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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 REAL ESTATE 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 REAL ESTATE FUND
allocation
[GRAPHIC]
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 REAL ESTATE FUND
- --------------------------------------------------------------------------------
Dear Shareholder:
We are pleased to report that the Van Eck Worldwide Real Estate Fund gained
7.07% during the first six months of 2003. Real estate investments continued to
outpace the general financial market 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 (real estate
investment trusts). As total return expectations have been dampened by the
three-year bear market in general equities, income has become an important
source of investment return for shareholders. REITs' average dividend of
approximately 7% compares very favorably to bonds and other yield-bearing
investments. For example, the benchmark 10-year Treasury note--the usual
comparison due to the average ten-year REIT lease--traded at a yield of 3.52% on
June 30. During the period, the benchmark Citigroup World Property Index* gained
12.31% and the Morgan Stanley REIT Index** (representing U.S. REITs) gained
13.84%.
MARKET REVIEW
During the first six months of 2003, REITs, like many sectors of the market,
were influenced by rapidly changing expectations regarding economic recovery,
interest rates, and the events leading up to the war in Iraq. Interest in real
estate investments continued to prove resilient throughout most of the period.
Extremely low yields on Treasuries and other fixed income investments threw a
positive light onto the steady 7% yields offered by REITs. In addition, low
interest rates provided attractive financing deals, which buoyed property values
in most sectors. Also, pension funds and other institutional investors have been
on a property-buying binge in search of non-correlated returns. Their purchases
have pushed down initial yields on buildings and increased the value of property
that REITs have on their books. And finally, many REITs have been added to the
Standard & Poor's (S&P) 500 Index+ over the past year and a half, which has
created a significant amount of investment demand from Index funds.
However, on an absolute basis, fundamentals in world REIT markets have begun to
come into question and the sector experienced some weakness toward the end of
the period. This weakness was further exacerbated by the dramatic rally in
general equities in the second quarter--the largest quarterly gain for the S&P
500 in nearly five years. We believe that a recent spike in common equity
issuance played a crucial role in softening the real estate market in the U.S.
We feel, however, that the impact of this issuance will likely be offset by the
draw of lower relative valuations and the continued low interest rate
environment. Also taking its toll on real estate investments was the market's
initial reaction to the Bush administration's proposal to eliminate double
taxation on corporate dividends, which was perceived as a negative as this would
effectively eliminate REITs' substantial tax advantage. However, as the
complications surrounding the new rules became clearer, the advantages to
non-REIT companies were put into question and REITs once again emerged as a
reliable high dividend provider.
The Fund continues to be focused in the U.S. and CANADIAN real estate markets,
where some sectors such as retail malls and outlets provided strong returns and
showed little signs of weakening, and sectors such as hotels offered promising
outlooks. U.S. REITs gained 13.8% year to date through June 30 (as measured by
the Morgan Stanley REIT Index). We believe that this rally was largely driven by
the high liquidity in the market. Fund flows into U.S. REITs totaled $1.6
billion during the first six months of 2003, on the back of $3.4 billion during
2002. Within the U.S., total return leaders were shopping malls and other retail
establishments. Laggards included the apartment and office sectors. At June 30,
U.S. holdings accounted for 62.1% of the Fund's total net assets and Canadian
holdings represented 11.9% of net assets.
While there has been some concern surrounding domestic retail REITs (e.g.,
grocery store bankruptcies, etc.), the sector showed strong resilience to the
faltering economy during the period. Somewhat surprisingly, consumer activity
has continued at a healthy pace throughout the economic downturn, keeping retail
malls afloat.
1
WORLDWIDE REAL ESTATE FUND
- --------------------------------------------------------------------------------
In addition, vacancies in diversified shopping centers were not problematic as
openings were quickly filled by "super stores" and the like. During the period,
we believed that retail REIT prices fully reflected the positive underlying
fundamentals.
The U.S. hotel sector experienced a strong rally that coincided with the
recovery of the stock market in late March. As leisure and business activities
are typically tied to the strength of the economy, we believed that hotels
represented a promising investment opportunity in an improving microeconomic
environment. Accordingly, we increased holdings in the sector. Our largest
holdings among hotels were La Quinta Corp. and Starwood Hotels & Resorts (2.7%
and 1.8% of Fund net assets, respectively).
Apartments continued to be hurt by housing affordability and oversupply. While
vacancies continued to creep up, rents declined and landlords continued to make
concessions to attract tenants. The office sector also experienced continued
weakness. National vacancy rates in the office sector are now averaging
approximately 17%--high by any historic measure. On the positive side, there
does appear to be a market for quality office assets, and we believe that
vacancy rates for the sector as a whole may have peaked.
Performance of healthcare REITs has varied, with some smaller companies doing
quite well. Generally, senior assisted living establishments have shown positive
results, while other components of the healthcare sector have struggled. It
appears that the federal, state and local budget deficits are having an
influence on reimbursement rates in the healthcare industry, thereby diminishing
the overall profitability of many facilities and the growth prospects of many
healthcare REITs. Accordingly, we have maintained a low exposure to this sector.
The JAPANESE real estate market has endured a difficult environment over the
last six months. Vacancies in the office market rose to 8.1%. A continuation of
the contraction in financial markets made its way into real estate, and Japanese
REITs traded with financials throughout the period. We maintained a relatively
low weighting to this market (8.4% of Fund net assets), which benefited the
Fund, but performance was still hampered by the modest allocation. On the
positive side, the residential condominium market experienced a strong rally
during the period. The HONG KONG market was badly hurt by the outbreak of SARS
in the region, and real estate was no exception. We remained underweight in this
market (with a 2.7% allocation) versus the benchmark Index while we waited out
the storm.
The EUROPEAN real estate market experienced similar trends to that of the U.S.
Our largest weightings in this region were to the UNITED KINGDOM and SPAIN. In
the UK, buyout activity has highlighted the potential of high quality assets. We
used current price weakness as an opportunity to add quality holdings at
reasonable prices. In our opinion, many stocks here are trading below their
worth and we have had some success capitalizing on these inefficiencies. For
example, we purchased Canary Wharf Group PLC (0.9% of Fund net assets) at very
depressed prices and buyout activity later resulted in a 40% premium on our
purchase price. Merger and acquisition activity has also proven positive for the
Spanish real estate market. Real estate equities have been driven up as buyouts
have been bringing in elevated stock prices. At June 30, our European holdings
represented 11.4% of Fund net assets (UK, 4.2% and Spain, 4.5%).
We believe that it is still a good time for investors to diversify their
portfolios by allocating a small percentage to real estate markets. The sector's
defensive characteristics have continued to prove beneficial to shareholders
during a volatile time in the equity markets. We would like to thank you for
your participation in the Van Eck Worldwide Real Estate Fund, and we look
forward to helping you meet your investment goals in the future.
[PHOTO] [PHOTO]
/s/ Derek S. Van Eck /s/ Samuel R. Halpert
- -------------------- ------------------------
DEREK S. VAN ECK SAMUEL R. HALPERT
PORTFOLIO MANAGER MANAGEMENT TEAM MEMBER
July 2, 2003
2
WORLDWIDE REAL ESTATE FUND
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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.
*The Citigroup World Property Index (formerly the Salomon Smith Barney World
Property Index) is made up of nearly 400 real estate companies in approximately
20 countries, weighted according to each country's total "float" (share total)
of companies eligible for the Index.
**The Morgan Stanley REIT Index is a total return index of the most actively
traded real estate investment trusts and is designed to be a measure of real
estate equity performance.
+The Standard and 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.
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. 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.
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.
The Fund is only available as an option under various insurance contracts issued
by life insurance and annuity companies. 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 REAL ESTATE FUND
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[The following tables represent pie charts in the printed piece.]
SECTOR WEIGHTINGS
AS OF JUNE 30, 2003* (UNAUDITED)
Diversified 24.2%
Other 6.0%
Storage 2.4%
Shopping Centers 3.7%
Residential 8.6%
Regional Malls 12.0%
Short-Term Obligations Less
Other Assets Less Liabilities 3.0%
Office 16.8%
Industrial 5.6%
Hotels 6.4%
Healthcare 5.5%
Forest Products 5.8%
GEOGRAPHICAL WEIGHTINGS
AS OF JUNE 30, 2003* (UNAUDITED)
Italy 0.7%
Spain 4.5%
Japan 8.4%
Hong Kong 2.7%
France 1.2%
Canada 11.9%
Australia 0.5%
United Kingdom 4.2%
Germany 0.8%
Short-Term Obligations Less
Other Assets Less Liabilities 3.0%
United States 62.1%
- ----------
*Portfolio is subject to change.
4
WORLDWIDE REAL ESTATE FUND
TOP TEN EQUITY HOLDINGS AS OF JUNE 30, 2003*
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TIMBERWEST FOREST CORP.
(CANADA, 5.8%)
TimberWest owns timberland and two lumber manufacturing facilities. The company
also has the rights to Crown timber tenures. TimberWest sells and trades logs,
and produces lumber products for export markets.
BOSTON PROPERTIES, INC.
(U.S., 5.2%)
Boston Properties develops, redevelops, acquires, manages, operates, and leases
office, industrial, and hotel properties. The company has a significant presence
in the Massachusetts, Washington, D.C., California, Maryland, New Jersey and
Virginia markets.
SIMON PROPERTY GROUP, INC.
(U.S., 4.9%)
Simon Property Group is a self-administered and self-managed real estate
investment trust. The company is engaged in the ownership, operation,
management, leasing, acquisition, expansion and development of real estate
properties, primarily regional malls and community shopping centers.
BROOKFIELD PROPERTIES CORP.
(CANADA, 4.3%)
Brookfield Properties is a North American office property company. The company
owns and manages a portfolio of properties in Canada and the U.S., and also
develops master-planned residential communities.
MITSUBISHI ESTATE CO. LTD.
(JAPAN, 3.8%)
Mitsubishi Estate invests in real estate properties in Japan and the United
States. The company leases, manages and develops commercial buildings in central
Tokyo. Mitsubishi Estate also develops and sells residential properties and
parking lots and manages recreational facilities, including golf places and
tennis clubs.
LTC PROPERTIES, INC.
(U.S., 3.5%)
LTC Properties is a real estate investment trust that invests in long-term
health care facilities, assisted living residences, and schools through mortgage
loans, facility lease transactions and other investments.
CRESCENT REAL ESTATE EQUITIES CO.
(U.S., 3.2%)
Crescent Real Estate owns a diversified portfolio of real estate properties,
including office complexes, retail centers, hotel properties, a health and
fitness resort and single family residential developments mainly in Texas and
Colorado. Properties include Las Colina Plaza, Continental Plaza and MacArthur
Center in Texas and The Citadel in Colorado.
UNITED DOMINION REALTY TRUST, INC.
(U.S., 3.1%)
United Dominion is a self-administered real estate investment trust. The company
owns, operates and develops apartment communities located nationwide.
PROLOGIS TRUST
(U.S., 2.9%)
ProLogis provides distribution facilities and services. The company owns,
manages and currently develops distribution facilities in various markets
throughout North America, Europe, and Japan.
MITSUI FUDOSAN CO. LTD.
(JAPAN, 2.8%)
Mitsui Fudosan provides overall real estate services such as leasing,
subdivision, construction, sales and maintenance of office buildings and
residential houses. The company also manufactures building materials, operates
commercial facilities including hotels and golf places and provides financial
services such as securitization of real estate properties.
- ----------
*Portfolio is subject to change.
5
WORLDWIDE REAL ESTATE FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 2003 (UNAUDITED)
- --------------------------------------------------------------------------------
NO. OF VALUE
COUNTRY SHARES SECURITIES (A) (NOTE 1)
- --------------------------------------------------------------------------------
AUSTRALIA: 0.5%
8,000 Westfield Holdings Ltd. $ 78,402
-----------
CANADA: 11.9%
10,000 BPO Properties Ltd. 194,495
6,400 Brookfield Homes Corp. USD 98,688
500 Brookfield Properties Corp. 10,744
31,500 Brookfield Properties Corp. USD 669,375
110,000 TimberWest Forest Corp. 920,980
-----------
1,894,282
-----------
FRANCE: 1.2%
2,500 Unibail S.A. 185,155
500 Unibail S.A. Warrants
(EUR 43.33, expiring 5/11/04) 8,239
-----------
193,394
-----------
GERMANY: 0.8%
15,000 IVG Immobilien AG 125,906
-----------
HONG KONG: 2.7%
300,000 Hang Lung Properties Ltd. 271,211
30,000 Sun Hung Kai Properties Ltd. 151,571
-----------
422,782
-----------
ITALY: 0.7%
200,000 Beni Stabili S.p.A. 102,424
-----------
JAPAN: 8.4%
90,000 Mitsubishi Estate Co. Ltd. 609,979
70,000 Mitsui Fudosan Co. Ltd. 447,585
60,000 Sumitomo Realty & Development
Co. Ltd. 267,100
-----------
1,324,664
-----------
SPAIN: 4.5%
10,000 Inmobiliaria Colonial S.A. 181,424
34,540 Inmobiliaria Urbis S.A. 266,123
5,650 Metrovacesa S.A. 160,893
10,000 Vallehermoso S.A. 110,921
-----------
719,361
-----------
UNITED KINGDOM: 4.2%
32,160 British Land Co. PLC $ 256,071
35,000 Canary Wharf Group PLC 148,409
20,562 Land Securities Group PLC 267,715
-----------
672,195
-----------
UNITED STATES: 62.1%
15,000 AMB Property Corp. 422,550
10,000 Annaly Mortgage Management, Inc. 199,100
11,000 Archstone-Smith Trust 264,000
19,000 Boston Properties, Inc. 832,200
5,000 Camden Property Trust 174,750
10,000 Chelsea Property Group, Inc. 403,100
30,500 Crescent Real Estate Equities Co. 506,605
13,000 Equity Residential Properties Trust 337,350
16,000 Equity Office Properties Trust 432,160
6,000 General Growth Properties, Inc. 374,640
20,300 Hilton Hotels Corp. 259,637
10,000 Kimco Realty Corp. 379,000
100,000 La Quinta Corp. 431,000
12,000 Liberty Property Trust 415,200
57,500 LTC Properties, Inc. 549,122
10,000 Macerich Co. (The) 351,300
17,500 National Health Investors, Inc. 322,700
11,000 Newhall Land & Farming Co. 332,750
17,000 ProLogis Trust 464,100
11,000 Public Storage, Inc. 373,890
20,000 Simon Property Group, Inc. 780,600
9,000 SL Green Realty Corp. 314,010
10,000 Starwood Hotels & Resorts
Worldwide, Inc. 285,900
28,500 United Dominion Realty Trust, Inc. 490,770
10,000 Urstadt Biddle Properties (Class A) 128,600
80,000 Wyndham International, Inc.
(Class A) 35,200
-----------
9,860,234
-----------
TOTAL STOCKS AND OTHER INVESTMENTS: 97.0%
(COST: $13,794,677) 15,393,644
-----------
See Notes to Financial Statements
6
WORLDWIDE REAL ESTATE FUND
SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED)
JUNE 30, 2003 (UNAUDITED)
- --------------------------------------------------------------------------------
SHORT-TERM
OBLIGATION: DATE OF VALUE
52.7% MATURITY COUPON (NOTE 1)
- --------------------------------------------------------------------------------
Repurchase Agreement
(Note 10):
Purchased on 6/30/03;
maturity value $8,368,251
(with State Street Bank & Trust
Co., collateralized by
$8,525,000 Federal Home
Loan Bank--1.35%
due 6/02/04 with a
value of $8,535,912)
(Cost: $8,368,000) 7/01/03 1.08% $ 8,368,000
-----------
TOTAL INVESTMENTS: 149.7%
(COST: $22,162,677) 23,761,644
OTHER ASSETS LESS
LIABILITIES: (49.7)% (7,892,774)
-----------
NET ASSETS: 100% $15,868,870
===========
SUMMARY OF % OF SUMMARY OF % OF
INVESTMENTS NET INVESTMENTS NET
BY INDUSTRY ASSETS BY INDUSTRY ASSETS
- ----------- -------- ----------- --------
Diversified 24.2% Shopping Centers 3.7%
Forest Products 5.8% Storage 2.4%
Healthcare 5.5% Other 6.0%
Hotels 6.4% Short-Term
Industrial 5.6% Obligation 52.7%
Office 16.8% Other assets less
Regional Malls 12.0% liabilities (49.7)%
-----
Residential 8.6% 100.0%
=====
- ----------
(a) Unless otherwise indicated, securities owned are shares of common stock.
See Notes to Financial Statements
7
WORLDWIDE REAL ESTATE FUND
- -----------------------------------------------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2003 (UNAUDITED)
ASSETS:
Investments, at value (including repurchase agreement of $8,368,000) (cost $22,162,677) (Note 1) ....... $23,761,644
Cash and foreign currency .............................................................................. 7,668
Receivables:
Securities sold ...................................................................................... 330,069
Capital shares sold .................................................................................. 84,718
Dividends and interest ............................................................................... 84,386
-----------
Total assets ..................................................................................... 24,268,485
-----------
LIABILITIES:
Payables:
Capital shares redeemed .............................................................................. 6,940,759
Securities purchased ................................................................................. 1,423,774
Due to Adviser ....................................................................................... 12,671
Accounts payable ..................................................................................... 22,411
-----------
Total liabilities ................................................................................ 8,399,615
-----------
Net assets ............................................................................................. $15,868,870
===========
Shares outstanding ..................................................................................... 1,505,215
===========
Net asset value, redemption and offering price per share ............................................... $10.54
===========
Net assets consist of:
Aggregate paid in capital ............................................................................ $15,453,820
Unrealized appreciation of investments and foreign currency transactions ............................. 1,598,880
Undistributed net investment income .................................................................. 209,479
Accumulated realized loss ............................................................................ (1,393,309)
-----------
$15,868,870
===========
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2003 (UNAUDITED)
INCOME (NOTE 1):
Dividends (net of foreign taxes withheld of $7,568) .................................................... $ 362,751
Interest ............................................................................................... 19,321
-----------
Total income ..................................................................................... 382,072
EXPENSES:
Management (Note 2) ....................................................................... $ 85,911
Administration (Note 2) ................................................................... 1,136
Professional .............................................................................. 17,218
Reports to shareholders ................................................................... 9,412
Custodian ................................................................................. 5,068
Transfer agency ........................................................................... 3,585
Trustees' fees and expenses ............................................................... 2,572
Other ..................................................................................... 1,810
--------
Total Expenses ......................................................................... 126,712
Expenses assumed by the Adviser (Note 2) .................................................. (3,791)
--------
Net Expenses ........................................................................................ 122,921
-----------
Net investment income .................................................................................. 259,151
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 3):
Realized loss from security transactions ............................................................... (246,160)
Realized loss from foreign currency transactions ....................................................... (1,160)
Change in unrealized depreciation of foreign denominated assets and liabilities ........................ (180)
Change in unrealized appreciation of investments ....................................................... 1,425,039
-----------
Net realized and unrealized gain (loss) on investments and foreign currency transactions ............... 1,177,539
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................................................... $ 1,436,690
===========
See Notes to Financial Statements
8
WORLDWIDE REAL ESTATE FUND
- ------------------------------------------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS ENDED
JUNE 30, YEAR ENDED
2003 DECEMBER 31,
(UNAUDITED) 2002
--------------- -----------
INCREASE IN NET ASSETS:
OPERATIONS:
Net investment income ............................................................... $ 259,151 $ 520,493
Realized loss from security transactions ............................................ (246,160) (664,510)
Realized loss from foreign currency transactions .................................... (1,160) (22,960)
Change in unrealized depreciation of foreign denominated assets and liabilities ..... (180) (2,363)
Change in unrealized appreciation / depreciation of investments ..................... 1,425,039 (623,744)
------------ ------------
Net increase (decrease) in net assets resulting from operations ................... 1,436,690 (793,084)
------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income ............................................................... (336,311) (378,552)
------------ ------------
CAPITAL SHARE TRANSACTIONS*:
Proceeds from sales of shares ....................................................... 106,558,151 186,809,433
Reinvestment of dividends ........................................................... 336,311 378,552
Cost of shares reacquired ........................................................... (107,434,955) (184,654,715)
------------ ------------
Net increase (decrease) in net assets resulting from capital share transactions ... (540,493) 2,533,270
------------ ------------
Total increase in net assets ...................................................... 559,886 1,361,634
NET ASSETS:
Beginning of period .................................................................... 15,308,984 13,947,350
------------ ------------
End of period (including undistributed net investment income of
$209,479 and $287,799, respectively) ................................................. $ 15,868,870 $ 15,308,984
============ ============
* SHARES OF BENEFICIAL INTEREST ISSUED AND REDEEMED (UNLIMITED NUMBER OF $.001
PAR VALUE SHARES AUTHORIZED)
Shares sold ......................................................................... 10,714,575 18,076,042
Reinvestment of dividends ........................................................... 35,106 35,612
Shares reacquired ................................................................... (10,765,022) (17,874,125)
------------ ------------
Net increase (decrease) ............................................................. (15,341) 237,529
============ ============
See Notes to Financial Statements
9
WORLDWIDE REAL ESTATE FUND
- ----------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
2003 ------------------------------------------------------------------
(UNAUDITED) 2002 2001 2000 1999 1998
---------------- -------- --------- --------- --------- --------
Net Asset Value,
Beginning of Period ............... $10.07 $10.87 $10.62 $ 9.15 $ 9.54 $11.96
------ ------ ------ ------ ------ ------
Income From Investment Operations:
Net Investment Income ............. 0.17 0.38 0.35 0.34 0.25 0.22
Net Realized and Unrealized
Gain (Loss) on Investments and
Foreign Currency Transactions .... 0.52 (0.85) 0.20 1.33 (0.44) (1.45)
------ ------ ------ ------ ------ ------
Total From Investment Operations .... 0.69 (0.47) 0.55 1.67 (0.19) (1.23)
------ ------ ------ ------ ------ ------
Less Dividends and Distributions:
Dividends from Net Investment
Income ........................... (0.22) (0.33) (0.30) (0.20) (0.20) (0.19)
Distributions from Realized
Capital Gains .................... -- -- -- -- -- (1.00)
------ ------ ------ ------ ------ ------
Total Dividends and Distributions ... (0.22) (0.33) (0.30) (0.20) (0.20) (1.19)
------ ------ ------ ------ ------ ------
Net Asset Value, End of Period ...... $10.54 $10.07 $10.87 $10.62 $ 9.15 $ 9.54
====== ====== ====== ====== ====== ======
Total Return (a) .................... 7.07% (4.48)% 5.34% 18.71% (2.01)% (11.35)%
======================================================================================================================
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Period (000) ..... $15,869 $15,309 $13,947 $6,875 $3,166 $1,906
Ratio of Gross Expenses to Average
Net Assets ........................ 1.47% (d) 1.48% 1.62% 2.27% 3.23% 5.32%
Ratio of Net Expenses to Average
Net Assets (c) .................... 1.43%(d) 1.46%(b) 1.50%(b) 1.45%(b) 1.44% 0.89%
Ratio of Net Investment Income to
Average Net Assets (c) ............ 3.02%(d) 3.04% 4.17% 4.21% 3.33% 3.33%
Portfolio Turnover Rate ............. 14% 139% 74% 233% 172% 107%
- ----------
(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) Net effect of expense waivers, brokerage arrangement and custodian fee
arrangement to average net assets for the perioeds ended June 30,2003,
December 31, 2001, December 31, 2000 and December 31, 1999, was 0.04%,
0.07%, 0.12% and 0.79%, respectively.
(d) Annualized.
See Notes to Financial Statements
10
WORLDWIDE REAL ESTATE FUND
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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 Co. Act of 1940, as amended. The following is a
summary of significant accounting policies consistently followed by the
Worldwide Real Estate 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. 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.
NOTE 2--MANAGEMENT AGREEMENT--Van Eck Associates Corp. (the "Adviser") earns
fees for investment management and advisory services provided to the Fund. The
Adviser agreed to assume expenses exceeding 1.50% of average daily net assets
except interest, taxes, brokerage commission and extraordinary expenses for the
six months ended June 30, 2003. The fee is based on an annual rate of 1% of the
average daily net assets. For the six months ended June 30, 2003 the Adviser
assumed expenses in the amount of $3,791. Certain of the officers and trustees
of the Trust are officers, directors or stockholders of the Adviser and Van Eck
Securities Corp. 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 $1,996,387 and $2,487,030, 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 $22,162,677. As of June 30, 2003, net
unrealized appreciation for federal income tax purposes aggregated $1,598,967 of
which $2,107,833 related to appreciated securities and $508,866 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.
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 or sell forward
foreign currency contracts to settle purchases and sales of foreign denominated
securities. The Fund may incur additional risk from investments in forward
foreign currency contracts if the counterparty is unable to fulfill its
obligations or there are unanticipated movements of the foreign currency
relative to the U.S. dollar. Realized and unrealized gains and losses from
forward foreign currency contracts are included in realized and unrealized gains
and losses from foreign currency transactions. At June 30, 2003, the Fund had no
forward foreign currency contracts outstanding.
11
WORLDWIDE REAL ESTATE FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
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 asset
and corresponding liability of the Fund's portion of the plan is $4,686.
NOTE 9--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 ending June 30, 2003, the Fund did not borrow under the Facility.
NOTE 10--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 repurchase agreement, 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.
12
[LOGO] VAN ECK GLOBAL
Investment Adviser: Van Eck Associates Corporation
Distributor: Van Eck Securities Corporation
99 Park Avenue, New York, NY 10016 www.vaneck.com
[GRAPHIC}
Retire on Your Terms(SM)
Variable Annuities
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 Real Estate 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 Real Estate 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 REAL ESTATE 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
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