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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-05083
WORLDWIDE INSURANCE TRUST - WORLDWIDE BOND 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, 2004
Date of reporting period: JUNE 30, 2004
Item 1. Report to Shareholders
VAN ECK GLOBAL
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Worldwide Insurance Trust
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SEMI-ANNUAL REPORT
JUNE 30, 2004
discipline
WORLDWIDE BOND FUND
allocation
diversity
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, 2004,
and are subject to change.
WORLDWIDE BOND FUND
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Dear Shareholder:
For the year-to-date period ending June 30, 2004, the Van Eck Worldwide Bond
Fund declined 2.07%, slightly underperforming the benchmark Citigroup World
Government Bond Index*, which returned -1.53% in U.S. dollar terms and 0.57% in
local currency terms over the same time period. Thus far, 2004 has been
challenging for global bond investors as the U.S. dollar strengthened relative
to most major currencies and bond yields around the globe ended the first six
months higher than where they began the year.
BOND MARKET REVIEW
During the first quarter, global bond yields drifted lower following the lead of
U.S. interest rates. A weak labor market in the first quarter led investors to
believe that there would be no change in monetary policy by the Federal Reserve
until after the fall election. This view changed quickly following strong
employment reports for March and April. In the second quarter, global bond
yields quickly began to rise (and, conversely, bond prices fell) as investors
became concerned that rising commodity prices, a tightening labor market, and
strong economic activity may result in more inflationary pressure than the Fed
had anticipated. This led to the belief that the Fed would have to be much more
aggressive in the tightening of monetary policy than had been previously
discounted by investors.
The U.S. economy grew at an annualized rate of 4.5% in the first quarter and
growth for the second quarter is expected to be approximately 3.0%. While the
unemployment rate has been relatively flat (ending the first half at 5.6%), the
fact that in the three months ending May the non-farm payroll reports added more
than 300,000 jobs on average per month drew attention to the tightening labor
market. This triggered a dramatic rise in U.S. government bond yields in the
second quarter. Yields on U.S. Treasury notes with a maturity of two years rose
from a low of 1.46% in the later part of March to a yield of 2.68% on June 30.
This steep rise in yields across the U.S. Treasury curve led the U.S. bond
market to deliver the worst second quarter performance among those sectors
included in the Citigroup World Government Bond Market Index. (The Citigroup
U.S. Government Bond Index** fell 3.12% during the second quarter, and declined
0.17% for the six months ending June 30.) The U.S. dollar strengthened versus
most major currencies on the back of strong economic activity and the improving
labor market in the United States. The Fund was slightly overweight U.S.
duration and underweight U.S. currency exposure versus the benchmark Index,
which was the main factor contributing to the Fund's relative underperformance.
The countries making up the Eurozone continued to suffer from slower relative
growth during the first half of 2004. Structural reforms, labor market
uncertainties, and fiscal policy questions were all factors that concerned
member countries during the period. With the annualized growth rate hovering
around 2% for the first two quarters of this year, the ECB (European Central
Bank) appears set to maintain its current monetary policy stance and leave their
repo rate at 2% for the balance of the year. The European Government Bond Index
fell 1.66% in U.S. dollar terms for the first half and gained 1.95% in local
currency terms. The Fund was underweight duration and neutral currency exposure
relative to the Index for the Eurozone.
The Fund remained slightly overweight the UK bond market during the first half
of this year. The Bank of England tightened monetary policy three times during
the period, as the UK economy remained robust, the labor market tight, and the
housing market strong. The British Pound Sterling appreciated against both the
U.S. dollar and the euro, which in turn meant that UK bonds were one of the best
performing markets in the Citigroup World Government Bond Index during the first
half of 2004. The UK government bond market gained 1.74% in U.S. dollar terms,
or 0.43% in local currency terms. The Fund ended June with a 6.4% weighting in
the UK bond market.
In addition, the Fund held positions in two other European countries outside of
the Eurozone, Sweden and Norway. The Scandinavian currencies were weak relative
to the euro and this led to the
1
WORLDWIDE BOND FUND
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underperformance of these markets relative to other European bond markets. While
we were underweight duration versus the Index in these markets, we were
overweight currency exposure and, as a result, these positions led to some
relative underperformance by the Fund. The Swedish bond market returned -2.03%
in U.S. dollar terms and the Norwegian bond market had a -1.81% U.S. dollar
return for the first half.
Japanese economic growth, buoyed by business investment spending, continues to
exceed expectations and appears to be spilling over to consumer spending as
well. The increase in growth is driving the investor sentiment that Japan may
finally be exiting the deflationary spiral it has been battling over the last
decade. This led to a rise in Japanese government bond yields across the curve.
We continue to avoid the Japanese bond market (0% of Fund net assets at June 30,
2004) as we feel there are more attractive opportunities elsewhere. The Japanese
Bond Market Index returned -2.67% in U.S. dollar terms and -0.90% in local
currency terms, making it one of the poorer performing global bond markets for
the first six months of the year.
We reduced our exposure to the dollar bloc bond markets of Australia and Canada
during the period, while maintaining our exposure to New Zealand. These
economies have benefited greatly from their link to commodity markets and a fast
growing Chinese economy. During the first half of this year, China took steps to
slow its economy in order to reduce potential overheating. These initiatives led
to weakness in commodities as investors questioned China's ability to manage its
economic growth. This weakness also spread to the commodity-related currencies
and led to currency weakness relative to the U.S. dollar. At the end of June,
the Fund's exposure to New Zealand was 7.6% of assets, Australian bond market
exposure was 0% and Canadian bond exposure was 4.5%. For the year-to-date
period, U.S. dollar returns of their government bond markets were -2.20% for New
Zealand, -5.67% for Australia, and -2.59% for Canada.
The Fund continued to hold two emerging markets bond positions throughout the
first half. The Brazilian bond holding (3.0% of Fund net assets) was weak as
fiscal, political, and inflationary concerns combined to lead to an increase in
sovereign risk premium for Brazil. The Mexican bond position, in the telephone
provider Telmex (Telefonos de Mexico, 3.0% of Fund net assets), added to
performance with a positive return for the first half of 2004.
Investors should be aware that the Fund is subject to certain risks associated
with international bond markets. Foreign investments may be subject to
volatility from political or economic factors or from changing currency values.
The Fund's share value will tend to fall when interest rates go up and to rise
when interest rates fall. The longer the maturity or duration of the debt
security, the higher the risk of price fluctuations due to changes in interest
rates. Bonds rated below investment grade are viewed as speculative because
their issuers are more vulnerable to financial setbacks and economic pressures
than issuers with higher ratings.
We continue to believe that an allocation to global bond markets can provide
diversification benefits to shareholders. We appreciate your participation in
the Van Eck Worldwide Bond Fund and look forward to helping you meet your
investment goals in the future.
[GRAPHIC OMITTED] [GRAPHIC OMITTED]
/s/ Charles T. Cameron /s/ Gregory F. Krenzer
CHARLES T. CAMERON GREGORY F. KRENZER
MANAGEMENT TEAM MEMBER MANAGEMENT TEAM MEMBER
July 9, 2004
2
WORLDWIDE BOND FUND
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PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS; CURRENT PERFORMANCE MAY BE
LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. Performance information
reflects waivers of expenses and/or fees. Investment return and value of shares
of the Fund will fluctuate so that an investor's 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. Performance information
current to the most recent month end is available by calling 1-800-826-2333.
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 insurance and tax benefits to the beneficial owners of the Fund. Your
insurance or annuity 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.
All indices listed are unmanaged indices and 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 Government Bond Index is a market capitalization-weighted
benchmark that tracks the performance of approximately 20 world government bond
markets.
**All country and regional bond market returns are Citigroup Government Bond
Indices.
3
WORLDWIDE BOND FUND
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GEOGRAPHICAL WEIGHTINGS*
AS OF JUNE 30, 2004 (UNAUDITED)
(GRAPHIC OMITTED)
Germany 21.4%
United States 23.6%
Other Assets Less Liabilities 2.7%
New Zealand 7.6%
Sweden 3.8%
United Kingdom 6.4%
Italy 6.1%
Canada 4.5%
Spain 5.1%
France 5.1%
Norway 4.5%
Mexico 3.0%
Ireland 3.2%
Brazil 3.0%
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*Percentage of net assets.
4
WORLDWIDE BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 2004 (UNAUDITED)
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PRINCIPAL VALUE
COUNTRY AMOUNT BONDS (NOTE 1)
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BONDS AND NOTES:
BRAZIL: 3.0%
Republic of Brazil Bond
USD 2,000,000 11.25% due 7/26/07 $ 2,165,000
------------
CANADA: 4.5%
Canadian Government Bonds
CAD 4,000,000 6.00% due 6/01/11 3,224,895
------------
FRANCE: 5.1%
French Government Bond
EUR 3,000,000 3.75% due 1/12/07 3,720,082
------------
GERMANY: 21.4%
Bundesrepublik Deutschland
Bonds
EUR 3,579,043 7.375% due 1/03/05 4,463,152
2,709,846 6.00% due 1/04/07 3,532,675
3,000,000 4.75% due 7/04/28* 3,575,171
3,000,000 4.50% due 7/04/09 3,795,676
------------
15,366,674
------------
IRELAND: 3.2%
Irish Government Bond
EUR 1,714,146 8.00% due 8/18/06 2,306,269
------------
ITALY: 6.1%
Italian Government Bond
EUR 3,500,000 4.50% due 3/01/07 4,418,659
------------
MEXICO: 3.0%
Telefonos de Mexico S.A. Bond
USD 2,000,000 8.25% due 1/26/06 2,148,144
------------
NEW ZEALAND: 7.6%
International Bank for
Reconstruction &
Development Bond
NZD 4,000,000 7.50% due 11/30/05 2,566,883
New Zealand Government Bond
4,500,000 6.50% due 4/15/13 2,879,147
------------
5,446,030
------------
NORWAY: 4.5%
Norwegian Government Bond
NOK 22,000,000 5.75% due 11/30/04 3,216,058
------------
SPAIN: 5.1%
Spanish Government Bond
EUR 3,000,000 4.00% due 1/31/10 $ 3,688,182
------------
SWEDEN: 3.8%
Swedish Government Bond
SEK 20,000,000 6.00% due 2/09/05 2,712,706
------------
UNITED KINGDOM: 6.4%
Great Britain Government Bond
GBP 2,400,000 7.50% due 12/07/06 4,607,017
------------
UNITED STATES: 23.6%
Core Investment Grade Trust
USD 1,000,000 4.727% due 11/30/07 1,021,985
U.S. Treasury Notes
3,000,000 6.625% due 2/15/27* 3,481,995
1,000,000 6.50% due 8/15/05* 1,048,204
5,000,000 5.50% due 5/15/09* 5,385,940
3,000,000 4.375% due 5/15/07* 3,101,721
U.S. Treasury Bonds
3,000,000 5.25% due 2/15/29* 2,942,346
------------
16,982,191
------------
TOTAL BONDS AND NOTES: 97.3%
(Cost: $59,509,329) 70,001,907
OTHER ASSETS LESS LIABILITIES: 2.7% 1,970,986
------------
NET ASSETS: 100% $ 71,972,893
============
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* These securities are segregated as collateral for forward foreign currency
contracts.
See Notes to Financial Statements
5
WORLDWIDE BOND FUND
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STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2004 (UNAUDITED)
ASSETS:
Investments, at value (cost $59,509,329) (Note 1) ........................................................ $ 70,001,908
Cash ..................................................................................................... 269,054
Receivables:
Interest ............................................................................................. 1,565,668
Capital shares sold .................................................................................. 526,961
Unrealized appreciation on forward currency contracts (Note 5) ....................................... 258,641
Prepaid expense .......................................................................................... 48,072
------------
Total assets ............................................................................................. 72,670,304
------------
LIABILITIES:
Payables:
Capital shares redeemed .............................................................................. 588,529
Due to Adviser ....................................................................................... 61,206
Accounts payable ..................................................................................... 47,676
------------
Total liabilities ........................................................................................ 697,411
------------
Net assets ............................................................................................... $ 71,972,893
============
INITIAL CLASS SHARES:
Net Assets ............................................................................................... $ 68,373,707
============
Shares Outstanding ....................................................................................... 5,719,144
============
Net asset value, redemption price and offering price per share ........................................... $11.96
============
CLASS R1 SHARES:
Net Assets ............................................................................................... $ 3,599,186
============
Shares Outstanding ....................................................................................... 301,059
============
Net asset value, redemption price and offering price per share ........................................... $11.96
============
Net assets consist of:
Aggregate paid in capital ............................................................................ $ 63,075,367
Unrealized appreciation of investments, forward foreign currency contracts and
foreign currency transactions ...................................................................... 10,780,778
Accumulated net investment income .................................................................... 3,979,358
Accumulated realized loss ............................................................................ (5,862,610)
------------
$ 71,972,893
============
See Notes to Financial Statements
6
WORLDWIDE BOND FUND
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STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2004 (UNAUDITED)
INCOME:
Interest income (Note 1) ................................................................. $ 2,079,708
-----------
EXPENSES:
Management (Note 2) ...................................................................... $ 393,702
Administration (Note 2) .................................................................. 1,224
Professional fees ........................................................................ 26,435
Custodian ................................................................................ 12,990
Reports to shareholders .................................................................. 12,033
Trustees' fees and expenses .............................................................. 7,891
Transfer agent - Initial Class Shares .................................................... 5,911
Transfer agent - Class R1 Shares ......................................................... 1,251
Interest (Note 8) ........................................................................ 1,254
Other .................................................................................... 18,466
-----------
Total expenses ........................................................................... 481,157
-----------
Net investment income .................................................................... 1,598,551
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 3):
Realized gain from security transactions ................................................. 169,760
Realized gain from foreign currency transactions ......................................... 1,162,600
Change in unrealized appreciation of investments ......................................... (4,775,057)
Change in unrealized appreciation of forward foreign currency contracts and
foreign currency transactions ........................................................ 92,404
-----------
Net realized and unrealized loss on investments, forward foreign currency contracts
and foreign currency transactions .................................................... (3,350,293)
-----------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ..................................... $(1,751,742)
===========
See Notes to Financial Statements
7
WORLDWIDE BOND FUND
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STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS ENDED
JUNE 30, YEAR ENDED
2004 DECEMBER 31,
(UNAUDITED) 2003
----------------- -------------
INCREASE IN NET ASSETS FROM:
OPERATIONS:
Net investment income ............................................................... $ 1,598,551 $ 3,510,681
Realized gain from security transactions ............................................ 169,760 617,242
Realized gain from foreign currency transactions .................................... 1,162,600 4,291,711
Change in unrealized appreciation of investments .................................... (4,775,057) 8,500,018
Change in unrealized appreciation of forward foreign currency contracts and
foreign currency transactions ..................................................... 92,404 (165,947)
------------- -------------
Net increase (decrease) in net assets resulting from operations ..................... (1,751,742) 16,753,705
------------- -------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income
Initial Class Shares .............................................................. (6,965,610) (1,748,846)
Class R1 Shares ................................................................... -- --
------------- -------------
(6,965,610) (1,748,846)
------------- -------------
CAPITAL SHARE TRANSACTIONS*:
Proceeds from sales of shares
Initial Class Shares .............................................................. 6,263,581 423,676,520
Class R1 Shares ................................................................... 4,374,081 --
------------- -------------
10,637,662 423,676,520
------------- -------------
Reinvestment of dividends
Initial Class Shares .............................................................. 6,965,610 1,748,846
Class R1 Shares ................................................................... -- --
------------- -------------
6,965,610 1,748,846
------------- -------------
Cost of shares reacquired
Initial Class Shares .............................................................. (21,490,666) (450,085,254)
Class R1 Shares ................................................................... (807,558) --
Redemption fees ................................................................... 55 --
------------- -------------
(22,298,169) (450,085,254)
------------- -------------
Net decrease in net assets resulting from capital share transactions ................ (4,694,897) (24,659,888)
------------- -------------
Total decrease in net assets ........................................................ (13,412,249) (9,655,029)
NET ASSETS:
Beginning of period ................................................................. 85,385,142 95,040,171
------------- -------------
End of period (including accumulated net investment income of $3,979,358
and $6,889,374, respectively) ..................................................... $ 71,972,893 $ 85,385,142
============= =============
*SHARES OF BENEFICIAL INTEREST ISSUED AND REACQUIRED (UNLIMITED NUMBER OF $.001
PAR VALUE SHARES AUTHORIZED)
Initial Class Shares:
Shares sold ....................................................................... 501,254 35,318,888
Reinvestment of dividends ......................................................... 569,086 152,074
Shares reacquired ................................................................. (1,765,551) (37,348,467)
------------- -------------
Net decrease ...................................................................... (695,211) (1,877,505)
============= =============
Class R1 Shares:+
Shares sold ....................................................................... 368,923
Shares reacquired ................................................................. (67,864)
-------------
Net increase ...................................................................... 301,059
=============
- ----------
+ Inception date of Class R1 shares May 1, 2004
See Notes to Financial Statements
8
WORLDWIDE BOND FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
INITIAL CLASS SHARES CLASS R1 SHARES
----------------------------------------------------------------------- ---------------
FOR THE PERIOD
SIX MONTHS MAY 1, 2004(d)
ENDED YEAR ENDED DECEMBER 31, THROUGH
JUNE 30, 2004 ----------------------------- JUNE 20, 2004
(UNAUDITED) 2003 2002 2001 2000 1999 (UNAUDITED)
------------- ------- ------- ------- ------- ------- --------------
Net Asset Value, Beginning of Period ....... $ 13.31 $ 11.46 $ 9.42 $ 10.37 $ 10.69 $ 12.28 $11.82
------- ------- ------- ------- ------- ------- ------
Income From Investment Operations:
Net Investment Income ................... 0.31 0.53 0.35 0.57 0.52 0.61 0.03
Net Realized and Unrealized Gain (Loss)
on Investments and Foreign Currency
Transactions ............................ (0.56) 1.52 1.69 (1.08) (0.34) (1.52) 0.11
------- ------- ------- ------- ------- ------- ------
Total from Investment Operations ........... (0.25) 2.05 2.04 (0.51) 0.18 (0.91) 0.14
------- ------- ------- ------- ------- ------- ------
Less Dividends and Distributions:
Dividends from Net Investment Income .... (1.10) (0.20) -- (0.44) (0.50) (0.47) --
Distributions from Realized Capital Gains -- -- -- -- -- (0.21) --
------- ------- ------- ------- ------- ------- ------
Total Dividends and Distributions .......... (1.10) (0.20) -- (0.44) (0.50) (0.68) --
------- ------- ------- ------- ------- ------- ------
Redemption fees ............................ --(e) -- -- -- -- -- --(e)
------- ------- ------- ------- ------- ------- ------
Net Asset Value, End of Period ............. $ 11.96 $ 13.31 $ 11.46 $ 9.42 $ 10.37 $ 10.69 $11.96
======= ======= ======= ======= ======= ======= ======
Total Return (a) ........................... (2.07)% 18.16% 21.66% (5.11)% 1.88% (7.82)% 1.18%
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Period (000) ............ $68,374 $85,385 $95,040 $52,127 $74,083 $84,875 $3,599
Ratio of Gross Expenses to Average
Net Assets .............................. 1.22%(c) 1.21 1.24% 1.24% 1.21% 1.22% 1.81%(c)
Ratio of Net Expenses to Average
Net Assets .............................. 1.21%(b)(c) 1.19%(b) 1.21%(b) 1.19%(b) 1.15%(b) 1.22% 1.80%(b)(c)
Ratio of Net Investment Income to Average
Net Assets .............................. 4.05%(c) 3.58% 4.06% 4.62% 5.14% 4.92% 3.95%(c)
Portfolio Turnover Rate .................... 0% 6% 18% 22% 19% 47% 0%
- --------
(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
(d) Inception date of Class R1 shares
(e) Amount represents less than $0.01 per share
See Notes to Financial Statements
9
WORLDWIDE BOND 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 Fund
offers two classes of shares: shares that have been continuously offered since
the inception of the Fund, the Initial Class and Class R1 shares that became
available for purchase on May 1, 2004. The two classes are identical except
Class R1 shares are, under certain circumstances subject to a redemption fee on
redemptions within 60 days. The following is a summary of significant accounting
policies consistently followed by the Worldwide Bond Fund (the "Fund"), a
non-diversified series 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 affect the reported
amounts in the financial statements. Actual results could differ from those
estimates.
A. SECURITY VALUATION--Securities traded on national exchanges or 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. As of June 23, 2003, the
portfolio began pricing securities traded on the NASDAQ stock market using the
NASDAQ official closing price. 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. Short-term obligations purchased with sixty days or less to maturity
are valued at amortized cost, which with accrued interest approximates 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. DIVIDEND AND DISTRIBUTIONS--Dividend income and distributions to shareholders
are recorded on the ex-dividend date.
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. Realized gains and losses are calculated based on the
identified cost basis. Interest income, including amortization on premiums and
discounts, is accrued as earned.
NOTE 2--MANAGEMENT AGREEMENT--Van Eck Associates Corporation (the "Adviser")
earned fees for investment management and advisory services provided to the
Fund. The fee is based on an annual rate of 1% on the first $500 million of
average daily net assets, 0.90 of 1% on the next $250 million and 0.70 of 1% on
the excess over $750 million. 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 proceeds from sales of securities, other than
U.S. government securities and short-term obligations, aggregated $0 and
$8,421,906 respectively, for the six months ended June 30, 2004.
NOTE 4--INCOME TAXES--For federal income tax purposes, the identified cost of
investments owned, other than forward foreign exchange contracts, at June 30,
2004 was $59,509,329. At June 30, 2004, net unrealized appreciation for federal
income tax purposes aggregated $10,492,579 all of which $10,585,726 related to
appreciated securities and $93,147 related to depreciated securities.
Because federal income tax regulations differ from accounting principals
generally accepted in the United States of America, income and capital gains
distributions determined in accordance with tax regulations may differ from net
investment income and realized gains recognized for financial reporting
purposes. Accordingly, the character of distributions and composition of net
assets for tax purposes differs from those reflected in the accompanying
financial statements.
The Fund intends to retain realized capital gains that may be offset against
available capital loss carryforwards for federal income tax purpose.
At December 31, 2003, the Fund had a capital loss carryforward of $4,727,394
available, $1,444,058 expiring December 31, 2008; $2,541,134 expiring December
31, 2009; and $742,202 expiring December 31, 2010.
NOTE 5--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. At June 30, 2004, the Fund had the following
outstanding forward foreign currency contract:
10
WORLDWIDE BOND FUND
- --------------------------------------------------------------------------------
VALUE AT
SETTLEMENT CURRENT UNREALIZED
CONTRACTS DATE VALUE APPRECIATION
- --------- ----------- ----------- ------------
FORWARD FOREIGN CURRENCY BUY CONTRACT:
JPY 1,400,000,000
EXPIRING 9/14/04 $12,646,793 $12,905,434 $258,641
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.
NOTE 6--CONCENTRATION OF RISK--The Fund invests in foreign securities.
Investments in foreign securities may involve a greater degree of risk than
investments in domestic securities due to political, economic or social
instability. Foreign investments may also be subject to foreign taxes and
settlement delays. Since the Fund may have significant investments in foreign
debt securities it may be subject to greater credit and interest risks and
greater currency fluctuations than portfolios with significant investments in
domestic debt securities. The aggregate shareholder accounts of a single
insurance company own approximately 84% of the Initial Class shares and
approximately 99% of the Class R1 shares.
NOTE 7--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. 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, 2004, the net value of the assets
and corresponding liability of the Fund's portion of the Plan is $77,339.
NOTE 8--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, 2004, the Fund borrowed an average daily amount of
$156,096 at a weighted average interest rate of 1.65% under the Facility. At
June 30, 2004, there were no outstanding borrowings under the Facility.
NOTE 9--REPURCHASE AGREEMENT--Collateral for a 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.
NOTE 10--REGULATORY MATTERS--In connection with their investigations of
practices identified as "market timing" and "late trading" of mutual fund
shares, the Office of the New York State Attorney General and the United States
Securities and Exchange Commission have requested and received information from
the Adviser. The investigations are ongoing. At the present time, the Adviser is
unable to estimate the impact, if any, that the outcome of these investigations
may have on the Fund's results of operations or financial condition.
The Adviser has received a so-called "Wells Notice" from the Securities and
Exchange Commission ("SEC") in connection with the SEC's investigation of
market-timing activities in the securities industry as described in the Funds'
prospectus and prospectus supplements. This Wells Notice informed the Adviser
that the SEC staff is considering recommending that the SEC bring a civil or
administrative action alleging violations of U.S. securities laws against the
Adviser and two of its senior officers. Under SEC procedures, the Adviser has an
opportunity to respond to the SEC staff before the staff makes a formal
recommendation. The Adviser is currently considering whether to provide such a
response, while continuing to cooperate fully with the SEC investigation.
Costs associated with the investigations have been and will continue to be paid
by the Adviser.
11
[VAN ECK GLOBAL LOGO]
Investment Adviser: Van Eck Associates Corporation [GRAPHIC OMITTED]
Distributor: Van Eck Securities Corporation
99 Park Avenue, New York, NY 10016 www.vaneck.com
This report must be preceded or accompanied by a Van Eck Worldwide Insurance
Trust 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. Investors should consider the investment objectives,
risks and charges and expenses of the Fund. Please read the prospectus carefully
before you invest. Additional information about the Fund's Board of
Trustees/Officers and a description of the policies and procedures the Fund uses
to determine how to vote proxies relating to portfolio securities are provided
in the Statement of Additional Information. The Statement of Additional
Information and information regarding how the Fund voted proxies relating to
portfolio securities during the most recent 12 month period ending June 30 is
available, without charge, by calling 1-800-826-2333, or by visiting
www.vaneck.com, or on the Securities and Exchange Commission's website at
http://www.sec.gov.
Item 2. Code of Ethics
Not Applicable
Item 3. Audit Committee Financial Expert
Not Applicable
Item 4. Principal Accountant Fees and Services
Not Applicable
Item 5. Audit Committee of Listed Registrants
Not applicable.
Item 6. Schedule of Investments
Not Applicable
Item 7. Disclosure of Proxy Voting Policies and Procedures For Closed-End
Management Investment Companies
Not applicable.
Item 8. Purchases of Equity Securities by Closed-End Management Investment
Companies and Affiliated Purchasers
Not Applicable
Item 9. Submission of Matters to a Vote of Security Holders
Not applicable
Item 10. Controls and Procedures.
(a) The Chief Executive Officer and the Chief Financial Officer have concluded
that the Worldwide Bond Fund disclosure controls and procedures (as defined
in Rule 30a-3(c) under the Investment Company Act) provide reasonable
assuances that material information relating to the Worldwide Bond 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) For the period ending June 20, 2004, the Chief Executive Officer and the
Chief Financial Officer are aware of no significant changes in the
registrant's internal controls over financial reporting that has materially
affected or is reasonably likely to materially affect internal controls
over financial reporting.
Item 11. 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 BOND FUND
By (Signature and Title) /s/ Bruce J. Smith, VP & Treasurer
----------------------------------
Date August 27, 2004
---------------
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/ Keith J. Carlson, CEO
--------------------------
Date August 27, 2004
---------------
By (Signature and Title) /s/ Bruce J. Smith, CFO
---------------------------
Date August 27, 2004
---------------