U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PRE-EFFECTIVE AMENDMENT NO. 1
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POST-EFFECTIVE AMENDMENT NO.
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VAN ECK FUNDS
(Exact Name of Registrant as Specified in Charter)
99 Park Avenue, 8th Floor, New York, New York 10016
(Address of Principal Executive Offices)
212-687-5200
(Area Code and Telephone Number)
Thomas H. Elwood, Esq.
Van Eck Associates Corporation
99 Park Avenue, 8th Floor, New York, New York 10016
(Name and Address of Agent for Service)
Copy to: Philip H. Newman, Esq., Goodwin Procter LLP
Exchange Place, Boston, Massachusetts 02109
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No filing fee is required because the Registrant has heretofore declared its
intention to register an indefinite number of shares of beneficial interest,
$.001 par value, of the Van Eck Emerging Markets Fund series, pursuant
to Rule 24f-2.
VAN ECK FUNDS
Cross-Reference Sheet
Pursuant to Rule 481(a) under the Securities Act of 1933
Form N-14 Item No. Location in Prospectus/Proxy Statement
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PART A
1 Cover Page of Registration Statement; Prospectus Cover Page
2 Table of Contents
3 Synopsis; Special Considerations and Risk Factors
4 Synopsis, The Reorganization
5 Prospectus Cover Page; Synopsis; and Additional Information
6 Prospectus Cover Page; Synopsis; and Additional Information
7 Special Meeting; Introduction; Synopsis; The Reorganization;
Van Eck Asia Dynasty Fund; Emerging Markets Fund;
Information Concerning Special Meeting; Additional Information
8 Not Applicable
9 Not Applicable
PART B
10 Cover Page of Statement of Additional Information
11. Table of Contents
12. General Information
13. General Information
14. Financial Statement
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LOGO VAN ECK GLOBAL
_________________, 2003
Dear Van Eck Asia Dynasty Fund Shareholder:
At this time, we are asking our shareholders to consider voting for the
following change:
To approve the reorganization of the Van Eck Asia Dynasty Fund by means of a
tax-free reorganization into the Van Eck Emerging Markets Fund.
We believe the reorganization to be in shareholders' best interests. The
reorganization is being proposed, in part, because both Funds have similar
investment objectives and strategies and consolidating these funds will provide
significant economies of scale benefiting the shareholders of each fund.
The Van Eck Asia Dynasty Fund (Class A and B) was closed to new and subsequent
investments effective September 3, 2003.
Attached are the Notice and Prospectus/Proxy Statement for a Special Meeting of
Shareholders of Asia Dynasty Fund to be held on October ___, 2003 for the
purpose of considering the proposed Agreement and Plan of Reorganization and
Liquidation.
PLEASE READ THE Prospectus/Proxy Statement CAREFULLY--IT DISCUSSES THE PROPOSAL
AS WELL AS THE REASONS WHY THE BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE FOR
THE PROPOSAL.
Please take a moment now to vote by telephone or sign and return the proxy card
in the enclosed postage-paid envelope. Your prompt attention in this matter
benefits all shareholders. Thank you.
Sincerely,
/s/ Derek S. van Eck
Derek S. van Eck
President
Van Eck Global, 99 Park Avenue, New York, NY 10016
tel. 212.687.5200 or 1.800.544.4653
VAN ECK FUNDS
ASIA DYNASTY FUND
99 Park Avenue, New York, New York 10016
212.687.5200 1.800.544.4653
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
_____________, 2003
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A SPECIAL MEETING OF SHAREHOLDERS OF ASIA DYNASTY FUND (the "Fund"), a series of
Van Eck Funds, will be held at 99 Park Avenue, 8th Floor, New York, New York, on
__________________, 2003 at 10:00 a.m., New York Time, for the following
purposes:
(1) To consider and act upon a proposal to approve the Plan of Reorganization
and Liquidation dated ______ 2003 providing for the exchange of substantially
all of the Fund's assets for shares of Van Eck Emerging Markets Fund, another
series of Van Eck Funds, the assumption of the liabilities of the Fund by Van
Eck Emerging Markets Fund, the distribution of Van Eck Emerging Markets Fund
shares to the Fund's shareholders and the liquidation of the Fund; and
(2) To act upon such other matters as may properly come before the meeting or
any adjournment or adjournments thereof. Shareholders of record at the close of
business on __________________ 2003 are entitled to notice of, and to vote at,
the meeting or any adjournment thereof.
By order of the Board of Trustees
/s/ Thomas H. Elwood
Thomas H. Elwood
Secretary
____________, 2003
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YOUR VOTE IS IMPORTANT!
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WHETHER YOU EXPECT TO ATTEND THE MEETING OR NOT, PLEASE VOTE BY TELEPHONE OR
DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY.
VAN ECK FUNDS
99 Park Avenue, New York, New York 10016
212.687.5200 1.800.544.4653
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PROSPECTUS/PROXY STATEMENT
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This Prospectus/Proxy Statement is being furnished to shareholders of Van Eck
Asia Dynasty Fund ("ADF"), a series of Van Eck Funds (the "Trust"), in
connection with the solicitation by the Board of Trustees of the Trust of
proxies to be used at a special meeting of shareholders of ADF to be held on
___________, 2003 at 10:00 a.m., New York Time, or any adjournments thereof (the
"Meeting") to consider approval of a Plan of Reorganization and Liquidation
("Plan"). Pursuant to the Plan, shareholders of ADF will receive shares of Van
Eck Emerging Markets Fund ("EMF"), a separate series of the Trust, equal in
value to their holdings in ADF as of the closing date of the reorganization (the
"Reorganization""). Class A shares of ADF will be exchanged for Class A shares
of EMF; and Class B shares of ADF will be exchanged for Class C shares of EMF.
After the Reorganization is complete, ADF will be dissolved. If approved by
shareholders the Reorganization is expected to be effective on or about
_____________, 2003.
EMF, a series of the Trust, is an open-end investment company whose objective is
to seek long-term capital appreciation by investing in equity securities in
emerging markets throughout the world.
This Prospectus/Proxy Statement, which you should read carefully and retain for
further reference, sets forth concisely the information that a prospective
investor ought to know about the Trust, the Funds and the transaction
contemplated by the Plan.
The Prospectus and Statement of Additional Information for EMF dated May 1, 2003
and the Prospectus and Statement of Additional Information for ADF also dated
May 1, 2003 are incorporated by reference into this Prospectus/Proxy Statement.
A Statement of Additional Information relating to the Reorganization (the
"Reorganization Statement of Additional Information") dated _______________
2003, which follows this Prospectus/Proxy Statement, is incorporated by
reference into this Prospectus/Proxy Statement.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED ON THE
ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
This Prospectus/Proxy Statement is dated ___________, 2003
INVESTORS ARE ADVISED TO READ AND RETAIN THIS PROSPECTUS/PROXY STATEMENT FOR
FUTURE REFERENCE.
TABLE OF CONTENTS
PAGE
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Introduction................................................................
Synopsis....................................................................
The Reorganization.........................................................
Investment Objectives and Policies.........................................
Reasons for the Transaction................................................
Investment Advisory and Administrative Fees................................
Distribution Fees and Benefits.............................................
Shareholder Transaction Expenses ..........................................
Annual Fund Operating Expenses ............................................
Fund Expenses .............................................................
Purchase Procedures/Sales Charges..........................................
Exchange Privileges........................................................
Redemption Procedures......................................................
Dividends and Distributions................................................
Net Asset Value............................................................
Tax Consequences...........................................................
Special Considerations and Risk Factors.....................................
The Reorganization..........................................................
Procedures.................................................................
Terms of the Agreement and Plan of Reorganization and Liquidation..........
Benefits to ADF as a Result of the Reorganization..........................
Tax Consequences of the Reorganization.....................................
Capitalization.............................................................
Management.................................................................
Shares of EMF to be Issued in the Reorganization and Shares of ADF.........
Other Matters..............................................................
Information Concerning the Meeting..........................................
Date, Time and Place of Meeting............................................
Solicitation, Revocation and Use of Proxies................................
Record Date and Outstanding Shares.........................................
Voting Rights and Required Vote............................................
Additional Information......................................................
Agreement and Plan of Reorganization and Liquidation........................
VAN ECK FUNDS
ASIA DYNASTY FUND
99 Park Avenue, 8th Floor, New York, New York 10016
212.687.5200 . 1.800.544.4653
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PROSPECTUS/PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON________, __________, 2003
99 PARK AVENUE, 8TH FLOOR, NEW YORK, NEW YORK 10016
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INTRODUCTION
This Proxy Statement is being furnished to the shareholders of Van Eck Asia
Dynasty Fund ( or "ADF") in connection with the solicitation by the Board of
Trustees of Van Eck Funds (the "Trust"), of which ADF is a series, of proxies to
be used at a special meeting of shareholders of ADF to be held on_______, 2003
at 10:00 a.m., New York Time, or any adjournments thereof (the "Meeting"), to
approve or disapprove a Plan of Reorganization and Liquidation (the "Plan")
which contemplates the exchange of assets of ADF for shares of Van Eck Emerging
Markets Fund ("EMF") (the "Reorganization Shares"), the assumption of certain
liabilities of ADF by EMF, the distribution of such Reorganization Shares to the
shareholders of ADF and the subsequent liquidation of ADF, as set forth in the
Plan (the "Reorganization"). As of ________, 2003, the record date, there were
____________ shares of ADF outstanding (representing __________ Class A shares
and _______________Class B shares and there were _______ shares of EMF
outstanding (representing __________ Class A shares and no Class C shares. Each
shareholder of ADF will be entitled to one vote for each share and a fractional
vote for each fractional share held on the record date. It is expected that the
mailing of this proxy statement will commence on or about __________ 2003. ADF
and EMF each may be referred to herein individually as a "Fund" and collectively
as the "Funds."
The enclosed form of proxy, if properly executed and returned, will be voted in
accordance with the choice specified thereon. The proxy will be voted in favor
of the proposal unless a choice is indicated to vote against the proposal.
Proxies properly executed and returned, but which fail to specify how the shares
are to be voted, will be voted FOR the proposal.
The proxy may be revoked at any time prior to the voting thereof by executing a
superseding proxy, by giving written notice to the secretary of the Trust at the
address listed on the first page of this Prospectus/Proxy Statement or by voting
in person at the Meeting.
In the event there are not sufficient votes to approve the proposal at the time
of the Meeting, the Meeting may be adjourned in order to permit further
solicitations of proxies by ADF. If ADF proposes to adjourn the Meeting by a
vote of the shareholders, the persons named in the enclosed proxy card will vote
all shares for which they have voting authority in favor of such adjournment.
To the knowledge of ADF, as of _____________, 2003, no shareholder owned of
record or beneficially 5% or more of the outstanding shares of that Fund.
In addition, as of __________, 2003, all Trustees and officers of the Trust as a
group owned less than 1% of EMF and less than 1% of ADF. Van Eck Associates
Corporation (the "Adviser") owned ____% of ADF's shares, as of that date.
To the knowledge of EMF, as of __________, 2003, no shareholder owned of record
or beneficially 5% or more of the outstanding shares of that Fund, except as
follows:
[Insert 5% owners]
Legal and printing expenses and expenses of holding the Meeting (such as proxy
tabulation and the expense of a solicitor, if any) will be borne by ADF. Any
registration fee payable to the Securities and Exchange Commission in connection
with the registration of shares under the Securities Act of 1933 or any filing
or notification fee payable to the Commission or state securities commission, in
connection with the transactions contemplated by the Plan, shall be payable by
the Fund required to pay such fee. All fees payable by any party as described
herein are payable regardless of whether the transactions contemplated by the
Plan are consummated. In addition to the solicitation of proxies by mail,
proxies may be solicited by officers and/or employees of the Trust, the Adviser,
DST Systems, Inc., ADF's Transfer Agent and Dividend Paying Agent (the "Transfer
Agent" or "DST"), and/or D.F. King & Co., Inc., a proxy solicitation firm.
Brokerage houses, banks, custodian, nominees and fiduciaries will be requested
to forward soliciting material to the beneficial owners of the shares of the
Fund, obtain authorization for the execution of proxies and will be reimbursed
for their reasonable costs. Such solicitations may be by telephone or otherwise.
Any telephonic solicitations will follow procedures designed to ensure accuracy
and prevent fraud, including requiring identifying shareholder after the fact.
Shareholders who communicate proxies by telephone or other electronic means have
the same power and authority to issue, revoke, or otherwise change their voting
instructions as shareholders submitting proxies in written form.
See also "Information Concerning the Meeting" below.
SYNOPSIS
The following is a synopsis of the information contained in or incorporated by
reference in this Prospectus/Proxy Statement regarding the Reorganization, and
presents key considerations for shareholders of ADF to assist them in
determining whether to approve the Reorganization. See also "Special
Considerations and Risk Factors" below.
The Reorganization
The Board of Trustees of the Trust, of which ADF is a series, has determined
that the Reorganization (as described herein) is in the best interests of the
shareholders of ADF and has approved the transactions contemplated in the Plan
associated with the Reorganization. The result of the Reorganization, if it is
consummated, will be the exchange of assets of ADF for Reorganization Shares,
the assumption of the liabilities of ADF by EMF, the distribution of such
Reorganization Shares to the shareholders of ADF and the subsequent liquidation
of ADF. For more information, see "The Reorganization" below.
Investment Objectives and Policies
Summary Comparison between ADF and EMF. ADF and EMF have similar investment
objectives and policies with certain exceptions: EMF is non-diversified, as such
term is defined in the Investment Company Act of 1940, as amended (the "1940
Act") and ADF is diversified. ADF's investments are limited to companies
expected to benefit from Asian economic development, EMF has no geographical
limitations.
ADF and EMF. The Funds both seek long-term capital appreciation by investing
primarily in equity securities of companies. ADF seeks to achieve this objective
by investing in companies outside of Japan that are expected to benefit from
Asian development. EMF seeks to achieve its objective by investing in equity
securities in emerging markets throughout the world. The primary difference
between the objectives of the Funds is that ADF invests in the equity securities
of companies outside of Japan that are expected to benefit from Asian
development, while EMF may invest more broadly in equity securities of companies
in emerging markets around the world, including Asia. ADF is a diversified fund,
as that term is used in the 1940 Act. EMF is a non-diversified fund and its
investments may be more concentrated. Investment in both Funds generally involve
greater risks than those associated with an investment in other funds that
invest in securities of companies in more developed countries. These risks
include those associated with borrowing and leverage, investing in Collaterized
Mortgage Obligations, debt securities derivatives, direct investments, emerging
markets securities, foreign securities, partly paid securities, low-rated
securities and junk bonds and repurchase agreements, and defensive investing. In
addition, EMF poses risks associated with investing in asset-backed securities,
indexed commercial paper and when issued securities; lack of reliable financial
information in the markets in which EMF invests; and the ability as a
non-diversified fund to invest in fewer companies. There is no assurance that
either Fund will meet its investment objectives and neither Fund should be
considered a complete investment in itself.
Equity securities in which the Funds may invest include common stocks; preferred
stocks (either convertible or non-convertible); rights, warrants; direct equity
interests in trusts, partnerships, joint ventures and other unincorporated
entities or enterprises; convertible debt instruments; and special classes of
shares available only to foreign persons in those markets that restrict
ownership of certain classes of shares available only to foreign persons in
those markets that restrict ownership of certain classes of equity to nationals
or residents of that country. These securities may be listed on securities
exchanges or traded over-the-counter.
The Funds emphasize equity securities, but may also invest in other types of
instruments, including debt securities of any quality (other than commercial
paper). Debt securities may include fixed or floating rate bonds, notes,
debentures, commercial paper, loans, convertible securities and other debt
securities issued or guaranteed by governmental, banking and private entities.
ADF and EMF may also buy and sell derivatives such as financial futures
contracts, bond index futures contracts and foreign currency futures contracts
for hedging and investment purposes. Both Funds are permitted to borrow up to
30% of net assets to increase holdings of portfolio securities.
Both Funds may lend up to one-third of their securities to broker dealers who
must collateralize these borrowings in full. The risk of lending portfolio
securities is that such broker-dealers may breach their agreement to return the
securities or repay the loan in cash.
For temporary defensive purposes, both Funds may invest a substantial portion of
their assets in bonds of U.S. or foreign governments, certificates of deposit,
bankers acceptances, high-grade commercial paper and repurchase agreements.
Reasons for the Transaction
The assets of ADF have exhibited a declining trend in recent years. Generally,
as assets of a Fund decline fixed expenses as a percentage of total net assets
increase, and for the last three fiscal years, the expense ratio of each Fund
has increased. A high expense ratio impedes sales and reduces the investment
return to shareholders.
Recently, EMF's performance is better than that of ADF. The better performance
can be attributed, in part, to EMF's broader investment mandate because it is
not restricted geographically. EMF was formerly known as Global Leaders Fund and
invested its assets globally in large capitalization stocks; its investment was
not limited to companies in the emerging markets. EMF's long-term performance
reflects an investment style different from the one EMF currently utilizes. It
is the Trust's belief that EMF's ability to diversify its investments across
geographic regions provides a more attractive product for investors. The Trust
believes that the merged Fund will offer ADF shareholders with a more attractive
investment alternative and will generate economics that will reduce the expense
ratio of both Funds.
The Board of Trustees determined that participation in the Reorganization, as
described herein, is in the best interests of ADF and EMF; the interests of
existing EMF shareholders will not be diluted as a result of such participation;
and that the shareholders of neither Fund will be disadvantaged. The Board also
considered a number of factors and alternatives to the Plan. The Trustees
determined that the Reorganization provided greater benefits to ADF shareholders
than other options, such as the liquidation of ADF. Liquidating ADF would have
required most shareholders to recognize either gains or losses in the current
tax year when many shareholders might have preferred to defer such gains or
losses. An exchange into EMF would force the shareholder to recognize a gain or
loss for tax purposes, whereas the Reorganization will achieve the same result,
but on a tax-free basis. The redemption procedure and exchange privilege, which
are described below, allow any shareholder not desiring to participate in the
Reorganization to achieve the same results as liquidation of ADF. The Board also
considered each Fund's investment objectives, policies, restrictions and
portfolios; factors which might require an adjustment to the exchange price or
formula, such as costs or tax and other benefits to be derived by the Funds; tax
consequences of the Reorganization; relative benefits to be derived by the
Adviser and/or its affiliates or other persons; and other factors.
Investment Advisory and Administrative Fees
Van Eck Associates Corporation ("Van Eck" or the "Adviser") acts as the
investment adviser to EMF and ADF. Total aggregate assets under management of
the Adviser on June 30, 2003 were approximately $1.3 billion. The
Adviser acts as investment adviser to other mutual funds registered with the
Securities and Exchange Commission under the 1940 Act and provides investment
advisory services to private investment funds and accounts, pension plans and
others. John C. van Eck, Chairman of the Trust, together with members of his
immediate family, own 100% of the voting stock of Van Eck.
EMF and ADF both pay an annual investment advisory fee of .75 of 1% of average
daily net assets. In addition, Van Eck performs accounting and administrative
services for ADF and EMF, for which each Fund pays Van Eck at an annual rate of
..25% of average daily net assets
Distribution Fees
EMF and ADF have adopted a Plans of Distribution (each a "Plan" together the
"Plans") EMF - Class A and ADF - Class A each, under their respective Plans,
pays a 12b-1 fee at an annual rate of .50% of average daily net assets of which
..25% is paid to dealers and others. Payments are made pursuant to these Plans to
agents or brokers who service their shareholder accounts and for other
promotional and distribution expenses incurred by the Distributor. ADF offers
Class B shares which provide for a 12b-1 fee at an annual rate of 1.00% (a
distribution fee of .75% and a service fee of .25%). Class B shares redeemed
within six years of purchase will be subject to a contingent deferred sales
charge ("CDSC") which declines from 5.00% during year one to 1.00% during year
six. EMF intends to offer Class C shares which will pay a 12b-1 fee at an annual
rate of 1.00% (a distribution fee of .75% and a service fee of .25%). Class C
shares redeemed within one year of purchase are subject to a 1.00% contingent
deferred redemption charge ("CDRC"). Class B and Class C shares convert to Class
A after eight years, at which time they will be subject to the lower 12b-1 fees.
The Plan for ADF - Class A is a reimbursement plan. The other plans are
compensation plans. Under a reimbursement plan, 12b-1 fees accrued in excess of
payments to brokers and agents and reimbursement to the Distributor for its
actual expenses is retained by the Funds. For the five year period ended
December 31, 2002, no portion of the 12b-1 fee accrued was retained by ADF -
Class A. Under a compensation type plan, the Distributor retains the excess
12b-1 fees even if its payments to brokers and agents and expenses are less.
Under the Plan for Class B shares, commission (4% of the purchase amount) paid
to selling brokers are advanced by the Distributor; Class C commissions (1%)
paid to the broker are advanced by the Fund. Advanced commissions are recouped
from the 12b-1 fee and the CDSC and CDSR. If expenditures for distribution,
including advanced commissions, for Class C shares exceed the 1% annual
limitation, the Distributor will reimburse the Fund for any excess. For both the
Class B and C shares, the Distributor bears the risk that 12b-1 payments will be
less than advanced commissions and other distribution expenses.
After distribution of EMF - Class C shares for ADF - Class B shares, EMF - Class
C shareholders will have the same holding period as their ADF - Class B for
purposes of the conversion to Class A shares. Class C shares will not be subject
to the CDSC, or to the CDRC if the Class B shares have been held for more than
one year.
Fund Expenses
EMF's total gross operating expenses for the year ended December 31, 2002 were
2.91% of average daily net assets; ADF's total operating expenses for the year
ended December 31, 2002 were 3.39% (Class A) and 4.18% (Class B).
The following table provides a comparison of the transaction and operating
expenses paid by ADF and EMF. It is intended to assist an investor in
understanding the various direct and indirect costs and expenses borne by an
investor in the Funds. The sales charges are the maximum sales charges an
investor would incur. Sales charges decline depending on the amount of the
purchase, the number of shares an investor already owns or use of various
investment programs. See "Purchase of Shares" in the Prospectuses. Van Eck
and/or the distributor of each Fund may from time to time waive fees and/or
reimburse certain expenses of either Fund.
SHAREHOLDER TRANSACTION EXPENSES
PRO FORMA
FOR THE
COMBINED
EMF ADF FUND
------- ----- ---------
Maximum Sales Charge Imposed on
Purchases (as a percent
of offering price)........................... 5.75% 5.75% 5.75%
ANNUAL FUND OPERATING EXPENSES AS OF JUNE 30, 2003 FOR CLASS A*
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
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PRO FORMA
FOR THE
COMBINED
EMF ADF FUND
----- ----- ---------
Management Fee ........................... 0.75% 0.75% 0.75%
12b-1 Fee/Shareholder Servicing Fee ...... 0.25% 0.25% 0.25%
Other Expenses**.......................... 3.36% 3.03% 2.30%
---- ---- ----
Total Fund Operating Expenses ............ 4.36% 4.03% 3.30%
==== ==== ====
* Period ended 6/30/03 expenses have been annualized.
** Includes 0.25% paid to Van Eck Associates Corp. for accounting and
administrative services.
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Example: You would bear the following expenses on a $10,000 investment in Class
A, including maximum sales load, assuming (1) 5% annual return and (2)
redemption at the end of each time period.
PRO FORMA
FOR THE
COMBINED
EMF ADF FUND
------- ----- ------
1 Year............................................ $ 987 $ 957 $ 889
3 Years........................................... $1,820 $1,731 $1,532
5 Years........................................... $2,663 $2,521 $2,198
10 Years.......................................... $4,818 $4,563 $3,963
PRO FORMA
FOR THE
COMBINED
EMF-C ADF-B FUND
----- ----- ------
Maximum Deferred Sales Charge (load) (as a percent) -- 1.00% 1.00%
ANNUAL FUND OPERATING EXPENSES AS OF JUNE 30, 2003 FOR ADF CLASS B AND EMF AND
COMBINED FUND CLASS C*
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- ---------------------------------------
PRO FORMA
FOR THE
COMBINED
EMF-C ADF-B FUND
------- ----- ------
Management Fee .................................. -- 0.75% 0.75%
12b-1 Fee/Shareholder Servicing Fee ............. -- 1.00% 1.00%
Other Expenses** ................................ -- 3.12% 2.06%
------- ----- ------
TOTAL ANNUAL FUND OPERATING EXPENSES ............ -- 4.87% 3.81%
======= ===== ======
* Period ended 6/30/03 expenses have been annualized.
** Includes 0.25% paid to Van Eck Associates Corp. for accounting and
administration services
- --------
Example: You would bear the following expenses on a $10,000 investment in Asia
Dynasty Class B and Emerging Markets Class C, including maximum sales
load, assuming (1) 5% annual return and (2) redemption at the end of
each time period.
PRO FORMA
FOR THE
COMBINED
EMF-C ADF-B FUND
------- ----- ------
1 Year............................................ -- $ 987 $ 483
3 Years........................................... -- $1,864 $1,164
5 Years........................................... -- $2,643 $1,962
10 Years.......................................... -- $4,902 $4,045
These tables should not be considered a representation of past or future
expenses which may be more or less than those shown. The assumed 5% annual
return is hypothetical and should not be considered a representation of past or
future annual return. Actual return may be greater or less than the assumed
amount.
Purchase Procedures/Sales Charges
After the Reorganization, shareholders of ADF will be shareholders of EMF, and
therefore subsequent purchases of shares of EMF will be subject to the
applicable initial sales charge as described in "Synopsis-Shareholder
Transaction Expenses" above.
Exchange Privileges
Shareholders of ADF and EMF may exchange shares, at net asset value, for shares
of the same class of any of the other funds in the Van Eck Group. ADF Class B
shares may be exchanged for EMF Class C shares and will retain the same holding
period for purposes of the conversion to Class A shares. Shareholders who do not
participate in the reorganization and exchange their ADF shares for EMF shares
will be required to recognize a gain or loss for tax purposes.
Shareholders of most of the Van Eck Funds are generally limited to six exchanges
per calendar year. Each Fund reserves the right to terminate, modify or impose a
fee in connection with the exchange privilege as described in more detail in
their Prospectuses and Statements of Additional Information under "Exchange
Privilege."
Exchanges out of ADF will be accepted up to the business day prior to the
Exchange Date, as defined in "The Reorganization."
Redemption Procedures
Shares of EMF and ADF may be redeemed at any time. Shares may be redeemed by
writing to DST Systems, Inc., P.O. Box 218407, Kansas City, Missouri 64121, the
Fund's transfer agent, through the shareholder's broker or agent (although they
may charge a fee for their services) or, if the shareholder has so elected, by
contacting DST by telephone. See also "Redemption of Shares" in the Van Eck
Funds Prospectus for more information.
Redemptions of ADF shares will be accepted up to the business day prior to the
Exchange Date.
Dividends and Distributions
If the Reorganization is approved by shareholders, ADF intends to declare any
applicable dividends and distributions prior to the Exchange Date. ADF and EMF
make distribution from net investment income in December and distribute any net
realized capital gains resulting from their investment activity annually in
December.
Net Asset Value
The net asset value of ADF and EMF is determined at the close of business on
each day the New York Stock Exchange is open for trading. Each Fund computes net
asset value by dividing the value of its securities, plus cash and other assets
(including interest and dividends accrued but not yet received), less all
liabilities (including accrued expenses), by the number of shares outstanding.
Expenses, including fees paid to the Adviser and/or Van Eck, are accrued daily
for the Funds.
Tax Consequences
Neither Fund will recognize any gain or loss on the transaction. EMF will have
the same basis and holding period in the assets received as ADF. As of December
31, 2002, ADF had capital loss carryforwards available to offset future capital
gains of $5,347,503 and $826,157 expiring December 31, 2009 and December 31,
2010, respectively. Under the Internal Revenue Code, the utilization of these
losses in future years may be limited.
As a condition to closing, counsel to EMF and ADF must opine in part to the
effect that, subject to customary assumptions and representations, upon
consummation of the Reorganization and the transfer of substantially all of the
assets of ADF to EMF, neither the Trust nor any Fund shareholder will recognize
a gain or loss in the exchange of their shares.
Prior to or at the closing of the Reorganization, counsel to EMF and ADF,
Goodwin, Procter LLP, must opine substantially to the effect that, subject to
the customary assumptions and representations, on the basis of the existing
provisions of the Internal Revenue Code of 1986 as amended (the "Code"), the
Treasury regulations promulgated thereunder and current administrative and
judicial interpretations thereof, for Federal income tax purposes: (i) the
transfer of all or substantially all of the assets of ADF to EMF solely in
exchange for EMF shares and the assumption by EMF of certain of ADF's
liabilities and the distribution of such EMF shares to the shareholders of ADF,
as provided in the Plan, will constitute a reorganization within the meaning of
Section 368(a)(1)(C) of the Code, and ADF and EMF will each be a "party to a
reorganization" within the meaning of Section 368(b); (ii) ADF will not
recognize a gain or loss on the transfer of its assets to EMF in the
Reorganization; (iii) ADF will not recognize a gain or loss upon its
distribution to its shareholders of the EMF shares received in the
Reorganization; (iv) EMF will not recognize a gain or loss upon the receipt of
the assets of ADF in exchange for the EMF shares; (v) shareholders of ADF will
not recognize a gain or loss on the exchange of shares of ADF for shares of EMF
provided that such shareholders receive solely EMF shares (including fractional
shares) in exchange for their ADF shares; (vi) the tax basis of the ADF assets
acquired by EMF will be the same to EMF as the tax basis of such assets to ADF
immediately prior to the Reorganization and the holding period of the assets of
ADF in the hands of EMF will include the period during which those assets were
held by ADF; (vii) the aggregate tax basis of the EMF shares received by the
shareholders of ADF will be the same as the aggregate tax basis of ADF shares
exchanged by such shareholder immediately prior to the Reorganization; and
(viii) the holding period of the EMF shares (including fractional shares)
received by shareholders of ADF will include the holding period that the ADF
shares exchanged were held (provided that the ADF shares exchanged were held as
a capital asset on the date of the Reorganization). For a discussion of
additional tax considerations, see "The Reorganization--Tax Consequences of the
Reorganization" below.
SPECIAL CONSIDERATIONS AND RISK FACTORS
The Funds' investment objectives, policies and restrictions are similar, and
therefore the related special considerations and risk factors are similar. ADF
and EMF have invested their assets in securities of companies in the emerging
markets although ADF is limited to Asia.
EMF is a non-diversified fund and as such is not limited by the 1940 Act in its
ability to concentrate its investments in fewer companies. The sole limitation
on investment concentration is provided by the Internal Revenue Code
concentration limitations which are much less restrictive that the 1940 Act. EMF
may invest up to 25% of its assets in a single issuer. Because of this, the
value of the shares of EMF may be more susceptible to any single economic,
political or regulatory event than would the shares of a diversified fund.
Since both ADF and EMF invest extensively in foreign securities, any risks
inherent in such investments are applicable to both Funds. Since investments in
foreign companies will frequently involve currencies of foreign countries, and
since these Funds may hold securities and funds in foreign currencies, these
Funds may be affected favorably or unfavorably by changes in currency rates and
in exchange control regulations, if any, and may incur costs in connection with
conversions between various currencies. Most foreign stock markets, while
growing in volume of trading activity, have less volume than the New York Stock
Exchange, and securities of some foreign companies are less liquid and more
volatile than securities of comparable domestic companies. Similarly, volume and
liquidity in most foreign bond markets are less than in the United States and at
times volatility of price can be greater than in the United States. Fixed
commissions on foreign securities exchanges are generally higher than negotiated
commissions on United States exchanges, although these Funds endeavor to achieve
most favorable net results on their portfolio transactions. There is generally
less government supervision and regulation of securities exchanges, broker and
listed companies in foreign countries than in the United States. In addition,
with respect to certain foreign countries, there is the possibility of exchange
control restrictions, expropriation or confiscatory taxation, political,
economic or social stability, which could affect investments in those countries.
Foreign securities such as those purchased by these Funds may be subject to
foreign government taxes, higher custodian fees and dividend collection fees,
which could reduce the yield on such securities.
EMF and ADF will have a substantial portion of their assets in developing
countries. Although there is no universally accepted definition, a developing
country is generally considered by the Adviser to be a country, which is in the
initial stages of industrialization. Shareholders should be aware that investing
in the equity and fixed income markets of developing countries involves exposure
to unstable governments, economies based on only a few industries, and
securities markets which trade a small number of securities. Political and
economic structures in many of such countries may be undergoing significant
evolution and rapid development, and such countries may lack the social,
political and economic stability characteristic of the United States. Certain of
such countries have in the past failed to recognize private property rights and
have at times nationalized or expropriated the assets of private companies. As a
result, the risks described above, including the risks of nationalization or
expropriation of assets, may be heightened. In addition, unanticipated political
or social developments may affect the value of the Funds' investments in those
countries and the availability to the Funds of additional investment in those
countries Securities markets of developing countries tend to be more volatile
than the markets of developed counties; however, such markets have in the past
provided the opportunity for higher rates of return to investors.
For investment purposes, both ADF and EMF may enter into currency, options,
futures and other derivatives transactions. Among the risks of effecting
transactions in derivatives for investment purposes are market risk, in that the
Fund has market exposure to instruments it would otherwise not be permitted to
invest in (excessive exposure to low credits), and settlement (both legal and
operation) risk with the various counterparties. The use of derivatives is a
highly specialized activity which involves investment techniques and risks
different from those associated with ordinary portfolio transactions. If the
investment adviser is incorrect in its forecasts about market values and
currency exchange rates, the investment performance of a Fund would be less
favorable than it would have been if this investment technique were not used. In
addition, transactions costs may be greater.
While it is the policy of EMF and ADF generally not to engage in trading for
short-term gains, both EMF and ADF may effect portfolio transactions without
regard to the holding period if, in the judgment of the investment adviser, such
transactions are advisable in light of a change in circumstances of a particular
company, within a particular industry or country, or in general market, economic
or political conditions. This may lead to a higher portfolio turnover ratio. The
annual portfolio turnover rates for EMF for the fiscal year ended December 31,
2001, and 2002 were 56% and 120%, respectively. ADF's portfolio turnover rates
for the same periods were 106% and 104%, respectively. The portfolio turnover
rate of the Funds may vary greatly from year to year. The higher a Fund's
portfolio turnover rate, the higher a Fund's overall expenses may be, due to
certain transactional costs incurred as a result of effecting a securities trade
(such as brokerage commissions and custodian expenses) and/or possible tax
consequences.
See "Risk Factors" in the EMF and ADF Prospectus and "Investment Objectives and
Policies" in the EMF and ADF Statement of Additional Information for a more
detailed discussion of the risks involved with each Fund's investment practices
and strategies.
THE REORGANIZATION
Procedures
The Board of Trustees is hereby soliciting shareholders of EMF to vote for the
approval of the Reorganization. It is anticipated that the Meeting will be held
on ______________, 2003 at 99 Park Avenue, 8th Floor, New York, New York at
10:00 a.m., New York Time. If ADF's shareholders approve the Reorganization, the
Reorganization will take place on or about _______________, 2003.
Terms of the Agreement and Plan of Reorganization and Liquidation
The following is a summary of the significant terms of the Plan which has been
considered and approved by the Trustees of the Trust at a meeting held on
_________________, 2003. A copy of the Plan is attached to this Proxy
Statement/Prospectus as Exhibit A. This summary is qualified in its entirety by
reference to the Plan.
Valuation of Assets and Liabilities. The assets of ADF and EMF will be valued as
of the last determinate of the net asset value of each Fund's shares prior to
the date of the Reorganization will take place (the "Exchange Date"). The assets
in each portfolio will be valued according to the procedures set forth under
"Purchase of Shares" in EMF and ADF's Prospectuses and "Valuation of Shares" in
EMF and ADF's Statement of Additional Information (a summary of that method
appears above under "Synopsis--Net Asset Value"). Redemption requests for EMF
which have not been settled as of the Exchange Date will be treated as
liabilities for purposes of the Reorganization. Exchange requests as to EMF
shares received on the Exchange Date will be treated and processed as exchanges
from ADF and will be effected as of the close of business on the Exchange Date.
Distribution of Shares and Transfer of Assets. On the Exchange Date, EMF - Class
A and C shares will issue to ADF Class A and Class B shares, respectively, a
number of Class A and Class C shares the aggregate net asset value of which will
equal the aggregate net asset value of the ADF Class A and Class B assets
transferred by ADF to EMF on the Exchange Date. Each ADF Class A shareholder
will receive a number of Class A shares of EMF having an aggregate net asset
value equal to the value of his or her ADF Class A shares. Each Class B
shareholder of ADF will receive a number of Class C shares of EMF having an
aggregate net asset value equal to the value of his or her ADF Class B shares.
The Class C shares of EMF received will have the same holding period for
purposes of conversion to Class A shares as did the Class B shares. Class C
shares will not be subject to the CDRC if the Class B shares were held more than
one year. No sales charge or fee of any kind will be charged to the shareholders
of ADF in connection with their receipt of Class A shares of EMF in the
Reorganization.
Expenses. Legal and printing expenses and expenses of holding the Meeting (such
as proxy tabulation and the expense of a solicitor, if any) will be borne by
ADF. Any registration fee payable to the Securities and Exchange Commission in
connection with the registration of shares under the Securities Act of 1933 or
any filing or notification fee payable to the Commission or state securities
commission, in connection with the transactions contemplated by the Plan, shall
be payable by the Fund required to pay such fee. All fees payable by any party
as described herein are payable regardless of whether the transactions
contemplated by the Plan are consummated.
Required Approvals. Approval of the Plan requires approval of a majority of
ADF's outstanding voting shares, as defined in the 1940 Act. Such majority is
defined as the lesser of (i) 67% or more of the outstanding shares present at
the meeting, provided the holders of 50% or more of the outstanding shares are
present in person or by proxy, or (ii) more than 50% of the outstanding shares.
Amendments and Conditions. The Plan may be amended at any time prior to the
Exchange Date with respect to any of the terms therein except that following the
meeting of the shareholders of ADF, no such amendment may have the effect of
changing the provisions of the Plan determining the number of EMF shares to be
issued to ADF shareholders to their detriment without their further approval.
The obligations of ADF and EMF are subject to various conditions, including a
registration statement on Form N-14 being declared effective by the Securities
and Exchange Commission, approval of the Reorganization by the shareholders of
ADF, receipt of a tax opinion from Goodwin Procter LLP and the continuing
accuracy of various representations and warranties of ADF and EMF being
confirmed by the respective parties.
BENEFITS TO ADF AS A RESULT OF THE REORGANIZATION
Shareholders of ADF will be able to participate in the emerging markets with a
more flexible investment style and with a potential reduction of expenses over
time.
Class B shareholders will be able to redeem their Class C shares without
imposition of a CDSC or CDRC after one year after purchase, rather than six
years from the original date of purchase. For a more detailed description see
"Synopsis - Distribution Fees."
The Reorganization allows shareholders of ADF the option to recognize or defer
recognition of gains or losses on their shares until they choose to recognize
them. As more fully explained in "The Reorganization--Tax Consequences of the
Reorganization" below, as of the Exchange Date, ADF will obtain an opinion from
Fund counsel that the Reorganization has been structured to be consummated, for
Federal income tax purposes, on a tax-free basis. Thus, a shareholder of ADF
will be able to defer the recognition of any gains or losses on his or her
shares of ADF until shares of EMF received pursuant to the Reorganization are
exchanged or sold. If ADF were liquidated rather than reorganized, a shareholder
would have no choice but to recognize any gains or losses in the current tax
year.
Tax Consequences of the Reorganization
The Reorganization has been structured with the intention that it will qualify
for Federal income tax purposes as a tax-free reorganization under Section
368(a)(1)(C) of the Code. ADF and EMF have both elected to qualify as a
regulated investment company under the Code, and EMF intends to continue to
elect to so qualify. Upon the closing of the Reorganization, counsel to EMF and
ADF, Goodwin, Procter LLP, must opine substantially to the effect that, subject
to the customary assumptions and representations, on the basis of the existing
provisions of the Code, the Treasury regulations promulgated thereunder and
current administrative and judicial interpretations thereof, for Federal income
tax purposes: (i) the transfer of all or substantially all of the assets of ADF
to EMF solely in exchange for EMF shares and the assumption by EMF of certain of
ADF's liabilities and the distribution of such shares to the shareholders of
ADF, as provided in the Plan, will constitute a "reorganization" within the
meaning of Section 368(a)(1)(C) of the Code, and ADF and EMF will each be a
"party to a reorganization" within the meaning of Section 368(b); (ii) ADF will
not recognize a gain or loss on the transfer of its assets to EMF in the
Reorganization; (iii) ADF will not recognize a gain or loss upon its
distribution to its shareholders of the EMF shares received in the
Reorganization; (iv) EMF will not recognize a gain or loss upon the receipt of
the assets of ADF in exchange for the EMF shares; (v) shareholders of ADF will
not recognize a gain or loss on the exchange of shares of EMF for shares of ADF
provided that such shareholders receive solely EMF shares (including fractional
shares) in exchange for their ADF shares; (vi) the tax basis of the ADF assets
acquired by EMF will be the same to EMF as the tax basis of such assets to ADF
immediately prior to the Reorganization and the holding period of the assets of
ADF in the hands of EMF will include the period during which those assets were
held by ADF; (vii) the aggregate tax basis of the EMF shares received by the
shareholders of ADF will be the same as the aggregate tax basis of ADF shares
exchanged by such shareholder immediately prior to the Reorganization; and
(viii) the holding period of the EMF shares (including fractional shares)
received by shareholders of ADF will include the holding period that the ADF
shares exchanged were held (provided that the ADF shares exchanged were held as
a capital asset on the date of the Reorganization). The receipt of such opinions
upon the closing of the transaction is a condition to the closing of the
Reorganization. If the transfer of assets of ADF in exchange for EMF shares and
the assumption by EMF of the liabilities of ADF were deemed not to constitute a
tax-free reorganization, each shareholder would recognize gain or loss equal to
the difference between the value of the EMF shares such shareholder acquires and
the tax basis of such shareholder's ADF shares.
As a condition to closing, counsel to EMF and ADF must opine in part to the
effect that, subject to customary assumptions and representations, upon
consummation of the Reorganization and the transfer of substantially all of the
assets of EMF to ADF, neither the Trust nor any Fund shareholder will recognize
a gain or loss in the exchange of their shares.
Shareholders should consult their tax advisors regarding the effect, if any, of
the Reorganization in light of their individual circumstances. Since the
foregoing relates only to Federal income tax consequences, shareholders should
also consult with their tax advisors as to the foreign, state and local tax
consequences, if any, of the Reorganization.
Capitalization
The following table sets forth, as of June 30, 2003, the capitalization of ADF
and EMF. (unaudited)
CAPITALIZATION
PRO FORMA
REORGANIZATION
Emerging Asia Dynasty Pro Forma
Markets Fund Fund for the
(Class A) (Class A) Combined Fund
------------ ------------ -------------
Total Net Assets................. $11,044,250 $10,054,960 $21,099,210
=========== =========== ===========
Shares Outstanding............... 1,871,630 1,551,595 3,575,864
=========== =========== ===========
Net Asset Value Per Share........ $ 5.90 $ 6.48 $ 5.90
=========== =========== ===========
Emerging Asia Dynasty Pro Forma
Markets Fund Fund for the
(Class C) (Class B) Combined Fund*
------------ ------------ -------------
Total Net Assets................. -- $ 1,841,337 $ 1,841,337
=========== =========== ===========
Shares Outstanding............... -- 307,078 312,091
=========== =========== ===========
Net Asset Value Per Share........ -- $ 6.00 $ 5.90
=========== =========== ===========
* Pro Forma Net Asset Value for the Combined Fund will be based on Emerging
Markets Fund-Class A Net Asset Value Per Share.
Management
Trustees. The management of the business and affairs of EMF and ADF is the
responsibility of the Board of Trustees of Van Eck Funds. The Board of Trustees
of Van Eck Funds (of which EMF and ADF are series) consists of nine persons,
six of whom are not "interested persons" as defined in the 1940 Act.
Investment Adviser and Administrator. Van Eck Associates Corp., 99 Park Avenue,
New York, New York 10016, serves as the investment adviser to and administrator
of ADF and investment adviser to EMF.
Under the Investment Advisory Agreements applicable to EMF and ADF, Van Eck
provides EMF and ADF with a continuous investment program which includes
determining which securities should be bought, sold or held. Van Eck and/or the
administrator also manages the business and affairs of EMF and ADF.
EMF and ADF pay advisory fees at the rates indicated under "Synopsis- Investment
Advisory Fees" above. For additional information, see "Management" in the EMF
and ADF Prospectus and "Investment Advisory Services" in the EMF and ADF
Statement of Additional Information.
Portfolio Manager. Mr. David Semple is the Portfolio Manager of both EMF and
ADF.
Transfer Agent. The Transfer Agent and Dividend Paying Agent for EMF and ADF is
DST Systems, Inc., P.O. Box 218407, Kansas City, Missouri 64121.
Shares of EMF to be issued in the Reorganization and Shares of ADF
EMF has, or will have on the Exchange Date, two classes of shares outstanding
which are designated Class A and Class C. ADF has two classes of shares
outstanding designated as Class A and Class B. Each Class has adopted its own
Rule 12b-1 Plan, each of the two classes will vote separately on their
respective 12b-1 Plan and any higher incremental transfer agency costs and any
other costs attributable solely to one Class will be borne exclusively by that
class. On the Exchange Date, all Class A shareholders of ADF will be given a
number of Class A shares of common stock, par value $.001, of EMF having an
aggregate net asset value equal to the net asset value of his or her Class A
shares of ADF; all Class B shareholders of ADF will be given a number of Class C
shares of common stock, par value $.001, of EMF having an aggregate net asset
value equal to the net asset value of his or her Class B shares of ADF. The
Class A and Class C shares of EMF to be issued in the Reorganization will be
identical in all material respects to all other Class A and Class C shares,
respectively, of EMF then outstanding. The Class C shares of EMF will differ
from the Class B shares of ADF in that the Class C shares are not subject to
CDSC on redemptions within seven years of purchase. The EMF Class C shares are
subject to a 1% CDRC on redemptions within a year of purchase. Class B and Class
C shares convert to Class A shares after eight years. EMF - Class C shares will
be deemed to have been held for the same period
as the ADF - Class B shares for which they were exchanged. For a more detailed
description see "Synopsis - Distribution Fees."
ADF and EMF have adopted Rule 12b-1 Plans in accordance with the 1940 Act. The
Rule 12b-1 Plans are described in "Synopsis-Other Fees" above. Each Rule 12b-1
Plan must be approved annually by the Board of Trustees. For more discussion of
the Rule 12b-1 Plans, see "Plan of Distribution" in the EMF and ADF Prospectus.
Voting Rights. Shareholders of ADF and EMF are entitled to one vote for each
share and a fractional vote for each fractional share held with respect to the
election of Trustees (to the extent hereafter provided) and other matters
submitted to a vote of shareholders. With respect to the Rule 12b-1 Plans in
effect for ADF and EMF, the Plans may not be amended to increase materially the
amount of expenditures unless such amendment is approved by a vote of the
majority of the outstanding voting securities of the Class affected. Thus, there
will ordinarily be no shareholder meeting unless required by the 1940 Act. The
Board of Trustees is a self-perpetuating body until fewer than 50% of its
members have been elected by the shareholders. Under the Trust's Amended and
Restated Master Trust Agreement, any Trustee may be removed by a vote of
two-thirds of the outstanding Trust shares (outstanding Trust shares include
shares of all series of the Trust and not solely shares of EMF and ADF); and
holders of ten percent or more of the outstanding shares of the Trust can
require Trustees to call a meeting of shareholders for purposes of voting on the
removal of one or more Trustees.
Shareholder Liability. Under Massachusetts law, the shareholders of the Trust
could, under certain circumstances, be held personally liable for the
obligations of the Trust. However, the Amended and Restated Master Trust
Agreement of the Trust disclaims shareholder liability for acts or obligations
of the Trust and requires that notice of such disclaimer be given in each
agreement, obligation or instrument entered into or executed by the Trust or the
Trustees. The Amended and Restated Master Trust Agreement provides for
indemnification out of the Trust's property for all losses and expenses of any
shareholder held personally liable for the obligations of the Trust. Thus, the
risk of a shareholder incurring financial loss on account of shareholder
liability is limited to circumstances in which the Trust itself would be unable
to meet its obligations. The Adviser believes that, in view of the above, the
risk of personal liability to shareholders is remote.
Control. As of ___________, 2003, there were no persons who exercised "control"
over EMF or ADF as "control" is defined in the 1940 Act.
Shareholder Inquiries. Shareholder inquiries with respect to ADF or EMF should
be addressed to the Funds by telephone at (800) 544-4653 or in writing at the
address set forth on the first page of the Prospectus/Proxy Statement.
Dividends and Distributions.
Any dividends and capital gains paid by the Funds will be automatically
reinvested in additional shares of the Fund at the Fund's net asset value at the
close of business on the payment date of the dividend or distribution unless the
shareholder elects to receive all dividends and/or distributions either in cash
or to invest them, without imposition of any sales charge, in any other Van Eck
Fund at such fund's net asset value at the close of business on the payment
date.
Tax Consequences. For a discussion of the tax consequences associated with an
investment in EMF and ADF, see "Taxes" in Trust's Statement of Additional
Information. Shareholders are urged to consult their tax advisors regarding
specific questions as to Federal, foreign, state and local taxes.
Purchase of Shares. Both prior to and subsequent to the Reorganization, shares
of EMF will be offered continuously for sale by the Distributor or by brokers
and agents that have entered into selling group or selling agency agreements
with the Distributor, 99 Park Avenue, New York, New York 10016. The
Reorganization will have no effect on the purchase procedures for shares of EMF.
See "Purchase of Shares" in the Prospectuses. For more information on the
Distributor, see "The Distributor" in the Statement of Additional Information
for Van Eck Funds.
Redemption Procedures. Redemption procedures for the Funds are identical. Shares
of each Fund will be redeemed on the day on which proper instructions are
received by the Fund's transfer agent. See "Redemption of Shares" in the Funds'
Prospectuses and "Redemption or Repurchase" in the ADF Prospectus.
Other Matters
It is not anticipated that any matters other than the adoption of the Plan
described above will be brought before the Meeting. If, however, any other
business is properly brought before the Meeting, proxies will be voted in
accordance with the judgment of the persons designated on such proxies.
INFORMATION CONCERNING THE MEETING
Date, Time and Place of Meeting
The Meeting of shareholders of ADF will be held on xxxxxxx, 2003 at 99 Park
Avenue, 8th Floor, New York, New York 10016 at 8:00 a.m., New York Time.
Solicitation, Revocation and Use of Proxies
Only shareholders of record on the Record Date will be entitled to vote at the
Meeting. Each full or fractional share of ADF is entitled to vote the same
number of full or fractional shares of the Fund owned. Under both the 1940 Act,
the term "Majority Shareholder Vote" of the Fund means favorable vote of: (a)
67% or more of the outstanding votes of the Fund present at the Meeting, if 50%
or more of the outstanding votes of the Fund are present or represented by
proxy; or by (b) the vote of more than 50% of the outstanding votes of the Fund,
whichever is less. A Majority Shareholder Vote of the Fund is required to
approve the Plan.
Any person giving a proxy has the power to revoke it any time prior to its
exercise by executing a superseding proxy by submitting a written notice of
revocation to the Secretary of the Trust at 99 Park Avenue, 8th Floor, New York,
NY 10016. In addition, although mere attendance at the Meeting will not revoke a
proxy, a shareholder present at the Meeting may withdraw his or her proxy and
vote in person.
All shares represented by properly authorized proxies, unless such proxies have
previously been revoked, will be voted at the Meeting in accordance with the
directions on the proxies. If no direction is indicated, the shares will be
voted "FOR" the approval of the Plan and any other proposals.
Record Date and Outstanding Shares
Only holders of record of ADF's shares of beneficial interest at the close of
business on _______________ 2003 (the "Record Date") are entitled to vote at the
Meeting and any adjournments thereof. At the close of business on the Record
Date, there were ____________________ shares of ADF outstanding and entitled to
vote.
Security Ownership of Certain Beneficial Owners and Management
No person or entity owns beneficially 5% or more of the shares of EMF or ADF
except as stated in "Introduction" above.
Voting Rights and Required Vote
In order to hold the Meeting, a "quorum" must be present. A quorum is present if
the holders of at least one-half of the votes entitled to be cast are
represented at the meeting, either in person or by proxy.
For purpose of determining a quorum for transacting business at the Meeting,
abstentions and broker "non-votes" (that is, proxies from brokers or nominees
indicating that such persons have not received instructions from the beneficial
owner or other persons entitled to vote shares on a particular matter with
respect to which the brokers or nominees do not have discretionary power) will
be treated as shares that are present but which have not been voted. For this
reason, abstentions and broker non-votes will have the effect of a "no" vote for
purposes of obtaining the requisite approval of Proposal 1.
If a quorum is not present, the persons named as proxies may vote those proxies
which have been received and adjourn the Meeting to a later date. In the event
that a quorum is present but sufficient votes in favor of the proposal have not
been received, the person named as proxies may propose one or more adjournments
of the Meeting to permit further solicitations of proxies with respect to the
proposal. All such adjournments will require the affirmative vote of a majority
of the votes entitled to be cast present in person or by proxy at the session of
the Meeting to be adjourned. The persons named as proxies will vote AGAINST any
such adjournment those proxies which they are required to vote against the
proposal and will vote in FAVOR of the adjournment other proxies which they are
authorized to vote. A shareholder vote may be taken on other proposals in the
Proxy Statement prior to any such adjournment if sufficient votes have been
received for approval.
Under Massachusetts law, shareholders of a registered investment company are not
entitled to demand fair value of the shares and will be bound by the terms of
the Reorganization if the Plan is approved at the Meeting. Any shareholder in
ADF may, however, either redeem his or her shares at net asset value or exchange
his or her shares into another Van Eck Fund prior to the date of the
Reorganization.
ADDITIONAL INFORMATION
This Prospectus/Proxy Statement and the related Statement of Additional
Information do not include all the information set forth in the registration
statements and exhibits relating thereto which Van Eck Funds has filed with the
Securities and Exchange Commission, Washington, DC 20549, under the Securities
Act of 1933 and the 1940 Act, to which reference is hereby made.
Van Eck Funds is subject to the informational requirements of the Securities
Exchange Act of 1934 and in accordance therewith files reports and other
information with the Securities and Exchange Commission. Reports, proxy
statements, registration statements and other information filed by Van Eck Funds
can be inspected and copied at the public reference facilities of the Securities
and Exchange Commission in Washington, DC and Regional Offices of the Commission
located at 233 Broadway, New York, New York 10278 and Suite 1400, 500 West
Madison Street, Chicago, Illinois 60621. Copies of such material can also be
obtained by mail from the Public Reference Branch, Office of Consumer Affairs
and Information Services, Securities and Exchange Commission, 450 Fifth Street,
N.W., Washington, DC 20549 and its public reference facilities in New York, New
York and Chicago, Illinois, at prescribed rates.
EXHIBIT A
PLAN OF REORGANIZATION AND LIQUIDATION
PLAN OF REORGANIZATION AND LIQUIDATION dated as of ____________, 2003 (the
"Plan") adopted by Van Eck Funds, a Massachusetts business trust (the "Trust"),
on behalf of Emerging Markets Fund ("Emerging Markets Fund"), a series of the
Trust, and Asia Dynasty Fund, another series of the Trust. Emerging Markets Fund
and Asia Dynasty Fund are collectively referred to as the "Funds" and
individually as a "Fund".
WITNESSETH:
WHEREAS, the Trust is an open-end management investment company registered under
the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, this Plan is intended to be and is adopted as a plan of reorganization
and liquidation within the meaning of Section 368(a)(1)(C) of the Internal
Revenue Code of 1986, as amended, such reorganization to consist of the transfer
of all of the assets of Asia Dynasty Fund - Class A in exchange solely for Class
A shares of common stock, par value $0.001 per share, of Emerging Markets Fund,
the transfer of all the assets of Asia Dynasty Fund - Class B in exchange solely
for Class C shares of Emerging Markets Fund and the assumption by Emerging
Markets Fund of all of the stated liabilities of Asia Dynasty Fund and the
distribution, after the Closing hereinafter referred to, of Emerging Markets
Fund Shares to the shareholders of Asia Dynasty Fund in liquidation of Asia
Dynasty Fund, all upon the terms and conditions hereinafter set forth in this
Plan; and
WHEREAS, the Trustees of the Trust, including a majority of the Trustees who are
not "interested persons", as defined in the 1940 Act have determined with regard
to the constituent Funds that participating in the transactions contemplated by
this Plan is in the best interests of each Fund and its shareholders and that
the interest of each Fund's shareholders would not be diluted as a result of
this transaction.
NOW, THEREFORE, the Trust hereby agrees as follows:
1. Transfer of Assets. Subject to the terms and conditions set forth herein,
at the closing provided for in Section 5 (herein referred to as the "Closing"),
the Trust shall transfer all of the assets of Asia Dynasty Fund, and assign all
Assumed Liabilities (as hereinafter defined), Emerging Markets Fund, shall
acquire all such assets, and shall assume all such Assumed Liabilities, upon
delivery to the Trust of Emerging Markets Shares having a net asset value equal
to the value of the net assets of Asia Dynasty Fund transferred (the "New
Shares"). "Assumed Liabilities" shall mean all liabilities, expenses, costs,
charges and reserves reflected in an unaudited statement of assets and
liabilities of Asia Dynasty Fund as of the close of business on the Valuation
Date (as hereinafter defined), determined in accordance with generally accepted
accounting principles consistently applied from the prior audited period. The
net asset value of the New Shares and the value of the net assets of Asia
Dynasty Fund to be transferred shall be determined as of the close of regular
trading on the New York Stock Exchange on the business day next preceding the
Closing (the "Valuation Date") using the valuation procedures set forth in the
then-current prospectus and statement of additional information of Asia Dynasty
Fund and Emerging Markets Fund.
All Assumed Liabilities of Asia Dynasty Fund, to the extent that they exist at
or after the Closing, shall after the Closing attach to Emerging Markets Fund
and may be enforced against Emerging Markets Fund to the same extent as if the
same had been incurred by Emerging Markets Fund.
2. Liquidation of Asia Dynasty Fund. At or as soon as practicable after the
Closing, Asia Dynasty Fund will be liquidated and the New Shares delivered to
the Trust on behalf of Asia Dynasty Fund will be distributed to shareholders of
Asia Dynasty Fund, each shareholder to receive the number of New Shares equal to
the pro rata portion of shares of beneficial interest of Asia Dynasty Fund held
by such shareholder as of the close of business on the Valuation Date. Such
liquidation and distribution will be accompanied by the establishment of an open
account on the stock records of Emerging Markets Fund in the name of each
shareholder of Asia Dynasty Fund and representing the respective pro rata number
of New Shares due such shareholder. As soon as practicable after the Closing,
the Trust shall file on behalf of Asia Dynasty Fund such instruments of
dissolution, if any, as are necessary to effect the dissolution of Asia Dynasty
Fund and shall take all other steps necessary to complete liquidation and
dissolution of Asia Dynasty Fund. As of the Closing, each outstanding
certificate which, prior to
the Closing, represented shares of Asia Dynasty Fund will be deemed for all
purposes to evidence ownership of the number of Emerging Markets Fund shares
issuable with respect thereto pursuant to the Reorganization. After the Closing,
certificates of originally represented shares of Asia Dynasty Fund will be
rendered nonnegotiable; upon special request and surrender of such certificates
to the Trust's transfer agent, holders of these non-negotiable certificates
shall be entitled to receive certificates representing the number of Emerging
Markets Fund shares issuable with respect thereto.
Conditions Precedent. The obligations of the Trust to effectuate the Plan of
Reorganization and Liquidation hereunder shall be subject to the satisfaction of
the following conditions:
(a) At or immediately prior to the Closing, the Trust shall have declared and
paid a dividend or dividends which, together with all previous such dividends,
shall have the effect of distributing to the shareholders of Asia Dynasty Fund
all of the Fund's investment company taxable income, if any, for taxable years
ending at or prior to the Closing (computed without regard to any deduction for
dividends paid) and all of its net capital gain, if any, realized in taxable
years ending at or prior to the Closing (after reduction for any capital loss
carry-forward);
(b) Such authority and orders from the Securities and Exchange Commission (the
"Commission") and state securities commissions as may be necessary to permit the
Trust to carry out the transactions contemplated by this Plan shall have been
received;
(c) A registration statement of the Trust on Form N-14 under the Securities Act
of 1933, as amended (the "Securities Act"), registering the New Shares under the
Securities Act, and such amendment or amendments thereto as are determined by
the officers of the Trust to be necessary or appropriate to effect such
registration of the New Shares (the "Registration Statement"), shall have been
filed with the Commission and the Registration Statement shall have become
effective, and no stop-order suspending the effectiveness of such Registration
Statement shall have been issued, and no proceeding for that purpose shall have
been initiated or threatened by the Commission (and not withdrawn or
terminated);
(d) All necessary actions shall have been taken in order to enable Emerging
Markets Fund to offer the New Shares to the public in all states in which the
ability to offer such New Shares is required for consummation of the
transactions contemplated hereunder;
(e) The Trust shall have received a legal opinion from counsel, in form and
substance reasonably satisfactory to the Trustees of the Trust, as to the tax
consequences of the reorganization;
(f) A vote approving this Plan and the reorganization contemplated hereby shall
have been adopted by at least a majority (as defined in the 1940 Act) of the
outstanding shares of beneficial interest of Asia Dynasty Fund entitled to vote
at a Meeting of Shareholders of Asia Dynasty Fund duly called for such purpose.
4. Closing. The Closing shall be held at the offices of the Trust and shall
occur (a) as of the close of business on or about __________, 2003, (b) if all
regulatory or shareholder approvals shall not have been received as of that
date, then on the first business day following receipt of all necessary
regulatory approvals and the final adjournment of meetings of shareholders of
Asia Dynasty Fund at which this Plan is considered or (c) such later time as the
parties may agree. All acts taking place at the Closing shall be deemed to take
place simultaneously unless otherwise provided. At, or as soon as may be
practicable following the Closing, the Trust shall distribute the New Shares to
Asia Dynasty Fund Record Holders (as herein defined) by instructing Emerging
Markets Fund to register the appropriate number of New Shares in the names of
Asia Dynasty Fund's shareholders and Emerging Markets Fund will promptly comply
with said instruction. The shareholders of record of the Asia Dynasty Fund as of
the close of business on the Valuation Date shall be certified by the Trust's
transfer agent (the " Asia Dynasty Fund Record Holders").
5. Expenses. Legal and printing expenses and expenses of holding the meeting
of shareholders of Asia Dynasty Fund (such as proxy tabulation and the expense
of a solicitor, if any) will be borne by Asia Dynasty Fund, for which it shall
be liable. Any registration fee payable to the Commission in connection with the
registration of New Shares under the Securities Act or any filing or
notification fee payable to the Commission or state securities commission in
connection with the transactions contemplated by this Plan shall be payable by
such Fund required to pay such fee. All fees payable by any party as described
herein shall be payable by such party regardless of whether the transactions
contemplated hereby are consummated.
6. Termination. This Plan and the transactions contemplated hereby may be
terminated and abandoned by resolution of the Board of Trustees of the Trust
with respect to either of Emerging Markets Fund or Asia Dynasty Fund, at any
time prior to the Closing, if circumstances should develop that, in the opinion
of the Board, in its sole discretion, make proceeding with this Plan inadvisable
for either Fund. In the event of any such termination, there shall be no
liability for damages on the part of either Emerging Markets Fund or Asia
Dynasty Fund, or their respective Trustees or officers, to the other party,
except with respect to the payment of expenses as contemplated in Section 6
hereof.
7. Amendments. This Plan may be amended, waived or supplemented in such manner
as may be mutually agreed upon in writing by the authorized officers of the
Trust, provided, however, that following the meeting of Asia Dynasty Fund
shareholders called by the Trust pursuant to Section 3(f) of this Plan, no such
amendment, waiver or supplement may have the effect of changing the provisions
for determining the number of Emerging Markets Fund Shares to be issued to the
Asia Dynasty Fund shareholders under this Plan to the detriment of such
shareholders without their further approval.
8. Governing Law. This Plan shall be governed and construed in accordance with
the laws of the Commonwealth of Massachusetts, without giving effect to the
conflict of laws provisions thereof.
9. Further Assurances. Unless the Plan has been terminated pursuant to Section
6 hereof, the Trust with respect to Emerging Markets Fund and Asia Dynasty Fund
shall take such further actions, prior to, at, and after the Closing as may be
necessary or desirable and proper to consummate the transactions contemplated
hereby.
10. Limitations of Liability. The term "Van Eck Funds" means and refers to the
Trustees from time to time serving under the Master Trust Agreement, as the same
may subsequently thereto have been, or subsequently hereto may be, amended. It
is expressly agreed that the obligations of the Trust hereunder shall not be
binding upon any of the Trustees, shareholders, nominees, officers, agents or
employees of the Trust, personally, but bind only the assets and property of the
Emerging Markets Fund or Asia Dynasty Fund series of the Trust, as provided in
the Master Trust Agreement. The execution and delivery of this Plan has been
authorized by the Trustees of the Trust and signed by an authorized officer of
the Trust, acting as such, and neither such authorization nor such execution and
delivery shall be deemed to have been made individually or to impose any
personal liability, but shall bind only the Trust property of the Asia Dynasty
Fund and Emerging Markets Fund series of the Trust as provided in the Van Eck
Funds Master Trust Agreement. The Master Trust Agreement of the Trust provides,
and it is expressly agreed, that Emerging Markets Fund and Asia Dynasty Fund
shall be solely and exclusively responsible for the payment of its debts,
liabilities and obligations, and that no other series of the Trust shall be
responsible for the same.
IN WITNESS WHEREOF, the Trustees of the Trust have caused this Plan to be
executed on behalf of its constituent Fund as of the date first set forth above
by their duly authorized representatives.
Van Eck Funds--Emerging Markets Fund and Asia Dynasty Fund
/s/ Derek S. van Eck
By:__________________________________
Derek S. van Eck
President
PART B
STATEMENT OF ADDITIONAL INFORMATION
Acquisition of the Assets of
VAN ECK ASIA DYNASTY FUND
a series of
VAN ECK FUNDS
99 PARK AVENUE, 8TH FLOOR
NEW YORK, NEW YORK 10016
212.687-5200 . 1.800.544.4653
By and in Exchange for Shares of
VAN ECK EMERGING MARKETS FUND
a series of
VAN ECK FUNDS
99 PARK AVENUE, 8TH FLOOR
NEW YORK, NEW YORK 10016
212.687-5200 . 1.800.544.4653
-----------------------------------
This Statement of Additional Information relates specifically to the proposed
transfer of all or substantially all of the assets and liabilities of Van Eck
Asia Dynasty Fund ("ADF"), a series of Van Eck Funds, to Van Eck Emerging
Markets Fund ("EMF"), a series of Van Eck Funds, in exchange for shares of the
EMF. This Statement of Additional Information also consists of portions of other
documents each of which is attached and incorporated herein by reference:
Further information about ADF, is contained in the Fund's Statement of
Additional Information, dated May 1, 2003, and its Annual Report to Shareholders
for the year ended December 31, 2002, each of which are incorporated by
reference herein and are available at no cost by either calling Van Eck Funds,
the phone number listed above or by writing to the above address.
Further information about EMF is contained in the Fund's Statement of Additional
Information, dated May 1, 2003, and its Annual Report to Shareholders for the
year ended December 31, 2002 each of which are incorporated by reference herein
and are available at no cost by either calling EMF at the phone number listed
above or by writing to the above address.
This Statement of Additional Information is not a prospectus and should be read
in conjunction with the Prospectus/Proxy Statement of ADF, dated _________,
2003, which is enclosed. This Statement of Additional Information has been
incorporated by reference into the Prospectus/Proxy Statement.
The following is general information and pro-forma financial information for ADF
and EMF.
THIS STATEMENT OF ADDITIONAL INFORMATION IS DATED ______________, 2003.
TABLE OF CONTENTS
PAGE
- --------------------------------------------------------------------------------
General Information........................................................... 2
Pro Forma Information......................................................... 3
GENERAL INFORMATION
The shareholders of ADF are being asked to approve a Plan of Reorganization and
Liquidation (the "Plan") which contemplates the exchange of substantially all of
the assets of ADF for shares of EMF, the assumption of the liabilities of ADF by
EMF, the distribution of EMF shares to the shareholders of ADF and the
liquidation of ADF. EMF is an open-end management investment company registered
under the Investment Company Act of 1940 and a series of Van Eck Funds, which is
organized as a Massachusetts business trust. A Special Meeting of Shareholders
to consider the Plan and other matters described in the Proxy
Statement/Prospectus will be held at 99 Park Avenue, 8th Floor, New York, New
York on _________________, 2003 at 10:00 a.m., New York Time.
For detailed information about the Plan, shareholders of ADF should refer to the
Prospectus/Proxy Statement.
2
PRO FORMA INFORMATION
COMBINED SCHEDULE OF INVESTMENTS FOR
VAN ECK ASIA DYNASTY FUND AND
VAN ECK EMERGING MARKETS FUND
PRO FORMA SCHEDULE OF INVESTMENTS
PRO FORMA INFORMATION
COMBINED SCHEDULE OF INVESTMENTS FOR
VAN ECK ASIA DYNASTY FUND AND
VAN ECK EMERGING MARKET FUND
JUNE, 30 2003 (UNAUDITED)
SHARES
EMERGING MARKETS ASIA DYNASTY PRO FORMA FOR THE
FUND FUND COMBINED FUND
- -------------------------------------------------------------------------------------------------
Brazil: 4.2%
9,900 -- 9,900
13,200 -- 13,200
22,600 -- 22,600
CHINA: 9.4%
-- 498,000 498,000
-- 1,100,000 1,100,000
188,000 167,000 355,000
400,000 584,000 984,000
250,000 250,000 500,000
-- 250,000 250,000
1,115,000 875,000 1,990,000
CROATIA: 0.5%
7,500 -- 7,500
CZECH REPUBLIC: 1.4%
13,500 -- 13,500
HONG KONG: 10.3%
-- 350,000 350,000
-- 730,000 730,000
-- 61,000 61,000
-- 874,000 874,000
-- 52,000 52,000
-- 45,000 45,000
-- 89,000 89,000
-- 4,636,000 4,636,000
1,050,000 1,074,000 2,124,000
-- 227,020 227,020
236,000 115,000 351,000
INDIA: 5.2%
-- 18,000 18,000
-- 4,300 4,300
-- 11,000 11,000
-- 3,800 3,800
-- 12,500 12,500
32,000 -- 32,000
35,000 35,000
MARKET VALUE
EMERGING MARKETS ASIA DYNASTY PRO FORMA FOR
SECURITIES FUND FUND THE COMBINED FUND
- -------------------------------------------------------------------------------------------------
Cia Vale,do Rio Doce (ADR) $ 274,725 -- $ 274,725
Embraer, Aircraft Corp.
(Sponsored ADR) 252,120 -- 252,120
Petroleo Brasileiro S.A. (ADR) 446,576 -- 446,576
973,421 -- 973,421
----------- ----------- -----------
Chaoda,Modern Agriculture
Holdings Ltd. -- 86,211 86,211
China, Oilfield Services Ltd. -- 246,847 246,847
CNOOC Ltd. 277,238 246,270 523,508
Denway, Motors Ltd. 180,807 263,979 444,786
Lianhua Supermarket
Holdings Ltd. 132,240 132,240 264,480
Matrix 8848. Net Holdings -- 20,000 20,000
Sinotrans Ltd. 314,554 246,847 561,401
904,839 1,242,394 2,147,233
----------- ----------- -----------
Pliva D.D. (GDR) 103,500 -- 103,500
----------- ----------- -----------
Komercni Banka AS (GDR) 324,000 -- 324,000
----------- ----------- -----------
Asia Satellite Telecommunications
Holdings Ltd. -- 46,228 46,228
Chen Hsong Holdings Ltd. -- 262,107 262,107
Esprit Holdings Ltd. -- 149,012 149,012
Global China Group Holdings Ltd. -- 43,709 43,709
Hutchison Whampoa Ltd. -- 316,734 316,734
Hutchison Whampoa Ltd. Warrants
(HKD 50, expiring 4/01/04) -- 975 975
Li & Fung Ltd. -- 114,697 114,697
Media Partners International
Holdings, Inc. -- 101,062 101,062
Next Media Ltd. 336,610 344,304 680,914
Star Cruises Ltd. -- 59,678 59,678
Techtronic Industries Co. Ltd. 396,443 193,182 589,625
733,053 1,631,688 2,364,741
----------- ----------- -----------
Bharat Heavy Electricals Ltd. -- 104,641 104,641
HDFC Bank Ltd. (ADR) -- 80,625 80,625
Housing Development Finance
Corporation Ltd. -- 96,940 96,940
Infosys Technologies Ltd. -- 266,933 266,933
Maruti Udyog Ltd. -- 33,667 33,667
Satyam Computer Services Ltd. 317,760 -- 317,760
State Bank of India -- 288,914 288,914
317,760 871,720 1,189,480
----------- ----------- -----------
INDONESIA: 2.0%
-- 500,000 500,000
350,000 390,000 740,000
ISRAEL: 1.2%
5,000 -- 5,000
MALAYSIA: 1.5%
-- 31,000 31,000
-- 78,000 78,000
-- 17,000 17,000
-- 220,000 220,000
MEXICO: 2.2%
100,000 -- 100,000
90,000 -- 90,000
RUSSIA: 1.9%
3,000 -- 3,000
3,750 -- 3,750
SINGAPORE: 4.8%
100,000 450,000 550,000
-- 550,000 550,000
-- 150,000 150,000
-- 281,250 281,250
-- 20,000 20,000
-- 185,000 185,000
150,000 125,000 275,000
SOUTH AFRICA: 6.6%
450,000 -- 450,000
190,000 -- 190,000
50,000 -- 50,000
210,000 -- 210,000
230,000 -- 230,000
Enseval Putera Maga Trading Tbk -- 51,515 51,515
PT Telekomunikasi Indonesia 196,212 218,636 414,848
196,212 270,151 466,363
----------- ----------- -----------
Teva Pharmaceutical
Industries Ltd. 284,500 -- 284,500
----------- ----------- -----------
Genting Berhad -- 122,368 122,368
IOI Corp. -- 117,000 117,000
MAA Holdings Berhad -- 20,489 20,489
Multi-Purpose Holdings Berhad -- 74,105 74,105
-- 333,962 333,962
----------- ----------- -----------
Corporacion GEO S.A. de C.V.
(Series B) 291,943 -- 291,943
Grupo Modelo S.A. de C.V.
(Series C) 204,360 -- 204,360
496,303 -- 496,303
----------- ----------- -----------
Lukoil (Sponsored ADR) 237,000 -- 237,000
Yukos (Sponsored ADR) 210,000 -- 210,000
447,000 -- 447,000
----------- ----------- -----------
Citiraya Industries Ltd. 33,510 150,797 184,307
Jurong Technologies Industrrial
Corp. Ld. -- 146,821 146,821
Neptune Orient Lines Ltd. -- 126,090 126,090
Noble Group Ltd. -- 260,380 260,380
Oversea-Chinese Banking Corp. Ltd. -- 113,594 113,594
Sembcorp Logistics Ltd. -- 197,541 197,541
Star Cruises Ltd. 39,000 32,500 71,500
72,510 1,027,723 1,100,233
----------- ----------- -----------
African Bank Investments Ltd. 372,432 -- 372,432
Alexander Forbes Ltd. 278,990 -- 278,990
Kumba Resources Ltd. 200,900 -- 200,900
MTN Group0Ltd. 456,369 -- 456,369
Sanlam Ltd. 214,916 -- 214,916
1,523,607 -- 1,523,607
----------- ----------- -----------
SOUTH KOREA: 28.2%
-- 3,300 3,300
-- 13,000 13,000
9,000 4,000 13,000
12,700 19,400 32,100
14,000 15,800 29,800
2,000 2,150 4,150
8,400 16,752 25,152
15,500 6,000 21,500
-- 3,800 3,800
-- 2,500 2,500
1,900 2,476 4,376
25,000 25,000
2,300 1,500 3,800
850 850
TAIWAN: 14.0%
-- 110,080 110,080
156,000 107,184 263,184
-- 234,000 234,000
-- 651,600 651,600
196,000 125,000 321,000
27,000 35,000 62,000
491,000 200,000 691,000
-- 86,000 86,000
-- 57,250 57,250
-- 41,771 41,771
24,620 185,700 210,320
-- 165,193 165,193
-- 175,000 175,000
THAILAND: 4.4%
-- 100,000 100,000
-- 700,000 700,000
-- 140,000 140,000
1,000,000 -- 1,000,000
-- 35,000 35,000
230,000 150,000 380,000
TOTAL STOCKS AND OTHER INVESTMENTS: 97.8%
(Cost: $ 19,240,513)
OTHER ASSETS LESS LIABILITIES: 2.2%
NET ASSETS: 100%
Cheil Communications, Inc. -- 324,613 324,613
Hanjin Shipping Co. Ltd. -- 106,873 106,873
Honam Petrochemical Corp. 264,462 117,539 382,001
Hyundai Mobis 325,873 497,790 823,663
Hyundai Motor Co. Ltd. 370,364 417,982 788,346
Kangwon Land, Inc. 222,687 239,389 462,076
Kookmin Bank 253,160 504,874 758,034
Korea Electric Power Corp. 245,249 94,935 340,184
KT Freetel -- 79,372 79,372
POSCO -- 259,523 259,523
Samsung Electronics Co. Ltd. 564,671 735,856 1,300,527
Samsung Heavy Industries Co. Ltd. -- 100,251 100,251
Shinsegae Co. Ltd. 359,104 234,198 593,302
SK Telecom Co. Ltd. -- 145,165 145,165
2,605,570 3,858,360 6,463,930
----------- ----------- -----------
Advantech Co. Ltd. -- 159,029 159,029
Benq Corp. 177,140 121,709 298,849
Chinatrust Financial Holding Co. Ltd. -- 188,633 188,633
Eva Airways Corp. -- 233,454 233,454
Evergreen Marine 139,312 88,847 228,159
Mediatek, Inc. 270,702 350,910 621,612
Mega Financial
Holdings Co. Ltd. 231,242 94,192 325,434
Nien Hsing Textile Co. Ltd. -- 85,727 85,727
Quanta Computer, Inc. -- 118,271 118,271
Siliconware Precision Industries Co. (ADR) -- 134,503 134,503
Taiwan Semiconductor Manufacturing
Co. Ltd. (Sponsored ADR) 248,170 305,834 554,004
United Microelectronics Corp. -- 106,438 106,438
Wan Hai Lines Ltd. -- 154,724 154,724
1,066,566 2,142,271 3,208,837
----------- ----------- -----------
Central Pattana Public Co. Ltd. -- 83,155 83,155
Quality Houses Public Co. Ltd. -- 124,733 124,733
Quality Houses Public Co. Ltd. Warrants -- 4,989 4,989
National Finance
Public Co. Ltd. 327,869 -- 327,869
Siam Cement Public Co. Ltd. -- 124,735 124,735
Thai Airways International
Public Co. Ltd. 204,919 133,642 338,561
532,788 471,254 1,004,042
----------- ----------- -----------
10,581,629 11,849,523 22,431,152
462,621 46,774 509,395
----------- ----------- -----------
$11,044,250 $11,896,297 $22,940,547
=========== =========== ===========
GLOSSARY:
ADR -- American Depositary Receipt
GDR -- Global Depositary Receipt
PRO FORMA INFORMATION
COMBINED STATEMENTS OF ASSETS AND LIABILITIES FOR VAN ECK ASIA DYNASTY FUND AND
VAN ECK EMERGING MARKETS FUND
JUNE 30, 2003 (UNAUDITED)
EMERGING MARKETS ASIA DYNASTY PRO FORMA FOR
FUND FUND THE COMBINED FUND
---------------- ------------ -----------------
Assets:
Investments at cost $ 9,088,753 $ 10,151,760 $ 19,240,513
------------ ------------ ------------
Investments at value $ 10,581,629 $ 11,849,523 $ 22,431,152
Cash and Foreign Currency 449,094 273,866 722,960
Receivables:
Dividends and interest 27,728 6,817 34,545
Capital shares sold 5,852 2,000 7,852
Due from Adviser 29,779 -- 29,779
Prepaid expense 3,795 -- 3,795
------------ ------------ ------------
Total assets 11,097,877 12,132,206 23,230,083
------------ ------------ ------------
Liabilities:
Payables:
Capital shares redeemed 14,513 144,449 158,962
Accounts payable 32,681 67,826 100,507
Due to Trustees 2,005 2,626 4,631
Due to Distributor 4,428 8,628 13,056
Due to Adviser -- 12,380 12,380
------------ ------------ ------------
Total liabilities 53,627 235,909 289,536
------------ ------------ ------------
Net Assets $ 11,044,250 $ 11,896,297 $ 22,940,547
============ ============ ============
CLASS A SHARES:
Net assets $ 11,044,250 $ 10,054,960 $ 21,099,210
============ ============ ============
Shares outstanding 1,871,630 1,551,595 3,575,864
============ ============ ============
Net asset value and redemption price per share $ 5.90 $ 6.48 $ 5.90
============ ============ ============
Maximum offering price per share $ 6.26 $ 6.88 --
============ ============ ============
CLASS B SHARES:
Net assets -- $ 1,841,337 --
============ ============
Shares outstanding -- 307,078 --
============ ============
Net asset value, maximum offering and redemption
price per share (Redemption may be subject to a
contingent deferred sales charge within the
first six years of ownership) -- $ 6.00 --
============ ============
Class C Shares:
Net Assets -- -- $ 1,841,337
============ ============ ============
Shares outstanding -- -- 312,091
============ ============ ============
Net asset value, maximum offering and redemption
price per share (Redemption may be subject to
a contingent deferred sales charge within the
first year of ownership) -- -- $ 5.90
============ ============ ============
NET ASSETS CONSIST OF:
Aggregate paid in capital $ 15,314,703 $ 16,874,338 $ 32,100,639
Unrealized appreciation of investments foreign
currency, forward foreign currency contracts, and
other assets and liabilities denominated in
foreign currencies 1,488,239 1,684,102 3,172,341
Overdistributed/underdistributed net investment
income (loss) (2,857) (100,653) (15,108)
Accumulated realized loss (5,755,835) (6,561,490) (12,317,325)
------------ ------------ ------------
Net Assets $ 11,044,250 $ 11,896,297 $ 22,940,547
============ ============ ============
PRO FORMA INFORMATION
COMBINED STATEMENTS OF OPERATIONS FOR VAN ECK ASIA DYNASTY FUND AND
VAN ECK EMERGING MARKETS FUND
SIX MONTHS ENDED JUNE 30, 2003 (UNAUDITED)
EMERGING MARKETS ASIA DYNASTY PRO FORMA PRO FORMA FOR
FUND FUND ADJUSTMENTS THE COMBINED FUND
---------------- ------------ ----------- -----------------
INCOME:
Dividends $ 141,256 $ 160,831 $ -- $ 302,087
Interest 758 1,298 -- 2,056
Foreign taxes withheld (12,485) (18,110) -- (30,595)
----------- ----------- ----------- -----------
Total income 129,529 144,019 -- 273,548
EXPENSES:
Management 35,947 40,849 -- 76,796
Distribution Class A 23,965 22,944 -- 46,909
Distribution Class B -- 8,577 -- 8,577
Administration 19,603 20,524 -- 40,127
Reports to shareholders 34,313 7,272 (7,272)(a) 34,313
Trustees' fees and expenses 1,908 3,620 -- 5,528
Transfer agent 33,784 56,110 (33,784)(a) 56,110
Custodian 16,273 18,735 (10,598)(a) 24,410
Registration 3,238 16,109 (16,109)(a) 3,238
Professional 38,315 27,556 (27,556)(a) 38,315
Interest expense 176 -- -- 176
Other 1,441 4,525 -- 5,966
----------- ----------- ----------- -----------
Total expenses 208,963 226,821 (95,319) 340,465
----------- ----------- ----------- -----------
Expense reduction (112,846) -- -- (112,846)
Net expenses 96,117 226,821 (95,319) 227,619
----------- ----------- ----------- -----------
Net investment income (loss) 33,412 (82,802) 95,319 45,929
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Realized gain from investments 197,404 106,127 -- 303,531
Realized loss from forward foreign currency contracts and
foreign currency transactions (20,980) (6,675) -- (27,655)
Change in unrealized appreciation (depreciation) of foreign
currency, forward foreign currency --
contracts and other assets and liabilities denominated in
foreign currencies 10,853 (4,489) -- 6,364
Change in unrealized appreciation (depreciation) of investments 1,785,623 1,447,823 -- 3,233,446
----------- ----------- ----------- -----------
Net gain on investments and foreign currency transactions 1,972,900 1,542,786 -- 3,515,686
----------- ----------- ----------- -----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 2,006,312 $ 1,459,984 $ 95,319 $ 3,561,615
=========== =========== =========== ===========
- ---------
(a) Reflects adjustments in expenses due to elimination of duplicative services.
PART C
OTHER INFORMATION
Item 15. Indemnification
Reference is made to Article VI of the Master Trust Agreement of the Registrant,
as amended, previously filed as Exhibit (1) to the Registration Statement.
Insofar as indemnification by the Registrant for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers, underwriters and
controlling persons of the Registrant, pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification is against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted against the Registrant by such trustee, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question of whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
ITEM 16: Exhibits
(An * denotes inclusion in this filing)
(1)(a)Master Trust Agreement
(incorporated by reference to Registration Statement No. 2-97596); Form of First
Amendment to Master Trust Agreement (incorporated by reference to Registration
Statement No. 2-97596). Form of Second Amendment to Master Trust Agreement
(incorporated by reference to Pre-Effective Amendment No. 1). Form of Third
Amendment to Master Trust Agreement (incorporated by reference to Post-Effective
Amendment No. 1). Form of Fourth Amendment to Master Trust Agreement
(incorporated by reference to Post-Effective Amendment No. 3). Form of Fifth
Amendment to the Master Trust Agreement, adding World Income Fund as a series to
the trust (incorporated by reference to Post-Effective Amendment No. 7). Form of
Sixth Amendment to Master Trust Agreement, adding International Investors Fund
as a series of the Trust and establishing investment limitations therefore,
respectively, (incorporated by reference to Post-Effective Amendment No. 17).
Form of Seventh Amendment to the Master Trust Agreement, adding Short-Term World
Income Fund and International Equities Fund as series of the Trust (incorporated
by reference to Post-Effective Amendment No. 19).
(1)(b) Form of Amended and Restated Master Trust Agreement (incorporated by
reference to Post-Effective Amendment No. 20); Form of Amendment to the Master
Trust Agreement changing the name of Short-Term World Income Fund to Short-Term
World Income Fund-C and changing the name of International Equities Fund to
International Growth Fund (incorporated by reference to Post-Effective Amendment
No. 20); Form of Second Amendment to the Amended and Restated Master Trust
Agreement adding Asia Dynasty Fund as a series of the Trust (incorporated by
reference to Post-Effective Amendment No. 23); Third Amendment to the Amended
and Restated Master Trust Agreement adding Global Balanced Fund as a series of
the Trust and changing the name of International Investors Fund to International
Investors Gold Fund (incorporated by reference to Post-Effective Amendment No.
29); Fourth Amendment to the Amended and Restated Master Trust Agreement adding
Global SmallCap Fund and Asia Infrastructure Fund as series of the Trust
(incorporated by reference to Post-Effective Amendment No. 30); Form of Fifth
Amendment to the Amended and Restated Master Trust Agreement (incorporated by
reference to Post-Effective Amendment No. 35); Form of Sixth Amendment to the
Amended and Restated Master Trust Agreement (incorporated by reference to
Post-Effective Amendment No. 35); Seventh Amendment to Amended and Restated
Master Trust Agreement adding Emerging Markets Fund as a series of the Trust
(incorporated by reference to Post-Effective Amendment No. 36); Eighth Amendment
to Amended and Restated Master Trust Agreement adding Gold Opportunity Fund as a
series of the Trust (incorporated by reference to Post-Effective Amendment No.
37); Ninth Amendment to the Amended and Restated Master Trust Agreement adding
Class B shares to Asia Infrastructure Fund, Emerging Markets Fund and Gold
Opportunity Fund series of the Trust (incorporated by reference to
Post-Effective Amendment No. 39).
(2) By-laws of Registrant (incorporated by reference to Registration
Statement No. 2-97596).
(3) Not Applicable.
(4) Not Applicable.
(5) Emerging Markets Fund (incorporated by reference to Post-Effective
Amendment No. 39.
(6)(a) Advisory Agreement (incorporated by reference to Post-Effective
Amendment No. 1).
(7)(a) Distribution Agreement (incorporated by reference to Post-Effective
Amendment No. 1 and 36).
(8) Form of Deferred Compensation Plan (incorporated by reference to
Post-Effective Amendment No. 40).
(9) Global Custody Agreement, Incorporated by reference to Post Effective
Amendment No. 55.
(10) Distribution Plan for Emerging Markets Fund (formerly Global Balanced
Fund (Incorporated by reference to Post-Effective Amendment No. 26.)
(11) Opinion of Counsel as to the legality of securities issued*
(12) Tax Opinion*
(13) Not Applicable.
(14) Not Applicable.
(15) Not Applicable.
(16) Power of Attorney (Incorporated by reference to post Effective
Amendment No. 51)
(17) Not Applicable.
(18) Van Eck Funds Statement of Additional Information 05/03*
(19) Van Eck Funds Annual Report 12/02*
SIGNATURES
----------
As required by the Securities Act of 1933 the registration statement on Form
N-14 has been signed on behalf of the registrant in the City of New York, State
of New York, on the 1st day of August 2003.
VAN ECK FUNDS
By: /s/ John C. van Eck
----------------------------------
John C. van Eck, President
Pursuant to the requirements of the Securities Act of 1933, this Amendment to
the Registration Statement has been signed below by the following persons in the
capacities and on the date indicated:
Signature Title Date
- ---------- ----- ----
/s/ John C. van Eck Chairman and President August 1, 2003
- -----------------------
John C. van Eck
/s/ Bruce J. Smith Chief Financial Officer August 1, 2003
- -----------------------
Bruce J. Smith
/s/ Jeremy H. Biggs* Trustee August 1, 2003
- -----------------------
Jeremy H. Biggs
/s/ Richard C. Cowell* Trustee August 1, 2003
- -----------------------
Richard C. Cowell
/s/ Philip D. DeFeo* Trustee August 1, 2003
- -----------------------
Philip D. DeFeo
/s/ David J. Olderman* Trustee August 1, 2003
- -----------------------
David J. Olderman
/s/ Ralph F. Peters* Trustee August 1, 2003
- -----------------------
Ralph F. Peters
Signature Title Date
- ---------- ----- ----
/s/ Richard D. Stamberger* Trustee August 1, 2003
- ------------------------
Richard D. Stamberger
/s/ Derek S. van Eck Trustee August 1, 2003
- ------------------------
Derek S. van Eck
/s/ Jan F. van EcK Trustee August 1, 2003
- ------------------------
Jan F. van Eck
/s/ John C. van Eck Trustee August 1, 2003
- ------------------------
* Executed on behalf of Trustee by John C. van Eck, as attorney-in-fact.
ITEM 17. UNDERTAKINGS
(1) The undersigned Registrant agrees that prior to any public
reoffering of the securities registered through the use of a prospectus
which is part of this registration statement by any person or party who
is deemed to be an underwriter within the meaning of Rule 145(c) of the
Securities Act of 1933, as amended, the reoffering prospectus will
contain the information called for by the applicable registration form
for reofferings by persons who may be deemed underwriters, in addition
to the information called for by the other items of applicable form.
(2) The undersigned Registrant agrees that every prospectus that is
filed under paragraph (1) above will be filed as a part of an amendment
to the registration statement and will not be used until the amendment
is effective, and that, in determining liability under the Securities
Act of 1933, as amended, each post-effective amendment shall be deemed
to be a new registration statement for the securities offered herein,
and the offering of the securities at that time shall be deemed to be
the initial bona fide offering of them.
(3) The Registrant undertakes to file, by post-effective amendment, an
opinion of counsel supporting the tax consequences of the proposed
reorganization within a reasonable time after receipt of such opinion.
VAN ECK FUNDS
ASIA DYNASTY FUND
- --------------------------------------------------------------------------------
PLEASE VOTE THIS PROXY CARD TODAY
VOTE BY TELEPHONE OR BY MAIL
CALL TOLL-FREE 1-888-XXX-XXXX
OR RETURN IN THE ENCLOSED POSTAGE PAID ENVELOPE
VAN ECK FUNDS
ASIA DYNASTY FUND
The undersigned shareholder(s) of ASIA DYNASTY FUND, (the "Fund"), a series of
VAN ECK FUNDS, (the "Trust"), having received Notice of the Meeting of
Shareholders of the Fund and the Proxy Statement accompanying such Notice,
hereby constitutes and appoints Jan F. van Eck, Derek S. van Eck, Susan C.
Lashley, Thomas H. Elwood and Bruce J. Smith, and each of them, true and lawful
attorneys or attorney for the undersigned, with several powers of substitution,
for and in the name, place and stead of the undersigned, to attend and vote all
shares of the Fund which the undersigned would be entitled to vote at the
Meeting to be held at 99 Park Avenue, 8th Floor, New York, New York 10016, on
xxxxxxxxx at 10:00 a.m., New York Time, and at any and all adjournments thereof,
with all powers the undersigned would possess if personally present.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES.
DATE __________________
IF NOT VOTING BY TELEPHONE, PLEASE SIGN, DATE AND RETURN THIS PROXY PROMPTLY
USING THE ENCLOSED ENVELOPE.
- ---------------------------------------------------------------
Signature(s) and Title(s), if applicable
Note: Please date and sign exactly as name or names appear herein. When signing
as attorney, executor, trustee, guardian, or officer of a corporation, please
give your title as such.
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
Please fill in box(es) as shown using black or blue ink or number 2 pencil.
PLEASE DO NOT USE FINE POINT PENS.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL.
1. To approve the Agreement and Plan of Reorganization and Liquidation
involving the exchange of substantially all of the Fund's assets for shares
of Emerging Markets Fund, a series of the Van Eck Funds, the assumption of
liabilities of the Fund by Emerging Markets Fund, the distribution of such
shares to the shareholders of the Fund and the subsequent liquidation of
the Fund.
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]