U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PRE-EFFECTIVE AMENDMENT NO. __ /--/
POST-EFFECTIVE AMENDMENT NO. __ /--/
VAN ECK/CHUBB FUNDS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
99 PARK AVENUE, 8TH FLOOR, NEW YORK, NEW YORK 10016
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
212-687-5200
(REGISTRANT'S TELEPHONE NUMBER)
THOMAS ELWOOD, ESQ.
VAN ECK ASSOCIATES CORPORATION
99 PARK AVENUE, 8TH FLOOR, NEW YORK, NEW YORK 10016
(NAME AND ADDRESS OF AGENT FOR SERVICE)
COPY TO: PHILIP H. NEWMAN, ESQ., GOODWIN PROCTER & HOAR, LLP
EXCHANGE PLACE, BOSTON, MASSACHUSETTS 02109
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APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: AS SOON AS PRACTICABLE
AFTER THE REGISTRATION STATEMENT BECOMES EFFECTIVE UNDER THE SECURITIES ACT OF
1933.
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE ON THE THIRTIETH
DAY AFTER THE DATE OF FILING PURSUANT TO RULE 488 UNDER THE SECURITIES ACT OF
1933.
NO FILING FEE IS REQUIRED BECAUSE THE REGISTRANT HAS HERETOFORE
DECLARED ITS INTENTION TO REGISTER AN INDEFINITE NUMBER OF SHARES OF COMMON
STOCK, $.01 PAR VALUE, OF THE GROWTH AND INCOME FUND SERIES, PURSUANT TO RULE
24F-2.
<PAGE>
VAN ECK/CHUBB FUNDS, INC.
Cross-Reference Sheet
Pursuant to Rule 481(a) under the Securities Act of 1933
FORM N-14 ITEM NO. LOCATION IN PROXY STATEMENT/PROSPECTUS
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PART A
1. Cover page of Registration Statement; Prospectus
Cover Page
2. Table of Contents
3. Synopsis; Special Considerations and Risk Factors
4. Synopsis; The Reorganization
5. Prospectus Cover Page; Synopsis; Additional
Information
6. Prospectus Cover Page; Synopsis; Additional
Information
7. Notice of Special Meeting; Introduction; Synopsis;
The Reorganization; Capital Appreciation Fund; Growth
and Income Fund; Information Concerning the Meeting;
Additional Information
8. Not Applicable
9. Not Applicable
PART B
10. Cover Page of Statement of Additional Information
11. Table of Contents
12. General Information
13. General Information
14. Financial Statement
<PAGE>
VAN ECK/CHUBB FUNDS, INC.
[LOGO]
_______________, 1999
Dear Shareholder:
At this time, we are asking our shareholders to consider voting for the
reorganization of the Van Eck/Chubb Capital Appreciation Fund - Class A by means
of a tax-free merger into the Van Eck/Chubb Growth and Income Fund - Class A,
which we believe to be in shareholders' best interests. The reorganization is
being proposed in part because both these funds have substantially similar
investment objectives and policies. We expect the proposed reorganization to
benefit shareholders by:
1. improving efficiency in the operation of the combined funds,
including potentially achieving economies of scale and greater
portfolio diversification;
2. eliminating duplicative shareholder costs
and
3. facilitating investment management, administration and marketing
of the combined funds.
Attached are the Notice and Proxy Statement/Prospectus for a Special Meeting of
Shareholders of Capital Appreciation Fund to be held on _________, ___________,
1999 for the purpose of considering the proposed Agreement and Plan of
Reorganization and Liquidation.
PLEASE READ THE PROXY STATEMENT/PROSPECTUS CAREFULLY. IT DISCUSSES THE PROPOSAL
AS WELL AS THE REASONS WHY THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR
THE PROPOSAL.
Please take a moment now to sign and return the proxy card in the enclosed
postage-paid envelope. Your prompt attention in this matter benefits all
shareholders. Thank you.
Sincerely,
Michael O'Reilly
President
Van Eck Global, 99 Park Avenue, New York, NY 10016 tel. 212.687.5200 or
800.826.3251 fax 212.687.5248
<PAGE>
VAN ECK/CHUBB FUNDS, INC.
CAPITAL APPRECIATION FUND
99 PARK AVENUE, NEW YORK, NEW YORK 10016
1-800-221-2220
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
_______________, 1999
----------------------------------------------
A SPECIAL MEETING OF SHAREHOLDERS OF CAPITAL APPRECIATION FUND (THE "FUND" or
"CAF"), A SERIES OF VAN ECK/CHUBB FUNDS, INC. (THE "COMPANY"), will be held at
99 Park Avenue, 8th Floor, New York, New York, on _________, ______, 1999 at
9:00 a.m., New York Time, for the following purposes:
(1) To consider approval of the Plan of Reorganization and Liquidation involving
the exchange of substantially all of the Fund's assets for shares of Van
Eck/Chubb Growth and Income Fund, another series of Van Eck/Chubb Funds, the
assumption of certain liabilities of the Fund by Van Eck/Chubb Growth and Income
Fund, the distribution of Van Eck/Chubb Growth and Income Fund shares to the
Fund's shareholders and the liquidation of the Fund; and
(2) To act upon such other matters as may properly come before the meeting or
any adjournment or adjournments thereof.
Shareholders of record at the close of business on Tuesday, July 20, 1999 are
entitled to notice of, and to vote at, the meeting or any adjournment thereof.
By order of the Board of Directors
Thomas Elwood
Secretary
_______, 1999
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YOUR VOTE IS IMPORTANT!
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WHETHER YOU EXPECT TO ATTEND THE MEETING OR NOT, PLEASE COMPLETE,
DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY.
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<PAGE>
INVESTORS ARE ADVISED TO READ AND RETAIN THIS PROXY
STATEMENT/PROSPECTUS FOR FUTURE REFERENCE.
---------------------------------------
VAN ECK/CHUBB FUNDS, INC.
99 Park Avenue, New York, New York 10016
1-800-221-2220
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PROXY STATEMENT/PROSPECTUS
---------------------------------------
Van Eck/Chubb Funds has filed a Registration Statement with the Securities and
Exchange Commission (the "SEC") for the registration of the shares of Van
Eck/Chubb Growth and Income Fund - Class A ("GRO"), a series of Van Eck/Chubb
Funds, Inc. (the "Company"), to be offered to the shareholders of Van Eck/Chubb
Capital Appreciation Fund - Class A ("CAF"), another series of the Company,
pursuant to a Plan of Reorganization and Liquidation of CAF involving the
exchange of CAF's asset, for shares of GRO, the assumption of certain
liabilities of CAF by GRO, the distribution of GRO shares to CAF's shareholders
and the subsequent liquidation of CAF (the "Reorganization").
GRO is a series of the Company, an open-end investment company, whose objective
is to seek long-term growth by investing in a wide range of equity securities
(stocks) that will appreciate in value and generate a reasonable level of
current income.
The Prospectus and Statement of Additional Information for CAF and GRO dated May
1, 1999 are incorporated by reference into this Proxy Statement/Prospectus.
This Proxy Statement/Prospectus sets forth concisely information about GRO and
CAF that the shareholders of CAF should know in considering the Reorganization
and should be retained for future reference. CAF has authorized solicitation of
proxies in connection with the Reorganization solely on the basis of this Proxy
Statement/Prospectus and the accompanying documents.
A Statement of Additional Information relating to the Reorganization (the
"Reorganization Statement of Additional Information") dated _______, 1999, is
incorporated by reference into this Proxy Statement/Prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED ON THE
ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
This Proxy Statement/Prospectus is dated ________, 1999
<PAGE>
TABLE OF CONTENTS Page
- -------------------------------------------------------------------------------
Introduction..................................................................
Synopsis......................................................................
THE REORGANIZATION..........................................................
INVESTMENT OBJECTIVES AND POLICIES..........................................
REASONS FOR THE TRANSACTION.................................................
INVESTMENT ADVISORY AND ADMINISTRATIVE FEES.................................
OTHER FEES AND BENEFITS.....................................................
EXCHANGE PRIVILEGES.........................................................
REDEMPTION PROCEDURES.......................................................
DIVIDENDS AND DISTRIBUTIONS.................................................
NET ASSET VALUE.............................................................
TAX CONSEQUENCES............................................................
Special Considerations and Risk Factors.......................................
The Reorganization............................................................
Procedures....................................................................
TERMS OF THE AGREEMENT AND PLAN OF REORGANIZATION AND LIQUIDATION...........
BENEFITS TO THE CAF AS A RESULT OF REORGANIZATION...........................
TAX CONSEQUENCES OF THE REORGANIZATION......................................
CAPITALIZATION..............................................................
MANAGEMENT..................................................................
SHARE OF GRO TO BE ISSUED IN THE REORGANIZATION AND SHARES OF CAF...........
OTHER MATTERS...............................................................
Information Concerning the Meeting............................................
DATE, TIME AND PLACE OF MEETING.............................................
SOLICITATION, REVOCATION AND USE OF PROXIES.................................
RECORD DATE AND OUTSTANDING SHARES..........................................
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT..............
VOTING RIGHTS AND REQUIRED VOTE.............................................
Additional Information........................................................
Plan of Reorganization and Liquidation........................................
<PAGE>
VAN ECK/CHUBB FUNDS, INC.
CAPITAL APPRECIATION FUND
99 PARK AVENUE, 8TH FLOOR, NEW YORK, NEW YORK 10016
1-800-221-2220
------------------------------------------
PROXY STATEMENT/PROSPECTUS
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON _________, _______, 1999
99 PARK AVENUE, 8TH FLOOR, NEW YORK, NEW YORK
------------------------------------------
INTRODUCTION
This proxy statement is furnished to the shareholders of Van Eck/Chubb Capital
Appreciation Fund - Class A (the "Fund" or "CAF") in connection with the
solicitation by the Board of Directors of Van Eck/Chubb Funds, Inc., (the
"Company") of which CAF is a series, of proxies to be used at a special meeting
of shareholders of CAF to be held on _________, ________, 1999 at 9:00 a.m., New
York time, or any adjournments thereof (the "Meeting"), to approve or disapprove
a Plan of Reorganization and Liquidation (the "Plan") which contemplates the
exchange of assets of CAF for shares of Van Eck/Chubb Growth and Income Fund -
Class A ("GRO") (the "Reorganization Shares"), the assumption of certain
liabilities of CAF by GRO, the distribution of such Reorganization Shares to the
shareholders of CAF and the subsequent liquidation of CAF, as set forth herein
(the "Reorganization"). As of July 20, 1999 the record date, there were
outstanding ___________ shares of CAF and _____________ shares of GRO. Each
shareholder of CAF will be entitled to one vote for each share and a fractional
vote for each fractional share held on the record date. It is expected that the
mailing of this proxy statement will commence on or about _________, 1999. GRO
and CAF each may be referred to herein individually as a "Fund" and collectively
as the "Funds."
The enclosed form of proxy, if properly executed and returned, will be voted in
accordance with the choice specified thereon. The proxy will be voted in favor
of the proposal unless a choice is indicated to vote against the proposal.
Proxies properly executed and returned, but which fail to specify how the shares
are to be voted, will be voted FOR the proposal.
The proxy may be revoked at any time prior to the voting thereof by executing a
superseding proxy, by giving written notice to the secretary of the Company at
the address listed on the front cover of this Proxy Statement/Prospectus or by
voting in person at the Meeting.
In the event there are not sufficient votes to approve the proposal at the time
of the Meeting, the Meeting may be adjourned in order to permit further
solicitations of proxies. If CAF proposes to adjourn the Meeting by a vote of
the shareholders, the persons named in the enclosed proxy card will vote all
shares for which they have voting authority in favor of such adjournment.
To the knowledge of CAF, as of May 31, 1999 no shareholder owned of record or
beneficially 5% or more of the outstanding shares of that Fund, except as
follows:
CAF
Federal Insurance Co. 2,111,196.6560 shares
c/o Chubb & Son or 84.95%
Attn Investment Accounting
15 Mountain View
Warren, NJ 07059
Chubb & Sons has indicated that they intend to vote the shares they own in favor
of the Plan.
1
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In addition, as of May 31, 1999, all Director and officers of the Company as a
group owned less than 1% of CAF and GRO .
To the knowledge of GRO, as of May 31, 1999 no shareholder owned of record or
beneficially 5% or more of the outstanding shares of that fund, except as
follow:
GRO
Federal Insurance Co. 740,253.1250 shares
c/o Chubb & Son or 30.86%
Attn Investment Accounting
15 Mountain View
Warren, NJ 07059
Legal and printing expenses and expenses of holding the Meeting (such as proxy
tabulation and the expense of a solicitor, if any) will be borne by CAF. Any
registration fee payable to the Securities and Exchange Commission in connection
with the registration of shares under the Securities Act of 1933 or any filing
or notification fee payable to the Commission or state securities commission in
connection with the transactions contemplated by the Plan, shall be payable by
the Fund required to pay such fee. All fees payable by any party as desired
herein are payable regardless of whether the transactions contemplated by the
Plan are consummated. In addition to the solicitation of proxies by mail,
proxies may be solicited by officers and/or employees of the Company, the
Adviser, Van Eck Associates Corporation, and/or DST Systems, Inc., CAF's
Transfer Agent and Dividend Paying Agent (the "Transfer Agent" or "DST"),
personally, or by telephone, telegraph, facsimile or other means. Brokerage
houses, banks and other fiduciaries will be requested to forward soliciting
material to the beneficial owners of the shares of the Fund and to obtain
authorization for the execution of proxies.
See also "Information Concerning the Meeting" below.
SYNOPSIS
The following is a synopsis of the information contained in or incorporated by
reference in this Proxy Statement/Prospectus regarding the Reorganization, and
presents key considerations for shareholders of CAF to assist them in
determining whether to approve the Reorganization. See also "Special
Considerations and Risk Factors" below.
THE REORGANIZATION
The Directors of the Company, of which CAF is a series, have determined that the
Reorganization (as described herein) is in the best interests of the
shareholders of CAF and have given their approval to the transactions
contemplated in the Plan associated with the Reorganization. The result of the
Reorganization, if it is consummated, will be the exchange of assets from CAF
for Reorganization Shares, the assumption of the liabilities of CAF by GRO, the
distribution of such Reorganization Shares to the shareholders of CAF and the
subsequent liquidation of CAF. For more information see, "The Reorganization"
below.
INVESTMENT OBJECTIVES AND POLICIES
SUMMARY COMPARISON BETWEEN CAF AND GRO. Although CAF and GRO differ in some
respects, they have certain similarities in their investment objectives,
policies and portfolios.
CAF. CAF is a diversified series of the Company. This Fund seeks long-term
capital appreciation by investing primarily in equity securities of companies
that the Adviser believes will have long term capital appreciation. Under normal
market conditions, the Fund invests at least 80% of its total assets in common
stocks and other equity securities, including preferred stocks and securities
convertible into common stock. The Fund intends to invest at least 65% of assets
in companies with market capitalization
2
<PAGE>
between $500 million and $2.5 billion ("small to mid-cap companies"). The Fund
primarily invests in domestic securities, and it may invest as much as 20% of
assets in equity and high quality debt securities in foreign issuers, either
exchange traded or traded over the counter.
GRO. GRO is also a diversified series of the Company. GRO seeks long-term growth
by investing in a wide range of equity securities (stocks) that will appreciate
in value and generate a reasonable level of current income. The Fund invests at
least 80% of assets in common stocks and other equity securities, including
preferred stocks and securities convertible into common stock. The adviser uses
a value strategy, primarily looking for stocks with the potential for capital
growth based upon low price to earnings ratio and low price to net asset value.
The Fund invests at least 60% of Fund assets in securities that have paid
interest or dividends in the past 12 months. The Fund invests primarily in the
United States. The Fund may sometimes invest up to 20% of its assets in foreign
equity and investment grade debt securities, including exchange-traded and over
the counter foreign issues, American Depository Receipts (ADRs), European
Depository Receipts (EDRs) and Global Depository Receipts (GDRs). The maturity
of any debt issue is set to take advantage of capital appreciation opportunities
and income. Any of these securities may be traded either in United States or in
foreign markets.
REASONS FOR THE TRANSACTION
Sales of CAF have, overall, fallen short of the expectations of Chubb Asset
Managers, Inc., the investment adviser to each fund (the "Adviser"). Net assets
of CAF as of May 19, 1999 were approximately $30 million. This failure of CAF to
reach the net asset level anticipated by the Adviser has meant that the CAF's
expense ratio has been higher than anticipated. Since commencement of
operations, the Adviser has been waiving a portion of the fees. The Adviser
cannot reasonably be expected to subsidize a portion of the fees indefinitely
and without continued subsidization of CAF by the Adviser. At the current asset
levels, over time, the Fund's expense ratio would exceed that of many other
funds with similar investment objectives. This would have an adverse impact on
the Fund's performance. As a result, CAF's current asset base would decline and
the Fund's expense ratio would rise as certain fixed costs would be spread over
a shrinking asset base. CAF expense ratio for the year ended December 31, 1998
was 1.25% of average daily net assets and if the Adviser had not assumed certain
expenses, it would have been 1.62%. Expenses assumed by the Adviser were
$146,419 for the year ended December 31, 1998.
GRO, on the other hand, has achieved a growth in its asset base since its
inception, with net assets of approximately $60 million as of May 19, 1999.
Although the assets of GRO have fluctuated from time to time, assets under
management have been sufficiently stable for the Adviser to pursue the
investment objectives of the Fund. The Distributor anticipates that assets of
GRO, whether the Reorganization is approved or not, will remain relatively
constant or will increase. Certain fixed shareholder expenses (such as
accounting, transfer agent and legal expenses) will be lower for GRO than they
would be for CAF in the absence of the Adviser's current practice of assuming
CAF's expenses. Thus, assuming the Adviser discontinues its current practice of
absorbing CAF's expenses, CAF shareholders will experience lower per share fixed
costs by holding GRO shares than they would if they continued to hold shares in
CAF. GRO's expense ratio for the year ended December 31, 1998 was 1.25% of
average daily net assets (1.57% had fees not been waived and expenses not been
assumed). The Adviser will voluntarily continue to waive its fees until its
expense ratio is competitive with other funds of similar size and objective.
The Board of Directors has determined that participation in the Reorganization,
as described herein, is in the best interest of CAF and the interests of
existing CAF shareholders will not be diluted as a result of such participation.
The Board also considered a number of factors and alternatives in addition to
the ones stated in the preceding paragraph. The Directors determined that the
Reorganization provided greater benefits to shareholders than other options,
such as the liquidation of CAF. Liquidating CAF would have required most
shareholders, subject to federal income taxation, to recognize either gains or
losses in the current tax year when many shareholders might have preferred to
defer such gains or losses. An exchange into GRO generally would require the
shareholder to recognize a gain or loss for tax purposes, whereas the
reorganization will achieve the same result, but on a tax-deferred basis. The
redemption procedure and exchange privilege, which are described below, allow
any shareholder not desiring to participate in the Reorganization to receive the
similar federal income tax treatment as if CAF
3
<PAGE>
was liquidated. The Board also considered the similarity of the Funds'
investment objectives, policies, restrictions and portfolios; various factors
which might require an adjustment to the exchange price or formula, such as
costs or tax and other benefits to be derived by the Funds; tax consequences of
the reorganization to the Funds as well as to shareholders; relative benefits to
be derived by the Adviser and/or its affiliates or other persons; and other
factors.
INVESTMENT ADVISORY AND ADMINISTRATIVE FEES
Chubb Asset Managers, Inc. acts as the investment adviser for both CAF and GRO.
Total aggregate assets under management of Chubb Asset Managers, Inc. on May 28,
1999 were approximately $275,280,000.
Van Eck Associates Corporation acts as investment administrator to CAF and GRO.
For the three years beginning October 1, 1997 or until assets in all of the Van
Eck/Chubb Funds reach $500 million, whichever occurs first, Van Eck Associates
Corporation will receive the advisory as well as the administrative fees paid by
the Funds.
Each of CAF and GRO pays investment advisory fees to the Adviser according to
the following schedule (1):
<TABLE>
<CAPTION>
NET ASSETS ADVISORY FEE ADMINISTRATIVE FEES TOTAL FEES
- ---------- ------------ ------------------- ----------
<S> <C> <C> <C>
$0-$200 million.................................. .20% 0.45% .65%
Next $1.1 billion............................... .19% 0.41% .60%
Over $1.3 billion............................... .18% 0.37% .55%
</TABLE>
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(1) The advisory fee is payable monthly, computed on the average daily net
assets.
OTHER FEES AND BENEFITS
Each of CAF and GRO has adopted a Plan of Distribution pursuant to which the
Funds pay a 12b-1 fee to Van Eck Securities Corporation ("the Distributor") or
securities dealers and others at an annual rate of .25% of average daily net
assets or actual distribution expenses, whichever is less. Of that amount, the
Board of Directors of the Company has determined that the maximum payable under
the Plan should be allocated so that 0.075% per annum will be used to finance
sales or promotional activities and 0.175% will be paid to securities dealers
and others as a service fee. No service fee is paid to a dealer unless the
dealer has sold Company shares valued in excess of $1 million. For the fiscal
year ended December 31, 1998, $745,850 was paid by the Company to the
Distributor under the Class A Plan of Distribution. The Plans do not provide for
the carry-forward of reimbursable or payable amounts under the Plan to
subsequent years. The Plan of Distribution in effect for CAF is described in
more detail in the Prospectus for CAF under "Distribution Plan."
Neither Fund will recognize any gain or loss on the transaction. GRO will have
the same basis and holding period in the assets received as CAF.
GRO's total operating expenses for the year ended December 31, 1998 were 1.25%
of average daily net assets after fee waivers. CAF's total operating expenses
for the year ended December 31, 1998 were 1.25% after fee waivers. Had certain
fees and expenses for CAF and GRO not been assumed or waived in 1998, CAF's
expenses for the year would have been 1.62% and GRO's expenses for the year
would have been 1.57%.
The following table provides a comparison of the transaction and operating
expenses paid by GRO and CAF. It is intended to assist an investor in
understanding the various direct and indirect costs and expenses borne by an
investor in the Funds. The investment adviser, the administrator and/or
Distributor of each Fund may from time to time waive fees and/or reimburse
certain expenses of a Fund.
4
<PAGE>
SHAREHOLDER TRANSACTION EXPENSES
GRO
GRO- CAF- Post-
CLASS A CLASS A MERGER
------- ------- ------
Maximum Sales Charge Imposed on Purchases (as a
percent of offering price).......................... 5.75% 5.75% 5.75%
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- --------------------------------------
Management Fee ....................................... 0.20% 0.20% 0.20%
Administration Fee.................................... 0.45% 0.45% 0.45%
12b-1 Fee/Shareholder Servicing Fee*.................. 0.50% 0.50% 0.50%
Other Expenses........................................ 0.42% 0.47% 0.44%
Total Fund Operating Expenses......................... 1.57%** 1.62%** 1.59%
- ---------------
* Long-term shareholders in Funds may pay more than the economic equivalent of
the maximum front- end sales charge permitted by the NASD. The shareholder
servicing fee will not exceed .25%.
** After a fee waiver during 1998, GRO's and CAF's net expenses for the year
were 1.25%. Effective May 1, 1999, the expense limitation was 1.35% of
average daily net assets of Class A shares.
Example: You would bear the following expenses on a $10,000 investment assuming
(1) 5% annual return and (2) redemption at the end of each time period.
GRO
GRO CAF Post-
CLASS A CLASS A MERGER
------- ------- ------
1 Year.......................................... $ 726 $ 730 $ 727
3 Years......................................... $1,042 $1,057 $1,048
5 Years......................................... $1,381 $1,406 $1,391
10 Years........................................ $2,335 $2,386 $2,356
THIS TABLE REPRESENTS EXPENSES USING THE TOTAL FUND OPERATING EXPENSES BEFORE
THE WAIVER. THIS TABLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES WHICH MAY BE MORE OR LESS THAN THOSE SHOWN. THE ASSUMED 5%
ANNUAL RETURN IS HYPOTHETICAL AND SHOULD NOT BE CONSIDERED A REPRESENTATION OF
PAST OR FUTURE ANNUAL RETURN. ACTUAL RETURN MAY BE GREATER OR LESS THAN THE
ASSUMED AMOUNT.
PURCHASE PROCEDURES/SALES CHARGES
After the Reorganization, shareholders of CAF will be shareholders of GRO, and
therefore subsequent purchases of shares of GRO will be subject to the
applicable initial sales charge as described in "Synopsis-Shareholder
Transaction Expenses" above.
EXCHANGE PRIVILEGES
Shareholders of GRO and CAF may exchange shares into Van Eck U.S. Government
Money Fund and into Class A shares of any other Van Eck Fund or Van Eck/Chubb
Fund at net asset value. Such an exchange prior to the Exchange Date as defined
in "The Reorganization" would be a tax-reportable event. Shareholders may wish
to evaluate the possible tax effect of a capital gain or loss from such a
transaction.
Share may be exchanged by writing to DST Systems, Inc., the Funds' transfer
agent, through the shareholder's broker or agent (although they may charge a fee
for their services) or, if the shareholder has so elected, by contacting DST by
telephone.
Shareholders of the Van Eck Family of Funds are generally limited to six
exchanges per calendar year (International Investors Gold Fund - Class A and
U.S. Government Money Fund are currently waiving the
5
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six exchange limit). Each Fund reserves the right to terminate, modify or impose
a fee in connection with the exchange privilege as described in more detail in
the Prospectuses and Statement of Additional Information under "Exchange
Privilege."
Exchanges out of CAF will be accepted up to the business day prior to the
Exchange Date, as defined in "The Reorganization."
REDEMPTION PROCEDURES
Shares of CAF and GRO may be redeemed at any time. Shares may be redeemed by
writing to DST Systems, Inc., the Funds' transfer agent, through the
shareholder's broker or agent (although they may charge a fee for their
services) or, if the shareholder has so elected, by contacting DST by telephone.
Redemptions of CAF will be accepted up to the business day prior to the Exchange
Date. See also "Shareholder Information" in the Prospectus for more information.
DIVIDENDS AND DISTRIBUTIONS
If the Reorganization is approved by shareholders, CAF intends to declare any
applicable dividends and distributions prior to the Exchange Date. GRO generally
declares and pays dividends on the last business day of the month of declaration
(December).
NET ASSET VALUE
The net asset value of GRO and CAF is determined at the close of business on
each day the New York Stock Exchange is open for trading. Each Fund computes net
asset value by dividing the value of its securities, plus cash and other assets
(including interest and dividends accrued but not yet received), less all
liabilities (including accrued expenses), by the number of shares outstanding.
Expenses, including fees paid to the investment adviser and/or administrator,
are accrued daily for the Funds.
TAX CONSEQUENCES
Prior to or upon the closing of the Reorganization, counsel to CAF and GRO,
Goodwin, Procter & Hoar LLP, will opine that, subject to the customary
assumptions and representations, on the basis of the existing provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), the Treasury Regulations
promulgated thereunder and current administrative and judicial interpretations
thereof, for Federal income tax purposes: (i) the transfer of all or
substantially all of the assets of CAF to GRO solely in exchange for GRO shares
and the assumption by GRO of some of CAF's liabilities and the distribution of
such shares to the shareholders of CAF, as provided in the Plan, will constitute
a reorganization within the meaning of Section 368(a)(1)(C) of the Code, and GRO
and CAF will each be a "party to a reorganization" within the meaning of Section
368(b), (ii) CAF will not recognize gain or loss on the transfer of its assets
to GRO in the Reorganization; (iii) CAF will not recognize gain or loss upon its
distribution to its shareholders of the GRO shares received in the
Reorganization; (iv) GRO will not recognize a gain or loss upon the receipt of
the assets of CAF in exchange for the GRO shares; (v) shareholders of CAF will
not recognize a gain or loss on the exchange of shares of CAF for shares of GRO
provided that such shareholders receive solely GRO shares (including fractional
shares) in exchange for their CAF shares; (vi) the tax basis of the CAF assets
acquired by GRO will be the same to GRO as the tax basis of such assets to CAF
immediately prior to the Reorganization and the holding period of the assets of
CAF in the hands of GRO will include the period during which those assets were
held by CAF; (vii) the aggregate tax basis of the GRO shares received by the
shareholders of CAF will be the same as the aggregate tax basis of CAF shares
exchanged by such shareholder immediately prior to the Reorganization; and
(viii) the holding period of the GRO shares (including fractional shares)
received by shareholders of CAF will include the holding period that the CAF
shares exchanged were held (provided that the CAF shares exchanged were held as
a capital asset on the date of the Reorganization). For a discussion of
additional tax considerations, see "The Reorganization-Tax Consequences of the
Reorganization" below.
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SPECIAL CONSIDERATIONS AND RISK FACTORS
Except as stated below, the Funds' investment objectives, policies and
restrictions are similar, and therefore the related special considerations and
risk factors, are similar.
Small- and mid-cap stocks carry greater risk of price fluctuation and are
sensitive to markets factors. CAF is subject to market risk, interest rate risk,
credit rate risk and foreign risk. An investment in CAF may result in the loss
of principal. Foreign securities are subject to political, economic and currency
risks.
The prices of securities in GRO tend to go down more than prices of securities
in other funds. GRO share price, therefore, may swing more, both short- and
long-term, than the share prices of the other Funds. GRO is subject to interest
rate risk, credit risk and the political, economic and currency risks of
investment in foreign securities.
Both GRO and CAF are diversified funds, (i.e., the Funds are limited in how much
they may invest in a single issuer).
Both CAF and GRO may invest up to 20% of its total assets in securities issued
by foreign companies, traded in foreign currencies or issued by companies with
most of their business interests in foreign countries. Investments in foreign
securities may involve greater risk than investments in domestic securities due
to exchange rate fluctuations and exchange controls.
GRO and CAF are subject to substantially similar investment restrictions. For
example, GRO and CAF each may borrow up to 5% of its total assets valued at cost
for temporary and emergency purposes. In addition, the Funds may not pledge,
mortgage or hypothecate their assets except in connection with permissible
borrowings and then only in amounts not exceeding 10% of its total assets.
See "Additional Investment Strategies" in GRO's and CAF's Prospectus and
"Investment Objectives and Policies" in GRO's and CAF's Statement of Additional
Information for a more detailed discussion of the risks involved with each
Fund's investment practices and strategies.
THE REORGANIZATION
PROCEDURES
The Directors are hereby soliciting shareholders of CAF to vote for the approval
of the Reorganization. The Meeting will be held on _________, 1999 at 99 Park
Avenue, 8th Floor, New York, New York at 9:00 a.m., New York time. If the CAF's
shareholders approve the Reorganization at that time, the Reorganization will
take place on or about ________, 1999.
TERMS OF THE PLAN OF REORGANIZATION AND LIQUIDATION
The following is a summary of the significant terms of the Plan which has been
considered and approved by the Directors of the Company. A copy of the Plan is
attached to this Proxy Statement/Prospectus as Exhibit A. This summary is
qualified in its entirety by reference to the Plan.
VALUATION OF ASSETS AND LIABILITIES. The assets of GRO and CAF will be valued on
the business day prior to the date on which the Reorganization will take place
(the "Exchange Date"). The assets in each portfolio will be valued according to
the procedures set forth in the Funds' Prospectus and Statement of Additional
Information. Exchange requests as to CAF shares received on the Exchange Date
will be treated and processed as exchanges from GRO and will be effected as of
the close of business on the Exchange Date.
DISTRIBUTION OF SHARES AND TRANSFER OF ASSETS. On the Exchange Date, GRO will
issue to CAF a number of shares of beneficial interest, the aggregate net asset
value of which will equal the aggregate net asset value of the assets
transferred to GRO by CAF on the Exchange Date. Each shareholder of CAF will
receive a number of shares of GRO having an aggregate net asset value equal to
the value of his or her shares of CAF on that date. No sales charge or fee of
any kind will be charged to the
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shareholders of CAF in connection with their receipt of shares of GRO in the
Reorganization.
EXPENSES. Legal and printing expenses and expenses of holding the Meeting (such
as proxy tabulation and the expense of a solicitor, if any) will be borne by
CAF. Any registration fee payable to the Securities and Exchange Commission in
connection with the registration of shares under the Securities Act of 1933 or
any filing or notification fee payable to the Commission or state securities
commission, in connection with the transactions contemplated by the Plan, shall
be payable by the Fund required to pay such fee.
All fees payable by any party as described herein are payable regardless of
whether the transactions contemplated by the Plan are consummated.
REQUIRED APPROVALS. Approval of the Plan requires the majority of CAF's
outstanding voting shares to vote in favor of the Plan.
AMENDMENTS AND CONDITIONS. The Plan may be amended at any time prior to the
Exchange Date with respect to any of the terms therein except that following the
meeting of the shareholders of CAF, no such amendment may have the effect of
changing the provisions of the Plan determining the number of GRO shares to be
issued to CAF shareholders to their detriment without their further approval.
The obligations of GRO and CAF are subject to various conditions, including a
registration statement on Form N-14 being declared effective by the Securities
and Exchange Commission, approval of the Reorganization by the shareholders of
CAF and the continuing accuracy of various representations and warranties of GRO
and CAF being confirmed by the respective parties.
BENEFITS TO CAF AS A RESULT OF THE REORGANIZATION
1. Management anticipates that this reorganization will benefit shareholders by:
a. improving efficiency in the operation of the combined funds including
potentially achieving economies of scale and greater portfolio
diversification;
b. facilitating investment management, administration and marketing of
the combined funds and
c. eliminating duplicative shareholder costs.
TAX CONSEQUENCES OF THE REORGANIZATION
The Reorganization has been structured with the intention that it will qualify
for Federal income tax purposes as a tax-free reorganization under Section
368(a)(1)(C) of the Code. GRO and CAF have both elected to qualify as a
regulated investment company under the Code, and GRO intends to continue to
elect to so qualify. Upon the closing of the Reorganization, counsel to CAF and
GRO, Goodwin, Procter & Hoar, LLP will opine that, subject to the customary
assumptions and representations, on the basis of the existing provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), the Treasury Regulations
promulgated thereunder and current administrative and judicial interpretations
thereof, for Federal income tax purposes: (i) the transfer of all or
substantially all of the assets of CAF to GRO solely in exchange for GRO shares
and the assumption by GRO of some of CAF's liabilities and the distribution of
such shares to the shareholders of CAF, as provided in the Plan, will constitute
a "reorganization" within the meaning of Section 368(a)(1)(C) of the Code, and
GRO and CAF will each be a "party to a reorganization" within the meaning of
Section 368(b); (ii) CAF will not recognize gain or loss on the transfer of its
assets to GRO in the Reorganization; (iii) CAF will not recognize gain or loss
upon its distribution to its shareholders of the GRO shares received in the
Reorganization; (iv) GRO will not recognize a gain or loss upon the receipt of
the assets of CAF in exchange for the GRO shares; (v) shareholders of CAF will
not recognize a gain or loss on the exchange of shares of CAF for shares of GRO
provided that such shareholders receive solely GRO shares (including fractional
shares) in exchange for their CAF shares; (vi) the tax basis of the CAF assets
acquired by GRO will be the same to GRO as the tax basis of such assets to CAF
immediately prior to the Reorganization and the holding period of the assets of
CAF in the hands of GRO will include the period during which those assets were
held by CAF; (vii) the aggregate tax basis of the GRO shares received by the
shareholders of CAF will be the same as the aggregate tax basis of CAF shares
exchanged by such shareholder immediately prior to
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the Reorganization; and (viii) the holding period of the GRO shares (including
fractional shares) received by shareholders of CAF will include the holding
period that the CAF shares exchanged were held (provided that the CAF shares
exchanged were held as a capital asset on the date of the Reorganization). The
receipt of such opinions upon the closing of the transaction is a condition to
the closing of the Reorganization. If the transfer of assets of CAF in exchange
for GRO shares and the assumption by GRO of the liabilities of CAF were deemed
not to constitute a tax-free reorganization, each CAF shareholder would
recognize gain or loss equal to the difference between the value of the GRO
shares such shareholder acquires and the tax basis of such shareholder's CAF
shares.
As a condition to closing, counsel to CAF and GRO must opine in part to the
effect that, subject to customary assumptions and representations, upon
consummation of the reorganization and the transfer of substantially all of the
assets of CAF to GRO, neither the Company nor any Fund shareholder will
recognize a gain or loss in the exchange of their shares.
Shareholders should consult their tax advisors regarding the effect, if any of
the Reorganization in light of their individual circumstances. Since the
foregoing relates only to Federal income tax consequences, shareholders should
also consult with their tax advisors as to the state and local tax consequences,
if any, of the Reorganization.
CAPITALIZATION
The following table sets forth, as of May 28, 1999, the capitalization of GRO
and CAF.
CAPITALIZATION
Pro Forma
GRO CAF Reorganization
Class A Class A GRO
----------- --------- ---------------
Total Net Assets.................... $ 61,054,426 $ 29,756,677 $ 90,268,514
Shares Outstanding.................. $ 2,399,121 $ 2,486,081 $ 3,578,556
Net Asset Value Per Share........... $ 25.22 $ 11.96 $ 25.22
MANAGEMENT AND CERTAIN SERVICES PROVIDERS
DIRECTORS. The management of the business and affairs of CAF and GRO is the
responsibility of the Board of Directors of Van Eck/Chubb Funds. The Directors
of Van Eck/Chubb Funds consist of five persons, three of whom are not
"interested persons" as defined in the 1940 Act.
INVESTMENT ADVISER AND ADMINISTRATOR. Chubb Asset Managers, Inc., 15 Mountain
View Road, Warren, New Jersey 07061, serves as the investment adviser for CAF
and GRO and Van Eck Associates Corporation serves as investment administrator to
the Funds.
Pursuant to the Investment Management Agreements for CAF and GRO, Chubb Asset
Managers, Inc. is responsible for the investment of the Funds' portfolios
consistent with the Funds' investment objectives, policies and restrictions.
CAF and GRO pay advisory fees at the rates indicated under "Synopsis-Investment
Advisory Fees" above. CAF and GRO pay a separate fee for administrative
services. For additional information, see "Management of the Funds" in the Funds
Prospectus, and "Investment Advisory Services " in the Funds Statement of
Additional Information.
PORTFOLIO MANAGER. Robert Witkoff is the Portfolio Manager for CAF and GRO and
as such is responsible for managing the Funds' portfolio investments. Mr.
Witkoff has worked for Chubb Asset Managers since 1988.
TRANSFER AGENT. The Transfer Agent and Dividend Paying Agent for CAF and GRO is
DST Systems, Inc., P.O. Box 418407, Kansas City, Missouri 64141.
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SHARES OF GRO TO BE ISSUED IN THE REORGANIZATION AND SHARES OF CAF
SHARES. On the Exchange Date, all shareholders of CAF will be given a number of
shares of beneficial interest, par value $.01, of GRO having an aggregate net
asset value equal to the net asset value of his or her shares of CAF. The shares
of GRO to be issued in the Reorganization will be identical in all respects to
all shares of GRO then outstanding.
VOTING RIGHTS. Shareholders of GRO and CAF are entitled to one vote for each
share and a fractional vote for each fractional share held with respect to the
election of Directors (to the extent hereafter provided) and other matters
submitted to a vote of shareholders. With respect to the Rule 12b-1 Plans in
effect for GRO and CAF, the Plans may not be amended to increase materially the
amount of expenditures unless such amendment is approved by a vote of the
majority of the outstanding voting securities of that Fund. Thus, there will
ordinarily be no shareholder meeting unless required by the 1940 Act. The Board
of Van Eck/Chubb Funds, Inc. is a self-perpetuating body until fewer than 50% of
their members were elected by the shareholders. Under the Bylaws of Van
Eck/Chubb Funds, Inc., any Director may be removed by a vote of a majority of
the votes entitled to be cast for the election of Directors at any meeting of
stockholders duly called and at which a quorum is present. With respect to each
of CAF and GRO, each issued and outstanding share is entitled to participate
equally in dividends and distributions declared by such Fund and, upon
liquidation or dissolution, in the net assets of such Fund remaining after
satisfaction of outstanding liabilities.
CONTROL. As of ________, 1999, there were no persons who exercised control over
GRO or CAF as "control" is defined in the 1940 Act.
OTHER CLASSES. As of the date hereof, neither CAF nor GRO has any other classes
of securities outstanding as defined in the 1940 Act other than the shares
described herein.
SHAREHOLDER INQUIRIES. Shareholder inquiries with respect to GRO or CAF should
be addressed to the Funds by telephone at (800) 221-2220 or in writing at the
address set forth on the cover page of the Proxy Statement/Prospectus.
DIVIDENDS AND DISTRIBUTIONS. Any dividends and capital gains paid by CAF and GRO
will be automatically reinvested in additional shares of the fund at the fund's
net asset value at the close of business on the payment date of the dividend or
distribution unless the shareholder elects to receive all dividends and/or
distributions either in cash or to invest them without imposition of any sales
charge in any other Van Eck/Chubb Fund at such fund's net asset value at the
close of business on the payment date.
PURCHASE OF SHARES. Both prior to and subsequent to the Reorganization, shares
of GRO will be offered continuously for sale by the Distributor or by brokers
and agents that have entered into selling group or selling agency agreements
with the Distributor, 99 Park Avenue, New York, New York 10016. The
Reorganization will have no effect on the purchase procedures for shares of GRO.
See "How to Buy, Sell, Exchange or Transfer Shares" in the Prospectuses. For
more information on the Distributor, see "The Distributor" in the Statement of
Additional Information for Van Eck/Chubb Funds.
GRO and CAF have adopted Rule 12b-1 Plans in accordance with the 1940 Act. The
Rule 12b-1 Plans are described in "Synopsis-Other Fees" above. Each Rule12b-1
Plan must be approved annually by the Board of Directors. For more discussion of
the 12b-1 Plans, see "Plan of Distribution" in the Funds' Prospectus.
REDEMPTION PROCEDURES. Shares of each Fund will be redeemed on the day on which
proper instructions are received by its transfer agent. See "How to Buy, Sell,
Exchange or Transfer Shares" in the Van Eck/Chubb Funds' Prospectus.
INFORMATION CONCERNING THE MEETING
DATE, TIME AND PLACE OF MEETING
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The Meeting for shareholders of CAF will be held on __________, 1999 at 99 Park
Avenue, 8th Floor, New York, New York 10016 at 9:00 a.m., New York Time.
SOLICITATION, REVOCATION AND USE OF PROXIES
A shareholder executing and returning a proxy has the power to revoke it at any
time prior to its exercise by executing a superseding proxy or by submitting a
notice of revocation to the Secretary of the Trust at 99 Park Avenue, 8th Floor,
New York, New York 10016. Although mere attendance at the Meeting will not
revoke a proxy, a shareholder present at the Meeting may withdraw his or her
proxy and vote in person.
All shares represented by properly executed proxies, unless such proxies have
previously been revoked, will be voted at the Meeting in accordance with the
directions on the proxies; if no direction is indicated, the shares will be
voted "FOR" the approval of the Plan and any other proposals.
RECORD DATE AND OUTSTANDING SHARES
Only holders of record of CAF's shares of beneficial interest, par value $.01
per share, at the close of business on July 20, 1999 (the "Record Date") are
entitled to vote at the Meeting and any adjournment thereof. At the close of
business on the Record Date, there were ______________shares of CAF outstanding
and entitled to vote.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
No person or entity owns beneficially 5% or more of the shares of CAF or GRO
except as stated in "Introduction" above.
VOTING RIGHTS AND REQUIRED VOTE
Voting procedures are described under "The Reorganization-Terms of the Agreement
and Plan of Reorganization" above.
A proxy that is properly executed by a client and returned to his or her broker,
which holds CAF shares for the client in its own name, and that is accompanied
by the client's instructions to withhold authority to vote with respect to the
reorganization proposal, represents a broker "non-vote" (that is, a proxy from a
broker or nominee indicating that such person has not received instructions from
the beneficial owner or other person entitled to vote shares on the particular
matter with respect to which the broker or nominee does not have discretionary
power). Also, a properly executed and returned proxy marked with an abstention
will be considered present at the Meeting for purposes of determining the
existence of a quorum for the transaction of business. However, abstentions and
broker "non-votes" do not constitute a vote "for" or "against" the matter, and,
therefore, have the effect of a negative vote on matters which require approval
by a requisite percentage of the outstanding shares.
In the event a quorum ( a majority of shares entitled to vote) is not present at
the Meeting or in the event that a quorum is present but sufficient votes to
approve the Plan are not received, the persons named as proxies may propose one
or more adjournments of such Meeting to permit further solicitation of proxies.
Any such adjournment will require the affirmative vote of a majority of those
shares voted at the Meeting in person or by proxy. The persons named as proxies
will vote those proxies that they are entitled to vote in such manner as they
determine to be in the best interest of shareholders with respect to any
proposal to adjourn the Meeting. A shareholder vote may be taken on the
Reorganization prior to such adjournment if sufficient votes have been received
for approval.
Under Maryland law, shareholders of a registered investment company are not
entitled to demand fair value of the shares and will be bound by the terms of
the Reorganization if the Plan is approved at the Meeting. Any shareholder in
CAF may, however, either redeem his or her shares at net asset value or exchange
his or her shares into another Van Eck Fund or Van Eck/Chubb Fund prior to the
date of the Reorganization.
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OTHER MATTERS
It is not anticipated that any matters other than the adoption of the Plan
described above will be brought before the Meeting. If, however, any other
business is properly brought before the Meeting, proxies will be voted in
accordance with the judgment of the persons designated on such proxies.
ADDITIONAL INFORMATION
This Proxy Statement/Prospectus and the related Statement of Additional
Information do not include all the information set forth in the registration
statements and exhibits relating thereto which Van Eck/Chubb Funds, Inc., has
filed with the Securities and Exchange Commission, Washington, DC 20549, under
the Securities Act of 1933 and the Investment Company Act of 1940, to which
reference is hereby made.
Reports, proxy statements, registration statements and other information filed
by Van Eck/Chubb Funds, Inc., can be inspected and copied at the public
reference facilities of the Securities and Exchange Commission in Washington, DC
and Regional Offices of the Commission located at 7 World Trade Center, New
York, New York 10048 and Suite 1400, 500 West Madison Street, Chicago, Illinois
60621. Copies of such material can also be obtained by mail from the Public
Reference Branch, Office of Consumer Affairs and Information Services,
Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, DC 20549
and its public reference facilities in New York, New York and Chicago, Illinois,
at prescribed rates.
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EXHIBIT A
PLAN OF REORGANIZATION AND LIQUIDATION
PLAN OF REORGANIZATION AND LIQUIDATION dated as of ________, 1999 (the "Plan")
by and between Van Eck/Chubb Funds, Inc., a Maryland corporation (the
"Corporation") on behalf of Van Eck/Chubb Capital Appreciation Fund ("Capital
Appreciation Fund"), a series of the Corporation and on behalf of Van Eck/Chubb
Growth and Income Fund, another series of the Corporation. Van Eck/Chubb Capital
Appreciation Fund and Van Eck/Chubb Growth and Income Fund are collectively
referred to as the "Funds" and individually as a "Fund".
WITNESSETH:
WHEREAS, the Corporation is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, this Plan is intended to be and is adopted as a plan of reorganization
and liquidation within the meaning of Section 368(a)(1)(C) of the Internal
Revenue Code of 1986, as amended, such reorganization to consist of the transfer
of all of the assets of Capital Appreciation Fund in exchange solely for Class A
shares of common stock, par value $0.01 per share, of the Growth and Income Fund
("Growth and Income Fund Shares") and the assumption by Growth and Income Fund
of all of the stated liabilities of Capital Appreciation Fund and the
distribution, after the Closing hereinafter referred to, of Growth and Income
Fund Shares to the shareholders of Capital Appreciation Fund in liquidation of
Capital Appreciation Fund, all upon the terms and conditions hereinafter set
forth in this Plan; and
WHEREAS, the Directors of the Corporation, including a majority of the Directors
who are not interested persons, have determined with regard to the Funds that
participating in the transactions contemplated by this Plan is in the best
interests of that Fund.
NOW, THEREFORE, the Corporation hereby agree as follows:
1. TRANSFER OF ASSETS. Subject to the terms and conditions set forth herein, at
the closing provided for in Section 4 (herein referred to as the "Closing"), the
Corporation shall transfer all of the assets of Capital Appreciation Fund, and
assign all Assumed Liabilities (as hereinafter defined), to Growth and Income
Fund, and the Corporation, on behalf of Growth and Income Fund, shall acquire
all such assets, and shall assume all such Assumed Liabilities, upon delivery to
the Corporation of Growth and Income Fund Shares having a net asset value equal
to the value of the net assets of Capital Appreciation Fund transferred (the
"New Shares"). "Assumed Liabilities" shall mean all liabilities, expenses,
costs, charges and reserves reflected in an unaudited statement of assets and
liabilities of Capital Appreciation Fund as of the close of business on the
Valuation Date (as hereinafter defined), determined in accordance with generally
accepted accounting principles consistently applied from the prior audited
period. The net asset value of the New Shares and the value of the net assets of
Capital Appreciation Fund to be transferred shall be determined as of the close
of regular trading on the New York Stock Exchange on the business day next
preceding the Closing (the "Valuation Date") using the valuation procedures set
forth in the then-current prospectus and statement of additional information of
the Funds.
All Assumed Liabilities of Capital Appreciation Fund, to the extent that they
exist at or after the Closing, shall after the Closing attach to Growth and
Income Fund and may be enforced against Growth and Income Fund to the same
extent as if the same had been incurred by Growth and Income Fund.
<PAGE>
2. LIQUIDATION OF CAPITAL APPRECIATION FUND. At or as soon as practicable after
the Closing, Capital Appreciation Fund will be liquidated and the New Shares
delivered to the Corporation on behalf of Capital Appreciation Fund will be
distributed to shareholders of Capital Appreciation Fund, each shareholder to
receive the number of New Shares equal to the pro rata portion of shares of
beneficial interest of Capital Appreciation Fund held by such shareholder as of
the close of business on the Valuation Date. Such liquidation and distribution
will be accompanied by the establishment of an open account on the stock records
of Growth and Income Fund in the name of each shareholder of Capital
Appreciation Fund and representing the respective pro rata number of New Shares
due such shareholder. As soon as practicable after the Closing, the Corporation
shall file on behalf of Capital Appreciation Fund such instruments of
dissolution, if any, as are necessary to effect the dissolution of Capital
Appreciation Fund and shall take all other steps necessary to complete
liquidation and dissolution of Capital Appreciation Fund. As of the Closing,
each outstanding certificate which, prior to the Closing, represented shares of
Capital Appreciation Fund will be deemed for all purposes to evidence ownership
of the number of Growth and Income Fund Shares issuable with respect thereto
pursuant to the Reorganization. After the Closing, certificates of originally
represented shares of Capital Appreciation Fund will be rendered nonnegotiable;
upon special request and surrender of such certificates to the Corporation's
transfer agent, holders of these non-negotiable certificates shall be entitled
to receive certificates representing the number of Growth and Income Fund shares
issuable with respect thereto.
3. CONDITIONS PRECEDENT. The obligations of the Corporation, to effectuate the
Plan of Reorganization and Liquidation hereunder shall be subject to the
satisfaction of the following conditions:
(a) At or immediately prior to the Closing, the Corporation shall have declared
and paid a dividend or dividends which, together with all previous such
dividends, shall have the effect of distributing to the shareholders of
Capital Appreciation Fund all of the Fund's investment company taxable
income, if any, for taxable years ending at or prior to the Closing
(computed without regard to any deduction for dividends paid) and all of its
net capital gain, if any, realized in taxable years ending at or prior to
the Closing (after reduction for any capital loss carry-forward);
(b) Such authority and orders from the Securities and Exchange Commission (the
"Commission") and state securities commissions as may be necessary to permit
the Corporation to carry out the transactions contemplated by this Plan
shall have been received;
(c) A registration statement of the Corporation on Form N-14 under the
Securities Act of 1933, as amended (the "Securities Act"), registering the
New Shares under the Securities Act, and such amendment or amendments
thereto as are determined by the officers of the Corporation to be necessary
or appropriate to effect such registration of the New Shares (the
"Registration Statement"), shall have been filed with the Commission and the
Registration Statement shall have become effective, and no stop-order
suspending the effectiveness of such Registration Statement shall have been
issued, and no proceeding for that purpose shall have been initiated or
threatened by the Commission (and not withdrawn or terminated);
(d) All necessary actions shall have been taken in order to enable Growth and
Income Fund to offer the New Shares to the public in all states in which the
ability to offer such New Shares is required for consummation of the
transactions contemplated hereunder;
(e) The Corporation shall have received a legal opinion from counsel, in form
and substance reasonably satisfactory to the Directors of the Corporation,
as to the tax consequences of the reorganization;
(f) A vote approving this Plan and the reorganization contemplated hereby shall
have been adopted by at least a majority of the outstanding shares of
beneficial interest of Capital Appreciation Fund entitled to vote at a
Meeting of Shareholders of Capital Appreciation Fund duly called for such
purpose.
<PAGE>
4. CLOSING. The Closing shall be held at the offices of the Corporation and
shall occur (a) immediately prior to the opening of business on the first Monday
following receipt of all necessary regulatory approvals and the final
adjournment of meetings of shareholders of Capital Appreciation Fund at which
this Plan is considered or (b) such later time as the parties may agree. All
acts taking place at the Closing shall be deemed to take place simultaneously
unless otherwise provided. At, or as soon as may be practicable following the
Closing, the Corporation shall distribute the New Shares to Capital Appreciation
Fund Record Holders (as herein defined) by instructing Capital Appreciation Fund
to register the appropriate number of New Shares in the names of Capital
Appreciation Fund's shareholders and Capital Appreciation Fund will promptly
comply with said instruction. The shareholders of record of the Capital
Appreciation Fund as of the close of business on the Valuation Date shall be
certified by the Corporation's transfer agent (the "Capital Appreciation Fund
Record Holders").
5. EXPENSES. All expenses of the Corporation attributable to the transactions
contemplated by this Plan, other than any registration fee payable to the
Commission in connection with the registration of New Shares under the
Securities Act or any filing or notification fee payable to the Commission or
state securities commission in connection with the transactions contemplated by
this Plan, will be borne by Capital Appreciation Fund. Any registration fee
payable to the Commission in connection with the registration of New Shares
under the Securities Act or any filing or notification fee payable to the
Commission or state securities commission in connection with the transactions
contemplated by this Plan shall be payable by such Fund required to pay such
fee. All fees payable by any party as described herein shall be payable by such
party regardless of whether the transactions contemplated hereby are
consummated.
6. TERMINATION. This Plan and the transactions contemplated hereby may be
terminated and abandoned by resolution of the Board of Directors of the
Corporation with respect to either of Growth and Income Fund or Capital
Appreciation Fund, at any time prior to the Closing, if circumstances should
develop that, in the opinion of the Board, in its sole discretion, make
proceeding with this Plan inadvisable for either Fund. In the event of any such
termination, there shall be no liability for damages on the part of either
Capital Appreciation Fund or Growth and Income Fund, or their respective
Directors or officers, to the other party, except with respect to the payment of
expenses as contemplated in Section 5 hereof.
7. AMENDMENTS. This Plan may be amended, waived or supplemented in such manner
as may be mutually agreed upon in writing by the authorized officers of the
Corporation; provided, however, that following the meeting of Capital
Appreciation Fund shareholders called by the Corporation pursuant to Section
3(f) of this Plan, no such amendment, waiver or supplement may have the effect
of changing the provisions for determining the number of Growth and Income Fund
Shares to be issued to the Capital Appreciation Fund shareholders under this
Plan to the detriment of such shareholders without their further approval.
8. GOVERNING LAW. This Plan shall be governed and construed in accordance with
the laws of the State of Maryland, without giving effect to the conflicts of
laws provisions thereof.
9. FURTHER ASSURANCES. Unless the Plan has been terminated pursuant to Section 6
hereof, the Corporation with respect to Growth and Income Fund and Capital
Appreciation Fund, shall take such further action, prior to, at, and after the
Closing as may be necessary or desirable and proper to consummate the
transactions contemplated hereby.
IN WITNESS WHEREOF, the Directors of the Corporation have approved this Plan on
behalf of the Funds.
<PAGE>
VAN ECK/CHUBB FUNDS
99 PARK AVENUE, 8TH FLOOR
NEW YORK, NEW YORK 10016
1-800-826-2333
---------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
---------------------------------------
This Statement of Additional Information is not a prospectus and should be read
in conjunction with the Proxy Statement/Prospectus of Capital Appreciation Fund
(the "Fund" or "CAF"), a series of Van Eck/Chubb Funds, dated ________, 1999,
which is enclosed. This Statement of Additional Information has been
incorporated by reference into the Proxy Statement/Prospectus.
Further information about the Fund and the Growth and Income Fund ("GRO") series
of Van Eck/Chubb Funds is contained in and incorporated by reference to its
latest Prospectus and Statement of Additional Information, dated May 1, 1999 and
its Annual Report to shareholders for the year ended December 31, 1998, all of
which are incorporated by reference herein and are available at no cost by
either calling Van Eck/Chubb Funds at the phone number listed above or by
writing to the above address.
The following is the pro-forma information for GRO and CAF.
THIS STATEMENT OF ADDITIONAL INFORMATION IS DATED____________, 1999.
<PAGE>
TABLE OF CONTENTS PAGE
===============================================================================
General Information ........................................................ 2
GENERAL INFORMATION
The shareholders of CAF are being asked to approve a Plan of Reorganization and
Liquidation (the "Plan") which contemplates the exchange of substantially all of
the assets of CAF for shares of GRO, the assumption of the liabilities of CAF by
GRO, the distribution of GRO shares to the shareholders of CAF and the
liquidation of CAF. GRO is an open-end management investment Corporation
registered under the Investment Corporation Act of 1940 and a series of Van
Eck/Chubb Funds organized as a Maryland corporation. A Special Meeting of
Shareholders to consider the Plan and other matters described in the Proxy
Statement/Prospectus will be held at 99 Park Avenue, 8th Floor, New York, New
York on, _________, ___________, 1999 at 9:00 a.m., New York Time.
For detailed information about the Plan, shareholders of CAF should refer to the
Proxy Statement/Prospectus.
2
<PAGE>
Pro Forma Information
COMBINED SCHEDULE OF INVESTMENTS FOR
VAN ECK/CHUBB GROWTH AND INCOME FUND AND
VAN ECK/CHUBB CAPITAL APPRECIATION FUND
PRO FORMA SCHEDULE OF INVESTMENTS
MAY 28, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
MARKET VALUE
--------------------------------------------
VAN ECK/CHUBB VAN ECK/CHUBB PRO FORMA
GROWTH & CAPITAL FOR COMBINED
SHARES INCOME FUND APPRECIATION FUND FUND
-------- ------------ --------------- -----------
<S> <C> <C> <C> <C>
COMMON STOCK--89.89%
Aerospace--0.91%
General Motors Co. ................................. 15,000 $ 0 $ 823,125 $ 823,125
---------- --------- ----------
Autos, Trucks & Parts--3.75%
Borg-Warner Automotive, Inc. ....................... 26,600 1,474,639 0 1,474,639
Ford Motor Co. ..................................... 21,600 1,232,550 0 1,232,550
OEA, Inc. .......................................... 65,000 0 654,063 654,063
United Road Services, Inc. ......................... 3,500 0 27,125 27,125
---------- ---------- ----------
2,707,189 681,188 3,388,377
---------- ---------- ----------
Banking--7.56%
Charter One Financial, Inc. ........................ 22,000 625,625 625,625
Chase Manhattan Corp. .............................. 24,200 1,754,500 0 1,754,500
Fleet Financial Group, Inc. ........................ 35,000 1,439,375 0 1,439,375
KeyCorp ............................................ 46,622 1,620,114 0 1,620,114
New Bank One Corp .................................. 24,479 1,384,593 0 1,384,593
---------- ---------- ----------
6,198,582 625,625 6,824,207
---------- ---------- ----------
Building & Construction--0.94%
Champion Enterprises, Inc. ......................... 41,300 0 844,069 844,069
---------- ---------- ----------
Building Materials & Tools--0.79%
Lafarge Corp. ...................................... 21,200 0 708,875 708,875
---------- ---------- ----------
Chemicals/Fertilizer--0.13%
Millennium Chemicals Inc. .......................... 4,857 121,121 0 121,121
---------- ---------- ----------
Computer Products & Services--12.95%
BancTec, Inc. ...................................... 41,800 674,025 674,025
BMC Software Inc. .................................. 25,000 1,235,937 0 1,235,937
Compuware Corp. .................................... 40,000 1,242,500 0 1,242,500
International Business Machines Corp. .............. 16,000 1,861,000 0 1,861,000
Keane Inc. ......................................... 24,000 0 696,000 696,000
Metamor Worldwide Inc. ............................. 25,000 0 684,375 684,375
Microsoft Corp. .................................... 23,000 1,855,813 0 1,855,813
</TABLE>
SEE NOTES TO PRO FORMA FINANCIAL STATEMENTS
3
<PAGE>
<TABLE>
<CAPTION>
MARKET VALUE
--------------------------------------------
VAN ECK/CHUBB VAN ECK/CHUBB PRO FORMA
GROWTH & CAPITAL FOR COMBINED
SHARES INCOME FUND APPRECIATION FUND FUND
-------- ------------ --------------- -----------
<S> <C> <C> <C> <C>
Computer Products & Services (continued)
Parametric Technology Corp. ........................ 50,000 $ 0 $ 693,750 $ 693,750
Reynolds and Reynolds Co. (Class A) ................ 32,000 0 700,000 700,000
Storage Technology Corp. ........................... 19,000 0 377,625 377,625
Sun Microsystems Inc. .............................. 28,000 1,673,000 0 1,673,000
---------- ---------- -----------
7,868,250 3,825,775 11,694,025
---------- ---------- -----------
Drugs--0.65%
AmeriSource Health Corp. ........................... 20,000 0 591,250 591,250
---------- ---------- -----------
Electrical Equipment--1.86%
Gillette Co. ....................................... 33,000 1,683,000 0 1,683,000
---------- ---------- -----------
Electronics--5.14%
General Electric Co. ............................... 17,000 1,728,687 0 1,728,687
Koninklijke Philips Elec ........................... 16,500 1,419,000 0 1,419,000
Motorola Inc. ...................................... 18,000 1,490,625 0 1,490,625
---------- ---------- -----------
4,638,312 0 4,638,312
---------- ---------- -----------
Financial Services--4.12%
CCB Financial Corp. ................................ 12,000 0 647,250 647,250
Merrill Lynch & Co., Inc. .......................... 16,100 1,352,400 0 1,352,400
Washington Mutual Inc. ............................. 45,000 1,718,438 0 1,718,438
---------- ---------- -----------
3,070,838 647,250 3,718,088
---------- ---------- -----------
Food Processing--0.00%
Archer-Daniels-Midland Co. ......................... 132 0 1,980 1,980
---------- ---------- -----------
Household Products--2.59%
Procter & Gamble ................................... 15,000 1,400,625 0 1,400,625
Tupperware Corp. ................................... 42,000 0 934,500 934,500
---------- ---------- -----------
1,400,625 934,500 2,335,125
---------- ---------- -----------
Housing and Home Furnishings--0.03%
Newmark Homes Corp. ................................ 5,000 0 28,750 28,750
---------- ---------- -----------
Industrial Metals--0.96%
Bethlehem Steel Corp. .............................. 50,000 0 415,625 415,625
Intermet Corp. ..................................... 32,500 0 450,937 450,937
---------- ---------- -----------
0 866,562 866,562
---------- ---------- -----------
Insurance--2.58%
Citigroup Inc. ..................................... 24,000 1,590,000 0 1,590,000
Commerce Group, Inc. ............................... 31,800 0 737,362 737,362
---------- ---------- -----------
1,590,000 737,362 2,327,362
---------- ---------- -----------
</TABLE>
SEE NOTES TO PRO FORMA FINANCIAL STATEMENTS
4
<PAGE>
<TABLE>
<CAPTION>
MARKET VALUE
---------------------------------------------
VAN ECK/CHUBB VAN ECK/CHUBB PRO FORMA
GROWTH & CAPITAL FOR COMBINED
SHARES INCOME FUND APPRECIATION FUND FUND
-------- ------------ --------------- -----------
<S> <C> <C> <C> <C>
Machinery & Tools--0.37%
Brown & Sharpe Manufacturing Co. (Cl.A) .............. 60,000 $ 0 $ 330,000 $ 330,000
---------- ---------- ----------
Manufacturing--1.65%
United Technologies Corp. ............................ 24,000 1,489,500 0 1,489,500
---------- ---------- ----------
Medical-Healthcare Services--5.49%
Baxter International Inc. ............................ 20,000 1,291,250 0 1,291,250
Bristol-Myers Squibb Co. ............................. 28,000 1,921,500 0 1,921,500
Healthcare Services Corp. ............................ 96 912 0 912
Healthsouth Corp. .................................... 130,000 1,738,750 0 1,738,750
---------- ---------- ----------
4,952,412 0 4,952,412
---------- ---------- ----------
Medical Supplies & Services--4.25%
Bard (C.R.), Inc. .................................... 14,000 0 639,625 639,625
Beckman Coulter Inc. ................................. 9,100 0 461,825 461,825
Becton, Dickinson & Co. .............................. 20,000 0 775,000 775,000
St. Jude Medical, Inc. ............................... 30,000 0 1,014,375 1,014,375
Total Renal Care Holdings, Inc. ...................... 61,400 0 944,025 944,025
---------- ---------- ----------
0 3,834,850 3,834,850
---------- ---------- ----------
Oil & Gas Equipment & Services--3.07%
Core Laboratories N.V. ............................... 40,000 0 625,000 625,000
Halliburton Co. ...................................... 40,000 1,655,000 0 1,655,000
Wolverine Tube, Inc. ................................. 20,500 0 488,156 488,156
---------- ---------- ----------
1,655,000 1,113,156 2,768,156
---------- ---------- ----------
Pharmaceutical--3.95%
Bergen Brunswig Corp. ................................ 23,000 0 506,000 506,000
ICN Pharmaceuticals, Inc. ............................ 25,000 0 821,875 821,875
Johnson & Johnson .................................... 20,000 1,852,500 0 1,852,500
Sepracor Inc. ........................................ 6,000 0 382,500 382,500
---------- ---------- ----------
1,852,500 1,710,375 3,562,875
---------- ---------- ----------
Restaurants--1.29%
Brinker International, Inc. .......................... 20,000 0 561,250 561,250
Lone Star Steakhouse & Saloon, Inc. .................. 60,000 0 603,750 603,750
---------- ---------- ----------
0 1,165,000 1,165,000
---------- ---------- ----------
Retail--5.73%
BJ Wholesale Club, Inc. .............................. 25,000 0 650,000 650,000
Gap Inc. ............................................. 20,000 1,251,250 0 1,251,250
Great Atlantic & Pacific Tea Co., Inc. ............... 17,500 0 573,125 573,125
Tandy Corp. .......................................... 10,000 0 825,000 825,000
Wal-Mart Stores, Inc. ................................ 44,000 1,875,500 0 1,875,500
---------- ---------- ----------
3,126,750 2,048,125 5,174,875
---------- ---------- ----------
</TABLE>
SEE NOTES TO PRO FORMA FINANCIAL STATEMENTS
5
<PAGE>
<TABLE>
<CAPTION>
MARKET VALUE
---------------------------------------------
VAN ECK/CHUBB VAN ECK/CHUBB PRO FORMA
GROWTH & CAPITAL FOR COMBINED
SHARES INCOME FUND APPRECIATION FUND FUND
-------- ------------ --------------- -----------
<S> <C> <C> <C> <C>
Semiconductors & Semiconductor Equipment--0.72%
Intel Corp. ..................................... 12,000 $ 648,750 $ 0 $ 648,750
----------- ----------- -----------
Supermarkets--2.59%
Kroger Co. ...................................... 40,000 2,342,500 0 2,342,500
----------- ----------- -----------
Technology--3.47%
Hewlett-Packard Co. ............................. 23,000 2,169,187 0 2,169,187
Wyman-Gordon Co. ................................ 50,000 0 965,625 965,625
----------- ----------- -----------
2,169,187 965,625 3,134,812
----------- ----------- -----------
Telecommuncications--3.61%
AT&T Corp. ...................................... 30,000 1,665,000 0 1,665,000
Lucent Technologies Inc. ........................ 28,000 1,592,500 0 1,592,500
----------- ----------- -----------
3,257,500 0 3,257,500
----------- ----------- -----------
Telephone--2.74%
Centurytel Inc. ................................. 15,000 0 574,688 574,688
MCI Worldcom Inc. ............................... 22,000 1,900,250 0 1,900,250
----------- ----------- -----------
1,900,250 574,688 2,474,938
----------- ----------- -----------
Thrift Holding Company--2.99%
Cisco Systems, Inc. ............................. 12,000 1,306,500 0 1,306,500
Oracle Systems Corp. ............................ 56,000 1,389,500 0 1,389,500
----------- ----------- -----------
2,696,000 0 2,696,000
----------- ----------- -----------
Transportation & Shipping--2.17%
FDX Corp. ....................................... 35,600 1,960,225 0 1,960,225
------ ----------- ----------- -----------
Vision Care--0.84%
BMC Industries Inc. ............................. 75,000 0 754,688 754,688
----------- ----------- -----------
TOTAL INVESTMENTS* .............................. 89.89% 57,328,491 23,812,818 81,141,309
Other assets less liabilities ................... 10.11% 3,725,935 5,943,859 9,127,205
------ ----------- ----------- -----------
TOTAL NET ASSETS ................................ 100.00% $61,054,426 $29,756,677 $90,268,514
====== =========== =========== ===========
INVESTMENTS AT COST ............................. $47,215,327 $27,841,586 $75,056,913
=========== =========== ===========
</TABLE>
- -----------------------
* Aggregate cost for Federal income tax purposes.
SEE NOTES TO PRO FORMA FINANCIAL STATEMENTS
6
<PAGE>
The following unaudited pro forma Combined Statement of Assets, Liabilities and
Capital for the Combined Fund has been derived from the Statements of Assets,
Liabilities and Capital of the respective Funds at May 28, 1999 and such
information has been adjusted to give effect to the Reorganization as if the
Reorganization had occurred at May 28, 1999. The pro forma Combined Statements
of Assets, Liabilities and Capital is presented for informational purposes only
and does not purport to be indicative of the financial condition that actually
would have resulted if the Reorganization had been consummated at May 28, 1999.
The pro forma Combined Statement of Assets, Liabilities and Capital should be
read in conjunction with the Funds' financial statements and related notes
thereto which are included in the accompanying Proxy Statement/Prospectus.
PRO FORMA COMBINED STATEMENT OF ASSETS, LIABILITIES AND CAPITAL
AS OF MAY 28, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
VAN ECK/CHUBB VAN ECK/CHUBB
CAPITAL GROWTH & PRO FORMA PRO FORMA FOR
APPRECIATION FUND INCOME FUND ADJUSTMENT COMBINED FUND
--------------- ----------- ---------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments at Cost ............................ $27,841,586 $47,215,327 $ 0 $75,056,913
========== ========== ========== ===========
Investments at Value ........................... $23,812,818 $57,328,491 $ 0 $81,141,309
Receivables:
Cash and currencies ......................... 5,950,743 3,788,592 0 9,739,335
Dividends ................................... 10,868 35,178 0 46,046
Securities sold ............................. 141,570 0 0 141,570
From Broker ................................. 0 41,320 0 41,320
Deferred organizational costs .................. 3,337 0 (3,337)(b) 0
Other assets ................................ 12,991 16,084 0 29,075
---------- ---------- ---------- -----------
Total Assets .............................. 29,932,327 61,209,665 (3,337) 91,138,655
---------- ---------- ---------- -----------
LIABILITIES:
Payables:
Securities purchased ........................ 100,000 0 0 100,000
Capital shares redeemed ..................... 147 15,706 550,596* 566,449
Accounts payable ............................ 75,503 139,533 (11,344)(b)(c) 203,692
---------- ---------- ---------- -----------
Total Liabilities ......................... 175,650 155,239 539,252 870,141
---------- ---------- ---------- -----------
Net Assets ..................................... $29,756,677 $61,054,426 $ (542,589) $90,268,514
========== ========== ========== ===========
Net Assets Consist of:
Par value ...................................... $ 24,861 $ 23,991 $ (13,066)(a)* $35,786
Capital paid in excess of par .................. 38,197,703 46,143,043 (537,530)(a)* 83,803,216
Overdistributed investment income-- net ........ (8,990) (264) 8,007(c) (1,247)
Accumulated realized capital gains (losses)
on investments-- net ........................ (4,428,129) 4,774,492 346,363
Unrealized appreciation of investments ......... (4,028,768) 10,113,164 6,084,396
---------- ---------- ---------- -----------
Net Assets ..................................... $29,756,677 $61,054,426 $ (542,589) $90,268,514
========== ========== ========== ===========
</TABLE>
SEE NOTES TO PRO FORMA FINANCIAL STATEMENTS
7
<PAGE>
<TABLE>
<CAPTION>
VAN ECK/CHUBB VAN ECK/CHUBB
CAPITAL GROWTH & PRO FORMA PRO FORMA FOR
APPRECIATION FUND INCOME FUND ADJUSTMENT COMBINED FUND
--------------- ----------- ---------- -------------
<S> <C> <C> <C> <C>
Class A Shares
Net Assets ..................................... $29,745,343 $60,515,164 $90,268,514
=========== =========== ===========
Shares outstanding ($.01 par value,
100,000,000 shares per fund authorized) ..... 2,486,081 2,399,121 $(1,306,646)(a) 3,578,556
Net Asset Value Per Share ...................... $ 11.96 $ 25.22 25.22
Maximum Offering Price Per Share (Net Asset
Value Per Share divided by 0.9425) .......... $ 12.69 $ 26.76 $ 26.76
=========== =========== ===========
Class B Shares
Net Assets ..................................... $ 11,334 $ 539,262 (550,596)* 0
=========== ===========
Shares outstanding ($.01 par value,
100,000,000 shares per fund authorized) ..... 952 21,479 (22,431)* 0
Net Asset Value Per Share ...................... $ 11.91 $ 25.11 $ 0
=========== =========== ===========
</TABLE>
- ---------------------
* Represents the effect of capital stock due to the difference in par value
between the Funds and the liquidation of Class B shares for both funds on
June 16,1999.
(a) Reflects the issuance of 1,179,435 shares of Van Eck/Chubb Growth & Income
Fund Class A to the shareholders of Van Eck/Chubb Capital Appreciation Fund
Class A in exchange for the 2,486,081 outstanding Class A shares of Van
Eck/Chubb Capital Appreciation Fund.
(b) Reflects write-off of unamortized organizational expenses.
(c) Reflects expenses eliminated from the liquidation of the Class B shares for
both Funds prior to the reorganization.
SEE NOTES TO PRO FORMA FINANCIAL STATEMENTS
8
<PAGE>
The following unaudited pro forma Combined Statement of Operations for the
Combined Fund has been derived from the statements of operations of the
respective Funds for the year ended May 28, 1999, and such information has been
adjusted to show the effect of the Reorganization on the combined Funds
operations for the year ended May 28, 1999. The pro forma Combined Statement of
Operations is presented for informational purposes only and does not purport to
be indicative of the results of operations that actually would have resulted if
the Reorganization had been consummated on May 28, 1999 nor which may result
from future operations. The pro forma Combined Statement of Operations should be
read in conjunction with the Funds' financial statements and related notes
thereto which are included in the accompanying Proxy Statement/Prospectus.
PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MAY 28, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
Van Eck/Chub Van Eck/Chubb
Capital Growth & Pro Forma Pro Forma for
Appreciation Fund Income Fund Adjustment Combined Fund
--------------- ----------- ---------- -------------
<S> <C> <C> <C> <C>
INCOME:
Dividends ...................................... $ 387,270 $ 1,077,319 $ 0 $ 1,464,589
----------- ----------- ---------- -----------
Total Income ................................ 387,270 1,077,319 0 1,464,589
----------- ----------- ---------- -----------
EXPENSES:
Advisory fee ................................... 66,375 134,536 (909)(a) 200,002
Distribution ................................... 165,975 338,550 (4,544)(a) 499,981
Custodian ...................................... 2,671 2,886 0 5,557
Transfer agency ................................ 56,648 121,862 (7,844)(a) 170,666
Administrative fee ............................. 156,946 323,822 (2,045)(a) 478,723
Registration ................................... 27,132 29,685 0 56,817
Professional ................................... 18,965 22,557 (19,522)(b) 22,000
Reports to shareholders ........................ 23,552 35,845 0 59,397
Directors fees and expenses .................... 2,049 4,206 0 6,255
Amortization of deferred organizational costs .. 2,690 0 (2,690)(c) 0
Other .......................................... 18,323 30,854 0 49,177
----------- ----------- ---------- -----------
Total Expenses .............................. 541,326 1,044,803 (37,554) 1,548,575
Expenses waived by the Advisor ................. (124,161) (196,966) 29,547 (291,580)
----------- ----------- ---------- -----------
NET EXPENSES ................................ 417,165 847,837 (8,007) 1,256,995
----------- ----------- ---------- -----------
NET INVESTMENT INCOME (LOSS) ................ (29,895) 229,482 8,007 207,594
----------- ----------- ---------- -----------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net Realized Gain on Investments ............... (4,149,367) 3,532,577 (616,790)
Change in Unrealized Appreciation of
Investments ................................. (7,400,059) (11,207,446) (18,607,505)
----------- ---------- ---------- -----------
(11,549,426) (7,674,869) (19,224,295)
----------- ---------- ---------- -----------
NET DECREASE IN NET ASSETS
RESULTING FROM OPERATIONS .................. $(11,579,321) $(7,445,387) $ 8,007 $(19,016,701)
============ =========== ========== ============
</TABLE>
- -------------------
(a) Reflects expenses eliminated from the liquidation of the Class B shares for
both Funds prior to the reorganization.
(b) Reflects anticipated savings of the
reorganization.
(c) Reflects write-off of unamortized organizational expenses.
SEE NOTES TO PRO FORMA FINANCIAL STATEMENTS
9
<PAGE>
PRO FORMA FOOTNOTES OF REORGANIZATION BETWEEN
VAN ECK/CHUBB GROWTH & INCOME FUND AND VAN ECK/CHUBB CAPITAL APPRECIATION FUND
May 28, 1999 (UNAUDITED)
1. GENERAL
The accompanying pro forma financial statements are presented to show the effect
of the proposed reorganization of Van Eck/Chubb Capital Appreciation Fund into
Van Eck/Chubb Growth and Income Fund, as if such reorganization had taken place
as of May 28, 1999.
Under the terms of the Plan of Reorganization and Liquidation, the
reorganization of the Funds will be treated as a tax-free business combination
and accordingly will be accounted for by a method of accounting for tax free
combinations of investment companies (sometimes referred to as the pooling
without restatement method). The reorganization would be accomplished by an
acquisition of the Class A net assets of Capital Appreciation Fund in exchange
for shares of Van Eck/Chubb Growth and Income Fund at the Class A net asset
value. The statement of assets and liabilities and the related statement of
operations of Van Eck/Chubb Growth and Income Fund and Capital Appreciation Fund
have been combined as of and for the year ended May 28, 1999.
In connection with the reorganization, during June 1999 all of the outstanding
Class B shares for both Funds were liquidated. The impact of the liquidation has
been reflected in the proforma combined financial statement.
The accompanying pro forma financial statements should be read in conjunction
with the financial statements and schedule of investments of Capital
Appreciation Fund and Van Eck/Chubb Growth and Income Fund which are included in
their annual reports dated December 31, 1998. The pro forma combined financial
statements are presented for informational purposes and may not necessarily be
representative of what actual combined financial statements would have been had
the reorganization occurred on May 28, 1999.
The following notes refer to the accompanying pro forma financial statements as
if the above mentioned reorganization of Capital Appreciation Fund and Van
Eck/Chubb Growth and Income Fund had taken place as of May 28, 1999.
2. SIGNIFICANT ACCOUNTING POLICIES
Van Eck/Chubb Funds, Inc., of which Van Eck/Chubb Growth and Income Fund is a
series, is a Maryland corporation. Van Eck/Chubb Growth and Income Fund is
registered under the Investment Company Act of 1940, as amended, as
non-diversified, open-end management investment company.
The significant accounting policies consistently followed by Van Eck/Chubb
Growth and Income Fund are (a) securities transactions are accounted for on the
trade date (b) debt instruments are valued on the basis of quotes provided by a
pricing service; short-term investments that have a maturity of more than 60
days are valued at prices based on market quotations; short-term investments
that have a maturity of 60 days or less are valued at cost plus accreted
discount, or minus amortized premiums, as applicable (c) interest and dividend
income is recorded on the accrual basis (d) gains or losses on the sale of
securities are calculated by using the first-in, first-out method (e) direct
expenses are charged to the fund (f) dividends and distributions to shareholders
are recorded on the ex-dividend date (g) Van Eck/Chubb Growth and Income Fund
intends to comply with the requirements of the Internal Revenue Code pertaining
to regulated investment companies and to make the required distributions to
shareholders; therefore, no provision for Federal income taxes has been made.
3. PRO FORMA ADJUSTMENTS
The accompanying pro forma financial statements reflect changes in fund shares
as if the reorganization had taken place on May 28, 1999. In addition,
adjustments have been made to reflect the liquidation of Class B shares for both
Funds prior to reorganization. Adjustments have been made to expenses for the
combined fund expense structure and elimination of duplicated services that
would not have been incurred if the reorganization had taken place on May 28,
1999.
10
<PAGE>
4. MANAGEMENT AGREEMENT AND TRANSACTIONS WITH AFFILIATED PERSONS
Chubb Asset Managers, Inc. acts as investment manager and Van Eck Associates
Corporation acts as investment administrator of Van Eck/Chubb Growth and Income
Fund. Van Eck/Chubb Growth and Income Fund pays a management fee calculated at
the annual rate of 0.20% of the first $200 million of average daily net assets,
.19% of the next $1.1 billion of average daily net assets and .18% of average
daily net assets in excess of $1.3 billion. Van Eck/Chubb Growth and Income Fund
pays an administration fee calculated at an annual rate of 0.45% of the first
$200 million of average daily net assets, .41% of the next $1.1 billion of
average daily net assets and .37% of average daily net assets in excess of $1.3
billion. The 12b-1 fees are accrued daily at an annual rate of .25% of average
daily net assets. All fees are calculated daily and paid monthly. Effective May
1, 1999, the expense limitation was 1.35% of average daily net assets of Class A
shares. Prior to May 1,1999, the expense limitation was 1.25% of average daily
net assets of Class A shares.
11
<PAGE>
PART C
OTHER INFORMATION
Item 15. Indemnification
Reference is made to Article VII, Section 10 of the Registrant's Amended and
Restated Articles of Incorporation filed herein as Exhibit 1 to this
Registration Statement and to Article V of the Registrant's By-Laws filed herein
as Exhibit 2 to this Registration Statement. The Articles of Incorporation
provide that neither an officer nor director of the Registrant will be liable to
the Registrant or its shareholders for monetary damages for breach of fiduciary
duty as an officer or director, except to the extent such limitation of
liability is not otherwise permitted by law. The By-Laws provide that the
Registrant will indemnify its directors and officers to the extent permitted or
required by Maryland law. A resolution of the Board of Directors specifically
approving payment or advancement of expenses to an officer is required by the
By-Laws. Indemnification may not be made if the director or officer has incurred
liability by reason or willful misfeasance, bad faith, gross negligence or
reckless disregard of duties in the conduct of his/her office ("Disabling
Conduct"). The means of determining whether indemnification shall be made are
(1) a final decision by a court or other-body before
WHOM THE PROCEEDING IS BROUGHT THAT THE DIRECTOR OR OFFICER WAS NOT LIABLE BY
reason of Disabling Conduct, or (2) in the absence of such a decision, a
reasonable determination, based on a review of the facts, that the director or
officer was not liable by reason of Disabling Conduct. Such latter determination
may be made either by (a) vote of a majority of directors who are neither
interested persons (as defined in the Investment Company Act of 1940) nor
parties to the proceeding or (b) independent legal counsel in a written opinion.
The advancement of legal expenses may not occur unless the director or officer
agrees to repay the advance (if it is determined that he/she is not entitled to
the indemnification) and one of three other conditions is satisfied: (1) the
director or officer provides security for his/her agreement to repay, (2) the
Registrant is insured against loss by reason of lawful advances, or (3) the
directors who are not interested persons and are not parties to the proceedings,
or independent counsel in a written opinion, determine that there is reason to
believe that the director or officer will be found entitled to indemnification.
The directors and officers are currently covered for liabilities incurred in
their capacities as such directors and officers under the terms of a joint
liability insurance policy. This policy also covers the directors and officers
of Chubb Investment Advisory, Chubb Asset and Chubb America Fund, Inc. The
policy also insures the Registrant, Chubb Investment Advisory, Chubb Asset and
Chubb America Fund, Inc. for errors and omissions liabilities.
Insofar as indemnification for liability arising under the Securities
Act of 1933 (the "Securities Act") may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
ITEM 16: Exhibits
1. a. Amended and Restated Articles of Incorporation./7/
b. Articles Supplementary to the Amended and Restated Articles of
Incorporation./8/
c. Articles Supplementary to the Amended and Restated Articles of
Incorporation./1//4/
2. Amended and Restated By-Laws/6/
<PAGE>
3. Not applicable.
4. Not Applicable. Reference is made to Exhibit A of the Proxy
Statement/Prospectus filed herewith.
5. a. Specimen of Certificate of Stock of the Chubb Money Market Fund./2/
b. Specimen of Certificate of Stock of the Chubb Government Securities
Fund./2/
c. Specimen of Certificate of Stock of the Chubb Total Return Fund./2/
d. Specimen of Certificate of Stock of the Chubb Tax-Exempt Fund./2/
e. Specimen of Certificate of Stock of the Chubb Growth and Income
Fund./3/
f. Specimen of Certificate of Stock of the Chubb Capital Appreciation
Fund./4/
g. Specimen of Certificate of Stock of the Chubb Global Income Fund./4/
6. a. Investment Management Agreement between Chubb Investment Funds, Inc.,
Chubb Investment Advisory Corporation and Chubb Asset Managers, Inc. with
respect to Chubb Money Market Fund./2/
b. Technical Amendment to Investment Management Agreement between Chubb
Investment Funds, Inc., Chubb Investment Advisory Corporation and Chubb
Asset Managers, Inc. with respect to Chubb Money Market Fund./5/
c. Investment Management Agreement between Chubb Investment Funds, Inc.,
Chubb Investment Advisory Corporation and Chubb Asset Managers, Inc.
with respect to Chubb Government Securities Fund./2/
d. Technical Amendment to Investment Management Agreement between Chubb
Investment Funds, Inc., Chubb Investment Advisory Corporation and Chubb
Asset Managers, Inc. with respect to Chubb Government Securities
Fund./5/
e. Investment Management Agreement between Chubb Investment Funds, Inc.,
Chubb Investment Advisory Corporation and Chubb Asset Managers, Inc.
with respect to Chubb Total Return Fund./2/
f. Technical Amendment to Investment Management Agreement between Chubb
Investment Funds, Inc., Chubb Investment Advisory Corporation and Chubb
Asset Managers, Inc. with respect to Chubb Total Return Fund./5/
g. Investment Management Agreement between Chubb Investment Funds, Inc.,
Chubb Investment Advisory Corporation and Chubb Asset Managers, Inc.
with respect to Chubb Tax-Exempt Fund./2/
h. Technical Amendment to Investment Management Agreement between Chubb
Investment Funds, Inc., Chubb Investment Advisory Corporation and Chubb
Asset Managers, Inc. with respect to Chubb Tax-Exempt Fund./5/
i. Investment Management Agreement between Chubb Investment Funds, Inc.,
Chubb Investment Advisory Corporation and Chubb Asset Managers, Inc.
with respect to Chubb Growth Fund, (now known as the Chubb Growth and
Income Fund)./2/
j. Technical Amendment to Investment Management Agreement between Chubb
Investment Funds, Inc., Chubb Investment Advisory Corporation and Chubb
Asset Managers, Inc. with respect to Chubb Growth Fund./5/
k. Investment Management Agreement between Chubb Investment Funds, Inc.,
Chubb Investment Advisory Corporation and Chubb Asset Managers, Inc.
with respect to Chubb Capital Appreciation Fund./4/
l. Investment Management Agreement between Chubb Investment Funds, Inc.,
Chubb Investment Advisory Corporation and Chubb Asset Managers, Inc.
with respect to Chubb Global Income Fund./4/
7.a. Fund Distribution Agreement between Chubb Investment Funds, Inc.
and Chubb Securities Corporation./2/
<PAGE>
b. Specimen Copy of Selected Dealers Agreement./2//1/
8. Not applicable.
9. Custodial Services Agreement between Chubb Investment Funds, Inc. and
Citibank, N.A./2/
10.Rule 12b-1Plan./1/
11. Opinion and Consent of counsel as to legality of the securities
being registered.
a. Opinion and Consent of Counsel as to legality of the
securities being registered.
12. To be filed by subsequent post-effective amendment.
13. a. Shareholder Services Agreement between Chubb Investment Funds,
Inc. and Firstar Trust Company.
b. Agreement for Waiver of Fees and Assumption of Expenses between
Chubb Investment Funds, Inc., Chubb Investment Advisory Corporation,
Chubb Asset Managers, Inc., Chubb Securities Corporation, and Chubb
Life Insurance Company of New Hampshire./6/
14. Consent of Ernst & Young LLP.*
15. Not Applicable.
16. Power of Attorney.
17. Not Applicable.
- --------------
/1/ Incorporated by reference to Form N-1A Post-Effective Amendment No. 13.
/2/ Incorporated by reference to earlier filing on September 17, 1987, SEC File
No. 33-147367, to the exhibit number indicated on that Form N-1A
Registration Statement.
/3/ Incorporated by reference to earlier filing on April 22, 1992, SEC File No.
33-14737, to the exhibit number indicated on that Form N-1A Registration
Statement.
/4/ Incorporated by reference to earlier filing on June 16, 1995. SEC File No.
33-147367, to the exhibit number indicated on that Form N-1A Registration
Statement.
/5/ Incorporated by reference to earlier filing on April 17, 1989, SEC File No.
33-147367, to the exhibit number indicated on that Form N-1A Registration
Statement.
/6/ Incorporated by reference to earlier filing on April 15, 1991, SEC File No.
33-147367, to the exhibit number indicated on that Form N-1A Registration
Statement.
/7/ Incorporated by reference to earlier filing on April 28, 1988, SEC File No.
33-147367, to the exhibit number indicated on that Form N-1A Registration
Statement.
/8/ Incorporated by reference to earlier filing on April 23, 1994, SEC File No.
33-14737, to the exhibit number indicated on that Form N-1A Registration
Statement.
* Filed herewith.
ITEM 17. UNDERTAKINGS
------------
(1) The undersigned Registrant agrees that prior to any public
reoffering of the securities registered through the use of a prospectus
which is part of this registration statement by any person or party who
is deemed to be an underwriter within the meaning of Rule 145(c) of the
<PAGE>
Securities Act of 1933, as amended, the reoffering prospectus will
contain the information called for by the applicable registration form
for reofferings by persons who may be deemed underwriters, in addition
to the information called for by the other items of applicable form.
(2) The undersigned Registrant agrees that every prospectus that is
filed under paragraph (1) above will be filed as a part of an amendment
to the registration statement and will not be used until the amendment
is effective, and that, in determining liability under the Securities
Act of 1933, as amended, each post-effective amendment shall be deemed
to be a new registration statement for the securities offered herein,
and the offering of the securities at that time shall be deemed to be
the initial bona fide offering of them.
(3) The Registrant undertakes to file, by post-effective amendment, an
opinion of counsel supporting the tax consequences of the proposed
reorganization within a reasonable time after receipt of such opinion.
<PAGE>
SIGNATURES
----------
As required by the Securities Act of 1933, the registration statement on Form
N-14 has been signed on behalf of the Registrant by the undersigned, thereunto
duly authorized, in the City of New York, State of New York, on the 30th day of
June, 1999.
Van Eck/Chubb Funds, Inc.
By: /s/ MICHAEL O'REILLY
---------------------------------
Michael O'Reilly, President
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed below by the following persons in the capacities and
on the date indicated:
Signature Title Date
/s/ MICHAEL O'REILLY President, Director 6/30/99
- --------------------------
Michael O'Reilly
/s/ JEREMY H. BIGGS Director 6/30/99
- --------------------------
Jeremy H. Biggs
/s/ WESLEY G. MCCAIN Director 6/30/99
- --------------------------
Wesley G. McCain
/s/ DAVID J. OLDERMAN Director 6/30/99
- --------------------------
David J. Olderman
/s/ JOHN C. VAN ECK Director 6/30/99
- --------------------------
John C. van Eck
<PAGE>
PROXY CARD PROXY CARD
VAN ECK/CHUBB FUNDS, INC.
CAPITAL APPRECIATION FUND
PROXY FOR SPECIAL SHAREHOLDERS MEETING TO BE HELD ________ ___, 1999
The undersigned shareholder of CAPITAL APPRECIATION FUND, (the "Fund"),
a series of Van Eck/Chubb Funds, Inc. (the "Company"), having received Notice of
the Meeting of Shareholders of the Fund to be held on _________, 1999 and the
Proxy Statement/Prospectus accompanying such Notice, hereby constitutes and
appoints Jan van Eck and Derek van Eck and each of them, true and lawful
attorneys or attorney for the undersigned, with several powers of substitution,
for and in the name, place and stead of the undersigned, to attend and vote all
shares of the Fund which the undersigned would be entitled to vote at the
Meeting to be held at 99 Park Avenue, 8th Floor, New York, New York, on
_________, 1999, at ____ Eastern Time, and at any and all adjournments thereof,
with all powers the undersigned would possess if personally present.
Dated: ______________1999
------------------------
Signature of shareholder
-----------------------
Signature of Co-owner
For joint accounts, all co-owners must
sign. Executors, administrators, trustees,
etc. should so indicate when signing.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL. THE SHARES
REPRESENTED HEREBY WILL BE VOTED AS INDICATED ON THE REVERSE SIDE OR FOR
THE PROPOSAL IF NO CHOICE IS INDICATED.
PROPOSAL
1. To approve the Plan of Reorganization and Liquidation involving the
exchange of substantially all of the Fund's assets for shares of Van
Eck/Chubb Growth and Income Fund, a series of the Van Eck/Chubb Funds, the
assumption of liabilities of the Fund by Van Eck/Chubb Growth and Income
Fund, the distribution of such shares to the shareholders of the Fund and
the subsequent liquidation of the Fund.
FOR _________ AGAINST __________ ABSTAIN __________
-----------------------
PROXY CARD
-----------------------
PLEASE MARK YOUR PROXY, DATE AND SIGN IT AND RETURN IT PROMPTLY IN THE
ACCOMPANYING ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
CONSENT OF INDEPENDENT AUDITORS
We consent to the use of our report dated February 16, 1999 on the Van Eck/Chubb
Funds, Inc., which is included in the Annual Report to the Shareholders for the
year ended December 31, 1998, and is incorporated by reference, in this
Registration Statement (Form N-14) for the Van Eck/Chubb Funds, Inc.
/s/Ernst & Young LLP
--------------------
ERNST & YOUNG LLP
New York, New York
June 28, 1999
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<NAME> Capital Appreciation
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<NAME> Growth & Income Fund
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