-----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, OkYQ0mMvgzhV/hKiaIah8tYR6mFEbPhfH9hOx/n0LZQ5FzFF9m8C4AskJ9Q96Z8n 5uawwR4XSMtOA7ZcL06hpg== 0000930413-01-501149.txt : 20010906 0000930413-01-501149.hdr.sgml : 20010906 ACCESSION NUMBER: 0000930413-01-501149 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010630 FILED AS OF DATE: 20010905 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VAN ECK FUNDS CENTRAL INDEX KEY: 0000768847 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-04297 FILM NUMBER: 1731184 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 c21488_n30d.txt SEMI-ANNUAL REPORT VAN ECK GLOBAL - -------------------------------------------------------------------------------- SEMI-ANNUAL REPORT JUNE 30, 2001 [GRAPHIC OMITTED] VAN ECK FUNDS ASIA DYNASTY FUND EMERGING MARKETS VISION FUND GLOBAL HARD ASSETS FUND GLOBAL LEADERS FUND INTERNATIONAL INVESTORS GOLD FUND U.S. GOVERNMENT MONEY FUND - -------------------------------------------------------------------------------- GLOBAL INVESTMENTS SINCE 1955 - -------------------------------------------------------------------------------- ASIA DYNASTY FUND - -------------------------------------------------------------------------------- Dear Shareholder: Asian markets turned in relatively good performance for the first six months of 2001, outperforming the major U.S. indices. However, positive returns have proven elusive as fears of recession in the world economy have weighed on global equity markets. In this environment, the Van Eck Asia Dynasty Fund declined 6.17% in the first half of the year compared with the MSCI Far East Free ex-Japan Index,* which declined 5.89%. We have a positive outlook for the Asian markets overall and expect them to continue their outperformance of developed markets. However, for serious and sustained positive returns we believe that the re-emergence of decent global growth will be required. Toward the end of the second quarter, some signs have started to appear that give grounds for optimism in this regard. Central banks around the world are easing liquidity fairly aggressively and governments are engaging in counter-cyclical fiscal stimulus. This will eventually stimulate a recovery in developed economies. It is important to realize that the cathartic effect of the so-called "Asian crisis" of 1997-1998 has made most Asian economies far less vulnerable to systemic risk. In general, the domestic sector in most countries has held up quite well, although exports have been weak. There is clearly a great deal of liquidity in most economies, which should fuel a rally in equity markets once recession fears abate. Asian markets tend to perform particularly well when global growth expectations turn from pessimism to optimism. Investors' risk appetite increases in this environment, which also helps relatively riskier assets such as the Asian markets. In addition, any rebound in technology spending should benefit exporters of computer hardware and software in India, Taiwan and Korea. Asia valuations are low in relation to more developed markets, relative to their own history, and relative to domestic interest rates, which gives further confidence of a strong rally once sentiment improves. We believe that the U.S. economy is at or near the bottom of the cycle, and expect a gradual recovery over the next twelve months. Europe and Japan appear to be lagging somewhat, but continuing monetary easing should ensure that 2002 will be a year of economic recovery. Asian stocks are underowned and unloved at the moment. Cheap valuations and increasing global liquidity conditions are generally a fairly potent combination. However, with a background of constant negative revisions to both earnings and economic growth in developed markets, it will be difficult for emerging markets to perform strongly. When growth expectations turn--which we are seeing tentative signs of at the moment--and risk aversion abates, emerging markets ought to provide not only the good relative performance seen in the first half, but also good absolute returns. Exogenous factors will probably still dominate the performance of Asian markets in the near-term. Underlying this, the news flow at the domestic and corporate level is still overwhelmingly positive. With less uncertainty and less volatility in the major global markets, Asia markets should perform well. REVIEW The best performing Asian markets for the first half were those of GREATER CHINA (CHINA `B', +156%; TAIWAN, -1.0%; and HONG KONG, -13.6%)+ and SOUTH KOREA (+15%), which were less affected by the U.S. economic slowdown, and whose economies are less technology oriented. In contrast, the Southeast Asian countries generally suffered from a lack of interest. One exception to this was Thailand, which gained 15% after the election of a more stable government. CHINA is responding well to monetary stimulus and exports are holding up well despite slowing global growth. Chinese consumers appear to be spending again, as the savage deflation that has been a feature of the Chinese economy is lifting. It appears as though the Chinese economy may be in the best shape it has been in since the early nineties. HONG KONG is showing a more mixed picture. It is still suffering from weak exports, but is a beneficiary of U.S. interest rate cuts and the spillover of liquidity from the mainland. Our total exposure to Hong Kong/China (47.7% of the Fund's net assets as of June 30) is nearly twice the benchmark weighting, as we feel strongly that these markets will do well in the second half of the year. 1 ASIA DYNASTY FUND - -------------------------------------------------------------------------------- The TAIWANESE market (15.0% of assets) performed well over the first quarter, but gave back those gains in the second. We were underweight through the first half, but less so in the second quarter, which contributed negatively to returns. Fear of slackening demand for electronics goods as the U.S. economy slowed down was the major reason. Elections at the end of the second quarter saw the incumbent party's candidate defeated, paving the way for some progress in stalled cross-straits negotiations. The technology sector did not really participate in the rally that many U.S. technology stocks experienced in June, but we hope that there will be an element of "catch-up" in the next few months. Over the longer run, while we appreciate the continuing strength of the outsourcing theme, we are concerned that China is increasingly the destination of choice for new investment. The Fund has avoided MALAYSIA (-13% year to date) since the economy is suffering from a pegged exchange rate that is starting to look uncompetitive. However, interest rates should remain at subdued levels, providing valuation support for equities. On the negative side, most international money managers are skeptical of the corporate reform efforts, and remain underweight. INDIA'S (16.5% of assets) economy has performed relatively well so far this year, though the market is down 14%. The agricultural sector has benefited from a good monsoon (i.e., there has been sufficient rain). Privatization efforts by the government are still frustratingly slow, but at least some progress has been made. There has been a series of equity market-specific setbacks, including some stock manipulation scandals and a change to the settlement system, which have not helped. Unfortunately, many software stocks were especially hard hit. The issue for the software stocks is essentially a valuation one, as their business outlook remains very attractive. The SOUTH KOREAN market (8.7% of assets) performed well in the second quarter after struggling in the first. The domestic economy began to show signs of bottoming, with retail sales rising. The yen stabilized, which gave support to the Korean won. Domestic pension funds, which had built heavy cash positions in the first quarter, began to accumulate equities and foreign investors stopped selling. In our opinion, valuations are still attractive and we expect the market to continue to rally, particularly when economic newsflow from the U.S. improves. SINGAPORE'S (3.2% of assets) market has been disappointing (falling 15% year to date) and we remain underweight. The economy is on fairly sound footing, although suffering at the moment from weaker exports. The real problem is more at a corporate level. There are too many cash rich, apparently unambitious companies that are not utilizing the strength of their balance sheets to position themselves for an economic upturn. THAILAND (1.1% of assets) has been both a source of concern and of optimism in the first half of this year. The new Prime Minister appears to have generated some momentum in tackling such problems as the banking sector. At the same time, his corruption trial highlights the venality of the Thai political system. Political strife dominated the first half of the year in the PHILIPPINES (0.01% of assets), driving the market down 10%. However, the new president, Gloria Arroyo, is perceived to be a vast improvement over ousted President Estrada. Exports from the Philippines are particularly targeted toward the United States, and have suffered commensurately. In addition, the Philippines market is the one Asian market that does not appear to be cheaply valued. We are likely to continue to ignore this market. INDONESIA (0.7% of assets) is still in a political hiatus and the market fell some 11% in the first half. The president, Gus Dur, is becoming increasingly beleaguered, but the obvious replacement candidate, Vice President Megawati, is still reticent about taking on the job. In this environment, effective economic decision making is severely hampered, and investor interest will remain marginal. 2 ASIA DYNASTY FUND - -------------------------------------------------------------------------------- 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 July 6, 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 for country-specific stock markets in U.S. dollar terms; for example, the Hong Kong market is measured by the Hang Seng Index. - -------------------------------------------------------------------------------- PERFORMANCE RECORD AS OF 6/30/01 - -------------------------------------------------------------------------------- AVERAGE ANNUAL AFTER MAXIMUM BEFORE SALES TOTAL RETURN SALES CHARGE* CHARGE - -------------------------------------------------------------------------------- A shares--Life (since 3/22/93) (0.17)% 0.56% - -------------------------------------------------------------------------------- 5 year (6.94)% (5.84)% - -------------------------------------------------------------------------------- 1 year (42.67)% (39.17)% - -------------------------------------------------------------------------------- B shares--Life (since 9/1/93) (2.29)% (2.29)% - -------------------------------------------------------------------------------- 5 year (6.82)% (6.57)% - -------------------------------------------------------------------------------- 1 year (42.23)% (39.49)% - -------------------------------------------------------------------------------- THE PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NOT INDICATIVE OF FUTURE RESULTS. Investment return and principal value of an investment in the Fund will vary so that shares, when redeemed, may be worth more or less than their original cost. 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 = 5.75% B shares: maximum contingent deferred sales charge = 5.00% GEOGRAPHICAL HOLDINGS AS OF JUNE 30, 2001 [Data below represents pie chart in printed piece] Singapore 3.2% South Korea 8.7% China/Hong Kong 47.7% Cash/Equavalents 7.1% Other 1.8% Taiwan 15.0% India 16.5% 3 ASIA DYNASTY FUND TOP TEN EQUITY HOLDINGS AS OF JUNE 30, 2001* - -------------------------------------------------------------------------------- INFOSYS TECHNOLOGIES LTD. (INDIA, 5.0%) Infosys Technologies provides IT consulting and software services, including e-business, program management and supply chain solutions. The group's services include application development, product co-development, and system implementation and engineering. Infosys targets businesses specializing in the insurance, banking, telecommunications and manufacturing sectors. CHINA UNICOM LTD. (HONG KONG, 4.9%) 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 fiberoptic transmission and core-switching network. It is the second-largest provider in the largest cellular market in the world. LI & FUNG LTD. (HONG KONG, 4.3%) Li & Fung, through its subsidiaries, operates an export trading business. The company sources and exports a wide range of garments and household items for a broad range of clients. CONVENIENCE RETAIL ASIA LTD. (HONG KONG, 4.1%) Convenience Retail Asia operates convenience store chains in Hong Kong under the Circle K brand. It will soon be expanding its network into China. HUTCHISON WHAMPOA LTD. (HONG KONG, 4.1%) Hutchison Whampoa, through its subsidiaries, operates five core businesses including ports and related services, telecommunications and e-commerce, property and hotels, retail and manufacturing, energy, infrastructure, finance and investments. SATYAM COMPUTER SERVICES LTD. (INDIA, 4.0%) Satyam provides IT consulting and software services. The group's services include application development, product co-development, and system implementation and engineering. HCL TECHNOLOGIES LTD. (INDIA, 3.9%) HCL provides software development and related engineering services across many technologies, including Internet, e-commerce and networking. HCL has been growing very fast and has recently announced several new client wins. ASM PACIFIC TECHNOLOGY LTD. (HONG KONG, 3.9%) ASM Pacific, through its subsidiaries, designs, manufactures and markets machines, tools and materials used in the semiconductor industry. ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LTD. (HONG KONG, 3.8%) 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. CHEUNG KONG (HOLDINGS) LTD. (HONG KONG, 3.4%) Cheung Kong, through its subsidiaries, develops and invests in real estate. Cheung Kong is the parent company of Hutchison Whampoa (see above). - --------------- *Portfolio is subject to change. 4 EMERGING MARKETS VISION FUND - -------------------------------------------------------------------------------- Dear Shareholder: We are pleased to report that the Van Eck Emerging Markets Vision Fund had a total return of 10.90% for the first six months of the year, substantially outperforming both the S&P 500 Index,* which declined 6.70%, and the MSCI Emerging Markets Free Index,** which lost 1.78% for the same period. Emerging markets in general turned in relatively good performance for the first six months of 2001, outperforming the major U.S. indices. However, positive returns proved elusive for most of these stock markets as fears of recession in the world economy weighed on global equity markets. The Fund's strong performance was primarily due to a significant weighting in Russia (which was one of the strongest markets in the first half), low exposure to India, Taiwan, Brazil and South Africa, and a relatively high, defensive cash position. We have a positive outlook for the emerging markets overall and expect them to continue their outperformance of developed markets over the next several months. However, for serious and sustained positive returns, we believe that the re-emergence of decent global growth will be required. Toward the end of the second quarter, some signs have started to appear that give grounds for optimism on this score. Central banks around the world are easing liquidity fairly aggressively and governments are engaging in counter-cyclical fiscal stimulus. This should eventually stimulate a recovery in developed economies. Most emerging market economies have held up very well under the strain, with the notable exceptions of Argentina and Turkey. It is important to realize that the cathartic effect of the so-called "Asian crisis" of 1997-1998 has made most emerging market economies far less vulnerable to systemic risk. In general, the domestic sector in most countries has held up quite well, although exports generally have been weak. There is clearly a great deal of liquidity in most economies, which should fuel a rally in equity markets once recession fears abate. We believe that the U.S. economy is at or near the bottom of the cycle, and expect a gradual recovery over the next twelve months. Europe and Japan appear to be lagging somewhat, but continuing monetary easing should ensure that 2002 will be a year of economic recovery. Emerging markets tend to perform particularly well when global growth expectations improve as demand increases for the basic commodities such as oil, gas, pulp, metals and agricultural products produced in many emerging markets. Risk appetite also tends to increase in this environment. Emerging market valuations are low in relation to more developed markets and relative to their own history, which gives further confidence of a strong rally once sentiment improves. Emerging market stocks are underowned and unloved at the moment, representing a small fraction of most global portfolios, despite the fact that much of the growth in the next century will probably be found in emerging markets. Cheap valuations and increasing global liquidity conditions are generally a fairly potent and persuasive combination supporting investments in emerging markets. However, with a background of constant negative revisions to both earnings and economic growth in developed markets, it will be difficult for emerging markets to perform strongly. When growth expectations turn and risk aversion abates, emerging markets ought to provide not only the good relative performance seen in the first half, but also good absolute returns. REVIEW Emerging markets outperformed developed markets in the first half of 2001 despite an unfriendly global growth environment. The first half of 2001 has seen coordinated easing in monetary conditions, which led to a positive re-rating in some emerging markets. High oil prices have benefited countries such as Mexico and Russia. Though most emerging economies are much stronger than they were previously, debt dynamics in Argentina and Turkey have given cause for concern and many Asian markets have struggled in the face of falling demand for information technology products. In terms of country weightings, we continued to favor Asia at the expense of Latin America, emerging Europe and Africa throughout the first 5 EMERGING MARKETS VISION FUND - -------------------------------------------------------------------------------- half of the year. Within Asia, Hong Kong/China remained the Fund's largest overweight position, which benefited performance. The Fund's second largest weighting was in Russia, which turned in exceptional returns. We have maintained our growth emphasis, although in the technology sector we are principally overweight in the software sector, rather than the hardware industry. The best performing Asian markets for the first half were those of GREATER CHINA (CHINA `B', +156%; TAIWAN, -1.0%; and HONG KONG, -13.6%)+ and SOUTH KOREA (+15%), which were both less affected by the U.S. economic slowdown, and whose economies are less technology-oriented. In contrast, the Southeast Asian countries generally suffered from a lack of interest. One exception to this was THAILAND, which gained 15% after the election of a more stable government. CHINA is responding well to monetary stimulus and exports are holding up well despite slowing global growth. Chinese consumers appear to be spending again as the savage deflation that has been a feature of the Chinese economy is lifting. It appears as though the Chinese economy may be in the best shape it has been in since the early nineties. HONG KONG is showing a more mixed picture. It is still suffering from weak exports, but is a beneficiary of U.S. interest rate cuts and the spillover of liquidity from the mainland. Our total exposure to Hong Kong/China (17.3% of the Fund's net assets as of June 30) has been nearly twice the benchmark weighting. The TAIWANESE market (11.0% of assets) performed well over the first quarter, but gave back those gains in the second. The Fund was underweight in exposure to this market throughout the first half. Fear of slackening demand for electronics goods as the U.S. economy slows was the major reason, and Taiwanese tech stocks did not really participate in the rally that many U.S. technology stocks experienced in June. Elections at the end of the second quarter saw the incumbent party's candidate defeated, paving the way for some progress in stalled cross-straits negotiations. INDIA'S (7.8% of assets) market fell 14% in the first half of the year despite the fact that the economy has performed relatively well. The agricultural sector has benefited from a good monsoon (i.e., there has been sufficient rain). Privatization efforts by the government are still frustratingly slow, but at least some progress has been made. There has been a series of equity market-specific setbacks, including some stock manipulation scandals and a change to the settlement system, which have not helped. Unfortunately, many software stocks were especially hard hit. The issue for the software stocks is essentially a valuation one, as their business outlook remains very attractive. The SOUTH KOREAN market (7.7% of assets) performed well in the second quarter after struggling in the first quarter. The domestic economy began to show signs of bottoming, with retail sales rising. The yen stabilized, which gave support to the Korean won. Domestic pension funds, which had built heavy cash positions in the first quarter, began to accumulate equities while foreign investors stopped selling. In our opinion, valuations are still attractive and we expect the market to continue to rally, particularly when economic news flow from the U.S. improves. In Latin America, MEXICO (9.7% of assets) performed extremely well, rising 26% despite the slowdown in the U.S. Citibank and BBVA (Banco Bilbao Vizcaya Argentaria, a major Spanish bank) have invested $16 billion in the Mexican banking sector, which has triggered further foreign direct investment and a strengthening of the peso. The Mexican economy is becoming increasingly integrated with the U.S. economy, leading to contracting risk premia and falling interest rates. The Mexican Congress is likely to approve a fiscal reform bill in the third quarter, which should lead to an investment-grade rating by Standard & Poor's. BRAZIL (4.4% of assets) has performed poorly (-19%) due to economic problems in Argentina that have caused the real (Brazil's currency) to lose 16% of its value. The Central Bank has raised interest rates several times and investors have been wary of rising political risk and the effects 6 EMERGING MARKETS VISION FUND - -------------------------------------------------------------------------------- of an electricity rationing program. We have been underweight Brazil for some time and do not expect the above issues to be resolved in the short term. In Eastern Europe, the RUSSIAN market (12.4% of assets) was the star performer, rising 28% in the second quarter alone, which brings the year-to-date gain to 51%. We have been consistently overweight in this market. Macroeconomic data points to a continuing recovery from the crisis of 1998. The strong oil price has helped, and improved tax collection has bolstered the government's finances. President Putin has moved to consolidate state control over natural monopolies such as the gas and electricity sectors, prior to much needed reform. Many companies have improved corporate governance and several have published IAS (International Accounting Standards) accounts, which give clearer financial disclosure. Despite this rally, Russian companies trade at huge discounts to western peers, and we expect the market's strong performance to continue. Other European markets put in poor performances. ISRAEL'S (6.3% of assets) market fell 18%. Although the Fund benefited from strong performance in the Israeli pharmaceutical sector, Israeli technology stocks have struggled. We have been underweight TURKEY (0.7% of assets) for most of the year as we are pessimistic on the prospects for economic growth due to the extent of the country's debt. Though the International Monetary Fund (IMF) has bailed Turkey out in return for a promise of deep economic reforms, we see further currency weakness ahead. The Turkish market has rebounded somewhat (+16% in the second quarter) but is still down 37% year to date. SOUTH AFRICA (2.7% of assets) took a hit with its currency, the rand, declining approximately 6% in the first half. Some of this can be attributed to the political instability of its neighbor, Zimbabwe. The Fund remained underweight this market versus our benchmark since we have not favored the commodity-related stocks due to the global economic slowdown. THE OUTLOOK As you are probably aware from the "Information Statement" we sent you dated July 1, 2001, the Emerging Markets Vision Fund will undergo a change in its investment universe effective August 1, 2001. The Fund will invest primarily in equity securities of companies that derive substantial portions of their revenue in Eastern and Central Europe, Russia and the former Soviet Union. Exogenous factors will probably still dominate the performance of emerging markets, including Eastern Europe and Russia, in the near-term. Underlying this, there are fundamental positives. In macroeconomic terms, the Eastern European and former Soviet Union regions ("Eurasia") should benefit from geo-political trends such as EU and NATO enlargement, the rise of democracies, the fall of communism and increased cross-border commerce. In terms of Eurasian stocks, Eastern Europe's heavy weighting in technology, media and telecommunication (TMT) stocks made the region vulnerable to last year's TMT crash on the Nasdaq. Its other heavy weightings, however, in banking and pharmaceutical stocks, have provided good defensive cover and should perform well in the trough of this interest rate cycle. Profits from oil and gas companies have helped Russia shore up its foreign currency reserves by over 200%, and provided massive trade, current account and fiscal budget surpluses. Tough times have caused management to become more lean and efficient in Eastern European companies, where past socialist policies often thwarted change in the workforce. Corporate governance is improving in Russia and securities laws are being more effectively enforced, which will, in effect, help protect shareholder rights. This increased transparency has already supported valuations this year and should permit valuations of Russian stocks (which are currently extremely undervalued relative to their emerging market peers) to at least approach the valuation multiples of these peers, providing attractive upside potential. With less uncertainty and less volatility, emerging markets should perform well. 7 EMERGING MARKETS VISION FUND - -------------------------------------------------------------------------------- We would like to thank you for your participation in the 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 July 6, 2001 - ----------------- The Standard & Poor's 500 (S&P 500) Index and the Morgan Stanley Capital International (MSCI) Emerging Markets Free 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 S&P 500 Index consists of 500 widely held common stocks, covering four broad sectors (industrials, utilities, financial and transportation). It is a market-value weighted index (stock price times shares outstanding), with each stock affecting the index in proportion to its market value. Construction of the S&P 500 Index proceeds from industry group to the whole. Since some industries are characterized by companies of relatively small stock capitalization, the Index is not comprised of the 500 largest companies on the New York Stock Exchange. This Index, calculated by Standard & Poor's, is a total return index with dividends reinvested. ** The 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 from 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 for country-specific stock markets in U.S. dollar terms; for example, the Hong Kong market is measured by the Hang Seng Index. - -------------------------------------------------------------------------------- PERFORMANCE RECORD AS OF 6/30/01 - -------------------------------------------------------------------------------- AVERAGE ANNUAL AFTER MAXIMUM BEFORE SALES TOTAL RETURN SALES CHARGE* CHARGE - -------------------------------------------------------------------------------- A shares--Life (since 4/07/00) (29.35)% (25.87)% - -------------------------------------------------------------------------------- 1 Year (33.33)% (29.24)% - -------------------------------------------------------------------------------- THE PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NOT INDICATIVE OF FUTURE RESULTS. Investment return and principal value of an investment in the Fund will vary so that shares, when redeemed, may be worth more or less than their original cost. The Adviser is currently waiving certain or all expenses on the Fund. Had the Fund incurred all expenses, investment returns would have been reduced. *A shares: maximum sales charge is 5.75% 8 GLOBAL HARD ASSETS FUND - -------------------------------------------------------------------------------- Dear Shareholder: In a difficult environment, the Van Eck Global Hard Assets Fund had a total return of -4.05% for the first six months of the year, compared to a total return of -6.70% for the S&P 500 Index.* Commodities prices generally trended lower in the first six months of 2001 as economic growth slowed around the world and affected demand. Despite this, hard asset equities have had mixed performance, with some asset classes attracting increased investor interest as the economy weakens. Following strong gains in 2000, the oil and gas stocks had disappointing results. Real estate, gold and many industrial metals stocks, in contrast, performed well, and the Fund's overweight position in real estate throughout most of the first half of the year helped offset losses in the energy sector.+ Performance for the ENERGY sector, both commodities and stocks alike, ranged between flat to double-digit declines in the first half of 2001. Crude oil prices, which began the year at a relatively high price of $26.80 per barrel, fell about 2%, to $26.25 per barrel at the end of June. Given the global economic slowdown that was unraveling, oil prices held up well. This was due to continued OPEC production discipline, cuts in Iraqi oil production and high gasoline prices (brought on by maintenance shutdowns and operating difficulties at many refineries). The price of natural gas, which had nearly quadrupled to record levels in 2000 as a result of limited supply, the energy crisis in California and a winter of below normal temperatures, fell dramatically in the second quarter of 2001. Demand for natural gas declined unexpectedly, as industrial consumers began to use energy alternatives, such as residual fuel oil and middle distillates. In addition, heavy energy users, such as mines and smelters, were encouraged to curtail or eliminate production, which made more hydroelectric or coal power available to residential consumers and light industries. At the same time, natural gas inventories increased more than expected in the spring, creating a more balanced market. By the end of June, natural gas prices had fallen from $10 per mcf to $3.25 per mcf year to date. While many energy companies had record earnings in the first half of the year, investor sentiment turned somewhat negative due to the combination of a slowing economy, increasing commodity inventories, and the extreme drop in the price of natural gas. Energy stocks, depending on their industry focus, had mixed performance, with the "integrated" energy stocks, such as Exxon Mobil (1.1% of the Fund's net assets as of June 30) and Chevron (3.2% of assets), up slightly. The integrated oil companies fared well as they continued to benefit from strong gasoline prices and as refining capacity came down. Due to their heavy reliance on natural gas production, the oil service stocks and exploration and production (E&P) stocks, which had outperformed in 2000, were down about 20%. As we entered 2001, we held an overweight position of about 50% of Fund assets in the energy sector, primarily in integrated oil and E&P stocks as these companies continued to turn in record earnings. Although we pared back this position somewhat in the beginning of June, it offset the strong performance of our real estate and gold holdings. The U.S. REAL ESTATE sector performed very well in the first half of 2001, achieving gains of 12.1%. Despite the economic slowdown, we maintained our overweight position in U.S. real estate investment trusts (REITs) as a result of two particular factors. The first was the continued perception of REITs as a safe haven. REITs continued to attract investor attention due to their predictable cash flows and secure, high dividend yields. At 7% average yields, the spread between REIT and 10-year bonds remains attractive. The second factor, which became more apparent in the second quarter, was the increasing legitimization of REITs as a large and accepted asset class. Serious consideration is being given to including REITs in the S&P 500. Further, both REITs themselves and analysts have started to push for REIT earnings to be reported as "Earnings Per Share" (as are other equities) rather than "Funds From Operation" in an effort to make REITs universally accepted. Smaller positions in Canadian REITs fared well also, while 9 GLOBAL HARD ASSETS FUND - -------------------------------------------------------------------------------- Asian real estate securities, where the Fund holds a small percentage of assets, declined 7% as economic fundamentals deteriorated and the equity markets in the region continued to be volatile. INDUSTRIAL METALS commodities and stocks ended the first half of the year with diverging performance. The commodities, affected by the weakening global economy and a strong dollar (which has a dampening effect on exports), fell, with steel trading near ten-year lows, aluminum down 5.9% and copper down 14.3%. At the same time metals stocks were up substantially overall, as investors reacted to the Federal Reserve interest rate cuts and an anticipated economic turnaround. For example, Alcoa, (1.1% of assets) the aluminum manufacturer, gained 19.4%, Billiton, (0.4% of assets) a diversified metals producer, gained 29.8%, USX Marathon (1.1% of assets) gained 11.9%. Steel companies enjoyed an added boost when LTV, a large steel company, filed for bankruptcy, which was expected to curtail steel production. They also benefited from discussions of trade protection being considered by the Bush Administration. We increased the industrial metals equity weighting in the Fund moderately in the first half. Still, we remained cautious due to relatively low earnings, unattractive stock valuations and weak fundamentals. FOREST PRODUCT commodities turned in mixed results. Given the weakness in the economy, most of the commodity prices held up fairly well, with the exception of pulp, which fell precipitously. Lumber prices, for example, increased substantially as a result of an unexpectedly strong housing market and the threat of possible new tariffs on Canadian producers. Prices of newsprint and most grades of paper were somewhat lower. Like the underlying forest products, equities turned in mixed performances in the first half. Companies with large exposure to the lumber market fared well, ending the period with positive returns. We remained underweight these stocks as the group's earnings were low, stock valuations were unattractive, and we did not believe the outlook was as promising as it was for some of the other hard asset sectors. Gold equities were among the best performers in the hard asset universe, even though PRECIOUS METALS prices trended sideways to lower in the first half. Early in the year, aggressive U.S. interest rate cuts by the Federal Reserve caused many to forecast a second-half turnaround in the weak U.S. economy. This created strength in the U.S. dollar and the gold price declined. First-quarter weakness in gold was compounded by a devastating earthquake centered near the Indian gold-trading center of Gujarat. While the Gujarat gold trade was routed through other channels, commodity traders seized this negative development as an opportunity to push gold below the technically important US$252 level, which would have marked a new 20-year low. Gold moved below $255 twice in the first quarter, but failed to reach new long-term lows as bargain hunters moved in to push prices higher. Investors' outlook for gold improved markedly in the second quarter, as continued Fed easing was perceived to be excessive and potentially inflationary. Further, low to negative real interest rates, as experienced in the first half, tend to push gold prices higher. Bullion prices did move higher, peaking at the $285 level in May, then consolidated to end June at $270.60, well above its lows for the year. Gold-mining shares reacted positively to the improving gold price, as the Financial Times Gold Mines Index** gained 13.6% in the first half. We remain cautiously optimistic on this sector given an all-time high U.S. dollar, which tends to attract investors as a safe haven when strong. THE OUTLOOK We believe that certain hard asset sectors currently offer good potential at this time. We remain somewhat overweight in energy since these stocks currently offer attractive valuations and very high earnings, which we do not believe have been priced in by investors. In addition, we believe crude oil prices will remain relatively high, and that the natural gas price has stabilized. We also continue to favor real estate, which tends to be a much more defensive sector than any other hard asset sector. Real estate securities currently offer dividend yields of 7%, cash flow growth rates of 5%, and attractive valuations, which should support the group. 10 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 July 19, 2001 - ------------------ + Important note: On June 22, 2001, all shares of the Van Eck Natural Resources Fund were exchanged, dollar for dollar, for shares of the Van Eck Global Hard Assets Fund. This in no way affects either the management, investment universe or objective of your Fund. It did, however, temporarily alter your Fund's sector weightings, primarily because the Natural Resources Fund did not invest in real estate and had a higher allocation to precious metals. For example, before this "merger", the Global Hard Assets Fund's real estate allocation was approximately 19% of total Fund net assets; after the merger, it was approximately 8%. The precious metals allocation before the merger was approximately 9%; after the merger it was over 22%. Over the next several weeks we expect to redistribute Fund assets as we see fit to best position the Fund among the hard asset sectors. The Standard & Poor's 500 (S&P 500) Index and the Financial Times Gold Mines 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 S&P 500 Index consists of 500 widely held common stocks, covering four broad sectors (industrials, utilities, financial and transportation). It is a market value-weighted index (stock price times shares outstanding), with each stock affecting the index in proportion to its market value. Construction of the S&P 500 Index proceeds from industry group to the whole. Since some industries are characterized by companies of relatively small stock capitalization, the Index is not comprised of the 500 largest companies on the New York Stock Exchange. This Index, calculated by Standard & Poor's, is a total return index with dividends reinvested. **The Financial Times Gold Mines Index is a market capitalization-weighted index of gold-mining shares. - -------------------------------------------------------------------------------- PERFORMANCE RECORD AS OF 6/30/01 - -------------------------------------------------------------------------------- AVERAGE ANNUAL AFTER MAXIMUM BEFORE SALES TOTAL RETURN SALES CHARGE* CHARGE - -------------------------------------------------------------------------------- A shares--Life (since 11/2/94) 6.68% 7.63% - -------------------------------------------------------------------------------- 5 year 1.50% 2.71% - -------------------------------------------------------------------------------- 1 year (4.27)% 1.54% - -------------------------------------------------------------------------------- B shares--Life (since 4/24/96) 2.47% 2.65% - -------------------------------------------------------------------------------- 5 year 1.78% 2.14% - -------------------------------------------------------------------------------- 1 year (4.02)% 0.98% - -------------------------------------------------------------------------------- C shares--Life (since 11/2/94) 7.29% 7.29% - -------------------------------------------------------------------------------- 5 year 2.15% 2.15% - -------------------------------------------------------------------------------- 1 year 0.05% 1.05% - -------------------------------------------------------------------------------- THE PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NOT INDICATIVE OF FUTURE RESULTS. Investment return and principal value of an investment in the Fund will vary so that shares, when redeemed, may be worth more or less than their original cost. The Adviser is currently waiving certain or all expenses 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 11 GLOBAL HARD ASSETS FUND - -------------------------------------------------------------------------------- GEOGRAPHICAL HOLDINGS AS OF JUNE 30, 2001 [Data below represents pie chart in printed piece.] Australia 8.0% Russia 3.4% United States 50.9% Cash/Equivalents 5.1% Canada 15.7% South Africa 10.6% Hong Kong 1.3% Other Countries 1.4% France 1.3% United Kingdom 1.2% Netherlands 1.1% SECTOR HOLDINGS AS OF JUNE 30, 2001 [Data below represents pie chart in printed piece.] Forest Products & Paper 11.5% Industrial Metals 14.1% Other 4.1% Cash/Equivalents 5.1% Energy 34.4% Real Estate 8.2% 12 GLOBAL HARD ASSETS FUND REPRESENTATIVE HOLDINGS AS OF JUNE 30, 2001* - -------------------------------------------------------------------------------- HOMESTAKE MINING CO. (U.S., 4.6%) 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. CHEVRON CORP. (U.S., 3.2%) 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. MERIDIAN GOLD, INC. (CANADA, 2.1%) Meridian Gold is a gold production and exploration company with properties in North and South America. Meridian's core asset is the El Penon Mine in Chile, an underground operation with cash costs in the lowest quartile. Ongoing exploration success at El Penon should enable the company to sustain a long mine life. AK STEEL CORPORATION (U.S., 2.1%) AK Steel Holding Corporation, through its wholly-owned subsidiary, AK Steel Corporation, produces flat rolled carbon steel. The company produces coated, cold rolled, and hot rolled carbon steel for the automotive, appliance, construction, and manufacturing markets. AK Steel also cold rolls and aluminum coats stainless steel for automotive industry customers. RIO TINTO LTD. (AUSTRALIA, 1.7%) 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. BROOKFIELD PROPERTIES CORP. (CANADA, 1.4%) 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. NABORS INDUSTRIES, INC. (U.S., 1.2%) Nabors Industries is an oil services company that 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. ENSCO INTERNATIONAL, INC. (U.S., 1.1%) Ensco, an international offshore contract drilling company, provides marine transportation services in the Gulf of Mexico. The company serves the oil and gas industry. - ------------------ *Portfolio is subject to change. 13 GLOBAL LEADERS FUND - -------------------------------------------------------------------------------- Dear Shareholder: The first half of 2001 was marked by a continuing global economic slowdown and stock market volatility. The world has entered into a phase of synchronized slowdown for the first time in a decade, and world markets have entered into a period of fairly high synchronization as well. Most world stock markets witnessed declines in the first six months of the year as sectors across the board revised corporate earnings expectations downward and technology, in particular, continued to disappoint. In this environment, the Van Eck Global Leaders Fund had a total return of -17.59% for the six months ended June 30, 2001, while the Morgan Stanley Capital International (MSCI) World Stock Index* had a total return of -10.50% during this period. Of note, the MSCI World Growth Index,** which may be more representative of the Fund's growth bias, declined 15.70%. We were cautious on world markets in the second half of 2000 and in the beginning of 2001 as GDP growth figures began to fall in the U.S. and abroad, and we positioned the Fund accordingly. We significantly reduced the technology holdings and increased the portfolio's consumer staples holdings and drug and healthcare stocks. Still, there were few safe havens during the period. Pharmaceuticals, which should be a defensive play (and which, in the case of our holdings, have a line of cutting-edge, high profile drugs in their pipeline, which should eventually be in huge demand) showed surprising weakness. This weakness was due primarily to increasing pressure on the large drug companies to offer drugs at very low prices to underdeveloped countries, and also to a slower FDA approval process. Technology stocks continue to be battered and even the "blue chip" technology stocks that remained in the portfolio, such as Nokia (0.6% of the Fund's net assets as of June 30) and St. Microelectronics (0.8% of assets), fared poorly. Although the U.S. stock market had a weak first half, it fared better than most developed markets, ending the period with a decline of 6.3%+. As we entered 2001, expectations were for a fairly brief recession in the U.S., with a return to high growth within months. However, negative corporate earnings surprises continued in the second quarter, capital spending did not rebound, and economic growth faltered. Technology and telecommunications companies, in particular, were hard hit since they had built up so much capacity. On the positive side, the Federal Reserve has been aggressive in easing monetary policy and consumers have remained surprisingly resilient in the face of additional layoffs and further erosion of wealth related to the financial markets. The Fund remained overweight U.S. equities in the first half of the year with over half of Fund assets in the U.S. market throughout the period, which, in relative terms, helped performance. The European stock markets fell substantially in the first half of the year as the region's economic slowdown accelerated, partly as a result of the U.S. economy's continued sluggishness. Further hurting performance for U.S. investors in Europe was the weakness of the euro currency--while the European markets fell 9.5% in local currency terms, this translated into a dramatic decline of 17.4% in U.S. dollar terms. We moderately reduced the Fund's European position in the first half of the year. The Japanese economy fell back into recession in the first half, and the Japanese equity market retraced some of the "reform" euphoria, declining 8.2% during the period. Government estimates for growth were revised downward and are now negative for the coming year. We remained underweight in Japan throughout most of the first half. However, the Japanese financial markets appear to be looking ahead--elections are on July 29 and, once they go through, Prime Minister Koizumi should be able to push some of his proposed economic reforms. The public seems to be accepting the near-term economic pain associated with these measures, the results of which should be positive, reducing the banks' bad loans (allowing them to lend again) and reducing government regulations, thus spurring job creation and economic recovery. With healthy changes on the horizon, we added cautiously to the Fund's Japanese position with defensive stocks in the latter part of the second quarter. 14 GLOBAL LEADERS FUND - -------------------------------------------------------------------------------- For example, we purchased Fanuc (0.3% of assets), a manufacturer of factory automation machinery, and Yamato (0.8% of assets), a shipping company similar to UPS, which should benefit substantially from the coming deregulation of the Japanese postal system. The developing markets fared relatively well in the first six months of the year. The Asian markets declined 0.8% for the period, while Asian companies, particularly in the technology sector, were hurt by the U.S. slowdown and a decrease in U.S. technology-related business. The Fund did not hold any Asian technology stocks during the first half. Certain sectors and regions of Asia offer fairly strong growth, however. China, for example, is currently among the world's fastest-growing economies. We have added moderately to the Fund's Asian position, which is entirely focused on China-related businesses, with defensive stocks such as China Light & Power (0.9% of assets), a utilities company, and Denway Motors (0.5% of assets), which sells automobiles in China. The Fund did not have significant holdings in Latin America during the first half due to several fundamental weaknesses. There have been signs that Argentina may default on its debt, and there have been threats to Brazil's growth, including an electricity crisis with rolling blackouts, much like in California, but on a nationwide scale. Despite the region's stock market gains of 4.9% through June, we remain cautious on its outlook, and have only a very small position there (1.0% at June 30). We recently added Embraer (1.0% of assets), the Brazilian regional jet manufacturer, but this is more a play on the changing jet industry than on Brazil's economy. THE OUTLOOK While economic growth continues to flounder throughout much of the world, there are several positives, such as low inflation and monetary and fiscal ease in general. The rest of the summer may be volatile, but we are expecting a recovery in the U.S. to begin later in the year, followed by a recovery in the emerging markets and Europe and we anticipate a healthier environment for the financial markets toward yearend. We continue to favor the U.S. market, which is further along in its economic cycle, and which has been helped by the Federal Reserve's aggressive actions. We plan to decrease the European position somewhat as recent legislation has curbed the region's once heated mergers and acquisitions activities and established penalties for corporate layoffs, making corporate restructuring more difficult. In terms of sector weightings, we remain defensive awaiting strong signs of an economic turnaround. 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 July 18, 2001 15 GLOBAL LEADERS FUND - -------------------------------------------------------------------------------- The Morgan Stanley Capital International (MCSI) World Stock Index and the Morgan Stanley Capital International (MSCI) World Growth 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 MSCI World Stock Index is a market capitalization-weighted benchmark that tracks the performance of approximately 25 world stock markets. 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. **The MSCI World Growth Index includes approximately 50% of the MSCI World Stock Index stocks that are considered "growth" stocks versus "value" stocks based on "Price-to-Book Value." + All market returns are Morgan Stanley Capital International (MSCI) Indices (with gross dividends reinvested) in U.S. dollar terms. - -------------------------------------------------------------------------------- PERFORMANCE RECORD AS OF 6/30/01 - -------------------------------------------------------------------------------- AVERAGE ANNUAL AFTER MAXIMUM BEFORE SALES TOTAL RETURN SALES CHARGE* CHARGE - -------------------------------------------------------------------------------- A shares--Life (since 12/20/93) 4.46% 5.28% - -------------------------------------------------------------------------------- 5 year 3.75% 4.98% - -------------------------------------------------------------------------------- 1 year (35.94)% (32.02)% - -------------------------------------------------------------------------------- B shares--Life (since 12/20/93) 4.65% 4.65% - -------------------------------------------------------------------------------- 5 year 4.23% 4.46% - -------------------------------------------------------------------------------- 1 year (35.30)% (32.35)% - -------------------------------------------------------------------------------- THE PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NOT INDICATIVE OF FUTURE RESULTS. Investment return and principal value of an investment in the Fund will vary so that shares, when redeemed, may be worth more or less than their original cost. The Advisor 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% GEOGRAPHICAL HOLDINGS AS OF JUNE 30, 2001 [Data below represents pie chart in printed piece.] Other Countries 6.1% United States 54.6% Cash/Equivalent 2.3% United Kingdom 8.5% France 4.3% Japan 10.7% Germany 4.4% Denmark 4.0% Netherlands 2.8% Hong Kong 2.3% 16 GLOBAL LEADERS FUND REPRESENTATIVE HOLDINGS AS OF JUNE 30, 2001* - -------------------------------------------------------------------------------- CANON, INC. (JAPAN, 1.7%) Canon is one of the world's leading manufacturers of office equipment, cameras and video devices. The company's products include color laser and high-speed copiers, printers, 35mm and digital cameras and optical instruments. Canon also manufactures medical equipment and aligners for semiconductor manufacturing equipment. Despite the difficult environment for technology companies this year, the company's earnings have been enhanced by strong sales in the areas of digital cameras and copiers. Additionally, since more than 70% of Canon's revenues are generated outside Japan, the weakness of the yen continues to positively impact earnings. NOMURA SECURITIES CO., LTD. (JAPAN, 1.4%) Nomura provides financial services in the areas of brokerage, underwriting and securities distribution. Nomura is a multinational company with subsidiaries all over the world and is a member of the New York and London Stock Exchanges. The company's ability to generate superior trading profits has enabled them to maintain their leadership position among the largest Japanese securities firms. Nomura stands to be a benefactor of the expected growth in private pension funds spurred by deregulation in Japan. SCHERING AG (GERMANY, 1.9%) Schering is a healthcare company that manufactures pharmaceutical products and equipment. The company's business is concentrated in the areas of Female Health, Therapeutics and Imaging. Schering produces hormone therapeutics, treatments for Multiple Sclerosis, Alzheimer's and Parkinson's diseases, cancer, stroke, cardiovascular and skin disorders, as well as x-ray, MRI, ultrasound and diagnostic equipment. New product development and geographic expansion are expected to be key components to double-digit revenue growth. DANSKE BANK (DENMARK, 1.5%) Danske Bank is a leading financial services firm in the Nordic region with branches and subsidiaries throughout the region. The company has six key operating divisions: retail banking, mortgage finance, wholesale banking, brokerage, asset management, and insurance. Led by an excellent management team, Danske's diversified business mix provides a superior risk/reward profile relative to other Nordic banks. WOOLWORTHS LTD. (AUSTRALIA, 0.6%) Woolworths is Australia's largest supermarket chain and the country's second-largest retailer. The company has increased its competitive position through the acquisition of more than 60 sites from Franklins, Australia's third-largest supermarket chain, which has exited the market. Woolworths' impressive management team has succeeded in increasing profitability and shareholder value through a substantial reduction of costs and an ongoing share-buy-back program. Due to its defensive nature, Woolworths offers stable and visible earnings, and this year has been able to report results that have exceeded even their own expectations. DENWAY MOTORS LTD. (HONG KONG, 0.5%) Denway Motors, through its subsidiaries, manufactures, assembles, and trades motor vehicles, automotive equipment and parts in China. Traded on the Hong Kong Stock Exchange, Denway provides direct exposure to mainland China. Earnings growth for the company will stem from its ability to increase its share of the sedan market and the expectation that automobile prices will remain strong. 17 GLOBAL LEADERS FUND - -------------------------------------------------------------------------------- ROYAL BANK OF SCOTLAND GROUP PLC (UNITED KINGDOM, 1.4%) Royal Bank of Scotland provides a wide range of banking, insurance and finance-related activities. As a result of its merger with National Westminster Bank last year, it is now the market leader in corporate banking in the UK. Royal Bank has also been successful in expanding outside its home market, making multiple acquisitions in the United States since the late `80's. The company maintains an earnings growth rate above that of its peer group. AMVESCAP PLC (UNITED KINGDOM, 1.1%) Amvescap is one of the world's largest independent investment management groups; it operates under the AIM and INVESCO brand names. The company provides investment services in equities, fixed income and real estate to both institutional and individual clients. Amvescap's diversification across regions and product lines makes it well-positioned to benefit from deregulation of the Japanese pension market, the introduction of a mandatory pension scheme in Hong Kong, and improvements to both state-funded and private pension plans across Europe. TYCO INTERNATIONAL LTD. (U.S., 3.1%) Tyco is a diversified manufacturing and service company with operations around the world. The company manufactures, services, and installs electrical and electronic components, undersea telecommunications systems, and fire protection and security systems. The company also produces flow control valves, healthcare and specialty products and plastics. Tyco has been successful in growing its business both organically and through acquisitions. Its diversified business portfolio is well-positioned to withstand an environment of lower GDP growth and the outlook remains favorable in its key end markets. FEDERAL NATIONAL MORTGAGE ASSOCIATION (FANNIE MAE) (U.S., 3.0%) Fannie Mae buys and holds mortgages, and issues and sells guaranteed mortgage-backed securities to facilitate housing ownership for low to middle-income Americans. The United States Congress created the company in 1938 to promote home ownership; it became a public company in 1970. The series of interest rate cuts by the Federal Reserve this year has resulted in a robust refinancing cycle that has led Fannie Mae to record volumes of business and strong earnings. EMBRAER AIRCRAFT CORP. (BRAZIL, 1.0%) Embraer (Empresa Brasileira de Aeronautica) is an aerospace company that manufactures commercial, corporate, and defense aircrafts. The company is the fourth-largest jet maker in the world and specializes in the manufacturing of regional jets. Embraer is Brazil's largest exporter and its shares are traded both in Brazil and on the New York Stock Exchange. The company markets its aircraft to companies and governments throughout the world. The regional jet market is expected to be the fastest growth segment of commercial aerospace and, despite the global economic downturn, demand for regional jets remains strong. - ---------------- *Portfolio is subject to change. 18 INTERNATIONAL INVESTORS GOLD FUND - -------------------------------------------------------------------------------- Dear Shareholder: We are pleased to report that the Van Eck International Investors Gold Fund had a total return of 11.28% during the first half of 2001, substantially outperforming the major U.S. stock indices. The Financial Times Gold Mines Index* rose 13.57% while the S&P 500 Index** fell 6.70% for the same period. According to Lipper Analytical Services, gold-oriented funds were the best-performing sector during the second quarter of the year. Gold tested its long-term lows by dipping below the $255 an ounce level twice in the first quarter. Each time bargain hunters moved in to push prices higher. The past bearish sentiment in the gold market appears to have become more positive. At the close of the second quarter, gold futures positions traded on the Comex had remained long for the longest period since 1996, as declining interest rates and concerns about the health of the U.S. economy may have caused many metals traders to anticipate higher gold prices. Bullion prices ended June at $270.60 an ounce, well above the lows for the year. GOLD-MINING SHARES Gold-mining shares reacted positively to the second quarter improvement in the gold price. Regional gold-mining indices show that the South African shares turned in the best performance. South African producers Gold Fields Ltd. (11.8% of total Fund assets at June 30) and Harmony Gold Mining Co., Ltd. (6.1% of assets) are both unhedged companies that tend to outperform in a rising gold price environment. As a group, North American shares lagged South Africa, however, Canadian miner Goldcorp, Inc. (4.1% of assets) and California-based Homestake Mining Co. (13.9% of assets) were two of the top performing stocks globally. Goldcorp's Red Lake Mine in Ontario, Canada continued to report higher grade and tonnage than expected, making it one of the lowest cost gold mines in the world. Homestake's share price was already soaring when it got another boost on June 25 from its merger announcement with Barrick Gold Corp. (4.5% of assets). If approved by Homestake shareholders, this combination will create the largest gold company in the world in terms of market capitalization and the second-largest in ounce production. In terms of other corporate activity, Harmony Gold raised approximately US$160 million in equity in June to pay down debt and fund acquisitions. The stock sale was met with strong investor interest, as the offering was roughly 2.5-times oversubscribed. In another deal, Canadian gold royalty company Franco Nevada Mining Corp. Ltd. (0.6% of assets) arranged to exchange a profitable high-grade mine in Nevada and some cash for 19.99% of the outstanding shares of Australia's largest gold producer, Normandy Mining Ltd. (4.0% of assets). Normandy has one of the highest debt levels of the major gold producers, and a stable of developing properties that offer significant potential at somewhat higher gold prices. Franco has a substantial cash position and no debt. Further mutually beneficial arrangements between these companies are likely if managements find they can work together. THE ECONOMIC OUTLOOK GROWTH SLOWDOWN The 1991-2000 economic expansion was accompanied by unsustainable imbalances, in our opinion, and a huge credit expansion. Business and household debt climbed an average 9.5% a year from $9.6 trillion (125% of GDP) in 1996 to $13.8 trillion (135% of GDP) at the end of March 2001. The bursting of the high-technology bubble last year began a correction of the imbalances. So far the "growth slowdown" has primarily affected the manufacturing sector. Industrial production fell for nine straight months to June, the longest slump in 19 years. Manufacturing capacity utilization sank to 75.5% in June, an 18-year low, and for high-technology industries, it hit a 25-year low of 67.5%. Profits were squeezed as worker productivity fell at a 1.2% rate and business unit labor costs rose at a 6.3% rate during the first quarter, the fastest since the fourth quarter of 1990. Capital spending suffered a severe downturn. Although the Nasdaq Composite Index*** fell 68% from its March 2000 high to its recent April 2001 low, valuations on the senior stock indices remained historically high. 19 INTERNATIONAL INVESTORS GOLD FUND - -------------------------------------------------------------------------------- NEGATIVE REAL INTEREST RATES Creditors in the U.S. faced a new era of negative real interest rates in June. Inflation had edged upward, and short-term interest rates have been sharply reduced. The compound annual growth rate of the consumer price index for the three months ended June 30 was 3.7%. The Federal Reserve's interest rate cuts since January have lowered nominal 3-month Treasury bill yields from 6.4% last November to a low of 3.4% in June. Accordingly, real returns on 12-month Treasury notes and on Treasury bills became insignificant and even negative. REAL INTEREST RATES (CPI-Adjusted 12 Month T-Bill) [Data below represents line chart in printed piece.] Dec-69 2.34 1.96 1.16 0.86 0.93 1.62 1.6 1.38 1.32 1.17 1.01 0.1 Dec-70 -0.48 -0.67 -0.73 -0.7 0.11 0.46 1.25 1.72 1.48 1.39 1.18 1.17 Dec-71 1.33 0.71 0.47 1.14 1.39 1.44 1.98 2.2 2.2 2.57 2.52 2.07 Dec-72 2.17 2.27 2.44 2.16 1.66 1.57 1.59 2.92 1.68 1.41 -0.33 -0.26 Dec-73 -1.4 -2.06 -3.04 -2.22 -1.28 -1.76 -1.97 -2.8 -1.14 -2.63 -3.63 -4.34 Dec-74 -4.81 -5.06 -5.32 -4.42 -3.35 -2.98 -2.96 -2.42 -0.91 -0.15 -0.72 -0.92 Dec-75 -0.56 -0.94 -0.42 0.12 0.02 0.15 0.54 0.62 0.26 0.33 0.01 0.2 Dec-76 -0.17 0.07 -0.64 -0.95 -1.58 -1 -0.98 -0.77 -0.28 0.11 0.58 0.26 Dec-77 0.3 0.48 1.13 0.94 0.98 0.71 0.71 0.72 0.52 0.22 0.3 1.26 Dec-78 1.44 1.3 0.52 0.1 -0.26 -0.48 -1.42 -1.72 -1.75 -0.9 0.58 0.05 Dec-79 -1 -1.56 0.07 1.73 -0.99 -4.94 -6.11 -4.46 -2.53 -1.06 0.11 1.86 Dec-80 2.89 2.65 3.54 3.39 4.53 6.88 5.54 5.38 6.42 6.03 5.5 3.03 Dec-81 4.17 6.38 7.47 7.36 7.66 6.7 7.19 6.95 5.6 6.07 4.41 4.74 Dec-82 5.14 5 5.54 5.53 5.04 5.53 7.04 8.03 7.94 7.05 6.96 6.76 Dec-83 6.27 5.48 5.52 5.81 6.5 7.72 7.92 7.48 7.63 7.12 5.96 5.52 Dec-84 5.15 5.59 5.64 5.7 5.39 4.34 3.99 4.6 4.7 4.72 4.66 4.31 Dec-85 3.79 3.58 4.22 4.54 4.91 5.19 4.58 4.42 3.93 4.03 4.15 4.46 Dec-86 4.73 4.47 3.87 3.3 2.76 3.05 2.81 2.8 2.79 3.49 2.27 2.38 Dec-87 2.67 2.51 2.73 2.91 3.19 3.6 3.51 3.75 4.23 3.98 3.78 4.36 Dec-88 4.6 4.52 4.62 4.71 4.08 3.58 3.04 2.58 3.59 4.03 3.3 3.13 Dec-89 3.18 2.88 2.85 3.18 3.83 3.86 3.27 2.88 2.06 1.49 1.02 1.07 Dec-90 0.61 0.86 1.14 1.35 1.22 1.14 1.61 1.78 1.93 2.01 2.24 1.61 Dec-91 1.11 1.52 1.48 1.31 1.13 1.22 1.04 0.46 0.37 0.06 0.23 0.7 Dec-92 0.62 0.18 0.03 0.27 0.1 0.39 0.44 0.68 0.53 0.6 0.72 0.95 Dec-93 0.77 0.99 1.46 1.78 2.72 3.08 2.99 2.66 2.64 2.96 3.53 4.21 Dec-94 4.58 3.92 3.55 3.69 3.19 2.67 2.59 2.82 3.02 3.14 2.74 2.76 Dec-95 2.54 2.11 2.51 2.54 2.8 2.92 2.86 2.95 3.09 2.68 2.42 2.1 Dec-96 2.17 2.54 2.58 3.24 3.46 3.47 3.42 3.26 3.34 3.23 3.27 3.61 Dec-97 3.79 3.59 3.96 3.95 3.88 3.79 3.75 3.68 3.17 3.04 2.76 3.01 Dec-98 2.92 2.83 3.25 2.98 2.55 2.94 3.09 2.96 3.08 2.54 2.79 3.07 Dec-99 3.28 3.45 2.95 2.48 3.1 2.98 2.38 2.46 2.8 2.63 2.78 2.47 Dec-00 1.99 0.87 0.94 1.13 0.59 -0.05 0.32
SOURCE: BLOOMBERG SUSTAINABLE REBOUND OR GLOBAL RECESSIONARY CORRECTION The Federal Open Market Committee reversed its tight money policy and sharply lowered its target for the federal funds rate from 6.5% in January to 3.75% in June to encourage a resumption of the credit expansion and economic growth and to avert the threat of recession. The current expectation is that the easy money policy will restore a rebound in long-term business activity and profit in the foreseeable future. Lower short-term interest rates and rapid increases in the monetary aggregates may not, however, expand credit and spending as expected. On the contrary, a correction of the huge outstanding debt could lead to a recession. Long-term interest rates have shown little change from January. The cost of servicing the accumulated $13.8 trillion business and household debt could pose an acute financial risk as corporate profits and cash flow are squeezed. This cost and the risks in the derivatives market were supportable when the economy was growing at a 5% rate, speculative sentiment was exuberant and there were numerous investment and speculative opportunities. At a 2% growth rate or less, no one knows what bad debt problems might surface or how long it will take to correct them. Risk spreads on corporate bonds have picked up since May. In the first three months of this year overall bankruptcy filings reached their highest level since the second quarter of 1998 and are expected to reach a new peak this year. Corporate bond defaults are predicted to continue to rise further in 2002 and 2003. Speculative positions could be liquidated further. A financial crisis can not be ruled out. The slowdown could be more than a self-correcting inventory correction. The current level of consumption might be corrected. Warning signs follow: The recession in the manufacturing sector may spread. Service sector employment fell in June and in the second quarter as a whole, the first quarterly decline since 1958. Consumers continued to spend in excess of their personal income in May in spite of job cuts. However, consumer credit increased only 4.9% in May, compared to 10.2% for the first quarter of the year. Household debt rose at an annual rate of 7.8% or $560 billion a year during the first quarter, of which approximately 70% was home mortgage debt, largely financed by government-sponsored enterprises. During the first five months of the year, Americans bought more homes than during any previous January-to-May period on record. The median price of an existing home climbed 8.8% in June from a year ago to the highest level on record. A recent Harvard University report, however, warned that the recent strength of the housing market is pushing prices out of reach of some families and was a "significant problem". The Mortgage Bankers Association expects a record volume of home loans and refinancings this year, but it expects this to fall 25% next year as refinancings slow. Perhaps consumer spending is peaking. 20 INTERNATIONAL INVESTORS GOLD FUND - -------------------------------------------------------------------------------- Household debt, a record 103% of disposable income, may be vulnerable to a weakening economy because household budgets are stretched so thin. Debt-servicing costs as a percentage of disposable income have grown close to 1986 peak levels. Low- and moderate-income household debt-to-income ratios have doubled from 1989 to 2000. These households are more exposed to shock than in the past. If households were to reduce their spending in order to increase their personal savings from a negative .95 of 1% of disposable income in May, a record low, to a more normal positive 4% to 5% of disposable income, a recession probably could not be avoided. GDP in Japan shrank 0.2% during the first three months of 2001 from the end of last year, and the latest monthly Bank of Japan outlook for its economy was pessimistic. Growth in Germany is forecast to slow down as well. POSSIBLE GOLD SCENARIO COVERING OF HEDGES A more positive sentiment in the gold market may make hedging less interesting to the gold mines. Central banks, largely European, have rapidly increased their loans (leases) of gold from 900 metric tons in 1990, to 2,100 tons in 1995 and to 4,700 tons in 1999. The largest borrowers in effect were the gold mines. The net amount of the producer hedging book at the end of 1999, after taking delta hedging into account, was about 3,000 tons, which exceeded total 1999 output. Last year there was a reduction in the growth of net producer hedging to approximately zero. The bulk of the hedging volume matures in the next four years. The natural delivery of mined gold into forward contracts expiring during the next four-year period by the gold mines, even in the absence of a total buyback of the entire position, would imply that the 3,000 ton short position could unwind reasonably swiftly. NEGATIVE INTEREST RATES If the economic and financial imbalances are more serious than expected, the Fed may fight a recession with ever lower short-term interest rates rather than allow free market forces to correct the imbalances quickly although painfully. The fight may well be prolonged. Thus, creditors may be punished over a longer period with negligible or negative real interest rates. To preserve their savings, it is possible that creditors may again turn to gold. In the 1970s and in 1992 and 1993, short-term interest rates were also below inflation rates, and real interest rates were negative. To protect their wealth, creditors diversified into real assets. The price of gold soared from $35 an ounce to $850 an ounce during the 1970s. In 1993, gold climbed from $327 an ounce to $410 an ounce. INVESTMENT POLICY No one knows whether or when the current "growth slowdown" will rebound or deteriorate into a global recessionary correction, and, if so, how long or how deep it will be. The longer a period of negative or insignificant real returns on short-term credit instruments persists and of a correction of stock prices, if it occurs, the greater the possible gold investment demand. The investment demand could more than offset a decline in the industrial demand. Thus, it is our opinion that the precautionary diversification of an investment portfolio into gold or gold-mining shares may be prudent as well as improve its overall performance. 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 July 19, 2001 21 INTERNATIONAL INVESTORS GOLD FUND - -------------------------------------------------------------------------------- The Financial Times Gold Mines Index, the Standard & Poor's 500 (S&P 500) Index and the Nasdaq Composite Index are unmanaged indices and include the reinvestment of all dividends, but do not reflect the payment of transaction costs, advisory fees or expenses that are associated with an investment in the Fund. The Indices' performance is not illustrative of the Fund's performance. Indices are not securities in which investments can be made. * The Financial Times Gold Mines Index is a market capitalization-weighted index of gold-mining shares. ** The S&P 500 Index consists of 500 widely held common stocks, covering four broad sectors (industrials, utilities, financial and transportation). It is a market value-weighted index (stock price times shares outstanding), with each stock affecting the index in proportion to its market value. Construction of the S&P 500 Index proceeds from industry group to the whole. Since some industries are characterized by companies of relatively small stock capitalization, the Index is not comprised of the 500 largest companies on the New York Stock Exchange. This Index, calculated by Standard & Poor's, is a total return index with dividends reinvested. *** The Nasdaq Composite Index is a broad-based capitalization-weighted index of all Nasdaq national market and small cap stocks. - -------------------------------------------------------------------------------- PERFORMANCE RECORD AS OF 6/30/01 - -------------------------------------------------------------------------------- AVERAGE ANNUAL AFTER MAXIMUM BEFORE SALES TOTAL RETURN SALES CHARGE* CHARGE - -------------------------------------------------------------------------------- Life (since 2/10/56) 7.92% 8.06% - -------------------------------------------------------------------------------- 20 year 0.18% 0.48% - -------------------------------------------------------------------------------- 15 year (1.65)% (1.26)% - -------------------------------------------------------------------------------- 10 year (7.31)% (6.77)% - -------------------------------------------------------------------------------- 5 year (18.93)% (17.96)% - -------------------------------------------------------------------------------- 1 year (6.74)% (0.96)% - -------------------------------------------------------------------------------- *A shares: maximum sales charge is 5.75% THE PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NOT INDICATIVE OF FUTURE RESULTS. Investment return and principal value of an investment in the Fund will vary so that shares, when redeemed, may be worth more or less than their original cost. GEOGRAPHICAL HOLDINGS AS OF JUNE 30, 2001 [Data below represents pie chart in printed piece.] Canada 28.2% Cash/Equivalent 4.6% Australia 13.3% United States 25.0% South Africa 27.2% United Kingdom 0.6% Peru 1.1% 22 U.S. GOVERNMENT MONEY FUND - -------------------------------------------------------------------------------- Dear Shareholder: The Van Eck U.S. Government Money Fund continues to meet its objectives as an investment that seeks safety of principal 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 4.79%* and its 30-day average yield was 2.86% on June 29, 2001. During the first half of 2001, the yield on three-month Treasury bills averaged 4.35%. Treasury bill rates fell precipitously on the back of a dramatic easing of monetary policy by the Federal Reserve. The Fed, trying to combat the slowdown in economic activity that started at the end of 2000 and that has persisted throughout the first half of 2001, has aggressively eased the federal funds target rate six times so far in 2001 by a remarkable 275 basis points (2.75%). Due to this easing, the rates on three-month T-bills have fallen steadily from their high of 5.90% on January 2 to a low of 3.41% on June 19. This dramatic monetary stimulus combined with the fiscal stimulus associated with the $1.35 billion tax cut signed into law in June should begin to pull the U.S. economy out of the economic doldrums in the second half of 2001. We look for money market rates to rise as signs of an economic recovery become apparent and investors begin to discount the end of monetary easing by the Federal Reserve. The Fund's investment strategy continues to emphasize safety by investing in short-term United States 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 U.S. Government.** Of course, shares of the Fund are not guaranteed by the 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 helping you meet your investment objectives in the future. [PHOTO OMITTED] /s/ GREGORY F. KRENZER - ---------------------- GREGORY F. KRENZER PORTFOLIO MANAGER July 15, 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. 23 ASIA DYNASTY FUND SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 2001 (UNAUDITED) NO. OF SHARES SECURITIES (a) VALUE (NOTE 1) - --------------------------------------------------------------------------- CHINA: 2.7% 1,900,000 China Petroleum and Chemical Corp. $ 380,004 250,000 MATRIX 8848.net Holdings, LLC (b)(c)(d) 125,000 ----------- 505,004 ----------- HONG KONG: 45.0% 414,000 Asia Satellite Telecommunications Holdings Ltd. 716,548 405,000 ASM Pacific Technology Ltd. 726,932 1,548,000 Brilliance China Automotive Holdings Ltd. 377,082 59,000 Cheung Kong (Holdings) Ltd. 642,957 86,000 China Mobile (Hong Kong) Ltd. 454,262 519,000 China Unicom Ltd. 904,935 800,000 Cofco International Ltd. 179,489 2,238,000 Convenience Retail Asia 767,529 1,785,000 Denway Motors Ltd. 640,777 360,000 Esprit Holding 394,620 10,000 HSBC Holding PLC 118,271 75,000 Hutchison Whampoa Ltd. 757,221 492,000 Li & Fung Ltd. 807,395 95,000 Television Broadcast Ltd. 399,492 293,000 TravelSky Technology Ltd. 296,760 850,000 Zhejiang Expressway Co. Ltd. 207,055 ----------- 8,391,325 ----------- INDIA: 16.5% 128,400 HCL Technologies Ltd. 727,027 21,500 Housing Development Finance Corporation Ltd. 309,017 12,200 Infosys Technologies Ltd. 936,915 208,000 Satyam Computer Services Ltd. 745,068 239,000 Sonata Software Ltd. 86,627 28,000 Videsh Sanchar Nigam Ltd. 192,857 43,710 Visualsoft Technologies Ltd. 78,983 ----------- 3,076,494 ----------- INDONESIA: 0.7% 750,000 PT Bank Pan Indonesia Tbk Warrants (expiring 7/08/02) 1,382 475,000 PT Telekomunikasi Indonesia 133,450 ----------- 134,832 ----------- PHILIPPINES: 0.0% 3,000 Benpres Holdings Corp. (GDR) 1,890 ----------- SINGAPORE: 3.2% 31,420 Datacraft Asia Ltd. 128,194 115,000 Singapore Technologies Engineering Ltd. 162,798 34,000 Singapore Land Ltd. Warrants (expiring 3/23/05) 31,342 490,000 Star Cruises Ltd. 264,600 ----------- 586,934 ----------- SOUTH KOREA: 8.7% 14,210 Housing & Commercial Bank, Korea 317,963 9,810 Korea Telecom Corp. 392,249 1,100 NCsoft Corp. 90,081 3,576 Samsung Electronics 527,945 2,500 Shinsegae Co. Ltd. 180,700 800 SK Telecom Co. , Ltd. 117,800 ----------- 1,626,738 ----------- TAIWAN: 15.0% 168,000 Advantech Co. Ltd. 568,458 428,375 Compal Electronics, Inc. 460,351 115,000 Elan Microelectronics Corp. 222,117 99,800 Siliconware Precision Industries Co. (ADR) 281,436 55,000 Sunplus Technology Co. Ltd. 233,227 211,235 Taiwan Cellular Corp. 275,471 446,800 United Microelectronics Corp. 593,051 23,000 Via Technologies, Inc. 158,989 ----------- 2,793,100 ----------- THAILAND: 1.1% 1,000,000 Regional Container Line Public Co. Ltd. "F" 207,577 ----------- TOTAL STOCKS AND OTHER INVESTMENTS: 92.9% (Cost: $19,506,435) 17,323,894 ----------- SHORT-TERM OBLIGATION: 1.1% PRINCIPAL INTEREST MATURITY AMOUNT RATE DATE - ---------------------------------------------------- $209,000 Repurchase Agreement (Note 10): Purchased on 6/29/01; maturity value $209,066 (with State Street Bank & Trust Co., collateralized by $215,000 Federal Home Loan Bank 4.75% due 5/22/03 with a value of $216,503) (Cost: $209,000) 3.80% 7/02/01 209,000 ----------- TOTAL INVESTMENTS: 94.0% (Cost: $19,715,435) 17,532,894 OTHER ASSETS LESS LIABILITIES: 6.0% 1,114,787 ----------- NET ASSETS: 100% $18,647,681 =========== - --------------- (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). GLOSSARY: ADR - American Depositary Receipt GDR - Global Depositary Receipt "F" - Foreign Registry See Notes to Financial Statements 24 ASIA DYNASTY FUND SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 2001 (UNAUDITED) (CONTINUED) SUMMARY OF % OF INVESTMENTS NET BY INDUSTRY ASSETS - ----------- ------ Automotive 5.5% Broadcast Media 2.2% Computer Software & Technology 8.0% Computer Services 8.6% Distribution 4.3% Electronics 4.0% Engineering & Construction 0.9% Financial Services 5.1% Holding 5.0% Oil 2.0% Real Estate 3.6% Retail 7.2% Semiconductors & Semiconductor Equipment 13.2% Technology Hardware 3.0% Telecommunications 17.8% Transportation 2.5% Short-Term Obligation 1.1% Other assets less liabilities 6.0% ------ 100.0% ====== See Notes to Financial Statements 25 EMERGING MARKETS VISION FUND SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 2001 (UNAUDITED) NO. OF SHARES SECURITIES (a) VALUE (NOTE 1) - --------------------------------------------------------------------------- BRAZIL: 4.4% 550 Petroleo Brasileiro S.A. Pfd. $ 12,875 22,000,000 Tele Norte Leste Participacoes S.A. (ADR) 17,963 --------- 30,838 --------- CROATIA: 1.6% 1,000 Pliva D.D. (GDR) 11,100 --------- HONG KONG: 17.3% 10,000 Asia Satellite Telecommunications Holdings Ltd. 17,308 8,000 ASM Pacific Technology Ltd. 14,359 1,000 Cheung Kong (Holdings) Ltd. 10,898 19,000 China Unicom Ltd. 33,129 52,000 Convenience Retail Asia Ltd. 17,834 16,000 Li & Fung Ltd. 26,256 --------- 119,784 --------- INDIA: 7.8% 2,000 India Fund, Inc. 20,720 2,5000 Videsh Sanchar Nigam Ltd. 33,500 --------- 54,220 --------- INDONESIA: 0.8% 20,000 PT Telekomunikasi Indonesia 5,619 --------- ISRAEL: 6.3% 600 Bio-Technology General Corp. 7,800 1,050 ESC Medical Systems Ltd. 30,324 800 Fundtech Ltd. 5,360 --------- 43,484 --------- MEXICO: 9.7% 500 America Movil S.A. de S.V. (Series L) (ADR) 10,430 5,000 Consorcio ARA S.A. de C.V. 8,292 7,000 Controladora Comercial Mexicana S.A. de C.V. 6,524 500 Grupo Aeroportuario del Sureste S.A. de S.V. (ADR) 9,350 22,000 Grupo Financiero Bancomer S.A. de S.V. 21,866 300 Telefonos de Mexico S.A. de C.V. (Sponsored ADR) 10,527 --------- 66,989 --------- RUSSIA: 12.4% 500 AO Vimpel Com (Sponsored ADR) 8,205 1,000 Lukoil Pref. 11,750 225 Mobile Telesystems (Sponsored ADR) 6,165 1,000 Norilsk Nickel 18,050 4,000 Sun Interbrew Ltd. (GDR) 13,578 50,000 Surgutneftegas 12,775 4,000 YUKOS 15,640 --------- 86,163 --------- SINGAPORE: 1.7% 1,560 Datacraft Asia Ltd. 6,365 10,000 Star Cruises Ltd. 5,400 --------- 11,765 --------- SOUTH AFRICA: 2.7% 3,000 Alexander Forbes Ltd. 6,361 9,000 Comparex Holdings Ltd. 12,536 --------- 18,897 --------- SOUTH KOREA: 7.7% 600 Korea Telecom Corp. 23,990 100 Samsung Electronics 14,764 100 SK Telecom Co., Ltd. 14,725 --------- 53,479 --------- TAIWAN: 11.0% 2,375 Acer, Inc. (GDR) 7,909 1,243 Compal Electronics, Inc. 6,767 1,800 Hon Hai Precision Industry Co. Ltd. 21,960 2,739 Powerchip Semiconductor Corp. 17,119 3,000 R.O.C. Taiwan Fund 13,860 1,000 Winbond Electronic Corp. 8,600 --------- 76,215 --------- TURKEY: 0.7% 1,000,000 Turkiye Garanti Bankasi A.S. 5,040 --------- VENEZUELA: 3.4% 1,000 Compania Anonima Nacional Telefonos de Venezuela (CANTV) 23,440 --------- TOTAL STOCKS AND OTHER INVESTMENTS: 87.5% (Cost: $728,700) 607,033 --------- SHORT-TERM OBLIGATION: 9.2% PRINCIPAL INTEREST MATURITY AMOUNT RATE DATE - ---------------------------------------------------- $64,000 Repurchase Agreement (Note 10): Purchased on 6/29/01; maturity value $64,020 (with State Street Bank & Trust Co., collateralized by $65,000 Federal Home Loan Bank 4.80% due 5/29/03 with a value of $65,345) (Cost: $64,000) 3.80% 7/02/01 64,000 --------- TOTAL INVESTMENTS: 96.7% (Cost: $792,700) 671,033 OTHER ASSETS LESS LIABILITIES: 3.3% 22,413 --------- NET ASSETS: 100% $ 693,446 ========= - ----------------- (a) Unless otherwise indicated, securities owned are shares of common stock. GLOSSARY: ADR - American Depositary Receipt GDR - Global Depositary Receipt See Notes to Financial Statements 26 EMERGING MARKETS VISION FUND SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 2001 (UNAUDITED) (CONTINUED) SUMMARY OF % OF INVESTMENTS NET BY INDUSTRY ASSETS - ----------- ------ Air Transportation 1.3% Beverages 2.0% Closed End Fund 5.0% Computer Software & Technology 9.8% Distribution 3.8% Electrical Equipment & Electronics 3.2% Entertainment & Leisure 0.8% Financial Services & Insurance 4.8% Medical Devices 4.4% Mining 2.6% Oil & Gas 7.6% Pharmaceuticals 2.7% Real Estate 2.8% Retail 3.5% Semiconductors & Semiconductor Equipment 7.6% Telecommunications 25.7% Short-Term Obligation 9.2% Other assets less liabilities 3.2% ------- 100.0% ======= See Notes to Financial Statements 27 GLOBAL HARD ASSETS FUND SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 2001 (UNAUDITED) NO. OF SHARES SECURITIES (a) VALUE (NOTE 1) - --------------------------------------------------------------------------- AUSTRALIA: 8.0% 13,000 BHP Billiton Ltd. $ 68,974 13,846 BHP Billiton Ltd. ( Bonus Shares) 75,302 690,000 M.I.M. Holdings Ltd. 422,818 319,215 Newcrest Mining Ltd. 731,739 500,000 Normandy Mining Ltd. 316,603 58,000 Origin Energy Ltd. 88,853 250,000 Pasminco Ltd. 38,937 667,400 Portman Mining Ltd. 507,804 41,000 Rio Tinto Ltd. 714,777 84,809 WMC Ltd. 414,888 ----------- 3,380,695 ----------- CANADA: 15.7% 15,000 Aber Resources Ltd. 168,335 43,500 Abitibi-Consolidated, Inc. 332,775 25,000 Agnico Eagle Mines Ltd. 212,500 7,200 Alberta Energy Co. Ltd. 297,059 18,000 Anderson Exploration Ltd. 364,194 12,200 Barrick Gold Corp. 184,830 707,700 Brazilian Resources, Inc. 56,061 31,800 Brookfield Properties Corp. 608,773 4,600 Canadian Natural Resources Ltd. 136,192 30,000 Canfor Corp. 196,059 24,300 Cominco Ltd. 449,153 50,000 Corner Bay Silver, Inc. 158,432 100,000 Cumberland Resources Ltd. 62,712 24,450 Ensign Resource Service Group, Inc. 242,910 42,200 Francisco Gold Corp. 179,681 32,000 Gulf Canada Resources Ltd. 259,405 113,200 Meridian Gold, Inc. 887,755 7,800 NQL Drilling Tools, Inc. 48,916 15,000 Penn West Petroleum Ltd. 386,177 31,200 Placer Dome, Inc. 305,760 11,400 Talisman Energy, Inc. 434,597 25,000 Tembec, Inc. 183,186 35,000 Timberwest Forest Corp. 281,876 150,000 Wallbridge Mining Co. Ltd. 113,873 9,000 Westport Innovations, Inc. 63,868 ----------- 6,615,079 ----------- FINLAND: 0.6% 22,500 Stora Enso Oyj (R Shares) 238,683 ----------- FRANCE: 1.3% 7,400 Total S.A. (ADR) 519,480 3,500 Societe Fonciere Lyonnaise Warrants (expiring 7/30/02) 401 3,000 Unibail S.A. Warrants (expiring 5/11/04) 36,407 ----------- 556,288 ----------- GHANA: 0.0% 30,191 Ashanti GSM Ltd. 19,564 ----------- HONG KONG: 1.3% 15,000 Cheung Kong (Holdings) Ltd. 163,463 44,400 Sun Hung Kai Properties Ltd. 399,890 ----------- 563,353 ----------- NETHERLANDS: 1.1% 7,800 Royal Dutch Petroleum Co. 454,506 ----------- PERU: 0.8% 18,000 Compania de Minas Buenaventura (Sponsored ADR) 331,919 ----------- RUSSIA: 3.4% 1,679 Khanty-Mansiysk Oil Co. (b)(c) 881,475 2,600 Lukoil Holding Corp. (ADR) 124,005 2,600 Lukoil Holding Corp. Pfd. (ADR) 59,796 7,000 Norilsk Nickel 90,250 7,800 Surgutneftegaz, Inc. Pfd. (Sponsored ADR) 121,798 35,000 YUKOS 136,850 ----------- 1,414,174 ----------- SOUTH AFRICA: 10.6% 4,092 Anglogold Ltd. 73,288 50,000 Gold Fields Ltd. (Sponsored ADR) 229,500 243,000 Gold Fields Ltd. 1,095,480 50,000 Harmony Gold Mining Co. Ltd. (Sponsored ADR) 290,000 173,800 Harmony Gold Mining Co. Ltd. 1,013,707 17,400 Impala Platinum Holdings Ltd. 872,921 23,000 Sappi Ltd. (ADR) 872,625 ----------- 4,447,521 ----------- UNITED KINGDOM: 1.2% 13,200 Anglo American PLC 198,710 35,200 Billiton PLC 176,258 50,000 Brancote Holdings PLC 115,200 ----------- 490,168 ----------- UNITED STATES: 50.9% 68,901 AK Steel Holding Corp. 864,019 12,000 Alcoa, Inc. 472,800 8,000 AMB Property Corp. 206,080 3,425 Apache Corp. 173,819 700 Aquila, Inc. 17,255 30,000 Arch Coal, Inc. 776,100 3,900 Bedford Property Investors, Inc. 81,705 14,100 Boise Cascade Corp. 495,897 7,000 Boston Properties, Inc. 286,300 14,800 Chevron Corp. 1,339,400 9,000 Consol Energy, Inc. 227,700 2,100 Cooper Cameron Corp. 117,180 10,000 Crescent Real Estate Equities Co. 245,700 12,100 Dana Corp. 282,414 12,000 Denbury Resources, Inc. 112,800 15,100 Devon Energy Corp. 792,750 4,900 Diamond Offshore Drilling, Inc. 161,945 2,640 Dominion Resources, Inc. 158,743 2,850 El Paso Corp. 149,739 9,100 Enron Corp. 445,900 19,900 Ensco International, Inc. 465,660 10,000 EOG Resources, Inc. 355,500 11,008 Equity Office Properties Trust 348,183 5,000 Equity Residential Properties Trust 282,750 See Notes to Financial Statements 28 GLOBAL HARD ASSETS FUND SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 2001 (UNAUDITED) (CONTINUED) NO. OF SHARES SECURITIES (a) VALUE (NOTE 1) - --------------------------------------------------------------------------- UNITED STATES: (continued) 5,272 Exxon Mobil Corp. $ 460,509 4,300 FMC Technologies, Inc. 88,795 16,500 Georgia-Pacific Group 558,525 11,525 Global Marine, Inc. 214,710 2,900 Halliburton Co. 103,240 11,800 Hilton Hotels Corp. 136,880 252,601 Homestake Mining Co. 1,957,658 17,000 Host Marriott Corp. 212,840 18,480 International Paper Co. 659,736 25,200 Massey Energy Co. 497,952 4,960 Mirant Corp. 170,624 13,900 Nabors Industries, Inc. 517,080 6,560 Newfield Exploration Co. 210,314 12,000 Newmont Mining Corp. 223,320 7,800 Noble Drilling Corp. 255,450 8,300 Occidental Petroleum Corp. 220,697 31,600 Ocean Energy, Inc. 551,420 21,875 Parker Drilling Co. 142,188 3,500 Peabody Energy Corp. 114,625 10,500 Phelps Dodge Corp. 435,750 3,200 Phillips Petroleum Co. 182,400 5,000 Potash Corp. 287,000 9,600 Prentiss Properties Trust 252,480 6,500 Pride International, Inc. 123,500 6,100 Rowan Co. 134,810 8,000 Santa Fe International Corp. 232,000 13,700 Schlumberger Ltd. 721,305 2,400 Sealed Air Corp. 89,400 4,800 Shaw Group, Inc. (The) 192,480 6,500 Simon Property Group, Inc. 194,805 2,780 Smith International, Inc. 166,522 9,275 Stillwater Mining Co. 271,294 4,540 Transocean Sedco Forex, Inc. 187,275 3,600 Tyco International Ltd. 196,200 23,750 USX Marathon Group 478,563 10,800 Weyerhaeuser Co. 593,675 7,000 Willamette Industries, Inc. 346,500 6,400 Williams Cos., Inc. (The) 210,880 ----------- 21,453,741 ----------- TOTAL STOCKS AND OTHER INVESTMENTS: 94.9% (Cost: $38,695,316) 39,965,691 ----------- PRINCIPAL INTEREST MATURITY AMOUNT RATE DATE VALUE (NOTE 1) - ------------------------------------------------------------------------- $2,412,000 Repurchase Agreement (Note 10): Purchased on 6/29/01; maturity value $2,412,763 (with State Street Bank & Trust Co., collateralized by $2,435,000 Federal National Mortgage Association 5.02% due 4/25/03 with a value of $2,464,515) (Cost: $2,412,000) 3.80% 7/02/01 $ 2,412,000 ----------- TOTAL INVESTMENTS: 100.6% (Cost: $41,107,316) 42,377,691 OTHER ASSETS LESS LIABILITIES: (0.6)% (243,086) ----------- NET ASSETS: 100% $42,134,605 =========== - ------------------- (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. GLOSSARY: ADR - American Depositary Receipt SUMMARY OF % OF INVESTMENTS NET BY INDUSTRY ASSETS - ----------- ------ Agricultural 0.7% Energy 34.4% Forest Products & Paper 11.5% Industrial Metals 14.1% Manufacturing 1.1% Precious Metals 22.6% Real Estate 8.2% Transportation 0.2% Short-Term Obligation 5.7% Other 2.1% Other assets less liabilities (0.6%) ------- 100.0% ======= See Notes to Financial Statements 29 GLOBAL LEADERS FUND SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 2001 (UNAUDITED) NO. OF SHARES SECURITIES (a) VALUE (NOTE 1) - --------------------------------------------------------------------------- AUSTRALIA: 0.6% 22,100 Woolworths Ltd. $ 124,139 ----------- BRAZIL: 1.0% 5,600 Embraer Aircraft Corp. 218,680 ----------- DENMARK: 4.0% 17,000 Danske Bank 305,714 4,600 ISS A/S 269,634 3,000 Novo Nordisk 132,825 3,000 Vestas Wind Systems A/S 139,995 ----------- 848,168 ----------- FINLAND: 0.6% 5,300 Nokia Oyj 118,293 ----------- FRANCE: 4.3% 1,300 Coflexip S.A. 188,655 4,000 Sanofi-Synthelabo S.A. 263,082 5,700 Societe Television Francaise 166,693 2,000 Total Fina Elf S.A. (Class B) 280,733 ----------- 899,163 ----------- GERMANY: 4.4% 6,000 Bayerische Motoren Werke 199,093 2,700 Metro AG 101,095 2,000 MLP AG Pfd. 222,516 7,500 Schering AG 394,622 ----------- 917,326 ----------- HONG KONG: 2.3% 16,000 Cheung Kong (Holdings) Ltd. 174,361 15,000 China Telecom (Hong Kong) Ltd. 79,232 46,800 CLP Holding Ltd. 196,203 280,000 Denway Motors Ltd. 100,514 4,971 HSBC Holdings PLC 58,792 ----------- 609,102 ----------- IRELAND: 0.6% 10,500 Allied Irish Banks 118,068 ----------- ITALY: 1.6% 19,000 Mondadori (Arnoldo) Editore S.p.A. 136,460 36,000 Saipem S.p.A. 197,912 ----------- 334,372 ----------- JAPAN: 10.7% 9,000 Canon, Inc. 363,855 1,200 Fanuc Ltd. 59,766 4,000 Kao Corp. 99,467 5,200 Nitto Denko Corp. 150,162 15,000 Nomura Securities Co., Ltd. (The) 287,571 12 NTT Mobile Communications Network, Inc. 208,880 9,000 Pioneer Electric Corp. 273,613 1,500 Rohm Co. 233,185 2,000 Shin-Etsu Chemical Co., Ltd. 73,477 2,000 SMC Corp. 214,174 11,000 Tokio Marine & Fire Insurance Co. 102,795 8,000 Yamato Transport Co., Ltd. 167,810 ----------- 2,234,755 ----------- NETHERLANDS: 2.8% 4,000 Philips Electronics N.V. 262,063 5,000 St. Microelectronics N.V. 173,973 ----------- 436,036 ----------- SINGAPORE: 0.0% 720 Datacraft Asia Ltd. 2,938 ----------- SPAIN: 0.7% 8,000 Banco Bilbao Vizcaya Argentaria S.A. 103,739 3,300 Industria de Diseno Textil S.A. 52,790 ----------- 156,529 ----------- SWITZERLAND: 0.9% 5,200 Novartis AG 188,383 ----------- TAIWAN: 0.1% 2,400 United Microelectronics 21,360 ----------- UNITED KINGDOM: 8.5% 13,000 Amvescap PLC 226,937 5,000 Colt Telecom Group PLC 34,772 27,200 Compass Group 218,764 16,000 Lloyds TSB Group PLC 160,913 21 Misys PLC 148 21,000 Ocean Group 225,446 13,000 Reckitt Benckiser PLC 188,349 16,000 Reed International 142,481 13,000 Royal Bank of Scotland Group PLC 287,944 6,000 Shire Pharmaceuticals 109,744 64,500 Telewest Communications 81,142 32,000 Tesco PLC 116,065 ----------- 1,792,705 ----------- UNITED STATES: 54.6% 20,000 ADC Telecommunications, Inc. 132,000 2,800 Aglient Technologies, Inc. 91,000 5,000 American Express Co. 194,000 5,000 American International Group, Inc. 430,000 5,000 Anadarko Petroleum Corp. 270,150 10,000 Broadwing, Inc. 244,500 9,000 Cisco Systems, Inc. 163,800 7,500 Clear Channel Communications, Inc. 470,250 10,000 Costco Wholesale Corp. 410,800 5,300 CVS Corp. 204,580 2,500 Electronic Data System Corp. 156,250 6,000 EMC Corp. 174,300 5,900 Enron Corp. 289,100 7,500 Federal National Mortgage Association 638,625 14,200 Flextronics International Ltd. 370,762 12,000 General Electric Co. 585,000 4,800 Genzyme Corp. 292,800 See Notes to Financial Statements 30 GLOBAL LEADERS FUND SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 2001 (UNAUDITED) (CONTINUED) NO. OF SHARES SECURITIES (a) VALUE (NOTE 1) - --------------------------------------------------------------------------- UNITED STATES: (continued) 7,500 Home Depot, Inc. $ 349,125 7,500 JDS Uniphase Corp. 95,625 7,500 Lilly & Co. 555,000 4,900 Marsh & McLennan Co., Inc. 494,900 8,000 Medtronic, Inc. 368,080 8,000 Merck & Co. 511,285 5,000 Mercury Interactive Corp. 299,500 10,000 Oracle Corp. 190,000 10,000 Pfizer, Inc. 400,500 14,000 Solectron Corp. 256,200 10,000 The St. Paul Co., Inc. 506,900 8,000 Target Corp. 276,800 12,000 Transocean Sedco Forex, Inc. 495,000 12,000 Tyco International Ltd. 654,000 5,000 United Technologies Corp. 366,300 9,765 Viacom, Inc. 505,345 ----------- 11,442,477 ----------- TOTAL STOCKS AND OTHER INVESTMENTS: 97.7% (Cost: $19,298,651) 20,462,494 ----------- SHORT-TERM OBLIGATION: 2.0% PRINCIPAL INTEREST MATURITY AMOUNT RATE DATE - ------------------------------------------------------ $426,000 Repurchase Agreement (Note 10): Purchased on 6/29/01; maturity value $426,135 (with State Street Bank & Trust Co., collateralized by $435,000 Federal National Mortgage Association 4.75% due 5/02/03 with a value of $437,719) (Cost: $426,000) 3.80% 7/02/01 426,000 ----------- TOTAL INVESTMENTS: 99.7% (Cost: $19,724,651) 20,888,494 OTHER ASSETS LESS LIABILITIES: 0.3% 69,448 ----------- NET ASSETS: 100% $20,957,942 =========== - ------------- (a) Unless otherwise indicated, securities owned are shares of common stock. SUMMARY OF % OF INVESTMENTS NET BY INDUSTRY ASSETS - ----------- ------ Aerospace & Defense 1.0% Apparel 0.3% Automotive 1.4% Banks 3.5% Broadcast Media 5.5% Chemicals 1.5% Commercial Services 1.3% Computer Services 4.2% Distribution 1.1% Drug 4.3% Electronics & Electrical 9.6% Energy 0.7% Financial Services 9.2% Holding Companies 3.5% Insurance 7.3% Manufacturing 4.9% Medical Products & Supplies 5.7% Natural Gas 1.4% Office Equipment 1.7% Oil (Integrated/Services & Products) 5.5% Pharmaceuticals 5.4% Publishing & Broadcasting 0.7% Real Estate 0.8% Restaurants 1.0% Retail 8.9% Semiconductors 0.8% Technology 0.4% Telecommunications 3.6% Toiletries/Cosmetics 0.8% Transportation 0.8% Utilities 0.9% Short-Term Obligation 2.0% Other assets less liabilities 0.3% ------ 100.0% ====== See Notes to Financial Statements 31 INTERNATIONAL INVESTORS GOLD FUND SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 2001 (UNAUDITED) NO. OF SHARES SECURITIES (a) VALUE (NOTE 1) - --------------------------------------------------------------------------- AUSTRALIA: 13.3% 2,987,400 Delta Gold Ltd. $ 2,440,825 6,033,788 Lihir Gold Ltd. 2,803,850 2,109,685 Newcrest Mining Ltd. 4,836,047 6,858,032 Normandy Mining Ltd. 4,342,547 725,000 Pasminco Ltd. 112,918 ------------- 14,536,187 ------------- CANADA: 28.2% 317,300 Agnico-Eagle Mines Ltd. 2,697,050 324,871 Barrick Gold Corp. 4,921,796 31,000 Cominco Ltd. 572,994 520,000 Corner Bay Minerals, Inc. 549,229 350,000 Cumberland Resources Ltd. 219,494 51,864 Franco Nevada Mining Corp. Ltd. 666,595 409,800 Goldcorp, Inc. (Class A) 4,421,742 200,000 Great Basin Gold Ltd. 128,065 168,200 IAMGOLD Corp. 341,430 589,900 Meridian Gold, Inc. 4,626,209 419,000 Miramar Mining Corp. 331,914 1,052,275 Placer Dome, Inc. 10,312,295 586,600 Richmont Mines, Inc. 743,487 30,000 Teck Corp. (Class A) 256,461 ------------- 30,788,761 ------------- PERU: 1.1% 63,300 Compania de Minas Buenaventura S.A. (ADR) 1,167,252 ------------- SOUTH AFRICA: 27.2% 235,449 Anglogold Ltd. (Sponsored ADR) 4,216,892 3,895,855 Avgold Ltd. 2,325,594 1,700,862 Gold Fields Ltd. (Sponsored ADR) 7,738,922 1,147,226 Gold Fields Ltd. 5,171,862 771,440 Harmony Gold Mining Co. Ltd. (Sponsored ADR) 4,389,494 366,500 Harmony Gold Mining Co. Ltd. 2,137,651 80,000 Harmony Gold Warrants (expiring 6/29/03) 148,800 71,000 Impala Platinum Holdings Ltd. (ADR) 3,553,017 ------------- 29,682,232 ------------- UNITED KINGDOM: 0.6% 300,000 Brancote 691,201 ------------- UNITED STATES: 25.0% 18,000 Arch Coal, Inc. 465,660 3,000,000 Business Development Bank of Canada, Gold Linked Note 2.50% due 12/14/01 (b) 2,422,800 13,600 Enron Corp. 666,400 1,234,000 Glamis Gold Ltd. 3,504,560 1,961,139 Homestake Mining Co. 15,198,827 3,000,000 HSBC Bank USA, Gold Linked Note 2.50% due 8/17/01 (b) 2,633,400 122,683 Newmont Mining Corp. 2,283,132 ------------- 27,174,779 ------------- TOTAL STOCKS AND OTHER INVESTMENTS: 95.4% (Cost: $97,587,438) 104,040,412 OTHER ASSETS LESS LIABILITIES: 4.6% 5,061,866 ------------- NET ASSETS: 100% $109,102,278 ============= - --------------- (a) Unless otherwise indicated, securities owned are shares of common stock. (b) Structured note (Note 1). GLOSSARY: ADR - American Depositary Receipt SUMMARY OF % OF INVESTMENTS NET BY INDUSTRY ASSETS - ----------- ------ Energy 1.0% Industrial Metals 0.6% Precious Metals 93.8% Other assets less liabilities 4.6% ------ 100.0% ====== See Notes to Financial Statements 32 U.S. GOVERNMENT MONEY FUND SCHEDULE OF PORTFOLIO INVESTMENTS JUNE 30, 2001 (UNAUDITED) ANNUALIZED YIELD AT TIME OF PRINCIPAL PURCHASE OR MATURITY VALUE AMOUNT COUPON RATE DATE (NOTE 1) - ------------------------------------------------------------------------- U.S. TREASURY BILLS: 117.6% $20,000,000 3.40% 8/23/01 $ 19,899,889 20,000,000 3.30% 8/30/01 19,889,000 10,000,000 3.40% 8/30/01 9,943,333 ------------ TOTAL U.S. TREASURY BILLS: 117.6% (Amortized Cost: $49,732,222) 49,732,222 ------------ SHORT-TERM OBLIGATION: 23.6% PRINCIPAL INTEREST MATURITY AMOUNT RATE DATE - ----------------------------------------------------- $9,955,000 Repurchase Agreement (Note 10): Purchased on 6/29/01; maturity value $9,958,152 (with State Street Bank and Trust Co., collateralized by $10,210,000 U.S. Treasury Bill 3.40% due 8/23/01 with a value of $10,158,950) (Cost: $9,955,000) 3.80% 7/02/01 9,955,000 ------------ TOTAL INVESTMENTS: 141.2% (Cost: $59,687,222) 59,687,222 OTHER ASSETS LESS LIABILITIES: (41.2)% (17,417,164) ------------ NET ASSETS: 100% $ 42,270,058 ============ See Notes to Financial Statements 33 VAN ECK FUNDS STATEMENTS OF ASSETS AND LIABILITIES June 30, 2001 (unaudited)
ASIA DYNASTY EMERGING MARKETS FUND VISION FUND ------------ ---------------- ASSETS: Investments at cost .................................................... $19,459,735 $792,700 =========== =========== Investments at value (including repurchase agreements of $209,000, $64,000, $2,412,000, $426,000, $0and $9,955,000) (Note 1) .. $17,407,894 $671,033 Investments in affiliate, at value (cost $255,700) (Note 9) ............ 125,000 -- Cash and foreign currency .............................................. 804,697 2,842 Cash--initial margin ................................................... -- -- Receivables: Securities sold ...................................................... -- 3,580 Dividends and interest ............................................... 21,896 2,741 Capital shares sold .................................................. 745,578 -- Due from adviser ..................................................... -- 25,826 Due from broker (Note 11) ............................................ -- -- Unrealized appreciation on open forward foreign currency contracts (Note 6) ............................................................. -- -- Other assets ........................................................... -- 4,722 ----------- ----------- Total assets ....................................................... 19,105,065 710,744 ----------- ----------- LIABILITIES: Payables: Due to custodian ..................................................... -- -- Line of credit (Note 12) ............................................. -- -- Securities purchased ................................................. 267,342 1,840 Dividends payable .................................................... -- -- Capital shares redeemed .............................................. 86,488 -- Accounts payable ..................................................... 71,470 14,713 Due to distributor (Note 4) .......................................... 13,111 633 Due to adviser (Note 2) .............................................. 18,517 -- Due to trustees (Note 7) ............................................. 412 112 Unrealized depreciation on open forward foreign currency contracts (Note 6) ............................................................. 44 -- ----------- ----------- Total liabilities .................................................. 457,384 17,298 ----------- ----------- NET ASSETS ............................................................. $18,647,681 $693,446 =========== =========== CLASS A SHARES+: Net assets ............................................................. $13,335,297 $693,446 =========== =========== Shares outstanding ..................................................... 2,039,333 100,146 =========== =========== Net asset value and redemption price per share ......................... $6.54 $6.92 =========== =========== Maximum offering price per share (NAV/(1--maximum sales commission) ... $6.94 $7.34 =========== =========== CLASS B SHARES: Net assets ............................................................. $5,312,384 -- =========== =========== Shares outstanding ..................................................... 864,737 -- =========== =========== 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) ............................. $6.14 -- =========== =========== CLASS C SHARES: Net assets ............................................................. -- -- =========== =========== Shares outstanding ..................................................... -- -- =========== =========== Net asset value, maximum offering and redemption price per share (Redemption may be subject to contingent deferred sales charge within the first year of ownership) ................................ -- -- =========== =========== Net assets consist of: Aggregate paid in capital ............................................ $23,872,875 $1,088,485 Unrealized appreciation (depreciation) of investments, swaps, foreign currencies and forward foreign currency contracts .......... (2,202,183) (121,668) Undistributed net investment income (loss) ........................... (208,944) 1,675 Cumulative realized gain (loss) ...................................... (2,814,067) (275,046) ----------- ----------- $18,647,681 $693,446 =========== ===========
- ------------------- + The U.S. Government Money Fund does not have a designated class of shares. See Notes to Financial Statements 34
GLOBAL HARD ASSETS GLOBAL INTERNATIONAL INVESTORS U.S. GOVERNMENT FUND LEADERS FUND GOLD FUND MONEY FUND - ------------------ ------------ ----------------------- --------------- $41,107,316 $19,724,651 $97,587,438 $59,687,222 =========== =========== ============ =========== $42,377,691 $20,888,494 $104,040,412 $59,687,222 -- -- -- -- -- -- -- 1,716 38,990 -- -- -- 155,125 268,726 1,751,363 -- 59,183 29,810 106,253 2,102 -- -- 11,058,498 -- -- -- -- -- 187,453 -- -- -- -- 112 -- -- 10,920 -- -- -- ----------- ----------- ------------ ----------- 42,829,362 21,187,142 116,956,526 59,691,040 ----------- ----------- ------------ ----------- 59,012 51,632 7,389,157 -- -- -- -- -- 411,315 114,379 101,706 -- -- -- -- 40,965 48,256 10,470 51,548 17,262,985 135,109 33,221 175,318 70,149 13,574 10,061 24,493 17,541 17,276 6,713 109,275 29,063 10,215 1,623 11,203 278 -- 1,101 29 -- ----------- ----------- ------------ ----------- 694,757 229,200 7,854,247 17,420,981 ----------- ----------- ------------ ----------- $42,134,605 $20,957,942 $109,102,278 $42,270,059 =========== =========== ============ =========== $36,966,111 $17,541,104 $109,102,278 42,270,059 =========== =========== ============ =========== 2,944,954 2,371,792 22,099,470 42,332,301 =========== =========== ============ =========== $12.55 $7.40 $4.94 $1.00 =========== =========== ============ =========== $13.32 $7.85 $5.24 -- =========== =========== ============ =========== $2,826,901 $3,416,838 -- -- =========== =========== ============ =========== 227,516 473,534 -- -- =========== =========== ============ =========== $12.43 $7.22 -- -- =========== =========== ============ =========== $2,341,593 -- -- -- =========== =========== ============ =========== 187,714 -- -- -- =========== =========== ============ =========== $12.47 -- -- -- =========== =========== ============ =========== $53,365,687 $21,397,518 $122,861,004 $42,332,301 1,371,842 1,162,522 6,452,662 -- (43,467) (202,861) 162,447 -- (12,559,457) (1,399,327) (20,373,835) (62,242) ----------- ----------- ------------ ----------- $42,134,605 $20,957,942 $109,102,278 $42,270,059 =========== =========== ============ ===========
See Notes to Financial Statements 35 VAN ECK FUNDS STATEMENTS OF OPERATIONS Six Months Ended June 30, 2001 (unaudited)
ASIA DYNASTY EMERGING MARKETS FUND VISION FUND ------------ ---------------- INCOME: Dividends .............................................................. $ 208,165 $ 10,711 Interest ............................................................... 14,890 1,512 Foreign taxes withheld ................................................. (13,967) (794) ----------- ----------- Total income ........................................................... 209,088 11,429 ----------- ----------- EXPENSES: Management (Note 2) .................................................... 79,454 4,168 Distribution Class A (Note 4) .......................................... 37,570 2,237 Distribution Class B (Note 4) .......................................... 30,798 -- Distribution Class C (Note 4) .......................................... -- -- Administration (Note 2) ................................................ 35,793 671 Transfer agent ......................................................... 56,110 21,411 Custodian .............................................................. 37,435 14,948 Registration ........................................................... 16,109 8,604 Professional ........................................................... 21,458 6,153 Interest expense (Note 12) ............................................. 7,034 -- Reports to shareholders ................................................ 20,272 3,000 Trustees' fees and expenses (Note 7) ................................... 3,620 -- Other .................................................................. 4,525 510 ----------- ----------- Total expenses ......................................................... 350,178 61,702 Expense reduction (Note 2) ............................................. -- (53,130) ----------- ----------- Net expenses ........................................................... 350,178 8,572 ----------- ----------- Net investment income (loss) ........................................... (141,090) 2,857 ----------- ----------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 3): Realized gain (loss) from security transactions ........................ (884,753) (151,074) Realized gain from equity swaps and futures contracts .................. -- -- Realized loss from options ............................................. -- -- Realized gain (loss) from foreign currency transactions ................ (42,486) (2,912) Change in unrealized appreciation (depreciation) of foreign currency transactions and forward foreign currency contracts .................. 607,769 10 Change in unrealized appreciation (depreciation) of investments, futures, swaps and options ........................................... (55,040) 234,370 ----------- ----------- Net gain (loss) on investments and foreign currency transactions ....... (374,510) 80,394 ----------- ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ........ $(515,600) $ 83,251 =========== ===========
See Notes to Financial Statements 36
GLOBAL HARD ASSETS GLOBAL INTERNATIONAL INVESTORS U.S. GOVERNMENT FUND LEADERS FUND GOLD FUND MONEY FUND - ------------------ ------------ ----------------------- --------------- $ 217,165 $ 152,013 $ 1,223,140 $ -- 7,950 5,572 600,103 1,544,114 (7,746) (10,667) (30,880) -- ----------- ----------- ------------ ----------- 217,369 146,918 1,792,363 1,544,114 ----------- ----------- ------------ ----------- 93,063 90,359 447,167 161,855 29,220 50,350 149,056 80,928 15,301 19,780 -- -- 15,854 -- -- -- 7,931 38,749 241,610 28,642 57,961 43,708 353,000 26,588 9,000 12,637 11,721 3,538 17,690 6,814 7,281 5,693 8,320 14,048 21,675 21,177 4,863 3,385 60,870 -- 4,038 9,343 28,121 37,200 5,479 2,019 24,907 12,058 2,978 4,114 27,331 6,719 ----------- ----------- ------------ ----------- 271,698 295,306 1,372,739 384,398 (23,606) (41,073) -- -- ----------- ----------- ------------ ----------- 248,092 254,233 1,372,739 384,398 ----------- ----------- ------------ ----------- (30,721) (107,315) 419,624 1,159,716 ----------- ----------- ------------ ----------- 1,114,474 (1,508,189) 1,651,528 (6,465) 36,000 -- -- -- -- -- (22,380) -- (14,211) 34,893 -- -- 1,246 (13,505) 1,551 -- (349,580) (3,365,831) 18,235,801 -- ----------- ----------- ------------ ----------- 787,929 (4,867,725) 19,866,500 (6,466) ----------- ----------- ------------ ----------- $ 757,208 $(4,959,947) $20,286,124 $1,153,251 =========== =========== ============ ===========
See Notes to Financial Statements 37 VAN ECK FUNDS STATEMENTS OF CHANGES IN NET ASSETS
ASIA DYNASTY EMERGING MARKETS FUND VISION FUND ---------------------------------- ----------------------------------- FOR THE PERIOD SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED APRIL 7, 2000 TO JUNE 30, 2001 DECEMBER 31, JUNE 30, 2001 DECEMBER 31, (UNAUDITED) 2000 (UNAUDITED) 2000+ ----------------- --------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: OPERATIONS: Net investment income (loss) ......................... $ (141,090) $ (574,947) $ 2,857 $ (1,097) Realized gain (loss) from security transactions ...... (884,753) (841,906) (151,074) (123,972) Realized gain from equity swaps and futures contracts -- 165,154 -- -- Realized gain (loss) from options .................... -- -- -- -- Realized gain (loss) from foreign currency transactions ....................................... (42,486) (48,047) (2,912) (1,408) Realized loss from short sales ....................... -- -- -- -- Change in unrealized appreciation (depreciation) of foreign currencies and forward foreign currency contracts ........................................ 607,769 (1,181) 10 (11) Change in unrealized appreciation (depreciation) of investments, futures, swaps and options ............ (55,040) (18,914,577) 234,370 (356,037) --------------- --------------- --------------- --------------- Increase (decrease) in net assets resulting from operations ......................................... (515,600) (20,215,504) 83,251 (482,525) --------------- --------------- --------------- --------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income: Class A Shares++ ................................... -- -- -- -- Class B Shares ..................................... -- -- -- -- Class C Shares ..................................... -- -- -- -- Realized gain: Class A Shares++ ................................... -- (1,271,933) -- -- Class B Shares ..................................... -- (607,729) -- -- Class C Shares ..................................... -- -- -- -- Tax return of capital: Class A Shares++ ................................... -- -- -- -- Class B Shares ..................................... -- -- -- -- Class C Shares ..................................... -- -- -- -- --------------- --------------- --------------- --------------- Total dividends and distributions .................... -- (1,879,662) -- -- --------------- --------------- --------------- --------------- CAPITAL SHARE TRANSACTIONS (NOTE 5): Net proceeds from sales of shares: Class A Shares++ ................................... 47,136,409 57,343,775 39,296 1,437,259 Class B Shares ..................................... 413,246 3,433,213 47,797 78,272 Class C Shares ..................................... -- -- -- -- --------------- --------------- --------------- --------------- 47,549,655 60,776,988 87,093 1,515,531 --------------- --------------- --------------- --------------- Reinvestment of dividends: Class A Shares++ ................................... -- 1,008,584 -- -- Class B Shares ..................................... -- 383,469 -- -- Class C Shares ..................................... -- -- -- -- --------------- --------------- --------------- --------------- -- 1,392,053 -- -- --------------- --------------- --------------- --------------- Cost of shares reacquired: Class A Shares++ ................................... (47,730,309) (60,414,651) (179,570) (225,232) Class B Shares ..................................... (1,124,482) (2,595,010) (105,102) -- Class C Shares ..................................... -- -- -- -- --------------- --------------- --------------- --------------- (48,854,791) (63,009,661) (284,672) (225,232) --------------- --------------- --------------- --------------- Increase (decrease) in net assets resulting from capital share transactions ......................... (1,305,136) (840,620) (197,579) 1,290,299 --------------- --------------- --------------- --------------- Total increase (decrease) in net assets .............. (1,820,736) (22,935,786) (114,328) 807,774 NET ASSETS: Beginning of period .................................. 20,468,417 43,404,203 807,774 -- --------------- --------------- --------------- --------------- End of period ........................................ 18,647,681 20,468,417 693,446 807,774 =============== =============== =============== =============== Accumulated net investment income (loss) ............. $ (208,944) $ (25,368) $ 1,675 $ 1,730 =============== =============== =============== ===============
- ------------------ + Commencement of operations. ++ The U.S. Government Money Fund does not have a designated class of shares. See Notes to Financial Statements 38
GLOBAL HARD ASSETS GLOBAL LEADERS INTERNATIONAL INVESTORS GOLD U.S. GOVERNMENT MONEY FUND FUND FUND FUND - ----------------------------- --------------------------- --------------------------------- --------------------------------- SIX SIX SIX SIX MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED JUNE 30, 2001 DECEMBER 31, JUNE 30, 2001 DECEMBER 31, JUNE 30, 2001 DECEMBER 31, JUNE 30, 2001 DECEMBER 31, (UNAUDITED) 2000 (UNAUDITED) 2000 (UNAUDITED) 2000 (UNAUDITED) 2000 - -------------- ------------ ------------ ------------ --------------- --------------- --------------- --------------- $ (30,721) $ 56,963 $ (107,315) $ (512,717) $ 419,624 $ 112,259 $ 1,159,716 $ 4,156,884 1,114,474 83,148 (1,508,189) 3,748,774 1,651,528 (8,976,480) (6,465) (44,197) 36,000 27,860 -- -- -- -- -- -- -- 176,222 -- -- -- -- -- -- (14,211) (35,714) 34,893 (13,730) (22,380) (2,807,750) -- -- -- -- -- -- -- (159,362) -- -- 1,246 (1,308) (13,505) 9,414 1,551 (2,047) -- -- (349,580) 1,178,291 (3,365,831) (11,660,680) 18,235,801 (24,736,116) -- -- - -------------- ------------ ------------ ------------ --------------- --------------- --------------- --------------- 757,208 1,485,462 (4,957,947) (8,428,939) 20,286,124 (36,569,496) 1,153,251 4,112,687 - -------------- ------------ ------------ ------------ --------------- --------------- --------------- --------------- -- -- (628) (830) (201,981) -- (1,159,717) (4,156,884) -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- (4,454,489) -- -- -- -- -- -- -- (155,002) -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- (249,898) -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- - -------------- ------------ ------------ ------------ --------------- --------------- --------------- --------------- -- -- (628) (4,610,321) (201,981) (249,898) (1,159,717) (4,156,884) - -------------- ------------ ------------ ------------ --------------- --------------- --------------- --------------- 24,997,925 7,580,561 525,277 7,162,334 1,609,017,585 4,189 1,676,313,897 4,214,700,071 69,515 158,574 66,655 1,257,844 -- -- -- -- 33,361 167,466 -- -- -- -- -- -- - -------------- ------------ ------------ ------------ --------------- --------------- --------------- --------------- 25,100,801 7,906,601 591,932 8,420,178 1,609,017,585 4,189 1,676,313,897 4,214,700,071 - -------------- ------------ ------------ ------------ --------------- --------------- --------------- --------------- -- -- -- 3,410,538 -- 205,090 (142.359) 2,154,281 -- -- -- 623,319 -- -- -- -- -- -- -- -- -- -- -- -- - -------------- ------------ ------------ ------------ --------------- --------------- --------------- --------------- -- -- -- 4,033,857 -- 205,090 (142,359) 2,154,281 - -------------- ------------ ------------ ------------ --------------- --------------- --------------- --------------- (2,622,413) (12,733,686) (2,822,769) (8,797,970) (1,636,512,067) (4,205,373,419) (1,707,691,552) (4,240,456,825) (535,259) (2,038,028) (681,820) (1,297,713) -- -- -- -- (281,697) (913,129) -- -- -- -- -- -- - -------------- ------------ ------------ ------------ --------------- --------------- --------------- --------------- (3,439,369) (15,684,843) (3,504,589) (10,095,683) (1,636,512,067) (4,205,373,419) (1,707,691,552) (4,240,456,825) - -------------- ------------ ------------ ------------ --------------- --------------- --------------- --------------- 21,661,432 (7,778,242) (2,912,657) 2,358,352 (27,494,482) (15,712,978) (31,520,014) (23,602,473) - -------------- ------------ ------------ ------------ --------------- --------------- --------------- --------------- 22,418,640 (6,292,780) (7,873,232) (10,680,908) (7,410,339) (52,532,372) (31,526,480) (23,646,670) 19,715,965 26,008,745 28,831,174 39,512,082 116,512,617 169,044,989 73,796,539 97,443,209 - -------------- ------------ ------------ ------------ --------------- --------------- --------------- --------------- 42,134,605 19,715,965 20,957,942 28,831,174 109,102,278 116,512,617 42,270,059 73,796,539 ============== ============ ============ ============ =============== =============== =============== =============== $ (43,467) $ 1,465 $ (202,861) $ (129,811) $ 162,447 $ (32,816) $ -- $ -- ============== ============ ============ ============ =============== =============== =============== ===============
See Notes to Financial Statements 39 ASIA DYNASTY FUND - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS For a share outstanding throughout each period:
CLASS A ------------------------------------------------------------------------------------------ SIX MONTHS ENDED YEAR ENDED DECEMBER 31, JUNE 30, 2001 ---------------------------------------------------------------------- (UNAUDITED) 2000 1999 1998 1997 1996 ----------- ---------- ---------- ---------- ---------- ---------- Net Asset Value, Beginning of Period ... $ 6.97 $ 14.60 $ 7.80 $ 7.82 $ 13.21 $ 12.40 ------- ------- ------- ------- ------- ------- Income from Investment Operations: Net Investment Loss .................... (0.05) (0.18) (0.11)(c) (0.01) (0.28) (0.20) Net Gain (Loss) on Investments (both Realized and Unrealized) ......... (0.38) (6.77) 9.35 (0.01) (3.82) 1.01 ------- ------- ------- ------- ------- ------- Total from Investment Operations ....... (0.43) (6.95) 9.24 (0.02) (4.10) 0.81 ------- ------- ------- ------- ------- ------- Less Distributions: Distributions from Capital Gains ....... -- (0.68) (2.44) -- (1.15) -- Tax Return of Capital .................. -- -- -- -- (0.14) -- ------- ------- ------- ------- ------- ------- Total Distributions .................... -- (0.68) (2.44) -- (1.29) -- ------- ------- ------- ------- ------- ------- Net Asset Value, End of Period ......... $ 6.54 $ 6.97 $ 14.60 $ 7.80 $ 7.82 $ 13.21 ======= ======= ======= ======= ======= ======= Total Return (a) ....................... (6.17)% (47.60)% 118.46% (0.26)% (32.10)% 6.53% - ---------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTARY DATA Net Assets, End of Period (000) ........ $13,335 $14,062 $31,385 $10,685 $12,873 $44,351 Ratio of Gross Expenses to Average Net Assets ........................... 3.23%(f) 2.63% 2.82% 3.13% 2.38% 2.42% Ratio of Net Expenses to Average Net Assets ........................... 3.19%(d)(f) 2.50%(b)(d) 2.82% 2.43%(b) 2.38% 2.42% Ratio of Net Investment Loss to Average Net Assets ........................... (1.25)%(f) (1.49)%(e) (1.03)%(e) (0.09)% (0.76)% (0.73)% Portfolio Turnover Rate ................ 51.45% 113.88% 172.18% 121.96% 200.45% 52.99% CLASS B - ---------------------------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED DECEMBER 31, JUNE 30, 2001 --------------------------------------------------------------- (UNAUDITED) 2000 1999 1998 1997 1996 ----------- --------- ---------- --------- --------- ---------- $ 6.55 $ 13.90 $ 7.54 $ 7.63 $ 13.08 $ 12.33 ------ ------- ------- ------- ------- ------- (0.06) (0.23) (0.24)(c) (0.07) (0.30) (0.24) (0.35) (6.44) 9.04 (0.02) (3.86) 0.99 ------ ------- ------- ------- ------- ------- (0.41) (6.67) 8.80 (0.09) (4.16) 0.75 ------ ------- ------- ------- ------- ------- -- (0.68) (2.44) -- (1.15) -- -- -- -- -- (0.14) -- ------ ------- ------- ------- ------- ------- -- (0.68) (2.44) -- (1.29) -- ------ ------- ------- ------- ------- ------- $ 6.14 $ 6.55 $ 13.90 $ 7.54 $ 7.63 $ 13.08 ====== ======= ======= ======= ======= ======= (6.26)% (47.99)% 116.71% (1.18)% (32.87)% 6.08% - --------------------------------------------------------------------------------- $5,312 $ 6,406 $12,019 $ 4,942 $ 6,914 $20,296 3.52%(f) 3.31% 3.89% 3.83% 3.00% 2.86% 3.40%(d)(f) 3.18%(b)(d) 3.89% 3.14%(b) 3.00% 2.86% (1.57)%(f) (2.15)%(e) (2.21)%(e) (0.79)% (1.36)% (1.14)% 51.45% 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. (f) Annualized. See Notes to Financial Statements 40 EMERGING MARKETS VISION FUND - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS For a share outstanding throughout the period: CLASS A --------------------------------------- SIX MONTHS ENDED APRIL 7, 2000(A) TO JUNE 30, 2001 DECEMBER 31, (UNAUDITED) 2000 ---------------- -------------------- Net Asset Value, Beginning of Period ....... $6.24 $10.00 ----- ------ Income from Investment Operations: Net Investment Income (Loss) ............... 0.68 (0.01) Net Gain (Loss) on Investments (both Realized and Unrealized) ............. -- (3.75) ----- ------ Total from Investment Operations ........... 0.68 (3.76) ===== ====== Net Asset Value, End of Period ............. $6.92 $6.24 ===== ====== Total Return (b) ........................... 10.90% (37.60)% - -------------------------------------------------------------------------------- RATIOS/SUPPLEMENTARY DATA Net Assets, End of Period (000) ............ $693 $756 Ratio of Gross Expenses to Average Net Assets ............................... 15.97%(d) 10.11%(d) Ratio of Net Expenses to Average Net Assets (c) ........................... 2.00%(d) 2.00%(d) Net Effect of Advisory Fee Waiver to Average Net Assets ....................... 8.11%(d) Ratio of Net Investment Income (Loss) to Average Net Assets ......................... 0.74%(d) (0.10)%(d) Portfolio Turnover Rate .................... 71.45% 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 41 GLOBAL HARD ASSETS FUND - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS For a share outstanding throughout each period:
CLASS A ----------------------------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED DECEMBER 31, JUNE 30, 2001 ----------------------------------------------------------------- (UNAUDITED) 2000 1999 1998 1997 1996 ------- ------- ------- ------- ------- ------- Net Asset Value, Beginning of Period .................... $13.08 $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) ............. (0.53) 0.99 1.65 (5.09) 2.01 4.70 ------- ------- ------- ------- ------- ------- Total from Investment Operations ......... (0.53) 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 $12.55 $13.08 $12.01 $10.34 $15.50 $14.42 ======= ======= ======= ======= ======= ======= Total Return (b) ......................... (4.05)% 8.91% 16.64% (32.25)% 14.29% 45.61% - ------------------------------------------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTARY DATA Net Assets, End of Period (000) $36,966 $13,581 $17,757 $22,969 $61,341 $27,226 Ratio of Gross Expenses to Average Net Assets ..................... 2.78%(f) 2.52% 2.89 2.11% 2.00% 2.63% Ratio of Net Expenses to Average Net Assets (net of interest expense)(c) ................... 2.41%(f) 2.00% 2.00% 2.00% 1.97% 0.72% Ratio of Net Investment Income (Loss) to Average Net Assets (0.08)%(f) 0.49%(e) 0.49%(e) 0.58% 0.36% 1.45% Portfolio Turnover Rate .................. 48.23% 91.27% 195.00% 167.79% 118.10% 163.91% CLASS B CLASS C ---------------------------------------------------------------- -=----------------------------------------------------------- FOR THE SIX MONTHS PERIOD SIX MONTHS ENDED APRIL 24, ENDED JUNE 30, YEAR ENDED DECEMBER 31, 1996(A) TO JUNE 30, YEAR ENDED DECEMBER 31, 2001 ----------------------------------------- DECEMBER 31, 2001 ------------------------------------------------- (UNAUDITED) 2000 1999 1998 1997 1996 (UNAUDITED) 2000 1999 1998 1997 1996 ------- ------- ------ ------ ------- ------- ------- ------ ------ ------ ------- ------- $12.98 $12.00 $10.37 $15.60 $14.50 $12.55 $13.01 $12.04 $10.40 $15.64 $14.52 $10.76 ------- ------- ------ ------ ------- ------- ------- ------ ------ ------ ------- ------- (0.07) (0.02) (0.03) 0.01 (0.01) 0.11 (0.05) (0.02) (0.03) 0.01 (0.01) 0.11 (0.48) 1.00 1.66 (5.08) 2.00 2.95 (0.49) 0.99 1.67 (5.09) 2.00 4.73 ------- ------- ------ ------ ------- ------- ------- ------ ------ ------ ------- ------- (0.55) 0.98 1.63 (5.07) 1.99 3.06 (0.54) 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) ------- ------- ------ ------ ------- ------- ------- ------ ------ ------ ------- ------- $12.43 $12.98 $12.00 $10.37 $15.60 $14.50 $12.47 $13.01 $12.04 $10.40 $15.64 $14.52 ======= ======= ====== ====== ======= ======= ======= ====== ====== ====== ======= ======= (4.24)% 8.17% 15.72% (32.55)% 13.72% 24.55% (4.15)% 8.06% 15.77% (32.53)% 13.71% 45.18% - ------------------------------------------------------------------------------------------------------------------------------------ $2,827 $3,438 $5,029 $5,580 $10,541 $1,806 $2,342 $2,697 $3,223 $4,011 $8,698 $1,935 3.43%(f) 3.35% 3.79% 2.81% 2.73% 3.27%(d) 3.04%(f) 3.82% 4.15% 3.00% 2.94% 6.02% 3.16%(f) 2.75% 2.71% 2.50% 2.50% 1.64%(d) 3.16%(f) 2.75% 2.71% 2.50% 2.50% 1.31% (1.00)%(f) (0.23)%(e) (0.23)%(e) 0.12% (0.13)% 0.53%(d) (0.83)%(f) (0.23)%(e) (0.22)%(e) 0.11% (0.15)% 0.84% 48.23% 91.27% 195.00% 167.79% 118.10% 163.91% 48.23% 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. (f) Annualized. See Notes to Financial Statements 42 GLOBAL LEADERS FUND - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS For a share outstanding throughout each period:
CLASS A ----------------------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED DECEMBER 31, JUNE 30, 2001 --------------------------------------------------------- (UNAUDITED) 2000 1999 1998 1997 1996 ------- ------- ------- ------- ------- ------- Net Asset Value, Beginning of Period .............. $8.98 $13.49 $10.78 $10.38 $10.37 $10.31 ------- ------- ------- ------- ------- ------- Income from Investment Operations: Net Investment Income (loss) .................... (0.05) (0.16) (0.06) 0.02 0.10 0.12 Net Gain on Investments (both Realized and Unrealized) ................ (1.53) (2.73) 3.59 2.07 1.43 1.15 ------- ------- ------- ------- ------- ------- Total from Investment Operations .................. (1.58) (2.89) 3.53 2.09 1.53 1.27 ------- ------- ------- ------- ------- ------- Less Dividends and Distributions: Dividends from Net Investment Income ............ -- -- -- -- (0.08)(d) (0.11) Distribution from Capital Gains ................... -- (1.62) (0.82) (1.61) (1.43) (1.10) Tax Return of Capital ............................. -- -- -- (0.08) (0.01) -- ------- ------- ------- ------- ------- ------- Total Dividends and Distributions ................. -- (1.62) (0.82) (1.69) (1.52) (1.21) ------- ------- ------- ------- ------- ------- Net Asset Value, End of Period .................... $7.40 $8.98 $13.49 $10.78 $10.38 $10.37 ======= ======= ======= ======= ======= ======= Total Return (a) .................................. (17.59)% (21.88)% 32.83% 20.65% 14.77% 12.28% - ---------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTARY DATA Net Assets, End of Period (000) ................... $17,541 $23,990 $33,070 $27,461 $24,630 $29,331 Ratio of Gross Expenses to Average Net Assets ..... 2.34%(f) 2.15% 2.20% 2.32% 2.45% 2.54% Ratio of Net Expenses to Average Net Assets (b) ... 2.00%(d)(f) 2.00%(d) 2.00 2.00%(c) 2.00%(c) 2.17%(c) Ratio of Net Investment Income (Loss) to Average Net Assets ........................... (0.83)%(f) (1.35)%(e) (0.48)% 0.85% 0.85% 1.05% Portfolio Turnover Rate ........................... 28.91% 97.61% 86.14% 87.79% 78.07% 114.30% CLASS B - ---------------------------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED DECEMBER 31, JUNE 30, 2001 -------------------------------------------------------------- (UNAUDITED) 2000 1999 1998 1997 1996 ------- ------- --------- ------- ------- ------- $8.78 $13.31 $10.67 $10.31 $10.32 $10.28 ------- ------- --------- ------- ------- ------- (0.02) (0.19) (0.12) -- 0.04 0.06 (1.54) (2.72) 3.56 2.02 1.43 1.14 ------- ------- --------- ------- ------- ------- (1.56) (2.91) 3.44 2.02 1.47 1.20 ------- ------- --------- ------- ------- ------- -- -- -- -- (0.03)(d) (0.06) -- (1.62) (0.80) (1.61) (1.45) (1.10) -- -- -- (0.05) -- -- ------- ------- --------- ------- ------- ------- -- (1.62) (0.80) (1.66) (1.48) (1.16) ------- ------- --------- ------- ------- ------- $7.22 $8.78 $13.31 $10.67 $10.31 $10.32 ======= ======= ========= ======= ======= ======= (17.77)% (22.33)% 32.27% 20.07% 14.26% 11.49% -------------------------------------------------------------------------------- $3,417 $4,841 $6,442 $6,039 $5,055 $4,932 3.03%(f) 3.00% 3.21% 3.25% 2.51% 3.19% 2.50%(d)(f) 2.50%(d) 2.50%(c) 2.50%(c) 2.50%(c) 2.71%(c) (1.31)%(f) (1.86)%(e) (0.94)% 0.36% 0.36% 0.51% 28.91% 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. (f) Annualized. See Notes to Financial Statements 43 INTERNATIONAL INVESTORS GOLD FUND - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS For a share outstanding throughout each period:
CLASS A ------------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED DECEMBER 31, JUNE 30, 2001 ------------------------------------------------------------------- (UNAUDITED) 2000 1999 1998 1997 1996 -------- -------- -------- -------- -------- -------- Net Asset Value, Beginning of Period ...... $4.45 $5.73 $6.59 $7.54 $11.90 $13.35 -------- -------- -------- -------- -------- -------- Income from Investment Operations: Net Investment Income ..................... 0.02 0.00(e) 0.03 0.06 0.09 0.05 Net Loss on Investments (both Realized and Unrealized) ......................... 0.48 (1.27) (0.84) (0.95) (4.36) (1.29) -------- -------- -------- -------- -------- -------- Total from Investment Operations .......... 0.50 (1.27) (0.81) (0.89) (4.27) (1.24) -------- -------- -------- -------- -------- -------- Less Dividends and Distributions: Dividends from Net Investment Income ...... (0.01) -- (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) (0.01) (0.05) (0.06) (0.09) (0.21) -------- -------- -------- -------- -------- -------- Net Asset Value, End of Period ............ $4.94 $4.45 $5.73 $6.59 $7.54 $11.90 ======== ======== ======== ======== ======== ======== Total Return (a) .......................... 11.28% (22.18)% (12.37)% (11.87)% (36.00)% (9.37)% - ---------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTARY DATA Net Assets, End of Period (000) ........... $109,102 $116,513 $169,045 $238,639 $232,944 $409,331 Ratio of Gross Expenses to Average Net Assets ...................... 2.30%(f) 2.30% 2.09% 1.78% 1.52% 1.43% Ratio of Net Expenses to Average Net Assets ...................... 2.20%(c)(f) 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 ................... 0.70%(f) 0.08%(d) 0.46%(d) 0.99% 0.90% 0.36% Portfolio Turnover Rate ................... 17.81% 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. (f) Annualized. See Notes to Financial Statements 44 U.S. GOVERNMENT MONEY FUND - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS For a share outstanding throughout each period:
CLASS A --------------------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED DECEMBER 31, JUNE 30, 2001 -------------------------------------------------------- (UNAUDITED) 2000 1999 1998 1997 1996 -------- -------- -------- -------- -------- -------- Net Asset Value, Beginning of Period .................... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 -------- -------- -------- -------- -------- -------- Income from Investment Operations: Net Investment Income ................................... 0.02 0.05 0.03 0.04 0.04 0.04 Less Distributions to Shareholders: Dividends from Net Investment Income .................... (0.02) (0.05) (0.03) (0.04) (0.04) (0.04) -------- -------- -------- -------- -------- -------- Net Asset Value, End of Period .......................... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 ======== ======== ======== ======== ======== ======== Total Return ............................................ 1.00% 4.77% 3.43% 3.88% 3.77% 3.85% - ---------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTARY DATA Net Assets, End of Period (000) ......................... $42,270 $73,797 $97,443 $47,222 $76,650 $107,698 Ratio of Gross Expenses to Average Net Assets ........... 1.19%(a) 1.10% 1.15% 1.20% 1.28% 1.23% Ratio of Net Investment Income to Average Net Assets ............................................ 3.56%(a) 4.80% 3.68% 3.89% 3.91% 4.02%
- ---------- (a) Annualized. See Notes to Financial Statements 45 VAN ECK FUNDS NOTES TO FINANCIAL STATEMENTS (unaudited) - -------------------------------------------------------------------------------- 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. On May 30, 2001 all of the shares of Emerging Markets Vision Fund Class B shares were redeemed. The Trust operates as a series fund currently comprised of six portfolios: Asia Dynasty Fund, Emerging Markets Vision Fund, Global Hard Assets Fund, Global Leaders Fund, International Investors Gold 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 and International Investors Gold 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 46 VAN ECK FUNDS NOTES TO FINANCIAL STATEMENTS (unaudited) (continued) - -------------------------------------------------------------------------------- repurchase the security at the higher price. Short sales may 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 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 June 30, 2001, 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 ................................. $2,633,400 2.4% HSBC Bank USA Gold Linked Note @ 2.50% due 8/17/01 .................................. 2,422,800 2.2 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 Fund pays 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: $9,308 Asia Dynasty Fund, $671 Emerging Markets Vision Fund, $7,930 Global Hard Assets Fund, $8,628 Global Leaders Fund, $92,554 International Investors Gold Fund and $43 U.S. Government Money Fund. For the six months ended to June 30, 2001, the Adviser agreed to assume expenses exceeding 2% of average daily net assets for Class A shares for the Emerging Markets Vision Fund. Expenses were reduced by $53,130 under this agreement. For period January 1, 2001 through February 28, 2001, 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. For period March 1, 2001 through June 20, 2001, the Adviser agreed to assume expenses exceeding 2.25% of average daily net assets for Class A shares and 3.00% of average daily net assets for Class B and C shares, for the Global Hard Assets Fund. Expenses were reduced by $23,606 under this agreement. For the period ended June 30, 2001, 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 $41,073 under this agreement. Van Eck Associates Corporation also performs accounting and administrative services for Asia Dynasty Fund, Global Leaders Fund and International Investors Gold Fund 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 International Investors Gold Fund's average daily net assets and 0.20 of 1% of average daily net assets in excess of $750 million. The Funds have a fee arrangement based on cash balances left on deposit with the custodian, which reduces operating expenses. For the six months ended June 30, 2001, Van Eck Securities Corporation (the "Distributor") received $38,709 in sales loads of which $6,552 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 June 30, 2001, the Adviser owned 59.9% of the outstanding shares of beneficial interest of the Emerging Markets Vision Fund Class A shares. 47 VAN ECK FUNDS NOTES TO FINANCIAL STATEMENTS (unaudited) (continued) - -------------------------------------------------------------------------------- NOTE 3 -- INVESTMENTS -- For federal income tax purposes, the identified cost of investments owned at June 30, 2001 is $19,715,435, $792,700, $41,107,316, $19,724,651 and $97,587,438 for the Asia Dynasty Fund, Emerging Markets Vision Fund, Global Hard Assets Fund, Global Leaders Fund and International Investors Gold Fund, respectively. The U.S. Government Money Fund's identified cost for federal income taxes is the same for financial reporting purposes. As of June 30, 2001, gross unrealized gains and losses were as follows: NET GROSS GROSS UNREALIZED UNREALIZED UNREALIZED APPRECIATION APPRECIATION DEPRECIATION (DEPRECIATION) ---------- ---------- ----------- Asia Dynasty Fund ................... $2,231,001 $4,413,542 $(2,182,541) Emerging Markets Vision Fund ........ 65,011 186,678 (121,667) Global Hard Assets Fund ............. 5,427,564 4,157,189 1,270,375 Global Leaders Fund ................. 3,500,171 2,336,328 1,163,843 International Investors Gold Fund ... 18,687,676 12,234,702 6,452,974 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; 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 six months ended June 30, 2001, other than short-term obligations, were as follows: PROCEEDS COST OF FROM INVESTMENT INVESTMENT SECURITIES SECURITIES PURCHASED SOLD ----------- ----------- Asia Dynasty Fund ............................ $10,398,548 $12,634,034 Emerging Markets Vision Fund ................. 542,610 769,993 Global Hard Assets Fund ...................... 30,230,791 10,241,433 Global Leaders Fund .......................... 7,008,706 10,512,897 International Investors Gold Fund ............ 17,833,376 32,772,585 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, 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 June 30, 2001 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 June 30, 2001, were as follows: Asia Dynasty Fund - Class A $1,377,653 Asia Dynasty Fund - Class B 1,520,487 Emerging Markets Vision Fund - Class A 19,383 Global Hard Assets Fund - Class A 971,194 Global Hard Assets Fund - Class B 126,870 Global Hard Assets Fund - Class C 322,740 Global Leaders Fund - Class A 983,196 Global Leaders Fund - Class B 443,924 NOTE 5 -- SHAREHOLDER TRANSACTIONS -- Shares of Beneficial Interest issued and redeemed (unlimited number of $.001 par value shares authorized): ASIA DYNASTY FUND ----------------------------------- SIX MONTHS ENDED YEAR ENDED JUNE 30, 2001 DECEMBER 31, (UNAUDITED) 2001 ---------- ---------- CLASS A Shares sold 6,711,016 5,155,545 Shares reinvested (105) 144,704 ---------- ---------- 6,710,911 5,300,249 Shares reacquired (6,689,752) (5,431,962) ---------- ---------- Net increase/(decrease) 21,159 (131,713) ========== ========== CLASS B Shares sold 60,080 295,472 Shares reinvested -- 58,545 ---------- ---------- 60,080 354,017 Shares reacquired (172,731) (241,410) ---------- ---------- Net increase (112,651) 112,607 ========== ========== EMERGING MARKETS VISION FUND ---------------------------------- PERIOD ENDED APRIL 7, 2000+ SIX MONTHS ENDED TO JUNE 30, 2001 DECEMBER 31, (UNAUDITED) 2000 ---------- ---------- CLASS A Shares sold 5,556 147,506 Shares reinvested -- -- ---------- ---------- 5,556 147,506 Shares reacquired (26,551) (26,365) ---------- ---------- Net increase (20,995) 121,141 ========== ========== CLASS B Shares sold 6,796 8,409 Shares reinvested -- -- ---------- ---------- 6,796 8,409 Shares reacquired (Note 1) (15,205) -- ---------- ---------- Net increase (8,409) 8,409 ========== ========== + Commencement of operations. 48 VAN ECK FUNDS NOTES TO FINANCIAL STATEMENTS (unaudited) (continued) - -------------------------------------------------------------------------------- GLOBAL HARD ASSETS FUND ----------------------------------- SIX MONTHS ENDED YEAR ENDED JUNE 30, 2001 DECEMBER 31, (UNAUDITED) 2000 ---------- ---------- CLASS A Shares sold 84,828 620,561 Shares issued in connection with an acquisition (Note 13) 2,026,452 -- Shares reinvested -- -- ---------- ---------- 2,111,280 620,561 Shares reacquired (204,639) (1,061,058) ---------- ---------- Net increase (decrease) 1,906,641 (440,497) ========== ========== CLASS B Shares sold 5,504 12,954 Shares reacquired (42,971) (166,939) ---------- ---------- Net decrease (37,467) (153,985) ========== ========== CLASS C Shares sold 2,633 13,856 Shares reacquired (22,121) (74,423) ---------- ---------- Net decrease (19,488) (60,567) ========== ========== GLOBAL LEADERS FUND ----------------------------------- SIX MONTHS ENDED YEAR ENDED JUNE 30, 2001 DECEMBER 31, (UNAUDITED) 2000 ---------- ---------- CLASS A Shares sold 66,239 575,893 Shares reinvested -- 358,151 ---------- ---------- 66,239 934,044 Shares reacquired (365,956) (713,568) ---------- ---------- Net increase/(decrease) (299,717) 220,476 ========== ========== CLASS B Shares sold 7,999 105,358 Shares reinvested -- 67,133 ---------- ---------- 7,999 172,491 Shares reacquired (85,685) (105,469) ---------- ---------- Net increase/(decrease) (77,686) 67,022 ========== ========== INTERNATIONAL INVESTORS GOLD FUND ----------------------------------- SIX MONTHS ENDED YEAR ENDED JUNE 30, 2001 DECEMBER 31, (UNUDITED) 2000 ---------- ----------- CLASS A Shares sold 351,431,924 877,506,908 Shares reinvested -- 42,199 ----------- ----------- 351,431,924 877,549,107 Shares reacquired (355,505,201) (880,886,926) ----------- ----------- Net decrease (4,073,277) (3,337,819) =========== =========== U.S. GOVERNMENT MONEY FUND ---------------------------------- SIX MONTHS ENDED YEAR ENDED JUNE 30, 2001 DECEMBER 31, (UNAUDITED) 2000 -------------- -------------- CLASS A Shares sold 1,676,313,897 4,214,700,071 Shares reinvested (142,359) 2,154,281 -------------- -------------- 1,676,171,538 4,216,854,352 Shares reacquired (1,707,691,552) (4,240,456,825) -------------- -------------- Net increase/(decrease) (31,520,014) (23,602,473) ============== ============== 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 June 30, 2001, the following forward foreign currency contracts were outstanding: UNREALIZED CONTRACT CURRENT APPRECIATION CONTRACTS AMOUNT VALUE (DEPRECIATION) - --------- ------- ------- ---- ASIA DYNASTY FUND: Foreign Currency Buy Contracts: INR 4,363,000 expiring 7/05/01 $92,795 $92,751 $(44) ===== GLOBAL LEADER FUND: Foreign Currency Sale Contracts: GBP 56,523 expiring $80,007 $79,895 $112 6/29/01-7/02/01 JPY 12,906,136 expiring 7/03/01 103,776 103,914 (138) Foreign Currency Buy Contracts: GBP 123,357 expiring 6/29/01 175,117 174,365 (752) JPY 7,219,991 expiring 6/29/01-7/02/01 58,126 57,915 (211) ----- $(989) ===== INTERNATIONAL INVESTORS GOLD FUND: Foreign Currency Sale Contracts: CAN 6,503 expiring $4,264 $4,293 $(29) 6/29/01 ====== 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 June 30, 2001, the total fair market value of the liability portion of the Plan is as follows: Asia Dynasty Fund -- $11,054, Emerging Markets Vision Fund -- $156, Global Hard Assets Fund--$44,270, Global Leaders Fund--$11,410, International Investors Gold Fund -- $67,916, and U.S. Government Money Fund -- $34,067. 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 6/30/01 -------- -------- -------- ---------- ASIA DYNASTY FUND Matrix 8848.net Holdings, LLC 6/14/00 $255,700 $125,000 0.7% GLOBAL HARD ASSETS FUND Khanty-Mansiysk Oil Co. 1/31/97 $549,995 $881,475 2.1% 49 VAN ECK FUNDS NOTES TO FINANCIAL STATEMENTS (unaudited) (continued) - -------------------------------------------------------------------------------- NOTE 9 -- SCHEDULE OF AFFILIATED COMPANIES TRANSACTIONS -- Transactions with affiliates (as defined by the Investment Company Act of 1940) for the six months ended June 30, 2001: ASIA DYNASTY FUND MATRIX 8848.NET HOLDINGS, LLC ----------------- 12/31/00 Share Balance -- Purchases: Shares 250,000 Cost $255,700 Sales: Shares -- Cost -- Realized Loss -- 6/30/01 Share Balance 250,000 -------- Market Value $125,000 -------- 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 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 June 30, 2001, 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 $94,938 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. 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 six months ended June 30, 2001, the Funds made the following borrowings: AVERAGE AMOUNT AVERAGE INTEREST FUND BORROWED RATE --------- ---- Asia Dynasty Fund $237,699 5.88% Global Hard Assets Fund 173,697 5.57 Global Leaders Fund 79,596 5.90 International Investors Gold Fund 2,210,259 5.38 U.S. Government Money Fund 1,007 5.64 NOTE 13 -- As of the close of business on June 22, 2001, the Global Hard Assets Fund acquired all the net assets of Natural Resources Fund pursuant to a plan of reorganization approved by the Natural Resources Fund shareholders on June 8, 2001. The acquisition was accomplished by a tax-free exchange of 2,026,452 shares of Global Hard Assets Fund--Class A Shares (valued at $23,911,334) for the 9,602,945 shares of Natural Resources Fund's net assets at that date, $23,447,272, including $1,422,570 of unrealized appreciation, were combined with those of the Global Hard Assets Fund. The aggregate net assets of Global Hard Assets Fund and Natural Resources Fund before the acquisition were $16,791,047 and $25,334,135, respectively. NOTE 14 -- On April 24, 2001 at a regular meeting of Board of Trustees of the Van Eck Funds, the Trustees approved a new advisory agreement for the Emerging Markets Vision Fund and a change in its fundamental investment objectives and policies. The new advisory agreement dated August 1, 2001 names Troika Dialog Asset Management Ltd. as the Funds Advisor. Additionally, the trustees have approved the change of the Fund's name to Troika Dialog Fund, effective August 1, 2001. 50 This page left intentionally blank. This page left intentionally blank. 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-----