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 EMERGING MARKETS 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
Date of reporting period: JUNE 30, 2005
ITEM 1: REPORT TO SHAREHOLDERS.
VAN ECK GLOBAL
Worldwide Insurance Trust
[GRAPHIC OMITTED]
SEMI-ANNUAL REPORT
JUNE 30, 2005
WORLDWIDE EMERGING MARKETS FUND
GLOBAL INVESTMENTS SINCE 1955
The information in the shareholder letter represents the personal opinions of
the portfolio manager 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 are as of June 30, 2005 and are subject to
change.
WORLDWIDE EMERGING MARKETS FUND
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Dear Shareholder:
The Initial Class shares of the Van Eck Worldwide Emerging Markets Fund gained
7.33% for the six months ended June 30, 2005. In comparison, emerging markets in
general returned 6.26% for the same period, as measured by the Morgan Stanley
Capital International Emerging Markets Free Index (MSCI EMF Index).(1)
MARKET AND ECONOMIC REVIEW
Overall, the emerging markets' performance for the first half of 2005 was
resilient in the face of several headwinds, including a flattening U.S. yield
curve, rising short-term interest rates, a global economic slowdown, U.S. dollar
volatility, heightened inflation pressures, falling commodity prices and rising
oil prices. Together, these factors led to growing investor risk aversion.
However, ample market liquidity, improved fundamentals within the emerging
markets and, late in the period, better economic data from the U.S. more than
offset these usual drawbacks and buoyed emerging market equities. Indeed, for
the six months, emerging market equities significantly outperformed both the
broad U.S. equity market, as measured by the S&P 500 Index(2), and the developed
international markets, as measured by the MSCI EAFE Index(3).
On a regional basis, the Latin American markets performed best for the
semi-annual period, followed by the Asian markets. The markets of Eastern
Europe, Middle East and Africa (EMEA) lagged.
FUND REVIEW
Throughout the first half of 2005, we continued to favor Asia at the expense of
Latin America and the EMEA markets in terms of regional weightings.
ASIA
The equity market of SOUTH KOREA performed well during the six-month period, due
primarily to a stabilizing domestic economy and a strengthening of the U.S.
dollar. Thus the Fund's overweighted exposure (24.5% of Fund net assets as of
June 30) benefited its performance. Within this market, forged component
manufacturer Taewoong (1.3% of Fund net assets as of June 30) was a top
performer based on strong demand in the shipbuilding industry it serves. On the
other hand, Insun ENT (2.5% of Fund net assets as of June 30), a waste
management company primarily serving the construction industry, saw its share
price decline upon disappointing first quarter earnings.
The Fund also benefited from maintaining underweighted exposure to the equity
markets of both TAIWAN (10.4% of Fund net assets as of June 30), which struggled
despite improvement in prospects for the technology sector in the latter part of
the period, and MALAYSIA (2.3% of Fund net assets as of June 30), which lagged
the region overall.
Taking CHINA (5.4% of Fund net assets as of June 30) and HONG KONG (6.9% of Fund
net assets as of June 30) together, the Fund maintained an overweighted exposure
to these equity markets. Hong Kong stocks and Hong Kong-listed Chinese stocks
performed well, as the outlook for the Hong Kong economy remained positive and
most believed enough had been done by the Chinese government to cool down its
property market and yet avoid an economic "hard landing." Still, the Fund's
stock selection within these markets detracted from relative results. For
example, Chinese stock Weiqiao Textile (1.4% of Fund net assets as of June 30),
the nation's largest cotton yarn producer, performed poorly due to uncertainty
following the elimination of international textile quotas phased out as of the
beginning of 2005. Yanzhou Coal Mining (1.2% of Fund net assets as of June 30)
also was a poor performer, as concerns over the sustainability of high coal
prices and the company's capacity to grow dominated.
Further detracting from the Fund's relative results was its overweighted
position in THAILAND (4.3% of Fund net assets as of June 30) and its
underweighted exposure to INDIA (4.5% of Fund net assets as of June 30).
Thailand's equity market was affected by weak domestic confidence, political
concerns over the declining popularity of its prime minister and the
after-effects of the tsunami. Though India's equity market performed well, we
remained comfortable with the Fund's modest position given what we considered to
be high equity valuations, the potential impact on the banking industry's
profits in the face of rising interest rates and the uncertain progress of the
June-September monsoon, a key factor driving India's economic growth.
1
WORLDWIDE EMERGING MARKETS FUND
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In SINGAPORE (3.5% of Fund net assets as of June 30), Noble Group (2.5% of Fund
net assets as of June 30), logistics and risk management consultants for the
commodity trading industry, underperformed due to a fear of peaking commodity
prices. Noble Group, listed on the Singapore exchange, based in Hong Kong and
conducting a significant part of its business with China, was one of the Fund's
largest positions over the period.
LATIN AMERICA
Benefiting the Fund's relative performance was an overweighted exposure to the
strongly-performing BRAZILIAN equity market (10.4% of Fund net assets as of June
30). Although the market sold off somewhat during the second quarter due to a
political scandal involving bribery allegations against one of President Lula da
Silva's top officials and due to concerns over its currency being too strong,
the Fund's effective stock selection more than compensated. Particularly strong
performers for the Fund were Petrobras (3.4% of Fund net assets as of June 30)
and Itausa (2.4% of Fund net assets as of June 30). Integrated oil company
Petrobras, unaffected by the nation's political scandal, benefited from record
high fuel prices. Holding company Itausa's major holding is Banco Itau, a
leading bank in Brazil, which benefited from strong loan demand and healthy
interest rate margins.
The MEXICAN equity market (6.2% of Fund net assets as of June 30) also performed
well, and while the Fund had an underweighted position in this market, we
increased exposure during the period and also benefited from effective stock
selection. Affordable housing construction company Corporacion GEO (0.8% of Fund
net assets as of June 30) and beer producer Grupo Modelo (0.6% of Fund net
assets as of June 30), whose brands include Corona, were particularly strong
performers.
EMEA
The Fund held underweighted positions in most of the Eastern Europe, Middle East
and African (EMEA) equity markets, including RUSSIA, SOUTH AFRICA, TURKEY and
ISRAEL (2.1%, 6.6%, 1.4% and 1.9% of Fund net assets as of June 30,
respectively).
The Fund's positioning in the central Eastern European nations and Turkey
benefited relative performance. These markets were affected by disruptions in
the European Union (EU) integration process through the defeat of two
referendums to ratify the EU Constitution, first in France on May 29th, then in
the Netherlands in early June, as well as the inability of EU officials to reach
a consensus on the 2007-2013 budget. The Fund also benefited from effective
stock selection in Turkey. Positioning in Israel contributed positively to Fund
results as well, given that this market sold off during the period, as the peace
process was derailed by heightened violence in the Gaza Strip.
On the other hand, the Fund's modest positioning in Russia and South Africa
detracted. Despite some volatility, Russia's equity market performed well over
the six months, boosted by strong oil prices, an improving economy and
market-friendly remarks by the Putin administration late in the period. South
Africa's equity market benefited from a weak rand and a strong domestic economy.
* * *
Overall, we remain cautiously optimistic for emerging market equities going
forward. Valuations generally appear reasonable, the Federal Reserve Board
tightening cycle may be nearing an end and macroeconomic conditions in emerging
markets remain sound, with many countries benefiting from current account
surpluses, strong domestic demand and prudent fiscal and monetary policies. The
appeal of the asset class remains strong. At the same time, the pace of global
economic growth and the relative strength of commodity prices remain critical
factors to monitor. We expect gains from emerging market equities to remain
positive but modest in the months ahead.
We have a positive view of the Brazilian market heading into the second half of
the year, as we expect slack in Brazil's domestic demand to be offset by a more
positive contribution from its net exports. Elsewhere, we do not expect to
change the Fund's overweighted positions in Hong Kong and China, given that
economic prospects still appear favorable
2
WORLDWIDE EMERGING MARKETS FUND
- --------------------------------------------------------------------------------
and valuations reasonable. We may seek to reduce the Fund's overweighted
position in Indonesia based on concerns about less macroeconomic stability.
While we intend to maintain the Fund's underweighted position in Russia, the
recent market-friendly moves by the Putin administration may lead us to
opportunistically seek additional investment candidates. We will, of course,
continue our strategy of trying to find value throughout the emerging markets
and to identify those pockets of potential in what we see as one of the most
exciting, though still risky, investment arenas of this new millennium. We
maintain that portfolio diversification is a key element to successful
investing.
By investing in emerging markets, the Fund is exposed to certain risks. Many
emerging markets are much less liquid and much more volatile than the U.S.
market. Foreign investments may be subject to volatility from political or
economic factors or from changing currency values.
The Fund is subject to volatility due to foreign securities risk and emerging
market risk, exaggeration of price movements due to leverage, interest rate
changes and market fluctuation. The Fund may invest in securities of other
investment companies, which may involve additional fees such as management and
other fees.
An investment in the Fund involves the risk of losing money and should be
considered part of an overall investment program, not a complete investment
program.
We appreciate your participation in the Van Eck Worldwide Emerging Markets Fund
and look forward to helping you meet your investment goals in the future.
[GRAPHIC OMITTED]
/s/ DAVID A. SEMPLE
- -------------------
DAVID A. SEMPLE
PORTFOLIO MANAGER
July 18, 2005
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS; CURRENT PERFORMANCE MAY BE
LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. PERFORMANCE INFORMATION
REFLECTS CURRENT TEMPORARY WAIVERS OF EXPENSES AND/OR FEES. HAD THE FUND
INCURRED ALL EXPENSES, INVESTMENT RETURNS WOULD HAVE BEEN REDUCED. 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.
3
WORLDWIDE EMERGING MARKETS FUND
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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's charges, fees and expenses for these benefits 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 references to Fund assets refer to Total Net Assets.
All indices listed are unmanaged indices and include the reinvestment of all
dividends, but do not reflect the payment of transaction costs, advisory fees or
expenses that are associated with an investment in the Fund. An index's
performance is not illustrative of the Fund's performance. Indices are not
securities in which investments can be made.
(1) The Morgan Stanley Capital International Emerging Markets Free Index (MSCI
EMF Index) is a market capitalization weighted index that captures 60% of the
publicly traded equities in each industry for approximately 25 emerging markets.
"Free" indicates that the Index includes only those securities available to
foreign (e.g. U.S.) investors.
(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. 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.
(3) The Morgan Stanley Capital International (MSCI) EAFE Index is an unmanaged
capitalization-weighted index containing approximately 1,100 equity securities
of companies located in Europe, Australasia and the Far East.
4
WORLDWIDE EMERGING MARKETS FUND
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GEOGRAPHICAL WEIGHTINGS*
AS OF JUNE 30, 2005 (UNAUDITED)
[Data below represents pie chart in printed piece]
Argentina 1.9%
South Korea 24.5%
Philippines 1.7%
Taiwan 10.4%
Brazil 10.4%
China 5.4%
Cash/Equivalents plus
Other Assets Less
Liabilities 3.1%
Hong Kong 6.9%
Israel 1.9%
Thailand 4.3%
South Africa 6.6%
Mexico 6.2%
India 4.5%
Singapore 3.5%
Indonesia 2.9%
Turkey 1.4%
Malaysia 2.3%
Russia 2.1%
TOP TEN SECTORS*
AS OF JUNE 30, 2005 (UNAUDITED)
Electronics ......................... 9.1%
Diversified ......................... 8.7%
Oil & Gas ........................... 7.5%
Telecommunications .................. 6.7%
Auto Parts & Equipment .............. 5.0%
Technology .......................... 4.3%
Retail .............................. 3.8%
Home Builders ....................... 3.7%
Hand/Machine Tools .................. 3.6%
Iron/Steel .......................... 3.5%
- ------------
* PERCENTAGE OF NET ASSETS.
PORTFOLIO IS SUBJECT TO CHANGE.
5
WORLDWIDE EMERGING MARKETS FUND
TOP TEN EQUITY HOLDINGS AS OF JUNE 30, 2005* (UNAUDITED)
- --------------------------------------------------------------------------------
SAMSUNG ELECTRONICS CO., LTD.
(SOUTH KOREA, 3.6%)
Samsung Electronics manufactures and exports a wide range of consumer and
industrial electronic equipment, such as memory chips, semiconductors, personal
computers, telecommunications equipment and televisions.
PETROLEO BRASILEIRO S.A. (PETROBRAS)
(BRAZIL, 3.4%)
Petrobras explores for, produces, refines, transports, and markets petroleum and
petroleum products, including gasoline, diesel oil, jet fuel, aromatic extracts,
petrochemicals and turpentine. The company operates refineries, oil tankers and
a distribution pipeline grid in Brazil and markets its products in Brazil and
abroad.
HYUNDAI MOBIS
(SOUTH KOREA, 2.8%)
Hyundai Mobis manufactures and markets automotive parts and equipment both for
auto assembly and the after-sales market.
AFRICAN BANK INVESTMENTS LTD.
(SOUTH AFRICA, 2.6%)
African Bank Investments is a bank holding company. The group provides financial
services to the under-serviced areas of the South African population and
specializes in making consumer loans and micro-lending products to individuals
and small businesses.
NOBLE GROUP LTD.
(SINGAPORE, 2.5%)
Noble Group is a diversified commodities trading company, whose principal
activities comprise agricultural, energy, finance, minerals and ores, logistics
and technology. The group links producers and consumers on a global basis,
integrating sourcing, marketing, processing and transportation of products and
e-commerce.
INSUN ENT CO., LTD.
(SOUTH KOREA, 2.5%)
Insun ENT specializes in waste management and recycling. Insun ENT also operates
a real estate rental service and a building demolition business.
INVESTIMENTOS ITAU S.A. (ITAUSA)
(BRAZIL, 2.4%)
Itausa is a holding company, whose principal asset is a stake in Banco Itau, a
leading bank in Brazil. Itausa also has operations in the insurance,
construction materials, electronics, chemicals, real estate and
telecommunications industries.
HON HAI PRECISION INDUSTRY CO., LTD.
(TAIWAN, 2.2%)
Hon Hai Precision manufactures and assembles a broad range of products for the
computer and communications industries, including personal computer connectors
and cable assemblies used in desktop PCs and PC servers.
TECHTRONIC INDUSTRIES CO. LTD.
(HONG KONG, 2.1%)
Techtronic Industries, through its subsidiaries, manufactures and trades
electrical, electronic and professional industrial products. The products
include power tools and outdoor power equipment, floor care appliances and solar
powered lighting and electronic measuring products.
ADVANTECH CO., LTD.
(TAIWAN, 2.0%)
Advantech manufactures and markets embedded personal computers, network
computing products, industrial automation products and panel PCs.
- --------------
*PORTFOLIO IS SUBJECT TO CHANGE.
SOME COMPANY DESCRIPTIONS COURTESY OF BLOOMBERG.COM.
6
WORLDWIDE EMERGING MARKETS FUND
EXPLANATION OF EXPENSES (UNAUDITED)
- --------------------------------------------------------------------------------
HYPOTHETICAL $1,000 INVESTMENT AT BEGINNING OF PERIOD
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including program fees on purchase payments; and (2) ongoing costs,
including management fees and other Fund expenses. This disclosure is intended
to help you understand your ongoing costs (in dollars) of investing in the Fund
and to compare these costs with the ongoing costs of investing in other mutual
funds.
The disclosure is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period, January 1, 2005 to June 30, 2005.
ACTUAL EXPENSES
The first line in the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over a
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line in the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as program
fees. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
Beginning Ending Expenses Paid
Account Value Account Value During Period*
January 1, 2005 June 30, 2005 1/1/05-6/30/05
- -----------------------------------------------------------------------------------------------------------------------
Initial Class Actual $1,000.00 $1,073.30 $6.78
Hypothetical (5% return before expenses) $1,000.00 $1,018.26 $6.60
- -----------------------------------------------------------------------------------------------------------------------
Class R1 Actual $1,000.00 $1,072.70 $6.96
Hypothetical (5% return before expenses) $1,000.00 $1,018.08 $6.78
- -----------------------------------------------------------------------------------------------------------------------
* Expenses are equal to the Fund's annualized expense ratio of 1.32% on the
Initial Class shares and 1.35% on the Class R1 shares, multiplied by the average
account value over the period, multiplied by 181 divided by 365 (to reflect the
one-half year period)
7
WORLDWIDE EMERGING MARKETS FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 2005 (UNAUDITED)
- --------------------------------------------------------------------------------
NO. OF VALUE
COUNTRY SHARES SECURITIES (NOTE 1)
- --------------------------------------------------------------------------------
COMMON STOCKS:
ARGENTINA: 1.9%
150,000 Inversiones y
Representaciones S.A.+
(Sponsored GDR) $ 1,830,000
25,000 Tenaris S.A. (ADR) 1,956,750
-----------
3,786,750
-----------
BRAZIL: 5.4%
108,000 Companhia Vale do Rio
Doce (Sponsored ADR)+ 2,743,200
115,000 Petroleo Brasileiro S.A.
(Sponsored ADR) 5,994,950
175,000 Votorantim Celulose e Papel
S.A (Sponsored ADR) 2,117,500
-----------
10,855,650
-----------
CHINA: 5.4%
2,530,000 China International Marine
Containers Co. Ltd.
(Class B)* 2,302,960
2,370,000 CNOOC Ltd.* 1,412,900
1,400,000 Global Bio-chem Technology
Group Co. Ltd.* 866,150
418,750 Global Bio-chem Technology
Group Co. Ltd.
Warrants (HKD 9.80,
expiring 5/13/07)+* 7,005
350,000 Weichai Power Co., Ltd.* 1,032,111
1,955,000 Weiqiao Textile Co. Ltd.* 2,744,809
3,158,400 Yanzhou Coal Mining Co. Ltd.* 2,470,180
-----------
10,836,115
-----------
HONG KONG: 6.9%
3,520,000 Chen Hsong Holdings Ltd.* 1,985,701
6,900,000 China Petroleum and
Chemical Corporation* 2,698,240
300,000 Kingboard Chemical Holdings
Ltd.* 953,921
7,932,000 Media Partners International
Holdings, Inc.+* 600,151
3,440,000 Midland Holdings Ltd.* 1,918,439
1,000,000 Shangri-La Asia Ltd.* 1,538,590
1,695,000 Techtronic Industries Co. Ltd.* 4,270,325
-----------
13,965,367
-----------
INDIA: 4.5%
35,000 Bharat Electronics Ltd. 565,434
310,000 Bharti Tele-Ventures Ltd.+ 1,731,650
140,000 Mahindra & Mahindra Ltd. 1,798,827
190,000 Reliance Industries Ltd. 2,805,313
95,955 Satyam Computer Services Ltd. 1,120,119
32,110 Tata Consultancy Services Ltd. 998,494
-----------
9,019,837
-----------
INDONESIA: 2.9%
1,900,000 PT Astra International Tbk* 2,469,122
17,000,000 PT Berlian Laju Tanker Tbk* 1,548,190
3,800,000 PT Telekomunikasi
Indonesia Tbk* 1,944,191
-----------
5,961,503
-----------
ISRAEL: 1.9%
46,000 Lipman Electronic
Engineering Ltd. 1,415,420
80,400 Teva Pharmaceutical
Industries Ltd.(ADR) 2,503,656
-----------
3,919,076
-----------
MALAYSIA: 2.3%
1,250,000 Astro All Asia Networks PLC+* 1,789,474
895,000 MAA Holdings Berhad* 1,128,407
132,920 Multi-Purpose Holdings Berhad
Rights (MYR 1.00,
expiring 2/26/09)+* 9,444
600,000 Transmile Group Berhad* 1,670,684
-----------
4,598,009
-----------
MEXICO: 6.2%
60,000 America Movil, S.A. de C.V.
(ADR) 3,576,600
720,000 Consorcio ARA, S.A. de C.V. 2,485,985
750,000 Controladora Comercial
Mexicana, S.A. de C.V. 904,956
663,500 Corporacion GEO, S.A.
de C.V. (Series B)+ 1,674,454
70,000 Grupo Industrial Saltillo,
S.A. de C.V. 99,471
400,000 Grupo Modelo, S.A. de C.V.
(Series C) 1,247,448
620,000 Walmart de Mexico, S.A.
de C.V. (Series V) 2,517,060
-----------
12,505,974
-----------
See Notes to Financial Statements
8
WORLDWIDE EMERGING MARKETS FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 2005 (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
NO. OF VALUE
COUNTRY SHARES SECURITIES (NOTE 1)
- --------------------------------------------------------------------------------
COMMON STOCKS: (CONTINUED)
PHILIPPINES: 1.7%
82,000 Philippine Long Distance
Telephone Company
(Sponsored ADR) $ 2,382,100
246,400 SM Investments Corporation* 1,121,874
-----------
3,503,974
-----------
RUSSIA: 2.1%
125,000 AO RITEK+* 512,375
100,000 LUKOIL (Sponsored ADR) 3,678,000
-----------
4,190,375
-----------
SINGAPORE: 3.5%
2,400,000 Citiraya Industries Ltd.+* --
2,551,000 First Engineering Ltd.* 1,857,612
250,000 Goodpack Ltd.* 204,303
31,250 Goodpack Ltd. Warrants
(SGD 1.00, expiring
4/13/07)+* 6,751
5,887,200 Noble Group Ltd.* 5,055,655
-----------
7,124,321
-----------
SOUTH AFRICA: 6.6%
1,916,000 African Bank Investments Ltd.* 5,361,067
240,000 Bidvest Group Ltd.* 2,610,740
1,894,200 FirstRand Ltd.* 3,931,192
90,000 SABMiller PLC* 1,401,869
-----------
13,304,868
-----------
SOUTH KOREA: 24.5%
19,200 Cheil Communications, Inc* 3,592,533
185,000 Doosan Infracore Co., Ltd.* 1,615,985
90,000 GS Holdings Corp.* 2,112,575
100,000 Hanwha Chemical Corp.* 1,192,893
84,500 Hyundai Mobis* 5,649,648
57,000 Hyundai Motor Co.* 3,152,990
287,707 Insun ENT Co., Ltd.* 4,968,151
204,740 Kangwon Land, Inc.* 2,915,038
1,537 Kookmin Bank
(Sponsored ADR) 70,056
115,000 Korean Air Lines Co., Ltd.* 1,941,578
20,000 Korea Zinc Co., Ltd.* 517,562
120,000 Kumho Industrial Co., Ltd.* 2,118,347
150,000 Paradise Industry Co., Ltd.* 476,195
5,500 POSCO* 965,618
55,300 POSCO (Sponsored ADR) 2,431,541
15,450 Samsung Electronics Co., Ltd.* 7,342,354
120,000 SFA Engineering Corp.* 3,099,598
5,550 Shinsegae Co., Ltd.* 1,745,905
7,400 SK Telecom Co., Ltd.* 1,295,636
285,000 Taewoong Co., Ltd.* 2,549,809
-----------
49,754,012
-----------
TAIWAN: 10.4%
1,719,499 Advantech Co., Ltd.* 4,055,141
2,700,000 Asia Vital Components Co.,
Ltd.* 2,122,494
425,000 Basso Industry Corp.* 992,937
2,270,000 Career Technology (MFG.)
Co., Ltd.* 3,454,700
300,000 Foxconn Technology Co., Ltd.* 1,127,280
350,000 Gemtek Technology Corp.* 692,243
873,999 Hon Hai Precision Industry
Co., Ltd.* 4,520,844
915,000 Merry Electronics Co., Ltd.* 2,431,199
300,000 Tsann Kuen Enterprise Co.,
Ltd.* 411,296
1,636,800 Yuanta Core Pacific Securities
Co.* 1,204,333
-----------
21,012,467
-----------
THAILAND: 4.3%
10,250,000 Asian Property Development
Public Co. Ltd.* 895,867
605,000 Bangkok Bank Public Co. Ltd.* 1,475,459
2,150,000 Bumrungrad Hospital Public Co.
Ltd.* 986,351
4,110,000 Quality Houses Public Co. Ltd.
Warrants (THB 1.20,
expiring 9/11/08)+* 24,770
6,271,650 Minor International Public Co.
Ltd.* 590,657
2,150,000 Shin Corporation Public Co.
Ltd.* 1,946,787
490,000 Siam Cement Public Co. Ltd.* 2,697,615
-----------
8,617,506
-----------
TURKEY: 1.4%
727,499 Haci Omer Sabanci Holding
A.S.* 2,797,358
-----------
TOTAL COMMON STOCKS: 91.9%
(Cost: $131,601,884) 185,753,162
-----------
PREFERRED STOCKS:
BRAZIL: 5.0%
2,575,000 Caemi Mineracao e
Metalurgia S.A. 2,413,720
176,000 Gerdau S.A. 1,694,759
2,243,973 Investimentos Itau S.A. 4,857,002
19,400 Petroleo Brasileiro S.A. 886,928
125,000 Randon SA Implementos e
Participacoes 292,927
TOTAL PREFERRED STOCKS: 5.0%
-----------
(Cost: $5,375,328) 10,145,336
-----------
See Notes to Financial Statements
9
WORLDWIDE EMERGING MARKETS FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 2005 (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL DATE OF VALUE
AMOUNT MATURITY COUPON (NOTE 1)
- --------------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS: 2.4%
Repurchase Agreement
(Note 11): Purchased on
6/30/05; maturity value
$4,950,344 (with State
Street Bank & Trust Co.,
collateralized by $5,105,000
Federal National Mortgage
Association 3.25% due
2/15/09 with a value of
$5,053,154)
(Cost: $4,950,000) 07/01/05 2.50% $ 4,950,000
------------
TOTAL INVESTMENTS: 99.3%
(Cost: $141,927,212) 200,848,498
OTHER ASSETS LESS LIABILITIES: 0.7% 1,466,443
------------
NET ASSETS: 100% $202,314,941
============
SUMMARY OF SUMMARY OF
INVESTMENTS % OF INVESTMENTS % OF
BY INDUSTRY NET BY INDUSTRY NET
(UNAUDITED) ASSETS (UNAUDITED) ASSETS
- ----------- ------ ----------- ------
Advertising 2.1% Iron/Steel 3.5%
Airlines 1.0% Lodging 2.5%
Auto Manufacturers 0.9% Machinery Diversified 2.3%
Auto Parts & Equipment 5.0% Media 0.9%
Banks 2.7% Metal Fabricate/
Beverages 1.3% Hardware 1.3%
Biotechnology 0.4% Mining 2.8%
Chemicals 2.4% Miscellaneous
Commercial Services 0.2% Manufacturer 0.9%
Diversified 8.7% Oil & Gas 7.5%
Diversified Financial Packaging & Containers 1.1%
Services 3.2% Pharmaceuticals 1.2%
Electronics 9.1% Real Estate 3.1%
Energy 1.2% Retail 3.8%
Environmental Control 2.5% Software 1.0%
Forest Products & Paper 1.0% Technology 4.3%
Hand/Machine Tools 3.6% Telecommunications 6.7%
Healthcare Services 0.5% Textiles 1.4%
Home Builders 3.7% Transportation 1.7%
Home Appliances 0.2% Short-Term Obligations 2.4%
Insurance 0.6% Other Assets Less
Investment Companies 0.6% liabilities 0.7%
------
100.0%
======
- -------------
+ Non-income producing
* Indicates a fair valued security which has not been valued utilizing an
independent quote, but has been valued pursuant to guidelines established
by the Board of Trustees. The aggregate value of fair valued securities is
$137,104,178, which represented 67.8% of net assets.
Glossary:
ADR-American Depositary Receipt
GDR-Global Depository Receipt
See Notes to Financial Statements
10
WORLDWIDE EMERGING MARKETS FUND
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2005 (UNAUDITED)
ASSETS:
Investments, at value (cost $141,927,212) (Note 1) ................................................ $ 200,848,498
Cash .............................................................................................. 335
Foreign currency (cost $620,059) .................................................................. 610,653
Receivables:
Capital shares sold ............................................................................ 490,977
Dividends and interest ......................................................................... 801,915
Prepaid expenses .................................................................................. 26,672
-------------
Total assets ............................................................................... 202,779,050
-------------
LIABILITIES:
Payables:
Capital shares redeemed ........................................................................ 116,607
Due to Adviser ................................................................................. 164,622
Accounts payable ............................................................................... 182,880
-------------
Total liabilities ............................................................................ 464,109
-------------
Net assets ........................................................................................ $ 202,314,941
=============
INITIAL CLASS SHARES:
Net Assets ........................................................................................ $ 165,858,076
=============
Shares outstanding ................................................................................ 10,241,956
=============
Net asset value, redemption and offering price per share .......................................... $ 16.19
=============
CLASS R1 SHARES:
Net Assets ........................................................................................ $ 36,456,865
=============
Shares outstanding ................................................................................ 2,252,992
=============
Net asset value, redemption and offering price per share .......................................... $ 16.18
=============
Net assets consist of:
Aggregate paid in capital ...................................................................... $ 142,628,392
Unrealized appreciation of investments, equity swaps, forward foreign currency contracts and
foreign currency transactions ................................................................ 58,781,917
Undistributed net investment income ............................................................ 1,652,827
Accumulated realized loss ...................................................................... (748,195)
-------------
$ 202,314,941
=============
See Notes to Financial Statements
11
WORLDWIDE EMERGING MARKETS FUND
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2005 (UNAUDITED)
INCOME (NOTE 1):
Dividends (net of foreign taxes withheld of $261,252) ............................... $ 3,241,135
Interest ............................................................................ 72,436
-----------
Total income .................................................................... 3,313,571
EXPENSES:
Management (Note 2) ................................................................. $996,652
Custodian ........................................................................... 133,216
Professional ........................................................................ 64,979
INTEREST (NOTE 10) .................................................................. 4,293
Report to shareholders .............................................................. 31,675
Trustees' fees and expenses ......................................................... 35,295
Transfer agency--Initial Class Shares ............................................... 6,154
Transfer agency--R1 Class Shares .................................................... 5,611
Other ............................................................................... 42,173
-------
Total expenses .................................................................. 1,320,048
-----------
Net investment income ........................................................... 1,993,523
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 3):
Realized gain from security transactions ............................................ 9,690,182
Realized loss from foreign currency transactions .................................... (222,006)
Change in unrealized depreciation of foreign denominated assets and liabilities and forward foreign
currency contracts .............................................................. (12,515)
Change in unrealized appreciation of investments .................................... 1,910,139
-----------
Net realized and unrealized gain on investments, futures and foreign currency transactions
11,365,800
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................................ $13,359,323
===========
See Notes to Financial Statements
12
WORLDWIDE EMERGING MARKETS FUND
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS ENDED
JUNE 30, YEAR ENDED
2005 DECEMBER 31,
(UNAUDITED) 2004
------------- -------------
INCREASE IN NET ASSETS FROM:
OPERATIONS:
Net investment income ................................................................. $ 1,993,523 $ 1,831,142
Realized gain from security transactions .............................................. 9,690,182 40,820,303
Realized losses from forward currency contracts and foreign currency transactions ..... (222,006) (191,280)
Realized gain from futures and swaps .................................................. -- 3,823,957
Change in unrealized depreciation of foreign denominated assets and liabilities and
forward currency contracts .......................................................... (12,515) 238,806
Change in unrealized appreciation of investments and swaps ............................ 1,910,139 (8,845,538)
------------- -------------
Net increase in net assets resulting from operations ..................................... 13,359,323 37,677,390
------------- -------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income
Initial Class Shares ................................................................ (1,381,136) (1,017,032)
Class R1 Shares ..................................................................... (252,304) --
------------- -------------
Total dividends to shareholders ....................................................... (1,633,440) (1,017,032)
------------- -------------
CAPITAL SHARE TRANSACTIONS*:
Proceeds from sales of shares
Initial Class Shares ................................................................ 16,146,314 49,815,599
Class R1 Shares ..................................................................... 18,556,455 26,983,355
Reimbursement from Adviser (Note 13) ................................................ 140,145 --
------------- -------------
34,842,914 76,798,954
------------- -------------
Reinvestment of dividends
Initial Class Shares ................................................................ 1,381,136 1,017,032
Class R1 Shares ..................................................................... 252,304 --
------------- -------------
1,633,440 1,017,032
------------- -------------
Cost of shares reacquired
Initial Class Shares ................................................................ (31,748,210) (90,150,954)
Class R1 Shares ..................................................................... (9,897,387) (4,921,938)
Redemption fees ..................................................................... 7,890 39,235
------------- -------------
(41,637,707) (95,033,657)
------------- -------------
Net decrease in net assets resulting from capital share transactions ................ (5,161,353) (17,217,671)
------------- -------------
Total increase in net assets ........................................................ 6,564,530 19,442,687
NET ASSETS:
Beginning of period ...................................................................... 195,750,411 176,307,724
------------- -------------
End of period (including undistributed net investment
income of $1,652,827 and $1,514,750 respectively) ..................................... $ 202,314,941 $ 195,750,411
============= =============
* SHARES OF BENEFICIAL INTEREST ISSUED AND REACQUIRED (UNLIMITED NUMBER OF
$.001 PAR VALUE SHARES AUTHORIZED):
INITIAL CLASS SHARES:
Shares sold ........................................................................... 1,034,101 3,837,100
Reinvestment of dividends ............................................................. 88,876 81,887
Shares reacquired ..................................................................... (2,049,988) (7,263,976)
------------- -------------
Net decrease .......................................................................... (927,011) (3,344,989)
============= =============
CLASS R1 SHARES:+
Shares sold ........................................................................... 1,172,172 2,127,437
Reinvestment of dividends ............................................................. 16,236 --
Shares reacquired ..................................................................... (638,530) (424,323)
------------- -------------
Net increase .......................................................................... 549,878 1,703,114
============= =============
+ Inception date of Class R1 shares May 1, 2004
See Notes to Financial Statements
13
WORLDWIDE EMERGING MARKETS FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
INITIAL CLASS SHARES CLASS R1 SHARES
------------------------------------------------------------ -----------------------------
FOR THE
SIX MONTHS SIX MONTHS PERIOD
ENDED ENDED MAY 1, 2004 (E)
JUNE 30, YEAR ENDED DECEMBER 31, JUNE 30, THROUGH
2005 ------------------------------------------------- 2005 DECEMBER 31,
(UNAUDITED) 2004 2003 2002 2001 2000 (UNAUDITED) 2004
---------- ------- ------- ------- ------- ------- ---------- --------------
Net Asset Value,
Beginning of Period ........... $ 15.21 $ 12.15 $ 7.89 $ 8.15 $ 8.29 $ 14.26 $ 15.21 $ 11.94
------- ------- ------- ------- ------- ------- ------- -------
Income From
Investment Operations:
Net Investment Income (Loss) ..... 0.15 0.15 0.13 0.04 0.08 (0.03) 0.15 0.06
Net Realized and Unrealized Gain
(Loss) on Investments, Swaps,
Futures and Foreign Currency
Transactions .................. 0.95 2.98 4.14 (0.28) (0.22) (5.94) 0.95 3.21
------- ------- ------- ------- ------- ------- ------- -------
Total from
Investment Operations ......... 1.10 3.13 4.27 (0.24) (0.14) (5.97) 1.10 3.27
------- ------- ------- ------- ------- ------- ------- -------
Less:
Dividends from Net
Investment Income ........... (0.13) (0.07) (0.01) (0.02) -- -- (0.13) --
------- ------- ------- ------- ------- ------- ------- -------
Reimbursement from Adviser
(Note 13) ..................... 0.01 -- -- -- -- -- -- --
------- ------- ------- ------- ------- ------- ------- -------
Redemption fees .................. --(f) --(f) -- -- -- -- --(f) --(f)
------- ------- ------- ------- ------- ------- ------- -------
Net Asset Value, End of Period ... $ 16.19 $ 15.21 $ 12.15 $ 7.89 $ 8.15 $ 8.29 $16.18 $ 15.21
======= ======= ======= ======= ======= ======= ======= =======
Total Return (a) ................. 7.33% 25.89% 54.19% (3.02)% (1.69)% (41.87)% 7.27% 27.39%
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY DATA
Net Assets,
End of Period (000) .............. $165,858 $ 169,845 $ 176,308 $149,262 $134,424 $129,047 $36,457 $25,906
Ratio of Gross Expenses to
Average Net Assets ............ 1.32%(d) 1.39% 1.43% 1.36% 1.30% 1.33% 1.35%(d) 1.52%(d)
Ratio of Net Expenses to
Average Net Assets (b)(c) ..... 1.31%(d) 1.36% 1.30% 1.30% 1.28% 1.26% 1.35%(d) 1.39%(d)
Ratio of Net Investment
Income (Loss) to Average
Net Assets (c) ................ 1.98%(d) 1.07% 1.27% 0.39% 1.04% (0.22)%(g) 2.12%(d) 1.27%(d)
Portfolio Turnover Rate .......... 20% 81% 63% 125% 135% 113% 20% 81%
- ---------------
(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 waiver, brokerage arrangements and custodian fee
arrangements to average net assets for
the periods ended December 31, 2004, December 31, 2003 and December 31, 2002
was 0.03%, 0.09% and 0.03%, respectively, for Initial Class shares and for
the period ended December 31, 2004 was 0.13% for Class R1 shares.
(d) Annualized.
(e) Inception date of Class R1 shares. (f) Amount represents less than $0.01 per
share.
(g) Net effect of expense waiver and brokerage arrangements to average net
assets was 0.02%.
SEE NOTES TO FINANCIAL STATEMENTS
14
WORLDWIDE EMERGING MARKETS 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 Worldwide
Emerging Markets Fund (the "Fund") is a diversified fund of the Trust and seeks
long-term capital appreciation by investing primarily in equity securities in
emerging markets around the world. The following is a summary of significant
accounting policies consistently followed by the Fund in the preparation of its
financial statements. The policies are in conformity with U.S. generally
accepted accounting principles. The preparation of financial statements in
conformity with U.S generally accepted accounting principles requires management
to make estimates and assumptions that effect the reported amounts in the
financial statements. Actual results could differ from those estimates. 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.
A. SECURITY VALUATION--Securities traded on national exchanges or traded on the
NASDAQ National Market System are valued at the last sales price as reported at
the close of each business day. As of June 23, 2003, the Fund began pricing
securities traded on the NASDAQ Stock Market using the NASDAQ official close
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. Securities in which the Fund invests are traded
in markets that close before 4:00 p.m. Eastern Time. Normally, developments that
occur between the close of the foreign market and 4:00 p.m. Eastern Time will
not be reflected in the Fund's daily net asset value. However, if the Fund
determines that such developments are so significant that they will materially
affect the value of the Fund's securities, the Fund may adjust the previous
closing prices to reflect what the Board of Trustees believes to be the fair
value of the securities as of 4:00 p.m. Eastern Time. The Fund may also fair
value securities in other situations, for example, when a particular foreign
market is closed but the Fund is open. The price which the Fund may realize upon
sale may differ materially from the value presented on the Schedule of Portfolio
Investments. 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 foreign markets.
Securities for which quotations are not available are stated at fair value as
determined by a Pricing Committee of the Adviser appointed by the Board of
Trustees. Certain factors such as economic conditions, political events, market
trends and security specific information are used to determine the fair value
for these securities.
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 as of the close of each business day. 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 realized gains
or 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 and capital gain distributions are determined in accordance with income
tax regulations, which may differ from such amounts reported in accordance with
U.S. generally accepted accounting principles.
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.
Income, expenses (excluding class-specific expenses) and realized/unrealized
gains/losses are allocated proportionately to each class of shares based upon
the relative net asset value of outstanding shares of each class at the
beginning of the day (after adjusting for current capital share activity of the
respective classes). Class-specific expenses are charged directly to the
applicable class of shares.
F. USE OF DERIVATIVE INSTRUMENTS
FUTURES CONTRACTS--The Fund may buy and sell financial futures contracts for
hedging purposes. When a fund enters into a futures contract, it must make an
initial deposit ("initial margin") as a partial guarantee of its performance
under the contract. As the value of the futures contract fluctuates, the Fund is
required to make additional margin payments ("variation margin") to cover any
additional obligation it may have under the contract. In the remote chance that
a broker cannot fulfill its obligation, the Fund could lose the variation margin
due to it. Risks may be caused by an imperfect correlation between the movements
in price of the futures contract and the price of the underlying instrument and
interest rates. Gains and losses on futures contracts, if any, are separately
disclosed. There were no futures contracts outstanding at June 30, 2005.
OPTION CONTRACTS--The Fund may invest, for hedging and other purposes, in call
and put options on securities, currencies and commodities. Call and put options
give the Fund the right but not the obligation to buy (calls) or sell (puts) the
instrument underlying the option at a specified price. The premium paid on the
option, should it be exercised, will, on a call, increase the cost of the
instrument acquired and, on a put, reduce the proceeds received from the sale of
the instrument underlying the option. If the options are not exercised, the
premium paid will be recorded as a realized loss upon expiration. The
15
WORLDWIDE EMERGING MARKETS FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
Fund may incur additional risk to the extent the value of the underlying
instrument does not correlate with the movement of the option value.
The Fund may also write call or put options. As the writer of an option, the
Fund receives a premium. The Fund keeps the premium whether or not the option is
exercised. The premium will be recorded, upon expiration of the option, as a
short-term realized gain. If the option is exercised, the Fund must sell, in the
case of a written call, or buy, in the case of a written put, the underlying
instrument at the exercise price. The Fund may write only covered puts and
calls. A covered call option is an option in which the Fund owns the instrument
underlying the call. A covered call sold by the Fund exposes it
during the term of the option to possible loss of opportunity to realize
appreciation in the market price of the underlying instrument or to possible
continued holding of an underlying instrument which might otherwise have been
sold to protect against a decline in the market price. A covered put exposes the
Fund during the term of the option to a decline in price of the underlying
instrument. A put option sold by the Fund is covered when, among other things,
cash or short-term liquid securities are placed in a segregated account to
fulfill the obligations undertaken. The Fund may incur additional risk from
investments in written currency options if there are unanticipated movements in
the underlying currencies. There were no written options outstanding at June 30,
2005.
NOTE 2--MANAGEMENT AGREEMENT--Van Eck Associates Corporation (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 1.30% of average daily net assets
except interest, taxes, brokerage commissions and extraordinary expenses for the
period January 1, 2004 through April 30, 2004 and 1.40% from May 1, 2005 through
April 30, 2006. Certain of the officers and trustees of the Trust are officers,
directors or stockholders of the Adviser and Van Eck Securities Corporation, the
Distributor.
NOTE 3--INVESTMENTS--Purchases and sales of securities, other than U.S.
government securities and short-term obligations, aggregated $39,290,478 and
$44,504,766 respectively, for the six months ended June 30, 2005.
The identified cost of investments owned at June 30, 2005 was $141,927,212 and
net unrealized appreciation aggregated $58,921,286 of which $63,616,471 related
to appreciated securities and $4,695,185 related to the depreciated securities.
NOTE 4--INCOME TAXES--The tax character of distributions paid to shareholders
during the year ended December 31, 2004 consisted of ordinary income of
$1,017,032. The tax character of distributions made in 2005 will be determined
at year end.
At December 31, 2004, the Fund had a capital loss carryforward of $7,200,845
available, expiring December 31, 2010.
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 transaction 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 76% of the Initial Class shares and approximately 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 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 on the Statement of Operations. The Fund may incur
additional risk from investments in forward foreign currency contracts if the
counterparty is unable to fulfill its obligation or there are unanticipated
movements of the foreign currency relative to the U.S. dollar. At June 30, 2005,
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 this deferred liability net of the corresponding
asset for financial statement purposes. As of June 30, 2005, the net value of
the asset and corresponding liability of the Fund's portion of the Plan is
$27,549.
NOTE 9--EQUITY SWAP--The Fund may enter into an equity swap to gain investment
exposure to the relevant market of the underlying security. A swap is an
agreement that obligates the parties to exchange cash flows at specified
intervals. The Fund is obligated to pay the counterparty on trade date an amount
based upon the value of the underlying instrument (notional amount) and, at
termination date, final payment is settled based on the value of the underlying
security on trade date versus the value on termination date plus accrued
dividends. Risks may arise as a result of the failure of the counterparty to the
contract to comply with the terms of the swap contract. The Fund bears the risk
of loss of the amount expected to be received under a swap agreement in the
event of the default of the counterparty. Therefore, the
16
WORLDWIDE EMERGING MARKETS FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
Fund considers the
credit worthiness of each counterparty to a swap contract in evaluating
potential credit risk. Additionally, risks may arise from unanticipated
movements in the value of the swap relative to the underlying securities. The
net receivable or payable for financial statement purposes is shown as due to or
from broker on the Statement of Assets and Liabilities. There were no
outstanding equity swaps at June 30, 2005.
NOTE 10--BANK LINE OF CREDIT--The Trust may participate with other funds managed
by the Adviser (the "Van Eck Funds") in a $10 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 Trust and the Van Eck Funds, at the request of the shareholders
and other temporary or emergency purposes. In connection therewith, the Trust
and the Van Eck Funds have agreed to pay commitment fees, pro rata, based on the
unused but available balance. Interest is charged to the Trust and the Van Eck
Funds at rates based on prevailing market rates in effect at the time of
borrowings. During the six months ended June 30, 2005, the Fund borrowed under
this Facility. The average daily balance during the eleven day period during
which the loan was outstanding amounted to $2,028,000 and the weighted average
interest rate was 3.66%. At June 30, 2005, there were no outstanding borrowings
by the Fund under the Facility.
NOTE 11--REPURCHASE AGREEMENTS--Collateral for repurchase agreements, in the
form of U.S. government obligations, the value of which must be at least 102% of
the underlying debt obligations, is held by the Fund's custodian. In the remote
chance the counterparty should fail to complete the repurchase agreements,
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 12--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 ("NYAG") and the
United States Securities and Exchange Commission ("SEC") have requested and
received information from the Adviser. The investigations are ongoing, and the
Adviser is continuing to cooperate with such investigations. If it is determined
that the Adviser or its affiliates engaged in improper or wrongful activity that
caused a loss to a Fund, the Board of Trustees of the Funds will determine the
amount of restitution that should be made to a Fund or its shareholders. At the
present time, the amount of such restitution, if any, has not been determined.
In July 2004, the Adviser received a "Wells Notice" from the SEC in connection
with the SEC's Investigation of market-timing activities. 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 the U.S.
securities laws against the Adviser and two of its senior officers.
There cannot be any assurance that if the SEC or NYAG were to assess sanctions
against the Adviser, such sanctions would not materially and adversely affect
the Adviser.
NOTE 13--REIMBURSEMENT FROM ADVISER--The Adviser reimbursed the Fund $140,145 in
connection with dividends paid in January 2003 to shareholders redeeming on the
day between record date and ex-dividend date.
17
VAN ECK WORLDWIDE INSURANCE TRUST
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APPROVAL OF ADVISORY AGREEMENTS
WORLDWIDE BOND FUND
WORLDWIDE EMERGING MARKETS FUND
WORLDWIDE HARD ASSETS FUND
WORLDWIDE REAL ESTATE FUND
In considering the renewal of the investment advisory agreements, the Board,
including the Independent Trustees, considered information that had been
provided throughout the year at regular Board meetings, as well as information
furnished for meetings of the Trustees held on April 19 and 20, 2005 to
specifically consider the renewal of each Fund's investment advisory agreement.
This information included, among other things, the following:
o The Adviser's response to a comprehensive questionnaire prepared by
independent legal counsel on behalf of the Independent Trustees;
o An independent report comparing the management fees and non-investment
management expenses of each Fund with those of comparable funds;
o An independent report comparing Fund investment performance to relevant
peer groups of funds and appropriate indices;
o Presentations by the Adviser's key investment personnel with respect to the
Adviser's investment strategies and general investment outlook in relevant
markets and the resources available to support the implementation of such
investment strategies;
o Reports with respect to the Adviser's brokerage practices, including the
benefits received by the Adviser from research acquired with soft dollars;
o The Adviser's financial statements and business plan with respect to its
mutual fund operations;
o A profitability analysis with respect to each Fund and the Van Eck complex
of mutual funds as a whole; and
o Reports on a variety of compliance-related issues.
The Board considered, among other things, the following factors in determining
whether to approve each Agreement: (1) the quality, nature, cost and character
of the investment management as well as the administrative and other
non-investment management services provided by the Adviser and its affiliates;
(2) the nature, quality and extent of the services performed by the Adviser in
interfacing and monitoring the services performed by third parties such as the
Funds' custodian, transfer agent, sub-accounting agent and independent auditors,
and the Adviser's commitment and efforts to review the quality and pricing of
third party service providers to the Funds with a view to reducing
non-management expenses of the Funds; (3) the terms of the advisory agreements
and the reasonableness and appropriateness of the particular fee paid by each
Fund for the services described therein; (4) the Adviser's willingness to
subsidize the operations of the Funds from time to time by means of waiving a
portion of its management fees or paying expenses of the Funds; (5) the
Adviser's development and use of proprietary fair valuation models with respect
to foreign securities; (6) the actions of the Adviser in response to recent
regulatory developments, including the development of written policies and
procedures reasonably designed to prevent violations of the federal securities
laws, and the implementation of recommendations of independent consultants with
respect to market timing and related compliance issues; (7) the responsiveness
of the Adviser to inquiries from regulatory agencies such as the SEC and the
office of the New York Attorney General ("NYAG"); (8) the resources devoted to
compliance efforts undertaken by the
18
VAN ECK WORLDWIDE INSURANCE TRUST
- --------------------------------------------------------------------------------
APPROVAL OF ADVISORY AGREEMENTS (CONTINUED)
Adviser on behalf of the Funds and the record of compliance with the investment
policies and restrictions and with policies on personal securities transactions;
and (9) the ability of the Adviser to attract and retain quality professional
personnel to perform investment advisory and administrative services for the
Funds.
The Trustees considered the fact that the Adviser has received a Wells Notice
from the SEC in connection with on-going investigations concerning market timing
and related matters. The Trustees determined that the Adviser is cooperating
with the SEC, the NYAG and the Independent Trustees in connection with these
matters and that the Adviser has taken appropriate steps to implement policies
and procedures reasonably designed to prevent harmful market timing activities
by investors in the Funds. In addition, the Trustees concluded that the Adviser
has acted in good faith in providing undertakings to the Board to make
restitution of damages, if any, that may have resulted from any prior wrongful
actions of the Adviser and that it would be appropriate to permit the SEC and
the NYAG to bring to conclusion their pending regulatory investigations prior to
the Board making any final determination of its own with respect to these same
matters.
The Board considered the fact that the Adviser is managing alternative
investment products, including hedge funds that invest in the same financial
markets and are managed by the same investment professionals as the Funds. The
Board concluded that the management of these products contributes to the
Adviser's financial stability and is helpful to the Adviser in attracting and
retaining quality portfolio management personnel for the Funds. In addition, the
Board concluded that the Adviser has established appropriate procedures to
monitor conflicts of interest involving the management of the Funds and these
alternative products and for resolving any such conflicts of interest in a fair
and equitable manner.
With respect to each Fund, the Board concluded that, in light of the services
rendered and the costs associated with providing such services, the profits, if
any, realized by the Adviser from managing the Fund are not unreasonable. In
this regard, the Board also considered the extent to which the Adviser may
realize economies of scale as each Fund grows and concluded that, with respect
to Worldwide Bond Fund and Worldwide Hard Assets Fund, the advisory fee
breakpoints in place will allow the Funds to share the benefits of economies of
scale as they grow in a fair and equitable manner. The Board also concluded that
neither of Worldwide Emerging Markets Fund nor the Worldwide Real Estate Fund
currently has sufficient assets, or in the foreseeable future is likely to have
sufficient assets, for the Adviser to realize material benefits from economies
of scale, and, therefore, the implementation of breakpoints would not be
warranted at this time for either Fund.
With respect to each Fund, the Board also considered additional specific factors
and related conclusions, as detailed below.
WORLDWIDE BOND FUND
In its renewal deliberations for the Fund, the Board noted that: (1) the Fund
outperformed its peer group average for the annualized three-year period ended
December 31, 2004, and was at or slightly below its peer group average for the
one-year, two-year, four-year and five-year periods ended December 31, 2004; and
(2) although the Fund's management fees and overall expense ratio are high
relative to its peer group, neither is unreasonable in view of the relatively
small size of the Fund, the size of the entire family of Van Eck mutual funds,
and the nature of the global investment strategy used to pursue the Fund's
objective.
19
VAN ECK WORLDWIDE INSURANCE TRUST
- --------------------------------------------------------------------------------
APPROVAL OF ADVISORY AGREEMENTS (CONTINUED)
WORLDWIDE EMERGING MARKETS FUND
In its renewal deliberations for the Fund, the Board noted that: (1) the Fund
outperformed its peer group average for the annualized one-year, two-year,
three-year and four-year periods ended December 31, 2004; (2) the Adviser has
taken action to improve investment results in the past two years by
strengthening the Fund's investment team; (3) the Adviser has agreed to waive
and will continue to waive through April 2006 a portion of its management fee
such that the overall management fee for the Fund during 2004, net of waivers,
was below average for its peer group; and (4) the Fund's overall expense ratio,
net of fee waivers, is below average for its peer group.
WORLDWIDE HARD ASSETS FUND
In its renewal deliberations for the Fund, the Board noted that: (1) the Fund
outperformed its peer group average for the one-year, two-year and three-year
periods ended December 31, 2004; (2) the Adviser has taken action to strengthen
the Fund's investment team by adding a key energy sector analyst; and (3) the
Fund's management fees and expense ratio are above average but within the range
of management fees and expense ratios, respectively, for its peer group.
WORLDWIDE REAL ESTATE FUND
In its renewal deliberations for the Fund, the Board noted that: (1) the Fund
outperformed its peer group average and was in the top quintile for the one-year
period ended December 31, 2004; (2) the Adviser has agreed to waive and will
continue to waive through April 2006 a portion of its management fee such that
the overall management fee for the Fund during 2004, net of fee waivers, was
below average for its peer group; and (3) the Fund's expense ratio, net of fee
waivers, is above average, but within the range of expense ratios for its peer
group.
The Board did not consider any single factor as controlling in determining
whether or not to renew the investment advisory agreement. Nor are the items
described herein all of the matters considered by the Board. Based on its
consideration of the foregoing factors and conclusions, and such other factors
and conclusions as it deemed relevant, and assisted by the advice of its
independent counsel, the Board concluded that the renewal of the investment
advisory agreements, including the fee structures (described herein) is in the
interests of shareholders, and accordingly, the Board, including all of the
Independent Trustees, approved the continuation of the advisory agreements for
an additional one-year period.
20
[VAN ECK GLOBAL LOGO OMITTED] [GRAPHIC OMITTED]
Investment Adviser: Van Eck Associates Corporation
Distributor: Van Eck Securities Corporation
99 Park Avenue, New York, NY 10016 www.vaneck.com
Account Assistance: (800) 544-4653
This report must be preceded or accompanied by a Van Eck Worldwide Insurance
Trust Prospectus, which includes more complete information. An investor should
consider the investment objective, risks, and charges and expenses of the Fund
carefully before investing. The prospectus contains this and other information
about the investment company. Please read the prospectus carefully before
investing.
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 and information regarding how the Fund voted proxies
relating to portfolio securities during the most recent twelve month period
ending June 30 is available, without charge, calling 1.800.826.2333, or by
visiting www.vaneck.com, or on the Commission's website at http://www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the Commission
for the first and third quarters of each fiscal year on Form N-Q. The Fund's
Form N-Qs are available on the Commission's website at http://www.sec.gov and
may be reviewed and copied at the Commission's Public Reference Room in
Washington, D.C. Information on the operation of the Public Reference Room may
be obtained by calling 1.800.SEC.0330. The Fund's complete schedule of portfolio
holdings is also available by calling 1.800.826.2333 or by visiting
www.vaneck.com.
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.
Information included in Item 1.
Item 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
Item 8. PORTFOLIO MANAGER OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
Item 9. PURCHASE OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
Item 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
Item 11. CONTROLS AND PROCEDURES.
(a) The Chief Executive Officer and the Chief Financial Officer have concluded
that the Worldwide Emerging Markets 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
Emerging Markets 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
over financial reporting or in other factors that could significantly
affect these controls over financial reporting subsequent to the date of
our evaluation.
Item 12. EXHIBITS.
(a)(1) Not applicable.
(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 EMERGING MARKETS FUND
By (Signature and Title) /s/ Bruce J. Smith, SVP & CFO
-----------------------------
Date August 26, 2005
---------------
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 26, 2005
---------------
By (Signature and Title) /s/ Bruce J. Smith, CFO
-------------------------
Date August 26, 2005
---------------