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VAN ECK CHUBB FUNDS
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ANNUAL REPORT
DECEMBER 31, 1999
GLOBAL INCOME FUND
GOVERNMENT SECURITIES FUND
GROWTH AND INCOME FUND
TAX-EXEMPT FUND
TOTAL RETURN FUND
ANALYSIS
THE VAN ECK PARTNERSHIP SERIES
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Dear Fellow Shareholder:
A YEAR FOR THE HISTORY BOOKS
As we enter a new century, we have left behind a year--and a decade--that can be
characterized by the phrase "it was a period that greatly exceeded
expectations." We say this with some awe, given that 1999 marked the ninth
consecutive year of steady U.S. economic expansion and was, by our measure, the
eighteenth year of a strong bull market for U.S. common stocks. Both of these
events made 1999 and the decade of the 1990s record-setting and caused a giddy
euphoria among American consumers and investors.
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--the fiscal turmoil in Asia, Russia, Latin America, and the hedge
fund disasters of 1998. An important impetus to this past decade's tremendous
global growth was the fall of communism in 1989, which created the stage for the
transformation of global markets and economies--particularly Europe, which
gained access to the inexpensive, educated labor force of the Eastern bloc.
Benign inflation and rising corporate profits worldwide are the underpinnings of
this growth; they are the end result of increased free trade and global
competition, and the efficiency gains resulting from the global deployment of
productivity-enhancing technology. At the same time, the themes of deregulation,
freer capital markets, and the wider acceptance of the importance of corporate
shareholder value have all contributed to worldwide economic growth.
This positive picture does have its gray spots, however. There are concerns that
the U.S. economy is over-heating, and the Federal Reserve Board continues to
predict additional interest rate hikes this year in order to preempt rising
inflation. Financial markets continue to be extremely volatile. Although many of
the world's stock markets enjoyed spectacular returns in 1999, it was a
difficult year for global bond markets. As was the case in 1998, investors
experienced mixed results this past year, from positive double-digit stock
returns to negative fixed income returns--much depended on the specific asset
category. While the specter of rising inflation may help U.S. bond investors
comprehend last year's lackluster results, it is not so simple for those U.S.
equity investors who failed to garner big returns. It has become increasingly
difficult to maintain perspective on equity returns given that the
technology-rich Nasdaq Composite Index soared 85.6% in 1999, the best gain in a
single year ever by any U.S. stock index. At the same time, the large-cap Dow
Jones Industrial Average (DJIA) and the Standard & Poor's 500 Index (S&P 500)
gained 27.2% and 21.0%, respectively. The period 1995 to 1999 was one of the
best five-year records in U.S. market history. Despite these spectacular
results, the actual number of individual stocks contributing to these gains has
narrowed considerably over the past two years. There are also many signs that
indicate that we may be in the midst of another of history's "euphoric
speculative bubbles," as warned by Federal Reserve Board Chairman Alan
Greenspan.
With this said, we report mixed news on the Van Eck/Chubb Funds. We are very
pleased with the performance of the equity funds. Both the Growth and Income
Fund and the Total Return Fund exceeded expectations, and we are proud of the
major portfolio restructuring we initiated in late 1998 and early 1999. On the
other hand, our fixed income funds had less positive results, although their
performance was not out of sync with their relative benchmarks and peer
funds--as we have said, 1999 was tough on bonds. The individual reports that
follow will give you greater insight into the specific investment results of
each Fund.
THE NEW GLOBAL ECONOMY
In past reports, we have traditionally discussed specific market and economic
results in this letter. But the dawning of a new century prompts us to reflect
on broader themes that are impacting economies and markets. Furthermore, there
were few critical events or global crises in 1999 that require lengthy
discourse. Yes, a single European currency was launched, equity markets soared,
and
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behemoth mega-mergers continued, but 1999 was most significant in that it marked
the broader acknowledgement by both investment professionals and the general
public of certain watershed themes that have been gestating throughout the
decade. We point to two closely linked themes: 1) the U.S. economy is being
transformed by technology into a "new economy," a trend also taking hold
overseas; and 2) the world has become a truly global, interdependent economy.
In reflecting on the first theme: Heady returns of "dot-com" companies,
stratospheric IPOs (initial public offerings), and the recent merger of America
Online and Time Warner(1) are all witness to the way in which technology,
particularly information technology including the Internet, is changing the
American economic landscape. In November 1999, the DJIA revamped its list of
companies by replacing Chevron, Goodyear, Sears and Union Carbide with
Microsoft, Intel, Home Depot and SBC(2)--the first time in its 103-year history
that the Index added listed Nasdaq stocks. While the old economic laws of supply
and demand have certainly not changed, some economic relationships have been
altered. In some cases, traditional measures of investment value and economic
productivity need to be rethought.
Technological improvements have helped American companies become more efficient
and productive in their use of the basic inputs of labor, capital and natural
resources. As a nation, we are producing better goods and services at lower
costs, and delivering them at a faster rate. U.S. economic productivity growth
picked up substantially in the 1990s, with the biggest acceleration coming after
1996. The decade's 2.5% average annual growth rate is a full percentage point
higher than the 25-year trailing average of 1.5%. We believe that we are in the
midst of a second industrial revolution; the magnitude of the advances created
by communications technology in our time is equivalent to that which resulted
from steel, steam and oil at the end of the 1800s.
This technological metamorphosis is also changing the face of economies
worldwide. Productivity gains are being made across all regions, and in many
cases at a more rapid rate than we have ever experienced in the developed world.
Less developed countries are able to embrace new technologies without having to
build or retool basic infrastructure. A good example is mobile cellular
communications. Penetration (or usage) rates are much higher in several
countries outside the U.S. This is because the U.S. telephone industry is more
mature and was originally built on a networked infrastructure of millions of
miles of copper wire. By bypassing years of basic infrastructure building,
developing countries are able to adopt newer-generation technologies more
readily.
The second theme is one that embraces the idea that we are entering an era of a
truly global economy. Currently, there is a greater exchange of goods and
services among nations than at any other time in the modern era. This has been
fueled by the trend of nation states to embrace both democracy and free-market
capitalism. In addition, communications technology, especially via the
borderless Internet, is dramatically accelerating the speed of international
transactions and information exchange. Generally speaking, the tremendous
productivity trends that have occurred in the U.S. are taking place throughout
both the developed and the developing world. All of this has greatly benefited
the consumer.
For investors, the New Global Economy does not mean that financial markets are
immune to corrections and that economies are not prone to reversals in
confidence. Take, for example, the U.S. equity market, the key for investors
going forward will be to identify those companies that are embracing the new
paradigms of our technology-based economy-- those enterprises that can continue
to grow and sustain growth over time. A critical issue for companies going
forward will be size--in many cases, bigger will mean better. The investment in
technology needed to successfully compete in the new global economy is
tremendous; bigger, wealthier companies will continue to have the advantage.
INVESTMENT OUTLOOK FOR 2000
We are optimistic about this coming year; perhaps the Y2K bug's failure to
create massive meltdowns as the clocks turned is the first positive harbinger.
The general economic theme that we operated under
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last year will continue to guide us in 2000. Prosperity will continue and there
appears little on the horizon to disrupt it. U.S. economic growth will slow
somewhat in the coming year. Monetary policy will continue to command the
attention of financial markets in the next few months. The Federal Reserve is
likely to keep a lid on the U.S. economy by tightening short-term rates 0.50% to
0.75% in February and March. The November 2000 U.S. presidential election will
command attention as the year progresses, with markets starting to anticipate
the impact of increased government spending on social programs--the current
rhetoric of both Democrats and Republicans. Outside the U.S., we believe that
economies will continue to strengthen; Continental Europe and Asia should
continue to recover, while Latin America should stabilize. Nevertheless,
financial markets will remain volatile.
There are considerable opportunities for investors as we enter the new century
and take advantage of the new global economy. We will do our part to guide you
with our conservative time-tested approach, continuing to manage each Fund by
weighing the upside potential with downside risk of each portfolio security.
This has been our strategy for successful long-term investing. All of us at Van
Eck/Chubb Funds wish you and your family a prosperous new millennium.
[PHOTO OF MICHAEL O'REILLY]
/s/ MICHAEL O'REILLY
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MICHAEL O'REILLY
PRESIDENT
VAN ECK/CHUBB FUNDS
PRESIDENT AND CHIEF OPERATING OFFICER
CHUBB ASSET MANAGERS, INC.
January 31, 2000
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(1)America Online was not held by any of the Van Eck/Chubb Funds at December
31, 1999. Time Warner accounted for 2.3% of the total net assets of the Van
Eck/Chubb Growth and Income Fund at year end.
(2)Of these eight companies, Intel and Microsoft were the only two companies
held by the Van Eck/Chubb Funds at December 31, 1999. In the Van Eck/Chubb
Growth and Income Fund, Intel accounted for 1.4% and Microsoft 2.8% of total net
assets at year end. In the Van Eck/Chubb Total Return Fund, Intel accounted for
1.4% and Microsoft 2.3% of total net assets at year end.
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VAN ECK/CHUBB GLOBAL INCOME FUND
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THE VAN ECK/CHUBB GLOBAL INCOME FUND SEEKS CAPITAL APPRECIATION AND A STEADY
FLOW OF DIVIDEND INCOME BY INVESTING PRIMARILY IN HIGH-GRADE U.S. AND
INTERNATIONAL DEBT SECURITIES. UNDER NORMAL CONDITIONS, THE FUND MAINTAINS AT
LEAST 75% OF ITS PORTFOLIO IN INVESTMENT GRADE SECURITIES, WHICH ARE OFTEN FOUND
IN THE MORE MATURE INVESTMENT MARKETS OF DEVELOPED NATIONS.
As discussed in the opening letter, 1999 was a tumultuous year for global fixed
income markets. A rebound in global economic growth, robust equity markets, and
mounting concerns over inflation created an unsupportive environment for world
bonds, with only Japanese and emerging market debt gaining value. The Van
Eck/Chubb Global Income Fund had a disappointing year, given its total return of
- -9.55%. Your Fund underperformed the -2.74% average return of its peer mutual
funds as measured by the Lipper Global Income Fund Index, and the -4.27% return
of the Salomon Smith Barney World Government Bond Index (WGBI). Although the
Fund's performance was more favorable relative to its benchmarks at June 30 (as
reported in the semi-annual report), the third and fourth quarters proved
difficult. Unfortunately, our successful strategies of maximizing the Fund's
opportunistic investments in high-yielding lower-grade securities and
overweighting the U.S. dollar relative to the euro were offset by the Fund's
underweightings in Japanese bonds and the yen, both of which were unexpectedly
strong in the second half.
ECONOMIC AND BOND MARKET OVERVIEW
Nineteen ninety-nine was a year of contradictory forces and somewhat perverse
responses in markets. Favorable inflationary prospects did not result in stable
or declining bond yields, rather yields rose and volatility plagued all asset
classes, including currencies. Yield curves changed shape, responding adversely
to a variety of often very technical institutional factors rather than positive
underlying fundamentals. Throughout the year, investors continued to favor the
soaring equity markets, finding the returns of global bonds less attractive.
The U.S. economy continued to exceed expectations in 1999, with growth
accelerating sharply toward year end. The Federal Reserve Board chose to respond
to inflation in a tempered manner, given the escalating U.S. budget surplus and
subdued inflation measures. By raising short-term interest rates 75 basis points
(0.75%) in the second half of 1999, the Fed returned rates to their 1998
pre-crisis levels. Rising interest rates throughout the year made it tough on
U.S. bonds, particularly long-term U.S. Treasury bonds which lost 14.9%--a
reversal of the flight-to-quality rally of 1998. Despite the record-setting U.S.
expansion, potentially damaging "imbalances" in the U.S. economy gained notice
by policy-makers this past year, notably the burgeoning foreign deficit on trade
and services (some 4% of gross national product), a diminishing labor pool, and
an unnaturally low savings rate.
Europe continued to disappoint in 1999 with economic growth falling below
expectations. The broadly unsatisfactory European fiscal consolidation and the
steep depreciation of the euro in its debut year caused mixed results for
individual countries; for example, France benefited strongly and Germany
suffered. The efficacy of the "one-size-fits-all" single currency and a unified
monetary policy may have appeared questionable as the year closed, with real
interest rates too low in the smaller inflationary countries (such as Ireland,
Spain and the Netherlands), and too high for Germany, Europe's largest country.
At year end, bond yields were much higher than was consistent with any likely
inflationary threat, as the market focused on the risk of a depreciating euro
and money supply growth exceeding official targets. On a more positive note, one
of the main factors contributing to European growth in 1999 was rising exports.
By contrast, the UK (not in the euro) exceeded expectations in 1999, with all
economic sectors doing well by year end and inflation remaining subdued. Fiscal
health progressed throughout 1999 and, as growth accelerated, monetary easing
was replaced by perhaps a too aggressive anti-inflationary tightening, resulting
(as in Europe), in higher interest rates than prospective inflation could
justify. Throughout the year, there were few places to hide in the European bond
market; however, UK bonds did provide some relative safety, outperforming its
Continental counterparts.
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Despite Japan's mixed economic picture, the stable yields of Japanese government
bonds provided some stability for investors in the second half of the year,
while bond yields elsewhere rose. Enormous fiscal boosts and an expansionary
economic policy by the Japanese government did not fully pull the Japanese
economy out of its slump in 1999. Deflation (falling prices) strengthened its
hold. By year end, retail sales had continued their two-year negative trend,
suggesting that consumption, the most important single component of gross
national product, remained depressed. The Bank of Japan--the only major central
bank in a loosening mode--cut its target interest rate to zero to supply
liquidity to markets, but real interest rates continued to rise as the prices of
goods and services fell, the perverse effect of deflation. Thus, overall
monetary policy tightened inadvertently and pulled against record fiscal
deficits, contributing to a large rise in the yen. On the positive side, the
strengthening of the banking system from its very weak state is an important
policy success, as is the slow reconstruction of Japanese industry, which helped
the stock market to post impressive gains last year.
The emerging markets of the Far East continued their rapid rebound, buoyed by
exports to the West at exchange rates sharply devalued after the 1997-8
financial crisis. Eastern Europe continued to provide attractive investment
potential, given economic recovery, the discipline imposed by the euro, and the
productivity enhancements gained from the deployment of technology. Latin
American countries had more mixed, generally less dynamic development.
BOND MARKET OUTLOOK
Throughout the world's bond markets, short-term rates will continue to be
affected by coordinated tightening. Yield curves may flatten or invert at the
longer end as confidence returns to lock in these high real rates. A declining
supply of government bonds, although possibly offset by an increase in private
sector supply, may contribute to this situation. This in turn suggests credit
spreads at best may stabilize and at worst increase moderately in an environment
of falling longer-dated yields. Stabilization or cooling of the more buoyant
segments of equity markets, especially in the U.S., should also provide positive
support to bonds. In the U.S., the Fed's continued squeeze on short-term
borrowing costs should help curb wealth effects, cool excessive domestic demand
growth, and ultimately reduce the trade deficit, which remains an important risk
to the U.S. dollar in the long term. In the near future, the dollar should
remain strong.
Japanese authorities have repeatedly stated that fiscal policy can no longer
bear the full burden of averting recession, and that the yen must be brought
down. There are early signs that recent monetary policy contradictions will be
resolved by the adoption of an inflation target, and that the Bank of Japan will
expand liquidity to achieve this. This suggests the yen will reverse its recent
appreciation and that bond yields will come under increasing upward pressure.
The situation is likely to become ever more delicate as large, low-yielding
long-term savings deposits mature later this year. Banks may also reduce their
recent strong appetite for bonds if the economy does start to recover
autonomously later in the year.
A finely balanced situation should remain in Europe. Fiscal consolidation should
continue to reduce new government bond supply, and it is likely that the boom in
private debt issuance may abate somewhat. On the other hand, banks, which have
been major bond investors, may reduce their appetite in favor of lending as the
economy continues to accelerate. Uncertainties about the best way to implement
monetary policy and stabilize the euro's exchange rate are also likely to be
unhelpful, as are emerging political issues. This suggests a volatile period for
European bonds, which may be mitigated somewhat by a possible stabilization or
decline in long-term U.S. bond yields.
In the UK, the very complex yield-curve situation is likely to continue. Growth
is strong, but inflation is extraordinarily low and by many measures falling,
which suggests limited further monetary policy tightening. Intermediate
maturities could continue to be adversely affected by the UK's uncertain
prospects for joining the euro. On the other hand, long maturities could benefit
from stable or falling U.S. long-bond yields, adding to the downward pressure
from local technical demand excesses and supply shortfalls.
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VAN ECK/CHUBB GLOBAL INCOME FUND
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The overall prospects for bond investments worldwide are positive. Markets
should continue to reflect many beneficial long-term factors that support low
inflation, including further deregulation, the technology revolution, industrial
restructuring (especially in Europe and Japan), ample supply of commodities,
capital mobility and easy access to low-cost labor resources, improved
anti-inflation economic policies, and falling public sector debt levels. The
synchronized, albeit relatively moderate, upturn in world growth that emerged
this past year should continue in 2000. At the same time, inflationary pressures
should remain very muted as central banks around the world continue their
pre-emptive monetary policy. Significant imbalances and risks do, however,
exist. These include, in the U.S., stock market buoyancy and wealth effects, the
large foreign deficit, and over-reliance on foreign capital; in Japan, poor
execution of monetary and fiscal policy; and in Europe, the need to restore
credibility to the euro.
FUND REVIEW AND OUTLOOK
The benign inflation and high-yield environment earlier in the year prompted us
to favor a long-maturity bias in the first nine months of 1999. This, however,
resulted in a loss of performance for your Fund. In the fourth quarter, we
shifted to shorter maturities, as the impact of short-term inflationary
technical factors were reassessed and it became clear that U.S. authorities were
allowing domestic credit to expand on Y2K. Reflecting this shift, the Fund's
dollar-weighted average maturity declined from 8.9 to 5.8 years and its duration
from 6.6 to 4.2 years, from June 30 to December 31. Throughout the year, we
avoided the Japanese bond market on grounds that yields were both low and
volatile, and that high downside risks existed. The Fund's underweighting in
Japan, while it contributed to outperformance earlier in the year, was
responsible in part for the Fund's underperformance in the second half. In
addition, as the yen strengthened (against the wishes of Japanese
policy-makers), we reduced the Fund's weighting in yen in a contrarian policy,
on the basis that Japanese authorities would rectify the policy errors that had
encouraged the yen's rise, thus leading to a sharp devaluation at some point;
the Fund's performance at year end was adversely affected by this approach.
On the positive side, your Fund gained performance by correctly overweighting
the U.S. dollar for much of the year, taking profits in the complex UK yield
curve environment, and rebuilding the high yield sub-investment grade sector to
a maximum (after correctly running it down in 1998). Our investment policy has
been changing in the opening weeks of 2000 to exploit potential profits from
bond market yield curve inversions and changes in currency markets, where the
yen and euro have suffered sharp depreciations. In closing, we are confident
that the Fund is well positioned to take advantage of the opportunities
presented to us at the start of the new millennium.
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 OF ROBERT C.P. BROOKHOUSE]
/s/ ROBERT C.P. BROOKHOUSE
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ROBERT C.P. BROOKHOUSE
SENIOR VICE PRESIDENT
CHUBB ASSET MANAGERS, INC.
[PHOTO OF MARJORIE D. RAINES]
/s/ MARJORIE D. RAINES
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MARJORIE D. RAINES
SENIOR VICE PRESIDENT
CHUBB ASSET MANAGERS, INC.
[PHOTO OF EMMA C. FISHWICK]
/s/ EMMA C. FISHWICK
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EMMA C. FISHWICK
VICE PRESIDENT
CHUBB ASSET MANAGERS, INC.
January 31, 2000
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VAN ECK/CHUBB GLOBAL INCOME FUND
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PERFORMANCE RECORD AS OF 12/31/99
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AFTER
MAXIMUM BEFORE
AVERAGE ANNUAL SALES SALES
TOTAL RETURN CHARGE* CHARGE
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Life (since 9/1/95) 1.88% 3.04%
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1 year (13.81)% (9.55)%
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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)
Government and
Agency Obligations: 53.4%
[PIE CHART OMITTED] Corporate Bonds: 29.5%
Short-Term Obligations: 8.8%
Other Net Assets: 7.3%
Options: 1.0%
TOP COUNTRIES
France
United States
Germany
Netherlands
United Kingdom
Japan
Italy
DOLLAR WEIGHTED AVERAGE MATURITY
5.8 Years
PORTFOLIO DURATION
4.2 Years
30-DAY SEC YIELD
5.18%
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(1)As a percentage of total net assets at December 31, 1999.
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VAN ECK/CHUBB GLOBAL INCOME FUND
PERFORMANCE COMPARISON
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This graph compares a hypothetical $10,000 investment in the Van Eck/Chubb
Global Income Fund made at inception with a similar investment in the Salomon
Smith Barney World Government Bond Index and the Lipper Global Income Fund
Index.
VAN ECK/CHUBB GLOBAL INCOME FUND
Performance Comparison
Van Eck/ Salomon Smith
Chubb Global Barney World Lipper Global
Income Fund Gov't Bond Income Fund
(w/sales charge) Index Index
--------------- -------------- --------------
Sep-1-95 9524 $10,000 $10,000
9048 $10,223 $10,167
9571 $10,300 $10,261
9685 $10,416 $10,436
Dec-95 9834 $10,525 $10,650
9767 $10,395 $10,774
9649 $10,342 $10,586
9617 $10,328 $10,594
9655 $10,287 $10,685
9667 $10,289 $10,716
Jun-96 9712 $10,370 $10,820
9879 $10,568 $10,931
9924 $10,610 $11,030
10018 $10,653 11240
10201 $10,852 11468
10434 $10,995 11747
Dec-96 10421 $10,906 11717
10205 $10,615 11617
10242 $10,535 11626
10082 $10,455 11481
10040 $10,363 11514
10261 $10,645 11679
Jun-97 10398 $10,772 11822
10361 $10,688 11921
10345 $10,682 11860
10640 $10,909 12113
10514 $11,136 12100
10310 $10,965 12101
Dec-97 10422 $10,931 12141
$10,542 $11,038 12231
10649 $11,127 12336
10718 $11,017 12387
10833 $11,193 12486
10864 $11,220 12471
Jun-98 10849 $11,236 12434
10945 $11,251 12488
11118 $11,558 12040
11754 $12,172 12533
11782 $12,533 12640
11754 $12,356 12774
Dec-98 11985 $12,605 12909
11864 $12,489 12937
11393 $12,087 12605
11450 $12,118 12705
11505 $12,113 12821
11268 $11,909 12565
Jun-99 11052 $11,700 12447
11063 $11,987 12490
11052 $12,043 12464
11063 $12,231 12577
11930 $12,225 12560
10781 $12,096 12495
Dec-99 10840 $12,067 12555
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Average Annual Total Return 12/31/99 1 Year Since Inception 1
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VE/C Global IncomeFund (w/o sales charge) (9.55)% 3.04%
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VE/C Global Income Fund (w/ sales charge)2 (13.81)% 1.88%
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Salomon Smith Barney World Gov't Bond Index (4.27)% 4.43%
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Lipper Global Income Fund Index (2.74)% 5.38%
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(1)Inception date for the Van Eck/Chubb Global Income Fund was 9/1/95. Index
returns are calculated as of nearest month end.
(2)The maximum sales charge is 4.75%.
Returns for the Van Eck/Chubb Global Income Fund reflect all recurring expenses
and include the reinvestment of all dividends and distributions. Performance
does not fully reflect the impact of the Fund's expenses, as they have been
partially reimbursed by the Adviser at certain times since the Fund's inception.
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.
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Performance data quoted
represents past performance; the investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
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VAN ECK/CHUBB 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."
The Van Eck/Chubb Government Securities Fund posted a -1.20% total return for
the year. While many fixed income mutual funds ended 1999 in negative territory,
your Fund's performance compares favorably to its benchmarks. It outpaced the
- -2.66% average loss of its peer mutual funds as measured by the Lipper General
U.S. Government Fund Index, and had favorable relative results for the longer
five- and ten-year time periods. At the same time, the Fund beat its benchmark
market index, the Lehman Brothers Government Bond Index, which dropped 2.23% for
the year. (Please see the tables and charts that follow for in-depth detail on
performance, including specific total return figures.)
U.S. BOND MARKET OVERVIEW
The extreme volatility that plagued global fixed income markets throughout 1997
and 1998 dissipated this past year and, by December, it seemed but a distant
memory. Economies across the globe, especially in Asia, continued to stabilize
or recover in 1999. With no major calamities as in past years, central banks
throughout the world were able to shift focus from crisis management to
assessing the combination of secular (long-term) and cyclical issues that
determine appropriate monetary policy. The U.S. economy extended its amazing
performance, adding another year to what has become the longest peacetime
expansion in U.S. history. Secular forces, including increased global
competition and technology-based productivity gains (as discussed in the opening
letter), continued to propel our economy and those abroad.
The strength of the U.S economy created inflation jitters, thus causing
difficulty for the U.S. bond market. Interest rates increased steadily over the
course of the year with most fixed-income asset classes losing value. Federal
Reserve Board action plus strong credit demand pushed up both nominal and real
interest rates. For bonds, 1999 was the worst year since 1994 and the second
worst year since 1973. Thirty-year Treasury bonds, the best performers of 1998,
were hit hardest and declined 14.9% as yields on the long bond backed up 139
basis points (1.39%), from 5.09% to 6.48%. Ten-year Treasury bonds declined
8.4%. It is possible to argue that after 1998's tremendous rally, bond prices
had nowhere to go but down. The only categories that managed positive returns in
1999 were emerging market debt, high-yielding corporate ("junk") bonds, and
mortgage- and asset-backed securities. Finally, many investors just simply
ignored bonds in 1999 as they chased double-digit stock returns.
Although the Federal Reserve and its Chairman Alan Greenspan acknowledge the
strong secular forces affecting the U.S. economy, the Fed embarked on a cycle of
preemptive tightening in 1999. In the second half of the year, the Fed took back
the 75 basis points (0.75%) of easing it gave to markets during the global
financial crisis of 1998. In three 25 basis point tightenings, the Fed increased
the short-term federal funds rate from 4.75% to 5.50%, with the last hike
occurring on November 16. While the core inflation rate (which excludes food and
energy prices) did not increase in 1999, tight labor markets throughout the
nation prompted the Fed's proactive moves. At year end, the unemployment rate
was its lowest in 31 years; the 4.1% level is well below the 5% threshold that
has historically been seen as inflationary. Additional rate hikes by the Fed are
anticipated in early 2000. Since its November rate hike, the Fed has clearly
indicated that it will raise rates further to help prevent inflation, which may
result from late business-cycle imbalances in the labor markets and other
segments of the economy.
9
<PAGE>
VAN ECK/CHUBB GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
FUND REVIEW
In managing your Fund, we strive to structure its portfolio so that it
experiences good relative performance to its peer group category in both rising
and falling interest rate environments. As noted above, the Fund outperformed
its peer group average during the rising rate environment of 1999. Our
conservative intermediate maturity strategy, along with the good relative
performance of mortgage-backed securities and putable agency debentures--which
can trade to the shorter put date in a rising rate environment--were responsible
for our superior results. Your Fund was well diversified throughout the year
and, at December 31, 1999, it was approximately 46% invested in putable agency
debentures, 30% in mortgage-backed securities, and 21% in Treasury securities,
with the remainder in cash equivalents.
OUTLOOK
With the rise in interest rates that we experienced during 1999 and thus far in
2000, bonds have moved from the zone of fair value to above-average value. Real
interest rates (nominal rates minus inflation) on 30-year Treasuries stood at
3.5% at year-end 1998 and are currently 4.0% (a nominal rate of 6.5% minus 2.5%
inflation). Before 1980, real interest rates were rarely above 3.0%. Those
earlier periods included many cycles with low inflation and a federal budget
surplus as we have now. While the Federal Reserve is likely to continue its
tightening policy by raising short-term interest rates, its anti-inflationary
actions help to protect the value of longer-dated bonds. With historically high
real rates, we would expect to be increasing the duration--or interest-rate
sensitivity--of the Fund over the coming months. Given the backdrop of a
proactive Federal Reserve, stable core inflation, and high real rates we are
confident about the prospects for this conservatively managed Fund.
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 OF NED I. GERSTMAN] [PHOTO OF PAUL R. GEYER]
/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.
January 31, 2000
10
<PAGE>
VAN ECK/CHUBB GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------
PERFORMANCE RECORD AS OF 12/31/99
- --------------------------------------------------------
AFTER
MAXIMUM BEFORE
AVERAGE ANNUAL SALES SALES
TOTAL RETURN CHARGE* CHARGE
- --------------------------------------------------------
Life (since 12/1/87) 7.52% 7.96%
- --------------------------------------------------------
10 year 6.75% 7.27%
- --------------------------------------------------------
5 year 6.04% 7.08%
- --------------------------------------------------------
1 year (5.90)% (1.20)%
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)
[PIE CHART OMITTED]
U.S. Government and Agency Obligations: 97.2%
Other Net Assets: 2.8%
% OF
PORTFOLIO COMPOSITION PORTFOLIO
Tennessee Valley Authority 45.9%
Putable Debentures
Federal National Mortgage 29.3%
Association Securities
U.S. Treasury Securities 21.0%
Federal Home Loan Mortgage 1.0%
Association Securities
DOLLAR WEIGHTED AVERAGE MATURITY
6.9 Years
PORTFOLIO DURATION
4.5 Years
30-DAY SEC YIELD
5.95%
- --------------------------------------------------------------------------------
(1)As a percentage of total net assets at December 31, 1999.
11
<PAGE>
VAN ECK/CHUBB GOVERNMENT SECURITIES FUND
PERFORMANCE COMPARISON
- --------------------------------------------------------------------------------
This graph compares a hypothetical $10,000 investment in the Van Eck/Chubb
Government Securities Fund made ten years ago with a similar investment in the
Lehman Brothers Government Bond Index and the Lipper General U.S. Government
Fund Index.
VAN ECK/CHUBB GOVERNMENT SECURITIES FUND
Performance Comparison
Van Eck/Chubb
Government Securities Lehman Brothers Lipper General
Fund (w/sales charge)(1) Gov't Bond Indes U.S. Gov't Fund Index
--------------------- ---------------- ---------------------
Dec-89 $9,521 $10,000.00 $10,000
$9,412 $9,875.94 $9,874
Jun-90 $9,753 $10,221.11 $10,187
$9,818 $10,305.62 $10,247
Dec-90 $10,368 $10,871.68 $10,802
$10,562 $11,107.48 $11,035
Jun-91 $10,667 $11,257.05 $11,154
11353 $11,899.19 $11,791
Dec-91 12024 $12,536.80 $12,382
11634 $12,317.42 $12,161
Jun-92 12205 $12,804.59 $12,608
12932 $13,437.01 $13,102
Dec-92 12918 $13,442.84 $13,138
13352 $14,050.19 13603
Jun-93 13745 $14,456.52 13947
13892 $14,926.19 14275
Dec-93 14118 $14,875.61 14231
13733 $14,427.99 13786
Jun-94 13584 $14,263.30 13519
13626 $14,323.60 13537
Dec-94 13646 $14,373.53 13556
14367 $15,050.04 14168
Jun-95 15162 $15,983.31 14954
15403 $16,266.89 15216
Dec-95 16034 $17,009.75 15853
15756 $16,625.46 15476
Jun-96 15781 $16,704.56 15490
16057 $16,985.76 15739
Dec-96 16545 $17,481.14 16195
16411 $17,339.14 16072
Jun-97 17031 $17,940.22 16639
17593 $18,541.73 17179
Dec-97 18106 $19,157.28 17671
18390 $19,446.04 17905
Jun-98 18744 $19,958.50 18296
19410 $21,062.31 19105
Dec-98 19446 $21,044.59 19057
19304 $20,744.38 18848
Jun-99 19233 $20,567.14 18592
19333 $20,703.74 18664
Dec-99 19212 $20,574.49 18550
- --------------------------------------------------------------------------------
Average Annual Total Return 12/31/99 1 Year 5 Year 10 Year
- --------------------------------------------------------------------------------
VE/C Gov't Securities Fund (w/o sales charge) (1.20)% 7.08% 7.27%
- --------------------------------------------------------------------------------
VE/C Gov't Securities Fund (w/ sales charge)1 (5.90)% 6.04% 6.75%
- --------------------------------------------------------------------------------
Lehman Brothers Gov't Bond Index (2.23)% 7.44% 7.48%
- --------------------------------------------------------------------------------
Lipper General U.S. Gov't Fund Index (2.66)% 6.47% 6.37%
- --------------------------------------------------------------------------------
Inception date for the Van Eck/Chubb Government Securities Fund was 12/1/87.
(1)The maximum sales charge is 4.75%.
Returns for the Van Eck/Chubb Government Securities Fund reflect all recurring
expenses and include the reinvestment of all dividends and distributions.
Performance does not fully reflect the impact of the Fund's expenses, as they
have been partially reimbursed by the Adviser at certain times since the Fund's
inception.
The Lehman Brothers Government Bond Index and the Lipper General U.S. Government
Fund Index are unmanaged indices and include the reinvestment of all dividends,
but do not reflect the payment of transaction costs, advisory fees or expenses
that are associated with an investment in the Fund. The Indices' performance is
not illustrative of the Fund's performance. Indices are not securities in which
investments can be made.
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. Price,
coupon and total return are reported on a month-end to month-end basis. All
returns are market value-weighted inclusive of accrued interest.
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.
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Performance data quoted
represents past performance; the investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
12
<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.
We are pleased to report that the Van Eck/Chubb Growth and Income Fund had an
excellent year in 1999, which helped it to end the decade on a high note. For
the twelve months ended December 31, 1999, your Fund achieved a total return of
29.42%. This compares very favorably to the 21.04% rise of the broader stock
market as measured by the S&P 500 Index (with dividends included), and to the
more modest 5.94% average gain posted by the Fund's peer group of mutual funds
as measured by the Lipper Multi-Cap Value Fund Index. In addition to its
superior one-year results, your Fund had favorable relative results for the past
five- and ten-year periods. (Please see the tables and charts that follow for
in-depth detail on performance, including specific total return figures.)
U.S. EQUITY MARKET OVERVIEW
When we reported to you at midyear, the U.S. economy was outpacing all
expectations. Through year end, it continued to accelerate. In an effort to
quell the over-heating economy, the Federal Reserve Board initiated three 0.25%
interest rate hikes in July, August and November. The Fed's primary concern was
(and has continued to be) rising inflation due to wage pressures. But many
experts contend that greater U.S. productivity is allowing wages to rise without
triggering pricing pressures. Supporting this theory was the fact that in 1999
both the unemployment rate and the core inflation rate (which excludes food and
energy prices) fell simultaneously, thus turning a traditional forecast on its
head.
In the past, rising interest rates have generally impeded the performance of
equities. But 1999 provided another entry into the stock market record books. At
June 30, the S&P 500 Index had risen 12.4% in the first half of the year. In the
third quarter, Y2K fears and rising interest rates weighed heavily and the
market tumbled 6.2%; by contrast, in the fourth quarter the market rebounded
strongly, gaining 14.9%. For the full year, the Index was up 21.0%, its fifth
consecutive year of 20%-plus returns. The DJIA turned in a 27.2% return, a
flip-flop of 1998's results when it underperformed the S&P. However, both
indices were upstaged by the soaring 85.6% rise of the Nasdaq Composite Index,
the best-ever market index gain in a single year.
Technology companies drove these stellar market advances. In the S&P 500, the
technology sector posted a 73% total return for the year (accounting for more
than three-quarters of the Index's return), more than double the 26% rise of the
next best sector, capital goods. This was also the case in 1998, when tech rose
72%. But as in 1998, last year's technology surge reflected a further narrowing
of market performance. In 1999, a large portion of Nasdaq stocks actually
retreated and the average S&P 500 Index stock rose less than 10%. This contrast
can be easily understood when one compares the doubling of stock prices of
companies such as Cisco Systems, Nokia, Sun Microsystems and Oracle (your Fund
owns all four(1)), to the decline in prices suffered by such famous names as
Coca-Cola, Merck, Gillette, Pfizer and Berkshire Hathaway (your Fund owned only
Coca-Cola at year end(2)).
The trend favoring technology and tech-related sectors has been gaining momentum
throughout the past decade. As discussed in the opening letter, technology is
being heralded as the underpinning of America's "new economy." The speed and
character of the "information superhighway" has evolved rapidly since the early
1990s. Ten years ago, businesses and American households were just beginning to
embrace the power of computing through the use of personal computers. Driving
this movement was the dramatic improvement in semiconductor technology, in
conjunction with easier
13
<PAGE>
VAN ECK/CHUBB GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
to use computer hardware and software. Today, the exploding usage of the
Internet and the rapid adoption of wireless communications are leading the
charge. The lexicon changes monthly, with terms like "e-commerce" being
supplanted by "B2B" (business-to-business). Finally, the history-making merger
of new-media America Online and old-line Time Warner(3) is a sign of the
changing times and the blurring of the distinctions between two major industry
groups. It also reinforces the bigger-is-better large-capitalization bias of
today's stock market.
For investors, this Brave New Technology World has resulted in a clear
bifurcation of investment results over the past few years--tech versus non-tech.
At the same time, the performance gulf between value- and growth-oriented
investments has widened further. Last year, the market continued to reward
aggressive growth investors, particularly those focusing on tech companies,
while ignoring value investors, those seeking undervalued and beaten-down
stocks.
While technology was the clear winner in 1999, a few other industries provided
notable gains, benefiting from accelerated global economic growth and greater
global interdependence. Increased demand from a recovering Asia and production
cuts by OPEC helped crude oil prices rise from $11 to $25 a barrel last year,
thus giving a boost to energy-related investments. The basic materials and
capital goods sectors benefited from an upswing in worldwide infrastructure
building and the demand for durable goods. By contrast, two of 1998's best
performing sectors, financials and pharmaceuticals, lagged this past year.
Rising interest rates crimped profit margins for financials, while fewer new
blockbuster products and drug patent expirations adversely affected the prices
of drug companies.
FUND REVIEW
We attribute your Fund's excellent performance in 1999 to the change in strategy
we initiated late in 1998 and carried through to this year. Our intent was to
take advantage of the clear secular (long-term) shift that has favored a
large-capitalization, momentum- and technology-driven market. By broadening our
screening parameters to include large-cap stocks at reasonable valuations, we
were able to restructure the Fund's portfolio. One of the best ways to
understand these changes is to compare the Fund's "Top Ten Equities" at the end
of 1998 and 1999. At year-end 1998, your Fund's top ten holdings were: 1) Banc
One, 2) Healthsouth, 3) Baxter International, 4) Electronic Data Systems, 5)
United Technologies, 6) Hasbro, 7) Lafarge, 8) Bell Atlantic, 9) Ingersoll-Rand,
and 10) Burlington Northern Santa Fe. At the end of 1999, the Fund's top ten
holdings were: 1) Oracle, 2) Computer Sciences, 3) Sun Microsystems, 4) ADC
Telecommunications, 5) Lexmark, 6) Microsoft, 7) General Electric, 8) Compuware
9) Complete Business Solutions, and 10) Lucent Technologies(4). Not one name
remained the same in the Fund's top ten holdings; furthermore, just seven of
the 37 names held by the Fund at year-end 1998 remained twelve months later.
Just as individual company holdings changed dramatically this past year, so too
did the Fund's industry/sector allocations. The Fund's technology and
tech-related investments grew from a modest 10% a year ago to a weighting of
more than 50% by year-end 1999. As you can see from the list of top ten
holdings, all are technology related. Throughout the year, we made it a point to
avoid the high-flying, risky "dot-com" companies with unproven business models
and to favor well-established names that are helping create the Internet's
backbone, or which stand to benefit from its expansion and exploding usage. In
addition, we increased our investments in mobile communications, computer
services and software companies. The Fund's sector shift was achieved by
reducing exposure to transportation, consumer goods and financials. At the same
time, our investments in energy increased slightly over the year to take
advantage of the global recovery, particularly in the emerging markets.
OUTLOOK
Looking ahead, we are confident that the Fund's large-cap technology bias will
serve it well in the coming year. We remain bullish on technology, given that
the end of Y2K remediation permits tremendous resources and capital to be
redirected
14
<PAGE>
VAN ECK/CHUBB GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
toward growth. We will continue to favor those companies where earnings growth
appears sustainable in the 10% to 30% range--companies that have improving
earnings and future prospects, and that are participating in the new economy.
Despite extremely high valuations, we will be mindful of price and maintain our
discipline of not overpaying for companies. Market volatility will continue and
there is the possibility of a major correction; nevertheless, we believe that
your Fund is well positioned in these uncertain times.
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 OF ROBERT WITKOFF]
/s/ ROBERT WITKOFF
- --------------------------
ROBERT WITKOFF
SENIOR VICE PRESIDENT
CHUBB ASSET MANAGERS, INC.
January 31, 2000
(1)Cisco Systems accounted for 2.1% of the Fund's total net assets at December
31, 1999; Nokia 2.4%; Sun Microsystems 3.3%; and Oracle 4.1%.
(2)Coca-Cola accounted for 0.5% of the Fund's total net assets at December 31,
1999.
(3)America Online was not held by the Fund at December 31, 1999. Time Warner
accounted for 2.3% of the Fund's total net assets at year end.
(4)Oracle accounted for 4.1% of the Fund's total net assets at December 31,
1999; Computer Sciences 3.3%; Sun Microsystems 3.3%; ADC Telecommunications
2.9%; Lexmark International 2.9%; Microsoft 2.8%; General Electric 2.8%;
Compuware 2.7%; Complete Business Solutions 2.5%; and Lucent Technologies
2.4%.
15
<PAGE>
VAN ECK/CHUBB GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
- -------------------------------------------------------
PERFORMANCE RECORD AS OF 12/31/99
- -------------------------------------------------------
AFTER
MAXIMUM BEFORE
AVERAGE ANNUAL SALES SALES
TOTAL RETURN CHARGE* CHARGE
- -------------------------------------------------------
Life (since 12/1/87) 15.44% 16.00%
- -------------------------------------------------------
10 year 14.46% 15.14%
- -------------------------------------------------------
5 year 20.53% 21.97%
- -------------------------------------------------------
1 year 21.99% 29.42%
- -------------------------------------------------------
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)
[PIE CHART OMITTED]
Common Stocks: 88.7%
Other Net Assets: 11.3%
% OF
TOP TEN EQUITIES PORTFOLIO
Oracle Corp. 4.1%
Computer Sciences Corp. 3.3%
Sun Microsystems, Inc. 3.3%
ADC Telecommunications, Inc. 2.9%
Lexmark International Group, Inc. 2.8%
Microsoft Corp. 2.8%
General Electric Co. 2.8%
Compuware Corp. 2.7%
Complete Business Solutions 2.5%
Lucent Technologies, Inc. 2.4%
% OF
TOP TEN INDUSTRIES PORTFOLIO
Computers and Computer Software 24.9%
Electronics 12.1%
Technology 9.5%
Telecommunications 8.9%
Oil & Gas Equipment and Services 5.7%
Financial Services 4.8%
Retail 4.2%
Banking 3.3%
Electrical Equipment 2.8%
Entertainment and Leisure 2.3%
(1)As a percentage of total net assets at December 31, 1999.
16
<PAGE>
VAN ECK/CHUBB GROWTH AND INCOME FUND
PERFORMANCE COMPARISON
- --------------------------------------------------------------------------------
This graph compares a hypothetical $10,000 investment in the Van Eck/Chubb
Growth and Income Fund made ten years ago with a similar investment in the S&P
500 Index and the Lipper Growth & Income Fund and Multi-Cap Value Fund Indices.
<TABLE>
<CAPTION>
Van Eck/Chubb
Lipper Multi-Cap S&P Lipper Growth & Growth & Income
Value Fund Index 500 Index Income Fund Index Fund (w/ sales charge)(1)
---------------- --------- ----------------- ------------------------
<S> <C> <C> <C> <C>
Dec-89 $9,422 $10,000.00 10000 10000
$9,495 $9,699.18 9742 9665
Jun-90 $9,973 $10,309.30 10108 10020
$8,816 $8,892.47 8749 8752
Dec-90 $9,106 $9,689.56 9401 9325
$10,050 $11,097.05 10742 10517
Jun-91 $10,569 $11,071.59 10704 10504
$11,111 $11,663.65 11335 11089
Dec-91 $12,162 $12,641.56 12010 11835
$12,344 $12,322.28 11997 11876
Jun-92 $12,044 $12,556.55 12139 12023
$12,135 $12,952.38 12483 12363
Dec-92 $12,974 $13,604.52 13166 13169
$13,600 $14,198.63 13946 13871
Jun-93 $13,711 $14,267.77 14125 14020
$14,320 $14,636.42 14753 14663
Dec-93 $14,959 $14,975.77 15092 14977
$14,523 $14,407.87 14603 14564
Jun-94 $14,358 $14,468.51 14679 14653
$14,861 $15,175.99 15285 15290
Dec-94 $14,315 $15,173.60 15029 14993
$15,502 $16,650.99 16208 16198
Jun-95 $17,477 $18,240.61 17538 17536
$18,987 $19,690.05 18845 18884
Dec-95 $19,380 $20,875.52 19709 19643
$19,912 $21,996.03 20841 20782
Jun-96 $20,851 $22,983.13 21377 21301
$21,279 $23,693.45 22066 21929
Dec-96 $23,741 $25,668.53 23784 23766
$23,981 $26,356.71 24184 24166
Jun-97 $28,042 $30,958.04 27576 27421
$31,271 $33,277.05 29885 30161
Dec-97 $29,879 $34,232.53 30176 30161
33833 $39,007.56 33616 33607
Jun-98 33383 $40,295.60 33681 33012
25122 $36,287.17 29481 27993
Dec-98 29823 $44,015.01 34274 32129
30184 $46,208.19 35000 32361
Jun-99 33271 $49,465.58 38246 36184
31528 $46,377.04 35187 32294
Dec-99 38598 $53,277.80 38339 34037
</TABLE>
- --------------------------------------------------------------------------------
Average Annual Total Return 12/31/99 1 Year 5 Year 10 Year
- --------------------------------------------------------------------------------
VE/C Growth and Income Fund (w/o sales charge) 29.42% 21.97% 15.14%
- --------------------------------------------------------------------------------
VE/C Growth and Income Fund (w/ sales charge)1 21.99% 20.53% 14.46%
- --------------------------------------------------------------------------------
S&P 500 Index 21.04% 28.56% 18.21%
- --------------------------------------------------------------------------------
Lipper Growth & Income Fund Index 11.86% 20.60% 14.38%
- --------------------------------------------------------------------------------
Lipper Multi-Cap Value Fund Index 5.94% 17.82% 13.03%
- --------------------------------------------------------------------------------
Inception date for the Van Eck/Chubb Growth and Income Fund was 12/1/87.
(1)The maximum sales charge is 5.75%.
Returns for the Van Eck/Chubb Growth and Income Fund reflect all recurring
expenses and include the reinvestment of all dividends and distributions.
Performance does not fully reflect the impact of the Fund's expenses, as they
have been partially reimbursed by the Adviser at certain times since the Fund's
inception.
The S&P 500 Index, the Lipper Growth & Income Fund Index and the 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 Standard & Poor's 500 Index
consists of 500 widely held common stocks, covering four broad sectors
(industrials, utilities, financials and transportation). It is a market-value
weighted index (stock price times shares outstanding), with each stock affecting
the index in proportion to its market value. Construction of the S&P 500 Index
proceeds from industry group to the whole. Since some industries are
characterized by companies of relatively small stock capitalization, the Index
is not comprised of the 500 largest companies on the New York Stock Exchange.
This Index, calculated by Standard & Poor's, is a total return index with
dividends reinvested.
The Lipper Growth & Income Fund Index is comprised of funds that combine
growth-of-earnings income dividends of the largest qualifying funds in the
growth and income category.
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 earnings growth figures, compared to the U.S. diversified multi-cap
funds universe average.
Going forward, we will compare the Fund only to the Lipper Multi-Cap Value Fund
Index, its new peer group category as determined by Lipper.
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Performance data quoted
represents past performance; the investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
17
<PAGE>
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.
The Van Eck/Chubb Tax-Exempt Fund posted good relative results in 1999, although
its total return was -3.25% for the year. Your Fund outperformed its peer group
average as measured by the Lipper General Municipal Debt Fund Index, which lost
4.07%. Also, the Fund had favorable relative results for the five- and ten-year
time periods ended December 31, 1999. At the same time, the benchmark Lehman
Brothers Municipal Bond Index declined 2.06% in 1999. (Please see the tables and
charts that follow for greater detail on performance, including specific total
return figures.)
U.S. MUNICIPAL MARKET OVERVIEW
For fixed income markets, 1999 was a reverse of 1998. Most categories--including
municipal bonds--lost value this past year, except for high-yielding corporate
("junk") bonds, mortgage- and asset-backed securities, and emerging market debt.
It was the worst year for bonds since 1994 and the second worst year since 1973.
Thirty-year Treasury bonds--1998's best performers--were hit the hardest and
declined 14.9%. Inflation jitters and rising interest rates were to blame, along
with lackluster demand from investors who continued to favor the higher returns
of equity investments. Rates backed up on the heels of monetary tightening by
the Federal Reserve Board in the second half of the year. In three 25 basis
point (0.25%) moves, the Fed increased the short-term federal funds rate from
4.75% to 5.50%, with the third increase occurring on November 16. This was a
complete reversal of the Fed's 1998 lowering of rates by 75 basis points in
order to increase capital market liquidity in an effort to stave off a global
financial downturn.
The gray clouds above bonds sharply contrasted with the mostly sunny picture for
the U.S. economy, which at the end of this month, recorded its 107th consecutive
month of growth, thus matching the previous uninterrupted monthly record set in
the 1960s. But fourth quarter gross domestic product growth of 5.8% may warn of
an over-heating economy. Although Y2K concerns kept monetary policy steady in
December, the Federal Reserve remains vigilant about creeping inflation and has
indicated that it will continue its cycle of preemptive tightening. The Fed's
primary concern is the extremely low rate of U.S. unemployment, which dropped to
4.1% at year end, its lowest level in 31 years. The Fed is wary that
productivity growth will not be strong enough to offset wage pressures. Although
the core inflation rate (which excludes food and energy prices) did not increase
in 1999, labor markets throughout the nation continued to tighten as America
enjoyed robust job growth.
The municipal bond market had a better year than the Treasury bond market in
1999, although it underperformed during the second half. In addition,
longer-maturity municipals traded at very high ratios to Treasuries, offering
90% to 95% of Treasury yields for the bulk of the year. The yield on the Bond
Buyer 20-Bond General Obligation Index (BB20), the benchmark we follow to
monitor municipal yields, climbed 100 basis points (1.00%) from 5.00% to 6.00%
over the course of the year. At the same time, 30-year Treasury bond yields rose
139 basis points (1.39%), from 5.09% to 6.48%.
New issuance of municipals was close to 1998 levels, while refundings were off
by 54%. This caused a considerable decline in total volume, with last year's
$226 billion supply off 20% from 1998's $284 billion supply. While volume was
restrained in 1998, there was very limited demand from traditionally important
buyers, such as tax-exempt bond mutual funds (like your Fund) and property and
casualty insurance companies.
On the bright side, municipal credit quality continued to improve, largely owing
to the prolonged economic expansion. State and local surpluses are currently at
their highest levels since 1981. The fourth quarter of 1999 marked the
seventeenth consecutive quarter in which debt-rating upgrades exceeded
downgrades in the public finance arena. By number of issues, upgrades
8
<PAGE>
VAN ECK/CHUBB TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
outnumbered downgrades by a ratio of 3.5 to 1, as reported by Standard & Poor's.
FUND REVIEW
In 1999, our barbell maturity strategy remained intact, as our shorter maturity
positions served to cushion the price declines of our longer-term
securities--the latter were hurt by the rising interest rate environment. Your
Fund's credit quality was extremely high at year end, with 69% invested in
triple- and double-A rated paper--the two highest credit categories. Given the
persistent narrow yield spreads among credit categories, higher-yielding,
lower-quality credits provided little yield advantage in 1999; thus, there was
little incentive to downgrade the Fund's portfolio in order to chase yield.
Throughout the year, our geographical favorites continued to be the states of
New York, Washington, Texas and Indiana. At year end, your Fund was
approximately 16% invested in New York, 13% in Washington, 12% in Indiana and 6%
in Texas. New York's credit picture continued to improve and it has issued a
healthy supply of bonds. Washington's employment and personal income growth
statistics are consistently among the highest in the country. Indiana bonds
benefited from the state's diversifying economy and strengthening financial
operations. Finally, Texas, now the nation's second most populous state (behind
California), is enjoying a booming economy and has substantial bond financing
plans in the works. On the sector side, transportation was a primary focus in
1999, with airport and toll road credits continuing to offer attractive
investment opportunities.
OUTLOOK
We hope to see renewed interest in municipal bonds in 2000, although it may take
some time to build. In the short run, financial markets are likely to be
preoccupied with monetary policy, as they anticipate further tightening action
by the Federal Reserve. We expect that the presidential election will command
some attention in the second half of the year, although none of the major tax
law changes being discussed are likely to threaten municipals.
Although inflation and rising interest rates are the twin enemies of bonds,
higher yields may make fixed income investments more attractive relative to
equities. Another year of double-digit stock market returns may be less likely,
and it is possible that the American investor's love affair with technology will
endure some rough patches. When that happens, a big picture outlook may well
replace the fixation on technology and perhaps illuminate the prudence of
conservative fixed income investments. Even now, municipals are very attractive;
today's tax-free municipal yield of 6.00% is equivalent to a 9.93% taxable yield
for investors in the maximum 39.6% federal income tax bracket. As one of the few
remaining tax havens, municipals continue to make sense for long-term 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 of Fredrick W. Gaertner] [Photo of Thomas J. Swartz, III
/s/ FREDRICK W. GAERTNER /s/ THOMAS J. SWARTZ, III
- ------------------------------- -------------------------------
FREDRICK W. GAERTNER THOMAS J. SWARTZ, III
SENIOR VICE PRESIDENT VICE PRESIDENT
CHUBB ASSET MANAGERS, INC. CHUBB ASSET MANAGERS, INC.
January 31, 2000
19
<PAGE>
VAN ECK/CHUBB TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------
PERFORMANCE RECORD AS OF 12/31/99
- -----------------------------------------------------------------
AFTER
MAXIMUM BEFORE
AVERAGE ANNUAL SALES SALES
TOTAL RETURN CHARGE* CHARGE
- -----------------------------------------------------------------
Life (since 12/1/87) 6.82% 7.25%
- -----------------------------------------------------------------
10 year 5.57% 6.08%
- -----------------------------------------------------------------
5 year 5.06% 6.09%
- -----------------------------------------------------------------
1 year (7.88)% (3.25)%
- -----------------------------------------------------------------
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)
[PIE CHART OMITTED]
Municipal Bonds: 97.5%
Other Net Assets: 2.5%
PORTFOLIO QUALITY
% OF
RATING(2) PORTFOLIO 1
Aaa 48.3%
Aa 20.7%
A 17.0%
Baa 11.1%
Not Rated 3.0%
% OF
TOP TEN STATES PORTFOLIO 1
New York 15.6%
Washington 13.4%
Indiana 12.4%
New Jersey 6.9%
Texas 6.3%
Tennessee 6.1%
Massachusetts 5.4%
Illinois 5.4%
Florida 4.6%
Utah 4.3%
DOLLAR WEIGHTED AVERAGE MATURITY
14.5 Years
PORTFOLIO DURATION
7.4 Years
30-DAY SEC YIELD
4.20%
(1)As a percentage of total net assets at December 31, 1999.
(2)Predominantly Moody's Investors Service ratings.
20
<PAGE>
VAN ECK/CHUBB TAX-EXEMPT FUND
PERFORMANCE COMPARISON
- --------------------------------------------------------------------------------
This graph compares a hypothetical $10,000 investment in the Van Eck/Chubb
Tax-Exempt Fund made ten years ago with a similar investment in the Lehman
Brothers Municipal Bond Index and the Lipper General Municipal Debt Fund Index.
VAN ECK/CHUBB TAX-EXEMPT FUND
Performance Comparison
Van Eck/ Lehman Lipper
Chubb Brothers General
Tax-Exempt Municipal Municipal
Fund Debt Debt Fund
(w/sales charge)(1) Bond Index Index
------------------ ---------- ---------
Dec-89 9524 $10,000.00 10000
9395 $10,044.65 9980
Jun-90 9652 $10,279.38 10206
9529 $10,285.12 10159
Dec-90 10010 $10,728.77 10600
10211 $10,971.28 10818
Jun-91 10367 $11,205.60 11039
10768 $11,641.06 11477
Dec-91 11082 $12,031.46 11877
11151 $12,067.10 11892
Jun-92 11589 $12,524.68 12399
11882 $12,858.14 12680
Dec-92 12099 $13,092.05 12934
12624 $13,578.30 13453
Jun-93 12995 $14,022.78 13908
13454 $14,496.74 14378
Dec-93 13603 $14,700.34 14541
12937 $13,893.33 13742
Jun-94 12971 $14,046.54 13821
13000 $14,142.80 13886
Dec-94 12791 $13,940.44 13664
13644 $14,925.65 14633
Jun-95 13950 $15,285.32 14931
14198 $15,724.47 15295
Dec-95 14821 $16,373.77 16029
14666 $16,176.72 15744
Jun-96 14729 $16,300.44 15833
15056 $16,674.04 16205
Dec-96 15415 $17,098.85 16603
15429 $17,057.88 16540
Jun-97 15872 $17,645.73 17121
16291 $18,177.46 17654
Dec-97 16761 $18,670.68 18162
16967 $18,885.75 18355
Jun-98 17191 $19,173.32 18606
17648 $19,761.58 19158
Dec-98 17767 $19,880.38 19186
17880 $20,056.53 19295
Jun-99 17572 $19,702.59 18905
17365 $19,623.94 18665
Dec-99 17191 $19,471.55 18404
- --------------------------------------------------------------------------------
Average Annual Total Return 12/31/99 1 Year 5 Year 10 Year
- --------------------------------------------------------------------------------
VE/C Tax-Exempt Fund (w/o sales charge) (3.25%) 6.09% 6.08%
- --------------------------------------------------------------------------------
VE/C Tax-Exempt Fund (w/sales charge)(1) (7.88%) 5.06% 5.57%
- --------------------------------------------------------------------------------
Lehman Brothers Municipal Bond Index (2.06%) 6.91% 6.89%
- --------------------------------------------------------------------------------
Lipper General Municipal Debt Fund Index (4.07%) 6.14% 6.29%
- --------------------------------------------------------------------------------
Inception date for the Van Eck/Chubb Tax-Exempt Fund was 12/1/87.
(1)The maximum sales charge is 4.75%.
Returns for the Van Eck/Chubb Tax-Exempt Fund reflect all recurring expenses and
include the reinvestment of all dividends and distributions. Performance does
not fully reflect the impact of the Fund's expenses, as they have been partially
reimbursed by the Adviser at certain times since the Fund's inception.
The Lehman Brothers Municipal Bond Index and the Lipper General Municipal Debt
Fund Index are unmanaged indices and include the reinvestment of all dividends,
but do not reflect the payment of transaction costs, advisory fees or expenses
that are associated with an investment in the Fund. The Indices' performance is
not illustrative of the Fund's performance. Indices are not securities in which
investments can be made.
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 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.
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Performance data quoted
represents past performance; the investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
21
<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.
We are pleased to report that the Van Eck/Chubb Total Return Fund had an
excellent year in 1999, gaining 18.57%. Your Fund outpaced the 8.98% average
total return achieved by its peer group of mutual funds as measured by the
Lipper Balanced Fund Index. In addition to its superior one-year results, the
Fund had favorable relative results for the longer five- and ten-year periods.
(Please see the tables and charts that follow for in-depth detail on
performance, including specific total return figures.)
REVIEW OF MARKETS
January 2000 marks the 107th consecutive month of uninterrupted U.S. economic
growth, thus edging out the previous longest expansion of the 1960s. While this
dates the expansion back to early 1991, it can be argued that it stretches as
far back as 1982. It was in the early 1980s that the current era of freer, more
productive markets began--an era characterized by more positive public policy
and private practices, including greater industry deregulation, favorable tax
treatment, and less interference from government. In addition, strong long-term
forces, most notably technology-based productivity gains and greater global
competition, have bolstered America's spectacular progress and provided impetus
to economies worldwide. However, a fast-growing American economy has its
disadvantages, particularly the threat of inflation. Concerned over rising
costs, the Federal Reserve Board increased short-term interest rates three times
after mid-year 1999, with its final 0.25% tightening coming on November 16.
Recent gross domestic product (GDP) growth figures confirmed the economy's
acceleration, with the rate climbing from the range of 2.5% to 3.0% in the first
two quarters to 5.8% by year end. Overall, GDP growth was 4.2% in 1999, down
somewhat from 1998's 4.3% but still historically high. (At the time of this
writing, the Fed was poised to raise rates yet again.)
For the U.S. stock market, 1999 was another record-setting year. The astounding
85.6% return of the technology-rich Nasdaq Composite Index was the biggest
market index gain ever in a single year. At the same time, both the S&P 500
Index and the Dow Jones Industrial Average enjoyed their fifth consecutive year
of double-digit returns, gaining 21.0% and 27.2%, respectively. For all three
market indices, technology companies led performance and captivated the minds of
American investors. On closer inspection, the technology bonanza was a narrow
phenomenon that sharply contrasted the more sobering results of many common
stocks. Most stocks in the Nasdaq Composite Index actually retreated in 1999 and
the average stock in the S&P 500 Index rose less than 10%. As was also the case
in 1998, the market continued to favor growth over value investments, rewarding
rapidly growing companies offering an immediate pay-off rather than solid,
healthy companies with good prospects that were selling at a discount. Outside
of technology, there was good news for a few other sectors, including energy,
basic materials and capital goods, which all benefited from the strong global
economic recovery.
In contrast to equities, U.S. bond investments were hurt by rising interest
rates in 1999 and most fixed income asset classes lost value. Federal Reserve
tightening plus strong credit demand pushed up both nominal and real interest
rates last year. The only categories that had positive results were emerging
market debt, high-yielding corporate ("junk") bonds, and mortgage- and
asset-backed securities. It was the worst year for bonds since 1994 and the
second worst year since 1973. Thirty-year Treasury bonds, the best performers of
1998, were hit hardest and declined 14.9%, as yields on the long bond backed up
139 basis points (1.39%), from 5.09% to 6.48%. Ten-year Treasury bonds declined
8.4%. Finally, many investors just simply ignored bonds in 1999, preferring to
chase double-digit equity returns.
22
<PAGE>
VAN ECK/CHUBB TOTAL RETURN FUND
- --------------------------------------------------------------------------------
FUND REVIEW
Your Fund's broader allocations were little changed over 1999, with
approximately 58% invested in equity securities and 38% in fixed income
securities at year end. However, dramatic shifts were made in the sector
emphasis of the Fund's equity holdings. At the end of 1999, the Fund was more
than 40% invested in technology and tech-related sectors, compared to a 0%
weighting at the end of 1998. This shift was made by broadening our screening
parameters to include some of the large-capitalization winners of this momentum-
and technology-driven market, while at the same time being mindful of valuation.
We culled the S&P 500 Index for top names with secular earnings growth in the
10% to 30% range, selling at a reasonable price. We attribute your Fund's
excellent performance in 1999 to this change in strategy. On the other hand, the
Fund's fixed income investments continued to be concentrated in high-quality
government and corporate bonds of intermediate maturity, but their declining
values on the back of rising interest rates added little to the Fund's overall
total return.
A quick look at the "Top Ten Equities" gives a good representation of the Fund's
changes in the past year: Oracle, Electronic Data, Nokia, Microsoft, Sun
Microsystems, Hewlett Packard, Lexmark, Motorola, ADC Telecommunications, and
Koninklijke (Royal) Philips1. All ten companies are technology related. Although
we are firm believers in the power of the Internet, we have intentionally
avoided high-flying, risky "dot-com" companies with unproven business models.
Rather, we sought out those well-established names that are helping to build the
Internet's networking infrastructure, and which stand to benefit from its
expansion and exploding usage. In addition, we increased our investments in
mobile communications, computer services and software companies. The Fund's
technology bias was achieved by paring the portfolio's exposure to
transportation, consumer goods and financials. At the same time, we increased
the Fund's energy investments slightly over the year to take advantage of the
global economic recovery, particularly among the emerging markets.
OUTLOOK
The Fund's large-cap technology bias should continue to serve it well in the
coming year. We remain bullish on technology, given that the end of Y2K
remediation permits tremendous resources and capital to be redirected toward
growth. We will continue to seek out those companies participating in the new
economy, whose earnings growth appears sustainable in the 10% to 30% range. In
view of extremely high valuations, we will maintain our value discipline by
purchasing those companies that are selling at a reasonable price. Going
forward, more traditional sectors of the economy with growth rates below 10%,
including consumer cyclicals, basic materials, capital goods, utilities and
transportation, should continue to be less attractive. We are, however, mindful
of the increased volatility of a portfolio with a strong technology bias, and
will continue to diversify the Fund's investments in order to manage this risk
prudently. In addition, the Fund's investments in high-quality fixed income
securities should continue to safeguard it against the volatility associated
with a stock-only investment. While the Federal Reserve is likely to continue to
tighten monetary policy by raising short-term interest rates, its
anti-inflationary actions will help to protect the value of longer-dated bonds
like those held by the Fund.
We thank you for your investment in the Van Eck/Chubb Total Return and we look
forward to helping you meet your investment objectives in the future.
[PHOTO OF MICHAEL O'REILLY] [PHOTO OF ROBERT WITKOFF]
/s/ MICHAEL O'REILLY /s/ ROBERT WITKOFF
- --------------------------- --------------------------
MICHAEL O'REILLY ROBERT WITKOFF
PRESIDENT SENIOR VICE PRESIDENT
VAN ECK/CHUBB FUNDS CHUBB ASSET MANAGERS, INC.
January 31, 2000
23
<PAGE>
VAN ECK/CHUBB TOTAL RETURN FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PERFORMANCE RECORD AS OF 12/31/99
- ----------------------------------------------------------------
AFTER
MAXIMUM BEFORE
AVERAGE ANNUAL SALES SALES
TOTAL RETURN CHARGE* CHARGE
- ----------------------------------------------------------------
Life (since 12/1/87) 13.36% 13.92%
- ----------------------------------------------------------------
10 year 12.55% 13.22%
- ----------------------------------------------------------------
5 year 16.75% 18.15%
- ----------------------------------------------------------------
1 year 11.73% 18.57%
- ----------------------------------------------------------------
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%.
(1)Oracle accounted for 4.2% of the Fund's total net assets at December 31;
Electronic Data Systems 2.5%; Nokia 2.4%; Microsoft 2.3%; Sun Microsystems 2.3%;
Hewlett Packard 2.3%; Lexmark 2.3%; Motorola 2.2%; ADC Telecommunications 2.2%;
and Koninklijke (Royal) Philips 2.2%.
- --------------------------------------------------------------------------------
% OF PORTFOLIO
[PIE CHART OMITTED]
U.S. Government Obligations: 26.1%
Corporate Bonds: 12.2%
Other Net Assets: 3.3%
Common Stocks: 58.4%
% OF
TOP TEN EQUITIES PORTFOLIO
Oracle Corp. 4.2%
Electronic Data Systems Corp. 2.5%
Nokia Oyj 2.4%
Microsoft Corp. 2.3%
Sun Microsystems, Inc. 2.3%
Hewlett Packard Co. 2.3%
Lexmark International Group, Inc. 2.3%
Motorola, Inc. 2.2%
ADC Telecommunications, Inc. 2.2%
Koninklijke (Royal) Philips Electronics N.V. 2.2%
% OF
TOP TEN INDUSTRIES PORTFOLIO
Computers and Computer Software 16.6%
Electronics 10.9%
Technology 9.5%
Telecommunications 4.9%
Oil & Gas Equipment and Services 2.9%
Electrical Equipment 2.9%
Financial Services 2.4%
Retail 2.1%
Consumer Products 1.9%
Manufacturing 1.6%
(1)As a percentage of total net assets at December 31, 1999
24
<PAGE>
VAN ECK/CHUBB TOTAL RETURN FUND
PERFORMANCE COMPARISON
- --------------------------------------------------------------------------------
This graph compares a hypothetical $10,000 investment in the Van Eck/Chubb Total
Return Fund made ten years ago with a similar investment in the S&P 500 Index
and the Lipper Balanced Fund Index
Van Eck/Chubb Lipper
Total Return Balanced
Fund S&P 500 Fund
(w/ sales charge)(1) Index Index
- --------------------------------------------------------------------------------
Dec-89 $9,423 $10,000.00 10000
$9,418 $9,699.18 9766
Jun-90 $9,867 $10,309.30 10217
$9,034 $8,892.47 9390
Dec-90 $9,376 $9,689.56 10066
$10,207 $11,097.05 11113
Jun-91 $10,593 $11,071.59 11143
$11,105 $11,663.65 11848
Dec-91 $12,119 $12,641.56 12665
$12,087 $12,322.28 12516
Jun-92 $12,088 $12,556.55 12716
$12,353 $12,952.38 13117
Dec-92 $12,976 $13,604.52 13610
$13,590 $14,198.63 14250
Jun-93 $13,789 $14,267.77 14542
$14,358 $14,636.42 15074
Dec-93 $14,798 $14,975.77 15237
$14,387 $14,407.87 14772
Jun-94 $14,269 $14,468.51 14660
$14,569 $15,175.99 15089
Dec-94 $14,171 $15,173.60 14925
$15,232 $16,650.99 15826
Jun-95 $16,776 $18,240.61 16933
$17,860 $19,690.05 17842
Dec-95 $18,429 $20,875.52 18639
18766 $21,996.03 19056
Jun-96 19359 $22,983.13 19443
19688 $23,693.45 19956
Dec-96 21570 $25,668.53 21072
21685 $26,356.71 21170
Jun-97 24566 $30,958.04 23452
27158 $33,277.05 24959
Dec-97 26767 $34,232.53 25349
29203 $39,007.56 27354
Jun-98 28858 $40,295.60 27770
24785 $36,287.17 26163
Dec-98 27498 $44,015.01 29173
27355 $46,208.19 29641
Jun-99 29120 $49,465.58 30974
28470 $46,377.04 29690
Dec-99 32606 $53,277.80 31792
- --------------------------------------------------------------------------------
Average Annual Total Return 12/31/99 1 Year 5 Year 10 Year
- --------------------------------------------------------------------------------
VE/C Total Return Fund (w/o sales charge) 18.57% 18.15% 13.22%
- --------------------------------------------------------------------------------
VE/C Total Return Fund (w/ sales charge) 1 11.73% 16.75% 12.55%
- --------------------------------------------------------------------------------
S&P 500 Index 21.04% 28.56% 18.21%
- --------------------------------------------------------------------------------
Lipper Balanced Fund Index 8.98% 16.33% 12.26%
- --------------------------------------------------------------------------------
Inception date for the Van Eck/Chubb Total Return Fund was 12/7/87.
(1)The maximum sales charge is 5.75%.
Returns for the Van Eck/Chubb Total Return Fund reflect all recurring expenses
and include the reinvestment of all dividends and distributions. Performance
does not fully reflect the impact of the Fund's expenses, as they have been
partially reimbursed by the Adviser at certain times since the Fund's inception.
The S&P 500 Index and the Lipper Balanced Fund Index are unmanaged indices and
include the reinvestment of all dividends, but do not reflect the payment of
transaction costs, advisory fees or expenses that are associated with an
investment in the Fund. The Indices' performance is not illustrative of the
Fund's performance. Indices are not securities in which investments can be made.
The Standard & Poor's 500 Index consists of 500 widely held common stocks,
covering four broad sectors (industrials, utilities, financials and
transportation). It is a market value-weighted index (stock price times shares
outstanding), with each stock affecting the index in proportion to its market
value. Construction of the S&P 500 Index proceeds from industry group to the
whole. Since some industries are characterized by companies of relatively small
stock capitalization, the Index is not comprised of the 500 largest companies on
the New York Stock Exchange. This Index, calculated by Standard & Poor's, is a
total return index with dividends reinvested.
The Lipper 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.
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Performance data quoted
represents past performance; the investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
25
<PAGE>
VAN ECK/CHUBB GLOBAL INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1999
MARKET
PRINCIPAL VALUE
CURRENCY AMOUNT (NOTE B)
-------- ------ --------
GOVERNMENT AND AGENCY
OBLIGATIONS-53.4%
AUSTRALIA-0.8%
Australian Government
Bond
9.50%, due 8/15/03........ AUD 650,000 $ 466,852
New South Wales Treasury
Note
9.25%, due 6/20/05........ AUD 200,000 142,703
-----------
609,555
-----------
BULGARIA-1.1%
Bulgaria Discount Floating
Rate Note
6.50%, due 7/28/24........ USD 1,000,000 797,500
-----------
CANADA-1.8%
Government of Canada
Bond
5.25%, due 9/01/03 (a).... CAD 2,000,000 1,344,747
-----------
CROATIA-0.6%
Croatia Government Bond
7.00%, due 2/27/02........ USD 500,000 467,951
FRANCE-16.8%
French Government Bond
5.50%, due 10/12/01....... EUR 2,439,184 2,511,238
4.50%, due 7/12/03........ EUR 2,200,000 2,201,093
4.00%, due 1/12/02........ EUR 1,000,000 1,001,911
France O.A.T.
6.50%, due 10/25/06....... EUR 1,867,500 2,046,593
6.75%, due 10/25/04....... EUR 2,500,000 2,724,267
5.50%, due 10/25/07....... EUR 2,250,000 2,308,608
-----------
12,793,710
GERMANY-11.0%
Bundesobligation
6.00%, due 7/04/07........ EUR 2,721,455 2,865,787
Deutschland Republic
7.375%, due 1/03/05....... EUR 2,300,813 2,564,374
6.00%, due 1/05/06....... EUR 2,800,000 2,962,693
-----------
8,392,854
GREECE-2.0%
Hellenic Republic
6.60%, due 1/15/04 (a).... GRD 500,000,000 1,533,737
-----------
ITALY-2.1%
Buoni Poliennali del tes
Government National
5.00%, due 5/01/08........ EUR 1,652,659 $ 1,619,265
-----------
NETHERLANDS-3.5%
Government of Netherlands
8.25%, due 9/15/07........ EUR 249,580 296,866
6.00%, due 1/15/06........ EUR 1,588,231 1,665,869
3.00%, due 2/15/02........ EUR 720,000 705,079
-----------
2,667,814
-----------
SPAIN-0.8%
Spanish Government Bond
3.25%, due 1/31/05........ EUR 627,000 578,497
-----------
SUPRANATIONAL-5.5%
European Investment Bank
6.00%, due 11/26/04....... GBP 1,100,000 1,735,295
International Bank for
Reconstruction &
Development
5.875%, due 11/10/03...... DEM 1,050,000 559,694
9.25 %, due 7/20/07....... GBP 1,000,000 1,871,660
-----------
4,166,649
-----------
TURKEY-1.4%
Republic of Turkey Bond
11.875%, due 11/05/04..... USD 1,000,000 1,035,000
-----------
UNITED STATES-6.0%
U.S. Treasury Notes
6.00%, due 8/15/09 (a).... USD 4,750,000 4,603,049
-----------
TOTAL GOVERNMENT
AND AGENCY
OBLIGATIONS
(Cost: $44,571,806)....... 40,610,328
-----------
CORPORATE BONDS-29.5%
BELGIUM-1.7%
Hermes Euro Rail
11.50%, due 8/15/07....... USD 1,250,000 1,290,625
-----------
FRANCE-3.9%
Caisse Centrale
6.234%, due 6/27/04 (a).... USD 3,000,000 2,988,900
-----------
See Notes to Financial Statements
26
<PAGE>
VAN ECK/CHUBB GLOBAL INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1999 (continued)
MARKET
PRINCIPAL VALUE
CURRENCY AMOUNT (NOTE B)
-------- ------ --------
JAPAN-5.2%
Fuji JGB Carrier Preferred
9.87%, due 12/31/49+...... USD 1,000,000 $ 992,647
IBJ Preferred Capital Co. LLC
8.79%, due 12/29/49+...... USD 1,000,000 928,616
SB Treasury Co. LLC
9.40%, due 12/29/49+...... USD 1,000,000 990,239
Tokai Preferred Capital
Co. LLC
9.98%, due 12/29/49+...... USD 1,000,000 1,020,000
-----------
3,931,502
-----------
KAZAKHSTAN-0.6%
Para Financial Services
9.375%, due 10/15/02...... USD 500,000 470,000
-----------
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 500,000 456,250
-----------
956,250
-----------
NETHERLANDS-3.4%
Netia Holdings S.A.
13.50%, due 6/15/09....... EUR 1,000,000 1,040,244
United Pan-Europe Reg S
10.875%, due 8/01/09...... EUR 500,000 519,492
United Pan-Europe
10.875%, due 8/01/09...... EUR 500,000 519,492
11.25%, due 11/01/09...... EUR 500,000 516,344
-----------
2,595,572
-----------
SPAIN-0.7%
Jazztel PLC
14.00%, due 4/01/09....... USD 500,000 516,250
-----------
UNITED KINGDOM-6.5%
British Telecom
5.75%, due 12/07/12 (a)... GBP 1,050,000 1,654,318
Luxfer
10.125%, due 5/01/09 (a).. GPB 1,000,000 1,557,421
NTL Comm
9.875%, due 11/15/09 (a).. USD 1,000,000 1,012,538
Polestar Corp.
10.5%, due 5/30/08 (a).... GPB 500,000 775,590
-----------
4,999,867
-----------
UNITED STATES-6.2%
AT&T Corp.
6.5%, due 9/15/02 USD 1,000,000 991,250
C.S. First Boston Commercial
Mortgage 97-C1
7.46%, due 5/20/09+....... USD 2,000,000 1,823,438
Entex Information Service
12.50%, due 8/01/06+...... USD 1,000,000 340,000
Tokheim Reg S
11.375%, due 8/01/08...... USD 500,000 287,138
Viatel Inc.
11.50%, due 3/15/09....... EUR 500,000 510,047
11.15%, due 4/15/08....... DEM 1,500,000 774,630
-----------
4,726,503
-----------
TOTAL CORPORATE
BONDS
(Cost: $23,886,756) 22,475,469
-----------
SHORT-TERM OBLIGATIONS-8.8%
UNITED STATES-8.8%
American Express
Commercial Paper
Interest Yield 5.83%,
due 1/18/00 (a)........... USD 1,025,000 1,022,179
Interest Yield 5.82%,
due 1/18/00 (a)........... USD 500,000 498,626
Deutsche Bank
Commercial Paper
Interest Yield 5.95%,
due 1/24/00 (a)........... USD 1,550,000 1,544,108
General Electric Co.
Commercial Paper
Interest Yield 5.98%,
due 2/01/00 (a)........... USD 2,655,000 2,641,328
John Deere Capital
Commercial Paper
Interest Yield 6.36%,
due 1/21/00 (a)........... USD 1,025,000 1,021,378
-----------
TOTAL SHORT-TERM
OBLIGATIONS
(Cost: $6,727,619)........ 6,727,619
-----------
See Notes to Financial Statements
27
<PAGE>
VAN ECK/CHUBB GLOBAL INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1999 (continued)
MARKET
NUMBER OF VALUE
CONTRACTS (NOTE B)
------------ ------------
OPTIONS PURCHASED-1.2%
Call, JPY/USD Currency Strike
$110 expiring 1/25/00+.... 55,000 $ 434,500
Call, JPY/USD Currency Strike
$107 expiring 2/15/00+.... 80,000 440,000
Put, JPY/USD Currency Strike
$110 expiring 2/25/00+.... 50,000 10,000
Put, JPY/USD Currency Strike
$115 expiring 2/25/00+.... 50,000 2,000
-----------
TOTAL OPTIONS PURCHASED
(Cost: $816,638).......... 886,500
-----------
TOTAL INVESTMENTS
(Cost: $76,002,819)....... 92.9% 70,699,916
-----------
OPTIONS WRITTEN-(0.2%)
Call, JPY/USD Currency Strike
$95 expiring 2/25/00+..... (50,000) $ (30,000)
Call, JPY/USD Currency Strike
$98 expiring 1/25/00+..... (55,000) (27,500)
Call, JPY/USD Currency Strike
$98 expiring 2/15/00+..... (80,000) (80,000)
-----------
TOTAL OPTIONS WRITTEN
(premiums received:
$150,763)................ (137,500)
-----------
TOTAL INVESTMENTS, NET OF
OPTIONS WRITTEN
(Cost: $75,852,056*)...... 92.7% 70,562,416
Other assets less
liabilities............... 7.3% 5,522,487
------- -----------
TOTAL NET ASSETS............. 100.0% $76,084,903
======= ===========
- ----------
* 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 8.01% 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, options written and futures contracts.
+ Non-income producing.
See Notes to Financial Statements
28
<PAGE>
VAN ECK/CHUBB GOVERNMENT SECURITIES FUND
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1999
MARKET
NUMBER OF VALUE
CONTRACTS (NOTE B)
----------- ----------
U.S. GOVERNMENT AND AGENCY
OBLIGATIONS-97.2%
Federal Home Loan Mortgage Association
Series 1058 H 8.00%, due 4/15/21.... $ 280,909 $ 285,639
Federal National Mortgage Association
9.00%, due 7/01/01.................. 6,599 6,729
6.00%, due 1/01/29.................. 9,543,942 8,745,882
Tennessee Valley Authority
6.235%, due 7/15/45................. 10,000,000 9,941,500
5.98%, due 4/01/36.................. 4,000,000 3,789,800
U.S. Treasury Bond
10.375%, due 11/15/12............... 1,000,000 1,215,313
11.250%, due 2/15/15................ 2,900,000 4,098,970
U.S. Treasury Bond
5.50%, due 2/28/03.................. 1,000,000 976,250
-----------
TOTAL INVESTMENTS
(Cost: $30,009,169*)................ 97.2% 29,060,083
Other assets less liabilities....... 2.8% 830,825
------- -----------
TOTAL NET ASSETS.................... 100.0% $29,890,908
======= ===========
- ----------
* Aggregate cost for Federal income tax purposes.
See Notes to Financial Statements
29
<PAGE>
VAN ECK/CHUBB GROWTH AND INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1999
NUMBER MARKET
OF VALUE
COMPANY SHARES (NOTE B)
- ------- ------ --------
COMMON STOCK-88.7%
AUTOS, TRUCKS & PARTS-1.5%
General Motors Corp.................... 15,000 $ 1,440,000
-----------
BANKING-3.3%
Bank of America Corp................... 20,000 1,003,750
Chase Manhattan Corp................... 27,000 2,097,563
-----------
3,101,313
-----------
BEVERAGES-0.5%
Coca-Cola Enterprises, Inc............. 25,000 503,125
-----------
COMPUTERS AND COMPUTER SOFTWARE-24.9%
BMC Software, Inc.+.................... 25,000 1,998,438
Complete Business Solutions, Inc.+..... 95,000 2,386,875
Computer Sciences Corp.+............... 33,300 3,151,013
Compuware Corp. ....................... 70,000 2,607,500
Electronic Data Systems Corp........... 25,000 1,673,438
Extreme Networks, Inc.+................ 500 41,750
International Business Machines Corp... 16,000 1,728,000
Keane, Inc............................. 24,000 762,000
Microsoft Corp......................... 23,000 2,685,250
Parametric Technology Corp.+........... 50,000 1,353,125
Sun Microsystems, Inc.+................ 40,000 3,097,499
USWeb Corp............................. 50,000 2,221,875
-----------
23,706,763
-----------
CONSUMER PRODUCTS-0.8%
Clorox Co.............................. 15,000 755,625
-----------
ELECTRICAL EQUIPMENT-2.8%
General Electric Co. .................. 17,000 2,630,750
-----------
ELECTRONICS-12.1%
Koninklijke (Royal) Philips Electronics N.V. 15,180 2,049,300
Lexmark International Group, Inc....... 30,000 2,715,000
Motorola, Inc.......................... 15,000 2,208,750
Nokia Oyj.............................. 12,000 2,280,000
Sanmina Corp........................... 22,500 2,247,188
-----------
11,500,238
-----------
ENTERTAINMENT AND LEISURE-2.3%
Time Warner, Inc....................... 30,000 2,173,125
-----------
FINANCIAL SERVICES-4.8%
Citigroup, Inc......................... 36,000 2,000,250
Merrill Lynch & Co., Inc............... 16,100 1,344,350
Washington Mutual, Inc................. 45,000 1,170,000
-----------
4,514,600
-----------
FOOD PROCESSING-0.0%
Archer-Daniels-Midland Co.............. 138 1,682
-----------
HOUSEHOLD PRODUCTS-1.7%
Procter & Gamble Co.................... 15,000 $ 1,643,438
-----------
MANUFACTURING-1.6%
United Technologies Corp............... 24,000 1,560,000
-----------
MEDICAL-HEALTHCARE SERVICES-1.3%
Baxter International, Inc.............. 20,000 1,256,250
Healthcare Services Corp.+............. 96 672
-----------
1,256,922
-----------
OIL & GAS EQUIPMENT AND SERVICES-5.7%
Burlington Resources, Inc.............. 49,600 1,639,900
Cooper Cameron Corp.+.................. 13,800 675,338
Halliburton Co......................... 40,000 1,610,000
Transocean Sedco Forex, Inc............ 44,000 1,482,250
-----------
5,407,488
-----------
printed circuit boards-1.2%
Jabil Circuit, Inc..................... 15,000 1,095,000
-----------
RETAIL-4.2%
BJ Wholesale Club, Inc................. 25,000 912,500
Tandy Corp............................. 20,000 983,750
Wal-Mart Stores, Inc................... 30,000 2,073,750
-----------
3,970,000
SUPERMARKETS-1.6%
Kroger Co. ............................ 80,000 1,510,000
-----------
TECHNOLOGY-9.5%
Cisco Systems, Inc..................... 19,000 2,035,375
Hewlett Packard Co. ................... 15,000 1,709,063
Intel Corp............................. 16,000 1,317,000
Oracle Corp.+.......................... 35,000 3,922,188
-----------
8,983,626
TELECOMMUNICATIONS-8.9%
ADC Telecommunications, Inc.+.......... 38,000 2,757,375
AT&T Corp. ............................ 30,000 1,522,500
Antec Corp............................. 25,000 912,500
Lucent Technologies, Inc............... 31,000 2,319,188
MCI Worldcom, Inc. .................... 16,500 875,527
-----------
8,387,090
-----------
TOTAL INVESTMENTS 88.7% 84,140,785
(Cost: $60,814,770*)
Other assets less liabilities 11.3% 10,698,784
-------- -----------
TOTAL NET ASSETS 100.0% $94,839,569
======== ===========
- ----------
* Aggregate cost for Federal income tax purposes.
+ Non-income producing.
See Notes to Financial Statements
30
<PAGE>
VAN ECK/CHUBB TAX-EXEMPT FUND
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1999
MARKET
PRINCIPAL VALUE
AMOUNT (NOTE B)
--------- --------
MUNICIPAL OBLIGATIONS-97.5%
ALASKA-2.1%
Anchorage, Alaska, Hospital Revenue,
(Sisters of Providence Project),
6.75%, due 10/01/02................. 150,000 $ 156,730
North Slope Borough, Alaska,
General Obligation, Series A,
Zero Coupon, MBIA Insured,
due 6/30/04......................... 550,000 438,726
----------
595,456
----------
CONNECTICUT-0.6%
Connecticut State, General Obligation,
Series C, 7.00%, Prerefunded to
9/15/00 at 102+..................... 160,000 166,405
----------
DISTRICT OF COLUMBIA-3.9%
District of Columbia, Certificate
of Participation, 7.30%,
due 1/01/13+....................... 300,000 318,990
District of Columbia, Series 93A,
5.875%, due 6/01/05................ 255,000 262,357
District of Columbia, Series 93A,
5.875%, due 6/01/05, ETM........... 245,000 257,959
Metropolitan Washington D.C.
Airport Authority,.................
General Airport Revenue,
Series A, AMT, MBIA Insured,
6.50%, due 10/01/07+................ 250,000 262,742
----------
1,102,048
----------
FLORIDA-4.6%
Dade County, Florida, Aviation Revenue,
Miami International Airport,
FSA Insured, 5.125%,
due 10/01/27........................ 1,500,000 1,302,556
----------
GEORGIA-0.9%
Cartersville, Georgia Development
Authority, Water & Wastewater
Facilities, Anheuser Busch, AMT,
6.75%, due 2/01/12+................ 250,000 262,598
----------
ILLINOIS-5.4%
Illinois State Toll Highway, Series 92A,
6.375%, Prerefunded to
1/01/03 at 102+.................... 1,100,000 1,170,303
Metropolitan Pier & Exposition Authority,
Illinois, 6.50%, Prerefunded to
6/15/03 at 102+.................... 345,000 $ 370,348
Metropolitan Pier & Exposition Authority,
Illinois, 6.50%, due 6/15/27+...... 5,000 5,164
----------
1,545,815
----------
INDIANA-12.4%
Indiana Bond Bank, Revenue,
State Revolving Fund,
6.00%, due 2/01/15+................ 500,000 513,378
Indiana Health Facilities
Financing Authority, Charity Obligated
Group, 5.00%, due 11/01/26,
Mandatory Put on 11/01/07 at 100... 1,290,000 1,305,196
Indiana Health Facilities Financing
Authority, Holy Cross Health
System Corp, MBIA Insured, 5.375%,
due 12/01/12....................... 500,000 490,851
Indiana Municipal Power Supply,
MBIA Insured 5.50%, due 1/01/16... 1,200,000 1,154,334
Indiana State Housing Finance Authority,
Single Family Mortgage 1990,
Series C, AMT, 7.80%,
due 1/01/22+....................... 65,000 66,739
----------
3,530,498
----------
IOWA-3.9%
Iowa Finance Authority, Single Family
Revenue, AMT, 4.95%, due 1/01/21... 1,215,000 1,113,981
----------
LOUISIANA-0.7%
Jefferson, Louisiana, Sales Tax Revenue,
Refunding, FGIC Insured, Series A,
6.75%, Prerefunded to
12/01/02 at 100+................... 60,000 63,464
Jefferson, Louisiana, Sales Tax Revenue,
Refunding, FGIC Insured, Series A,
6.75%, due 12/01/06+............... 140,000 146,333
----------
209,797
----------
MAINE-0.6%
Maine Educational Loan Authority,
Series 92A, AMT, 6.95%,
due 12/01/07+...................... 155,000 157,790
----------
See Notes fo Financial Statements
31
<PAGE>
VAN ECK/CHUBB TAX-EXEMPT FUND
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1999 (continued)
MARKET
PRINCIPAL VALUE
AMOUNT (NOTE B)
--------- --------
MASSACHUSETTS-5.4%
Massachusetts State Construction Loan,
Series A, 6.00%, Prerefunded to
6/01/01 at 100+.................. 300,000 $ 306,551
Massachusetts State Turnpike Authority,
MBIA Insured, Series A,
5.00%, due 1/01/37+.............. 1,500,000 1,236,296
----------
1,542,847
----------
MISSOURI-0.6%
Missouri Health & Educational Facilities
Authority, St. Luke's Hospital,
MBIA Insured, 7.00%,
Prerefunded to 11/15/01 at 102+..... 150,000 159,579
----------
New Hampshire-0.8%
New Hampshire Turnpike System,
Series A, FGIC Insured,
6.75%, due 11/01/11+................ 200,000 220,801
----------
NEW JERSEY-6.9%
New Jersey Economic Development
Authority, The Seeing Eye, Inc. Project,
7.30%, due 4/01/11+................ 550,000 573,307
New Jersey Wastewater Treatment Trust,
6.875%, Prerefunded to 6/15/00
at 101.75+......................... 165,000 169,923
New Jersey Wastewater Treatment Trust,
6.875%, due 6/15/07+............... 15,000 15,370
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 1,199,877
----------
1,958,477
----------
NEW YORK-15.6%
Metropolitan Transportation Authority,
New York, Transit Facilities,
Service Contract, Series 8, 5.00%,
due 7/01/02........................ 1,000,000 1,007,702
New York City, New York,
General Obligation, Series H,
6.875%, due 2/01/02, ETM........... 230,000 239,690
New York City, New York,
General Obligation, Series H,
Subseries H-1, 5.80%, due 8/01/04... 250,000 259,125
New York City, New York,
General Obligation, Series D,
5.25%, due 8/01/03................. 1,000,000 $1,011,986
New York City, Series H,
6.875%, due 2/01/02................ 20,000 20,806
New York State Dormitory Authority,
City University System, Series 1,
5.125%, due 7/01/13+............... 1,325,000 1,232,063
New York State Local Government
Assistance Corporation, Series B,
5.50%, due 4/01/21+................ 450,000 417,028
New York State Thruway Authority,
Highway and Bridge Trust Fund,
Series A, MBIA Insured,
5.60%, due 4/01/10+................ 250,000 253,093
----------
4,441,493
----------
OKLAHOMA-2.0%
Oklahoma Industrial Development
Authority, Sisters of Mercy, Series A,
5.00%, due 6/01/13+................. 600,000 560,418
----------
PENNSYLVANIA-1.0%
Philadelphia, Pennsylvania, Hospital &
Higher Education Facility Authority,
(Children's Hospital), 5.00%,
due 2/15/21+....................... 350,000 291,172
----------
TENNESSEE-6.1%
Memphis-Shelby County, Tennessee Airport
Authority, (Federal Express Corp.),
AMT, 6.75%, due 9/01/12+........... 250,000 261,384
Shelby County, Tennessee,
General Obligation, Series B,
Zero Coupon, due 12/01/12.......... 2,000,000 975,046
Tennessee Housing Development Agency,
1993 Series A, 5.90%,
due 7/01/18+....................... 495,000 492,795
----------
1,729,225
----------
TEXAS-6.3%
Austin, Texas, Independent School
District, Permanent School Fund,
Zero Coupon, due 8/01/13........... 500,000 229,675
Austin, Texas, Utility System Revenue,
Series C, 7.30%, Prerefunded to
11/15/01 at 100+................... 60,000 63,046
See Notes to Financial Statements
32
<PAGE>
VAN ECK/CHUBB TAX-EXEMPT FUND
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1999 (continued)
MARKET
PRINCIPAL VALUE
AMOUNT (NOTE B)
--------- --------
TEXAS (continued)
Houston, Texas, Independent School
District, Permanent School Fund,
Zero Coupon, due 8/15/13........... 1,150,000 $ 531,279
Waxahachie, Texas, Independent School
District, Permanent School Fund,
Zero Coupon, due 8/15/13........... 2,060,000 950,424
-----------
1,774,424
-----------
UTAH-4.3%
Utah State Board of Regents,
Student Loan Revenue, Series F,
AMT, 5.00%, due 5/01/06............. 1,250,000 1,231,935
-----------
WASHINGTON-13.4%
Lewis County, Washington, Public Utility
District #1, Revenue Series 91,
7.00%, Prerefunded to
10/01/01 at 102+................... 250,000 265,269
Washington Health Care Facilities
Authority, Catholic Health Initiatives,
MBIA Insured, 5.125%,
due 12/01/17+...................... 1,300,000 1,158,347
Washington Health Care Facilities
Authority, Revenue, MBIA Insured,
(Group Health Co-Op),
6.75%, due 12/01/11+............... 300,000 310,584
Washington Health Care Facilities
Authority, Revenue, Series 93
(Sisters of Providence),
6.25%, due 10/01/13+............... 500,000 514,007
Washington Housing Finance Commission,
GNMA/FNMA MBS Programs,
7.10%, due 7/01/22+................ 125,000 126,609
Washington State Public Power Supply
System, Nuclear Project Number 1,
FSA Insured, 5.75%, due 7/01/11.... 1,200,000 1,198,003
Washington State Public Power Supply
System, Nuclear Project Number 2,
Revenue, Series 90C, 7.625%,
Prerefunded to 1/01/01 at 102+..... 100,000 104,991
Washington State Public Power Supply
System, Nuclear Project Number 3,
Revenue, 7.50%, Prerefunded to
7/01/00 at 102+.................... 125,000 129,570
-----------
3,807,380
-----------
TOTAL INVESTMENTS
(Cost: $28,095,248*)................ 97.5% 27,704,695
Other assets less liabilities....... 2.5% 703,904
------ -----------
TOTAL NET ASSETS.................... 100.0% $28,408,599
====== ===========
- -----------
* 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
33
<PAGE>
VAN ECK/CHUBB TOTAL RETURN FUND
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1999
MARKET
NUMBER OF VALUE
COMPANY SHARES (NOTE B)
- ------- --------- --------
COMMON STOCK-58.4%
BANKING-1.6%
Chase Manhattan Corp............. 8,000 $ 621,500
-----------
BUILDING & CONSTRUCTION-0.2%
Hanson PLC (ADR)................. 1,687 68,218
-----------
CHEMICALS/FERTILIZER-0.0%
Millennium Chemicals, Inc........ 964 19,039
-----------
COMPUTERS AND COMPUTER
SOFTWARE-16.6%
BMC Software, Inc.+.............. 10,000 799,375
Complete Business Solutions, Inc.+ 30,000 753,750
Computer Sciences Corp.+......... 9,000 851,625
Compuware Corp.+................. 20,000 745,000
Electronic Data Systems Corp..... 15,000 1,004,063
International Business Machines Corp. 6,000 648,000
Microsoft Corp.+................. 8,000 934,000
Sun Microsystems, Inc.+.......... 12,000 929,250
-----------
6,665,063
-----------
CONSUMER PRODUCTS-1.9%
Clorox Co........................ 15,000 755,625
-----------
ELECTRICAL EQUIPMENT-2.9%
General Electric Co. ............ 5,000 773,750
Honeywell International, Inc..... 7,000 403,813
-----------
1,177,563
-----------
ELECTRONICS-10.9%
Koninklijke (Royal) Philips
Electronics N.V. 6,384 861,840
Lexmark International Group, Inc.+ 10,000 905,000
Motorola, Inc.................... 6,000 883,500
Nokia Oyj........................ 5,000 950,000
Samina Corp...................... 7,500 749,063
-----------
4,349,403
-----------
FINANCIAL SERVICES-2.4%
Associates First Capital Corp.... 7,548 207,098
Merrill Lynch & Co., Inc. ....... 9,000 751,500
-----------
958,598
-----------
NUMBER OF MARKET
SHARES OR VALUE
COMPANY PRINCIPAL AMOUNT (NOTE B)
- ------- ---------------- --------
MANUFACTURING-1.6%
United Technologies Corp......... 10,000 $ 650,000
-----------
MEDICAL SERVICES-0.0%
Healthcare Services Group+....... 96 672
-----------
OIL & GAS EQUIPMENT AND SERVICES-2.9%
Burlington Resources, Inc........ 12,200 403,363
Halliburton Co................... 10,000 402,500
Transocean Sedco Forex, Inc...... 10,400 350,350
-----------
1,156,213
-----------
RETAIL-2.1%
Wal-Mart Stores, Inc............. 12,000 829,500
-----------
SUPERMARKETS-0.9%
Kroger Co.+...................... 20,000 377,500
-----------
TECHNOLOGY-9.5%
Cisco Systems, Inc.+............. 6,000 642,750
Hewlett Packard Co............... 8,000 911,500
Intel Corp. ..................... 7,000 576,188
Oracle Corp.+.................... 15,000 1,680,938
-----------
3,811,376
-----------
TELECOMMUNICATIONS-4.9%
ADC Telecommunications, Inc.+.... 12,000 870,750
Lucent Technologies, Inc......... 8,000 598,500
MCI Worldcom, Inc.+.............. 9,000 477,560
-----------
1,946,810
-----------
TOTAL COMMON STOCK
(Cost: $15,199,103) 23,387,080
-----------
U.S. GOVERNMENT OBLIGATIONS
AND AGENCY OBLIGATIONS-26.1%
Federal National Mortgage Association
6.50%, due 8/15/04 $ 750,000 740,355
-----------
U.S. Treasury Notes
7.25%, due 8/15/04............. 2,900,000 2,993,345
6.875%, due 5/15/06............ 5,200,000 5,292,628
6.50%, due 10/15/06............ 200,000 199,500
6.25%, due 2/15/03............. 1,250,000 1,246,485
-----------
9,731,958
-----------
See Notes to Financial Statements
34
<PAGE>
VAN ECK/CHUBB TOTAL RETURN FUND
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1999 (continued)
MARKET
VALUE
COMPANY PRINCIPAL AMOUNT (NOTE B)
- ------- ---------------- --------
TOTAL U.S. GOVERNMENT OBLIGATIONS
AND AGENCY OBLIGATIONS
(Cost: $10,597,876) $10,472,313
-----------
CORPORATE BONDS-12.2%
Alliant Energy Corp.
7.375%, due 11/09/09......... $1,000,000 973,515
First Union Corp.
7.50%, due 4/15/35........... 2,000,000 1,987,590
Tennessee Gas Pipeline Co.
7.00%, due 3/15/27........... 2,000,000 1,910,626
-----------
TOTAL CORPORATE BONDS
(Cost: $5,174,552)........... 4,871,731
-----------
TOTAL INVESTMENTS
(Cost: $30,971,531*)......... 96.7% 38,731,124
Other assets less liabilities 3.3% 1,328,311
----- -----------
TOTAL NET ASSETS.............. 100.0% $40,059,435
====== ===========
- -----------
* Aggregate cost for Federal income tax purposes.
+ Non-income producing.
ABBREVIATIONS:
ADR-American Depositary Receipt
See Notes to Financial Statements
35
<PAGE>
VAN ECK/CHUBB FUNDS, INC.
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1999
<TABLE>
<CAPTION>
VAN ECK/CHUBB
GLOBAL
INCOME
FUND
------------
<S> <C>
ASSETS
Investments at cost........................................................... $76,002,819
===========
Investments at market value (Notes B & C)..................................... $70,699,916
Cash and foreign currencies................................................... 3,873,979
Receivable for interest and dividends......................................... 1,551,476
Unrealized appreciation on forward foreign currency contracts (Note B)........ 213,654
Due from broker--variation margin (Note F).................................... 294,133
Receivable for Fund shares sold............................................... 279
Deferred organization costs (Note B).......................................... 1,738
-----------
Total Assets............................................................... 76,635,175
-----------
LIABILITIES
Due to investment manager..................................................... 6,218
Dividends payable............................................................. 32,693
Payable for Fund shares redeemed.............................................. 72,634
Unrealized depreciation on forward foreign currency contracts (Note B)........ 228,459
Options written (premiums received $150,763) (Note C)......................... 137,500
Accounts payable.............................................................. 72,768
-----------
Total Liabilities.......................................................... 550,272
-----------
NET ASSETS...................................................................... $76,084,903
===========
NET ASSETS CONSIST OF:
Par value..................................................................... $ 85,579
Capital paid in excess of par................................................. 86,471,595
Undistributed (overdistributed) net investment income......................... (820,361)
Accumulated net realized gain (loss) from investments and options............. (4,240,798)
Net unrealized gain (loss) from investments and options....................... (5,289,640)
Net unrealized loss on futures and foreign denominated assets, liabilities and
foreign forward exchange contracts (121,472)
-----------
Net Assets................................................................. $76,084,903
===========
CLASS A SHARES
Net Assets...................................................................... $76,084,903
===========
Shares Outstanding
($.01 par value, 100,000,000 shares per Fund authorized) 8,557,912
===========
Net Asset Value Per Share....................................................... $8.89
===========
Maximum Offering Price Per Share (NAV [divided by]
(1 -maximum sales commission))............................................... $9.33
===========
</TABLE>
See Notes to Financial Statements
36
<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>
$30,009,169 $60,814,770 $28,095,248 $30,971,531
=========== =========== =========== ===========
$29,060,083 $84,140,785 $27,704,695 $38,731,124
323,048 10,946,295 390,066 1,156,044
553,486 59,696 450,266 271,040
-- -- -- --
-- -- -- --
-- 82,073 -- 2,753
-- -- -- --
----------- ----------- ----------- -----------
29,936,617 95,228,849 28,545,027 40,160,961
----------- ----------- ----------- -----------
2,747 7,969 2,792 4,022
5,004 254,432 8,674 53,634
3,650 34,848 88,788 1,916
-- -- -- --
-- -- -- --
34,308 92,031 36,174 41,954
----------- ----------- ----------- -----------
45,709 389,280 136,428 101,526
----------- ----------- ----------- -----------
$29,890,908 $94,839,569 $28,408,599 $40,059,435
=========== =========== =========== ===========
$ 28,911 $ 34,206 $ 24,080 $ 20,797
31,071,117 73,272,461 28,783,746 32,248,528
21,141 -- (8,119) 11,910
(281,175) (1,793,113) (555) 18,607
(949,086) 23,326,015 (390,553) 7,759,593
-- -- -- --
----------- ----------- ----------- -----------
$29,890,908 $94,839,569 $28,408,599 $40,059,435
=========== =========== =========== ===========
$29,890,908 $94,839,569 $28,408,599 $40,059,435
=========== =========== =========== ===========
2,891,064 3,420,590 2,408,028 2,079,710
=========== =========== =========== ===========
$10.34 $27.73 $11.80 $19.26
=========== =========== =========== ===========
$10.86 $29.42 $12.39 $20.44
=========== =========== =========== ===========
</TABLE>
See Notes to Financial Statements
37
<PAGE>
VAN ECK/CHUBB FUNDS, INC.
STATEMENT OF OPERATIONS
Year Ended December 31, 1999
<TABLE>
<CAPTION>
VAN ECK/CHUBB
GLOBAL
INCOME
FUND
------------
INVESTMENT INCOME
<S> <C>
Income:
Interest...................................................................... $ 5,083,671
Dividends..................................................................... --
Foreign taxes withheld........................................................ (2,063)
-----------
Total investment income..................................................... 5,081,608
-----------
Expenses:
Administrative fees (Note D).................................................. 390,566
Investment management fees (Note D)........................................... 164,552
Distribution fees Class A and B (Note D)...................................... 411,387
Shareholder servicing costs................................................... 87,850
Registration fees............................................................. 20,499
Shareholder reports........................................................... 31,244
Professional fees............................................................. 27,922
Directors' fees and expenses.................................................. 6,546
Custodian fees................................................................ 12,815
Organization expenses......................................................... 2,690
Miscellaneous expenses........................................................ 13,449
-----------
Total expenses.............................................................. 1,169,520
Fees waived and expenses assumed by affiliates (Note D)....................... (58,786)
-----------
Net expenses................................................................ 1,110,734
Net investment income (loss)................................................ 3,970,874
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES
Net realized gain (loss) on investments, futures and options purchased........ (2,703,607)
Net realized gain on options written.......................................... 78,439
Net realized loss from foreign currency transactions.......................... (1,149,683)
Net change in unrealized gain (loss) on investments and options............... (8,687,312)
Net change in unrealized loss on futures, foreign denominated assets,
liabilities and forward foreign exchange contracts.......................... 42,791
-----------
Net gain (loss) on investments and foreign currencies......................... (12,419,372)
-----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................. $ (8,448,498)
============
</TABLE>
See Notes to Financial Statements
38
<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> <C>
$ 1,924,122 $ 118,963 $ 1,613,192 $1,060,897
-- 640,524 -- 260,549
-- (4,287) -- (3,756)
----------- ----------- ----------- ----------
1,924,122 755,200 1,613,192 1,317,690
147,009 317,818 143,233 187,470
62,563 130,692 60,856 77,708
156,767 328,143 152,250 195,065
48,573 111,125 50,358 61,515
19,224 24,244 19,080 19,381
12,016 26,348 11,423 13,738
16,351 24,122 16,862 16,731
2,449 6,628 2,295 3,210
978 3,275 2,696 2,746
-- -- -- --
4,325 13,209 5,120 4,664
----------- ----------- ----------- ----------
470,255 985,604 464,173 582,228
(157,081) (123,186) (159,781) (70,291)
----------- ----------- ----------- ----------
313,174 862,418 304,392 511,937
----------- ----------- ----------- ----------
1,610,948 (107,218) 1,308,800 805,753
----------- ----------- ----------- ----------
(39,186) 8,592,899 10,244 5,605,360
-- -- -- --
-- -- -- --
(1,950,772) 11,647,179 (2,317,247) 92,901
-- -- -- --
----------- ----------- ----------- ----------
(1,989,958) 20,240,078 (2,307,003) 5,698,261
----------- ----------- ----------- ----------
$ (379,010) $20,132,860 $ (998,203) $6,504,014
=========== =========== =========== ==========
</TABLE>
See Notes to Financial Statements
39
<PAGE>
VAN ECK/CHUBB FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
VAN ECK/CHUBB
GLOBAL
INCOME
FUND
---------------------------
YEAR YEAR
ENDED ENDED
DECEMBER DECEMBER
31, 1999 31, 1998
----------- -----------
INCREASE (DECREASE) IN NET ASSETS:
<S> <C> <C>
From operations:
Net investment income (loss) ........................... $ 3,970,874 $ 3,312,070
Net realized gain (loss) on investments, futures
and options purchased ................................ (1,158,949) 3,387,264
Net realized gain on options written ................... 78,439 --
Net realized gain (loss) from foreign currency
transactions ......................................... (1,149,683) 362,788
Net realized gain (loss) on futures .................... (1,544,658) 925,365
Net change in unrealized gain (loss) on investments,
futures, options and translation of
assets and liabilities in foreign currency ............ (8,644,521) 3,432,433
----------- -----------
Net increase (decrease) in net assets resulting
from operations ....................................... (8,448,498) 11,419,920
DIVIDENDS AND DISTRIBUTIONS:
From net investment income:
Class A ................................................ (2,797,876) (3,596,717)
Class B ................................................ (46) (40)
From net realized gains:
Class A ................................................ -- (2,485,897)
Class B ................................................ -- (98)
From tax returns of capital:
Class A ................................................ (1,172,843) --
Class B ................................................ -- --
----------- -----------
Total dividends and distributions ...................... (3,970,765) (6,082,752)
INCREASE (DECREASE) IN NET ASSETS DERIVED FROM
SHAREHOLDER TRANSACTIONS (NOTE E) ...................... (2,709,085) 33,788,516
----------- -----------
Net increase (decrease) in net assets .................. (15,128,348) 39,125,684
Net Assets:
Beginning of year ...................................... 91,213,251 52,087,567
----------- -----------
End of year ............................................ $76,084,903 $91,213,251
=========== ===========
UNDISTRIBUTED (OVERDISTRIBUTED) NET INVESTMENT INCOME .... $ (820,361) $ (23,888)
=========== ===========
</TABLE>
See Notes to Financial Statements
40
<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
-------------------------- ---------------------------- ------------------------ ----------------------------
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
DECEMBER DECEMBER DECEMBER DECEMBER DECEMBER DECEMBER DECEMBER DECEMBER
31, 1999 31, 1998 31, 1999 31, 1998 31, 1999 31, 1998 31, 1999 31, 1998
------------- ---------- ------------- ---------- ------------- ---------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 1,610,948 $ 1,727,370 $ (107,218) $ 305,933 $ 1,308,800 $ 1,327,931 $ 805,753 $ 882,883
(39,186) 175,195 8,592,899 1,235,023 10,244 52,555 5,605,360 2,328,681
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
(1,950,772) 393,290 11,647,179 (2,800,889) (2,317,247) 446,289 2,901 (1,693,399)
----------- ----------- ------------ ------------- ----------- ----------- ----------- -----------
(379,010) 2,295,855 20,132,860 (1,259,933) (998,203) 1,826,775 6,504,014 1,518,165
(1,607,585) (1,708,754) -- (306,732) (1,306,929) (1,333,269) (786,472) (874,966)
(3,362) (1,991) -- (2,706) (761) (100) (1,948) (2,589)
-- -- (10,052,985) (1,223,543) (12,009) (49,501) (5,586,753) (2,309,377)
-- -- -- (10,799) -- (46) -- (17,997)
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
----------- ----------- ------------ ------------- ----------- ----------- ----------- -----------
(1,610,947) (1,710,745) (10,052,985) (1,543,780) (1,319,699) (1,382,916) (6,375,173) (3,204,929)
(1,003,063) 559,828 16,687,381 4,113,706 (982,247) (23,604) (2,923,979) (5,392,298)
----------- ----------- ------------ ------------- ----------- ----------- ----------- -----------
(2,993,020) 1,144,938 26,767,256 1,309,993 (3,300,149) 420,255 (2,795,138) (7,079,062)
32,883,928 31,738,990 68,072,313 66,762,320 31,708,748 31,288,493 42,854,573 49,933,635
----------- ----------- ------------ ------------- ----------- ----------- ----------- -----------
$29,890,908 32,883,928 $ 94,839,569 $ 68,072,313 $28,408,599 $31,708,748 $40,059,435 $42,854,573
=========== =========== ============ ============= =========== =========== =========== ===========
$ 21,141 $ 16,625 $ -- $ (13,343) $ (8,119) $ (12,570) $ 11,910 $ (5,423)
=========== =========== ============ ============= =========== =========== =========== ===========
</TABLE>
See Notes to Financial Statements
41
<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)
YEAR ENDED DECEMBER 31, THROUGH
-------------------------------------------------------- DECEMBER 31,
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period .......... $ 10.32 $ 9.64 $ 10.24 $ 10.21 $ 10.00
-------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income ....................... 0.458 0.421 0.471 0.551 0.116
Net Gains (Losses) on Securities
(both Realized and Unrealized) ............ (1.430) 0.994 (0.476) 0.030 0.210
-------- -------- -------- -------- --------
Total from Investment Operations ............ (0.972) 1.415 (0.005) 0.581 0.326
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS TO SHAREHOLDERS
Dividends from Net Investment Income ........ (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 ......................... (0.458) (0.735) (0.595) (0.551) (0.116)
-------- -------- -------- -------- --------
Net Asset Value, End of Period ................ $ 8.89 $ 10.32 $ 9.64 $ 10.24 $ 10.21
======== ======== ======== ======== ========
Total Return(A) ............................... (9.55%) 15.00% 0.02% 5.95% 3.27%
RATIOS TO AVERAGE NET ASSETS:
Gross Expenses(B) ........................... 1.42% 1.56% 1.56% 1.68% 2.14%(D)
Net Expenses ................................ 1.35% 1.35% 1.35% 1.23% 1.75%(D)
Net Investment Income(E) .................... 4.83% 4.24% 4.62% 5.49% 4.48%(D)
Portfolio Turnover Rate ....................... 101.78% 99.31% 185.95% 80.70% 14.16%
Net Assets, At End of Period (000) ............ $ 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 periods of less than
one year are not annualized.
(B) Had fees not been waived and expenses not been assumed.
(C) Commencement of operations.
(D) Annualized.
(E) Ratios would have been 4.76%, 4.03%, 4.41%, 5.04% and 4.09%, respectively,
had the Investment Manager not waived expenses.
See Notes to Financial Statements
42
<PAGE>
VAN ECK/CHUBB FUNDS, INC.
FINANCIAL HIGHLIGHTS (continued)
For a share outstanding throughout each year:
<TABLE>
<CAPTION>
VAN ECK/CHUBB GOVERNMENT SECURITIES FUND
---------------------------------------------------------------------------
CLASS A
---------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------------------
1999 1998 1997 1996 1995
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year ............ $ 11.02 $ 10.82 $ 10.48 $ 10.78 $ 9.75
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income ....................... 0.550 0.583 0.616 0.623 0.636
Net Gains (Losses) on Securities (both
Realized and Unrealized) .................... (0.680) 0.200 0.340 (0.300) 1.030
------- ------- ------- ------- -------
Total from Investment Operations ............ (0.130) 0.783 0.956 0.323 1.666
------- ------- ------- ------- -------
LESS DISTRIBUTIONS TO SHAREHOLDERS
Dividends from Net Investment Income ........ (0.550) (0.583) (0.616) (0.623) (0.636)
------- ------- ------- ------- -------
Total Distributions ......................... (0.550) (0.583) (0.616) (0.623) (0.636)
------- ------- ------- ------- -------
Net Asset Value, End of Year .................. $ 10.34 $ 11.02 $ 10.82 $ 10.48 $ 10.78
======= ======= ======= ======= =======
Total Return(A) ............................... (1.20%) 7.40% 9.44% 3.19% 17.50%
RATIOS TO AVERAGE NET ASSETS:
Gross Expenses(B) ........................... 1.50% 1.61% 1.55% 1.60% 1.70%
Net Expenses ................................ 1.00% 1.00% 1.00% 0.93% 1.00%
Net Investment Income(C) .................... 5.15% 5.32% 5.78% 5.94% 6.16%
Portfolio Turnover Rate ....................... 41.09% 14.10% 39.86% 140.94% 276.56%
Net Assets, At End of Year (000) .............. $29,891 $32,730 $31,739 $12,818 $13,886
</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.
(B) Had fees not been waived and expenses not been assumed.
(C) Ratios would have been 4.65%, 4.71%, 5.23%, 5.27% and 5.46%, respectively,
had the Investment Manager not waived expenses.
See Notes to Financial Statements
43
<PAGE>
VAN ECK/CHUBB FUNDS, INC.1
FINANCIAL HIGHLIGHTS (continued)
For a share outstanding throughout each year:
<TABLE>
<CAPTION>
VAN ECK/CHUBB GROWTH AND INCOME FUND
-----------------------------------------------------------------------
CLASS A
-----------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------------
1999 1998 1997 1996 1995
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year ................. $ 23.96 $ 24.56 $ 21.04 $ 18.58 $ 14.77
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) ..................... (0.030) 0.110 0.096 0.250 0.204
Net Gains (Losses) on Securities (both
Realized and Unrealized) ......................... 7.080 (0.156) 5.286 3.931 5.042
------- ------- ------- ------- -------
Total from Investment Operations ................. 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 Year ....................... $ 27.73 $ 23.96 $ 24.56 $ 21.04 $ 18.58
======= ======= ======= ======= =======
Total Return(A) .................................... 29.42% (0.18%) 25.85% 22.50% 35.52%
RATIOS TO AVERAGE NET ASSETS:
Gross Expenses(B) ................................ 1.50% 1.57% 1.49% 1.58% 1.69%
Net Expenses ..................................... 1.32% 1.25% 1.25% 1.06% 1.08%
Net Investment Income (Loss)(C) .................. (0.16%) 0.44% 0.49% 1.29% 1.20%
Portfolio Turnover Rate ............................ 133.63% 43.42% 21.02% 44.50% 37.59%
Net Assets, At End of Year (000) ................... $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.
(B) Had fees not been waived and expenses not been assumed.
(C) Ratios would have been (0.34%), 0.12%, 0.25%, 0.77% and 0.59%,
respectively, had the Investment Manager not waived expenses.
See Notes to Financial Statements
44
<PAGE>
VAN ECK/CHUBB FUNDS, INC.
FINANCIAL HIGHLIGHTS (continued)
For a share outstanding throughout each year:
<TABLE>
<CAPTION>
VAN ECK/CHUBB TAX-EXEMPT FUND
-------------------------------------------------------
CLASS A
-------------------------------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------------------------------
1999 1998 1997 1996 1995
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year ..................................... $ 12.74 $ 12.56 $ 12.15 $ 12.33 $ 11.22
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income ................................................ 0.533 0.537 0.581 0.611 0.621
Net Gains (Losses) on Securities (both Realized and Unrealized) ...... (0.935) 0.202 0.450 (0.137) 1.132
------- ------- ------- ------- -------
Total from Investment Operations ..................................... (0.402) 0.739 1.031 0.474 1.753
------- ------- ------- ------- -------
LESS DISTRIBUTIONS TO SHAREHOLDERS
Dividends from Net Investment Income ................................. (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 .................................................. (0.538) (0.559) (0.621) (0.654) (0.643)
------- ------- ------- ------- -------
Net Asset Value, End of Year ........................................... $ 11.80 $ 12.74 $ 12.56 $ 12.15 $ 12.33
======= ======= ======= ======= =======
Total Return(A) ........................................................ (3.25%) 6.01% 8.73% 4.00% 15.88%
RATIOS TO AVERAGE NET ASSETS:
Gross Expenses(B) .................................................... 1.52% 1.63% 1.56% 1.65% 1.79%
Net Expenses ......................................................... 1.00% 1.00% 1.00% 0.98% 1.00%
Net Investment Income(C) ............................................. 4.30% 4.23% 4.74% 5.00% 5.20%
Portfolio Turnover Rate ................................................ 0.74% 2.50% 12.78% 16.29% 7.39%
Net Assets, At End of Year (000) ....................................... $28,409 $31,680 $31,288 $15,061 $15,259
</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.
(B) Had fees not been waived and expenses not been assumed.
(C) Ratios would have been 3.78%, 3.60%, 4.18%, 4.33% and 4.41%,
respectively, had the Investment Manager not waived expenses.
See Notes to Financial Statements
45
<PAGE>
VAN ECK/CHUBB FUNDS, INC.
FINANCIAL HIGHLIGHTS (continued)
For a share outstanding throughout each year:
<TABLE>
<CAPTION>
VAN ECK/CHUBB TOTAL RETURN FUND
-----------------------------------------------------------
CLASS A
-----------------------------------------------------------
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------
1999 1998 1997 1996 1995
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year ................................ $ 19.27 $ 20.22 $ 17.41 $ 15.96 $ 13.23
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income ........................................... 0.417 0.393 0.365 0.370 0.373
Net Gains on Securities (both Realized and Unrealized) .......... 3.113 0.158 3.778 2.321
3.586
------- ------- ------- ------- -------
Total from Investment Operations ................................ 3.530 0.551 4.143 2.691 3.959
------- ------- ------- ------- -------
LESS DISTRIBUTIONS TO SHAREHOLDERS
Dividends from Net Investment Income ............................ (0.410) (0.390) (0.365) (0.370) (0.373)
Dividends in Excess of
Net Investment Income ........................................... -- -- (0.004) -- --
Distributions from Capital Gains ................................ (3.130) (1.111) (0.964) (0.871) (0.692)
Tax Return of Capital ........................................... -- -- -- -- (0.164)
------- ------- ------- ------- -------
Total Distributions ............................................. (3.540) (1.501) (1.333) (1.241) (1.229)
------- ------- ------- ------- -------
Net Asset Value, End of Year ...................................... $ 19.26 $ 19.27 $ 20.22 $ 17.41 $ 15.96
======= ======= ======= ======= =======
Total Return(A) ................................................... 18.57% 2.73% 24.09% 17.04% 30.13%
RATIOS TO AVERAGE NET ASSETS:
Gross Expenses(B) ............................................... 1.49% 1.61% 1.51% 1.59% 1.70%
Net Expenses .................................................... 1.32% 1.25% 1.25% 1.08% 1.08%
Net Investment Income(C) ........................................ 2.07% 1.87% 1.92% 2.26% 2.45%
Portfolio Turnover Rate ........................................... 59.16% 15.78% 15.80% 27.01% 57.62%
Net Assets, At End of Year (000) .................................. $40,059 $42,524 $49,934 $31,064 $22,171
</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.
(B) Had fees not been waived and expenses not been assumed.
(C) Ratios would have been 1.90%, 1.51%, 1.66%, 1.75% and 1.83%,
respectively, had the Investment Manager not waived expenses.
See Notes to Financial Statements
46
<PAGE>
VAN ECK/CHUBB FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1999
- --------------------------------------------------------------------------
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 December 31, 1999, Chubb Life Insurance Company of America ("Chubb Life") and
its affiliates and Van Eck Associates Corporation owned the following shares of
each Fund:
SHARES % OF
OWNED SHARES
--------- -----
Van Eck/Chubb Global Income Fund
Class A shares ................................ 5,985,072 69.94%
Van Eck/Chubb Government Securities Fund
Class A shares ................................ 2,353,540 81.41%
Van Eck/Chubb Growth and Income Fund
Class A shares ................................ 1,836,326 53.68%
Van Eck/Chubb Tax-Exempt Fund
Class A Shares ................................ 1,761,628 73.16%
Van Eck/Chubb Total Return Fund
Class A Shares ................................ 1,000,335 48.10%
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 year. Purchases, sales, income and
expenses are translated at the exchange rate prevailing on the respective dates
of such transactions.
Since the net assets of the Funds are presented at the exchange rates and market
value prevailing at the end of the period, the Funds generally do not isolate
the portion of the results of operations arising as a result of changes in
foreign exchange rates on securities from the fluctuations arising from changes
in the market prices of securities held during the period. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
However, the 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 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.
47
<PAGE>
VAN ECK/CHUBB FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1999 (continued)
- --------------------------------------------------------------------------
Realized gains or losses arising from such transactions are included in net
realized gains or losses from foreign currency transactions. At December 31,
1999, 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 4,468,705 expiring 1/27/00 $ 4,676,053 $ 4,511,553 $(164,500)
GBP 1,404,310 expiring 1/27/00 2,336,000 2,272,041 (63,959)
JPY 1,071,157,000 expiring
2/14-2/29/00 10,500,000 10,564,726 64,726
FOREIGN CURRENCY SELL CONTRACT:
EUR 23,600,439 expiring 1/27/00 23,975,660 23,826,732 148,928
---------
$ (14,805)
=========
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.
For the year ended December 31, 1999, the reclassifications arising from
permanent "book/tax" differences resulting in increases (decreases) to the
components of net assets were as follows:
INCREASE (DECREASE) INCREASE (DECREASE)
UNDISTRIBUTED/ ACCUMULATED CAPITAL
(OVERDISTRIBUTED) NET REALIZED PAID IN
NET INVESTMENT GAIN/(LOSS) EXCESS
INCOME FROM INVESTMENTS OF PAR
------------------ ------------------- -----------
Van Eck/Chubb Global
Income Fund ............ $(796,582) $ 1,800,867 $(1,004,285)
Van Eck/Chubb
Government Securities
Fund ................... 4,515 (4,515) --
Van Eck/Chubb Growth
& Income Fund .......... 120,561 (333,027) 212,466
Van Eck/Chubb Tax-
Exempt Fund ............ 3,341 1,238 (4,579)
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 December 31, 1999, 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 ....................... $ 256,315 $5,545,955 $ (5,289,640)
Van Eck/Chubb Government
Securities Fund ................... 151 949,237 (949,086)
Van Eck/Chubb Growth and
Income Fund ....................... 25,943,283 2,617,268 23,326,015
Van Eck/Chubb Tax-Exempt Fund ....... 411,000 801,553 (390,553)
Van Eck/Chubb Total Return Fund ..... 8,492,887 733,294 7,759,593
48
<PAGE>
VAN ECK/CHUBB FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1999 (continued)
- --------------------------------------------------------------------------------
Purchases and sales of investment securities for the year ended December 31,
1999, other than short-term obligations, were as follows:
PROCEEDS
COST OF FROM
INVESTMENT INVESTMENT
SECURITIES SECURITIES
PURCHASED SOLD
----------- -----------
Van Eck/Chubb Global Income Fund ............. $69,953,307 $78,064,370
Van Eck/Chubb Government
Securities Fund ............................ 13,692,001 12,493,962
Van Eck/Chubb Growth and Income Fund ......... 85,601,752 83,226,420
Van Eck/Chubb Tax-Exempt Fund ................ 220,000 1,205,063
Van Eck/Chubb Total Return Fund .............. 22,464,695 30,566,582
Transactions in put/call options written for the Van Eck/Chubb Global Income
Fund for the year ended December 31, 1999 were as follows:
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
------- -------
Options outstanding at beginning of year .......... -- $ --
Options written ................................... 265,000 229,202
Options expired ................................... 80,000 78,439
------- --------
Options outstanding at end of year ................ 185,000 $150,763
======= ========
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 year ended December 31, 1999, received
$111,365 in sales loads of which $21,090 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%
In 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: $20,324 for Van Eck/Chubb Global Income Fund, $6,242 for Van
Eck/Chubb Government Securities Fund, $23,761 for Van Eck/Chubb Growth & Income
Fund, $6,307 for Van Eck/Chubb Tax-Exempt Fund and $12,627 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 year ended December 31, 1999, Van Eck/Chubb Global Income Fund, Van
Eck/Chubb Government Securities Fund and Van Eck/Chubb Tax-Exempt Fund such
limitation was 1.35%. For the periods January 1, 1999 to April 30, 1999 and May
1, 1999 to December 31, 1999, such limitations were 1.25% and 1.35%,
respectively, for the Van Eck/Chubb Growth and Income Fund and Van Eck/Chubb
Total Return Fund.
NOTE E--SHAREHOLDERS' TRANSACTIONS
Following is a summary of transactions with shareholders for each Fund.
VAN ECK/CHUBB GLOBAL INCOME FUND
----------------------------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, 1999 DECEMBER 31, 1998
------------------------ ------------------------
CLASS A SHARES DOLLARS SHARES DOLLARS
--------- ----------- --------- -----------
Shares sold .............. 417,848 $ 3,884,393 108,585 $ 786,154
Share issued in
connection with an
acquisition (Note H) ... -- -- 3,707,367 36,851,229
Shares issued as
reinvestment of
dividends and
distributions .......... 377,885 3,542,354 581,772 5,902,596
Shares redeemed .......... (1,079,584) (10,132,489) (960,209) (9,755,118)
--------- ----------- --------- -----------
Net increase
(decrease) ............. (283,851) $(2,705,742) 3,437,515 $33,784,861
========= =========== ========= ===========
PERIOD FROM PERIOD FROM
JANUARY 1, 1999 APRIL 29, 1998+
THROUGH THROUGH
JUNE 15, 1999 DECEMBER 31, 1998
------ ------- ------ -------
CLASS B SHARES DOLLARS SHARES DOLLARS
------ ------- ------ -------
Shares sold ...................... 150 $ 1,448 902 $ 9,151
Shares issued as
reinvestment of dividends
and distributions .............. 5 45 13 130
Shares redeemed .................. (503) (4,836) (567) (5,626)
Net increase (decrease) .......... (348) $(3,343) 348 $ 3,655
VAN ECK/CHUBB GOVERNMENT SECURITIES FUND
------------------------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, 1999 DECEMBER 31, 1998
---------------------- ----------------------
CLASS A SHARES DOLLARS SHARES DOLLARS
-------- ---------- -------- ----------
Shares sold ................ 84,345 $ 897,779 226,772 $2,494,818
Shares issued as
reinvestment of dividends 144,433 1,534,400 147,737 1,619,400
Shares redeemed ............ (308,427) (3,287,213) (337,604) (3,708,941)
-------- ---------- -------- ----------
Net increase (decrease) .... (79,649) $ (855,034) 36,905 $ 405,277
======== ========== ======== ==========
49
<PAGE>
VAN ECK/CHUBB FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1999 (continued)
- --------------------------------------------------------------------------------
PERIOD FROM PERIOD FROM
JANUARY 1, 1999 APRIL 29, 1998+
THROUGH THROUGH
JUNE 15, 1999 DECEMBER 31, 1998
CLASS B SHARES DOLLARS SHARES DOLLARS
------- --------- ------ --------
Shares sold ........................ 2,365 $ 26,118 13,841 $152,798
Shares issued as
reinvestment of dividends ........ 278 3,006 158 1,753
Shares redeemed .................... (16,642) (177,153) -- --
------- --------- ------ --------
Net increase (decrease) ............ (13,999) $(148,029) 13,999 $154,551
======= ========= ====== ========
VAN ECK/CHUBB GROWTH AND INCOME FUND
----------------------------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, 1999 DECEMBER 31, 1998
------------------------ ------------------------
CLASS A SHARES DOLLARS SHARES DOLLARS
-------- ----------- -------- -----------
Shares sold .......... 85,153 $ 1,176,880 811,345 $ 21,768,228
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 61,002 1,459,118
Shares redeemed ...... (835,014) (21,209,620) (774,435) (19,734,223)
-------- ----------- -------- -----------
Net increase ......... 604,178 $ 17,315,021 97,912 $ 3,493,123
======== =========== ======== ===========
PERIOD FROM PERIOD FROM
JANUARY 1, 1999 APRIL 29, 1998+
THROUGH THROUGH
JUNE 16, 1999 DECEMBER 31, 1998
-------------------- -------------------
CLASS B SHARES DOLLARS SHARES DOLLARS
------- --------- ------ ---------
Shares sold .................... 5,876 $ 138,798 25,220 $ 627,467
Shares issued as
reinvestment of dividends
and distributions ............ -- -- 486 11,619
Shares redeemed ................ (30,758) (766,438) (824) (18,503)
------- --------- ------ ---------
Net increase (decrease) ........ (24,882) $(627,640) 24,882 $ 620,583
======= ========= ====== =========
VAN ECK/CHUBB TAX EXEMPT FUND
-------------------------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, 1999 DECEMBER 31, 1998
----------------------- ----------------------
CLASS A SHARES DOLLARS SHARES DOLLARS
-------- ---------- -------- ----------
Shares sold ............... 190,591 $ 2,367,315 318,054 $4,025,056
Shares issued as
reinvestment of dividends
and distributions ....... 98,553 1,212,867 100,164 1,267,929
Shares redeemed ........... (367,466) (4,534,290) (422,157) (5,345,855)
-------- ---------- -------- ----------
Net decrease .............. (78,322) $ (954,108) (3,939) $ (52,870)
======== ========== ======== ==========
PERIOD FROM PERIOD FROM
JANUARY 1, 1999 APRIL 29, 1998+
THROUGH THROUGH
JUNE 16, 1999 DECEMBER 31, 1998
------------------- -----------------
CLASS B SHARES DOLLARS SHARES DOLLARS
------ -------- ----- -------
Shares sold ........................ 2,467 $ 31,568 2,280 $29,122
Shares issued as
reinvestment of dividends
and distributions ................ 28 355 11 144
Shares redeemed .................... (4,786) (60,062) -- --
------ -------- ----- -------
Net increase (decrease) ............ (2,291) $(28,139) 2,291 $29,266
====== ======== ===== =======
VAN ECK/CHUBB TOTAL RETURN FUND
-------------------------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, 1999 DECEMBER 31, 1998
----------------------- -----------------------
CLASS A SHARES DOLLARS SHARES DOLLARS
-------- ----------- -------- -----------
Shares sold ............... 48,982 $ 959,854 144,665 $ 4,826,003
Shares issued as
reinvestment of dividends
and distributions ....... 326,596 6,302,681 158,797 3,099,318
Shares redeemed ........... (502,199) (9,850,433) (567,173) (13,653,344)
-------- ----------- -------- -----------
Net decrease .............. (126,621) $(2,587,898) (263,711) $(5,728,023)
======== =========== ======== ===========
PERIOD FROM PERIOD FROM
JANUARY 1, 1999 APRIL 29, 1998+
THROUGH THROUGH
JUNE 16, 1999 DECEMBER 31, 1998
-------------------- -------------------
CLASS B SHARES DOLLARS SHARES DOLLARS
------- --------- ------ ---------
Shares sold .................... 6,035 $ 112,964 16,211 $ 317,258
Shares issued as
reinvestment of dividends
and distributions ............ 91 1,735 1,029 19,796
Shares redeemed ................ (23,300) (450,780) (66) (1,329)
------- --------- ------ ---------
Net increase (decrease) ........ (17,174) $(336,081) 17,174 $ 335,725
======= ========= ====== =========
- ----------
+ Commencement of operations.
NOTE F--FUTURES CONTRACTS
As of December 31, 1999, the Van Eck/Chubb Global Income Fund had open futures
contracts. These contracts were acquired in lieu of a direct purchase of the
securities. Using futures contracts involves various market risks. The maximum
amount at risk from the purchase of a futures contract is the contract value.
Risks may also be caused by imperfect correlations between the movements in the
price of the futures contract and the price of the underlying security.
Upon entering into a futures contract, the Fund is required to pledge to a
broker cash in an amount equal to a certain percentage of the contract amount.
This amount is known as the "initial margin." Subsequent payments, known as
variation margin, are made or received by the Fund each day, depending on the
daily fluctuations in the value of the underlying futures contracts. Such
variation margin is recorded for financial statement purposes on a daily basis
as an unrealized gain or loss until the futures contract is closed, at which
time the net gain or loss is reclassified to realized. At December 31, 1999 open
futures contracts for the Van Eck/Chubb Global Income Fund were as follows:
UNREALIZED
EXPIRATION NUMBER OF CONTRACT CURRENT APPRECIATION
DATE CONTRACTS VALUE VALUE (DEPRECIATION)
------- --------- ---------- ---------- -------------
LONG CONTRACT:
5 Year Euro
Bundesobligation .... 3/08/00 75 $7,751,075 $7,807,118 $(56,043)
SHORT CONTRACT:
10 Year Gilt Bond ... 3/29/00 8 1,448,766 1,442,180 6,586
--------
$(49,457)
========
50
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VAN ECK/CHUBB FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1999
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NOTE G--DIRECTOR DEFERRED COMPENSATION PLAN
The Van Eck/Chubb Funds, Inc. established a Deferred Compensation Plan (the
Plan) for Directors. The Directors can elect to defer receipt of their director
meeting fees and retainers until retirement, disability or termination from the
board. The Funds' contributions to the Plan are limited to the amount of fees
earned by the participating Directors. The fees otherwise payable to the
participating Directors are invested in shares of the Van Eck/Chubb Funds as
directed by the Directors. The Funds have elected to show this deferred
liability net of the corresponding asset for financial statement purposes. The
Plan has been approved by the Internal Revenue Service.
As of December 31, 1999, the total liability portion of the Plan is as follows:
Van Eck/Chubb Global Income Fund--$11,957, Van Eck/Chubb Government Securities
Fund--$5,523, Van Eck/Chubb Growth and Income Fund--$11,615, Van Eck/Chubb
Tax-Exempt Fund-$5,383 and Van Eck/Chubb Total Return Fund--$7,546.
NOTE H--ACQUISITION
As of the close of business on April 24, 1998, Van Eck/Chubb Global Income Fund
acquired all the net assets of Van Eck Global Income Fund pursuant to a plan of
reorganization approved by Van Eck/Chubb Global Income Fund shareholders on
April 16, 1998. The acquisition was accomplished by a tax-free exchange of
4,292,666 shares of Van Eck Global Income Fund (valued at $36,851,229) for
3,707,367 shares of Van Eck/Chubb Global Income Fund outstanding on April 24,
1998. Van Eck Global Income Fund's net assets at that date, $36,851,229,
including $405,616 of unrealized appreciation were combined with those of the
Van Eck/Chubb Global Income Fund. The aggregate net assets of Van Eck/Chubb
Global Income Fund and Van Eck Global Income Fund before the acquisition were
$54,462,808 and $36,851,229, respectively. In connection with the merger, the
Van Eck/Chubb Global Income Fund acquired accumulated net realized losses of
$3,907,263, of which $1,362,991 was utilized during the current year. The
balance is available for carryforward to future years (see Note B). In
accordance with income tax rules the utilization of such carryforward is limited
to $1,989,966 annually.
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 year ended December 31, 1999,
the Funds did not borrow under the Facility.
51
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REPORT OF INDEPENDENT AUDITORS
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TO THE BOARD OF DIRECTORS AND SHAREHOLDERS
VAN ECK/CHUBB FUNDS, INC.
We have audited the accompanying statement of assets and liabilities, including
the schedules of portfolio investments, of the Van Eck/Chubb Funds, Inc.
(comprising, respectively, Global Income Fund, Government Securities Fund,
Growth and Income Fund, Tax-Exempt Fund and Total Return Fund) (the "Funds"), as
of December 31, 1999, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the periods
indicated therein. These financial statements and the financial highlights are
the responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and the financial highlights based on our
audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of December 31, 1999, by correspondence with
the custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the Funds constituting Van Eck/Chubb Funds, Inc. at December 31, 1999, the
results of their operations for the year then ended, the changes in their net
assets for each of the two years in the period then ended, and the financial
highlights for each of the indicated periods, in conformity with accounting
principles generally accepted in the United States.
/s/ Ernest & Young LLP
New York, New York
February 10, 2000
52
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[VAN ECK GLOBAL LOGO]
Investment Adviser: Chubb Asset Manager, Inc.
Distributor: Van Eck Securities Corporation
99 Park Avenue, New York, NY 10016
www.vaneck.com
Account Asssistance: (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.
