<PAGE>
Supplement Dated April 15, 1995
to the Current Prospectus
of
Delaware Pooled Trust, Inc.-The Aggressive Growth Portfolio, The
Defensive Equity Portfolio, The Fixed Income Portfolio, The
Global Fixed Income Portfolio, The International Equity
Portfolio, The International Fixed Income Portfolio, The Limited-
Term Maturity Portfolio
On March 29, 1995, shareholders of each of The Aggressive Growth
Portfolio, The Defensive Equity Portfolio, The Fixed Income Portfolio
and The Limited-Term Maturity Portfolio of Delaware Pooled Trust, Inc.
(the "Fund") approved a new Investment Management Agreement with
Delaware Management Company, Inc. ("DMC"), an indirect wholly-owned
subsidiary of Delaware Management Holdings, Inc. ("DMH"). In
addition, shareholders of The International Equity Portfolio, The
International Fixed Income Portfolio and The Global Fixed Income
Portfolio of the Fund approved a new Investment Management Agreement
with Delaware International Advisers Ltd. ("Delaware
International"), an indirect wholly-owned subsidiary of DMH and an
affiliate of DMC. The approval of new Agreements was subject to the
completion of the merger (the "Merger") between DMH and a wholly-owned
subsidiary of Lincoln National Corporation ("Lincoln National") which
occured on April 3, 1995. Accordingly, the previous Investment
Management Agreements terminated and the new Investment Management
Agreements became effective on that date.
As a result of the Merger, Delaware International, DMC and their
two affiliates, Delaware Service Company, Inc., the Fund's shareholder
servicing, dividend disbursing and transfer agent and Delaware
Distributors, L.P., the Fund's national distributor became indirect
wholly-owned subsidiaries of Lincoln National. Lincoln National, with
headquarters in Fort Wayne, Indiana, is a diversified organization
with operations in many aspects of the financial services industry,
including insurance and investment management.
Under the new Agreements, Delaware International and DMC will be
paid at the same annual fee rates and on the same terms as they were
under the previous Agreements. In addition, the investment approach
and operation of each series of the Fund will remain substantially
unchanged.
<PAGE>
DELAWARE
POOLED
TRUST
- --------
Delaware Pooled Trust, Inc. ("Fund") is a no-load, open-end management
investment company. The Fund consists of seven portfolios (collectively, the
"Portfolios," or, individually, a "Portfolio") offering investment
alternatives for institutional clients. Investors may make investments in
only one or in more than one of the following Portfolios:
EQUITY ORIENTED FIXED INCOME ORIENTED
THE DEFENSIVE EQUITY PORTFOLIO THE FIXED INCOME PORTFOLIO
THE AGGRESSIVE GROWTH PORTFOLIO THE LIMITED-TERM MATURITY PORTFOLIO
THE INTERNATIONAL EQUITY PORTFOLIO THE GLOBAL FIXED INCOME PORTFOLIO
THE INTERNATIONAL FIXED INCOME PORTFOLIO
- --------------------------------------------------------------------------------
The Fund is designed to meet the investment needs of discerning institutional
investors who desire experienced investment management and place a premium on
personal service.
This Prospectus is designed to set forth concisely the information about the
Fund that a prospective institutional client should know before investing and
it should be retained for future reference. Additional information about the
Fund is contained in a Statement of Additional Information dated January 5,
1995, as it may be amended from time to time. That information is
incorporated herein by reference and is available without charge upon request
from the Fund:
Delaware Pooled Trust, Inc.
One Commerce Square
2005 Market Street
Philadelphia, PA 19103
1-800-231-8002
- --------------------------------------------------------------------------------
- --------
TABLE OF
CONTENTS
PAGE
Fund Expenses....................... 2
Financial Highlights................ 4
Delaware Pooled Trust
Summary............................. 6
Fund Officers and Portfolio
Managers............................ 7
Risk Factors........................ 10
Investment Objectives, Policies
and Risk Considerations............. 11
Purchase of Shares.................. 20
Redemption of Shares................ 21
Additional Investment Information... 23
Investment Limitations.............. 34
Management of the Fund.............. 35
Shareholder Services................ 37
Dividends and
Capital Gains Distributions......... 37
Taxes............................... 38
Performance Information............. 41
Appendix A-Ratings.................. 42
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 UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is:
January 5, 1995.
<PAGE>
DELAWARE
POOLED
TRUST
--------
- ----------
FUND
EXPENSES
The following table illustrates all expenses and fees that a shareholder of
the Fund can expect to incur:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
The The The
The The The The Limited- Global International
Shareholder Defensive Aggressive International Fixed Term Fixed Fixed
Transaction Equity Growth Equity Income Maturity Income Income
Expenses Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
- -------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Sales Charge Imposed
on Purchases None None None None None None None
Sales Charge Imposed
on Reinvested
Dividends None None None None None None None
Redemption Fees None None None None None None None
Exchange Fees None None None None None None None
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Annual Fund The The The
Operating The The The The Limited- Global International
Expenses Defensive Aggressive International Fixed Term Fixed Fixed
(as a percentage of Equity Growth Equity Income Maturity Income Income
average net assets) Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
- ------------------ --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment Advisory
Fees After Voluntary
Waiver and
Reimbursement .39%* .55%* .71%* .32%* .22%* .33%** .02%***
12b-1 Fees None None None None None None None
Other Expenses After
Voluntary Waiver
and Reimbursement .29%* .38%* .23%* .21%* .21%* .27%** .58%***
----- ----- ----- ----- ----- ------ -------
Total
Operating Expenses .68%* .93%* .94%* .53%* .43%* .60%** .60%***
===== ===== ===== ===== ===== ====== =======
</TABLE>
The purpose of this table is to assist the investor in understanding the various
expenses that an investor in the Fund will bear directly or indirectly. With
respect to The Fixed Income Portfolio, The Limited-Term Maturity Portfolio and
The International Fixed Income Portfolio, the amounts set forth above under the
heading "Other Expenses After Voluntary Waiver and Reimbursement" are based on
estimates for the Portfolios' initial fiscal year in which they conduct
operations. With respect to The Defensive Equity Portfolio, The Aggressive
Growth Portfolio, The Global Fixed Income Portfolio and The International Equity
Portfolio, the amounts set forth above under the heading "Other Expenses After
Voluntary Waiver and Reimbursement" are based on actual results for the
Portfolios' most recently completed fiscal year.
*With respect to The Defensive Equity Portfolio, The Aggressive Growth
Portfolio, The Fixed Income Portfolio and The Limited-Term Maturity Portfolio,
Delaware Investment Advisers elected voluntarily to waive that portion, if any,
of the annual Investment Advisory Fees payable by a particular Portfolio and to
reimburse a Portfolio for its expenses to the extent necessary to ensure that
the expenses of that Portfolio (exclusive of taxes, interest, brokerage
commissions and extraordinary expenses) do not exceed, on an annualized basis,
the amounts noted above during the period from commencement of the public
offering for the Portfolio through April 30, 1995. Similarly, Delaware
International Advisers Ltd., ("Delaware International") the investment adviser
to The International Equity Portfolio, voluntarily elected to waive that
portion, if any, of its annual Investment Advisory Fees and to reimburse the
Portfolio for its expenses to the extent necessary to ensure that the expenses
of that Portfolio (exclusive of taxes, interest, brokerage commissions and
extraordinary expenses) do not exceed, on an annualized basis, .96% during the
period from commencement of the public offering for the Portfolio through April
30, 1995. In the absence of such voluntary waivers, Total Operating Expenses (as
a percentage of average net assets) are expected to equal 0.82%, 1.17%, 0.97%,
0.61% and 0.51%, respectively, for the Portfolios in the order they appear in
the above table. **With respect to The Global Fixed Income Portfolio, Delaware
International, the Portfolio's investment adviser, voluntarily elected to waive
that portion, if any, of its annual Investment Advisory Fees and to reimburse
the Portfolio for its expenses to the extent necessary to ensure that the
expenses of that Portfolio (exclusive of taxes, interest, brokerage commissions
and extraordinary expenses) do not exceed, on an annualized basis, .60% through
April 30, 1995. In the absence of such voluntary waiver, Total Operating
Expenses (as a percentage of average net assets) are expected to equal 0.76%.
***With respect to The International Fixed Income Portfolio, Delaware
International voluntarily elected to waive that portion, if any, of its annual
Investment Advisory Fees and to reimburse the Portfolio for its expenses to
(2)
<PAGE>
the extent necessary to ensure that the expenses of that Portfolio (exclusive of
taxes, interest, brokerage commissions and extraordinary expenses) do not
exceed, on an annualized basis, .60% during the period from commencement of the
public offering for the Portfolio through April 30, 1995. Other Operating
Expenses for The International Fixed Income Portfolio are estimates derived from
The Global Fixed Income Portfolio and assume the voluntary waiver of fees will
be in effect. In the absence of such voluntary waiver, Total Operating Expenses
(as a percentage of average net assets) are expected to be 1.08%. See
"MANAGEMENT OF THE FUND" for a recital of the Investment Advisory Fees to which
each adviser is entitled under its Investment Management Agreement.
- --------------------------------------------------------------------------------
The following example illustrates the expenses that you would incur on a $1,000
investment assuming (1) a 5% annual rate of return, and (2) redemption at the
end of each time period. As noted in the table above, the Fund charges no
redemption fees.
<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
------ ------- ------- --------
<S> <C> <C> <C> <C>
The Defensive Equity Portfolio $ 7 $22 $38 $ 85
The Aggressive Growth Portfolio 9 30 51 114
The International Equity Portfolio 10 30 52 115
The Fixed Income Portfolio 5 17 30 66
The Limited-Term Maturity Portfolio 4 14 24 54
The Global Fixed Income Portfolio 6 19 33 75
The International Fixed Income Portfolio 6 19 33 75
</TABLE>
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE
SHOWN.
(3)
<PAGE>
DELAWARE
POOLED
TRUST
--------
- ----------
FINANCIAL
HIGHLIGHTS
The following financial highlights are derived from the financial statements of
each of the Portfolios of Delaware Pooled Trust, Inc. and have been audited by
Ernst & Young LLP, independent auditors. The data should be read in conjunction
with the financial statements, related notes, and the report of Ernst & Young
LLP covering such financial information and highlights all of which are
incorporated by reference into Part B. Further information about The Defensive
Equity, The Aggressive Growth, The International Equity and The Global Fixed
Income Portfolios' performance is contained in their respective Annual Reports
to shareholders. A copy of each Portfolio's Annual Report (including the report
of Ernst & Young LLP) may be obtained from the Fund upon request at no charge.
Except for the initial sale of shares to Delaware Management Company, Inc., The
Fixed Income Portfolio, The Limited-Term Maturity Portfolio and The
International Fixed Income Portfolio have sold no shares to investors.
Consequently, no financial highlights are being supplied for those three
Portfolios.
<TABLE>
<CAPTION>
THE DEFENSIVE THE AGGRESSIVE
EQUITY PORTFOLIO GROWTH PORTFOLIO
--------------------------------- -------------------------------
PERIOD PERIOD
2/3/92/1/ 2/27/92/1/
YEAR ENDED TO YEAR ENDED TO
10/31/94 10/31/93 10/31/92 10/31/94 10/31/93 10/31/92
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period....................... $ 12.7300 $ 10.6600 $ 10.0000 $ 11.2000 $ 9.0400 $ 10.0000
INCOME FROM INVESTMENT
- ----------------------
OPERATIONS
- ----------
Net Investment Income............. 0.3203 0.2841 0.2291 0.0075 0.0181 0.0167
Net Gains (Losses) on
Securities (both realized
and unrealized)............... 0.6527 2.3159 0.5109 0.0325 2.1589 (0.9767)
--------- --------- --------- --------- --------- ----------
Total From Investment
Operations.................... $ 0.9730 $ 2.6000 $ 0.7400 $ 0.0400 $ 2.1770 ($ 0.9600)
--------- --------- --------- --------- --------- ----------
LESS DISTRIBUTIONS
- ------------------
Dividends (from net investment
income)......................... (0.2800) (0.3200) (0.0800) (0.0200) (0.0170) none
Distributions (from capital gains) (0.3430) (0.2100) none (0.2100) none none
Returns of Capital................ none none none none none none
--------- --------- --------- --------- --------- ----------
Total Distributions.............($ 0.6230)($ 0.5300) ($ 0.0800) ($ 0.2300)($ 0.0170) none
--------- --------- --------- --------- --------- ----------
Net Asset Value, End of Period.... $ 13.0800 $ 12.7300 $ 10.6600 $ 11.0100 $ 11.2000 $ 9.0400
========= ========= ========= ========= ========= ==========
- -----------------------------------------------------------------------------------------------------------
TOTAL RETURN...................... 7.96% 25.17% 10.13% 0.34% 24.10% (13.89%)
- ------------
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------
Net Assets, End of Period
(000's omitted)................. $37,323 $13,418 $4,473 $22,640 $20,478 $4,538
Ratio of Expenses to Average
Daily Net Assets................ 0.68%/2/ 0.68%/2/ 0.68%/2/ 0.93%/2/ 0.93%/2/ 0.93%/2/
Ratio of Net Investment Income
to Average Daily Net Assets..... 3.26%/3/ 2.90%/3/ 3.65%/3/ 0.07%/3/ 0.23%/3/ 0.28%/3/
Portfolio Turnover Rate........... 73% 37% 28% 43% 81% 34%
- ----------------------
</TABLE>
/1/Date of initial sale; ratios and total return have been annualized.
/2/Ratio of expenses to average daily net assets prior to voluntary management
fee waiver was 0.82% for the year ended 10/31/94, 1.38% for the year ended
10/31/93 and 2.38% for the period ended 10/31/92 for The Defensive Equity
Portfolio; 1.17% for the year ended 10/31/94, 1.40% for the year ended
10/31/93 and 2.56% for the period ended 10/31/92 for The Aggressive Growth
Portfolio; 0.97% for the year ended 10/31/94, 1.38% for the year ended
10/31/93 and 2.94% for the period ended 10/31/92 for the International Equity
Portfolio; and 0.76% for the year ended 10/31/94 and 0.88% for the period
ended 10/31/93 for The Global Fixed Income Portfolio.
/3/Ratio of net investment income (loss) to average daily net assets prior to
voluntary management fee waiver was 3.12% for the year ended 10/31/94, 2.20%
for the year ended 10/31/93 and 1.95% for the period ended 10/31/92 for The
Defensive Equity Portfolio; (0.17%) for the year ended 10/31/94, (0.24%) for
the year ended 10/31/93 and (1.35%) for the period ended 10/31/92 for The
Aggressive Growth Portfolio; 1.33% for the year ended 10/31/94, 2.56% for the
year ended 10/31/93 and 2.69% for the period ended 10/31/92 for The
International Equity Portfolio; and 3.48% for the year ended 10/31/94 and
10.42% for the period ended 10/31/93 for The Global Fixed Income Portfolio.
(4)
<PAGE>
DELAWARE
POOLED
TRUST
- --------
<TABLE>
<CAPTION>
THE INTERNATIONAL THE GLOBAL
EQUITY PORTFOLIO FIXED INCOME PORTFOLIO
------------------------------- -----------------------
PERIOD PERIOD
2/4/92/1/ YEAR 11/30/92/1/
YEAR ENDED TO ENDED TO
10/31/94 10/31/93 10/31/92 10/31/94 10/31/93
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period............................. $ 11.9900 $ 9.5000 $ 10.0000 $ 11.0900 $ 10.0000
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income................... 0.1440 0.2414 0.2282 0.4189 0.9547
Net Gains (Losses) on
Securities (both realized
and unrealized)..................... 1.2360 2.5686 (0.6282) (0.1929) 0.7433
--------- --------- --------- --------- ---------
Total From Investment
Operations.......................... $ 1.3800 $ 2.8100 ($ 0.4000) $ 0.2260 $ 1.6980
--------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
Dividends (from net investment
income)............................... (0.1600) (0.3200) (0.1000) (0.9490) (0.6080)
Distributions (from capital gains)...... (0.1000) none none (0.5770) none
Returns of Capital...................... none none none none none
--------- --------- --------- --------- ---------
Total Distributions................... ($ 0.2600)($ 0.3200)($ 0.1000) ($ 1.5260) ($ 0.6080)
--------- --------- --------- --------- ---------
Net Asset Value, End of Period.......... $ 13.1100 $ 11.9900 $ 9.5000 $ 9.7900 $ 11.0900
========= ========= ========= ========= =========
- -----------------------------------------------------------------------------------------------------------
TOTAL RETURN............................ 11.66% 30.28% (5.44%) (2.07%) 18.96%
- ------------
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------
Net Assets, End of Period
(000's omitted)....................... $70,820 $24,288 $5,966 $42,266 $29,313
Ratio of Expenses to Average
Daily Net Assets...................... 0.94%/2/ 0.96%/2/ 0.96%/2/ 0.62%/2/ 0.62%/2/
Ratio of Net Investment Income
to Average Daily Net Assets........... 1.36%/3/ 2.98%/3/ 4.67%/3/ 3.62%/3/ 10.68%/3/
Portfolio Turnover Rate................. 22% 28% 2% 205% 198%
</TABLE>
/1/Date of initial sale; ratios and total return have been annualized.
/2/Ratio of expenses to average daily net assets prior to voluntary management
fee waiver was 0.82% for the year ended 10/31/94, 1.38% for the year ended
10/31/93 and 2.38% for the period ended 10/31/92 for The Defensive Equity
Portfolio; 1.17% for the year ended 10/31/94, 1.40% for the year ended
10/31/93 and 2.56% for the period ended 10/31/92 for The Aggressive Growth
Portfolio; 0.97% for the year ended 10/31/94, 1.38% for the year ended
10/31/93 and 2.94% for the period ended 10/31/92 for the International Equity
Portfolio; and 0.76% for the year ended 10/31/94 and 0.88% for the period
ended 10/31/93 for The Global Fixed Income Portfolio.
/3/Ratio of net investment income (loss) to average daily net assets prior to
voluntary management fee waiver was 3.12% for the year ended 10/31/94, 2.20%
for the year ended 10/31/93 and 1.95% for the period ended 10/31/92 for The
Defensive Equity Portfolio; (0.17%) for the year ended 10/31/94, (0.24%) for
the year ended 10/31/93 and (1.35%) for the period ended 10/31/92 for The
Aggressive Growth Portfolio; 1.33% for the year ended 10/31/94, 2.56% for the
year ended 10/31/93 and 2.69% for the period ended 10/31/92 for The
International Equity Portfolio; and 3.48% for the year ended 10/31/94 and
10.42% for the period ended 10/31/93 for The Global Fixed Income Portfolio.
(5)
<PAGE>
DELAWARE
POOLED
TRUST
--------
- -----------
DELAWARE
POOLED
TRUST
SUMMARY
THE FUND
The Fund consists of seven Portfolios offering institutional investors a broad
range of investment choices coupled with the advantage of a no-load mutual fund
with the service companies of The Delaware Group providing customized services
as investment adviser, administrator and distributor. Each Portfolio, other than
The Global Fixed Income Portfolio and The International Fixed Income Portfolio,
is a diversified fund as defined by the Investment Company Act of 1940 ("1940
Act"). The Global Fixed Income Portfolio and The International Fixed Income
Portfolio are nondiversified funds as defined by the 1940 Act. The investment
objectives and principal policies of each of the seven Portfolios are as
follows:
THE DEFENSIVE EQUITY PORTFOLIO--seeks to realize maximum long-term total return,
consistent with reasonable risk, through investments in equity securities of
companies which, at the time of purchase, have dividend yields above the current
yield of the Standard & Poor's 500 Stock Index and which, in the opinion of
Delaware Investment Advisers, offer capital gains potential as well.
THE AGGRESSIVE GROWTH PORTFOLIO--seeks to realize maximum long-term capital
growth by investing in equity securities of smaller and medium-sized
companies that, in the opinion of Delaware Investment Advisers, offer, at the
time of purchase, superior long-term growth potential.
THE INTERNATIONAL EQUITY PORTFOLIO--seeks to achieve maximum long-term total
return by investing primarily in equity securities of issuers organized or
having a majority of their assets in or deriving a majority of their operating
income outside of the United States which, in the opinion of Delaware
International Advisers Ltd., are undervalued, at the time of purchase, based on
rigorous fundamental analysis conducted by the investment adviser.
THE FIXED INCOME PORTFOLIO--seeks to realize maximum long-term total return,
consistent with reasonable risk, by investing in a diversified portfolio of
investment grade fixed income obligations. The Portfolio will include U.S.
government securities, mortgage-backed securities, corporate bonds, and other
fixed income securities.
THE LIMITED-TERM MATURITY PORTFOLIO--seeks to provide a high level of current
income, consistent with the preservation of principal and reasonable risk. The
Portfolio will include U.S. government securities, mortgage-backed securities,
corporate bonds, and other fixed income securities. At no time will the average
maturity of the Portfolio exceed five years.
THE GLOBAL FIXED INCOME PORTFOLIO--seeks to achieve current income consistent
with the preservation of investors' principal. The Portfolio seeks to achieve
this objective by investing primarily in fixed income securities of issuers
organized or having a majority of their assets in or deriving a majority of
their operating income in at least three different countries, one of which
may be the United States and that may also provide the potential for capital
appreciation.
THE INTERNATIONAL FIXED INCOME PORTFOLIO--seeks to achieve current income
consistent with the preservation of investors' principal. The Portfolio seeks to
achieve this objective by investing primarily in fixed income securities of
issuers organized or having a majority of their assets in or deriving a majority
of their operating income in at least three different countries outside of the
United States and that may also provide the potential for capital appreciation.
Under normal circumstances, the Portfolio intends to invest in securities that
are denominated in foreign currencies.
For further information, see "INVESTMENT OBJECTIVES, POLICIES AND RISK
CONSIDERATIONS" and "ADDITIONAL INVESTMENT INFORMATION."
(6)
<PAGE>
DELAWARE
POOLED
TRUST
- --------
INVESTMENT MANAGEMENT
Delaware Investment Advisers, a division of Delaware Management Company, Inc.
("Delaware"), acts as investment adviser to The Defensive Equity, The Aggressive
Growth, The Fixed Income and The Limited-Term Maturity Portfolios. The
investment management fees payable to Delaware Investment Advisers by these
Portfolios are, respectively, .55%, .80%, .40% and .30% of the Portfolio's
average net assets. Delaware International Advisers Ltd. ("Delaware
International"), an affiliate of Delaware Management Company, Inc., is the
investment adviser to The International Equity, The Global Fixed Income and The
International Fixed Income Portfolios. The investment management fees payable to
Delaware International by The International Equity Portfolio, The Global Fixed
Income Portfolio and The International Fixed Income Portfolio are, respectively,
.75%, .50% and .50% of the Portfolio's average net assets. In addition, out of
the investment advisory fees to which they are otherwise entitled, Delaware and
Delaware International pay their proportionate share of the fees paid to
unaffiliated directors by the Fund, except that Delaware International will make
no such payments out of the fees it receives for managing The International
Fixed Income Portfolio. See "MANAGEMENT OF THE FUND."
- -------------
FUND OFFICERS
AND PORTFOLIO
MANAGERS
[PHOTO OF WAYNE A. STORK APPEARS HERE]
WAYNE A. STORK
Chairman
A graduate of Brown University, Mr. Stork also attended the NYU Graduate
School of Business Administration while a senior transportation analyst at
the Irving Trust Company. He joined Delaware in 1962 as a security analyst
covering a wide range of industry groups. In 1975, he became Chief Investment
Officer of Delaware Investment Advisers, President in 1984, and in 1990 was
named Chairman. Mr. Stork is a Director of Delaware Management Company, Inc.
and its affiliates, and is Chairman of the Delaware Group of funds. He is a
member of the Institute of Chartered Financial Analysts and the Financial
Analysts Federation.
[PHOTO OF WINTHROP S. JESSUP APPEARS HERE]
WINTHROP S. JESSUP
President and Chief Executive Officer
Mr. Jessup is a graduate of Brown University where he majored in Economics.
He was a vice president of Kidder, Peabody & Co. Inc. prior to joining
Delaware in 1977. In 1988, he was named Executive Vice President of Delaware
Management Company, Inc. and its Delaware Investment Advisers division. Mr.
Jessup is also Executive Vice President of the Delaware Group of funds, and a
Director of Delaware Management Company, Inc. and its domestic and foreign
affiliates.
[PHOTO OF DAVID G. TILLES APPEARS HERE]
DAVID G. TILLES
Managing Director and Chief Investment Officer-Delaware International
Advisers Ltd.
Mr. Tilles was educated at the Sorbonne, Warwick University and Heidelberg
University. Prior to joining Delaware in 1990 as Managing Principal and Chief
Investment Officer of Delaware International Advisers Ltd., he spent 16 years
with Hill Samuel Investment Management Group in London, serving in a number
of investment capacities. His most recent position prior to joining Delaware
was Chief Investment Officer of Hill Samuel Investment Advisers Ltd.
[PHOTO OF GEORGE E. DEMING APPEARS HERE]
GEORGE E. DEMING
Vice President/Senior Portfolio Manager-The Defensive Equity Portfolio
Mr. Deming received his BA in Economics and Political Science from the
University of Vermont and an MA in International Affairs from the University
of Pennsylvania. Prior to joining Delaware in 1978, he was responsible for
portfolio management and institutional sales at White Weld & Co., Inc. He is
a member of the Financial Analysts of Philadelphia. Mr. Deming has managed
The Defensive Equity Portfolio since its inception.
(7)
<PAGE>
DELAWARE
POOLED
TRUST
- --------
[PHOTO OF EDWARD N. ANTOIAN APPEARS HERE]
EDWARD N. ANTOIAN
Vice President/Senior Portfolio Manager--The Aggressive Growth Portfolio
Mr. Antoian holds a BS from The State University of New York at Albany and
earned an MBA in Finance from the University of Pennsylvania's Wharton
School. Mr. Antoian began his career with Price Waterhouse. Prior to joining
Delaware in 1984, he worked in the Institutional Equity Department of E. F.
Hutton in Philadelphia. He is a Chartered Financial Analyst and a member of
the Philadelphia Finance Association and the Philadelphia Securities
Association. Mr. Antoian has managed The Aggressive Growth Portfolio since
its inception.
[PHOTO OF TIMOTHY W. SANDERSON APPEARS HERE]
TIMOTHY W. SANDERSON
Portfolio Manager--The International Equity Portfolio
A graduate of University College, Oxford, Mr. Sanderson began his investment
career in 1979 with Hill Samuel Investment Management Group. Prior to joining
Delaware International Advisers Ltd. in 1990 as Senior Portfolio Manager and
Director, he was an analyst and senior portfolio manager for Hill Samuel
where, since 1987, he had responsibility for Pacific Basin research and the
management of international institutional portfolios. Mr. Sanderson has
managed The International Equity Portfolio since its inception.
[PHOTO OF DOROTHEA M. DUTTON APPEARS HERE]
DOROTHEA M. DUTTON
Vice President/Senior Portfolio Manager--The Fixed Income Portfolio
A graduate of the University of Washington, Ms. Dutton held various positions
in investment management firms before specializing in fixed income investing
as an Assistant Vice President and Senior Portfolio Manager at First
Interstate Bank of Oregon. Prior to joining Delaware in September 1986 as
Vice President, she was Senior Investment Officer, responsible for all fixed
income investing for the California State Teachers' Retirement System. Ms.
Dutton is a Chartered Financial Analyst and a past president and board member
of the Portland Society of Financial Analysts. She is a current member of the
Financial Analysts of Philadelphia and the Fixed Income Analysts' Society.
[PHOTO OF GARY A. REED APPEARS HERE]
GARY A. REED
Vice President/Senior Portfolio Manager--The Fixed Income Portfolio
Mr. Reed holds an AB in Economics from the University of Chicago and an MA in
Economics from Columbia University. He began his investment career in 1978
with The Equitable Life Assurance Society, specializing in credit analysis.
Prior to joining Delaware Investment Advisers in 1989, Mr. Reed served as
Vice President and Manager of the Fixed Income department at Irving Trust
Company. Mr. Reed has managed both discretionary and structured fixed income
portfolios and is experienced with a broad range of high-grade fixed income
securities. Additionally, he has developed investment programs for
Decommissioning Trust Funds and supervised their management.
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[PHOTO OF IAN G. SIMS APPEARS HERE]
IAN G. SIMS
Portfolio Manager-The Global Fixed Income Portfolio and The International
Fixed Income Portfolio
Mr. Sims is a graduate of the University of Leicester and holds a
postgraduate degree in statistics from the University of Newcastle-Upon-Tyne.
He joined Delaware International Advisers Ltd. in 1990 as a senior
international fixed income and currency manager. Mr. Sims began his
investment career with the Standard Life Assurance Co., and subsequently
moved to the Royal Bank of Canada Investment Management International
Company, where he was an international fixed income manager. Prior to joining
Delaware, he was a senior fixed income and currency portfolio manager with
Hill Samuel Investment Advisers Ltd. Mr. Sims has managed The Global Fixed
Income Portfolio since its inception and will manage The International Fixed
Income Portfolio when it commences operations.
[PHOTO OF MARIA E. POLLACK APPEARS HERE]
MARIA E. POLLACK
Assistant Vice President and Administrative Manager
Ms. Pollack joined the Delaware organization in 1982 and has served in a
number of senior administrative capacities. After attending Chestnut Hill
College and Temple University, she began her career as executive assistant to
the Chairman of the Delaware Group of funds and Delaware Investment Advisers.
Prior to becoming Administrative Manager for the Fund, she was responsible
for coordinating administrative activity for institutional shareholders in
another investment program maintained by the Delaware Group.
ADMINISTRATIVE SERVICES
Delaware Service Company, Inc., an affiliate of Delaware Management Company,
Inc. and Delaware International Advisers Ltd., provides the Fund with
administrative, dividend disbursing and transfer agency services. See
"MANAGEMENT OF THE FUND."
SPECIAL REPORTS AND OTHER SERVICES
The Fund provides client shareholders with annual audited financial reports
and unaudited semi-annual financial reports. In addition, the investment
advisers' dedicated service staff will provide client shareholders detailed
monthly appraisals of the status of their account and complete reviews of
portfolio assets, performance results, and other pertinent data. Finally, the
investment advisers' service staff expects to conduct personal reviews no
less than annually with each shareholder, with interim telephone updates and
other communications, as appropriate. The Fund's dedicated telephone number
(1-800-231-8002) is available for shareholder inquiries during normal
business hours. The net asset values for the Portfolios are also available by
using the above "800" telephone number. Written correspondence should be
addressed to:
Delaware Pooled Trust, Inc.
One Commerce Square
2005 Market Street
Philadelphia, PA 19103
Attn: Client Services
See "SHAREHOLDER SERVICES."
CUSTODIAL SERVICES
The Morgan Guaranty Trust Company of New York, 60 Wall Street, New York, NY
10260, acts as the Fund's custodian bank.
HOW TO INVEST
Shares of each Portfolio are offered directly to institutional investors at
net asset value with no sales commissions or 12b-1 charges. The minimum
initial investment for a Portfolio of the
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Fund is $1,000,000. There is no minimum for subsequent investments in a
Portfolio where the minimum initial investment has been satisfied. In addition,
institutional investors in The International Equity Portfolio may, under certain
circumstances, be required to make their investments in the Portfolio, pursuant
to instructions of the Fund, by a contribution of securities in-kind to the
Portfolio or by following another procedure that will have the same economic
effect as an in-kind purchase; in either case, such investors will be required
to pay the brokerage or other transaction costs arising in connection with
acquiring the subject securities. See "PURCHASE OF SHARES."
HOW TO REDEEM
Shares of each Portfolio may be redeemed at any time, without cost, at the net
asset value per share of the Portfolio next determined after receipt of the
redemption request. The redemption price may be more or less than the purchase
price and the redemption may be in cash or, under certain circumstances, in-
kind. If a shareholder reduces their investment in a Portfolio below $500,000
their investment in that Portfolio may be subject to redemption. In addition,
investors in The International Equity, The Global Fixed Income and The
International Fixed Income Portfolios may, under certain circumstances, be
required to accept their redemption, pursuant to instructions from the Fund, in-
kind in portfolio securities or, at the election of the investor, by following
another procedure that will have the same economic effect as an in-kind
redemption; in either case, such investors will be required to pay the brokerage
or other transaction costs arising in connection with the sale of the subject
securities. See "REDEMPTION OF SHARES."
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RISK FACTORS
An investment in the Fund entails certain risks and considerations about which
an investor should be aware.
Because The Aggressive Growth Portfolio seeks long-term capital growth by
investing primarily in small- to medium-sized companies, investments in this
Portfolio are likely to involve a higher degree of liquidity risk and price
volatility than larger capitalization securities. The Aggressive Growth
Portfolio also may, under certain circumstances, use certain futures contracts
and options on futures contracts, as well as options on stock.
The International Equity Portfolio, The Global Fixed Income Portfolio and The
International Fixed Income Portfolio will invest in securities of foreign
issuers which normally are denominated in foreign currencies and may hold
foreign currency directly. Consequently, these Portfolios may be affected by
changes in currency rates and exchange control regulations and may incur costs
in connection with conversions between currencies. To hedge this currency risk
associated with investments in non-U.S. dollar denominated securities, a
Portfolio may invest in forward foreign currency contracts. Those activities
pose special risks which do not typically arise in connection with investments
in U.S. securities. The securities in which The International Equity Portfolio,
The Global Fixed Income Portfolio and The International Fixed Income Portfolio
may invest from time to time may be listed primarily on foreign exchanges which
trade on days when the New York Stock Exchange is closed (such as Saturday). As
a result, the net asset value of the Portfolios may be significantly affected by
such trading on days when shareholders will have no access to the Portfolios.
See "VALUATION OF SHARES."
The International Equity Portfolio, The Global Fixed Income Portfolio and The
International Fixed Income Portfolio may enter into forward foreign currency
contracts, and The International Fixed Income Portfolio may engage in foreign
currency options and futures transactions. For a discussion of the risks
associated with these instruments see "RISKS OF TRANSACTIONS IN OPTIONS, FUTURES
AND FORWARD CONTRACTS."
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The Fixed Income, The Limited-Term Maturity, The Global Fixed Income and The
International Fixed Income Portfolios will normally experience annual
portfolio turnover rates exceeding 100%, but those rates are not expected to
exceed 250% with respect to The Fixed Income Portfolio and 200% with respect
to The Limited-Term Maturity, The Global Fixed Income and The International
Fixed Income Portfolios. Such relatively high portfolio turnover rates
involve correspondingly higher brokerage commissions and other transaction
costs and may affect the taxes payable by the Portfolios' shareholders that
are subject to federal income tax. See "INVESTMENT OBJECTIVES, POLICIES AND
RISK CONSIDERATIONS," "PORTFOLIO TRANSACTIONS" and "TAXES."
The Fixed Income, The Limited-Term Maturity and The Global Fixed Income
Portfolios may invest in collateralized mortgage obligations. See "ADDITIONAL
INVESTMENT INFORMATION--MORTGAGE-BACKED SECURITIES."
Each of the seven Portfolios may lend its portfolio securities, may invest in
repurchase agreements and may purchase securities on a when-issued basis.
While The Global Fixed Income Portfolio and The International Fixed Income
Portfolio intend to seek to qualify as a "diversified" investment company under
provisions of Subchapter M of the Internal Revenue Code, they will not be
diversified under the 1940 Act. Thus, while at least 50% of the Portfolio's
total assets will be represented by cash, cash items, certain qualifying
securities and other securities limited in respect of any one issuer to an
amount not greater than 5% of the Portfolio's total assets, it will not satisfy
the 1940 Act requirement in this respect, which applies that test to 75% of the
Portfolio's assets. A nondiversified portfolio is believed to be subject to
greater risk because adverse effects on the portfolio's security holdings may
affect a larger portion of the overall assets.
Each of the investment strategies identified above involves special risks
which are described under "INVESTMENT OBJECTIVES, POLICIES AND RISK
CONSIDERATIONS" and "ADDITIONAL INVESTMENT INFORMATION" in this Prospectus
and "INVESTMENT POLICIES, PORTFOLIO TECHNIQUES AND RISK CONSIDERATIONS" in
the Statement of Additional Information.
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INVESTMENT
OBJECTIVES,
POLICIES
AND RISK
CONSIDERATIONS
The investment objective of each Portfolio of the Fund is described below,
together with the policies each Portfolio employs in its efforts to achieve its
objective. There is no assurance that a Portfolio will attain its objective. The
investment objective of each Portfolio is fundamental and may only be changed by
a majority approval of that Portfolio's shareholders. Unless otherwise noted,
the investment policies described below are not fundamental policies and may be
changed without shareholder approval.
THE DEFENSIVE EQUITY PORTFOLIO
The Defensive Equity Portfolio's investment objective is to realize maximum
long-term total return, consistent with reasonable risk. The Portfolio seeks
to achieve this objective by investing in equity securities of companies
which, at the time of purchase, have dividend yields above the current yield
of the Standard & Poor's 500 Stock Index ("S&P 500 Index") and which, in the
investment adviser's opinion, offer capital gains potential as well.
In selecting Portfolio securities, the investment adviser places an emphasis
on strong relative performance in falling markets. The Portfolio invests
primarily in equity securities of U.S. companies, although from time to time
the Portfolio will include sponsored or unsponsored American Depository
Receipts actively traded in the United States. Under normal market
conditions, at least 65% of the Portfolio's total assets will be invested in
equity securities. Equity securities for this purpose include, but are not
limited to, common stocks, securities convertible into common stocks and
securities having common stock characteristics, such as
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rights and warrants to purchase common stocks. The Portfolio also may purchase
preferred stock. The Portfolio may hold cash or invest in short-term debt
securities and other money market instruments when, in the investment adviser's
opinion, such holdings are prudent given then prevailing market conditions.
Except when the investment adviser believes a temporary defensive approach is
appropriate, the Portfolio, normally, will not hold more than 5% of its total
assets in cash or such short-term investments. All these short-term investments
will be of the highest quality as determined by a nationally-recognized
statistical rating organization (e.g., AAA by Standard & Poor's Corporation
("S&P") or Aaa by Moody's Investors Service, Inc. ("Moody's")) or be of
comparable quality as determined by the investment adviser. Appendix A of this
Prospectus describes the ratings of S&P and Moody's. See "ADDITIONAL INVESTMENT
INFORMATION" for further details concerning these and other investment policies.
The investment adviser seeks to invest in high yielding equity securities and
believes that, although capital gains are important, the dividend return
component will be a significant portion of the expected total return. The
investment adviser believes that a diversified portfolio of such high yielding
stocks will outperform the market over the long-term, as well as preserve
principal in difficult market environments. Companies considered for purchase
generally will exhibit the following characteristics at the time of purchase: 1)
a dividend yield greater than the prevailing yield of the S&P 500 Index; 2) a
price-to-book ratio lower than the average large capitalization company; and 3)
a below-market price-to-earnings ratio.
The investment adviser takes a long-term investment approach by placing a strong
emphasis on its ability to determine attractive values and, generally, does not
seek to respond to short-term changes in the market. It is anticipated that the
annual turnover rate of the Portfolio will not exceed 100% under normal
circumstances. The Portfolio will maintain diversity among economic sectors and
industries and will not invest 25% or more of its total assets in the stocks of
issuers in any one industry, nor, ordinarily, more than 5%, at the time of
purchase, of any one company.
THE AGGRESSIVE GROWTH PORTFOLIO
The Aggressive Growth Portfolio's investment goal is to realize maximum
long-term capital growth. The Portfolio seeks to attain this objective by
investing in equity securities of smaller and medium-sized companies which,
in the opinion of the investment adviser, present, at the time of purchase,
significant long-term growth potential. In pursuing this objective, current
income is expected to be incidental.
The Portfolio invests primarily in growth-oriented common stocks of small- to
medium-sized domestic corporations. Such companies, in the investment adviser's
view, generally are those companies that have total market capitalization
between $100 million and $2.5 billion at the time of purchase. The Portfolio may
invest in securities issued by companies having a capitalization outside that
range when, in the investment adviser's opinion, such a company exhibits the
same characteristics and growth potential as companies within the range. Equity
securities for this purpose include, but are not to be limited to, common
stocks, securities convertible into common stocks and securities having common
stock characteristics, such as rights and warrants to purchase common stocks.
The Portfolio also may purchase preferred stock. Although the investment adviser
does not pursue a market timing approach to investing, the Portfolio may hold
cash or invest in short-term debt securities or other money market instruments
when, in the investment adviser's opinion, such holdings are prudent given the
prevailing market conditions. Except when the investment adviser believes a
temporary defensive approach is appropriate, the Portfolio, normally, will not
hold more than 10% of its total assets in cash or such short-term investments,
but, on occasion, may hold as much as 30% of its total assets in cash or such
short-term investments. All such holdings will be of the highest
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quality as determined by a nationally-recognized statistical rating organization
(e.g., AAA by S&P or Aaa by Moody's) or be of comparable quality as determined
by the investment adviser. See "ADDITIONAL INVESTMENT INFORMATION."
The Portfolio may also, to a limited extent, enter into futures contracts on
stocks, purchase or sell options on such futures, engage in certain options
transactions on stocks and enter into closing transactions with respect to
those activities. However, these activities will not be entered into for
speculative purposes, but rather to facilitate the ability quickly to deploy
into the stock market the Portfolio's positions in cash, short-term debt
securities and other money market instruments, at times when the Portfolio's
assets are not fully invested in equity securities. Such positions will
generally be eliminated when it becomes possible to invest in securities that
are appropriate for the Portfolio. See "ADDITIONAL INVESTMENT
INFORMATION-FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS" and "OPTIONS"
for a further discussion of these investment policies.
The Portfolio will not invest 25% or more of its total assets in securities of
companies which conduct their principal business activities in specific
industries. The Portfolio expects to invest in small- to medium-sized companies
that have been in existence for at least three years (including the operation of
any predecessor company) but which have the potential, in the investment
adviser's judgment, for significant long-term capital growth. The investment
adviser assesses economic, industry, market and company developments to select
investments in promising emerging growth companies that are expected to benefit
from new technology, new products or services, research discoveries, rejuvenated
management and the like. However, the Portfolio may invest in any equity
security which, in the investment adviser's judgment, provides the potential for
significant capital appreciation.
The investment adviser believes that consistent earnings per share growth is
just as important as high absolute growth. Because the Portfolio seeks
long-term capital growth by investing primarily in small- to medium-sized
companies, its investments are likely to involve a higher degree of liquidity
risk and price volatility than larger capitalization securities.
The investment adviser does not normally intend to respond to short-term market
fluctuations or to acquire securities for the purpose of short-term trading;
however, the investment adviser may take advantage of short-term opportunities
that are consistent with its investment objective. It is anticipated that the
annual turnover rate of the Portfolio, under normal circumstances, will not
exceed 100%.
THE INTERNATIONAL EQUITY PORTFOLIO
The investment objective of The International Equity Portfolio is to achieve
maximum long-term total return. The Portfolio seeks to achieve its objective
by investing primarily in equity securities of issuers organized or having a
majority of their assets or deriving a majority of their operating income
outside the United States, and which, in the investment adviser's opinion,
are undervalued at the time of purchase based on fundamental analysis
employed by the investment adviser.
In selecting portfolio securities the investment adviser emphasizes strong
performance in falling markets relative to other mutual funds focusing on
international equity investments. Equity securities in which the Portfolio may
invest include, but are not limited to, common stocks and securities convertible
into common stock and securities having common stock characteristics, such as
rights and warrants to purchase common stocks. Additionally, the Portfolio may
from time to time, hold its assets in cash (which may be U.S. dollars or foreign
currency, including European Currency Units ("ECU")) or may invest in short-term
debt securities or other money market instruments. Except when the investment
adviser believes a temporary defensive approach is appropriate, the Portfolio
generally will not hold more than
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5% of its assets in cash or such short-term instruments. All such holdings will
be of the highest quality as determined by a nationally-recognized statistical
rating organization (e.g., AAA by S&P or Aaa by Moody's) or of comparable
quality as determined by the Portfolio's investment adviser.
The Portfolio may hold up to 15% of its assets in foreign fixed income
securities when, in the investment adviser's opinion, equity securities are
overvalued and such fixed income securities present an opportunity for returns,
over an 18-month period, greater than those available through investments in
equity securities or the short-term investments described above. The foreign
fixed income securities in which the Portfolio may invest may be U.S. dollar or
foreign currency denominated, including ECU, and must have a government or
government agency backed credit status which would include, but not be limited
to, supranational entities. A supranational entity is an entity established or
financially supported by the national governments of one or more countries to
promote development or reconstruction. They include: The World Bank, European
Investment Bank, Asian Development Bank, European Economic Community, and the
Inter-American Development Bank. Such fixed income securities will be, at the
time of purchase, of the highest quality (e.g., AAA by S&P or Aaa by Moody's) or
of comparable quality as determined by the Portfolio's investment adviser. See
"ADDITIONAL INVESTMENT INFORMATION" for a further description of these and other
investment policies.
The investment adviser's approach in selecting investments for the Portfolio is
oriented to individual stock selection and is value driven. In selecting stocks
for the Portfolio, the investment adviser identifies those stocks which it
believes will provide the highest total return over a market cycle taking into
consideration the movement in the price of the individual security, and the
impact of currency adjustment on a United States domiciled, dollar-based
investor. The investment adviser conducts extensive fundamental research on a
global basis, and it is through this research effort that securities which, in
the investment adviser's opinion, have the potential for maximum long-term total
return are identified. The center of the fundamental research effort is a value
oriented dividend discount methodology toward individual securities and market
analysis which isolates value across country boundaries. This approach focuses
on future anticipated dividends and discounts the value of those dividends back
to what they would be worth if they were being paid today. Comparisons of the
values of different possible investments are then made. The investment adviser's
management approach is long-term in orientation, but, it is expected that the
annual turnover rate of the Portfolio will not exceed 150% under normal
circumstances. See "PORTFOLIO TRANSACTIONS" and "TAXES."
While the Portfolio is not subject to any specific geographic diversification
requirements, it will, under normal conditions, invest at least 65% of its
total assets in equity securities of issuers organized or having a majority
of their assets or deriving a majority of their operating income in at least
three different countries outside the United States. Investments will be made
mainly in marketable securities of companies located in developed countries,
but the stock markets of developing countries are rapidly becoming accessible
and the Portfolio may hold securities of issuers located in any developing
country determined to be appropriate by the investment adviser. Investments
in obligations of foreign issuers involve somewhat different investment risks
than those affecting obligations of United States issuers. The risks posed by
investments in emerging or developing countries frequently are greater. See
"ADDITIONAL INVESTMENT INFORMATION-FOREIGN INVESTMENT INFORMATION."
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Currency considerations carry a special risk for a portfolio of international
securities, and the investment adviser employs a purchasing power parity
approach to evaluate currency risk. In this regard, the Portfolio will actively
carry on hedging activities, and may invest in forward foreign currency exchange
contracts to hedge currency risks associated with the purchase of individual
securities denominated in a particular currency. See "ADDITIONAL INVESTMENT
INFORMATION--FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS."
THE FIXED INCOME PORTFOLIO
The Fixed Income Portfolio's investment objective is to realize maximum
long-term total return, consistent with reasonable risk. It seeks to achieve
its objective by investing in a diversified portfolio of investment grade
fixed income obligations, including securities issued or guaranteed by the
U.S. government, its agencies or instrumentalities ("U.S. government secur-
ities"), mortgage-backed securities, asset-backed securities, corporate bonds,
and other fixed income securities.
It seeks maximum long-term total return by investing in debt securities
having an average effective maturity (that is, the market value weighted
average time to repayment of principal) of between one to ten years. Short-
and intermediate-term debt securities (under ten years) form the core of the
Portfolio, with long-term bonds (over ten years) purchased as well when the
investment adviser believes they will enhance return without significantly
increasing risk. Average effective maturity may exceed the above range when
the investment adviser believes opportunities for enhanced returns exceed
risk.
Typically, approximately 50% of the Portfolio's assets will be invested in U.S.
government securities, mortgage-backed securities and asset-backed securities.
All securities purchased by the Portfolio will have an investment grade rating
at the time of purchase. Investment grade fixed income obligations will be those
rated BBB or better by S&P or Baa or better by Moody's or those deemed to be of
comparable quality by the investment adviser. Obligations rated BBB and Baa have
speculative characteristics. To the extent that the rating of a debt obligation
held by the Portfolio falls below BBB or Baa, the Portfolio, as soon as
practicable, will dispose of the security, unless such disposal would be
detrimental to the Portfolio in light of market conditions. See "ADDITIONAL
INVESTMENT INFORMATION--U.S. GOVERNMENT SECURITIES" and "MORTGAGE-BACKED
SECURITIES" for more detailed information about these and other investment
policies.
The Portfolio will normally experience an annual portfolio turnover rate
exceeding 100%, but that rate is not expected to exceed 250%. A 100% turnover
rate would occur if all of the securities in the Portfolio were sold and
replaced within one year. The rate of portfolio turnover is not a limiting
factor when the investment adviser deems it desirable to purchase or sell
securities. High portfolio turnover (over 100%) involves correspondingly greater
brokerage commissions and other transaction costs and may affect taxes payable
by the Portfolio's shareholders that are subject to federal income taxes. The
turnover rate may also be affected by cash requirements from redemptions and
repurchases of the Portfolio's shares. The degree of Portfolio activity may
affect brokerage costs of the Portfolio and taxes payable by institutional
shareholders that are subject to federal income taxes. See "PORTFOLIO
TRANSACTIONS" and "TAXES."
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THE LIMITED-TERM MATURITY PORTFOLIO
The Limited-Term Maturity Portfolio seeks to realize a high level of current
income, consistent with the preservation of principal and reasonable risk. It
seeks to achieve its objective by investing in a diversified portfolio of
investment grade fixed income securities including: U.S. government
securities, mortgage-backed securities, asset-backed securities, corporate
bonds, and other fixed income securities. The Portfolio will not exceed an
average effective maturity (that is, the market value weighted average time
to repayment of principal) of five years and will invest at least a majority
of its assets in U.S. government securities and mortgage-backed securities.
The Portfolio also may hold up to 30% of its assets in investment grade
corporate fixed income obligations (other than mortgage-backed securities and
U.S. government securities) and asset-backed securities, but may not invest
more than 10% of its assets in such investment grade corporate fixed income
securities rated, at the time of purchase, Baa by Moody's or BBB by S&P or
determined to be of comparable quality by the investment adviser. To the
extent that the rating of a debt obligation held by the Portfolio falls below
BBB or Baa the Portfolio, as soon as practicable, will dispose of the
security, unless such disposal would be detrimental to the Portfolio in light
of market conditions.
The Limited-Term Maturity Portfolio will normally experience an annual portfolio
turnover rate exceeding 100%, but that rate is not expected to exceed 200%. See
"INVESTMENT OBJECTIVES, POLICIES AND RISK CONSIDERATIONS--THE FIXED INCOME
PORTFOLIO" for a discussion of the implication of a portfolio turnover rate
exceeding 100%.
THE GLOBAL FIXED INCOME PORTFOLIO
The Portfolio seeks to realize current income consistent with the preservation
of investors' principal. It seeks to achieve its objective by investing
primarily in fixed income securities that may also provide the potential for
capital appreciation. The Portfolio is a global fund. As such, it may invest in
securities issued in any currency and may hold foreign currency. Under normal
circumstances, at least 65% of the Portfolio's assets will be invested in the
fixed income securities of issuers organized or having a majority of their
assets in or deriving a majority of their operating income in at least three
different countries, one of which may be the United States. Securities of
issuers within a given country may be denominated in the currency of another
country or in multinational currency units such as the ECU. The Portfolio will
operate as a nondiversified fund for purposes of the 1940 Act.
The investment adviser's approach in selecting investments for the portfolio
is oriented to country selection and is value driven. In selecting fixed
income instruments for the Portfolio, the investment adviser identifies those
countries' fixed income markets which it believes will provide the United
States' domiciled investor the highest yield over a market cycle, while also
offering the opportunity for capital gain and currency appreciation. The
investment adviser conducts extensive fundamental research on a global basis,
and it is through this effort that attractive fixed income markets are selected
for investment. The core of the fundamental research effort is a value oriented
discounted income stream methodology which isolates value across country
boundaries. This approach focuses on future coupon and redemption payments and
discounts the value of those payments back to what they would be worth if they
were to be paid today. Comparisons of the values of different possible
investments are then made. The investment adviser's management approach is long-
term in orientation, and it is therefore expected that the annual turnover of
the portfolio will not exceed 200% under normal circumstances. See "PORTFOLIO
TRANSACTIONS" and "TAXES."
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The Portfolio will attempt to achieve its objective by investing in a broad
range of fixed income securities, including debt obligations of foreign and U.S.
companies which are generally rated A or better by S&P or Moody's or, if
unrated, are deemed to be of comparable quality by Delaware International, as
well as, foreign and U.S. government securities with the limitation noted below.
The Portfolio may invest up to 5% of its assets in fixed income securities rated
below investment grade, including foreign government securities as discussed
below. See "ADDITIONAL INVESTMENT INFORMATION-HIGH YIELD, HIGH RISK SECURITIES."
The Portfolio may also invest in zero coupon bonds, and in the debt securities
of supranational entities denominated in any currency. The Portfolio may also
invest in mortgage-backed securities. See "ADDITIONAL INVESTMENT INFORMATION-
MORTGAGE-BACKED SECURITIES."
Zero coupon bonds are debt obligations which do not entitle the holder to any
periodic payments of interest prior to maturity or a specified date when the
securities begin paying current interest, and therefore are issued and traded
at a discount from their face amounts or par value. A supranational entity is
an entity established or financially supported by the national governments of
one or more countries to promote reconstruction or development. Examples of
supranational entities include, among others, the World Bank, the European
Economic Community, the European Coal and Steel Community, the European
Investment Bank, the Inter-Development Bank, the Export-Import Bank and the
Asian Development Bank. For increased safety, the Portfolio currently
anticipates that a large percentage of its assets will be invested in U.S. and
foreign government securities and securities of supranational entities.
With respect to U.S. government securities, the Portfolio may invest only in
securities issued or guaranteed as to the payment of principal and interest
by the U.S. government, and those of its agencies or instrumentalities which
are backed by the full faith and credit of the United States. Direct
obligations of the U.S. government which are available for purchase by the
Portfolio include bills, notes, bonds and other debt securities issued by the
U.S. Treasury. These obligations differ mainly in interest rates, maturities and
dates of issuance. Agencies whose obligations are backed by the full faith and
credit of the United States include the Farmers Home Administration, Federal
Financing Bank and others. When the Portfolio's investment adviser believes a
temporary defensive approach is appropriate, the Portfolio may hold up to 100%
of its assets in such U.S. government securities and certain other short-term
instruments. See "ADDITIONAL INVESTMENT INFORMATION-U.S. GOVERNMENT SECURITIES"
and "SHORT-TERM INVESTMENTS."
With respect to securities issued by foreign governments, their agencies,
instrumentalities or political subdivisions, the Portfolio will generally
invest in such securities if they have been rated AAA or AA by S&P or Aaa or
Aa by Moody's or, if unrated, have been determined by the investment manager to
be of comparable quality. As noted above, the Portfolio may invest up to 5% of
its assets in non-investment grade fixed income securities. These investments
may include foreign government securities, some of which may be so-called Brady
Bonds. See "ADDITIONAL INFORMATION-HIGH YIELD, HIGH RISK SECURITIES." The
Portfolio may also invest in sponsored or unsponsored American Depository
Receipts or European Depository Receipts. While the Portfolio may purchase
securities of issuers in any foreign country, developed or underdeveloped, it is
currently anticipated that the countries in which the Portfolio may invest will
include, but not be limited to, Canada, Germany, the United Kingdom, New
Zealand, France, the Netherlands, Belgium, Spain, Switzerland, Ireland, Denmark,
Portugal, Italy, Austria, Norway, Sweden, Finland, Luxembourg, Japan and
Australia. With respect to certain countries, investments by an investment
company may only be made through investments in closed-end investment companies
that in turn are authorized to invest in the securities of issuers in such
countries. Any investment the Portfolio may make in other investment companies
is limited in amount by the 1940 Act and would involve the indirect payment of a
portion of the expenses, including advisory fees, of such other
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investment companies. See "ADDITIONAL INVESTMENT INFORMATION-FOREIGN INVESTMENT
INFORMATION."
Currency considerations carry a special risk for a portfolio of international
securities and the investment adviser employs a purchasing power parity approach
to evaluate currency risk. In this regard, the Portfolio will actively carry on
hedging activities, and may invest in forward foreign currency exchange
contracts to hedge currency risks associated with its portfolio of securities.
See "ADDITIONAL INVESTMENT INFORMATION-FORWARD FOREIGN CURRENCY EXCHANGE
CONTRACTS."
It is anticipated that the average weighted maturity of the Portfolio will be in
the five-to-ten year range. If, however, the investment adviser anticipates a
declining interest rate environment, the average weighted maturity may be
extended beyond ten years. Conversely, if the investment adviser anticipates a
rising rate environment, the average weighted maturity may be shortened to less
than five years. The Portfolio will not invest 25% or more of its total assets
in the securities of issuers all of which conduct their principal business
activities in the same industry.
THE INTERNATIONAL FIXED INCOME PORTFOLIO
The Portfolio seeks to realize current income consistent with the preservation
of investors' principal. It seeks to achieve its objective by investing
primarily in fixed income securities that may also provide the potential for
capital appreciation. The Portfolio is an international fund. As such, it may
invest in securities issued in any currency and may hold foreign currency. Under
normal circumstances, at least 65% of the Portfolio's assets will be invested in
the fixed income securities of issuers organized or having a majority of their
assets in or deriving a majority of their operating income in at least three
different countries outside of the United States. Under normal circumstances,
the Portfolio intends to invest in securities which are denominated in foreign
currencies. Securities of issuers within a given country may be denominated in
the currency of another country or in multinational currency units such as ECU.
The Portfolio will operate as a nondiversified fund for purposes of the 1940
Act.
The investment adviser's approach in selecting investments for the portfolio is
oriented to country selection and is value driven. In selecting fixed income
instruments for the Portfolio, the investment adviser identifies those
countries' fixed income markets which it believes will provide the United States
domiciled investor the highest yield over a market cycle, while also offering
the opportunity for capital gain and currency appreciation. The investment
adviser conducts extensive fundamental research on a global basis, and it is
through this effort that attractive fixed income markets are selected for
investment. The core of the fundamental research effort is a value oriented
discounted income stream methodology which isolates value across country
boundaries. This approach focuses on future coupon and redemption payments and
discounts the value of those payments back to what they would be worth if they
were to be paid today. Comparisons of the values of different possible
investments are then made. The investment adviser's management approach is long-
term in orientation, but, it is expected that the annual turnover of the
portfolio will be approximately 200% under normal circumstances. See "PORTFOLIO
TRANSACTIONS" and "TAXES."
The Portfolio will attempt to achieve its objective by investing in a broad
range of fixed income securities, including debt obligations of foreign
companies which are generally rated A or better by S&P or Moody's or, if
unrated, are deemed to be of comparable quality by Delaware International, as
well as, foreign government securities with the limitations noted below. The
Portfolio may invest up to 5% of its assets in fixed income securities rated
below investment grade, including foreign government securities as discussed
below. See "ADDITIONAL INVESTMENT INFORMATION-HIGH YIELD, HIGH RISK
SECURITIES." The Portfolio may also invest in zero coupon bonds, and in the
debt securities of supranational entities denominated in any currency.
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Zero coupon bonds are debt obligations which do not entitle the holder to any
periodic payments of interest prior to maturity or a specified date when the
securities begin paying current interest, and therefore are issued and traded at
a discount from their face amounts or par value. A supranational entity is an
entity established or financially supported by the national governments of one
or more countries to promote reconstruction or development. Examples of
supranational entities include, among others, the World Bank, the European
Economic Community, the European Coal and Steel Community, the European
Investment Bank, the Inter-Development Bank, the Export-Import Bank and the
Asian Development Bank. For increased safety, the Portfolio currently
anticipates that a large percentage of its assets will be invested in foreign
government securities and securities of supranational entities.
With respect to U.S. government securities, the Portfolio may invest only in
securities issued or guaranteed as to the payment of principal and interest by
the U.S. government, and those of its agencies or instrumentalities which are
backed by the full faith and credit of the United States. Direct obligations of
the U.S. government which are available for purchase by the Portfolio include
bills, notes, bonds and other debt securities issued by the U.S. Treasury. These
obligations differ mainly in interest rates, maturities and dates of issuance.
Agencies whose obligations are backed by the full faith and credit of the United
States include the Farmers Home Administration, Federal Financing Bank and
others. When the Portfolio's investment adviser believes a temporary defensive
approach is appropriate, the Portfolio may hold up to 100% of its assets in such
U.S. government securities and certain other short-term instruments. See
"ADDITIONAL INVESTMENT INFORMATION--U.S. GOVERNMENT SECURITIES" and "SHORT-TERM
INVESTMENTS."
With respect to securities issued by foreign governments, their agencies,
instrumentalities or political subdivisions, the Portfolio will generally invest
in such securities if they have been rated AAA or AA by S&P or Aaa or Aa by
Moody's or, if unrated, have been determined by the investment manager to be of
comparable quality. As noted above, the Portfolio may invest up to 5% of its
assets in non-investment grade fixed income securities. These investments may
include foreign government securities, some of which may be so-called Brady
Bonds. See "ADDITIONAL INFORMATION--HIGH YIELD, HIGH RISK SECURITIES." The
Portfolio may also invest in sponsored or unsponsored American Depository
Receipts or European Depository Receipts. While the Portfolio may purchase
securities of issuers in any foreign country, developed or underdeveloped, it is
currently anticipated that the countries in which the Portfolio may invest will
include, but not be limited to, Canada, Germany, the United Kingdom, New
Zealand, France, the Netherlands, Belgium, Spain, Switzerland, Ireland, Denmark,
Portugal, Italy, Austria, Norway, Sweden, Finland, Luxembourg, Japan and
Australia. With respect to certain countries, investments by an investment
company may only be made through investments in closed-end investment companies
that in turn are authorized to invest in the securities of issuers in such
countries. Any investment the Portfolio may make in other investment companies
is limited in amount by the 1940 Act and would involve the indirect payment of a
portion of the expenses, including advisory fees, of such other investment
companies. See "ADDITIONAL INVESTMENT INFORMATION--FOREIGN INVESTMENT
INFORMATION."
Currency considerations carry a special risk for a portfolio of international
securities and the investment adviser employs a purchasing power parity approach
to evaluate currency risk. In this regard, the Portfolio will actively carry on
hedging activities, and may utilize a wide range of hedging instruments,
including options, futures contracts, and related options, and forward foreign
currency exchange contracts to hedge currency risks associated with its
portfolios of securities. See "ADDITIONAL INVESTMENT INFORMATION--FORWARD
FOREIGN CURRENCY EXCHANGE CONTRACTS, FUTURES CONTRACTS AND OPTIONS ON FUTURES
CONTRACTS" and "OPTIONS."
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It is anticipated that the average weighted maturity of the Portfolio will be in
the five-to-ten year range. If, however, the investment adviser anticipates a
declining interest rate environment, the average weighted maturity may be
extended beyond ten years. Conversely, if the investment adviser anticipates a
rising rate environment, the average weighted maturity may be shortened to less
than five years. The Portfolio will not invest 25% or more of its total assets
in the securities of issuers all of which conduct their principal business
activities in the same industry.
- -----------
PURCHASE
OF
SHARES
Shares of each Portfolio may be purchased without a sales commission, at net
asset value per share next determined after (i) the Fund has been notified by
telephone of your purchase order and (ii) Federal Funds have been delivered to
the Fund's bank account maintained with The Morgan Guaranty Trust Company of New
York ("Custodian Bank"). Shares of The International Equity Portfolio may, under
certain circumstances, be required to be purchased in-kind, as noted below. See
"VALUATION OF SHARES."
The minimum initial investment for a Portfolio is $1,000,000.
BY FEDERAL FUNDS WIRE
Purchases of shares of a Portfolio may only be made by having your bank wire
Federal Funds to the Fund's bank account maintained with the Custodian Bank. In
order for share purchases to be priced at the end of a given business day, the
Fund must be notified by telephone and Federal Funds must be received no later
than the close of regular trading on the New York Stock Exchange ("NYSE")
(ordinarily, 4 p.m., Eastern time) on days when the exchange is open. If notice
is given or Federal Funds are delivered after that time, the purchase order will
be priced on the following business day. In order to ensure prompt receipt of
your Federal Funds Wire and processing of your purchase order, it is important
that the following steps be taken:
1. Telephone the Fund (Toll Free: 1-800-231-8002) and provide us with the
account name, address, telephone number, Tax Identification Number, the
Portfolio(s) selected, the amount being wired and by which bank and which
specific branch, if applicable. We will provide you with a Fund account
number.
2. Instruct your bank to wire the specified amount of Federal Funds to the
Fund's Wire Concentration Bank Account (be sure to have your bank include the
name of the Portfolio(s) selected and the account number assigned to you) at:
The Morgan Guaranty Trust Company of New York
New York, NY 10015
ABA #021000238
DDA #001-30-970 (The Defensive Equity Portfolio)
DDA #001-30-981 (The Aggressive Growth Portfolio)
DDA #001-30-992 (The International Equity Portfolio)
DDA #001-31-003 (The Fixed Income Portfolio)
DDA #001-31-014 (The Limited-Term Maturity Portfolio)
DDA #001-49-527 (The Global Fixed Income Portfolio)
DDA #001-63-453 (The International Fixed Income Portfolio)
Attn: Delaware Pooled Trust, Inc.
Ref: (Portfolio name, your account number, your account name)
Federal Funds purchase orders will be accepted only on a day on which the
Fund, the NYSE and the Custodian Bank are open for business.
(20)
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3. Complete the Account Registration Form within two days and mail it to:
Delaware Pooled Trust, Inc.
One Commerce Square
2005 Market Street
Philadelphia, PA 19103
Attn: Client Services
IN-KIND PURCHASES OR SIMILAR PROCEDURES (THE INTERNATIONAL EQUITY PORTFOLIO)
Institutions proposing to invest an amount which at the time they telephone the
Fund (as required above), would constitute 5% or more of the assets of The
International Equity Portfolio, will, under normal circumstances, be required to
make purchases by tendering securities in which the Portfolio otherwise would
invest or, by following another procedure that will have the same economic
effect as an in-kind purchase. In either case, an investor that is required to
purchase shares pursuant to those procedures will be required to pay the
brokerage or other transaction costs of acquiring the subject securities.
Prospective investors will be notified when they telephone the Fund whether
their investment must be made in-kind or by such other procedure and, if in-
kind, what securities must be tendered. The purchase price per share for such
investors shall be the net asset value next determined after, as the case may
be, (1) delivery of cash or securities to the Custodian Bank and/or (2) the
assignment to the Portfolio by a prospective purchaser on trade date of the
investor's right to delivery of securities as to which brokerage orders have
been placed (but, as to which settlement is yet to occur) and delivery of cash
in an amount necessary to pay for those securities on settlement date. The
assets provided to the Portfolio pursuant to these procedures shall be valued
consistent with the same valuation procedures used to calculate the Portfolio's
net asset value. See "VALUATION OF SHARES." Such investors should contact the
Fund at (1-800-231-8002) for further information.
ADDITIONAL INVESTMENTS
You may add to your shareholder account at any time and in any amount.
Procedures are the same as those to be followed for a new account, in as much
as it is very important to notify the Fund of your impending purchase by
first calling the Fund (1-800-231-8002). Then you must be sure that your bank
follows the same procedures as described above with respect to the wiring of
Federal Funds to the Fund's Custodian Bank. Additional investments in The
International Equity Portfolio are subject to the same procedures and
requirements (including the in-kind or similar procedures) set forth above.
- ------------
REDEMPTION
OF
SHARES
You may withdraw all or any portion of the amount in your account by
redeeming shares at any time. The Fund will redeem shares of each Portfolio
at its net asset value next determined after receipt of your redemption
request in accordance with the following instructions. On days that the Fund,
the NYSE and the Custodian Bank are open for business, the net asset value of
the Fund's Portfolios are determined as of the close of regular trading of
the NYSE (ordinarily, 4 p.m., Eastern time). See "VALUATION OF SHARES."
Shares of the Fund may be redeemed by mail, FAX message or telephone. No
charge is made for redemption. The proceeds of any redemption may be more or
less than the purchase price of your shares depending on the market value of
the investment securities held by the Portfolio. Shares of The International
Equity Portfolio, The Global Fixed Income Portfolio and The International
Fixed Income Portfolio may, under certain circumstances, and subject to an
election by the client, be redeemed in-kind in portfolio securities, as noted
below.
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BY MAIL OR FAX MESSAGE
Each Portfolio will redeem its shares at the net asset value next determined
on the date the request is received in "good order." Your request should be
addressed to:
Delaware Pooled Trust, Inc.
Attn: Client Services
One Commerce Square
2005 Market Street
Philadelphia, PA 19103
FAX # 215-972-8864
"Good order" for purposes of mail or FAX message redemptions means that the
request to redeem must include the following documentation:
a. A letter of instruction specifying the number of shares or dollar amount to
be redeemed signed by the appropriate corporate or organizational officer(s)
exactly as it appears on the Account Registration Form.
b. If you wish to change the name of the commercial bank or account designation
to receive the redemption proceeds as provided in the Account Registration Form,
then a separate written request must be submitted to the Fund at the above
address and copies of this request sent to both the current commercial bank and
the new designee bank. Prior to redemption, the Fund will telephonically confirm
the change with both the current and the new designee banks. Further
clarification of these procedures can be obtained by calling the Fund.
BY TELEPHONE
If you have previously elected the Telephone Redemption Option on the Account
Registration Form, you can request a redemption of your shares by calling the
Fund and requesting the redemption proceeds be wired to the commercial bank or
account designation identified in the Account Registration Form. Shares cannot
be redeemed by telephone if stock certificates are held for those shares or, in
the case of The International Equity Portfolio, The Global Fixed Income
Portfolio or The International Fixed Income Portfolio, in instances when the
special in-kind redemption procedures are triggered, as described below. Please
contact the Fund for further details. In times of drastic market conditions, the
telephone redemption option may be difficult to implement. If you experience
difficulty in making a telephone redemption, your request may be made by mail or
FAX message, pursuant to the procedures described above. It will be implemented
at the net asset value next determined after it is received. Neither the Fund,
the Portfolios nor the Fund's transfer agent, Delaware Service Company, Inc., is
responsible for any losses incurred in acting upon written or telephone
instructions for redemption or exchange of Portfolio shares which are reasonably
believed to be genuine. With respect to such telephone transactions, the Fund
will ensure that reasonable procedures are used to confirm that instructions
communicated by telephone are genuine (including verification of a form of
personal identification) as, if it does not, the Fund or Delaware Service
Company, Inc. may be liable for any losses due to unauthorized or fraudulent
transactions. A written confirmation will be provided for all purchase, exchange
and redemption transactions initiated by telephone.
To change the name of the commercial bank or account designated to receive the
redemption proceeds, a written request must be sent to the Fund at the address
above. Requests to change the bank or account designation must be signed by the
appropriate person(s) authorized to act on behalf of the shareholder.
The Fund's telephone redemption privileges and procedures may be modified or
terminated by the Fund only upon written notice to the Fund's client
shareholders.
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REDEMPTIONS IN-KIND OR SIMILAR PROCEDURES (THE INTERNATIONAL EQUITY, THE GLOBAL
FIXED INCOME AND THE INTERNATIONAL FIXED INCOME PORTFOLIOS)
Institutions proposing to redeem an amount which, at the time they notify the
Fund of their intention to redeem (as described below), would constitute 5% or
more of the assets of The International Equity Portfolio, The Global Fixed
Income Portfolio or The International Fixed Income Portfolio will, under normal
circumstances, be required to accept their redemption proceeds in-kind in
Portfolio securities, unless they elect another procedure which will have the
same economic effect as an in-kind redemption. In either case, an investor that
is required to redeem shares pursuant to this election must bear the brokerage
or other transaction costs of selling the Portfolio securities representing the
value of their redeemed shares. Any Portfolio securities delivered upon
redemption will be valued as described in "VALUATION OF SHARES." Investors in
these Portfolios should contact the Fund at (1-800-231-8002) for further
information.
IMPORTANT REDEMPTION INFORMATION
Because the Fund's shares are sold to institutional investors with a relatively
high investment minimum, Fund shareholders likely will hold a significant number
of Fund shares. For this reason, the Fund requests that shareholders proposing
to make a large redemption order give the Fund at least ten days advanced notice
of any such order. This request can easily be satisfied by calling the Fund at
(1-800-231-8002), and giving notification of your future intentions. Once a
formal redemption order is received, the Fund, in the case of redemptions to be
made in cash, normally will make payment for all shares redeemed under this
procedure within three business days of receipt of the order. In no event,
however, will payment be made more than seven days after receipt of a redemption
request in good order. The Fund may suspend the right of redemption or postpone
the date at times when the NYSE is closed, or under any emergency circumstances
as determined by the Securities and Exchange Commission ("Commission").
With respect to The International Equity, The Global Fixed Income and The
International Fixed Income Portfolios, as noted above, or if the Fund otherwise
determines that it would be detrimental to the best interests of the remaining
shareholders of a Portfolio to make payment wholly or partly in cash, the Fund
may pay the redemption proceeds in whole or in part by a distribution in-kind of
securities held by a Portfolio in lieu of cash in conformity with applicable
rules of the Commission. Investors may incur brokerage charges on the sale of
Portfolio securities so received in payment of redemptions.
Due to the relatively high cost of maintaining shareholder accounts, the Fund
reserves the right to redeem shares in a Portfolio if the value of your holdings
in that Portfolio is below $500,000. The Fund, however, will not redeem shares
based solely upon market reductions in net asset value. If the Fund intends to
take such action, a shareholder would be notified and given 90 days to make an
additional investment before the redemption is processed.
- ----------------
ADDITIONAL
INVESTMENT
INFORMATION
U.S. GOVERNMENT SECURITIES
The U.S. government securities in which the various Portfolios may invest for
temporary purposes and otherwise (see "INVESTMENT OBJECTIVES, POLICIES AND RISK
CONSIDERATIONS"), include a variety of securities which are issued or guaranteed
as to the payment of principal and interest by the U.S. government, and by
various agencies or instrumentalities which have been established or sponsored
by the U.S. government.
U.S. Treasury securities are backed by the "full faith and credit" of the
United States. Securities issued or guaranteed by federal agencies and U.S.
government sponsored instrumentalities may or may not be backed by the full
faith and credit of the United States. In the case of securities not backed
by the full faith and credit of the United States, the investors must look
principally to the agency or instrumentality issuing or guaranteeing the
obligation
(23)
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for ultimate repayment, and may not be able to assert a claim against the United
States itself in the event the agency or instrumentality does not meet its
commitment. Agencies which are backed by the full faith and credit of the United
States include the Export-Import Bank, Farmers Home Administration, Federal
Financing Bank and others. Certain agencies and instrumentalities, such as the
Government National Mortgage Association ("GNMA"), are, in effect, backed by the
full faith and credit of the United States through provisions in their charters
that they may make "indefinite and unlimited" drawings on the Treasury, if
needed to service its debt. Debt from certain other agencies and
instrumentalities, including the Federal Home Loan Bank and Federal National
Mortgage Association, are not guaranteed by the United States, but those
institutions are protected by the discretionary authority for the U.S. Treasury
to purchase certain amounts of their securities to assist the institutions in
meeting their debt obligations. Finally, other agencies and instrumentalities,
such as the Farm Credit System and the Federal Home Loan Mortgage Corporation,
are federally chartered institutions under U.S. government supervision, but
their debt securities are backed only by the creditworthiness of those
institutions, not the U.S. government.
Some of the U.S. government agencies that issue or guarantee securities include
the Export-Import Bank of the United States, Farmers Home Administration,
Federal Housing Administration, Maritime Administration, Small Business
Administration and the Tennessee Valley Authority.
An instrumentality of a U.S. government agency is a government agency organized
under Federal charter with government supervision. Instrumentalities issuing or
guaranteeing securities include, among others, Federal Home Loan Banks, the
Federal Land Banks, Central Bank for Cooperatives, Federal Immediate Credit
Banks and the Federal National Mortgage Association.
MORTGAGE-BACKED SECURITIES
The Fixed Income, The Limited-Term Maturity and The Global Fixed Income
Portfolios may invest in mortgage-backed securities issued or guaranteed by
the U.S. government, its agencies or instrumentalities or by government
sponsored corporations. Those securities include, but are not limited to,
GNMA certificates. Such securities differ from other fixed income securities
in that principal is paid back by the borrower over the length of the loan
rather than returned in a lump sum at maturity. When prevailing interest
rates rise, the value of a GNMA security may decrease as do other debt
securities. When prevailing interest rates decline, however, the value of
GNMA securities may not rise on a comparable basis with other debt securities
because of the prepayment feature of GNMA securities. Additionally, if a GNMA
certificate is purchased at a premium above its principal value because its
fixed rate of interest exceeds the prevailing level of yields, the decline in
price to par may result in a loss of the premium in the event of prepayment.
Funds received from prepayments may be reinvested at the prevailing interest
rates which may be lower than the rate of interest that had previously been
earned.
The Portfolios also may invest in collateralized mortgage obligations ("CMOs")
and real estate mortgage investment conduits ("REMICs"). CMOs are debt
securities issued by U.S. government agencies or by financial institutions and
other mortgage lenders and collateralized by a pool of mortgages held under an
indenture. CMOs are issued in a number of classes or series with different
maturities. The classes or series are retired in sequence as the underlying
mortgages are repaid. REMICs, which were authorized under the Tax Reform Act of
1986, are private entities formed for the purpose of holding a fixed pool of
mortgages secured by an interest in real property. REMICs are similar to CMOs in
that they issue multiple classes of securities. To the extent any privately-
issued CMOs or REMICs in which the Portfolios may invest are considered by the
Commission to be investment companies, the Portfolios will limit their
investments in such securities in a manner consistent with the provisions of the
1940 Act.
(24)
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The mortgages backing these securities include conventional 30-year fixed rate
mortgages, graduated payment mortgages and adjustable rate mortgages. These
mortgages may be supported by various types of insurance, may be backed by GNMA
certificates or other mortgage pass-throughs issued or guaranteed by the U.S.
government, its agencies or instrumentalities. However, the guarantees do not
extend to the mortgage-backed securities' value, which is likely to vary
inversely with fluctuations in interest rates. These certificates are in most
cases "pass-through" instruments, through which the holder receives a share of
all interest and principal payments from the mortgages underlying the
certificate. Because the prepayment characteristics of the underlying mortgages
vary, it is not possible to predict accurately the average life or realized
yield of a particular issue of pass-through certificates. During periods of
declining interest rates, prepayment of mortgages underlying mortgage-backed
securities can be expected to accelerate. When the mortgage obligations are
prepaid, the Portfolio may reinvest the prepaid amounts in securities, the yield
of which reflects interest rates prevailing at the time. Moreover, prepayments
of mortgages which underlie securities purchased at a premium could result in
capital losses.
Certain CMOs and REMICs may have variable or floating interest rates and others
may be stripped. Stripped mortgage securities have greater market volatility
than other types of mortgage securities in which the Portfolios may invest.
Stripped mortgage securities are usually structured with two classes that
receive different proportions of the interest and principal distributions on
a pool of mortgage assets. A common type of stripped mortgage security will
have one class receiving some of the interest and most of the principal from
the mortgage assets, while the other class will receive most of the interest
and the remainder of the principal. In the most extreme case, one class will
receive all of the interest (the "interest-only" class), while the other
class will receive all of the principal (the "principal-only" class). The
yield to maturity on an interest-only class is extremely sensitive not only to
changes in prevailing interest rates but also to the rate of principal payments
(including prepayments) on the related underlying mortgage assets, and a rapid
rate of principal payments may have a material adverse effect on a Portfolio's
yield to maturity. If the underlying mortgage assets experience greater than
anticipated prepayments of principal, a Portfolio may fail to fully recoup its
initial investment in these securities even if the securities are rated in the
highest rating categories.
Although stripped mortgage securities are purchased and sold by institutional
investors through several investment banking firms acting as brokers or dealers,
these securities were only recently developed. As a result, established trading
markets have not yet been fully developed and, accordingly, these securities are
generally illiquid and to such extent, together with any other illiquid
investments, will not exceed 10% of a Portfolio's net assets.
CMOs and REMICs issued by private entities are not government securities and are
not directly guaranteed by any government agency. They are secured by the
underlying collateral of the private issuer. The Portfolios will invest in such
private-backed securities only if they are 100% collateralized at the time of
issuance by securities issued or guaranteed by the U.S. government, its agencies
or instrumentalities. The Portfolios currently invest in privately-issued CMOs
and REMICs only if they are rated at the time of purchase in the two highest
grades by a nationally-recognized statistical rating agency.
(25)
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ASSET-BACKED SECURITIES
The Fixed Income and Limited-Term Maturity Portfolios may also invest in
securities which are backed by assets such as receivables on home equity and
credit card loans, and receivables regarding automobile, mobile home and
recreational vehicle loans, wholesale dealer floor plans and leases. All such
securities must be rated in the highest rating category by a reputable credit
rating agency (e.g., AAA by S&P or Aaa by Moody's). Such receivables are
securitized in either a pass-through or a pay-through structure. Pass-through
securities provide investors with an income stream consisting of both principal
and interest payments in respect of the receivables in the underlying pool. Pay-
through asset-backed securities are debt obligations issued usually by a special
purpose entity, which are collateralized by the various receivables and in which
the payments on the underlying receivables provide the funds to pay the debt
service on the debt obligations issued. The Portfolios may invest in these and
other types of asset-backed securities that may be developed in the future. It
is the Portfolios' current policy to limit asset-backed investments to those
represented by interests in credit card receivables, wholesale dealer floor
plans, home equity loans and automobile loans.
The rate of principal payment on asset-backed securities generally depends upon
the rate of principal payments received on the underlying assets. Such rate of
payments may be affected by economic and various other factors such as changes
in interest rates. Therefore, the yield may be difficult to predict and actual
yield to maturity may be more or less than the anticipated yield to maturity.
Due to the shorter maturity of the collateral backing such securities, there is
less of a risk of substantial prepayment than with mortgage-backed securities.
See "MORTGAGE-BACKED SECURITIES" above. Such asset-backed securities do,
however, involve certain risks not associated with mortgage-backed securities,
including the risk that security interests cannot be adequately or in many
cases, ever, established. In addition, with respect to credit card receivables,
a number of state and federal consumer credit laws give debtors the right to set
off certain amounts owed on the credit cards, thereby reducing the outstanding
balance. In the case of automobile receivables, there is a risk that the holders
may not have either a proper or first security interest in all of the
obligations backing such receivables due to the large number of vehicles
involved in a typical issuance and technical requirements under state laws.
Therefore, recoveries on repossessed collateral may not always be available to
support payments on the securities.
SHORT-TERM INVESTMENTS
The short-term investments in which The Defensive Equity, The Aggressive Growth,
The International Equity, The Global Fixed Income and The International Fixed
Income Portfolios may invest consistent with the limits recited above (see
"INVESTMENT OBJECTIVES, POLICIES AND RISK CONSIDERATIONS") include the
following:
(1) Time deposits, certificates of deposit (including marketable variable rate
certificates of deposit) and bankers' acceptances issued by a U.S. commercial
bank. Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time at a stated interest rate. Time
deposits maturing in more than seven days will not be purchased by a Portfolio,
and time deposits maturing from two business days through seven calendar days
will not exceed 10% of the total assets of a Portfolio. Certificates of deposit
are negotiable short-term obligations issued by commercial banks against funds
deposited in the issuing institution. Variable rate certificates of deposit are
certificates of deposit on which the interest rate is periodically adjusted
prior to their stated maturity based upon a specified market rate. A bankers'
acceptance is a time draft drawn on a commercial bank by a borrower usually in
connection with an international commercial transaction (to finance the import,
export, transfer or storage of goods).
(26)
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A Portfolio will not invest in any security issued by a commercial bank unless
(i) the bank has total assets of at least $1 billion or, in the case of a bank
which does not have total assets of at least $1 billion, the aggregate
investment made in any one such bank is limited to $100,000 and the principal
amount of such investment is insured in full by the Federal Deposit Insurance
Corporation, (ii) it is a member of the Federal Deposit Insurance Corporation,
and (iii) the bank or its securities have received the highest quality rating by
a nationally-recognized statistical rating organization;
(2) Commercial paper with the highest quality rating by a nationally-recognized
statistical rating organization (e.g., A-1 by S&P or Prime-1 by Moody's) or, if
not so rated, of comparable quality as determined by a Portfolio's investment
adviser;
(3) Short-term corporate obligations with the highest quality rating by a
nationally-recognized statistical rating organization (e.g., AAA by S&P or
Aaa by Moody's) or, if not so rated, of comparable quality as determined by a
Portfolio's investment adviser;
(4) U.S. government securities (see "U.S. GOVERNMENT SECURITIES"); and
(5) Repurchase agreements collateralized by securities listed above.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES
Each Portfolio of the Fund may purchase securities on a when-issued or delayed
delivery basis. In such transactions, instruments are purchased with payment and
delivery taking place in the future in order to secure what is considered to be
an advantageous yield or price at the time of the transaction. Delivery of and
payment for these securities may take as long as a month or more after the date
of the purchase commitment. Each Portfolio will maintain with the Custodian Bank
a separate account with a segregated portfolio of securities in an amount at
least equal to these commitments. The payment obligation and the interest rates
that will be received are each fixed at the time a Portfolio enters into the
commitment and no interest accrues to the Portfolio until settlement. Thus, it
is possible that the market value at the time of settlement could be higher or
lower than the purchase price if the general level of interest rates has
changed. It is a current policy of the Portfolios not to enter into when-issued
commitments exceeding in the aggregate 15% of the market value of the
Portfolio's total assets less liabilities other than the obligations created by
these commitments.
REPURCHASE AGREEMENTS
Each Portfolio may enter into repurchase agreements with brokers, dealers or
banks deemed to be creditworthy by a Portfolio's investment adviser under
guidelines of the Fund's directors. In a repurchase agreement, a Portfolio
buys securities from a seller that has agreed to repurchase it at a mutually
agreed upon date and price, reflecting the interest rate effective for the
term of the agreement. The term of these agreements is usually from overnight
to one week and never exceeds one year. Not more than 10% of a Portfolio's
assets may be invested in repurchase agreements having a maturity in excess
of seven days. Repurchase agreements may be viewed as a fully collateralized
loan of money by a Portfolio to the seller. The Portfolio always receives
securities as collateral with a market value at least equal to the purchase
price and this value is maintained during the term of the agreement. If the
seller defaults and the collateral value declines, a Portfolio might incur a
loss. If bankruptcy proceedings are commenced with respect to the seller, a
Portfolio's realization upon the collateral may be delayed or limited. Each
Portfolio may invest cash balances in a joint repurchase agreement in
accordance with an Order the Delaware Group has obtained from the Commission
under Section 17(d) of the 1940 Act.
(27)
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SECURITIES LENDING ACTIVITIES
Each Portfolio may loan up to 25% of its assets to qualified broker/dealers or
institutional investors for their use relating to short sales or other security
transactions.
The major risk to which a Portfolio would be exposed on a loan transaction is
the risk that the borrower would go bankrupt at a time when the value of the
security goes up. Therefore, a Portfolio will only enter into loan arrangements
after a review of all pertinent facts by the investment adviser, subject to
overall supervision by the Board of Directors, including the creditworthiness of
the borrowing broker, dealer or institution and then only if the consideration
to be received from such loans would justify the risk. Creditworthiness will be
monitored on an ongoing basis by the investment adviser.
BORROWING FROM BANKS
Each Portfolio may borrow money as a temporary measure or to facilitate
redemptions. No Portfolio has the intention of increasing its net income through
borrowing. Any borrowing will be done from a bank and, consistent with
Commission rules, immediately after any borrowing is in an amount which exceeds
5% of its net assets, there must be asset coverage of at least 300%. In the
event the asset coverage declines below 300%, a Portfolio would take steps to
reduce the amount of its borrowings so that asset coverage would equal at least
300%. Securities will not be purchased while a Portfolio has an outstanding
borrowing.
FOREIGN INVESTMENT INFORMATION
The International Equity Portfolio, The Global Fixed Income Portfolio and The
International Fixed Income Portfolio will invest in securities of foreign
issuers and may hold foreign currency. Investments in obligations of foreign
issuers involve somewhat different investment risks than those affecting
obligations of United States issuers. There is limited publicly available
information with respect to foreign issuers, and foreign issuers are not subject
to uniform accounting, auditing and financial standards and requirements
comparable to those applicable to domestic companies. There is also less
government supervision and regulation of foreign securities exchanges, brokers
and listed companies than in the United States and it is more difficult to
enforce legal rights outside of the U.S. Many foreign securities markets have
substantially less volume than U.S. national securities exchanges, and
securities of some foreign issuers are less liquid and more volatile than
securities of comparable domestic issuers. Settlement practices of certain
foreign countries may include delays and may otherwise differ from those
customary in U.S. markets. Brokerage commissions and other transaction costs on
foreign securities exchanges are generally higher than in the United States. It
is also expected that the expenses for custodial arrangements of The
International Equity, The Global Fixed Income and The International Fixed Income
Portfolios' foreign securities will be somewhat greater than the expenses for
the custodial arrangements for U.S. securities of equal value. Dividends and
interest paid by foreign issuers may be subject to withholding and other foreign
taxes. Although in some countries a portion of these taxes is recoverable, the
non-recovered portion of foreign withholding taxes will reduce the income a
Portfolio receives from the companies comprising the Portfolio's investments.
See "TAXES." Additional risks include future political and economic
developments, the possibility that a foreign jurisdiction might impose or change
withholding taxes on income payable with respect to foreign securities, possible
seizure, nationalization or expropriation of the foreign issuer or foreign
deposits and the possible adoption of foreign government restrictions such as
exchange controls. Also, because a Portfolio may hold foreign currency and
because stocks of foreign companies are normally denominated in foreign
currencies, the Portfolio may be affected favorably or unfavorably by changes in
currency rates and exchange control regulations, and may incur costs in
connection with conversions between various currencies. See "FORWARD FOREIGN
CURRENCY EXCHANGE CONTRACTS" below.
(28)
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The risks noted above often are heightened for investments in emerging or
developing countries. Compared to the United States and other developed
countries, emerging or developing countries may have relatively unstable
governments, economies based on only a few industries, and securities markets
that trade a small number of securities. Prices on these exchanges tend to be
volatile and, in the past, securities in these countries have offered greater
potential for gain (as well as loss) than securities of companies located in
developed countries. Further, investments by foreign investors are subject to a
variety of restrictions in many emerging or developing countries. These
restrictions may take the form of prior governmental approval, limits on the
amount or type of securities held by foreigners, and limits on the type of
companies in which foreigners may invest. Additional restrictions may be imposed
at any time by these or other countries in which a Portfolio invests. In
addition, the repatriation of both investment income and capital from several
foreign countries is restricted and controlled under certain regulations,
including in some cases the need for certain government consents. Although these
restrictions may in the future make it undesirable to invest in emerging or
developing countries, the Portfolios' investment adviser does not believe that
any current repatriation restrictions would affect its decision to invest in
such countries.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
As noted above, the foreign investments made by The International Equity, The
Global Fixed Income and The International Fixed Income Portfolios present
currency considerations which pose special risks. The investment adviser uses a
purchasing power parity approach to evaluate currency risk. A purchasing power
parity approach attempts to identify the amount of goods and services that a
dollar will buy in the United States and compares that to the amount of a
foreign currency required to buy the same amount of goods and services in
another country. When the dollar buys less abroad, the foreign currency may be
considered to be overvalued. When the dollar buys more abroad, the foreign
currency may be considered to be undervalued. Eventually, currencies should
trade at levels that should make it possible for the dollar to buy the same
amount of goods and services overseas as in the United States.
Although The International Equity Portfolio, The Global Fixed Income Portfolio
and The International Fixed Income Portfolio value their assets daily in terms
of U.S. dollars, they do not intend to convert their holdings of foreign
currencies into U.S. dollars on a daily basis. A Portfolio will, however, from
time to time, purchase or sell foreign currencies and/or engage in forward
foreign currency transactions in order to expedite settlement of Portfolio
transactions and to minimize currency value fluctuations. A Portfolio may
conduct its foreign currency exchange transactions on a spot (i.e., cash) basis
at the spot rate prevailing in the foreign currency exchange market or through
entering into contracts to purchase or sell foreign currencies at a future date
(i.e., a "forward foreign currency" contract or "forward" contract). A Portfolio
will convert currency on a spot basis from time to time, and investors should be
aware of the costs of currency conversion.
A forward contract involves an obligation to purchase or sell a specific
currency at a future date, which may be any fixed number of days from the date
of the contract, agreed upon by the parties, at a price set at the time of the
contract.
A Portfolio may enter into forward contracts to "lock in" the price of a
security it has agreed to purchase or sell, in terms of U.S. dollars or other
currencies in which the transaction will be consummated. By entering into a
forward contract for the purchase or sale, for a fixed amount of U.S. dollars or
foreign currency, of the amount of foreign currency involved in the underlying
security transaction, a Portfolio will be able to protect itself against a
possible loss resulting from an adverse change in currency exchange rates during
the period between the date the security is purchased or sold and the date on
which payment is made or received.
(29)
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For example, when the investment adviser believes that the currency of a
particular foreign country may suffer a significant decline against the U.S.
dollar or against another currency, a Portfolio may enter into a forward
contract to sell, for a fixed amount of U.S. dollars or other appropriate
currency, the amount of foreign currency approximating the value of some or
all of the Portfolio's securities denominated in such foreign currency. A
Portfolio will not enter into forward contracts or maintain a net exposure to
such contracts where the consummation of the contracts would obligate the
Portfolio to deliver an amount of foreign currency in excess of the value of
the Portfolio's securities or other assets denominated in that currency.
The Portfolios may enter into forward contracts to hedge the currency risk
associated with the purchase of individual securities denominated in particular
currencies. In the alternative, the Portfolios may also engage in currency
"cross hedging" when, in the opinion of Delaware International, the historical
relationship among foreign currencies suggests that the Portfolios may achieve
the same protection for a foreign security at reduced cost and/or administrative
burden through the use of a forward contract relating to a currency other than
the U.S. dollar or the foreign currency in which the security is denominated.
At the maturity of a forward contract, a Portfolio may either sell the portfolio
security and make delivery of the foreign currency, or it may retain the
security and terminate its contractual obligation to deliver the foreign
currency by purchasing an "offsetting" contract with the same currency trader
obligating it to purchase, on the same maturity date, the same amount of the
foreign currency. The Portfolio may realize gain or loss from currency
transactions.
With respect to forward foreign currency contracts, the precise matching of
forward contract amounts and the value of the securities involved is generally
not possible since the future value of such securities in foreign currencies
will change as a consequence of market movements in the value of those
securities between the date the forward contract is entered into and the date it
matures. The projection of short-term currency strategy is highly uncertain.
It is impossible to forecast the market value of Portfolio securities at the
expiration of the contract. Accordingly, it may be necessary for a Portfolio to
purchase additional foreign currency on the spot market (and bear the expense of
such purchase) if the market value of the security is less than the amount of
foreign currency the Portfolio is obligated to deliver and if a decision is made
to sell the security and make delivery of the foreign currency. Conversely, it
may be necessary to sell on the spot market some of the foreign currency
received upon the sale of a Portfolio security if its market value exceeds the
amount of foreign currency the Portfolio is obligated to deliver.
HIGH YIELD, HIGH RISK SECURITIES
The International Fixed Income Portfolio and The Global Fixed Income Portfolio
may each invest up to 5% of its assets in high risk, high yield fixed income
securities of foreign governments, including so-called Brady Bonds. These
securities are rated lower than BBB by S&P and Baa by Moody's or, if unrated,
are considered by the investment manager to have characteristics similar to such
rated securities. See "APPENDIX A-RATINGS" to this Prospectus for more rating
information. Fixed income securities of this type are considered to be of poor
standing and predominantly speculative. Such securities are subject to a
substantial degree of credit risk.
In the past, the high yields from these bonds have more than compensated for
their higher default rates. There can be no assurance, however, that yields will
continue to offset default rates on these bonds in the future. The investment
manager intends to maintain an adequately diversified portfolio of these bonds.
While diversification can help to reduce the effect of an individual default on
the Portfolios, there can be no assurance that diversification will protect the
Portfolios from widespread bond defaults brought about by a sustained economic
downturn.
(30)
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Medium and low-grade bonds held by the Portfolios may be issued as a consequence
of corporate restructurings, such as leveraged buy-outs, mergers, acquisitions,
debt recapitalizations or similar events. Also these bonds are often issued by
smaller, less creditworthy companies or by highly leveraged (indebted) firms,
which are generally less able than more financially stable firms to make
scheduled payments of interest and principal. The risks posed by bonds issued
under such circumstances are substantial.
The economy and interest rates may affect these high yield, high risk securities
differently from other securities. Prices have been found to be less sensitive
to interest rate changes than higher rated investments, but more sensitive to
adverse economic changes or individual corporate developments. Also, during an
economic downturn or substantial period of rising interest rates, highly
leveraged issuers may experience financial stress which would adversely affect
their ability to service principal and interest payment obligations, to meet
projected business goals and to obtain additional financing. Changes by
recognized rating agencies in their rating of any security and in the ability of
an issuer to make payments of interest and principal will also ordinarily have a
more dramatic effect on the values of these investments than on the values of
higher-rated securities. Such changes in value will not affect cash income
derived from these securities, unless the issuers fail to pay interest or
dividends when due. Such changes will, however, affect the Portfolios' net asset
value per share.
The Portfolios also have the ability to invest in Brady Bonds issued pursuant
to the Brady Plan. Brady Bonds are debt securities issued under the framework
of the Brady Plan, an initiative announced by former U.S. Treasury Secretary
Nicholas F. Brady in 1989 as a mechanism for debtor nations to restructure
their outstanding external indebtedness (generally commercial bank debt). In
restructuring its external debt under the Brady Plan framework, a debtor nation
negotiates with its existing bank lenders as well as multilateral institutions
such as the World Bank and the International Monetary Fund. The Brady Plan
framework, as it has developed, contemplates the exchange of commercial bank
debt for new issued bonds (Brady Bonds). The investment manager believes that
economic reforms undertaken by countries in connection with the issuance of
Brady Bonds make the debt of countries which have issued or have announced plans
to issue Brady Bonds an attractive opportunity for investment. Investors,
however, should recognize that the Brady Plan only sets forth general guiding
principles for economic reform and debt reduction, emphasizing that solutions
must be negotiated on a case-by-case basis between debtor nations and their
creditors. In addition, Brady Bonds have been issued only recently and,
accordingly, do not have a long payment history. See "FOREIGN INVESTMENT
INFORMATION" above.
FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS
In order to remain fully invested, to facilitate investments in equity
securities and to reduce transaction costs, The Aggressive Growth Portfolio
may, to a limited extent, enter into futures contracts, purchase or sell
options on futures contracts and engage in certain transactions in options on
securities, and may enter into closing transactions with respect to such
activities. The Portfolio will only enter into these transactions for hedging
purposes if it is consistent with the Portfolio's investment objective and
policies and the Portfolio will not engage in such transactions to the extent
that obligations relating to futures contracts, options on futures contracts
and options on securities, in the aggregate, exceed 25% of the Portfolio's
assets.
Additionally, The International Fixed Income Portfolio may enter into futures
contracts, purchase or sell options on futures contracts, and trade in
options on foreign currencies, and may enter into closing transactions with
respect to such activities. The Portfolio will enter into such transactions
to hedge or "cross hedge" the currency risks associated with its investments,
as described under "FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS," above.
(31)
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The Aggressive Growth Portfolio may enter into contracts for the purchase or
sale for future delivery of securities. When a futures contract is sold, the
Portfolio incurs a contractual obligation to deliver the securities underlying
the contract at a specified price on a specified date during a specified future
month. A purchase of a futures contract means the acquisition of a contractual
right to obtain delivery to the Portfolio of the securities called for by the
contract at a specified price during a specified future month. Because futures
contracts require only a small initial margin deposit, the Portfolio would then
be able to keep a cash reserve applicable to meet potential redemptions while at
the same time being effectively fully invested.
Foreign currency futures contracts operate similarly to futures contracts
concerning securities. When The International Fixed Income Portfolio sells a
futures contract on a foreign currency, it is obligated to deliver that foreign
currency at a specified future date. Similarly, a purchase by the Portfolio
gives it a contractual right to receive a foreign currency. This enables the
Portfolio to "lock in" exchange rates.
The Portfolios may also purchase and write options to buy or sell futures
contracts. Options on futures are similar to options except that options on
futures give the purchaser the right, in return for the premium paid, to assume
a position in a futures contract, rather than actually to purchase or sell the
futures contract, at a specified exercise price at any time during the period of
the option. The Portfolios will not enter into futures contracts and options
thereon to the extent that more than 5% of a Portfolio's assets are required as
futures contract margin deposits and premiums on options and only to the extent
that obligations under such contracts and options would not exceed 20% of the
Portfolio's total assets.
To the extent that interest or exchange rates move in an unexpected direction,
the Portfolio may not achieve the anticipated benefits of investing in futures
contracts and options thereon, or may realize a loss. To the extent that a
Portfolio purchases an option on a futures contract and fails to exercise the
option prior to the exercise date, it will suffer a loss of the premium paid.
Further, the possible lack of a secondary market would prevent the Portfolio
from closing out its positions relating to futures.
OPTIONS
OPTIONS ON SECURITIES
The Aggressive Growth Portfolio may write covered call options on U.S. or
foreign securities, purchase call options on such securities and enter into
closing transactions related thereto. The Portfolio may also purchase put
options on U.S. or foreign securities, may write secured put options on such
securities and enter into closing transactions related thereto.
A covered call option obligates the writer, in return for the premium received,
to sell one of its securities to the purchaser of the option for an agreed price
up to an agreed date. The advantage is that the writer receives premium income
and the purchaser may hedge against an increase in the price of securities it
ultimately wishes to buy. The Portfolio will only purchase call options to the
extent that premiums paid on all outstanding call options do not exceed 2% of
the Portfolio's total assets.
A put option obligates the writer, in return for the premium received, to buy
the security underlying the option at the exercise price during the option
period, and the purchaser of the option has the right to sell the security to
the writer. The Portfolio will only write put options on a secured basis which
means that the Portfolio will maintain, in a segregated account with the
Custodian Bank, cash or U.S. government securities in an amount not less than
the exercise price of the option at all times during the option period. The
Portfolio will only purchase put options if the Portfolio owns the security
covered by the put option at the time of purchase
(32)
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and to the extent that the premiums on all outstanding put options do not exceed
2% of the Portfolio's total assets. The advantage is that the writer receives
premium income while the purchaser can be protected should the market value of
the security decline.
Closing transactions essentially let the Portfolio offset put options or call
options prior to exercise or expiration. If the Portfolio cannot effect closing
transactions, it may have to hold a security it would otherwise sell or deliver
a security it might want to hold.
The Portfolio may use both Exchange-traded and over-the-counter options. Certain
over-the-counter options may be illiquid. The Portfolio will only invest in such
options to the extent consistent with its 10% limit on investments in illiquid
securities.
With respect to writing covered call options, the Portfolio may lose the
potential market appreciation of the securities subject to the option, if the
investment adviser's judgment is wrong and the price of the security moves in
the opposite direction from what was anticipated. In purchasing put and call
options, the premium paid by the Portfolio plus any transaction costs will
reduce any benefit realized by the Portfolio upon exercise of the option. When
writing put options, the Portfolio may be required, when the put is exercised,
to purchase securities at higher prices than current market prices.
OPTIONS ON FOREIGN CURRENCIES
The International Fixed Income Portfolio may purchase call options and write
covered call options on foreign currencies and enter into related closing
transactions. The Portfolio may also purchase put options and write secured put
options on foreign currencies and enter into related closing transactions. The
Portfolio will enter into such transactions to hedge or "cross hedge" the
currency risks associated with its investments, as described under "FORWARD
FOREIGN CURRENCY EXCHANGE CONTRACTS," above.
Options on foreign currencies operate similarly to options on securities. The
purchase of an option on a foreign currency may constitute an effective hedge
against fluctuations in exchange rates although, in the event of a rate movement
adverse to the Portfolio's position, the Portfolio may forfeit the entire amount
of the premium plus any related transaction costs. As in the case of other types
of options, the writing of an option on a foreign currency will constitute only
a partial hedge, up to the amount of the premium received, and the Portfolio
could be required to purchase or sell foreign currencies at disadvantageous
exchange rates, thereby incurring losses.
The Portfolio will write call options only if they are "covered" and put options
only if they are secured. A call written by the Portfolio will be considered
covered if the Portfolio owns short-term debt securities with a value equal to
the face amount of the option contract and denominated in the currency upon
which the call is written. A put option written by the Portfolio will be
considered secured if, so long as the Portfolio is obligated as the writer of
the put, it segregates with its Custodian Bank cash or liquid high grade debt
securities equal at all times to the aggregate exercise price of the put.
RISKS OF TRANSACTIONS IN OPTIONS, FUTURES AND FORWARD CONTRACTS
The use of futures contracts, options on futures contracts, forward contracts
and certain options for hedging and other non-speculative purposes as described
above involves certain risks. For example, a lack of correlation between price
changes of an option or futures contract and the assets being hedged could
render a Portfolio's hedging strategy unsuccessful and could result in losses.
The same results could occur if movements of foreign currencies do not correlate
as expected by Delaware International at a time when The International Equity,
The Global Fixed Income or The International Fixed Income Portfolio is using a
hedging instrument denominated in one foreign currency to protect the value of a
security denominated in a
(33)
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second foreign currency against changes caused by fluctuations in the exchange
rate for the dollar and the second currency. If the direction of securities
prices, interest rates or foreign currency prices is incorrectly predicted, the
Portfolio will be in a worse position than if such transactions had not been
entered into. In addition, since there can be no assurance that a liquid
secondary market will exist for any contract purchased or sold, a Portfolio may
be required to maintain a position (and in the case of written options may be
required to continue to hold the securities used as cover) until exercise or
expiration, which could result in losses. Further, options and futures contracts
on foreign currencies, and forward contracts, entail particular risks related to
conditions affecting the underlying currency. Over-the-counter transactions in
options and forward contracts also involve risks arising from the lack of an
organized exchange trading environment.
RESTRICTED/ILLIQUID SECURITIES
Each Portfolio may invest in restricted securities, including securities
eligible for resale without registration pursuant to Rule 144A ("Rule 144A
Securities") under the Securities Act of 1933 ("1933 Act"). Rule 144A exempts
many privately placed and legally restricted securities from the registration
requirements of the 1933 Act and permits such securities to be freely traded
among certain institutional buyers such as the Portfolios. Each Portfolio, other
than The International Fixed Income Portfolio may invest no more than 10% of the
value of its net assets in illiquid securities. The International Fixed Income
Portfolio may invest no more than 15% of the value of its net assets in illiquid
securities. Illiquid securities, for purposes of this policy, include repurchase
agreements maturing in more than seven days.
While maintaining oversight, the Board of Directors has delegated to each
Portfolio's investment manager the day-to-day functions of determining whether
or not individual Rule 144A Securities are liquid for purposes of a Portfolio's
10% limitation on investments in illiquid assets. The Board has instructed each
Portfolio's investment manager to consider the following factors in determining
the liquidity of a Rule 144A Security: (i) the frequency of trades and trading
volume for the security; (ii) whether at least three dealers are willing to
purchase or sell the security and the number of potential purchasers; (iii)
whether at least two dealers are making a market in the security; and (iv) the
nature of the security and the nature of the marketplace trades (e.g., the time
needed to dispose of the security, the method of soliciting offers and the
mechanics of transfer).
If an investment adviser determines that a Rule 144A Security which was
previously determined to be liquid is no longer liquid and, as a result, the
Portfolio's holdings of illiquid securities exceed the Portfolio's 10% limit on
investment in such securities, the investment adviser will determine what action
shall be taken to ensure that the Portfolio continues to adhere to such
limitation.
- --------------
INVESTMENT
LIMITATIONS
Each Portfolio's investment objectives, their designation as a diversified
portfolio or, in the case of The Global Fixed Income and The International Fixed
Income Portfolios, as non-diversified portfolios, and their policies concerning
portfolio lending, borrowing from a bank and concentration of investments in
specific industries may not be changed unless authorized by the vote of a
majority of a Portfolio's outstanding voting securities. A "majority vote of the
outstanding voting securities" is the vote by the holders of the lesser of a)
67% or more of a Portfolio's voting securities present in person or represented
by proxy; or b) more than 50% of the outstanding voting securities. The
Statement of Additional Information lists other more specific investment
restrictions of each Portfolio which may not be changed without a majority
shareholder vote.
(34)
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Except as specified above and under the heading "INVESTMENT OBJECTIVES, POLICIES
AND RISK CONSIDERATIONS" and as described under "INVESTMENT POLICIES, PORTFOLIO
TECHNIQUES AND RISK CONSIDERATIONS," in the Statement of Additional Information,
the foregoing investment policies are not fundamental and the directors may
change such policies without an affirmative vote of a "majority of the Fund's
outstanding voting securities," as defined in the 1940 Act.
- ------------
MANAGEMENT
OF THE FUND
DIRECTORS
The business and affairs of the Fund and its Portfolios are managed under the
direction of the Fund's Board of Directors. See "FUND OFFICERS AND PORTFOLIO
MANAGERS" in the Prospectus Summary and the Fund's Statement of Additional
Information for additional information about the Fund's officers and directors.
INVESTMENT ADVISERS
Delaware Investment Advisers, a division of Delaware Management Company, Inc.
("Delaware"), furnishes investment advisory services to The Defensive Equity,
The Aggressive Growth, The Fixed Income and The Limited-Term Maturity
Portfolios. Delaware and its predecessors have been managing the funds in the
Delaware Group since 1938. On October 31, 1994, Delaware and its affiliate,
Delaware International, were supervising in the aggregate more than $25 billion
in assets in various institutional (approximately $16,074,376,000) and
investment company (approximately $4,525,500,000) accounts.
Delaware International Advisers Ltd. ("Delaware International") furnishes
investment advisory services to The International Equity Portfolio, The Global
Fixed Income Portfolio and The International Fixed Income Portfolio. Several of
the principals of Delaware International were previously associated with a
registered investment adviser which managed the assets of a registered
investment company. Delaware International commenced operations as a registered
investment adviser in December 1990.
Delaware has entered into Investment Advisory Agreements with the Fund on behalf
of The Defensive Equity, The Aggressive Growth, The Fixed Income and The
Limited-Term Maturity Portfolios. Delaware International has entered into
Investment Advisory Agreements with the Fund on behalf of The International
Equity Portfolio, The Global Fixed Income Portfolio and The International Fixed
Income Portfolio. Under these Agreements, Delaware and Delaware International,
subject to the control and supervision of the Fund's Board of Directors and in
conformance with the stated investment objective and policies of the Portfolios
with which they have an agreement, manage the investment and reinvestment of the
assets of the Portfolios with which they have agreements. In this regard, it is
their responsibility to make investment decisions for the respective Portfolios.
As compensation for the services to be rendered under their advisory agreements,
Delaware or, as relevant, Delaware International is entitled to an advisory fee
calculated by applying a quarterly rate, based on the following annual
percentage rates, to the Portfolio's average daily net assets for the quarter:
<TABLE>
<CAPTION>
PORTFOLIO RATE
<S> <C>
The Defensive Equity Portfolio .55%
The Aggressive Growth Portfolio .80%
The Fixed Income Portfolio .40%
The Limited-Term Maturity Portfolio .30%
The International Equity Portfolio .75%
The Global Fixed Income Portfolio .50%
The International Fixed Income Portfolio .50%
</TABLE>
(35)
<PAGE>
DELAWARE
POOLED
TRUST
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As noted in "FUND EXPENSES," Delaware or, as relevant, Delaware International
elected voluntarily to waive that portion, if any, of its investment advisory
fees and to reimburse a Portfolio's expenses to the extent necessary to ensure
that a Portfolio's expenses (investment advisory fees, plus certain other noted
expenses) do not exceed, on an annualized basis, the amounts noted in that
section of this Prospectus through April 30, 1995. In addition, out of the
investment advisory fees to which they are otherwise entitled, Delaware and
Delaware International pay their proportionate share of the fees paid to
unaffiliated directors by the Fund, except that Delaware International will make
no such payments out of the fees it receives for managing The International
Fixed Income Portfolio. For the fiscal year ended October 31, 1994, the
investment management fees earned by The Defensive Equity, The Aggressive
Growth, The International Equity and The Global Fixed Income Portfolios were
0.54%, 0.79%, 0.74% and 0.49%, respectively, of average daily net assets. After
considering the waiver of fees by the respective investment manager, as
described above, the fee paid by The Defensive Equity, The Aggressive Growth,
The International Equity and The Global Fixed Income Portfolios amounted to
0.39%, 0.55%, 0.71% and 0.35%, respectively, of average daily net assets.
Delaware is an indirect, wholly-owned subsidiary of Delaware Management
Holdings, Inc. ("DMH"). By reason of its percentage ownership of DMH common
stock and through a Voting Trust Agreement with certain other DMH shareholders,
Legend Capital Group, L.P. ("Legend") controls DMH and Delaware. As General
Partners of Legend, Leonard M. Harlan and John K. Castle have the ability to
direct the voting of more than a majority of the shares of DMH common stock and
thereby control Delaware. Delaware's address is One Commerce Square, 2005 Market
Street, Philadelphia, PA 19103. Delaware International is controlled and is
indirectly wholly-owned by DMH and thus, by Legend and Messrs. Harlan and
Castle. Delaware International's address is Veritas House, 125 Finsbury
Pavement, London, England EC2A 1NQ.
ADMINISTRATOR
Delaware Service Company, Inc., an affiliate of Delaware and an indirect,
wholly-owned subsidiary of DMH, provides the Fund with administrative services
pursuant to the Amended and Restated Shareholders Services Agreement with the
Fund on behalf of the Portfolios. The services provided under the Amended and
Restated Shareholders Services Agreement are subject to the supervision of the
officers and directors of the Fund, and include day-to-day administration of
matters related to the corporate existence of the Fund, maintenance of its
records, preparation of reports, supervision of the Fund's arrangements with its
Custodian Bank, and assistance in the preparation of the Fund's registration
statements under Federal and State laws. The Amended and Restated Shareholders
Services Agreement also provides that Delaware Service Company, Inc. will
provide the Fund with dividend disbursing and transfer agent services. Delaware
Service Company, Inc. is located at 1818 Market Street, Philadelphia, PA 19103.
For its services under the Amended and Restated Shareholders Services Agreement,
the Fund pays Delaware Service Company, Inc. an annual fixed fee, payable
monthly, and allocated among the Portfolios of the Fund based on the relative
percentage of assets of each Portfolio.
(36)
<PAGE>
DELAWARE
POOLED
TRUST
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DISTRIBUTOR
Delaware Distributors, Inc. ("DDI"), 1818 Market Street, Philadelphia, PA 19103,
serves as the exclusive Distributor of the shares of the Fund's Portfolios.
Under its Distribution Agreements with the Fund on behalf of each Portfolio, DDI
sells shares of the Fund upon the terms and at the current offering price
described in this Prospectus. DDI is not obligated to sell any certain number of
shares of the Fund. DDI is an indirect, wholly-owned subsidiary of DMH.
EXPENSES
Each Portfolio is responsible for payment of certain other fees and expenses
(including legal fees, accountants' fees, custodial fees and printing and
mailing costs) specified in the Amended and Restated Shareholders Services
Agreement and each of the respective Distribution Agreements. The ratio of
expenses to average daily net assets for The Defensive Equity, The Aggressive
Growth, The International Equity and The Global Fixed Income Portfolios was
0.68%, 0.93%, 0.94% and 0.62%, respectively. These ratios reflect the waiver of
fees by the respective investment manager, as described above.
- -------------
SHAREHOLDER
SERVICES
SPECIAL REPORTS AND OTHER SERVICES
The Fund provides client shareholders with annual audited financial reports and
unaudited semi-annual financial reports. In addition, the investment advisers'
dedicated service staff will provide client shareholders a detailed monthly
appraisal of the status of their account and a complete review of portfolio
assets, performance results, and other pertinent data. Finally, the investment
advisers expect to conduct personal reviews no less than annually with each
client shareholder, with interim telephone updates and other communication, as
appropriate. The Fund's dedicated telephone number, (1-800-231-8002), is
available for shareholder inquiries during normal business hours. The net asset
values for the Portfolios are also available by using the above "800" telephone
number.
EXCHANGE PRIVILEGE
Each Portfolio's shares may be exchanged for shares of the Fund's other
Portfolios based on the respective net asset values of the shares involved and
as long as a Portfolio's minimum is satisfied. Exchange requests should be sent
to Delaware Pooled Trust, Inc., One Commerce Square, 2005 Market Street,
Philadelphia, PA 19103, Attn: Client Services. Such an exchange would be
considered a taxable event in instances where an institutional shareholder is
subject to tax. The exchange privilege is only available with respect to
Portfolios that are registered for sale in a shareholder's state of residence.
The Fund reserves the right to suspend or terminate, or amend the terms of, the
exchange privilege upon 60 days' written notice to client shareholders.
- ----------------
DIVIDENDS AND
CAPITAL GAINS
DISTRIBUTIONS
The Fund maintains the following dividend and capital gains policies for its
seven Portfolios.
The Fixed Income, The Limited-Term Maturity, The Global Fixed Income and The
International Fixed Income Portfolios expect to declare dividends daily and
distribute them monthly. The Defensive Equity and The International Equity
Portfolios expect to declare and distribute all of their net investment income
to shareholders as dividends quarterly. The Aggressive Growth Portfolio expects
to declare and distribute all of its net investment income to shareholders as
dividends annually.
Net capital gains, if any, will be distributed annually. All dividends and
capital gains distributions are automatically paid in additional shares at net
asset value of the Portfolio.
(37)
<PAGE>
DELAWARE
POOLED
TRUST
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In addition, in order to satisfy certain distribution requirements of the Tax
Reform Act of 1986, each Portfolio may declare special year-end dividend and
capital gains distributions during October, November or December to shareholders
of record on a date in such month. Such distributions, if received by
shareholders by January 31, are deemed to have been paid by a Portfolio and
received by shareholders on the earlier of the date paid or December 31 of the
prior year.
For the fiscal year ended October 31, 1994, a dividend of $0.280, $0.020, $0.949
and $0.160 per share of The Defensive Equity, The Aggressive Growth, The Global
Fixed Income and The International Equity Portfolios, respectively, was paid
from net investment income. In addition, a distribution of $0.343, $0.210,
$0.577 and $0.100 per share of The Defensive Equity, The Aggressive Growth, The
Global Fixed Income, and The International Equity Portfolios, respectively, was
paid from realized securities profits.
- --------
TAXES
GENERAL
Each Portfolio within the Fund has qualified or intends to qualify, and each
intends to continue to qualify, as a regulated investment company under the
Internal Revenue Code (the "Code"). As such, a Portfolio will not be subject to
federal income or excise tax to the extent its earnings are distributed to its
shareholders as provided in the Code.
Each Portfolio intends to distribute substantially all of its net investment
income and net capital gains. Dividends from net investment income or net short-
term capital gains will be taxable to you as ordinary income. For corporate
investors, dividends paid by The Defensive Equity and The Aggressive Growth
Portfolios from net investment income will generally qualify, in part, for the
intercorporate dividends-received deduction. However, the portion of the
dividends so qualified depends on the aggregate qualifying dividend income
received by a Portfolio from domestic (U.S.) sources. Of the dividends paid by
The Defensive Equity and The Aggressive Growth Portfolios for the fiscal year
ended October 31, 1994, 42% and 100%, respectively, were eligible for this
deduction.
Distributions paid by a Portfolio from long-term capital gains and reinvested in
additional shares, are taxable to those investors who are subject to income
taxes as long-term capital gains, regardless of the length of time an investor
has owned shares in a Portfolio. The Portfolios do not seek to realize any
particular amount of capital gains during a year; rather, realized gains are a
byproduct of Portfolio management activities. Consequently, capital gains
distributions may be expected to vary considerably from year to year. Also, for
those investors subject to tax, if purchases of shares in a Portfolio are made
shortly before the record date for a dividend or capital gains distribution, a
portion of the investment will be returned as a taxable distribution.
The sale of shares of a Portfolio is a taxable event and may result in a capital
gain or loss to shareholders subject to tax. Capital gain or loss may be
realized from an ordinary redemption of shares or an exchange of shares between
two mutual funds (or two portfolios of a mutual fund). Any loss incurred on the
sale or exchange of the shares of a Portfolio, held for six months or less, will
be treated as a long-term capital loss to the extent of capital gain dividends
received with respect to such shares.
Each year, the Fund will mail to you information on the amount and tax status of
each Portfolio's dividends and distributions. Shareholders should consult their
own tax advisers regarding specific questions as to federal, state or local
taxes.
(38)
<PAGE>
DELAWARE
POOLED
TRUST
- --------
The Fund is required to withhold 31% of taxable dividends, capital gains
distributions, and redemptions paid to shareholders who have not complied with
IRS taxpayer identification regulations. You may avoid this withholding
requirement by certifying on your Account Registration Form your proper Taxpayer
Identification Number and by certifying that you are not subject to backup
withholding.
THE INTERNATIONAL EQUITY PORTFOLIO, THE GLOBAL FIXED INCOME PORTFOLIO
AND THE INTERNATIONAL FIXED INCOME PORTFOLIO--FOREIGN TAXES
Each of the International Equity Portfolio, The Global Fixed Income Portfolio
and The International Fixed Income Portfolio may elect to "pass-through" to its
shareholders the amount of foreign income taxes paid by such Portfolio. A
Portfolio will make such an election only if it deems it to be in the best
interests of its shareholders.
If this election is made, shareholders of a Portfolio will be required to
include in their gross income their pro-rata share of foreign taxes paid by the
Portfolio. However, shareholders will be able to treat their pro-rata share of
foreign taxes as either an itemized deduction or a foreign tax credit (but not
both) against U.S. income taxes on their tax return.
The tax discussion set forth above is included for general information only.
Prospective investors should consult their own tax advisers concerning the tax
consequences of an investment in the Fund.
VALUATION OF SHARES
The net asset value per share of each Portfolio is determined by dividing the
total market value of the Portfolio's investments and other assets, less any
liabilities, by the total outstanding shares of the Portfolio. Net asset value
per share is determined as of the close of regular trading on the NYSE on each
day the NYSE is open for business. Securities listed on a U.S. securities
exchange for which market quotations are available are valued at the last quoted
sale price on the day the valuation is made. Price information on listed
securities is taken from the exchange where the security is primarily traded.
Securities listed on a foreign exchange are valued at the last quoted sale price
available before the time when net assets are valued. Unlisted securities and
listed securities not traded on the valuation date for which market quotations
are readily available are valued at a price that is considered to best represent
fair value within a range not in excess of the current asked price nor less than
the current bid prices. Domestic equity securities traded over-the-counter,
domestic equity securities which are not traded on the valuation date and U.S.
government securities are priced at the mean of the bid and ask price.
Bonds and other fixed income securities are valued according to the broadest and
most representative market, which will ordinarily be the over-the-counter
market. In addition, bonds and other fixed income securities may be valued on
the basis of prices provided by a pricing service when such prices are believed
to reflect the fair market value of such securities. The prices provided by a
pricing service are determined without regard to bid or last sale prices but
take into account institutional size trading in similar groups of securities and
any developments related to the specific securities. Securities not priced in
this manner are valued at the most recent quoted mean price, or, when stock
exchange valuations are used, at the latest quoted sale price on the day of
valuation. If there is no such reported sale, the latest quoted mean price will
be used. Securities with remaining maturities of 60 days or less are valued at
amortized cost, if it approximates market value. In the event that amortized
cost does not approximate market value, market prices as determined above will
be used.
Exchange-traded options are valued at the last reported sales price or, if no
sales are reported, at the mean between the last reported bid and ask prices.
Non-exchange traded options are valued at fair value using a mathematical model.
Futures contracts are valued at their daily
(39)
<PAGE>
DELAWARE
POOLED
TRUST
- --------
quoted settlement price. The value of other assets and securities for which no
quotations are readily available (including restricted securities) are
determined in good faith at fair value using methods determined by the Fund's
Board of Directors.
The securities in which The International Equity Portfolio, The Global Fixed
Income Portfolio and The International Fixed Income Portfolio may invest from
time to time may be listed primarily on foreign exchanges which trade on days
when the NYSE is closed (such as Saturday). As a result, the net asset value of
those Portfolios may be significantly affected by such trading on days when
shareholders have no access to the Portfolios.
For purposes of calculating net asset value per share, all assets and
liabilities initially expressed in foreign currencies will be converted into
U.S. dollars at the mean between the bid and ask price of such currencies
against the U.S. dollar as provided by an independent pricing service or any
major bank, including the Custodian Bank. Forward foreign currency contracts are
valued at the mean price of the contracts. Interpolated values will be derived
when the settlement date of the contract is on an interim period for which
quotations are not available.
PORTFOLIO TRANSACTIONS
In purchasing and selling securities for each of the Portfolios, the Fund
(and, in the case of The International Equity Portfolio, The Global Fixed
Income Portfolio and The International Fixed Income Portfolio, the investment
adviser) uses its best efforts to obtain the best available price and most
favorable execution and may pay higher commissions in recognition of
brokerage services which in the opinion of the Fund's trading department
(and, in the case of The International Equity Portfolio, The Global Fixed
Income Portfolio and The International Fixed Income Portfolio, the investment
manager) are necessary and in the best interest of the Fund's shareholders.
In selecting broker/dealers to execute the securities transactions for the
Portfolios, consideration will be given to such factors as the price of the
security, the rate of the commission, the size and difficulty of the order, the
reliability, integrity, financial condition, general execution and operational
capabilities of competing broker/dealers, and the brokerage and research
services which they provide to the Fund. These services may be used by the
investment advisers in servicing any of their other accounts. Some securities
considered for investment by each of the Fund's Portfolios may also be
appropriate for other clients served by the investment advisers. If a purchase
or sale of securities consistent with the investment policies of a Portfolio and
one or more of these other clients served by the investment advisers is
considered at or about the same time, transactions in such securities will be
allocated among the Portfolio and clients in a manner deemed fair and
reasonable. Although there is no specified formula for allocating such
transactions, the various allocation methods used and the results of such
allocations are subject to periodic review by the Fund's directors.
Since shares of the Fund's Portfolios are not marketed through intermediary
brokers or dealers, it is not the Fund's practice to allocate brokerage or
principal business on the basis of sales of shares which may be made through
such firms. However, portfolio orders may be placed with qualified
broker/dealers who recommend the Fund's Portfolios or who act as agents in the
purchase of shares of the Portfolios for their clients. The portfolio turnover
rates for the fiscal years ended October 31, 1993 and 1994 for The Defensive
Equity Portfolio were 37% and 73%, respectively. The portfolio turnover rates
for the fiscal years ended October 31, 1993 and 1994 for The Aggressive Growth
Portfolio were 81% and 43%, respectively. The portfolio turnover rates for the
fiscal year ended October 31, 1993 and 1994 for The International Equity
Portfolio were 28% and 22%, respectively. For the period November 30, 1992 (date
of initial sale) to October 31, 1993, The Global Fixed Income Portfolio's
annualized portfolio turnover rate was 198%, and for the fiscal year ended
October 31, 1994 was 205%. See "PORTFOLIO TURNOVER" under "TRADING PRACTICES AND
BROKERAGE" in the Statement of Additional Information.
(40)
<PAGE>
DELAWARE
POOLED
TRUST
- -----------
- -----------
PERFORMANCE
INFORMATION
From time to time, the Portfolios may quote yield in advertising and other types
of sales literature. The current yield for each of these Portfolios will be
calculated by dividing the annualized net investment income earned by each of
the Portfolios during a recent 30-day period by the offering price per share
(net asset value) on the last day of the period. The yield information provides
for semi-annual compounding which assumes that net investment income is earned
and reinvested at a constant rate and annualized at the end of a six-month
period. Each Portfolio also may quote total return performance in advertising
and other types of literature. Total return will be based on a hypothetical
$1,000 investment, reflecting the reinvestment of all distributions at net asset
value at the beginning of the specific period. Each presentation will include,
as relevant, the average annual total return for one-, five- and ten-year
periods. Each Portfolio may also advertise aggregate and average total return
information over additional periods of time.
Yield and net asset value fluctuate and are not guaranteed. Past performance
is not an indication of future results.
GENERAL INFORMATION
DESCRIPTION OF COMMON STOCK
The Fund was organized as a Maryland corporation on May 30, 1991. The Articles
of Incorporation permit the Fund to issue five hundred million shares of common
stock with $.01 par value and fifty million shares have been allocated to each
Portfolio. The Board of Directors has the power to designate one or more classes
of shares of common stock and to classify and reclassify any unissued shares
with respect to such classes.
The shares of each Portfolio, when issued, will be fully paid, non-assessable,
fully transferable and redeemable at the option of the holder. The shares have
no preference as to the conversion, exchange, dividends, retirement or other
features and have no preemptive rights. The shares of each Portfolio have
noncumulative voting rights, which means that the holders of more than 50% of
the shares voting for the election of directors can elect 100% of the directors
if they choose to do so. Shares of each Portfolio entitled to vote on a matter
will vote in the aggregate and not by Portfolio, except when the matter to be
voted upon affects only the interests of shareholders of a particular Portfolio
or when otherwise expressly required by law. The Fund does not issue
certificates for shares unless a shareholder submits a specific request. Under
Maryland law, the Fund is not required, and does not intend, to hold annual
meetings of its shareholders unless, under certain circumstances, it is required
to do so under the Investment Company Act of 1940.
CUSTODIAN BANK
Securities and cash are held by The Morgan Guaranty Trust Company of New York,
60 Wall Street, New York, NY 10260, as the Fund's custodian bank for all
Portfolios.
INDEPENDENT AUDITORS
Ernst & Young LLP, Two Commerce Square, 2001 Market Street, Suite 4000,
Philadelphia, PA 19103, serves as independent auditors for the Fund.
EXPENSES
Each Portfolio is responsible for all its own expenses other than those borne by
its investment adviser under the relevant Investment Advisory Agreement and the
distributor under the Distribution Agreement.
LITIGATION
The Fund is not involved in any litigation.
(41)
<PAGE>
DELAWARE
POOLED
TRUST
- -----------
- -----------
APPENDIX A-
RATINGS
BONDS
Excerpts from Moody's description of its bond ratings: Aaa--judged to be the
best quality. They carry the smallest degree of investment risk; Aa--judged to
be of high quality by all standards; A--possess favorable attributes and are
considered "upper medium" grade obligations; Baa--considered as medium grade
obligations. Interest payments and principal security appear adequate for the
present but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time; Ba--judged to have
speculative elements; their future cannot be considered as well assured. Often
the protection of interest and principal payments may be very moderate and
thereby not well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class; B--generally lack
characteristics of the desirable investment. Assurance of interest and principal
payments or of maintenance of other terms of the contract over any long period
of time may be small; Caa--are of poor standing. Such issues may be in default
or there may be present elements of danger with respect to principal or
interest; Ca--represent obligations which are speculative in a high degree. Such
issues are often in default or have other marked shortcomings; C--the lowest
rated class of bonds and issues so rated can be regarded as having extremely
poor prospects of ever attaining any real investment standing.
Excerpts from S&P's description of its bond ratings: AAA--highest grade
obligations. They possess the ultimate degree of protection as to principal and
interest; AA--also qualify as high grade obligations, and in the majority of
instances differ from AAA issues only in a small degree; A--strong ability to
pay interest and repay principal although more susceptible to changes in
circumstances; BBB--regarded as having an adequate capacity to pay interest and
repay principal; BB, B, CCC, CC--regarded, on balance, as predominantly
speculative with respect to capacity to pay interest and repay principal in
accordance with the terms of the obligation. BB indicates the lowest degree of
speculation and CC the highest degree of speculation. While such debt will
likely have some quality and protective characteristics, these are outweighed by
large uncertainties or major risk exposures to adverse conditions; C--reserved
for income bonds on which no interest is being paid; D--in default, and payment
of interest and/or repayment of principal is in arrears.
(42)
