-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, A2XYNGJk7l3IbSfBsSipgJo1Ukmc8PAixcyWsrs3jC6dHJNI9rCRNSTURSnC5T3y yB2fS1g0cLlmWFIGBqPyig== 0000930413-01-000540.txt : 20010308 0000930413-01-000540.hdr.sgml : 20010308 ACCESSION NUMBER: 0000930413-01-000540 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010306 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VAN ECK FUNDS CENTRAL INDEX KEY: 0000768847 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-04297 FILM NUMBER: 1562015 BUSINESS ADDRESS: STREET 1: 99 PARK AVE STREET 2: 8TH FL CITY: NEW YORK STATE: NY ZIP: 10016 BUSINESS PHONE: 2126875200 MAIL ADDRESS: STREET 1: 99 PARK AVE STREET 2: 8TH FL CITY: NEW YORK STATE: NY ZIP: 10016 N-30D 1 0001.txt ANNUAL REPORT [GRAPHIC OMITTED] VAN ECK GLOBAL ANNUAL REPORT DECEMBER 31, 2000 VAN ECK FUNDS ASIA DYNASTY FUND EMERGING MARKETS VISION FUND GLOBAL HARD ASSETS FUND GLOBAL LEADERS FUND INTERNATIONAL INVESTORS GOLD FUND NATURAL RESOURCES FUND U.S. GOVERNMENT MONEY FUND GLOBAL INVESTMENTS SINCE 1955 ASIA DYNASTY FUND - -------------------------------------------------------------------------------- Dear Shareholder: Expectations were high after the rapid recovery in both Asian economies and stocks in 1999, making the year 2000 a deeply disappointing one for the Asian stock markets. The irony is that for most of the year news on Asia was positive, with corporate earnings coming in ahead of expectations at the beginning of the year. The economies remained fairly robust throughout the year, but the stock markets struggled as liquidity declined. No major Asian market finished in positive territory in 2000, with some (Korea, Indonesia, and Thailand) more than halving in dollar terms. In this environment, the Van Eck Asia Dynasty Fund declined 47.60%, compared with a loss of 36.80% for the Morgan Stanley Capital International Far East Free Ex-Japan Index.* MARKET REVIEW Despite healthy fundamentals, such as solid domestic demand, low interest rates, corporate restructuring and attractive stock valuations, the Asian markets performed poorly in 2000 for a number of reasons. The flow of foreign capital was anemic and domestic investor sentiment was poor, primarily due to poor political news in a number of countries. There were also a fair amount of new issues in the equity markets, which dispersed the money available for investment. Banks, though flush with deposits, were not recycling the money in the form of loans. The liquidity generated by current account surpluses was mopped up by the central banks in order to ensure that there was no acceleration in inflation. Reform momentum slowed in places like Korea and Thailand. In sum, the news was broadly positive but there was little money available to buy that news. The Fund's bias toward growth and technology stocks hurt performance in 2000 as investors realigned their portfolios in favor of cheaper value stocks. We maintain this bias because, although corporate earnings are entering a cyclical downturn, longer-term prospects remain bright. Stock valuations are extremely attractive and we have realigned the position in favor of the most established companies offering the best stock value. In terms of country emphasis, your Fund had an overweight position in Hong Kong/China, which would benefit from an economic slowdown in the U.S. and resulting interest rate cuts. The Fund is also overweight in South Korea, principally because of very cheap valuations there. The Fund is underweight Malaysia because of the country's relatively poor macroeconomic conditions, corporate governance concerns and a lack of value in the large stocks. The best performing Asian markets for the year were HONG KONG/CHINA.+ The largely illiquid "B" share market in Shanghai actually gained 136%. The Hong Kong market declined 11% in U.S. dollar terms, a good performance in relative terms. Two fundamental reasons explain this. First, the Chinese economy is reasonably robust at the moment. Second, interest rate cuts in the States will likely be replicated in Hong Kong due to the peg to the U.S. dollar. Despite changes to the composition of the stock market over the last few years, there is still a high proportion of interest rate-sensitive stocks. We substantially increased the Fund's weighting to Hong Kong during the course of the year when the outlook for U.S. interest rates turned. These two markets made up 49.1% of total net assets at year end. The worst performing Asian market was SOUTH KOREA, which declined 56% during the year. South Korea is still struggling with the legacy of high corporate indebtedness mixed with inefficient corporate structures. The days of the all-encompassing chaebols (conglomerates) fueled by cheap money and expanding into a variety of areas are clearly over. We feel that the legacy of poor capital allocation will continue to haunt South Korea for some time to come. That being said, the restructuring situation has been moving forward and should continue to improve shareholder return. Domestic investors have taken a great deal of money out of the market, and the banks are flush with deposits. This may reverse as South Korean equity valuations are very compelling. At year end, the Fund had a 17.2% weighting to South Korea. The remarkable turnaround in sentiment toward technology companies in 2000 hurt TAIWAN badly and the market fell 47%. Both the country's economy and stock market are heavily geared to 1 ASIA DYNASTY FUND - -------------------------------------------------------------------------------- the technology cycle. Throughout the year it has become apparent that demand for core technology products from Europe and the United States has weakened, even as more supply materializes. This has had a major impact on the product pricing and margins of Taiwanese technology companies. Although they are still key beneficiaries of the structural trend toward outsourcing, they are very much the victims of a sharp cyclical downturn. We added to the Fund's Taiwan weighting last summer as valuations became more attractive, ending the year with an 11.3% position. SINGAPORE is normally viewed as something of a safe haven in the Asian region, however, this did not prevent the Index from declining 28%. This was driven primarily by external factors rather than specific negatives. Interest rates were low, domestic liquidity has been good, and earnings have been fairly stable. One area where Singapore is at risk is in the slowdown of electronic exports, particularly to the U.S. We significantly cut our exposure to this country throughout the year from 16.0% at the beginning of the year to 7.8% by December 31. Singapore's neighbor, MALAYSIA, actually performed relatively well (-16%), helped by the insularity that has been engendered by capital controls, which have remained in place since the height of the Asian crisis. Looking at the capital account, however, it does appear that there is an element of capital flight, which may necessitate higher interest rates in 2001, even as other Asian countries are cutting their rates. Sadly, there were also a number of instances of poor corporate governance, in which minority shareholders fared poorly during the year. Due to our pessimistic outlook on this market, we liquidated almost the entire Malaysian position in 2000, with only 0.3% in this market at year end. THAILAND suffered throughout the year, losing 52%. The banking sector has seen an increase in the number of supposedly restructured loans falling back into the non-performing category. It has proven to still be difficult to attach the assets of recalcitrant debtors. The prospect of the general election, which has just taken place, added to the uncertainty. Liquidity has been sapped due to the continuing outflow of money to repay foreign debtors. Favoring other markets, we allocated only a very small position to Thailand in 2000, ending the year with 0.6% of assets in this market. The INDONESIAN market fell 55% during the year. The economy appears to be remarkably robust, however, particularly in terms of domestic demand, and the country is a beneficiary of high oil prices. Indonesian stocks, on the other hand, have slipped off the radar screen of many investors due to the very small weighting that they have in a regional context. Additionally, President Wahid's quixotic approach to the government of the country has created more uncertainty. Nevertheless, there is a huge amount of value apparent in the market, particularly in the consumer and telecommunications sectors. Cautious regarding investor interest, we ended the year with only a 1.2% Fund weighting to Indonesia. Like Indonesia, the PHILIPPINES has become too small a market for most investors to spend a lot of time on and we liquidated the small Philippine position we held at the beginning of the year. Daily stock market volume has been running at less than $10 million a day. The economy has suffered from a general lack of confidence, primarily engendered by disillusion about President Estrada. The impeachment process is currently underway, but the result is still in the balance. Philippine stocks declined 44% for the year. In INDIA, the market was yet again frustrated by the slow progress that the government has made in deregulation, cutting the fiscal deficit, and privatizing inefficient state-run companies. On the positive side, the software sector has defied expectations of a slowdown in the rate of its growth, capturing market share while increasing billing rates and the scope of the work that it does. This illustrates the robustness of the sector's business model. Although the market declined 26% in 2000, 9.5% of Fund assets are in India. Our holdings are concentrated in the software sector, which is exhibiting impressively robust momentum, even as other technology spending in the developed markets slows down. 2 ASIA DYNASTY FUND - -------------------------------------------------------------------------------- THE OUTLOOK It is always tempting to be gloomy after such a difficult year. However, we have learned that often, when people start to question the asset class, it may presage a period of strong outperformance. We do not foresee the sharp upward movement of stocks that took place in the latter half of 1998 and in 1999. However, we see definite reasons for optimism. Aggressive interest rate cuts in the U.S., which should spread to other major markets, should benefit Asian stocks, most notably Hong Kong's. Oil prices have declined and, for the most part, so have inflationary expectations. This allows Asian interest rates to fall even further, sparking domestic demand and support for asset prices. Currently, we are significantly overweight Hong Kong/China and Korea, while being underweight Malaysia and Taiwan. We do expect downward revisions in earnings, particularly in the technology sector. We also expect revisions in economic growth expectations to be downwards. However, the reflationary impact of the move to cut rates, as well as the possibility of a weaker U.S. dollar, should outweigh the negatives. Even with the expected downgrades, there is tremendous support from valuations--relative to developed markets, compared to their own history, and relative to domestic interest rates. Finally, local investors have substantially reduced their equity weightings and this is likely to reverse. In general, we believe that although the news flow will be negative in the short term, there will be a much healthier flow of funds to buy these markets. We are positive in our outlook for 2001, and expect that Asian stocks will be a rewarding place to invest in the coming year. We would like to thank you for your participation in the Van Eck Asia Dynasty Fund and we look forward to working with you in the future. [PHOTO OMITTED] [PHOTO OMITTED] /s/ David A. Semple /s/ David M. Hulme - ------------------- ------------------ DAVID A. SEMPLE DAVID M. HULME CO-PORTFOLIO MANAGER CO-PORTFOLIO MANAGER January 24, 2001 - ------------- *The Morgan Stanley Capital International (MSCI) Far East Free ex-Japan Index is an unmanaged index and includes the reinvestment of all dividends, but does not reflect the payment of transaction costs, advisory fees or expenses that are associated with an investment in the Fund. The Index's performance is not illustrative of the Fund's performance. Indices are not securities in which investments can be made. The MSCI Far East Free ex-Japan Index is a market capitalization-weighted index that captures the largest 60% of the publicly traded securities in each industry for approximately ten Asian markets (excluding Japan); "free" indicates that the Index includes only shares available for purchase by foreign (e.g., U.S.) investors. +All individual country returns are in U.S. dollar terms and are based on country-specific stock markets; for example, the Hong Kong market is measured by the Hang Seng Index. 3 ASIA DYNASTY FUND - -------------------------------------------------------------------------------- - ----------------------------------------------------------------------- PERFORMANCE RECORD AS OF 12/31/00 - ----------------------------------------------------------------------- AVERAGE ANNUAL AFTER MAXIMUM BEFORE SALES TOTAL RETURN SALES CHARGE* CHARGE - ----------------------------------------------------------------------- A shares--Life (since 3/22/93) 0.64% 1.42% - ----------------------------------------------------------------------- 5 year (4.89)% (3.75)% - ----------------------------------------------------------------------- 1 year (50.61)% (47.60)% - ----------------------------------------------------------------------- B shares--Life (since 9/1/93) (1.58)% (1.58)% - ----------------------------------------------------------------------- 5 year (4.78)% (4.53)% - ----------------------------------------------------------------------- 1 year (50.34)% (47.99)% - ----------------------------------------------------------------------- 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 the original cost. At certain times in the past, the Adviser waived certain or all expenses on the Fund. Had the Fund incurred all expenses, investment returns would have been reduced. * A shares: maximum sales charge is 5.75% B shares: maximum contingent deferred sales charge is 5.00% GEOGRAPHICAL HOLDINGS AS OF DECEMBER 31, 2000 [Data below represents pie chart in printed piece.] China 5.9% Cash/Equivalents 3.0% Hong Kong 43.2% India 9.5% Indonesia 1.2% Malaysia 0.3% Singapore 7.8% South Korea 17.2% Taiwan 11.3% Thailand 0.6% 4 ASIA DYNASTY FUND TOP TEN EQUITY HOLDINGS AS OF DECEMBER 31, 2000* - -------------------------------------------------------------------------------- DAH SING FINANCIAL GROUP (HONG KONG, 4.8%) Dah Sing Financial, through its subsidiaries, offers general banking services. The company also invests in properties and provides insurance broking services. HOUSING & COMMERCIAL BANK, KOREA (SOUTH KOREA, 4.6%) Housing and Commercial Bank, formerly known as Korea Housing Bank, specializes in mortgage financing but also undertakes a full range of commercial banking activities. Its restructuring and cost-cutting efforts have started to bear fruit, and the bank has made vast improvements in "financial transparency." ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LTD. (HONG KONG, 4.2%) Asia Satellite, through its subsidiaries, owns and operates satellites for commercial services primarily to the broadcasting and telecommunications industries. The company's satellite capacity is used for video, high speed Internet, broadband multimedia, and direct to home (DTH) services. LI & FUNG LTD. (HONG KONG, 3.9%) Li & Fung, through its subsidiaries, operates an export trading business. The company exports consumer products such as garments, fashion accessories, toys, games, sporting goods, home furnishings, handicrafts, shoes, travel goods and tableware. KOOKMIN CREDIT CARD CO. LTD. (SOUTH KOREA, 3.9%) Kookmin offers credit card services. The company also provides various financial services such as installment financing, factoring, cyber loans, e-business cards, and B2B e-commerce business processing. BRILLIANCE CHINA AUTOMOTIVE HOLDINGS LTD. (HONG KONG, 3.7%) Brilliance China, through its subsidiaries, manufactures and distributes minibuses in the People's Republic of China. The company also holds partial interest in Asian component suppliers who manufacture automobile window molding and stripping, as well as gasoline engines. AMOY PROPERTIES LTD. (HONG KONG, 3.4%) Amoy Properties, through its subsidiaries, invests in, develops, and manages real estate. The company also manages car parks and provides financial services. SAMSUNG ELECTRONICS (SOUTH KOREA, 3.2%) Samsung Electronics manufactures and exports a wide range of consumer and industrial electronic equipment such as memory chips, semiconductors, personal computers, telecommunication equipment and televisions. ASM PACIFIC TECHNOLOGY (HONG KONG, 3.1%) ASM Pacific, through its subsidiaries, designs, manufactures and markets machines, tools and materials used in the semiconductor industry. CHEUNG KONG (HOLDINGS) LTD. (HONG KONG, 2.9%) Cheung Kong, through its subsidiaries, develops and invests in real estate. The company also provides real estate agency and management services and invests in securities. - ------------- *Portfolio is subject to change. 5 ASIA DYNASTY FUND PERFORMANCE COMPARISON - -------------------------------------------------------------------------------- These graphs compare a hypothetical $10,000 investment in the Van Eck Asia Dynasty Fund (Classes A and B) made at inception with a similar investment in the Morgan Stanley Capital International Far East Free ex-Japan Index. [Data below represents line chart in printed piece.] VAN ECK ASIA DYNASTY FUND (CLASS A) vs. MSCI Far East Free ex-Japan Index Van Eck Asia Dynasty Fund-A MSCI Far East (with sales Free ex-Japan charge)(2) Index Mar-22-93 9421 10000 10386 11226 Sep-93 11454 12718 15183 18596 Mar-94 12391 14554 12431 15183 Sep-94 13712 17058 12341 15344 Mar-95 11670 15156 12626 16588 Sep-95 12555 16327 12728 16701 Mar-96 13580 18316 13323 18269 Sep-96 13149 18009 13559 18561 Mar-97 13015 17868 13631 18785 Sep-97 11896 15286 9207 10337 Mar-98 9337 11355 7100 7671 Sep-98 6899 6985 9184 9839 Mar-99 9996 10400 15565 14347 Sep-99 13599 12900 20063 15950 Mar-00 19513 15488 16215 13694 Sep-00 13467 11531 Dec-00 10512 10081 [Data below represents line chart in printed piece.] VAN ECK ASIA DYNASTY FUND (CLASS B) vs. MSCI Far East Free ex-Japan Index Van Eck Asia Dynasty Fund-B MSCI Far East (with sales Free ex-Japan charge)(3) Index Sep-1-93 10000 10000 Sep-93 10221 10386 Dec-93 13522 15186 Mar-94 11012 11886 Jun-94 11039 12399 Sep-94 12165 13930 Dec-94 10933 12531 Mar-95 10318 12377 Jun-95 11150 13546 Sep-95 11059 13333 Dec-95 11222 13639 Mar-96 11959 14957 Jun-96 11723 14920 Sep-96 11568 14707 Dec-96 11905 15158 Mar-97 11386 14592 Jun-97 11914 15341 Sep-97 10385 12483 Dec-97 7991 8442 Mar-98 8096 9273 Jun-98 6148 6264 Sep-98 5959 5704 Dec-98 7897 8035 Mar-99 8588 8493 Jun-99 13332 11716 Sep-99 11625 10535 Dec-99 17113 13026 Mar-00 16621 12648 Jun-00 13789 11183 Sep-00 11425 9417 Dec-00 8901 8233 - -------------------------------------------------------------------------------- Since Average Annual Total Return 12/31/00 1 Year 5 Year Inception(1) - -------------------------------------------------------------------------------- VE Asia Dynasty Fund-A (w/o sales charge) (47.60)% (3.75)% 1.42% - -------------------------------------------------------------------------------- VE Asia Dynasty Fund-A (with sales charge)(2) (50.61)% (4.89)% 0.64% - -------------------------------------------------------------------------------- MSCI Far East Free ex-Japan Index (36.80)% (9.60)% 0.10% - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Since Average Annual Total Return 12/31/00 1 Year 5 Year Inception(1) - -------------------------------------------------------------------------------- VE Asia Dynasty Fund-B (w/o sales charge) (47.99)% (4.53)% (1.58)% - -------------------------------------------------------------------------------- VE Asia Dynasty Fund-B (with sales charge)(3) (50.34)% (4.78)% (1.58)% - -------------------------------------------------------------------------------- MSCI Far East Free ex-Japan Index (36.80)% (9.60)% (2.62)% - -------------------------------------------------------------------------------- (1) INCEPTION DATE FOR THE VAN ECK ASIA DYNASTY FUND WAS 3/22/93 (CLASS A) AND 9/1/93 (CLASS B). Index returns are calculated as of nearest month end. (2) The maximum sales charge is 5.75%. (3) Applicable contingent deferred sales charge taken into account (the maximum is 5.00%). Returns for the Van Eck Asia Dynasty Fund (Classes A and B) 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 fully or partially reimbursed by the Fund's Adviser at certain times since the Fund's inception. The Morgan Stanley Capital International Far East Free ex-Japan Index is an unmanaged index and includes the reinvestment of all dividends, but does not reflect the payment of transaction costs, advisory fees or expenses that are associated with an investment in the Fund. The Index's performance is not illustrative of the Fund's performance. Indices are not securities in which investments can be made. The MSCI Far East Free ex-Japan Index is a market capitalization-weighted index that captures the largest 60% of the publicly traded securities in each industry for approximately ten Asian markets (excluding Japan); the Index includes only shares available for purchase by foreign (e.g., U.S.) investors. 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. 6 EMERGING MARKETS VISION FUND - -------------------------------------------------------------------------------- Dear Shareholder: Expectations were high after the rapid recovery in both emerging market economies and stocks in 1999, thus making the year 2000 a deeply disappointing one for emerging market stocks. The irony is that, for most of the year, news from the asset class was positive, with earnings coming in ahead of expectations at the beginning of the year. The economies generally remained fairly robust, but the stock markets struggled as liquidity declined. In particular, Asia was the underperformer for the year. No major Asian market finished in positive territory for the year, with some (Korea, Indonesia, and Thailand) more than halving in dollar terms. In this environment, the Van Eck Emerging Markets Vision Fund declined 37.60% since its inception on April 7, 2000, compared with a loss of 32.25% for the Morgan Stanley Capital International Emerging Markets Free Index* during the same period. MARKET REVIEW We see cause for optimism in the coming months for the asset class, even given the heavy volatility experienced last year, and we remain positive on the long-term outlook for emerging markets. Domestic demand remains solid in most emerging markets and low interest rates have been sustained. Corporate restructuring is continuing throughout the region and stock valuations are very attractive. ASIAN MARKETS suffered the most in the year 2000 despite healthy fundamentals as the flow of foreign capital, as well as domestic investor sentiment, collapsed on poor political news in a number of countries. There were also a fair number of new issues in the equity markets, which dispersed the money available for investment. Banks, though flush with deposits, were not recycling the money in the form of loans. The liquidity generated by current account surpluses was mopped up by the central banks in order to ensure that there was no acceleration in inflation. Reform momentum slowed in places like Korea and Thailand. In sum, the newsflow was broadly positive, but there was little money available to buy that news. The best performing markets for the year were HONG KONG/CHINA+. The largely illiquid "B" share market in Shanghai actually gained 136%. The Hong Kong market declined 11% in U.S. dollar terms, a good performance in relative terms. Two fundamental reasons explain this. First, the Chinese economy is reasonably robust at the moment. Also, interest rate cuts in the United States are expected to be replicated in Hong Kong due to the peg to the U.S. dollar. Despite changes to the composition of the stock market over the last few years, there is still a high proportion of interest rate-sensitive stocks. Together, these markets made up over 15% of Fund assets at year end. The worst performing market was SOUTH KOREA, which declined 56% during the year. South Korea is still struggling with the legacy of high corporate indebtedness mixed with inefficient corporate structures. The days of the all-encompassing chaebols (conglomerates) expanding into a variety of areas and fuelled by cheap money, are clearly over. The legacy of poor capital allocation will likely continue to haunt South Korea for some time to come. That being said, the restructuring situation has been moving forward and should continue to improve returns to shareholders. Domestic investors have taken a great deal of money out of the market, and the banks are flush with deposits. This may reverse as South Korean equity valuations are very compelling. Your Fund held a 10.3% allocation to South Korea at December 31. The remarkable turnaround in sentiment toward technology companies damaged the TAIWAN equity market extensively. Both the economy and the stock market are heavily geared to the technology cycle. Throughout the year, it has become apparent that demand for core technology products from Europe and the United States has weakened, even as more supply materializes. This has had a major impact on the product pricing and margins of Taiwanese technology companies. Although they are still key beneficiaries of the structural trend toward outsourcing, they are very much the victims of a sharp cyclical downturn. The market was down 47%. We added a position in Taiwan last summer as valuations became more attractive, and ended the year with an 8.5% weighting to this market. 7 EMERGING MARKETS VISION FUND - -------------------------------------------------------------------------------- SINGAPORE is normally viewed as something of a safe haven in the Asian region. This, however, did not prevent the index from declining 28%. This was primarily driven by external factors rather than specific negatives. Interest rates were low, domestic liquidity has been good, and earnings have been fairly stable. One area where Singapore is at risk is in the slowdown of electronic exports, particularly to the States. We significantly cut our exposure to this country throughout the year from over 11% in April to 4.7% at December 31, 2000. In INDIA (approximately 6% of Fund assets for much of the year), the market was yet again frustrated by the slow progress that the government has made in deregulation, cutting the fiscal deficit, and privatizing inefficient state-run companies. On the positive side, the software sector has defied expectations of a growth slowdown and captured market share while increasing its billing rates as well as the scope of the work that it does. This illustrates the strength of its business model. The market declined 26% in 2000. LATIN MARKETS performed relatively well in 2000, though the major markets were all in negative territory. BRAZIL lost 18% despite much improved macroeconomic fundamentals. The country has rebounded strongly from the devaluation at the beginning of 1999 and domestic interest rates fell in 2000 despite U.S. monetary tightening. Earnings growth was strong, particularly in the telecom sector where companies are investing heavily in anticipation of the onset of full competition at the end of 2001. Brazilian companies are currently trading at extremely cheap valuations and we expect a re-rating in 2001. We added to the Fund's exposure to the Brazilian market during 2000, ending the year with a 14.6% position. The MEXICAN market fell 22% in 2000, despite strong economic growth and high average oil prices. The Mexican economy is well integrated with that of the U.S. During the presidential elections in July, the incumbent PRI candidate lost power for the first time in over 70 years. Mexico's new president, Vicente Fox, is a business friendly reformer, having been CEO of Coca-Cola in Mexico. Though the transition has been smooth thus far, he will have to govern through consensus building as his PAN party lacks an overall majority in Congress. We reduced the Fund's weighting in Mexico over the course of the year (from almost 22% in April to 13.5% by the end of the year) due to the potential effect of a slowdown in the U.S. economy. ARGENTINA fell 24% and ended the year with a crisis of confidence that spurred a $39 billion bailout by the IMF (International Monetary Fund) and other multilateral institutions. The Argentine peso is tied to the U.S. dollar, which forced Argentine interest rates higher even as the country was facing a deep recession. Fiscal stimulus is constrained by the conditions of an IMF agreement and much needed reforms were avoided by a politically weak president facing a hostile Congress. We avoided investing in Argentina during the year, though going forward Argentina will likely benefit substantially from falling U.S. interest rates. Developing EUROPEAN MARKETS mostly outperformed other emerging markets in 2000, though most lost ground. RUSSIA (7.3% of assets) had a good start to the year on the back of high oil prices and increasing economic growth. However, monetary tightening in the U.S. reduced investor appetite for risk and the market corrected substantially. In addition, several companies displayed a poor understanding of good corporate governance, which further depleted investor confidence. The market ended the year down 18%, looking rather oversold. ISRAEL performed well, rising 3%. The Israeli market has a high weighting of technology stocks, which did very well in the first quarter before correcting substantially. We reduced the Fund's exposure to this market from 20% in April to 4.6% at year-end 2000 as we realigned our technology weightings toward the most solid and conservative stocks in the sector. TURKEY struggled for most of the year, losing 49% after a fantastic run in the fourth quarter of 1999. Investors were unsure of the government's commitment to the disinflation program and were worried about a mounting current account deficit. This caused a liquidity crisis in the fourth 8 EMERGING MARKETS VISION FUND - -------------------------------------------------------------------------------- quarter as many banks had overextended foreign lines of credit, taking advantage of lower overseas funding costs. The IMF came to the rescue with a package that should ease liquidity, though strict fiscal conditions were imposed. We held only a small position in Turkey (1% of Fund assets at December 31) as uncertainty in this market mounted. The SOUTH AFRICAN market (1.2% of assets) held up relatively well in 2000, notwithstanding weakness in the currency, and declined 21%. One major factor affecting sentiment was the continuing problems of neighboring Zimbabwe, which is struggling to maintain a rule of law. We are cautious about the outlook for South Africa, as the resource sector will suffer as global growth declines. FUND REVIEW The Fund's bias toward growth and technology stocks hurt performance in 2000 as investors realigned their portfolios in favor of cheaper value stocks. We maintain this bias because, although corporate earnings are entering a cyclical downturn, longer-term prospects remain bright. Stock valuations are extremely attractive and we have realigned the position in favor of the most established companies offering the best stock value. In terms of country emphasis, we had an overweight position in Asia, where fundamentals have been quite healthy, yet this hurt performance as Asia fared poorly. In particular, the large markets of Korea and Taiwan suffered from poor domestic sentiment. Our emphasis on the Hong Kong/China market (which would benefit from an economic slowdown in the U.S. and resulting interest rate cuts) proved beneficial since those markets held up well in relative terms. In Latin America, the Fund was overweight Brazil, which has been experiencing healthy macroeconomic fundamentals and falling interest rates, and Mexico, which has had strong economic growth, falling inflation and cheap stock valuations, both of which held up fairly well. THE OUTLOOK It is always tempting to be gloomy after such a difficult year. However, we have learned that often, when people start to question the asset class, it may presage a period of strong outperformance. We do not foresee the sharp upward movement of stocks that took place in the latter half of 1998 and in 1999. However, we see many reasons for optimism. Aggressive interest rate cuts in the U.S., which should spread to other major markets, should benefit emerging market stocks, most notably Hong Kong's. Oil prices have declined and, for the most part, inflationary expectations have quieted as well. This should allow interest rates to fall even further, sparking domestic demand and support for asset prices. Currently, we are significantly overweight Brazil, Hong Kong/China, Russia and Korea, while being underweight in Malaysia, Taiwan, South Africa and Greece. We do expect downward revisions in earnings, particularly in the technology sector and in those countries particularly sensitive to U.S. demand, such as Mexico. We also expect revisions in economic growth expectations to be downwards. However, the reflationary impact of the move to cut rates, as well as the possibility of a weaker U.S. dollar, should outweigh the negatives. Even with the expected downgrades, there is tremendous support from valuations relative to developed markets. In addition, emerging market risk premia (spreads over U.S. Treasuries) are likely to fall, reducing the cost of capital for emerging market companies and governments. Finally, local investors have substantially reduced their equity weightings and this is likely to reverse. In general, we believe that although the news flow will be negative in the short term, there will be a much healthier flow of funds to buy these markets. We are positive in our outlook for 2001, and expect that emerging market stocks will be a rewarding place to invest in the coming year. 9 EMERGING MARKETS VISION FUND - -------------------------------------------------------------------------------- We would like to thank you for your participation in the Van Eck Emerging Markets Vision Fund, and we look forward to working with you in the future. [PHOTO OMITTED] [PHOTO OMITTED] /s/ David A. Semple /s/ David M. Hulme - ------------------- ------------------ DAVID A. SEMPLE DAVID M. HULME CO-PORTFOLIO MANAGER CO-PORTFOLIO MANAGER January 19, 2001 - ------------- *The Morgan Stanley Capital International (MSCI) Emerging Markets Free Index is an unmanaged index and includes the reinvestment of all dividends, but does not reflect the payment of transaction costs, advisory fees or expenses that are associated with an investment in the Fund. The Index's performance is not illustrative of the Fund's performance. Indices are not securities in which investments can be made. The MSCI Emerging Markets Free Index is a market capitalization-weighted index that captures 60% of the publicly traded equities in each industry for approximately 25 emerging markets. "Free" indicates that the Index includes only those securities available to foreign (e.g., U.S.) investors. The Index's return, in this instance, is calculated as of March 31, 2000 as its return with gross dividends reinvested is not available as of April 7 (the Fund's inception date). +All individual country returns are in U.S. dollar terms and are based on country-specific stock markets; for example, the Hong Kong market is measured by the Hang Seng Index. - ----------------------------------------------------------------------- PERFORMANCE RECORD AS OF 12/31/00 - ----------------------------------------------------------------------- AVERAGE ANNUAL AFTER MAXIMUM BEFORE SALES TOTAL RETURN SALES CHARGE* CHARGE - ----------------------------------------------------------------------- A shares--Life (since 4/7/00) (41.19)% (37.60)% - ----------------------------------------------------------------------- B shares--Life (since 4/7/00) (41.00)% (37.90)% - ----------------------------------------------------------------------- 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 the original cost. The Adviser is currently waiving certain or all expenses on the Fund. Had the Fund incurred all expenses, investment returns would have been reduced. *A shares: maximum sales charge is 5.75% B shares: maximum contingent deferred sales charge is 5.00% 10 EMERGING MARKETS VISION FUND - -------------------------------------------------------------------------------- GEOGRAPHICAL HOLDINGS AS OF DECEMBER 31, 2000 [Data below represents pie chart in printed piece.] Brazil 14.6% Mexico 13.5% Hong Kong 12.3% South Korea 10.3% Taiwan 8.5% Russia 7.3% India 6.3% Singapore 4.7% Israel 4.6% China 2.9% Other 8.0% Cash/Equivalents 7.0% 11 EMERGING MARKETS VISION FUND TOP TEN EQUITY HOLDINGS AS OF DECEMBER 31, 2000* - -------------------------------------------------------------------------------- TELEFONOS DE MEXICO S.A. DE C.V. (TELMEX) (MEXICO, 3.9%) Telmex is the dominant telecom carrier in Mexico with over 12 million fixed line customers and over seven million cellular subscribers. Recent initiatives have included a focus on profitability, overseas expansion into Central and South America and Internet and data services. Telmex trades at a substantial discount to its western peers. TV AZTECA S.A. (MEXICO, 3.4%) TV Azteca owns and operates two national television networks through two anchor stations in Mexico and numerous other stations throughout the country. The company also produces television programming for broadcast over its networks and for international sale. GRUPO FINANCIERO BANAMEX ACCIVAL, S.A. DE C.V. (BANACCI) (MEXICO, 3.2%) Banacci is a full-range financial services group with banking, insurance and asset management activities. It is the second-largest bank in Mexico and has recently launched a number of e-business initiatives. The Mexican banking system is beginning to grow again after several years of rebuilding since the Tequila Crisis in 1995. Banacci is well placed to take advantage of this growth. INDIA FUND, INC. (INDIA, 3.0%) India Fund is a closed-end mutual fund that seeks long-term capital appreciation. This fund invests primarily in equity securities of Indian companies. CHINA UNICOM LTD. (CHINA, 2.8%) China Unicom provides telecommunications services in the People's Republic of China. The company's services include cellular, paging, long distance, data, and Internet services. China Unicom operates an advanced telecommunications network system based on a fiber-optic transmission and core switching network. KOOKMIN CREDIT CARD CO. LTD. (SOUTH KOREA, 2.7%) Kookmin offers credit card services. The company also provides various financial services such as installment financing, factoring, cyber loans, e-business cards, and B2B e-commerce business processing. SK TELECOM CO. LTD. (SOUTH KOREA, 2.5%) SK Telecom is Korea's market leader in mobile communications, with over 10 million subscribers and a market share of 43%. EMBRAER AIRCRAFT CORP. (BRAZIL, 2.5%) Embraer (Empresa Brasileira de Aeronautica S.A.) manufactures and markets a variety of aircraft. The company produces and sells commercial- and military-use aircraft to over 25 countries around the world. Embraer also provides maintenance, repair and updating services to its clients. LI & FUNG LTD. (HONG KONG, 2.3%) Li & Fung, through its subsidiaries, operates an export trading business. The company exports consumer products such as garments, fashion accessories, toys, games, sporting goods, home furnishings, handicrafts, shoes, travel goods and tableware. KOREA TELECOM CORP. (SOUTH KOREA, 2.0%) Korea Telecom provides telecommunications services including local telephone, domestic and international long distance, multimedia satellite communication, data network and wireless telephone services in Korea. The company also offers Internet search and telephone directory services. - ------------------- *Portfolio is subject to change. 12 EMERGING MARKETS VISION FUND PERFORMANCE COMPARISON - -------------------------------------------------------------------------------- These graphs compare a hypothetical $10,000 investment in the Van Eck Emerging Markets Vision Fund (Classes A and B) made at inception with a similar investment in the Morgan Stanley Capital International Emerging Markets Free Index. [Data below represents line chart in printed piece.] VAN ECK EMERGING MARKETS VISION FUND (CLASS A) vs. MSCI Emerging Markets Free Index Emerging Mkts. Vision Fund-A MSCI Emerging (with sales Mkts. Free charge)(2) Index Apr-7-00 9425 10000 Apr-00 9076 9052 May-00 8784 8678 Jun-00 9218 8984 Jul-00 8586 8522 Aug-00 8992 8563 Sep-00 7681 7816 Oct-00 6833 7249 Nov-00 5957 6615 Dec-00 5881 6775 [Data below represents line chart in printed piece.] VAN ECK EMERGING MARKETS VISION FUND (CLASS A) vs. MSCI Emerging Markets Free Index Emerging Mkts. Vision Fund-B MSCI Emerging (with sales Mkts. Free charge)(2) Index Apr-7-00 10000 10000 Apr-00 9630 9052 May-00 9310 8678 Jun-00 9770 8984 Jul-00 9100 8522 Aug-00 9520 8563 Sep-00 8130 7816 Oct-00 7220 7249 Nov-00 6290 6615 Dec-00 5900 6775 - -------------------------------------------------------------------------------- Since Average Annual Total Return 12/31/00 1 Month Inception(1) - -------------------------------------------------------------------------------- VE Emerging Mkts. Vision Fund-A (w/o sales charge) (1.27)% (37.60)% - -------------------------------------------------------------------------------- VE Emerging Mkts. Vision Fund-A (with sales charge)(2) (7.00)% (41.19)% - -------------------------------------------------------------------------------- MSCI Emerging Mkts. Free Index 2.41% (32.25)% - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Since Average Annual Total Return 12/31/00 1 Month Inception(1) - -------------------------------------------------------------------------------- VE Emerging Mkts. Vision Fund-B (w/o sales charge) (1.27)% (37.90)% - -------------------------------------------------------------------------------- VE Emerging Mkts. Vision Fund-B (with sales charge)(3) (6.21)% (41.00)% - -------------------------------------------------------------------------------- MSCI Emerging Mkts. Free Index 2.41% (32.25)% - -------------------------------------------------------------------------------- (1) INCEPTION DATE FOR THE VAN ECK EMERGING MARKETS VISION FUND WAS 4/7/00 (CLASSES A AND B). Index returns are calculated as of nearest month end. (2) The maximum sales charge is 5.75%. (3) Applicable contingent deferred sales charge taken into account (the maximum is 5.00%). Returns for the Van Eck Emerging Markets Vision Fund (Classes A and B) 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 fully or partially reimbursed by the Fund's Adviser at certain times since the Fund's inception. The Morgan Stanley Capital International Emerging Markets Free Index is an unmanaged index and includes the reinvestment of all dividends, but does not reflect the payment of transaction costs, advisory fees or expenses that are associated with an investment in the Fund. The Index's performance is not illustrative of the Fund's performance. Indices are not securities in which investments can be made. The MSCI Emerging Markets Free Index is a market capitalization-weighted index that captures 60% of the publicly traded equities in each industry for approximately 25 emerging markets. "Free" indicates that the Index includes only those securities available to foreign (e.g., U.S.) investors. 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. 13 GLOBAL HARD ASSETS FUND - -------------------------------------------------------------------------------- Dear Shareholder: We are pleased to report that the Van Eck Global Hard Assets Fund gained 8.91% during 2000, substantially outperforming the general stock market as measured by the Standard & Poor's 500 Index,* which fell 9.11%. Many hard asset sectors achieved positive performance in a year distinguished by market volatility and disappointing returns, thus underscoring hard assets' diversification benefits. Hard assets were boosted by continued (albeit slowing) global growth and positive supply/demand fundamentals. Among the hard asset sectors, energy led the way, as natural gas and oil prices skyrocketed and dominated the headlines for most of the year. Real estate also provided healthy returns as investors sought out more defensive positions in the face of an uncertain market environment. Heavy allocations to energy and real estate and a reduction in paper and metals proved beneficial to Fund performance during this time period. REVIEW Global growth in 2000 was the strongest it has been in 16 years, up nearly 5%. Global economic expansion is generally good for commodity demand. This proved to be the case this year, with rising demand for most hard assets resulting in increases in most commodity prices and, in turn, strength in hard asset equities as well. ENERGY was the best performing hard asset sector this year. The year proved to be the best environment for oil in decades as healthy demand, OPEC production cohesion, and low inventories combined to keep oil prices high. Several increases in OPEC production throughout the year failed to cause a rise in U.S. inventory levels (anecdotal evidence suggests that much of the additional oil ended up in Asia, as China is thought to have been building inventory) and crude oil peaked at $35 per barrel in September. Crude finally found its way into U.S. and global inventories and the price weakened somewhat to finish the year at $26.70. Prices averaged $30.25 for the year, roughly 50% higher than the ten-year average of $20.25. Energy stocks were up 9.4% for 2000. Natural gas prices continued to soar throughout the year, up nearly 100% in the first half of the year alone and tripling by the end of the year. The natural gas supply and demand equation turned dramatically positive as continued increases in demand from new clean-burning power plants have caught up to a supply that is constrained by depleting reserves. In addition, since October, prices have risen sharply since winter weather has been 10% colder than normal and a drought in the Northwest has curtailed hydroelectric power generation, causing California to rely on natural gas for electricity. We increased the Fund's exposure to energy early on in the year (from 40% of total net assets in January to nearly 50% by March). We maintained this high exposure to the sector throughout the year, which greatly benefited Fund performance. We continued to emphasize exploration and production and oil service companies, which have been primary beneficiaries of price increases. We also increased the Fund's position in the REAL ESTATE sector throughout 2000 (from about 17% at the beginning of the year to 23% by year end), as fundamentals in the sector remained very healthy. This contributed to Fund gains as the sector posted its best performance in several years, rising 26.8% for the year. These exceptional gains were due to strong earnings growth, cheap stock valuations, and the fact that volatility and declines in the broader markets pushed investors to seek out relative stability, making REITs and their 7.5% average dividend yield very attractive. In a year when most of corporate America fell short of expectations, REITs generally met and, for the most part, exceeded earnings expectations in 2000. In the U.S., the best performing sectors were hotels, apartments, offices, diversified real estate, industrial, retail and self storage (in that order). We emphasized the office sector, in particular, where all-time low vacancy rates resulted in surging rents. FOREST AND PAPER PRODUCT commodity prices generally rose during the year, although prices weakened in the second half as the U.S. economy slowed and the strong U.S. dollar made imports more competitive. Newsprint prices ended the year with the strongest performance of the group, up 18%, as industry consolidation and plant closures created a tight market. Other paper and paperboard grades finished the year 14 GLOBAL HARD ASSETS FUND - -------------------------------------------------------------------------------- with gains ranging from 1% to 10%. At the other end of the spectrum, chronic overcapacity plagued the lumber market as prices sank to multi-year lows. While the commodities turned in a positive year, forest and paper product stocks declined as investors focused on an economic slowdown and rejected cyclical stocks. The stocks made some gains in the fourth quarter when the dollar weakened (easing commodity price pressures from imports) and the market started anticipating a Federal Reserve rate cut that would help spur growth. Nonetheless, forest and paper product shares ended the year down 20%. We reduced the Fund's position in this sector gradually throughout the year from approximately 25% in January to the current 7.8% of total net assets, reallocating the portfolio in favor of the more promising energy and real estate sectors. INDUSTRIAL METALS finished the year with declines of 3% to 5% for copper and aluminum and 15% to 30% for zinc, nickel and steel. Robust economic growth in the first half led to overproduction of semi-finished and finished products, causing substantial declines in raw metals inventories. Low inventories caused prices to strengthen in September. However, prices have declined since there was now an oversupply of semi-finished and finished products. Prices for copper and aluminum have not declined nearly as much as other metals due to tighter supplies caused by the ongoing energy crisis in the western U.S., which has increased the cost of mining and forced some production of these metals to shut down. Industrial metals stocks declined 31.7% for the year. In addition to weak commodity prices, the sector, being cyclical in nature, experienced much of the same negative bias as the forest and paper products sector. Stock prices bottomed in October but rallied into the new year as the market for metals shares reacted favorably in anticipation of a Fed rate cut in January 2001. We reduced the Fund's industrial metals weighting from over 10% at the start of the year to about 8% by December 31 as fundamentals and market sentiment began to deteriorate. PRECIOUS METALS had mixed results in 2000. Gold prices experienced a slight decline, but record highs were reached for platinum and palladium prices. Precious metals shares, however, met with some volatility and fell over 20%. Gold shares, in particular, were encumbered by a strong dollar and low inflation environment. We maintained a small position of about 10% in the precious metals sector throughout the year, concentrating primarily in platinum- and palladium-related stocks, which have industrial demand bases. THE OUTLOOK While the global economy grew at its fastest rate in 16 years in 2000, the critical question as we enter 2001 is not whether we will have a slowdown, but rather the extent of the slowdown. Currently, every leading indicator points to significantly slower growth. Our view is that we are experiencing a relatively short, yet very sharp, period of economic deterioration. The manufacturing sector, approximately 16% of GDP in the U.S., has come to a grinding halt. Consumer spending will likely slow down, particularly given the high consumer debt level (the highest on record). Business investment, a primary driver of economic growth in recent years, is also slowing, driven by the rapid deceleration of Old Economy earnings. Due to this slowdown, we expect to see returns moderate--we do not expect anything like the 100+% increase in natural gas in 2000 to be repeated in any sectors or markets in 2001. However, we remain optimistic about the possibilities for hard assets in the coming months due to still-favorable fundamentals in many sectors and the fact that many of the equities have lagged their related commodities, meaning positive factors are not entirely priced in. We favor the energy sector going into 2001 and plan to maintain our high weighting of 50% of assets, a maximum by prospectus, in the near future. We plan to keep the Fund's allocation to paper and metals to a minimum, at roughly 5% of assets. However, platinum and palladium remain attractive and we will monitor these asset classes for investment opportunities in the new year. 15 GLOBAL HARD ASSETS FUND - -------------------------------------------------------------------------------- We would like to thank you for your participation in the Van Eck Global Hard Assets Fund, and we look forward to helping you meet your investment goals in the future. [PHOTO OMITTED] /s/ Derek S. Van Eck - -------------------- DEREK S. VAN ECK PORTFOLIO MANAGER January 18, 2001 - ------------- *The Standard & Poor's 500 Index is an unmanaged index and includes the reinvestment of all dividends, but does not reflect the payment of transaction costs, advisory fees or expenses that are associated with an investment in the Fund. The Index's performance is not illustrative of the Fund's performance. Indices are not securities in which investments can be made. The S&P 500 Index consists of 500 widely held common stocks, covering four broad sectors (industrials, utilities, financial and transportation). It is a market value-weighted index (stock price times shares outstanding), with each stock affecting the index in proportion to its market value. Construction of the S&P 500 Index proceeds from industry group to the whole. Since some industries are characterized by companies of relatively small stock capitalization, the Index is not comprised of the 500 largest companies on the New York Stock Exchange. This Index, calculated by Standard & Poor's, is a total return index with dividends reinvested. - -------------------------------------------------------------------------------- PERFORMANCE RECORD AS OF 12/31/00 - -------------------------------------------------------------------------------- AVERAGE ANNUAL AFTER MAXIMUM BEFORE SALES TOTAL RETURN SALES CHARGE* CHARGE - -------------------------------------------------------------------------------- A shares--Life (since 11/2/94) 7.95% 8.99% - -------------------------------------------------------------------------------- 5 year 6.19% 7.45% - -------------------------------------------------------------------------------- 1 year 2.67% 8.91% - -------------------------------------------------------------------------------- B shares--Life (since 4/24/96) 3.51% 3.89% - -------------------------------------------------------------------------------- 1 year 3.17% 8.17% - -------------------------------------------------------------------------------- C shares--Life (since 11/2/94) 8.63% 8.63% - -------------------------------------------------------------------------------- 5 year 6.87% 6.87% - -------------------------------------------------------------------------------- 1 year 7.06% 8.06% - -------------------------------------------------------------------------------- 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 the original cost. The Adviser is currently waiving certain or all expenses on the Fund. Had the Fund incurred all expenses, investment returns would have been reduced. *A shares: maximum sales charge is 5.75% B shares: maximum contingent deferred sales charge is 5.00% C shares: 1.00% redemption charge, first year 16 GLOBAL HARD ASSETS FUND - -------------------------------------------------------------------------------- GEOGRAPHICAL HOLDINGS AS OF DECEMBER 31, 2000 [Data below represents pie chart in printed piece.] Finland 1.4% Other 3.0% Cash/Equivalents 2.2% United States 58.0% Canada 18.6% Australia 7.7% Russia 5.5% Hong Kong 2.2% United Kingdom 1.4% SECTOR HOLDINGS AS OF DECEMBER 31, 2000 [Data below represents pie chart in printed piece.] Real Estate 22.9% Forest Products & Paper 7.8% Precious Metals 9.2% Industrial Metals 7.8% Transportation 0.6% Cash/Equivalents 2.2% Energy 49.5% 17 GLOBAL HARD ASSETS FUND REPRESENTATIVE HOLDINGS AS OF DECEMBER 31, 2000* - -------------------------------------------------------------------------------- NABORS INDUSTRIES, INC. (U.S., 3.7%) Nabors Industries is an oil services company which conducts oil, gas, and geothermal land drilling operations in the continental United States, Alaska and Canada, as well as in South and Central America and the Middle East. STILLWATER MINING CO. (U.S., 3.2%) Stillwater Mining develops, processes and refines platinum, palladium, and associated metals from the Stillwater Mine in Montana. Stillwater is the only primary producer of platinum outside of South Africa. The company is currently developing the East Boulder project, a new underground mine on the Stillwater property that will boost metals production substantially starting in 2001. TALISMAN ENERGY, INC. (CANADA, 3.0%) Talisman Energy is an independent oil and gas producer. The company has operations in Canada, Indonesia, Sudan and the North Sea. Talisman is also conducting exploration in Algeria and Trinidad. BROOKFIELD PROPERTIES CORP. (CANADA, 2.7%) Brookfield Properties is a diversified North American real estate development company. The company owns commercial rental properties, develops residential land, builds homes and offers real estate management services. NOBLE DRILLING CORP. (U.S., 2.6%) Noble Drilling provides diversified services for the oil and gas industry. The company provides contract drilling services with its fleet of offshore drilling units located in markets worldwide. Noble Drilling also provides labor contract drilling services, engineering, and production management services. ENSCO INTERNATIONAL, INC. (U.S., 2.6%) Ensco, an international offshore contract drilling company, provides marine transportation services in the Gulf of Mexico. The company serves the oil and gas industry. GLOBAL MARINE, INC. (U.S., 2.5%) Global Marine provides offshore drilling and offshore drilling management services. Global Marine conducts business operations in the U.S. Gulf of Mexico, West Africa, and the North Sea. APACHE CORP. (U.S., 2.4%) Apache explores for and produces natural gas, crude oil and natural gas liquids. The company has operations in North America, Egypt, western Australia, Poland, China and Cote d'Ivoire. BOSTON PROPERTIES, INC. (U.S., 2.3%) Boston Properties develops, redevelops, acquires, manages, operates and leases office, industrial and hotel properties. The company has a significant presence in the Boston, Washington, D.C., San Francisco and midtown Manhattan real estate markets. SUN HUNG KAI PROPERTIES LTD. (HONG KONG, 2.2%) Sun Hung Kai Properties, through its subsidiaries, develops and invests in real estate. The company also operates hotels, and provides information technology, telecommunication, construction, engineering, financial, and air freight forwarding services. - ---------- *Portfolio is subject to change. 18 GLOBAL HARD ASSETS FUND PERFORMANCE COMPARISON - -------------------------------------------------------------------------------- These graphs compare a hypothetical $10,000 investment in the Van Eck Global Hard Assets Fund (Classes A, B and C) made at inception with a similar investment in the Ibbotson Hard Assets Index. [The table below represents a line chart in the printed piece.] Global Hard Assets Ibbotson Fund-A Hard Assets (with sales charge)(2) Index - -------------------------------------------------------------------------------- Nov-2-94 9426 10000 Dec-94 9322 9720 Mar-95 9838 9880 Jun-95 10313 10120 Sep-95 10670 10446 Dec-95 11195 10689 Mar-96 12537 11457 Jun-96 13459 11288 Sep-96 14135 11315 Dec-96 16301 11994 Mar-97 16323 11730 Jun-97 17680 12106 Sep-97 21064 12805 Dec-97 18631 10759 Mar-98 18174 11304 Jun-98 15794 10373 Sep-98 12671 9941 Dec-98 12623 9631 Mar-99 12794 9930 Jun-99 14625 11189 Sep-99 14490 11938 Dec-99 14723 12324 Mar-00 14858 11456 Jun-00 15152 11921 Sep-00 15729 11715 Dec-00 16035 12553 - -------------------------------------------------------------------------------- Since Average Annual Total Return 12/31/00 1 Year 5 Year Inception(1) - -------------------------------------------------------------------------------- VE Global Hard Assets Fund-A (w/o sales charge) 8.91% 7.45% 8.99% - ------------------------------------------------------------------------------- VE Global Hard Assets Fund-A (with sales charge)(2) 2.67% 6.19% 7.95% - -------------------------------------------------------------------------------- Ibbotson Hard Assets Index 1.86% 3.27% 3.76% - -------------------------------------------------------------------------------- [The table below represents a line chart in the printed piece.] Global Hard Assets Ibbotson Fund-B Hard Assets (with sales charge)(3) Index - -------------------------------------------------------------------------------- Apr-24-96 10000 10000 Jun-96 10303 9614.14 Sep-96 10825 9637.22 Dec-96 12455 10216.2 Mar-97 12455 9991.12 Jun-97 13477 10311.5 Sep-97 16037 10906.4 Dec-97 14164 9164.1 Mar-98 13801 9628.25 Jun-98 11976 8834.78 Sep-98 9599 8467.37 Dec-98 9553 8203.16 Mar-99 9664 8458.1 Jun-99 11028 9530.46 Sep-99 10899 10168.5 Dec-99 11055 10496.9 Mar-00 11138 9757.25 Jun-00 11341 10153.4 Sep-00 11746 9978.55 Dec-00 11758 10691.6 - -------------------------------------------------------------------------------- Since Average Annual Total Return 12/31/00 1 Year Inception(1) - -------------------------------------------------------------------------------- VE Global Hard Assets Fund-B (w/o sales charge) 8.17% 3.89% - -------------------------------------------------------------------------------- VE Global Hard Assets Fund-B (with sales charge)(3) 3.17% 3.51% - -------------------------------------------------------------------------------- Ibbotson Hard Assets Index 1.86% 1.44% - -------------------------------------------------------------------------------- [The table below represents a line chart in the printed piece.] Global Hard Assets Ibbotson Fund-C Hard Assets (with sales charge)(4) Index - -------------------------------------------------------------------------------- Nov-2-94 10000 10000 Dec-94 9885 9720 Mar-95 10420 9880 Jun-95 10914 10120 Sep-95 11292 10446 Dec-95 11954 10689 Mar-96 13387 11457 Jun-96 14365 11288 Sep-96 15092 11315 Dec-96 17354 11994 Mar-97 17354 11730 Jun-97 18776 12106 Sep-97 22338 12805 Dec-97 19733 10759 Mar-98 19228 11304 Jun-98 16692 10373 Sep-98 13376 9941 Dec-98 13313 9631 Mar-99 13467 9930 Jun-99 15361 11189 Sep-99 15195 11938 Dec-99 15412 12324 Mar-00 15528 11456 Jun-00 15809 11921 Sep-00 16372 11715 Dec-00 16667 12553 - -------------------------------------------------------------------------------- Since Average Annual Total Return 12/31/00 1 Year 5 Year Inception(1) - -------------------------------------------------------------------------------- VE Global Hard Assets Fund-C (w/o sales charge) 8.06% 6.87% 8.63% - -------------------------------------------------------------------------------- VE Global Hard Assets Fund-C (with sales charge)(4) 7.06% 6.87% 8.63% - -------------------------------------------------------------------------------- Ibbotson Hard Assets Index 1.86% 3.27% 3.76% - -------------------------------------------------------------------------------- (1) INCEPTION DATE FOR THE VAN ECK GLOBAL HARD ASSETS FUND WAS 11/2/94 (CLASS A), 4/24/96 (CLASS B), AND 11/2/94 (CLASS C). Index returns are calculated as of nearest month end. (2) The maximum sales charge is 5.75%. (3) Applicable contingent deferred sales charge taken into account (the maximum is 5.00%). (4) 1.00% redemption charge taken into account on total return for one-year time period. Returns for the Van Eck Global Hard Assets Fund (Classes A, B and C) 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 fully or partially reimbursed by the Fund's Adviser at certain times since the Fund's inception. The Ibbotson Hard Assets Index is an unmanaged index and includes the reinvestment of all dividends and distributions, but does not reflect the payment of transaction costs, advisory fees or expenses that are associated with an investment in the Fund. The Index's performance is not illustrative of the Fund's performance. Indices are not securities in which investments can be made. The Ibbotson Hard Assets Index is 75% equities of global companies whose primary business is linked to hard assets and 25% commodity futures. The equity component consists of equal weightings of the MSCI Gold Mines, Non-Ferrous Metals, Energy Sources, and Forest Products and Paper Indices, and the National Association of Real Estate Investment Trusts Equity Index. The commodity component consists of equal weightings of the Goldman Sachs Energy, Precious Metals and Industrial Metals Indices. 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. 19 GLOBAL LEADERS FUND - -------------------------------------------------------------------------------- Dear Shareholder: The year 2000 was a difficult one for world equity markets as stronger-than-expected economic growth and inflationary worries gave way to concerns of economic slowing as the year progressed. The technology sector was particularly hard hit after a euphoric 1999. Just as technology stocks drove the extraordinary returns then, they drove market declines in 2000. Growth stocks also fell dramatically as investors, wary of increasingly volatile markets, refocused on defensive equities. In this environment, the Van Eck Global Leaders Fund had a total return of -21.88% for the twelve months ended December 31 while the Morgan Stanley Capital International (MSCI) World Index* declined 13.18% during the same period. REVIEW While there remains some regional differentiation between markets, the last several years have been distinguished by a marked increase in the correlation of performance among industry sectors across geographic markets. This increased synchronization is a result of several factors including the increasingly multinational scope of business, the advent of the euro (Europe's currency) and greater investor knowledge of international markets. Thus, while choosing the right region is still of importance, in 2000, choosing the right sector had the greatest impact on performance. The most concise explanation for equity performance worldwide in 2000 was "technology." The strong global returns experienced in 1999, led by the technology sector, were largely a result of massive liquidity injections by the world's central banks in anticipation of Y2K problems. Much of this liquidity found its way into the financial markets, which led to one of the best fourth quarters in history. A year later, the fourth quarter of 2000 was one of the worst quarters for equity investors in a decade. The main causes of this sea change were: slowing economic growth in the U.S. as a result of six interest rate increases by the Federal Reserve Bank, too much inventory in most sectors, a tightening in lending by banks, slowing corporate capital expenditures, and a resultant slowing in revenues and earnings, particularly for tech and growth stocks. Market weakness began to surface toward the end of the first quarter. As technology, telecom and consumer cyclical companies began to disappoint in the U.S., similar companies in other regions also declined. Seeking safer havens in uncertain markets, investors began to seek out value and defensive sectors both in the U.S. and abroad. Our emphasis on growth and technology stocks, strategies that boosted Fund performance in 1999, hurt performance in 2000. On the positive side, we began to position the Fund more defensively as the year unfolded. We reduced the technology weighting somewhat, from about 32% of total net assets to about 24% by November. Technology companies that remain in the portfolio are generally high quality market leaders--software-oriented companies or specialty semiconductor manufacturers that continue to benefit from technology spending. We continue to believe that technology, though more cyclical than originally anticipated, remains a long-term growth story. We augmented the Fund's weighting to financial stocks during the year, primarily in the U.S., the UK and Continental Europe, as this sector historically benefits from lower interest rates (which we expected, and continue to expect, due to slowing economic growth). We increased positions in defensive stocks, such as supermarket chains in the consumer sector and pharmaceutical companies, both of which we expect will be unaffected by an economic slowdown. The Fund's allocation to healthcare, which did well in 2000, was increased to 14% of the Fund (primarily in the U.S.). We expect the healthcare sector to continue to show strength as a result of aging demographics and strong product pipelines. Finally, we added to the energy sector where we expect increased spending on the part of drillers and refiners to finally come to fruition after a prolonged period of higher oil prices. Financial, defensive consumer, healthcare and energy stocks were among the top performing sectors for the year. 20 GLOBAL LEADERS FUND - -------------------------------------------------------------------------------- In terms of regional emphases, we continue to overweight the developed markets. The United States (51.5% of total net assets at December 31) and Europe (36.1% of assets), although slowing, were not as badly affected by negative factors as were the emerging markets in 2000, with returns of -12.5%+ and -8.1%, respectively. While both the U.S. and European economies have been slowing, there are some positives. Growth is coming off exceptionally high levels (the U.S., for example, was growing at approximately 5% last year, and analysts were calling for 31/2%-4% U.S. GDP (gross domestic product) growth in 2000 at the end of 1999; these figures were revised downward to 21/2%-3% by year end). Investors, expecting stratospheric growth rates to continue, reacted strongly to downward revisions in both general economic and corporate earnings growth. However, the truth is that these figures remain positive, if more realistic, at current levels. In addition, after a year of monetary tightening in both the U.S. and Europe, we believe interest rates have peaked (indeed, on January 3, 2001 the U.S. Federal Reserve cut the federal funds target rate by 0.50%), which should improve the investment environment. Further, Europe, which is expected to experience the highest relative growth in 2001, has been in a period of healthy industry consolidation and corporate restructuring. The Fund remained underweight Japan throughout the year (7.1% of assets at year end), where the expected economic recovery did not materialize and the market declined over 27%. Economic growth has been slowing largely due to the reluctance of Japanese consumers to spend. The ability of the government to stimulate the Japanese economy is fairly limited due to already low interest rates and high levels of government debt. Fund positions were primarily in leading exporters that benefited from a weak yen. The Fund's largest position in the emerging markets was in Asia. We reduced the position from about 6% of portfolio assets at the beginning of the year to about 3% in September as it became evident that the U.S. economy and associated demand was slowing. Despite some strong signs of recovery, the region was very badly affected by reduced industrial demand from the West, particularly in the crucial technology sector, and the Asian markets fell over 36% for the year. The Asian position that we retained has been concentrated in Hong Kong and Singapore, whose economies are not as directly tied to technology and which should benefit from U.S. interest rate cuts. THE OUTLOOK We are optimistic on the outlook for equity markets in 2001 although, with slowing growth, we do not expect to see the high double-digit returns common in the 1990s. As mentioned above, interest rates have begun to come down in the U.S. and we expect them to be cut in Europe as well, as further reductions in both economic growth estimates and earnings expectations take hold. We also expect continued market volatility and weakness short term. As the Federal Reserve continues to act aggressively to improve liquidity, however, we expect the U.S. to lead coming out of a short-lived "recession," and, in the second half, we expect reasonably good results overall. In Europe, consumer confidence remains high and tax cuts benefiting consumers and businesses are expected for the first time in seven years. The emerging markets remain heavily dependent on both U.S. demand and technology exports for a significant portion of their growth and we plan to remain underweight there. Historically, growth investing has returned to favor when interest rates begin to decline, with financials, healthcare, technology and consumer cyclicals doing well in that environment. Regarding the technology sector, growth expectations are adjusting from stratospheric figures to historical norms. As expectations are adjusted, the sector should provide reasonable returns for the most solid companies. 21 GLOBAL LEADERS FUND - -------------------------------------------------------------------------------- We would like to thank you for your participation in the Van Eck Global Leaders Fund, and we look forward to working with you in the future. [Photo Omitted] [Photo Omitted] /s/ANNE M. TATLOCK /s/ SHEILA HARTNETT-DEVLIN - ------------------ -------------------------- ANNE M. TATLOCK SHEILA HARTNETT-DEVLIN GLOBAL STRATEGIST CO-PORTFOLIO MANAGER [Photo Omitted] [Photo Omitted] /s/ WILLIAM Y. YUN /s/ JOSHUA A. ROSENTHAL - ------------------ -------------------------- WILLIAM Y. YUN JOSHUA A. ROSENTHAL CO-PORTFOLIO MANAGER CO-PORTFOLIO MANAGER January 31, 2001 * The Morgan Stanley Capital International (MCSI) World Stock Index is an unmanaged index and includes the reinvestment of all dividends, but does not reflect the payment of transaction costs, advisory fees or expenses that are associated with an investment in the Fund. The Index's performance is not illustrative of the Fund's performance. Indices are not securities in which investments can be made. The MSCI World Stock Index is a market capitalization-weighted benchmark that tracks the performance of approximately 25 world stock markets. The Index is based on the reinvestment of dividends less any withholding taxes on foreigners who do not benefit from a double taxation treaty ("net dividends"). The Index aims for 60% of the total market capitalization for each market that is represented in the Index. The companies included in the Index replicate the industry composition of each global market. The chosen list of stocks includes a representative sampling of large, medium and small capitalization companies and investment funds are not eligible. Companies with restricted float due to dominant shareholders or cross ownership are avoided. + All market returns are Morgan Stanley Capital International (MSCI) Indices (with gross dividends reinvested) in U.S. dollar terms. - -------------------------------------------------------------------------------- PERFORMANCE RECORD AS OF 12/31/00 - -------------------------------------------------------------------------------- AVERAGE ANNUAL AFTER MAXIMUM BEFORE SALES TOTAL RETURN SALES CHARGE* CHARGE - -------------------------------------------------------------------------------- A shares--Life (since 12/20/93) 7.70% 8.61% - -------------------------------------------------------------------------------- 5 year 8.74% 10.04% - -------------------------------------------------------------------------------- 1 year (26.36)% (21.88)% - -------------------------------------------------------------------------------- B shares--Life (since 12/20/93) 7.95% 7.95% - -------------------------------------------------------------------------------- 5 year 9.22% 9.46% - -------------------------------------------------------------------------------- 1 year (25.63)% (22.33)% - -------------------------------------------------------------------------------- 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 the original cost. The Adviser is currently waiving certain or all expenses on the Fund. Had the Fund incurred all expenses, investment returns would have been reduced. * A shares: maximum sales charge is 5.75% B shares: maximum contingent deferred sales charge is 5.00% 22 GLOBAL LEADERS FUND - -------------------------------------------------------------------------------- GEOGRAPHICAL WEIGHTINGS+ AS OF DECEMBER 31, 2000 [The table below represents a pie chart in the printed piece.] United States 51.5% United Kingdom 8.2% France 7.5% Japan 7.1% Germany 4.3% Switzerland 3.8% Netherlands 2.8% Italy 2.5% Spain 2.5% Other 9.9% - ---------- + Does not reflect a negative cash position of 0.1% (see "Other assets less liabilities" in "Schedule of Portfolio Investments," p. 45). 23 GLOBAL LEADERS FUND REPRESENTATIVE HOLDINGS AS OF DECEMBER 31, 2000 - -------------------------------------------------------------------------------- ST. MICROELECTRONICS N.V. (STM) (NETHERLANDS, 1.5%) STM is a European-based technology company that designs, develops, manufactures and markets semiconductor integrated circuits and discrete devices. The company's products are used in the telecommunications, consumer electronics, automotive, computer and industrial sectors. Geographically, STM's customer base is located in North America, Europe and the Asia/Pacific region. Despite the weakness of the technology sector over the past six to nine months, we continue to feel that STM's product portfolio is well positioned to benefit from the long-term growth trends in both the wireless and Internet industries. Over the short term, the stock will probably continue to consolidate its position. However, given the likelihood of more interest rate cuts by the Federal Reserve, a second-half recovery in the U.S. economy could have a beneficial impact on the technology sector in 2001. EXEL PLC (UNITED KINGDOM, 1.0%) Exel is a global logistics company that was formed by the merger between Ocean Group and NFC in 2000. Exel is engaged in two principal business activities: contract logistics and freight forwarding. The merger has transformed Exel into one of the few truly global logistics players, an industry that is expected to grow 15% per annum. With its blue-chip customer list and particularly strong positions in the fast-growing consumer, technology and healthcare sectors, Exel is well-positioned to deliver above-average top-line growth. In addition, limited capital requirements should boost cash flow going forward. Exel represents an attractive way to invest in the continued growth of the logistics industry. CHEUNG KONG (HOLDINGS) LTD. (HONG KONG, 0.7%) Cheung Kong is one of Hong Kong's two largest property developers concentrating on the residential market. It also holds more than 49% of Hutchison Whampoa, the region's premier conglomerate. The company is poised to benefit from lower interest rates and a potential recovery in property prices. GRUPO TELEVISA S.A. (MEXICO, 0.9%) Grupo Televisa is the largest media and broadcasting company in Mexico. Both Grupo Televisa and its only competitor, TV Azteca, are increasing real advertising prices in 2001 which bodes well for earnings. Additionally, Grupo Televisa, which currently supplies Spanish language programming to Univision in the U.S., stands to benefit from 13 stations bought by Univision that are likely to program Televisa content. VESTAS WIND SYSTEMS A/S (DENMARK, 0.4%) Vestas is the leading global manufacturer of wind turbines, possessing an approximate 30% share of the "wind energy" market. This industry is expected to grow significantly over the next five years, driven by rising global electricity consumption, a commitment by the European Union and other countries to increase the proportion of electricity generated by renewable energy sources (including wind energy), and declining development costs for wind energy. Vestas is the only truly global company in the industry, with operations in over 30 countries. 24 GLOBAL LEADERS FUND PERFORMANCE COMPARISON These graphs compare a hypothetical $10,000 investment in the Van Eck Global Leaders Fund (Classes A and B) made at inception with a similar investment in the Morgan Stanley Capital International World Stock Index. [The table below represents a line chart in the printed piece.] Global Leaders Fund-A MSCI World (with sales charge)(2) Stock Index - -------------------------------------------------------------------------------- Dec-20-93 9426 10000 Mar-94 9110 10061 Jun-94 9080 10363 Sep-94 9357 10585 Dec-94 9059 10508 Mar-95 9368 10999 Jun-95 9938 11468 Sep-95 10248 12109 Dec-95 10444 12685 Mar-96 10626 13201 Jun-96 10890 13583 Sep-96 11103 13764 Dec-96 11727 14395 Mar-97 11716 14436 Jun-97 13142 16609 Sep-97 13630 17084 Dec-97 13459 16664 Mar-98 14990 19050 Jun-98 15484 19437 Sep-98 14468 17107 Dec-98 16239 20719 Mar-99 16419 21459 Jun-99 16691 22483 Sep-99 16903 22149 Dec-99 21570 25886 Mar-00 22002 26151 Jun-00 20427 25224 Sep-00 19311 23957 Dec-00 16850 22474 - -------------------------------------------------------------------------------- Since Average Annual Total Return 12/31/00 1 Year 5 Year Inception(1) - -------------------------------------------------------------------------------- VE Global Leaders Fund-A (w/o sales charge) (21.88)% 10.04% 8.61% - -------------------------------------------------------------------------------- VE Global Leaders Fund-A (with sales charge)(2) (26.36)% 8.74% 7.70% - -------------------------------------------------------------------------------- MSCI World Stock Index (13.18)% 12.12% 12.26% - -------------------------------------------------------------------------------- [The table below represents a line chart in the printed piece.] Global Leaders Fund-B MSCI World (with sales charge)(3) Stock Index - -------------------------------------------------------------------------------- Dec-20-93 10000 10000 Mar-94 9654 10061 Jun-94 9591 10363 Sep-94 9864 10585 Dec-94 9516 10508 Mar-95 9833 10999 Jun-95 10424 11468 Sep-95 10741 12109 Dec-95 10899 12685 Mar-96 10069 13201 Jun-96 11323 13583 Sep-96 11524 13764 Dec-96 12152 14395 Mar-97 12128 14436 Jun-97 13590 16609 Sep-97 14074 17084 Dec-97 13885 16664 Mar-98 15447 19050 Jun-98 15932 19437 Sep-98 14879 17107 Dec-98 16671 20719 Mar-99 16843 21459 Jun-99 17109 22483 Sep-99 17297 22149 Dec-99 22051 25886 Mar-00 22448 26151 Jun-00 20817 25224 Sep-00 19660 23957 Dec-00 17126 22474 - -------------------------------------------------------------------------------- Since Average Annual Total Return 12/31/00 1 Year 5 Year Inception(1) - -------------------------------------------------------------------------------- VE Global Leaders Fund-B (w/o sales charge) (22.33)% 9.46% 7.95% - -------------------------------------------------------------------------------- VE Global Leaders Fund-B (with sales charge)(3) (25.63)% 9.22% 7.95% - -------------------------------------------------------------------------------- MSCI World Stock Index (13.18)% 12.12% 12.26% - -------------------------------------------------------------------------------- (1) INCEPTION DATE FOR THE VAN ECK GLOBAL LEADERS FUND WAS 12/20/93 (CLASSES A AND B). Index returns are calculated as of nearest month end. (2) The maximum sales charge is 5.75%. (3) Applicable contingent deferred sales charge taken into account (the maximum is 5.00%). Returns for the Van Eck Global Leaders Fund (Classes A and B) 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 fully or partially reimbursed by the Fund's Adviser at certain times since the Fund's inception. The Morgan Stanley Capital International World Stock Index is an unmanaged index and includes the reinvestment of all dividends, but does not reflect the payment of transaction costs, advisory fees or expenses that are associated with an investment in the Fund. The Index's performance is not illustrative of the Fund's performance. Indices are not securities in which investments can be made. The MSCI World Stock Index is a market capitalization-weighted benchmark that tracks the performance of approximately 25 world stock markets. The Index is based on the reinvestment of dividends less any withholding taxes on foreigners who do not benefit from a double taxation treaty ("net dividends"). The Index aims for 60% of the total market capitalization for each market that is represented in the Index. The companies included in the Index replicate the industry composition of each global market. The chosen list of stocks includes a representative sampling of large, medium and small capitalization companies and investment funds are not eligible. Companies with restricted float due to dominant shareholders or cross ownership are avoided. 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 INTERNATIONAL INVESTORS GOLD FUND - -------------------------------------------------------------------------------- Dear Shareholder: The average price of gold during the year 2000 was $279.11 an ounce, almost unchanged from the $278.57 an ounce average in 1999. Bullion reached $322 in February 2000 when Placer Dome announced that it would refrain from further hedging of its gold production. Other producers have followed suit, which resulted in the first decline in net hedging in over ten years. A subsequent lack of investment interest contributed to bringing the price down to the $265 level during October/November. Greater confidence in the dollar up to the final quarter of last year, higher dollar interest rates, and the peak U.S. economic growth rate led to some switching out of gold into dollar assets in Europe and to a reduction in Japanese gold purchases. The universal strength of the dollar also created additional selling pressure as local gold prices reached multi-year highs in Australian dollars, Indian rupees, and the South African rand. The dollar weakened slightly at year end when it became clear that a marked slowdown in U.S. economic activity was underway. The price of gold improved from the October/November lows to finish the year at $272.00 an ounce, down 5.7% from the end of 1999. Gold shares also turned in a disappointing performance, declining 26.4% for the year. Relative to the gold price and to historical stock valuations, gold shares became oversold as they declined to the November lows for the year. Investors recognized this oversold condition and bought up gold equities in light of the prevailing uncertainty in the U.S. economy. Since November 20, gold shares staged an impressive year-end gain of 19.9%. Stock valuations have improved, but still remain below historical measures. In this environment, the Van Eck International Investors Gold Fund had a total return of -22.18% for the twelve months ended December 31, 2000. GOLD-MINING SHARES While the overall performance of gold shares was disappointing in 2000, a number of companies were able to outperform the Standard & Poor's 500 Index* (which declined 9.1%) for the year. Among the majors, Barrick Gold (9.8% of the Fund's total net assets at December 31, 2000) outperformed due to its solid financial position and the emergence of the Bulyanhulu project in Tanzania as one of the top mining camps in the world. Bulyanhulu is an underground mine scheduled for initial production in mid-2001. Encouraging drill results and land acquisitions in the region make this one of Barrick's core assets for the future. Placer Dome (7.3% of net assets at year end) also turned in a favorable share price performance. Following some unfortunate problems with acquisitions in 1999, new CEO Jay Taylor is working to rebuild investor confidence by optimizing existing assets and seeking opportunities that should create shareholder value, such as joint mining ventures. Mid-tier producers Meridian (4.2% of assets) and GoldCorp (2.1% of assets) achieved share price gains for the year by delivering positive results at their new underground mines. In its first year of production, Meridian's El Penon Mine, located in Chile, met production expectations while identifying areas to expand reserves. Meanwhile, in Ontario, Canada, GoldCorp began production at its refurbished Red Lake Mine in November, providing high-grade feed to a newly constructed mill. The low gold price and the proposed Franco-Nevada/Gold Fields (0.3% and 8.4% of assets, respectively) combination brought plenty of speculation regarding mega-mergers and acquisitions in 2000. In actuality, activity was minimal, consisting mainly of the majors jockeying for property locally, as the South African authorities would not allow the Franco/Gold Fields merger to proceed. Barrick and Anglogold (9.8% and 4.0% of assets, respectively) increased their land positions in Africa. Anglogold also acquired a majority stake in two developing low-cost mines in Tanzania and Mali. Battle Mountain Gold (0.9% of assets) shareholders approved a friendly merger with Newmont (8.2% of assets) that creates synergy with their Nevada properties. Harmony Gold (3.6% of assets) bought two high-cost South African Mines from Anglogold. Harmony is a niche player known for finding value in underground mines that others have difficulty operating. 26 INTERNATIONAL INVESTORS GOLD FUND - -------------------------------------------------------------------------------- Another development that bodes well for the price of bullion is the removal of newly mined ounces from the market through the premature closure of mines and the postponement of planned development projects. During 2000, five companies have been forced to close mines with a combined output of 22 tonnes of gold annually, as their efforts to reduce production costs could not overcome a gold price that remained under $300 for most of the year. Then in December, Barrick suspended plans to construct the Pascua-Lama project, a world-class deposit that straddles the Chile/Argentina border. Pascua was slated to produce 800,000 ounces (25 tonnes) of gold per year along with enough by-product silver to make it the largest silver mine in the world. In 2000, newly mined gold production declined slightly, the first such decline since 1995. THE OUTLOOK We believe there are several reasons for optimism in 2001. Gold's supply/demand fundamentals are positive, the outlook for both the U.S. dollar and the U.S. economy are somewhat bearish, and the stock market remains pricey by historical standards, all of which could be positives for gold. At current gold prices, there is a fundamental deficit between the supply of gold from mines and scrap, and the demand used for fabrication and investment. This supply deficit, which amounted to 15.8% of total demand over the past five years, has been filled from central bank sales and lending. Most of the gold that the central banks lend goes ultimately to producers that hedge. If the substantial decline in producer hedging experienced in 2000 continues, one of the key sources of excess supply will have been eliminated, creating a tighter market for bullion. Additionally, bullion has a strong negative correlation with the trade-weighted U.S. dollar. Over the past three and a half years, this relationship has grown stronger, as the rolling 90-day correlation has averaged a negative 92%. The trade-weighted dollar made new 12-year highs as recently as November, at the same time gold was trading near its 20-year lows. The current environment of declining interest rates and weak economic activity is typically bearish for the dollar, especially when combined with an abnormally high trade deficit and elevated energy prices. The percentage of U.S. dollars held as official foreign exchange holdings is at historic highs of around 78%. This makes the dollar vulnerable to central banks, as well as other investors, who may wish to diversify their portfolios toward non-dollar assets, such as the euro or gold. On January 3, 2001 the Federal Reserve Board instituted a surprise 50-basis-point (0.50%) cut in the fed funds rate in reaction to the rapidly decelerating U.S. economy. This was followed by another 50-basis-point cut on January 31. What started as a slowdown in manufacturing and a spate of disappointing third quarter earnings has worsened to a contraction in manufacturing and continued earnings downgrades. This has been compounded by the Nasdaq collapse and a credit crunch in the telecommunications sector. Logic and history tell us that the debt and other excesses contained within the longest and most powerful economic expansion in history have yet to correct themselves fully. The impact of all this has not been lost on the U.S. consumer, as shown by the disappointing retail sales for the Christmas season and drops in the Consumer Confidence Index. It looks as though the economic slowdown will continue into the first half of 2001 and may evolve into a recession before it is over. At the same time, while general stock market prices have declined from their 2000 peak levels, the commensurate decline in earnings has meant that valuations, as measured by price/earnings ratios, are still well above the historic norm and double the levels of the 1990 recession. While we expected gold to perform better under these circumstances, defensive investing has not yet become widespread. Investors have become accustomed to the relentless rise in the general stock market through the 1990s. However, if economic uncertainty continues, investment attitudes could shift toward wealth protection, a situation in which gold has historically outperformed. 27 INTERNATIONAL INVESTORS GOLD FUND - -------------------------------------------------------------------------------- We appreciate your participation in the Van Eck International Investors Gold Fund and look forward to working with you in the future. [Photo omitted] [Photo omitted] /s/ JOHN C. VAN ECK /s/ JOSEPH M. FOSTER - ------------------- -------------------- JOHN C. VAN ECK JOSEPH M. FOSTER CHAIRMAN MANAGEMENT TEAM MEMBER February 1, 2001 * The Standard & Poor's 500 Index is an unmanaged index and includes the reinvestment of all dividends, but does not reflect the payment of transaction costs, advisory fees or expenses that are associated with an investment in the Fund. The Index's performance is not illustrative of the Fund's performance. Indices are not securities in which investments can be made. The S&P 500 Index consists of 500 widely held common stocks, covering four broad sectors (industrials, utilities, financial and transportation). It is a market value-weighted index (stock price times shares outstanding), with each stock affecting the Index in proportion to its market value. Construction of the S&P 500 Index proceeds from industry group to the whole. Since some industries are characterized by companies of relatively small stock capitalization, the Index is not comprised of the 500 largest companies on the New York Stock Exchange. This Index, calculated by Standard & Poor's, is a total return index with dividends reinvested. - -------------------------------------------------------------------------------- PERFORMANCE RECORD AS OF 12/31/00 - -------------------------------------------------------------------------------- AVERAGE ANNUAL AFTER MAXIMUM BEFORE SALES TOTAL RETURN SALES CHARGE* CHARGE - -------------------------------------------------------------------------------- Life (since 2/10/56) 7.75% 7.90% - -------------------------------------------------------------------------------- 20 year (1.67)% (1.38)% - -------------------------------------------------------------------------------- 15 year (2.22)% (1.83)% - -------------------------------------------------------------------------------- 10 year (7.48)% (6.93)% - -------------------------------------------------------------------------------- 5 year (19.95)% (19.00)% - -------------------------------------------------------------------------------- 1 year (26.66)% (22.18)% - -------------------------------------------------------------------------------- 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 the original cost. * A shares: maximum sales charge is 5.75%. 28 INTERNATIONAL INVESTORS GOLD FUND - -------------------------------------------------------------------------------- GEOGRAPHICAL WEIGHTINGS AS OF DECEMBER 31, 2000 [The table below represents a pie chart in the printed piece.] United States 23.9% Cash/Equivalents 15.0% Canada 29.1% South Africa 20.4% Australia 9.9% United Kingdom 1.3% Peru 0.4% 29 INTERNATIONAL INVESTORS GOLD FUND PERFORMANCE COMPARISON - -------------------------------------------------------------------------------- This graph compares a hypothetical $10,000 investment in the Van Eck International Investors Gold Fund made ten years ago with a similar investment in the Financial Times Gold Mines Index. Van Eck International Investors Gold Fund FT Gold Mines (with sales charge)(1) Index - -------------------------------------------------------------------------------- Dec-90 9425 10000 Mar-91 8868 8952.13 Jun-91 10305 13382.9 Sep-91 9407 10064.7 Dec-91 9667 9062.1 Mar-92 8853 7820.18 Jun-92 8820 5957.31 Sep-92 7925 4799.48 Dec-92 6855 4133.25 Mar-93 9023 8225.55 Jun-93 12548 12316.5 Sep-93 11302 10850.1 Dec-93 14630 14394.3 Mar-94 13256 13165.8 Jun-94 13202 12354 Sep-94 16355 15034 Dec-94 14477 12780 Mar-95 13211 12482.7 Jun-95 12763 12467.8 Sep-95 13909 12844.3 Dec-95 13184 12376.8 Mar-96 15377 15097.2 Jun-96 13764 13044.6 Sep-96 12734 11978.3 Dec-96 11949 11795.3 Mar-97 11257 10588.2 Jun-97 9888 9009.31 Sep-97 10191 9864.49 Dec-97 7648 6844.89 Mar-98 8104 7406.99 Jun-98 6864 6428.59 Sep-98 7179 7121.15 Dec-98 6740 6044.57 Mar-99 6300 5620.96 Jun-99 6198 5724.77 Sep-99 7041 7304.59 Dec-99 5907 6004.46 Mar-00 5020 5056.21 Jun-00 5165 5222.9 Sep-00 4566 4518.63 Dec-00 4597 4421.73 - -------------------------------------------------------------------------------- Average Annual Total Return 12/31/00 1 Year 5 Year 10 Year - -------------------------------------------------------------------------------- VE International Investors Gold Fund (w/o sales charge) (22.18)% (19.00)% (6.93)% - -------------------------------------------------------------------------------- VE International Investors Gold Fund (with sales charge)(1) (26.66)% (19.95)% (7.48)% - -------------------------------------------------------------------------------- FT Gold Mines Index (26.42)% (18.59)% (7.83)% - -------------------------------------------------------------------------------- INCEPTION DATE FOR THE VAN ECK INTERNATIONAL INVESTORS GOLD FUND WAS 2/10/56. (1) The maximum sales charge is 5.75%. Returns for the Van Eck International Investors Gold Fund reflect all recurring expenses and include the reinvestment of all dividends and distributions. The Financial Times Gold Mines Index is an unmanaged index and includes the reinvestment of all dividends, but does not reflect the payment of transaction costs, advisory fees or expenses that are associated with an investment in the Fund. The Index's performance is not illustrative of the Fund's performance. Indices are not securities in which investments can be made. The Financial Times Gold Mines Index is a market capitalization-weighted global index of gold-mining shares. 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. 30 NATURAL RESOURCES FUND - -------------------------------------------------------------------------------- Dear Shareholder: As you know, the Van Eck Gold/Resources Fund underwent a name change on May 1, 2000 and became the Van Eck Natural Resources Fund. While the Fund's objective of long-term capital appreciation remained unchanged and the Fund still invests in some gold-related securities, we diversified the majority of the Fund's assets into other natural resources, such as oil, industrial metals, forest and paper products, and other strategic or precious metals. This reallocation has been very beneficial to Fund performance since many natural resources substantially outperformed gold in 2000. While the Natural Resources Fund declined 12.82% for the year, we are pleased to report that performance improved in the second half of 2000, due largely to reallocations into natural resources, particularly energy. The Fund gained 1.71% in the last six months of the year, a period in which the overall market declined 8.72%, as measured by the Standard & Poor's 500 Index.* A portfolio of natural resource shares tends to provide defensive diversification and relative strength in times of general market weakness. The Fund realized substantial gains in energy and platinum group metals. Whereas the performance of industrial metals, forest products, and gold was disappointing for most of the year, patience and perseverance paid off as these sectors staged impressive year-end rallies. REVIEW In the second half of 2000, the ENERGY sector maintained or added to the gains achieved by the sector in the first half. Several increases in OPEC production throughout the year failed to cause a rise in U.S. inventory levels, as crude oil peaked at the $35 per barrel level. Anecdotal evidence suggests that much of the additional OPEC oil ended up in Asia, as China is thought to have been building inventory. Crude finally found its way into U.S. inventories in November and the price has since weakened to finish at $26.70, a 4.3% gain for the year. Natural gas prices climbed steadily into October due to fundamental tightness in the market. Continued increases in demand from new clean-burning power plants has caught up to a supply that is constrained by depleting reserves in mature hydrocarbon basins located in the Gulf of Mexico, the continental U.S., and western Canada. Since October, prices have risen sharply due to heavy demand brought on by the energy crisis in California and the first below-normal winter temperatures in years east of the Rockies. A drought in the Northwest has severely curtailed hydroelectric power generation, which has caused California to rely heavily on natural gas for electricity generation. Gas prices ended the year at $9.73 per million Btu's, up 317% for the year. The best performance among energy shares came from the independent producers and the oil services groups, which gained 105.5% and 45.2%, respectively, for the year. These are the companies with the most relative exposure to natural gas prices. The integrated producers lagged with a 6.6% gain. Many energy share prices peaked in the September-October time frame when Fund management took the opportunity to lock in profits, ending 2000 with 32.5% of assets in energy, down from earlier peak levels of around 45%. PRECIOUS METALS continued their split personalities, with gold and silver moving lower and the platinum group metals (PGM) substantially higher. Gold ended the year at $272.00 per ounce for a decline of 5.7%, after trading as low as $265 in October. The dominating negative influence affecting gold was the relentless climb in the U.S. dollar against all other currencies. During 2000, gold traded at or near multi-year highs in Swiss francs, Australian dollars, British pounds and Indian rupees, which created considerable selling pressure from abroad. This trend reversed course in late October when the U.S. dollar began to weaken due to the slowing U.S. economy. Coincident with the dollar's reversal, gold staged its longest uptrend of the year, and gold shares sprang to life with a year-end rally of 19.9% since November 20. Despite this, gold shares still finished the year with a disappointing 26.4% decline. At year end, the Fund was 23.6% invested in gold equities. 31 NATURAL RESOURCES FUND - -------------------------------------------------------------------------------- In stark contrast to gold, platinum increased 38.4% to $612.50 and palladium more than doubled to $959.45 per ounce. Supply of both of these metals is limited to a handful of mines located mainly in South Africa and Russia. Erratic supply from Russia has caused persistent shortages of these metals in the West, where they are used mainly in autocatalysts. This lack of supply has caused prices to skyrocket. After profit taking, the PGM producers stood at 5.1% of Fund assets at year end, down from peak levels of around 8%. INDUSTRIAL METALS finished the year with declines in the 3% to 5% range for copper and aluminum, and 15% to 30% for zinc, nickel, and steel. Robust economic growth in the first half led to overproduction of semi-finished and finished products, causing substantial declines in raw metals inventories. Low inventories caused prices to strengthen in September, however, prices have since declined due to the oversupply of semi-finished and finished products. Prices for copper and aluminum have not declined nearly as much as other metals due to tighter supplies caused by the ongoing energy crisis in the western U.S. High electricity costs have forced production cutbacks at a number of southwestern U.S. copper mines. In the Northwest, a shortage of hydropower has caused most of the aluminum capacity of the region to shut down. Industrial metals stocks declined 31.7% for the year. Prices bottomed in October, but rallied nicely into the new year, as the market for metals shares reacted favorably in anticipation of a January 2001 federal funds target rate cut. Steel producers' stock performance has lagged the other metals producers due to a severe downturn in automotive production and an increase in steel imports in the second half caused by the strong U.S. dollar. Most of the industrial metals shares within the Fund were purchased as shares declined throughout the year. As a result, approximately half of our positions (which totaled 15.7% of Fund assets at December 31) were showing positive gains at year end. FOREST AND PAPER PRODUCTS generally finished higher for the year, however, prices weakened in the second half as the U.S. economy slowed and the strong U.S. dollar made imports more competitive. Newsprint prices ended the year with the strongest performance of the group, up 18%, as industry consolidation and plant closures have created a tight market. Other paper and paperboard grades finished the year with gains ranging from 0% to 10%. At the other end of the spectrum, chronic overcapacity plagued the lumber market as prices sank to multi-year lows. Some of the lumber-making capacity was diverted to pulp production, creating substantial year-end pressure on market pulp prices, which had reached long-term highs in March. Whereas most commodity prices turned in a positive year, the share prices of the forest and paper products companies declined to recessionary levels, as market participants focused on a slowing U.S. economy. A turnaround came in October, when the U.S. dollar weakened, thereby easing commodity price pressures from imports. Stocks gained further momentum as the year ended and the market started anticipating a fed rate cut that could spur growth. Shares ended the year down 20%; however, earlier declines were cut in half by the year-end rally. At December 31, 13.5% of your Fund's assets were in this sector. THE OUTLOOK On January 3, 2001 the Fed instituted a surprise 50-basis-point (0.50%) cut in the Fed funds rate in reaction to the rapidly decelerating U.S. economy. What started as a slowdown in manufacturing and a spate of disappointing third quarter earnings has worsened to a contraction in manufacturing and continued earnings downgrades. This has been compounded by the Nasdaq crash and a credit crunch in the telecommunications sector. Logic and history tell us that the excesses contained within the longest economic expansion and the largest speculative stock market bubble in history have yet to correct themselves fully. The impact of all of this has not 32 NATURAL RESOURCES FUND - -------------------------------------------------------------------------------- been lost on the U.S. consumer, as shown by the disappointing retail sales for the holiday season. It looks as though the economic slowdown will continue into the first half of 2001 and may evolve into a recession before it is over. Because of the negative uncertainty currently in the market, the Fund has maintained a fairly large position in gold shares, as we expect investors to turn increasingly to defensive investing. Additionally, a cash position of 9.3% at year end will allow the Fund to take advantage of buying opportunities that will arise should the economy deteriorate further. The energy sector continues to look attractive. Natural gas will probably come down as more wells are drilled and the demand response to current high prices is factored in; however, we expect prices to eventually settle above historical levels. Crude oil prices have remained above $25 longer than most analysts expected, indicating that there is more discipline on the part of OPEC and international oil producers to refrain from flooding the market with new production, which has happened in past cycles. Elevated long-term commodity prices will ensure superior returns for shareholders. Also, to take advantage of an improving coal market, Natural Resources has taken a position in Arch Coal (1.7% of assets at December 31) and increased positions in diversified miners that have significant coal production, such as Rio Tinto and M.I.M. (3.4% and 1.7% of assets, respectively). Continued reductions in semi-finished and end-product inventories and weakening consumption may cause metals and forest products prices to soften during the first half of 2001. Much of this commodity price weakness has been priced into the shares, in our opinion, which experienced a recessionary price decline into October of 2000. Should a sharper or more prolonged economic downturn eventuate, the downside risk to these stocks will be limited, and in fact, provide an excellent buying opportunity. On the other hand, should the Fed rate cuts return the global economy to robust growth, then tight supplies of commodities such as aluminum, copper, or newsprint should create an extremely positive pricing environment for producers. We appreciate your participation in the Van Eck Natural Resources Fund and look forward to working with you in the future. [Photo omitted] /s/ JOSEPH M. FOSTER - -------------------- JOSEPH M. FOSTER MANAGEMENT TEAM MEMBER January 24, 2001 * The Standard & Poor's 500 Index is an unmanaged index and includes the reinvestment of all dividends, but does not reflect the payment of transaction costs, advisory fees or expenses that are associated with an investment in the Fund. The Index's performance is not illustrative of the Fund's performance. Indices are not securities in which investments can be made. The S&P 500 Index consists of 500 widely held common stocks, covering four broad sectors (industrials, utilities, financial and transportation). It is a market value-weighted index (stock price times shares outstanding), with each stock affecting the Index in proportion to its market value. Construction of the S&P 500 Index proceeds from industry group to the whole. Since some industries are characterized by companies of relatively small stock capitalization, the Index is not comprised of the 500 largest companies on the New York Stock Exchange. This Index, calculated by Standard & Poor's, is a total return index with dividends reinvested. - -------------------------------------------------------------------------------- PERFORMANCE RECORD AS OF 12/31/00 - -------------------------------------------------------------------------------- AVERAGE ANNUAL AFTER MAXIMUM BEFORE SALES TOTAL RETURN SALES CHARGE* CHARGE - -------------------------------------------------------------------------------- Life (since 2/15/86) (2.00)% (1.61)% - -------------------------------------------------------------------------------- 10 year (5.35)% (4.79)% - -------------------------------------------------------------------------------- 5 year (16.66)% (15.67)% - -------------------------------------------------------------------------------- 1 year (17.93)% (12.82)% - -------------------------------------------------------------------------------- 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 the original cost. * A shares: maximum sales charge is 5.75%. 33 NATURAL RESOURCES FUND - -------------------------------------------------------------------------------- SECTOR WEIGHTINGS AS OF DECEMBER 31, 2000 [The table below represents a pie chart in the printed piece.] Cash/Equivalents 9.3% Forest Products & Paper 13.5% Industrial Metals 15.7% Precious Metals 29.0% Energy 32.5% GEOGRAPHICAL WEIGHTINGS AS OF DECEMBER 31, 2000 [The table below represents a pie chart in the printed piece.] United States 41.3% Canada 16.7% Australia 10.1% South Africa 11.1% France 3.9% Netherlands 2.7% United Kingdom 3.7% Other 1.2% Cash/Equivalents 9.3% 34 NATURAL RESOURCES FUND TOP TEN EQUITY HOLDINGS AS OF DECEMBER 31, 2000* - -------------------------------------------------------------------------------- DEVON ENERGY CORP. (U.S., 4.2%) Devon Energy is an independent energy company involved in oil and gas property acquisition, exploration and production. The company operates in the Permian Basin of Texas, the Rocky Mountains, the Gulf Coast and offshore Gulf of Mexico, as well as western Canada and internationally. The company has focused on increasing domestic production with timely acquisitions. CHEVRON CORP. (U.S., 4.0%) Chevron explores for, develops and produces oil and natural gas. The company offers some of the best exploration plays among the major oil companies and has a strong position in the developing Caspian Sea region. Chevron also refines, markets and transports crude oil in the U.S. and throughout the world. TOTAL FINA ELF S.A. (FRANCE, 3.9%) Total Fina explores for, produces, refines, transports, and markets oil and natural gas. There are 12,840 Total gas filling stations in Europe, the United States, and Africa. The company also operates a chemical division, which produces rubber, paint, ink, adhesives, and resins. Total is investing heavily in new oil and gas projects that offer the greatest prospects for production growth among the integrated energy producers. MERIDIAN GOLD, INC. (CANADA, 3.9%) Meridian Gold is a gold production and exploration company with operations in the Americas. The company more than doubled its gold production in 2000 with the commissioning of its El Penon mine in Chile. El Penon is a high-grade underground gold mine with substantial silver credits that has transformed Meridian into one of the lowest-cost producers in the world. NEWMONT MINING CO. (U.S., 3.8%) Newmont is the largest gold producer outside of South Africa. The company's core property is the Yanacocha Mine in Peru, which has developed into a district, or collection of deposits, producing nearly two million ounces per year. In 2000, Newmont successfully commissioned the world class Batu Hijau Mine in Indonesia and continues to lead the North American industry with its production from Nevada. RIO TINTO LTD. (AUSTRALIA, 3.4%) Rio Tinto is an international mining company with interests in mining for aluminum, borax, coal, copper, gold, iron ore and other commodities. Rio Tinto focuses on producing materials in which it can play a dominant role in pricing and marketing. GRANT PRIDECO, INC. (U.S., 3.3%) Grant Prideco is the world's leading provider of drill stem products used for oil and gas exploration and production. With its integrated operations, Grant Prideco is the dominant player and low-cost producer in its market. HOMESTAKE MINING CORP. (U.S., 3.0%) Homestake Mining explores for and produces gold. The company has the lowest level of political risk in the industry with operations in the United States, Canada, and Australia. Homestake is an unhedged producer that has successfully reduced costs to stay competitive at low gold prices. IMPALA PLATINUM HOLDINGS LTD. (SOUTH AFRICA, 2.8%) Impala is the world's second-largest primary platinum producer. The company mines, refines, and markets platinum and other platinum group metals, such as palladium, rhodium, and nickel. Operations are located mainly in South Africa. Impala is also one of the largest recyclers of automotive catalytic converters. ROYAL DUTCH PETROLEUM CO. (NETHERLANDS, 2.7%) Royal Dutch Petroleum controls the Royal Dutch/Shell Group of companies. The company explores for, produces, refines, and markets petroleum products and manufactures chemicals. Royal Dutch has emerged from a restructuring and asset disposal program that promises to provide superior profitability going forward from one of the best asset portfolios in the business. - ---------- *Portfolio is subject to change. 35 NATURAL RESOURCES FUND PERFORMANCE COMPARISON - -------------------------------------------------------------------------------- This graph compares a hypothetical $10,000 investment in the Van Eck Natural Resources Fund made ten years ago with a similar investment in the Financial Times Gold Mines Index and the Ibbotson Hard Assets Index. [The table below represents a line chart in the printed piece.] VAN ECK NATURAL RESOURCES FUND vs. Financial Times Gold Mines Index and Ibbotson Hard Assets Index Van Eck Ibbotson Natural Resources Fund FT Gold Mines Hard Assets (with sales charge)(1) Index Index ---------------------- ------------- ----------- Dec-90 9420 10000 10000 Mar-91 8889 8952.13 10324 Jun-91 9227 13382.9 10535 Sep-91 8647 10064.7 10513 Dec-91 9036 9062.1 10444 Mar-92 8746 7820.18 10264 Jun-92 9327 5957.31 10645 Sep-92 9400 4799.48 10341 Dec-92 8629 4133.25 9919 Mar-93 10399 8225.55 11039 Jun-93 14132 12316.5 11859 Sep-93 12653 10850.1 11657 Dec-93 15368 14394.3 12249 Mar-94 15101 13165.8 12492 Jun-94 13671 12354 12935 Sep-94 15174 15034 13694 Dec-94 12968 12780 13324 Mar-95 13065 12482.7 13542 Jun-95 13065 12467.8 13872 Sep-95 13913 12844.3 14319 Dec-95 13526 12376.8 14652 Mar-96 16434 15097.2 15704 Jun-96 14689 13044.6 15472 Sep-96 13865 11978.3 15509 Dec-96 13865 11795.3 16441 Mar-97 12774 10588.2 16079 Jun-97 11320 9009.31 16594 Sep-97 11756 9864.49 17552 Dec-97 8411 6844.89 14748 Mar-98 9114 7406.99 15495 Jun-98 7805 6428.59 14218 Sep-98 7854 7121.15 13627 Dec-98 7369 6044.57 13201 Mar-99 6763 5620.96 13612 Jun-99 6545 5724.77 15337 Sep-99 8023 7304.59 16364 Dec-99 6617 6004.46 16893 Mar-00 5793 5056.21 15702 Jun-00 5672 5222.9 16340 Sep-00 5357 4518.63 16059 Dec-00 5769 4421.73 17206 - -------------------------------------------------------------------------------- Average Annual Total Return 12/31/00 1 Year 5 Year 10 Year - -------------------------------------------------------------------------------- VE Natural Resources Fund (w/o sales charge) (12.82)% (15.67)% (4.79)% - -------------------------------------------------------------------------------- VE Natural Resources Fund (with sales charge)(1) (17.93)% (16.66)% (5.35)% - -------------------------------------------------------------------------------- FT Gold Mines Index (26.36)% (18.59)% (7.83)% - -------------------------------------------------------------------------------- Ibbotson Hard Assets Index 1.86% 3.27% 5.58% - -------------------------------------------------------------------------------- INCEPTION DATE FOR THE VAN ECK NATURAL RESOURCES FUND WAS 2/15/86. (1) The maximum sales charge is 5.75%. Returns for the Van Eck Natural Resources Fund reflect all recurring expenses and include the reinvestment of all dividends and distributions. The Financial Times Gold Mines Index and the Ibbotson Hard Assets 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 Financial Times Gold Mines Index is a market capitalization-weighted global index of gold mining shares. The Ibbotson Hard Assets Index is 75% equities of global companies whose primary business is linked to hard assets and 25% commodity futures. The equity component consists of equal weightings of the MSCI Gold Mines, Non-Ferrous Metals, Energy Sources, and Forest Products and Paper Indices, and the National Association of Real Estate Investment Trusts Equity Index. The commodity component consists of equal weightings of the Goldman Sachs Energy, Precious Metals and Industrial Metals Indices. Effective May 1, 2000, the Van Eck Gold/Resources Fund changed its name to the Van Eck Natural Resources Fund. Its objective of long-term capital appreciation will remain the same, but the Fund, while continuing to invest a portion of its assets in gold-related securities, will place greater emphasis on securities of companies involved in the production of other strategic or precious metals, minerals, oil, natural gas and coal. Going forward, we will no longer compare the Fund to the Financial Times Gold Mines Index since the FT Gold Mines Index is not a natural resources index. A $10,000 investment in the FT Gold Mines Index at 12/31/99 would have declined to $7,364 by 12/31/00 versus the same investment in the Fund, which would have declined to $8,207 by year end (A shares, after maximum sales charge). 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. 36 U.S. GOVERNMENT MONEY FUND Dear Shareholder: The U.S. Government Money Fund continues to meet its objectives as an investment that provides a high degree of safety and daily liquidity. It also serves to assist investors who wish to employ our exchange privileges or to use our checkwriting privileges. The Fund's seven-day average yield was 4.65%* and its 30-day average yield was 4.92% on December 29, 2000. The Fund's total net assets were $73.8 million as of December 31, 2000. During the year 2000, the yield on three-month Treasury bills averaged 5.98%. Treasury bill rates climbed steadily from their January low of 5.33% to peak in early November at a rate of 6.43%. This rise in T-bill rates was a result of the continued tightening of monetary conditions by the Federal Reserve. The Fed raised the fed funds target rate three times during 2000, a total tightening of 100 basis points (1.00%), in an attempt to cool the robust U.S. economy and reduce inflationary risks. T-bill rates peaked in early November as the economy began to show signs of slowing. In December, money market rates fell precipitously as investors became nervous about the dramatic slowdown in economic activity and began discounting a shift in monetary policy from tightening to easing by the Federal Reserve. Three month T-bill rates reached the low for the year on December 22, with a yield of 5.26%, and ended the year at 5.90%. The Fund's investment strategy continues to emphasize safety by investing in short-term U.S. Treasury obligations and repurchase agreements collateralized by U.S. Treasury obligations. These obligations are the most conservative money market investments and offer the highest degree of security since they are backed by the United States Government. Of course, shares of the Fund are not guaranteed by the U.S. Government** and there can be no guarantee that the price of the Fund's shares will not fluctuate.*** Repurchase agreements allow us to take advantage of higher yields without significantly increasing risk. The Fund's repurchase agreements are collateralized 102% by U.S. Treasury obligations with maturities of less than five years. In addition, your Fund has possession of the collateral. We plan to continue our current investment strategy, keeping an equal weighting between U.S. Treasury bills and repurchase agreements over time. However, when repurchase agreements offer an attractive yield pickup over Treasury bills we will look to place more emphasis on repurchase agreements. The U.S. Government Money Fund offers daily liquidity and checkwriting privileges, providing the kind of convenient access to cash not available in many other types of investments. The Fund also provides an excellent base from which investors may transfer money into or out of other members of the Van Eck Family of Funds.+ We appreciate your participation in the Van Eck U.S. Government Money Fund and look forward to working with you in the future. [Photo omitted] /s/ GREGORY F. KRENZER - ---------------------- GREGORY F. KRENZER PORTFOLIO MANAGER January 16, 2001 - ---------- * Performance data represents past performance and is not indicative of future results. ** An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. *** There can be no assurance that the Fund will be able to maintain a stable net asset value of $1.00 per share. It is possible to lose money by investing in the Fund. + Currently, there is no charge imposed on exchanges or limits as to frequency of exchanges for this Fund. However, shareholders are limited to six exchanges per calendar year for other Van Eck and Van Eck/Chubb Funds. The Funds reserve the right to modify or terminate the terms of the Exchange Privilege. 37 ASIA DYNASTY FUND SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 2000 NO. OF SHARES SECURITIES (a) VALUE (NOTE 1) - -------------------------------------------------------------------------------- CHINA: 5.9% 325,000 China Unicom Ltd.+ $ 497,936 250,000 MATRIX 8848.net Holdings, LLC (b)(c)(d) 250,000 1,700,000 Sinopec Zhenhai Refining & Chemical Co. Ltd. 231,035 1,260,000 Yizheng Chemical Fibre Co. Ltd. 235,855 ----------- 1,214,826 ----------- HONG KONG: 43.2% 625,000 Amoy Properties Ltd. 697,142 50,500 ASAT Holdings Ltd. (ADR)+ 252,500 414,000 Asia Satellite Telecommunications Holdings Ltd. 859,879 450,000 ASM Pacific Technology Ltd. 640,409 2,798,000 Brilliance China Automotive Holdings Ltd. 762,305 190,000 Cathay Pacific Airways 350,783 47,000 Cheung Kong (Holdings) Ltd. 601,081 86,000 China Mobile (Hong Kong) Ltd.+ 469,710 183,200 Dah Sing Financial Group 986,499 2,550,000 Denway Motors Ltd.+ 444,632 500,000 Giordano International Ltd. 230,778 195,000 Great Eagle Holdings Ltd. 331,263 442,000 Li & Fung Ltd. 804,698 82,000 Swire Pacific Ltd. "A" 591,369 40,000 Television Broadcast Ltd. 210,265 100,000 Wharf (Holdings) Ltd. 242,958 225,000 Wheelock & Co. Ltd. 186,065 1,100,000 Zhejiang Expressway Co. Ltd. 174,879 ----------- 8,837,215 ----------- INDIA: 9.5% 28,400 HCL Technologies Ltd. 324,945 18,500 Housing Development Finance Corporation Ltd. 214,407 4,800 Infosys Technologies Ltd. 589,203 400 ITC Ltd. 7,656 45,000 Satyam Computer Services Ltd. 311,134 239,000 Sonata Software Ltd. 234,494 35 Tata Infotech Ltd. 164 13,500 Television Eighteen India Ltd. 75,627 12,000 Visualsoft Technologies Ltd. 182,776 ----------- 1,940,406 ----------- INDONESIA: 1.2% 640,554 PT Astra International Tbk+ 132,414 750,000 PT Bank Pan Indonesia Tbk Warrants (expiring 7/08/02)+ 2,093 500,000 PT Telekomunikasi Indonesia 105,943 ----------- 240,450 ----------- MALAYSIA: 0.3% 47,333 MAA Holdings Berhad 57,298 ----------- PHILIPPINES: 0.0% 3,000 Benpres Holdings Corp. (GDR)+ 3,375 ----------- SINGAPORE: 7.8% 110,000 Capitaland Ltd.+ 190,311 5,000 Chartered Semiconductor (ADR)+ 131,875 21,420 Datacraft Asia Ltd. 101,102 27 DBS Group Holdings Ltd. 305 130,000 Keppel Land Ltd. 206,171 92,000 Singapore Land Ltd. 209,043 34,000 Singapore Land Warrants (expiring 3/23/05)+ 32,353 723 Singapore Press Holdings Ltd. 10,674 230,000 Singapore Tech Engineering 370,069 490,000 Star Cruises Ltd.+ 343,000 ----------- 1,594,903 ----------- SOUTH KOREA: 17.2% 4,000 Cheil Communications, Inc. 196,047 41,100 Housing & Commercial Bank, Korea 932,466 36,000 Kookmin Credit Card Co. Ltd.+ 793,992 9,810 Korea Telecom Corp. 519,581 5,226 Samsung Electronics 652,734 2,100 SK Telecom Co. Ltd. 420,000 ----------- 3,514,820 ----------- TAIWAN: 11.3% 104,000 Advantech Co. Ltd. 329,710 41,906 Ambit Microsystems Corp. 177,772 282,700 Compal Electronics, Inc. 383,250 102,600 Siliconware Precision Industries Co. (ADR)+ 256,500 87,000 Sunplus Technology Co. Ltd. 345,426 160,000 Taiwan Cellular Corp.+ 241,546 306,800 United Microelectronics Corp. 445,564 26,000 Via Technologies, Inc.+ 140,519 ----------- 2,320,287 ----------- THAILAND: 0.6% 190,800 Regional Container Line Public Co. Ltd. "F" 120,899 ----------- TOTAL STOCKS AND OTHER INVESTMENTS: 97.0% (Cost: $22,595,918) 19,844,479 OTHER ASSETS LESS LIABILITIES: 3.0% 623,938 ----------- NET ASSETS: 100% $20,468,417 =========== - ---------- (a) Unless otherwise indicated, securities owned are shares of common stock. (b) Affiliated company. See Schedule of Affiliated Company Transactions (Note 9). (c) Fair value as determined by Board of Trustees. (d) Restricted security (Note 8). + Non-income producing. GLOSSARY: ADR - American Depositary Receipt GDR - Global Depositary Receipt "F" - Foreign Registry See Notes to Financial Statements 38 ASIA DYNASTY FUND SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 2000 SUMMARY OF % OF INVESTMENTS NET BY INDUSTRY ASSETS - ----------- ------ Advertising 1.0% Airlines 1.7% Apparel 1.1% Automotive 6.5% Chemicals 2.3% Computer Software & Technology 9.2% Conglomerates 7.7% Consumer Products 3.9% Electrical Equipment & Electronics 9.1% Engineering & Construction 3.4% Entertainment & Leisure 1.7% Financial Services & Insurance 14.6% Publishing 0.1% Real Estate 8.5% Semiconductors & Semiconductor Equipment 7.7% Telecommunications 15.7% Television 1.4% Transportation 1.4% Other assets less liabilities 3.0% ----- 100.0% ===== See Notes to Financial Statements 39 EMERGING MARKETS VISION FUND SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 2000 NO. OF SHARES SECURITIES (a) VALUE (NOTE 1) - -------------------------------------------------------------------------------- BRAZIL: 14.6% 300 Ambev (ADR) $ 7,725 100 Brasil Telecom Participacoes S.A. (ADR) 5,900 110,000 Caemi Mineracao E Metalurgica S.A. Pfd.+ 12,974 40,007 Celular CRT Participacoes S.A. Pfd. (ADR)+ 12,925 1,300 CIA Paranaense de Energia (Copel) Pfd. (ADR) 10,968 500 Embraer Aircraft Corp. (Sponsored ADR) 19,875 1,000 Embratel Participacoes S.A. 15,688 600,000 Petrobras Distribuidora S.A. Pfd. 8,615 335 Petroleo Brasileiro S.A. Pfd. 7,865 2,000,000 Tele Centro Oeste Celular Participacoes S.A. Pfd.+ 6,944 150 Tele Norte Leste Participacoes S.A. (ADR) 3,422 170 Uniao de Bancos Brasileiros S.A. 5,005 ----------- 117,906 ----------- CHINA: 2.9% 15,000 China Unicom Ltd.+ 22,982 ----------- CROATIA: 1.5% 1,000 Pliva D.D. (GDR) 11,750 ----------- GREECE: 1.5% 1,450 Cosmote Mobile Communication S.A.+ 11,836 ----------- HONG KONG: 12.3% 3,000 Asat Holdings Ltd. (ADR)+ 15,000 7,000 Asia Satellite Telecommunications Holdings Ltd. 14,539 8,000 ASM Pacific Technology Ltd. 11,385 1,000 Cheung Kong (Holdings) Ltd. 12,789 2,800 Dah Sing Financial Group 15,078 8,000 Johnson Electric Holdings Ltd. 12,308 10,000 Li & Fung Ltd. 18,206 ----------- 99,305 ----------- INDIA: 6.3% 2,000 India Fund, Inc.+ 24,250 1,500 Rediff.com India Ltd. (ADR)+ 3,750 1,000 Silverline Technologies Ltd. (ADR)+ 10,063 4,500 SSI Ltd. 12,825 ----------- 50,888 ----------- INDONESIA: 0.5% 20,000 PT Telekomunikasi Indonesia 4,238 ----------- ISRAEL: 4.6% 1,000 ESC Medical Systems Ltd.+ 12,063 500 Fundtech Ltd.+ 8,938 70 Gilat Satellite Networks Ltd.+ 1,785 1,000 Nova Measuring Instruments Ltd.+ 6,937 200 Orbotech Ltd.+ 7,462 ----------- 37,185 ----------- MALAYSIA: 0.8% 5,333 MAA Holdings Berhad 6,456 ----------- MEXICO: 13.5% 248 Cemex S.A. (Sponsored ADR) 4,480 5,000 Consorcio ARA S.A. de C.V. 5,925 3,524 Corporation Interamericana de Entretenimiento S.A. de C.V. 14,468 15,500 Grupo Financiero Banamex Accival, S.A. de C.V. 25,455 700 Telefonos de Mexico S.A. de C.V. (Sponsored ADR) 31,587 2,750 TV Azteca S.A. (Sponsored ADR) 27,328 ----------- 109,243 ----------- PHILIPPINES: 1.5% 700 Philippine Long Distance Telephone Co. (Sponsored ADR) 12,469 ----------- RUSSIA: 7.3% 1,000 AO Taftneft (Sponsored ADR) 7,063 300 Lukoil Holding (ADR) 10,854 400 Mobile Telesystems (Sponsored ADR)+ 9,600 2,000 Norilsk Nickel+ 14,600 1,100 OAO Gazprom (ADR) 7,012 35,000 Surgutneftegaz Pfd. 3,255 650 Surgutneftegaz (Sponsored ADR) 6,841 ----------- 59,225 ----------- SINGAPORE: 4.7% 300 Chartered Semiconductor Manufacturing Ltd. (ADR)+ 7,913 1,560 Datacraft Asia Ltd. 7,363 10,000 Keppel Land Ltd. 15,859 10,000 Star Cruises Ltd.+ 7,000 ----------- 38,135 ----------- SOUTH AFRICA: 1.2% 9,000 Comparex Holdings Ltd. 9,945 ----------- SOUTH KOREA: 10.3% 100 Cheil Communications, Inc. 4,901 350 Housing & Commercial Bank, Korea 7,941 1,000 Kookmin Credit Card Co. Ltd.+ 22,055 300 Korea Telecom Corp. 15,890 100 Samsung Electronics 12,490 100 SK Telecom Co. Ltd. 20,000 ----------- 83,277 ----------- TAIWAN: 8.5% 2,375 Acer, Inc. (GDR) 5,522 1,000 ASE Test 8,500 1,300 Hon Hai Precision Industry Co. Ltd. 15,438 1,300 Powerchip Semiconductor Corp.+ 6,435 3,000 R.O.C. Taiwan Fund 13,687 3,700 Siliconware Precision Industries Co. (ADR)+ 9,250 1,000 Winbond Electronics Corp. 9,375 ----------- 68,207 ----------- See Notes to Financial Statements 40 EMERGING MARKETS VISION FUND SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 2000 NO. OF SHARES SECURITIES (a) VALUE (NOTE 1) - -------------------------------------------------------------------------------- TURKEY: 1.0% 75,000 Turkiye Garanti Bankasi A.S. $ 4,196 105,000 Vestel Elektronik Sanayi ve Ticoret. A.S.+ 3,877 ----------- 8,073 ----------- TOTAL STOCKS AND OTHER INVESTMENTS: 93.0% (Cost: $1,107,157) 751,120 ----------- SHORT-TERM OBLIGATION: 5.3% PRINCIPAL INTEREST MATURITY AMOUNT RATE DATE - -------------------------------------------------------------------------------- $43,000 Repurchase Agreement (Note 10): Purchased on 12/29/00; maturity value $43,027 (with State Street Bank & Trust Co., collateralized by $45,000 Federal Home Loan Bank 5.875% due 8/15/01 with a value of $45,946) (Cost: $43,000) 5.75% 1/02/01 43,000 ----------- TOTAL INVESTMENTS: 98.3% (Cost: $1,150,157) 794,120 OTHER ASSETS LESS LIABILITIES: 1.7% 13,654 ----------- NET ASSETS: 100% $ 807,774 =========== - ---------- (a) Unless otherwise indicated, securities owned are shares of common stock. + Non-income producing. GLOSSARY: ADR - American Depositary Receipt GDR - Global Depositary Receipt SUMMARY OF % OF INVESTMENTS NET BY INDUSTRY ASSETS - ----------- ------ Advertising 0.6% Aerospace & Defense 2.4% Beverages 1.0% Building & Construction 0.6% Closed End Fund 4.7% Computer Software & Technology 4.9% Distribution 2.2% Electrical Equipment & Electronics 2.8% Entertainment & Leisure 2.7% Financial Services & Insurance 12.3% Industrial 1.5% Manufacturing 0.5% Medical Devices 1.5% Mining 3.4% Oil & Gas 6.4% Pharmaceuticals 1.4% Real Estate 4.3% Semiconductors & Semiconductor Equipment 10.8% Telecommunications 24.2% Television 3.4% Utilities 1.4% Short-Term Obligation 5.3% Other assets less liabilities 1.7% ------- 100.0% ======= See Notes to Financial Statements 41 GLOBAL HARD ASSETS FUND SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 2000 NO. OF SHARES SECURITIES (a) VALUE (NOTE 1) - -------------------------------------------------------------------------------- AUSTRALIA: 7.7% 325,000 M.I.M. Holdings Ltd. $ 210,083 123,000 Newcrest Mining Ltd. 299,733 6,830 Online Advantage Ltd.+ 456 542,400 Portman Mining Ltd. 350,612 56,500 Santos Ltd. 189,537 143,000 United Energy Ltd. 256,591 47,500 WMC Ltd. 202,676 ----------- 1,509,688 ----------- BERMUDA: 0.6% 5,700 Knightsbridge Tankers Ltd. 125,043 ----------- CANADA: 18.6% 34,500 Abitibi-Consolidated, Inc. 316,969 7,200 Alberta Energy Co. Ltd. 344,651 12,600 Barrick Gold Corp. 206,388 707,700 Brazilian Resources, Inc.+ 117,953 30,000 Brookfield Properties Corp. 528,017 8,150 Ensign Resource Service Group, Inc. 301,560 20,000 NQL Drilling Tools, Inc.+ 103,336 16,875 Oxford Properties Group, Inc. 202,506 31,200 Placer Dome, Inc. 300,300 16,200 Talisman Energy, Inc.+ 601,040 19,500 Tembec, Inc.+ 181,356 35,000 Timberwest Forest Corp. 253,175 8,200 TrizecHahn Corp. 124,025 333,000 Windsor Energy Corp. (b)(c)+ 86,582 ----------- 3,667,858 ----------- FINLAND: 1.4% 22,500 Stora Enso Oyj (R Shares) 266,404 ----------- FRANCE: 0.1% 3,500 Societe Fonciere Lyonnaise Warrants (expiring 7/30/02)+ 657 3,000 Unibail S.A. Warrants (expiring 5/11/04)+ 26,725 ----------- 27,382 ----------- HONG KONG: 2.2% 44,400 Sun Hung Kai Properties Ltd. 442,593 ----------- RUSSIA: 5.5% 1,679 Khanty-Mansiysk Oil Co. (b)(c)+ 881,475 2,600 Lukoil Holding Corp. (ADR) 94,064 2,600 Lukoil Holding Corp. Pfd. (ADR) 45,199 7,800 Surgutneftegaz, Inc. Pfd. (Sponsored ADR) 70,365 ----------- 1,091,103 ----------- SINGAPORE: 1.2% 137,000 Capitaland Ltd.+ 237,024 ----------- SOUTH AFRICA: 1.1% 4,092 Anglogold Ltd. (Sponsored ADR) 61,124 23,000 Sappi Ltd. (ADR) 163,875 ----------- 224,999 ----------- UNITED KINGDOM: 1.4% 5,700 BP Amoco PLC (ADR) 272,888 ----------- UNITED STATES: 58.0% 45,201 AK Steel Holding Corp. 395,509 12,000 Alcoa, Inc. 402,000 8,000 AMB Property Corp. 206,500 4,800 Anadarko Petroleum Corp. 341,184 6,825 Apache Corp. 478,177 5,500 Bedford Property Investors, Inc. 111,375 5,600 Boise Cascade Corp. 188,300 10,510 Boston Properties, Inc. 457,185 16,000 Brandywine Realty Trust 331,000 3,800 Burlington Resources, Inc. 191,900 3,650 Cooper Cameron Corp.+ 241,128 10,000 Crescent Real Estate Equities Co. 222,500 6,600 Devon Energy Corp 402,402 4,900 Diamond Offshore Drilling, Inc. 196,000 14,900 Ensco International, Inc. 507,531 3,500 EOG Resources, Inc. 191,406 11,008 Equity Office Properties Trust 359,136 5,000 Equity Residential Properties Trust 276,563 4,372 Exxon Mobil Corp. 380,091 17,325 Global Marine, Inc.+ 491,597 17,000 Host Marriott Corp. 219,938 4,480 International Paper Co. 182,840 10,200 Kilroy Realty Corp. 291,338 12,300 Nabors Industries, Inc.+ 727,545 12,000 Newmont Mining Corp. 204,750 12,000 Noble Drilling Corp.+ 521,250 21,600 Ocean Energy, Inc. 375,300 9,600 Prentiss Properties Trust 258,600 12,000 Santa Fe International Corp. 384,750 9,650 Simon Property Group, Inc. 231,600 2,780 Smith International, Inc.+ 207,284 15,975 Stillwater Mining Co.+ 628,616 9,020 Tidewater, Inc. 400,263 4,540 Transocean Sedco Forex, Inc. 208,840 7,300 USX Marathon Group 202,584 ----------- 11,416,982 ----------- TOTAL STOCKS AND OTHER INVESTMENTS: 97.8% (Cost: $17,591,485) 19,281,964 ----------- See Notes to Financial Statements 42 GLOBAL HARD ASSETS FUND SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 2000 SHORT-TERM OBLIGATION: 10.5% PRINCIPAL INTEREST MATURITY AMOUNT RATE DATE VALUE (NOTE 1) - -------------------------------------------------------------------------------- $2,074,000 Repurchase Agreement (Note 10): Purchased on 12/29/00; maturity value $2,075,325 (with State Street Bank & Trust Co., collateralized by $2,050,000 Federal National Mortgage Association 6.375% due 1/16/02 with a value of $2,120,200) (Cost: $2,074,000) 5.75% 1/02/01 $ 2,074,000 ----------- TOTAL INVESTMENTS: 108.3% (Cost: $19,665,485) 21,355,964 OTHER ASSETS LESS LIABILITIES: (8.3)% (1,639,999) ----------- NET ASSETS: 100% $19,715,965 =========== - ---------- (a) Unless otherwise indicated, securities owned are shares of common stock. (b) Restricted security (Note 8). (c) Fair value as determined by Board of Trustees. + Non-income producing. GLOSSARY: ADR - American Depositary Receipt SUMMARY OF % OF INVESTMENTS NET BY INDUSTRY ASSETS - ----------- ------ Energy 49.5% Forest Products & Paper 7.8% Industrial Metals 7.8% Precious Metals 9.2% Real Estate 22.9% Transportation 0.6% Short-Term Obligation 10.5% Other assets less liabilities (8.3)% ------- 100.0% ======= See Notes to Financial Statements 43 GLOBAL LEADERS FUND SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 2000 NO. OF SHARES SECURITIES (a) VALUE (NOTE 1) - -------------------------------------------------------------------------------- CANADA: 1.2% 10,500 Nortel Networks Corp. $ 336,656 ----------- DENMARK: 1.5% 4,600 ISS A/S 313,517 2,300 Vestas Wind Systems A/S 124,595 ----------- 438,112 ----------- FINLAND: 0.8% 5,300 Nokia Oyj 236,569 ----------- FRANCE: 7.5% 8,000 Accor S.A. 338,292 6,500 Alcatel S.A. 369,537 1,300 Castorama Dubois Investissements S.A. 337,164 1,300 Coflexip S.A.+ 165,406 10,000 Havas Advertising S.A. 144,714 7,500 Sanofi-Synthelabo S.A. 500,390 2,000 Total Fina Elf S.A. (Class B) 297,697 ----------- 2,153,200 ----------- GERMANY: 4.3% 6,000 Bayerische Motoren Werke 195,927 2,400 Ergo Versicherungs Gruppe AG 390,164 8,900 Metro AG 408,967 4,500 Shering AG 255,410 ----------- 1,250,468 ----------- HONG KONG: 1.9% 16,000 Cheung Kong (Holdings) Ltd. 204,623 30,000 China Telecom (Hong Kong) Ltd.+ 163,852 11,971 HSBC Holdings PLC 177,270 ----------- 545,745 ----------- IRELAND: 0.8% 20,000 Allied Irish Banks 232,670 ----------- ITALY: 2.5% 22,500 Mondadori (Arnoldo) Editore S.p.A. 209,318 100,000 Unicredito Italiano S.p.A+ 523,413 ----------- 732,731 ----------- JAPAN: 7.1% 9,000 Canon, Inc. 314,081 600 Fast Retailing Co., Ltd. 117,152 1,100 Keyence Corp. 268,714 15,000 Nomura Securities Co. Ltd. (The) 268,932 12 NTT Mobile Communications Network, Inc. 206,247 9,000 Pioneer Electric Corp. 239,487 1,500 Rohm Co. 283,982 6,000 Takeda Chemical Industries, Ltd. 353,865 ----------- 2,052,460 ----------- LUXEMBOURG: 0.5% 1,000 Societe Europeenne des Satellites 150,352 ----------- MEXICO: 1.2% 6,000 Grupo Televisa S.A.+ 269,625 38,700 Walmart de Mexico+ 76,829 ----------- 346,454 ----------- NETHERLANDS: 2.8% 9,700 Philips Electronics N.V. 355,671 10,000 St. Microelectronics N.V. 436,960 ----------- 792,631 ----------- SINGAPORE: 0.8% 18,720 Datacraft Asia Ltd. 88,358 11,401 Development Bank of Singapore, Ltd. 128,870 ----------- 217,228 ----------- SPAIN: 2.5% 22,000 Banco Bilbao Vizcaya Argentaria S.A. 327,673 11,000 Banco Popular Espanol S.A. 383,492 ----------- 711,165 ----------- SWEDEN: 0.9% 24,600 Skandinaviska Enskilda Banken (SEB) 270,931 ----------- SWITZERLAND: 3.8% 500 Adecco S.A. 315,068 80 Julius Baer Holding Ltd. 438,376 360 Serono S.A. (Class B) 346,945 ----------- 1,100,389 ----------- TAIWAN: 0.3% 5,589 Taiwan Semiconductors Manufacturing Co. Ltd.+ 96,410 ----------- UNITED KINGDOM: 8.2% 13,000 Amvescap PLC 263,715 15,000 Celltech Group PLC+ 263,229 2,000 Colt Telecom Group PLC+ 43,013 21,000 Exel PLC 297,953 10,052 GlaxoSmithKline PLC+ 283,739 27,200 Granada Compass PLC+ 287,374 21 Misys PLC 207 16,000 Reed International PLC 166,035 13,000 Royal Bank of Scotland Group PLC 307,155 107,400 Tesco PLC 437,496 ----------- 2,349,916 ----------- UNITED STATES: 51.5% 20,000 ADC Telecommunications, Inc.+ 362,500 7,500 American Express Co. 412,031 7,500 American International Group, Inc. 739,219 5,000 Anadarko Petroleum Corp. 355,400 10,000 Broadwing, Inc.+ 228,125 9,000 Cisco Systems, Inc.+ 344,250 7,500 Clear Channel Communications, Inc.+ 363,281 8,000 Corning, Inc. 422,500 10,000 Costco Wholesale Corp.+ 399,375 See Notes to Financial Statements 44 GLOBAL LEADERS FUND SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 2000 NO. OF SHARES SECURITIES (a) VALUE (NOTE 1) - -------------------------------------------------------------------------------- UNITED STATES: (continued) 6,000 EMC Corp.+ $ 399,000 8,900 Enron Corp. 739,813 20,200 Flextronics International Ltd.+ 575,700 4,800 Genentech, Inc.+ 391,200 5,900 General Electric Co. 282,831 7,500 Home Depot, Inc. 342,656 12,625 Honeywell International, Inc. 597,320 7,500 JDS Uniphase Corp.+ 312,656 7,500 Lilly & Co. 697,969 7,500 Marsh & McLennan Co., Inc. 877,500 8,000 Merck & Co. 749,000 5,000 Mercury Interactive Corp.+ 451,250 4,000 Morgan Stanley Dean Witter & Co. 317,000 10,000 Oracle Corp.+ 290,625 10,000 Pfizer, Inc. 460,000 14,000 Solectron Corp.+ 474,600 8,100 Time Warner, Inc. 423,144 10,000 The St. Paul Co., Inc. 543,125 12,000 Transocean Sedco Forex, Inc. 552,000 16,000 Tyco International Ltd. 888,000 5,000 United Technologies Corp. 393,125 9,765 Viacom, Inc.+ 456,515 ----------- 14,841,710 ----------- TOTAL STOCKS: 100.1% (Cost: $24,326,124) 28,855,797 OTHER ASSETS LESS LIABILITIES: (0.1)% (24,623) ----------- NET ASSETS: 100% $28,831,174 =========== - ---------- (a) Unless otherwise indicated, securities owned are shares of common stock. + Non-income producing. SUMMARY OF % OF INVESTMENTS NET BY INDUSTRY ASSETS - ----------- ------ Advertising 0.5% Automotive 0.7% Banks 7.9% Biotechnology 0.9% Broadcast Media 4.3% Brokerage 1.1% Commercial Services 1.1% Communications-- Equipment & Software 0.8% Computer Software 2.9% Distribution 1.0% Drug & Healthcare 3.7% Electronics & Electrical 10.6% Energy 0.4% Entertainment & Leisure 1.5% Financial Services 4.2% Food & Household Products 1.5% Holding Companies 3.7% Hotels 1.2% Human Resources 1.1% Insurance 8.8% Manufacturing 4.4% Medical Products & Supplies 6.3% Natural Gas 2.6% Office Equipment 1.1% Oil (Integrated/Services & Products) 3.7% Pharmaceuticals 4.0% Publishing & Broadcasting 0.7% Real Estate 0.7% Restaurants 1.0% Retail 7.0% Semiconductors 1.9% Telecommunications 7.4% Wholesale Distributor 1.4% Other assets less liabilities (0.1)% ----- 100.0% ===== See Notes to Financial Statements 45 INTERNATIONAL INVESTORS GOLD FUND SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 2000 NO. OF SHARES SECURITIES (a) VALUE (NOTE 1) - -------------------------------------------------------------------------------- AUSTRALIA: 9.9% 2,837,400 Delta Gold Ltd. $ 1,818,312 4,482,102 Lihir Gold Ltd.+ 1,521,069 1,770,750 Newcrest Mining Ltd. 4,315,059 4,756,133 Normandy Mining Ltd. 2,570,844 300,000 WMC Ltd. 1,280,058 ------------ 11,505,342 ------------ CANADA: 29.1% 317,300 Agnico-Eagle Mines Ltd. 1,903,800 694,871 Barrick Gold Corp. 11,381,987 31,000 Cominco Ltd. 517,717 501,600 Corner Bay Minerals, Inc.+ 481,552 350,000 Cumberland Resources Ltd.+ 200,673 200,000 Eldorado Gold Mining+ 66,668 29,900 Falconbridge Ltd. 331,901 26,864 Franco Nevada Mining Corp. Ltd. 306,259 409,800 GoldCorp, Inc. (Class A) 2,484,413 200,000 Great Basin Gold Ltd.+ 141,338 168,200 IAMGOLD Corp.+ 280,342 350,000 Kinross Gold Corp.+ 189,006 385,000 Manhattan Minerals Corp.+ 418,380 714,900 Meridian Gold, Inc.+ 4,861,482 100,000 Miramar Mining Corp.+ 63,335 887,275 Placer Dome, Inc. 8,540,022 586,600 Richmont Mines, Inc.+ 508,403 130,000 Teck Corp. (Class A) 1,230,707 ------------ 33,907,985 ------------ PERU: 0.4% 35,000 Compania de Minas Buenaventura S.A. (ADR) 507,500 ------------ SOUTH AFRICA: 20.4% 310,449 Anglogold Ltd. 4,637,332 3,795,755 Avgold Ltd.+ 1,251,732 2,823,088 Gold Fields Ltd. (ADR) 9,787,658 897,940 Harmony Gold Mining Co. Ltd. 4,192,121 76,200 Impala Platinum Holdings Ltd. (ADR) 3,883,088 ------------ 23,751,931 ------------ UNITED KINGDOM: 1.3% 9,000 Anglo American PLC 495,991 260,000 Billiton PLC 1,001,839 ------------ 1,497,830 ------------ UNITED STATES: 23.9% 622,700 Battle Mountain Gold Co. 1,050,806 3,000,000 Business Development Bank of Canada, Gold Linked Note 2.50% due 12/14/01 (b) 2,896,800 1,234,000 Glamis Gold Ltd. 2,005,250 1,741,139 Homestake Mining Co. 7,291,020 3,000,000 HSBC Bank USA, Gold Linked Note 2.50% due 8/17/01 (b) 2,685,900 557,300 Newmont Mining Corp. 9,508,936 63,100 Stillwater Mining Co.+ 2,482,991 ------------ 27,921,703 ------------ TOTAL STOCKS AND OTHER INVESTMENTS: 85.0% (Cost: $110,875,119) 99,092,291 OTHER ASSETS LESS LIABILITIES: 15.0% 17,420,326 ------------ NET ASSETS: 100% $116,512,617 ============ - ---------- (a) Unless otherwise indicated, securities owned are shares of common stock. (b) Structured note (Note 1). + Non-income producing. GLOSSARY: ADR - American Depositary Receipt SUMMARY OF % OF INVESTMENTS NET BY INDUSTRY ASSETS - ----------- ------ Industrial Metals 3.3% Precious Metals 81.7% Other assets less liabilities 15.0% ------- 100.0% ======= See Notes to Financial Statements 46 NATURAL RESOURCES FUND SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 2000 NO. OF SHARES SECURITIES (a) VALUE (NOTE 1) - -------------------------------------------------------------------------------- AUSTRALIA: 10.1% 237,189 Delta Gold NL $ 152,000 690,000 M.I.M. Holdings Ltd. 446,023 187,215 Newcrest Mining Ltd. 456,216 125,000 Portman Mining Ltd. 80,801 56,000 Rio Tinto Ltd. 918,611 151,000 WMC Ltd. 644,296 ------------ 2,697,947 ------------ CANADA: 16.7% 50,000 Agnico-Eagle Mines 300,000 30,000 Canfor Corp. 198,007 24,300 Cominco Ltd. 405,824 30,000 Compton Petroleum Corp.+ 75,403 145,400 Corner Bay Minerals, Inc.+ 139,589 100,000 Cumberland Resources Ltd.+ 57,335 20,000 Eldorado Gold Corporation+ 6,667 16,500 Encal Energy+ 117,154 25,600 Falconbridge Ltd. 284,169 42,200 Francisco Gold Corp.+ 135,889 17,000 Gulf Canada Res Ltd.+ 86,703 6,800 Imperial Oil Ltd. 178,846 155,000 Manhattan Minerals Corp.+ 168,439 153,200 Meridian Gold, Inc.+ 1,041,795 15,000 Penn West Petroleum Ltd.+ 374,012 11,000 Precision Drilling Corp.+ 412,514 197,800 Romarco Minerals, Inc.+ 39,561 40,000 Slocan Forest Products Ltd. 214,674 25,000 Tembec, Inc.+ 232,508 ------------ 4,469,089 ------------ FRANCE: 3.9% 14,400 Total Fina Elf S.A. (Sponsored ADR) 1,046,700 ------------ GHANA: 0.2% 30,191 Ashanti Goldfields Co. Ltd. (Sponsored GDR) 39,128 ------------ NETHERLANDS: 2.7% 12,000 Royal Dutch Petroleum Co. 726,750 ------------ PERU: 1.0% 18,000 Minas Buenaventura (Sponsored ADR) 261,000 ------------ SOUTH AFRICA: 11.1% 38,000 Anglogold Ltd. 567,625 143,000 Gold Fields Ltd. 484,778 50,000 Gold Fields Ltd. (Sponsored ADR) 175,000 117,800 Harmony Gold Mining Co. 547,744 14,900 Impala Platinum Holding Ltd. 758,267 60,000 Sappi Ltd. (Sponsored ADR) 427,500 ------------ 2,960,914 ------------ UNITED KINGDOM: 3.7% 3,300 Anglo American PLC 181,864 105,000 Billiton PLC 404,589 8,500 BP Amoco PLC (Sponsored ADR) 406,938 ------------ 993,391 ------------ UNITED STATES: 41.3% 32,700 AK Steel Holding Corp. 286,125 32,000 Arch Coal, Inc. 452,000 8,500 Boise Cascade Corp. 285,813 12,700 Chevron Corp. 1,072,356 18,500 Devon Energy Corp. 1,127,945 5,000 Enron Corp. 415,625 10,000 Ensco International, Inc. 340,625 16,500 Georgia-Pacific Corp. 513,563 40,000 Grant Prideco, Inc.+ 877,500 2,900 Halliburton Co. 105,125 192,601 Homestake Mining Co. 806,517 2,300 HS Resources, Inc.+ 97,463 14,000 International Paper Co. 571,375 8,000 Nabors Industries, Inc.+ 473,200 59,100 Newmont Mining Corp. 1,008,394 5,000 Phelps Dodge Corp. 279,063 7,000 Prize Energy Corp.+ 145,250 1,800 Schlumberger Ltd. 143,888 15,450 Stillwater Mining Co. + 607,958 14,000 USX-U.S. Steel Group 252,000 10,800 Weyerhaeuser Co. 548,100 13,000 Willamette Industries, Inc. 609,937 ------------ 11,019,822 ------------ TOTAL STOCKS AND OTHER INVESTMENTS: 90.7% (Cost: $23,794,236) 24,214,741 ------------ SHORT-TERM OBLIGATION: 10.5% PRINCIPAL INTEREST MATURITY AMOUNT RATE DATE - ------------------------------------------------------ $2,809,000 Repurchase Agreement (Note 10): Purchased on 12/29/00; maturity $2,810,795 (with State Street Bank & Trust Co., collateralized by $2,775,000 Federal National Mortgage Association 6.375% due 1/16/02 with a value of $2,874,955) (Cost: $2,809,000) 5.75% 1/02/01 2,809,000 ------------ TOTAL INVESTMENTS: 101.2% (Cost: $26,603,236) 27,023,741 OTHER ASSETS LESS LIABILITIES: (1.2)% (313,403) ----------- NET ASSETS: 100% $26,710,338 =========== - ---------- (a) Unless otherwise indicated, securities owned are shares of common stock. + Non-income producing. GLOSSARY: ADR - American Depositary Receipt GDR - Global Depositary Receipt SUMMARY OF % OF INVESTMENTS NET BY INDUSTRY ASSETS - ----------- ------ Energy 32.5% Forest Products & Paper 13.5% Industrial Metals 15.7% Precious Metals 29.0% Short-Term Obligation 10.5% Other assets less liabilities (1.2)% ------- 100.0% ------- See Notes to Financial Statements 47 U.S. GOVERNMENT MONEY FUND SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 2000 ANNUALIZED YIELD AT TIME OF PRINCIPAL MATURITY PURCHASE OR VALUE AMOUNT DATE COUPON RATE (NOTE 1) - -------------------------------------------------------------------------------- U.S. TREASURY BILLS: 101.2% $25,000,000 1/25/01 5.86% $ 24,902,333 25,000,000 2/01/01 5.30 24,885,903 10,000,000 2/01/01 5.30 9,954,361 15,000,000 1/25/01 4.80 14,952,000 ------------ TOTAL U.S. TREASURY BILLS:101.2% (Amortized Cost: $74,694,597) 74,694,597 ------------ SHORT-TERM OBLIGATION: 30.5% PRINCIPAL INTEREST MATURITY AMOUNT RATE DATE - ----------------------------------------------------------- $22,500,000 Repurchase Agreement (Note 10): Purchased on 12/29/00; maturity value $22,503,594 (with State Street Bank and Trust Co., collateralized by $22,225,000 U.S. Treasury Notes 5.75% due 1/02/01 with a value of $22,962,200) (Cost: $22,500,000) 5.75% 1/02/01 22,500,000 ------------ TOTAL INVESTMENTS: 131.7% (Cost: $97,194,597) 97,194,597 OTHER ASSETS LESS LIABILITIES: (31.7)% (23,398,058) ------------ NET ASSETS: 100% $ 73,796,539 ============ See Notes to Financial Statements 48 THIS PAGE INTENTIONALLY LEFT BLANK. 49 VAN ECK FUNDS STATEMENTS OF ASSETS AND LIABILITIES December 31, 2000
EMERGING GLOBAL ASIA DYNASTY MARKETS HARD ASSETS FUND VISION FUND FUND ----------- ----------- ----------- ASSETS: Investments at cost .............................. $22,340,218 $ 1,150,157 $19,665,485 =========== =========== =========== Investments at value (including repurchase agreements of $0, $43,000, $2,074,000, $0, $0, $2,809,000 and $22,500,000) (Note 1) ........... $19,594,479 $ 794,120 $21,355,964 Investments in affiliate, at value (cost $255,700) (Note 9) .............. 250,000 -- -- Cash and foreign currency ........................ 556,120 9,126 -- Cash--initial margin ............................. -- -- 38,990 Receivables: Securities sold ................................ 497,699 21,040 798,656 Dividends and interest ......................... 16,152 2,096 40,141 Capital shares sold ............................ 376,953 2,282 9,830 Due from adviser ............................... -- 9,773 -- Due from broker (Note 11) ...................... -- -- 80,928 Unrealized appreciation on open forward foreign currency contracts (Note 6) ....................................... 283 -- -- Other assets ..................................... -- 5,011 1,737 ----------- ----------- ----------- Total assets ................................. 21,291,686 843,448 22,326,246 ----------- ----------- ----------- LIABILITIES: Payables: Due to custodian ............................... -- -- 23,814 Line of credit (Note 12) ....................... 85,967 -- -- Foreign taxes .................................. 1,313 -- -- Securities purchased ........................... -- 3,376 2,436,092 Dividends payable .............................. 487,604 -- -- Capital shares redeemed ........................ 140,540 -- 69,907 Accounts payable ............................... 70,830 31,581 46,762 Due to distributor (Note 4) .................... 14,381 714 12,091 Due to adviser (Note 2) ........................ 21,878 -- 9,368 Due to trustees (Note 7) ....................... 756 -- 11,129 Unrealized depreciation on open forward foreign currency contracts (Note 6) ....................................... -- 3 1,118 ----------- ----------- ----------- Total liabilities ............................ 823,269 35,674 2,610,281 ----------- ----------- ----------- NET ASSETS ....................................... $20,468,417 $ 807,774 $19,715,965 =========== =========== =========== CLASS A SHARES+: Net assets ....................................... $14,062,085 $ 755,561 $13,581,067 =========== =========== =========== Shares outstanding ............................... 2,018,174 121,141 1,038,313 =========== =========== =========== Net asset value and redemption price per share ................................ $ 6.97 $ 6.24 $ 13.08 =========== =========== =========== Maximum offering price per share (NAV/(1--maximum sales commission)) ............ $ 7.40 $ 6.62 $ 13.88 =========== =========== =========== CLASS B SHARES: Net assets ....................................... $ 6,406,332 $ 52,213 $ 3,438,279 =========== =========== =========== Shares outstanding ............................... 977,388 8,409 264,983 =========== =========== =========== Net asset value, maximum offering and redemption price per share (Redemption may be subject to a contingent deferred sales charge within the first six years of ownership) ....... $ 6.55 $ 6.21 $ 12.98 =========== =========== =========== CLASS C SHARES: Net assets ....................................... -- -- $ 2,696,619 =========== =========== =========== Shares outstanding ............................... -- -- 207,202 =========== =========== =========== Net asset value, maximum offering and redemption price per share (Redemption may be subject to a contingent deferred sales charge within the first year of ownership) ............ -- -- $ 13.01 =========== =========== =========== Net assets consist of: Aggregate paid in capital ...................... $25,178,011 $ 1,286,064 $31,704,255 Unrealized appreciation (depreciation) of investments, swaps, foreign currencies and forward foreign currency contracts ........... (2,754,912) (356,048) 1,720,176 Accumulated net investment income (loss) ....... (25,368) 1,730 1,465 Accumulated realized gain (loss) ............... (1,929,314) (123,972) (13,709,931) ----------- ----------- ----------- $20,468,417 $ 807,774 $19,715,965 =========== =========== ===========
- ---------- + The U.S. Government Money Fund does not have a designated class of shares. See Notes to Financial Statements 50 INTERNATIONAL NATURAL U.S. GLOBAL INVESTORS RESOURCES GOVERNMENT LEADERS FUND GOLD FUND FUND MONEY FUND - ------------ ------------ ----------- ----------- $ 24,326,124 $110,875,119 $26,603,236 $97,194,597 ============ ============ =========== =========== $ 28,855,797 $ 99,092,291 $27,023,741 $97,194,597 -- -- -- -- 514,629 -- 828 6,139 -- -- -- -- 314,217 -- 358,659 -- 18,374 34,484 21,512 10,781 185,431 23,583,873 93,499 309,037 -- -- -- -- -- -- -- -- 12,557 15 111 -- -- -- -- -- ------------ ------------ ----------- ----------- 29,901,005 122,710,663 27,498,350 97,520,554 ------------ ------------ ----------- ----------- -- 627,625 -- -- 275,606 4,346,808 -- -- -- -- -- -- 214,738 261,463 505,883 -- 452,863 -- -- 63,610 38,864 609,876 169,869 23,548,208 48,746 184,315 72,279 74,179 14,111 28,808 7,349 -- 23,280 118,316 27,077 38,018 1,623 20,835 5,555 -- -- -- -- -- ------------ ------------ ----------- ----------- 1,069,831 6,198,046 788,012 23,724,015 ------------ ------------ ----------- ----------- $ 28,831,174 $116,512,617 $26,710,338 $73,796,539 ============ ============ =========== =========== $ 23,989,946 $116,512,617 $26,710,338 $73,796,539 ============ ============ =========== =========== 2,671,509 26,172,747 11,225,497 73,852,315 ============ ============ =========== =========== $ 8.98 $ 4.45 $ 2.38 $ 1.00 ============ ============ =========== =========== $ 9.53 $ 4.72 $ 2.53 -- ============ ============ =========== =========== $ 4,841,228 -- -- -- ============ ============ =========== =========== 551,220 -- -- -- ============ ============ =========== =========== $ 8.78 -- -- -- ============ ============ =========== =========== -- -- -- -- ============ ============ =========== =========== -- -- -- -- ============ ============ =========== =========== -- -- -- -- ============ ============ =========== =========== $ 24,310,175 $150,355,486 $56,930,666 $73,852,315 4,541,858 (11,784,690) 423,557 -- (129,811) (32,816) (45,573) -- 108,952 (22,025,363) (30,598,312) (55,776) ------------ ------------ ----------- ----------- $ 28,831,174 $116,512,617 $26,710,338 $73,796,539 ============ ============ =========== =========== See Notes to Financial Statements 51 VAN ECK FUNDS STATEMENTS OF OPERATIONS Year Ended December 31, 2000
EMERGING GLOBAL ASIA DYNASTY MARKETS HARD ASSETS FUND VISION FUND+ FUND ------------ --------- ----------- INCOME: Dividends ...................................................... $ 400,027 $ 5,584 $ 547,081 Interest ....................................................... 22,956 9,125 33,149 Foreign taxes withheld ......................................... (30,970) (380) (15,674) ------------ --------- ----------- Total income ................................................... 392,013 14,329 564,556 ------------ --------- ----------- EXPENSES: Management (Note 2) ............................................ 256,468 7,590 217,431 Distribution Class A (Note 4) .................................. 120,472 3,631 74,072 Distribution Class B (Note 4) .................................. 101,012 329 41,198 Distribution Class C (Note 4) .................................. -- -- 28,090 Administration (Note 2) ........................................ 106,116 1,536 15,487 Transfer agent ................................................. 113,720 13,364 126,594 Custodian ...................................................... 97,258 12,815 10,874 Registration ................................................... 32,566 24,588 29,517 Professional ................................................... 42,041 20,559 31,807 Interest expense (Note 12) ..................................... 43,410 -- 20,764 Reports to shareholders ........................................ 25,314 3,845 7,908 Trustees' fees and expenses (Note 7) ........................... 12,120 253 6,925 Other .......................................................... 16,924 4,758 8,684 ------------ --------- ----------- Total expenses ................................................. 967,421 93,268 619,351 Expense reduction (Note 2) .................................... (461) (77,842) (111,758) ------------ --------- ----------- Net expenses ................................................... 966,960 15,426 507,593 ------------ --------- ----------- Net investment income (loss) ................................... (574,947) (1,097) 56,963 ------------ --------- ----------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 3): Realized gain (loss) from security transactions (Asia Dynasty Fund is net of foreign taxes of $676,208) ...... (841,906) (123,972) 83,148 Realized gain from equity swaps and futures contracts .......... 165,154 -- 27,860 Realized gain (loss) from options .............................. -- -- 176,222 Realized loss from foreign currency transactions ............... (48,047) (1,408) (35,714) Change in unrealized appreciation (depreciation) of foreign currency transactions and forward foreign currency contracts ........................................... (1,181) (11) (1,308) Change in unrealized appreciation (depreciation) of investments, futures, swaps and options (Asia Dynasty Fund is net of foreign taxes of $1,313) ...................... (18,914,577) (356,037) 1,178,291 ------------ --------- ----------- Net gain (loss) on investments and foreign currency transactions (19,640,557) (481,428) 1,428,499 ------------ --------- ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $(20,215,504) $(482,525) $ 1,485,462 ============ ========= ===========
- ---------- + For the period April 7, 2000 (commencement of operations) to December 31, 2000. See Notes to Financial Statements 52 INTERNATIONAL NATURAL U.S. GLOBAL INVESTORS RESOURCES GOVERNMENT LEADERS FUND GOLD FUND FUND MONEY FUND - ------------ ------------ ----------- ----------- $ 249,749 $ 1,698,299 $ 467,787 $ -- 22,605 1,521,888 129,927 5,108,216 (29,092) (81,639) (13,925) -- - ------------ ------------ ----------- ----------- 243,262 3,138,548 583,789 5,108,216 - ------------ ------------ ----------- ----------- 268,654 993,983 220,463 433,058 150,083 331,328 73,487 216,529 58,039 -- -- -- -- -- -- -- 105,486 500,427 129,694 57,828 99,496 796,404 258,187 60,876 36,486 8,948 8,048 1,773 22,120 32,784 20,904 25,515 26,560 31,205 25,470 37,114 10,549 150,504 1,627 -- 21,859 128,959 32,321 60,294 10,271 32,127 8,433 37,887 9,778 41,053 11,041 20,458 - ------------ ------------ ----------- ----------- 819,381 3,047,722 789,675 951,332 (63,402) (21,433) (13,741) -- - ------------ ------------ ----------- ----------- 755,979 3,026,289 775,934 951,332 - ------------ ------------ ----------- ----------- (512,717) 112,259 (192,145) 4,156,884 - ------------ ------------ ----------- ----------- 3,748,774 (8,976,480) (3,959,794) (44,197) -- -- -- -- -- (2,807,750) -- -- (13,730) (159,362) (51,618) -- 9,414 (2,047) 3,052 -- (11,660,680) (24,736,116) (1,008,022) -- - ------------ ------------ ----------- ----------- (7,916,222) (36,681,755) (5,016,382) (44,197) - ------------ ------------ ----------- ----------- $ (8,428,939) $(36,569,496) $(5,208,527) $ 4,112,687 ============ ============ =========== =========== See Notes to Financial Statements 53 VAN ECK FUNDS STATEMENTS OF CHANGES IN NET ASSETS
ASIA DYNASTY EMERGING MARKETS GLOBAL HARD ASSETS FUND VISION FUND FUND ---------------------------- ------------ ---------------------------- FOR THE PERIOD YEAR ENDED YEAR ENDED APRIL 7, 2000+ TO YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2000 1999 2000 2000 1999 ------------ ------------ ------------ ------------ ------------ INCREASE (DECREASE) IN NET ASSETS: OPERATIONS: Net investment income (loss) ........... $ (574,947) $ (367,375) $ (1,097) $ 56,963 $ 90,053 Realized gain (loss) from security transactions ......................... (841,906) 9,088,492 (123,972) 83,148 (3,507,118) Realized gain from equity swaps and futures contracts ................ 165,154 80,166 -- 27,860 340,492 Realized gain (loss) from options ...... -- 97,496 -- 176,222 236,704 Realized gain (loss) from foreign currency transactions ................ (48,047) (212,465) (1,408) (35,714) (46,029) Realized loss from short sales ......... -- -- -- -- (224,439) Change in unrealized appreciation (depreciation) of foreign currencies and forward foreign currency contracts ................... (1,181) 25,137 (11) (1,308) (277,731) Change in unrealized appreciation (depreciation) of investments, futures, swaps and options ........... (18,914,577) 13,553,987 (356,037) 1,178,291 7,685,797 ------------ ------------ ------------ ------------ ------------ Increase (decrease) in net assets resulting from operations ............ (20,215,504) 22,265,438 (482,525) 1,485,462 4,297,729 ------------ ------------ ------------ ------------ ------------ DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income: Class A Shares++ ..................... -- -- -- -- (21,571) Class B Shares ....................... -- -- -- -- -- Class C Shares ....................... -- -- -- -- -- Realized gain: Class A Shares++ ..................... (1,271,933) (4,585,684) -- -- -- Class B Shares ....................... (607,729) (1,797,699) -- -- -- Class C Shares ....................... -- -- -- -- -- Tax return of capital: Class A Shares++ ..................... -- -- -- -- (86,282) Class B Shares ....................... -- -- -- -- -- Class C Shares ....................... -- -- -- -- -- ------------ ------------ ------------ ------------ ------------ Total dividends and distributions ...... (1,879,662) (6,383,383) -- -- (107,853) ------------ ------------ ------------ ------------ ------------ CAPITAL SHARE TRANSACTIONS (NOTE 5): Net proceeds from sales of shares: Class A Shares++ ..................... 57,343,775 47,934,490 1,437,259 7,580,561 10,858,208 Class B Shares ....................... 3,433,213 4,235,666 78,272 158,574 932,899 Class C Shares ....................... -- -- -- 167,466 298,652 ------------ ------------ ------------ ------------ ------------ 60,776,988 52,170,156 1,515,531 7,906,601 12,089,759 ------------ ------------ ------------ ------------ ------------ Reinvestment of dividends: Class A Shares++ ..................... 1,008,584 3,345,176 -- -- 90,539 Class B Shares ....................... 383,469 1,054,774 -- -- -- Class C Shares ....................... -- -- -- -- -- ------------ ------------ ------------ ------------ ------------ 1,392,053 4,399,950 -- -- 90,539 ------------ ------------ ------------ ------------ ------------ Cost of shares reacquired: Class A Shares++ ..................... (60,414,651) (42,412,204) (225,232) (12,733,686) (19,101,929) Class B Shares ....................... (2,595,010) (2,262,561) -- (2,038,028) (2,192,358) Class C Shares ....................... -- -- -- (913,129) (1,626,813) ------------ ------------ ------------ ------------ ------------ (63,009,661) (44,674,765) (225,232) (15,684,843) (22,921,100) ------------ ------------ ------------ ------------ ------------ Increase (decrease) in net assets resulting from capital share transactions ......................... (840,620) 11,895,341 1,290,299 (7,778,242) (10,740,802) ------------ ------------ ------------ ------------ ------------ Total increase (decrease) in net assets (22,935,786) 27,777,396 807,774 (6,292,780) (6,550,926) NET ASSETS: Beginning of period .................... 43,404,203 15,626,807 -- 26,008,745 32,559,671 ------------ ------------ ------------ ------------ ------------ End of period .......................... $ 20,468,417 $ 43,404,203 $ 807,774 $ 19,715,965 $ 26,008,745 ============ ============ ============ ============ ============ Accumulated net investment income (loss) $ (25,368) $ (7,035) $ 1,730 $ 1,465 $ 45,571 ============ ============ ============ ============ ============
- ---------- + Commencement of operations. ++ The U.S. Government Money Fund does not have a designated class of shares. See Notes to Financial Statements 54
GLOBAL LEADERS INTERNATIONAL INVESTORS GOLD NATURAL RESOURCES U.S. GOVERNMENT MONEY FUND FUND FUND FUND - ----------------------------- -------------------------------- -------------------------------- -------------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2000 1999 2000 1999 2000 1999 2000 1999 - ------------ --------------- --------------- --------------- --------------- --------------- --------------- --------------- $ (512,717) $ (185,323) $ 112,259 $ 864,143 $ (192,145) $ (374,216) $ 4,156,884 $ 3,026,907 3,748,774 3,110,359 (8,976,480) 12,423,170 (3,959,794) (6,584,236) (44,197) (11,580) -- -- -- -- -- -- -- -- -- -- (2,807,750) (2,405,267) -- (477,148) -- -- (13,730) (67,032) (159,362) 219,126 (51,618) 41,139 -- -- -- -- -- -- -- -- -- -- 9,414 12,670 (2,047) -- 3,052 -- -- -- (11,660,680) 7,121,476 (24,736,116) (12,426,887) (1,008,022) 2,360,158 -- -- - ------------ --------------- --------------- --------------- --------------- --------------- --------------- --------------- (8,428,939) 9,992,150 (36,569,496) (1,325,715) (5,208,527) (5,034,303) 4,112,687 3,015,327 - ------------ --------------- --------------- --------------- --------------- --------------- --------------- --------------- (830) -- -- (1,457,953) -- -- (4,156,884) (3,026,907) -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- (4,454,489) (1,912,779) -- -- -- -- -- -- (155,002) (367,947) -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- (249,898) -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- - ------------ --------------- --------------- --------------- --------------- --------------- --------------- --------------- (4,610,321) (2,280,726) (249,898) (1,457,953) -- -- (4,156,884) (3,026,907) - ------------ --------------- --------------- --------------- --------------- --------------- --------------- --------------- 7,162,334 7,648,708 4,189,455,351 4,300,307,346 5,386,899 14,708,878 4,214,700,071 4,365,984,087 1,257,844 1,442,296 -- -- -- -- -- -- -- -- -- -- -- -- -- -- - ------------ --------------- --------------- --------------- --------------- --------------- --------------- --------------- 8,420,178 9,091,004 4,189,455,351 4,300,307,346 5,386,899 14,708,878 4,214,700,071 4,365,984,087 - ------------ --------------- --------------- --------------- --------------- --------------- --------------- --------------- 3,410,538 1,704,064 205,090 1,093,636 -- -- 2,154,281 1,709,890 623,319 271,969 -- -- -- -- -- -- -- -- -- -- -- -- -- -- - ------------ --------------- --------------- --------------- --------------- --------------- --------------- --------------- 4,033,857 1,976,033 205,090 1,093,636 -- -- 2,154,281 1,709,890 - ------------ --------------- --------------- --------------- --------------- --------------- --------------- --------------- (8,797,970) (10,215,398) (4,205,373,419) (4,368,210,994) (12,856,892) (23,682,720) (4,240,456,825) (4,317,461,360) (1,297,713) (2,551,137) -- -- -- -- -- -- -- -- -- -- -- -- -- -- - ------------ --------------- --------------- --------------- --------------- --------------- --------------- --------------- (10,095,683) (12,766,535) (4,205,373,419) (4,368,210,994) (12,856,892) (23,682,720) (4,240,456,825) (4,317,461,360) - ------------ --------------- --------------- --------------- --------------- --------------- --------------- --------------- 2,358,352 (1,699,498) (15,712,978) (66,810,012) (7,469,993) (8,973,842) (23,602,473) 50,232,617 - ------------ --------------- --------------- --------------- --------------- --------------- --------------- --------------- (10,680,908) 6,011,926 (52,532,372) (69,593,680) (12,678,520) (14,008,145) (23,646,670) 50,221,037 39,512,082 33,500,156 169,044,989 238,638,669 39,388,858 53,397,003 97,443,209 47,222,172 - ------------ --------------- --------------- --------------- --------------- --------------- --------------- --------------- $ 28,831,174 $ 39,512,082 $ 116,512,617 $ 169,044,989 $ 26,710,338 $ 39,388,858 $ 73,796,539 $ 97,443,209 ============ =============== =============== =============== =============== =============== =============== =============== $ (129,811) $ (98,760) $ (32,816) $ (47) $ (45,573) $ -- $ -- $ -- ============ =============== =============== =============== =============== =============== =============== ===============
See Notes to Financial Statements 55 ASIA DYNASTY FUND - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS For a share outstanding throughout each year:
CLASS A CLASS B --------------------------------------------------- -------------------------------------------------- YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, --------------------------------------------------- -------------------------------------------------- 2000 1999 1998 1997 1996 2000 1999 1998 1997 1996 ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Net Asset Value, Beginning of Year ..... $ 14.60 $ 7.80 $ 7.82 $ 13.21 $ 12.40 $ 13.90 $ 7.54 $ 7.63 $ 13.08 $ 12.33 ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Income from Investment Operations: Net Investment Loss ... (0.18) (0.11)(c) (0.01) (0.28) (0.20) (0.23) (0.24)(c) (0.07) (0.30) (0.24) Net Gain (Loss) on Investments (both Realized and Unrealized) ........ (6.77) 9.35 (0.01) (3.82) 1.01 (6.44) 9.04 (0.02) (3.86) 0.99 ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Total from Investment Operations ............ (6.95) 9.24 (0.02) (4.10) 0.81 (6.67) 8.80 (0.09) (4.16) 0.75 ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Less Distributions: Distributions from Capital Gains ....... (0.68) (2.44) -- (1.15) -- (0.68) (2.44) -- (1.15) -- Tax Return of Capital . -- -- -- (0.14) -- -- -- -- (0.14) -- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Total Distributions ..... (0.68) (2.44) -- (1.29) -- (0.68) (2.44) -- (1.29) -- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Net Asset Value, End of Year ........... $ 6.97 $ 14.60 $ 7.80 $ 7.82 $ 13.21 $ 6.55 $ 13.90 $ 7.54 $ 7.63 $ 13.08 ======= ======= ======= ======= ======= ======= ======= ======= ======= ======= Total Return (a) ........ (47.60)% 118.46% (0.26)% (32.10)% 6.53% (47.99)% 116.71% (1.18)% (32.87)% 6.08% - ---------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTARY DATA Net Assets, End of Year (000) ..... $14,062 $31,385 $10,685 $12,873 $44,351 $ 6,406 $12,019 $ 4,942 $ 6,914 $20,296 Ratio of Gross Expenses to Average Net Assets . 2.63% 2.82% 3.13% 2.38% 2.42% 3.31% 3.89% 3.83% 3.00% 2.86% Ratio of Net Expenses to Average Net Assets . 2.50%(b)(d) 2.82% 2.43%(b) 2.38% 2.42% 3.18%(b)(d) 3.89% 3.14%(b) 3.00% 2.86% Ratio of Net Investment Loss to Average Net Assets ............ (1.49)%(e) (1.03)%(e) (0.09)% (0.76)% (0.73)% (2.15)%(e) (2.21)%(e) (0.79)% (1.36)% (1.14)% Portfolio Turnover Rate . 113.88% 172.18% 121.96% 200.45% 52.99% 113.88% 172.18% 121.96% 200.45% 52.99%
- ---------- (a) Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of dividends and distributions at net asset value during the period and a redemption on the last day of the period. A sales charge is not reflected in the calculation of total return. (b) After expenses reduced by a custodian fee arrangement and/or directed brokerage arrangement. (c) Based on average shares outstanding. (d) Net of interest expense. (e) For the years ended 2000 and 1999, the net effect of the reductions due to a custodian fee arrangement and/or directed brokerage arrangement for both years, for Class A and Class B, are 0.00% and 0.00%, respectively. See Notes to Financial Statements 56 EMERGING MARKETS VISION FUND - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS For a share outstanding throughout the period: CLASS A CLASS B ------------ ------------ APRIL 7, APRIL 7, 2000(a) TO 2000(a) TO DECEMBER 31, DECEMBER 31, 2000 2000 ------------ ------------ Net Asset Value, Beginning of Period ................. $ 10.00 $ 10.00 ------- ------- Income from Investment Operations Net Investment Loss .................................. (0.01) (0.05) Net Loss on Investments (both Realized and Unrealized) ....................... (3.75) (3.74) ------- ------- Total from Investment Operations ..................... (3.76) (3.79) ------- ------- Net Asset Value, End of Period ....................... $ 6.24 $ 6.21 ======= ======= Total Return (b) ..................................... (37.60)% (37.90)% - -------------------------------------------------------------------------------- RATIOS/SUPPLEMENTARY DATA Net Assets, End of Period (000) ...................... $ 756 $ 52 Ratio of Gross Expenses to Average Net Assets ........ 10.11%(d) 60.32%(d) Ratio of Net Expenses to Average Net Assets (c) ...... 2.00%(d) 2.75%(d) Net Effect of Advisory Fee Waiver to Average Net Assets ................................. 8.11%(d) 57.57%(d) Ratio of Net Investment Loss to Average Net Assets ... (0.10)%(d) (1.23)%(d) Portfolio Turnover Rate .............................. 74.01% 74.01% - ---------- (a) Commencement of operations. (b) Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period and distributions at net asset value during the period and a redemption on the last day of the period. A sales charge is not reflected in the calculation of total return. Total return for a period of less than one year is not annualized. (c) After expenses reduced by an Advisory fee waiver arrangement. (d) Annualized. See Notes to Financial Statements 57 GLOBAL HARD ASSETS FUND - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS For a share outstanding throughout each period:
CLASS A -------------------------------------------------------------------- YEAR ENDED DECEMBER 31, -------------------------------------------------------------------- 2000 1999 1998 1997 1996 ------- ------- ------- ------- ------- Net Asset Value, Beginning of Period .......................... $ 12.01 $ 10.34 $ 15.50 $ 14.42 $ 10.68 ------- ------- ------- ------- ------- Income from Investment Operations: Net Investment Income (Loss) ....... 0.08 0.07 0.10 0.05 0.15 Net Gain (Loss) on Investments (both Realized and Unrealized) ... 0.99 1.65 (5.09) 2.01 4.70 ------- ------- ------- ------- ------- Total from Investment Operations ..... 1.07 1.72 (4.99) 2.06 4.85 ------- ------- ------- ------- ------- Less Dividends and Distributions: Dividends from Net Investment Income ................ -- (0.01) (0.15) (0.02) (0.14) Net Distributions from Capital Gains .................... -- -- (0.02) (0.96) (0.95) Tax Return of Capital .............. -- (0.04) -- -- (0.02) ------- ------- ------- ------- ------- Total Dividends and Distributions .... -- (0.05) (0.17) (0.98) (1.11) ------- ------- ------- ------- ------- Net Asset Value, End of Period ....... $ 13.08 $ 12.01 $ 10.34 $ 15.50 $ 14.42 ======= ======= ======= ======= ======= Total Return (b) ..................... 8.91% 16.64% (32.25)% 14.29% 45.61% - ------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTARY DATA Net Assets, End of Period (000) ...... $13,581 $17,757 $22,969 $61,341 $27,226 Ratio of Gross Expenses to Average Net Assets ................... 2.52% 2.89% 2.11% 2.00% 2.63% Ratio of Net Expenses to Average Net Assets (net of interest expense) (c) .............. 2.00% 2.00% 2.00% 1.97% 0.72% Ratio of Net Investment Income (Loss) to Average Net Assets ....... 0.49%(e) 0.49%(e) 0.58% 0.36% 1.45% Portfolio Turnover Rate .............. 91.27% 195.00% 167.79% 118.10% 163.91% CLASS B CLASS C - --------------------------------------------------------------- ----------------------------------------------------------- FOR THE PERIOD APRIL 24, 1996(a) TO YEAR ENDED DECEMBER 31, DECEMBER 31, YEAR ENDED DECEMBER 31, - ---------------------------------------------- ------- ----------------------------------------------------------- 2000 1999 1998 1997 1996 2000 1999 1998 1997 1996 - ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- $ 12.00 $ 10.37 $ 15.60 $ 14.50 $ 12.55 $ 12.04 $ 10.40 $ 15.64 $ 14.52 $ 10.76 - ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- (0.02) (0.03) 0.01 (0.01) 0.11 (0.02) (0.03) 0.01 (0.01) 0.11 1.00 1.66 (5.08) 2.00 2.95 0.99 1.67 (5.09) 2.00 4.73 - ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- 0.98 1.63 (5.07) 1.99 3.06 0.97 1.64 (5.08) 1.99 4.84 - ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -- -- (0.14) -- (0.14) -- -- (0.14) -- (0.11) -- -- (0.02) (0.89) (0.95) -- -- (0.02) (0.87) (0.95) -- -- -- -- (0.02) -- -- -- -- (0.02) - ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -- -- (0.16) (0.89) (1.11) -- -- (0.16) (0.87) (1.08) - ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- $ 12.98 $ 12.00 $ 10.37 $ 15.60 $ 14.50 $ 13.01 $ 12.04 $ 10.40 $ 15.64 $ 14.52 ======= ======= ======= ======= ======= ======= ======= ======= ======= ======= 8.17% 15.72% (32.55)% 13.72% 24.55% 8.06% 15.77% (32.53)% 13.71% 45.18% - -------------------------------------------------------------------------------------------------------------------------------- $ 3,438 $ 5,029 $ 5,580 $10,541 $ 1,806 $ 2,697 $ 3,223 $ 4,011 $ 8,698 $ 1,935 3.35% 3.79% 2.81% 2.73% 3.27%(d) 3.82% 4.15% 3.00% 2.94% 6.02% 2.75% 2.71% 2.50% 2.50% 1.64%(d) 2.75% 2.71% 2.50% 2.50% 1.31% (0.23)%(e) (0.23)%(e) 0.12% (0.13)% 0.53%(d) (0.23)%(e) (0.22)%(e) 0.11% (0.15)% 0.84% 91.27% 195.00% 167.79% 118.10% 163.91% 91.27% 195.00% 167.79% 118.10% 163.91%
- ---------- (a) Commencement of offering. (b) Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of dividends and distributions at net asset value during the period and a redemption on the last day of the period. A sales charge is not reflected in the calculation of total return. Total return for a period of less than one year is not annualized. (c) After expenses reduced by a custodian fee, directed brokerage and/or Advisory expense reimbursement arrangement. (d) Annualized. (e) For the years ended 2000 and 1999, the net effect of reductions due to a custodian fee, directed brokerage and/or Advisory expense reimbursement arrangement, for both years, for Class A are 0.43% and 0.84%, respectively; Class B 0.51% and 1.03%, respectively; and Class C 0.98% and 1.39%, respectively. See Notes to Financial Statements 58 GLOBAL LEADERS FUND - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS For a share outstanding throughout each year:
CLASS A CLASS B ------------------------------------------------- ----------------------------------------------- YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, ------------------------------------------------- ----------------------------------------------- 2000 1999 1998 1997 1996 2000 1999 1998 1997 1996 ------- ------- ------- ------- ------- ------- ------ ------ ------ ------- Net Asset Value, Beginning of Year .......... $ 13.49 $ 10.78 $ 10.38 $ 10.37 $ 10.31 $ 13.31 $10.67 $10.31 $10.32 $ 10.28 ------- ------- ------- ------- ------- ------- ------ ------ ------ ------- Income from Investment Operations: Net Investment Income (loss) .............. (0.16) (0.06) 0.02 0.10 0.12 (0.19) (0.12) -- 0.04 0.06 Net Gain on Investments (both Realized and Unrealized) ................ (2.73) 3.59 2.07 1.43 1.15 (2.72) 3.56 2.02 1.43 1.14 ------- ------- ------- ------- ------- ------- ------ ------ ------ ------- Total from Investment Operations ................. (2.89) 3.53 2.09 1.53 1.27 (2.91) 3.44 2.02 1.47 1.20 ------- ------- ------- ------- ------- ------- ------ ------ ------ ------- Less Dividends and Distributions: Dividends from Net Investment Income .......... -- -- -- (0.08)(c (0.11) -- -- -- (0.03) (0.06) Distribution from Capital Gains .............. (1.62) (0.82) (1.61) (1.43) (1.10) (1.62) (0.80) (1.61) (1.45) (1.10) Tax Return of Capital ........ -- -- (0.08) (0.01) -- -- -- (0.05) -- -- ------- ------- ------- ------- ------- ------- ------ ------ ------ ------- Total Dividends and Distributions .............. (1.62) (0.82) (1.69) (1.52) (1.21) (1.62) (0.80) (1.66) (1.48) (1.16) ------- ------- ------- ------- ------- ------- ------ ------ ------ ------- Net Asset Value, End of Year ................ $ 8.98 $ 13.49 $ 10.78 $ 10.38 $ 10.37 $ 8.78 $13.31 $10.67 $10.31 $ 10.32 ======= ======= ======= ======= ======= ======= ====== ====== ====== ======= Total Return (a) ............. (21.88)% 32.83% 20.65% 14.77% 12.28% (22.33)% 32.27% 20.07% 14.26% 11.49% - ----------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTARY DATA Net Assets, End of Year (000) .......... $23,990 $33,070 $27,461 $24,630 $29,331 $ 4,841 $6,442 $6,039 $5,055 $ 4,932 Ratio of Gross Expenses to Average Net Assets ...... 2.15% 2.20% 2.32% 2.45% 2.54% 3.00% 3.21% 3.25% 2.51% 3.19% Ratio of Net Expenses to Average Net Assets (b) .. 2.00%(d) 2.00% 2.00% 2.00% 2.17% 2.50%(d) 2.50% 2.50% 2.50% 2.71% Ratio of Net Investment Income (Loss) to Average Net Assets ................. (1.35)%(e) (0.48)%(e) 0.85% 0.85% 1.05% (1.86)%(e) (0.94)%(e) 0.36% 0.36% 0.51% Portfolio Turnover Rate ...... 97.61% 86.14% 87.79% 78.07% 114.30% 97.61% 86.14% 87.79% 78.07% 114.30%
- ---------- (a) Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of dividends and distributions at net asset value during the period and a redemption on the last day of the period. A sales charge is not reflected in the calculation of total return. (b) After expenses reduced by a custodian fee, directed brokerage and/or Advisory expense reimbursement arrangement. (c) Net of foreign taxes withheld (to be included in income claimed as a tax credit on deduction by shareholder for federal income tax purposes) of $0.01 in 1997. (d) Net of interest expense. (e) For the years ended 2000 and 1999, the net effect of the reductions due to a custodian fee, directed brokerage and/or Advisory expense reimbursement arrangement for both years for Class A are 0.12% and 0.20%, respectively and for Class B are 0.47% and 0.71%, respectively. See Notes to Financial Statements 59 INTERNATIONAL INVESTORS GOLD FUND - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS For a share outstanding throughout each year:
CLASS A ----------------------------------------------------------------------- YEAR ENDED DECEMBER 31, ----------------------------------------------------------------------- 2000 1999 1998 1997 1996 -------- -------- -------- -------- -------- Net Asset Value, Beginning of Year ...................... $ 5.73 $ 6.59 $ 7.54 $ 11.90 $ 13.35 -------- -------- -------- -------- -------- Income from Investment Operations: Net Investment Income ................................... 0.00(e) 0.03 0.06 0.09 0.05 Net Loss on Investments (both Realized and Unrealized) .. (1.27) (0.84) (0.95) (4.36) (1.29) -------- -------- -------- -------- -------- Total from Investment Operations ........................ (1.27) (0.81) (0.89) (4.27) (1.24) -------- -------- -------- -------- -------- Less Dividends and Distributions: Dividends from Net Investment Income .................... -- (0.05) (0.06) (0.09) (0.07) Distributions from Capital Gains ........................ -- -- -- -- (0.14) Tax Return of Capital ................................... (0.01) -- -- -- -- -------- -------- -------- -------- -------- Total Dividends and Distributions ....................... (0.01) (0.05) (0.06) (0.09) (0.21) -------- -------- -------- -------- -------- Net Asset Value, End of Year ............................ $ 4.45 $ 5.73 $ 6.59 $ 7.54 $ 11.90 ======== ======== ======== ======== ======== Total Return (a) ........................................ (22.18)% (12.37)% (11.87)% (36.00)% (9.37)% - ----------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTARY DATA Net Assets, End of Year (000) ........................... $116,513 $169,045 $238,639 $232,944 $409,331 Ratio of Gross Expenses to Average Net Assets ........... 2.30% 2.09% 1.78% 1.52% 1.43% Ratio of Net Expenses to Average Net Assets ............. 2.17%(b)(c) 2.08%(b) 1.76%(b) 1.47%(b) 1.43% Ratio of Net Investment Income (Loss) to Average Net Assets ................................. 0.08%(d) 0.46%(d) 0.99% 0.90% 0.36% Portfolio Turnover Rate ................................. 65.41% 94.67% 86.65% 19.99% 12.45%
- ---------- (a) Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of dividends and distributions at net asset value during the period and a redemption on the last day of the period. A sales charge is not reflected in the calculation of total return. (b) After expenses reduced by a custodian fee or directed brokerage arrangement. (c) Net of interest expense. (d) For the years ended 2000 and 1999, the net effect of the reductions due to a custodian fee or directed brokerage arrangement for both years are 0.02% and 0.01%, respectively. (e) Amount represents less than $0.01 per share. See Notes to Financial Statements 60 NATURAL RESOURCES FUND - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS For a share outstanding throughout each year:
CLASS A -------------------------------------------------------------------- YEAR ENDED DECEMBER 31, -------------------------------------------------------------------- 2000 1999 1998 1997 1996 -------- -------- -------- -------- -------- Net Asset Value, Beginning of Year ....................... $ 2.73 $ 3.04 $ 3.47 $ 5.72 $ 5.58 -------- -------- -------- -------- -------- Income from Investment Operations Net Investment Loss ...................................... (0.02) (0.03) (0.04) (0.04) (0.06) Net Gain (Loss) on Investments (both Realized and Unrealized) ......................... (0.33) (0.28) (0.39) (2.21) 0.20 -------- -------- -------- -------- -------- Total from Investment Operations ......................... (0.35) (0.31) (0.43) (2.25) 0.14 -------- -------- -------- -------- -------- Net Asset Value, End of Year ............................. $ 2.38 $ 2.73 $ 3.04 $ 3.47 $ 5.72 ======== ======== ======== ======== ======== Total Return (a) ......................................... (12.82)% (10.20)% (12.39)% (39.34)% 2.51% - -------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTARY DATA Net Assets, End of Year (000) ............................ $ 26,710 $ 39,389 $ 53,397 $ 66,151 $132,298 Ratio of Gross Expenses to Average Net Assets ............ 2.69% 2.52% 2.24% 1.87% 1.71% Ratio of Net Expenses to Average Net Assets .............. 2.63%(b)(c) 2.51%(b) 2.21%(b) 1.87% 1.71% Ratio of Net Investment Loss to Average Net Assets ....... (0.65)%(d) (0.84)%(d) (0.98)% (0.57)% (0.75)% Portfolio Turnover Rate .................................. 117.67% 95.44% 79.99% 32.46% 12.95%
- ---------- (a) Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period and a redemption on the last day of the period. A sales charge is not reflected in the calculation of total return. (b) After expenses reduced by a custodian fee or directed brokerage arrangement. (c) Net of interest expense. (d) For the years ended 2000 and 1999, the net effect of the reductions due to a custodian fee or directed brokerage arrangement for both years are 0.05% and 0.01%, respectively. See Notes to Financial Statements 61 U.S. GOVERNMENT MONEY FUND - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS For a share outstanding throughout each year:
CLASS A ------------------------------------------------------------ YEAR ENDED DECEMBER 31, ------------------------------------------------------------ 2000 1999 1998 1997 1996 -------- -------- -------- -------- -------- Net Asset Value, Beginning of Year ................................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 -------- -------- -------- -------- -------- Income from Investment Operations: Net Investment Income ............................................. 0.05 0.03 0.04 0.04 0.04 Less Distributions to Shareholders: Dividends from Net Investment Income .............................. (0.05) (0.03) (0.04) (0.04) (0.04) -------- -------- -------- -------- -------- Net Asset Value, End of Year ...................................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== ======== ======== ======== ======== Total Return ...................................................... 4.77% 3.43% 3.88% 3.77% 3.85% - ---------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTARY DATA Net Assets, End of Year (000) ..................................... $ 73,797 $ 97,443 $ 47,222 $ 76,650 $107,698 Ratio of Gross Expenses to Average Net Assets ..................... 1.10% 1.15% 1.20% 1.28% 1.23% Ratio of Net Investment Income to Average Net Assets .............. 4.80% 3.68% 3.89% 3.91% 4.02%
See Notes to Financial Statements 62 VAN ECK FUNDS NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- NOTE 1--SIGNIFICANT ACCOUNTING POLICIES--Van Eck Funds (the "Trust"), organized as a Massachusetts business trust on April 3, 1985, is registered under the Investment Company Act of 1940, as amended. The Trust operates as a series fund currently comprised of seven portfolios: Asia Dynasty Fund, Emerging Markets Vision Fund, Global Hard Assets Fund, Global Leaders Fund, International Investors Gold Fund, Natural Resources Fund (name changed on May 1, 2000 from Gold/Resources Fund) and U.S. Government Money Fund (the "Funds"). Asia Dynasty Fund, Emerging Markets Vision Fund and U.S. Government Money Fund are classified as diversified funds under the Investment Company Act of 1940, as amended. Global Hard Assets Fund, Global Leaders Fund, International Investors Gold Fund and Natural Resources Fund (formerly Gold/Resources Fund) are non-diversified funds. The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of their financial statements. The policies are in conformity with accounting principles generally accepted in the United States. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts in the financial statements. Actual results could differ from those estimates. A. SECURITY VALUATION--Securities traded on national or foreign exchanges are valued at the last sales prices reported at the close of business on the last business day of the year. Over-the-counter securities and listed securities for which no sale was reported are valued at the mean of the bid and ask prices. Short-term obligations are valued at amortized cost which, with accrued interest, approximates value. Forward foreign currency contracts are valued at the spot currency rate plus an amount ("points"), which reflects the differences in interest rates between the U.S. and foreign markets. Securities for which quotations are not available are stated at fair value as determined by the Board of Trustees. B. FEDERAL INCOME TAXES--It is each Fund's policy to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income to its shareholders. Therefore, no federal income tax provision is required. C. CURRENCY TRANSLATION--Assets and liabilities denominated in foreign currencies and commitments under forward foreign currency contracts are translated into U.S. dollars at the mean of the quoted bid and ask prices of such currencies. Purchases and sales of investments are translated at the exchange rates prevailing when such investments are acquired or sold. Income and expenses are translated at the exchange rates prevailing when accrued. The portion of realized and unrealized gains and losses on investments that result from fluctuations in foreign currency exchange rates is not separately disclosed. Realized gains or losses and the appreciation or depreciation attributable to foreign currency fluctuations on other foreign currency denominated assets and liabilities are recorded as net realized or unrealized gains and losses from foreign currency transactions, respectively. D. OTHER--Security transactions are accounted for on the date the securities are purchased or sold. Dividend income is recorded on the ex-dividend date. Dividends on foreign securities are recorded when the Funds are informed of such dividends. Interest income is accrued as earned. E. DISTRIBUTIONS TO SHAREHOLDERS--Dividends to shareholders from net investment income and realized gains, if any, are recorded on the ex-dividend date. Income and capital gains distributions are determined in accordance with income tax regulations, which may differ from such amounts determined in accordance with accounting principles generally accepted in the United States. USE OF DERIVATIVE INSTRUMENTS F. OPTION CONTRACTS--The Funds (except U.S. Government Money Fund) may invest, for hedging and other purposes, in call and put options on securities, currencies and commodities. Call and put options give the Funds the right, but not the obligation, to buy (calls) or sell (puts) the instrument underlying the option at a specified price. The premium paid on the option, should it be exercised, will, on a call, increase the cost of the instrument acquired and, on a put, reduce the proceeds received from the sale of the instrument underlying the option. If the options are not exercised, the premium paid will be recorded as a capital loss upon expiration. The Funds may incur additional risk to the extent the value of the underlying instrument does not correlate with the movement of the option value. The Funds (except U.S. Government Money Fund) may also write call or put options. As the writer of an option, the Funds receive a premium. The Funds keep the premium whether or not the option is exercised. The premium will be recorded, upon expiration of the option, as a short-term capital gain. If the option is exercised, the Funds must sell, in the case of a written call, or buy, in the case of a written put, the underlying instrument at the exercise price. The Funds may write only covered puts and calls. A covered call option is an option in which the Funds own the instrument underlying the call. A covered call sold by the Funds expose them during the term of the option to possible loss of opportunity to realize appreciation in the market price of the underlying instrument or to possible continued holding of an underlying instrument which might otherwise have been sold to protect against a decline in the market price of the underlying instrument. A covered put exposes the Funds during the term of the option to a decline in price of the underlying instrument. A put option sold by the Funds is covered when, among other things, cash or short-term liquid securities are placed in a segregated account to fulfill the obligations undertaken. The Funds may incur additional risk from investments in written currency options if there are unanticipated movements in the underlying currencies. G. SHORT SALES--The Global Hard Assets Fund may make short sales of equity securities. A short sale occurs when the Fund sells a security, which it does not own, by borrowing it from a broker. In the event that the value of the security that the Fund sold short declines, the Fund will gain as it repurchases the security in the market at the lower price. If the price of the security increases, the Fund will suffer a loss, as it will have to repurchase the security at the higher price. Short sales may 63 VAN ECK FUNDS NOTES TO FINANCIAL STATEMENTS (continued) - -------------------------------------------------------------------------------- incur higher transaction costs than regular securities transactions. Cash is deposited in a segregated account with brokers, maintained by the Fund, for its open short sales. Proceeds from securities sold short are reported as liabilities and are marked to market. Gains and losses are classified as realized when short positions are closed. H. FUTURES--The Funds (except U.S. Government Money Fund) may buy and sell financial futures contracts which may include security and interest-rate futures, stock and bond index futures contracts and foreign currency futures contracts. The Funds may engage in these transactions for hedging purposes and (except for Natural Resources Fund) for other purposes. Global Hard Assets Fund may also buy and sell commodity futures contracts, which may include futures on natural resources and natural resource indices. A security or interest-rate futures contract is an agreement between two parties to buy or sell a specified security at a set price on a future date. An index futures contract is an agreement to take or make delivery of an amount of cash based on the difference between the value of the index at the beginning and at the end of the contract period. A foreign currency futures contract is an agreement to buy or sell a specified amount of currency at a set price on a future date. A commodity futures contract is an agreement to take or make delivery of a specified amount of a commodity, such as gold, at a set price on a future date. I. STRUCTURED NOTES--The Funds may invest in indexed securities whose value is linked to one or more currencies, interest rates, commodities or financial or commodity indices. When the Fund purchases a structured note (a non-publicly traded indexed security entered into directly between two parties) it will make a payment of principal to the counterparty. The Fund will purchase structured notes only from counterparties rated A or better by S&P, Moody's or another nationally recognized statistical rating organization. Van Eck Associates Corporation will monitor the liquidity of structured notes under supervision of the Board of Trustees and structured notes determined to be illiquid will be aggregated with other illiquid securities and limited to 15% of the net assets of the Fund. Indexed securities may be more volatile than the underlying instrument itself, and present many of the same risks as investing in futures and options. Indexed securities are also subject to credit risks associated with the issuer of the security with respect to both principal and interest. At December 31, 2000, the following structured notes were outstanding: % OF NET VALUE ASSETS ------ ----- INTERNATIONAL INVESTORS GOLD FUND Business Development Bank of Canada Gold Linked Note @ 2.50% due 12/14/01 .................... $2,896,800 2.5% HSBC Bank USA Gold Linked Note @ 2.50% due 8/17/01 ..................... 2,685,900 2.3 NOTE 2--MANAGEMENT--Van Eck Associates Corporation (the "Adviser") earns fees for investment management and advisory services. The Asia Dynasty Fund and Global Leaders Fund each pay the Adviser a monthly fee at the annual rate of 0.75% of average daily net assets. The Emerging Markets Vision and Global Hard Assets Funds pay the Adviser a monthly fee at the annual rate of 1% of average daily net assets, a portion of which is paid to the Adviser for accounting and administrative services it provides to the Fund. The International Investors Gold and Natural Resources Funds each pay the Adviser a monthly fee at the annual rate of 0.75 of 1% of the first $500 million of average daily net assets of the Fund, 0.65 of 1% of the next $250 million of average daily net assets and 0.50 of 1% of average daily net assets in excess of $750 million. The U.S. Government Money Fund pays the Adviser a monthly fee at the annual rate of 0.50 of 1% of the first $500 million of average daily net assets, 0.40 of 1% of the next $250 million of average daily net assets and 0.375 of 1% of average daily net assets in excess of $750 million. In accordance with the advisory agreement, the Funds paid Van Eck Associates Corporation for costs incurred in connection with certain administrative and operating functions. The Funds paid costs in the following amounts: $20,627 Asia Dynasty Fund, $1,536 Emerging Markets Vision Fund, $15,487 Global Hard Assets Fund, $15,935 Global Leaders Fund, $169,099 International Investors Gold Fund, $56,207 Natural Resources Fund and $0 U.S. Government Money Fund. For the period April 7, 2000 (commencement of operations) to December 31, 2000, the Adviser agreed to assume expenses exceeding 2% of average daily net assets for Class A shares and 2.75% of average daily net assets for Class B shares for the Emerging Markets Vision Fund. Expenses were reduced by $77,842 under this agreement. For the year ended December 31, 2000, the Adviser agreed to assume expenses exceeding 2% of average daily net assets for Class A shares and 2.75% of average daily net assets for Class B and C shares, for the Global Hard Assets Fund. Expenses were reduced by $111,758 under this agreement. For the year ended December 31, 2000, the Adviser agreed to assume expenses exceeding 2% of average daily net assets for Class A shares and 2.5% of average daily net assets for Class B shares for the Global Leaders Fund. Expenses were reduced by $63,402 under this agreement. Van Eck Associates Corporation also performs accounting and administrative services for Asia Dynasty Fund, Global Leaders Fund, International Investors Gold Fund and Natural Resources Fund and is paid at an annual rate of 0.25 of 1% of average daily net assets (Asia Dynasty Fund and Global Leaders Fund) or at an annual rate of 0.25 of 1% of the first $750 million of each Funds' average daily net assets and 0.20 of 1% of average daily net assets in excess of $750 million (International Investors Gold Fund and Natural Resources Fund). Asia Dynasty Fund, International Investors Gold Fund and Natural Resources Fund have directed portfolio trades to brokers who paid a portion of the Funds' expenses. The Funds' expenses were reduced by $461, $21,433 and $13,741, respectively, under this arrangement for the year ended December 31, 2000. 64 VAN ECK FUNDS NOTES TO FINANCIAL STATEMENTS (continued) - -------------------------------------------------------------------------------- The Funds have a fee arrangement based on cash balances left on deposit with the custodian, which reduces operating expenses. For the year ended December 31, 2000, Van Eck Securities Corporation (the "Distributor") received $194,889 in sales loads of which $44,292 was reallowed to broker dealers. Certain of the officers and trustees of the Trust are officers, directors or stockholders of Van Eck Associates Corporation and Van Eck Securities Corporation. As of December 31, 2000, the Adviser owned 55% of the outstanding shares of beneficial interest of the Emerging Markets Vision Fund Class A shares. NOTE 3--INVESTMENTS--For federal income tax purposes, the identified cost of investments owned at December 31, 2000 is $22,442,066, $1,151,741, $20,057,013, $24,431,514, $111,974,570 and $26,606,197 for the Asia Dynasty Fund, Emerging Markets Vision Fund, Global Hard Assets Fund, Global Leaders Fund, International Investors Gold Fund and Natural Resources Fund, respectively. The U.S. Government Money Fund's identified cost for federal income taxes is the same for financial reporting purposes. As of December 31, 2000, gross unrealized gains and losses were as follows: NET GROSS GROSS UNREALIZED UNREALIZED UNREALIZED APPRECIATION APPRECIATION DEPRECIATION (DEPRECIATION) ------------ ------------ ------------ Asia Dynasty Fund ................... $ 2,270,898 $ 5,022,337 $ (2,751,439) Emerging Markets Vision Fund ........ 26,627 382,664 (356,037) Global Hard Assets Fund ............. 3,650,646 1,960,167 1,690,479 Global Leaders Fund ................. 6,251,153 1,721,480 4,529,673 International Investors Gold Fund ... 13,880,488 25,663,316 (11,782,828) Natural Resources Fund .............. 3,000,749 2,580,244 420,505 At December 31, 2000 the Funds had the following capital loss carryforward available to offset future capital gains; Emerging Markets Vision Fund $8,615 expiring December 31, 2008; Global Hard Assets Fund $13,330,931, of which $9,966,738 expires December 31, 2006 and $3,364,193 expires December 31, 2007; International Investors Gold Fund $20,348,160, of which $8,070,154 expires December 31, 2006 and $12,278,006 expires December 31, 2008; Natural Resources Fund $30,440,338, of which $4,289,233 expires December 31, 2005, $13,306,791 expires December 31, 2006, $8,862,338 expires December 31, 2007 and $3,981,976 expires December 31, 2008; U.S. Government Money Fund $55,777, of which $9,832 expires December 31, 2007 and $45,945 expires December 31, 2008. Purchases and sales of investment securities for the year ended December 31, 2000, other than short-term obligations, were as follows: PROCEEDS COST OF FROM INVESTMENT INVESTMENT SECURITIES SECURITIES PURCHASED SOLD ----------- ----------- Asia Dynasty Fund ............................ $37,681,756 $39,134,014 Emerging Markets Vision Fund ................. 1,782,686 551,910 Global Hard Assets Fund ...................... 19,194,776 27,263,099 Global Leaders Fund .......................... 34,685,292 36,471,437 International Investors Gold Fund ............ 73,831,288 87,339,465 Natural Resources Fund ....................... 32,878,848 42,819,265 Transactions in put/call options written for the year ended December 31, 2000 were as follows: NUMBER OF PREMIUMS CONTRACTS RECEIVED --------- --------- GLOBAL HARD ASSETS FUND: Options outstanding at 12/31/99 .............. 300 $ 349,000 Options written .............................. 130 126,000 Options closed ............................... (300) (349,000) Options expired .............................. (130) (126,000) ---- --------- Options outstanding at 12/31/00 .............. -- $ -- ==== ========= NOTE 4--12b-1 PLANS OF DISTRIBUTION--Pursuant to Rule 12b-1 Plans of Distribution (the "Plans") all of the Funds are authorized to incur distribution expenses which will principally be payments to securities dealers who have sold shares and serviced shareholder accounts and payments to Van Eck Securities Corporation (VESC), the distributor, for reimbursement of other actual promotion and distribution expenses incurred by the distributor on behalf of the Funds. The amount paid under the Plans in any one year is limited to 0.50% of average daily net assets (except for International Investors Gold Fund, Natural Resources Fund and U.S. Government Money Fund which is 0.25%) for Class A shares and 1% of average daily net assets for Classes B and C shares (the "Annual Limitations"). For Class C shares, the Funds will pay to the selling broker at the time of sale 1% of the amount of the purchase. Such Class C 12b-1 fees will be expensed by the Funds over the course of the first twelve months from the time of purchase. Should the payments to the brokers made by the Funds exceed, on an annual basis, 1% of average daily net assets, VESC will reimburse the Funds for any excess. Class C shareholders redeeming within one year of purchase will be subject to a 1% redemption charge, which will be retained by the Funds. After the first year, the 1% 12b-1 fee will be paid to VESC which will retain a portion of the fee for distribution services and pay the remainder to brokers. Distribution expenses incurred under the Plans that have not been paid because they exceed the Annual Limitation may be carried forward to future years and paid by the Funds within the Annual Limitation. VESC has waived its right to reimbursement of the carried forward amounts incurred through December 31, 2000 in the event the Plans are terminated, unless the Board of Trustees determines that reimbursement of the carried forward amounts is appropriate. The accumulated amount of excess distribution expenses incurred over the Annual Limitations as of December 31, 2000, were as follows: Asia Dynasty Fund--Class A $1,353,220 Asia Dynasty Fund--Class B 1,525,244 Emerging Markets Vision Fund--Class A 18,093 Emerging Markets Vision Fund--Class B 17,676 Global Hard Assets Fund--Class A 948,123 Global Hard Assets Fund--Class B 127,745 Global Hard Assets Fund--Class C 313,624 Global Leaders Fund--Class A 1,012,059 Global Leaders Fund--Class B 446,435 65 VAN ECK FUNDS NOTES TO FINANCIAL STATEMENTS (continued) - -------------------------------------------------------------------------------- NOTE 5--SHAREHOLDER TRANSACTIONS--Shares of Beneficial Interest issued and redeemed (unlimited number of $.001 par value shares authorized): ASIA DYNASTY FUND ----------------------------------- YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, 2000 1999 -------------- -------------- CLASS A Shares sold 5,155,545 4,258,905 Shares reinvested 144,704 229,122 -------------- -------------- 5,300,249 4,488,027 Shares reacquired (5,431,962) (3,708,372) -------------- -------------- Net increase/(decrease) (131,713) 779,655 ============== ============== CLASS B Shares sold 295,472 350,409 Shares reinvested 58,545 75,883 -------------- -------------- 354,017 426,292 Shares reacquired (241,410) (216,757) -------------- -------------- Net increase 112,607 209,535 ============== ============== EMERGING MARKETS VISION FUND ----------------------------------- PERIOD ENDED APRIL 7, 2000+ TO DECEMBER 31, 2000 ----------------- CLASS A Shares sold 147,506 Shares reacquired (26,365) -------- Net increase 121,141 ======== CLASS B Shares sold 8,409 Shares reacquired -- -------- Net increase 8,409 ======== + Commencement of operations. GLOBAL HARD ASSETS FUND ----------------------------------- YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, 2000 1999 -------------- -------------- CLASS A Shares sold 620,561 923,841 Shares reinvested -- 7,699 -------------- -------------- 620,561 931,540 Shares reacquired (1,061,058) (1,673,331) -------------- -------------- Net decrease (440,497) (741,791) ============== ============== CLASS B Shares sold 12,954 79,508 Shares reacquired (166,939) (198,644) -------------- -------------- Net decrease (153,985) (119,136) ============== ============== CLASS C Shares sold 13,856 25,965 Shares reacquired (74,423) (143,976) -------------- -------------- Net decrease (60,567) (118,011) ============== ============== GLOBAL LEADERS FUND ----------------------------------- YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, 2000 1999 -------------- -------------- CLASS A Shares sold 575,893 658,810 Shares reinvested 358,151 127,531 -------------- -------------- 934,044 786,341 Shares reacquired (713,568) (883,573) -------------- -------------- Net increase/(decrease) 220,476 (97,232) ============== ============== CLASS B Shares sold 105,358 129,131 Shares reinvested 67,133 20,507 -------------- -------------- 172,491 149,638 Shares reacquired (105,469) (231,450) -------------- -------------- Net increase/(decrease) 67,022 (81,812) ============== ============== INTERNATIONAL INVESTORS GOLD FUND ----------------------------------- YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, 2000 1999 -------------- -------------- CLASS A Shares sold 877,506,908 700,390,969 Shares reinvested 42,199 172,459 -------------- -------------- 877,549,107 700,563,428 Shares reacquired (880,886,926) (707,247,143) -------------- -------------- Net decrease (3,337,819) (6,683,715) ============== ============== NATURAL RESOURCES FUND ----------------------------------- YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, 2000 1999 -------------- -------------- CLASS A Shares sold 2,180,320 5,063,633 Shares reacquired (5,367,690) (8,201,348) -------------- -------------- Net decrease (3,187,370) (3,137,715) ============== ============== U.S. GOVERNMENT MONEY FUND ----------------------------------- YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, 2000 1999 -------------- -------------- CLASS A Shares sold 4,214,700,071 4,365,984,087 Shares reinvested 2,154,281 1,709,890 -------------- -------------- 4,216,854,352 4,367,693,977 Shares reacquired (4,240,456,825) (4,317,461,360) -------------- -------------- Net increase/(decrease) (23,602,473) 50,232,617 ============== ============== NOTE 6--FORWARD FOREIGN CURRENCY CONTRACTS--The Funds (except U.S. Government Money Fund) may buy and sell forward foreign currency contracts to settle purchases and sales of foreign denominated securities. In addition, the Funds (except U.S. Government Money Fund) may enter into forward foreign currency contracts to hedge foreign denominated assets. Realized gains and losses from forward foreign currency contracts are included in realized gain (loss) from foreign currency transactions. At December 31, 2000, the following forward foreign currency contracts were outstanding: 66 VAN ECK FUNDS NOTES TO FINANCIAL STATEMENTS (continued) - -------------------------------------------------------------------------------- UNREALIZED CONTRACT CURRENT APPRECIATION CONTRACTS AMOUNT VALUE (DEPRECIATION) - -------------------------------------------------------------------------------- ASIA DYNASTY FUND Foreign Currency Sale Contracts: SGD 280,584 expiring 1/02/01-1/04/01 $162,096 $161,813 $ 283 EMERGING MARKETS VISION FUND Foreign Currency Sale Contract: MXN 45,755 expiring 1/02/01 $ 4,753 $ 4,756 $ (3) GLOBAL HARD ASSETS FUND Foreign Currency Sale Contract: AUD 212,910 expiring 1/03/01 $117,526 $118,644 $ (1,118) GLOBAL LEADERS FUND Foreign Currency Buy Contracts: GBP 129,541 expiring 1/03/01-1/04/01 $192,354 $193,469 $ 1,115 Foreign Currency Sale Contract: JPY 66,426,000 expiring 3/21/01 600,000 588,558 11,442 -------- $ 12,557 ======== INTERNATIONAL INVESTORS GOLD FUND Foreign Currency Buy Contract: AUD 19,760 expiring 1/02/01 $ 10,996 $ 11,011 $ 15 NATURAL RESOURCES FUND Foreign Currency Buy Contract: AUD 49,321 expiring 1/03/01 $ 27,373 $ 27,484 $ 111 NOTE 7--TRUSTEE DEFERRED COMPENSATION PLAN--The Trust has a Deferred Compensation Plan (the "Plan") for Trustees. Commencing January 1, 1996, the Trustees can elect to defer receipt of their trustee fees 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 Trustees. The fees otherwise payable to the participating Trustees are invested in shares of the Van Eck Funds as directed by the Trustees. The Funds have elected to show this deferred liability at fair market value for financial statement purposes. The Plan has been approved by the Internal Revenue Service. As of December 31, 2000, the total fair market value of the liability portion of the Plan is as follows: Asia Dynasty Fund--$21,354, Emerging Markets Vision Fund--$168, Global Hard Assets Fund--$21,969, Global Leaders Fund--$21,200, International Investors Gold Fund--$134,654, Natural Resources Fund--$37,917, and U.S. Government Money Fund--$63,558. NOTE 8--RESTRICTED SECURITIES--The following securities are restricted as to sale and deemed to be illiquid: PERCENT OF DATE(S) NET ASSETS ACQUIRED COST VALUE AT 12/31/00 ---------- -------- ------- ----------- ASIA DYNASTY FUND Matrix 8848.net Holdings, LLC 6/14/00 $ 255,700 $250,000 1.2% GLOBAL HARD ASSETS FUND Khanty-Mansiysk Oil Co. 1/31/97 $ 549,995 $881,475 4.5% Windsor Energy Corp. 7/09/96- 5/27/98 1,266,515 86,582 0.4 --- 4.9% === NOTE 9--SCHEDULE OF AFFILIATED COMPANIES TRANSACTIONS--Transactions with affiliates (as defined by the Investment Company Act of 1940) for the year ended December 31, 2000: ASIA INTERNATIONAL NATURAL DYNASTY INVESTORS RESOURCES FUND GOLD FUND FUND ---------------- -------------- ------------- MATRIX 8848.net Piedmont Piedmont Holdings, LLC Mining Co. Mining Co. ---------------- -------------- ------------- 12/31/99 Share Balance -- 1,270,000 1,000,000 Purchases: Shares 250,000 -- -- Cost $255,700 -- -- Sales: Shares -- (1,270,000) (1,000,000) Cost -- $ 1,428,544 $ 1,000,000 Realized Loss -- $(1,403,144) $ (980,000) 12/31/00 Share Balance 250,000 -- -- -------- ----------- ----------- Market Value $250,000 -- -- -------- ----------- ----------- Dividend Income -- -- -- NOTE 10--REPURCHASE AGREEMENTS--Collateral for repurchase agreements, the value of which must be at least 102% of the underlying debt obligation, plus accrued interest, is held by the Funds' custodian. In the remote chance the counterparty should fail to complete the repurchase agreement, realization and retention of the collateral may be subject to legal proceedings and the Funds would become exposed to market fluctuation on the collateral. NOTE 11--EQUITY SWAPS--The Funds (except U.S. Government Money Fund) may enter into equity swaps to gain investment exposure to the relevant market of the underlying security. A swap is an agreement that obligates the parties to exchange cash flows at specified intervals. The Fund is obligated to pay the counterparty on trade date an amount based upon the value of the underlying instrument and, at termination date, final payment is settled based on the value of the underlying security on trade date versus the value on termination date plus accrued dividends. Risks may arise as a result of the failure of the counterparty to the contract to comply with the terms of the swap contract. The Fund bears the risk of loss of the amount expected to be received under a swap agreement in the event of the default of the counterparty. Therefore, the Fund considers the credit worthiness of each counterparty to a swap contract in evaluating potential credit risk. Additionally, risks may arise from unanticipated movements in the value of the swap relative 67 VAN ECK FUNDS NOTES TO FINANCIAL STATEMENTS (continued) - -------------------------------------------------------------------------------- to the underlying securities. The Fund records a net receivable or payable daily, based on the change in the value of the underlying securities. The net receivable or payable for financial statement purposes is shown as due to or from broker. The Fund has collateralized 100% of the notional amount of the swap. Such amounts are reflected in the Statement of Assets and Liabilities as Cash-initial margin. At December 31, 2000, the following swap was outstanding (stated in U.S. dollars): UNDERLYING NUMBER OF NOTIONAL TERMINATION UNREALIZED SECURITY SHARES AMOUNT DATE APPRECIATION - ----------- ----------- --------- ------------ ------------- GLOBAL HARD ASSETS FUND Gazprom Oil Co. 239,200 $38,990 3/15/01 $30,928 COMMODITY SWAPS--The Funds (except U.S. Government Money Fund) may enter into a commodity swap to gain investment exposure to the relevant spread of the commodity reference prices. A swap is an agreement that obligates the parties to exchange cash flows at specified intervals. At termination date, a final payment is made based on the swap's notional amount on trade date versus the value on termination date. Risks may arise as a result of the failure of the counterparty to the contract to comply with the terms of the swap contract. The Fund bears the risk of loss of the amount expected to be received under a swap agreement in the event of the default of the counterparty. Therefore, the Fund considers the credit worthiness of each counterparty to a swap contract in evaluating potential credit risk. Additionally, risks may arise from unanticipated movements in the value of the swap relative to the underlying reference prices. The Fund records a net receivable or payable daily, based on the change in the value of the swap. The net receivable or payable for financial statement purposes is shown as due to or from broker. At December 31, 2000, the Funds had no outstanding commodity swaps. NOTE 12--BANK LINE OF CREDIT--The Trust may participate with other funds managed by Van Eck in a $15 million committed credit facility (the "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 Portfolios at the request of the shareholders and other temporary or emergency purposes. In connection therewith, the Portfolios have agreed to pay commitment fees, pro rata, based on usage. Interest is charged to the Fund at rates based on prevailing market rates in effect at the time of borrowings. For the year ended December 31, 2000, the Funds made the following borrowings: AVERAGE AMOUNT AVERAGE INTEREST FUND BORROWED RATE - ------ -------------- ---------------- Asia Dynasty Fund $ 602,771 6.94% Global Hard Assets Fund 272,177 6.70 Global Leaders Fund 125,079 6.85 International Investors Gold Fund 2,116,963 6.85 Natural Resources Fund 21,663 6.50 U.S. Government Money Fund 1,207 6.78 68 REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS - -------------------------------------------------------------------------------- TO THE BOARD OF TRUSTEES AND SHAREHOLDERS VAN ECK FUNDS We have audited the accompanying statements of assets and liabilities, including the schedules of portfolio investments, of the Van Eck Funds (comprising Asia Dynasty Fund, Emerging Markets Vision Fund, Global Hard Assets Fund, Global Leaders Fund, International Investors Gold Fund, Natural Resources Fund and U.S. Government Money Fund) (collectively the "Funds") as of December 31, 2000, and the related statements of operations for the period then ended, the statements of changes in net assets and financial highlights for the period from April 7, 2000 (commencement of operations) to December 31, 2000 for the Emerging Markets Vision Fund and for each of the two years in the period then ended December 31, 2000 for the Asia Dynasty Fund, Global Hard Assets Fund, Global Leaders Fund, International Investors Gold Fund, Natural Resources Fund and U.S. Government Money Fund. 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. The financial highlights for the year ended December 31, 1998 and the periods prior thereto were audited by other auditors whose report dated February 19, 1999, expressed an unqualified opinion on those statements. 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 include confirmation of securities owned as of December 31, 2000, 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, and audited by us, present fairly, in all material respects, the financial position of each of the Funds constituting the Van Eck Funds at December 31, 2000, the results of their operations, the changes in their net assets, and the financial highlights for the periods then ended, in conformity with accounting principles generally accepted in the United States. /s/ Ernst & Young LLP New York, New York February 7, 2001 69 This report must be accompanied or preceded by a Van Eck 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. [VAN ECK GLOBAL LOGO] Investment Adviser: Van Eck Associates Corporation Distributor: Van Eck Securities Corporation 99 Park Avenue, New York, NY 10016 www.vaneck.com Account Assistance: (800) 544-4653 -----END PRIVACY-ENHANCED MESSAGE-----