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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-05083
WORLDWIDE INSURANCE TRUST - WORLDWIDE HARD ASSETS FUND
(Exact name of registrant as specified in charter)
99 Park Avenue, New York, NY 10016
(Address of principal executive offices) (Zip code)
Van Eck Associates Corporation
99 PARK AVENUE, NEW YORK, NY 10016
(Name and address of agent for service)
Registrant's telephone number, including area code: (212) 687-5200
Date of fiscal year end: DECEMBER 31, 2002
Date of reporting period: JUNE 30, 2003
Item 1. REPORT TO SHAREHOLDERS
VAN ECK GLOBAL
Worldwide Insurance Trust
SEMI-ANNUAL REPORT
JUNE 30, 2003
discipline
WORLDWIDE HARD ASSETS FUND
allocation
diversify
GLOBAL INVESTMENTS SINCE 1955
The information in the shareholder letter represents the personal opinions of
the individual portfolio manager(s) and may differ from those of other portfolio
managers or of the firm as a whole. This information is not intended to be a
forecast of future events, a guarantee of future results or investment advice.
Also, please note that any discussion of the Fund's holdings, the Fund's
performance, and the views of the portfolio manager(s) are as of June 30, 2003,
and are subject to change.
WORLDWIDE HARD ASSETS FUND
- --------------------------------------------------------------------------------
Dear Shareholder:
We are pleased to report that the Van Eck Worldwide Hard Assets Fund provided a
total return of 6.64% for the year-to-date period ending June 30, 2003. Since
the start of the bear market (using a start date of March 31, 2000), the Fund
rose 1.70% versus a decline of 31.82% for the Standard & Poor's (S&P) 500
Index(1), a decline of 14.84% for the Goldman Sachs Natural Resources (GSR)
Index(2), and a gain of 17.52% for the Dow Jones-AIG Commodity Index
(DJ-AIG)(3). Over this period, the Fund had correlation coefficients of 0.48 and
0.58 with the DJ-AIG and the S&P, respectively. Year to date, the Fund has
outperformed the DJ-AIG (5.00%) and underperformed the S&P (11.75%) and the GSR
(10.88%). Over the longer term, we are pleased that the Fund continues to offer
strong relative performance with limited correlation to traditional asset
classes.
MARKET REVIEW
The first six months of 2003 saw the continuation of a positive environment for
hard asset sectors. A major theme was the ongoing pro-growth monetary policy
throughout the world. This type of environment has historically benefited
cyclical stocks. For over two years, central banks around the world have lowered
interest rates in an effort to prop up the global economy. Recently, they have
focused on monetary easing policies in an effort to fight deflation. The Federal
Reserve cut rates by 25 basis points (0.25%) in June and the European Central
Bank cut rates twice for a total of 75 basis points during the period. Other
factors that positively contributed to hard asset performance were an
increasingly unstable geopolitical environment, downward pressure on the U.S.
dollar, and lower supplies in several commodity markets. Few commodity producers
have invested in infrastructure or new production facilities in recent years.
Thus, limited capacity exists in many industries. This shed a positive light on
natural resource sectors, as rising demand in many hard asset markets had a
positive effect on prices.
Natural resource stocks, however, did lag the strong rally in general equities
in the second quarter, as investors wrestled with the post-Iraqi war environment
and SARS-related issues. SARS fears during the period created concerns that
Chinese demand for commodities would decline. China is the growth driver in the
world's commodity market. It consumed nearly 25% of the world's seaborne iron
last year, 22% of the world's steel, 17% of copper, 15% of aluminum and 8% of
the world's gold. As events unfolded, however, SARS primarily affected the
tourism and services industries; the impact on manufacturing and commodity
sectors were limited.
During the period under review, the Fund benefited from its high exposure to
ENERGY shares, particularly those with leverage to natural gas. Historically,
energy prices have been heavily influenced by global politics. As we entered the
period, all eyes were on the events leading up to the war in Iraq. The main
focus in energy markets was the speed with which Iraqi oil production would be
restored, as well as any OPEC response. Energy commodities screamed upwards in
early 2003 in anticipation of interruptions of crude oil supply from the Middle
East. Images from the previous Gulf War of Iraqi forces burning their own oil
wells remained vivid in the minds of many investors. However, toward the end of
the first quarter, crude and natural gas commodities suffered a short, albeit
sharp, correction. Key drivers included a reduction in the "war premium" as
Iraqi production appeared to be secured by coalition forces. Also, a significant
increase in Saudi Arabian oil exports helped to cool the market. Throughout the
period, investors faced the challenge of attempting to accommodate the
development of the Iraqi oil industry. While this is a long-term issue, it is
critical to understanding normalized valuations for equity investors. In the
end, however, the market failed to collapse following the invasion in Iraq, as
many had feared. As a result, the crude and natural gas markets enjoyed a
significant rally during the second quarter.
In addition to the war in Iraq, low inventories across the board played a
crucial role in the performance of the energy sector. Energy commodities rose
sharply early in the period as cold weather exacerbated already depleted oil and
gas inventories. Winter temperatures in the U.S. averaged significantly lower
than both the previous year and the ten-year average. There was also a surge in
demand in the Far East due to the shutdown of nuclear plants in Japan as well as
colder temperatures across Asia. The Fund ended June with a 44.5% allocation to
the energy market, up from 35.9% at the end of 2002.
In the GOLD market, the main factors influencing prices were the war in Iraq and
U.S. dollar exchange rates. In February, gold advanced to a five-year high of
1
WORLDWIDE HARD ASSETS FUND
- --------------------------------------------------------------------------------
US$381.25 per ounce, propelled by buying in Asia and the Middle East as
investors there sought safety amid the prospect of military conflict in Iraq,
North Korea, and Israel. However, as the Iraqi invasion got underway, bullion
corrected to US$322.75. Gold made another advance to the US$370 level in May
that coincided with a renewed drop in the U.S. dollar. The first half ended with
a gold price of US$346.40, slightly below the 2002 year-end price of $348.05.
Gold-mining shares gained 1.41% in the first half (as measured by the Financial
Times Gold Mines Index(4). Regionally, North American and Australian gold shares
turned in the best performance. Due to the global nature of the business, most
gold producers have come under cost pressures due to rising local currencies.
Strong local currencies cause the costs of labor and local materials to escalate
in U.S. dollar terms. The South African miners have experienced the largest rise
in costs due to the incredible strength of the rand, which has appreciated an
astounding 60% (versus the U.S. dollar) during the past 18 months. The Fund
maintained a steady allocation to the precious metals market during the first
half of the year and ended June with a 23.8% allocation.
INDUSTRIAL METALS, generally used as raw materials in manufacturing, are
typically very sensitive to worldwide economic conditions. As the economic slump
worsened in the U.S., demand from manufacturers for metals such as aluminum
dwindled. However, we believed that this sector offered some growth potential.
Typically, prices rise with the first signs of renewed life in the manufacturing
sector. This strategy proved beneficial to the Fund as manufacturing activity,
after bottoming in April, began to improve in May. The Fund ended June with a
12.0% allocation to the industrial metals sector.
PAPER AND FOREST PRODUCT markets remained tight--the result of continued
discipline on the supply side. The sector continued to be characterized by
reduced capacity and attractive stock prices. Industry consolidation also proved
to be a positive factor, further supporting prices. However, as we entered a
seasonally weak period for the sector, we reduced the Fund's exposure, ending
June with a 10.9% allocation.
REAL ESTATE investments continued to outpace the general financial markets
through the first quarter of this year, marking one of the longest periods of
outperformance for real estate investments in recent history. Additionally, the
asset class has maintained its popularity in recent years due to the steady
yields offered by REITs. REITs' average dividend of approximately 7% compares
very favorably to the yields of bonds and other yield-bearing investments. For
example, the benchmark 10-year Treasury note traded at a yield of 3.52% on June
30. In addition, low interest rates provided attractive financing deals, which
buoyed property values in most sectors. However, on an absolute basis,
fundamentals in world real estate markets have begun to come into question and
the sector experienced some weakness toward the end of the period. Given the
more attractive opportunities in other hard asset sectors, the Fund began to
pare down its real estate holdings and ended June with a 6.0% allocation.
We would like to thank you for your participation in the Van Eck Worldwide Hard
Assets Fund, and we look forward to helping you meet your investment goals in
the future.
[Photo Omitted] [Photo Omitted]
/s/ DEREK S. VAN ECK /s/ SAMUEL R. HALPERT
- -------------------- ---------------------
DEREK S. VAN ECK SAMUEL R. HALPERT
PORTFOLIO MANAGER MANAGEMENT TEAM MEMBER
[Photo Omitted]
/s/ JOSEPH M. FOSTER
- --------------------
JOSEPH M. FOSTER
MANAGEMENT TEAM MEMBER
July 8, 2003
2
WORLDWIDE HARD ASSETS FUND
- --------------------------------------------------------------------------------
All references to Fund assets refer to Total Net Assets.
All indices listed 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. An index's
performance is not illustrative of the Fund's performance. Indices are not
securities in which investments can be made.
(1) The Standard & Poor's (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.
(2) The Goldman Sachs Natural Resource (GSR) Index is a modified
capitalization-weighted index which includes companies involved in the following
categories: extractive industries, energy companies, owners and operators of
timber tracts, forestry services, producers of pulp and paper, and owners of
plantations.
(3) The Dow Jones-AIG Commodity Index is designed to be a highly liquid and
diversified benchmark for commodities as an asset class. The DJ-AIG Index is
composed of futures contracts on 20 physical commodities.
(4) The Financial Times Gold Mines Index is a market capitalization-weighted
global index of gold-mining shares.
The performance data represents past performance and is not indicative of future
results. Investment return and principal value of an investment will fluctuate
so that an investor's shares, when redeemed, may be worth more or less than the
original cost. These returns do not reflect the deduction of taxes that a
shareholder would pay on Fund dividends and distributions or the redemption of
Fund shares. These returns do not take variable annuity/life fees and expenses
into account.
The Fund is only available to life insurance and annuity companies to fund their
variable annuity and variable life insurance products. These contracts offer
life and tax benefits to the beneficial owners of the Fund. Your insurance or
annuity company charges fees and expenses for these benefits which are not
reflected in this report or in the Fund's performance, since they are not direct
expenses of the Fund. Had these fees been included, returns would have been
lower. For insurance products, performance figures do not reflect the cost for
insurance and if they did, the performance shown would be significantly lower. A
review of your particular life and/or annuity contract will provide you with
much greater detail regarding these costs and benefits.
3
WORLDWIDE HARD ASSETS FUND
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS*
AS OF JUNE 30, 2003 (UNAUDITED)
[Data below represents pie chart in the printed piece]
Real Estate 6.0%
Other 0.1%
Agriculture 2.5%
Energy 44.5%
Industrial Metals 12.0%
Other Assets Less Liabilities 0.2%
Paper & Forest Products 10.9%
Precious Metals 23.8%
GEOGRAPHICAL WEIGHTINGS*
AS OF JUNE 30, 2003 (UNAUDITED)
[Data below represents pie chart in the printed piece]
Australia 8.6%
Canada 26.2%
China 1.1%
Finland 0.9%
France 1.5%
Hong Kong 0.8%
Russia 4.8%
South Africa 6.2%
South Korea 1.2%
United Kingdom 5.2%
Other Assets Less Liabilities 0.2%
United States 43.3%
- -----------
* Portfolio is subject to change.
4
WORLDWIDE HARD ASSETS FUND
TOP TEN EQUITY HOLDINGS AS OF JUNE 30, 2003*
- --------------------------------------------------------------------------------
OCCIDENTAL PETROLEUM CORP.
(U.S., 3.5%)
Occidental Petroleum explores for, develops, produces and markets crude oil and
natural gas. In addition, the company manufactures and markets a variety of
basic chemicals. Occidental also has an interest in petrochemicals.
MURPHY OIL CORP.
(U.S., 3.1%)
Murphy Oil is a worldwide oil and gas exploration and production company with
refining and marketing operations. The company's principal activities are
located in the United States and the United Kingdom. Murphy Oil also conducts
pipeline and crude oil trading operations in Canada.
NEWCREST MINING LTD.
(AUSTRALIA, 2.9%)
Newcrest Mining is a gold-mining, exploration and production company. The
company's exploration projects include Telfer and Boddington, which are located
in Western Australia. The company also is developing and exploring at the Cadia
Hill and Ridgeway projects in New South Wales and the Gosowong project in
Indonesia.
YUKOS
(RUSSIA, 2.9%)
YUKOS produces, distributes, and markets oil and petroleum products worldwide.
The company refines crude oil and operates reserves in West Siberian fields
including Priobskoye. YUKOS markets its products through retail and wholesale
networks in Europe and Asia via the Baltic Sea ports, the Black Sea, and the
Druzhba pipeline.
SMITH INTERNATIONAL, INC.
(U.S., 2.7%)
Smith International supplies products and services to the oil and gas
exploration and production industry. The company's products and services include
drilling and completion fluid systems, solids control equipment, waste
management services, three-cone drill bits and diamond drill bits.
TIMBERWEST FOREST CORP.
(CANADA, 2.6%)
TimberWest is a private timberland owner operating in western Canada. The
company owns timber growing lands and two lumber manufacturing facilities, and
has rights to Crown timber tenures. TimberWest sells and trades logs, and
produces lumber products for export markets.
GOLD FIELDS LTD.
(SOUTH AFRICA, 2.5%)
Gold Fields is a global gold mining, development and exploration company with
operations in South Africa, Ghana and Australia. The group's principal operating
mines include Driefontein, Kloof, Beatrix, and St. Helena. Gold Fields also has
a platinum project undergoing evaluation in Finland.
BUNGE LTD.
(U.S., 2.5%)
Bunge is an integrated global agri-business and food company spanning the
farm-to-consumer food chain. The company processes soybeans, produces and
supplies fertilizer, manufactures edible oils and shortenings, mills dry corn
and wheat, manufactures isolated soybean protein, and produces other food
products. Bunge has primary operations in North and South America.
DEVON ENERGY CORP.
(U.S., 2.4%)
Devon Energy is an independent energy company involved in oil and gas property
acquisition, exploration, and production. The company operates in the Permian
Basin and the Rocky Mountains, in the Gulf Coast area and offshore Gulf of
Mexico, in the Western Canada Sedimentary Basin in Alberta and British Columbia,
and in Azerbaijan and Brazil.
RANDGOLD RESOURCES LTD.
(UK, 2.2%)
Randgold Resources explores for and develops mines and mineral interests in
sub-Saharan Africa. The company also acquires and rehabilitates existing
under-performing gold mines, as well as mature exploration programs and bulk
tonnage shallow deposits with gold producing potential. Randgold has interests
in Cote d'Ivoire, Mali, Tanzania and Senegal.
- -----------
*Portfolio is subject to change.
5
WORLDWIDE HARD ASSETS FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 2003 (UNAUDITED)
- --------------------------------------------------------------------------------
NO. OF VALUE
COUNTRY SHARES SECURITIES (A) (NOTE 1)
- --------------------------------------------------------------------------------
AUSTRALIA: 8.6%
3,975,540 Aviva Corporation Ltd. $ 48,034
30,000 Catuity, Inc. 45,309
527,606 Newcrest Mining Ltd. 2,709,290
1,811,000 Oil Search Ltd. 996,820
506,733 Origin Energy Ltd. 1,377,585
532,000 Portman Ltd. 382,102
519,500 Santos Ltd. 2,057,415
1,914,285 Southern Pacific
Petroleum NL 295,542
------------
7,912,097
------------
CANADA: 26.2%
201,500 Abitibi-Consolidated,
Inc. USD 1,291,615
42,500 Agnico-Eagle Mines Ltd.
Warrants ($19.00,
expiring 11/14/07) USD 117,725
924,000 Bema Gold Corp. 1,191,242
462,000 Bema Gold Corp. Warrants
(CAD 2.00, expiring
6/02/04)* 0
1,614,800 Brazilian Resources, Inc.* 167,504
11,610 Brookfield Homes Corp. USD 179,026
30,000 Brookfield Properties Corp. 644,612
28,050 Brookfield Properties Corp. USD 596,063
59,000 CHC Helicopter Corp. (Class A) 1,137,465
70,000 Domtar, Inc. 767,606
70,000 Domtar, Inc. Warrants
(CAD 17.55, expiring
12/23/04) 17,634
63,850 Ensign Resources Service
Group, Inc. 955,633
889,100 Esprit Exploration Ltd. 1,581,032
80,000 FNX Mining Co., Inc. 379,358
210,000 Ivanhoe Mines Ltd. 519,690
138,300 Kinross Gold Corp. 931,461
133,685 Kinross Gold Corp. USD 902,374
94,300 Meridian Gold, Inc. 1,075,997
1,300,000 Miramar Mining Corp. 1,637,462
1,072,000 Northern Orion Resources, Inc. 1,175,534
536,000 Northern Orion Resources, Inc.
Warrants (CAD 2.00, expiring
05/29/08)* 0
25,000 NQL Drilling Tools, Inc. (Class A) 67,610
68,600 Placer Dome, Inc. USD 841,722
187,300 SFK Pulp Fund 1,088,009
48,800 Suncor Energy, Inc. USD 915,000
27,200 Suncor Energy, Inc. 510,686
40,000 Talisman Energy, Inc. 1,822,695
285,800 TimberWest Forest Corp. 2,392,872
1,000,000 Wheaton River Minerals Ltd. 1,259,586
------------
24,167,213
------------
CHINA: 1.1%
705,000 CNOOC Ltd. 1,039,643
------------
FINLAND: 0.9%
72,000 Storo Enso Oyj (R Shares) 802,765
------------
FRANCE: 1.5%
18,500 Total Fina Elf SA
(Sponsored ADR) 1,402,300
------------
HONG KONG: 0.8%
145,600 Sun Hung Kai
Properties Ltd. 735,622
------------
RUSSIA: 4.8%
35,000 JSC MMC Norilsk
Nickel (ADR) 1,21 8,000
22,200 Surgutneftegaz Preferred
Stock (Sponsored ADR) 563,880
190,000 YUKOS 2,660,000
------------
4,441,880
------------
SOUTH AFRICA: 6.2%
190,000 Gold Fields Ltd.
(Sponsored ADR) 2,314,200
28,000 Impala Platinum Holdings Ltd. 1,667,000
145,150 Sappi Ltd. (ADR) 1,792,603
------------
5,773,803
------------
SOUTH KOREA: 1.2%
44,000 POSCO (ADR) 1,152,360
------------
UNITED KINGDOM: 5.2%
100,000 Anglo American PLC 1,532,124
221,978 BHP Billiton PLC 1,172,878
122,000 Randgold Resources
Ltd. (ADR) 2,074,000
------------
4,779,002
------------
UNITED STATES: 43.3%
64,420 Alcoa, Inc. 1,642,710
26,000 AMB Property Corp. 732,420
28,000 Boise Cascade Corp. 669,200
18,000 Boston Properties, Inc. 788,400
80,300 Bunge Ltd. 2,296,580
22,000 ConocoPhillips 1,205,600
36,000 Crescent Real Estate
Equities Co. 597,960
41,300 Devon Energy Corp. 2,205,420
50,000 Duke Energy Corp. 997,500
36,000 Forest Oil Corp. 904,320
See Notes to Financial Statements
6
WORLDWIDE HARD ASSETS FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 2003 (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
NO. OF VALUE
COUNTRY SHARES SECURITIES (A) (NOTE 1)
- --------------------------------------------------------------------------------
UNITED STATES (CONTINUED):
129,000 Glamis Gold Ltd. $ 1,479,630
60,000 GlobalSantaFe Corp. 1,400,400
330,000 Golden Star Resources Ltd. 871,200
90,000 Golden Star Resources Ltd.
Warrants ($1.50,
expiring 12/11/04)* 102,600
239,200 Hecla Mining Co. 1,011,816
95,000 Inco Ltd. 2,008,300
150,000 La Quinta Corp. 646,500
54,000 Murphy Oil Corp. 2,840,400
55,000 Noble Corp. 1,886,500
33,000 Nucor Corp. 1,612,050
97,000 Occidental Petroleum Corp. 3,254,350
70,000 PetroKazakhstan, Inc.
(Class A) 874,300
53,000 Remington Oil & Gas Corp. 974,140
60,000 Rowan Companies, Inc. 1,344,000
68,000 Smith International, Inc. 2,498,320
20,000 Smurfit-Stone Container Corp. 260,600
20,000 Starwood Hotels & Resorts
Worldwide, Inc. 571,800
62,800 Transocean, Inc. 1,379,719
47,000 Weatherford International Ltd. 1,969,300
18,000 Weyerhaeuser Co. 972,000
-----------
39,998,035
-----------
TOTAL STOCKS AND OTHER INVESTMENTS: 99.8%
(Cost: $83,090,344) 92,204,720
-----------
OPTIONS PURCHASED:
AUSTRALIA: 0.0%
3,975,540 Aviva Corp. Ltd.
(Call Option-Strike
AUD 0.10, expiring
12/31/05)* 5,337
1,914,285 Southern Pacific
Petroleum NL
(Call Option-Strike
AUD 0.55, expiring
11/19/04)* 0
-----------
TOTAL OPTIONS PURCHASED: 0.0%
(Premiums paid $11,068) 5,337
-----------
TOTAL INVESTMENTS: 99.8%
(Cost: $83,101,412) 92,210,057
OTHER ASSETS LESS LIABILITIES: 0.2% 191,403
-----------
NET ASSETS: 100% $92,401,460
===========
SUMMARY OF % OF
INVESTMENTS NET
BY INDUSTRY ASSETS
- -------------- ---------
Agriculture 2.5%
Energy 44.5%
Industrial Metals 12.0%
Paper & Forest Products 10.9%
Precious Metals 23.8%
Real Estate 6.0%
Other 0.1%
Other assets less liabilities 0.2%
---------
Net Assets 100%
=========
- -------------
(a) Unless otherwise indicated, securities owned are shares of common stock.
* Fair value as determined by the Board of Trustees.
Glossary:
ADR-American Depositary Receipt
See Notes to Financial Statements
7
WORLDWIDE HARD ASSETS FUND
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2003 (UNAUDITED)
ASSETS:
Investments, at value (cost $83,101,412) (Note 1) ..................... $ 92,210,057
Cash and foreign currency ............................................. 10,361
Cash--initial margin for swap (Note 9) ................................ 110,970
Receivables:
Securities sold .................................................... 3,783,119
Due from broker-- swap (Note 9) .................................... 631,782
Dividends and interest ............................................. 185,930
Capital shares sold ................................................ 13,935
------------
Total assets ..................................................... 96,946,154
------------
LIABILITIES:
Payables:
Line of credit (Note 11) ........................................... 4,226,889
Capital shares redeemed ............................................ 190,147
Due to Adviser ..................................................... 81,065
Accounts payable ................................................... 46,593
------------
Total liabilities ................................................ 4,544,694
------------
Net assets ............................................................ $ 92,401,460
============
Shares outstanding .................................................... 8,450,607
============
Net asset value, redemption and offering price per share .............. $10.93
============
Net assets consist of:
Aggregate paid in capital .......................................... $117,756,481
Unrealized appreciation of investments, swaps and foreign
currency transactions ............................................ 9,742,066
Undistributed net investment income ................................ 351,885
Accumulated realized loss .......................................... (35,448,972)
------------
$ 92,401,460
============
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2003 (UNAUDITED)
INCOME (NOTE 1):
Dividends (less foreign taxes withheld of $67,570) .................... $ 988,912
Interest .............................................................. 28,724
----------
Total income ........................................................ 1,017,636
EXPENSES:
Management (Note 2) ..................................... $ 470,249
Administration (Note 2) ................................. 1,124
Reports to shareholders ................................. 48,302
Professional ............................................ 30,191
Trustees' fees and expenses ............................. 17,195
Custodian ............................................... 17,014
Transfer agency ......................................... 6,130
Interest (Note 11) ...................................... 5,252
Other ................................................... 10,498
-----------
Total expenses ........................................ 605,955
-----------
Net investment income ................................. 411,681
-----------
REALIZED AND UNREALIZED LOSS ON INVESTMENTS (NOTE 3):
Realized loss from security transactions ................ (2,638,791)
Realized gain from foreign currency transactions ........ 23,856
Change in unrealized appreciation of investments and swaps 7,956,072
Change in unrealized depreciation of foreign denominated
assets and liabilities ............................... 5,239
-----------
Net realized and unrealized loss on investments, swaps and
foreign currency transactions ....................... 5,346,376
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .... $ 5,758,057
===========
See Notes to Financial Statements
8
WORLDWIDE HARD ASSETS FUND
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, 2003 DECEMBER 31,
(UNAUDITED) 2002
------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income ............................................................ $ 411,681 $ 711,859
Realized loss from security transactions ......................................... (2,638,791) (6,715,482)
Realized gain (loss) from foreign currency transactions .......................... 23,856 (125,621)
Realized gain (loss) from swaps .................................................. -- (158,000)
Change in unrealized appreciation of investments and swaps ....................... 7,956,072 (490,722)
Change in unrealized depreciation of foreign denominated assets and
liabilities .................................................................... 5,239 (10,524)
------------- -------------
Net increase (decrease) in net assets resulting from operations .................. 5,758,057 (6,788,490)
------------- -------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income ............................................................ (515,801) (652,177)
------------- -------------
CAPITAL SHARE TRANSACTIONS*:
Proceeds from sales of shares .................................................... 155,241,959 541,224,244
Reinvestment of dividends ........................................................ 515,801 652,177
Cost of shares reacquired ........................................................ (166,576,343) (514,006,768)
------------- -------------
Increase (decrease) in net assets resulting from capital share transactions ...... (10,818,583) 27,869,653
------------- -------------
Total increase (decrease) in net assets .......................................... (5,576,327) 20,428,986
NET ASSETS:
Beginning of period ................................................................. 97,977,787 77,548,801
------------- -------------
End of period (including undistributed net investment income of $351,885 and
$432,149, respectively) ........................................................... $ 92,401,460 $ 97,977,787
============= =============
* SHARES OF BENEFICIAL INTEREST ISSUED AND REDEEMED (UNLIMITED NUMBER OF $.001
PAR VALUE SHARES AUTHORIZED)
Shares sold ...................................................................... 15,196,871 50,872,791
Reinvestment of dividends ........................................................ 50,668 60,220
Shares reacquired ................................................................ (16,308,605) (48,672,993)
------------- -------------
Net increase (decrease) .......................................................... (1,061,066) 2,260,018
============= =============
See Notes to Financial Statements
9
WORLDWIDE HARD ASSETS FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 2003 -------------------------------------------------------------
(UNAUDITED) 2002 2001 2000 1999 1998
------------ ------- ------- ------- ------- -------
Net Asset Value, Beginning of Period ........... $ 10.30 $ 10.69 $ 12.07 $ 10.96 $ 9.20 $ 15.72
------- ------- ------- ------- ------- -------
Income from Investment Operations:
Net Investment Income ....................... 0.04 0.08 0.14 0.16 0.15 0.21
Net Realized and Unrealized Gain (Loss) on
Investments, Swaps and Foreign
Currency Transactions ..................... 0.64 (0.38) (1.39) 1.07 1.75 (4.43)
------- ------- ------- ------- ------- -------
Total from Investment Operations ............... 0.68 (0.30) (1.25) 1.23 1.90 (4.22)
------- ------- ------- ------- ------- -------
Less Dividends and Distributions:
Dividends from Net Investment Income ........ (0.05) (0.09) (0.13) (0.12) (0.14) (0.09)
Distributions from Realized Capital Gains ... -- -- -- -- -- (2.21)
------- ------- ------- ------- ------- -------
Total Distributions ............................ (0.05) (0.09) (0.13) (0.12) (0.14) (2.30)
------- ------- ------- ------- ------- -------
Net Asset Value, End of Period ................. $ 10.93 $ 10.30 $ 10.69 $ 12.07 $ 10.96 $ 9.20
======= ======= ======= ======= ======= =======
Total Return (a) ............................... 6.64% (2.85)% (10.45)% 11.41% 21.00% (30.93)%
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Period (000) ................ $92,401 $97,978 $77,549 $98,728 $98,911 $85,813
Ratio of Gross Expenses to Average Net Assets .. 1.29%(c) 1.23% 1.18% 1.16% 1.26% 1.20%
Ratio of Net Expenses to Average Net Assets .... 1.28%(b)(c) 1.20%(b) 1.15%(b) 1.14%(b) 1.26% 1.16%
Ratio of Net Investment Income to Average
Net Assets ..................................... 0.88%(c) 0.68% 1.13% 1.41% 1.39% 1.64%
Portfolio Turnover Rate ........................ 22% 63% 86% 110% 199% 153%
- -------------
(a) Total return is calculated assuming an initial investment of $10,000 made at
the net asset value at the beginning of the period, reinvestment of
dividends and distributions at net asset value on the dividend payment date
and a redemption on the last day of the period. The return does not reflect
the deduction of taxes that a shareholder would pay on Fund dividends and
distributions or the redemption of Fund shares.
(b) Excluding interest expense.
(c) Annualized
See Notes to Financial Statements
10
WORLDWIDE HARD ASSETS FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES--Van Eck Worldwide Insurance Trust (the
"Trust"), organized as a Massachusetts business trust on January 7, 1987, is
registered under the Investment Company Act of 1940, as amended. The following
is a summary of significant accounting policies consistently followed by the
Worldwide Hard Assets Fund (the "Fund"), a diversified fund of the Trust, in the
preparation of its 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 effect the reported amounts in the financial statements. Actual
results could differ from those estimates.
A. SECURITY VALUATION--Securities traded on national exchanges or traded on the
NASDAQ National Market System are valued at the last sales prices reported at
the close of business on the last business day of the period. Over-the-counter
securities not included in the NASDAQ National Market System and listed
securities for which no sale was reported are valued at the mean of the bid and
ask prices. Short-term obligations purchased with more than sixty days remaining
to maturity are valued at market value. Short-term obligations purchased with
sixty days or less to maturity are valued at amortized cost, which with accrued
interest approximates market value. Futures are valued using the closing price
reported at the close of the respective exchange. 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 the 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 the 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 on the last business day of the period. Purchases and sales of
investments are translated at the exchange rates prevailing when such
investments were 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 results from fluctuations in foreign
currency exchange rates is not separately disclosed. Recognized gains or losses
attributable to foreign currency fluctuations on foreign currency denominated
assets, other than investments, and liabilities are recorded as net realized
gains and losses from foreign currency transactions.
D. DIVIDENDS AND DISTRIBUTIONS--Dividend income and distributions to
shareholders are recorded on the ex-dividend date. Dividends on foreign
securities are recorded when the Fund is informed of such dividends.
Income distributions and capital gain distributions are determined in accordance
with income tax regulations, which may differ from such amounts reported in
accordance with accounting principles generally accepted in the United States.
E. OTHER--Security transactions are accounted for on the date the securities are
purchased or sold. Interest income is accrued as earned.
F. USE OF DERIVATIVE INSTRUMENTS
OPTION CONTRACTS--The Fund may invest, for hedging and other purposes, in call
and put options on securities, currencies and commodities. Call and put options
give the Fund 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 realized loss upon expiration. The Fund may
incur additional risk to the extent the value of the underlying instrument does
not correlate with the movement of the option value.
The Fund may also write call or put options. As the writer of an option, the
Fund receives a premium. The Fund keeps the premium whether or not the option is
exercised. The premium will be recorded, upon expiration of the option, as a
short-term realized gain. If the option is exercised, the Fund 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 Fund may write only covered puts and
calls. A covered call option is an option in which the Fund owns the instrument
underlying the call. A covered call sold by the Fund exposes it 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 Fund during the term of the option to a decline in price of the underlying
instrument. A put option sold by the Fund is covered when, among other things,
cash or short-term liquid securities are placed in a segregated account to
fulfill the obligations undertaken. The Fund may incur additional risk from
investments in written currency options if there are unanticipated movements in
the underlying currencies. The Fund had no written options outstanding at June
30, 2003.
FUTURES CONTRACTS--The Fund may buy and sell financial futures contracts for
hedging purposes. When a fund enters into a futures contract, it must make an
initial deposit ("initial margin") as a partial guarantee of its performance
under the contract. As the value of the futures contract fluctuates, the Fund is
required to make additional margin payments ("variation margin") to cover any
additional obligation it may have under the contract. In the remote chance that
a broker cannot fulfill its obligation, the Fund could lose the variation margin
due to it. Risks may be caused by an imperfect correlation between the movements
in price of the futures contract and the price of the underlying instrument and
interest rates. The Fund had no futures contracts outstanding at June 30, 2003.
11
WORLDWIDE HARD ASSETS FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
STRUCTURED NOTES--The Fund may invest in indexed securities whose value is
linked to one or more currencies, interest rates, commodities or financial
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 the supervision
of the Board of Trustees and structured notes determined to be illiquid will be
aggregated with other illiquid securities 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
counterparty of the security with respect to both principal and interest. The
Fund had no outstanding structured notes at June 30, 2003.
NOTE 2--MANAGEMENT AGREEMENT--Van Eck Associates Corporation (the "Adviser")
earns fees for investment management and advisory services provided to the Fund.
This fee is based on an annual rate of 1% of the average daily net assets.
Certain of the officers and trustees of the Trust are officers, directors or
stockholders of the Adviser and Van Eck Securities Corporation. In accordance
with the advisory agreement, the Fund paid the Adviser for costs incurred in
connection with certain administrative functions.
NOTE 3--INVESTMENTS--Purchases and sales of securities other than short-term
obligations aggregated $10,704,620 and $15,916,089, respectively, for the six
months ended June 30, 2003.
NOTE 4--INCOME TAXES--For federal income tax purposes, the identified cost of
investments owned at June 30, 2003 was $83,101,412. As of June 30, 2003, net
unrealized appreciation for federal income tax purposes aggregated $9,108,645 of
which $16,732,440 related to appreciated securities and $7,623,795 related to
depreciated securities.
NOTE 5--CONCENTRATION OF RISK--The Fund may purchase securities on foreign
exchanges. Securities of foreign issuers involve special risks and
considerations not typically associated with investing in U.S. issuers. These
risks include devaluation of currencies, less reliable information about
issuers, different securities transactions clearance and settlement practices,
and future adverse political and economic developments. These risks are
heightened for investments in emerging market countries. Moreover, securities of
many foreign issuers and their markets may be less liquid and their prices more
volatile than those of comparable U.S. issuers.
The Fund may concentrate its investments in companies which are significantly
engaged in the exploration, development, production and distribution of gold and
other natural resources such as strategic and other metals, minerals, forest
products, oil, natural gas and coal and by investing in gold bullion and coins.
Since the Fund may so concentrate, it may be subject to greater risks and market
fluctuations than other more diversified portfolios. The production and
marketing of gold and other natural resources may be affected by actions and
changes in governments. In addition, gold and natural resources may be cyclical
in nature.
NOTE 6--WARRANTS--The Fund invests in warrants whose values are linked to
indices or underlying instruments. The Fund uses these warrants to gain exposure
to markets that might be difficult to invest in through conventional securities.
Warrants may be more volatile than their linked indices or underlying
instruments. Potential losses are limited to the amount of the original
investment.
NOTE 7--FORWARD FOREIGN CURRENCY CONTRACTS--The Fund may buy and sell forward
foreign currency contracts to settle purchases and sales of foreign denominated
securities. In addition, the 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. The Fund may incur additional risk from
investments in forward foreign currency contracts if the counterparty is unable
to fulfill its obligation or there are unanticipated movements of the foreign
currency relative to the U.S. dollar. At June 30, 2003, the Fund had no
outstanding forward foreign currency contracts.
NOTE 8--TRUSTEE DEFERRED COMPENSATION PLAN--The Trust established 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 of Trustees. The Fund's 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 Fund has elected to show the deferred liability net of the asset for
financial statement purposes. As of June 30, 2003, the net value of the assets
and corresponding liability of the Fund's portion of the Plan is $60,401.
NOTE 9--EQUITY SWAP--The Fund may enter into an equity swap 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. At June 30, 2003, the Fund had the following outstanding
equity swap (stated in U.S. dollars):
12
WORLDWIDE HARD ASSETS FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
NUMBER TERMI-
UNDERLYING OF NOTIONAL NATION UNREALIZED
SECURITY SHARES AMOUNT DATE APPRECIATION
- ------------ -------- -------- ------ -----------
Gazprom Oil Co. 680,800 $110,970 Open $631,782
NOTE 10--COMMODITY SWAP--The Fund may enter into a commodity swap to gain
investment exposure to the relevant spread of the commodity reference prices. A
swap is an agreement that obligates the parties to exchange cash flows at
specified intervals. At termination date, a final payment is made based on the
swap's notional amount on trade date versus the value on termination date. Risks
may arise as a result of the failure of the counterparty to the contract to
comply with the terms of the swap contract. The Fund bears the risk of loss of
the amount expected to be received under a swap agreement in the event of the
default of the counterparty. Therefore, the Fund considers the credit worthiness
of each counterparty to a swap contract in evaluating potential credit risk.
Additionally, risks may arise from unanticipated movements in the value of the
swap relative to the underlying reference prices. The Fund records a net
receivable or payable daily, based on the change in the value of the swap. The
net receivable or payable for financial statement purposes is shown as due to or
from broker. At June 30, 2003, the Fund has no outstanding commodity swaps.
NOTE 11--BANK LINE OF CREDIT--The Trust may participate with other funds managed
by the Adviser (the "Van Eck Funds") in a $45 million committed credit facility
("Facility") to be utilized for temporary financing until the settlement of
sales or purchases of portfolio securities, the repurchase or redemption of
shares of the Van Eck Funds, including the Fund, at the request of the
shareholders and other temporary or emergency purposes. In connection therewith,
the Van Eck Funds have agreed to pay commitment fees, pro rata, based on the
unused but available balance. Interest is charged to the Van Eck Funds at rates
based on prevailing market rates in effect at the time of borrowings. For the
six months ended June 30, 2003, the Fund borrowed an average daily amount of
$514,152 at a weighted average interest rate of 1.88% under the Facility. At
June 30, 2003, there were $4,226,889 outstanding borrowings under the Facility.
NOTE 12--REPURCHASE AGREEMENT--Collateral for the repurchase agreement, in the
form of U.S. government obligations, the value of which must be at least 102% of
the underlying debt obligation, is held by the Fund's 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 Fund would become exposed to market fluctuations on the collateral.
13
SUPPLEMENT TO
VAN ECK WORLDWIDE INSURANCE TRUST PROSPECTUS
DATED MAY 1, 2003
WORLDWIDE HARD ASSETS FUND
See PRINCIPAL STRATEGIES, page 8 of the Prospectus.
Effective September 3, 2003, the Fund may invest more than 50% of its assets in
any one "hard assets" sector and is not required to invest at least 5% of its
assets in each of the "hard assets" sectors.
PROSPECTUS SUPPLEMENT DATED AUGUST 8, 2003
VAN ECK GLOBAL [Graphic Omitted] [Graphic Omitted]
Investment Adviser: Van Eck Associates Corporation Retire on YOUR terms(SM)
Distributor: Van Eck Securities Corporation Variable annuities
99 Park Avenue, New York, NY 10016 www.vaneck.com
This report must be accompanied or preceded by a prospectus, which includes more
complete information, such as charges and expenses and the risks associated with
international investing, including currency fluctuation or controls,
expropriation, nationalization and confiscatory taxation. Please read the
prospectus carefully before investing. Additional information about the Fund's
Board of Trustees is provided in the "Statement of Additional Information" that
is available by calling 1-800-826-2333 or by visiting www.vaneck.com.
Item 2. CODE OF ETHICS.
Not applicable at this time, pursuant to SEC Release 34-47262; IC-25914.
Item 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable at this time, pursuant to SEC Release 34-47262; IC-25914.
Item 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable at this time, pursuant to SEC Release 34-47262; IC-25914.
Item 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable at this time, pursuant to SEC Release 34-47262; IC-25914.
Item 6. [RESERVED]
Item 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
NOT APPLICABLE TO THIS REGISTRANT.
Item 8. [RESERVED]
Item 9. CONTROLS AND PROCEDURES.
(a) The Chief Executive Officer and the Chief Financial Officer have
concluded that the Worldwide Hard Assets Fund disclosure controls and
procedures (as defined in Rule 30a-3(c) under the Investment Company Act)
provide reasonable assurances that material information relating to the
Worldwide Hard Assets Fund is made known to them by the appropriate
persons, based on their evaluation of these controls and procedures as of
a date within 90 days of the filing date of this report.
(b) There were no significant changes in the registrant's internal controls
or in other factors that could significantly affect these controls
subsequent to the date of our evaluation.
Item 10. EXHIBITS.
(a)(2) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2
under the Act (17 CFR 270.30a-2) is attached as Exhibit 99.CERT.
(b) Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
is furnished as Exhibit 99.906CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) WORLDWIDE INSURANCE TRUST - WORLDWIDE HARD ASSETS FUND
By (Signature and Title) /s/ Bruce J. Smith, VP & Treasurer
----------------------------------
Date 8/25/03
---------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title) /s/ Jan F. van Eck, CEO
------------------------
Date 8/25/03
---------
By (Signature and Title) /s/ Bruce J. Smith, CFO
---------------------------
Date 8/25/03
---------