<PAGE> 1
VAN ECK CHUBB FUNDS
SEMI-ANNUAL REPORT
JUNE 30, 1998
CAPITAL APPRECIATION FUND
GLOBAL INCOME FUND
GOVERNMENT SECURITIES FUND
GROWTH AND INCOME FUND
TAX-EXEMPT FUND
TOTAL RETURN FUND
THE VAN ECK PARTNERSHIP SERIES
<PAGE> 2
VAN ECK/CHUBB FUNDS
- --------------------------------------------------------------------------------
Dear Fellow Shareholder,
I am pleased to present you with your mid-year report on the Van Eck/Chubb
Funds. The markets were strong during the first six months of the year,
particularly in light of the current low inflation environment. With this year's
inflation rate averaging around the 2% mark, real return levels were excellent.
MID-YEAR REVIEW OF THE FINANCIAL MARKETS
During the first half of 1998, stock returns were higher than expected,
particularly in the early part of the year. Most of this growth, however, was
concentrated in the very largest companies, so it has not been a broad-based
rise. Fixed income markets continued to be buoyed by strong demand from foreign
investors leaving the uncertain Asian markets, as well as other factors
described below.
A REVIEW OF U.S. EQUITY MARKETS
It has been a favorable but somewhat turbulent year thus far for the U.S. stock
market, which continued its rise to record levels. The Dow Jones Industrial
Average peaked at 9211.8 in May, and closed the mid-year at 8952 before heading
upward again in July to a new peak. In contrast, just 18 months ago the Dow was
at 6448.
As of June 30, the Dow was up 18.7% compared to a year ago and 14.2% relative to
the prior six months. The S&P 500 and Nasdaq Composite posted growth of 17.7%
and 20.7%, respectively, during the first half, while the S&P Mid-Cap Index was
up 8.6%--reflecting the market's bias toward large-cap stocks. This same bias
inflated the S&P 500's performance, since it is a market-weighted index and
large companies have a disproportionate effect. If all companies in the index
were given equal weighting, the S&P would be up approximately 12% for January
through June 1998.
A REVIEW OF FIXED INCOME MARKETS
Globally, as expected, European bonds offered attractive returns during the
first half of the year, though they tended to trail the U.S. over this time
period. Within the European community, rates continued to converge in
anticipation of January's European Monetary Union. Asia continues in turmoil,
and our expectation is that the region will require a long time to work out its
problems.
Domestic fixed income markets in the first half of 1998 reflected the strong
U.S. economy and a passive Fed strategy. But the driving market force continued
to be the "flight to quality" as foreign investors, particularly Asian, sought
high-quality alternatives to those available in their own countries. The
resulting heavy demand for 30-year Treasury bonds caused yields to fall to the
5.6% range compared to over 7% in the spring of 1997. This yield drop also
reflected low long-term inflation expectations and a balanced federal budget.
LOOKING AHEAD
Our overall outlook is for moderate growth with low inflation. Double digit
returns have been the norm over the past decade, but we believe that lowered
expectations for all investors are more reasonable over the next ten years. Real
returns (nominal return minus inflation), however, should continue to be
attractive.
We are pleased to have been of service to you in the first half of 1998 and we
look forward to helping you meet your investment objectives in the years ahead.
[O'Reilly Photo]
/s/ Michael O'Reilly
Michael O'Reilly
President
Van Eck/Chubb Funds
President and Chief Operating Officer
Chubb Asset Managers, Inc.
July 24, 1998
1
<PAGE> 3
VAN ECK/CHUBB CAPITAL APPRECIATION FUND
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The Van Eck/Chubb Capital Appreciation Fund seeks long-term capital appreciation
by investing primarily in equity securities of medium-capitalization U.S.
companies that offer 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 stocks that sell at a discount to the market in terms of several
valuation measures--including price-earnings multiples--and that have solid
future prospects (primarily defined as future earnings growth potential above
the S&P 500 Index). Qualifying companies may also possess one or more of the
following characteristics: a strong balance sheet, new products or markets,
streamlined or re-engineered operations, and/or improved management.
The Van Eck/Chubb Capital Appreciation Fund posted a 6.4% gain in the first six
months of 1998. This compares to the 8.6% returned by the S&P Mid-Cap Index and
the 4.9% rise in the Russell 2000 for the first half. Our strong performance was
fueled by an excellent first quarter in which we posted a 13.7% return and
outpaced both of the indices. In the second quarter, a brutal market environment
for small- and mid-cap stocks took its toll on overall returns and the mid-cap
sector in general.
REVIEW OF THE U.S. EQUITY MARKET
Although U.S. stocks strongly appreciated in the first half of 1998, with the
Dow peaking in May at 9211.8 and ending the half-year at 8952, smaller companies
weakened in the second quarter as investors moved to large companies and away
from smaller firms with perceived exposure to Asia. The irony in this situation
was that many mid-cap companies have less exposure to Asia. Nonetheless, many
small company stocks lost ground. The difference between large and small-cap
performance increased over the first half.
For example, although the S&P 500 was up 3.3% for the second quarter, 70% of its
stocks actually underperformed the average during this time. If the S&P 500
stocks were equally weighted, performance would have fallen by 0.9% during the
second quarter of 1998. Through June 30, 1998, the S&P 500 was up 17.7% vs.
12% for the equally-weighted index.
This narrowing was also evident in the number of individual stocks
underperforming the overall market. At mid-year, 34% of the S&P 500 stocks were
actually down, with another 22% posting gains under 10%. This is clear evidence
that market averages were dramatically skewed by the large-cap sector, and that
the real story for many investors has been one of holding on while waiting for
the market to return to normal. This bias toward size was not unexpected and we
have seen these cycles happen before. We would rather find companies that
deliver the same type of earnings numbers as the favored large-caps at the
moment--or even a little bit less--as long as they are selling at a 40% to 50%
discount. We are confident that the market will once again come to appreciate
the relative attractiveness of mid-cap stocks, leaving us well-positioned to
profit.
FUND REVIEW
The Fund returned 13.7% in the first quarter of the year but fell by 6.4% in the
second quarter (versus a 2.1% fall for the S&P Mid-Cap Index and a loss of 4.7%
in the Russell 2000 during the last three months of the half). In the first
quarter, the Fund benefited from large premiums achieved during two takeovers
involving our Echlin and American Bankers holdings, both of which were sold.
Other strong first quarter performers included Brinker International,
Owens-Illinois, York International and St. Jude Medical. During the second
quarter, negative news for specific companies cyclical in nature and/or linked
to Asian economies caused losses, primarily from Polaroid, Philip Services, OEA,
MagneTek, Cabot, Bethlehem Steel and BMC Industries. Some of the
better-performing holdings in the second quarter included C.R. Bard, Champion
2
<PAGE> 4
VAN ECK/CHUBB CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------
Enterprises, Storage Technology, American Standard and Commerce Group.
At mid-year, the Fund's portfolio was well-diversified in a dozen sectors and
even more industries, with the heaviest concentrations held in capital goods
such as medical products and supplies, machinery and containers (18.9% of net
assets); natural resources such as chemicals, oil and gas and industrial metals
(16.8%); and consumer goods such as housing, home furnishings and apparel
(15.0%).
THE OUTLOOK
Equities in general continue to be buoyed by steady economic growth, high
employment levels, low inflation, Fed policy and heavy demand. That being said,
some of the mid- and small-cap range companies--particularly those related to
technology and industrial sectors--are economically sensitive to unfolding
events and could be facing softened demand. We are most likely looking at a
period of slowing growth and declining small- and medium-cap earnings. As a
result, we are taking this opportunity to reassess our holdings systematically
to determine whether valuations are still attractive and whether growth
prospects for each company and its markets have been or could be affected by
Asia's woes.
On the plus side, it's a good time for capturing opportunity. Mid-caps that were
cheap five or six months ago are selling at even more attractive levels now.
Keep in mind, also, that not all of the news from Asia is bad: many
domestic-oriented U.S. companies are benefiting from reduced competition and
lower overseas labor costs. Our challenge will be to identify those companies
whose long-term earnings growth potential and outlook have not been undermined
by global events.
Though we will very carefully navigate the mid-cap market over the next six
months, we remain firmly committed to the sector and to the value approach over
the long term. We will continue to be a value buyer as long as there are
companies that fit our stringent screens. Attractive industries for the second
half of the year appear to include machinery and other capital goods,
commodities and technology. Within those sectors, we will look closely at the
merits of individual companies, and will likely invest in companies that are
focused on the U.S. or Europe until we have a clearer view of the Asian
situation.
Thank you for your investment in the Van Eck/Chubb Capital Appreciation Fund. We
look forward to helping you meet your investment objectives in the future.
[Robert Witkoff Photo]
/s/ Robert Witkoff
Robert Witkoff
Senior Vice President
Chubb Asset Managers, Inc.
July 24, 1998
3
<PAGE> 5
VAN ECK/CHUBB CAPITAL APPRECIATION FUND
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- ---------------------------------------------------------
PERFORMANCE RECORD AS OF 6/30/98
- ---------------------------------------------------------
<TABLE>
<CAPTION>
AFTER
MAXIMUM BEFORE
AVERAGE ANNUAL SALES SALES
TOTAL RETURN CHARGE* CHARGE
- ------------------------------------------------
<S> <C> <C>
A shares--Life (since 9/1/95) 21.3 % 23.4 %
- ------------------------------------------------
1 year 9.1 % 14.6 %
- ------------------------------------------------
B shares--Life (since
5/1/98)** (12.5)% (7.9)%
- ------------------------------------------------
</TABLE>
THE PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NOT INDICATIVE OF FUTURE
RESULTS. Investment return and principal value of an investment in the Fund will
vary so that shares, when redeemed, may be worth more or less than their
original cost.
The Adviser is currently waiving certain expenses on the Fund. Had the Fund
incurred all expenses, investment returns would have been reduced.
* A shares: maximum sales charge = 4.75%
B shares: maximum contingent deferred sales charge = 5.0%
** Not annualized.
[Cap. App. Fund % of Portfolio CHART]
% OF PORTFOLIO++
Common Stock: 104.85%
Other Net Assets: (4.85)%
<TABLE>
<CAPTION>
% OF
TOP TEN EQUITIES PORTFOLIO
<S> <C>
Champion Enterprises, Inc. 4.82%
Storage Technology Corp. 4.54%
Bard (C.R.), Inc. 3.98%
Elsag Bailey Process Automation NV 3.72%
Lafarge Corp. 3.38%
Ametek, Inc. 3.35%
Cleveland-Cliffs Inc. 3.32%
Bethlehem Steel Corp. 3.25%
Wolverine Tube, Inc. 3.21%
Brinker International, Inc. 3.20%
<CAPTION> % OF
TOP TEN INDUSTRIES PORTFOLIO
<S> <C>
Medical Supplies & Services 10.93%
Industrial Metals 10.56%
Computer Products & Services 9.43%
Building Materials & Tools 5.96%
Restaurants 5.17%
Building & Construction 4.82%
Chemicals/Fertilizer 4.34%
Electrical Equipment 3.94%
Industrials 3.82%
Instruments 3.72%
</TABLE>
++ As a percentage of total net assets at June 30, 1998.
4
<PAGE> 6
VAN ECK/CHUBB GLOBAL INCOME FUND
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The Van Eck/Chubb Global Income Fund seeks capital appreciation and a steady
flow of dividend income by investing primarily in high-grade U.S. and
international debt securities.
The first half of 1998 proved to be a strong performance period for the Van
Eck/Chubb Global Income Fund. The Fund returned 4.1%, compared to 2.8% posted by
the benchmark Salomon Smith Barney World Government Bond Index (WGBI).
ECONOMIC OVERVIEW
European growth in the first half of 1998 remained resilient, and we anticipate
continued growth at a non-inflationary tempo. U.S. growth remained healthy, but
there are recent indications this may ease somewhat in the second half. Japan
has entered a recession that we believe will last for some time, as discussed in
the President's Letter.
MARKET AND CURRENCY PERFORMANCE
The Asian crisis continues to be a major factor in the world's bond markets.
With the Japanese government failing to take decisive action, investors
continued their flight to U.S. markets and the yen weakened. However, following
the recent resignation of the prime minister, the election of his successor
could accelerate the reform process and improve market conditions.
All of the major bond markets produced positive returns in the first half of
1998. However, for the dollar-based investor, currency weakness eroded returns
in some markets, especially Japan. The UK bond market was the strongest of the
major markets. European bond yields fell to record lows, taking their cue from
the U.S., where steady economic growth, benign inflation and falling commodity
prices provided strength to the bond market.
Short-term interest rates in the European community continued to converge as the
marketplace anticipated the new single monetary unit (the Euro) in January 1999.
The UK was the only major economy to raise interest rates during the second
quarter, a move taken by the Monetary Policy Committee to dampen inflationary
pressures.
There was a global trend of reduced supply in government paper as a result of
improved fiscal conditions. At the same time, there was a flight to these
high-quality sovereign bonds by investors avoiding risk in the Far East. Lower
rates and less government supply encouraged corporate bond issuance, resulting
in a widening of the yield spread between government and private sector bonds.
FUND REVIEW
As noted, the Fund substantially outperformed the benchmark index in the first
half. The following policies contributed to this performance:
- - MARKET WEIGHTING: In general, the Fund was more heavily weighted in U.S. and
European bonds than the WGBI, and underweight in Japanese securities. The Fund
especially benefited from the latter.
- - LONGER DURATIONS: The Fund benefited from our policy of maintaining a longer
average duration than the WGBI, so that the Fund captured positive returns
from falling yields.
- - EMPHASIS ON CREDIT QUALITY: Our emphasis on quality was a factor in the Fund's
strong performance. We maintained a heavy bias toward high credit quality,
investing most of the portfolio in the major government bonds. In addition,
some diversification was provided by selective opportunities in corporate and
emerging market securities.
- - CURRENCY POSITIONS AND HEDGING: Through active currency management, we were
able to add value to the Fund.
5
<PAGE> 7
VAN ECK/CHUBB GLOBAL INCOME FUND
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THE OUTLOOK
From a sector standpoint, we believe that government paper will continue to
outperform comparable corporates in the months ahead. Consequently, we plan to
maintain our focus on high-quality government issues over corporates. We will
look to the emerging markets for yield opportunities, but will remain prudent
about exposure. In general, bond yields continue to be attractive due to steady
growth and low inflation.
On the currency front, we look for a period of short-term volatility while the
U.S. dollar and Deutschemark consolidate their gains. We are maintaining our
negative outlook for the yen.
Thank you for your investment in the Van Eck/ Chubb Global Income Fund. We look
forward to continuing to help you meet your investment objectives.
<TABLE>
<S> <C>
[R.C.P. Brookhouse Photo] [M. D. Raines Photo]
/s/ Roger C.P. Brookhouse /s/ Marjorie D. Raines
Roger C.P. Brookhouse Marjorie D. Raines
Senior Vice President Senior Vice President
Chubb Asset Managers, Inc. Chubb Asset Managers, Inc.
[E. C. Fishwick Photo]
/s/ Emma C. Fishwick
Emma C. Fishwick
Vice President
Chubb Asset Managers, Inc.
July 24, 1998
</TABLE>
- ---------------------------------------------------------
PERFORMANCE RECORD AS OF 6/30/98
- ---------------------------------------------------------
<TABLE>
<CAPTION>
AFTER
MAXIMUM BEFORE
AVERAGE ANNUAL SALES SALES
TOTAL RETURN CHARGE* CHARGE
- --------------------------------------------------
<S> <C> <C>
A shares--Life (since 9/1/95) 2.9 % 4.7 %
- --------------------------------------------------
1 year (0.7)% 4.3 %
- --------------------------------------------------
B shares--Life (since 5/1/98)** (5.5)% (0.5)%
- --------------------------------------------------
</TABLE>
THE PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NOT INDICATIVE OF FUTURE
RESULTS. Investment return and principal value of an investment in the Fund will
vary so that shares, when redeemed, may be worth more or less than their
original cost.
The Adviser is currently waiving certain expenses on the Fund. Had the Fund
incurred all expenses, investment returns would have been reduced.
* A shares: maximum sales charge = 4.75%
B shares: maximum contingent deferred sales charge = 5.0%
** Not annualized.
[Global Income Fund % of Portfolio CHART]
% OF PORTFOLIO++
Government and Agency Obligations: 83.24%
Corporate Bonds: 10.73%
Short-Term Obligations: 3.98%
Other Net Assets: 2.05%
TOP TEN COUNTRIES
United States
France
United Kingdom
Germany
Japan
Sweden
Italy
Netherlands
Spain
Mexico
PORTFOLIO DURATION
6.0 YEARS
DOLLAR WEIGHTED AVERAGE MATURITY
9.1 YEARS
++ As a percentage of total net assets at June 30, 1998.
6
<PAGE> 8
VAN ECK/CHUBB GOVERNMENT SECURITIES FUND
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The Van Eck/Chubb Government Securities Fund seeks to earn a high level of
income consistent with the preservation of capital value. The Fund is invested
only in debt instruments that are issued, guaranteed or collateralized by the
U.S. Government, its agencies or instrumentalities. The Fund will typically be
invested in a combination of U.S. Treasury notes and bonds, government agency
debentures and/or government agency mortgage-backed securities, such as those
issued by "Fannie Mae" or "Freddie Mac."
We are pleased to report that in the first half of 1998, the Van Eck/Chubb
Government Securities Fund achieved a 3.5% return. This return reflects the
reinvestment of monthly dividends and price appreciation. Our conservative
maturity strategy and prudent security selections helped us to perform in line
with the Lipper General and Intermediate U.S. Government Bond Fund Indices
during a time of low volatility in the bond market.
REVIEW OF THE MARKET
As was the case in 1997, secular or long-term economic forces continued to
outweigh cyclical or short-term dynamics. Based on conventional wisdom, cyclical
forces should have exerted upward pressure on inflation and interest rates by
this point in the business cycle. Economic expansion is in its eighth year, the
economy is still very strong, labor markets are tight, stock values have grown
tremendously, and pricing pressures are building in certain areas of the
economy. Despite all of these factors, inflation has been subdued. With the help
of falling import prices due to Asia's currency devaluations and a strong
dollar, the rise in the Consumer Price Index (CPI) is unchanged from year-end
1997 at 1.7% on a year-over-year basis.
The most important determinants of value in the bond market are current
inflation and future expectations of inflation. The present benign inflationary
environment has certainly provided the major backdrop, allowing interest rates
to fall to their current low levels. In addition, the problems in Asia have
created a "flight to quality" bid for the U.S. bond market as well as provided
additional fuel for secular global competition in goods prices, which has helped
to keep inflation low despite domestic cyclical pressures. Also, the strong U.S.
economy combined with capital gains from an historic bull market in stocks to
result in the first federal budget surplus in more than a generation. This means
less issuance of government bonds. These factors allowed interest rates to fall
approximately 25 basis points (.25%) during the first half of 1998. The good
news for incumbent bond investors when yields fall, of course, is the resulting
capital gains when the values of existing bonds rise thanks to their relatively
higher yields.
FUND REVIEW
The Fund continues to be diversified among Treasuries, mortgage-backed
securities and putable Agency debentures. The putable TVA debentures should act
as a valuable protective device for the Fund, and should help Fund performance
if interest rates rise or fall sharply.
As noted above, the Fund's performance was in line with other funds in its peer
group in the first half of 1998.
On June 30, 1998, the Fund had about 8% of its total net assets invested in
Treasury notes, 45% in agency securities and 46% in putable TVA debentures, with
the remainder in cash equivalents. This represents a shift to a stronger
position in TVA issues, which comprised about one-third of the portfolio at the
end of 1997.
PORTFOLIO OUTLOOK
We look for the factors that have driven the markets in recent years to
continue. The real interest rate (nominal rate adjusted for inflation) on
30-year Treasuries stood at 4.2% at year-end 1997
7
<PAGE> 9
VAN ECK/CHUBB GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
and is currently 4.0%. Before 1980, real interest rates were rarely above 3.0%.
Those earlier periods included many cycles with either balanced or surplus
Federal budgets such as we have now. So, there remains good value in the bond
market based on longer-term historical valuations.
In closing, we thank you for your investment in the Van Eck/Chubb Government
Securities Fund. We look forward to helping you meet your investment objectives
in the future.
<TABLE>
<S> <C>
[Gertsman Photo] [Geyer Photo]
/s/ Ned I. Gerstman /s/ Paul R. Geyer
Ned I. Gerstman Paul R. Geyer
Senior Vice President Vice President
Chubb Asset Managers, Inc. Chubb Asset Managers, Inc.
July 24, 1998
</TABLE>
- ---------------------------------------------------------
PERFORMANCE RECORD AS OF 6/30/98
- ---------------------------------------------------------
<TABLE>
<CAPTION>
AFTER
MAXIMUM BEFORE
AVERAGE ANNUAL SALES SALES
TOTAL RETURN CHARGE* CHARGE
- --------------------------------------------------
<S> <C> <C>
A shares--Life (since 12/1/87) 8.4 % 8.9%
- --------------------------------------------------
10 years 8.3 % 8.8%
- --------------------------------------------------
5 years 5.4 % 6.4%
- --------------------------------------------------
1 year 4.9 % 10.1%
- --------------------------------------------------
B shares--Life (since 5/1/98)** (3.5)% 1.5%
- --------------------------------------------------
</TABLE>
THE PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NOT INDICATIVE OF FUTURE
RESULTS. Investment return and principal value of an investment in the Fund will
vary so that shares, when redeemed, may be worth more or less than their
original cost.
The Adviser is currently waiving certain expenses on the Fund. Had the Fund
incurred all expenses, investment returns would have been reduced.
* A shares: maximum sales charge = 4.75%
B shares: maximum contingent deferred sales charge = 5.0%
** Not annualized.
[GOVERNMENT SECURITIES FUND % OF PORTFOLIO CHART]
% OF PORTFOLIO++
U.S. Government and
Agency Obligations: 99.3%
Other Net Assets: 0.7%
DOLLAR WEIGHTED AVERAGE MATURITY
10.7 YEARS
PORTFOLIO DURATION
5.1 YEARS
30-DAY SEC YIELD
5.28%*
*A Shares only
++ As a percentage of total net assets at June 30, 1998.
8
<PAGE> 10
VAN ECK/CHUBB GROWTH AND INCOME FUND
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The Van Eck/Chubb Growth and Income Fund primarily seeks long-term capital
appreciation by investing in 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
measures--including price-earnings ratios--and that have solid future prospects
(primarily defined as future growth potential above the S&P 500 Index). This
strategy helps keep the Fund's volatility below that of the U.S. stock market in
general. As a secondary objective, the Fund also seeks a reasonable level of
current income through stock dividends.
Despite a difficult second quarter, the Van Eck/Chubb Growth and Income Fund
posted an 11.7% gain in the first six months of 1998. This compares to the 9.4%
returned by the broader Lipper General Equity Fund Index and the 11.5% averaged
by the Lipper Growth & Income Fund Index. In contrast, the S&P 500 was up 17.7%
during this time, while the Dow gained 14.2%.
REVIEW OF THE U.S. EQUITY MARKET
As detailed in the President's Letter, U.S. stocks have risen substantially in
the first half of 1998, with the Dow peaking in May at 9211.8 and ending the
first half at 8952. Equities continue to be buoyed by steady economic growth,
high employment levels, low inflation, Fed policy and heavy demand for
large-capitalization stocks.
However, with many large-cap stocks selling at a 50% premium due to heavy demand
by skittish investors, market averages have been skewed by this sector. The
disparity between large and small-cap performance grew more pronounced as the
year progressed. For example, though the S&P 500 was up 3.3% for the second
quarter, 70% of its stocks actually underperformed during this time and, indeed,
for the first six months of the year. If the S&P 500 stocks were equally
weighted, performance would have fallen by 0.9% during the second quarter of
1998. What this has meant for diversified investors in general is that top
performers tended to perform very well, but results were inevitably tempered by
a large number of disappointments.
FUND REVIEW
The Fund's performance during the first half can be attributed to a strong
showing in the first quarter with a return of 13.2%. The second quarter proved
to be a challenge, with the Fund falling 1.3% versus a rise of 3.3% for the S&P
500. In both cases, performance was largely defined by the market's infatuation
with large-cap stocks. On the plus side, some of our better-performing stocks
turned out to be Equitable, Owens-Illinois, Chase Manhattan Corp., Merrill
Lynch, Black & Decker and Ford. Holdings with more economic ties to Asia came
off their first quarter highs, although most remained positive year to date.
These included Philips Electronics, Lafarge, Tektronix and United Technologies.
At mid-year, the Fund's portfolio was well-diversified, with the heaviest
concentrations held in finance-related industries (30.0%), consumer goods
(14.2%) and transportation (11.2%).
PORTFOLIO OUTLOOK
The macro-environment remains solid for stocks, with continued low inflation,
moderate GDP (Gross Domestic Product) growth, low interest rates, decent
corporate profits and steady demand for equity funds. We are holding steady in
our strategy and taking the opportunity to re-examine our holdings thoroughly.
Not all of the news from Asia is bad: many domestic-oriented U.S. companies are
benefiting from reduced competition and lower overseas labor costs. But for now,
we are looking to those less affected by Asia and more focused on the U.S. or
Europe.
9
<PAGE> 11
VAN ECK/CHUBB GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
Thank you for your investment in the Van Eck/ Chubb Growth and Income Fund. We
look forward to helping you meet your investment objectives in the future.
[Robert Witkoff Photo]
/s/ Robert Witkoff
Robert Witkoff
Senior Vice President
Chubb Asset Managers, Inc.
July 24, 1998
- ---------------------------------------------------------
PERFORMANCE RECORD AS OF 6/30/98
- ---------------------------------------------------------
<TABLE>
<CAPTION>
AFTER
MAXIMUM BEFORE
AVERAGE ANNUAL SALES SALES
TOTAL RETURN CHARGE* CHARGE
- --------------------------------------------------
<S> <C> <C>
A shares--Life (since 12/1/87) 16.3 % 16.9 %
- --------------------------------------------------
10 years 15.7 % 16.2 %
- --------------------------------------------------
5 years 18.3 % 19.5 %
- --------------------------------------------------
1 year 13.4 % 19.0 %
- --------------------------------------------------
B shares--Life (since 5/1/98)** (8.9)% (4.1)%
- --------------------------------------------------
</TABLE>
THE PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NOT INDICATIVE OF FUTURE
RESULTS. Investment return and principal value of an investment in the Fund will
vary so that shares, when redeemed, may be worth more or less than their
original cost.
The Adviser is currently waiving certain expenses on the Fund. Had the Fund
incurred all expenses, investment returns would have been reduced.
* A shares: maximum sales charge = 4.75%
B shares: maximum contingent deferred sales charge = 5.0%
** Not annualized.
[Growth and Income Fund % of Portfolio CHART]
% OF PORTFOLIO ++
Common Stocks: 100.93%
Other Net Assets: (0.93)%
<TABLE>
<CAPTION>
% OF
TOP TEN EQUITIES PORTFOLIO
<S> <C>
Black & Decker Corp. 4.04%
Hasbro, Inc. 3.72%
Owens-Illinois, Inc. 3.59%
Equitable Companies, Inc. 3.47%
Banc One Corp. 3.25%
Praxair, Inc. 3.10%
United Technologies Corp. 3.06%
Lafarge Corp. 2.97%
Nike, Inc. 2.90%
Tenet Healthcare Corp. 2.89%
<CAPTION>
% OF
TOP TEN INDUSTRIES PORTFOLIO
<S> <C>
Financial Services 11.86%
Insurance 9.95%
Banking 8.16%
Electronics 8.10%
Building Materials & Tools 7.00%
Autos, Trucks & Parts 6.81%
Hospital Management 5.75%
Toys 5.43%
Oil & Gas--Integrated 4.91%
Transportation & Shipping 4.43%
</TABLE>
++ As a percentage of total net assets at June 30, 1998.
10
<PAGE> 12
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 perform rigorous credit analysis in selecting tax-exempt
bonds from across the U.S. The Fund emphasizes investment-grade securities,
including general obligation and revenue-backed bonds.
We are pleased to report that the Van Eck/Chubb Tax-Exempt Fund gained 2.6% in
the first six months of 1998. This figure includes price appreciation and the
reinvestment of monthly dividends. In comparison, the benchmark Lehman Brothers
Municipal Bond Index gained 2.7% over the same time period, while the Lipper
General Municipal Debt Fund Index gained 2.5%.
MUNICIPAL MARKET OVERVIEW
Municipal supply climbed 51% during the first half of 1998 compared to the prior
year period, primarily reflecting the favorably low interest rate environment.
During this period, Treasury supply declined as a result of the shrinking
Federal deficit and a reduced need for borrowing. Demand for U.S. Treasury
securities increased with "safe haven" buying from Asian investors fleeing
economic turmoil. The yield on the long Treasury bond fell to the lowest levels
seen since the U.S. Government started selling 30-year bonds in 1977. From a
rate of 5.84% at the beginning of 1998, the yield declined to an all-time low of
5.57% and ended the second quarter of the year at 5.63%.
Municipal bond yields, on the other hand, were more stable, reflecting the
increase in supply versus last year and subdued demand from retail investors. As
a result, the Bond Buyer 20 yield declined only slightly from 5.15% at the start
of the year to 5.14% at the end of June. The negligible decline in municipal
yields in the context of the dramatic fall in Treasury yields boosted the ratio
between the two indicators from 88.2% at the start of the year to 91.3% at the
end of June.
Municipal yields in relation to Treasury yields are currently at their most
attractive ratios in recent history. Given the differing technical pictures of
the two markets, it appears that the high municipal ratios may persist for some
time. Moreover, the strong national economy has helped the municipal market to
enhance its solid credit profile, as rating upgrades have widely exceeded
downgrades.
FUND REVIEW
At the outset of 1998, the Fund employed a "barbell" maturity strategy. That is
to say, we purchased selected higher-yielding bonds at the short end of the
maturity curve in order to capture incremental yield, while also investing in
high-grade, long-term bonds to boost total return performance. This strategy has
proved effective by positioning the portfolio for both up and down markets, and
we intend to maintain it going forward.
From a sector standpoint, we emphasized high-quality multi-hospital groups
during the first half of 1998, particularly larger organizations that can
capitalize on economies of scale and steady patient referrals. For example,
during the second quarter, we purchased the insured bonds of Holy Cross Health
System, a highly regarded multi-hospital group based in Indiana. We were not
alone in our focus--the hospital component of the Lehman Municipal Bond Index
was the best-performing revenue bond sector during the reporting period. We also
continue to focus selectively on electric utilities with low fixed costs, low
rates relative to regional competition, strong management and vibrant,
well-diversified service areas.
Geographically, we have emphasized holdings in New York, where credit trends
continue to be very favorable. Our New York statewide holdings were 15.1% of the
portfolio at the close of the second
11
<PAGE> 13
VAN ECK/CHUBB TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
quarter--our largest state weighting. Both New York State and New York City have
recently been upgraded and have strongly improved finances. New York was the
second-highest performing state on a year-to-date basis within the Lehman
Municipal Bond Index. We also favorably view both Texas and Indiana as a result
of their robust economies and strong fiscal positions. Holdings in these two
states together account for 17.5% of the portfolio.
PORTFOLIO OUTLOOK
We will continue to emphasize the health care, transportation and electric
utility sectors going forward. Well-managed multi-hospital groups can be
expected to sustain their recent pattern of improving finances and credit
upgrades. New bond issues for airports and toll roads are expected to be
plentiful, owing to long-delayed infrastructural needs. This will provide an
opportunity for attractive new purchases in the transportation sector. Our
existing positions in the electric utility sector should continue to perform
well because supply and demand factors continue to be extremely positive for the
sector. New money issues will be limited because there is little need to finance
new power plant construction.
We will also maintain our focus on New York, Texas, Indiana and other states in
the Midwest such as Illinois. We anticipate a healthy supply of New York new
issues during the balance of the year, combined with favorable trading
performance. Texas is now the second most populous state, with a booming economy
and substantial expected bond financing.
Finally, the strong national economy should continue to create credit upgrade
opportunities through the end of the year, which would potentially enhance the
value of the Fund. As we maintain the "barbell" portfolio structure, we will
remain mindful of upgrade possibilities and seek out value. At the same time,
given the currently narrow yield spread environment, we are comfortable with our
primary focus on high-grade securities and intend to continue investing
primarily in top-rated bonds.
As many of you realized all too well in April, marginal tax rates may have
fallen from their peak levels, but effective tax rates remain high--and the
number of allowable deductions has gone down. Municipals remain one of the few
tax-advantaged alternatives open to investors today. Given that a 5.0%
tax-exempt yield translates into the equivalent of an 8.3% taxable yield for
investors in the top 39.6% federal income tax bracket, we are very pleased to be
bringing you the level of income we achieved during the first half of 1998.
We thank you again for your participation in the Van Eck/Chubb Tax-Exempt Fund
and we look forward to helping you meet your investment objectives in the year
ahead.
<TABLE>
<S> <C>
[F. W. Gaetner Photo] [Thomas J. Swartz, III Photo]
/s/ Frederick W. Gaertner /s/ Thomas J. Swartz, III
Frederick W. Gaertner Thomas J. Swartz, III
Senior Vice President Vice President
Chubb Asset Managers, Inc. Chubb Asset Managers, Inc.
July 24, 1998
</TABLE>
12
<PAGE> 14
VAN ECK/CHUBB TAX-EXEMPT FUND
- ------------------------------------------------------------------------------
- ---------------------------------------------------------
PERFORMANCE RECORD AS OF 6/30/98
- ---------------------------------------------------------
<TABLE>
<CAPTION>
AFTER
MAXIMUM BEFORE
AVERAGE ANNUAL SALES SALES
TOTAL RETURN CHARGE* CHARGE
- --------------------------------------------------
<S> <C> <C>
A shares--Life (since 12/1/87) 7.8 % 8.3%
- --------------------------------------------------
10 years 7.5 % 8.0%
- --------------------------------------------------
5 years 4.7 % 5.8%
- --------------------------------------------------
1 year 3.2 % 8.3%
- --------------------------------------------------
B shares--Life (since 5/1/98)** (3.6)% 1.4%
- --------------------------------------------------
</TABLE>
THE PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NOT INDICATIVE OF
FUTURE RESULTS. Investment return and principal value of an investment in the
Fund will vary so that shares, when redeemed, may be worth more or less than
their original cost.
The Adviser is currently waiving certain expenses on the Fund. Had the Fund
incurred all expenses, investment returns would have been reduced.
* A shares: maximum sales charge = 4.75%
B shares: maximum contingent deferred sales charge = 5.0%
** Not annualized.
[Tax-Exempt Fund % of Portfolio CHART]
% OF PORTFOLIO++
Municipal Bonds: 96.89%
Other Net Assets: 3.11%
PORTFOLIO QUALITY
<TABLE>
<CAPTION>
RATING % OF PORTFOLIO
---------------- --------------
<S> <C>
AAA 47.77%
AA 20.09%
A 17.18%
BAA 8.70%
BA 2.74%
B --
Below B --
Not Available 3.52%
</TABLE>
DOLLAR WEIGHTED AVERAGE MATURITY
17 YEARS
PORTFOLIO DURATION
7.8 YEARS
30-DAY SEC YIELD
3.71%*
*A Shares only
++ As a percentage of total net assets at June 30, 1998.
13
<PAGE> 15
VAN ECK/CHUBB TOTAL RETURN FUND
- --------------------------------------------------------------------------------
The Van Eck/Chubb Total Return Fund seeks to provide both income and capital
appreciation using a strategic combination of high-quality bonds and common
stocks of large- and medium-capitalization companies. Stocks are selected using
a value approach. The Fund's managers monitor and adjust the asset mix based on
continuous analysis of the financial markets. In most market conditions, 60% to
70% of the Fund's assets are invested in common stocks.
The Van Eck/Chubb Total Return Fund has had a positive year thus far in 1998.
Overall, the Fund returned 7.8% during the first six months, compared to a peer
group average of 9.8% as measured by the Lipper Balanced Fund Index. Performance
reflects favorable stock and bond climates. The U.S. stock market was up 17.7%
from December 31, 1997 through June 30, 1998 as measured by the S&P 500, while
bonds gained 4.0% as measured by the Salomon Smith Barney Investment-Grade Bond
Index.
REVIEW OF THE U.S. EQUITY AND
FIXED INCOME MARKETS
As detailed in the President's Letter, U.S. stocks performed very well in the
first half of 1998, with the Dow peaking in May at 9211.8 and ending the first
half at 8952. Equities continue to be buoyed by steady economic growth, high
employment levels, low inflation, Fed policy and heavy demand for
large-capitalization stocks. The effect of this demand was to push up prices of
large-cap stocks, many of which are selling at a 50% P/E premium to the market
average.
Positive conditions within the U.S. bond market during the first half of 1998
reflected a sturdy U.S. economy, strong U.S. dollar, Fed strategy, a "flight to
quality" by investors and a vanishing Federal deficit. This resulted in 30-year
Treasury bond yields averaging around 5.6% by the spring of 1998, well below
last year's 7%. Lack of supply in the government sector and lower yields
inspired corporate issuers to fill the market void, leading to a widening in the
yield spread between the two sectors.
FUND REVIEW
Performance was particularly strong during the first quarter of the year due to
such equity holdings as United Technologies, Lafarge, Borg-Warner Automotive,
Philips Electronics, Ford Motor Company, Owens-Illinois and Federated Department
Stores. However, heavy demand for large-caps also pushed market values as a
whole well beyond what we viewed as a favorable opportunity range and so we
added only one stock holding during this time--Phillips Petroleum. We took
advantage of the opportunity to capture gains and divest the portfolio of IBP,
Mellon Bank, Owens Corning, LaSalle Re and Singer.
The second quarter proved more challenging. At the beginning of the year, we had
increased the Fund's bond holdings from minimal levels to reduce volatility and
because a risk-reward analysis indicated that bonds were excellent values. When
stocks did better than bonds in the first half of the year, our performance
lagged behind market averages somewhat. As the Fund's goal is to provide
consistent, high-quality, long-term performance, we ignore short-term dips in
the middle of a longer cycle. Recently, bonds began to perform more strongly.
We began 1998 with approximately 64% of the Fund's net assets invested in common
stock, 26% in U.S. government obligations and 9% in high-grade corporate bonds.
At mid-year, approximately 69% was in equities, about 27% was in U.S. government
obligations and 9% was in corporate bonds. Mid-year equity holdings were heavily
concentrated in finance, natural resources and, to a lesser extent,
transportation and selected consumer goods.
14
<PAGE> 16
VAN ECK/CHUBB TOTAL RETURN FUND
- --------------------------------------------------------------------------------
PORTFOLIO OUTLOOK
Going forward, we plan to increase the Fund's bond position using new cash flow
only, to avoid selling stocks that we like and generating unnecessary capital
gains.
There is also value in selected common stocks such as machinery, capital goods,
commodities and technology, where careful analysis should prove fruitful.
When it comes to the fixed-income sector, we intend to stay with quality, with
an emphasis on Treasuries and corporates. Given the maturity of the current
business expansion, this is not the time to downgrade.
In closing, we thank you for your investment in the Van Eck/Chubb Total Return
Fund. We look forward to helping you meet your investment objectives in the
future.
<TABLE>
<S> <C>
[Michael OReilly Photo] [Robert Witkoff Photo]
/s/ Robert OReilly /s/ Robert Witkoff
Michael O'Reilly Robert Witkoff
President Senior Vice President
Van Eck/Chubb Funds Chubb Asset Managers, Inc.
President and
Chief Operating Officer
Chubb Asset Managers, Inc.
July 24, 1998
</TABLE>
15
<PAGE> 17
VAN ECK/CHUBB TOTAL RETURN FUND
- --------------------------------------------------------------------------------
- ---------------------------------------------------------
PERFORMANCE RECORD AS OF 6/30/98
- ---------------------------------------------------------
<TABLE>
<CAPTION>
AFTER
MAXIMUM BEFORE
AVERAGE ANNUAL SALES SALES
TOTAL RETURN CHARGE* CHARGE
- -------------------------------------------------
<S> <C> <C>
A shares--Life (since 12/1/87) 14.2 % 14.7 %
- -------------------------------------------------
10 years 13.8 % 14.4 %
- -------------------------------------------------
5 years 14.8 % 15.9 %
- -------------------------------------------------
1 year 11.9 % 17.5 %
- -------------------------------------------------
B shares--Life (since
5/1/98)** (7.6)% (2.7)%
- -------------------------------------------------
</TABLE>
THE PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NOT INDICATIVE OF FUTURE
RESULTS. Investment return and principal value of an investment in the Fund will
vary so that shares, when redeemed, may be worth more or less than their
original cost.
The Adviser is currently waiving certain expenses on the Fund. Had the Fund
incurred all expenses, investment returns would have been reduced.
* A shares: maximum sales charge = 4.75%
B shares: maximum contingent deferred sales charge = 5.0%
** Not annualized.
[Total Return Fund % of Portfolio CHART]
% OF PORTFOLIO++
Common Stock: 69.18%
Other Net Assets: (4.81)%
U.S. Government Obligations: 26.63%
Corporate Bonds: 9.00%
<TABLE>
<CAPTION>
% OF
TOP TEN EQUITIES PORTFOLIO
<S> <C>
Hasbro, Inc. 2.85%
Philips Electronics N.V. 2.67%
Lafarge Corp 2.64%
Tenet Healthcare Corp. 2.59%
Banc One Corp. 2.54%
AlliedSignal Inc. 2.48%
Federated Dept. Stores, Inc. 2.45%
Chase Manhattan Corp. 2.41%
Progressive Corp. 2.33%
United Technologies Corp. 2.30%
<CAPTION>
% OF
TOP TEN INDUSTRIES PORTFOLIO
<S> <C>
Banking 7.54%
Financial Services 6.71%
Electronics 5.58%
Insurance 5.45%
Autos, Trucks & Parts 5.41%
Transportation & Shipping 5.22%
Toys 4.80%
Manufacturing 4.78%
Hospital Management 4.58%
Oil & Gas -- Integrated 3.93%
</TABLE>
++ As a percentage of total net assets at June 30, 1998.
16
<PAGE> 18
VAN ECK/CHUBB CAPITAL APPRECIATION FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
NUMBER MARKET
OF VALUE
COMPANY SHARES (NOTE B)
------- --------- ------------
<S> <C> <C>
COMMON STOCK-104.85%
APPAREL-3.19%
Nine West Group Inc. ................ 50,000 $ 1,340,625
-----------
AUTOS, TRUCKS & PARTS-2.97%
Borg-Warner Automotive, Inc. ........ 3,000 144,188
OEA, Inc. ........................... 65,000 1,040,000
United Road Services, Inc. .......... 3,500 66,938
-----------
1,251,126
-----------
BUILDING & CONSTRUCTION-4.82%
Champion Enterprises, Inc. .......... 69,300 2,027,025
-----------
BUILDING MATERIALS & TOOLS-5.96%
Lafarge Corp. ....................... 36,200 1,423,112
York International Corp. ............ 25,000 1,089,063
-----------
2,512,175
-----------
CHEMICALS/FERTILIZER-4.34%
Agrium, Inc. ........................ 70,000 883,750
Cabot Corp. ......................... 29,100 940,294
-----------
1,824,044
-----------
COMPUTER PRODUCTS & SERVICES-9.43%
BancTec, Inc. ....................... 41,800 966,625
Reynolds and Reynolds Co. (Class
A)................................. 60,000 1,091,250
Storage Technology Corp. ............ 44,000 1,908,500
-----------
3,966,375
-----------
ELECTRICAL EQUIPMENT-3.94%
MagneTek, Inc. ...................... 70,000 1,102,500
UCAR International, Inc. ............ 19,000 554,563
-----------
1,657,063
-----------
ELECTRONICS-3.35%
Ametek, Inc. ........................ 48,100 1,409,931
-----------
FOOD PROCESSING-0.01%
Archer-Daniels-Midland Co. .......... 126 2,441
-----------
HOUSING AND HOME FURNISHINGS-3.31%
American Standard Companies Inc. .... 30,000 1,340,625
Newmark Homes Corp. ................. 5,000 51,875
-----------
1,392,500
-----------
HOUSEHOLD PRODUCTS-2.81%
Tupperware Corp. .................... 42,000 1,181,250
-----------
</TABLE>
<TABLE>
<CAPTION>
NUMBER MARKET
OF VALUE
COMPANY SHARES (NOTE B)
------- --------- ------------
<S> <C> <C>
INDUSTRIAL METALS-10.56%
Bethlehem Steel Corp. ............... 110,000 $ 1,368,125
Cleveland-Cliffs Inc. ............... 26,000 1,394,250
Cyprus Amax Minerals Co. ............ 41,400 548,550
Intermet Corp. ...................... 62,500 1,132,812
-----------
4,443,737
-----------
INDUSTRIALS-3.82%
Harsco Corp. ........................ 28,000 1,282,750
Philip Services Corp. ............... 78,000 321,750
-----------
1,604,500
-----------
INSTRUMENTS-3.72%
Elsag Bailey Process Automation NV... 65,000 1,564,062
-----------
INSURANCE-3.71%
Commerce Group, Inc. ................ 31,800 1,232,250
Old Republic Int'l. Corp. ........... 11,175 327,567
-----------
1,559,817
-----------
MACHINERY & TOOLS-3.67%
AGCO Corp. .......................... 40,000 822,500
Brown & Sharpe Manufacturing Co.
(Class A).......................... 60,000 720,000
-----------
1,542,500
-----------
MEDICAL SUPPLIES & SERVICES-10.93%
Bard (C.R.), Inc. ................... 44,000 1,674,750
Beverly Enterprises Inc. ............ 66,000 911,625
St. Jude Medical, Inc. .............. 30,000 1,104,375
U.S. Surgical Corp. ................. 20,000 912,500
-----------
4,603,250
-----------
OIL & GAS EQUIPMENT & SERVICES-3.21%
Wolverine Tube, Inc. ................ 35,500 1,349,000
-----------
PACKAGING & CONTAINERS-3.11%
Owens-Illinois, Inc. ................ 29,200 1,306,700
-----------
PHOTOGRAPHY-2.96%
Polaroid Corp. ...................... 35,000 1,244,688
-----------
</TABLE>
See Notes to Financial Statements
17
<PAGE> 19
VAN ECK/CHUBB CAPITAL APPRECIATION FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1998 (Unaudited) (continued)
<TABLE>
<CAPTION>
NUMBER MARKET
OF VALUE
COMPANY SHARES (NOTE B)
------- --------- ------------
<S> <C> <C>
RESTAURANTS-5.17%
Brinker International, Inc. ......... 70,000 $ 1,347,500
Lone Star Steakhouse & Saloon,
Inc. .............................. 60,000 828,750
-----------
2,176,250
-----------
RETAIL STORES-2.66%
The Great Atlantic & Pacific Tea Co.,
Inc. .............................. 33,800 1,117,512
-----------
TECHNOLOGY-2.84%
Wyman-Gordon Co. .................... 60,000 1,196,250
-----------
TIRES & RUBBER GOODS-2.70%
Cooper Tire & Rubber Co. ............ 55,000 1,134,375
-----------
</TABLE>
<TABLE>
<CAPTION>
NUMBER MARKET
OF VALUE
COMPANY SHARES (NOTE B)
------- --------- ------------
<S> <C> <C>
VISION CARE-1.56%
BMC Industries Inc. ................. 75,000 $ 656,250
-----------
WATER TREATMENT SYSTEMS-0.10%
U.S. Filter Corp. ................... 1,200 33,675
-----------
TOTAL INVESTMENTS
(Cost: $42,172,538)............... 104.85% 44,097,121
Other assets less liabilities...... (4.85)% (2,039,949)
------- -----------
TOTAL NET ASSETS................... 100.00% $42,057,172
======= ===========
</TABLE>
See Notes to Financial Statements
18
<PAGE> 20
VAN ECK/CHUBB GLOBAL INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
CURRENCY AMOUNT (NOTE B)
-------- ------------- -----------
<S> <C> <C> <C>
GOVERNMENT AND AGENCY
OBLIGATIONS-83.24%
AUSTRALIA-0.71%
Australian Government
Bond 9.50% due
8/15/03................. AUD 650,000 $ 475,723
New South Wales Treasury
9.25% due 6/20/05....... AUD 200,000 146,703
-----------
622,426
-----------
BELGIUM-1.14%
Kingdom of Belgium
7.00% due 5/15/06....... BEF 29,000,000 885,990
6.50% due 3/31/05....... BEF 4,000,000 117,947
-----------
1,003,937
-----------
CANADA-1.05%
Government of Canada
9.50% due 6/01/10....... CAD 1,000,000 923,989
-----------
DENMARK-0.88%
Kingdom of Denmark
7.00% due 12/15/04...... DKK 3,600,000 585,493
7.00% due 11/15/07...... DKK 1,160,000 193,965
-----------
779,458
-----------
FRANCE-16.05%
Government of France
Caisse Centrale 5.768%
due 6/27/04............. USD 3,000,000 2,994,300
France O.A.T
7.25% due 4/25/06....... FRF 3,740,000 718,393
6.00% due 10/25/25...... FRF 12,000,000 2,241,829
5.50% due 4/25/07....... FRF 13,500,000 2,344,107
5.25% due 4/25/08....... FRF 8,000,000 1,360,986
Government of France
7.75% due 4/12/00....... FRF 26,000,000 4,490,290
-----------
14,149,905
-----------
GERMANY-10.48%
Bundesobligation
7.375% due 1/03/05...... DEM 4,500,000 2,857,045
6.75% due 7/15/04....... DEM 6,500,000 4,006,416
6.00% due 7/04/07....... DEM 1,900,000 1,143,678
International Bank for
Reconstruction &
Development
6.125% due 9/27/02...... DEM 1,050,000 615,992
5.875% due 11/10/03..... DEM 1,050,000 617,990
-----------
9,241,121
-----------
</TABLE>
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
CURRENCY AMOUNT (NOTE B)
-------- ------------- -----------
<S> <C> <C> <C>
ITALY-3.93%
Buoni Poliennali Del Tes
Government National
10.00% due 8/01/03...... ITL 2,200,000,000 $ 1,525,144
8.25% due 7/01/99....... ITL 625,000,000 363,646
6.75% due 7/01/07....... ITL 2,500,000,000 1,578,689
-----------
3,467,479
-----------
JAPAN-4.45%
Government of Japan
6.30% due 9/20/01....... JPY 275,000,000 2,322,446
2.60% due 9/20/07....... JPY 205,000,000 1,604,290
-----------
3,926,736
-----------
MEXICO-0.37%
United Mexican State
7.00% due 6/02/03....... CAD 500,000 324,344
-----------
NETHERLANDS-3.83%
Hermes Euro Railte lBV
Series 144A 11.50% due
8/15/07+................ USD 750,000 851,250
Government of Netherlands
8.25% due 2/15/07....... NLG 550,000 335,006
8.25% due 9/15/07....... NLG 550,000 337,974
6.00% due 1/15/06....... NLG 3,500,000 1,856,249
-----------
3,380,479
-----------
SPAIN-2.10%
Government of Spain Bonds
9.40% due 4/30/99....... ESP 28,000,000 190,167
8.80% due 4/30/06....... ESP 77,000,000 628,436
8.00% due 5/30/04....... ESP 50,000,000 380,326
5.25% due 1/31/03....... ESP 45,000,000 301,290
Kingdom of Spain 4.75%
due 3/14/05............. JPY 40,000,000 348,892
-----------
1,849,111
-----------
SWEDEN-4.14%
Sweden Government Bonds
10.25% due 5/05/03...... SEK 9,500,000 1,474,313
6.00% due 2/09/05....... SEK 16,300,000 2,177,464
-----------
3,651,777
-----------
UNITED KINGDOM-15.29%
U.K. Gilt 8.00%
6/07/21................. GBP 600,000 1,309,247
U.K. Treasury
7.75% due 9/08/06....... GBP 2,800,000 5,191,168
7.50% due 12/07/06...... GBP 3,798,000 6,976,367
-----------
13,476,782
-----------
</TABLE>
See Notes to Financial Statements
19
<PAGE> 21
VAN ECK/CHUBB GLOBAL INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1998 (Unaudited) (continued)
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
CURRENCY AMOUNT (NOTE B)
-------- ------------- -----------
<S> <C> <C> <C>
UNITED STATES-18.82%
U.S. Treasury Bonds
8.75% due 8/15/20....... USD 800,000 $ 1,100,501
6.75% due 8/15/26....... USD 1,000,000 1,145,313
6.625% due 5/15/07...... USD 2,000,000 2,150,002
6.125% due 11/15/27..... USD 2,000,000 2,143,752
U.S. Treasury Notes
6.00% due 8/15/00....... USD 4,000,000 4,038,750
6.25% due 2/15/07....... USD 2,000,000 2,095,626
6.50% due 8/15/05....... USD 3,700,000 3,906,971
-----------
16,580,915
-----------
TOTAL GOVERNMENT AND
AGENCY OBLIGATIONS
(Cost: $72,647,098).... 73,378,459
-----------
CORPORATE BONDS-10.73%
BRAZIL-0.52%
Tevacap S.A 12.625% due
11/26/04+............... USD 500,000 460,625
-----------
CANADA-0.77%
Shaw Communications Inc.
8.54% due 9/30/27....... CAD 1,000,000 682,378
-----------
JAPAN-0.51%
Export-Import Bank of
Japan 4.625% due
2/26/03................. JPY 54,000,000 450,146
-----------
MEXICO-1.72%
Controladora Com Mexican
9.375% due 4/14/05...... USD 500,000 486,250
Panamerican Beverages,
Series 144A 7.25% due
7/01/09+................ USD 500,000 502,500
Vicap S.A 11.375% due
5/15/07................. USD 500,000 523,894
-----------
1,512,644
-----------
UNITED STATES-7.21%
APP Finance VII Mauritus
3.25% due 4/30/03....... USD 250,000 202,500
</TABLE>
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
CURRENCY AMOUNT (NOTE B)
-------- ------------- -----------
<S> <C> <C> <C>
Decora Industries Inc.
11.00% due 5/01/05...... USD 1,000,000 $ 970,000
Falcon Holdings Group,
L.P. 8.375% due
4/15/10................. USD 500,000 502,500
Fuji JGB Preferred 9.87%
due 12/31/49............ USD 1,000,000 880,325
Global TeleSystems Group,
Inc., Series 144A 8.75%
due 6/30/00+............ USD 500,000 985,000
IBJ Preferred Capital Co.
LLC 8.79% due 12/29/49.. USD 1,000,000 915,496
SB Treasury Co. LLC 9.40%
due 12/29/49............ USD 1,000,000 985,627
Tokai Preferred Capital
Co. LLC 9.98% due
12/29/49................ USD 1,000,000 915,000
-----------
6,356,448
-----------
TOTAL CORPORATE BONDS
(Cost: $9,450,080)..... 9,462,241
-----------
SHORT-TERM OBLIGATIONS--3.98%
UNITED STATES-3.98%
Eurofima Commercial Paper
Interest Yield
5.597% due 7/17/98...... USD 1,500,000 1,496,369
G.E. Capital Commercial
Paper Interest Yield
5.607% due 9/18/98...... USD 1,013,000 1,000,707
5.556% due 7/02/98...... USD 1,015,000 1,014,845
-----------
TOTAL SHORT-TERM
OBLIGATIONS (Amortized
Cost: $3,511,921)....... 3,511,921
-----------
TOTAL INVESTMENTS
(Cost: $85,609,099)..................... 97.95% 86,352,621
Other assets less liabilities............ 2.05% 1,811,204
------- ----------
TOTAL NET ASSETS.........................100.00% $88,163,825
------- ----------
------- ----------
</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
20
<PAGE> 22
VAN ECK/CHUBB GOVERNMENT SECURITIES FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
AMOUNT (NOTE B)
----------- -----------
<S> <C> <C>
U.S. GOVERNMENT AND AGENCY OBLIGATIONS-99.30%
Federal National Mortgage
Association
Pool #294290, 9.000%, due
7/01/01......................... $ 16,989 $ 17,565
Series 1058 H 8.000% due
4/15/21......................... 591,553 611,251
Pool #282883, 7.000%, due
5/01/24......................... 182,314 185,324
Pool #306175, 7.000%, due
1/01/25......................... 2,641,492 2,691,944
Pool #251286, 7.000%, due
11/01/27........................ 8,442,869 8,575,084
Government National Mortgage
Association
Pool #166009, 9.000%, due
6/15/16......................... 78,281 84,722
Pool #780339, 8.000%, due
12/15/23........................ 1,027,724 1,084,122
Pool #402760, 8.000%, due
8/15/25......................... 1,081,962 1,123,368
</TABLE>
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
AMOUNT (NOTE B)
----------- -----------
<S> <C> <C>
Tennessee Valley Authority
6.235% due 7/15/45.............. $10,000,000 $10,325,590
5.980% due 4/01/36.............. 4,000,000 4,120,000
U.S. Treasury Bond
10.375%, due 11/15/12........... 1,000,000 1,339,688
U.S. Treasury Notes
6.250%, due 10/31/01............ 185,000 188,874
6.250%, due 2/28/02............. 330,000 337,632
5.500%, due 3/31/03............. 760,000 759,763
-----------
TOTAL INVESTMENTS
(Cost: $30,770,682*)........... 99.30% 31,444,927
Other assets less liabilities... 0.70% 222,934
-------- -----------
TOTAL NET ASSETS................ 100.00% $31,667,861
-------- -----------
-------- -----------
</TABLE>
- ------------
* Aggregate cost for Federal income tax purposes.
See Notes to Financial Statements
21
<PAGE> 23
VAN ECK/CHUBB GROWTH AND INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
NUMBER MARKET
OF VALUE
COMPANY SHARES (NOTE B)
------- ------- -----------
<S> <C> <C>
COMMON STOCK-100.93%
AEROSPACE & DEFENSE-0.14%
Raytheon Company
(Class B).......................... 1,913 $ 110,237
-----------
AUTOS, TRUCKS & PARTS-6.81%
Borg-Warner Automotive, Inc. ........ 26,600 1,278,463
Ford Motor Co. ...................... 31,600 1,864,400
General Motors Co. .................. 30,000 2,004,375
-----------
5,147,238
-----------
BANKING-8.16%
Banc One Corp. ...................... 44,000 2,455,750
Chase Manhattan Corp. ............... 27,200 2,053,600
KeyCorp. ............................ 46,622 1,660,909
-----------
6,170,259
-----------
BUILDING MATERIALS & TOOLS-7.00%
Black & Decker Corp. ................ 50,000 3,050,000
Lafarge Corp. ....................... 57,000 2,240,813
-----------
5,290,813
-----------
CHEMICALS/FERTILIZER-2.41%
IMC Global, Inc. .................... 55,000 1,656,875
Millennium Chemicals Inc. ........... 4,857 164,531
-----------
1,821,406
-----------
CONTAINERS-METAL & GLASS-2.89%
Crown Cork and Seal Company, Inc. ... 46,000 2,185,000
-----------
ELECTRICAL EQUIPMENT-1.93%
UCAR International, Inc. ............ 50,000 1,459,375
-----------
ELECTRONICS-8.10%
Avnet, Inc. ......................... 17,500 957,031
Electronic Data Systems Corp. ....... 50,000 2,000,000
Philips Electronics NV............... 42,000 2,082,500
Tektronix, Inc. ..................... 30,450 1,077,165
-----------
6,116,696
-----------
</TABLE>
<TABLE>
<CAPTION>
NUMBER MARKET
OF VALUE
COMPANY SHARES (NOTE B)
------- ------- -----------
<S> <C> <C>
FINANCIAL SERVICES-11.86%
Citicorp............................. 10,000 $ 1,492,500
First Chicago NBD Corp. ............. 21,901 1,940,976
Merrill Lynch & Co., Inc. ........... 19,100 1,761,975
PaineWebber Group Inc. .............. 42,275 1,812,541
Washington Mutual Inc. .............. 45,000 1,954,688
-----------
8,962,680
-----------
HOSPITAL MANAGEMENT-5.75%
Columbia/HCA Healthcare Corp. ....... 74,000 2,155,250
Tenet Healthcare Corp. .............. 70,000 2,187,500
-----------
4,342,750
-----------
INDUSTRIALS-3.10%
Praxair, Inc. ....................... 50,000 2,340,625
-----------
INSURANCE-9.95%
Equitable Companies, Inc. ........... 35,000 2,622,813
LaSalle Re Holdings Ltd. ............ 12,000 454,500
Old Republic Int'l Corp. ............ 68,400 2,004,975
The PMI Group, Inc. ................. 22,000 1,614,250
W.R. Berkley Corp. .................. 20,550 823,284
-----------
7,519,822
-----------
MANUFACTURING-4.41%
AlliedSignal Inc. ................... 23,000 1,020,625
United Technologies Corp. ........... 25,000 2,312,500
-----------
3,333,125
-----------
MEDICAL-HEALTHCARE SERVICES-1.10%
Beverly Enterprises, Inc. ........... 60,000 828,750
-----------
MINING & METALS-3.41%
Carpenter
Technology Corp. .................. 26,000 1,306,500
Cyprus Amax
Minerals Co. ...................... 95,700 1,268,025
-----------
2,574,525
-----------
OIL & GAS-INTEGRATED-4.91%
Phillips Petroleum Co. .............. 42,000 2,023,875
YPF Sociedad Anonima
(ADR).............................. 56,200 1,689,513
-----------
3,713,388
-----------
</TABLE>
See Notes to Financial Statements
22
<PAGE> 24
VAN ECK/CHUBB GROWTH AND INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1998 (Unaudited) (continued)
<TABLE>
<CAPTION>
NUMBER MARKET
OF VALUE
COMPANY SHARES (NOTE B)
------- ------- -----------
<S> <C> <C>
PACKAGING & CONTAINERS-3.59%
Owens-Illinois, Inc. ................ 60,600 $ 2,711,850
-----------
RETAIL STORES-2.14%
Federated Department Stores Inc. .... 30,000 1,614,375
-----------
TEXTILES & APPAREL-3.41%
Nike, Inc. .......................... 45,000 2,190,938
Reebok International Ltd. ........... 13,900 384,856
-----------
2,575,794
-----------
TOYS-5.43%
Hasbro, Inc. ........................ 71,500 2,810,844
Toys "R" Us, Inc. ................... 55,000 1,295,938
-----------
4,106,782
-----------
</TABLE>
<TABLE>
<CAPTION>
NUMBER MARKET
OF VALUE
COMPANY SHARES (NOTE B)
------- ------- -----------
<S> <C> <C>
TRANSPORTATION & SHIPPING-4.43%
Burlington Northern Santa Fe Corp.... 20,800 $ 2,042,300
FDX Corp. ........................... 20,800 1,305,200
-----------
3,347,500
-----------
TOTAL INVESTMENTS
(Cost: $56,684,375*).............. 100.93% 76,272,990
Other assets less liabilities...... (0.93)% (701,901)
------- -----------
TOTAL NET ASSETS................... 100.00% $75,571,089
======= ===========
</TABLE>
- ------------
*Aggregate cost for Federal income tax purposes.
ADR--American Depositary Receipt
See Notes to Financial Statements
23
<PAGE> 25
VAN ECK/CHUBB TAX-EXEMPT FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
AMOUNT (NOTE B)
---------- -----------
<S> <C> <C>
MUNICIPAL OBLIGATIONS-96.89%
ALASKA-1.87%
Anchorage, Alaska, Hospital
Revenue, (Sisters of Providence
Project), Series 1991, 6.750%,
due 10/01/02+.................... $ 150,000 $ 163,453
North Slope Borough, Alaska,
General Obligation, Zero Coupon,
MBIA Insured, due 6/30/04........ 550,000 424,343
-----------
587,796
-----------
CONNECTICUT-0.55%
Connecticut State, General
Obligation, Series C, 7.000%,
Prerefunded to 9/15/00 at 102+... 160,000 173,323
-----------
DISTRICT OF COLUMBIA-2.76%
District of Columbia, Cert. of
Participation, 7.300%, due
1/01/13+......................... 300,000 336,452
District of Columbia, Series 93A,
5.875%, due 6/01/05 ............. 500,000 533,890
-----------
870,342
-----------
FLORIDA-4.74%
Dade County, Florida, Aviation
Revenue, Miami International
Airport, FSA Insured, 5.125% due
10/01/27......................... 1,500,000 1,490,870
-----------
GEORGIA-1.19%
Cartersville, Georgia Development
Authority, Water & Wastewater
Facilities, Anheuser Busch, AMT,
6.750%, due 2/01/12+............. 250,000 273,070
Metropolitan Atlanta Rapid Transit
Authority, Georgia, Sales Tax
Revenue, Series K, 7.250%, due
7/01/10+......................... 100,000 102,010
-----------
375,080
-----------
ILLINOIS-5.56%
Cook County, Illinois, General
Obligation, MBIA Insured, Series
1990, 7.000%, due 11/01/99....... 150,000 156,305
Illinois State Toll Highway, Series
92A, 6.375%, due 1/01/15+........ 1,100,000 1,201,476
Metropolitan Pier & Exposition
Authority, Illinois, 6.500%,
Prerefunded to 6/15/03 at 102+... 345,000 385,958
</TABLE>
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
AMOUNT (NOTE B)
---------- -----------
<S> <C> <C>
Metropolitan Pier & Exposition
Authority, Illinois, 6.500%, due
6/15/27+, unrefunded balance..... $ 5,000 $ 5,483
-----------
1,749,222
-----------
INDIANA-12.20%
Indiana Bond Bank, Revenue, State
Revolving Fund, 6.000%, due
2/01/15+......................... 500,000 530,617
Indiana Health Facilities Financing
Authority, Charity Obligated
Group, 5.00% due 11/1/26,
Mandatory Put on 11/01/07 at
100.............................. 1,340,000 1,372,784
Indiana Health Facilities Financing
Authority, Holy Cross Health
System Corp, 5.375%, MBIA Insured
due 12/1/12...................... 500,000 515,080
Indiana Municipal Power Supply,
5.500%, MBIA Insured, due
1/01/16.......................... 1,200,000 1,272,328
Indiana State Housing Finance
Authority, Single Family Mortgage
1990, Series C, AMT, 7.800%, due
1/01/22+......................... 140,000 148,979
-----------
3,839,788
-----------
IOWA-4.01%
Iowa Finance Authority, Single
Family Revenue, AMT, 4.950% due
1/1/21........................... 1,250,000 1,262,685
-----------
LOUISIANA-0.70%
Jefferson, Louisiana, Sales Tax
Revenue, Refunding, FGIC Insured,
Series A, 6.750%, Prerefunded to
12/01/02 at 100+................. 200,000 219,017
-----------
MAINE-0.67%
Maine Educational Loan Authority,
Series 92A, AMT, 6.950%, due
12/01/07+........................ 195,000 212,306
-----------
MASSACHUSETTS-5.59%
Massachusetts State, Construction
Loan, Series A, 6.000%,
Prerefunded to 6/01/01 at 100+... 300,000 316,028
Massachusetts State Turnpike
Authority, MBIA Insured, Series
A, 5.000%, due 1/01/37........... 1,500,000 1,443,069
-----------
1,759,097
-----------
</TABLE>
See Notes to Financial Statements
24
<PAGE> 26
VAN ECK/CHUBB TAX-EXEMPT FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1998 (Unaudited) (continued)
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
AMOUNT (NOTE B)
---------- -----------
<S> <C> <C>
MINNESOTA-0.33%
Northern Municipal Power Agency,
Minnesota, Electric System
Revenue, Series A, 7.250%, due
1/01/16+......................... $ 100,000 $ 103,731
-----------
MISSOURI-0.53%
Missouri Health & Educational
Facilities Authority, St. Luke's
Hospital, MBIA Insured, 7.000%,
Prerefunded to 11/15/01 at
102+............................. 150,000 166,489
-----------
NEW HAMPSHIRE-0.74%
New Hampshire Turnpike System,
Series A, FGIC Insured, 6.750%,
due 11/01/11+.................... 200,000 231,763
-----------
NEW JERSEY-7.99%
New Jersey Economic Development
Authority, The Seeing Eye, Inc.
Project, 7.300%, due 4/01/11+.... 1,000,000 1,089,060
New Jersey Wastewater Treatment
Trust, 6.875%, Prerefunded to
6/15/00 at 101.75+............... 165,000 176,697
New Jersey Wastewater Treatment
Trust, 6.875%, due 6/15/07+,
unrefunded balance............... 15,000 15,873
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 1,232,001
-----------
2,513,631
-----------
NEW YORK-15.14%
Metropolitan Transportation
Authority, New York, Transit
Facilities, Series 2, 8.000%,
Prerefunded to 7/01/98 at 102+... 100,000 102,012
Metropolitan Transportation
Authority, New York, Transit
Facilities, Service Contract,
Series 8, 5.000%, due 7/01/02.... 1,000,000 1,028,822
New York City, New York, General
Obligation, Series H, 6.875%, due
2/01/02, Escrowed to maturity.... 220,000 239,891
New York City, New York, General
Obligation, Series H, Subseries
H-1, 5.800%, due 8/01/04......... 250,000 267,948
New York City, New York, General
Obligation, Series D, 5.250% due
8/01/03.......................... 1,000,000 1,039,706
</TABLE>
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
AMOUNT (NOTE B)
---------- -----------
<S> <C> <C>
New York City, Series H, 6.875%,
due 2/01/02, unrefunded
balance.......................... $ 30,000 $ 32,515
New York State Dormitory Authority,
City University System, Series I,
5.125% due 7/1/13+............... 1,325,000 1,331,866
New York State Local Government
Assistance Corporation, Series B,
5.500%, due 4/01/21+............. 450,000 459,106
New York State Thruway Authority,
Highway and Bridge Trust Fund,
Series A, MBIA Insured, 5.600%,
due 4/01/10+..................... 250,000 267,084
-----------
4,768,950
-----------
OKLAHOMA-1.91%
Oklahoma Industrial Development
Authority, Sisters of Mercy,
Series A, 5.000%, due 6/01/13+... 600,000 601,018
-----------
PENNSYLVANIA-1.07%
Philadelphia, PA, Hospital & Higher
Education Facility Authority,
(Children's Hospital), 5.000%,
due 2/15/21+..................... 350,000 337,126
-----------
TENNESSEE-5.71%
Memphis-Shelby County, Tennessee
Airport Authority, (Federal
Express Corp.), AMT, 6.750%, due
9/01/12+......................... 250,000 272,702
Shelby County, Tennessee, General
Obligation, Series B, Zero
Coupon, due 12/01/12............. 2,000,000 1,000,608
Tennessee Housing Development
Agency, 1993 Series A, 5.900%,
due 7/01/18+..................... 500,000 524,507
-----------
1,797,817
-----------
TEXAS-5.26%
Austin, Texas, Utility System
Revenue, Series C, 7.300%,
Prerefunded to 11/15/01 at
100+............................. 60,000 66,150
Brazos River Authority, Texas,
Houston Light & Power Co.,
7.750%, due 10/01/15+............ 60,000 61,707
Houston, Texas, Independent School
District, Permanent School Fund,
Zero Coupon, due 8/15/13......... 1,150,000 548,916
Waxahachie, Texas, Independent
School District, Permanent School
Fund, Zero Coupon, due 8/15/13... 2,060,000 980,375
-----------
1,657,148
-----------
</TABLE>
See Notes to Financial Statements
25
<PAGE> 27
VAN ECK/CHUBB TAX-EXEMPT FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1998 (Unaudited) (continued)
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
AMOUNT (NOTE B)
---------- -----------
<S> <C> <C>
UTAH-4.07%
Utah State Board of Regents,
Student Loan Revenue, AMT,
5.000%, due 5/01/06.............. $1,250,000 $ 1,280,854
-----------
VIRGINIA-1.19%
Virginia State Housing Development
Authority, Commonwealth Mortgage,
6.700%, due 07/01/08+............ 100,000 100,977
Metropolitan Washington D.C Airport
Authority, General Obligation,
Series A 6.50%, MBIA Insured, due
10/01/07+........................ 250,000 272,460
-----------
373,437
-----------
WASHINGTON-13.11%
Lewis County, Washington, Public
Utility District #1, Revenue
Series 91, 7.000%, Prerefunded to
10/01/01 at 102+................. 250,000 276,714
Washington Health Care Facilities
Authority, Catholic Health
Initiatives, MBIA Insured, 5.125%
due 12/1/17+..................... 1,300,000 1,298,357
Washington Health Care Facilities
Authority, Revenue, MBIA Insured,
(Group Health Co-Op), 6.750%, due
12/01/11+........................ 300,000 322,118
</TABLE>
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
AMOUNT (NOTE B)
---------- -----------
<S> <C> <C>
Washington Health Care Facilities
Authority, Revenue, Series 93,
(Sisters of Providence), 6.250%,
due 10/01/13+.................... $ 500,000 $ 543,494
Washington Housing Finance
Commission, GNMA/FNMA MBS
Programs, 7.100%, due 7/01/22+... 145,000 152,569
Washington State Public Power
Supply System, Nuclear Project
Number 1, FSA Insured, 5.750%,
due 7/01/11...................... 1,200,000 1,288,868
Washington State Public Power
Supply System, Nuclear Project
Number 2, Revenue, Series 90C,
7.625%, Prerefunded to 1/01/01 at
102+............................. 100,000 110,250
Washington State Public Power
Supply System, Nuclear Project
Number 3, Revenue, 7.500%,
Prerefunded to 7/01/00 at 102+... 125,000 135,802
-----------
4,128,172
-----------
TOTAL INVESTMENTS
(Cost: $28,953,255*)................. 96.89% 30,499,662
Other assets less liabilities......... 3.11% 979,675
-------- -----------
TOTAL NET ASSETS......................100.00% $31,479,337
-------- -----------
-------- -----------
</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
26
<PAGE> 28
VAN ECK/CHUBB TOTAL RETURN FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
NUMBER MARKET
OF VALUE
COMPANY SHARES (NOTE B)
------- ---------- -----------
<S> <C> <C>
COMMON STOCK-69.18%
AEROSPACE & DEFENSE-0.40%
Raytheon Company (Class A)......... 3,430 $ 197,654
-----------
AUTOS, TRUCKS & PARTS-5.41%
Borg-Warner Automotive, Inc. ...... 18,900 908,381
Chrysler Corp. .................... 15,200 856,900
Ford Motor Co. .................... 14,400 849,600
-----------
2,614,881
-----------
BANKING-7.54%
Banc One Corp. .................... 22,000 1,227,875
Chase Manhattan Corp. ............. 15,400 1,162,700
KeyCorp............................ 22,654 807,049
Mellon Bank Corp. ................. 6,400 445,600
-----------
3,643,224
-----------
BUILDING & CONSTRUCTION-0.11%
Hanson (ADR) plc................... 1,687 51,137
-----------
BUILDING MATERIALS & TOOLS-2.64%
Lafarge Corp. ..................... 32,500 1,277,654
-----------
CHEMICALS/FERTILIZER-1.00%
IMC Global, Inc. .................. 15,000 451,875
Millennium Chemicals Inc. ......... 964 32,656
-----------
484,531
-----------
CONTAINERS-METAL & GLASS-2.16%
Crown Cork and Seal Company,
Inc.............................. 22,000 1,045,000
-----------
ELECTRONICS-5.58%
Avnet, Inc. ....................... 12,000 656,250
Philips Electronics N.V. .......... 15,200 1,292,000
Tektronix, Inc. ................... 21,150 748,181
-----------
2,696,431
-----------
ENGINES-1.16%
Cummins Engine Co., Inc. .......... 10,900 558,625
-----------
FINANCIAL SERVICES-6.71%
Associates First Capital Corp. .... 3,774 290,126
First Chicago NBD Corp. ........... 10,860 962,468
Merrill Lynch & Co., Inc. ......... 11,000 1,014,750
PaineWebber Group Inc. ............ 22,675 972,191
-----------
3,239,535
-----------
</TABLE>
<TABLE>
<CAPTION>
NUMBER MARKET
OF VALUE
COMPANY SHARES (NOTE B)
------- ---------- -----------
<S> <C> <C>
HOSPITAL MANAGEMENT-4.58%
Columbia/HCA Healthcare Corp. ..... 33,000 $ 961,125
Tenet Healthcare Corp. ............ 40,000 1,250,000
-----------
2,211,125
-----------
INSURANCE-5.45%
Old Republic International
Corp. ........................... 33,300 976,106
Progressive Corp. ................. 8,000 1,128,000
W.R. Berkley Corp. ................ 13,200 528,825
-----------
2,632,931
-----------
MANUFACTURING-4.78%
AlliedSignal Inc. ................. 27,000 1,198,125
United Technologies Corp. ......... 12,000 1,110,000
-----------
2,308,125
-----------
MINING & METALS-2.36%
Carpenter Technology Corp. ........ 16,200 814,050
Cyprus Amax Minerals Co. .......... 24,500 324,625
-----------
1,138,675
-----------
OIL & GAS-INTEGRATED-3.93%
Phillips Petroleum Co. ............ 21,000 1,011,938
YPF Sociedad Anonima (ADR)......... 29,500 886,844
-----------
1,898,782
-----------
PACKAGING & CONTAINERS-2.26%
Owens-Illinois, Inc. .............. 24,400 1,091,900
-----------
RETAIL-2.45%
Federated Dept. Stores, Inc. ...... 22,000 1,183,875
-----------
TEXTILES & APPAREL-0.64%
Reebok International Ltd. ......... 11,100 307,331
-----------
TOYS-4.80%
Hasbro, Inc. ...................... 35,000 1,375,938
Toys "R" Us, Inc. ................. 40,000 942,500
-----------
2,318,438
-----------
TRANSPORTATION & SHIPPING-5.22%
Burlington Northern Santa Fe
Corp. ........................... 9,800 962,238
CSX Corp. ......................... 18,000 819,000
FDX Corp. ......................... 11,800 740,450
-----------
2,521,688
-----------
TOTAL COMMON STOCK
(Cost: $22,629,629)............. 33,421,542
-----------
</TABLE>
See Notes to Financial Statements
27
<PAGE> 29
VAN ECK/CHUBB TOTAL RETURN FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1998 (Unaudited) (continued)
MARKET
PRINCIPAL VALUE
AMOUNT (NOTE B)
---------- -----------
U.S. GOVERNMENT OBLIGATIONS-26.63%
U.S. Treasury Notes
6.875%, due 5/15/06.............. $5,200,000 $ 5,633,878
6.50%, due 10/15/06.............. 200,000 212,500
6.25%, due 2/15/03............... 6,650,000 7,017,538
-----------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(Cost: $12,478,634)............. 12,863,916
-----------
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
AMOUNT (NOTE B)
---------- -----------
<S> <C> <C>
CORPORATE BONDS-9.00%
First Union Banc, 7.500%, due
4/15/35.......................... $2,000,000 $ 2,235,286
Tennessee Gas Pipeline, 7.000%, due
3/15/27.......................... 2,000,000 2,115,652
-----------
TOTAL CORPORATE BONDS
(Cost: $4,190,947).............. 4,350,938
-----------
TOTAL INVESTMENTS
(Cost: $39,299,210*)............ 104.81% 50,636,396
Other assets less liabilities.... (4.81)% (2,326,131)
-------- -----------
TOTAL NET ASSETS................. 100.00% $48,310,265
-------- -----------
-------- -----------
</TABLE>
- ------------
* Aggregate cost for Federal income tax purposes.
ADR--American Depositary Receipt
See Notes to Financial Statements
28
<PAGE> 30
(This page intentionally left blank)
29
<PAGE> 31
VAN ECK/CHUBB FUNDS, INC.
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
VAN ECK/CHUBB VAN ECK/CHUBB
CAPITAL GLOBAL
APPRECIATION INCOME
FUND FUND
-------------- --------------
<S> <C> <C>
ASSETS
Investments at cost - see schedules of investments........ $42,172,538 $85,609,099
=========== ===========
Investments at market value (Notes B & C)................. $44,097,121 $86,352,621
Cash and foreign currencies............................... 1,239,572 855,356
Cash - initial margin (Note F)............................ -- 180,119
Receivable from administrator............................. 16,561 70,196
Receivable for interest and dividends..................... 18,528 1,794,205
Receivable for portfolio securities sold.................. -- --
Gross unrealized gain on foreign forward contracts (Note
B)...................................................... -- 239,211
Receivable for Fund shares sold........................... 881 2,559
Deferred organization costs (Note B)...................... 5,784 34,743
----------- -----------
Total Assets 45,378,447 89,529,010
----------- -----------
LIABILITIES
Payable for portfolio securities purchased................ -- --
Dividends payable......................................... 4,714 46,489
Payable for Fund shares redeemed.......................... 3,202,750 484,205
Gross unrealized loss on foreign forward contracts (Note
B)...................................................... -- 615,861
Due from broker - variation margin (Note F)............... -- 4,281
Accounts payable.......................................... 113,811 214,350
----------- -----------
Total Liabilities................................... 3,321,275 1,365,186
----------- -----------
NET ASSETS.................................................. $42,057,172 $88,163,824
=========== ===========
NET ASSETS CONSIST OF:
Par value................................................. 25,345 89,568
Capital paid in excess of par............................. 38,685,046 87,389,963
Undistributed (overdistributed) net investment income..... (83,325) (155,002)
Accumulated net realized gain (loss) from investments..... 1,505,523 406,425
Net unrealized gain from investments...................... 1,924,583 809,520
Net unrealized loss on futures and foreign denominated
assets, liabilities and forward foreign exchange
contracts................................................ -- (376,650)
----------- -----------
Net Assets.......................................... $42,057,172 $88,163,824
=========== ===========
CLASS A SHARES
Net Assets.................................................. $42,051,422 $88,162,092
=========== ===========
Shares Outstanding
($.01 par value, 100,000,000 shares per Fund authorized)... 2,534,143 8,956,632
=========== ===========
Net Asset Value Per Share................................... $16.59 $9.84
=========== ===========
Maximum Offering Price Per Share
(Net asset value divided by .9525).......................... $17.42 $10.33
=========== ===========
CLASS B SHARES
Net Assets.................................................. $5,750 $1,732
=========== ===========
Shares Outstanding
($.01 par value, 100,000,000 shares per Fund authorized)... 347 176
=========== ===========
Net asset value, offering and redemption price per share
(redemption may be subject to a contingent deferred sales
charge within the first six years of ownership)............ $16.57 $9.84
=========== ===========
</TABLE>
See Notes to Financial Statements
30
<PAGE> 32
<TABLE>
<CAPTION>
VAN ECK/CHUBB VAN ECK/CHUBB
GOVERNMENT GROWTH AND VAN ECK/CHUBB VAN ECK/CHUBB
SECURITIES INCOME TAX-EXEMPT TOTAL RETURN
FUND FUND FUND FUND
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
$30,770,682 $56,684,375 $28,953,255 $39,299,210
=========== =========== =========== ===========
$31,444,927 $76,272,990 $30,499,662 $50,636,396
261,762 4,819,217 537,322 204,904
-- -- -- --
83,811 73,625 83,694 63,807
464,264 48,016 494,790 309,424
3,944,267 -- -- --
-- -- -- --
5,185 2,232,437 476 343
-- -- -- --
----------- ----------- ----------- -----------
36,204,216 83,446,285 31,615,944 51,214,874
----------- ----------- ----------- -----------
4,188,122 2,434,338 -- --
8,035 -- 10,658 16,800
249,237 5,269,515 36,784 2,742,075
-- -- -- --
-- -- -- --
90,961 171,343 89,165 145,734
----------- ----------- ----------- -----------
4,536,355 7,875,196 136,607 2,904,609
----------- ----------- ----------- -----------
$31,667,861 $75,571,089 $31,479,337 $48,310,265
=========== =========== =========== ===========
29,056 27,542 24,966 22,350
31,207,259 53,380,254 29,873,112 35,485,210
(3,511) 102,356 (9,888) 2,836
(239,188) 2,472,322 44,741 1,462,684
674,245 19,588,615 1,546,406 11,337,185
-- -- -- --
----------- ----------- ----------- -----------
$31,667,861 $75,571,089 $31,479,337 $48,310,265
=========== =========== =========== ===========
$31,660,655 $75,519,806 $31,479,136 $48,230,439
=========== =========== =========== ===========
2,904,919 2,752,339 2,496,543 2,231,359
=========== =========== =========== ===========
$10.90 $27.44 $12.61 $21.61
=========== =========== =========== ===========
$11.44 $28.80 $13.24 $22.69
=========== =========== =========== ===========
$7,206 $51,283 $201 $79,826
=========== =========== =========== ===========
661 1,869 16 3,689
=========== =========== =========== ===========
$10.90 $27.44 $12.61 $21.63
=========== =========== =========== ===========
</TABLE>
See Notes to Financial Statements
31
<PAGE> 33
VAN ECK/CHUBB FUNDS, INC.
STATEMENT OF OPERATIONS
Six Months Ended June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
VAN VAN
ECK/CHUBB ECK/CHUBB
CAPITAL GLOBAL
APPRECIATION INCOME
FUND FUND
------------- -------------
<S> <C> <C>
INVESTMENT INCOME
Income:
Interest.................................................. $ 20,625 $1,878,844
Dividends................................................. 179,434 --
Foreign taxes withheld.................................... (842) (6,104)
---------- ----------
Total investment income............................... 199,217 1,872,740
---------- ----------
Expenses:
Administrative fees (Note D).............................. 106,187 155,230
Advisory fees (Note D).................................... 45,200 65,658
Distribution fees Classes A and B (Note D)................ 113,006 164,143
Registration fees......................................... -- 28,561
Shareholder reports....................................... 25,057 17,678
Professional fees......................................... 15,456 11,423
Directors' fees and expenses.............................. 9,659 2,196
Shareholder servicing costs............................... 27,202 38,078
Custodian fees............................................ 1,238 4,675
Organization expenses..................................... 2,030 1,334
Miscellaneous expenses.................................... 11,516 22,954
---------- ----------
Total expenses........................................ 356,551 511,930
Fees waived and expenses assumed by affiliates (Note D)... (74,048) (68,743)
---------- ----------
Net expenses.......................................... 282,503 443,187
---------- ----------
Net investment income................................. (83,286) 1,429,553
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY
Net realized gain (loss) on investments.................... 1,510,698 557,095
Net realized loss from foreign currency transactions....... -- (57,791)
Net change in unrealized gain (loss) on investments,
futures and options...................................... -- (459,136)
Net change in unrealized gain on futures and foreign
denominated assets, liabilities and forward foreign
exchange contracts....................................... 934,415 1,091,030
Net gain (loss) on investments and foreign currencies...... 244,296 --
---------- ----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........ $2,606,123 $2,560,751
========== ==========
</TABLE>
See Notes to Financial Statements
32
<PAGE> 34
<TABLE>
<CAPTION>
VAN VAN
ECK/CHUBB ECK/CHUBB VAN VAN
GOVERNMENT GROWTH ECK/CHUBB ECK/CHUBB
SECURITIES AND INCOME TAX-EXEMPT TOTAL RETURN
FUND FUND FUND FUND
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
$1,023,422 $ 25,527 $818,443 $ 531,909
-- 532,737 -- 249,650
-- (3,678) -- (2,585)
---------- ---------- -------- ----------
1,023,422 554,586 818,443 778,974
---------- ---------- -------- ----------
74,522 169,303 73,167 121,851
31,541 71,409 30,905 51,146
78,851 178,569 77,261 127,888
24,348 -- 22,411 26,140
14,687 38,338 14,247 15,883
9,562 11,977 8,709 9,405
856 11,306 829 1,421
23,467 46,984 23,620 36,490
943 2,100 2,040 1,905
-- 1,901 -- --
7,721 13,306 6,951 11,503
---------- ---------- -------- ----------
266,498 545,193 260,140 403,632
(108,795) (98,867) (105,619) (83,953)
---------- ---------- -------- ----------
157,703 446,326 154,521 319,679
---------- ---------- -------- ----------
865,719 108,260 663,922 459,295
173,481 2,476,937 44,757 1,470,154
-- -- -- --
65,849 -- 66,001 1,977,094
-- -- -- --
-- 5,108,890 -- --
---------- ---------- -------- ----------
$1,105,049 $7,694,087 $774,680 $3,906,543
========== ========== ======== ==========
</TABLE>
See Notes to Financial Statements
33
<PAGE> 35
VAN ECK/CHUBB FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
VAN ECK/CHUBB VAN ECK/CHUBB
CAPITAL GLOBAL
APPRECIATION INCOME
FUND FUND
--------------------------- ---------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
JUNE 30, 1998 DECEMBER JUNE 30, 1998 DECEMBER
(UNAUDITED) 31, 1997 (UNAUDITED) 31, 1997
------------- ----------- ------------- -----------
<CAPTION>
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
Net investment income..................................... $ (83,286) $ 12,457 $ 1,429,553 $ 675,358
Net realized gain (loss) on investments................... 1,510,698 2,023,906 557,095 192,757
Net realized loss from foreign currency transactions...... -- -- (57,791) (184,281)
Net realized gain (loss) on options.......................
Net realized gain (loss) on futures.......................
Net change in unrealized gain (loss) on investments and
translation of assets and liabilities in foreign
currency................................................. 1,178,711 (118,155) 631,894 (538,981)
----------- ----------- ----------- -----------
Net increase (decrease) in net assets resulting from
operations............................................... 2,606,123 1,918,208 2,560,751 144,853
DIVIDENDS AND DISTRIBUTIONS:
From net investment income:
Class A................................................... -- (12,457) (1,408,635) (548,912)
Class B................................................... -- -- (6) --
From excess of net investment income Class A................ -- (12,843) -- --
From capital gains Class A.................................. -- (2,129,463) -- (273,339)
From excess of capital gains Class A........................ -- (66) -- (128,654)
From tax return of Capital Class A.......................... -- -- -- (125,999)
INCREASE (DECREASE) IN NET ASSETS DERIVED FROM SHAREHOLDER
TRANSACTIONS (NOTE E)...................................... (2,031,032) 35,278,131 34,924,147 40,792,740
----------- ----------- ----------- -----------
Net increase (decrease) in net assets..................... 575,091 35,041,510 36,076,257 39,860,689
Net Assets:
Beginning of period....................................... 41,482,081 6,440,571 52,087,567 12,226,878
----------- ----------- ----------- -----------
End of period............................................. $42,057,172 $41,482,081 $88,163,824 $52,087,567
=========== =========== =========== ===========
UNDISTRIBUTED (OVERDISTRIBUTED) NET INVESTMENT INCOME....... $ (83,325) $ (82) $ (155,002) $ (118,123)
=========== =========== =========== ===========
</TABLE>
See Notes to Financial Statements
34
<PAGE> 36
<TABLE>
<CAPTION>
VAN ECK/CHUBB
VAN ECK/CHUBB GROWTH
GOVERNMENT AND VAN ECK/CHUBB
SECURITIES INCOME VAN ECK/CHUBB TOTAL RETURN
FUND FUND TAX-EXEMPT FUND FUND
--------------------------- --------------------------- --------------------------- ---------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
JUNE 30, 1998 DECEMBER JUNE 30, 1998 DECEMBER JUNE 30, 1998 DECEMBER JUNE 30, 1998 DECEMBER
(UNAUDITED) 31, 1997 (UNAUDITED) 31, 1997 (UNAUDITED) 31, 1997 (UNAUDITED) 31, 1997
------------- ----------- ------------- ----------- ------------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 865,719 $ 944,497 $ 108,260 $ 246,619 $ 663,922 $ 825,189 $ 459,295 $ 689,476
173,481 7,015 2,476,937 3,953,219 44,757 88,323 1,470,154 2,025,968
-- -- -- -- -- -- -- --
-- -- -- --
-- -- -- --
65,849 569,084 5,108,890 6,037,252 66,001 731,502 1,977,094 4,260,078
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
1,105,049 1,520,596 7,694,087 10,237,090 774,680 1,645,014 3,906,543 6,975,522
(869,227) (944,497) -- (246,619) (663,149) (825,189) (451,540) (689,476)
(3) -- -- -- (1) -- (331) --
-- -- -- (11,685) -- (88,323) -- (10,851)
-- -- -- (4,401,950) -- (10,638) -- (2,206,980)
-- -- -- -- -- -- -- (1,208)
-- -- -- -- -- -- -- --
(306,948) 18,344,441 1,114,682 20,903,635 79,314 15,506,247 (5,078,042) 14,802,529
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
(71,129) 18,920,540 8,808,769 26,480,471 190,844 16,227,111 (1,623,370) 18,869,536
31,738,990 12,818,450 66,762,320 40,281,849 31,288,493 15,061,382 49,933,635 31,064,099
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
$31,667,861 $31,738,990 $75,571,089 $66,762,320 $31,479,337 $31,288,493 $48,310,265 $49,933,635
=========== =========== =========== =========== =========== =========== =========== ===========
$ (3,511) $ -- $ 102,356 $ (5,904) $ (9,888) $ (10,660) $ 2,836 $ (4,588)
=========== =========== =========== =========== =========== =========== =========== ===========
</TABLE>
See Notes to Financial Statements
35
<PAGE> 37
VAN ECK/CHUBB FUNDS, INC.
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period:
<TABLE>
<CAPTION>
VAN ECK/CHUBB CAPITAL APPRECIATION FUND
-------------------------------------------------------------------------
CLASS A CLASS B
----------------------------------------------------------- -----------
PERIOD FROM
APRIL 29,
SIX MONTHS PERIOD FROM 1998(D)
ENDED YEAR ENDED SEPTEMBER 1, THROUGH
JUNE 30, DECEMBER 31, 1995(D) THROUGH JUNE 30,
1998 -------------------------- DECEMBER 31, 1998
(UNAUDITED) 1997 1996 1995 (UNAUDITED)
----------- ------------ ----------- --------------- -----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period................ $15.590 $12.990 $10.400 $10.000 $17.680
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss)...................... (0.031) 0.005 0.067 0.037 (0.021)
Net Gains (Losses) on Securities (both Realized
and Unrealized).................................. 1.031 3.565 2.796 0.422 (1.069)
------- ------- ------- ------- -------
Total from Investment Operations.................. 1.000 3.570 2.863 0.459 (1.090)
------- ------- ------- ------- -------
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...................... $16.590 $15.590 $12.990 $10.400 $16.590
======= ======= ======= ======= =======
Total Return(A)..................................... 6.42% 27.79% 27.53% 4.60% (7.88%)
RATIOS TO AVERAGE NET ASSETS:
Gross Expenses(B)................................. 1.58%(C) 1.52% 1.81% 2.50%(C) 1.98%(C)
Net Expenses...................................... 1.25%(C) 1.25% 1.13% 1.25%(C) 1.75%(C)
Net Investment Income (Loss)...................... (0.35%)(C) 0.08% 0.86% 1.38%(C) (0.81%)(C)
Portfolio Turnover Rate............................. 11.51% 50.67% 41.97% 2.73% 11.51%
Net Assets, At End of Period........................ $42,051,422 $41,482,081 $6,440,571 $1,596,254 $5,750
</TABLE>
- ------------
(A) Total return assumes reinvestment of all distributions 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 are
not annualized.
(B) Had fees not been waived and expenses not been assumed.
(C) Annualized.
(D) Commencement of operations.
See Notes to Financial Statements
36
<PAGE> 38
VAN ECK/CHUBB FUNDS, INC.
FINANCIAL HIGHLIGHTS (continued)
For a share outstanding throughout each period:
<TABLE>
<CAPTION>
VAN ECK/CHUBB GLOBAL INCOME FUND
--------------------------------------------------------------------------
CLASS A CLASS B
------------------------------------------------------------ -----------
PERIOD FROM
APRIL 29,
SIX MONTHS PERIOD FROM 1998(C)
ENDED YEAR ENDED SEPTEMBER 1, THROUGH
JUNE 30, DECEMBER 31, 1995(C) THROUGH JUNE 30,
1998 --------------------------- DECEMBER 31, 1998
(UNAUDITED) 1997 1996 1995 (UNAUDITED)
----------- ------------ ------------ --------------- -----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period............... $9.640 $10.240 $10.210 $10.000 $9.870
------ ------- ------- ------- ------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income............................ 0.204 0.471 0.551 0.116 0.045
Net Gains and Losses on Securities (both Realized
and Unrealized)................................. 0.189 (0.476) 0.030 0.210 (0.009)
------ ------- ------- ------- ------
Total from Investment Operations................. 0.393 (0.005) 0.581 0.326 0.036
------ ------- ------- ------- ------
LESS DISTRIBUTIONS TO SHAREHOLDERS
Dividends from Net Investment Income............. (0.193) (0.398) (0.485) (0.116) (0.066)
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.............................. (0.193) (0.595) (0.551) (0.116) (0.066)
------ ------- ------- ------- ------
Net Asset Value, End of Period..................... $9.840 $ 9.640 $10.240 $10.210 $9.840
====== ======= ======= ======= ======
Total Return(A).................................... 4.08% 0.02% 5.95% 3.27% (0.54%)
RATIOS TO AVERAGE NET ASSETS:
Gross Expenses(D)................................ 1.56%(B) 1.56% 1.68% 2.14%(B) 1.86%(B)
Net Expenses..................................... 1.35%(B) 1.35% 1.23% 1.75%(B) 1.85%(B)
Net Investment Income............................ 4.35%(B) 4.62% 5.49% 4.48%(B) 4.34%(B)
Portfolio Turnover Rate............................ 22.35% 185.95% 80.70% 14.16% 22.35%
Net Assets, At End of Period....................... $88,162,092 $52,087,567 $12,226,878 $10,705,562 $1,732
</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 are
not annualized.
(B) Annualized.
(C) Commencement of operations.
(D) Had fees not been waived and expenses not been assumed.
See Notes to Financial Statements
37
<PAGE> 39
VAN ECK/CHUBB FUNDS, INC.
FINANCIAL HIGHLIGHTS (continued)
For a share outstanding throughout each period:
[CAPTION]
<TABLE>
<CAPTION>
VAN ECK/CHUBB GOVERNMENT SECURITIES FUND
-----------------------------------------------------------------------------------------------------
CLASS A CLASS B
--------------------------------------------------------------------------------------- -----------
PERIOD FROM
APRIL 29,
SIX MONTHS 1998(B)
ENDED THROUGH
JUNE 30, YEAR ENDED DECEMBER 31, JUNE 30,
1998 ------------------------------------------------------------------------ 1998
(UNAUDITED) 1997 1996 1995 1994 1993 (UNAUDITED)
----------- ------------ ------------ ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period................ $10.820 $10.480 $10.780 $ 9.750 $10.710 $10.700 $10.790
------- ------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income.... 0.296 0.616 0.623 0.636 0.607 0.770 0.119
Net Gains (Losses) on
Securities (both
Realized and
Unrealized)............. 0.081 0.340 (0.300) 1.030 (0.960) 0.199 0.110
------- ------- ------- ------- ------- ------- -------
Total from Investment
Operations.............. 0.377 0.956 0.323 1.666 (0.353) 0.969 0.229
------- ------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from Net
Investment Income....... (0.297) (0.616) (0.623) (0.636) (0.607) (0.770) (0.119)
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...... (0.297) (0.616) (0.623) (0.636) (0.607) (0.959) (0.119)
------- ------- ------- ------- ------- ------- -------
Net Asset Value, End of
Period................... $10.900 $10.820 $10.480 $10.780 $ 9.750 $10.710 $10.900
======= ======= ======= ======= ======= ======= =======
Total Return(A)........... 3.53% 9.44% 3.19% 17.50% (3.34%) 9.29% 1.54%
RATIOS TO AVERAGE NET
ASSETS:
Gross Expenses(D)........ 1.69%(C) 1.55% 1.60% 1.70% 1.71% 1.89% 2.13%(C)
Net Expenses............. 1.00%(C) 1.00% 0.93% 1.00% 1.00% 1.00% 1.50%(C)
Net Investment Income.... 5.49%(C) 5.78% 5.94% 6.16% 5.96% 7.04% 5.55%(C)
Portfolio Turnover Rate... 12.79% 39.86% 140.94% 276.56% 113.36% 197.08% 12.79%
Net Assets, At End of
Period................... $31,660,655 $31,738,990 $12,818,450 $13,886,478 $12,534,640 $14,679,255 $7,206
</TABLE>
- ------------
(A) Total return assumes reinvestment of all distributions 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 are
not annualized.
(B) Commencement of operations.
(C) Annualized.
(D) Had fees not been waived and expenses not been assumed.
38
<PAGE> 40
VAN ECK/CHUBB FUNDS, INC.
FINANCIAL HIGHLIGHTS (continued)
For a share outstanding throughout each period:
<TABLE>
<CAPTION>
VAN ECK/CHUBB GROWTH AND INCOME FUND
-----------------------------------------------------------------------------------------------------
CLASS A CLASS B
--------------------------------------------------------------------------------------- -----------
PERIOD FROM
APRIL 29,
SIX MONTHS 1998(C)
ENDED THROUGH
JUNE 30, YEAR ENDED DECEMBER 31, JUNE 30,
1998 ------------------------------------------------------------------------ 1998
(UNAUDITED) 1997 1996 1995 1994 1993 (UNAUDITED)
----------- ------------ ------------ ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period................ $ 24.56 $21.040 $18.580 $14.770 $16.700 $15.140 $27.940
------- ------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income.... 0.039 0.096 0.250 0.204 0.247 0.277 --
Net Gains (Losses) on
Securities (both
Realized and
Unrealized)............. 2.841 5.286 3.931 5.042 (0.954) 2.039 (0.500)
------- ------- ------- ------- ------- ------- -------
Total from Investment
Operations.............. 2.880 5.382 4.181 5.246 (0.707) 2.316 (0.500)
------- ------- ------- ------- ------- ------- -------
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
Period................... $27.440 $24.560 $21.040 $18.580 $14.770 $16.700 $ 27.44
======= ======= ======= ======= ======= ======= =======
Total Return(A)........... 11.73% 25.85% 22.50% 35.52% (4.26%) 15.29% (4.09%)
RATIOS TO AVERAGE NET
ASSETS:
Gross Expenses(B)........ 1.53%(D) 1.49% 1.58% 1.69% 1.71% 1.92% 2.12%(D)
Net Expenses............. 1.25%(D) 1.25% 1.06% 1.08% 1.00% 1.00% 1.75%(D)
Net Investment Income.... 0.30%(D) 0.49% 1.29% 1.20% 1.66% 2.04% 0.12%(D)
Portfolio Turnover Rate... 17.04% 21.02% 44.50% 37.59% 46.17% 81.96% 17.04%
Net Assets, At End of
Period................... $75,519,806 $66,762,320 $40,281,849 $29,144,161 $18,679,228 $14,885,337 $51,283
</TABLE>
- ------------
(A) Total return assumes reinvestment of all distributions 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 are
not annualized.
(B) Had fees not been waived and expenses not been assumed.
(C) Commencement of operations.
(D) Annualized.
See Notes to Financial Statements
39
<PAGE> 41
VAN ECK/CHUBB FUNDS, INC.
FINANCIAL HIGHLIGHTS (continued)
For a share outstanding throughout each period:
<TABLE>
<CAPTION>
VAN ECK/CHUBB TAX-EXEMPT FUND
----------------------------------------------------------------------------------------------------
CLASS A CLASS B
-------------------------------------------------------------------------------------- -----------
PERIOD FROM
APRIL 29,
SIX MONTHS 1998 (C)
ENDED THROUGH
JUNE 30, YEAR ENDED DECEMBER 31, JUNE 30,
1998 ------------------------------------------------------------------------ 1998
(UNAUDITED) 1997 1996 1995 1994 1993 (UNAUDITED)
----------- ------------ ------------ ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period................. $12.560 $12.150 $12.330 $11.220 $12.580 $11.740 $ 12.46
------- ------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income..... 0.269 0.581 0.611 0.621 0.618 0.583 0.091
Net Gains (Losses) on
Securities (both Realized
and Unrealized).......... 0.050 0.450 (0.137) 1.132 (1.360) 0.850 0.139
------- ------- ------- ------- ------- ------- -------
Total from Investment
Operations............... 0.319 1.031 0.474 1.753 (0.742) 1.433 0.230
------- ------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from Net
Investment Income........ (0.269) (0.581) (0.611) (0.621) (0.618) (0.583) (0.080)
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....... (0.269) (0.621) (0.654) (0.643) (0.618) (0.593) (0.080)
------- ------- ------- ------- ------- ------- -------
Net Asset Value, End of
Period.................... $12.610 $12.560 $12.150 $12.330 $11.220 $12.580 $12.610
======= ======= ======= ======= ======= ======= =======
Total Return (A)........... 2.56% 8.73% 4.00% 15.88% (5.97%) 12.42% 1.44%
RATIOS TO AVERAGE NET ASSETS:
Gross Expenses(D)......... 1.68%(B) 1.51% 1.59% 1.70% 1.73% 1.93% 1.91%(B)
Net Expenses.............. 1.00%(B) 1.00% 0.98% 1.00% 1.00% 1.00% 1.50%(B)
Net Investment Income..... 4.30%(B) 4.74% 5.00% 5.20% 5.21% 4.81% 3.39%(B)
Portfolio Turnover Rate.... 1.69% 12.78% 16.29% 7.39% 8.37% 1.55% 1.69%
Net Assets, At End of
Period.................... $31,479,136 $31,288,136 $15,061,382 $15,259,349 $13,973,939 $16,406,372 $201
</TABLE>
- ------------
(A) Total return assumes reinvestment of all distributions 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 are
not annualized.
(B) Annualized.
(C) Commencement of operations.
(D) Had fees not been waived and expenses not been assumed.
See Notes to Financial Statements
40
<PAGE> 42
VAN ECK/CHUBB FUNDS, INC.
FINANCIAL HIGHLIGHTS (continued)
For a share outstanding throughout each period:
<TABLE>
<CAPTION>
VAN ECK/CHUBB TOTAL RETURN FUND
----------------------------------------------------------------------------------------------------
CLASS A CLASS B
-------------------------------------------------------------------------------------- -----------
PERIOD FROM
APRIL 29,
SIX MONTHS 1998(C)
ENDED THROUGH
JUNE 30, YEAR ENDED DECEMBER 31, JUNE 30,
1998 ------------------------------------------------------------------------ 1998
(UNAUDITED) 1997 1996 1995 1994 1993 (UNAUDITED)
----------- ------------ ------------ ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period................. $20.220 $17.410 $15.960 $13.230 $15.010 $13.890 $21.940
------- ------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income..... 0.193 0.365 0.370 0.373 0.373 0.405 0.015
Net Gains (Losses) on
Securities (both Realized
and Unrealized).......... 1.387 3.778 2.321 3.586 (0.994) 1.529 (0.235)
------- ------- ------- ------- ------- ------- -------
Total from Investment
Operations............... 1.580 4.143 2.691 3.959 (0.621) 1.934 (0.220)
------- ------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from Net
Investment Income........ (0.190) (0.365) (0.370) (0.373) (0.373) (0.405) (0.090)
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....... (0.190) (1.333) (1.241) (1.229) (1.159) (0.814) (0.090)
------- ------- ------- ------- ------- ------- -------
Net Asset Value, End of
Period.................... $21.610 $20.220 $17.410 $15.960 $13.230 $15.010 $21.630
======= ======= ======= ======= ======= ======= =======
Total Return(A)............ 7.81% 24.09% 17.04% 30.13% (4.21%) 14.03% (2.73%)
RATIOS TO AVERAGE NET
ASSETS:
Gross Expenses(B)......... 1.58%(D) 1.51% 1.59% 1.70% 1.73% 1.93% 2.12%(D)
Net Expenses.............. 1.25%(D) 1.25% 1.08% 1.08% 1.00% 1.00% 1.75%(D)
Net Investment Income..... 1.80%(D) 1.92% 2.26% 2.45% 2.66% 2.83% 1.77%(D)
Portfolio Turnover Rate.... 7.01% 15.80% 27.01% 57.62% 37.53% 66.15% 7.01%
Net Assets, At End of
Period.................... $48,230,439 $49,933,635 $31,064,099 $22,171,326 $16,431,195 $14,360,086 $79,826
</TABLE>
- ------------
(A) Total return assumes reinvestment of all distributions 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 are
not annualized.
(B) Had fees not been waived and expenses not been assumed.
(C) Commencement of operations.
(D) Annualized.
See Notes to Financial Statements
41
<PAGE> 43
VAN ECK/CHUBB FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS JUNE 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
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 six funds (the "Funds"): Van Eck/Chubb Capital Appreciation
Fund, Van Eck/Chubb Global Income Fund, Van Eck/ Chubb Government Securities
Fund, Van Eck/Chubb Growth and Income Fund, Van Eck/Chubb Tax-Exempt Fund, and
Van Eck/Chubb Total Return Fund. As of April 24, 1998, Van Eck Chubb Money
Market Fund ceased operations.
At June 30, 1998 Chubb Life Insurance Company of America ("Chubb Life") and its
affiliates and Van Eck Associates Corporation owned:
<TABLE>
<CAPTION>
JUNE 30, 1998
SHARES % OF
OWNED SHARES
------------- ------
<S> <C> <C>
Van Eck/Chubb Capital Appreciation Fund
Class A shares......................... 2,004,085 79.08%
Van Eck/Chubb Global Income Fund Class A
shares................................. 5,411,638 60.42%
Van Eck/Chubb Global Income Fund Class B
shares................................. 10 5.68%
Van Eck/Chubb Government Securities Fund
Class A shares......................... 2,178,403 74.99%
Van Eck/Chubb Government Securities Fund
Class B shares......................... 193 29.20%
Van Eck/Chubb Growth and Income Fund
Class A shares......................... 723,524 26.29%
Van Eck/Chubb Tax-Exempt Fund Class A
shares................................. 1,648,487 66.03%
Van Eck/Chubb Tax-Exempt Fund Class B
shares................................. 8 50.00%
Van Eck/Chubb Total Return Fund Class A
shares................................. 789,066 35.36%
</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 are valued by
the amortized cost method, which approximates market value, unless the Board of
Directors determines that this does not represent fair value.
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, 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 June 30, 1998, the Van Eck/Chubb Global Income Fund had the
following open forward currency contracts:
42
<PAGE> 44
VAN ECK/CHUBB FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS JUNE 30, 1998 (Unaudited) (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE AT UNREALIZED
SETTLEMENT CURRENT APPRECIATION
CONTRACTS DATE VALUE (DEPRECIATION)
- --------- ---------- ------- --------------
<S> <C> <C> <C> <C> <C>
FOREIGN CURRENCY PURCHASE CONTRACT:
DEM 62,557,959 expiring 7/30/98-8/06/98 $34,669,004 $35,284,865 $(615,861)
FOREIGN CURRENCY SALE CONTRACTS:
DEM 31,049,328 expiring 8/06/98 17,207,016 17,483,761 276,745
GBP 7,617,000 expiring 7/30/98 12,681,924 12,561,765 (120,159)
JPY 338,314,244 expiring 8/06/98 2,447,205 2,529,830 82,625
---------
$(376,650)
=========
</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 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, 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.
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 June 30, 1998, for Federal income tax
purposes is the same as for financial reporting purposes. As of June 30, 1998
gross unrealized gains and losses were as follows:
<TABLE>
<CAPTION>
GROSS GROSS NET
UNREALIZED UNREALIZED UNREALIZED
GAINS LOSSES GAINS
----------- ---------- -----------
<S> <C> <C> <C>
Van Eck/Chubb Capital
Appreciation Fund............ $ 6,996,182 $5,071,599 $ 1,924,583
Van Eck/Chubb Global Income
Fund......................... 2,892,968 2,149,446 743,522
Van Eck/Chubb Government
Securities Fund.............. 679,880 5,635 674,245
Van Eck/Chubb Growth and
Income Fund.................. 22,184,401 2,595,786 19,588,615
Van Eck/Chubb Tax-Exempt
Fund......................... 1,546,407 -- 1,546,407
Van Eck/Chubb Total Return
Fund......................... 12,225,351 888,165 11,337,186
</TABLE>
Purchases and sales of investment securities for the six months ended June 30,
1998, 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 Capital Appreciation
Fund.................................... $ 6,538,018 $ 5,093,482
Van Eck/Chubb Global Income Fund......... 49,285,915 13,749,235
Van Eck/Chubb Government Securities
Fund.................................... 5,218,722 3,990,941
Van Eck/Chubb Growth and Income Fund..... 13,285,505 12,062,601
Van Eck/Chubb Tax-Exempt Fund............ 513,165 761,191
Van Eck/Chubb Total Return Fund.......... 3,535,651 5,529,774
</TABLE>
NOTE D--MANAGEMENT AGREEMENTS AND EXPENSES
Chubb Asset Managers, Inc. ("Investment Manager"), a wholly-owned subsidiary of
The Chubb Corporation, is responsible for the overall investment management of
each Fund's portfolio, consistent with each Fund's investment objectives,
policies and restrictions. Van Eck Associates Corporation ("Investment
Administrator") provides certain administrative services and facilities for the
Company.
Van Eck Securities Corporation (the "Distributor"), a wholly owned subsidiary of
the Investment Administrator, for the six months ended June 30, 1998, received
$106,612 in sales loads of which $15,632 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 0.50% per annum of the average daily net
assets of each Fund.
Investment management fees, which compensate both the Investment Manager and the
Investment Administrator, are
43
<PAGE> 45
VAN ECK/CHUBB FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS JUNE 30, 1998 (Unaudited) (continued)
- --------------------------------------------------------------------------------
computed at the following annual percentages for each of the Funds:
<TABLE>
<CAPTION>
AVERAGE DAILY INVESTMENT INVESTMENT
NET ASSETS MANAGER ADMINISTRATOR
------------- ---------- -------------
<S> <C> <C>
First $200 Million................. 0.20% 0.45%
Next $1.1 Billion.................. 0.19% 0.41%
Over $1.3 Billion.................. 0.18% 0.37%
</TABLE>
Pursuant to an expense limitation agreement for the six months ended June 30,
1998, the rate of expenses borne by the Funds was limited to 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 six months ended June 30, 1998, the Investment Manager, the Investment
Administrator and the Distributor waived all or a portion of their fees.
NOTE E--SHAREHOLDERS' TRANSACTIONS
Following is a summary of transactions with shareholders for each Fund.
<TABLE>
<CAPTION>
VAN ECK/CHUBB CAPITAL APPRECIATION FUND
-------------------------------------------------
SIX MONTHS
ENDED
JUNE 30, 1998 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1997
---------------------- ------------------------
SHARES DOLLARS SHARES DOLLARS
CLASS A -------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Shares sold.............. 173,036 $ 2,943,303 2,137,853 $34,941,115
Shares issued as
reinvestment of
dividends and
distributions........... -- -- 139,585 2,040,444
Shares redeemed.......... (300,243) (4,980,576) (111,756) (1,703,428)
-------- ----------- ---------- -----------
Net increase
(decrease)........... (127,207) $(2,037,273) 2,165,682 $35,278,131
======== =========== ========== ===========
</TABLE>
<TABLE>
<CAPTION>
PERIOD FROM
APRIL 29, 1998+
THROUGH
JUNE 30, 1998
(UNAUDITED)
-------------------
SHARES DOLLARS
CLASS B ------ -------
<S> <C> <C>
Shares sold......................................... 347 $6,241
Shares issued as reinvestment of dividends and
distributions...................................... -- --
Shares redeemed..................................... -- --
--- ------
Net increase....................................... 347 $6,241
=== ======
</TABLE>
<TABLE>
<CAPTION>
VAN ECK/CHUBB GLOBAL INCOME FUND
-------------------------------------------------
SIX MONTHS
ENDED
JUNE 30, 1998 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1997
----------------------- -----------------------
SHARES DOLLARS SHARES DOLLARS
CLASS A --------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Shares sold............... 115,988 755,040 4,153,429 $40,249,318
Share issued in connection
with an acquisition (Note
G)....................... 3,707,367 36,851,229 -- --
Shares issued as
reinvestment of dividends
and distributions........ 78,532 775,471 110,564 1,070,720
Shares redeemed........... (349,503) (3,459,325) (53,640) (527,298)
--------- ----------- --------- -----------
Net increase............. 3,552,384 $34,922,415 4,210,353 $40,792,740
========= =========== ========= ===========
</TABLE>
<TABLE>
<CAPTION>
PERIOD FROM
APRIL 29, 1998+
THROUGH
JUNE 30, 1998
(UNAUDITED)
-------------------
SHARES DOLLARS
CLASS B ------ -------
<S> <C> <C>
Shares sold......................................... 175 $1,727
Shares issued as reinvestment of dividends and
distributions...................................... 1 5
Shares redeemed..................................... -- --
--- ------
Net increase..................................... 176 $1,732
=== ======
</TABLE>
<TABLE>
<CAPTION>
VAN ECK/CHUBB GOVERNMENT SECURITIES FUND
-------------------------------------------------
SIX MONTHS
ENDED
JUNE 30, 1998 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1997
---------------------- -----------------------
SHARES DOLLARS SHARES DOLLARS
CLASS A -------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Shares sold.............. 57,179 $ 480,876 2,006,126 $21,384,810
Shares issued as
reinvestment of
dividends............... 75,819 966,279 78,935 888,170
Shares redeemed.......... (161,887) (1,761,304) (373,997) (3,928,539)
-------- ----------- --------- -----------
Net increase
(decrease)............ (28,889) $ (314,149) 1,711,064 $18,344,441
======== =========== ========= ===========
</TABLE>
<TABLE>
<CAPTION>
PERIOD FROM
APRIL 29, 1998+
THROUGH
JUNE 30, 1998
(UNAUDITED)
-------------------
SHARES DOLLARS
CLASS B ------ -------
<S> <C> <C>
Shares sold......................................... 661 $7,201
Shares issued as reinvestment of dividends.......... -- --
Shares redeemed..................................... -- --
--- ------
Net increase....................................... 661 $7,201
=== ======
</TABLE>
- ------------
+ Commencement of operations.
44
<PAGE> 46
VAN ECK/CHUBB FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS JUNE 30, 1998 (Unaudited) (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VAN ECK/CHUBB GROWTH AND INCOME FUND
--------------------------------------------------
SIX MONTHS
ENDED
JUNE 30, 1998 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1997
----------------------- -----------------------
SHARES DOLLARS SHARES DOLLARS
CLASS A -------- ------------ --------- -----------
<S> <C> <C> <C> <C>
Shares sold............. 481,547 $ 13,094,521 1,017,154 $26,246,838
Shares issued as
reinvestment of
dividends and
distributions.......... -- -- 188,575 4,334,132
Shares redeemed......... (447,708) (12,029,667) (401,518) (9,677,335)
-------- ------------ --------- -----------
Net increase........... 33,839 $ 1,064,854 804,211 $20,903,635
======== ============ ========= ===========
</TABLE>
<TABLE>
<CAPTION>
PERIOD FROM
APRIL 29, 1998+
THROUGH
JUNE 30, 1998
(UNAUDITED)
-------------------
SHARES DOLLARS
CLASS B ------ -------
<S> <C> <C>
Shares sold......................................... 1,869 $51,692
Shares issued as reinvestment of dividends and
distributions...................................... -- --
Shares redeemed..................................... -- --
----- -------
Net increase..................................... 1,869 $51,692
===== =======
</TABLE>
<TABLE>
<CAPTION>
VAN ECK/CHUBB TAX-EXEMPT FUND
-------------------------------------------------
SIX MONTHS
ENDED
JUNE 30, 1998 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1997
---------------------- -----------------------
SHARES DOLLARS SHARES DOLLARS
CLASS A -------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Shares sold.............. 173,403 $ 2,186,714 1,618,059 $20,040,183
Shares issued as
reinvestment of
dividends and
distributions........... 48,571 611,088 74,378 875,229
Shares redeemed.......... (215,720) (2,718,677) (441,704) (5,409,165)
-------- ----------- --------- -----------
Net increase............ 6,254 $ 79,125 1,250,733 $15,506,247
======== =========== ========= ===========
</TABLE>
<TABLE>
<CAPTION>
VAN ECK/CHUBB
TAX-EXEMPT FUND
(CONTINUED)
---------------------
PERIOD FROM
APRIL 29, 1998+
THROUGH
JUNE 30, 1998
(UNAUDITED)
---------------------
SHARES DOLLARS
CLASS B ------ -------
<S> <C> <C>
Shares sold....................................... 16 $189
Shares issued as reinvestment of dividends and
distributions.................................... -- --
Shares redeemed................................... -- --
-- ----
Net increase..................................... 16 $189
== ====
</TABLE>
<TABLE>
<CAPTION>
VAN ECK/CHUBB TOTAL RETURN FUND
------------------------------------------------
SIX MONTHS
ENDED
JUNE 30, 1998 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1997
---------------------- ----------------------
SHARES DOLLARS SHARES DOLLARS
CLASS A -------- ----------- -------- -----------
<S> <C> <C> <C> <C>
Shares sold............... 76,759 $ 3,463,387 971,037 $20,382,124
Shares issued as
reinvestment of dividends
and distributions........ 19,690 427,957 145,823 2,792,442
Shares redeemed........... (335,132) (9,049,201) (430,994) (8,372,037)
-------- ----------- -------- -----------
Net increase
(decrease)............. (238,683) $(5,157,857) 685,866 $14,802,529
======== =========== ======== ===========
</TABLE>
<TABLE>
<CAPTION>
PERIOD FROM
APRIL 29, 1998+
THROUGH
JUNE 30, 1998
(UNAUDITED)
-------------------
SHARES DOLLARS
CLASS B ------ -------
<S> <C> <C>
Shares sold......................................... 3,674 $79,484
Shares issued as reinvestment of dividends and
distributions...................................... 15 331
Shares redeemed..................................... -- --
------ -------
Net increase........................................ 3,689 $79,815
====== =======
</TABLE>
- ------------
+ Commencement of operations.
45
<PAGE> 47
VAN ECK/CHUBB FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS JUNE 30, 1998 (Unaudited) (continued)
- --------------------------------------------------------------------------------
NOTE F--FUTURES CONTRACT
As of June 30, 1998 the Van Eck/Chubb Global Income Fund had an open futures
contract. This contract was 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>
20 Year U.S. Treasury Bond
8%.......................... 9/21/98 39 $4,742,156 $4,820,156 $78,000
</TABLE>
NOTE G--ACQUISITION
As of the close of business on April 24, 1998, Van Eck/Chubb Global Income Fund
acquired all the net assets of Van Eck Global Income Fund pursuant to a plan of
reorganization approved by Van Eck Global Income Fund shareholders on April 16,
1998. The acquisition was accomplished by a tax-free exchange of 4,292,666
shares of Van Eck Global Income Fund (valued at $36,851,228) for 3,707,367
shares of Van Eck/Chubb Global Income Fund outstanding on April 24, 1998. Van
Eck Global Income Fund's net assets at that date, $36,851,228, including
$405,616 of unrealized appreciation were combined with those of the Van Eck
/Chubb Global Income. The aggregate net assets of Van Eck/Chubb Global Income
Fund and Van Eck Global Income Fund before the acquisition were $54,462,808 and
$36,851,228, respectively.
46
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47
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48
<PAGE> 50
[VAN ECK GLOBAL LOGO]
Investment Adviser: Chubb Asset Managers, Inc.
Distributor: Van Eck Securities Corporation
99 Park Avenue, New York, NY 10016 www.vaneck.com
Account Assistance: (800) 544-4653 FR1998-0729-0044
