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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 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, 2004
Date of reporting period: JUNE 30, 2004
Item 1. Report to Shareholders
VAN ECK GLOBAL
Worldwide Insurance Trust
SEMI-ANNUAL REPORT
JUNE 30, 2004
WORLDWIDE REAL ESTATE FUND
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 REAL ESTATE FUND
- --------------------------------------------------------------------------------
Dear Shareholder:
The Van Eck Worldwide Real Estate Fund delivered a total return of 12.04% for
the six months ended June 30, 2004, handily outperforming the benchmark
Citigroup World Property Index's(1) 8.13% return for the same period. In
addition, real estate equities and REITs (Real Estate Investment Trusts)
outpaced the 3.44% return for the broader stock market during the period (as
measured by the S&P 500 Index).(2) Investor appreciation for the potential
current income offered by real estate investments continues to attract a high
level of demand for the asset class. In addition, both individual and
institutional investors continue to seek asset classes with low correlation to
the broader stock market.
While the Fund's assets continue to be heavily concentrated in domestic real
estate markets, the global component of the Fund-- particularly the exposure to
Japanese and UK real estate equity markets--proved to be the most profitable
during the period. The Fund significantly outperformed the average return for
its peer group*, which is mostly comprised of funds limited to real estate
investments within the U.S. The Morgan Stanley REIT Index,(3) another measure of
U.S.-only real estate investments, gained 5.19% during the period.
*According to Morningstar, Inc., a provider of independent investment research,
the average return among real estate funds within variable annuity products was
5.88%.
MARKET & FUND REVIEW
Disciplined and profitable property investments have rewarded real estate
companies worldwide with a very positive effect on growth in both net asset
value and earnings. Additionally, years of an historically low interest rate
environment enabled many REITs to improve their balance sheets. As a result,
cash flow growth has begun to accelerate, which ultimately drove performance
within the real estate sector during the period.
Retail malls and outlets continued to provide strong performance, with America's
love for high-end factory-outlet style shopping centers sparking similar trends
overseas. The hotel sector showed marked improvement as occupancy rates for both
tourism and business travel improved along with the domestic and global
economies. Apartments and office space, however, did not do as well. Reports of
strong job growth, which is the greatest determinant of demand for living and
working space and usually benefits these sectors, have not yet had the desired
effect on very high vacancy rates. However, the recovering economy has slowly
helped to increase demand and rents saw some stabilization as office and
apartment companies observed improved leasing activity.
Overall, REITs performed very well throughout most of the period. They did not,
however, react well to the unexpectedly strong labor reports released on April
2, 2004. The data reported a March increase in U.S. non-farm payrolls that was
well in excess of consensus expectations and ultimately led to elevated concerns
that the Federal Reserve would raise interest rates. Along with most bond and
stock markets, REITs had a decidedly negative response. The real estate sector
rebounded in May, however, and finished the first half higher than their levels
at the start of the year. One positive effect of the Spring sell-off is that
REITs have begun to trade more in line with their underlying net asset values,
improving valuations.
The Fund continues to focus a large amount of its assets in the real estate
markets of the U.S. and CANADA (50.6% and 11.7% of the Fund's net assets as of
June 30, respectively). However, JAPAN (8.2% of Fund net assets) offered very
attractive real estate investment opportunities. As Japanese real estate
typically trades with financials, the Fund's exposure here benefited as the
financial market in Japan rebounded (the Nikkei(4) gained 11.64% during the
period). Among European markets, the Fund's largest weightings were in the UK
and SPAIN (3.7% and 4.3% of Fund net assets, respectively). Despite high vacancy
rates in the UK real estate markets, property values have held up reasonably
well. Both the UK and Spain real estate markets continued to be buoyed by merger
and acquisition activity as buyouts resulted in elevated stock prices.
1
WORLDWIDE REAL ESTATE FUND
- --------------------------------------------------------------------------------
The Fund is subject to certain risks associated with international investing,
the real estate industry in general and REITs in particular. REITs are subject
to interest rate risk, heavy cash flow dependency, default by borrowers,
self-liquidation and the possibilities of failing to qualify for the exemption
from tax for distributed income.
We continue to believe that diversification among several different asset
classes is in the best interest of investors. The defensive characteristics of
real estate investments have proved beneficial to shareholders during volatile
times in 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.
[DEREK S. VAN ECK [SAMUEL R. HALPERT
PHOTO AND SIG OMITTED] PHOTO AND SIG OMITTED]
DEREK S. VAN ECK SAMUEL R. HALPERT
MANAGEMENT TEAM MEMBER MANAGEMENT TEAM MEMBER
July 13, 2004
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 Adviser is currently waiving certain or all expenses on the Fund. Had the
Fund incurred all expenses, investment returns would have been reduced.
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 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.
All indices listed are unmanaged indices and include the reinvestment of all
dividends where available, 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 Citigroup 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.
(2) 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. This Index, calculated by Standard & Poor's, is a total return index with
dividends reinvested.
(3) 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.
(4) The Nikkei 225 Stock Average is a price-weighted average of 225 top-rated
Japanese companies listed in the first section of the Tokyo Stock Exchange.
2
WORLDWIDE REAL ESTATE FUND
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS*
AS OF JUNE 30, 2004 (UNAUDITED)
(THE DATA BELOW REPRESENTS A GRAPH IN THE PRINTED PIECE)
Diversified 25.3%
Regional Malls 11.0%
Shopping Centers 3.0%
Office 11.1%
Hotels 8.2%
Cash/Equivalents plus Other Assets Less Liabilities 14.8%
Residential 7.1%
Forest Products 4.9%
Industrial 4.8%
Healthcare 4.1%
Storage 2.2%
Other 3.5%
GEOGRAPHICAL WEIGHTINGS*
AS OF JUNE 30, 2004 (UNAUDITED)
(THE DATA BELOW REPRESENTS A GRAPH IN THE PRINTED PIECE)
United States 50.6%
Cash/Equivalents plus Other Assets Less Liabilities 14.8%
Canada 11.7%
Japan 8.2%
Spain 4.3%
United Kingdom 3.7%
Hong Kong 2.8%
Australia 1.3%
France 1.1%
Other 1.5%
- ----------------------
*Portfolio is subject to change.
3
WORLDWIDE REAL ESTATE FUND
TOP TEN EQUITY HOLDINGS AS OF JUNE 30, 2004*
- --------------------------------------------------------------------------------
TIMBERWEST FOREST CORP.
(CANADA, 4.9%)
TimberWest is uniquely positioned as the largest owner of private forest lands
in western Canada. The company's 334,000 hectares are located on Vancouver
Island. TimberWest also owns renewable Crown harvest rights and operates a
lumber mill located near Campbell River, British Columbia.
MITSUI FUDOSAN CO. LTD.
(JAPAN, 4.2%)
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 courses and provides financial
services.
SIMON PROPERTY GROUP, INC.
(U.S., 4.1%)
Simon Property 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, 4.1%)
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.
CHELSEA PROPERTY GROUP, INC.
(U.S., 2.9%)
Chelsea Property is a real estate investment trust that owns, develops, leases
and manages upscale manufacturers' outlet centers, which are
manufacturer-operated retail stores that sell primarily first quality branded
goods at significant discounts from regular department store prices.
BOSTON PROPERTIES, INC.
(U.S., 2.7%)
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.
PROLOGIS TRUST
(U.S., 2.5%)
ProLogis provides distribution facilities and services. The company owns,
manages and develops distribution facilities in various markets throughout North
America, Europe and Japan.
SUMITOMO REALTY & DEVELOPMENT CO. LTD.
(JAPAN, 2.5%)
Sumitomo Realty & Development develops, manages, and sells houses and
condominiums. The company also develops and manages real estate in overseas
markets. Sumitomo undertakes infrastructure projects, manages real estate
properties, provides financing services to its customers and operates fitness
clubs and restaurants.
LA QUINTA CORP.
(U.S., 2.4%)
La Quinta owns, manages, and franchises hotels. The company owns and operates
limited service hotels under the La Quinta Inns and La Quinta Inn Suites names
in the United States.
GENERAL GROWTH PROPERTIES, INC.
(U.S., 2.4%)
General Growth Properties is a real estate investment trust that owns, operates,
leases, acquires and expands enclosed regional shopping mall centers throughout
the United States. The company, with its operating partnership, also has
unconsolidated equity interests in other regional mall companies.
- ----------------------
*Portfolio is subject to change.
4
WORLDWIDE REAL ESTATE FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
NO.OF VALUE
COUNTRY SHARES SECURITIES (A) (NOTE 1)
- ---------------------------------------------------------
AUSTRALIA: 1.3%
30,000 Lend Lease Corp. Ltd. $ 214,107
8,000 Westfield Holdings Ltd. 85,532
-----------
299,639
-----------
CANADA: 11.7%
5,000 BPO Properties Ltd. 141,961
6,400 Brookfield Homes Corp. 167,616
31500 Brookfield Properties Corp. 905,625
500 Brookfield Properties Corp.
(USD) 14,278
195,000 Killam Properties, Inc. 301,591
110,000 TimberWest Forest Corp.
(Stapled Units) 1,102,959
-----------
2,634,030
-----------
FRANCE: 1.1%
2,500 Unibail S.A. 258,474
-----------
GERMANY: 0.8%
15,000 IVG Immobilien AG 179,898
-----------
HONG KONG: 2.8%
300,000 Hang Lung Properties Ltd. 386,548
30,000 Sun Hung Kai Properties Ltd. 246,160
-----------
632,708
-----------
ITALY: 0.7%
200,000 Beni Stabili S.p.A. 150,827
-----------
JAPAN: 8.2%
28,000 Mitsubishi Estate Co. Ltd. 346,497
80,000 Mitsui Fudosan Co. Ltd. 956,359
45,000 Sumitomo Realty &
Development Co. Ltd. 556,048
-----------
1,858,904
-----------
SPAIN: 4.3%
10,000 Inmobiliaria Colonial S.A. 255,434
34,540 Inmobiliaria Urbis S.A. 381,055
4,865 Metrovacesa S.A. 186,166
10,000 Vallehermoso S.A. 136,839
-----------
959,494
-----------
UNITED KINGDOM: 3.7%
32,160 British Land Co. PLC 404,654
20,562 Land Securities Group PLC 432,385
-----------
837,039
-----------
NO.OF
SHARES/
PRINCIPAL VALUE
COUNTRY AMOUNT SECURITIES (A) (NOTE 1)
- ---------------------------------------------------------
UNITED STATES: 50.5%
15,000 AMB Property Corp. $ 519,450
8,000 Apartment Investment &
Management Co. (Class A) 249,040
11,000 Archstone-Smith Trust 322,630
12,000 Boston Properties, Inc. 600,960
10,000 Chelsea Property Group, Inc. 652,200
30,500 Crescent Real Estate Equities
Co. 491,660
8,000 Equity Office Properties Trust 217,600
10,000 Equity Residential Properties
Trust 297,300
18,000 General Growth Properties, Inc. 532,260
20,300 Hilton Hotels Corp. 378,798
10,000 Kimco Realty Corp. 455,000
65,400 La Quinta Corp. (Paired Shares) 549,360
9,000 Liberty Property Trust 361,890
30,000 LTC Properties, Inc. 498,000
8,000 Macerich Co. (The) 382,960
59,500 Meristar Hospitality Corp. 406,980
19,000 Mesabi Trust 149,150
15,500 National Health Investors, Inc. 421,445
5,000 Post Properties, Inc. 145,750
5,000 Prime Hospitality Corp. 53,100
17,000 ProLogis Trust 559,640
11,000 Public Storage, Inc. 506,110
18,000 Simon Property Group, Inc. 925,560
9,000 SL Green Realty Corp. 421,200
8,000 Starwood Hotels & Resorts
Worldwide, Inc. (Paired
Shares) 358,800
14,250 United Dominion Realty Trust,
Inc. 281,865
10,000 Urstadt Biddle Properties
(Class A) 148,100
22,000 Vail Resorts, Inc. 421,520
100,000 Wyndham International, Inc.
(Class A) 100,000
-----------
11,408,328
-----------
TOTAL STOCKS AND OTHER INVESTMENTS: 85.1%
(Cost: $12,698,300) 19,219,341
-----------
CORPORATE NOTE
UNITED STATES: 0.1%
28,000 Brookfield Homes Corp.
12.00% 6/30/20 Senior
Convertible Note
(Cost: $28,797) 28,980
-----------
See Notes to Financial Statements
5
WORLDWIDE REAL ESTATE FUND
SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED)
JUNE 30, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
SHORT-TERM
OBLIGATION: DATE OF VALUE
13.9% MATURITY COUPON (NOTE 1)
- ---------------------------------------------------------
Repurchase Agreement
Purchased on 6/30/04;
maturity value $3,150,118
(with State Street Bank & Trust
Co., collateralized by
$3,180,000 Federal Home
Loan Bank--3.55%
due 11/26/04 with a
value of $3,214,360)
(Cost: $ 3,150,000) 7/01/04 1.35% $ 3,150,000
-----------
TOTAL INVESTMENTS: 99.1%
(COST: $15,877,097) 22,398,321
OTHER ASSETS LESS
LIABILITIES: 0.9% 200,906
-----------
NET ASSETS: 100% $22,599,227
===========
SUMMARY OF % OF SUMMARY OF % OF
INVESTMENTS NET INVESTMENTS NET
BY INDUSTRY ASSETS BY INDUSTRY ASSETS
- ----------- -------- ----------- --------
Diversified 25.3% Shopping Centers 3.0%
Forest Products 4.9% Storage 2.2%
Healthcare 4.1% Other 2.6%
Home Building 0.9% Short-Term
Hotels 8.2% Obligation 13.9%
Industrial 4.8% Other assets less
Office 11.1% liabilities 0.9%
Regional Malls 11.0% -----
Residential 7.1% 100.0%
=====
- ---------------------
(a) Unless otherwise indicated, securities owned are shares of common stock.
See Notes to Financial Statements
6
WORLDWIDE REAL ESTATE FUND
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2004 (UNAUDITED)
ASSETS:
Investments, at value (cost $15,877,097) (Note 1) ......................................... $22,398,321
Cash ...................................................................................... 1,464
Foreign currency (cost $16,497) ........................................................... 16,354
Receivables:
Capital shares sold ..................................................................... 571,776
Dividends and interest .................................................................. 82,765
Prepaid expense ........................................................................... 13,210
-----------
Total assets ........................................................................ 23,083,890
-----------
LIABILITIES:
Payables:
Capital shares redeemed ................................................................. 438,551
Due to Adviser .......................................................................... 10,223
Accounts payable ........................................................................ 35,889
-----------
Total liabilities ................................................................... 484,663
===========
Net assets ................................................................................ $22,599,227
===========
INITIAL CLASS SHARES:
Net assets ................................................................................ $21,751,305
===========
Shares outstanding ........................................................................ 1,490,174
===========
Net asset value, redemption and offering price per share .................................. $14.60
===========
CLASS R1 SHARES:
Net assets ................................................................................ $ 847,922
===========
Shares outstanding ........................................................................ 58,267
===========
Net asset value, redemption and offering price per share .................................. $14.55
===========
Net assets consist of:
Aggregate paid in capital ............................................................... $15,976,824
Unrealized appreciation of investments and foreign currency transactions ................ 6,521,446
Undistributed net investment income ..................................................... 416,629
Accumulated realized loss ............................................................... (315,672)
-----------
$22,599,227
===========
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2004 (UNAUDITED)
INCOME (NOTE 1):
Dividends (net of foreign taxes withheld of $19,307) ...................................... $ 483,756
Interest .................................................................................. 9,887
-----------
Total income ........................................................................ 493,643
-----------
EXPENSES:
Management (Note 2) ....................................................................... $107,039
Administration (Note 2) ................................................................... 1,175
Professional .............................................................................. 18,430
Reports to shareholders ................................................................... 12,157
Transfer agency -- Initial Class Shares ................................................... 6,165
Transfer agency -- Class R1 Shares ........................................................ 1,639
Custodian ................................................................................. 4,323
Trustees' fees and expenses ............................................................... 2,676
Other ..................................................................................... 3,058
--------
Total expenses ...................................................................... 156,662
Expenses assumed by the Adviser (Note 2) .................................................. (16,971)
--------
Net Expense ......................................................................... 139,691
-----------
Net investment income ..................................................................... 353,952
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 3):
Realized gain from security transactions .................................................. 867,369
Realized gain from foreign currency transactions .......................................... 6,930
Change in unrealized appreciation of investments .......................................... 1,023,416
Change in unrealized appreciation of foreign denominated assets and liabilities ........... (380)
-----------
Net realized and unrealized gain (loss) on investments and foreign currency transactions .. 1,897,335
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ...................................... $ 2,251,287
===========
See Notes to Financial Statements
7
WORLDWIDE REAL ESTATE FUND
- --------------------------------------------------------------------------------
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 ............................................................. $ 353,952 $ 491,709
Realized gain (loss) from security transactions ................................... 867,369 (89,809)
Realized gain (loss) from foreign currency transactions ........................... 6,930 (1,664)
Change in unrealized appreciation of foreign denominated assets and liabilities ... (380) 510
Change in unrealized appreciation of investments .................................. 1,023,416 5,323,879
------------- -------------
Net increase in net assets resulting from operations ............................ 2,251,287 5,724,625
------------- -------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income
Initial Class Shares ............................................................ (331,869) (336,311)
Class R1 Shares ................................................................. -- --
------------- -------------
(331,869) (336,311)
------------- -------------
CAPITAL SHARE TRANSACTIONS*:
Proceeds from sales of shares
Initial Class Shares ............................................................ 7,243,810 177,134,362
Class R1 Shares ................................................................. 830,070 --
------------- -------------
8,073,880 177,134,362
------------- -------------
Reinvestment of dividends
Initial Class Shares ............................................................ 331,869 336,311
Class R1 Shares ................................................................. --
------------- -------------
331,869 336,311
------------- -------------
Cost of shares reacquired
Initial Class Shares ............................................................ (7,065,135) (178,823,891)
Class R1 Shares ................................................................. (4,900) --
Redemption fees ................................................................. 15 --
------------- -------------
(7,070,020) (178,823,891)
------------- -------------
Net increase (decrease) in net assets resulting from capital share transactions . 1,335,729 (1,353,218)
------------- -------------
Total increase in net assets .................................................... 3,255,147 4,035,096
NET ASSETS:
Beginning of Period .................................................................. 19,344,080 15,308,984
------------- -------------
End of Period (including undistributed net investment income of $416,629 and $387,616,
respectively) ...................................................................... $ 22,599,227 $ 19,344,080
============= =============
* SHARES OF BENEFICIAL INTEREST ISSUED AND REAQUIRED (UNLIMITED NUMBER OF
$.001 PAR VALUE SHARES AUTHORIZED)
INITIAL CLASS SHARES:
Shares sold ....................................................................... 509,920 17,109,103
Reinvestment of dividends ......................................................... 24,154 35,106
Shares reacquired ................................................................. (505,142) (17,203,523)
------------- -------------
Net increase (decrease) ........................................................... 28,932 (59,314)
============= =============
CLASS R1 SHARES:+
Shares sold ....................................................................... 58,610
Shares reacquired ................................................................. (343)
-------------
Net increase ...................................................................... 58,267
=============
+ Inception date of Class R1 shares May 1, 2004
See Notes to Financial Statements
8
WORLDWIDE REAL ESTATE FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
INITIAL CLASS SHARES CLASS R1 SHARES
------------------------------------------------------------------- ---------------
SIX MONTHS FOR THE PERIOD
ENDED MAY 1, 2004 (e)
JUNE 30, YEAR ENDED DECEMBER 31, THROUGH
2004 ----------------------------------------------------- JUNE 30,2004
(UNAUDITED) 2003 2002 2001 2000 1999 (UNAUDITED)
----------- ------ ------ ------ ------ ------ ---------------
Net Asset Value, Beginning of Period .. $13.24 $10.07 $10.87 $10.62 $ 9.15 $ 9.54 $13.55
------ ------ ------ ------ ------ ------ ------
Income From Investment Operations:
Net Investment Income ............... 0.22 0.33 0.38 0.35 0.34 0.25 0.03
Net Realized and Unrealized
Gain (Loss) on Investments and
Foreign Currency Transactions ...... 1.36 3.06 (0.85) 0.20 1.33 (0.44) 0.97
------ ------ ------ ------ ------ ------ ------
Total From Investment Operations ...... 1.58 3.39 (0.47) 0.55 1.67 (0.19) 1.00
------ ------ ------ ------ ------ ------ ------
Less Dividends and Distributions:
Dividends from Net Investment
Income ............................. (0.22) (0.22) (0.33) (0.30) (0.20) (0.20) --
------ ------ ------ ------ ------ ------ ------
Redemption fees .................... --(f) -- -- -- -- -- --(f)
------ ------ ------ ------ ------ ------ ------
Net Asset Value, End of Period ........ $14.60 $13.24 $10.07 $10.87 $10.62 $ 9.15 $14.55
====== ====== ====== ====== ====== ====== ======
Total Return (a) ...................... 12.04% 34.50% (4.48)% 5.34% 18.71% (2.01)% 7.38%
- ---------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Period (000) ....... $21,751 $19,344 $15,309 $13,947 $6,875 $3,166 $848
Ratio of Gross Expenses to Average
Net Assets .......................... 1.44%(d) 1.49% 1.48% 1.62% 2.27% 3.23% 6.64%(d)
Ratio of Net Expenses to Average
Net Assets (c) ........................ 1.30%(d) 1.49% 1.46%(b) 1.50%(b) 1.45%(b) 1.44% 1.10%(d)
Ratio of Net Investment Income
to Average
Net Assets (c) ...................... 3.31%(d) 2.68% 3.04% 4.17% 4.21% 3.33% 5.44%(d)
Portfolio Turnover Rate ............... 10% 19% 139% 74% 233% 172% 10%
- ----------------------
(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 of the Initial Class shares for the six
months ended June 30, 2004 and for the years ended, December 31, 2001,
December 31, 2000 and December 31, 1999, was 0.14%, 0.07%, 0.12% and 0.79%,
respectively and for the period ending June 30, 2004 for the Class R1 shares
was 5.54%.
(d) Annualized
(e) Inception date of Class R1 shares.
(f) Amount represents less than $0.01 per share.
See Notes to Financial Statements
9
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 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 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. 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 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 year. 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. Realized gains and losses are calculated based on the
identified cost basis. 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
fee is based on an annual rate of 1% of the average daily net assets. The
Adviser agreed to assume expenses exceeding 1.10% of the average daily net
assets except interest, taxes, brokerage commission and extraordinary expenses
for the period May 1, 2004 through April 30, 2005. For the period ending June
30, 2004 the Adviser assumed expenses in the amount of $16,971. 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 U.S.
government securities and short-term obligations, aggregated $1,991,443 and
$3,487,101, respectively, for the six months ended June 30, 2004.
NOTE 4--INCOME TAXES--For federal income tax purposes, the identified cost of
investments owned at June 30, 2004 was $15,877,097. As of June 30, 2004, net
unrealized appreciation for federal income tax purposes aggregated $6,521,224 of
which $6,581,210 related to appreciated securities and $59,986 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 finical 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 $1,067,201
available, $27,341 expiring December 31, 2006; $477,558 expiring December 31,
2008; $56,785 expiring December 31, 2009; $72,279 expiring December 31, 2010;
and $433,238 expiring December 31, 2011.
10
WORLDWIDE REAL ESTATE FUND
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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
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 aggregate shareholder
accounts of a single insurance company own approximately 40% of the Initial
Class shares and 99% of the Class R1 shares.
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, 2004, the Fund had no
forward foreign currency contracts outstanding.
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, 2004, the net value of the asset
and corresponding liability of the Fund's portion of the Plan is $7,329.
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 ended June 30, 2004, the Fund did not borrowed 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.
NOTE 11--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 investigation have been and will continue to be paid
by the Adviser.
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[VAN ECK GLOBAL GRAPHIC OMITTED] (GRAPHIC OMITTED)
Investment Adviser: Van Eck Associates Corporation
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
Company and Affiliated Purchases
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 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) For the period ending June 30, 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 REAL ESTATE FUND
By (Signature and Title) /s/ Bruce J. Smith, VP & Treasurer
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Date August 27, 2004
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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
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Date August 27, 2004
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By (Signature and Title) /s/ Bruce J. Smith, CFO
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Date August 27, 2004
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