
<CAPTION>
% OF
TOP TEN INDUSTRIES PORTFOLIO
<S> <C>
Banking 11.20%
Insurance 10.37%
Financial Services 9.75%
Building Materials & Tools 5.45%
Automotive Manufacturing 4.70%
Manufacturing 4.07%
Mining & Metals 4.08%
Electronics 4.03%
Toys 3.49%
Containers, Metals & Glass 3.45%
</TABLE>
VAN ECK/CHUBB CAPITAL APPRECIATION FUND
% OF PORTFOLIO++
Common Stock: 96.34%
Other Net Assets: 3.66%
<TABLE>
<CAPTION>
% OF
TOP TEN EQUITIES PORTFOLIO
<S> <C>
Champion Enterprises 3.43%
Bard (C.R.) 3.32%
Storage Technology 3.28%
Brinker International 3.28%
Cooper Tire & Rubber 3.23%
Echlin 3.14%
Ametek 3.13%
American Bankers Insurance 3.04%
Harsco 2.91%
Cleveland-Cliffs 2.87%
</TABLE>
<TABLE>
<CAPTION>
% OF
TOP TEN INDUSTRIES PORTFOLIO
<S> <C>
Restaurants 5.80%
Industrials 5.61%
Industrial Metals 5.51%
Medical Products & Supplies 3.62%
Packaging & Containers 3.52%
Building & Construction 3.44%
Medical Supplies & Services 3.32%
Computer Network Products & Services 3.28%
Tire & Rubber Goods 3.23%
Machinery 3.21%
</TABLE>
++ As a percentage of total net assets at December 31, 1997.
28
<PAGE> 30
VAN ECK/CHUBB FUNDS
PORTFOLIO COMPOSITION-CONTINUED
VAN ECK/CHUBB GLOBAL INCOME FUND
% OF PORTFOLIO++
<TABLE>
<S> <C>
Government and Agency Obligation: 84.88%
Corporate Bonds: 9.54%
Common Stock: 0.34%
Other Net Assets: 5.24%
</TABLE>
TOP TEN COUNTRIES
United States
Germany
United Kingdom
Italy
France
Netherlands
Canada
Spain
Belgium
Russia
PORTFOLIO DURATION
6.0 YEARS
DOLLAR WEIGHTED AVERAGE MATURITY
8.4 YEARS
At a Special Meeting of Shareholders of Van Eck/Chubb Funds, Inc. held on
November 17, 1997, shareholders elected a Board of five Directors. The votes
cast for and those that withheld authority to vote for each nominee were as
follows:
<TABLE>
<CAPTION>
DIRECTOR VOTED FOR WITHHELD AUTHORITY
- ------------------ --------- ------------------
<S> <C> <C>
Jeremy H. Biggs 8,117,471 144,872
Wesley G. McCain 8,117,471 144,872
David J. Olderman 8,117,471 144,872
Michael O'Reilly 8,117,471 144,872
John C. van Eck 8,117,144 145,199
</TABLE>
++ As a percentage of total net assets at December 31, 1997.
29
<PAGE> 31
VAN ECK/CHUBB MONEY MARKET FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
VALUE (NOTE B)
----------- -----------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS-97.71%
Federal National Mortgage Association Discount Note,
6.00%, due 02/10/98.......................................... $ 4,600,000 $ 4,571,429
U.S. Treasury Bill, 5.20%, due 01/22/98........................ 2,835,000 2,826,401
U.S. Treasury Bill, 5.18%, due 01/22/98........................ 1,800,000 1,794,581
-----------
TOTAL INVESTMENTS
(Amortized Cost $9,192,411*)..................... 97.71% 9,192,411
Other assets less liabilities....................... 2.29 214,995
-------- -----------
TOTAL NET ASSETS.................................. 100.00% $ 9,407,406
======== ==========
</TABLE>
- ------------
*Aggregate cost for Federal income tax purposes.
See notes to financial statements.
30
<PAGE> 32
VAN ECK/CHUBB GOVERNMENT SECURITIES FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
VALUE (NOTE B)
----------- -----------
<S> <C> <C>
U.S. GOVERNMENT AND AGENCY OBLIGATIONS-97.97%
Federal National Mortgage Association, Pool #294290,
9.000%, due 07/01/01................................... $ 22,144 $ 23,161
Federal National Mortgage Association, Pool #282883,
7.000%, due 05/01/24................................... 192,401 193,964
Federal National Mortgage Association, Pool #306175,
7.000%, due 01/01/25................................... 2,826,936 2,849,905
Federal National Mortgage Association, Pool #251286,
7.000%, due 11/01/27................................... 8,868,198 8,940,252
Federal Home Loan Mortgage Corporation, Series 1058 H
8.000% due 04/15/21.................................... 743,694 770,537
Government National Mortgage Association, Pool #166009,
9.000%, due 06/15/16................................... 79,262 84,860
Government National Mortgage Association, Pool #780339,
8.000%, due 12/15/23................................... 1,177,837 1,222,742
Government National Mortgage Association, Pool #402760,
8.000%, due 08/15/25................................... 1,236,401 1,283,539
Tennessee Valley Authority, 6.235% due 07/15/45.......... 10,000,000 10,248,500
U.S. Treasury Note, 10.375%, due 11/15/12................ 3,125,000 4,155,275
U.S. Treasury Note, 6.250%, due 02/15/07................. 1,000,000 1,032,501
U.S. Treasury Note, 6.250%, due 10/31/01................. 285,000 290,076
-----------
TOTAL INVESTMENTS
(Cost $30,486,916*)........................ 97.97% 31,095,312
Other assets less liabilities................. 2.03 643,678
-------- -----------
TOTAL NET ASSETS............................ 100.00% $31,738,990
======== ===========
</TABLE>
- ------------
*Aggregate cost for Federal income tax purposes.
See notes to financial statements.
31
<PAGE> 33
VAN ECK/CHUBB TOTAL RETURN FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
NUMBER MARKET
OF VALUE
COMPANY SHARES (NOTE B)
- ----------------------- ---------- -----------
<S> <C> <C>
COMMON STOCK-64.13%
AEROSPACE & DEFENSE-0.34%
Raytheon Company Class
A.................... 3,440 $ 169,646
-----------
APPLIANCES-0.53%
Singer Co. N.V. ....... 31,000 265,438
-----------
AUTOMOTIVE MANUFACTURING-2.96%
Chrysler Corp. ........ 15,200 534,850
Ford Motor Co. ........ 19,400 944,538
-----------
1,479,388
-----------
AUTOMOTIVE PARTS & ACCESSORIES-1.97%
Borg-Warner Automotive,
Inc. ................ 18,900 982,800
-----------
BANKING-7.47%
Banc One Corp. ........ 20,000 1,086,250
Chase Manhattan
Corp. ............... 7,700 843,150
KeyCorp................ 11,327 802,093
Mellon Bank Corp. ..... 16,400 994,250
-----------
3,725,743
-----------
BUILDING & CONSTRUCTION-1.05%
Hanson plc, ADR........ 1,687 38,906
Owens Corning.......... 14,200 484,575
-----------
523,481
-----------
BUILDING MATERIALS & TOOLS-1.92%
Lafarge Corp. ......... 32,500 960,781
-----------
CHEMICALS-0.05%
Millennium Chemicals
Inc. ................ 964 22,714
-----------
CHEMICALS - FERTILIZER-0.98%
IMC Global, Inc. ...... 15,000 491,250
-----------
CONTAINERS - METAL & GLASS-2.21%
Crown Cork and Seal.... 22,000 1,102,750
-----------
ELECTRONICS-3.97%
General Motors Corp.,
Class H.............. 6,100 225,319
Philips Electronics
N.V. ................ 15,200 919,600
Tektronix, Inc. ....... 21,150 839,391
-----------
1,984,310
-----------
<CAPTION>
NUMBER MARKET
OF VALUE
COMPANY SHARES (NOTE B)
- ----------------------- ------ -----------
<S> <C> <C>
ELECTRONICS - SEMICONDUCTOR-1.59%
Avnet, Inc. ........... 12,000 792,000
-----------
ENGINES-1.29%
Cummins Engine Co.,
Inc. ................ 10,900 $ 643,781
-----------
FINANCIAL SERVICES-5.63%
First Chicago NBD
Corp.+ .............. 10,860 906,810
Merrill Lynch & Co.,
Inc.................. 13,000 948,188
Paine Webber Group
Inc.................. 27,675 956,517
-----------
2,811,515
-----------
FOOD PROCESSING-0.96%
IBP, Inc. ............. 23,000 481,563
-----------
HOSPITAL MANAGEMENT-1.96%
Columbia/HCA Healthcare
Corp. ............... 33,000 977,625
-----------
INSURANCE-5.45%
W.R. Berkley Corp. .... 13,200 579,150
Old Republic
International
Corp. ............... 22,200 825,563
Progressive Corp. ..... 11,000 1,318,624
-----------
2,723,337
-----------
MANUFACTURING-4.15%
AlliedSignal Inc. ..... 27,000 1,051,313
United Technologies
Corp. ............... 14,000 1,019,375
-----------
2,070,688
-----------
MINING & METALS-2.31%
Carpenter Technology
Corp. ............... 16,200 778,613
Cyprus Amax Minerals
Co. ................. 24,500 376,688
-----------
1,155,301
-----------
OIL & GAS - INTEGRATED-2.66%
Atlantic Richfield
Co. ................. 4,000 320,500
YPF Sociedad Anonima,
ADR.................. 29,500 1,008,531
-----------
1,329,031
-----------
PACKAGING & CONTAINERS-1.85%
Owens-Illinois,
Inc.+................ 24,400 925,675
-----------
</TABLE>
See notes to financial statements.
32
<PAGE> 34
VAN ECK/CHUBB TOTAL RETURN FUND
SCHEDULE OF INVESTMENTS--(CONTINUED)
DECEMBER 31, 1997
<TABLE>
<CAPTION>
NUMBER MARKET
OF VALUE
COMPANY SHARES (NOTE B)
- ----------------------- ---------- -----------
<S> <C> <C>
COMMON STOCK-(CONTINUED)
PAPER PRODUCTS-1.01%
Asia Pulp & Paper Co.
Ltd., ADR............ 50,100 $ 504,129
-----------
PROPERTY - CASUALTY INSURANCE-1.42%
LaSalle Re Holdings
Ltd.................. 20,000 707,500
-----------
RAILROAD TRANSPORTATION-1.82%
Burlington Northern
Santa Fe Corp........ 9,800 910,788
-----------
RETAIL-1.90%
Federated Dept. Stores,
Inc.+................ 22,000 947,375
-----------
TEXTILES & APPAREL-0.93%
Reebok International
Ltd.+ ............... 16,100 463,881
-----------
TRANSPORTATION-1.95%
CSX Corp............... 18,000 972,000
-----------
TRANSPORTATION & SHIPPING-1.44%
Federal Express
Corp.+............... 11,800 720,538
-----------
TOYS-2.21%
Hasbro, Inc. .......... 35,000 1,102,500
-----------
UTILITIES - ELECTRIC & GAS-0.15%
Energy Group plc, ADR.. 1,687 75,282
-----------
TOTAL COMMON STOCK
(Cost $23,153,598).. 32,022,810
-----------
<CAPTION>
MARKET
PRINCIPAL VALUE
COMPANY VALUE (NOTE B)
- ----------------------- ---------- -----------
<S> <C> <C>
U.S. GOVERNMENT
OBLIGATIONS-25.53%
U.S. Treasury Note,
6.250%, due
02/15/03............. $3,750,000 $ 3,836,723
U.S. Treasury Note,
7.250%, due
08/15/04............. 2,900,000 3,135,628
U.S. Treasury Note,
6.875%, due
05/15/06............. 5,200,000 5,567,255
U.S. Treasury Note,
6.500%, due
10/15/06............. 200,000 209,500
-----------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(Cost $12,478,634).. 12,749,106
-----------
CORPORATE BONDS-8.84%
First Union Banc,
7.500%, due
04/15/35............. 2,000,000 2,297,900
Tennessee Gas Pipeline,
7.000%, due
03/15/27............. 2,000,000 2,113,454
-----------
TOTAL CORPORATE BONDS
(Cost $4,190,947)... 4,411,354
-----------
TOTAL INVESTMENTS
(Cost
$39,823,179*)..... 98.50% 49,183,270
-----------
Other assets less
liabilities.......... 1.50 750,365
------- -----------
TOTAL NET ASSETS..... 100.00% $49,933,635
======= ===========
</TABLE>
- ------------
*Aggregate cost for Federal income tax purposes.
+Non-income producing security.
ADR -- American Depositary Receipt
See notes to financial statements.
33
<PAGE> 35
VAN ECK/CHUBB TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
VALUE (NOTE B)
---------- -----------
<S> <C> <C>
MUNICIPAL OBLIGATIONS-97.74%
ALASKA-1.83%
Anchorage, Alaska, Hospital Revenue, (Sisters of Providence
Project), Series 1991, 6.750%, due 10/01/02+................... $ 150,000 $ 164,434
North Slope Borough, Alaska, General Obligation, Zero Coupon,
MBIA Insured, due 06/30/04..................................... 550,000 410,073
----------
574,507
----------
CONNECTICUT-0.56%
Connecticut State, General Obligation, Series C, 7.000%,
Prerefunded to 09/15/00 at 102+................................ 160,000 175,142
----------
DISTRICT OF COLUMBIA-3.63%
District of Columbia, Cert. of Participation, 7.300%, due
01/01/13+...................................................... 300,000 332,910
District of Columbia, Series 93A, 5.875%, due 06/01/05........... 500,000 527,607
Metropolitan Washington Airport Authority Revenue Bonds, Series
92A, MBIA Insured, 6.500%, due 10/01/07+....................... 250,000 274,631
----------
1,135,148
----------
FLORIDA-4.74%
Dade County, Florida, Aviation Revenue, Miami International
Airport, FSA Insured, 5.125% due 10/01/27...................... 1,500,000 1,481,811
----------
GEORGIA-1.20%
Cartersville, Georgia Development Authority, Water & Wastewater
Facilities, Anheuser Busch, AMT, 6.750%, due 02/01/12+......... 250,000 272,097
Metropolitan Atlanta Rapid Transit Authority, Georgia, Sales Tax
Revenue, Series K, 7.250%, due 07/01/10+....................... 100,000 103,594
----------
375,691
----------
ILLINOIS-6.05%
Cook County, Illinois, General Obligation, MBIA Insured, Series
1990, 7.000%, due 11/01/99..................................... 150,000 158,004
Illinois State Sales Tax Revenue, 6.800%, Prerefunded to 06/15/00
at 102+........................................................ 150,000 162,412
Illinois State Toll Highway, Series 92A, 6.375%, due 01/01/15+... 1,100,000 1,180,602
Metropolitan Pier & Exposition Authority, Illinois, 6.500%,
Prerefunded to 06/15/03 at 102+................................ 345,000 387,562
Metropolitan Pier & Exposition Authority, Illinois, 6.500%,
due 06/15/27+, unrefunded balance.............................. 5,000 5,491
----------
1,894,071
----------
</TABLE>
See notes to financial statements.
34
<PAGE> 36
VAN ECK/CHUBB TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS--(CONTINUED)
DECEMBER 31, 1997
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
VALUE (NOTE B)
---------- ----------
<S> <C> <C>
MUNICIPAL OBLIGATIONS-(CONTINUED)
INDIANA-11.44%
Indiana Bond Bank, Revenue, State Revolving Fund, 6.000%, due
02/01/15+...................................................... $ 500,000 $ 529,798
Indiana Health Facilities Financing Authority, Charity Obligated
Group, 5.00% due 11/1/26, Mandatory Put on 11/01/07 at 100..... 1,590,000 1,616,779
Indiana Municipal Power Supply, 5.500%, MBIA Insured, due
01/01/16....................................................... 1,200,000 1,275,083
Indiana State Housing Finance Authority, Single Family Mortgage
1990, Series C, AMT, 7.800%, due 01/01/22+..................... 150,000 160,032
----------
3,581,692
----------
IOWA-4.03%
Iowa Finance Authority, Single Family Revenue, AMT, 4.950% due
1/1/21......................................................... 1,250,000 1,260,920
----------
KENTUCKY-0.56%
Kentucky Turnpike Authority, Economic Development Revenue,
7.250%, Prerefunded to 05/15/00 at 101.50+..................... 160,000 173,756
----------
LOUISIANA-0.70%
Jefferson, Louisiana, Sales Tax Revenue, Refunding, FGIC Insured,
Series A, 6.750%, Prerefunded to 12/01/02 at 100+.............. 200,000 219,734
----------
MAINE-0.68%
Maine Educational Loan Authority, Series 92A, AMT, 6.950%, due
12/01/07+...................................................... 195,000 212,213
----------
MASSACHUSETTS-5.67%
Massachusetts State, Construction Loan, Series A, 6.000%,
Prerefunded to 06/01/01 at 100+................................ 300,000 317,792
Massachusetts State Turnpike Authority, MBIA Insured, Series A,
5.000%, due 01/01/37........................................... 1,500,000 1,454,970
----------
1,772,762
----------
MINNESOTA-0.33%
Northern Municipal Power Agency, Minnesota, Electric System
Revenue, Series A, 7.250%, due 01/01/16+....................... 100,000 105,179
----------
MISSOURI-0.54%
Missouri Health & Educational Facilities Authority, St. Luke's
Hospital, MBIA Insured, 7.000%, Prerefunded to 11/15/01 at
102+........................................................... 150,000 167,868
----------
</TABLE>
See notes to financial statements.
35
<PAGE> 37
VAN ECK/CHUBB TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS--(CONTINUED)
DECEMBER 31, 1997
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
VALUE (NOTE B)
---------- ----------
<S> <C> <C>
MUNICIPAL OBLIGATIONS-(CONTINUED)
NEW HAMPSHIRE-0.74%
New Hampshire Turnpike System, Series A, FGIC Insured, 6.750%,
due 11/01/11+.................................................. $ 200,000 $ 231,683
----------
NEW JERSEY-8.59%
New Jersey Economic Development Authority, The Seeing Eye, Inc.
Project, 7.300%, due 04/01/11+................................. 1,150,000 1,257,346
New Jersey Wastewater Treatment Trust, 6.875%, Prerefunded to
06/15/00 at 101.75+............................................ 165,000 178,506
New Jersey Wastewater Treatment Trust, 6.875%, due 06/15/07+,
unrefunded balance............................................. 15,000 15,966
Salem County, New Jersey, Pollution Control Financing Authority,
Waste Disposal Revenue, E.I. DuPont Project, AMT, 6.500%, due
11/15/21+...................................................... 1,150,000 1,235,704
----------
2,687,522
----------
NEW YORK-15.22%
Metropolitan Transportation Authority, New York, Transit
Facilities, Service Contract, Series 8, 5.000%, due 07/01/02... 1,000,000 1,027,953
Metropolitan Transportation Authority, New York, Transit
Facilities, Series 2, 8.000%, Prerefunded to 07/01/98 at
102+........................................................... 100,000 104,064
New York City, New York, General Obligation, Series H, 6.875%,
due 02/01/02, Escrowed to maturity............................. 90,000 98,998
New York City, New York, General Obligation, Series H, Subseries
H-1, 5.800%, due 08/01/04...................................... 250,000 265,987
New York City, New York, General Obligation, Series D, 5.250% due
08/01/03....................................................... 1,000,000 1,039,127
New York City, Series H, 6.875%, due 02/01/02,
unrefunded balance............................................. 160,000 174,554
New York State Dormitory Authority, City University System,
Series I, 5.125% due 7/1/13+................................... 1,325,000 1,329,227
New York State Local Government Assistance Corporation, Series B,
5.500%, due 04/01/21+.......................................... 450,000 457,485
New York State Thruway Authority, Highway and Bridge Trust Fund,
Series A, MBIA Insured, 5.600%, due 04/01/10+.................. 250,000 264,778
----------
4,762,173
----------
OKLAHOMA-1.92%
Oklahoma Industrial Development Authority, Sisters of Mercy,
Series A, 5.000%, due 06/01/13+................................ 600,000 599,335
----------
PENNSYLVANIA-1.07%
Philadelphia, PA, Hospital & Higher Education Facility Authority,
(Children's Hospital), 5.000%, due 02/15/21+................... 350,000 336,078
----------
</TABLE>
See notes to financial statements.
36
<PAGE> 38
VAN ECK/CHUBB TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS--(CONTINUED)
DECEMBER 31, 1997
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
VALUE (NOTE B)
---------- ----------
<S> <C> <C>
MUNICIPAL OBLIGATIONS-(CONTINUED)
TENNESSEE-5.61%
Memphis-Shelby County, Tennessee Airport Authority, (Federal
Express Corp.), AMT, 6.750%, due 09/01/12+..................... $ 250,000 $ 275,035
Shelby County, Tennessee, General Obligation, Series B,
Zero Coupon, due 12/01/12...................................... 2,000,000 958,812
Tennessee Housing Development Agency, 1993 Series A, 5.900%, due
07/01/18+...................................................... 500,000 522,771
----------
1,756,618
----------
TEXAS-5.11%
Austin, Texas, Utility System Revenue, Series C, 7.300%,
Prerefunded to 11/15/01 at 100+................................ 60,000 66,806
Brazos River Authority, Texas, Houston Light & Power Co., 7.750%,
due 10/01/15+.................................................. 60,000 62,663
Houston, Texas, Independent School District, Permanent School
Fund, Zero Coupon, due 08/15/13................................ 1,150,000 527,628
Waxahachie, Texas, Independent School District, Permanent School
Fund, Zero Coupon, due 08/15/13................................ 2,060,000 942,266
----------
1,599,363
----------
UTAH-4.05%
Utah State Board of Regents, Student Loan Revenue, AMT, 5.000%,
due 05/01/06................................................... 1,250,000 1,266,066
----------
VIRGINIA-0.33%
Virginia State Housing Development Authority, Commonwealth
Mortgage, 6.700%, due 07/01/08+................................ 100,000 101,834
----------
</TABLE>
See notes to financial statements.
37
<PAGE> 39
VAN ECK/CHUBB TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS--(CONTINUED)
DECEMBER 31, 1997
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
VALUE (NOTE B)
---------- ----------
<S> <C> <C> <C>
MUNICIPAL OBLIGATIONS-(CONTINUED)
WASHINGTON-13.14%
Lewis County, Washington, Public Utility District #1, Revenue
Series 91, 7.000%, Prerefunded to 10/01/01 at 102+............. $ 250,000 $ 279,051
Washington Health Care Facilities Authority, Catholic Health
Initiatives, MBIA Insured, 5.125% due 12/1/17+................. 1,300,000 1,283,961
Washington Health Care Facilities Authority, Revenue, MBIA
Insured, (Group Health Co-Op), 6.750%, due 12/01/11+........... 300,000 324,629
Washington Health Care Facilities Authority, Revenue, Series 93,
(Sisters of Providence), 6.250%, due 10/01/13+................. 500,000 534,489
Washington Housing Finance Commission, GNMA/FNMA MBS Programs,
7.100%, due 07/01/22+.......................................... 145,000 152,891
Washington State Public Power Supply System, Nuclear Project
Number 1, FSA Insured, 5.750%, due 07/01/11.................... 1,200,000 1,287,588
Washington State Public Power Supply System, Nuclear Project
Number 2, Revenue, Series 90C, 7.625%, Prerefunded to 01/01/01
at 102+........................................................ 100,000 111,552
Washington State Public Power Supply System, Nuclear Project
Number 3, Revenue, 7.500%, Prerefunded to 07/01/00 at 102+..... 125,000 137,512
-----------
4,111,673
-----------
TOTAL INVESTMENTS (Cost $29,102,434*).......................... 97.74% 30,582,839
Other assets less liabilities.................................... 2.26 705,654
---------- -----------
TOTAL NET ASSETS............................................... 100.00% $31,288,493
========== ===========
</TABLE>
--------------
*Aggregate cost for Federal income tax purposes.
+Issued with call provisions.
Abbreviations:
AMT -- Alternative Minimum Tax.
FGIC -- Financial Guaranty Insurance Company.
FSA -- Financial Security Assurance.
MBIA -- Municipal Bond Investors Assurance Corporation.
See notes to financial statements.
38
<PAGE> 40
VAN ECK/CHUBB GROWTH AND INCOME FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
NUMBER MARKET
OF VALUE
COMPANY SHARES (NOTE B)
- -------------------------- ------- -----------
<S> <C> <C>
COMMON STOCK-101.05%
AEROSPACE & DEFENSE-0.14%
Raytheon Company Class A.. 1,913 $ 94,340
-----------
APPLIANCES-0.68%
Singer Co. N.V. .......... 53,000 453,812
-----------
AUTO & TRUCKS-2.72%
General Motors Co. ....... 30,000 1,818,750
-----------
AUTOMOTIVE MANUFACTURING-4.70%
Chrysler Corp. ........... 31,400 1,104,888
Ford Motor Co. ........... 41,600 2,025,400
-----------
3,130,288
-----------
AUTOMOTIVE PARTS & ACCESSORIES-2.07%
Borg-Warner Automotive,
Inc. ................... 26,600 1,383,200
-----------
BANKING-11.20%
Banc One Corp. ........... 40,000 2,172,500
Chase Manhattan Corp. .... 18,600 2,036,700
KeyCorp. ................. 23,311 1,650,710
Mellon Bank Corp. ........ 26,700 1,618,688
-----------
7,478,598
-----------
BUILDING & CONSTRUCTION-1.04%
Owens Corning............. 20,300 692,737
-----------
BUILDING MATERIALS & TOOLS-5.45%
Black & Decker Corp. ..... 50,000 1,953,125
Lafarge Corp. ............ 57,000 1,685,063
-----------
3,638,188
-----------
CHEMICALS-0.17%
Millennium Chemicals
Inc. ................... 4,857 114,443
-----------
CHEMICALS - FERTILIZER-2.70%
IMC Global, Inc. ......... 55,000 1,801,250
-----------
CONTAINERS - METAL & GLASS-3.45%
Crown Cork and Seal....... 46,000 2,305,750
-----------
<CAPTION>
NUMBER MARKET
OF VALUE
COMPANY SHARES (NOTE B)
- -------------------------- ------- -----------
<S> <C> <C>
ELECTRICAL EQUIPMENT-2.99%
UCAR International,
Inc.+................... 50,000 $ 1,996,875
-----------
ELECTRONICS-4.03%
Philips Electronics
N.V. ................... 24,500 1,482,250
Tektronix, Inc. .......... 30,450 1,208,484
-----------
2,690,734
-----------
ELECTRONICS - SEMICONDUCTORS-1.73%
Avnet, Inc. .............. 17,500 1,155,000
-----------
FINANCIAL SERVICES-9.75%
Citicorp.................. 10,000 1,264,375
First Chicago NBD
Corp.+.................. 21,901 1,828,734
Merrill Lynch & Co.,
Inc. ................... 22,100 1,611,919
Paine Webber Group
Inc. ................... 52,275 1,806,755
-----------
6,511,783
-----------
FOOD PROCESSING-2.08%
IBP, Inc. ................ 66,300 1,388,156
-----------
HOSPITAL MANAGEMENT-3.28%
Columbia/HCA Healthcare
Corp. .................. 74,000 2,192,250
-----------
INDUSTRIALS-3.37%
Praxair, Inc. ............ 50,000 2,250,000
-----------
INSURANCE-10.37%
W. R. Berkley Corp. ...... 20,550 901,631
Equitable Companies,
Inc. ................... 35,000 1,741,250
LaSalle Re Holdings
Ltd. ................... 28,000 990,500
Old Republic International
Corp. .................. 45,600 1,695,750
The PMI Group, Inc. ...... 22,000 1,590,875
-----------
6,920,006
-----------
MANUFACTURING-4.07%
AlliedSignal Inc. ........ 23,000 895,562
United Technologies
Corp. .................. 25,000 1,820,312
-----------
2,715,874
-----------
MEDICAL - HEALTHCARE SERVICES-1.17%
Beverly Enterprises,
Inc.+................... 60,000 780,000
-----------
</TABLE>
See notes to financial statements.
39
<PAGE> 41
VAN ECK/CHUBB GROWTH AND INCOME FUND
SCHEDULE OF INVESTMENTS--(CONTINUED)
DECEMBER 31, 1997
<TABLE>
<CAPTION>
NUMBER MARKET
OF VALUE
COMPANY SHARES (NOTE B)
- -------------------------- ------- -----------
<S> <C> <C>
COMMON STOCK-(CONTINUED)
MEDICAL SERVICES-0.42%
PharMerica, Inc.+ ........ 27,306 $ 283,300
-----------
MINING & METALS-4.08%
Carpenter Technology
Corp. .................. 26,000 1,249,625
Cyprus Amax Minerals
Co. .................... 95,700 1,471,387
-----------
2,721,012
-----------
OIL & GAS - INTEGRATED-2.88%
YPF Sociedad Anonima,
ADR..................... 56,200 1,921,337
-----------
PACKAGING & CONTAINERS-3.44%
Owens-Illinois, Inc.+..... 60,600 2,299,013
-----------
PAPER PRODUCTS-1.08%
Asia Pulp & Paper Co.
Ltd., ADR............... 71,900 723,494
-----------
RAILROAD TRANSPORTATION-2.90%
Burlington Northern Santa
Fe Corp................. 20,800 1,933,100
-----------
<CAPTION>
NUMBER MARKET
OF VALUE
COMPANY SHARES (NOTE B)
- -------------------------- ------- -----------
<S> <C> <C>
RETAIL STORES-2.67%
The Great Atlantic &
Pacific Tea Co.,
Inc. ................... 60,000 $ 1,781,250
-----------
TEXTILES & APPAREL-1.03%
Reebok International
Ltd.+ .................. 23,900 688,619
-----------
TOYS-3.49%
Hasbro, Inc. ............. 74,000 2,331,000
-----------
TRANSPORTATION & SHIPPING-1.90%
Federal Express Corp.+.... 20,800 1,270,100
-----------
TOTAL INVESTMENTS
(Cost $52,984,534*).... 101.05% 67,464,259
Other assets less
liabilities............. (1.05) (701,939)
------- -----------
TOTAL NET ASSETS........ 100.00% $66,762,320
======== ===========
</TABLE>
- ------------
*Aggregate cost for Federal income tax purposes.
+Non-income producing security.
ADR -- American Depositary Receipt
See notes to financial statements.
40
<PAGE> 42
VAN ECK/CHUBB CAPITAL APPRECIATION FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
NUMBER MARKET
OF VALUE
COMPANY SHARES (NOTE B)
- ---------------------------- -------- ------------
<S> <C> <C>
COMMON STOCK-96.34%
APPAREL-2.19%
Nine West Group Inc.+....... 35,000 $ 907,813
-----------
AUTO PARTS-0.38%
Borg-Warner Automotive,
Inc....................... 3,000 156,000
-----------
AUTO TRUCKS & PARTS-3.14%
Echlin Inc. ................ 36,000 1,302,750
-----------
BUILDING & CONSTRUCTION-3.44%
Champion Enterprises,
Inc.+..................... 69,300 1,424,981
-----------
BUILDING MATERIALS-1.87%
Lafarge Corp. .............. 26,200 774,538
-----------
BUILDING MATERIALS & TOOLS-3.14%
Black & Decker Corp. ....... 8,000 312,500
York International Corp. ... 25,000 989,063
-----------
1,301,563
-----------
CHEMICALS-1.94%
Cabot Corp. ................ 29,100 803,888
-----------
CHEMICALS - FERTILIZER-2.06%
Agrium, Inc. ............... 70,000 853,125
-----------
COMPUTER INFORMATION SYSTEMS-2.70%
BancTec, Inc.+.............. 41,800 1,120,763
-----------
COMPUTER NETWORK PRODUCTS & SERVICES-3.28%
Storage Technology Corp.+... 22,000 1,362,625
-----------
COMPUTER SOFTWARE-2.67%
Reynolds & Reynolds,
Class A................... 60,000 1,106,250
-----------
ELECTRICAL EQUIPMENT-1.83%
UCAR International, Inc.+... 19,000 758,813
-----------
ELECTRONICS-3.13%
Ametek, Inc. ............... 48,100 1,298,700
-----------
<CAPTION>
NUMBER MARKET
OF VALUE
COMPANY SHARES (NOTE B)
- ---------------------------- ------- -----------
<S> <C> <C>
ENTERTAINMENT & LEISURE-0.25%
Quintel Entertainment,
Inc.+..................... 19,000 103,313
-----------
FOOD PROCESSING-0.01%
Archer-Daniels Midland
Co. ...................... 126 $ 2,733
-----------
HOUSING AND HOME FURNISHING-2.77%
American Standard Companies
Inc.+..................... 30,000 1,149,375
-----------
HOUSEHOLD PRODUCTS-2.82%
Tupperware Corporation...... 42,000 1,170,750
-----------
INDUSTRIAL METALS - DIVERSIFIED-5.51%
Cleveland-Cliffs Inc........ 26,000 1,191,125
Intermet Corp. ............. 62,500 1,093,750
-----------
2,284,875
-----------
INDUSTRIALS-5.61%
Harsco Corp................. 28,000 1,207,500
Philip Services Corp.+...... 78,000 1,121,250
-----------
2,328,750
-----------
INSTRUMENTS CONTROLS-2.59%
Elsag Bailey Process Automation
N.V.+..................... 65,000 1,072,500
-----------
INSURANCE-3.17%
Commerce Group, Inc. ....... 31,800 1,037,475
Old Republic International
Corp. .................... 7,450 277,047
-----------
1,314,522
-----------
MACHINERY-3.21%
AGCO Corp. ................. 40,000 1,170,000
Albany International Corp.,
Class A................... 7,000 161,000
-----------
1,331,000
-----------
MACHINE TOOLS-1.47%
Brown and Sharpe
Manufacturing Co.,
Class A+.................. 60,000 611,250
-----------
MEDICAL - HEALTHCARE SERVICES-2.07%
Beverly Enterprises Inc.+... 66,000 858,000
-----------
</TABLE>
See notes to financial statements.
41
<PAGE> 43
VAN ECK/CHUBB CAPITAL APPRECIATION FUND
SCHEDULE OF INVESTMENTS--(CONTINUED)
DECEMBER 31, 1997
<TABLE>
<CAPTION>
NUMBER MARKET
OF VALUE
COMPANY SHARES (NOTE B)
- ---------------------------- ------- -----------
<S> <C> <C>
COMMON STOCK-(CONTINUED)
MEDICAL PRODUCTS & SUPPLIES-3.62%
St. Jude Medical, Inc.+..... 30,000 $ 915,000
U.S. Surgical Corp. ........ 20,000 586,250
-----------
1,501,250
-----------
MEDICAL SERVICES-0.75%
PharMerica Inc.+ ........... 30,036 311,624
-----------
MEDICAL - SUPPLIES & SERVICES-3.32%
Bard (C.R.), Inc. .......... 44,000 1,377,750
-----------
MINING & METALS-1.53%
Cyprus Amax Minerals Co. ... 41,400 636,525
-----------
MULTI-LINE INSURANCE-3.05%
American Bankers Insurance
Group..................... 27,500 1,263,281
-----------
OIL & GAS EQUIPMENT & SERVICES-2.65%
Wolverine Tube, Inc+........ 35,500 1,100,500
-----------
PACKAGING & CONTAINERS-3.52%
Ball Corp. ................. 10,000 353,125
Owens-Illinois, Inc.+ ...... 29,200 1,107,775
-----------
1,460,900
-----------
<CAPTION>
NUMBER MARKET
OF VALUE
COMPANY SHARES (NOTE B)
- ---------------------------- -------- ------------
<S> <C> <C>
RESTAURANTS-5.80%
Brinker International,
Inc.+..................... 85,000 1,360,000
Lone Star Steakhouse &
Saloon, Inc.+............. 60,000 1,050,000
-----------
2,410,000
-----------
RETAIL STORES-2.42%
The Great Atlantic & Pacific
Tea Co., Inc. ............ 33,800 $ 1,003,438
-----------
STEEL-2.29%
Bethlehem Steel Corp.+...... 110,000 948,750
-----------
TECHNOLOGY-2.84%
Wyman-Gordon Co.+........... 60,000 1,177,500
-----------
TIRE AND RUBBER GOODS-3.23%
Cooper Tire & Rubber Co..... 55,000 1,340,621
-----------
WATER TREATMENT SYSTEMS-0.07%
Culligan Water Technologies,
Inc.+..................... 640 32,160
-----------
TOTAL INVESTMENTS
(Cost $39,217,304*)...... 96.34% 39,963,176
Other assets less
liabilities............... 3.66 1,518,905
------- -----------
TOTAL NET ASSETS.......... 100.00% $ 41,482,081
======= ===========
</TABLE>
- ------------
*Aggregate cost for Federal income tax purposes.
+Non-income producing security.
See notes to financial statements.
42
<PAGE> 44
VAN ECK/CHUBB GLOBAL INCOME FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
MARKET
NUMBER OF VALUE
SHARES (NOTE B)
------------- -----------
<S> <C> <C> <C>
COMMON STOCK-0.34%
RUSSIA-0.34%
Vimpel-Communications, ADR (Cost $150,000).................... 5,000 $ 178,125
-----------
<CAPTION>
LOCAL PAR
CURRENCY VALUE
-------- -------------
<S> <C> <C> <C>
GOVERNMENT AND AGENCY
OBLIGATIONS-84.88%
AUSTRALIA-1.25%
Australian Government Bond, 9.500%, due 08/15/03.............. AUD 650,000 497,553
New South Wales Treasury, 9.250%, due 06/20/05................ AUD 200,000 151,846
-----------
649,399
-----------
BELGIUM-1.89%
Kingdom of Belgium, 6.500%, due 03/31/05...................... BEF 4,000,000 115,770
Kingdom of Belgium, 7.000%, due 05/15/06...................... BEF 29,000,000 866,811
-----------
982,581
-----------
CANADA-2.60%
Government of Canada, 9.500%, due 06/01/10.................... CAD 1,000,000 931,552
Government of Canada, 6.500%, due 06/01/04.................... CAD 575,000 424,270
-----------
1,355,822
-----------
DENMARK-1.46%
Kingdom of Denmark, 7.000%, due 11/15/07...................... DKK 1,160,000 186,253
Kingdom of Denmark, 7.000%, due 12/15/04...................... DKK 3,600,000 572,855
-----------
759,108
-----------
FRANCE-17.20%
Caisse Centrale, 5.768%, due 06/27/04......................... USD 6,000,000 5,978,100
France O.A.T., 5.500%, due 04/25/07........................... FRF 13,500,000 2,274,840
France O.A.T., 7.250%, due 04/25/06........................... FRF 3,740,000 705,344
-----------
8,958,284
-----------
GERMANY-12.02%
Bundesobligation, 6.000%, due 07/04/07........................ DEM 1,900,000 1,104,884
Bundesobligation, 6.750%, due 07/15/04........................ DEM 6,500,000 3,939,647
International Bank for Reconstruction & Development, 6.125%
due 09/27/02................................................ DEM 1,050,000 614,178
International Bank for Reconstruction & Development, 5.875%
due 11/10/03................................................ DEM 1,050,000 606,005
-----------
6,264,714
-----------
</TABLE>
See notes to financial statements.
43
<PAGE> 45
VAN ECK/CHUBB GLOBAL INCOME FUND
SCHEDULE OF INVESTMENTS--(CONTINUED)
DECEMBER 31, 1997
<TABLE>
<CAPTION>
MARKET
LOCAL PAR VALUE
CURRENCY VALUE (NOTE B)
-------- ------------- -----------
<S> <C> <C> <C>
GOVERNMENT AND AGENCY OBLIGATIONS-(CONTINUED)
ITALY-6.60%
Buoni Poliennali Del Tes Government National,
10.000%, due 08/01/03....................................... ITL 2,200,000,000 $ 1,529,286
Buoni Poliennali Del Tes Government National,
8.250%, due 07/01/99........................................ ITL 625,000,000 370,453
Buoni Poliennali Del Tes Government National,
6.750%, due 07/01/07........................................ ITL 2,500,000,000 1,536,751
-----------
3,436,490
-----------
JAPAN-8.04%
Government of Japan, 6.300%, due 09/20/01..................... JPY 275,000,000 2,517,110
Government of Japan, 2.600%, due 09/20/07..................... JPY 205,000,000 1,668,926
-----------
4,186,036
-----------
MEXICO-0.63%
United Mexican State, 7.000%, due 06/02/03.................... CAD 500,000 327,900
-----------
NETHERLANDS-6.28%
Hermes Euro Railtel BV, Series 144A, 11.500%, due 08/15/07+... USD 750,000 798,750
Government of Netherlands, 8.250%, due 02/15/07............... NLG 550,000 327,826
Government of Netherlands, 8.250%, due 09/15/07............... NLG 550,000 329,859
Government of Netherlands, 6.000%, due 01/15/06............... NLG 3,500,000 1,813,074
-----------
3,269,509
-----------
SPAIN-3.55%
Government of Spain, 9.400%, due 04/30/99..................... ESP 28,000,000 194,938
Government of Spain, 8.800%, due 04/30/06..................... ESP 77,000,000 615,196
Government of Spain, 8.800%, due 05/30/04..................... ESP 50,000,000 375,859
Government of Spain, 5.250%, due 01/31/03..................... ESP 45,000,000 295,684
Kingdom of Spain, 4.750%, due 03/14/05........................ JPY 40,000,000 369,683
-----------
1,851,360
-----------
SWEDEN-1.49%
Sweden Government Bond, 6.000%, due 02/09/05.................. SEK 4,300,000 546,867
Sweden Government Bond, 10.250%, due 05/05/03................. SEK 1,500,000 227,916
-----------
774,783
-----------
UNITED KINGDOM-9.45%
U.K. Gilt, 8.000%, 06/07/21................................... GBP 600,000 1,202,792
U.K. Treasury, 7.500%, due 12/07/06........................... GBP 2,098,000 3,720,200
-----------
4,922,992
-----------
UNITED STATES-12.42%
U.S. Treasury Note, 6.125%, due 08/15/07...................... USD 1,400,000 1,439,376
U.S. Treasury Note, 6.625%, due 05/15/07...................... USD 4,750,000 5,030,549
-----------
6,469,925
-----------
TOTAL GOVERNMENT AND AGENCY OBLIGATIONS
(Cost $44,501,925)......................................... 44,208,903
-----------
</TABLE>
See notes to financial statements.
44
<PAGE> 46
VAN ECK/CHUBB GLOBAL INCOME FUND
SCHEDULE OF INVESTMENTS--(CONTINUED)
DECEMBER 31, 1997
<TABLE>
<CAPTION>
MARKET
LOCAL PAR VALUE
CURRENCY VALUE (NOTE B)
--------- ------------- -----------
<S> <C> <C> <C>
CORPORATE BONDS-9.54%
BRAZIL-0.93%
Comtel Brasileira, Series 144A, 10.750%, due 09/26/04+........ USD 500,000 $ 486,250
JAPAN-0.93%
Export-Import Bank of Japan, 4.625%, due 02/26/03............. JPY 54,000,000 479,789
MEXICO-0.96%
Panamerican Beverages, Series 144A, 7.250%, due 07/01/09+..... USD 500,000 500,000
SWEDEN-5.76%
Swiss Bank Corp. Certificate of Deposit, 5.770%, due
03/17/98.................................................... USD 3,000,000 3,000,000
UNITED STATES-0.97%
Global TeleSystems Group, Inc., Series 144A, 8.750%, due
06/30/00+................................................... USD 500,000 505,000
-----------
TOTAL CORPORATE BONDS (cost $5,040,675)..................... 4,971,039
-----------
</TABLE>
<TABLE>
<CAPTION>
CURRENCY TO CURRENCY TO
DELIVER RECEIVE
------------ ------------
<S> <C> <C> <C>
OPTIONS PURCHASED-0.08%
Call, DEM/USD Currency Opt. 98 Feb. Strike price 1.789
(Cost $26,250)............................................ DEM2,683,500 USD1,500,000 25,256
Put, USD/DEM Currency Opt. 98 Feb. Strike price 1.767
(Cost $12,350)............................................ USD 650,000 DEM1,148,550 15,514
-----------
40,770
-----------
TOTAL INVESTMENTS (Cost $49,731,200)...................... 94.84% 49,398,837
Other assets less liabilities............................. 5.16 2,688,730
------- -----------
TOTAL NET ASSETS........................................ 100.00% $52,087,567
======= ===========
Currency Classification
- -----------------------
Australian dollar.... AUD
Belgium franc........ BEF
Canadian dollar...... CAD
Danish krone......... DKK
French franc......... FRF
British pound........ GBP
German deutschemark.. DEM
Italian lira......... ITL
Japanese yen......... JPY
Netherlands
guilder............. NLG
Spanish peseta....... ESP
Swedish krona........ SEK
United States
dollar.............. USD
</TABLE>
- --------------
* Aggregate cost for Federal income tax purposes.
+ Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities, which amount to 4.4% of the Fund's net assets, may be
resold in transactions exempt from registration, normally to qualified,
institutional buyers.
See notes to financial statements.
45
<PAGE> 47
VAN ECK/CHUBB FUNDS, INC.
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<TABLE>
<CAPTION>
VAN ECK/CHUBB
VAN ECK/CHUBB GOVERNMENT VAN ECK/CHUBB
MONEY MARKET SECURITIES TOTAL RETURN
FUND FUND FUND
------------- ------------- -------------
<S> <C> <C> <C>
ASSETS
Investments at cost - see
schedules of investments.................. $ 9,192,411 $30,486,916 $39,823,179
=========== =========== ===========
Investments at market value (Notes B &
C)....................................... $ 9,192,411 $31,095,312 $49,183,270
Cash and foreign currencies................ 239,663 240,999 2,386,533
Cash -- Initial Margin (Note F)............ -- -- --
Receivable from administrator.............. 22,602 1,948 --
Receivable for interest and dividends...... 393 448,763 345,171
Receivable for portfolio securities sold... -- -- --
Receivable for variation margin (Note F)... -- -- --
Gross unrealized gain on foreign forward
contracts (Note B)....................... -- -- --
Receivable for Fund shares sold............ 4,317 -- 24,672
Deferred organization costs (Note B)....... -- -- --
----------- ----------- -----------
TOTAL ASSETS......................... 9,459,386 31,787,022 51,939,646
----------- ----------- -----------
LIABILITIES
Payable for portfolio securities
purchased................................ -- -- 1,920,160
Dividends payable.......................... 2,923 8,617 22,114
Payable for Fund shares redeemed........... 18,709 8,926 7,530
Payable to affiliates (Note D)............. 5,475 4,609 17,575
Gross unrealized loss on foreign forward
contracts (Note B)....................... -- -- --
Accounts payable........................... 24,873 25,880 38,632
----------- ----------- -----------
TOTAL LIABILITIES.................... 51,980 48,032 2,006,011
----------- ----------- -----------
NET ASSETS................................... $ 9,407,406 $31,738,990 $49,933,635
=========== =========== ===========
NET ASSETS CONSIST OF:
Par value.................................. 94,084 29,338 24,700
Capital paid in excess of par.............. 9,314,329 31,513,925 40,560,902
Undistributed (Overdistributed) net
investment income........................ -- -- (4,588)
Accumulated net realized loss
from investments.......................... (1,007) (412,669) (7,470)
Net unrealized gain (loss) from
investments............................... -- 608,396 9,360,091
Net unrealized gain on futures and foreign
denominated assets, liabilities and
forward foreign exchange contracts........ -- -- --
----------- ----------- -----------
NET ASSETS........................... $ 9,407,406 $31,738,990 $49,933,635
=========== =========== ===========
Shares of common stock outstanding
($.01 par value, 100,000,000 shares
per fund authorized)........................ 9,408,416 2,933,808 2,470,042
=========== =========== ===========
NET ASSET VALUE PER SHARE.................... $ 1.00 $ 10.82 $ 20.22
=========== =========== ===========
MAXIMUM OFFERING PRICE PER SHARE
(Net asset value divided by .97 on
Government Securities Fund, Tax-Exempt Fund,
and Global Income Fund, and by .95 on Total
Return Fund, Growth and Income Fund and
Capital Appreciation Fund. Money Market Fund
is offered at Net Asset Value per share).... $ 1.00 $ 11.15 $ 21.28
=========== =========== ===========
</TABLE>
See notes to financial statements.
46
<PAGE> 48
<TABLE>
<CAPTION>
VAN ECK/CHUBB VAN ECK/CHUBB VAN ECK/CHUBB
VAN ECK/CHUBB GROWTH AND CAPITAL GLOBAL
TAX-EXEMPT INCOME APPRECIATION INCOME
FUND FUND FUND FUND
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
$29,102,434 $52,984,534 $39,217,304 $49,731,200
=========== =========== =========== ===========
$30,582,839 $67,464,259 $39,963,176 $49,398,837
312,025 2,500,548 934,415 1,424,648
-- -- -- 112,000
5,129 -- -- 4,143
430,710 87,656 22,357 1,023,237
-- -- 778,214 --
-- -- -- 158,899
-- -- -- 5,871
3,023 19,840 4,633 50
-- -- 7,118 7,118
----------- ----------- ----------- -----------
31,333,726 70,072,303 41,709,913 52,134,803
----------- ----------- ----------- -----------
-- 2,327,425 165,336 --
11,166 101,903 5,214 45
3,050 800,810 167 --
3,851 21,878 19,833 2,786
-- -- -- 9,022
27,166 57,967 37,282 35,383
----------- ----------- ----------- -----------
45,233 3,309,983 227,832 47,236
----------- ----------- ----------- -----------
$31,288,493 $66,762,320 $41,482,081 $52,087,567
=========== =========== =========== ===========
24,903 27,185 26,614 54,042
29,793,861 52,265,929 40,714,809 52,501,342
(10,660) (5,904) (82) (118,123)
(16) (4,615) (5,132) (150,670)
1,480,405 14,479,725 745,872 (332,363)
-- -- -- 133,339
----------- ----------- ----------- -----------
$31,288,493 $66,762,320 $41,482,081 $52,087,567
=========== =========== =========== ===========
2,490,289 2,718,500 2,661,350 5,404,248
=========== =========== =========== ===========
$ 12.56 $ 24.56 $ 15.59 $ 9.64
=========== =========== =========== ===========
$ 12.95 $ 25.85 $ 16.41 $ 9.94
=========== =========== =========== ===========
</TABLE>
See notes to financial statements.
47
<PAGE> 49
VAN ECK/CHUBB FUNDS, INC.
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
VAN ECK/CHUBB
VAN ECK/CHUBB GOVERNMENT VAN ECK/CHUBB
MONEY MARKET SECURITIES TOTAL RETURN
FUND FUND FUND
------------- ------------- -------------
<S> <C> <C> <C>
INVESTMENT INCOME
Income:
Interest................................ $ 473,466 $ 1,108,024 $ 672,658
Dividends............................... -- -- 470,509
Foreign taxes withheld.................. -- -- (3,747)
----------- ----------- -----------
Total investment income............. 473,466 1,108,024 1,139,420
----------- ----------- -----------
Expenses:
Administrative fees (Note D)............ 31,522 73,587 161,980
Advisory fees (Note D).................. 13,510 32,706 71,991
Distribution fees (Note D).............. 22,516 81,764 179,978
State registration fees................. 9,095 15,653 30,586
Shareholder reports..................... 4,593 6,496 15,423
Professional fees....................... 10,508 14,054 16,346
Directors' fees......................... 1,012 1,833 3,699
Shareholder servicing costs............. 35,922 21,031 51,655
Custodian fees.......................... 3,032 2,661 4,219
Organization expense.................... -- -- --
Miscellaneous expenses.................. 1,914 3,714 7,997
----------- ----------- -----------
Total expenses...................... 133,624 253,499 543,874
Fees waived and expenses assumed by
affiliates (Note D).................... (88,592) (89,972) (93,930)
----------- ----------- -----------
Net expenses........................ 45,032 163,527 449,944
----------- ----------- -----------
Net investment income............... 428,434 944,497 689,476
----------- ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY
Net realized gain (loss) on
investments............................ (164) 7,015 2,025,968
Net realized loss from foreign currency
transactions............................ -- -- --
Net change in unrealized gain (loss) on
investments............................. -- 569,084 4,260,078
Net change in unrealized gain on futures
and foreign denominated assets,
liabilities and forward foreign exchange
contracts............................... -- -- --
----------- ----------- -----------
Net gain (loss) on investments and
foreign currencies..................... (164) 576,099 6,286,046
----------- ----------- -----------
Net increase in net assets resulting
from operations........................ $ 428,270 $ 1,520,596 $ 6,975,522
=========== =========== ===========
</TABLE>
See notes to financial statements.
48
<PAGE> 50
<TABLE>
<CAPTION>
VAN ECK/CHUBB VAN ECK/CHUBB VAN ECK/CHUBB
VAN ECK/CHUBB GROWTH CAPITAL GLOBAL
TAX-EXEMPT AND INCOME APPRECIATION INCOME
FUND FUND FUND FUND
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
$ 999,445 $ 34,235 $ 26,675 $ 875,224
-- 850,483 182,619 --
-- (9,127) (993) (2,442)
----------- ----------- ----------- -----------
999,445 875,591 208,301 872,782
----------- ----------- ----------- -----------
78,415 226,430 70,504 65,808
34,851 100,635 31,335 29,248
87,128 251,589 78,338 73,120
13,850 41,638 7,877 11,397
7,608 20,004 3,342 5,904
14,518 19,778 16,002 15,628
1,812 5,054 1,447 1,289
20,085 70,075 17,376 12,161
4,725 4,443 4,515 5,647
-- -- 2,690 2,690
8,132 9,157 4,297 5,624
----------- ----------- ----------- -----------
271,124 748,803 237,723 228,516
(96,868) (119,831) (41,879) (31,092)
----------- ----------- ----------- -----------
174,256 628,972 195,844 197,424
----------- ----------- ----------- -----------
825,189 246,619 12,457 675,358
----------- ----------- ----------- -----------
88,323 3,953,219 2,023,906 192,757
-- -- -- (184,281)
731,502 6,037,252 (118,155) (679,647)
-- -- -- 140,666
----------- ----------- ----------- -----------
819,825 9,990,471 1,905,751 (530,505)
----------- ----------- ----------- -----------
$ 1,645,014 $10,237,090 $ 1,918,208 $ 144,853
=========== =========== =========== ===========
</TABLE>
See notes to financial statements.
49
<PAGE> 51
VAN ECK/CHUBB FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
VAN ECK/CHUBB
VAN ECK/CHUBB GOVERNMENT VAN ECK/CHUBB
MONEY MARKET SECURITIES TOTAL RETURN
FUND FUND FUND
------------------------ -------------------------- --------------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
DECEMBER DECEMBER DECEMBER DECEMBER DECEMBER DECEMBER
31, 1997 31, 1996 31, 1997 31, 1996 31, 1997 31, 1996
---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net
assets:
From operations:
Net investment income... $ 428,434 $ 412,747 $ 944,497 $ 803,932 $ 689,476 $ 599,615
Net realized gain (loss)
on investments......... (164) (82) 7,015 82,884 2,025,968 1,864,506
Net realized loss from
foreign currency
transactions........... -- -- -- -- -- --
Net change in unrealized
gain (loss) on
investments and
translation of assets
and liabilities in
foreign currency....... -- -- 569,084 (483,663) 4,260,078 1,949,555
---------- ---------- ----------- ----------- ----------- -----------
Net increase (decrease)
in net assets resulting
from operations........ 428,270 412,665 1,520,596 403,153 6,975,522 4,413,676
Dividends to shareholders
from net investment
income................... (428,434) (412,747) (944,497) (803,932) (689,476) (599,615)
Dividends to shareholders
in excess of net
investment income........ -- -- -- -- (10,851) --
Distributions to
shareholders from capital
gains.................... -- -- -- -- (2,206,980) (1,467,709)
Distributions to
shareholders in excess of
capital gains............ -- -- -- -- (1,208) --
Tax return of capital..... -- -- -- -- -- --
Increase (decrease) in net
assets derived from
shareholder transactions
(Note E)................. 553,554 1,233,892 18,344,441 (667,249) 14,802,529 6,546,421
---------- ---------- ----------- ----------- ----------- -----------
Net increase (decrease)
in net assets.......... 553,390 1,233,810 18,920,540 (1,068,028) 18,869,536 8,892,773
Net Assets:
Beginning of year....... 8,854,016 7,620,206 12,818,450 13,886,478 31,064,099 22,171,326
---------- ---------- ----------- ----------- ----------- -----------
End of Year............. $9,407,406 $8,854,016 $31,738,990 $12,818,450 $49,933,635 $31,064,099
========== ========== =========== =========== =========== ===========
Undistributed
(overdistributed) net
investment income........ $ 0 $ 0 $ 0 $ 0 $ (4,588) $ 0
========== ========== =========== =========== =========== ===========
</TABLE>
See notes to financial statements.
50
<PAGE> 52
<TABLE>
<CAPTION>
VAN ECK/CHUBB
GROWTH VAN ECK/CHUBB VAN ECK/CHUBB
VAN ECK/CHUBB AND CAPITAL GLOBAL
TAX-EXEMPT INCOME APPRECIATION INCOME
FUND FUND FUND FUND
--------------------------- --------------------------- -------------------------- ---------------------------
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
DECEMBER DECEMBER DECEMBER DECEMBER DECEMBER DECEMBER DECEMBER DECEMBER
31, 1997 31, 1996 31, 1997 31, 1996 31, 1997 31, 1996 31, 1997 31, 1996
----------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 825,189 $ 778,830 $ 246,619 $ 444,976 $ 12,457 $ 32,494 $ 675,358 $ 627,964
88,323 67,216 3,953,219 3,562,614 2,023,906 205,469 192,757 80,582
-- -- -- -- -- -- (184,281) (71,480)
731,502 (249,230) 6,037,252 3,263,516 (118,155) 841,609 (538,981) 62,138
----------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
1,645,014 596,816 10,237,090 7,271,106 1,918,208 1,079,572 144,853 699,204
(825,189) (778,830) (246,619) (444,976) (12,457) (32,494) (548,912) (556,484)
-- -- (11,685) -- (12,843) -- -- (71,480)
(88,323) (52,938) (4,401,950) (2,606,711) (2,129,463) (99,912) (273,339) --
(10,638) (37) -- -- (66) -- (128,654) --
-- -- -- -- -- -- (125,999) --
15,506,247 37,022 20,903,635 6,918,269 35,278,131 3,897,151 40,792,740 1,450,076
----------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
16,227,111 (197,967) 26,480,471 11,137,688 35,041,510 4,844,317 39,860,689 1,521,316
15,061,382 15,259,349 40,281,849 29,144,161 6,440,571 1,596,254 12,226,878 10,705,562
----------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
$31,288,493 $15,061,382 $66,762,320 $40,281,849 $41,482,081 $6,440,571 $52,087,567 $12,226,878
=========== =========== =========== =========== =========== ========== =========== ===========
$ (10,660) $ 0 $ (5,904) $ 0 $ (82) $ 0 $ (118,123) $ 969
=========== =========== =========== =========== =========== ========== =========== ===========
</TABLE>
See notes to financial statements.
51
<PAGE> 53
VAN ECK/CHUBB FUNDS, INC.
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each year:
<TABLE>
<CAPTION>
VAN ECK/CHUBB MONEY MARKET FUND
------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
DECEMBER DECEMBER DECEMBER DECEMBER DECEMBER
31, 1997 31, 1996 31, 1995 31, 1994 31, 1993
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
year......................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income........ 0.047 0.049(A) 0.050(A) 0.034(A) 0.025(A)
Net gains and losses on
securities (both realized
and unrealized)............. -- -- -- -- --
---------- ---------- ---------- ---------- ----------
Total from investment
operations.................. 0.047 0.049 0.050 0.034 0.025
---------- ---------- ---------- ---------- ----------
LESS DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from net investment
income...................... (0.047) (0.049) (0.050) (0.034) (0.025)
Dividends in excess of net
investment income........... -- -- -- -- --
Distributions from capital
gains....................... -- -- -- -- --
Distributions in excess of
capital gains............... -- -- -- -- --
Returns of capital........... -- -- -- -- --
---------- ---------- ---------- ---------- ----------
Total distributions.......... (0.047) (0.049) (0.050) (0.034) (0.025)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
========== ========== ========== ========== ==========
Total Return(B)................ 4.85% 4.86% 5.16% 3.41% 2.50%
Ratios to Average Net Assets:
Expenses(C).................. 0.50% 0.50% 0.50% 0.50% 0.50%
Net investment income........ 4.76% 4.71% 5.05% 3.43% 2.48%
Net Assets, At End of Year..... $9,407,406 $8,854,016 $7,620,206 $7,494,743 $5,225,178
</TABLE>
(A) The per share amounts which are shown have been computed based on the
average number of shares outstanding during each period.
(B) Total return assumes reinvestment of all dividends during the period.
Investment returns and principal values will fluctuate and shares, when
redeemed, may be worth more or less than the original cost.
(C) Certain fees and expenses have been subsidized during each of the periods.
Had the fees not been waived and expenses not been assumed, the ratios of
expenses to average net assets would have been 1.48% in 1997, 1.21% in 1996,
1.31% in 1995, 1.31% in 1994 and 1.50% in 1993.
See notes to financial statements.
52
<PAGE> 54
VAN ECK/CHUBB FUNDS, INC.
FINANCIAL HIGHLIGHTS--(CONTINUED)
For a share outstanding throughout each year:
<TABLE>
<CAPTION>
VAN ECK/CHUBB GOVERNMENT SECURITIES FUND
-------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
DECEMBER DECEMBER DECEMBER DECEMBER DECEMBER
31, 1997 31, 1996 31, 1995 31, 1994 31, 1993
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
year.......................... $ 10.480 $ 10.780 $ 9.750 $ 10.710 $ 10.700
----------- ----------- ----------- ----------- -----------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income........ 0.616 0.623 0.636 0.607 0.770
Net gains and losses on
securities (both realized
and unrealized)............. 0.340 (0.300) 1.030 (0.960) 0.199
----------- ----------- ----------- ----------- -----------
Total from investment
operations.................. 0.956 0.323 1.666 (0.353) 0.969
----------- ----------- ----------- ----------- -----------
LESS DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from net investment
income...................... (0.616) (0.623) (0.636) (0.607) (0.770)
Dividends in excess of net
investment income........... -- -- -- -- --
Distributions from capital
gains....................... -- -- -- -- (0.170)
Distributions in excess of
capital gains............... -- -- -- -- (0.019)
Returns of capital........... -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Total distributions.......... (0.616) (0.623) (0.636) (0.607) (0.959)
----------- ----------- ----------- ----------- -----------
Net asset value, end of year... $ 10.820 $ 10.480 $ 10.780 $ 9.750 $ 10.710
=========== =========== =========== =========== ===========
Total Return(A)................ 9.44% 3.19% 17.50% (3.34%) 9.29%
Ratios to Average Net Assets:
Expenses(B).................. 1.00% 0.93% 1.00% 1.00% 1.00%
Net investment income........ 5.78% 5.94% 6.16% 5.96% 7.04%
Portfolio Turnover Rate........ 39.86% 140.94% 276.56% 113.36% 197.08%
Net Assets, At End of Year..... $31,738,990 $12,818,450 $13,886,478 $12,534,640 $14,679,255
</TABLE>
(A) Total return assumes reinvestment of all dividends during the period and
does not reflect deduction of sales charge. Investment returns and principal
values will fluctuate and shares, when redeemed, may be worth more or less
than the original cost.
(B) Certain fees and expenses have been subsidized during each of the periods.
Had the fees not been waived and expenses not been assumed, the ratios of
expenses to average net assets would have been 1.55% in 1997, 1.60% in
1996, 1.70% in 1995, 1.71% in 1994, and 1.89% in 1993.
See notes to financial statements.
53
<PAGE> 55
VAN ECK/CHUBB FUNDS, INC.
FINANCIAL HIGHLIGHTS--(CONTINUED)
For a share outstanding throughout each year:
<TABLE>
<CAPTION>
VAN ECK/CHUBB TOTAL RETURN FUND
-----------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
DECEMBER DECEMBER DECEMBER DECEMBER DECEMBER
31, 1997 31, 1996 31, 1995 31, 1994 31, 1993
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
year................................ $ 17.410 $ 15.960 $ 13.230 $ 15.010 $ 13.890
----------- ----------- ----------- ----------- -----------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income.............. 0.365 0.370 0.373 0.373 0.405
Net gains and
losses on securities (both
realized and unrealized).......... 3.778 2.321 3.586 (0.994) 1.529
----------- ----------- ----------- ----------- -----------
Total from investment
operations........................ 4.143 2.691 3.959 (0.621) 1.934
----------- ----------- ----------- ----------- -----------
LESS DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from net
investment income................. (0.365) (0.370) (0.373) (0.373) (0.405)
Dividends in excess of net
investment income................. (0.004) -- -- -- --
Distributions from capital
gains............................. (0.964) (0.871) (0.692) (0.786) (0.409)
Distributions in excess of
capital gains..................... -- -- -- -- --
Returns of capital................. -- -- (0.164) -- --
----------- ----------- ----------- ----------- -----------
Total distributions................ (1.333) (1.241) (1.229) (1.159) (0.814)
----------- ----------- ----------- ----------- -----------
Net asset value, end of year......... $ 20.220 $ 17.410 $ 15.960 $ 13.230 $ 15.010
=========== =========== =========== =========== ===========
Total Return(A)...................... 24.09% 17.04% 30.13% (4.21%) 14.03%
Ratios to Average Net Assets:
Expenses(B)........................ 1.25% 1.08% 1.08% 1.00% 1.00%
Net investment income.............. 1.92% 2.26% 2.45% 2.66% 2.83%
Portfolio Turnover Rate.............. 15.80% 27.01% 57.62% 37.53% 66.15%
Average Commission Rate Paid(C)...... $ 0.0652 $ 0.0700
Net Assets, At End of Year........... $49,933,635 $31,064,099 $22,171,326 $16,431,195 $14,360,086
</TABLE>
(A) Total return assumes reinvestment of all dividends during the period and
does not reflect deduction of sales charge. Investment returns and principal
values will fluctuate and shares, when redeemed, may be worth more or less
than the original cost.
(B) Certain fees and expenses have been subsidized during each of the periods.
Had the fees not been waived and expenses not been assumed, the ratios of
expenses to average net assets would have been 1.51% in 1997, 1.59% in
1996, 1.70% in 1995, 1.73% in 1994 and 1.93% in 1993.
(C) Effective in 1996, the Fund is required to disclose the average commission
rate paid per share of equity securities purchased or sold.
See notes to financial statements.
54
<PAGE> 56
VAN ECK/CHUBB FUNDS, INC.
FINANCIAL HIGHLIGHTS--(CONTINUED)
For a share outstanding throughout each year:
<TABLE>
<CAPTION>
VAN ECK/CHUBB TAX-EXEMPT FUND
-----------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
DECEMBER DECEMBER DECEMBER DECEMBER DECEMBER
31, 1997 31, 1996 31, 1995 31, 1994 31, 1993
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
year................................ $ 12.150 $ 12.330 $ 11.220 $ 12.580 $ 11.740
----------- ----------- ----------- ----------- -----------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income.............. 0.581 0.611 0.621 0.618 0.583
Net gains and
losses on securities (both
realized and unrealized).......... 0.450 (0.137) 1.132 (1.360) 0.850
----------- ----------- ----------- ----------- -----------
Total from investment
operations........................ 1.031 0.474 1.753 (0.742) 1.433
----------- ----------- ----------- ----------- -----------
LESS DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from net
investment income................. (0.581) (0.611) (0.621) (0.618) (0.583)
Dividends in excess of net
investment income................. -- -- -- -- --
Distributions from capital
gains............................. (0.036) (0.043) (0.010) -- (0.004)
Distributions in excess of
capital gains..................... (0.004) -- (0.012) -- (0.006)
Returns of capital................. -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Total distributions................ (0.621) (0.654) (0.643) (0.618) (0.593)
----------- ----------- ----------- ----------- -----------
Net asset value, end of year......... $ 12.560 $ 12.150 $ 12.330 $ 11.220 $ 12.580
=========== =========== =========== =========== ===========
Total Return(A)...................... 8.73% 4.00% 15.88% (5.97%) 12.42%
Ratios to Average Net Assets:
Expenses(B)........................ 1.00% 0.98% 1.00% 1.00% 1.00%
Net investment income.............. 4.74% 5.00% 5.20% 5.21% 4.81%
Portfolio Turnover Rate.............. 12.78% 16.29% 7.39% 8.37% 1.55%
Net Assets, At End of Year........... $31,288,493 $15,061,382 $15,259,349 $13,973,939 $16,406,372
</TABLE>
(A) Total return assumes reinvestment of all dividends during the period and
does not reflect deduction of sales charge. Investment returns and principal
values will fluctuate and shares, when redeemed, may be worth more or less
than the original cost.
(B) Certain fees and expenses had been subsidized during each of the periods.
Had the fees not been waived and expenses not been assumed, the ratios of
expenses to average net assets would have been 1.56% in 1997, 1.65% in 1996,
1.79% in 1995, 1.80% in 1994 and 1.97% in 1993.
See notes to financial statements.
55
<PAGE> 57
VAN ECK/CHUBB FUNDS, INC.
FINANCIAL HIGHLIGHTS--(CONTINUED)
For a share outstanding throughout the year:
<TABLE>
<CAPTION>
VAN ECK/CHUBB GROWTH AND INCOME FUND
-------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
DECEMBER DECEMBER DECEMBER DECEMBER DECEMBER
31, 1997 31, 1996 31, 1995 31, 1994 31, 1993
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
year........................... $ 21.040 $ 18.580 $ 14.770 $ 16.700 $ 15.140
----------- ----------- ----------- ----------- -----------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income......... 0.096 0.250 0.204 0.247 0.277
Net gains and losses on
securities (both realized and
unrealized).................. 5.286 3.931 5.042 (0.954) 2.039
----------- ----------- ----------- ----------- -----------
Total from investment
operations................... 5.382 4.181 5.246 (0.707) 2.316
----------- ----------- ----------- ----------- -----------
LESS DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from net investment
income....................... (0.096) (0.250) (0.204) (0.247) (0.277)
Dividends in excess of net
investment income............ (0.004) -- -- -- --
Distributions from capital
gains........................ (1.762) (1.471) (0.885) (0.976) (0.479)
Distributions in excess of
capital gains................ -- -- (0.346) -- --
Returns of capital............ -- -- (0.001) -- --
----------- ----------- ----------- ----------- -----------
Total distributions........... (1.862) (1.721) (1.436) (1.223) (0.756)
----------- ----------- ----------- ----------- -----------
Net asset value, end of year.... $ 24.560 $ 21.040 $ 18.580 $ 14.770 $ 16.700
=========== =========== =========== =========== ===========
Total Return(A)................. 25.85% 22.50% 35.52% (4.26%) 15.29%
Ratios to Average Net Assets:
Expenses(B)................... 1.25% 1.06% 1.08% 1.00% 1.00%
Net investment income......... 0.49% 1.29% 1.20% 1.66% 2.04%
Portfolio Turnover Rate......... 21.02% 44.50% 37.59% 46.17% 81.96%
Average Commission Rate
Paid(C)....................... $ 0.0681 $ 0.0700
Net Assets, At End of Year...... $66,762,320 $40,281,849 $29,144,161 $18,679,228 $14,885,337
</TABLE>
(A) Total return assumes reinvestment of all dividends during the period and
does not reflect deduction of sales charge. Investment returns and principal
values will fluctuate and shares, when redeemed, may be worth more or less
than the original cost.
(B) Certain fees and expenses had been subsidized during each of the periods.
Had the fees not been waived and expenses not been assumed, the ratios of
expenses of average net assets would have been 1.49% in 1997, 1.58% in 1996,
1.69% in 1995, 1.71% in 1994 and 1.92% in 1993.
(C) Effective in 1996, the Fund is required to disclose the average commission
rate paid per share of equity securities purchased or sold.
See notes to financial statements.
56
<PAGE> 58
VAN ECK/CHUBB FUNDS, INC.
FINANCIAL HIGHLIGHTS--(CONTINUED)
For a share outstanding throughout each period:
<TABLE>
<CAPTION>
VAN ECK/CHUBB CAPITAL APPRECIATION FUND
---------------------------------------------------------
PERIOD FROM
YEAR YEAR SEPTEMBER 1,
ENDED ENDED 1995(E) THROUGH
DECEMBER DECEMBER DECEMBER
31, 1997 31, 1996 31, 1995
----------- ---------- ----------------
<S> <C> <C> <C>
Net asset value, beginning of
period............................ $ 12.990 $ 10.400 $ 10.000
----------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS
Net investment income............ 0.005 0.067 0.037
Net gains and losses on
securities (both realized and
unrealized)..................... 3.565 2.796 0.422
----------- ---------- ----------
Total from investment
operations...................... 3.570 2.863 0.459
----------- ---------- ----------
LESS DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment
income.......................... (0.005) (0.067) (0.037)
Dividends in excess of net
investment income............... (0.005) -- --
Distributions from capital
gains........................... (0.960) (0.206) (0.022)
Distributions in excess of
capital gains................... -- -- --
Returns of capital............... -- -- --
----------- ---------- ----------
Total distributions.............. (0.970) (0.273) (0.059)
----------- ---------- ----------
Net asset value, end of period..... $ 15.590 $ 12.990 $ 10.400
=========== ========== ==========
Total Return(A).................... 27.79% 27.53% 4.60%
Ratios to Average Net Assets:
Expenses(B)...................... 1.25% 1.13% 1.25%(D)
Net investment income............ 0.08% 0.86% 1.38%(D)
Portfolio Turnover Rate............ 50.67% 41.97% 2.73%
Average Commission Rate Paid(C).... $ 0.0685 $ 0.0700
Net Assets, At End of Period....... $41,482,081 $6,440,571 $1,596,254
</TABLE>
(A) Total return assumes reinvestment of all dividends during the period and
does not reflect deduction of sales charge. Investment returns and principal
values will fluctuate and shares, when redeemed, may be worth more or less
than the original cost. Total returns for periods of less than one year have
not been annualized.
(B) Certain fees and expenses had been subsidized during each of the periods.
Had the fees not been waived and expenses not been assumed, the ratios of
expenses to average net assets would have been 1.52% in 1997, 1.81% in 1996
and 2.50% in 1995.
(C) Effective in 1996, the Fund is required to disclose the average commission
rate paid per share of equity securities purchased or sold.
(D) Annualized.
(E) Commencement of operations.
See notes to financial statements.
57
<PAGE> 59
VAN ECK/CHUBB FUNDS, INC.
FINANCIAL HIGHLIGHTS--(CONTINUED)
For a share outstanding throughout each period:
<TABLE>
<CAPTION>
VAN ECK/CHUBB GLOBAL INCOME FUND
----------------------------------------------------------
PERIOD FROM
YEAR YEAR SEPTEMBER 1,
ENDED ENDED 1995(D) THROUGH
DECEMBER DECEMBER DECEMBER
31, 1997 31, 1996 31, 1995
----------- ----------- ----------------
<S> <C> <C> <C>
Net asset value, beginning of
period......................... $ 10.240 $ 10.210 $ 10.000
----------- ----------- ------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income.......... 0.471 0.551 0.116
Net gains and losses on
securities (both realized and
unrealized)................... (0.476) 0.030 0.210
----------- ----------- ------------
Total from investment
operations.................... (0.005) 0.581 0.326
----------- ----------- ------------
LESS DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from net investment
income........................ (0.398) (0.485) (0.116)
Dividends in excess of net
investment income............. -- (0.066) --
Distributions from capital
gains......................... (0.084) -- --
Distributions in excess of
capital gains................. (0.040) -- --
Tax return of capital.......... (0.073) -- --
----------- ----------- ------------
Total distributions............ (0.595) (0.551) (0.116)
----------- ----------- ------------
Net asset value, end of period... $ 9.64 $ 10.240 $ 10.210
=========== =========== ============
Total Return(A).................. 0.02% 5.95% 3.27%
Ratios to Average Net Assets:
Expenses(B).................... 1.35% 1.23% 1.75%(C)
Net investment income.......... 4.62% 5.49% 4.48%(C)
Portfolio Turnover Rate.......... 185.95% 80.70% 14.16%
Net Assets, At End of Period..... $52,087,567 $12,226,878 $ 10,705,562
</TABLE>
(A) Total return assumes reinvestment of all dividends during the period and
does not reflect deduction of sales charge. Investment returns and principal
values will fluctuate and shares, when redeemed, may be worth more or less
than the original cost. Total returns for periods of less than one year have
not been annualized.
(B) Certain fees and expenses had been subsidized during each of the periods.
Had the fees not been waived and expenses not been assumed, the ratios of
expenses to average net assets would have been 1.56% in 1997, 1.68% in 1996
and 2.14% in 1995.
(C) Annualized.
(D) Commencement of operations.
See notes to financial statements.
58
<PAGE> 60
NOTES TO FINANCIAL STATEMENTS
VAN ECK/CHUBB FUNDS, INC.
DECEMBER 31, 1997
NOTE A--ORGANIZATION
Van Eck/Chubb Funds, Inc. (the "Company"), formerly known as Chubb Investment
Funds, Inc., was incorporated under the laws of the State of Maryland on April
27, 1987, and is registered under the Investment Company Act of 1940, as
amended, as a diversified, open-end series management investment company. The
Company consists of seven funds (the "Funds"): Van Eck/Chubb Money Market Fund,
Van Eck/Chubb Government Securities Fund, Van Eck/Chubb Total Return Fund, Van
Eck/Chubb Tax-Exempt Fund, Van Eck/Chubb Growth and Income Fund, Van Eck/Chubb
Capital Appreciation Fund, and Van Eck/Chubb Global Income Fund.
At December 31, 1997, Chubb Life Insurance Company of America ("Chubb Life") and
its affiliates and Van Eck Associates Corporation owned:
<TABLE>
<CAPTION>
DECEMBER 31, 1997 % OF
SHARES OWNED SHARES
----------------- ------
<S> <C> <C>
Van Eck/Chubb Money Market Fund...................... 3,933,934 41.81%
Van Eck/Chubb Government Securities Fund............. 2,119,782 72.25%
Van Eck/Chubb Total Return Fund...................... 782,053 31.66%
Van Eck/Chubb Tax-Exempt Fund........................ 1,613,676 64.80%
Van Eck/Chubb Growth and Income Fund................. 723,524 26.61%
Van Eck/Chubb Capital Appreciation Fund.............. 2,004,084 75.30%
Van Eck/Chubb Global Income Fund..................... 5,306,519 98.19%
</TABLE>
NOTE B--SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in accordance with generally accepted
accounting principles requires the Company's management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates. The following is a
summary of significant accounting policies:
Valuation of Investments: Equity securities are valued at the closing sales
price on the exchange on which such securities are principally traded; or, if
traded in the over-the-counter market or on a national exchange for which no
sales took place on the day of valuation, at the mean of the bid and asked
prices at the close of trading. Quotations of foreign securities denominated in
foreign currencies are converted into U.S. dollars using the prevailing foreign
exchange rates. Securities listed on a foreign exchange are valued at the last
quoted sale price available before the time when net assets are valued.
Securities or other assets for which market quotations are not readily available
are valued at fair value in accordance with procedures established by the Board
of Directors. Debt instruments are valued on the basis of quotes provided by a
pricing service that determines the current value for institutional size trading
units of securities, without exclusive reliance upon quoted prices. These
valuations are believed to reflect fair market value more accurately. Short-term
debt instruments with a remaining maturity of less than 60 days, including all
investments of the Van Eck/Chubb Money Market Fund, are valued by the amortized
cost method, which approximates market value, unless the Board of Directors
determines that this does not represent fair value.
59
<PAGE> 61
NOTES TO FINANCIAL STATEMENTS
VAN ECK/CHUBB FUNDS, INC.
DECEMBER 31, 1997
NOTE B--SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
Trading in securities on most foreign exchanges and over-the-counter markets is
normally completed before the close of the domestic market and may also take
place on days on which the domestic market is closed.
Foreign Currency Translation: The books and records of the Funds are maintained
in U.S. dollars. The market values of investments, other assets and liabilities,
and forward contracts stated in foreign currencies are translated at the
prevailing exchange rates at the end of the period. Purchases, sales, income and
expenses are translated at the exchange rate prevailing on the respective dates
of such transactions.
Since the net assets of the Funds are presented at the exchange rates and market
value prevailing at the end of the period, the Funds do not isolate the portion
of the results of operations arising as a result of changes in foreign exchange
rates on securities from the fluctuations arising from changes in the market
prices of securities held during the period. Such fluctuations are included with
the net realized and unrealized gain or loss from investments.
Reported net realized gain or loss from foreign currency transactions (including
foreign currency forward contracts) arises from sales and maturities of
short-term securities, sales of foreign currencies, currency gains or losses
realized between the trade and settlement dates on securities transactions, the
difference between the amounts of dividends, interest and foreign withholding
taxes recorded on the Funds books, and the U.S. dollar equivalent of the amounts
actually received or paid. Net unrealized gain or loss from foreign currency
transactions arises from changes in the value of assets and liabilities, other
than investments in securities at fiscal year end, resulting from fluctuations
in exchange rates.
Forward Foreign Currency Contracts: Certain Funds may enter into forward
foreign currency contracts to protect securities and related receivables and
payables against fluctuations in future foreign currency rates. The Van
Eck/Chubb Global Income Fund may also enter into cross currency hedges by
entering into transactions to purchase or sell one or more currencies that are
expected to increase or decrease relative to other currencies in which the Fund
has or expects to have exposure. A forward contract is an agreement to buy or
sell currencies of different countries on a specified future date at a specified
rate. Risk may arise upon entering into these contracts from the potential
inability of counterparties to meet the terms of their contracts and is
generally limited to the amount of unrealized gain on the contracts, if any, at
the date of default. Risk may also arise from unanticipated movements in the
value of a foreign currency relative to the U.S. dollar. Contracts are marked to
market daily and the change in market value is recorded as unrealized
appreciation or depreciation. Realized gains or losses arising from such
transactions are included in net realized gains or losses from foreign currency
transactions. At December 31, 1997, the Van Eck/Chubb Global Income Fund had the
following open forward currency contracts:
<TABLE>
<CAPTION>
U.S.
DOLLAR
FOREIGN CURRENCY CURRENCY TO VALUE AT NET UNREALIZED
PURCHASE CONTRACT SETTLEMENT DATE RECEIVE COST 12/31/97 DEPRECIATION
- ---------------------- --------------- -------------- --------- --------- --------------
<S> <C> <C> <C> <C> <C>
German deutschemarks 02/27/98 DEM 1,392,171 $777,814 $776,645 $ (1,169)
======== ======== ========
</TABLE>
60
<PAGE> 62
NOTES TO FINANCIAL STATEMENTS
VAN ECK/CHUBB FUNDS, INC.
DECEMBER 31, 1997
NOTE B--SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
<TABLE>
<CAPTION>
U.S. DOLLAR NET UNREALIZED
FOREIGN CURRENCY CURRENCY TO VALUE AT APPRECIATION
SALE CONTRACTS SETTLEMENT DATE DELIVER COST 12/31/97 (DEPRECIATION)
- -------------------- --------------- ----------- ----------- ----------- --------------
<S> <C> <C> <C> <C> <C>
Australian dollar 02/27/98 AUD784,188 $ 517,023 $ 511,152 $ 5,871
British pound 02/27/98 GBP949,557 1,554,478 1,562,331 (7,853)
----------- ----------- ----------
$ 2,071,501 $ 2,073,483 $ (1,982)
=========== =========== ==========
</TABLE>
Security Transactions and Investment Income: Security transactions are recorded
on a trade date basis. Realized gains and losses on investments sold are
recorded on the basis of the specific identification method. Interest income,
including, where applicable, amortization of discount on investments, is
recorded on the accrual basis. Dividend income is recorded on the ex-dividend
date, except for certain dividends from foreign securities, which are recorded
as soon after the ex-dividend date as the respective Funds, using reasonable
diligence, become aware of such dividends.
Dividends to Shareholders: Dividends to shareholders from net investment income
are declared daily and distributed monthly for the Van Eck/Chubb Money Market
Fund and the Van Eck/Chubb Government Securities Fund; declared and distributed
monthly for the Van Eck/Chubb Tax-Exempt Fund and the Van Eck/Chubb Global
Income Fund; declared and distributed quarterly for the Van Eck/Chubb Total
Return Fund; and declared and distributed annually for the Van Eck/Chubb Growth
and Income Fund and Van Eck/Chubb Capital Appreciation Fund. Dividends from net
realized capital gains are declared and distributed at least once annually.
Dividends distributed to shareholders are recorded on the ex-dividend date.
The Company distinguishes between dividends on a tax basis and a financial
reporting basis and only dividends in excess of tax basis earnings and profits
are reported in the financial statements as a return of capital. Differences in
the recognition or classification of income between the financial statements and
tax earnings and profits which result in over-distributions for financial
statement purposes are classified as distributions in excess of net investment
income or accumulated realized gains. To the extent that these differences are
permanent in nature, such amounts are reclassified within the capital accounts
based on their tax basis treatment; temporary differences do not require
reclassification. At December 31, 1997, certain Funds reclassified permanent
differences within the capital accounts based on their tax basis treatment. Net
assets were not affected by these reclassifications.
Federal Income Tax Status: It is the policy of the Company for each Fund to
qualify as a regulated investment company by complying with the requirements of
the Internal Revenue Code applicable to regulated investment companies, by
distributing substantially all of its taxable earnings to its shareholders.
Therefore, no Federal tax provision is required.
At December 31, 1997, the Van Eck/Chubb Government Securities Fund had $412,669
of accumulated realized losses expiring in 2002. These losses are available to
be used to offset future realized capital gains.
61
<PAGE> 63
NOTES TO FINANCIAL STATEMENTS
VAN ECK/CHUBB FUNDS, INC.
DECEMBER 31, 1997
NOTE B--SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
Organization Costs: Costs incurred in connection with the initial organization
of the Van Eck/Chubb Capital Appreciation Fund and the Van Eck/Chubb Global
Income Fund are being amortized on the straight-line basis over a period of five
years.
NOTE C--INVESTMENTS
The cost of investment securities held at December 31, 1997, for Federal income
tax purposes is the same as for financial reporting purposes. As of December 31,
1997, gross unrealized gains and losses were as follows:
<TABLE>
<CAPTION>
GROSS GROSS NET
UNREALIZED UNREALIZED UNREALIZED
GAINS LOSSES GAIN (LOSS)
----------- ----------- -----------
<S> <C> <C> <C>
Van Eck/Chubb Government Securities Fund..... $ 608,740 $ 344 $ 608,396
Van Eck/Chubb Total Return Fund.............. 10,294,233 934,142 9,360,091
Van Eck/Chubb Tax-Exempt Fund................ 1,480,405 0 1,480,405
Van Eck/Chubb Growth and Income Fund......... 16,894,610 2,414,885 14,479,725
Van Eck/Chubb Capital Appreciation Fund...... 3,139,774 2,393,902 745,872
Van Eck/Chubb Global Income Fund............. 301,000 633,363 (332,363)
</TABLE>
Purchases and sales of investment securities for the year ended December 31,
1997, other than short-term obligations, were as follows:
<TABLE>
<CAPTION>
PROCEEDS
COST OF FROM
INVESTMENT INVESTMENT
SECURITIES SECURITIES
PURCHASED SOLD
----------- -----------
<S> <C> <C>
Van Eck/Chubb Government Securities Fund................... $24,647,937 $ 6,455,444
Van Eck/Chubb Total Return Fund............................ 18,468,506 5,590,387
Van Eck/Chubb Tax-Exempt Fund.............................. 17,319,148 2,220,890
Van Eck/Chubb Growth and Income Fund....................... 28,144,791 10,461,593
Van Eck/Chubb Capital Appreciation Fund.................... 39,579,313 7,940,268
Van Eck/Chubb Global Income Fund........................... 61,861,088 25,667,392
</TABLE>
NOTE D--MANAGEMENT AGREEMENTS AND EXPENSES
Each of the Funds has an existing investment management agreement with Chubb
Asset Managers, Inc. ("Investment Manager"), a wholly-owned subsidiary of The
Chubb Corporation, and had an administrative agreement (through September 30,
1997) with Chubb Investment Advisory Corporation (the "prior Investment
Administrator"), a wholly-owned subsidiary of Chubb Life.
Under the terms of the agreement, the Investment Manager is responsible for the
overall investment management of each Fund's portfolio, consistent with each
Fund's investment objectives, policies and restrictions. The prior Investment
Administrator provided certain administrative services and facilities for the
Company through September 30, 1997. Effective October 1, 1997, Van Eck
Associates Corporation (the "current Investment Administrator") became
Investment
62
<PAGE> 64
NOTES TO FINANCIAL STATEMENTS
VAN ECK/CHUBB FUNDS, INC.
DECEMBER 31, 1997
NOTE D--MANAGEMENT AGREEMENTS AND EXPENSES--(CONTINUED)
Administrator for the Company under the same terms and conditions as the prior
Investment Administrator.
The Company had a prior distribution agreement under the Investment Company Act
of 1940 with Chubb Securities Corporation ("prior Distributor") through
September 30, 1997. Effective October 1, 1997, the Company entered into the
current distribution agreement with Van Eck Securities Corporation (the "current
Distributor"), a wholly owned subsidiary of the current Investment
Administrator. Under the terms of the agreements, for the year ended December
31, 1997 the prior and current Distributor received $462,598 in sales loads of
which $410,124 was reallowed to broker-dealers. Also, the Company has a plan of
distribution pursuant to Rule 12b-1 that provides that the Company may, directly
or indirectly, engage in activities primarily intended to result in the sale of
the Company's shares. The maximum expenditure the Company may make under the
plan is .25% per annum of the average daily net assets of the Van Eck/Chubb
Money Market Fund and .50% per annum of the average daily net assets of the Van
Eck/Chubb Government Securities Fund, Van Eck/Chubb Total Return Fund, Van
Eck/Chubb Tax-Exempt Fund, Van Eck/Chubb Growth and Income Fund, Van Eck/Chubb
Capital Appreciation Fund and Van Eck/Chubb Global Income Fund.
Investment management fees, which compensate both the Investment Manager and the
current Investment Administrator (from October 1, 1997 through December 31,
1997) are computed at the following annual percentages of average daily net
asset value:
<TABLE>
<CAPTION>
VAN ECK/CHUBB GOVERNMENT SECURITIES FUND
VAN ECK/CHUBB TOTAL RETURN FUND
VAN ECK/CHUBB TAX-EXEMPT FUND
VAN ECK/CHUBB GROWTH AND INCOME FUND
VAN ECK/CHUBB VAN ECK/CHUBB CAPITAL APPRECIATION FUND
MONEY MARKET FUND VAN ECK/CHUBB GLOBAL INCOME FUND
--------------------------- ---------------------------------------
AVERAGE DAILY INVESTMENT INVESTMENT INVESTMENT INVESTMENT
NET ASSETS MANAGER ADMINISTRATOR MANAGER ADMINISTRATOR
---------- ------------- ------------------ ------------------
<S> <C> <C> <C> <C>
First $200 Million....... 0.15% 0.35% 0.20% 0.45%
Next $1.1 Billion........ 0.14% 0.31% 0.19% 0.41%
Over $1.3 Billion........ 0.13% 0.27% 0.18% 0.37%
</TABLE>
For the period from January 1, 1997, through September 30, 1997, the prior
Investment Administrator was compensated at the same annual percentage of
average daily net asset value indicated above.
Pursuant to an expense limitation agreement for the year ended December 31,
1997, the rate of expenses borne by the Funds were limited to 0.50% of the
average daily net assets of the Van Eck/Chubb Money Market Fund, 1.00% of the
average daily net assets of the Van Eck/Chubb Government Securities Fund, 1.25%
of the average daily net assets of the Van Eck/Chubb Total Return Fund, 1.00% of
the average daily net assets of the Van Eck/Chubb Tax-Exempt Fund, 1.25% of the
average daily net assets of the Van Eck/Chubb Growth and Income Fund, 1.25% of
the average daily net assets of the Van Eck/Chubb Capital Appreciation Fund, and
1.35% of the average daily net assets of the Van Eck/Chubb Global Income Fund.
For the year ended December 31, 1997, the Investment Manager, the prior and
current Investment Administrator and
63
<PAGE> 65
NOTES TO FINANCIAL STATEMENTS
VAN ECK/CHUBB FUNDS, INC.
DECEMBER 31, 1997
NOTE D--MANAGEMENT AGREEMENTS AND EXPENSES--(CONTINUED)
the Distributor waived all or a portion of their fees. In addition, Chubb Life
and Van Eck Associates Corporation assumed a portion of all other expenses.
NOTE E--SHAREHOLDERS' TRANSACTIONS
Following is a summary of transactions with shareholders for each Fund.
<TABLE>
<CAPTION>
VAN ECK/CHUBB MONEY MARKET FUND
-------------------------------------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31, 1996
---------------------------- ----------------------------
SHARES DOLLARS SHARES DOLLARS
----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Shares sold...................... 12,985,547 $ 12,985,547 11,445,668 $ 11,445,668
Shares issued as reinvestment
of dividends.................... 420,222 420,222 394,000 394,000
Shares redeemed.................. (12,852,215) (12,852,215) (10,605,776) (10,605,776)
----------- ------------ ----------- ------------
Net increase................ 553,554 $ 553,554 1,233,892 $ 1,233,892
=========== ============ =========== ============
</TABLE>
<TABLE>
<CAPTION>
VAN ECK/CHUBB GOVERNMENT SECURITIES FUND
------------------------------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31, 1996
------------------------- ------------------------
SHARES DOLLARS SHARES DOLLARS
--------- ----------- -------- -----------
<S> <C> <C> <C> <C>
Shares sold...................... 2,006,126 $21,384,810 413,101 $ 4,317,205
Shares issued as reinvestment
of dividends.................... 78,935 888,170 62,283 649,238
Shares redeemed.................. (373,997) (3,928,539) (540,335) (5,633,692)
--------- ----------- -------- -----------
Net increase (decrease)..... 1,711,064 $18,344,441 (64,951) $ (667,249)
========= =========== ======== ===========
</TABLE>
<TABLE>
<CAPTION>
VAN ECK/CHUBB TOTAL RETURN FUND
-----------------------------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31, 1996
------------------------ ------------------------
SHARES DOLLARS SHARES DOLLARS
-------- ----------- -------- -----------
<S> <C> <C> <C> <C>
Shares sold...................... 971,037 $20,382,124 597,305 $ 9,864,163
Shares issued as reinvestment
of dividends and
distributions................... 145,823 2,792,442 115,858 1,997,200
Shares redeemed.................. (430,994) (8,372,037) (317,920) (5,314,942)
-------- ----------- -------- -----------
Net increase................ 685,866 $14,802,529 395,243 $ 6,546,421
======== =========== ======== ===========
</TABLE>
64
<PAGE> 66
NOTES TO FINANCIAL STATEMENTS
VAN ECK/CHUBB FUNDS, INC.
DECEMBER 31, 1997
NOTE E--SHAREHOLDERS' TRANSACTIONS--(CONTINUED)
<TABLE>
<CAPTION>
VAN ECK/CHUBB TAX-EXEMPT FUND
------------------------------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31, 1996
------------------------- ------------------------
SHARES DOLLARS SHARES DOLLARS
--------- ----------- -------- -----------
<S> <C> <C> <C> <C>
Shares sold...................... 1,618,059 $20,040,183 345,568 $ 4,189,497
Shares issued as reinvestment
of dividends and
distributions................... 74,378 875,229 59,320 717,135
Shares redeemed.................. (441,704) (5,409,165) (403,013) (4,869,610)
--------- ----------- -------- -----------
Net increase................ 1,250,733 $15,506,247 1,875 $ 37,022
========= =========== ======== ===========
</TABLE>
<TABLE>
<CAPTION>
VAN ECK/CHUBB GROWTH AND INCOME FUND
------------------------------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31, 1996
------------------------- ------------------------
SHARES DOLLARS SHARES DOLLARS
--------- ----------- -------- -----------
<S> <C> <C> <C> <C>
Shares sold...................... 1,017,154 $26,246,838 632,505 $12,434,470
Shares issued as reinvestment
of dividends and
distributions................... 188,575 4,334,132 141,075 2,968,258
Shares redeemed.................. (401,518) (9,677,335) (428,191) (8,484,459)
--------- ----------- -------- -----------
Net increase................ 804,211 $20,903,635 345,389 $ 6,918,269
========= =========== ======== ===========
</TABLE>
<TABLE>
<CAPTION>
VAN ECK/CHUBB CAPITAL APPRECIATION FUND
------------------------------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31, 1996
------------------------- ------------------------
SHARES DOLLARS SHARES DOLLARS
--------- ----------- -------- -----------
<S> <C> <C> <C> <C>
Shares sold...................... 2,137,853 $34,941,115 356,581 $ 4,046,795
Shares issued as reinvestment
of dividends and
distributions................... 139,585 2,040,444 10,013 130,064
Shares redeemed.................. (111,756) (1,703,428) (24,388) (279,708)
--------- ----------- -------- -----------
Net increase................ 2,165,682 $35,278,131 342,206 $ 3,897,151
========= =========== ======== ===========
</TABLE>
65
<PAGE> 67
NOTES TO FINANCIAL STATEMENTS
VAN ECK/CHUBB FUNDS, INC.
DECEMBER 31, 1997
NOTE E--SHAREHOLDERS' TRANSACTIONS--(CONTINUED)
<TABLE>
<CAPTION>
VAN ECK/CHUBB GLOBAL INCOME FUND
------------------------------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31, 1996
------------------------- ------------------------
SHARES DOLLARS SHARES DOLLARS
--------- ----------- -------- -----------
<S> <C> <C> <C> <C>
Shares sold...................... 4,153,429 $40,249,318 89,229 $ 888,414
Shares issued as reinvestment
of dividends and
distributions................... 110,564 1,070,720 62,431 625,986
Shares redeemed.................. (53,640) (527,298) (6,369) (64,324)
--------- ----------- -------- -----------
Net increase................ 4,210,353 $40,792,740 145,291 $ 1,450,076
========= =========== ======== ===========
</TABLE>
NOTE F--FUTURES CONTRACTS
As of December 31, 1997, the Van Eck/Chubb Global Income Fund had open futures
contracts. These contracts were acquired in lieu of a direct purchase of the
securities. Using futures contracts involves various market risks. The maximum
amount at risk from the purchase of a futures contract is the contract value.
Risks may also be caused by imperfect correlations between the movements in the
price of the futures contract and the price of the underlying security.
Upon entering into a futures contract, the Fund is required to pledge to a
broker an amount equal to a certain percentage of the contract amount. This
amount is known as the "initial margin." Subsequent payments, known as
"variation margin," are made or received by the Fund each day, depending on the
daily fluctuations in the value of the underlying futures contracts. Such
variation margin is recorded for financial statement purposes on a daily basis
as an unrealized gain or loss until the futures contract is closed, at which
time the net gain or loss is reclassified to realized.
<TABLE>
<CAPTION>
EXPIRATION NUMBER OF CONTRACT CURRENT UNREALIZED
LONG CONTRACTS: DATE CONTRACTS VALUE VALUE APPRECIATION
- ------------------------------ --------------- --------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
5 Year U.S. Treasury Note 8% March 20, 1998 20 $2,153,750 $2,172,500 $ 18,750
10 Year U.S. Treasury Note 8% March 20, 1998 40 4,428,000 4,486,250 58,250
20 Year U.S. Treasury Note 8% March 20, 1998 26 3,060,688 3,132,188 71,500
--------
$148,500
========
</TABLE>
66
<PAGE> 68
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Shareholders
Van Eck/Chubb Funds, Inc.
We have audited the accompanying statement of assets and liabilities of Van
Eck/Chubb Funds, Inc. (the "Funds," comprising, respectively, the Money Market
Fund, Government Securities Fund, Total Return Fund, Tax-Exempt Fund, Growth and
Income Fund, Capital Appreciation Fund, and Global Income Fund), including the
related schedules of investments, as of December 31, 1997, and the related
statement of operations for the year then ended, the statements of changes in
net assets for each of the two years in the period then ended, and the financial
highlights for periods indicated therein. These financial statements and
financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1997, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective Funds constituting Van Eck/Chubb Funds, Inc. at December 31,
1997, the results of their operations for the year then ended, the changes in
their net assets for each of the two years in the period then ended, and the
financial highlights for each of the periods indicated therein, in conformity
with generally accepted accounting principles.
/s/ ERNST & YOUNG LLP
New York, New York
February 20, 1998
67
<PAGE> 69
VAN ECK/CHUBB FUNDS, INC.
FEDERAL TAX NOTICE (UNAUDITED)
In order to meet certain requirements of the Internal Revenue Code we are
advising you that the following capital gain distributions paid by the Funds
during the fiscal year December 31, 1997 are subject to maximum tax rates of 28%
and 20% respectively.
<TABLE>
<CAPTION>
28% 20%
----------- -----------
<S> <C> <C>
Van Eck/Chubb Capital Appreciation.................. $ 524,620 $ 463,359
Van Eck/Chubb Global Income......................... 156,421 173,137
Van Eck/Chubb Growth & Income....................... 1,398,340 2,957,169
Van Eck/Chubb Tax-Exempt............................ 45,756 40,038
Van Eck/Chubb Total Return.......................... 639,926 1,548,510
</TABLE>
In addition, with respect to the Van Eck/Chubb Tax-Exempt Fund, $793,166 of the
dividends paid during the fiscal year were federally exempt interest dividends.
Shareholders should not use the above information to prepare their tax returns.
The information necessary to complete your income tax returns was sent with your
Form 1099 DIV which was mailed to you separately in January 1998.
68
<PAGE> 70
VAN ECK/CHUBB FUNDS
Money Market Fund
Government Securities Fund
Total Return Fund
Tax-Exempt Fund
Growth and Income Fund
Capital Appreciation Fund
Global Income Fund
VAN ECK FAMILY OF FUNDS
Global Hard Assets Fund
International Investors Gold Fund
Gold/Resources Fund
Global Real Estate Fund
Emerging Markets Growth Fund
Asia Dynasty Fund
Global Balanced Fund
Global Income Fund
U.S. Government Money Fund
- --------------------------------------------------------------------------------
This report must be accompanied or preceded by a Van Eck/Chubb Funds prospectus,
which includes more complete information, such as charges and expenses, and
which explains the risks associated with international investing, including
currency fluctuations or controls, expropriation, nationalization and
confiscatory taxation. For a free Van Eck/Chubb Fund, Van Eck Global Funds or
Van Eck Gold and Money Funds prospectus, please call the number listed below.
Please read the prospectus carefully before investing.
[VAN ECK CHUBB FUNDS LOGO]
Van Eck Securities Corporation
99 Park Avenue, New York, NY 10016
www.vaneck.com
For account assistance please call (800) 541-2053 FR1998-0216-0028
