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VAN ECK CHUBB FUNDS
SEMI-ANNUAL REPORT
JUNE 30, 1999
GLOBAL INCOME FUND
GOVERNMENT SECURITIES FUND
GROWTH AND INCOME FUND
TAX-EXEMPT FUND
TOTAL RETURN FUND
CAPITAL APPRECIATION FUND
THE VAN ECK PARTNERSHIP SERIES
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VAN ECK/CHUBB FUNDS
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Dear Fellow Shareholder:
The first half of 1999 was a diverse period for world markets. Internationally,
Europe's economic activity was sluggish, while many emerging economies
stabilized. Here in the U.S., the economy continued to defy expectations,
growing for the ninth straight year.
As a result of these forces, the performance of asset classes varied widely over
the six-month period covered by this report. Our bond funds have shown excellent
relative performance despite rising interest rates, which hurt absolute
valuations. The Growth and Income Fund has done well, particularly since it was
reoriented somewhat toward larger capitalization stocks by late February (see
the Growth and Income Fund letter on page 8 for further details). Market
unpredictability has hampered efforts to pull our mid-cap stock fund's
performance to acceptable levels, though losses have been stemmed considerably.
Please review the reports that follow for more detailed information on specific
funds, including in-depth discussion of the pertinent markets.
U.S. ECONOMIC HIGHLIGHTS
The U.S. economy continues to thrive. The federal deficit is still shrinking,
inflation remains under 2% and business profits are at record levels. The gross
domestic product (GDP) expanded 4.3% on an annualized basis during the first
quarter of 1999, higher than expected. Unofficial tallies put this figure at
about 4% for the second quarter. This growth was fueled by improved export
activity, housing, consumption and capital investment in technology. More of the
same is expected for the balance of the year, but with a moderating trend.
For some experts, the seemingly unstoppable growth of the U.S. economy is
problematic. On June 30, the Federal Reserve announced it was raising short-term
interest rates in an effort to cool what they see as a super-heated economy. The
impact was minimal as anticipation of this announcement had already been priced
into the market.
DOMESTIC MARKET OVERVIEW
Year to date, the U.S. stock market has confounded all predictions by reaching
record highs. The Dow Jones Industrial Average was up 17% as of the end of
June--a figure that was 50% higher than in December 1996, when Federal Reserve
Chairman Alan Greenspan first warned of "irrational exuberance" in the U.S.
stock market. The S&P 500 Index was at a record high of 1,372.71 on June 30, up
over 11% from year-end 1998.
The NASDAQ also reached new heights in June, surpassing the previous record set
in April 1999. This optimism was fueled in part by record quarters for corporate
profits.
This year's second quarter reversed a number of long-term trends. Small caps
beat large caps for the first time in seven quarters, and some value stocks
outperformed growth stocks for the first time in six quarters. Small caps still
lag behind on a year-to-date basis, in part because they hit historic lows
during the first quarter of 1999. On an industry basis, technology stocks
outperformed other areas in both the first and second quarters.
GLOBAL OVERVIEW
The big news globally, although not a surprise to us, was the disappointing
performance of the euro since its debut on January 2. Its value against the U.S.
dollar has fallen steadily. Stagnant economic activity in many European
countries is partially to blame, and while expected growth may increase
slightly, we do not expect much change.
News from Japan was far better where signs of economic recovery and optimism
have spread to other Asian economies. While it is probable that Asia has
stabilized, we believe that rapid recovery is unlikely.
Elsewhere in the world, China has economic problems and Russia is mired in
turmoil. Latin America is still coping with high interest rates, depreciated
currencies and recession.
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VAN ECK/CHUBB FUNDS
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A WORD ABOUT Y2K (YEAR 2000)
Many of you may be worried about the potential effects of Y2K on our operations
and your holdings. We have taken every precaution to assure that our systems are
ready for the changeover. In addition, the securities industry itself has been
testing systems for several years now and is way ahead of other industries in
preparing for next year.
As we approach the end of a century, I am filled with awe at how far investing
has come and how important it has become in people's lives. There has never been
a better time to stay with a long-term investing strategy. We at Van Eck/Chubb
firmly believe that the potential effect of the 21st century on investment
markets can best be summed up in a single word: opportunity.
[PHOTO OMITTED]
/s/ MICHAEL O'REILLY
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MICHAEL O'REILLY
PRESIDENT
VAN ECK/CHUBB FUNDS
PRESIDENT AND CHIEF OPERATING OFFICER
CHUBB ASSET MANAGERS, INC.
July 31, 1999
2
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VAN ECK/CHUBB GLOBAL INCOME FUND
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THE VAN ECK/CHUBB GLOBAL INCOME FUND SEEKS CAPITAL APPRECIATION AND A STEADY
FLOW OF DIVIDEND INCOME BY INVESTING PRIMARILY IN HIGH-GRADE U.S. AND
INTERNATIONAL DEBT SECURITIES. UNDER NORMAL CONDITIONS, THE FUND MAINTAINS AT
LEAST 75% OF ITS PORTFOLIO IN INVESTMENT-GRADE SECURITIES, WHICH ARE OFTEN FOUND
IN THE MORE MATURE INVESTMENT MARKETS OF DEVELOPED NATIONS.
The first six months of 1999 proved to be a difficult period for world bonds.
The Van Eck/Chubb Global Income Fund had a total return of -7.8%, versus -7.2%
for the Salomon Smith Barney World Government Bond Index (WGBI)+, and -3.6% for
the Lipper Global Income Fund Index+.
ECONOMIC OVERVIEW
Growth throughout Europe remained uneven during the first six months of 1999.
Some countries--such as Germany, Italy and the UK--struggled through apparent
slowdowns, while others, like Ireland, enjoyed robust growth. Overall, however,
the region remained sluggish. The thriving U.S. economy continued to defy
expectations by growing strongly, as detailed in the President's Letter. This
growth undermined the world's bond markets, but did lead to strength in the U.S.
dollar. Elsewhere, there was patchy recovery at best for Japan, though other
Asian economies showed a strong revival from the difficulties of recent years.
In Latin America, the pattern was more mixed.
MARKET AND CURRENCY REVIEW
The U.S. bond market, particularly the government sector, endured a difficult
six months during the first half of 1999. Thirty-year yields rose about 90 basis
points (.90%) during the first half of the year to end the period at 6.00%, with
the overall U.S. government market returning -2.5% over this same time period.
The previous year had seen the market bolstered by investor nervousness over
global economic instability and a resulting "flight-to-quality" by international
investors. When the U.S. showed unexpected strength early in 1999, these forces
evaporated and fears of inflation within the U.S. returned. The market began to
widely anticipate the Federal Reserve's eventual raising of interest rates,
driving down bond values.
The biggest news in Europe so far this year has been the disappointing launch of
the "euro," a single European currency that replaced the national currencies of
11 countries in the region. After a strong start, the euro declined steadily,
with a drop of 11% against the U.S. dollar by midyear. The euro's difficulties
have mainly been caused by divergent economic growth between Europe and the U.S.
In addition, in April, the European Central Bank cut its repurchase rate from
3.00% to 2.50%, hoping to jumpstart activity. This move increased the adverse
interest rate differential versus the U.S., weakening the euro further.
Resumption of interest in Japan and other parts of Asia also reduced interest in
European bonds. The region reached the midyear point down 12% on average in U.S.
dollar terms due to these pressures.
In Japan, the government took a number of aggressive steps to shore up its
faltering economy, with results coming unexpectedly quickly. A reversal of the
rapid rise in bond yields at the end of 1998 and a decision by the Trust Fund
Bureau to resume government bond purchases helped pace the Japanese bond market
to a surprising 2.5% return, the best of any major government bond market.
However, the weakness of the yen against the U.S. dollar reduced this return to
negative levels in dollar terms.
FUND REVIEW
O MARKET WEIGHTING: We were substantially weighted in U.S. government bonds at
the beginning of the year and this position hurt the Fund's performance. We
moved quickly to reweight the portfolio in favor of better-yielding, high
quality U.S. corporates and euro-denominated bonds, which we added to as 1999
unfolded, attracted by a steep yield curve and subdued inflation. The effect
of a weak euro was largely offset by currency hedging which overweighted the
Fund's dollar position against the euro. Finally, although the Fund's
benchmark index is 20% weighted in Japanese bonds, we have avoided that
country's issuance altogether because of the yen's weakness against the U.S.
dollar, an anticipated glut in supply and poor yield levels. The
non-government U.S. sector, emerging
3
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VAN ECK/CHUBB GLOBAL INCOME FUND
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market sovereigns and euro-denominated bonds all offered better returns.
o LONG MATURITIES: We began the year with a long maturity policy and reached the
mid-point of 1999 convinced that such a policy remained sound in light of low
inflation rates, likely muted growth rates and, possibly, even deflation at
some point.
O SECTOR WEIGHTINGS: The Fund began 1999 approximately 80% invested in
government bonds. Because of attractive spreads for non-government long-term
paper, we increased these holdings to over 20% (and decreased the government
holdings) by midyear.
O CREDIT QUALITY: The Fund continues to emphasize investment-grade issues,
particularly in the non-government sector, although good incremental income
was received from non-investment grade corporate bonds during the first six
months of 1999.
O CURRENCY POSITIONS AND HEDGING: The Fund began the year with an overweight
position in the euro, expecting the difficult months of 1998 to give way to
economic expansion in Europe. Instead, it quickly became apparent that the new
currency was suffering from continued slow growth in Europe, while the
unexpected strength of the U.S. economy boosted the dollar. We very quickly
reversed our position in the euro and, by February, had become underweight in
favor of the U.S. dollar. By midyear, the bulk of our exposure to the euro had
been hedged out. (At June 30, the portfolio had a 57% European bond weighting
but, because of the euro's weakness, 43% of this position was hedged out to
U.S. dollars.)
THE OUTLOOK
Looking at the U.S., it seems likely that the tempo of growth will slow
somewhat. As is discussed elsewhere in this report, on June 30 of this year, the
Federal Reserve raised its short-term rate from 4.75% to 5.00%; however, we do
not foresee further adjustments through the end of the year.
In Europe, steep yield curves and subdued inflation make European bonds more
attractive. We believe there could be some acceleration in European economies
during the second half of 1999; recent official figures surprised many observers
by indicating that Germany's economy started to move again in the first quarter.
The large amount of euro-denominated new issues has created an attractive
universe of potential investments.
The Fund's maturity remains relatively long, reflecting our belief that low
inflation will continue. The exception is the UK, where we have pruned the
maturity in response to technical yield curve factors as well as evidence that
growth is picking up and recent fears of a brief recession are unfounded.
Market expectations for a steady increase in short-term rates in Europe may be
exaggerated; thus, we continue to maintain a long position in the region.
Expectations of oversupply of Japanese government bonds, volatility and low
yield levels below 2% lead us to avoid participation in Japanese bond markets
for the time being. We continue to seek opportunity elsewhere.
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VAN ECK/CHUBB GLOBAL INCOME FUND
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In closing, we'd like to thank you for your investment in the Van Eck/Chubb
Global Income Fund. We look forward to helping you meet your investment
objectives in the future.
[PHOTO OMITTED] [PHOTO OMITTED]
/s/ ROGER C.P. BROOKHOUSE /s/ MARJORIE D. RAINES
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ROGER C.P. BROOKHOUSE MARJORIE D. RAINES
SENIOR VICE PRESIDENT SENIOR VICE PRESIDENT
CHUBB ASSET MANAGERS, INC. CHUBB ASSET MANAGERS, INC.
[PHOTO OMITTED]
/s/ EMMA C. FISHWICK
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EMMA C. FISHWICK
VICE PRESIDENT
CHUBB ASSET MANAGERS, INC.
July 30, 1999
+ The Salomon Smith Barney (SSB) World Government Bond Index is a market
capitalization weighted benchmark that tracks the performance of 18 world
government bond markets. Each has a total market capitalization of eligible
issues of at least US$20billion and Euro15billion. The issues are fixed rate,
greater than one-year maturity and subject to a minimum amount outstanding
that varies by local currency. Bonds must be sovereign debt issued in the
domestic market in local currency.
The Lipper Global Income Fund Index includes funds that are primarily
invested in U.S. dollar and non-U.S. dollar debt securities of issuers
located in at least three countries, one of which may be the United States.
The Index is an equally-weighted performance index adjusted for capital gains
distributions and income dividends of the largest qualifying funds in the
global income category.
The Indices' performance is not illustrative of the Fund's performance.
Indices are unmanaged and are not securities in which investments can be
made.
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PERFORMANCE RECORD AS OF 6/30/99
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AFTER
MAXIMUM BEFORE
AVERAGE ANNUAL SALES SALES
TOTAL RETURN CHARGE* CHARGE
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Life (since 9/1/95) 2.7% 4.0%
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1 Year (3.0)% 1.9%
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THE PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NOT INDICATIVE OF FUTURE
RESULTS. Investment return and principal value of an investment in the Fund will
vary so that shares, when redeemed, may be worth more or less than their
original cost. The Adviser is currently waiving certain or all expenses of the
Fund. Had the Fund incurred all expenses, investment returns would have been
reduced.
* A Shares: maximum sales charge = 4.75%
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% OF PORTFOLIO1
[FIGURES BELOW REPRESENT CHART IN PRINTED PIECE]
Government and Agency Obligations: 61.00%
Corporate Bonds: 20.50%
Short-Term Obligations: 15.00%
Other Net Assets: 3.40%
TOP COUNTRIES
France
United States
Germany
Japan
Netherlands
DOLLAR WEIGHTED AVERAGE MATURITY
8.9 Years
PORTFOLIO DURATION
6.6 Years
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(1) As a percentage of total net assets at June 30, 1999.
5
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VAN ECK/CHUBB GOVERNMENT SECURITIES FUND
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THE VAN ECK/CHUBB GOVERNMENT SECURITIES FUND SEEKS TO EARN A HIGH LEVEL OF
INCOME CONSISTENT WITH THE PRESERVATION OF CAPITAL VALUE. THE FUND IS INVESTED
ONLY IN DEBT INSTRUMENTS THAT ARE ISSUED, GUARANTEED OR COLLATERALIZED BY THE
U.S. GOVERNMENT, ITS AGENCIES OR INSTRUMENTALITIES. THE FUND WILL TYPICALLY BE
INVESTED IN A COMBINATION OF U.S. TREASURY NOTES OR BONDS, GOVERNMENT AGENCY
DEBENTURES AND/OR GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES, SUCH AS THOSE
ISSUED BY "FANNIE MAE" OR "FREDDIE MAC."
For the first six months of 1999, the Van Eck/Chubb Government Securities Fund
had a total return of -1.1%. With the unwinding of the flight-to-quality trend
to U.S. Treasury securities and the subsequent rise in interest rates, the Fund
outperformed the Lipper General U.S. Government Fund Index+, which had a total
return of -2.4% for the same period.
REVIEW OF THE MARKET
The primary driving force in the bond market during the first two quarters of
the year was the combination of a return to more normal liquidity conditions and
the reassessment of expected Federal Reserve policy. The latter issue was
resolved on June 30 when the Fed raised the federal funds target from 4.75% to
5.00%. The reason for this move was the aforementioned improved liquidity in the
financial markets, which reduced and/or eliminated the fears of financial doom
that colored the markets during the middle of 1998. This change in liquidity
conditions and Federal Reserve policy expectations resulted in an increase in
Treasury yields. During the first six months of 1999, interest rates on 2-, 10-
and 30-year maturity Treasuries rose 99, 114 and 88 basis points (.99%, 1.14%
and .88%), respectively.
FUND REVIEW
The Fund continues to be diversified between Treasuries, mortgage-backed
securities and putable agency debentures. As noted above, the Fund outperformed
the peer group average during the first half of 1999. Our conservative
intermediate maturity strategy as well as the good relative performance of
mortgage-backed securities and, especially, the putable agency debentures (which
can trade to the shorter maturity put date in a rising interest rate
environment) were responsible for our strong results.
At June 30, the Fund had a very similar sector allocation to that of December
31, 1998, with 45% invested in putable agency debentures, 34% in mortgage-backed
securities and the rest in Treasuries and cash. Since then we have restructured
the portfolio modestly by buying lower coupon mortgage-backed securities and
increasing our weighting in Treasury securities. This was done in order to add
greater interest rate sensitivity to the portfolio because we now believe that
bonds have better value than they did at year end.
PORTFOLIO OUTLOOK
With the rise in interest rates that we have experienced this year, bonds have
moved from the zone of fair value to the zone of above average value. Real
interest rates (nominal rates minus inflation) on 30-year Treasuries stood at
3.50% at year-end 1998 and are currently at 4.00%. Before 1980, real interest
rates were rarely above 3.00%. Those earlier periods included many cycles with
either a balanced or surplus federal budget as we have now. We also feel that
Federal Reserve policy need only be tweaked slightly tighter, if at all. Given
the backdrop of stable monetary policy, stable inflation and high historical
real rates, an investment in a conservatively-managed bond fund like the Van
Eck/Chubb Government Securities Fund continues to make sense.
Thank you for your investment in the Van Eck/Chubb Government Securities Fund.
We look forward to helping you meet your investment goals in the future.
[PHOTO OMITTED] [PHOTO OMITTED]
/s/ NED I. GERSTMAN /s/PAUL R. GEYER
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NED I. GERSTMAN PAUL R. GEYER
SENIOR VICE PRESIDENT VICE PRESIDENT
CHUBB ASSET MANAGERS, INC. CHUBB ASSET MANAGERS, INC.
July 30, 1999
6
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VAN ECK/CHUBB GOVERNMENT SECURITIES FUND
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PERFORMANCE RECORD AS OF 6/30/99
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AFTER
MAXIMUM BEFORE
AVERAGE ANNUAL SALES SALES
TOTAL RETURN CHARGE* CHARGE
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Life (since 12/1/87) 7.9% 8.3%
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10 Years 7.3% 7.8%
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5 Years 6.2% 7.2%
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1 Year (2.2)% 2.6%
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THE PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NOT INDICATIVE OF FUTURE
RESULTS. Investment return and principal value of an investment in the Fund will
vary so that shares, when redeemed, may be worth more or less than their
original cost.
The Adviser is currently waiving certain or all expenses of the Fund. Had the
Fund incurred all expenses, investment returns would have been reduced.
* A Shares: maximum sales charge = 4.75%
+ The Lipper General U.S. Government Fund Index is comprised of funds that
invest at least 65% of their assets in U.S. government and agency issues. The
Index is an equally-weighted performance index adjusted for capital gains
distributions and income dividends of the largest qualifying funds in the
general U.S. government category.
The Index's performance is not illustrative of the Fund's performance. Indices
are unmanaged and are not securities in which investments can be made.
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% OF PORTFOLIO(1)
[FIGURES BELOW REPRESENT CHART IN PRINTED PIECE]
US Government and Agency Obligations: 93.80%
Short-Term Obligations: 3.80%
Other Net Assets: 2.40%
% OF
PORTFOLIO COMPOSITION PORTFOLIO(1)
Tennessee Valley Authority
Putable Debentures 44.6%
Federal National Mortgage
Association Securities 27.3%
U.S. Treasury Securities 15.3%
Government National Mortgage
Association Securities 5.3%
Federal Home Loan Bank 3.8%
Federal Home Loan Mortgage
Association Securities 1.1%
DOLLAR WEIGHTED AVERAGE MATURITY
6.1 Years
PORTFOLIO DURATION
4.1 Years
30-DAY SEC YIELD
5.18%
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(1)As a percentage of total net assets at June 30, 1999.
7
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VAN ECK/CHUBB GROWTH AND INCOME FUND
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THE VAN ECK/CHUBB GROWTH AND INCOME FUND'S PRIMARY OBJECTIVE IS LONG-TERM
CAPITAL APPRECIATION THROUGH INVESTMENTS IN STOCKS OF LEADING LARGE- AND
MEDIUM-CAPITALIZATION U.S. COMPANIES. THE FUND MANAGER LOOKS FOR VALUE BY
INVESTING IN ESTABLISHED COMPANIES THAT ARE SELLING AT A DISCOUNT TO THE MARKET
IN TERMS OF SEVERAL MEASURES--INCLUDING PRICE-EARNINGS RATIOS--AND THAT HAVE
SOLID FUTURE PROSPECTS (DEFINED PRIMARILY AS FUTURE GROWTH POTENTIAL ABOVE THE
S&P 500 INDEX). THIS STRATEGY HELPS KEEP THE FUND'S VOLATILITY BELOW THAT OF THE
U.S. STOCK MARKET IN GENERAL. AS A SECONDARY OBJECTIVE, THE FUND SEEKS A
REASONABLE LEVEL OF CURRENT INCOME THROUGH STOCK DIVIDENDS.
The Van Eck/Chubb Growth and Income Fund achieved a total return of 11.6% for
the first six months of 1999, compared to the 12.4% posted by the S&P 500 Index+
(with dividends reinvested) during this time period. On a quarter-by-quarter
basis, the Fund trailed the Lipper Growth & Income Fund Index+ slightly in the
first quarter, but outperformed it by the same amount in the second quarter to
reach the half-year mark solidly in line with its peer group average (the Index
was also up 11.6% for the first six months of 1999).
REVIEW OF THE MARKET
The first three months of 1999 saw a continuation of the trends that drove the
stock market in 1998. A thriving U.S. economy continued to outpace all
expectations, leading to a 5.0% increase in the S&P 500 during that quarter. The
combination of strong liquidity flows and earnings nervousness accelerated the
bias toward the most expensive large-capitalization stocks--often at the expense
of smaller-sized companies. In fact, during the first quarter, ten stocks of the
S&P 500 contributed almost all of its return, with perennial favorites like
America Online, Merrill Lynch, Microsoft, Charles Schwab, and Sun Microsystems
pulling up the average considerably as they reached all-time highs in their
stock prices and valuations.
During the second quarter, renewed optimism for growth abroad--which fueled the
earnings of U.S. companies with multinational operations or overseas
sensitivity--drove the S&P 500 up 7.1%. The surprise during the second quarter
was a sharp reversal in the performance of a number of previously weak sectors
that had been severely affected by the 1998 Asian crisis and the collapse of
certain financial institutions. Areas such as basic materials, energy and heavy
machinery helped pace the market. In addition, brighter prospects in the
emerging markets and Japan helped ignite the cyclical technology sectors, such
as semiconductors and semiconductor equipment. Companies such as Case, RF
Microdevices, WR Grace, Alcoa, Dow, Caterpillar, Halliburton and Texas
Instruments strongly outperformed the S&P 500 during this quarter.
FUND REVIEW
The Fund's strategy during the first half of 1999 reflects these market factors.
During the first quarter, we continued to make changes in the Fund's character
to recognize the clear secular shift toward a large-cap, momentum-driven market.
We broadened our screening parameters to include larger-cap stocks at reasonable
valuation levels that offer greater earnings sustainability in uncertain
environments. During the first quarter, the Fund increased positions in such
companies as Microsoft, Wal-Mart, Lucent Technologies, Cisco Systems, MCI
Worldcom, IBM, General Electric, Motorola, Johnson & Johnson and Procter &
Gamble++. We intentionally overweighted the Fund in the technology and
communications sectors during the first quarter to take advantage of the strong
secular growth in these areas. Some of the positions we eliminated or reduced
during the first quarter of 1999 included IMC Global, Phillips Petroleum, Ford,
PaineWebber, First Union, Federated Department Stores and Bell Atlantic.
During the second quarter of the year, the Fund continued to add or initiate
positions in select technology and communication services companies seen as
bargains in terms of price-to-sales or price-to-earnings ratios. We initiated or
increased positions in Hewlett Packard, Motorola, BMC Software, Compuware,
Oracle, Compaq, Cisco, Time Warner and ADC Telecom. We also added several
larger-cap names that had pulled back significantly in price, including Kroger,
Gap, Gillette and
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VAN ECK/CHUBB GROWTH AND INCOME FUND
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Safeway++++. On the sales side, we eliminated or lightened positions in Hasbro,
Owens Illinois, Warner Lambert, Burlington Northern, KeyCorp and Healthsouth,
among others.
PORTFOLIO OUTLOOK
We see the remainder of 1999 as possibly a volatile time, during which the
market is likely to react to interest rate fluctuations, inflation fears and
concern over Y2K. In addition, while companies during the first half of 1999
have produced extremely positive earnings reports (particularly within
economically sensitive/cyclical sectors), we believe that, given the extended
valuations in the current market, many companies will have to meet very
aggressive earnings growth targets in order to sustain their stock price
momentum. Finally, while there is a clear and overdue broadening of the market
occurring, we nonetheless remain convinced that the most prudent strategy for
the Fund going forward continues to be an overweighting in large-cap growth
stocks with concentrations in the technology and communication services
sectors--where secular earnings growth appears sustainable in the 10% to 30%
range, depending on the sub-sector. This compares to a single digit growth rate
for such sectors as consumer cyclicals, basic materials, capital goods,
utilities and transportation. By positioning the portfolio toward the large-cap
end of the spectrum with a bias toward faster-growing sectors, we believe it is
well-structured for market conditions for the rest of 1999.
Thank you for your investment in the Van Eck/Chubb Growth and Income Fund. We
look forward to helping you meet your investment objectives in the future.
[PHOTO OMITTED]
/s/ ROBERT WITKOFF
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ROBERT WITKOFF
SENIOR VICE PRESIDENT
CHUBB ASSET MANAGERS, INC.
July 31, 1999
9
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VAN ECK/CHUBB GROWTH AND INCOME FUND
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PERFORMANCE RECORD AS OF 6/30/99
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AFTER
MAXIMUM BEFORE
AVERAGE ANNUAL SALES SALES
TOTAL RETURN CHARGE* CHARGE
- --------------------------------------------------------------------------------
Life (since 12/1/87) 14.7% 15.3%
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10 Years 14.5% 15.1%
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5 Years 16.9% 18.3%
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1 Year (6.1)% (0.3)%
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THE PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NOT INDICATIVE OF FUTURE
RESULTS. Investment return and principal value of an investment in the Fund will
vary so that shares, when redeemed, may be worth more or less than their
original cost.
The Adviser is currently waiving certain or all expenses of the Fund. Had the
Fund incurred all expenses, investment returns would have been reduced.
*A Shares: maximum sales charge = 5.75% (Prior to 5/1/99 maximum sales
charge was 4.75%.)
+The S&P 500 Index consists of 500 widely held common stocks, covering four
broad sectors (industrials, utilities, financial, and transportation). It
is a market-value weighted index (stock price times shares outstanding),
with each stock affecting the index in proportion to its market value.
Construction of the S&P 500 index proceeds from industry group to the
whole. Since some industries are characterized by companies of relatively
small stock capitalization, the index is not comprised of the 500 largest
companies on the New York Stock Exchange. This index, calculated by
Standard & Poor's, is a total return index with dividends reinvested.
The Lipper Growth & Income Fund Index is comprised of funds that combine a
growth-of-earnings orientation and an income requirement for level and/or
rising dividends. The Index is an equally-weighted performance index,
adjusted for capital gains distributions and income dividends of the
largest qualifying funds in the growth and income category.
The Indices' performance is not illustrative of the Fund's performance.
Indices are unmanaged and are not securities in which investments are made.
++Microsoft accounted for 3.3% of the Fund's total net assets at June 30;
Wal-Mart accounted for 3.4%; Lucent, 3.0%; Cisco, 2.5%; MCI, 2.2%; IBM,
3.3%; General Electric, 3.1%; Motorola, 2.7%; Johnson & Johnson, 3.1%;
Procter & Gamble, 2.1%.
++++Hewlett-Packard accounted for 3.7% of the Fund's total net assets at June
30; Motorola accounted for 2.7%; BMC Software, 2.1%; Compuware, 2.0%;
Oracle, 2.1%; Compaq, 1.3%; Cisco, 2.5%; Time Warner, 1.8%; ADC, 1.8%;
Kroger, 3.5%; Gap, 2.4%; Gillette, 2.1%; Safeway, 1.6%.
- --------------------------------------------------------------------------------
% OF PORTFOLIO(1)
[FIGURES BELOW REPRESENT CHART IN PRINTED PIECE]
Common Stocks: 94.3%
Other Net Assets: 5.7%
% OF
TOP TEN EQUITIES PORTFOLIO(1)
Hewlett Packard Company 3.7%
Kroger Company 3.5%
Wal-Mart Stores, Inc. 3.4%
Microsoft Corporation 3.3%
International Business
Machines Corporation 3.3%
Bristol-Myers Squibb Company 3.1%
Johnson & Johnson 3.1%
FDX Corporation 3.1%
Sun Microsystems, Inc. 3.1%
General Electric Company 3.1%
% OF
TOP TEN INDUSTRIES PORTFOLIO(1)
Computer and Computer Software 15.1%
Medical-Healthcare Services 9.8%
Telecommunications 9.7%
Technology 9.4%
Banking 7.5%
Retail 5.8%
Electronics 5.1%
Supermarkets 5.1%
Financial Services 4.6%
Household Products 4.3%
- --------------------------------------------------------------------------------
(1)As a percentage of total net assets at June 30, 1999.
10
<PAGE>
VAN ECK/CHUBB TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
THE VAN ECK/CHUBB TAX-EXEMPT FUND SEEKS A HIGH LEVEL OF CURRENT INCOME EXEMPT
FROM FEDERAL INCOME TAXES CONSISTENT WITH CAPITAL PRESERVATION. FUND MANAGERS
PERFORM RIGOROUS CREDIT ANALYSIS IN SELECTING TAX-EXEMPT BONDS FROM ACROSS THE
U.S. THE FUND EMPHASIZES INVESTMENT GRADE SECURITIES, INCLUDING GENERAL
OBLIGATION AND REVENUE-BACKED BONDS.
For the first six months of 1999, the Van Eck/Chubb Tax-Exempt Fund had a total
return of -1.1%. The Fund's performance substantially outpaced the Lipper
General Municipal Debt Fund Index+, which had a total return of -1.5% for this
period.
MUNICIPAL MARKET OVERVIEW
The high ratio of tax-exempt-to-Treasury yields in place at the start of 1999
helped cushion the municipal market from the sharp downturn that plagued U.S.
Treasuries during the first half of the year when flight-to-quality demand
largely evaporated. While the yield on 30-year Treasury bonds rose from 5.09% to
5.97% over the first six months of 1999, the Bond Buyer 20 increased a more
muted .45% during the period to reach 5.45% by the end of June.
During this same time period, municipal bond volume declined from its
near-record 1998 levels. Total bond issuance dropped by 23% during the first
half of 1999 (compared to the same period in 1998) to reach $115.7 billion by
June 30. This drop in volume was largely fueled by a 47% decline in refunding
caused by the backup in interest rates.
Municipal credit ratings continued to rise. The robust U.S. economy generated
large surpluses at both the state and local levels, which spurred rating agency
upgrades. According to the National Association of State Budget Officers, state
balances collectively totaled an estimated $32.1 billion at the close of the
fiscal year ending June 30, a figure equal to a healthy 7.4% of expenditures. In
addition, Standard & Poor's reported that the second quarter of 1999 marked the
fifteenth consecutive quarter during which rating upgrades had exceeded
downgrades. By number of issues, the ratio was nearly 4 to 1.
FUND REVIEW
The Fund continued to employ a maturity barbell strategy during the first half
of 1999. We purchased higher-yielding bonds (particularly housing bonds) at the
short end of the maturity spectrum in order to gain incremental yield, while
also purchasing high-grade bonds of longer maturities in order to boost total
return performance. This strategy proved effective as both short- and long-term
maturities outperformed intermediates during the first six months of the year.
The credit quality of the Fund remains extremely high. As of June 30, 71.9% of
Fund holdings were rated in the highest-quality AAA or AA categories. Given the
prevailing narrow yield differential between lower and higher credit qualities,
we feel that adequate incentive does not exist to downgrade the portfolio's
credit quality.
PORTFOLIO OUTLOOK
We continue to focus on New York, Washington, Texas and Indiana credits for
sound economic reasons. There has been a steadily improving credit picture as
well as a healthy supply of bonds within New York so far this year. Washington's
employment and personal income growth statistics have consistently been among
the highest in the nation. Texas is now our second most populous state, with a
booming economy and substantial bond financing plans. In addition, Indiana bonds
have benefited from the state's rapidly diversifying economy and strengthened
financial operations.
We will continue to emphasize the transportation sector. New bond issues for
airports and toll roads will continue to be plentiful due to long-delayed
infrastructure needs and should offer a good selection of investment
opportunities. On the other hand, our existing positions in electric utilities
should also continue to perform well. Limited supply in the sector is forecast
since there is little need for new power plant construction.
11
<PAGE>
VAN ECK/CHUBB TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Finally, the Tax-Exempt Fund remains well-positioned to take advantage of the
increasingly competitive health care environment. We have concentrated on the
highest-quality multi-hospital systems, such as Charity Obligated Group and
Catholic Health Initiatives.
Thank you for your investment in the Van Eck/Chubb Tax-Exempt Fund. We look
forward to helping you meet your investment objectives in the future.
[PHOTO OMITTED] [PHOTO OMITTED]
/s/ FREDERICK W. GAERTNER /s/ THOMAS J. SWARTZ, III
- ------------------------- -------------------------
FREDERICK W. GAERTNER THOMAS J. SWARTZ, III
SENIOR VICE PRESIDENT VICE PRESIDENT
CHUBB ASSET MANAGERS, INC. CHUBB ASSET MANAGERS, INC.
July 20, 1999
- --------------------------------------------------------------------------------
PERFORMANCE RECORD AS OF 6/30/99
- --------------------------------------------------------------------------------
AFTER
MAXIMUM BEFORE
AVERAGE ANNUAL SALES SALES
TOTAL RETURN CHARGE* CHARGE
- --------------------------------------------------------------------------------
Life (since 12/1/87) 7.3% 7.8%
- --------------------------------------------------------------------------------
10 Years 6.1% 6.6%
- --------------------------------------------------------------------------------
5 Years 5.2% 6.3%
- --------------------------------------------------------------------------------
1 Year (2.7)% 2.2%
- --------------------------------------------------------------------------------
THE PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NOT INDICATIVE OF FUTURE
RESULTS. Investment return and principal value of an investment in the Fund will
vary so that shares, when redeemed, may be worth more or less than their
original cost.
The Adviser is currently waiving certain or all expenses of the Fund. Had the
Fund incurred all expenses, investment returns would have been reduced.
* A Shares: maximum sales charge = 4.75%
- --------------------------------------------------------------------------------
% OF PORTFOLIO(1)
[FIGURES BELOW REPRESENT CHART IN PRINTED PIECE]
Municipal Bonds:96.7%
Other Net Assets: 3.3%
PORTFOLIO QUALITY
% OF
RATING(2) PORTFOLIO(1)
Aaa 52.0%
Aa 19.9%
A 16.5%
Baa 11.5%
Not Rated 0.1%
% OF
TOP TEN STATES PORTFOLIO(1)
New York 15.0%
Washington 13.2%
Indiana 12.1%
New Jersey 8.1%
Texas 6.1%
Tennessee 5.9%
Massachusetts 5.5%
Illinois 5.6%
Florida 4.7%
Utah 4.1%
DOLLAR WEIGHTED AVERAGE MATURITY
14.9 Years
PORTFOLIO DURATION
7.6 Years
30-DAY SEC YIELD
3.59%
- --------------------------------------------------------------------------------
(1)As a percentage of total net assets at June 30, 1999.
(2)Predominantly Moody's Investors Service ratings.
+ The Lipper General Municipal Debt Fund Index includes funds that invest at
least 65% of assets in municipal debt issues in the top four credit ratings.
The Index is an equally-weighted performance index adjusted for capital gains
distributions and income dividends of the largest qualifying funds in the
municipal debt category. The Index's performance is not illustrative of the
Fund's performance. Indices are unmanaged and are not securities in which
investments can be made.
12
<PAGE>
VAN ECK/CHUBB TOTAL RETURN FUND
- --------------------------------------------------------------------------------
THE VAN ECK/CHUBB TOTAL RETURN FUND SEEKS TO PROVIDE BOTH INCOME AND CAPITAL
APPRECIATION USING A STRATEGIC COMBINATION OF HIGH-QUALITY BONDS AND COMMON
STOCKS OF LARGE- AND MEDIUM-CAPITALIZATION COMPANIES. STOCKS ARE SELECTED USING
A RELATIVE VALUE APPROACH. FUND MANAGERS MONITOR AND ADJUST THE ASSET MIX BASED
ON CONTINUOUS ANALYSIS OF THE FINANCIAL MARKETS. IN MOST MARKETS, 60% TO 70% OF
THE FUND'S ASSETS WILL BE INVESTED IN COMMON STOCKS.
The Van Eck/Chubb Total Return Fund achieved a total return of 5.9% for the
first six months of 1999, compared to the 6.2% posted by the Lipper Balanced
Fund Index+ during this same time period. On a quarter-by-quarter basis, the
Fund lagged the Lipper Index in the first quarter, but outperformed it in the
second quarter to reach the half-year mark approximately in line with its peer
group average.
REVIEW OF THE MARKETS
Year to date, the U.S. stock market continues to be fueled by solid growth in
the U.S. economy and, more recently, renewed optimism for growth abroad--a plus
for U.S. companies with multinational operations or overseas sensitivity. During
the first quarter, the S&P 500 Index posted a quarterly gain of 5.0%, with the
overall market shaped by a stubborn bias toward the most expensive,
large-capitalization stocks. For example, many top performers during the first
quarter traded at a multiple of sales as high as 32 (America Online) and 13
(Charles Schwab), levels we believe are unsustainable over the long term.
During the second quarter of 1999, a number of long-term market trends seemed to
reverse, with demand rotating away from large-cap growth stocks into cyclical
and beaten-up value names. Sudden and dramatic rotation into such sectors as
basic materials, energy and capital goods caught many by surprise, with 30-50%
increases in many of the companies within these sectors. In addition, small-cap
stocks--after trailing behind for several years--made up some ground on the
large caps, with the Russell 2000 Index (15.6%) beating the S&P 500 Index by 850
basis points (the S&P was up 7.1% in the second quarter).
The U.S. bond market has had an extremely difficult year thus far. It started
off relatively strong with U.S. Treasury interest rates generally rising over
the yield curve while corporate credit spreads contracted, resulting in better
performance for corporate securities. Monetary policy remained neutral during
the first quarter and demand was buoyed by residual effects from 1998's flight
from foreign markets into the perceived security and quality of U.S. issues.
However, unexpectedly rapid recoveries in many emerging markets, notably parts
of Asia, siphoned off U.S. bond market investors during the second quarter,
driving down demand and values. This situation was exacerbated when the market
widely anticipated the Federal Reserve's subsequent July increase in its fed
funds rate, causing the value of existing lower interest rate bonds to fall
further. Although some economic woes in South America helped fuel a brief rally
at the tail end of the second quarter when a flight-to-quality rally resulted,
the first half of 1999 was, overall, a very bumpy ride for bond investors.
FUND REVIEW
Despite these challenges, the Fund performed well during the first half of 1999.
Unacceptable valuations among the "blue chip" universe during the first quarter
caused us to pass on some of the period's best performers in lieu of more
reasonably priced companies such as Sun Microsystems and Merrill Lynch++
(trading at sales multiples of 4 and 1, respectively). During the first quarter,
we continued to shift the Fund toward larger-cap stocks at reasonable valuation
levels that offer greater earnings sustainability in uncertain environments. We
increased the Fund's positions in such companies as Halliburton, MCI Worldcom,
Motorola and Johnson & Johnson++++ during this time. Some of the positions we
eliminated or reduced during the first quarter of 1999 included Tenant
Healthcare, Federated Department Stores and Carpenter Technology, to name a few.
During the second quarter, we continued to add or initiate positions in select
technology and communication service companies that were relatively cheaper in
terms of price-to-sales or price-
13
<PAGE>
VAN ECK/CHUBB TOTAL RETURN FUND
- --------------------------------------------------------------------------------
to-earnings ratios. For example, we initiated or increased positions in ADC
Telecom, Compaq, Oracle and BMC Software, and took advantage of a 25% pull-back
from trading highs to snap up shares in Gillette and Kroger++++++. During the
second quarter, the Fund lightened or eliminated positions in Warner Lambert,
Hasbro, Lafarge, Burlington Northern, FDX Corp., Ford, KeyCorp and Allied
Signal, among others.
Bond strategy remained unchanged during the period covered by this report.
Approximately 41% of the portfolio was invested in bonds, 74% of which were
high-quality, intermediate maturity fixed income securities
PORTFOLIO OUTLOOK
In the first month of the third quarter alone, we have witnessed a great deal of
volatility in the stock and bond markets. The remainder of 1999 will likely
continue to be a volatile time for both arenas, led by uncertainty of interest
rates, inflation fears and concern over Y2K.
We do not see the Federal Reserve changing rates further in the near future, but
the bond market will nonetheless remain vulnerable to changes in foreign
investor participation as well as general uncertainty.
In the stock market, we believe that extreme overall valuations and an uncertain
interest rate environment will weigh heavily on stock performance for the
remainder of the year. Still, earnings so far have been very strong, and are
likely to continue to be up at least 15% during the second half of 1999. Even
though the market is broadening, we remain convinced that the "new economy"
sectors of technology and communication services offer better long-term
appreciation potential when compared to "old economy" sectors, with secular
earnings growth in the 10% to 30% range. The "old economy" sectors, such as
consumer cyclicals, basic materials, capital goods, utilities and
transportation, with mid-single digit growth rates, look much less attractive.
Keep in mind, however, that technology and communication services are also
inherently more volatile than other industries because of shorter product
cycles, high valuations and larger standard deviations of earnings estimates.
In the final analysis, the market has favored, and will likely continue to
favor, large-cap stocks. By slanting the Van Eck/Chubb Total Return Fund toward
large caps and favoring reasonably valued technology and communication service
companies, we believe the Fund is well-positioned for market conditions in the
second half of the year, while preserving its value approach to take advantage
of the market in 2000.
Thank you for your investment in the Van Eck/Chubb Total Return Fund. We look
forward to helping you meet your investment objectives in the future.
[PHOTO OMITTED] [PHOTO OMITTED]
/s/ MICHAEL O'REILLY /s/ ROBERT WITKOFF
- -------------------- ------------------
MICHAEL O'REILLY ROBERT WITKOFF
PRESIDENT SENIOR VICE PRESIDENT
VAN ECK/CHUBB FUNDS CHUBB ASSET
PRESIDENT AND CHIEF OPERATING MANAGERS, INC.
OFFICER
CHUBB ASSET MANAGERS, INC.
JULY 30, 1999
14
<PAGE>
VAN ECK/CHUBB TOTAL RETURN FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PERFORMANCE RECORD AS OF 6/30/99
- --------------------------------------------------------------------------------
AFTER
MAXIMUM BEFORE
AVERAGE ANNUAL SALES SALES
TOTAL RETURN CHARGE* CHARGE
- --------------------------------------------------------------------------------
Life (since 12/1/87) 12.9% 13.5%
- --------------------------------------------------------------------------------
10 Years 12.6% 13.3%
- --------------------------------------------------------------------------------
5 Years 14.0% 15.3%
- --------------------------------------------------------------------------------
1 Year (4.9)% 0.9%
- --------------------------------------------------------------------------------
THE PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NOT INDICATIVE OF FUTURE
RESULTS. Investment return and principal value of an investment in the Fund will
vary so that shares, when redeemed, may be worth more or less than their
original cost. The Adviser is currently waiving certain or all expenses of the
Fund. Had the Fund incurred all expenses, investment returns would have been
reduced.
*A Shares: maximum sales charge = 5.75% (Prior to 5/1/99 maximum sales
charge was 4.75%.)
+The Lipper Balanced Fund Index includes funds with a primary objective of
conserving principal by maintaining at all times a balanced portfolio of
both stocks and bonds. Typically, the stock/bond ratio ranges around
60%/40%. The Index is an equally-weighted performance index adjusted for
capital gains distributions and income dividends of the largest qualifying
funds in the balanced category. The Index's performance is not
illustrative of the Fund's performance. Indices are unmanaged and are not
securities in which investments can be made.
++Sun Microsystems accounted for 1.7% of the Fund's total net assets at June
30; Merrill Lynch accounted for 1.8%.
++++Halliburton accounted for 1.1% of the Fund's total net assets at June 30;
MCI accounted for 1.3%; Motorola, 1.9%; Johnson & Johnson, 2.0%.
++++++ADC accounted for 1.0% of the Fund's total net assets at June 30; Compaq,
0.6%; Oracle, 1.3%; BMC Software, 1.4%; Gillette, 0.7%; Kroger, 1.4%.
- --------------------------------------------------------------------------------
% OF PORTFOLIO(1)
[FIGURES BELOW REPRESENT CHART IN PRINTED PIECE]
Common Stocks: 56.60%
U.S. Government Obligations: 25.50%
Corporate Bonds: 15.30%
Other Net Assets: 2.60%
% OF
TOP TEN EQUITIES PORTFOLIO(1)
Hewlett Packard Company 2.6%
Bristol-Myers Squibb Company 2.5%
Koninklijke Philips Electronics N.V. 2.4%
Banc One Corporation 2.2%
Wal-Mart Stores, Inc. 2.2%
FDX Corporation 2.0%
Johnson & Johnson 2.0%
International Business
Machines Corporation 2.0%
Motorola, Inc. 1.9%
Microsoft Corporation 1.8%
% OF
TOP TEN INDUSTRIES PORTFOLIO(1)
Computers & Computer Software 9.1%
Technology 6.3%
Banking 6.1%
Electronics 6.0%
Pharmaceuticals 4.5%
Retail 3.7%
Telecommunications 3.7%
Transportation &Shipping 3.5%
Autos, Trucks &Parts 3.2%
Manufacturing 2.9%
- --------------------------------------------------------------------------------
(1)As a percentage of total net assets at June 30, 1999.
15
<PAGE>
VAN ECK/CHUBB CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------
THE VAN ECK/CHUBB CAPITAL APPRECIATION FUND SEEKS LONG-TERM CAPITAL APPRECIATION
BY INVESTING PRIMARILY IN EQUITY SECURITIES OF SMALL- AND MEDIUM-CAPITALIZATION
U.S. COMPANIES THAT OFFER SOUND VALUE. AT LEAST 65% OF THE FUND'S ASSETS ARE
INVESTED IN COMPANIES WITH MARKET CAPITALIZATIONS BETWEEN $500 MILLION AND $2.5
BILLION. THESE ARE STOCKS THAT SELL AT A DISCOUNT TO THE MARKET IN TERMS OF
SEVERAL VALUATION MEASURES, INCLUDING PRICE-EARNINGS MULTIPLES, AND THAT HAVE
SOLID FUTURE PROSPECTS (PRIMARILY DEFINED AS FUTURE EARNINGS GROWTH POTENTIAL
ABOVE THE S&P 500 INDEX). QUALIFYING COMPANIES MAY ALSO POSSESS ONE OR MORE OF
THE FOLLOWING CHARACTERISTICS: A STRONG BALANCE SHEET, NEW PRODUCTS OR MARKETS,
STREAMLINED OR RE-ENGINEERED OPERATIONS, AND/OR IMPROVED MANAGEMENT.
The Van Eck/Chubb Capital Appreciation Fund had a total return of -6.9% for the
first six months of 1999, compared to 9.3% posted by the Russell 2000 Index+
during this same time period. The Fund lagged the Lipper Midcap Fund Index+,
which had a return of 11.9%.
REVIEW OF THE MARKETS
As a whole, the U.S. stock market continued to be fueled by rapid growth in the
domestic economy during the first half of 1999. More recently, renewed optimism
for growth abroad has helped spur growth in U.S. companies with overseas
operations. However, despite second quarter gains by some small cap and value
issues, the majority of this growth was posted by more expensive, large
capitalization stocks with the proven ability to weather economic and market
instability.
Within the small- and mid-cap arenas, the first half of 1999 was an extremely
volatile time. During the first quarter, the Russell 2000 Index (a proxy for
small-cap stocks) hit a 20-year low. The second quarter reversed this trend,
with small-cap stocks beating out large caps for the first time in seven
quarters, and value stocks outperforming growth stocks for the first time in six
quarters (though this strong value performance was mainly seen in the large-cap
arena). Small caps outperformed in virtually every sector during the second
quarter, but did not fully close the three-year long and growing gap with large
caps.
FUND REVIEW
During the second quarter, to the extent made possible given its stated
objective, we added or initiated Fund positions in companies with higher growth
profiles and more consistent earnings and cash flow trajectories, particularly
those that fell into the upper quartile of the Fund's capitalization range. None
of this, however, was enough to stem the damage done in the first quarter by
sectors very negatively affected by last year's Asian crisis, such as capital
goods, basic materials and consumer cyclicals. Exposure to these sectors was
dramatically reduced during the second quarter, when we lightened or eliminated
positions in Magnatek, Bethlehem Steel, Wolverine Tube, Intermet, Cleveland
Cliffs and Owens Illinois, among others. Despite this adjustment, the portfolio
remained vulnerable to the continuing market bias toward larger, growth-oriented
stocks and did not perform well in the second quarter.
PORTFOLIO OUTLOOK
The stock market environment seen over the past three years has been an
extremely challenging one for the Capital Appreciation Fund, which is hampered
by its size and inability to take advantage of the enduring trend toward
larger-cap stocks and sector diversity within the value world. While smaller
technology stocks, in particular, can offer outstanding value, pinpointing these
opportunities is extremely challenging--and one laggard stock can do a great
deal of damage in a portfolio the size of the Fund. Further, the most attractive
small-cap sectors of technology and communications are inherently more volatile
than other industries because of shorter product cycles, high valuations and
larger standard deviations of earnings.
Even with the recent run on cyclical and beaten-up value names and the market
broadening into previously weak sectors such as basic materials, energy and
heavy machinery, a tremendous gap between large caps and smaller issues remains.
In the final analysis, the market continues to sometimes inexplicably favor
over-valued large caps that offer steady growth and consistent operations
seemingly immune to cyclical fluctuations.
16
<PAGE>
VAN ECK/CHUBB CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------
We cannot, of course, control market perceptions, but can only anticipate or
respond to them. Going forward, we believe large caps will continue to prevail
over small/medium-cap stocks and that the best opportunities for value investors
will arise in the mid- to larger-cap sectors. Hence, we believe a change is in
order. After careful consideration, Van Eck/Chubb has made the decision that it
is no longer in the best interests of Fund shareholders to continue pursuing a
small- to mid-cap value approach. Given market realities, the Fund must be able
to take advantage of market opportunities outside its current investment
parameters. As you know, the Capital Appreciation Fund was closed to new
purchases on May 26, 1999. Later this year, we hope to propose a merger of this
Fund with the Van Eck/Chubb Growth and Income Fund, which we believe is better
positioned given the market environment and outlook we have described.
In closing, we'd like to thank you for your loyalty to the Van Eck/Chubb Capital
Appreciation Fund. We look forward to helping you meet your investment
objectives in the future.
[PHOTO OMITTED]
/s/ ROBERT WITKOFF
- ------------------
ROBERT WITKOFF
SENIOR VICE PRESIDENT
CHUBB ASSET MANAGERS, INC.
JULY 31, 1999
17
<PAGE>
VAN ECK CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PERFORMANCE RECORD AS OF 6/30/99
- --------------------------------------------------------------------------------
AFTER
MAXIMUM BEFORE
AVERAGE ANNUAL SALES SALES
TOTAL RETURN CHARGE* CHARGE
- --------------------------------------------------------------------------------
A Shares--Life (since 9/1/95) 7.2% 8.9%
- --------------------------------------------------------------------------------
1 Year (28.1)% (23.7)%
- --------------------------------------------------------------------------------
THE PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NOT INDICATIVE OF FUTURE
RESULTS. Investment return and principal value of an investment in the Fund will
vary so that shares, when redeemed, may be worth more or less than their
original cost. The Adviser is currently waiving certain or all expenses of the
Fund. Had the Fund incurred all expenses, investment returns would have been
reduced.
*A Shares: maximum sales charge = 5.75% (Prior to 5/1/99 maximum sales charge
was 4.75%.)
+ The Russell 2000 Index measures the performance of 2,000 small companies, with
an average capitalization of approximately $526.4 million. The Lipper Midcap
Fund Index is comprised of funds that invest primarily in companies with market
capitalizations less than $1 billion at the time of purchase. The Index is an
equally-weighted performance index adjusted for capital gains distributions and
income dividends of the largest qualifying funds in the midcap category.
The Indices' performance is not illustrative of the Fund's performance. Indices
are unmanaged and are not securities in which investments can be made.
- --------------------------------------------------------------------------------
% OF PORTFOLIO(1)
[FIGURES BELOW REPRESENT CHART IN PRINTED PIECE]
Common Stocks: 90.7%
Other Net Assets: 9.3%
% OF
TOP TEN EQUITIES PORTFOLIO(1)
Tupperware Corporation 3.7%
St. Jude Medical, Inc. 3.7%
Tandy Corporation 3.3%
Wyman-Gordon Company 3.3%
Total Renal Care Holdings, Inc. 3.3%
General Motors Corporation 2.9%
ICN Pharmaceuticals, Inc. 2.7%
Antec Corporation 2.7%
Commerce Group, Inc. 2.6%
BMC Industries, Inc. 2.6%
% OF
TOP TEN INDUSTRIES PORTFOLIO(1)
Computer Products & Services 13.5%
Medical Supplies & Services 12.8%
Retail 8.0%
Pharmaceuticals 7.5%
Telecommunications 7.1%
Aerospace & Defense 5.3%
Financial Services 4.3%
Restaurants 3.9%
Oil & Gas Equipment & Services 3.7%
Household Products 3.7%
- --------------------------------------------------------------------------------
(1)As a percentage of total net assets at June 30, 1999.
18
<PAGE>
VAN ECK/CHUBB GLOBAL INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1999 (Unaudited)
MARKET
PRINCIPAL VALUE
CURRENCY AMOUNT (NOTE B)
-------- --------- --------
GOVERNMENT AND AGENCY
OBLIGATIONS-61.04%
AUSTRALIA-0.78%
Australian Government
Bond
9.50%, due 8/15/03 ........... AUD 650,000 $ 486,351
New South Wales Treasury
9.25%, due 6/20/05 ........... AUD 200,000 150,307
------------
636,658
------------
CANADA-1.11%
Government of Canada
9.50%, due 6/01/10 ........... CAD 1,000,000 898,320
------------
COSTA RICA-1.21%
Republic of Costa Rica
Bond
9.34%, due 5/15/09 ........... USD 1,000,000 985,000
------------
CROATIA-0.57%
Croatia Government Bond
7.00%, due 2/27/02 ........... USD 500,000 463,750
------------
DENMARK-0.92%
Denmark Government Bond
7.00%, due 11/15/07 .......... DKK 1,160,000 183,489
Kingdom of Denmark
7.00%, due 12/15/04 .......... DKK 3,600,000 561,275
------------
744,764
------------
FRANCE-18.37%
BTNS
5.50%, due 10/12/01 .......... EUR 2,439,184 2,631,565
4.50%, due 7/12/03 ........... EUR 2,200,000 2,323,114
France O.A.T.
6.50%, due 10/25/06 .......... EUR 1,867,500 2,185,280
6.50%, due 4/25/11 ........... EUR 1,943,724 2,315,847
5.50%, due 10/25/07 .......... EUR 2,250,000 2,486,841
5.25%, due 4/25/08 ........... EUR 2,719,592 2,933,828
------------
14,876,475
------------
MARKET
PRINCIPAL VALUE
CURRENCY AMOUNT (NOTE B)
-------- --------- --------
GERMANY-10.34%
Bundesobligation
6.00%, due 7/04/07 ........... EUR 3,046,455 $ 3,296,772
5.625%, due 1/04/28 .......... EUR 2,198,555 2,331,765
Deutschland Republic
7.375%, due 1/03/05 .......... EUR 2,300,813 2,742,086
------------
8,370,623
------------
GREECE-2.02%
Hellenic Republic
6.60%, due 1/15/04 ........... GRD 500,000,000 1,635,350
------------
ITALY-2.14%
Buoni Poliennali Del Tes
Government National
5.00%, due 5/01/08 ........... EUR 1,652,659 1,732,955
------------
MEXICO-0.46%
United Mexican State--
Series W
6.25%, due 12/31/19 .......... USD 500,000 371,875
------------
NETHERLANDS-3.00%
Government of Netherlands
8.25%, due 9/15/07 ........... EUR 249,580 320,518
6.00%, due 1/15/06 ........... EUR 1,588,231 1,789,779
5.50%, due 1/15/28 ........... EUR 306,302 318,495
------------
2,428,792
------------
PANAMA-0.59%
Republic of Panama
9.375%, due 4/01/29 .......... USD 500,000 477,500
------------
PHILIPPINES-1.21%
Republic of Philippines
8.875%, due 4/15/08 .......... USD 1,000,000 977,500
------------
SPAIN-1.38%
Government of Spain
Bonds
8.80%, due 4/30/06 ........... EUR 462,779 595,031
6.15%, due 1/31/13 ........... EUR 456,769 520,138
------------
1,115,169
------------
See Notes to Financial Statements
19
<PAGE>
VAN ECK/CHUBB GLOBAL INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1999 (Unaudited) (continued)
MARKET
PRINCIPAL VALUE
CURRENCY AMOUNT (NOTE B)
-------- --------- --------
SUPRANATIONAL-7.38%
European Investment Bank
6.00%, due 5/07/03 ........... GBP 1,000,000 $ 1,575,533
International Bank for
Reconstruction &
Development
5.875%, due 11/10/03 ......... DEM 1,050,000 593,639
9.25 %, due 7/20/07 .......... GBP 2,000,000 3,803,254
------------
5,972,426
------------
TURKEY-1.23%
Republic of Turkey
Bond
12.00%, due 12/15/08 ......... USD 1,000,000 995,000
------------
UNITED STATES-8.33%
U.S. Treasury Bonds
6.75%, due 8/15/26 ........... USD 3,000,000 3,201,564
6.125%, due 11/15/27 ......... USD 2,000,000 1,981,876
4.75%, due 11/15/08 .......... USD 1,700,000 1,560,813
------------
6,744,253
------------
TOTAL GOVERNMENT
AND AGENCY
OBLIGATIONS
(Cost: $53,095,061) 49,426,410
------------
CORPORATE BONDS-20.52%
CANADA-0.80%
Shaw Communications, Inc.
8.54%, due 9/30/27 ........... CAD 1,000,000 647,854
------------
BELGIUM-1.62%
Hermes Euro Rail
11.50%, due 8/15/07 .......... USD 1,250,000 1,312,500
------------
FRANCE-3.69%
Caisse Centrale
5.38%, due 6/27/04 ........... USD 3,000,000 2,991,750
------------
JAPAN-4.42%
Fuji JGB Carrier
Preferred
9.87%, due 12/31/49+ ......... USD 1,000,000 871,460
IBJ Preferred Capital Co. LLC
8.79%, due 12/29/49+ ......... USD 1,000,000 838,955
MARKET
PRINCIPAL VALUE
CURRENCY AMOUNT (NOTE B)
-------- --------- --------
SB Treasury Co. LLC
9.40%, due 12/29/49+ ......... USD 1,000,000 $ 966,713
Tokai Preferred Capital
Co. LLC
9.98%, due 12/29/49+ ......... USD 1,000,000 905,000
------------
3,582,128
------------
MEXICO-1.16%
Grupo Industrial Durango,
S.A. de C.V.
12.00%, due 7/15/01 .......... USD 500,000 479,375
VICAP S.A.
11.375%, due 5/15/07 ......... USD 500,000 460,000
------------
939,375
------------
NETHERLANDS-1.33%
Netia Holdings S.A.
13.50%, due 6/15/09 .......... EUR 1,000,000 1,076,820
------------
POLAND-1.20%
Poland Communication, Inc.
(Series B)
9.875%, due 11/01/03 ......... USD 500,000 497,500
Polskie Linie Lotnicze
6.20%, due 7/15/03 ........... USD 500,000 471,250
------------
968,750
------------
UNITED KINGDOM-1.55%
Colt Telecom Group PLC
8.875%, due 11/30/07 ......... DEM 350,000 194,542
7.625%, due 7/31/08 .......... DEM 500,000 263,428
Jazztel PLC
14.00%, due 4/01/09 .......... USD 500,000 530,000
Leica Geosystems Finance B.V.
9.875%, due 12/15/08 ......... EUR 250,000 264,697
------------
1,252,667
------------
UNITED STATES-4.75%
Entex Information Service
12.50%, due 8/01/06+ ......... USD 1,000,000 592,500
C.S. First Boston Commercial
Mortgage 97-C1
7.46%, due 5/20/09+ .......... USD 2,000,000 1,910,000
Viatel
11.50%, due 03/15/09 ......... EUR 500,000 540,986
11.15%, due 04/15/08 ......... DEM 1,500,000 802,139
------------
3,845,625
------------
TOTAL CORPORATE
BONDS
(Cost: $17,627,518) .......... 16,617,469
------------
See Notes to Financial Statements
20
<PAGE>
VAN ECK/CHUBB GLOBAL INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1999 (Unaudited) (continued)
MARKET
NUMBER VALUE
OF SHARES (NOTE B)
---------- --------
WARRANT-0.00%
ARGENTINA-0.00%
Argentina Government
Warrants (expiring
12/03/99) .................... 1,000 $ 750
-----------
NUMBER
OF CONTRACTS
------------
CALL OPTION PURCHASED-0.10%
Euro @1.065 expiring
September 1999
(Cost: $142,500) ............. 12,500,000 81,250
-----------
MARKET
PRINCIPAL VALUE
CURRENCY AMOUNT (NOTE B)
-------- --------- --------
SHORT-TERM OBLIGATIONS-15.03%
UNITED STATES-15.03%
American Express
Commercial Paper
Interest Yield 4.68%,
due 7/01/99(a) ............... USD 1,025,000 $ 1,025,000
Chevron USA Capital
Commercial Paper Interest
Yield 4.81%,
due 8/08/99(a) ............... USD 2,655,000 2,643,294
CIT Group Capital
Commercial Paper
Interest Yield 4.81%,
due 7/06/99(a) ............... USD 1,025,000 1,024,315
Ford Motor Credit
Commercial Paper
Interest Yield 4.96%,
due 9/08/99(a) ............... USD 3,125,000 3,095,292
4.81%, due 8/17/99(a) ........ USD 500,000 496,860
General Electric Co.
Commercial Paper
Interest Yield 4.80%,
due 7/28/99(a) ............... USD 3,900,000 3,885,960
-----------
TOTAL SHORT-TERM
OBLIGATIONS
(Cost: $12,170,721) 12,170,721
-----------
TOTAL INVESTMENTS
(Cost: $82,962,127*) ......... 96.69% 78,296,600
Other assets less liabilities. 3.31% 2,678,307
-------- -----------
TOTAL NET ASSETS ............... 100.00% $80,974,907
======== ===========
- -------------------
* Aggregate cost for Federal income tax purposes.
+ Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities, which amount to 7.51% of the Fund's net assets, may
be resold in transactions exempt from registration, normally to qualified
institutional buyers.
(a) These securities are segregated as collateral for futures contracts.
See Notes to Financial Statements
21
<PAGE>
VAN ECK/CHUBB GOVERNMENT SECURITIES FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1999 (Unaudited) (continued)
MARKET
PRINCIPAL VALUE
AMOUNT (NOTE B)
---------- --------
U.S. GOVERNMENT AND AGENCY
OBLIGATIONS-93.75%
Federal Home Loan Mortgage Association
Series 1058 H 8.00%, due 4/15/21 ........ $344,861 $ 355,233
Federal National Mortgage Association
Pool #29429, 9.00%, due 7/01/01 ......... 9,509 9,806
Pool #306175, 7.00%, due 1/01/25 ........ 1,906,629 1,893,795
Pool #282883, 7.00%, due 5/01/24 ........ 142,654 141,658
Pool #251286, 7.00%, due 11/1/27 ........ 6,626,446 6,575,423
Government National Mortgage
Association
Pool #166009, 9.50%, due 6/15/16 ........ 47,294 50,475
Pool #780339, 8.00%, due 12/15/23 ....... 728,124 751,630
Pool #402760, 8.00%, due 8/15/25 ........ 856,568 881,994
Tennessee Valley Authority
6.235%, due 7/15/45 ..................... 10,000,000 10,091,000
5.98%, due 4/01/36 ...................... 4,000,000 3,980,536
U.S. Treasury Bond
10.375%, due 11/15/12 ................... 1,000,000 1,273,125
U.S. Treasury Notes
6.50%, due 10/15/06 ..................... 525,000 541,899
6.25%, due 10/31/01 ..................... 100,000 101,438
5.50%, due 2/28/03 ...................... 1,880,000 1,867,075
5.50%, due 3/31/03 ...................... 1,060,000 1,052,382
-------------
TOTAL U.S. GOVERNMENT AND
AGENCY OBLIGATIONS
(Cost: $29,735,627) ..................... 29,567,469
-------------
MARKET
PRINCIPAL VALUE
AMOUNT (NOTE B)
---------- --------
SHORT-TERM OBLIGATION-3.81%
Federal Home Loan Bank
Interest Yield 4.60%, due 7/01/99 (a)
(Amortized Cost: $1,200,000) ............ $1,200,000 $ 1,200,000
-------------
TOTAL INVESTMENTS
(Cost: $30,935,627*) .................... 97.56% 30,767,469
Other assets less liabilities ........... 2.44% 769,373
-------- -------------
TOTAL NET ASSETS ........................ 100.00% $31,536,842
======== =============
- ----------------
* Aggregate cost for Federal income tax purposes.
See Notes to Financial Statements
22
<PAGE>
VAN ECK/CHUBB GROWTH AND INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1999 (Unaudited) (continued)
NUMBER MARKET
OF VALUE
COMPANY SHARES (NOTE B)
- ------- ---------- --------
COMMON STOCK-94.28%
AUTOS, TRUCKS & PARTS-4.26%
Borg-Warner Automotive, Inc. .............. 26,600 $ 1,463,000
Ford Motor Co. ............................ 21,600 1,219,050
------------
2,682,050
------------
BANKING-7.50%
Banc One Corp. ............................ 24,479 1,458,030
Citigroup, Inc. ........................... 36,000 1,710,000
Fleet Financial Group, Inc. ............... 35,000 1,553,125
------------
4,721,155
------------
CHEMICALS/FERTILIZER-0.18%
Millennium Chemicals, Inc. ................ 4,857 114,443
------------
COMPUTERS AND COMPUTER SOFTWARE-15.12%
BMC Software, Inc. ........................ 25,000 1,350,000
Compaq Computer Corp. ..................... 35,000 829,063
Compuware Corp. ........................... 40,000 1,272,500
International Business Machines Corp. ..... 16,000 2,068,000
Microsoft Corp. ........................... 23,000 2,074,313
Sun Microsystems, Inc. .................... 28,000 1,928,500
------------
9,522,376
------------
ELECTRICAL EQUIPMENT-3.05%
General Electric Co. ...................... 17,000 1,921,000
------------
Electronics-5.14%
Koninklijke Philips Electronics N.V.
(New York Registry Shares) .............. 15,180 1,531,283
Motorola, Inc. ............................ 18,000 1,705,500
------------
3,236,783
------------
ENTERTAINMENT AND LEISURE-1.75%
Time Warner, Inc. ......................... 15,000 1,102,500
------------
FINANCIAL SERVICES-4.57%
Merrill Lynch & Co., Inc. ................. 16,100 1,286,994
Washington Mutual, Inc. ................... 45,000 1,591,875
------------
2,878,869
------------
HOUSEHOLD PRODUCTS-4.28%
Gillette Co. .............................. 33,000 1,353,000
Procter & Gamble Co. ...................... 15,000 1,338,750
------------
2,691,750
------------
NUMBER MARKET
OF VALUE
COMPANY SHARES (NOTE B)
- ------- ---------- --------
MANUFACTURING-2.73%
United Technologies Corp. ................. 24,000 $ 1,720,500
------------
MEDICAL-HEALTHCARE SERVICEs-9.83%
Baxter International, Inc. ................ 20,000 1,212,500
Bristol-Myers Squibb Co. .................. 28,000 1,972,250
Healthcare Services Corp. ................. 96 936
Healthsouth Corp. ......................... 70,000 1,045,625
Johnson & Johnson ......................... 20,000 1,960,000
------------
6,191,311
------------
OIL & GAS EQUIPMENT AND SERVICES-2.87%
Halliburton Co. ........................... 40,000 1,810,000
------------
RETAIL-5.77%
Gap, Inc. ................................. 30,000 1,511,250
Wal-Mart Stores, Inc. ..................... 44,000 2,123,000
------------
3,634,250
------------
SUPERMARKETS-5.12%
Kroger Co. ................................ 80,000 2,235,000
Safeway, Inc. ............................. 20,000 990,000
------------
3.225,000
------------
TECHNOLOGY-9.38%
Cisco Systems, Inc. ....................... 24,000 1,548,000
Hewlett Packard Co. ....................... 23,000 2,311,500
Intel Corp. ............................... 12,000 714,000
Oracle Corp. .............................. 36,000 1,336,500
------------
5,910,000
------------
TELECOMMUNICATIONS-9.66%
ADC Telecommunications, Inc. .............. 25,000 1,139,061
AT&T Corp. ................................ 30,000 1,674,375
Lucent Technologies, Inc. ................. 28,000 1,888,250
MCI Worldcom, Inc. ........................ 16,000 1,380,000
------------
6,081,686
------------
TRANSPORTATION & SHIPPING-3.07%
FDX Corp. ................................. 35,600 1,931,300
------------
TOTAL INVESTMENTS
(Cost: $47,635,912*) 94.28% 59,374,973
Other assets less liabilities ........... 5.72% 3,599,601
-------- -------------
TOTAL NET ASSETS ........................ 100.00% $62,974,574
======== =============
- ----------------
* Aggregate cost for Federal income tax purposes.
See Notes to Financial Statements
23
<PAGE>
VAN ECK/CHUBB TAX-EXEMPT FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1999 (Unaudited) (continued)
MARKET
PRINCIPAL VALUE
AMOUNT (NOTE B)
---------- --------
MUNICIPAL OBLIGATIONS-96.66%
ALASKA-1.95%
Anchorage, Alaska, Hospital Revenue,
(Sisters of Providence Project),
Series 1991, 6.75%, due 10/01/02 .......... $150,000 $ 159,621
North Slope Borough, Alaska,
General Obligation, Series A,
Zero Coupon, MBIA Insured,
due 6/30/04 ............................... 550,000 438,991
------------
598,612
------------
CONNECTICUT-0.55%
Connecticut State, General Obligation,
Series C, 7.00%, Prerefunded to
9/15/00 at 102+ ........................... 160,000 169,764
------------
District of Columbia-3.64%
District of Columbia, Certificate
of Participation, 7.30%,
due 1/01/13+ .............................. 300,000 327,677
District of Columbia, Series 93A,
5.875%, due 6/01/05 ....................... 465,000 486,455
District of Columbia, Series 93A,
5.875%, due 6/01/05, ETM .................. 35,000 37,579
Metropolitan Washington D.C.
Airport Authority,
General Airport Revenue,
Series A, AMT, MBIA Insured,
6.50%, due 10/01/07+ ...................... 250,000 267,860
------------
1,119,571
------------
FLORIDA-4.66%
Dade County, Florida, Aviation Revenue,
Miami International Airport,
FSA Insured, 5.125%,
due 10/01/27 .............................. 1,500,000 1,433,085
------------
GEORGIA-0.87%
Cartersville, Georgia Development
Authority, Water & Wastewater
Facilities, Anheuser Busch, AMT,
6.75%, due 2/01/12+ ....................... 250,000 266,995
------------
ILLINOIS-5.61%
Cook County, Illinois, General Obligation,
MBIA Insured, Series 1990,
7.00%, due 11/01/99 ....................... 150,000 151,760
MARKET
PRINCIPAL VALUE
AMOUNT (NOTE B)
---------- --------
Illinois State Toll Highway, Series 92A,
6.375%, Prerefunded to
1/01/03 at 102+ ........................... 1,100,000 $ 1,190,389
Metropolitan Pier & Exposition Authority,
Illinois, 6.50%, Prerefunded to
6/15/03 at 102+ ........................... 345,000 377,253
Metropolitan Pier & Exposition Authority,
Illinois, 6.50%, due 6/15/27+ ............. 5,000 5,407
------------
1,724,809
------------
INDIANA-12.07%
Indiana Bond Bank, Revenue,
State Revolving Fund,
6.00%, due 2/01/15+ ....................... 500,000 529,664
Indiana Health Facilities
Financing Authority, Charity Obligated
Group, 5.00%, due 11/1/26,
Mandatory Put on 11/01/07 at 100 .......... 1,315,000 1,342,601
Indiana Health Facilities Financing
Authority, Holy Cross Health
System Corp, MBIA Insured 5.375%,
due 12/01/12 .............................. 500,000 516,251
Indiana Municipal Power Supply,
MBIA Insured 5.50%, due 1/01/16 ........... 1,200,000 1,228,841
Indiana State Housing Finance Authority,
Single Family Mortgage 1990,
Series C, AMT, 7.80%,
due 1/01/22+ .............................. 90,000 93,581
------------
3,710,938
------------
IOWA-3.95%
Iowa Finance Authority, Single Family
Revenue, AMT, 4.95%, due 1/01/21 .......... 1,250,000 1,214,555
------------
LOUISIANA-0.70%
Jefferson, Louisiana, Sales Tax Revenue,
Refunding, FGIC Insured, Series A,
6.75%, Prerefunded to
12/01/02 at 100+ .......................... 60,000 64,744
Jefferson, Louisiana, Sales Tax Revenue,
Refunding, FGIC Insured, Series A,
6.75%, due 12/01/06+ ...................... 140,000 149,189
------------
213,933
------------
MAINE-0.61%
Maine Educational Loan Authority,
Series 92A, AMT, 6.95%,
due 12/01/07+ ............................. 175,000 186,726
------------
See Notes to Financial Statements
24
<PAGE>
VAN ECK/CHUBB TAX-EXEMPT FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1999 (Unaudited) (continued)
MASSACHUSETTS-5.46%
Massachusetts State Construction Loan,
Series A, 6.00%, Prerefunded to
6/01/01 at 100+ .......................... 300,000 $ 311,024
Massachusetts State Turnpike Authority,
MBIA Insured, Series A,
5.00%, due 1/01/37 ....................... 1,500,000 1,366,053
------------
1,677,077
------------
MISSOURI-0.53%
Missouri Health & Educational Facilities
Authority, St. Luke's Hospital,
MBIA Insured, 7.00%,
Prerefunded to 11/15/01 at 102+ .......... 150,000 162,678
------------
NEW HAMPSHIRE-0.74%
New Hampshire Turnpike System,
Series A, FGIC Insured,
6.75%, due 11/01/11+ ..................... 200,000 228,290
------------
NEW JERSEY-8.05%
New Jersey Economic Development
Authority, The Seeing Eye, Inc. Project,
7.30%, due 4/01/11+ ...................... 1,000,000 1,060,718
New Jersey Wastewater Treatment Trust,
6.875%, Prerefunded to 6/15/00
at 101.75+ ............................... 165,000 173,049
New Jersey Wastewater Treatment Trust,
6.875%, due 6/15/07+, .................... 15,000 15,544
Salem County, New Jersey, Pollution
Control Financing Authority,
Waste Disposal Revenue,
E.I. DuPont Project, AMT,
6.50%, due 11/15/21+ ..................... 1,150,000 1,224,028
------------
2,473,339
------------
NEW YORK-14.99%
Metropolitan Transportation Authority,
New York, Transit Facilities,
Service Contract, Series 8, 5.00%,
due 7/01/02 .............................. 1,000,000 1,021,499
New York City, New York,
General Obligation, Series H,
6.875%, due 2/01/02, ETM ................. 220,000 234,354
New York City, New York,
General Obligation, Series H,
Subseries H-1, 5.80%, due 8/01/04 ........ 250,000 264,967
New York City, New York,
General Obligation, Series D,
5.25%, due 8/01/03 ....................... 1,000,000 $ 1,032,565
New York City, Series H,
6.875%, due 2/01/02 ...................... 30,000 31,889
New York State Dormitory Authority,
City University System, Series I,
5.125%, due 7/01/13+ ..................... 1,325,000 1,297,786
New York State Local Government
Assistance Corporation, Series B,
5.50%, due 4/01/21+ ...................... 450,000 460,865
New York State Thruway Authority,
Highway and Bridge Trust Fund,
Series A, MBIA Insured,
5.60%, due 4/01/10+ ...................... 250,000 261,811
------------
4,605,736
------------
OKLAHOMA-1.95%
Oklahoma Industrial Development
Authority, Sisters of Mercy, Series A,
5.00%, due 6/01/13+ ...................... 600,000 598,783
------------
PENNSYLVANIA-1.06%
Philadelphia, Pennsylvania, Hospital &
Higher Education Facility Authority,
(Children's Hospital), 5.00%,
due 2/15/21+ ............................. 350,000 324,664
------------
TENNESSEE-5.92%
Memphis-Shelby County, Tennessee Airport
Authority, (Federal Express Corp.),
AMT, 6.75%, due 9/01/12+ ................. 250,000 267,234
Shelby County, Tennessee,
General Obligation, Series B,
Zero Coupon, due 12/01/12 ................ 2,000,000 1,037,664
Tennessee Housing Development Agency,
1993 Series A, 5.90%,
due 7/01/18+ ............................. 500,000 515,512
------------
1,820,410
------------
TEXAS-6.06%
Austin, Texas, Independent School
District, Permanent School Fund,
Zero Coupon, due 8/01/13 ................. 500,000 240,629
Austin, Texas, Utility System Revenue,
Series C, 7.30%, Prerefunded to
11/15/01 at 100+ ......................... 60,000 64,383
See Notes to Financial Statements
25
<PAGE>
VAN ECK/CHUBB TAX-EXEMPT FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1999 (Unaudited) (continued)
MARKET
PRINCIPAL VALUE
AMOUNT (NOTE B)
---------- --------
Houston, Texas, Independent School
District, Permanent School Fund,
Zero Coupon, due 8/15/13 ............... 1,150,000 $ 560,757
Waxahachie, Texas, Independent School
District, Permanent School Fund,
Zero Coupon, due 8/15/13 ............... 2,060,000 996,222
------------
1,861,991
------------
UTAH-4.13%
Utah State Board of Regents,
Student Loan Revenue,Series F,
AMT, 5.00%, due 5/01/06 ................ 1,250,000 1,270,168
------------
WASHINGTON-13.16%
Lewis County, Washington, Public Utility
District #1, Revenue Series 91,
7.00%, Prerefunded to
10/01/01 at 102+ ....................... 250,000 270,330
Washington Health Care Facilities
Authority, Catholic Health Initiatives,
MBIA Insured, 5.125%,
due 12/01/17+ .......................... 1,300,000 1,254,854
Washington Health Care Facilities
Authority, Revenue, MBIA Insured,
(Group Health Co-Op),
6.75%, due 12/01/11+ ................... 300,000 314,715
Washington Health Care Facilities
Authority, Revenue, Series 93,
(Sisters of Providence),
6.25%, due 10/01/13+ ................... 500,000 531,935
MARKET
PRINCIPAL VALUE
AMOUNT (NOTE B)
---------- --------
Washington Housing Finance Commission,
GNMA/FNMA MBS Programs,
7.10%, due 7/01/22+ .................... 145,000 $ 149,603
Washington State Public Power Supply
System, Nuclear Project Number 1,
FSA Insured, 5.75%, due 7/01/11 ........ 1,200,000 1,283,852
Washington State Public Power Supply
System, Nuclear Project Number 2,
Revenue, Series 90C, 7.625%,
Prerefunded to 1/01/01 at 102+ ......... 100,000 107,053
Washington State Public Power Supply
System, Nuclear Project Number 3,
Revenue, 7.50%, Prerefunded to
7/01/00 at 102+ ........................ 125,000 132,338
------------
4,044,680
------------
TOTAL INVESTMENTS:
(Cost: $28,778,088*) ................... 96.66% 29,706,804
Other assets less liabilities .......... 3.34% 1,026,342
-------- -------------
TOTAL NET ASSETS ....................... 100.00% $30,733,146
======== =============
- ---------------
* Aggregate cost for Federal income tax purposes.
+ Issued with call provisions.
Abbreviations:
AMT-Alternative Minimum Tax
ETM-Escrowed To Maturity
FGIC-Financial Guaranty Insurance Company
FSA-Financial Security Assurance
MBIA-Municipal Bond Investors Assurance Corporation
See Notes to Financial Statements
26
<PAGE>
VAN ECK/CHUBB TOTAL RETURN FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1999 (Unaudited) (continued)
NUMBER MARKET
OF VALUE
COMPANY SHARES (NOTE B)
- ------- ---------- --------
COMMON STOCK-56.64%
AUTOS, TRUCKS & PARTS-3.21%
Borg-Warner Automotive, Inc. ............. 10,900 $ 599,500
DaimlerChrysler AG ....................... 7,477 664,518
------------
1,264,018
------------
BANKING-6.05%
Banc One Corp. ........................... 14,593 869,196
Citigroup, Inc. .......................... 9,000 427,500
Fleet Financial Group, Inc. .............. 14,000 621,250
Mellon Bank Corp. ........................ 12,800 465,600
------------
2,383,546
------------
BUILDING & CONSTRUCTION-0.19%
Hanson PLC (ADR) ......................... 1,687 74,861
------------
CHEMICALS/FERTILIZER-0.06%
Millennium Chemicals, Inc. ............... 964 22,714
------------
Computers and Computer Software-9.13%
BMC Software, Inc. ....................... 10,000 540,000
Compaq Computer Corp. .................... 10,000 236,875
Compuware Corp. .......................... 20,000 636,250
International Business Machines Corp. .... 6,000 775,500
Microsoft Corp. .......................... 8,000 721,500
Sun Microsystems, Inc. ................... 10,000 688,750
------------
3,598,875
------------
ELECTRICAL EQUIPMENT-1.43%
General Electric Co. ..................... 5,000 565,000
------------
ELECTRONICS-5.95%
Koninklijke Philips Electronics N.V.
(New York Registry Shares) ............. 9,384 946,611
Motorola, Inc. ........................... 8,000 758,000
Tektronix, Inc. .......................... 21,150 638,466
------------
2,343,077
------------
FINANCIAL SERVICES-2.67%
Associates First Capital Corp. ........... 7,548 334,471
Merrill Lynch & Co., Inc. ................ 9,000 719,438
------------
1,053,909
------------
HOSPITAL MANAGEMENT-0.00%
Healthcare Services Group ................ 96 936
------------
NUMBER MARKET
OF VALUE
COMPANY SHARES (NOTE B)
- ------- ---------- --------
HOUSEHOLD PRODUCTS-0.73%
Gillette Co. ............................. 7,000 $ 287,000
------------
MANUFACTURING-2.94%
AlliedSignal, Inc. ....................... 7,000 441,000
United Technologies Corp. ................ 10,000 716,875
------------
1,157,875
------------
OIL & GAS EQUIPMENT & SERVICES-1.15%
Halliburton Co. .......................... 10,000 452,500
------------
PHARMACEUTICALS-4.49%
Bristol-Myers Squibb Co. ................. 14,000 986,125
Johnson & Johnson ........................ 8,000 784,000
------------
1,770,125
------------
RETAIL-3.74%
Gap, Inc. ................................ 12,000 604,500
Wal-Mart Stores, Inc. .................... 18,000 868,500
------------
1,473,000
------------
SUPERMARKETS-1.42%
Kroger Co. ............................... 20,000 558,750
------------
TECHNOLOGY-6.26%
Cisco Systems, Inc. ...................... 10,000 645,000
Hewlett Packard Co. ...................... 10,000 1,005,000
Intel Corp. .............................. 5,000 297,500
Oracle Corp. ............................. 14,000 519,750
- - ------------
2,467,250
------------
TELECOMMUNICATIONS-3.72%
ADC Telecommunications, Inc. ............. 9,000 410,063
Lucent Technologies, Inc. ................ 8,000 539,500
MCI Worldcom, Inc. ....................... 6,000 517,500
------------
1,467,063
------------
TRANSPORTATION & SHIPPING-3.50%
CSX Corp. ................................ 13,000 589,063
FDX Corp. ................................ 14,600 792,050
------------
1,381,113
------------
TOTAL COMMON STOCK
(Cost: $16,615,712) .................... 22,321,612
------------
See Notes to Financial Statements
27
<PAGE>
VAN ECK/CHUBB TOTAL RETURN FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1999 (Unaudited) (continued)
NUMBER MARKET
OF VALUE
COMPANY SHARES (NOTE B)
- ------- ---------- --------
U.S. GOVERNMENT OBLIGATIONS-25.47%
U.S. Treasury Notes
7.25%, due 8/15/04 .................. $2,900,000 $ 3,081,250
6.875%, due 5/15/06 ................. 5,200,000 5,476,250
6.50%, due 10/15/06 ................. 200,000 206,438
6.25%, due 2/15/03 .................. 1,250,000 1,271,485
------------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(Cost: $9,869,193) .................. 10,035,423
MARKET
PRINCIPAL VALUE
COMPANY AMOUNT (NOTE B)
- ------- ---------- --------
CORPORATE BONDS-15.26%
Credit Suisse First Boston Mortgage
Securities Corp.
7.46%, due 5/20/09 .................. $2,000,000 $ 1,910,000
First Union Banc
7.50%, due 4/15/35 .................. 2,000,000 2,112,550
Tennessee Gas Pipeline
7.00%, due 3,15,27 .................. 2,000,000 1,992,443
TOTAL CORPORATE BONDS -----------
(Cost: $6,222,537) .................. 6,014,993
TOTAL INVESTMENTS -----------
(Cost: $32,707,442*) ................ 97.37% 38,372,028
Other assets less liabilities ....... 2.63% 1,036,567
-------- -----------
TOTAL NET ASSETS .................... 100.00% $39,408,595
======== ===========
- -----------------
* Aggregate cost for Federal income tax purposes.
ADR-American Depositary Receipt
See Notes to Financial Statements
28
<PAGE>
NUMBER MARKET
OF VALUE
COMPANY SHARES (NOTE B)
- ------- ---------- --------
COMMON STOCKS--90.27%
AEROSPACE & DEFENSE-5.33%
General Motors Corp. (Class H) ........... 15,000 $ 843,750
Litton Industries, Inc. .................. 10,000 717,500
------------
1,561,250
------------
AUTOS, TRUCKS & PARTS-2.03%
OEA, Inc. ................................ 65,000 576,875
United Road Services, Inc. ............... 3,500 17,938
------------
594,813
------------
BUILDING & CONSTRUCTION-2.63%
Champion Enterprises, Inc. ............... 41,300 769,213
------------
BUILDING MATERIALS & TOOLS-2.57%
Lafarge Corp. ............................ 21,200 751,275
------------
COMPUTER PRODUCTS & SERVICES-13.53%
BancTec, Inc. ............................ 41,800 749,788
Complete Business Solutions, Inc. ........ 35,000 627,813
Keane, Inc. .............................. 24,000 543,000
Metamor Worldwide, Inc. .................. 25,000 601,563
Parametric Technology Corp. .............. 50,000 693,750
Reynolds and Reynolds Co. (Class A) ...... 32,000 746,000
------------
3,961,914
------------
FINANCIAL SERVICES-4.26%
CCB Financial Corp. ...................... 12,000 634,500
Charter One Financial, Inc. .............. 22,000 611,875
------------
1,246,375
------------
FOOD PROCESSING-0.01%
Archer-Daniels-Midland Co. ............... 132 2,038
------------
HOUSEHOLD PRODUCTS-3.66%
Tupperware Corp. ......................... 42,000 1,071,000
------------
HOUSING & HOME FURNISHINGS-0.09%
Newmark Homes Corp. ...................... 5,000 26,875
------------
INDUSTRIAL METALS-1.68%
Intermet Corp. ........................... 32,500 491,563
------------
NUMBER MARKET
OF VALUE
COMPANY SHARES (NOTE B)
- ------- ---------- --------
INSURANCE-2.65%
Commerce Group, Inc. ..................... 31,800 $ 775,125
------------
Machinery & Tools-1.12%
Brown & Sharpe Manufacturing Co.
(Class A) .............................. 60,000 326,250
------------
MEDICAL SUPPLIES & SERVICES-12.76%
Bard (C.R.), Inc. ........................ 14,000 669,375
Beckman Coulter, Inc. .................... 9,100 442,488
Becton, Dickinson & Co. .................. 20,000 600,000
St. Jude Medical, Inc. ................... 30,000 1,068,750
Total Renal Care Holdings, Inc. .......... 61,400 955,531
------------
3,736,144
------------
OIL & GAS EQUIPMENT & SERVICES-3.66%
Core Laboratories N.V. ................... 40,000 557,500
Wolverine Tube, Inc. ..................... 20,500 515,063
------------
1,072,563
------------
PHARMACEUTICALS-7.51%
AmeriSource Health Corp. ................. 20,000 510,000
Bergen Brunswig Corp. .................... 23,000 396,750
ICN Pharmaceuticals, Inc. ................ 25,000 804,688
Sepracor, Inc. ........................... 6,000 487,500
------------
2,198,938
------------
PRINTED CURCUIT BOARDS-2.31%
Jabil Circuit, Inc. ...................... 15,000 676,875
------------
RESTAURANTS-3.85%
Brinker International, Inc. .............. 20,000 543,750
Lone Star Steakhouse & Saloon, Inc. ...... 60,000 583,125
------------
1,126,875
------------
RETAIL-8.02%
BJ Wholesale Club, Inc. .................. 25,000 751,563
GoTo.com, Inc. ........................... 1,000 28,000
Great Atlantic & Pacific Tea Co., Inc. ... 17,500 591,719
Tandy Corp. .............................. 20,000 977,500
------------
2,348,782
------------
TECHNOLOGY-3.30%
Wyman-Gordon Co. ......................... 50,000 965,625
------------
See Notes to Financial Statements
29
<PAGE>
VAN ECK/CHUBB CAPITAL APPRECIATION FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 1999 (Unaudited) (continued)
NUMBER MARKET
OF VALUE
COMPANY SHARES (NOTE B)
- ------- ---------- --------
TELECOMMUNICATIONS-7.11%
ADC Telecommunications, Inc. ........... 15,000 $ 683,438
Antec Corp. ............................ 25,000 801,563
CenturyTel, Inc. ....................... 15,000 596,250
------------
2,081,251
------------
VISION CARE-2.64%
BMC Industries, Inc. ................... 75,000 773,438
------------
TOTAL INVESTMENTS
(Cost: $30,215,672*) ................. 90.72% 26,558,182
Other assets less liabilities ........ 9.28% 2,715,160
-------- -------------
TOTAL NET ASSETS ..................... 100.00% $29,273,342
======== =============
- --------------------
* Aggregate cost for Federal income tax purposes.
See Notes to Financial Statements
30
<PAGE>
(This page intentionally left blank)
31
<PAGE>
VAN ECK/CHUBB FUNDS, INC.
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
VAN ECK/CHUBB
GLOBAL GOVERNMENT
INCOME SECURITIES
FUND FUND
------------ ------------
<S> <C> <C>
ASSETS
Investments at cost--see schedules of investments ............................................ $ 82,962,127 $ 30,935,627
============ ============
Investments at market value (Notes B & C) .................................................... $ 78,296,600 $ 30,767,469
Cash and foreign currencies .................................................................. 1,428,428 407,049
Cash--initial margin (Note F) ................................................................ 21,600 --
Receivable for interest and dividends ........................................................ 1,651,867 482,198
Due from broker--variation margin (Note F) ................................................... 538,060 --
Receivable for Fund shares sold .............................................................. 136 73
Securities sold .............................................................................. 2,495,154 --
Deferred organization costs (Note B) ......................................................... 3,094 --
------------ ------------
Total Assets ............................................................................. 84,434,939 31,656,789
------------ ------------
LIABILITIES
Dividends payable ............................................................................ 34,844 6,059
Payable for Fund shares redeemed ............................................................. 1,625 69,644
Gross unrealized loss on foreign forward contracts (Note B) .................................. 4,132 --
Accounts payable ............................................................................. 104,206 44,244
Securities purchased ......................................................................... 3,315,225 --
------------ ------------
Total Liabilities ........................................................................ 3,460,032 119,947
------------ ------------
NET ASSETS ..................................................................................... $ 80,974,907 $ 31,536,842
============ ============
NET ASSETS CONSIST OF:
Par value .................................................................................... $ 87,023 $ 29,693
Capital paid in excess of par ................................................................ 88,782,210 31,897,623
Undistributed (overdistributed) net investment income ........................................ (23,879) 16,626
Accumulated net realized gain (loss) from investments ........................................ (3,148,444) (238,942)
Net unrealized gain (loss) from investments .................................................. (4,665,527) (168,158)
Net unrealized loss on futures and foreign denominated assets, liabilities and forward
foreign exchange contracts ................................................................. (56,476) --
------------ ------------
Net Assets ............................................................................... $ 80,974,907 $ 31,536,842
============ ============
CLASS A SHARES
Net Assets ..................................................................................... $ 80,974,907 $ 31,536,842
============ ============
Shares Outstanding
($.01 par value, 100,000,000 shares per Fund authorized) ..................................... 8,702,313 2,969,257
============ ============
Net Asset Value Per Share ...................................................................... $ 9.30 $ 10.62
============ ============
Maximum Offering Price Per Share (NAV/(1 -maximum sales commission)) ........................... $ 9.76 $ 11.15
============ ============
</TABLE>
32
<PAGE>
<TABLE>
<CAPTION>
VAN ECK/CHUBB VAN ECK/CHUBB
GROWTH AND VAN ECK/CHUBB VAN ECK/CHUBB CAPITAL
INCOME TAX-EXEMPT TOTAL RETURN APPRECIATION
FUND FUND FUND FUND
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
ASSETS
Investments at cost--see schedules of investments ................. $ 47,635,912 $ 28,778,088 $ 32,707,442 $ 30,215,672
============ ============ ============ ============
Investments at market value (Notes B & C) ......................... $ 59,374,973 $ 29,706,804 $ 38,372,028 $ 26,558,182
Cash and foreign currencies ....................................... 3,736,414 635,910 951,119 3,389,060
Cash--initial margin (Note F) ..................................... -- -- -- --
Receivable for interest and dividends ............................. 52,682 461,520 260,446 26,203
Due from broker--variation margin (Note F) ........................ -- -- -- --
Receivable for Fund shares sold ................................... 16,475 -- 287 --
Securities sold ................................................... -- -- -- --
Deferred organization costs (Note B) .............................. -- -- -- 3,094
------------ ------------ ------------ ------------
Total Assets .................................................. 63,180,544 30,804,234 39,583,880 $ 29,976,539
------------ ------------ ------------ ------------
LIABILITIES
Dividends payable ................................................. -- 8,691 6,608 --
Payable for Fund shares redeemed .................................. 91,979 21,233 101,898 14,830
Gross unrealized loss on foreign forward contracts (Note B) ....... -- -- -- --
Accounts payable .................................................. 113,991 41,164 66,779 58,373
Securities purchased .............................................. -- -- -- 629,994
------------ ------------ ------------ ------------
Total Liabilities ............................................. 205,970 71,088 175,285 703,197
------------ ------------ ------------ ------------
NET ASSETS .......................................................... $ 62,974,574 $ 30,733,146 $ 39,408,595 $ 29,273,342
============ ============ ============ ============
NET ASSETS CONSIST OF:
Par value ......................................................... $ 23,557 $ 24,898 $ 19,536 $ 24,354
Capital paid in excess of par ..................................... 44,499,864 29,784,793 29,994,246 37,595,049
Undistributed (overdistributed) net investment income ............. 57,213 (12,436) (721) (5,466)
Accumulated net realized gain (loss) from investments ............. 6,654,879 7,175 3,730,948 (4,683,105)
Net unrealized gain (loss) from investments ....................... 11,739,061 928,716 5,664,586 (3,657,490)
Net unrealized loss on futures and foreign denominated
assets, liabilities and forward
foreign exchange contracts ...................................... -- -- -- --
------------ ------------ ------------ ------------
Net Assets .................................................... $ 62,974,574 $ 30,733,146 $ 39,408,595 $ 29,273,342
============ ============ ============ ============
CLASS A SHARES
Net Assets .......................................................... $ 62,974,574 $ 30,733,146 $ 39,408,595 $ 29,273,342
============ ============ ============ ============
Shares Outstanding
($.01 par value, 100,000,000 shares per Fund authorized) .......... 2,355,730 2,489,844 1,953,632 2,435,448
============ ============ ============ ============
Net Asset Value Per Share ........................................... $ 26.73 $ 12.34 $ 20.17 $ 12.02
============ ============ ============ ============
Maximum Offering Price Per Share (NAV/(1 -maximum sales commission)). $ 28.36 $ 12.96 $ 21.40 $ 12.75
============ ============ ============ ============
</TABLE>
33
<PAGE>
VAN ECK/CHUBB FUNDS, INC.
STATEMENT OF OPERATIONS
Six Months Ended June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
VAN ECK/CHUBB
GLOBAL GOVERNMENT
INCOME SECURITIES
FUND FUND
----------- -----------
<S> <C> <C>
INVESTMENT INCOME
Income:
Interest ................................................................................... $ 2,534,379 $ 982,817
Dividends .................................................................................. -- --
Foreign taxes withheld ..................................................................... (2,063) --
----------- -----------
Total investment income ................................................................ 2,532,316 982,817
----------- -----------
Expenses:
Administrative fees (Note D) ................................................................. 196,445 73,199
Advisory fees (Note D) ....................................................................... 85,173 31,713
Distribution fees Class A and B (Notes A and D) .............................................. 212,939 79,644
Shareholder servicing costs .................................................................. 47,515 7,987
Registration fees ............................................................................ 14,528 10,754
Shareholder reports .......................................................................... 20,040 22,781
Professional fees ............................................................................ 13,049 9,566
Directors' fees and expenses ................................................................. 546 1,328
Custodian fees ............................................................................... 11,000 206
Organization expenses ........................................................................ 1,334 --
Miscellaneous expenses ....................................................................... 15,099 6,961
----------- -----------
Total expenses ......................................................................... 617,668 244,139
Fees waived and expenses assumed by affiliates (Note D) ...................................... (42,742) (85,212)
----------- -----------
Net expenses ........................................................................... 574,926 158,927
----------- -----------
Net investment income (loss) ........................................................... 1,957,390 823,890
----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES
Net realized gain (loss) on investments, futures and options ................................. 90,716 (1,468)
Net realized gain from foreign currency transactions ......................................... 129,043 --
Net change in unrealized gain (loss) on investments .......................................... (1,101,389) (1,169,844)
Net change in unrealized loss on futures, foreign denominated assets,
liabilities and forward foreign exchange contracts ......................................... (7,955,412) --
----------- -----------
Net gain (loss) on investments and foreign currencies ........................................ (8,837,042) (1,171,312)
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ................................ $(6,879,652) $ (347,422)
=========== ===========
</TABLE>
34
<PAGE>
<TABLE>
<CAPTION>
VAN ECK/CHUBB VAN ECK/CHUBB
GROWTH AND VAN ECK/CHUBB VAN ECK/CHUBB CAPITAL
INCOME TAX-EXEMPT TOTAL RETURN APPRECIATION
FUND FUND FUND FUND
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Income:
Interest ............................................................. $ 437,075 $ 810,869 $ 527,185 $ 62,606
Dividends ............................................................ 44,716 -- 203,027 123,369
Foreign taxes withheld ............................................... (6,732) -- (7,723) (578)
----------- ----------- ----------- -----------
Total investment income .......................................... 475,059 810,869 722,489 185,397
----------- ----------- ----------- -----------
Expenses:
Administrative fees (Note D) ........................................... 150,641 71,994 94,060 69,853
Advisory fees (Note D) ................................................. 62,852 31,209 39,805 29,745
Distribution fees Class A and B (Notes A and D) ........................ 158,544 78,132 100,309 74,388
Shareholder servicing costs ............................................ 51,833 21,886 33,034 22,954
Registration fees ...................................................... 15,675 10,894 11,597 11,519
Shareholder reports .................................................... 16,406 7,436 11,757 10,516
Professional fees ...................................................... 12,571 9,313 10,210 11,116
Directors' fees and expenses ........................................... 308 1,313 1,731 1,291
Custodian fees ......................................................... 513 1,561 1,796 1,389
Organization expenses .................................................. -- -- -- 1,334
Miscellaneous expenses ................................................. 13,904 5,376 9,384 7,219
----------- ----------- ----------- -----------
Total expenses ................................................... 483,247 239,114 313,683 241,324
Fees waived and expenses assumed by affiliates (Note D) ................ (78,744) (82,958) (57,587) (50,461)
----------- ----------- ----------- -----------
Net expenses ..................................................... 404,503 156,156 256,096 190,863
----------- ----------- ----------- -----------
Net investment income (loss) ..................................... 70,556 654,713 466,393 (5,466)
----------- ----------- ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES
Net realized gain (loss) on investments, futures and options ........... 6,654,879 7,203 3,730,948 (4,675,946)
Net realized gain from foreign currency transactions ................... -- -- -- --
Net change in unrealized gain (loss) on investments .................... 60,225 (997,978) (2,002,106) 2,290,181
Net change in unrealized loss on futures, foreign denominated assets,
liabilities and forward foreign exchange contracts ................... -- -- -- --
----------- ----------- ----------- -----------
Net gain (loss) on investments and foreign currencies .................. 6,715,104 (990,775) 1,728,842 (2,385,765)
----------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS .......... $ 6,785,660 $ (336,062) $ 2,195,235 $(2,391,231)
=========== =========== =========== ===========
</TABLE>
35
<PAGE>
VAN ECK/CHUBB FUNDS, INC.
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
VAN ECK/CHUBB VAN ECK/CHUBB
GLOBAL GOVERNMENT
INCOME SECURITIES
FUND FUND
---------------------------- ---------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
JUNE 30, 1999 DECEMBER JUNE 30, 1999 DECEMBER
(UNAUDITED) 31, 1998 (UNAUDITED) 31, 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
Net investment income (loss) ................................. $ 1,957,390 $ 3,312,070 $ 823,890 $ 1,727,370
Net realized gain (loss) on investments and options .......... 90,716 3,387,264 (1,468) 175,195
Net realized gain from foreign currency transactions ......... 129,043 362,788 -- --
Net realized gain (loss) on futures .......................... (1,101,389) 925,365 -- --
Net change in unrealized gain (loss) on investments,
futures, options and translation of assets and
liabilities in foreign currency ............................ (7,955,412) 3,432,433 (1,169,844) 393,290
------------ ------------ ------------ ------------
Net increase (decrease) in net assets resulting
from operations ............................................ (6,879,652) 11,419,920 (347,422) 2,295,855
DIVIDENDS AND DISTRIBUTIONS:
From net investment income:
Class A ...................................................... (1,957,335) (3,596,717) (820,527) (1,708,754)
Class B ...................................................... (46) (40) (3,362) (1,991)
From net realized gains:
Class A ...................................................... -- (2,485,897) -- --
Class B ...................................................... -- (98) -- --
INCREASE (DECREASE) IN NET ASSETS DERIVED FROM
SHAREHOLDER TRANSACTIONS (NOTE E) ............................ (1,401,311) 33,788,516 (175,775) 559,828
------------ ------------ ------------ ------------
Net increase (decrease) in net assets ...................... (10,238,344) 39,125,684 (1,347,086) 1,144,938
Net Assets:
Beginning of period ........................................ 91,213,251 52,087,567 32,883,928 31,738,990
------------ ------------ ------------ ------------
End of period .............................................. $ 80,974,907 $ 91,213,251 $ 31,536,842 $ 32,883,928
============ ============ ============ ============
UNDISTRIBUTED (OVERDISTRIBUTED) NET INVESTMENT INCOME .......... $ (23,879) $ (23,888) $ 16,626 $ 16,625
============ ============ ============ ============
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
VAN ECK/CHUBB
GROWTH AND
INCOME VAN ECK/CHUBB
FUND TAX-EXEMPT FUND
----------------------------- ---------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
JUNE 30, 1999 DECEMBER JUNE 30, 1999 DECEMBER
(UNAUDITED) 31, 1998 (UNAUDITED) 31, 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
Net investment income (loss) ................................. $ 70,556 $ 305,933 $ 654,713 $ 1,327,931
Net realized gain (loss) on investments and options .......... 6,654,879 1,235,023 7,203 52,555
Net realized gain from foreign currency transactions ......... -- -- -- --
Net realized gain (loss) on futures .......................... -- -- -- --
Net change in unrealized gain (loss) on investments,
futures, options and translation of assets and
liabilities in foreign currency ............................ (60,225) (2,800,889) (997,978) 446,289
------------ ------------ ------------ ------------
Net increase (decrease) in net assets resulting
from operations ............................................ 6,785,660 (1,259,933) (336,062) 1,826,775
DIVIDENDS AND DISTRIBUTIONS:
From net investment income:
Class A ...................................................... -- (306,732) (653,818) (1,333,269)
Class B ...................................................... -- (2,706) (761) (100)
From net realized gains:
Class A ...................................................... -- (1,223,543) -- (49,501)
Class B ...................................................... -- (10,799) -- (46)
INCREASE (DECREASE) IN NET ASSETS DERIVED FROM
SHAREHOLDER TRANSACTIONS (NOTE E) ............................ (11,883,399) 4,113,706 15,039 (23,604)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets ...................... (5,097,739) 1,309,993 (975,602) 420,255
Net Assets:
Beginning of period ........................................ 68,072,313 66,762,320 31,708,748 31,288,493
------------ ------------ ------------ ------------
End of period .............................................. $ 62,974,574 $ 68,072,313 $ 30,733,146 $ 31,708,748
============ ============ ============ ============
UNDISTRIBUTED (OVERDISTRIBUTED) NET INVESTMENT INCOME .......... $ 57,213 $ (13,343) $ (12,436) $ (12,570)
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
VAN ECK/CHUBB
VAN ECK/CHUBB CAPITAL
TOTAL RETURN APPRECIATION
FUND FUND
---------------------------- ----------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
JUNE 30, 1999 DECEMBER JUNE 30, 1999 DECEMBER
(UNAUDITED) 31, 1998 (UNAUDITED) 31, 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
Net investment income (loss) ................................. $ 466,393 $ 882,883 $ (5,466) $ (87,988)
Net realized gain (loss) on investments and options .......... 3,730,948 2,328,681 (4,675,946) 1,789,461
Net realized gain from foreign currency transactions ......... -- -- -- --
Net realized gain (loss) on futures .......................... -- -- -- --
Net change in unrealized gain (loss) on investments,
futures, options and translation of assets and
liabilities in foreign currency ............................ (2,002,106) (1,693,399) 2,290,181 (6,693,543)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets resulting
from operations ............................................ 2,195,235 1,518,165 (2,391,231) (4,992,070)
DIVIDENDS AND DISTRIBUTIONS:
From net investment income:
Class A ...................................................... (459,743) (874,966) -- --
Class B ...................................................... (1,948) (2,589) -- --
From net realized gains:
Class A ...................................................... -- (2,309,377) -- (1,711,100)
Class B ...................................................... -- (17,997) -- (535)
INCREASE (DECREASE) IN NET ASSETS DERIVED FROM
SHAREHOLDER TRANSACTIONS (NOTE E) ............................ (5,179,522) (5,392,298) (2,058,514) (1,055,289)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets ...................... (3,445,978) (7,079,062) (4,449,745) (7,758,994)
Net Assets:
Beginning of period ........................................ 42,854,573 49,933,635 33,723,087 41,482,081
------------ ------------ ------------ ------------
End of period .............................................. $ 39,408,595 $ 42,854,573 $ 29,273,342 $ 33,723,087
============ ============ ============ ============
UNDISTRIBUTED (OVERDISTRIBUTED) NET INVESTMENT INCOME .......... $ (721) $ (5,423) $ (5,466) --
============ ============ ============ ============
</TABLE>
37
<PAGE>
VAN ECK/CHUBB FUNDS, INC.
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period:
<TABLE>
<CAPTION>
VAN ECK/CHUBB GLOBAL INCOME FUND
-----------------------------------------------------------------------
CLASS A
-----------------------------------------------------------------------
PERIOD FROM
SIX MONTHS SEPTEMBER 1,
ENDED 1995(C)
JUNE 30, THROUGH
1999 YEAR ENDED DECEMBER 31, DECEMBER 31,
------------ ----------------------------------- ----------
(UNAUDITED) 1998 1997 1996 1995
------------ ------ ------ ------ ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ........ $10.32 $ 9.64 $10.24 $10.21 $10.00
------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income ..................... 0.224 0.421 0.471 0.551 0.116
Net Gains (Losses) on Securities
(both Realized and Unrealized) .......... (1.020) 0.994 (0.476) 0.030 0.210
------ ------ ------ ------ ------
Total from Investment Operations .......... (0.796) 1.415 (0.005) 0.581 0.326
------ ------ ------ ------ ------
LESS DISTRIBUTIONS TO SHAREHOLDERS
Dividends from Net Investment Income ...... (0.224) (0.445) (0.398) (0.485) (0.116)
Dividends in Excess of
Net Investment Income ................... -- -- -- (0.066) --
Distributions from Net Realized Gains ..... -- (0.290) (0.084) -- --
Distributions in Excess of
Net Realized Gains ...................... -- -- (0.040) -- --
Tax Returns of Capital .................... -- -- (0.073) -- --
------ ------ ------ ------ ------
Total Distributions ....................... (0.224) (0.735) (0.595) (0.551) (0.116)
------ ------ ------ ------ ------
Net Asset Value, End of Period .............. $ 9.30 $10.32 $9.64 $10.24 $10.21
====== ====== ====== ====== ======
Total Return(A) ............................. (7.78%) 15.00% 0.02% 5.95% 3.27%
RATIOS TO AVERAGE NET ASSETS:
Gross Expenses(B) ......................... 1.45%(D) 1.56% 1.56% 1.68% 2.14%(D)
Net Expenses .............................. 1.35%(D) 1.35% 1.35% 1.23% 1.75%(D)
Net Investment Income ..................... 4.60%(D) 4.24% 4.62% 5.49% 4.48%(D)
Portfolio Turnover Rate ..................... 47.30% 99.31% 185.95% 80.70% 14.16%
Net Assets, At End of Period ................ $80,974,907 $91,209,649 $52,087,567 $12,226,878 $10,705,562
</TABLE>
- --------------------
(A) Total return assumes reinvestment of all distributions during the period and
does not reflect deduction of sales charge. Investment returns and principal
values will fluctuate and shares, when redeemed, may be worth more or less
than the original cost. Total returns for periods of less than one year are
not annualized.
(B) Had fees not been waived and expenses not been assumed.
(C) Commencement of operations.
(D) Annualized.
38
<PAGE>
VAN ECK/CHUBB FUNDS, INC.
FINANCIAL HIGHLIGHTS (continued)
For a share outstanding throughout each period:
<TABLE>
<CAPTION>
VAN ECK/CHUBB GOVERNMENT SECURITIES FUND
-----------------------------------------------------------------
CLASS A
-----------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, -----------------------------------------------------------------
1999 (UNAUDITED) 1998 1997 1996 1995 1994
---------------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period .................... $11.02 $10.82 $10.48 $10.78 $ 9.75 $10.71
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income ...... 0.278 0.583 0.616 0.623 0.636 0.607
Net Gains (Losses) on
Securities (both Realized
and Unrealized) .......... (0.400) 0.200 0.340 (0.300) 1.030 (0.960)
------ ------ ------ ------ ------ ------
Total from Investment
Operations ............... (0.122) 0.783 0.956 0.323 1.666 (0.353)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from Net
Investment Income ........ (0.278) (0.583) (0.616) (0.623) (0.636) (0.607)
------ ------ ------ ------ ------ ------
Total Distributions ........ (0.278) (0.583) (0.616) (0.623) (0.636) (0.607)
------ ------ ------ ------ ------ ------
Net Asset Value, End of Period . $10.62 $11.02 $10.82 $10.48 $10.78 $9.75
====== ====== ====== ====== ====== ======
Total Return(A) ................ (1.10%) 7.40% 9.44% 3.19% 17.50% (3.34%)
RATIOS TO AVERAGE NET ASSETS:
Gross Expenses(B) .......... 1.53%(C) 1.61% 1.55% 1.60% 1.70% 1.71%
Net Expenses ............... 1.00%(C) 1.00% 1.00% 0.93% 1.00% 1.00%
Net Investment Income ...... 5.20%(C) 5.32% 5.78% 5.94% 6.16% 5.96%
Portfolio Turnover Rate -- 14.10% 39.86% 140.94% 276.56% 113.36%
Net Assets, At End of Period ... $31,536,842 $32,729,708 $31,738,990 $12,818,450 $13,886,478 $12,534,640
</TABLE>
- -----------------
(A) Total return assumes reinvestment of all distributions during the period and
does not reflect deduction of sales charge. Investment returns and principal
values will fluctuate and shares, when redeemed, may be worth more or less
than the original cost. Total returns for periods of less than one year are
not annualized.
(B) Had fees not been waived and expenses not been assumed. (C) Annualized.
(C) Annualized
39
<PAGE>
VAN ECK/CHUBB FUNDS, INC.
FINANCIAL HIGHLIGHTS (continued)
For a share outstanding throughout each period:
<TABLE>
<CAPTION>
VAN ECK/CHUBB GROWTH AND INCOME FUND
-----------------------------------------------------------------
CLASS A
-----------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, -----------------------------------------------------------------
1999 (UNAUDITED) 1998 1997 1996 1995 1994
---------------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period .................... $23.96 $24.56 $21.04 $18.58 $14.77 $16.70
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income ...... 0.029 0.110 0.096 0.250 0.204 0.247
Net Gains (Losses) on
Securities (both Realized
and Unrealized) .......... 2.741 (0.156) 5.286 3.931 5.042 (0.954)
------ ------ ------ ------ ------ ------
Total from Investment
Operations ............... 2.770 (0.046) 5.382 4.181 5.246 (0.707)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from Net
Investment Income ........ -- (0.111) (0.096) (0.250) (0.204) (0.247)
Dividends in Excess of
Net Investment Income .... -- -- (0.004) -- -- --
Distributions from Net
Realized Gains ........... -- (0.443) (1.762) (1.471) (0.885) (0.976)
Distributions in Excess of
Net Realized Gains ....... -- -- -- -- (0.346) --
Tax Return of Capital ...... -- -- -- -- (0.001) --
------ ------ ------ ------ ------ ------
Total Distributions ........ -- (0.554) (1.862) (1.721) (1.436) (1.223)
------ ------ ------ ------ ------ ------
Net Asset Value, End of Period . $26.73 $23.96 $24.56 $21.04 $18.58 $14.77
====== ====== ====== ====== ====== ======
Total Return(A) ................ 11.56% (0.18%) 25.85% 22.50% 35.52% (4.26%)
RATIOS TO AVERAGE NET ASSETS:
Gross Expenses(B) .......... 1.53%(C) 1.57% 1.49% 1.58% 1.69% 1.71%
Net Expenses ............... 1.28%(C) 1.25% 1.25% 1.06% 1.08% 1.00%
Net Investment Income ...... 0.23%(C) 0.44% 0.49% 1.29% 1.20% 1.66%
Portfolio Turnover Rate ........ 68.34% 43.42% 21.02% 44.50% 37.59% 46.17%
Net Assets, At End of Period ... $62,974,574 $67,477,768 $66,762,320 $40,281,849 $29,144,161 $18,679,228
</TABLE>
- -----------------
(A) Total return assumes reinvestment of all distributions during the period and
does not reflect deduction of sales charge. Investment returns and principal
values will fluctuate and shares, when redeemed, may be worth more or less
than the original cost. Total returns for periods of less than one year are
not annualized.
(B) Had fees not been waived and expenses not been assumed.
(C) Annualized.
40
<PAGE>
VAN ECK/CHUBB FUNDS, INC.
FINANCIAL HIGHLIGHTS (continued)
For a share outstanding throughout each period:
<TABLE>
<CAPTION>
VAN ECK/CHUBB TAX-EXEMPT FUND
-----------------------------------------------------------------
CLASS A
-----------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, -----------------------------------------------------------------
1999 (UNAUDITED) 1998 1997 1996 1995 1994
---------------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period .................... $12.74 $12.56 $12.15 $12.33 $11.22 $12.58
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income ...... 0.26 0.54 0.58 0.61 0.62 0.62
Net Gains (Losses) on
Securities (both Realized
and Unrealized) .......... (0.40) 0.20 0.45 (0.14) 1.13 (1.36)
------ ------ ------ ------ ------ ------
Total from Investment
Operations ............... (0.14) 0.74 1.03 0.47 1.75 (0.74)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from Net
Investment income ........ (0.26) (0.54) (0.58) (0.61) (0.62) (0.62)
Distributions from Capital
Gains .................... -- (0.02) (0.04) (0.04) (0.01) --
Distributions in Excess of
Capital Gains ............ -- -- (0.00) -- (0.01) --
------ ------ ------ ------ ------ ------
Total Distributions ........ (0.26) (0.56) (0.62) (0.65) (0.64) (0.62)
------ ------ ------ ------ ------ ------
Net Asset Value, End of Period . $12.34 $12.74 $12.56 $12.15 $12.33 $11.22
====== ====== ====== ====== ====== ======
Total Return(A) ................ (1.10%) 6.01% 8.73% 4.00% 15.88% (5.97%)
RATIOS TO AVERAGE NET ASSETS:
Gross Expenses(B) .......... 1.53%(C) 1.63% 1.56% 1.65% 1.79% 1.80%
Net Expenses ............... 1.00%(C) 1.00% 1.00% 0.98% 1.00% 1.00%
Net Investment Income ...... 4.20%(C) 4.23% 4.74% 5.00% 5.20% 5.21%
Portfolio Turnover Rate -- 2.50% 12.78% 16.29% 7.39% 8.37%
Net Assets, At End of Period ... $30,733,146 $31,708,748 $31,288,136 $15,061,382 $15,259,349 $13,973,939
</TABLE>
- --------------------
(A) Total return assumes reinvestment of all distributions during the period and
does not reflect deduction of sales charge. Investment returns and principal
values will fluctuate and shares, when redeemed, may be worth more or less
than the original cost. Total returns for periods of less than one year are
not annualized.
(B) Had fees not been waived and expenses not been assumed.
(C) Annualized.
41
<PAGE>
VAN ECK/CHUBB FUNDS, INC.
FINANCIAL HIGHLIGHTS (continued)
For a share outstanding throughout each period:
<TABLE>
<CAPTION>
VAN ECK/CHUBB TOTAL RETURN FUND
-----------------------------------------------------------------
CLASS A
-----------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, -----------------------------------------------------------------
1999 (UNAUDITED) 1998 1997 1996 1995 1994
---------------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period $19.27 $20.22 $17.41 $15.96 $13.23 $15.01
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income ...... 0.232 0.393 0.365 0.370 0.373 0.373
Net Gains (Losses) on
Securities (both Realized
and Unrealized) .......... 0.898 0.158 3.778 2.321 3.586 (0.994)
------ ------ ------ ------ ------ ------
Total from Investment
Operations ............... 1.130 0.551 4.143 2.691 3.959 (0.621)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from Net
Investment Income ........ (0.230) (0.390) (0.365) (0.370) (0.373) (0.373)
Dividends in Excess of
Net Investment Income .... -- -- (0.004) -- -- --
Distributions from Capital
Gains .................... -- (1.111) (0.964) (0.871) (0.692) (0.786)
Tax Returns of Capital ..... -- -- -- -- (0.164) --
------ ------ ------ ------ ------ ------
Total Distributions ........ (0.230) (1.501) (1.333) (1.241) (1.229) (1.159)
------ ------ ------ ------ ------ ------
Net Asset Value, End of Period . $20.17 $19.27 $20.22 $17.41 $15.96 $13.23
====== ====== ====== ====== ====== ======
Total Return(A) ................ 5.90% 2.73% 24.09% 17.04% 30.13% (4.21%)
RATIOS TO AVERAGE NET ASSETS:
Gross Expenses(B) .......... 1.57%(C) 1.61% 1.51% 1.59% 1.70% 1.73%
Net Expenses ............... 1.28%(C) 1.25% 1.25% 1.08% 1.08% 1.00%
Net Investment Income ...... 2.35%(C) 1.87% 1.92% 2.26% 2.45% 2.66%
Portfolio Turnover Rate ........ 33.26% 15.78% 15.80% 27.01% 57.62% 37.53%
Net Assets, At End of Period ... $39,408,595 $42,524,175 $49,933,635 $31,064,099 $22,171,326 $16,431,195
</TABLE>
- -----------------------
(A) Total return assumes reinvestment of all distributions during the period and
does not reflect deduction of sales charge. Investment returns and principal
values will fluctuate and shares, when redeemed, may be worth more or less
than the original cost. Total returns for periods of less than one year are
not annualized.
(B) Had fees not been waived and expenses not been assumed.
(C) Annualized.
42
<PAGE>
VAN ECK/CHUBB FUNDS, INC.
FINANCIAL HIGHLIGHTS (continued)
For a share outstanding throughout each period:
<TABLE>
<CAPTION>
VAN ECK/CHUBB CAPITAL APPRECIATION FUND
-----------------------------------------------------------------------
CLASS A
-----------------------------------------------------------------------
SIX MONTHS PERIOD FROM
ENDED SEPTEMBER 1,
JUNE 30, 1995(D)
1999 YEAR ENDED DECEMBER 31, THROUGH
------------ ----------------------------------- DECEMBER 31,
(UNAUDITED) 1998 1997 1996 1995
------------ ------ ------ ------ ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ......... $12.91 $15.59 $12.99 $10.40 $10.00
------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) ............... 0.000 (0.034) 0.005 0.067 0.037
Net Gains (Losses) on Securities
(both Realized and Unrealized) ........... (0.890) (1.956) 3.565 2.796 0.422
------ ------ ------ ------ ------
Total from Investment Operations ........... (0.890) (1.990) 3.570 2.863 0.459
------ ------ ------ ------ ------
LESS DISTRIBUTIONS TO SHAREHOLDERS
Dividends from Net Investment Income ....... -- -- (0.005) (0.067) (0.037)
Dividends in Excess of Net Investment Income -- -- (0.005) -- --
Distributions from Net Realized Gains ...... -- (0.690) (0.960) (0.206) (0.022)
------ ------ ------ ------ ------
Total Distributions ........................ -- (0.690) (0.970) (0.273) (0.059)
------ ------ ------ ------ ------
Net Asset Value, End of Period ............... $12.02 $12.91 $15.59 $12.99 $10.40
====== ====== ====== ====== ======
Total Return(A) .............................. (6.89%) (12.76%) 27.79% 27.53% 4.60%
RATIOS TO AVERAGE NET ASSETS:
Gross Expenses(B) .......................... 1.62%(C) 1.62% 1.52% 1.81% 2.50%(C)
Net Expenses ............................... 1.28%(C) 1.25% 1.25% 1.13% 1.25%(C)
Net Investment Income (Loss) ............... (0.04%)(C) (0.22%) 0.08% 0.86% 1.38%(C)
Portfolio Turnover Rate ...................... 57.45% 20.94% 50.67% 41.97% 2.73%
Net Assets, At End of Period ................. $29,273,342 $33,712,563 $41,482,081 $6,440,571 $1,596,254
</TABLE>
- ------------------------
(A) Total return assumes reinvestment of all distributions during the period and
does not reflect deduction of sales charge. Investment returns and principal
values will fluctuate and shares, when redeemed, may be worth more or less
than the original cost. Total returns for periods of less than one year are
not annualized.
(B) Had fees not been waived and expenses not been assumed.
(C) Annualized.
(D) Commencement of operations.
43
<PAGE>
VAN ECK/CHUBB FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS JUNE 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
NOTE A--ORGANIZATION
Van Eck/Chubb Funds, Inc. (the "Company"), formerly known as Chubb Investment
Funds, Inc., was incorporated under the laws of the State of Maryland on April
27, 1987, and is registered under the Investment Company Act of 1940, as
amended, as a diversified, open-end series management investment company. The
Company consists of six funds (the "Funds"): Van Eck/Chubb Capital Appreciation
Fund, Van Eck/Chubb Global Income Fund, Van Eck/ Chubb Government Securities
Fund, Van Eck/Chubb Growth and Income Fund, Van Eck/Chubb Tax-Exempt Fund, and
Van Eck/Chubb Total Return Fund. On June 15, 1999, Class B shares for Van
Eck/Chubb Capital Appreciation Fund, Van Eck/Chubb Global Income Fund, Van Eck/
Chubb Government Securities Fund and Van Eck/Chubb Total Return Fund ceased
operations. On June 16, 1999, Class B shares for Van Eck/Chubb Growth and Income
Fund Class B shares and Van Eck/Chubb Tax-Exempt Fund ceased operations.
At June 30, 1999, Chubb Life Insurance Company of America ("Chubb Life") and its
affiliates and Van Eck Associates Corporation owned the following shares of each
Fund:
SHARES % OF
OWNED SHARES
---------- -------
Van Eck/Chubb Capital Appreciation Fund
Class A shares ............................ 2,111,197 86.69%
Van Eck/Chubb Global Income Fund
Class A Shares ............................ 5,833,156 67.03%
Van Eck/Chubb Government Securities Fund
Class A shares ............................ 2,235,367 75.28%
Van Eck/Chubb Growth and Income Fund
Class A shares ............................ 740,253 31.42%
Van Eck/Chubb Tax-Exempt Fund
Class A Shares ............................ 1,721,954 69.16%
Van Eck/Chubb Total Return Fund
Class A Shares ............................ 853,002 43.66%
NOTE B--SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in accordance with generally accepted
accounting principles requires the Company's management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates. The following is a
summary of significant accounting policies:
VALUATION OF INVESTMENTS: Equity securities are valued at the closing sales
price on the exchange on which such securities are principally traded; or, if
traded in the over-the-counter market or on a national exchange for which no
sales took place on the day of valuation, at the mean of the bid and asked
prices at the close of trading. Quotations of foreign securities denominated in
foreign currencies are converted into U.S. dollars using the prevailing foreign
exchange rates. Securities listed on a foreign exchange are valued at the last
quoted sale price available before the time when net assets are valued.
Securities or other assets for which market quotations are not readily available
are valued at fair value in accordance with procedures established by the Board
of Directors. Debt instruments are valued on the basis of quotes provided by a
pricing service that determines the current value for institutional size trading
units of securities, without exclusive reliance upon quoted prices. These
valuations are believed to reflect fair market value more accurately. Short-term
debt instruments with a remaining maturity of less than 60 days are valued by
the amortized cost method, which approximates market value, unless the Board of
Directors determines that this does not represent fair value.
Trading in securities on most foreign exchanges and over-the-counter markets is
normally completed before the close of the domestic market and may also take
place on days on which the domestic market is closed.
FOREIGN CURRENCY TRANSLATION: The books and records of the Funds are maintained
in U.S. dollars. The market values of investments, other assets and liabilities,
and forward contracts stated in foreign currencies are translated at the
prevailing exchange rates at the end of the year. Purchases, sales, income and
expenses are translated at the exchange rate prevailing on the respective dates
of such transactions.
Since the net assets of the Funds are presented at the exchange rates and market
value prevailing at the end of the period, the Funds generally do not isolate
the portion of the results of operations arising as a result of changes in
foreign exchange rates on securities from the fluctuations arising from changes
in the market prices of securities held during the period. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
However, the Global Income Fund does isolate the effect of fluctuations in
foreign exchange rates when determining the gain or loss upon the sale or
maturity of foreign currency-denominated debt obligations pursuant to federal
income tax regulations; such fluctuations are included in net realized gain or
loss from foreign currency transactions.
Reported net realized gain or loss from foreign currency transactions (including
foreign currency forward contracts) arises from sales of foreign currencies,
currency gains or losses realized between the trade and settlement dates on
securities transactions, the difference between the amounts of dividends,
interest and foreign withholding taxes recorded on the Funds' books, and the
U.S. dollar equivalent of the amounts actually received or paid and for the
Global Income Fund, the fluctuations in exchange rates on sales or maturities of
foreign currency-denominated debt obligations. Net unrealized gain or loss from
foreign currency transactions arises from changes in the value of assets and
liabilities, other than investments in securities, resulting from fluctuations
in exchange rates.
FORWARD FOREIGN CURRENCY CONTRACTS: Certain Funds may enter into forward foreign
currency contracts to protect securities and related receivables and payables
against fluctuations in future foreign currency rates. The Van Eck/Chubb Global
Income Fund may also enter into cross currency hedges by entering into
transactions to purchase or sell one or more currencies that are expected to
increase or decrease relative to other currencies in which the Fund has or
expects to have exposure. A forward contract is an agreement to buy or sell
currencies of different countries on a specified future date at a specified
rate. Risk may arise upon entering into these contracts from the potential
inability of counterparties to meet the terms of their contracts and is
generally limited to the amount of unrealized gain on the contracts, if any, at
the date of default. Risk may also
44
<PAGE>
VAN ECK/CHUBB FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS JUNE 30, 1999 (Unaudited) (continued)
- --------------------------------------------------------------------------------
arise from unanticipated movements in the value of a foreign currency relative
to the U.S. dollar. Contracts are marked to market daily and the change in
market value is recorded as unrealized appreciation or depreciation. Realized
gains or losses arising from such transactions are included in net realized
gains or losses from foreign currency transactions. At June 30, 1999, the Van
Eck/Chubb Global Income Fund had the following open forward currency contract:
VALUE AT
SETTLEMENT CURRENT UNREALIZED
CONTRACTS DATE VALUE DEPRECIATION
- --------- ----------- ----------- ------------
FOREIGN CURRENCY SELL CONTRACT:
EUR2 4,447,733 expiring 9/10/99 $25,412,098 $25,416,230 $(4,132)
SECURITY TRANSACTIONS AND INVESTMENT INCOME: Security transactions are recorded
on a trade date basis. Realized gains and losses on investments sold are
recorded on the basis of the specific identification method. Interest income,
including, where applicable, amortization of discount on investments, is
recorded on the accrual basis. Dividend income is recorded on the ex-dividend
date, except for certain dividends from foreign securities, which are recorded
as soon after the ex-dividend date as the respective Funds, using reasonable
diligence, become aware of such dividends.
DIVIDENDS TO SHAREHOLDERS: Dividends to shareholders from net investment income
are declared daily and distributed monthly for the Van Eck/Chubb Government
Securities Fund; declared and distributed monthly for the Van Eck/Chubb
Tax-Exempt Fund and the Van Eck/Chubb Global Income Fund; declared and
distributed quarterly for the Van Eck/Chubb Total Return Fund; and declared and
distributed annually for the Van Eck/Chubb Growth and Income Fund and Van
Eck/Chubb Capital Appreciation Fund. Dividends from net realized capital gains
are declared and distributed at least once annually. Dividends distributed to
shareholders are recorded on the ex-dividend date.
The Company distinguishes between dividends on a tax basis and a financial
reporting basis and only dividends in excess of tax basis earnings and profits
are reported in the financial statements as a return of capital. Differences in
the recognition or classification of tax income between the financial statements
and tax earnings and profits which result in over-distributions for financial
statement purposes are classified as distributions in excess of net investment
income or accumulated realized gains. To the extent that these differences are
permanent in nature, such amounts are reclassified within the capital accounts
based on their tax basis treatment; temporary differences do not require
reclassification.
At December 31, 1998, the Van Eck/Chubb Government Securities Fund had $237,474
of accumulated realized losses expiring in 2002 and the Van Eck/Chubb Global
Income Fund had $2,544,272 of accumulated realized losses, of which $1,063,221
expires in 2002 and $1,481,051 expires in 2004. These losses are available to be
used to offset future realized capital gains.
ORGANIZATION COSTS: Costs incurred in connection with the initial organization
of the Van Eck/Chubb Capital Appreciation Fund and the Van Eck/Chubb Global
Income Fund are being amortized on the straight-line basis over a period of five
years.
NOTE C--INVESTMENTS
As of June 30, 1999, gross unrealized gains and losses were as follows:
GROSS GROSS NET
UNREALIZED UNREALIZED UNREALIZED
GAINS LOSSES GAINS (LOSSES)
---------- ---------- -------------
Van Eck/Chubb Capital
Appreciation Fund ............... $1,771,028 $5,428,518 ($3,657,490)
Van Eck/Chubb Global Income
Fund ............................ 123,669 4,789,196 (4,665,527)
Van Eck/Chubb Government
Securities Fund ................. 116,288 284,446 (168,158)
Van Eck/Chubb Growth and
Income Fund ..................... 12,684,049 944,988 11,739,061
Van Eck/Chubb Tax-Exempt Fund ..... 1,002,679 73,963 928,716
Van Eck/Chubb Total Return Fund ... 6,106,947 442,361 5,664,586
Purchases and sales of investment securities for the six months ended June 30,
1999, other than short-term obligations, were as follows:
PROCEEDS
COST OF FROM
INVESTMENT INVESTMENT
SECURITIES SECURITIES
PURCHASED SOLD
----------- ------------
Van Eck/Chubb Capital Appreciation Fund ...... $15,017,634 $ 18,148,997
Van Eck/Chubb Global Income Fund ............. 34,423,393 41,838,498
Van Eck/Chubb Government Securities Fund ..... -- --
Van Eck/Chubb Growth and Income Fund ......... 41,284,823 50,150,525
Van Eck/Chubb Tax-Exempt Fund ................ -- 232,000
Van Eck/Chubb Total Return Fund .............. 13,144,139 17,666,588
NOTE D--MANAGEMENT AGREEMENTS AND EXPENSES
Chubb Asset Managers, Inc. ("Investment Manager"), a wholly-owned subsidiary of
The Chubb Corporation, is responsible for the overall investment management of
each Fund's portfolio, consistent with each Fund's investment objectives,
policies and restrictions. Van Eck Associates Corporation ("Investment
Administrator") provides certain administrative services and facilities for the
Company.
Van Eck Securities Corporation (the "Distributor"), a wholly owned subsidiary of
the Investment Administrator, for the six months ended June 30, 1999, received
$81,612 in sales loads of which $67,392 was reallowed to broker-dealers. Also,
the Company has a plan of distribution pursuant to Rule 12b-1 that provides that
the Company may, directly or indirectly, engage in activities primarily intended
to result in the sale of the Company's shares. The maximum expenditure the
Company may make under the plan is 0.50% per annum on Class A shares and 1.00%
per annum on Class B shares of the average daily net assets of each Fund.
45
<PAGE>
VAN ECK/CHUBB FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS JUNE 30, 1999 (Unaudited) (continued)
- --------------------------------------------------------------------------------
Investment management fees, which compensate both the Investment Manager and the
Investment Administrator, are computed at the following annual percentages for
each of the Funds:
AVERAGE DAILY INVESTMENT INVESTMENT
NET ASSETS MANAGER ADMINISTRATOR
- -------------- ---------- -------------
First $200 Million ....................... 0.20% 0.45%
Next $1.1 Billion ........................ 0.19% 0.41%
Over $1.3 Billion ........................ 0.18% 0.37%
Pursuant to an expense limitation agreement for Class A shares the rate of
expenses borne by the Funds, based on average net assets, were as follows: For
the six months ended June 30, 1999, Van Eck/Chubb Global Income Fund, Van
Eck/Chubb Government Securities Fund and Van Eck/Chubb Tax-Exempt Fund such
limitation was 1.35%. For the periods January 1, 1999 to April 30, 1999 and May
1, 1999 to June 30, 1999, such limitations were 1.25% and 1.35%, respectively,
for the Van Eck Chubb Capital Appreciation Fund, Van Eck Chubb Growth and Income
Fund and Van Eck/Chubb Total Return Fund.
NOTE E--SHAREHOLDERS' TRANSACTIONS
Following is a summary of transactions with shareholders for each Fund.
VAN ECK/CHUBB CAPITAL APPRECIATION FUND
-----------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1999 (UNAUDITED) DECEMBER 31, 1998
------------------------ --------------------------
CLASS A SHARES DOLLARS SHARES DOLLARS
------ ------- ------ -------
Shares sold ............. 26,201 $ 319,482 2,979,400 $5,222,315
Shares issued as
Reinvestment of dividends
and distributions ..... -- -- 131,957 1,703,560
Shares redeemed ......... (202,703) (2,368,116) (3,160,757) (7,993,680)
--------- ------------ ----------- -----------
Net decrease .......... (176,502) $ (2,048,634) (49,400) $(1,067,805)
========= ============ =========== ===========
PERIOD FROM PERIOD FROM
JANUARY 1, 1999 APRIL 29, 1998+
THROUGH THROUGH
JUNE 15, 1999 (UNAUDITED) DECEMBER 31, 1998
------------------------ --------------------------
CLASS B SHARES DOLLARS SHARES DOLLARS
------ ------- ------ -------
Shares sold ............. 611 $ 7,050 777 $11,982
Shares issued as
reinvestment of dividends
and distributions ..... -- -- 41 534
Shares redeemed ......... (1,429) (16,930) -- --
--------- ------------ ----------- -----------
Net increase (decrease) . (818) $ (9,880) 818 $12,516
========= ============ =========== ===========
VAN ECK/CHUBB GLOBAL INCOME FUND
-----------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1999 (UNAUDITED) DECEMBER 31, 1998
------------------------ --------------------------
CLASS A SHARES DOLLARS SHARES DOLLARS
------ ------- ------ -------
Shares sold ............. 142,294 $1,387,571 108,585 $ 786,154
Share issued in connection
with an acquisition
(Note G) .............. -- -- 3,707,367 36,851,229
Shares issued as
reinvestment of dividends
and distributions ..... 147,308 1,440,669 581,772 5,902,596
Shares redeemed ......... (429,052) (4,226,208) (960,209) (9,755,118)
--------- ------------ ----------- -----------
Net increase (decrease) (139,450) $(1,397,968) 3,437,515 $33,784,861
========= ============ =========== ===========
PERIOD FROM PERIOD FROM
JANUARY 1, 1999 APRIL 29, 1998+
THROUGH THROUGH
JUNE 15, 1999 (UNAUDITED) DECEMBER 31, 1998
------------------------ --------------------------
CLASS B SHARES DOLLARS SHARES DOLLARS
------ ------- ------ -------
Shares sold ............. 150 $1,448 902 $9,151
Shares issued as
reinvestment
of dividends and
distributions ......... 5 45 13 130
Shares redeemed ......... (503) (4,836) (567) (5,626)
--------- ------------ ----------- -----------
Net increase(decrease) (348) $(3,343) 348 $3,655
========= ============ =========== ===========
VAN ECK/CHUBB GOVERNMENT SECURITIES FUND
-----------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1999 (UNAUDITED) DECEMBER 31, 1998
------------------------ --------------------------
CLASS A SHARES DOLLARS SHARES DOLLARS
------ ------- ------ -------
Shares sold ............. 60,067 $ 643,436 226,772 $2,494,818
Shares issued as
reinvestment
of dividends .......... 72,514 781,703 147,737 1,619,400
Shares redeemed ......... (134,037) (1,452,885) (337,604) (3,708,941)
--------- ------------ ----------- -----------
Net increase (decrease) (1,456) $ (27,746) 36,905 $ 405,277
========= ============ =========== ===========
PERIOD FROM PERIOD FROM
JANUARY 1, 1999 APRIL 29, 1998+
THROUGH THROUGH
JUNE 15, 1999 (UNAUDITED) DECEMBER 31, 1998
------------------------ --------------------------
CLASS B SHARES DOLLARS SHARES DOLLARS
------ ------- ------ -------
Shares sold ............. 2,365 $ 26,118 13,841 $152,798
Shares issued as
reinvestment
of dividends .......... 278 3,006 158 1,753
Shares redeemed ......... (16,642) (177,153) -- --
--------- ------------ ----------- -----------
Net increase(decrease) (13,999) $(148,029) 13,999 $154,551
========= ============ =========== ===========
VAN ECK/CHUBB GROWTH AND INCOME FUND
-----------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1999 (UNAUDITED) DECEMBER 31, 1998
------------------------ --------------------------
CLASS A SHARES DOLLARS SHARES DOLLARS
------ ------- ------ -------
Shares sold .............. 50,969 $ 1,260,532 811,345 $21,768,228
Shares issued as
reinvestment
of dividends
and distributions ...... -- -- 61,002 1,459,118
Shares redeemed .......... (511,651) (12,516,291) (774,435) (19,734,223)
--------- ------------ ----------- -----------
Net increase (decrease) (460,682) $(11,255,759) 97,912 $ 3,493,123
========= ============ =========== ===========
PERIOD FROM PERIOD FROM
JANUARY 1, 1999 APRIL 29, 1998+
THROUGH THROUGH
JUNE 15, 1999 (UNAUDITED) DECEMBER 31, 1998
------------------------ --------------------------
CLASS B SHARES DOLLARS SHARES DOLLARS
------ ------- ------ -------
Shares sold ............. 5,876 $138,798 25,220 $627,467
Shares issued as
reinvestment
of dividends
and distributions ..... -- -- 486 11,619
Shares redeemed ......... (30,758) (766,438) (824) (18,503)
--------- ------------ ----------- -----------
Net increase(decrease) (24,882) $(627,640) 24,882 $620,583
========= ============ =========== ===========
- -----------------
+ Commencement of operations.
46
<PAGE>
VAN ECK/CHUBB FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS JUNE 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
VAN ECK/CHUBB TAX-EXEMPT FUND
-----------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1999 (UNAUDITED) DECEMBER 31, 1998
------------------------ --------------------------
CLASS A SHARES DOLLARS SHARES DOLLARS
------ ------- ------ -------
Shares sold .............. 111,939 $1,418,362 318,054 $4,025,056
Shares issued as
reinvestment
of dividends
and distributions ...... 47,520 600,122 100,164 1,267,929
Shares redeemed .......... (155,965) (1,975,306) (422,157) (5,345,855)
--------- ------------ ----------- -----------
Net increase (decrease) 3,494 $ 43,178 (3,939) $ (52,870)
========= ============ =========== ===========
PERIOD FROM PERIOD FROM
JANUARY 1, 1999 APRIL 29, 1998+
THROUGH THROUGH
JUNE 15, 1999 (UNAUDITED) DECEMBER 31, 1998
------------------------ --------------------------
CLASS B SHARES DOLLARS SHARES DOLLARS
------ ------- ------ -------
Shares sold .............. 2,467 $31,568 2,280 $29,122
Shares issued as
reinvestment
of dividends
and distributions ...... 28 355 11 144
Shares redeemed .......... (4,786) (60,062) -- --
--------- ------------ ----------- -----------
Net increase(decrease) (2,291) $(28,139) 2,291 $29,266
========= ============ =========== ===========
VAN ECK/CHUBB TOTAL RETURN FUND
-----------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1999 (UNAUDITED) DECEMBER 31, 1998
------------------------ --------------------------
CLASS A SHARES DOLLARS SHARES DOLLARS
------ ------- ------ -------
Shares sold .............. 35,890 $ 696,272 144,665 $4,826,003
Shares issued as
reinvestment
of dividends
and distributions ...... 22,689 446,117 158,797 3,099,318
Shares redeemed .......... (311,278) (5,985,830) (567,173) (13,653,344)
--------- ------------ ----------- -----------
Net decrease ........... (252,699) $(4,843,441) (263,711) $(5,728,023)
========= ============ =========== ===========
PERIOD FROM PERIOD FROM
JANUARY 1, 1999 APRIL 29, 1998+
THROUGH THROUGH
JUNE 15, 1999 (UNAUDITED) DECEMBER 31, 1998
------------------------ --------------------------
CLASS B SHARES DOLLARS SHARES DOLLARS
------ ------- ------ -------
Shares sold .............. 6,035 $112,964 16,211 $317,258
Shares issued as
reinvestment
of dividends
and distributions ...... 91 1,735 1,029 19,796
Shares redeemed .......... (23,300) (450,780) (66) (1,329)
--------- ------------ ----------- -----------
Net increase(decrease) (17,174) $(336,081) 17,174 $335,725
========= ============ =========== ===========
- --------------
+ Commencement of Operations
NOTE F--FUTURES CONTRACTS
As of June 30, 1999, the Van Eck/Chubb Global Income Fund had open futures
contracts. These contracts were acquired in lieu of a direct purchase of the
securities. Using futures contracts involves various market risks. The maximum
amount at risk from the purchase of a futures contract is the contract value.
Risks may also be caused by imperfect correlations between the movements in the
price of the futures contract and the price of the underlying security.
Upon entering into a futures contract, the Fund is required to pledge to a
broker cash in an amount equal to a certain percentage of the contract amount.
This amount is known as the "initial margin." Subsequent payments, known as
variation margin, are made or received by the Fund each day, depending on the
daily fluctuations in the value of the underlying futures contracts. Such
variation margin is recorded for financial statement purposes on a daily basis
as an unrealized gain or loss until the futures contract is closed, at which
time the net gain or loss is reclassified to realized.
<TABLE>
<CAPTION>
EXPIRATION NUMBER OF CONTRACT CURRENT UNREALIZED
LONG CONTRACTS: DATE CONTRACTS VALUE VALUE DEPRECIATION
- --------------- ------------- ------------ --------- --------- ------------
<S> <C> <C> <C> <C> <C>
10 Year Euro Bond ..... 9/18/99 110 $12,514,918 $12,113,088 $(401,830)
10 Year U.S. Treasury
Note 7.125% ......... 9/18/99 18 2,019,094 2,001,375 (17,719)
---------
$(419,549)
=========
</TABLE>
NOTE G--DIRECTOR DEFERRED COMPENSATION PLAN
The Van Eck/Chubb Funds, Inc. established a Deferred Compensation Plan (the
Plan) for Directors. The Directors can elect to defer receipt of their director
meeting fees and retainers until retirement, disability or termination from the
board. The Funds contributions to the Plan are limited to the amount of fees
earned by the participating Directors. The fees otherwise payable to the
participating Directors are invested in shares of the Van Eck/ Chubb Funds as
directed by the Directors. The Funds have elected to show this deferred
liability net of the corresponding asset for financial statement purposes. The
Plan has been approved by the Internal Revenue Service.
As of June 30, 1999, the total liability portion of the Plan is as follows:
Van Eck/Chubb Capital Appreciation Fund-$4,363, Van Eck/Chubb Global Income
Fund- $7,919, Van Eck/Chubb Government Securities Fund- $3,857, Van Eck/Chubb
Growth and Income Fund- $7,995, Van Eck/Chubb Tax-Exempt Fund-$3,770 and Van
Eck/Chubb Total Return Fund- $5,421.
NOTE H--ACQUISITION
As of the close of business on April 24, 1998, Van Eck/Chubb Global Income Fund
acquired all the net assets of Van Eck Global Income Fund pursuant to a plan of
reorganization approved by Van Eck Global Income Fund shareholders on April 16,
1998. The acquisition was accomplished by a tax-free exchange of 4,292,666
shares of Van Eck Global Income Fund (valued at $36,851,229) for 3,707,367
shares of Van Eck/Chubb Global Income Fund outstanding on April 24, 1998. Van
Eck Global Income Fund's net assets at that date, $36,851,229, including
$405,616 of unrealized appreciation were combined with those of the Van Eck
/Chubb Global Income. The aggregate net assets of Van Eck/Chubb Global Income
Fund and Van Eck Global Income Fund before the acquisition were $54,462,808 and
$36,851,229, respectively. In connection with the merger, the Van Eck/Chubb
Global Income Fund acquired accumulated net realized losses of $3,907,263, of
which $1,362,991 was utilized during the current year. The balance is available
for carryforward to future years (see Note B). In accordance with income tax
rules the utilization of such carryforward is limited to $1,989,966 annually.
<PAGE>
[LOGO OMITTED]
Investment Adviser: Chubb Asset Managers, Inc.
Distributor: Van Eck Securities Corporation
99 Park Avenue, New York, NY 10016
www.vaneck.com
Account Assistance: (800) 544-4653
This report must be accompanied or preceded by a Van Eck/Chubb Funds prospectus,
which includes more complete information such as charges and expenses and the
risks associated with international investing, including currency fluctuations
or controls, expropriation, nationalization and confiscatory taxation. Please
read the prospectus carefully before you invest.
