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VAN ECK CHUBB FUNDS
SEMI-ANNUAL REPORT
JUNE 30, 2000
GLOBAL INCOME FUND
GOVERNMENT SECURITIES FUND
GROWTH AND INCOME FUND
TAX-EXEMPT FUND
TOTAL RETURN FUND
THE VAN ECK PARTNERSHIP SERIES
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Dear Fellow Shareholder:
THE NEW MILLENNIUM
As we entered the year 2000, we had just left behind a year that marked the end
of a tremendous decade, measured both in terms of unprecedented U.S. economic
growth and soaring equity returns. Our year-end 1999 letter focused on this
exuberance: "We enter the new millennium with the American horn of plenty
overflowing, but this is not simply a domestic phenomenon. Economies worldwide
are strengthening, having recovered strongly from the myriad financial and
economic crises of the past few years." But our mood was not all unbridled
enthusiasm; we tempered our optimism with the warning, "this positive picture
does have its gray spots." And although the overall theme of prosperity
continues, the emergence of several gray spots is, in part, what has dominated
the story thus far in 2000.
Rarely in the past have economic or financial markets lent themselves to easy
predictions, but the six months ended June 30 has been a particularly intense
time of uncertainty, volatility, and fear for investors. We entered 2000 with
U.S. economic growth at a blistering 5.5%-6.0% for the fourth quarter of 1999
and the technology-rich Nasdaq Composite Index* having soared to new highs (it
had gained 85.6% in 1999 and continued its meteoric rise well into this year's
first quarter). One couldn't help but wonder if there was enough oxygen at these
heights to sustain life. Two questions came to dominate the minds of thoughtful
investors: "Will our economy slow?," and "Will this wild technology party come
to an end?" With the benefit of some 20/20 hindsight, the answers look like a
combination of the somewhat nebulous replies that alight from a quick shake of a
toy magic eight ball: YOU CAN RELY ON IT; MOST LIKELY; TRY AGAIN LATER; ANSWERS
POINT TO YES; WITHOUT A DOUBT. Yes, there are spots in the U.S. economy that
appear to be slowing, but the verdict is not fully in. Yes, technology's wild
ride may be more sedate going forward, given the Nasdaq's 37.3% slide between
March 10 and May 23. It appears from the results thus far this year that we are
in store for more realistic returns not only from technology investments, but
from the broader stock market as well.
Ultimately these factors affected the results of the Van/Eck Chubb Funds. The
performance of your Funds through June 30 was not as robust as in 1999 for the
same period; this is particularly true of the two equity funds, the Growth and
Income and the Total Return Funds. However, we are reasonably pleased with the
Funds' returns relative to their benchmark indices and mutual fund peer groups.
Keep in mind that most equity investments, whether measured by the broad stock
market indices or mutual fund indices, had a difficult first half. All of the
major stock market indices (except the small-cap Russell 2000 Index**) finished
down for the first half: the S&P 500 Index+ returned -0.4%; the Dow Jones
Industrial Average (DJIA)++, -8.4%; and the Nasdaq, -2.5%. The average stock
mutual fund posted a positive 2.0% and the typical technology fund was up 3.0%,
as measured by Lipper Analytical Services. There were some equity asset classes
that experienced notable returns, including health/biotechnology, real estate
and pure value-oriented mutual funds, but this performance is calculated off
fairly depressed levels. At the same time, fixed income investments provided
solid returns across most asset classes. In the pages that follow, each
individual fund report goes into great detail about specific investment results.
ALL EYES ON THE FED
In our year-end letter, we stated that "monetary policy will command the
attention of financial markets in the next few months." This has certainly rung
true, with all eyes poised--including those of overseas central banks--on the
Federal Reserve Board's monetary action and its ultimate ability to maneuver a
"soft landing" for the U.S. economy. While the preoccupation with Fed actions
has caused considerable uncertainty in financial markets, both Wall Street and
Main Street have tremendous faith in Chairman Alan Greenspan, based on his very
successful track record during his 13-year tenure.
The Federal Reserve has been applying a steady brake to the American economy
since July of 1999. Reversing the easing given to markets during the
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aftermath of the 1997/98 global financial crisis, the Fed made three 25
basis-point (0.25%) tightenings in 1999 (July, August and November), increasing
the short-term federal funds rate (the overnight bank lending rate) from 4.75%
to 5.50%. This year, the Fed continued its tightening by boosting rates an
additional 100 basis points (1.00%), tightening 25 basis points on February 2
and March 21, and 50 basis points on May 16. In aggregate, the Fed has raised
rates a total of 175 basis points since July of 1999, with the federal funds
rate at a nine-year high of 6.50%. There is expectation that another round of
increases will take place at the next FOMC (Federal Open Market Committee)
meeting on August 22.
The results are that we are beginning to see signs of slowing in the economy and
less risk of inflation. Pockets of weakness have begun to show in manufacturing,
housing (sales of both new and existing homes), and retail consumer spending,
and corporate earnings disappointments are on the rise. Nevertheless, our
economy remains very strong, especially given our taut labor market--the
unemployment rate remains close to 4.0%, just above the 30-year low of 3.9% it
reached in April. While Federal Reserve action has certainly knocked the
fourth-quarter top off our economy, additional tightening is likely needed to
help halt growth to a more sustainable 3%-4% level. (Even these levels would be
high, given that from 1975 to 1999, the U.S. economy expanded an average 3.2% a
year.) Until the Fed gives a final signal that its work is done, investors
continue to be concerned over the direction of interest rates. It is hoped that,
come autumn, we can settle into an environment marked by low inflation, moderate
growth and healthy corporate profits--the type of environment that, in the past,
has supported equity investments.
SURVIVAL OF THE TECH FITTEST
Six months ago, we all may have experienced a fleeting fantasy of becoming
Internet dot-com millionaires. But Internet dreams have succumbed to the reality
that eventually successful businesses need to generate revenues and profits.
This reality hit in early March, as the tech-laden Nasdaq reached a high of
5048.62 on March 10 and then proceeded to fall to 3164.55 by May 23, losing
37.3% of its value. Since then, the Index has rebounded toward the 4000 level.
While the biggest blow came in the B2C arena (business to consumer, retailing),
the entire technology sector was affected. At the same time, the U.S. Justice
Department's antitrust case against Microsoft helped to depress valuations. The
hard times experienced by the sector are not all bad news, given that in many
cases technology companies had been selling at stratospheric price/earnings
multiples. We had all become somewhat comfortable with the swiftly rising tech
tide that had been lifting all boats, those with ballast and those without. Last
year's adage, "You must be invested in tech," has been replaced this year with,
"You must be invested in tech WISELY." This environment is suitable for
investors like ourselves who take a more conservative approach to equity
investing, choosing those companies that can endure both good and bad times.
Although the technology sector may have taken a beating in the first half, we
continue to believe strongly in the secular strength of the New Economy and its
technological underpinnings. Market leadership continues to be held by the
technology and telecommunications sectors. As we discussed in our year-end
letter, this phenomenon has global reach. Technological advancements continue to
improve the efficiency and productivity of both American and overseas
corporations across most sectors. We continue to believe that ample and exciting
investment opportunities abound.
THE SECOND HALF OF 2000
We anticipate that the Fed, as mentioned earlier, is likely to raise interest
rates again in August. This should help ease uncertainty in financial markets;
equity markets are likely to regain some momentum and, while bond values are
likely to come under some pressure, fixed income markets should continue
deriving support from the underlying technical supply/demand factors. As we move
into the third and fourth quarters, the November presidential elections will
command more attention. An interesting power shift seems to be occurring in the
dynamics between financial markets and the presidential candidates. This shift
has been growing
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over the past ten years and is being fueled by the growing (and now very large)
segment of the U.S population that has a very direct interest in what goes on in
the capital markets, and is willing to use their votes as influence. In the
past, the rhetoric of presidential candidates has tended to lead and influence
capital markets. With this year's election, the reverse seems to be true, with
financial markets exerting substantial pressure on the politicians and helping
to shape the major issues.
Although this letter may have dwelled on some of the "gray spots," we ask you to
remember that the overall picture of the U.S looks promising and remains one of
prosperity. In addition, international economies should continue to strengthen;
Continental Europe and Asia should continue to recover, while Latin America
should stabilize. Nevertheless, financial markets will likely remain volatile
and the road ahead may be bumpier, particularly for equity investors. As we have
discussed in earlier letters, the double-digit returns that stock investors
became accustomed to in the last half of the 1990s are not likely to be
sustainable. Historic U.S. stock market returns have averaged between 10-11% a
year since 1929; perhaps this year signals a return to these levels.
As we have done in the past, we will continue to manage each Fund with our
prudent risk-averse approach, designed to provide successful long-term results.
We thank you for your continued investment in the Van Eck/Chubb Funds and we
look forward to serving you in the years ahead.
[Photo omitted]
/s/ MICHAEL O'REILLY
--------------------
MICHAEL O'REILLY
PRESIDENT
VAN ECK/CHUBB FUNDS
PRESIDENT AND CHIEF OPERATING OFFICER
CHUBB ASSET MANAGERS, INC.
July 17, 2000
The Nasdaq Composite Index, Russell 2000 Index, Standard & Poor's 500 Index and
Dow Jones Industrial Average are unmanaged indices and include the reinvestment
of all dividends, but do not reflect the payment of transaction costs, advisory
fees or expenses that are associated with an investment in the Fund. The
Indices' performance is not illustrative of the Fund's performance. Indices are
not securities in which investments can be made.
* The Nasdaq Composite Index is a broad-based capitalization-weighted index of
all Nasdaq national market and small cap stocks.
** The Russell 2000 Index is comprised of the smallest 2000 companies in the
Russell 3000 Index, which represents approximately 98% of the investable U.S.
equity market.
+ 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 Dow Jones Industrial Average is a price-weighted average of 30 blue-chip
stocks that are generally the leaders in their industry. It has been a widely
followed indicator of the stock market since October 1, 1928.
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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.
We are pleased to report that, for the six months ended June 30, 2000, relative
performance has improved for the Van Eck/Chubb Global Income Fund. As we
discussed in our year-end letter to you, 1999 had been a difficult year for
global fixed income markets and for your Fund, which underperformed its
benchmarks. Results thus far in 2000 have improved, with the Fund's six-month
total return of -0.32% roughly in line with the 0.03% return (in U.S. dollar
terms) of its benchmark index, the Salomon Smith Barney World Government Bond
Index (WGBI).* The peer group of mutual funds, as measured by the Lipper Global
Income Fund Index** gained 0.57% during this time period. Your Fund's
performance results for longer periods are included in the table that follows.
ECONOMIC AND BOND MARKET OVERVIEW
In local currency terms, the Salomon Smith Barney WGBI showed a reasonably
robust return of just under 3.0% in the first half of the year. The U.S. dollar
bloc bond markets performed the best, with the United States, Canada and
Australia all producing returns of more than 5%. The Japanese bond market was
the worst performing of the major markets, with a return of just 0.7% during
this period.
However, the strength of the U.S. dollar weighed on the performance of the
Salomon Smith Barney WGBI in U.S. dollar terms, and the Index remained
effectively unchanged for the period, gaining just 0.03%. In dollar terms, the
European bond markets, including the UK, returned approximately -2.0% and the
Japanese bond market, -2.6%. The euro's weakness continued in the first half
with the euro hitting new lows against the dollar in May. By the end of June,
the euro had recovered by about 8% from its lows, leaving it around 19% below
its launch value in 1999.
Most of the major bond market yield curves either flattened or inverted over the
period, as investors anticipated that central banks would continue to take
whatever action was necessary to moderate growth and keep inflation subdued.
Although the U.S. Federal Reserve raised the federal funds rate (the overnight
bank lending rate) from 5.5% to 6.5% in the first six months, longer-maturity
bond yields showed a significant decline with, for example, 30-year U.S.
Treasury yields dropping from 6.48% to 5.90%. Similarly, the European Central
Bank (ECB) raised the repo rate from 3.00% to 4.25% in four stages over the
period, while 30-year German bond yields dropped from approximately 6.00% to
5.50%. In both the U.S. and Eurozone, reduced expectations of government bond
issuance also proved very supportive to the bond markets, particularly at the
long end. The U.S. Treasury announced a larger-than-expected program of buying
back government bonds and the relatively robust Eurozone economy is likely to
allow a smaller-than-previously-expected issuance program. These programs of
reducing outstanding debt, either by buying back outstanding debt or reducing
the issuance of new debt, are a direct reflection of the strong fiscal health of
both regions. The low supply of government bonds relative to corporate bonds
also contributed to a significant widening of credit spreads over the period, as
corporate bonds underperformed government bonds.
In the UK, despite a strong fiscal position and a government cash windfall from
proceeds of the mobile phone license auction, which at 23 billion pounds was
many times higher than expected, yields at the long end did not fall as much as
at shorter maturities. This was in part due to expectations that changes to
pension legislation would make long-dated gilts less attractive.
The exception to this pattern of a healthy fiscal position and declining bond
issuance was Japan. The Japanese government's program of fiscal stimulus
resulted in significant issuance of government bonds. The deteriorating fiscal
position was a major factor in leading Moody's and Fitch
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IBCA, the rating agencies, to downgrade Japan's credit rating one notch from the
most secure Aaa rating. Despite this, the Japanese bond market managed a
modestly positive return, in part helped by the reinvestment of maturing postal
savings deposits into the bond market.
Despite continuing strong economic growth in the U.S. and Europe, in general,
future growth expectations were reined in during the period, as were
expectations of where short-term interest rates are likely to peak. Incipient
signs of slowing in the U.S. economy came through in the form of weakness in the
manufacturing, housing and retail sectors. While the Federal Reserve and the ECB
are likely to raise rates once or twice more, this is not as likely in the UK.
The Bank of Japan, in contrast, is expected to end the zero interest rate policy
by autumn, largely to redress market inefficiencies caused by the policy rather
than to address any economic turnaround. After a surprisingly high first-quarter
growth figure, the economy appeared to have lost pace and industrial production
data remained weak.
FUND REVIEW
We avoided investing in Japanese bonds, the worst performing bonds of the major
markets over the period, as the very low yield levels combined with a worsening
fiscal position served to make the market relatively unattractive. We did,
however, maintain the Fund's exposure to the yen over the period, (although it
held less than that of the Salomon Smith Barney WGBI), as the high current
account surplus and tendency of Japanese exporters to hedge foreign currency
receivables into yen provided some underpinning to the currency.
We maintained an overweight position in European bonds in expectation that
economic growth would remain at current levels, thus prolonging the existing
output gap (i.e., economic production below capacity). This, together with
European Central Bank rate rises, should control inflation. However, this
background was thought unlikely to prove supportive to the euro, and the Fund's
European bond holdings were largely currency-hedged back into U.S. dollars. The
scale of the currency hedging was reduced over the period as the extent of the
euro's decline reduced the risk of further significant falls. We continued to
overweight UK corporate bonds, but hedged the currency exposure back into U.S.
dollars. The overall quality of the Fund's portfolio was improved over the
period by reducing holdings of non-investment grade bonds and increasing the
proportions of both government and investment-grade bonds.
THE OUTLOOK
Focus in the developed nations will continue to be on the direction of interest
rates and on the continued action of central banks. Fiscal and monetary policy
that supports moderate economic growth while curbing inflation is the ultimate
goal. Inflationary pressures have been building in both the U.S. and European
economies (with the exception of the UK) and it is our expectation that central
banks will continue their restrictive monetary policies by increasing rates.
While this may put some negative pressure on bond values, the government bond
markets should continue to derive some support from the underlying technical
supply/demand factors. We will continue to be cautious about Japan. Outside the
major bond markets, we will continue to look for opportunities in the developing
markets of Eastern Europe.
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We thank you for your investment in the Van Eck/Chubb Global Income Fund and we
look forward to continuing to help you meet your investment objectives.
[Photo omitted] [Photo omitted]
/s/ ROGER C.P. BROOKHOUSE /s/ MARJORIE D. RAINES
------------------------- ----------------------
ROGER C.P. BROOKHOUSE MARJORIE D. RAINES
SENIOR VICE PRESIDENT SENIOR VICE PRESIDENT
CHUBB ASSET MANAGERS, INC. CHUBB ASSET MANAGERS, INC.
[Photo omitted]
/s/ EMMA C. FISHWICK
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EMMA C. FISHWICK
VICE PRESIDENT
CHUBB ASSET MANAGERS, INC.
July 17, 2000
The Salomon Smith Barney World Government Bond Index and the Lipper Global
Income Fund Index are unmanaged indices and include the reinvestment of all
dividends, but do not reflect the payment of transaction costs, advisory fees or
expenses that are associated with an investment in the Fund. The Indices'
performance is not illustrative of the Fund's performance. Indices are not
securities in which investments can be made.
* The Salomon Smith Barney World Government Bond Index is a market
capitalization-weighted benchmark that tracks the performance of 17 world
government bond markets. Each has a total market capitalization of eligible
issues of at least US$20 billion and euro15 billion. 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 is comprised of funds that invest
primarily in U.S. dollar and non-U.S. dollar debt securities of issues
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.
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-----------------------------------------------------------------
PERFORMANCE RECORD AS OF 6/30/00
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AFTER
MAXIMUM BEFORE
AVERAGE ANNUAL SALES SALES
TOTAL RETURN CHARGE* CHARGE
-----------------------------------------------------------------
Life (since 9/1/95) 1.62% 2.65%
-----------------------------------------------------------------
1 Year (6.84)% (2.24)%
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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.
* Maximum sales charge is 4.75%
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% OF PORTFOLIO(1)
[Figures below represent pie chart in printed piece]
Government and
Agency Obligations: 58.7%
Corporate Bonds: 31.5%
Short-Term Obligations: 3.7%
Other Net Assets: 6.1%
TOP COUNTRIES
U.S.
France
Germany
United Kingdom
Netherlands
DOLLAR WEIGHTED AVERAGE MATURITY
8.4 Years
PORTFOLIO DURATION
5.6 Years
30-DAY SEC YIELD
5.53%
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(1) As a percentage of total net assets at June 30, 2000.
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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 WILL
TYPICALLY BE INVESTED IN A COMBINATION OF U.S. TREASURY NOTES AND BONDS,
GOVERNMENT AGENCY DEBENTURES AND/OR GOVERNMENT AGENCY MORTGAGE-BACKED
SECURITIES, SUCH AS THOSE ISSUED BY "FANNIE MAE" OR "FREDDIE MAC."
For the first six months of the year 2000, the
Van Eck/Chubb Government Securities Fund achieved a total return of 3.83%,
reflecting the reinvestment of monthly dividends and price appreciation. For
this period, your Fund's performance was comparable to its peer group of mutual
funds, which returned 4.04% as measured by the Lipper General U.S. Government
Fund Index.* We are pleased to report that, thus far, the year 2000 has been a
better year than 1999 for bond investors. Your Fund's performance results for
longer periods are included in the table that follows.
U.S. BOND MARKET OVERVIEW
In many ways, the first half of 2000 saw a continuation of the trends seen in
1999. As we discussed in our year-end letter, the volatility that had affected
global capital markets in both 1997 and 1998 dissipated during 1999. Economies
around the world, especially those in Asia, continued to stabilize and return to
positive growth. The U.S. continued its amazing economic performance. Central
banks throughout the world, no longer burdened with crisis management, began
assessing the combination of secular (long-term) and cyclical forces that help
determine appropriate monetary policy. For most developed countries outside of
Asia, this meant responding to the robust growth by tightening monetary policy
to help stave off inflationary pressures.
As we write this letter, the U.S. economy continues to benefit from many of the
secular forces that have aided the longest non-inflationary expansion in the
post-war period, now in its tenth year. These forces include global competition
and technology-based productivity gains. While the Federal Reserve and Chairman
Alan Greenspan appreciate these factors, they have embarked on a preemptive
tightening cycle to cool growth and contain inflation. In 1999, the Federal
Reserve took back the 75 basis points (0.75%) of easing that they gave to the
markets during the global financial crisis in 1998. Thus far in 2000, they have
raised the targeted federal funds rate an additional 100 basis points, with 50
basis points added at the May 16 meeting. There are some signs that the economy
may finally be slowing down from the blistering pace that we had seen over the
last year. Cyclical inflationary pressures, however, appear to be building and
it is not yet clear if final demand in the economy has slowed enough to satisfy
the Federal Reserve. We expect the Federal Reserve to raise rates again, for the
seventh time since July 1999, at the next FOMC (Federal Open Market Committee)
meeting on August 22.
Given the cyclical inflation backdrop, the strong economy, strong credit growth
and a tightening-biased Federal Reserve, one might have assumed that interest
rates would have moved higher over the first half of 2000. Yields, which move
inversely to prices, fell during the first half. This was due in part to the
higher prices investors are willing to pay for longer-maturity U.S. Treasuries.
Due in large part to the substantial U.S. federal budget surplus and the
subsequent paying down of government debt, demand for Treasuries has been
outpacing supply. Through June 30, interest rates of shorter maturity two-year
Treasury notes rose 12 basis points while intermediate10- and long-term 30-year
Treasury bonds fell 41 and 58 basis points, respectively. At June 30, the yield
on the 30-year Treasury bond stood at 5.90%.
FUND REVIEW
In our year-end letter we had called 1999 "the worst year since 1994 and the
second worst year since 1973" for bond investors. In 1999, your Fund returned
-1.20%, way ahead of its peer group average, which lost 2.66%. The year 2000 has
provided better results for bonds, but, as mentioned above, your Fund slightly
underperformed in the first half. The Fund's performance was driven by its
weighting in higher yielding alternatives to Treasury bond spread product, whose
prices did not appreciate as much as Treasury securities. Treasuries,
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as we discussed, benefited from unique technical supply/demand factors that
helped drive up values. We also shortened the average maturity of the Fund's
portfolio as a defensive measure, due to the modest rise in cyclical
inflationary pressures that we saw developing. Throughout the first half, your
Fund continued to be diversified. At June 30, your Fund was 20.4% invested in
Treasuries, 30.8% in mortgage-backed securities, and 45.5% in putable agency
debentures.
PORTFOLIO OUTLOOK
With the decline in long-term interest rates that we have seen so far this year,
along with a rise in year-over-year inflation as measured by the consumer price
index, bonds had moved from the zone of above-average value at year end to
slightly below-average value at midyear. Real interest rates (nominal rates
minus inflation) on 30-year Treasuries stood at almost 4.00% at the end of 1999
but had fallen to 2.80% at June 30 (a nominal rate of 5.90% minus 3.1%
inflation). We feel that the best time to extend the maturity structure of the
Fund's portfolio is when it appears that inflation has peaked; we do not believe
that it has yet. The timing will most likely depend on when the economy slows
enough to take the cyclical pressures off the extremely tight labor markets. In
the intervening period, we will maintain our strategy of investing in shorter,
intermediate-maturity securities.
Thank you for your investment in the Van Eck/Chubb Government Securities Fund.
We look forward to helping you meet your investment goals now and in the future.
[PHOTO OMITTED] [PHOTO OMITTED]
/s/ NED I. GERSTMAN /s/ PAUL R. GEYER
------------------- -----------------
NED I. GERSTMAN PAUL R. GEYER
SENIOR VICE PRESIDENT VICE PRESIDENT
CHUBB ASSET MANAGERS, INC. CHUBB ASSET MANAGERS, INC.
July 17, 2000
The Lipper General U.S. Government Fund Index is an unmanaged index and
includes the reinvestment of all dividends, but does not reflect the payment
of transaction costs, advisory fees or expenses that are associated with an
investment in the Fund. The Index's performance is not illustrative of the
Fund's performance. Indices are not securities in which investments can be
made.
*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.
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----------------------------------------------------------------
PERFORMANCE RECORD AS OF 6/30/00
----------------------------------------------------------------
AFTER
MAXIMUM BEFORE
AVERAGE ANNUAL SALES SALES
TOTAL RETURN CHARGE* CHARGE
----------------------------------------------------------------
Life (since 12/1/87) 7.54% 7.95%
----------------------------------------------------------------
10 Year 6.89% 7.42%
----------------------------------------------------------------
5 Year 4.62% 5.64%
----------------------------------------------------------------
1 Year (1.22)% 3.71%
----------------------------------------------------------------
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.
*Maximum sales charge is 4.75%
--------------------------------------------------------------------------------
% OF PORTFOLIO (1)
[Figures below represent pie chart in printed piece]
U.S. Government and
Agency Obligations: 94.3%
Other Net Assets: 2.4%
Short-Term Obligations: 3.3%
PORTFOLIO COMPOSITION % OF PORTFOLIO(1)
Tennessee Valley Authority 45.5%
Putable Debentures
Federal National Mortgage 30.8%
Association Securities
U.S. Treasury Securities 20.4%
Federal Farm Credit Bank 0.9%
Securities
DOLLAR WEIGHTED AVERAGE MATURITY
6.7 Years
PORTFOLIO DURATION
4.4 years
30-DAY SEC YIELD
5.52%
--------------------------------------------------------------------------------
(1) As a percentage of total net assets at June 30, 2000.
10
<PAGE>
VAN ECK/CHUBB GROWTH AND INCOME FUND
--------------------------------------------------------------------------------
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 (PRIMARILY DEFINED AS FUTURE GROWTH POTENTIAL ABOVE THE S&P 500
INDEX). THIS STRATEGY HELPS KEEP THE FUND'S VOLATILITY BELOW THAT OF THE U.S.
STOCK MARKET IN GENERAL. AS A SECONDARY OBJECTIVE, THE FUND SEEKS A REASONABLE
LEVEL OF CURRENT INCOME THROUGH STOCK DIVIDENDS.
The first half of 2000 brought divergent results for the Van Eck/Chubb Growth
and Income Fund, reflecting the challenges and volatility that plagued most
equity investors. Coming off an excellent year in 1999, your Fund experienced a
strong first quarter and gained 6.02%; however, this was offset by an 8.57%
decline in the second quarter. For the six months ended June 30, the Fund was
down 3.06%. All major stock market indices (except the small-cap Russell 2000
Index*) finished down for the first half as well: the S&P 500 Index** returned
-0.42%; the Dow Jones Industrial Average,+ -8.44%; and the Nasdaq Composite
Index,++ -2.46%. Your Fund's specific peer group of mutual funds, as measured by
the Lipper Multi-Cap Value Fund Index+++, lost 0.77%. While your Fund
underperformed relative to its peer group on a year-to-date basis, we are
pleased to report that its trailing one-year 12.46% total return significantly
outpaced the 6.66% loss of its peers. Your Fund's performance results for longer
periods are included in the table that follows.
U.S. EQUITY MARKET OVERVIEW
As we entered the new millennium, the U.S. economy was growing at an above-trend
5.5%-6.0% and the stock market, as measured by the S&P 500 Index, had just
delivered its fifth consecutive year of 20-plus percent returns. The Nasdaq
soared 85.6% in 1999, the best one-year gain ever for a market index. Technology
stocks were the primary drivers of these spectacular returns and a tremendous
buzz gripped both Wall Street and Main Street over the seemingly endless
potential of the Internet dot-com sector. This giddy party, marked by staggering
price/earnings multiples, continued into the first quarter. Many individual and
institutional investors who had remained on the technology sidelines in 1999
jumped in during the first quarter of 2000. Having gained momentum after the end
of 1998's emerging markets fiscal crisis, the technology ride seemed
unstoppable. But on March 10, the Nasdaq began its painful slide and did not
stop falling until it had lost 37.3% of its value by May 23. In the month of
June, the Index recovered quite a bit, but the decline helped bring perspective
to the marketplace. We were reminded that some Old Economy truths should not be
forgotten in our New Economy: what goes up too high often falls hard, and
successful companies, no matter how engaging the business idea, need to generate
revenues. Many New Economy industries have lagged in the first half and, thus
far in 2000, the leading sectors have been classic defensive industries: the
pharmaceutical sector (benefiting from new drug announcements), consumer goods
and food (fueled by merger talks), and finally, energy.
While the technology blood-letting may have dominated the headlines, the Federal
Reserve Board continued to draw the spotlight in its bid to slow America's
economic growth. The Federal Reserve's current round of tightening began in July
of 1999 and has continued through May 16 of this year. The Fed added 75 basis
points (0.75%) in 1999 and has added another 100 basis points thus far in 2000
(25 basis points on February 2 and on March 21, and 50 basis points on May
16)--a total of 175 basis points over the period, increasing the federal funds
rate (overnight bank lending rate) to a nine-year high of 6.50%. It is widely
expected that the Fed will increase rates again at the next FOMC (Federal Open
Market Committee) meeting to be held August 22. We believe this may signal the
end of Fed tightening. Although the U.S. labor market remains very tight, with
unemployment persisting close to the historically low level of 4.0%, weakness is
beginning to show in significant areas. The housing, retail and manufacturing
sectors of the
11
<PAGE>
VAN ECK/CHUBB GROWTH AND INCOME FUND
--------------------------------------------------------------------------------
economy are off from their recent highs, and corporate earnings disappointments
are increasing.
Historically, the best recipe for good stock market returns has been an
environment characterized by low inflation, moderate economic growth, healthy
corporate profits, and a "friendly" Federal Reserve Board--one that is
interested in protecting financial assets by containing inflation. It is our
belief that once the Federal Reserve completes its current cycle of rate
increases and achieves its "soft-landing" goal, the environment for equity
investing will improve. In any case, the terrain is likely to be more difficult
to maneuver, as has been the case this year. We feel that the excessive stock
returns that investors enjoyed in the latter half of the 1990s are an historic
aberration. Equity returns, going forward, are likely to revert to their 10%-11%
average annual levels (since 1929). The possibility of flat and down years
continues to exist.
FUND REVIEW
Our approach throughout the first half of 2000 was to continue to improve the
overall quality of the portfolio and to position the Fund for what we believe
will be a more difficult period ahead. Your Fund held 52 companies at June 30
and each represents our philosophy of choosing those enterprises that should
succeed over the long term. The Fund's portfolio has a good balance of both
fast-growing New Economy companies and stable, well-established Old Economy
companies.
During the first six months of 2000, the Fund's greatest sector shifts were
achieved by reducing the Fund's exposure to technology and increasing its
weightings in several sectors, including financial services, consumer goods and
energy. As we explained in December's year-end letter, we had increased your
Fund's technology investments from a modest 10% at year-end 1998 to more than
50% by year-end 1999. At the time, our intent was to take advantage of the clear
secular (long-term) shift that had favored a large-capitalization, momentum- and
technology-driven market. This helped performance in 1999 and through the first
quarter of 2000, but exposed us to some of the downside that occurred after the
technology sector weakened in March. On the other hand, our avoidance of risky
dot-com companies with unproven business models protected the Fund when the
technology market soured. We are not fully avoiding the Internet, rather our
approach is to carefully select well-established names that are helping to build
the Internet's backbone, and which stand to benefit from Internet growth.
Despite its negative impact on recent performance, we remain very bullish on the
long-term prospects for technology and telecommunications. At June 30, the
Fund's technology weighting was a substantial 40%. We made several changes in
this sector during the last six months, including selling shares to take profits
in strong performers like Oracle (2.2% of the Funds total net assets at June 30)
and Sun Microsystems (2.0% of assets). Given the pressures in the PC (personal
computer) business, we sold out of several holdings in the Computers and
Computer Software sector including Computer Sciences, Compuware, BMC Software,
and IBM (all of which represented 0% of assets at June 30). At the same time, we
added new holdings that represent the growing wave of technology
outsourcing--the model being spearheaded by highly successful technology
companies such as Cisco Systems (2.7% of assets). By outsourcing the risky ends
of their businesses, including manufacturing and inventory management, the
leading technology players can concentrate on what they do best: engineering and
design. It's a model that is expected to grow exponentially over the next
several years and to benefit high-quality providers like Sanmina Corp. (3.4% of
assets) and Solectron Corp. (2.8% of assets), two new additions to your Fund's
top holdings. Both are independent providers of customized manufacturing
services (including printed circuit boards) to electronics equipment
manufacturers. Nortel (3.1% of assets) was also added to the Fund's top-ten list
and is a provider of research, design and development for processing systems in
the telecommunications industry.
Notable additions outside of technology included Anheuser-Busch (2.7% of
assets), the beverage and brewing holding company; Costco (2.2% of assets), the
national discount-merchandise warehouse chain;
12
<PAGE>
VAN ECK/CHUBB GROWTH AND INCOME FUND
--------------------------------------------------------------------------------
Wells Fargo (2.2% of assets), a nationwide diversified financial services
company; and Chevron (2.5% of assets), the petroleum multinational. All four are
included in your Fund's top twenty holdings.
OUTLOOK
In the past, presidential election years have generally been good ones for
equity investments. Perhaps this, combined with an end to the Federal Reserve's
wave of tightening, will help rebuild confidence in equities. It shouldn't take
much good news given the significant equity participation of baby-boomers.
Nevertheless, a more tempered approach to investing by choosing those companies
with the best long-term prospects is more likely to be rewarded in the coming
months. Uncovering high-quality enterprises is always more critical when the
stock market slows. The pursuit of this quality is what drives our individual
stock selection process. As we have done in the past, we will continue to seek
out those companies where earnings growth appears sustainable in the 10-30%
range--companies that have improving earnings and future prospects. By following
our consistent discipline of choosing quality companies at reasonable
valuations, we believe your Fund is well positioned for the remainder of 2000.
We thank you for your investment in the
Van Eck/Chubb Growth and Income Fund and we look forward to continuing to help
you meet your investment objectives.
[PHOTO OMITTED]
/s/ ROBERT WITKOFF
------------------
ROBERT WITKOFF
SENIOR VICE PRESIDENT
CHUBB ASSET MANAGERS, INC.
July 17, 2000
The Russell 2000 Index, Standard & Poor's 500 Index, Dow Jones Industrial
Average, Nasdaq Composite Index and Lipper Multi-Cap Value Fund Index are
unmanaged indices and include the reinvestment of all dividends, but do not
reflect the payment of transaction costs, advisory fees or expenses that are
associated with an investment in the Fund. The Indices' performance is not
illustrative of the Fund's performance. Indices are not securities in which
investments can be made.
* The Russell 2000 Index is comprised of the smallest 2000 companies in the
Russell 3000 Index, which represents approximately 98% of the investable
U.S. equity market.
** The Standard & Poor's 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 Dow Jones Industrial Average is a price-weighted average of 30 blue-chip
stocks that are generally the leaders in their industry. It has been a
widely followed indicator of the stock market since October 1, 1928.
++ The Nasdaq Composite Index is a broad-based capitalization-weighted index of
all Nasdaq national market and small-cap stocks.
+++ The Lipper Multi-Cap Value Fund Index is an index comprised of funds that
invest in a variety of market capitalization ranges, without concentrating
75% of their equity assets in any one market capitalization range over an
extended period of time. Multi-Cap funds will generally have between 25% to
75% of their assets invested in companies with market capitalizations (on a
three-year weighted basis) above 300% of the dollar-weighted median market
capitalization of the S&P Mid-Cap 400 Index. Multi-Cap Value Funds seek
long-term growth of capital by investing in companies that are considered to
be undervalued relative to a major unmanaged stock index based on
price-to-current earnings, book value, asset value or other factors. These
funds will normally have a below average price-to-earnings ratio,
price-to-book ratio, and three-year earnings growth figure, compared to the
U.S. diversified multi-cap funds universe average.
13
<PAGE>
VAN ECK/CHUBB GROWTH AND INCOME FUND
--------------------------------------------------------------------------------
----------------------------------------------------------------
PERFORMANCE RECORD AS OF 6/30/00
----------------------------------------------------------------
AFTER
MAXIMUM BEFORE
AVERAGE ANNUAL SALES SALES
TOTAL RETURN CHARGE* CHARGE
----------------------------------------------------------------
Life (since 12/1/87) 14.50% 15.04%
----------------------------------------------------------------
10 Year 13.46% 14.14%
----------------------------------------------------------------
5 Year 15.07% 16.44%
----------------------------------------------------------------
1 Year 5.99% 12.46%
----------------------------------------------------------------
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.
* Maximum sales charge is 5.75%
--------------------------------------------------------------------------------
% OF PORTFOLIO(1)
[Figures below represent pie chart in printed piece]
Common Stocks: 97.9%
Other Net Assets: 2.1%
TOP TEN EQUITIES % OF PORTFOLIO(1)
Sanmina Corp. 3.4%
Koninklijke (Royal) Philips
Electronics N.V. 3.2%
Baxter International, Inc. 3.2%
Microsoft Corp. 3.2%
Nortel Networks Co. 3.1%
Solectron Corp. 2.8%
General Electric Co. 2.7%
Lucent Technologies, Inc. 2.7%
Cisco Systems, Inc. 2.7%
Anheuser-Busch Companies, Inc. 2.7%
TOP TEN INDUSTRIES % OF PORTFOLIO(1)
Computers & Computer Software 17.9%
Electronics 14.3%
Telecommunications 13.7%
Oil & Gas Equipment and Services 10.8%
Technology 7.3%
Retail 6.2%
Financial Services 5.7%
Medical-Healthcare Services 3.3%
Electrical Equipment 2.7%
Brewers 2.7%
--------------------------------------------------------------------------------
(1) As a percentage of total net assets at June 30, 2000.
14
<PAGE>
VAN ECK/CHUBB TAX-EXEMPT FUND
--------------------------------------------------------------------------------
THE VAN ECK/CHUBB TAX-EXEMPT FUND SEEKS A HIGH LEVEL OF CURRENT INCOME THAT IS
EXEMPT FROM FEDERAL INCOME TAXES, CONSISTENT WITH THE PRESERVATION OF CAPITAL.
THE FUND'S MANAGERS PERFORM RIGOROUS CREDIT ANALYSIS IN SELECTING TAX-EXEMPT
BONDS FROM ACROSS THE U.S. THE FUND EMPHASIZES INVESTMENT-GRADE SECURITIES,
INCLUDING GENERAL OBLIGATION AND REVENUE BACKED BONDS.
Thus far in 2000, the Van Eck/Chubb Tax-Exempt Fund has experienced good
relative results. For the six months ended June 30, 2000, your Fund gained
3.70%, versus 4.03% posted by its peer group of mutual funds as measured by the
Lipper General Municipal Debt Fund Index.* At the same time, the benchmark
Lehman Brothers Municipal Bond Index** gained 4.48% for the period. Your Fund's
performance results for longer periods are included in the table that follows.
U.S. MUNICIPAL MARKET OVERVIEW
Coming off a very difficult 1999, the municipal bond market rebounded well in
the first half of 2000, especially during the first quarter. In our year-end
letter, we had said that 1999 was "the worst year for bonds since 1994 and the
second worst year since 1973." Inflation jitters and rising interest rates were
to blame, along with lackluster demand for bonds from investors who favored the
higher potential returns of equities." In 2000, bond markets have been supported
by several factors:
1) a general reverse in the negative sentiment that characterized 1999; 2)
increased confidence that the Federal Reserve Board is helping to slow the U.S.
economy; 3) the disappointing results of equity markets, especially the dramatic
slide of the Nasdaq+; and 4) within the municipal marketplace, a significant
decrease in available supply.
Of these four factors, the actions of the Federal Reserve Board have commanded
the most attention from bond investors. With U.S. economic strength continuing
to exceed all predictions, the Federal Reserve Board has occupied center stage
in its bid to slow America's economic growth (which was a blistering 5.5%-6.0%
in the fourth quarter of 1999). Through June 30, the Fed extended its cycle of
preemptive tightening by increasing rates an additional 100 basis points
(1.00%)--25 basis points on February 2 and March 21, and 50 basis points on May
16. All told, the Fed has raised rates six times between July 1999 and May 2000,
increasing the short-term federal funds rate (the overnight bank lending rate)
from 4.75% to 6.50%, a total of 175 basis points. Another round of increases is
expected at the next FOMC (Federal Open Market Committee) meeting on August 22.
Many believe this will signal the end of Fed tightening. Signs of slowing have
emerged in manufacturing, housing sales (both new and existing homes) and retail
consumer spending, and are being reflected in some corporate earnings
disappointments. These small signs of economic slowdown have benefited fixed
income investments. At the same time, the extreme volatility and the lackluster
results of equity investments have turned attention toward bonds.
For the six-month period ended June 30, long-term municipal bonds slightly
underperformed long-term Treasuries, although both asset classes experienced a
positive return during the period. The yield on the Bond Buyer 20-Bond General
Obligation Index (BB20), the benchmark we follow to monitor long-term municipal
yields, declined 23 basis points from 6.00% to 5.77%. At the same time, 30-year
Treasury bond yields fell 58 basis points, from 6.48% to 5.90%. The Treasury
market continues to outperform, given that the U.S. government is buying back a
substantial portion of its outstanding debt in response to the shrinking federal
budget deficit. New supply is severely limited and risk-sensitive investors have
been willing to pay a substantial premium for Treasuries. There is even some
talk that the current administration will announce a plan to retire the
country's entire privately held U.S Treasury debt by 2013. These Treasury market
factors have caused longer-maturity municipals to trade at very high ratios to
Treasuries, from 95% to 100%. When municipals reach these levels, they are
considered more attractive on a relative basis.
On an absolute basis, a combination of factors continued to support the solid
performance of municipal bonds. In the first six months of 2000,
15
<PAGE>
VAN ECK/CHUBB TAX-EXEMPT FUND
--------------------------------------------------------------------------------
the supply of new issues was far below 1999 levels. Volume has declined 25%-30%
and refundings are off by more than 70%. During the extended period of low
interest rates in 1998 and early 1999, refundings peaked. The current supply
crunch is a direct reflection of the fiscal and financial health enjoyed by most
state and local governments; owing in large part to the prolonged economic
expansion, state and local surpluses are at their highest levels since the early
1980s. To finance infrastructure building and other projects, many financially
flush municipalities prefer financing with a pay-as-you-go strategy rather than
borrowing through debt issuance. The decline in supply has helped buoy prices,
particularly in the intermediate maturity range--an asset class favored by new
wealth being created in states like California. At the same time, municipal
credit quality continues to improve. The second quarter of 2000 marked the 19th
consecutive quarter in which debt-rating upgrades exceeded downgrades in the
public finance arena.
FUND REVIEW
On several fronts very little has changed in the management of your Fund since
we last wrote to you in January. We continue to maintain a barbell maturity
strategy of both shorter maturity and longer-term securities. We strive, over
differing market cycles, to offer solid returns to shareholders in both up and
down markets.
We continue to maintain a very high level of credit quality with 70% of the Fund
invested in Aaa- and Aa-rated paper--the two highest credit categories. The
persistent narrow yield spreads among credit categories provide little incentive
to lessen the quality of the Fund's portfolio. As was the case at year end, our
favorite states continue to be New York, Washington, Indiana and Texas. At June
30, your Fund was 15.0% invested in New York, 13.6% in Washington, 11.5% in
Indiana and 6.5% in Texas. All four of these states are experiencing tremendous
growth and fiscal health. The transportation arena remains our choice credit
sector, with airport and toll road credits providing ongoing opportunities. On
the other hand, we continue to be cautious about the healthcare sector, given
the generally poor performance of hospital systems nationwide.
OUTLOOK
At year-end 1999, we expressed our hope to see renewed interest in municipal
bonds in 2000. Results thus far in 2000 indicate that interest may be building,
even though the U.S. Treasury market continues to dominate. If equity markets
continue to stall, demand from market participants should increase. With the
Fed's cycle of tightening coming to a close, markets are likely to be less
preoccupied about the direction of interest rates. As Fed action filters through
the economy, we expect interest rates and bond yields to stabilize and even
decline, and this is good news for the value of bonds. Although the presidential
election will command some attention in the coming months, it should have only a
slight impact on bond markets. None of the major tax law changes being discussed
are likely to threaten municipals. Municipal yields are still very attractive; a
5.77% tax-free yield is equivalent to a 9.55% taxable yield for taxpayers in the
maximum 39.6% federal income tax bracket. As we have stated before, municipals
continue to make sense for long-term risk and tax conscious investors.
We thank you for your investment in the Van Eck/Chubb Tax-Exempt Fund and look
forward to helping you meet your investment goals in the months ahead.
[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 10, 2000
16
<PAGE>
VAN ECK/CHUBB TAX-EXEMPT FUND
--------------------------------------------------------------------------------
The Lipper General Municipal Debt Fund Index, Lehman Brothers Municipal Bond
Index and Nasdaq Composite Index are unmanaged indices and include the
reinvestment of all dividends, but do not reflect the payment of transaction
costs, advisory fees or expenses that are associated with an investment in
the Fund. The Indices' performance is not illustrative of the Fund's
performance. Indices are not securities in which investments can be made.
* 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 Lehman Brothers Municipal Bond Index is an unmanaged total return
performance benchmark of municipal bonds selected to represent the overall
municipal market. The bonds in the Index are investment grade and
geographically unrestricted.
+ The Nasdaq Composite Index is a broad-based capitalization- weighted index of
all Nasdaq national market and small-cap stocks.
-----------------------------------------------------------------
PERFORMANCE RECORD AS OF 6/30/00
-----------------------------------------------------------------
AFTER
MAXIMUM BEFORE
AVERAGE ANNUAL SALES SALES
TOTAL RETURN CHARGE* CHARGE
-----------------------------------------------------------------
Life (since 12/1/87) 6.84% 7.26%
-----------------------------------------------------------------
10 Year 5.81% 6.33%
-----------------------------------------------------------------
5 Year 4.02% 5.03%
-----------------------------------------------------------------
1 Year (3.41)% 1.44%
-----------------------------------------------------------------
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. Income may be subject to state and local taxes and the
Alternative Minimum Tax.
The Adviser is currently waiving certain or all expenses of the Fund. Had the
Fund incurred all expenses, investment returns would have been reduced.
*Maximum sales charge is 4.75%
--------------------------------------------------------------------------------
% OF PORTFOLIO(1)
[Figures below represent pie chart in printed piece]
Municipal Bonds: 96.6%
Other Net Assets: 3.4%
PORTFOLIO QUALITY
RATING(2) % OF PORTFOLIO(1)
Aaa 54.6%
Aa 15.7%
A 16.2%
Baa 11.4%
Not Rated 2.1%
TOP TEN STATES % OF PORTFOLIO(1)
New York 15.0%
Washington 13.6%
Indiana 11.5%
Texas 6.5%
Tennessee 6.3%
New Jersey 6.2%
Massachusetts 5.6%
Illinois 5.4%
Florida 4.8%
Connecticut 4.4%
DOLLAR WEIGHTED AVERAGE MATURITY
10.5 Years
PORTFOLIO DURATION
7.2 Years
30-DAY SEC YIELD
4.35%
--------------------------------------------------------------------------------
(1) As a percentage of total net assets at June 30, 2000.
(2) Predominantly Moody's Investors Service ratings.
17
<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 THE COMMON
STOCKS OF BOTH 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, ABOUT
60% TO 70% OF THE FUND'S ASSETS WILL BE INVESTED IN COMMON STOCKS.
The Van Eck/Chubb Total Return Fund, after providing excellent performance in
1999, endured the volatile market conditions presented in the first six months
of 2000 and managed to return 1.60%. The Fund slightly underperformed the
benchmark index of its peer mutual funds, the Lipper Balanced Fund Index*, which
gained 1.74%. We are pleased to report, however, that on a trailing one-year
basis, your Fund outpaced its peer group with a 13.76% total return compared to
a 4.43% return for the Lipper Index. Equity investors were presented with more
than a few hurdles during this time period as most major stock indices declined
(S&P 500 Index**, -0.42%; Dow Jones Industrial Average+, -8.44%; Nasdaq
Composite Index++, -2.46%). On the other hand, domestic fixed income markets
offered positive returns; the Lehman Brothers Government Bond Index+++ gained
4.97% for the period and the Lehman Brothers Corporate Bond Index++++ gained
2.68%. Your Fund's performance results for longer periods are included in the
table that follows.
REVIEW OF MARKETS
We entered the year 2000 with the U.S. economy growing at above-desired levels
of approximately 5.5% and the stock market, as measured by the S&P 500 Index,
delivering its fifth consecutive year of 20-plus percent returns. The Nasdaq,
greatly driven by technology stocks, soared 85.6% in 1999, the best one-year
gain ever for a market index. The high-flying tech sector continued to hold the
attention of both Wall Street and Main Street well into the first quarter.
However, the party came to an end when, on March 10, the Nasdaq began its
painful slide and eventually lost over one third of its value by the end of May.
The Index made a substantial recovery in June, but the landslide brought
much-needed perspective to the marketplace. Investors were reminded that
successful companies, no matter how engaging the business idea, need to generate
profits. Interest in technology waned and interest in some Old Economy sectors
increased, such as pharmaceuticals, consumer goods and energy.
In an attempt to slow the U.S. economy, the Federal Reserve continued its
gradualist approach to tighter monetary policy during the period under review.
Interest rates have been raised a total of six times in twelve months including
an unusual step of a single 50 basis-point (0.50%) increase in May. Since July
1999, the overnight bank lending rate has been increased a total of 175 basis
points to a nine-year high of 6.50%. The U.S. labor market remains tight, with
unemployment at the historically low level of 4.0%; however, weakness is
beginning to show in significant areas, such as the housing, retail, and
manufacturing sectors, and corporate earnings disappointments are increasing.
Cyclical inflationary pressures, however, do appear to be building and it is not
yet clear if final demand in the economy has slowed enough to satisfy the
Federal Reserve. We expect the Fed to raise rates again for the seventh time
since July 1999 at the next FOMC (Federal Open Market Committee) meeting on
August 22.
Given the cyclical inflation backdrop, the strong economy, strong credit growth
and a tightening-biased Federal Reserve, one might have assumed that interest
rates would have moved higher over the first half of 2000. Bond yields, however,
which move inversely to prices, fell during the first half. This was due in part
to the premiums paid by investors for longer-maturity U.S. Treasuries. The large
U.S. federal budget surplus and the subsequent paying down of government debt
helped drive the demand for Treasuries--a demand that has outpaced supply.
Through June 30, interest rates of shorter-maturity two-year Treasury notes rose
12 basis points while intermediate 10- and long-term 30-year Treasury bonds fell
41 and 58 basis points, respectively. At June 30, the yield on the 30-year
Treasury bond stood at 5.90%.
18
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VAN ECK/CHUBB TOTAL RETURN FUND
--------------------------------------------------------------------------------
FUND REVIEW
Your Fund's general asset allocations remained relatively unchanged during the
first six months of the year, with 58.9% invested in equity securities and 40.3%
invested in fixed income securities at June 30. Due to the many challenges faced
in the equity markets thus far in 2000, the Fund's equity holdings experienced
great sector shifts. Emphasis was taken from the New Economy technology sector
and redirected toward some Old Economy sectors, including financial services,
consumer goods and energy.
Some of the Fund's technology holdings that helped buoy performance in 1999
exposed us to the downside that occurred in equity markets after the technology
sector weakened in March. On the other hand, our avoidance of risky dot-com
companies with unproven business models protected the Fund when the technology
market soured. We are not fully avoiding the Internet, rather our approach is to
carefully select well-established names that are helping to build the Internet's
backbone, and which stand to benefit from Internet growth. We have made some
significant changes in our exposure to this market such as the selling off of
shares to take profits in strong performers, such as Oracle (1.5% of the Fund's
total net assets at June 30) and Sun Microsystems (2.4% of assets). Given the
pressures in the PC (personal computer) business, we sold out of several
holdings in the Computers & Computer Software sector, including Computer
Sciences, Compuware, BMC Software, and IBM (all of which represented 0% of
assets at June 30). At the same time, in order to capture the growing wave of
technology outsourcing, we have added Sanmina Corp. (2.2% of assets) and
Solectron Corp. (2.2% of assets), two high-quality providers expected to benefit
from this trend, to your Fund's top ten holdings. By outsourcing manufacturing
and inventory management, for example, these leading technology players can
concentrate on what they do best: engineering and design. Despite the negative
impact on recent performance, we remain very bullish on the long-term prospects
for technology and telecommunications. At June 30, the Fund's technology
weighting was nearly 30%.
Notable additions outside of technology included Anheuser-Busch (1.6% of
assets), the beverage and brewing holding company; Costco (1.7% of assets), the
national discount-merchandise warehouse chain; Pfizer (1.3% of assets), the
global pharmaceutical company; and Chevron (1.1% of assets), the petroleum
multinational.
The Fund's fixed income investments continue to be concentrated in high-quality
government and corporate bonds. Treasuries, as we discussed, benefited from
unique technical supply/demand factors that helped drive up values. As a
defensive measure, we shortened the average maturity of the Fund's portfolio due
to the modest rise in cyclical inflationary pressures that we saw developing. At
June 30, your Fund was approximately 13% invested in U.S. corporate bonds and
28% in Treasuries.
OUTLOOK
We hope to see a rebuilding of confidence in equity markets in the remainder of
2000. An approaching presidential election (which historically has coincided
with positive equity returns), combined with the likely end to the Federal
Reserve's cycle of rate increases, may provide eager investors enough reason to
reenter the market. Given a successful soft-landing scenario, the environment
for equity investing should improve. However, the terrain is likely to be more
difficult to maneuver, as has been the case this year. We continue to exercise
cautious stock selection, choosing those companies with the best long-term
prospects. We plan to seek out those companies where earnings growth appears
sustainable in the 10-30% range--companies that have improving earnings and
future prospects. By following our consistent discipline of choosing quality
companies at reasonable valuations, we believe your Fund is well positioned for
the remainder of 2000.
The decline in long-term interest rates witnessed in the first six months of
2000, combined with a rise in year-over-year inflation (as measured by the
Consumer Price Index), sent bonds from above-average value to slightly
below-average value by midyear. Real interest rates (nominal rates minus
19
<PAGE>
VAN ECK/CHUBB TOTAL RETURN FUND
--------------------------------------------------------------------------------
inflation) on 30-year Treasuries fell to 2.80% at June 30 from almost 4.00% at
year-end 1999. We do not believe that inflation has peaked; we expect to extend
the maturity structure of the Fund's portfolio when it appears that inflation
has reached its highs. This will depend largely on the slowing of the economy
and whether this slowdown will have the desired effect on the extremely tight
labor markets. In the meantime, our strategy of investing in shorter,
intermediate-maturity securities will remain intact.
We thank you for your investment in the Van Eck/Chubb Total Return Fund and we
look forward to continuing to help you meet your investment objectives.
[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 MANAGERS, INC.
July 24, 2000
The Lipper Balanced Fund Index, Standard & Poor's 500, Dow Jones Industrial
Average, Nasdaq Composite Index, Lehman Brothers Government Bond Index and
Lehman Brothers Corporate Bond Index are unmanaged indices and include the
reinvestment of all dividends, but do not reflect the payment of
transaction costs, advisory fees or expenses that are associated with an
investment in the Fund. The Indices' performance is not illustrative of the
Fund's performance. Indices are not securities in which investments can be
made.
* 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 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 Dow Jones Industrial Average is a price-weighted average of 30
blue-chip stocks that are generally the leaders in their industry. It has
been a widely followed indicator of the stock market since October 1, 1928.
++ The Nasdaq Composite Index is a broad-based capitalization-weighted index
of all Nasdaq national market and small-cap stocks.
+++ The Lehman Brothers Government Bond Index includes all public obligations
of the U.S. Treasury, excluding flower bonds and foreign-targeted issues,
all publicly issued debt of U.S. Government agencies and quasi-federal
corporations, and corporate debt guaranteed by the U.S. government. All
issues have at least one year to maturity and an outstanding par value of
at least $100 million. All returns are market value-weighted inclusive of
accrued interest.
++++ The Lehman Brothers Corporate Bond Index is approximately 86% (on a market
capitalization-weighted basis) publicly issued U.S. corporate debt
obligations of the industrial, utility and finance sectors of the economy.
Eight percent of the index is comprised of foreign debentures, secured
notes and non-corporate sectors. Issues included in the index have at least
one year to final maturity and at least $150 million par amount
outstanding. They are dollar-denominated, SEC registered and rated
investment grade by Moody's Investors Service, Standard & Poor's or Fitch.
20
<PAGE>
VAN ECK/CHUBB TOTAL RETURN FUND
--------------------------------------------------------------------------------
---------------------------------------------------------------
PERFORMANCE RECORD AS OF 6/30/00
---------------------------------------------------------------
AFTER
MAXIMUM BEFORE
AVERAGE ANNUAL SALES SALES
TOTAL RETURN CHARGE* CHARGE
---------------------------------------------------------------
Life (since 12/1/87) 12.94% 13.47%
---------------------------------------------------------------
10 Year 12.21% 12.88%
---------------------------------------------------------------
5 Year 13.24% 14.58%
---------------------------------------------------------------
1 Year 7.22% 13.76%
---------------------------------------------------------------
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.
*Maximum sales charge is 5.75%
--------------------------------------------------------------------------------
% OF PORTFOLIO(1)
[Figures below represent pie chart in printed piece]
U.S. Government Obligations: 27.6%
Corporate Bonds: 12.7%
Other Net Assets: 0.8%
Common Stocks: 58.9%
TOP TEN EQUITIES % OF PORTFOLIO(1)
Intel Corp. 2.4%
Sun Microsystems, Inc. 2.4%
Sanmina Corp. 2.2%
ADC Telecommunications, Inc. 2.2%
Solectron Corp. 2.2%
Koninklijke (Royal) Philips
Electronics N.V. 2.2%
General Electric Co. 2.1%
Cisco Systems, Inc. 2.0%
Halliburton Co. 1.9%
Baxter International, Inc. 1.8%
TOP TEN INDUSTRIES % OF PORTFOLIO(1)
Computers & Computer Software 11.1%
Electronics 9.5%
Telecommunications 9.2%
Technology 6.0%
Oil & Gas Equipment and Services 5.8%
Retail 3.5%
Electrical Equipment 2.1%
Medical Products & Supplies 1.8%
Brewers 1.6%
Manufacturing 1.5%
--------------------------------------------------------------------------------
(1) As a percentage of total net assets at June 30, 2000.
21
<PAGE>
VAN ECK/CHUBB GLOBAL INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 2000 (unaudited)
MARKET
PRINCIPAL VALUE
CURRENCY AMOUNT (NOTE B)
--------- --------- --------
GOVERNMENT AND AGENCY
OBLIGATIONS-58.7%
AUSTRALIA-0.8%
Australian Government
Bond
9.50%, due 8/15/03 ....... AUD 650,000 $ 427,100
New South Wales Treasury
Note
9.25%, due 6/20/05 ....... AUD 200,000 132,406
-----------
559,506
-----------
CANADA-2.7%
Government of Canada
Bond
5.25%, due 9/01/03 (a) ... CAD 3,000,000 1,986,292
-----------
FRANCE-15.4%
France O.A.T.
6.50%, due 10/25/06 (a) .. EUR 1,867,500 1,909,969
5.50%, due 4/25/29 (a) ... EUR 4,225,000 3,983,543
5.50%, due 10/25/07 (a) .. EUR 2,250,000 2,181,944
French Government Bond
4.50%, due 7/12/03 (a) ... EUR 2,200,000 2,070,215
4.00%, due 1/12/02 (a) ... EUR 1,000,000 941,867
-----------
11,087,538
-----------
GERMANY-11.0%
Bundesobligation
6.00%, due 7/04/07 ....... EUR 2,721,455 2,715,471
Deutschland Republic
7.375%, due 1/03/05 ...... EUR 2,300,813 2,388,479
6.00%, due 1/05/06 ....... EUR 2,800,000 2,777,496
-----------
7,881,446
-----------
GREECE-2.0%
Hellenic Republic
6.60%, due 1/15/04 ....... GRD 500,000,000 1,442,660
-----------
ITALY-2.1%
Buoni Poliennali del tes
Government National
5.00%, due 5/01/08 ....... EUR 1,652,659 1,532,146
-----------
NETHERLANDS-3.1%
Government of Netherlands
6.00%, due 1/15/06 ....... EUR 1,588,231 1,565,845
3.00%, due 2/15/02 ....... EUR 720,000 667,323
-----------
2,233,168
-----------
SPAIN-0.8%
Spanish Government Bond
3.25%, due 1/31/05 ....... EUR 627,000 550,118
-----------
SUPRANATIONAL-7.5%
European Investment Bank
5.25%, due 1/12/09 ....... USD 3,500,000 3,064,033
International Bank for
Reconstruction &
Development
9.25%, due 7/20/07 ....... GBP 1,000,000 1,758,618
5.875%, due 11/10/03 ..... DEM 1,050,000 521,000
-----------
5,343,651
-----------
UNITED STATES-13.3%
U.S. Treasury Bonds
6.50%, due 2/15/10 (a) ... USD 1,000,000 1,034,375
6.375%, due 4/30/02 (a) .. USD 1,500,000 1,498,595
6.00%, due 8/15/09 (a) ... USD 4,850,000 4,812,112
5.875%, due 11/15/04 (a) . USD 2,250,000 2,216,954
-----------
9,562,036
-----------
TOTAL GOVERNMENT
AND AGENCY
OBLIGATIONS
(Cost: $46,714,053) 42,178,561
-----------
CORPORATE BONDS-31.5%
CANADA-1.4%
Canadian Airlines Corp.
10.00%, due 5/01/05 ...... USD 1,000,000 1,035,000
-----------
FRANCE-4.2%
Caisse Centrale du Credit
Immobilier de France
6.83%, due 6/27/04 (a) ... USD 3,000,000 2,992,650
-----------
JAPAN-5.3%
Fuji JGB Carrier Preferred
9.87%, due 12/31/49+ ..... USD 1,000,000 973,413
IBJ Preferred Capital Co. LLC
8.79%, due 12/29/49+ ..... USD 1,000,000 915,224
SB Treasury Co. LLC
9.40%, due 12/29/49+ ..... USD 1,000,000 977,248
Tokai Preferred Capital
Co. LLC
9.98%, due 12/29/49+ ..... USD 1,000,000 942,500
-----------
3,808,385
-----------
See Notes to Financial Statements
22
<PAGE>
VAN ECK/CHUBB GLOBAL INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 2000 (unaudited) (continued)
MARKET
PRINCIPAL VALUE
CURRENCY AMOUNT (NOTE B)
--------- --------- --------
MEXICO-1.3%
Grupo Industrial Durango,
S.A. de C.V.
12.00%, due 7/15/01 ....... USD 500,000 $ 500,000
VICAP S.A.
11.375%, due 5/15/07 ...... USD 500,000 418,125
-----------
918,125
-----------
NETHERLANDS-3.1%
Global Telesystems Europe, Inc.
10.50% due 12/01/06 ....... EUR 500,000 383,536
Netia Holdings S.A.
13.50%, due 6/15/09 ....... EUR 1,000,000 965,409
Versatel Telecom N.V.
11.25%, due 3/30/10 ....... EUR 1,000,000 893,720
-----------
2,242,665
-----------
SINGAPORE-0.7%
Flextronics International Ltd.
9.75%, due 7/01/10 ........ EUR 500,000 489,873
-----------
SPAIN-0.6%
Jazztel PLC
14.00%, due 4/01/09 ....... USD 500,000 457,500
-----------
UNITED KINGDOM-9.9%
Bank of Scotland Capital Fund
8.117%, due 3/31/49 ....... GBP 1,000,000 1,527,774
BG Transco Holdings PLC
7.00%, due 12/16/24 ....... GBP 990,000 1,444,947
Diamond Holdings PLC
10.00%, due 2/01/08 ....... GBP 1,000,000 1,361,618
Luxfer Holdings PLC
10.125%, due 5/01/09 ...... GBP 1,000,000 1,400,636
Polestar Corp.
10.50%, due 5/30/08 ....... GBP 1,000,000 1,411,244
-----------
7,146,219
-----------
UNITED STATES-5.0%
C.S. First Boston Commercial
Mortgage 97-C1
7.46%, due 5/20/09+ ....... USD 2,000,000 1,866,563
Level 3 Communications, Inc.
10.75%, due 3/15/08 ....... EUR 1,000,000 902,083
Viatel, Inc.
11.50% due 3/15/09 ........ EUR 1,000,000 798,162
-----------
3,566,808
-----------
TOTAL CORPORATE
BONDS
(Cost: $24,103,979) 22,657,225
-----------
SHORT-TERM OBLIGATION-3.7%
UNITED STATES-3.7%
General Electric Capital
Commercial Paper
Interest Yield 6.60%,
due 8/15/00 (a)
(Cost: $2,633,092) ........ USD 2,655,000 2,633,092
-----------
TOTAL INVESTMENTS
(Cost: $73,451,124*) 93.90% 67,468,878
Other assets less liabilities 6.10% 4,361,361
--------- -----------
TOTAL NET ASSETS 100.00% $71,830,239
========= ===========
----------------
* 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 7.90% 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 foreign forward currency
contracts and futures contracts.
See Notes to Financial Statements
23
<PAGE>
VAN ECK/CHUBB GOVERNMENT SECURITIES FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 2000 (unaudited)
MARKET
PRINCIPAL VALUE
AMOUNT (NOTE B)
--------- --------
U.S. GOVERNMENT AND AGENCY
OBLIGATIONS-94.3%
Federal Farm Credit Bank
8.00%, due 4/15/21 ............ USD 260,155 $ 262,836
Federal National Mortgage Association
9.00%, due 7/01/01 ............ 3,922 3,969
6.00%, due 1/01/29 ............ 9,059,195 8,314,511
Tennessee Valley Authority
6.235%, due 7/15/45 ........... 10,000,000 9,949,400
5.98%, due 4/01/36 ............ 4,000,000 3,850,200
U.S. Treasury Bonds & Notes
11.250%, due 2/15/15 .......... 2,700,000 3,974,907
10.375%, due 11/15/12 ......... 1,000,000 1,230,938
5.50%, due 2/28/03 ............ 1,000,000 978,750
-----------
TOTAL GOVERNMENT
AND AGENCY
OBLIGATIONS
(Cost: $29,188,007) ........... 28,565,511
-----------
SHORT-TERM OBLIGATION-3.3%
Federal National Mortgage Association
Interest Yield 6.38%,
due 8/17/00 (a)
(Cost: $991,671) .............. USD 1,000,000 991,671
-----------
TOTAL INVESTMENTS
(Cost: $30,179,678*) .......... 97.6% 29,557,182
Other assets less liabilities . 2.4% 714,497
--------- -----------
TOTAL NET ASSETS .............. 100.0% $30,271,679
========= ===========
------------
* Aggregate cost for Federal income tax purposes.
See Notes to Financial Statements
24
<PAGE>
VAN ECK/CHUBB GROWTH AND INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 2000 (unaudited)
NUMBER MARKET
OF VALUE
COMPANY SHARES (NOTE B)
--------- --------- --------
COMMON STOCK-97.9%
AUTOS, TRUCKS & PARTS-1.5%
General Motors Corp. .................. 15,000 $1,316,250
-----------
BANKING-2.3%
Bank of America Corp. ................. 20,000 860,000
Chase Manhattan Corp. ................. 25,500 1,174,594
-----------
2,034,594
-----------
BREWERS-2.7%
Anheuser-Busch Companies, Inc. ........ 32,000 2,390,000
-----------
BUSINESS SERVICES-1.5%
Marchfirst, Inc. ...................... 71,900 1,312,175
-----------
COMMERCIAL SERVICES-1.3%
Dial Corp. (The) ...................... 115,000 1,193,125
-----------
COMPUTERS & COMPUTER SOFTWARE-17.9%
America Online, Inc. .................. 30,000 1,582,500
Complete Business Solutions, Inc. ..... 85,000 1,492,813
Crown Castle International Corp. ...... 65,000 2,372,500
EMC Corp. ............................. 27,000 2,077,313
Extreme Networks, Inc. ................ 500 52,750
I2 Technologies, Inc. ................. 15,000 1,563,984
Microsoft Corp. ....................... 35,000 2,800,000
Sun Microsystems, Inc. ................ 20,000 1,818,750
Sycamore Networks, Inc. ............... 2,500 275,938
VERITAS Software Corp. ................ 17,000 1,921,266
-----------
15,957,814
-----------
ELECTRICAL EQUIPMENT-2.7%
General Electric Co. .................. 46,000 2,438,000
-----------
ELECTRONICS-14.3%
Koninklijke (Royal) Philips
Electronics N.V. .................... 60,720 2,884,200
Lexmark International Group, Inc. ..... 30,000 2,017,500
Nokia Oyj (Sponsored ADR) ............. 45,000 2,247,188
Sanmina Corp. ......................... 35,000 2,992,500
Solectron Corp. ....................... 60,000 2,512,500
-----------
12,653,888
-----------
FINANCIAL SERVICES-5.7%
Citigroup, Inc. ....................... 31,000 1,867,750
Washington Mutual, Inc. ............... 45,000 1,299,375
Wells Fargo & Company ................. 50,000 1,937,500
-----------
5,104,625
-----------
FOOD PROCESSING-0.0%
Archer-Daniels-Midland Co. ............ 138 1,354
-----------
HOUSEHOLD PRODUCTS-1.0%
Procter & Gamble Co. .................. 15,000 858,750
-----------
MACHINERY-2.4%
Applied Materials, Inc. ............... 24,000 2,175,000
-----------
MANUFACTURING-1.6%
United Technologies Corp. ............. 24,000 1,413,000
-----------
MEDICAL-HEALTHCARE SERVICES-3.3%
Baxter International, Inc. ............ 40,000 2,812,500
Edwards Lifesciences Corp. ............ 4,000 74,000
Healthcare Services Corp. ............. 96 432
-----------
2,886,932
-----------
OIL & GAS EQUIPMENT AND SERVICES-10.8%
Burlington Resources, Inc. ............ 49,600 1,897,200
Chevron Corp. ......................... 25,900 2,196,644
Cooper Cameron Corp. .................. 13,800 910,800
Halliburton Co. ....................... 47,600 2,246,125
Royal Dutch Petroleum Co. (N.Y. Shares) 20,000 1,231,250
Transocean Sedco Forex, Inc. .......... 20,000 1,068,750
-----------
9,550,769
-----------
PRINTED CIRCUIT BOARDS-1.7%
Jabil Circuit, Inc. ................... 30,000 1,488,750
-----------
RETAIL-6.2%
BJ Wholesale Club, Inc. ............... 25,000 825,000
Costco Wholesale Corp. ................ 60,000 1,980,000
RadioShack Corp. ...................... 20,000 947,500
Wal-Mart Stores, Inc. ................. 30,000 1,728,750
-----------
5,481,250
-----------
TECHNOLOGY-7.3%
Cisco Systems, Inc. ................... 38,000 2,415,375
Intel Corp. ........................... 16,000 2,139,000
Oracle Corp. .......................... 23,000 1,933,438
-----------
6,487,813
-----------
See Notes to Financial Statements
25
<PAGE>
VAN ECK/CHUBB GROWTH AND INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 2000 (unaudited) (continued)
NUMBER MARKET
OF VALUE
COMPANY SHARES (NOTE B)
--------- --------- --------
TELECOMMUNICATIONS-13.7%
ADC Telecommunications, Inc. .......... 21,000 $ 1,761,375
JDS Uniphase Corp. .................... 15,000 1,798,125
Lucent Technologies, Inc. ............. 41,000 2,429,250
Nortel Networks Corp. ................. 40,000 2,730,000
Vodafone AirTouch PLC (ADR) ........... 43,000 1,781,813
WorldCom, Inc. ........................ 36,500 1,674,434
-----------
12,174,997
-----------
Total Investments
(Cost: $72,990,050*) ................ 97.9% 86,919,086
Other assets less liabilities ....... 2.1% 1,872,249
-------- -----------
Total Net Assets 100.0% $88,791,335
======== ===========
---------------
* Aggregate cost for Federal income tax purposes.
Abbreviation:
ADR-American Depositary Receipt
See Notes to Financial Statements
26
<PAGE>
VAN ECK/CHUBB TAX-EXEMPT FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 2000 (unaudited)
MARKET
PRINCIPAL VALUE
AMOUNT (NOTE B)
--------- --------
MUNICIPAL OBLIGATIONS-96.6%
ALASKA-2.1%
Anchorage, Alaska, Hospital Revenue,
(Sisters of Providence Project),
6.75%, due 10/01/02 ............... $ 150,000 $ 154,929
North Slope Borough, Alaska,
General Obligation, Series A,
Zero Coupon, MBIA Insured,
due 6/30/04 ....................... 550,000 450,379
-----------
605,308
-----------
CONNECTICUT-0.6%
Connecticut State, General Obligation,
Series C, 7.00%, Prerefunded to
9/15/00 at 102+ ................... 160,000 163,966
-----------
DISTRICT OF COLUMBIA-3.9%
District of Columbia, Certificate
of Participation, 7.30%,
due 1/01/13+ ...................... 300,000 316,053
District of Columbia, Series 93A,
5.875%, due 6/01/05 ............... 255,000 259,812
District of Columbia, Series 93A,
5.875%, due 6/01/05, ETM .......... 245,000 255,829
Metropolitan Washington D.C.
Airport Authority,
General Airport Revenue,
Series A, AMT, MBIA Insured,
6.50%, due 10/01/07+ .............. 250,000 261,318
-----------
1,093,012
-----------
FLORIDA-4.8%
Dade County, Florida, Aviation Revenue,
Miami International Airport,
FSA Insured, 5.125%,
due 10/01/27 ...................... 1,500,000 1,365,885
-----------
GEORGIA-0.9%
Cartersville, Georgia Development
Authority, Water & Wastewater
Facilities, Anheuser Busch, AMT,
6.75%, due 2/01/12+ ............... 250,000 261,398
-----------
ILLINOIS-5.4%
Illinois State Toll Highway, Series 92A,
6.375%, Prerefunded to
1/01/03 at 102+ ................... 1,100,000 1,160,225
Metropolitan Pier & Exposition Authority,
Illinois, 6.50%, Prerefunded to
6/15/03 at 102+ ................... 345,000 367,587
Metropolitan Pier & Exposition Authority,
Illinois, 6.50%, due 6/15/27+ ..... 5,000 5,148
-----------
1,532,960
-----------
INDIANA-11.5%
Indiana Bond Bank, Revenue,
State Revolving Fund,
6.00%, due 2/01/15+ ............... 500,000 510,565
Indiana Health Facilities
Financing Authority, Charity Obligated
Group, 5.00%, due 11/01/26,
Mandatory Put on 11/01/07 at 100 .. 1,000,000 998,110
Indiana Health Facilities Financing
Authority, Holy Cross Health
System Corp, MBIA Insured, 5.375%,
due 12/01/12 ...................... 500,000 500,925
Indiana Municipal Power Supply,
MBIA Insured 5.50%, due 1/01/16 ... 1,200,000 1,207,464
Indiana State Housing Finance Authority,
Single Family Mortgage 1990,
Series C, AMT, 7.80%,
due 1/01/22+ ...................... 55,000 56,100
-----------
3,273,164
-----------
IOWA-4.1%
Iowa Finance Authority, Single Family
Revenue, AMT, 4.95%, due 1/01/21 .. 1,165,000 1,151,859
-----------
LOUISIANA-0.7%
Jefferson, Louisiana, Sales Tax Revenue,
Refunding, FGIC Insured, Series A,
6.75%, Prerefunded to
12/01/02 at 100+ .................. 60,000 62,788
Jefferson, Louisiana, Sales Tax Revenue,
Refunding, FGIC Insured, Series A,
6.75%, due 12/01/06+ .............. 140,000 145,923
-----------
208,711
-----------
MAINE-0.6%
Maine Educational Loan Authority,
Series 92A, AMT, 6.95%,
due 12/01/07+ ..................... 155,000 159,326
-----------
See Notes to Financial Statements
27
<PAGE>
VAN ECK/CHUBB TAX-EXEMPT FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 2000 (unaudited) (continued)
MARKET
PRINCIPAL VALUE
AMOUNT (NOTE B)
--------- --------
MASSACHUSETTS-5.6%
Massachusetts State Construction Loan,
Series A, 6.00%, Prerefunded to
6/01/01 at 100+ ..................... $ 300,000 $ 304,374
Massachusetts State Turnpike Authority,
MBIA Insured, Series A,
5.00%, due 1/01/37+ ................. 1,500,000 1,296,600
-----------
1,600,974
-----------
MISSOURI-0.6%
Missouri Health & Educational Facilities
Authority, St. Luke's Hospital,
MBIA Insured, 7.00%,
Prerefunded to 11/15/01 at 102+ ..... 150,000 157,640
-----------
NEW HAMPSHIRE-0.8%
New Hampshire Turnpike System,
Series A, FGIC Insured,
6.75%, due 11/01/11+ ................ 200,000 219,616
-----------
NEW JERSEY-6.2%
New Jersey Economic Development
Authority, The Seeing Eye, Inc. Project,
7.30%, due 4/01/11+ ................. 550,000 564,245
New Jersey Wastewater Treatment Trust,
6.875%, due 6/15/07+ ................ 15,000 15,404
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 1,186,858
-----------
1,766,507
-----------
NEW YORK-15.0%
Metropolitan Transportation Authority,
New York, Transit Facilities,
Service Contract, Series 8, 5.00%,
due 7/01/02 ......................... 1,000,000 1,004,110
New York City, New York,
General Obligation, Series H,
Subseries H-1, 5.80%, due 8/01/04 ... 250,000 258,385
New York City, New York,
General Obligation, Series D,
5.25%, due 8/01/03 .................. 1,000,000 1,011,810
New York State Dormitory Authority,
City University System, Series 1,
5.125%, due 7/01/13+ ................ 1,325,000 1,275,737
New York State Local Government
Assistance Corporation, Series B,
5.50%, due 4/01/21+ ................. 450,000 433,791
New York State Thruway Authority,
Highway and Bridge Trust Fund,
Series A, MBIA Insured,
5.60%, due 4/01/10+ ................. 250,000 257,748
-----------
4,241,581
-----------
OKLAHOMA-2.0%
Oklahoma Industrial Development
Authority, Sisters of Mercy, Series A,
5.00%, due 6/01/13+ ................. 600,000 560,406
-----------
PENNSYLVANIA-1.1%
Philadelphia, Pennsylvania, Hospital &
Higher Education Facility Authority,
(Children's Hospital), 5.00%,
due 2/15/21+ ........................ 350,000 301,119
-----------
TENNESSEE-6.3%
Memphis-Shelby County, Tennessee Airport
Authority, (Federal Express Corp.),
AMT, 6.75%, due 9/01/12+ ............ 250,000 258,073
Shelby County, Tennessee,
General Obligation, Series B,
Zero Coupon, due 12/01/12 ........... 2,000,000 1,020,420
Tennessee Housing Development Agency,
1993 Series A, 5.90%,
due 7/01/18+ ........................ 495,000 498,386
-----------
1,776,879
-----------
TEXAS-6.5%
Austin, Texas, Independent School
District, Permanent School Fund,
Zero Coupon, due 8/01/13 ............ 500,000 240,475
Austin, Texas, Utility System Revenue,
Series C, 7.30%, Prerefunded to
11/15/01 at 100+ .................... 60,000 62,161
Houston, Texas, Independent School
District, Permanent School Fund,
Zero Coupon, due 8/15/13 ............ 1,150,000 555,416
Waxahachie, Texas, Independent School
District, Permanent School Fund,
Zero Coupon, due 8/15/13 ............ 2,060,000 994,918
-----------
1,852,970
-----------
See Notes to Financial Statements
28
<PAGE>
VAN ECK/CHUBB TAX-EXEMPT FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 2000 (unaudited) (continued)
MARKET
PRINCIPAL VALUE
AMOUNT (NOTE B)
--------- --------
UTAH-4.3%
Utah State Board of Regents,
Student Loan Revenue, Series F,
AMT, 5.00%, due 5/01/06 ............. $1,250,000 $1,222,788
-----------
WASHINGTON-13.6%
Lewis County, Washington, Public Utility
District #1, Revenue Series 91,
7.00%, Prerefunded to
10/01/01 at 102+ .................... 250,000 261,895
Washington Health Care Facilities
Authority, Catholic Health Initiatives,
MBIA Insured, 5.125%,
due 12/01/17+ ....................... 1,300,000 1,207,258
Washington Health Care Facilities
Authority, Revenue, MBIA Insured,
(Group Health Co-Op),
6.75%, due 12/01/11+ ................ 300,000 308,013
Washington Health Care Facilities
Authority, Revenue, Series 93
(Sisters of Providence),
6.25%, due 10/01/13+ ................ 500,000 508,405
Washington Housing Finance Commission,
GNMA/FNMA MBS Programs,
7.10%, due 7/01/22+ ................. 115,000 118,452
Washington State Public Power Supply
System, Nuclear Project Number 1,
FSA Insured, 5.75%, due 7/01/11 ..... 1,200,000 1,231,452
Washington State Public Power Supply
System, Nuclear Project Number 2,
Revenue, Series 90C, 7.625%,
Prerefunded to 1/01/01 at 102+ ...... 100,000 103,476
Washington State Public Power Supply
System, Nuclear Project Number 3,
Revenue, 7.50%, Prerefunded to
7/01/00 at 102+ ..................... 125,000 127,496
-----------
3,866,447
-----------
TOTAL INVESTMENTS
(Cost: $27,390,336*) ................ 96.6% 27,382,516
Other assets less liabilities ....... 3.4% 969,802
--------- -----------
TOTAL NET ASSETS .................... 100.0% $28,352,318
========= ===========
--------------
* 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
FNMA-Federal National Mortgage Association
FSA-Financial Security Assurance
GNMA-Government National Mortgage Association
MBIA-Municipal Bond Investors Assurance Corporation
MBS-Mortgage Backed Security
See Notes to Financial Statements
29
<PAGE>
VAN ECK/CHUBB TOTAL RETURN FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 2000 (unaudited)
NUMBER MARKET
OF VALUE
COMPANY SHARES (NOTE B)
--------- --------- --------
COMMON STOCK-58.9%
BANKING-1.4%
Chase Manhattan Corp. ................... 12,000 $ 552,750
-----------
BREWERS-1.6%
Anheuser-Busch Companies, Inc. .......... 8,000 597,500
-----------
BUILDING & CONSTRUCTION-0.2%
Hanson PLC (ADR) ........................ 1,687 59,467
-----------
BUSINESS SERVICES-1.1%
Marchfirst, Inc. ........................ 22,975 419,294
-----------
CHEMICALS/FERTILIZER-0.0%
Millennium Chemicals, Inc. .............. 964 16,388
-----------
COMMERCIAL SERVICES-1.0%
Dial Corp. (The) ........................ 35,000 363,125
-----------
COMPUTERS & COMPUTER
SOFTWARE-11.1%
Amdocs Ltd. ............................. 8,800 675,400
Complete Business Solutions, Inc. ....... 15,000 263,438
EMC Corp. ............................... 8,000 615,500
I2 Technologies, Inc. ................... 5,000 521,328
Microsoft Corp. ......................... 8,000 640,000
Netpliance, Inc. ........................ 2,000 18,250
Quantum Effect Devices, Inc. ............ 100 5,700
Sun Microsystems, Inc. .................. 10,000 909,375
VERITAS Software Corp. .................. 5,000 565,078
-----------
4,214,069
-----------
DRUGS-1.3%
Pfizer, Inc. ............................ 10,000 480,000
-----------
ELECTRICAL EQUIPMENT-2.1%
General Electric Co. .................... 15,000 795,000
-----------
ELECTRONICS-9.5%
Koninklijke (Royal) Philips
Electronics N.V. ...................... 17,536 832,960
Lexmark International Group, Inc. ....... 7,000 470,750
Nokia Oyj (Sponsored ADR) ............... 13,000 649,188
Sanmina Corp. ........................... 10,000 855,000
Solectron Corp. ......................... 20,000 837,500
-----------
3,645,398
-----------
FINANCIAL SERVICES-0.4%
Associates First Capital Corp. .......... 7,548 168,415
-----------
MACHINERY-1.4%
Applied Materials, Inc. ................. 6,000 543,750
-----------
MANUFACTURING-1.5%
United Technologies Corp. ............... 10,000 588,750
-----------
MEDICAL PRODUCTS & SUPPLIES-1.8%
Baxter International, Inc. .............. 10,000 703,125
-----------
MEDICAL SERVICES-0.0%
Healthcare Services Group, Inc. 96 432
-----------
OIL & GAS EQUIPMENT AND SERVICES-5.8%
Burlington Resources, Inc. .............. 12,200 466,650
Chevron Corp. ........................... 5,000 424,063
Halliburton Co. ......................... 15,000 707,813
Royal Dutch Petroleum Co. (N.Y. Shares) . 10,000 615,625
-----------
2,214,151
-----------
RETAIL-3.5%
Costco Wholesale Corp. .................. 20,000 660,000
Wal-Mart Stores, Inc. ................... 12,000 691,500
-----------
1,351,500
-----------
TECHNOLOGY-6.0%
Cisco Systems, Inc. ..................... 12,000 762,750
Intel Corp. ............................. 7,000 935,813
Oracle Corp. ............................ 7,000 588,434
-----------
2,286,997
-----------
TELECOMMUNICATIONS-9.2%
ADC Telecommunications, Inc. ............ 10,000 838,750
JDS Uniphase Corp. ...................... 5,000 599,375
Lucent Technologies, Inc. ............... 8,000 474,000
Nortel Networks Corp. ................... 10,000 682,500
Vodafone AirTouch PLC (ADR) ............. 12,000 497,250
WorldCom, Inc. .......................... 9,000 412,875
-----------
3,504,750
-----------
TOTAL COMMON STOCK
(Cost: $17,531,852) ................... 22,504,861
-----------
See Notes to Financial Statements
30
<PAGE>
VAN ECK/CHUBB TOTAL RETURN FUND
SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 2000 (unaudited) (continued)
MARKET
PRINCIPAL VALUE
COMPANY AMOUNT (NOTE B)
--------- --------- --------
U.S. GOVERNMENT OBLIGATIONS
AND AGENCY OBLIGATIONS-27.6%
Federal National Mortgage Association
6.50%, due 8/15/04 ................ $ 750,000 $ 736,108
-----------
U.S. Treasury Notes
7.25%, due 8/15/04 ................ 2,900,000 2,997,875
6.875%, due 5/15/06 ............... 5,200,000 5,352,750
6.50%, due 10/15/06 ............... 200,000 202,313
6.25%, due 2/15/03 ................ 1,250,000 1,246,875
-----------
9,799,813
-----------
Total U.S. Government Obligations
and Agency Obligations
(Cost: $10,570,795) ............... 10,535,921
-----------
CORPORATE BONDS-12.7%
Alliant Energy Corp.
7.375%, due 11/09/09 .............. 1,000,000 975,480
First Union Corp.
7.50%, due 4/15/35 ................ 2,000,000 1,997,920
Tennessee Gas Pipeline Co.
7.00%, due 3/15/27 ................ 2,000,000 1,903,424
-----------
Total Corporate Bonds
(Cost: $5,172,091) ................ 4,876,824
-----------
Total Investments
(Cost: $33,274,738*) .............. 99.2% 37,917,606
Other assets less liabilities ..... 0.8% 314,185
--------- -----------
Total Net Assets .................. 100.0% $38,231,791
========= ===========
---------------
* Aggregate cost for Federal income tax purposes.
Abbreviation:
ADR-American Depositary Receipt
See Notes to Financial Statements
31
<PAGE>
VAN ECK/CHUBB FUNDS, INC.
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (unaudited)
<TABLE>
<CAPTION>
VAN ECK/CHUBB
GLOBAL
INCOME
FUND
------------
<S> <C>
ASSETS
Investments at cost .................................................................. $73,451,124
===========
Investments at market value (Notes B & C) ............................................ $67,468,878
Cash and foreign currencies .......................................................... 2,559,067
Receivable for interest and dividends ................................................ 1,544,657
Due from broker--variation margin (Note F) ........................................... 436,381
Unrealized appreciation on forward foreign currency contracts (Note B) ............... 52,132
Deferred organization costs and other assets (Note B) ................................ 26,560
Receivable for Fund shares sold ...................................................... 271
Securities sold ...................................................................... --
-----------
Total Assets ....................................................................... 72,087,946
-----------
LIABILITIES
Unrealized depreciation on forward foreign currency contracts (Note B) ............... 117,582
Payable for Fund shares redeemed ..................................................... 34,015
Dividends payable .................................................................... 25,393
Due to investment administrator ...................................................... 1,515
Accounts payable ..................................................................... 79,202
-----------
Total Liabilities .................................................................. 257,707
-----------
NET ASSETS ............................................................................. $71,830,239
===========
NET ASSETS CONSIST OF:
Par value ............................................................................ $ 83,370
Capital paid in excess of par ........................................................ 84,550,058
Undistributed (overdistributed) net investment income ................................ (1,595,552)
Accumulated net realized gain (loss) from investments, futures and options ........... (5,024,229)
Net unrealized gain (loss) from investments .......................................... (5,982,247)
Net unrealized loss on futures, foreign denominated assets, liabilities and
foreign forward exchange contracts ................................................. (201,161)
-----------
Net Assets ......................................................................... $71,830,239
===========
CLASS A SHARES
Net Assets ............................................................................. $71,830,239
===========
Shares Outstanding
($.01 par value, 100,000,000 shares per Fund authorized) ............................. 8,337,017
===========
Net Asset Value Per Share .............................................................. $8.62
===========
Maximum Offering Price Per Share (NAV / (1 -maximum sales commission)) ................. $9.05
===========
</TABLE>
See Notes to Financial Statements
32
<PAGE>
<TABLE>
<CAPTION>
VAN ECK/CHUBB VAN ECK/CHUBB
GOVERNMENT GROWTH AND VAN ECK/CHUBB VAN ECK/CHUBB
SECURITIES INCOME TAX-EXEMPT TOTAL RETURN
FUND FUND FUND FUND
------------ ------------ ------------ ------------
<S> <C> <C> <C>
$30,179,678 $72,990,050 $27,390,336 $33,274,738
=========== =========== =========== ===========
$29,557,182 $86,919,086 $27,382,516 $37,917,606
211,254 1,929,701 609,509 41,483
541,060 62,151 437,492 273,888
-- -- -- --
-- -- -- --
-- -- -- --
874 27,098 1,950 2,197
-- -- -- 51,880
----------- ----------- ----------- -----------
30,310,370 88,938,036 28,431,467 38,287,054
----------- ----------- ----------- -----------
-- -- -- --
-- 47,688 35,807 4,167
4,200 -- 7,404 4,544
1,122 3,526 2,445 2,364
33,369 95,487 33,493 44,188
----------- ----------- ----------- -----------
38,691 146,701 79,149 55,263
----------- ----------- ----------- -----------
$30,271,679 $88,791,335 $28,352,318 $38,231,791
=========== =========== =========== ===========
$ 28,934 $ 33,028 $ 23,703 $ 19,817
31,101,364 70,086,731 28,334,388 30,374,758
21,141 (220,249) (8,076) 638
(257,264) 4,962,789 10,123 3,193,710
(622,496) 13,929,036 (7,820) 4,642,868
-- -- -- --
----------- ----------- ----------- -----------
$30,271,679 $88,791,335 $28,352,318 $38,231,791
=========== =========== =========== ===========
$30,271,679 $88,791,335 $28,352,318 $38,231,791
=========== =========== =========== ===========
2,893,397 3,302,848 2,370,296 1,981,728
=========== =========== =========== ===========
$10.46 $26.88 $11.96 $19.29
=========== =========== =========== ===========
$10.98 $28.52 $12.56 $20.47
=========== =========== =========== ===========
</TABLE>
See Notes to Financial Statements
33
<PAGE>
VAN ECK/CHUBB FUNDS, INC.
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2000 (unaudited)
<TABLE>
<CAPTION>
VAN ECK/CHUBB
GLOBAL
INCOME
FUND
------------
<S> <C>
INVESTMENT INCOME
Income:
Interest ................................................................................ $2,499,729
Dividends ............................................................................... --
Foreign taxes withheld .................................................................. (9,876)
-----------
Total investment income ............................................................... 2,489,853
-----------
Expenses:
Administrative fees (Note D) ............................................................ 169,518
Investment management fees (Note D) ..................................................... 72,551
Distribution fees Class A and B (Note D) ................................................ 181,378
Shareholder servicing costs ............................................................. 33,091
Shareholder reports ..................................................................... 17,161
Professional fees ....................................................................... 13,534
Registration fees ....................................................................... 9,906
Custodian fees .......................................................................... 7,716
Directors' fees and expenses ............................................................ 2,651
Organization expenses ................................................................... 1,341
Miscellaneous expenses .................................................................. 6,081
-----------
Total expenses ........................................................................ 514,928
Fees waived and expenses assumed by affiliates (Note D) ................................. (25,209)
-----------
Net expenses .......................................................................... 489,719
-----------
Net investment income (loss) .......................................................... 2,000,134
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES
Net realized gain (loss) on investments, futures and options purchased .................. (934,193)
Net realized gain on options written .................................................... 150,762
Net realized loss from foreign currency transactions .................................... (776,233)
Net change in unrealized gain (loss) on investments and options ......................... (692,607)
Net change in unrealized loss on futures, foreign denominated assets, liabilities
and forward foreign exchange contracts ................................................ (79,689)
-----------
Net gain (loss) on investments and foreign currencies ................................... (2,331,960)
-----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ........................... $ (331,826)
===========
</TABLE>
See Notes to Financial Statements
34
<PAGE>
<TABLE>
<CAPTION>
VAN ECK/CHUBB VAN ECK/CHUBB
GOVERNMENT GROWTH AND VAN ECK/CHUBB VAN ECK/CHUBB
SECURITIES INCOME TAX-EXEMPT TOTAL RETURN
FUND FUND FUND FUND
------------ ------------ ------------ ------------
<S> <C> <C> <C>
$ 927,978 $ 263,253 $ 780,084 $ 529,266
-- 143,006 -- 62,544
-- (10,883) -- (4,449)
----------- ----------- ----------- -----------
927,978 395,376 780,084 587,361
----------- ----------- ----------- -----------
68,344 216,139 65,688 92,474
29,715 91,204 27,952 38,742
74,287 228,009 69,881 96,854
20,412 40,823 20,227 26,699
7,429 15,772 5,959 8,760
8,914 13,478 9,415 8,970
10,400 10,040 10,813 11,622
389 1,832 1,648 1,542
1,486 3,215 1,423 1,937
-- -- -- --
4,846 6,928 2,935 4,154
----------- ----------- ----------- -----------
226,222 627,440 215,941 291,754
(77,647) (11,815) (76,178) (30,247)
----------- ----------- ----------- -----------
148,575 615,625 139,763 261,507
----------- ----------- ----------- -----------
779,403 (220,249) 640,321 325,854
----------- ----------- ----------- -----------
23,911 6,755,902 10,678 3,391,000
-- -- -- --
-- -- -- --
326,590 (9,396,979) 382,733 (3,116,725)
-- -- -- --
----------- ----------- ----------- -----------
350,501 (2,641,077) 393,411 274,275
----------- ----------- ----------- -----------
$1,129,904 $(2,861,326) $1,033,732 $ 600,129
=========== =========== =========== ===========
</TABLE>
See Notes to Financial Statements
35
<PAGE>
VAN ECK/CHUBB FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
VAN ECK/CHUBB
GLOBAL
INCOME
FUND
--------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2000 DECEMBER
(UNAUDITED) 31, 1999
------------- ----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
Net investment income (loss) ...................................................... $ 2,000,134 $ 3,970,874
Net realized gain (loss) on investments and options purchased ..................... (1,122,402) (1,158,949)
Net realized gain on options written .............................................. 150,762 78,439
Net realized loss from foreign currency transactions .............................. (776,233) (1,149,683)
Net realized gain (loss) on futures ............................................... 188,209 (1,544,658)
Net change in unrealized gain (loss) on investments, futures,
options and translation of assets and liabilities in foreign currency ........... (772,296) (8,644,521)
----------- -----------
Net increase (decrease) in net assets resulting from operations ................... (331,826) (8,448,498)
----------- -----------
DIVIDENDS AND DISTRIBUTIONS:
From net investment income:
Class A ........................................................................... (1,999,092) (2,797,876)
Class B ........................................................................... -- (46)
From net realized gains:
Class A ........................................................................... -- --
Class B ........................................................................... -- --
From tax returns of capital:
Class A ........................................................................... -- (1,172,843)
Class B ........................................................................... -- --
----------- -----------
Total dividends and distributions ................................................. (1,999,092) (3,970,765)
INCREASE (DECREASE) IN NET ASSETS DERIVED FROM SHAREHOLDER TRANSACTIONS (NOTE E) .... (1,923,746) (2,709,085)
----------- -----------
Net increase (decrease) in net assets ............................................. (4,254,664) (15,128,348)
Net Assets:
Beginning of period ............................................................... 76,084,903 91,213,251
----------- -----------
End of period ..................................................................... $71,830,239 $76,084,903
=========== ===========
UNDISTRIBUTED (OVERDISTRIBUTED) NET INVESTMENT INCOME ............................... $(1,595,552) $ (820,361)
=========== ===========
</TABLE>
See Notes to Financial Statements
36
<PAGE>
<TABLE>
<CAPTION>
VAN ECK/CHUBB VAN ECK/CHUBB
GOVERNMENT GROWTH AND VAN ECK/CHUBB
SECURITIES INCOME VAN ECK/CHUBB TOTAL RETURN
FUND FUND TAX-EXEMPT FUND FUND
-------------------------- -------------------------- -------------------------- --------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
JUNE 30, 2000 DECEMBER JUNE 30, 2000 DECEMBER JUNE 30, 2000 DECEMBER JUNE 30, 2000 DECEMBER
(UNAUDITED) 31, 1999 (UNAUDITED) 31, 1999 (UNAUDITED) 31, 1999 (UNAUDITED) 31, 1999
------------- ---------- ------------- ---------- ------------- ---------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 779,403 $ 1,610,948 $ (220,249) $ (107,218) $ 640,321 $ 1,308,800 $ 325,854 $ 805,753
23,911 (39,186) 6,755,902 8,592,899 10,678 10,244 3,391,000 5,605,360
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
326,590 (1,950,772) (9,396,979) 11,647,179 382,733 (2,317,247) (3,116,725) 92,901
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
1,129,904 (379,010) (2,861,326) 20,132,860 1,033,732 (998,203) 600,129 6,504,014
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
(779,403) (1,607,585) -- -- (640,278) (1,306,929) (337,126) (786,472)
-- (3,362) -- -- -- (761) -- (1,948)
-- -- -- (10,052,985) -- (12,009) (215,897) (5,586,753)
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
(779,403) (1,610,947) -- (10,052,985) (640,278) (1,319,699) (553,023) (6,375,173)
30,270 (1,003,063) (3,186,908) 16,687,381 (449,735) (982,247) (1,874,750) (2,923,979)
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
380,771 (2,993,020) (6,048,234) 26,767,256 (56,281) (3,300,149) (1,827,644) (2,795,138)
29,890,908 32,883,928 94,839,569 68,072,313 28,408,599 31,708,748 40,059,435 42,854,573
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
$30,271,679 $29,890,908 $88,791,335 $94,839,569 $28,352,318 $28,408,599 $38,231,791 $40,059,435
=========== =========== =========== =========== =========== =========== =========== ===========
$ 21,141 $ 21,141 $ (220,249) $ -- $ (8,076) $ (8,119) $ 638 $ 11,910
=========== =========== =========== =========== =========== =========== =========== ===========
</TABLE>
See Notes to Financial Statements
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
SEPTEMBER 1,
1995(C)
SIX MONTHS THROUGH
ENDED YEAR ENDED DECEMBER 31, DECEMBER 31,
JUNE 30, 2000 --------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
------------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period ................ $8.89 $10.32 $9.64 $10.24 $10.21 $10.00
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income .............. 0.236 0.458 0.421 0.471 0.551 0.116
Net Gains (Losses) on
Securities (both Realized
and Unrealized) .................. (0.268) (1.430) 0.994 (0.476) 0.030 0.210
------ ------ ------ ------ ------ ------
Total from Investment
Operations ....................... (0.032) (0.972) 1.415 (0.005) 0.581 0.326
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS TO SHAREHOLDERS
Dividends from Net
Investment Income ................ (0.238) (0.323) (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 ............. -- (0.135) -- (0.073) -- --
------ ------ ------ ------ ------ ------
Total Distributions ................ (0.238) (0.458) (0.735) (0.595) (0.551) (0.116)
------ ------ ------ ------ ------ ------
Net Asset Value, End of Period ....... $8.62 $8.89 $10.32 $9.64 $10.24 $10.21
====== ====== ====== ====== ====== ======
Total Return(A) ...................... (0.32%) (9.55%) 15.00% 0.02% 5.95% 3.27%
RATIOS TO AVERAGE NET ASSETS:
Gross Expenses(B) .................. 1.42%(D) 1.42% 1.56% 1.56% 1.68% 2.14%(D)
Net Expenses ....................... 1.35%(D) 1.35% 1.35% 1.35% 1.23% 1.75%(D)
Net Investment Income(E) ........... 5.51%(D) 4.83% 4.24% 4.62% 5.49% 4.48%(D)
Portfolio Turnover Rate .............. 41.95% 101.78% 99.31% 185.95% 80.70% 14.16%
Net Assets, At End of Period (000) ... $71,830 $76,085 $91,210 $52,088 $12,227 $10,706
</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 a period of less than one year is
not annualized.
(B) Had fees not been waived and expenses not been assumed.
(C) Commencement of operations.
(D) Annualized.
(E) Ratios would have been 5.44%, 4.76%, 4.03%, 4.41%, 5.04% and 4.09%,
respectively, had the Investment Manager not waived expenses.
See Notes to Financial Statements
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, 2000 -------------------------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
------------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period .............. $10.34 $11.02 $10.82 $10.48 $10.78 $ 9.75
------ ------ ------ ------ ------ -------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income .............. 0.278 0.550 0.583 0.616 0.623 0.636
Net Gains (Losses) on
Securities (both Realized
and Unrealized) .................. 0.120 (0.680) 0.200 0.340 (0.300) 1.030
------ ------ ------ ------ ------ -------
Total from Investment
Operations ....................... 0.398 (0.130) 0.783 0.956 0.323 1.666
------ ------ ------ ------ ------ -------
LESS DISTRIBUTIONS TO SHAREHOLDERS
Dividends from Net
Investment Income ................ (0.278) (0.550) (0.583) (0.616) (0.623) (0.636)
------ ------ ------ ------ ------ -------
Total Distributions ................ (0.278) (0.550) (0.583) (0.616) (0.623) (0.636)
------ ------ ------ ------ ------ -------
Net Asset Value, End of Period ....... $10.46 $10.34 $11.02 $10.82 $10.48 $10.78
====== ====== ====== ====== ====== =======
Total Return(A) ...................... 3.83% (1.20%) 7.40% 9.44% 3.19% 17.50%
RATIOS TO AVERAGE NET ASSETS:
Gross Expenses(B) .................. 1.52%(D) 1.50% 1.61% 1.55% 1.60% 1.70%
Net Expenses ....................... 1.00%(D) 1.00% 1.00% 1.00% 0.93% 1.00%
Net Investment Income(C) ........... 5.25%(D) 5.15% 5.32% 5.78% 5.94% 6.16%
Portfolio Turnover Rate .............. 0.00% 41.09% 14.10% 39.86% 140.94% 276.56%
Net Assets, At End of Period (000) ... $30,272 $29,891 $32,730 $31,739 $12,818 $13,886
</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 return for a period of less than one year is
not annualized.
(B) Had fees not been waived and expenses not been assumed.
(C) Ratios would have been 4.73%, 4.65%, 4.71%, 5.23%, 5.27% and 5.46%,
respectively, had the Investment Manager not waived expenses.
(D) Annualized.
See Notes to Financial Statements
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, 2000 ---------------------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
------------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $27.73 $23.96 $24.56 $21.04 $18.58 $14.77
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) ....... (0.067) (0.030) 0.110 0.096 0.250 0.204
Net Gains (Losses) on
Securities (both Realized
and Unrealized) .................. (0.783) 7.080 (0.156) 5.286 3.931 5.042
------ ------ ------ ------ ------ ------
Total from Investment
Operations ....................... (0.850) 7.050 (0.046) 5.382 4.181 5.246
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS TO SHAREHOLDERS
Dividends from Net
Investment Income ................ -- -- (0.111) (0.096) (0.250) (0.204)
Dividends in Excess of Net
Investment Income ................ -- -- -- (0.004) -- --
Distributions from Net
Realized Gains ................... -- (3.280) (0.443) (1.762) (1.471) (0.885)
Distributions in Excess of
Net Realized Gains ............... -- -- -- -- -- (0.346)
Tax Return of Capital .............. -- -- -- -- -- (0.001)
------ ------ ------ ------ ------ ------
Total Distributions ................ -- (3.280) (0.554) (1.862) (1.721) (1.436)
------ ------ ------ ------ ------ ------
Net Asset Value, End of Period ....... $26.88 $27.73 $23.96 $24.56 $21.04 $18.58
====== ====== ====== ====== ====== ======
Total Return(A) ...................... (3.06%) 29.42% (0.18%) 25.85% 22.50% 35.52%
RATIOS TO AVERAGE NET ASSETS:
Gross Expenses(B) .................. 1.38%(D) 1.50% 1.57% 1.49% 1.58% 1.69%
Net Expenses ....................... 1.35%(D) 1.32% 1.25% 1.25% 1.06% 1.08%
Net Investment Income (Loss)(C) .... (0.48%)(D) (0.16%) 0.44% 0.49% 1.29% 1.20%
Portfolio Turnover Rate .............. 45.36% 133.63% 43.42% 21.02% 44.50% 37.59%
Net Assets, At End of Period (000) ... $88,791 $94,840 $67,478 $66,762 $40,282 $29,144
</TABLE>
-------------------
(A) Total return assumes reinvestment of all distributions during the year 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 return for a period of less than one year is
not annualized.
(B) Had fees not been waived and expenses not been assumed.
(C) Ratios would have been (0.51%), (0.34%), 0.12%, 0.25%, 0.77% and 0.59%,
respectively, had the Investment Manager not waived expenses.
(D) Annualized.
See Notes to Financial Statements
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, 2000 ---------------------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
------------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period ................. $11.80 $12.74 $12.56 $12.15 $12.33 $11.22
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income ............... 0.270 0.533 0.537 0.581 0.611 0.621
Net Gains (Losses) on
Securities (both Realized
and Unrealized) ................... 0.160 (0.935) 0.202 0.450 (0.137) 1.132
------ ------ ------ ------ ------ ------
Total from Investment
Operations ........................ 0.430 (0.402) 0.739 1.031 0.474 1.753
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS TO SHAREHOLDERS
Dividends from Net
Investment Income ................. (0.270) (0.533) (0.539) (0.581) (0.611) (0.621)
Distributions from Capital Gains .... -- (0.005) (0.020) (0.036) (0.043) (0.010)
Distributions in Excess of
Capital Gains ..................... -- -- -- (0.004) -- (0.012)
------ ------ ------ ------ ------ ------
Total Distributions ................. (0.270) (0.538) (0.559) (0.621) (0.654) (0.643)
------ ------ ------ ------ ------ ------
Net Asset Value, End of Period ........ $11.96 $11.80 $12.74 $12.56 $12.15 $12.33
====== ====== ====== ====== ====== ======
Total Return(A) ....................... 3.70% (3.25%) 6.01% 8.73% 4.00% 15.88%
RATIOS TO AVERAGE NET ASSETS:
Gross Expenses(B) ................... 1.55%(D) 1.52% 1.63% 1.56% 1.65% 1.79%
Net Expenses ........................ 1.00%(D) 1.00% 1.00% 1.00% 0.98% 1.00%
Net Investment Income(C) ............ 4.58%(D) 4.30% 4.23% 4.74% 5.00% 5.20%
Portfolio Turnover Rate ............... 0.00% 0.74% 2.50% 12.78% 16.29% 7.39%
Net Assets, At End of Period (000) .... $28,352 $28,409 $31,680 $31,288 $15,061 $15,259
</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 return for a period of less than one year is
not annualized.
(B) Had fees not been waived and expenses not been assumed.
(C) Ratios would have been 4.03%, 3.78%, 3.60%, 4.18%, 4.33% and 4.41%,
respectively, had the Investment Manager not waived expenses.
(D) Annualized.
See Notes to Financial Statements
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, 2000 ---------------------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
------------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period ................. $19.26 $19.27 $20.22 $17.41 $15.96 $13.23
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income ............... 0.165 0.417 0.393 0.365 0.370 0.373
Net Gains on Securities (both
Realized and Unrealized) .......... 0.145 3.113 0.158 3.778 2.321 3.586
------ ------ ------ ------ ------ ------
Total from Investment Operations .... 0.310 3.530 0.551 4.143 2.691 3.959
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS TO SHAREHOLDERS
Dividends from Net
Investment Income ................. (0.170) (0.410) (0.390) (0.365) (0.370) (0.373)
Dividends in Excess of
Net Investment Income ............. -- -- -- (0.004) -- --
Distributions from Capital Gains .... (0.110) (3.130) (1.111) (0.964) (0.871) (0.692)
Tax Return of Capital ............... -- -- -- -- -- (0.164)
------ ------ ------ ------ ------ ------
Total Distributions ................. (0.280) (3.540) (1.501) (1.333) (1.241) (1.229)
------ ------ ------ ------ ------ ------
Net Asset Value, End of Period ........ $19.29 $19.26 $19.27 $20.22 $17.41 $15.96
====== ====== ====== ====== ====== ======
Total Return(A) ....................... 1.60% 18.57% 2.73% 24.09% 17.04% 30.13%
RATIOS TO AVERAGE NET ASSETS:
Gross Expenses(B) ................... 1.51%(D) 1.49% 1.61% 1.51% 1.59% 1.70%
Net Expenses ........................ 1.35%(D) 1.32% 1.25% 1.25% 1.08% 1.08%
Net Investment Income(C) ............ 1.68%(D) 2.07% 1.87% 1.92% 2.26% 2.45%
Portfolio Turnover Rate ............... 30.79% 59.16% 15.78% 15.80% 27.01% 57.62%
Net Assets, At End of Period (000) .... $38,232 $40,059 $42,524 $49,934 $31,064 $22,171
</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 return for a period of less than one year is
not annualized.
(B) Had fees not been waived and expenses not been assumed.
(C) Ratios would have been 1.52%, 1.90%, 1.51%, 1.66%, 1.75% and 1.83%,
respectively, had the Investment Manager not waived expenses.
(D) Annualized.
See Notes to Financial Statements
42
<PAGE>
VAN ECK/CHUBB FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS JUNE 30, 2000 (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 five funds (the "Funds"): 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 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 and Van Eck/Chubb Tax-Exempt Fund ceased operations.
At June 30, 2000, 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 Global Income Fund
Class A shares .......................... 6,152,505 73.80%
Van Eck/Chubb Government Securities Fund
Class A shares .......................... 2,415,550 83.48%
Van Eck/Chubb Growth and Income Fund
Class A shares .......................... 1,836,326 55.60%
Van Eck/Chubb Tax-Exempt Fund
Class A Shares .......................... 1,802,258 76.04%
Van Eck/Chubb Total Return Fund
Class A Shares .......................... 1,014,721 51.20%
NOTE B--SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in accordance with accounting principles
generally accepted in the United States 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.
All U.S. dollar denominated cash is held in an interest bearing account.
FOREIGN CURRENCY TRANSLATION: The books and records of the Funds are maintained
in U.S. dollars. The market values of investments, other assets and liabilities,
and forward contracts stated in foreign currencies are translated at the
prevailing exchange rates at the end of the period. Purchases, sales, income and
expenses are translated at the exchange rate prevailing on the respective dates
of such transactions.
Since the net assets of the Funds are presented at the exchange rates and market
value prevailing at the end of the period, the Funds 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 Van Eck/Chubb 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 Van
Eck/Chubb 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
43
<PAGE>
VAN ECK/CHUBB FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS JUNE 30, 2000 (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, 2000, the Van
Eck/Chubb Global Income Fund had the following open forward foreign currency
contracts:
VALUE AT UNREALIZED
SETTLEMENT CURRENT APPRECIATION
CONTRACTS DATE VALUE (DEPRECIATION)
--------- ---------- ------- --------------
FOREIGN CURRENCY BUY CONTRACTS:
EUR 7,569,068 expiring 7/05/00 $ 7,200,000 $ 7,235,322 $35,322
JPY 1,150,106,400 expiring
7/05/00 10,941,541 10,849,250 (92,291)
FOREIGN CURRENCY SELL CONTRACTS:
EUR 5,615,517 expiring 7/05/00 5,384,720 5,367,910 16,810
GBP 6,200,000 expiring 7/05/00 9,376,880 9,402,171 (25,291)
---------
$(65,450)
=========
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. Dividends
from net realized capital gains are declared and distributed at least once
annually, if available. Dividends distributed to shareholders are recorded on
the ex-dividend date.
Income and capital gain distributions are determined in accordance with income
tax regulations, which may differ from such amounts reported in accordance with
accounting principles generally accepted in the United States.
At December 31, 1999, the Van Eck/Chubb Government Securities Fund had $281,069
of accumulated realized losses, of which $237,474 expires in 2001 and $43,595
expires in 2007, the Van Eck/Chubb Growth and Income Fund had $9,736,429 of
accumulated realized losses expiring in 2007, and the Van Eck/Chubb Global
Income Fund had $4,068,060 of accumulated realized losses, of which $1,251,160
expires in 2002, $1,481,051 expires in 2004 and $1,335,849 expires in 2007.
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 Global Income Fund are being amortized on the straight-line
basis over a period of five years.
NOTE C--INVESTMENTS
As of June 30, 2000, gross unrealized gains and losses on investments were as
follows:
GROSS GROSS NET
UNREALIZED UNREALIZED UNREALIZED
GAINS LOSSES GAINS (LOSSES)
---------- ---------- -------------
Van Eck/Chubb Global
Income Fund ................... $ 150,037 $6,132,283 $ (5,982,246)
Van Eck/Chubb Government
Securities Fund ............... 36,994 659,490 (622,496)
Van Eck/Chubb Growth and
Income Fund ................... 19,874,892 5,945,856 13,929,036
Van Eck/Chubb Tax-Exempt Fund ... 368,226 376,046 (7,820)
Van Eck/Chubb Total Return Fund.. 6,065,374 1,422,506 4,642,868
Purchases and sales of investment securities for the six months ended June 30,
2000, other than short-term obligations, were as follows:
PROCEEDS
COST OF FROM
INVESTMENT INVESTMENT
SECURITIES SECURITIES
PURCHASED SOLD
----------- -----------
Van Eck/Chubb Global Income Fund ....... $31,335,209 $26,658,434
Van Eck/Chubb Government
Securities Fund ...................... -- 286,250
Van Eck/Chubb Growth and Income Fund ... 44,435,264 39,015,886
Van Eck/Chubb Tax-Exempt Fund .......... -- 784,947
Van Eck/Chubb Total Return Fund ........ 11,661,742 12,719,992
Transactions in put/call options written for the Van Eck/Chubb Global Income
Fund for the six months ended June 30, 2000 were as follows:
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- ---------
Options outstanding at beginning of period ... 185,000 $150,763
Options written .............................. (135,000) (121,263)
Options expired .............................. (50,000) (29,500)
------- --------
Options outstanding at end of period ......... -- --
======= ========
44
<PAGE>
VAN ECK/CHUBB FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS JUNE 30, 2000 (unaudited) (continued)
--------------------------------------------------------------------------------
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, 2000, received
$172,382 in sales loads of which $12,691 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.
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%
IIn accordance with the advisory agreement, the Funds reimbursed Van Eck
Associates Corporation for costs incurred in connection with certain
administrative and operating functions. The Funds reimbursed costs in the
following amounts: $6,279 for Van Eck/Chubb Global Income Fund, $1,486 for Van
Eck/Chubb Government Securities Fund, $10,930 for Van Eck/Chubb Growth & Income
Fund, $2,795 for Van Eck/Chubb Tax-Exempt Fund and $5,306 for Van Eck/Chubb
Total Return Fund.
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, 2000, Van Eck/Chubb Global Income Fund-1.35%, Van
Eck/Chubb Government Securities Fund-1%, Growth & Income Fund-1.35%, Van
Eck/Chubb Tax-Exempt Fund-1%, and Van Eck/Chubb Total Return Fund-1.35%.
NOTE E--SHAREHOLDERS' TRANSACTIONS
Following is a summary of transactions with shareholders for each Fund.
VAN ECK/CHUBB GLOBAL INCOME FUND
------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2000 (UNAUDITED) DECEMBER 31, 1999
------------------------------------------------
CLASS A SHARES DOLLARS SHARES DOLLARS
-------- ---------- -------- ---------
Shares sold ........... 204,534 $ 1,777,476 417,848 $3,884,393
Shares issued as
reinvestment of
dividends and
distributions ....... 212,108 1,825,444 377,885 3,542,354
Shares redeemed ....... (637,537) (5,526,666) (1,079,584) (10,132,489)
--------- ----------- ---------- -----------
Net decrease .......... (220,895) $(1,923,746) (283,851) $(2,705,742)
========= =========== ========== ===========
PERIOD FROM
JANUARY 1, 1999
THROUGH
JUNE 15, 1999
--------------------
CLASS B SHARES DOLLARS
-------- ----------
Shares sold ........................... 150 $ 1,448
Shares issued as
reinvestment of dividends
and distributions ................... 5 45
Shares redeemed ....................... (503) (4,836)
----- --------
Net decrease .......................... (348) $ (3,343)
===== ========
VAN ECK/CHUBB GOVERNMENT SECURITIES FUND
----------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2000 (UNAUDITED) DECEMBER 31, 1999
CLASS A SHARES DOLLARS SHARES DOLLARS
---------- ---------- -------- -----------
Shares sold ............. 90,094 $ 929,804 84,345 $ 897,779
Shares issued as
reinvestment of
dividends ............. 72,333 749,476 144,433 1,534,400
Shares redeemed ......... (160,094) (1,649,010) (308,427) (3,287,213)
-------- ---------- -------- ----------
Net increase (decrease).. 2,333 $ 30,270 (79,649) $ (855,034)
======== ========== ======== ==========
PERIOD FROM
JANUARY 1, 1999
THROUGH
JUNE 15, 1999
------------------------
CLASS B SHARES DOLLARS
-------- ----------
Shares sold ........................ 2,365 $ 26,118
Shares issued as
reinvestment of dividends ........ 278 3,006
Shares redeemed .................... (16,642) (177,153)
------- ---------
Net decrease ....................... (13,999) $(148,029)
======== =========
45
<PAGE>
VAN ECK/CHUBB FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS JUNE 30, 2000 (unaudited) (continued)
--------------------------------------------------------------------------------
VAN ECK/CHUBB GROWTH AND INCOME FUND
------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2000 (UNAUDITED) DECEMBER 31, 1999
CLASS A SHARES DOLLARS SHARES DOLLARS
-------- --------- -------- ---------
Shares sold ................. 75,102 $2,112,456 85,153 $1,176,880
Share issued in
connection with
an acquisition (Note H) ... -- -- 1,000,799 27,551,990
Shares issued as
reinvestment of dividends
and distributions ......... -- -- 353,240 9,795,771
Shares redeemed ............. (192,844) (5,299,364) (835,014) (21,209,620)
-------- ----------- -------- -----------
Net increase (decrease) ..... (117,742) $(3,186,908) 604,178 $17,315,021
======== =========== ======== ===========
PERIOD FROM
JANUARY 1, 1999
THROUGH
JUNE 16, 1999
------------------------
CLASS B SHARES DOLLARS
---------- ----------
Shares sold ...................... 5,876 $ 138,798
Shares redeemed .................. (30,758) (766,438)
-------- ---------
Net decrease ..................... (24,882) $(627,640)
======== =========
VAN ECK/CHUBB TAX-EXEMPT FUND
--------------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2000 (UNAUDITED) DECEMBER 31, 1999
CLASS A SHARES DOLLARS SHARES DOLLARS
-------- -------- ------- -------
Shares sold ................... 40,570 $478,724 190,591 $2,367,315
Shares issued as
reinvestment of dividends
and distributions ........... 49,314 582,845 98,553 1,212,867
Shares redeemed ...............(127,616) (1,511,304) (367,466) (4,534,290)
-------- ---------- -------- ----------
Net decrease .................. (37,732) $ (449,735) (78,322) $ (954,108)
======== ========== ======== ==========
PERIOD FROM
JANUARY 1, 1999
THROUGH
JUNE 16, 1999
--------------------
CLASS B SHARES DOLLARS
------- -------
Shares sold .......................... 2,467 $31,568
Shares issued as
reinvestment of dividends
and distributions .................. 28 355
Shares redeemed ...................... (4,786) (60,062)
------ --------
Net decrease ......................... (2,291) $(28,139)
====== ========
VAN ECK/CHUBB TOTAL RETURN FUND
---------------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2000 (UNAUDITED) DECEMBER 31, 1999
CLASS A SHARES DOLLARS SHARES DOLLARS
------ -------- -------- ---------
Shares sold ................... 23,319 $ 448,318 48,982 $ 959,854
Shares issued as
reinvestment of dividends
and distributions ........... 27,957 545,839 326,596 6,302,681
Shares redeemed ............... (149,258) (2,868,907) (502,199) (9,850,433)
-------- ----------- -------- -----------
Net decrease .................. (97,982) $(1,874,750) (126,621) $(2,587,898)
======== =========== ======== ===========
PERIOD FROM
JANUARY 1, 1999
THROUGH
JUNE 16, 1999
----------------------
CLASS B SHARES DOLLARS
-------- -----------
Shares sold ........................ 6,035 $112,964
Shares issued as
reinvestment of dividends
and distributions ................ 91 1,735
Shares redeemed .................... (23,300) (450,780)
------- ---------
Net decrease ....................... (17,174) $(336,081)
======= =========
NOTE F--FUTURES CONTRACTS
As of June 30, 2000, 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. At June 30, 2000, the Van
Eck/Chubb Global Income Fund had the following open futures contract:
EXPIRATION NUMBER OF CONTRACT CURRENT UNREALIZED
DATE CONTRACTS VALUE VALUE DEPRECIATION
----------------------------------------------------------
LONG CONTRACT:
10 Year Euro
Bundesobligation 9/07/00 75 $7,601,044 $7,532,337 $(68,707)
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.
46
<PAGE>
VAN ECK/CHUBB FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS JUNE 30, 2000 (unaudited) (continued)
--------------------------------------------------------------------------------
As of June 30, 2000, the total liability portion of the Plan is as follows:
Van Eck/Chubb Global Income Fund--$14,188, Van Eck/Chubb Government Securities
Fund--$6,415, Van Eck/Chubb Growth and Income Fund--$14,486, Van Eck/Chubb
Tax-Exempt Fund--$6,223 and Van Eck/Chubb Total Return Fund--$8,709.
NOTE H--ACQUISITION
As of the close of business on November 10, 1999 Van Eck/Chubb Growth & Income
Fund acquired all the net assets of Van Eck/Chubb Capital Appreciation Fund
pursuant to a plan of reorganization approved by Van Eck/Chubb Capital
Appreciation Fund shareholders on August 27, 1999.
The acquisition was accomplished by a tax-free exchange of 2,342,857 shares of
Van Eck/Chubb Capital Appreciation Fund (valued at $27,551,990) for 1,000,799
shares of Van Eck/Chubb Growth and Income Fund outstanding on November 10, 1999.
Van Eck/Chubb Capital Appreciation Fund's net assets at that date, $27,551,990,
including $999,686 of unrealized appreciation were combined with those of the
Van Eck/Chubb Growth and Income Fund. The aggregate net assets of Van Eck/Chubb
Growth and Income Fund and Van Eck/Chubb Capital Appreciation Fund before the
acquisition were $58,671,818 and $27,551,990, respectively. In connection with
the merger, the Van Eck/Chubb Growth and Income Fund acquired accumulated net
realized losses of $9,948,895, of which $212,466 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 $1,520,870 annually.
NOTE I--BANK LINE OF CREDIT
The Van Eck/Chubb Funds, Inc. may participate with other funds managed by Van
Eck in a $15 million committed credit facility ("Facility") to be utilized for
temporary financing until the settlement of sales or purchases of portfolio
securities, the repurchase or redemption of shares of the Funds at the request
of the shareholders and other temporary or emergency purposes. In connection
therewith, the Funds have agreed to pay commitment fees, pro rata, based on
usage. Interest is charged to the Funds at rates based on prevailing market
rates in effect at the time of borrowings. For the six months ended June 30,
2000, the Funds did not borrow under the Facility.
47
<PAGE>
[GRAPHIC OMITTED]
VAN ECK GLOBAL
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.
