UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-05083
WORLDWIDE INSURANCE TRUST - WORLDWIDE REAL ESTATE FUND
(Exact name of registrant as specified in charter)
99 Park Avenue, New York, NY 10016
(Address of principal executive offices) (Zip code)
Van Eck Associates Corporation
99 PARK AVENUE, NEW YORK, NY 10016
(Name and address of agent for service)
Registrant's telephone number, including area code: (212) 687-5200
Date of fiscal year end: DECEMBER 31
Date of reporting period: JUNE 30, 2005
Item 1. REPORT TO SHAREHOLDERS.
- --------------------------------------------------------------------------------
VAN ECK GLOBAL
- --------------------------------------------------------------------------------
Worldwide Insurance Trust
- --------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
JUNE 30, 2005
[GRAPHICS OMITTED]
WORLDWIDE REAL ESTATE FUND
GLOBAL INVESTMENTS SINCE 1955
The information in the shareholder letter represents the personal opinions of
the investment team members 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 investment team members are as of June 30,
2005 and are subject to change.
WORLDWIDE REAL ESTATE FUND
- --------------------------------------------------------------------------------
Dear Shareholder:
We are pleased to report that the Initial Class shares of the Van Eck Worldwide
Real Estate Fund gained 3.77% for the six months ended June 30, 2005. After five
consecutive calendar years of outperforming the general stock market, real
estate investments once again handily outperformed the S&P 500 Index's(1) -0.81%
for the first half of 2005. In addition, the Fund's performance is in line with
the benchmark Citigroup World Property Index,(2) which gained 3.61% for the
period. The U.S.-only Morgan Stanley REIT Index(3) rose 6.35%.
REITs (real estate investment trusts, which are publicly traded companies with
portfolios of commercial property that distribute most of their income to
shareholders) can be a convenient way to gain broad exposure to the commercial
real estate market. Because they typically behave differently than more
traditional financial markets, real estate investments can provide
diversification benefits when combined with other asset classes in an investment
portfolio. In addition to their return potential, real estate investments can
offer a source of current income. The Van Eck Worldwide Real Estate Fund takes a
global approach to real estate investing. At June 30, 2005, 38.3% of the Fund's
assets were allocated to real estate markets outside of the U.S. We believe that
the Fund's international exposure sets it apart from its peers as it allows
management to access the most compelling real estate investments across the
globe at a given time.
MARKET AND ECONOMIC REVIEW
Record oil prices and rising interest rates created a great deal of uncertainty
in the broader stock and bond markets during the first half of 2005. Reflecting
in part the tentative mood of investors, many markets witnessed some significant
price swings over the first six months. As such, investors continued to seek
defensive asset classes for their diversification benefits. Real estate equities
continued to be an attractive choice for investors, as they provided steady
yields and relatively attractive returns during the first six months of the
year. REIT performance this year compared favorably with the total return of the
S&P 500, which turned in a nearly flat performance year to date.
The real estate sector did, however, meet some headwinds during the first
quarter of 2005. The federal budget deficit, the trade deficit, financially
over-stretched consumers, a possible housing bubble and fears of higher
long-term interest rates took their toll on many segments of the economy. In an
abrupt turnaround from last year, REIT share prices fell further than the
broader equity market during the first quarter. Poor investor sentiment was also
partly to blame. Many feared that REITs were overvalued after a long period of
outperformance. In addition, interest rates--long viewed as a key player in the
determination of REIT stock prices--rose and many believed that this would have
a negative impact on the performance of real estate equities. Talks of a housing
bubble, also fueled by rising interest rates, took its toll as well. We hold the
view that this bubble may exist in single-family housing markets, but not among
the commercial property types that make up the holdings of the Fund. Many
commercial property companies, on the contrary, experienced recovery during the
first quarter. Taking advantage of growing acquisition opportunities, many
property companies began to expand their portfolios rapidly.
During the second quarter, REIT share prices rose. While U.S. economic growth
moderated somewhat, lower expectations regarding inflation continued to push
bond yields lower as the year progressed. This environment created a positive
backdrop for REIT shares. During the second quarter, investors bid up higher
quality REITs. Those with high earnings multiples and low dividend yields
generally outperformed those with higher yields and lower multiples (i.e., those
companies with higher quality balance sheets tended to outperform). The rise in
REIT share prices during the latter half of the period can be attributed, in
large part, to strong first quarter earnings reports that in most cases met or
exceeded Wall Street expectations.
In general, REIT prices have been supported by a continued demand for yield from
around the globe. As there are few ways to directly invest in
1
WORLDWIDE REAL ESTATE FUND
- --------------------------------------------------------------------------------
commercial real estate, demand has grown substantially for REITs in the recent
past. More than a dozen countries currently offer REITs or REIT-like structures
and this number is expected to rise. Several governments are considering
legislation to create them. During the period, we continued to see growing
opportunities outside the United States, where some commercial real estate
regions have been showing signs of overheating.
FUND REVIEW
During the first half of 2005, the Fund maintained its large allocation to the
hotel sector (18.9% of Fund net assets at June 30) as we felt that fundamentals
for luxury hotels in major urban areas continued to accelerate rapidly.
Valuations appeared relatively inexpensive on an asset basis. In addition,
limited new construction and strong REVPAR (revenue per available room) growth
buoyed the group. MeriStar Hospitality Corp. (4.9% of Fund net assets at June
30) was an example of a strong performer in the portfolio during the first half,
returning 3.0%. Our stock selection within the hotel sector was the greatest
contributor to the Fund's performance during the period.
Also beneficial to Fund performance during the period was the Fund's allocation
to the apartment sector. At June 30, our exposure to this sector stood at 14.6%
of Fund net assets, as we felt that the group may benefit from continued talks
of a housing bubble (the increase in housing activity had hurt the apartment
sector in recent years). Recent additions to the portfolio include Post
Properties, Inc. and AIV (U.S. Apartment Investment & Management Co.), (3.9% and
3.3% of Fund net assets at June 30, respectively), which both performed well
during the period. Also of note in the apartment sector was the early June
acquisition of Gables Residential Trust (0.0% of Fund net assets at June 30) by
a private equity partnership managed by ING Clarion Partners, a wholly-owned
subsidiary of the Netherlands' ING Groep. Gables, a company specializing in
luxury multi-family properties, is also one of the largest apartment operators
in the U.S. The transaction, expected to be completed by the end of the third
quarter of 2005, represents the largest public to private REIT transaction in
the apartment sector. While neither ING nor Gables was a Fund holding during the
period, we feel that this transaction particularly highlights the attractive
valuation currently of the apartment sector.
The retail sector, while not the star performer it has been recently, enjoyed
the best leasing velocity it has seen in years. This typically bodes well for
rents and occupancies. Retail earnings growth was driven higher during the
period. We have seen fewer store closings and a lack of sellers, which has
supported current real estate valuations. Currently, the Fund has a 4.4%
allocation to the retail sector, compared to the year-end 2004 exposure of
10.4%.
Our position in the office/industrial sector (which stood at 20.2% at June 30,
up from December 2004's 16.6% at the beginning of the period) was driven in part
by a sustained recovery in office fundamentals. The group as a whole performed
poorly during the period on expectations that Fed rate increases may slow the
economy. However, value within the sector became apparent as certain sales of
office buildings in urban areas came in at astonishing prices.
Geographically speaking, the Fund remained overweight in Spanish real estate
equities (5.6% of Fund net assets at June 30) versus the benchmark index. This
strategy has proved beneficial as Spanish real estate performed well for the
year-to-date period. However, we have kept a close watch on this area as we feel
that local real estate is becoming expensive. Our overweight Japanese real
estate position (9.3% of Fund net assets at June 30) detracted from relative
performance during the period. Though J-REITs (Japanese REITs) did see some
improvement toward the end of the period, Japanese real estate shares continued
to languish overall.
As a diversified portfolio of global real estate securities, the Van Eck
Worldwide Real Estate Fund is positioned to move into what it believes are the
most attractive markets as they emerge, while attempting to diversify against
adverse conditions in any single real estate market. Though the Fund remains
concentrated in North American real estate companies, we continue to seek
favorable real estate
2
WORLDWIDE REAL ESTATE FUND
- --------------------------------------------------------------------------------
market trends worldwide, ranging from short-term cyclical opportunities to
broader long-term trends.
* * *
In our view, there has been continued healthy growth within the real estate
sector. While REIT earnings growth may not be accelerating quickly, little new
construction is underway and replacement costs have continued to rise. In
addition, vacancy rates have declined while effective rents have risen. REITs
have enjoyed a strong period of growth and have benefited from new property
acquisitions. We remain cautiously optimistic for the real estate sector in the
coming months and believe that profitable acquisitions and development
opportunities remain available for those companies that can access inexpensive
capital.
Real estate investing can be risky by definition, and the Fund takes on
additional risk by investing in real estate companies in emerging markets. If
certain investment vehicles fail, the Fund may end up holding actual real estate
in settlement of investment claims, and this property may be hard to sell. In
addition, the Fund is subject to all the risks associated with companies in the
real estate industry such as declines in property values, adverse economic
conditions, overbuilding and competition. The Fund is also subject to the risks
associated with investment in junk bonds. The Fund may engage in active and
frequent trading to achieve its investment objectives. As a result, the Fund may
suffer increased transaction costs that may affect performance.
The Fund is classified as a non-diversified fund under the Investment Company
Act of 1940 (the "1940 Act") to enable it to concentrate its assets in a
narrower group of stocks than a diversified fund, and is thus also subject to
the non-diversification risk. A large loss in an individual stock may cause a
much larger loss in a non-diversified fund's value.
An investment in the Fund should be considered part of an overall investment
program, rather than a complete investment program.
We would like to thank you for your participation in the Van Eck Worldwide Real
Estate Fund. We look forward to helping you meet your investment goals in the
future.
[PHOTO OMITTED]
/s/ Samuel R. Halpert
SAMUEL R. HALPERT
INVESTMENT TEAM MEMBER
July 13, 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 REAL ESTATE FUND
- --------------------------------------------------------------------------------
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 S&P (Standard & Poor's) 500 Index consists of 500 widely held common
stocks, covering four broad sectors (industrials, utilities, financial and
transportation). It is a market value-weighted index (stock price times shares
outstanding), with each stock affecting the Index in proportion to its market
value. Construction of the S&P 500 Index proceeds from industry group to the
whole. Since some industries are characterized by companies of relatively
small-stock capitalization, the Index is not comprised of the 500 largest
companies on the New York Stock Exchange. This Index, calculated by Standard &
Poor's, is a total return index with dividends reinvested.
(2) The 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.
(3) The Morgan Stanley REIT (RMS) 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
WORLDWIDE REAL ESTATE FUND
- --------------------------------------------------------------------------------
GEOGRAPHICAL WEIGHTINGS*
AS OF JUNE 30, 2005 (UNAUDITED)
[The table below represents a pie chart in the printed report.]
United States 51.5%
Cash/Equivalents less Other Assets Less Liabilities 10.2%
Canada 12.2%
Japan 9.3%
United Kingdom 3.8%
Spain 5.6%
Germany 1.7%
Australia 1.8%
Hong Kong 2.3%
France 1.0%
Italy 0.6%
------------------------------------
TOP TEN SECTORS*
AS OF JUNE 30, 2005* (UNAUDITED)
------------------------------------
Diversified ............. 22.8%
Hotels .................. 18.9%
Office .................. 14.8%
Residential ............. 14.6%
Industrial .............. 5.4%
Forest Products ......... 4.1%
Regional Malls .......... 2.6%
Healthcare Services ..... 2.2%
Storage ................. 2.1%
Shopping Centers ........ 1.8%
------------------------------------
- ----------
* PERCENTAGE OF NET ASSETS.
PORTFOLIO IS SUBJECT TO CHANGE.
5
WORLDWIDE REAL ESTATE FUND
TOP TEN EQUITY HOLDINGS AS OF JUNE 30, 2005* (UNAUDITED)
- --------------------------------------------------------------------------------
LA QUINTA CORP.
(U.S., 4.9%)
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.
MERISTAR HOSPITALITY CORP.
(U.S., 4.9%)
MeriStar Hospitality is a hotel real estate investment trust and a hotel
management company. The company owns hotel and resort properties in the United
States and Canada. Through Interstate Hotels & Resorts, MeriStar manages hotels
and resorts in the United States, Canada and the Caribbean. Interstate Hotels is
organized into hotel, resort, inn and Doral divisions.
BROOKFIELD PROPERTIES CORP.
(CANADA, 4.3%)
Brookfield Properties is a North American office property company. The company
owns and manages a portfolio of properties in Canada and the U.S. and also
develops master-planned residential communities.
TIMBERWEST FOREST CORP.
(CANADA, 4.1%)
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.
POST PROPERTIES, INC.
(U.S., 3.9%)
Post Properties develops and operates upscale multi-family apartment communities
in the Southeastern and Southwestern United States. The company operates as a
self-administered and self-managed real estate investment trust, whose primary
business consists of developing and managing Post brand-name apartment
communities for its own account.
APARTMENT INVESTMENT & MANAGEMENT CO. (AIV)
(U.S., 3.3%)
Apartment Investment & Management, a self-administered and self-managed real
estate investment trust, owns a geographically diversified portfolio of
multi-family apartment properties. Some income is also derived from property
management for third parties and affiliates.
MITSUBISHI ESTATE CO. LTD.
(JAPAN, 3.3%)
Mitsubishi Estate invests in real estate properties in Japan and the United
States. The company leases, manages and develops commercial buildings in central
Tokyo. Mitsubishi Estate also develops and sells residential properties and
parking lots and manages recreational facilities, including golf and tennis
clubs.
MITSUI FUDOSAN CO. LTD.
(JAPAN, 3.0%)
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.
LIBERTY PROPERTY TRUST
(U.S., 2.7%)
Liberty Property Trust is a real estate investment trust, which owns suburban
office and industrial properties. The company operates through its Liberty
Property Limited Partnership subsidiary.
PROLOGIS TRUST
(U.S., 2.7%)
ProLogis provides distribution facilities and services. The company owns,
manages and develops distribution facilities in various markets throughout North
America, Europe and Japan.
- ----------
* PORTFOLIO IS SUBJECT TO CHANGE.
COMPANY DESCRIPTIONS COURTESY OF BLOOMBERG.COM.
6
WORLDWIDE REAL ESTATE 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 $1,037.70 $5.55
Hypothetical (5% return before expenses) $1,000.00 $1,019.35 $5.50
- -------------------------------------------------------------------------------------------------------------------------
Class R1 Actual $1,000.00 $1,037.30 $5.56
Hypothetical (5% return before expenses) $1,000.00 $1,019.34 $5.51
- -------------------------------------------------------------------------------------------------------------------------
* Expenses are equal to the Fund's annualized expense ratio of 1.10% on the
Initial Class shares and 1.10% 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 REAL ESTATE FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 2005 (UNAUDITED)
- --------------------------------------------------------------------------------
NO. OF VALUE
COUNTRY SHARES SECURITIES (NOTE 1)
- --------------------------------------------------------------------------------
COMMON STOCKS:
AUSTRALIA: 1.8%
60,000 Lend Lease Corp. Ltd. $ 591,870
------------
CANADA: 12.2%
5,000 BPO Properties Ltd. 159,293
6,400 Brookfield Homes Corp. 291,840
47,250 Brookfield Properties Corp. 1,360,800
750 Brookfield Properties Corp. (USD) 21,175
50,000 Genesis Land Development Corp.+ 93,702
283,200 Killam Properties, Inc.+ 627,641
20,000 Parkbridge Lifestyles Communities, Inc.+ 78,220
110,000 TimberWest Forest Corp.
(Stapled Units) 1,320,215
------------
3,952,886
------------
FRANCE: 1.0%
2,500 Unibail S.A. 320,661
------------
GERMANY: 1.7%
30,000 IVG Immobilien AG 554,160
------------
HONG KONG: 2.3%
300,000 Hang Lung Properties Ltd. 442,005
30,000 Sun Hung Kai Properties Ltd. 296,279
------------
738,284
------------
ITALY: 0.6%
200,000 Beni Stabili S.p.A. 204,062
------------
JAPAN: 9.3%
8,000 Goldcrest Co. Ltd. 450,176
96,000 Mitsubishi Estate Co. Ltd. 1,057,047
88,000 Mitsui Fudosan Co. Ltd. 988,006
45,000 Sumitomo Realty & Development Co. Ltd. 504,825
------------
3,000,054
------------
SPAIN: 5.6%
10,000 Inmobiliaria Colonial, S.A. 531,917
34,540 Inmobiliaria Urbis, S.A. 648,461
6,657 Metrovacesa, S.A. 392,081
10,000 Sacyr Vallehermoso, S.A. 235,615
10,000 Sacyr Vallehermoso S.A.,
(Rights expiring 7/12/05)+ 7,374
-----------
1,815,448
-----------
UNITED KINGDOM: 3.8%
32,160 British Land Co. PLC $ 504,705
10,000 Eurocastle Investment Ltd. 224,855
20,562 Land Securities Group PLC 512,032
------------
1,241,592
------------
UNITED STATES: 51.2%
20,000 AMB Property Corp. 868,600
25,000 American Financial Realty Trust 384,500
26,000 Apartment Investment & Management Co. (Class A) 1,063,920
11,000 Archstone-Smith Trust 424,820
12,000 Boston Properties, Inc. 840,000
25,500 Crescent Real Estate Equities Co. 478,125
45,000 Equity Inns, Inc 598,500
18,000 General Growth Properties, Inc. 739,620
20,300 Hilton Hotels Corp. 484,155
10,000 Kimco Realty Corp. 589,100
171,200 La Quinta Corp. (Paired Certificate)+ 1,597,296
20,000 Liberty Property Trust 886,200
74,400 Lodgian, Inc.+ 764,088
30,000 LTC Properties, Inc. 621,000
184,500 MeriStar Hospitality Corp.+ 1,586,700
11,500 Mesabi Trust 159,735
35,000 Post Properties, Inc. 1,263,850
22,000 ProLogis Trust 885,280
11,000 Public Storage, Inc. 695,750
9,000 SL Green Realty Corp. 580,500
10,000 Starwood Hotels & Resorts
Worldwide, Inc (Paired Certificate) 585,700
18,000 Vail Resorts, Inc.+ 505,800
------------
16,603,239
------------
TOTAL COMMON STOCKS: 89.5%
(Cost: $18,502,116) 29,022,256
------------
PREFERRED STOCK:
UNITED STATES: 0.3%
1,500 Simon Property Group, Inc.
(Cost: $80,325) 93,000
------------
See Notes to Financial Statements
8
WORLDWIDE REAL ESTATE FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 2005 (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
SHORT-TERM DATE OF VALUE
OBLIGATIONS: 10.4% MATURITY COUPON (NOTE 1)
- --------------------------------------------------------------------------------
Repurchase Agreement (Note 10):
Purchased on 6/30/05;
maturity value $3,361,233
(with State Street Bank &
Trust Co., collateralized by
$3,465,000 Federal National
Mortgage Association,
3.25% due 2/15/09 with a
value of $3,429,809)
(Cost: $3,361,000) 07/01/05 2.50% $ 3,361,000
------------
TOTAL INVESTMENTS: 100.2%
(Cost: $21,943,441) 32,476,256
OTHER ASSETS LESS LIABILITIES: (0.2%) (55,555)
------------
NET ASSETS: 100% $32,420,701
============
SUMMARY OF SUMMARY OF
INVESTMENTS % OF INVESTMENTS % OF
BY INDUSTRY NET BY INDUSTRY NET
(UNAUDITED) ASSETS (UNAUDITED) ASSETS
- ----------- -------- ----------- --------
Diversified 22.8% Residential 14.6%
Forest Products 4.1% Shopping Centers 1.8%
Healthcare Services 2.2% Storage 2.1%
Hotels 18.9% Short-Term
Industrial 5.4% Obligations 10.4%
Mining 0.5% Other assets less
Office 14.8% liabilities (0.2)%
Regional Malls 2.6% --------
100.0%
========
- ----------
+ Non-income producing
See Notes to Financial Statements
9
WORLDWIDE REAL ESTATE FUND
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2005 (UNAUDITED)
ASSETS:
Investments, at value (cost $21,943,441) (Note 1) ............... $32,476,256
Cash ............................................................ 816
Foreign currency (cost $8,749) .................................. 8,697
Receivables:
Securities sold ............................................... 104,206
Capital shares sold ........................................... 5
Dividends and interest ........................................ 104,388
Prepaid expenses ................................................ 749
-----------
Total assets ................................................ 32,695,117
-----------
LIABILITIES:
Payables:
Securities purchased .......................................... 79,072
Capital shares redeemed ....................................... 127,184
Due to Adviser ................................................ 17,974
Accounts payable .............................................. 50,186
-----------
Total liabilities ........................................... 274,416
-----------
Net assets ...................................................... $32,420,701
===========
INITIAL CLASS SHARES:
Net assets ...................................................... $28,259,989
===========
Shares outstanding .............................................. 1,586,049
===========
Net asset value, redemption and offering price per share ........ $17.82
===========
CLASS R1 SHARES:
Net assets ...................................................... $ 4,160,712
===========
Shares outstanding .............................................. 234,275
===========
Net asset value, redemption and offering price per share ........ $17.76
===========
Net assets consist of:
Aggregate paid in capital ..................................... $20,326,816
Unrealized appreciation of investments and
foreign currency transactions ............................... 10,532,153
Undistributed net investment income ........................... 491,909
Accumulated realized gain ..................................... 1,069,823
-----------
$32,420,701
===========
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2005 (UNAUDITED)
INCOME (NOTE 1):
Dividends (net of foreign taxes withheld of $24,589) ............ $ 474,774
Interest ........................................................ 29,371
-----------
Total income .............................................. 504,145
EXPENSES:
Management (Note 2) ................................... $151,064
Professional .......................................... 21,847
Reports to shareholders ............................... 13,948
Transfer agency -- Initial Class Shares ............... 5,886
Transfer agency -- R1 Class Shares .................... 6,147
Custodian ............................................. 5,966
Trustees' fees and expenses ........................... 4,079
Other ................................................. 7,635
--------
Total expenses .................................. 216,572
Expenses assumed by the Adviser (Note 2) .............. (50,401)
--------
Net expenses .............................................. 166,171
-----------
Net investment income ........................................... 337,974
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS (NOTE 3):
Realized gain from security transactions ........................ 1,165,785
Realized gain from foreign currency transactions ................ 7,520
Change in unrealized appreciation of investments ................ (363,524)
Change in unrealized appreciation of foreign
denominated assets and liabilities ............................ (1,141)
-----------
Net realized and unrealized gain on investments and
foreign currency transactions ................................. 808,640
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............ $ 1,146,614
===========
See Notes to Financial Statements
10
WORLDWIDE REAL ESTATE 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 ............................ $ 337,974 $ 837,534
Realized gain from security transactions ......... 1,165,785 1,317,931
Realized gain from foreign currency transactions . 7,520 2,994
Change in unrealized appreciation of investments . (363,524) 5,398,532
Change in unrealized appreciation of foreign
denominated assets and liabilities ............. (1,141) (124)
----------- -----------
Net increase in net assets resulting
from operations .............................. 1,146,614 7,556,867
----------- -----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Initial Class Shares ........................... (600,182) (331,869)
Class R1 Shares ................................ (65,302) --
----------- -----------
(665,484) (331,869)
----------- -----------
Net realized gains
Initial Class Shares ........................... (284,297) --
Class R1 Shares ................................ (30,932) --
----------- -----------
(315,229) --
----------- -----------
Total dividends and distributions to shareholders (980,713) (331,869)
----------- -----------
CAPITAL SHARE TRANSACTIONS*:
Proceeds from sales of shares
Initial Class Shares ........................... 4,333,271 13,037,291
Class R1 Shares ................................ 1,305,515 2,781,167
----------- -----------
5,638,786 15,818,458
----------- -----------
Reinvestment of dividends and distributions
Initial Class Shares ........................... 884,479 331,869
Class R1 Shares ................................ 96,234 --
----------- -----------
980,713 331,869
----------- -----------
Cost of shares reacquired
Initial Class Shares ........................... (5,216,283) (11,426,131)
Class R1 Shares ................................ (225,788) (216,490)
Redemption fees ................................ 303 285
----------- -----------
(5,441,768) (11,642,336)
----------- -----------
Net increase in net assets resulting from
capital share transactions ................... 1,177,731 4,507,991
----------- -----------
Total increase in net assets ................... 1,343,632 11,732,989
NET ASSETS:
Beginning of period ................................. 31,077,069 19,344,080
----------- -----------
End of period (including undistributed net
investment income of $491,909 and
$811,899, respectively) ........................... $32,420,701 $31,077,069
=========== ===========
* SHARES OF BENEFICIAL INTEREST ISSUED
AND REAQUIRED (UNLIMITED NUMBER OF
$.001 PAR VALUE SHARES AUTHORIZED)
INITIAL CLASS SHARES:
Shares sold ...................................... 255,951 883,772
Reinvestment of dividends ........................ 53,122 24,154
Shares reacquired ................................ (309,221) (782,971)
----------- -----------
Net increase (decrease) .......................... (148) 124,955
=========== ===========
CLASS R1 SHARES:+
Shares sold ...................................... 77,247 178,393
Reinvestment of dividends ........................ 5,801 --
Shares reacquired ................................ (13,447) (13,719)
----------- -----------
Net increase ..................................... 69,601 164,674
=========== ===========
+ Inception date of R1 shares May 1, 2004
See Notes to Financial Statements
11
WORLDWIDE REAL ESTATE FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
INITIAL CLASS SHARES CLASS R1 SHARES
------------------------------------------------------------------------ --------------------------
SIX MONTHS SIX MONTHS FOR THE 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 ........ $ 17.75 $ 13.24 $ 10.07 $ 10.87 $ 10.62 $ 9.15 $17.70 $13.55
------- ------- ------- ------- ------- ------ ------ ------
Income From
Investment Operations:
Net Investment Income ...... 0.19 0.49 0.33 0.38 0.35 0.34 0.18 0.18
Net Realized and Unrealized
Gain (Loss) on Investments
and Foreign Currency
Transactions ............. 0.44 4.24 3.06 (0.85) 0.20 1.33 0.44 3.97
------- ------- ------- ------- ------- ------ ------ ------
Total from
Investment Operations ...... 0.63 4.73 3.39 (0.47) 0.55 1.67 0.62 4.15
------- ------- ------- ------- ------- ------ ------ ------
Less:
Dividends from Net
Investment Income ........ (0.38) (0.22) (0.22) (0.33) (0.30) (0.20) (0.38) --
Distributions from Net
Realized Gains ........... (0.18) -- -- -- -- -- (0.18) --
------- ------- ------- ------- ------- ------ ------ ------
Total Dividends and
Distributions ............ (0.56) (0.22) (0.22) (0.33) (0.30) (0.20) (0.56) --
------- ------- ------- ------- ------- ------ ------ ------
Redemption fees ............... --(f) --(f) -- -- -- -- --(f) --(f)
------- ------- ------- ------- ------- ------ ------ ------
Net Asset Value, End of Period $ 17.82 $ 17.75 $ 13.24 $ 10.07 $ 10.87 $10.62 $17.76 $17.70
======= ======= ======= ======= ======= ====== ====== ======
Total Return (a) .............. 3.77% 36.21% 34.50% (4.48)% 5.34% 18.71% 3.73% 30.63%
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTARY DATA
Net Assets,
End of Period (000) ........ $28,260 $28,163 $19,344 $15,309 $13,947 $6,875 $4,161 $2,915
Ratio of Gross Expenses to
Average Net Assets ......... 1.40%(d) 1.45% 1.49% 1.48% 1.62% 2.27% 1.73%(d) 2.46%(d)
Ratio of Net Expenses to
Average Net Assets (b) (c) . 1.10%(d) 1.20% 1.49% 1.46%(b) 1.50%(b) 1.45%(b) 1.10%(d) 1.10%(d)
Ratio of Net Investment
Income to Average
Net Assets (c) ............. 2.26%(d) 3.52% 2.68% 3.04% 4.17% 4.21% 2.02%(d) 4.01%(d)
Portfolio Turnover Rate ....... 9% 29% 19% 139% 74% 233% 9% 29%
- ----------
(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 arrangements and custodian fee
arrangements to average net assets of the Initial Class shares for the
periods ended June 30, 2005, December 31, 2004, December 31, 2001 and
December 31, 2000 was 0.30%, 0.25%, 0.07% and 0.12%, respectively and for
the Class R1 shares for the periods ending June 30, 2005 and December 31,
2004 was 0.63% and 1.36%, respectively.
(d) Annualized.
(e) Inception date of R1 shares.
(f) Amount represents less than $0.01 per share.
See Notes to Financial Statements
12
WORLDWIDE REAL ESTATE 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
Real Estate Fund (the "Fund") is a diversified fund of the Trust and seeks to
maximize return by investing in equity securities of domestic and foreign
companies that own significant real estate assets or that are principally
engaged in the real estate industry. 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 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
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 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 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.
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 commissions and extraordinary expenses
for the period January 1, 2004 through April 30, 2006. For the six months ended
June 30, 2005 the Adviser assumed expenses in the amount of $50,401. 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 $2,563,746 and
$3,006,081 respectively, for the six months ended June 30, 2005.
The identified cost of investments owned at June 30, 2005 was $21,943,441 and
net unrealized appreciation aggregated $10,532,815 of which $10,610,576 related
to appreciated securities and $77,761 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
$331,869. The tax character of distributions made in 2005 will be determined at
year end.
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.
13
WORLDWIDE REAL ESTATE FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
The aggregate shareholder accounts of three insurance companies own
approximately 44%, 30% and 15% 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 gains and losses from forward foreign
currency contracts are included in realized gains and losses from foreign
currency transactions on the Statement of Operations. 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 the deferred liability net of the 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 $2,005.
NOTE 9--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 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. During the
six months ended June 30, 2005, there were no borrowings by the Fund under the
Facility.
NOTE 10--REPURCHASE AGREEMENT--Collateral for repurchase agreements, 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 ("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 12--SUBSEQUENT EVENT--The Fund has been notified by the insurance company
mentioned in Note 5 as owning 44% of the Initial Class shares at June 30, 2005
of its intention to redeem all of its investment in the Fund before December 31,
2005.
14
VAN ECK WORLDWIDE INSURANCE TRUST
- --------------------------------------------------------------------------------
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
15
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.
16
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.
17
[VAN ECK GLOBAL LOGO] [VARIABLE ANNUITIES LOGO]
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 Real Estate Fund disclosure controls and procedures (as
defined in Rule 30a-3(c) under the Investment Company Act) provide
reasonable assurances that material information relating to the Worldwide
Real Estate Fund is made known to them by the appropriate persons, based on
their evaluation of these controls and procedures as of a date within 90
days of the filing date of this report.
(b) There were no significant changes in the registrant's internal controls
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 REAL ESTATE 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
---------------