<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
File No. 33-40991
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
Pre-Effective Amendment No. / /
--------
Post-Effective Amendment No. 11 / X /
--------
AND
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / X /
Amendment No. 11
--------
DELAWARE POOLED TRUST, INC.
- -------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
1818 Market Street, Philadelphia, Pennsylvania 19103
- -------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (215) 255-2923
--------------
George M. Chamberlain, Jr., 1818 Market Street, Philadelphia, PA 19103
- -------------------------------------------------------------------------------
(Name and Address of Agent for Service)
Approximate Date of Public Offering: May 29, 1996
------------
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b)
---------
X on May 29, 1996 pursuant to paragraph (b)
--------
60 days after filing pursuant to paragraph (a)(1)
---------
on date pursuant to paragraph (a)(1)
---------
75 days after filing pursuant to paragraph (a)(2)
---------
on (date) pursuant to paragraph (a)(2) of Rule 485.
---------
Registrant has registered an indefinite amount of securities
under the Securities Act of 1933 pursuant to Section 24(f)
of the Investment Company Act of 1940. The Rule 24f-2 Notice for
Registrant's most recent fiscal year was filed on November 17, 1995.
<PAGE> 2
Form N-1A
File No. 33-40991
Delaware Pooled Trust, Inc.
--- C O N T E N T S ---
This Post-Effective Amendment No. 11 to Registration File No. 33-40991
includes the following:
1. Facing Page
2. Contents Page
3. Cross-Reference Sheet
4. Part A - Prospectus
5. Part B - Statement of Additional Information
6. Part C - Other Information
7. Signatures
<PAGE> 3
Form N-1A
File No. 33-40991
Delaware Pooled Trust, Inc.
CROSS-REFERENCE SHEET
PART A
<TABLE>
<CAPTION>
Item No. Description Location in Prospectus
------- ----------- ----------------------
<S> <C> <C>
1 Cover Page . . . . . . . . . . . . . . . . . . . . . . . Cover
2 Fund Expenses . . . . . . . . . . . . . . . . . . . . . . Fund Expenses
3 Condensed Financial Information . . . . . . . . . . . . . Financial Highlights
4 General Description of Registrant . . . . . . . . . . . Investment Objectives, Policies
and Risk Considerations
5 Management of the Fund . . . . . . . . . . . . . . . . . Management of the Fund
6 Capital Stock and Other Securities . . . . . . . . . . . Dividends and Capital Gains
Distributions; Taxes
7 Purchase of Securities Being Offered . . . . . . . . . . Cover; Purchase of Shares;
Management of the Fund
8 Redemption or Repurchase . . . . . . . . . . . . . . . . Purchase of Shares;
Redemption of Shares
9 Legal Proceedings . . . . . . . . . . . . . . . . . . . . None
</TABLE>
<PAGE> 4
Form N-1A
File No. 33-40991
Delaware Pooled Trust, Inc.
PART B
<TABLE>
<CAPTION>
Location in Statement
Item No. Description of Additional Information
------- ----------- -------------------------
<S> <C> <C>
10 Cover Page . . . . . . . . . . . . . . . . . . . . . . . Cover
11 Table of Contents . . . . . . . . . . . . . . . . . . . . Table of Contents
12 General Information and History . . . . . . . . . . . . . General Information
13 Investment Objectives and Policies . . . . . . . . . . . Investment Policies, Portfolio
Techniques and Risk
Considerations
14 Management of the Registrant . . . . . . . . . . . . . . Officers and Directors
15 Control Persons and Principal Holders
of Securities . . . . . . . . . . . . . . . . . . . . . Officers and Directors
16 Investment Advisory and
Other Services . . . . . . . . . . . . . . . . . . . . . Investment Management
Agreements; Officers and
Directors; General Information;
Financial Statements
17 Brokerage Allocation . . . . . . . . . . . . . . . . . . Trading Practices and Brokerage
18 Capital Stock and Other Securities . . . . . . . . . . . Capitalization and Noncumulative
Voting (under General
Information)
19 Purchase, Redemption and Pricing of
Securities Being Offered . . . . . . . . . . . . . . . . Purchasing Shares; Determining
Net Asset Value; Redemption
and Repurchase
20 Tax Status . . . . . . . . . . . . . . . . . . . . . . . Accounting and Tax Issues; Taxes
21 Underwriters . . . . . . . . . . . . . . . . . . . . . . Purchasing Shares
22 Calculation of Performance Data . . . . . . . . . . . . . Performance Information
23 Financial Statements . . . . . . . . . . . . . . . . . . Financial Statements
</TABLE>
<PAGE> 5
Form N-1A
File No. 33-40991
Delaware Pooled Trust, Inc.
PART C
<TABLE>
<CAPTION>
Item No. Description Location in Part C
------- ----------- ------------------
<S> <C> <C>
24 Financial Statements and Exhibits . . . . . . . . . . . . Item 24
25 Persons Controlled by or under Common
Control with Registrant . . . . . . . . . . . . . . . Item 25
26 Number of Holders of Securities . . . . . . . . . . . . . Item 26
27 Indemnification . . . . . . . . . . . . . . . . . . . . . Item 27
28 Business and Other Connections of
Investment Adviser . . . . . . . . . . . . . . . . . . . Item 28
29 Principal Underwriters . . . . . . . . . . . . . . . . . Item 29
30 Location of Accounts and Records . . . . . . . . . . . . Item 30
31 Management Services . . . . . . . . . . . . . . . . . . . Item 31
32 Undertakings . . . . . . . . . . . . . . . . . . . . . . Item 32
</TABLE>
<PAGE> 6
(DPT-I)
DELAWARE POOLED TRUST
Delaware Pooled Trust, Inc. ("Fund") is a no-load, open-end management
investment company. The Fund consists of twelve 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:
<TABLE>
<CAPTION>
EQUITY ORIENTED FIXED INCOME ORIENTED
<S> <C>
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 DEFENSIVE EQUITY SMALL/MID-CAP PORTFOLIO THE INTERNATIONAL FIXED INCOME PORTFOLIO
THE DEFENSIVE EQUITY UTILITY PORTFOLIO THE HIGH-YIELD BOND PORTFOLIO
THE LABOR SELECT INTERNATIONAL EQUITY PORTFOLIO
THE REAL ESTATE INVESTMENT TRUST PORTFOLIO
</TABLE>
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.
The High-Yield Bond Portfolio of the Fund invests up to 100% of its assets in
lower rated fixed income securities, commonly known as "junk bonds," which
involve greater risks, including default risks, than higher rated fixed income
securities. Purchasers should carefully assess these risks before investing in
The High-Yield Bond Portfolio. See "INVESTMENT OBJECTIVES, POLICIES AND RISK
CONSIDERATIONS" and "ADDITIONAL INVESTMENT INFORMATION - HIGH-YIELD, HIGH RISK
SECURITIES."
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 May 29, 1996,
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
<PAGE> 7
(DPT-I)
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE PAGE
<S> <C>
FUND EXPENSES ADDITIONAL INVESTMENT INFORMATION
FINANCIAL HIGHLIGHTS INVESTMENT LIMITATIONS
DELAWARE POOLED TRUST SUMMARY MANAGEMENT OF THE FUND
FUND OFFICERS AND PORTFOLIO MANAGERS SHAREHOLDER SERVICES
RISK FACTORS DIVIDENDS AND CAPITAL GAINS
INVESTMENT OBJECTIVES, POLICIES DISTRIBUTIONS
AND RISK CONSIDERATIONS TAXES
PURCHASE OF SHARES PERFORMANCE INFORMATION
REDEMPTION OF SHARES APPENDIX A--RATINGS
</TABLE>
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:
May 29, 1996
-2-
<PAGE> 8
(DPT-I)
FUND EXPENSES
The following tables illustrate all expenses and fees that a shareholder of the
Fund can expect to incur. The purpose of the tables 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, The International Fixed Income Portfolio, The
Defensive Equity Small/Mid-Cap Portfolio, The Defensive Equity Utility
Portfolio, The Labor Select International Equity Portfolio, The Real Estate
Investment Trust Portfolio and The High-Yield Bond Portfolio, the amounts set
forth below corresponding to the caption "Other Expenses" 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 International Equity Portfolio and The Global Fixed
Income Portfolio, the amounts set forth below corresponding to the caption
"Other Expenses" are based on actual results for the Portfolios' most recently
completed fiscal year.
<TABLE>
<CAPTION>
THE
THE THE THE THE LIMITED- THE GLOBAL THE
DEFENSIVE AGGRESSIVE INTERNATIONAL FIXED TERM FIXED INTERNATIONAL
SHAREHOLDER EQUITY GROWTH EQUITY INCOME MATURITY INCOME FIXED INCOME
TRANSACTION EXPENSES PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C> <C> <C> <C>
Sales Charge Imposed on None None None None None None None
Purchases
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>
THE
ANNUAL FUND THE THE THE THE LIMITED- THE GLOBAL THE
OPERATING EXPENSES DEFENSIVE AGGRESSIVE INTERNATIONAL FIXED TERM FIXED INTERNATIONAL
(AS A PERCENTAGE OF EQUITY GROWTH EQUITY INCOME MATURITY INCOME FIXED 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 .51%* .63%* .75%* .32%* .22%* .42%* .02%*
Reimbursement
12b-1 Fees None None None None None None None
Other Expenses .17% .30% .15% .21% .21% .18% .58%
---- ---- ---- ---- ---- ---- ----
Total Operating Expenses
After Voluntary Waiver and
Reimbursment .68%* .93%* .90%* .53%* .43%* .60%* .60%*
===== ===== ===== ===== ===== ===== =====
</TABLE>
-3-
<PAGE> 9
(DPT-I)
* 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, as a percentage of average net
assets, on an annualized basis, the amounts noted above corresponding
to the caption "Total Operating Expenses After Voluntary Waiver and
Reimbursement" during the period from commencement of the public
offering for the Portfolio through October 31, 1996. 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, as a percentage of average net assets, on an
annualized basis, .96% during the period from commencement of the
public offering for the Portfolio through October 31, 1996. With
respect to The Global Fixed Income Portfolio and The International
Fixed Income Portfolio, Delaware International, the Portfolios'
investment adviser, voluntarily elected to waive that portion, if any,
of its annual Investment Advisory Fees and to reimburse each 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, as a percentage of average
net assets, on an annualized basis, the amounts noted above
corresponding to the caption "Total Operating Expenses After Voluntary
Waiver and Reimbursement" during the period from commencement of the
public offering for the Portfolio through October 31, 1996. In the
absence of such voluntary waivers, Total Operating Expenses (as a
percentage of average net assets) are or are expected to equal 0.71%,
1.08%, 0.61%, 0.51%, 0.68%, and 1.08%, respectively, for The Defensive
Equity, The Aggressive Growth, The Fixed Income, The Limited-Term
Maturity, The Global Fixed Income and The International Fixed Income
Portfolios. The actual expenses of The International Equity Portfolio
were 0.90% for the fiscal year ended October 31, 1995 and therefore
the waiver noted above was not triggered. Other 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. See "MANAGEMENT OF THE FUND" for a recital of the
Investment Advisory Fees to which each adviser is entitled under its
Investment Management Agreement.
-4-
<PAGE> 10
(DPT-I)
<TABLE>
<CAPTION>
THE
DEFENSIVE THE THE LABOR THE REAL
EQUITY DEFENSIVE SELECT ESTATE
SMALL/ EQUITY INTERNATIONAL INVESTMENT THE HIGH-
SHAREHOLDER MID-CAP UTILITY EQUITY TRUST YIELD BOND
TRANSACTION EXPENSES PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C> <C>
Sales Charge Imposed on Purchases None None None None None
Sales Charge Imposed on Reinvested
Dividends None None None None None
Redemption Fees None None None None None
Exchange Fees None None None None None
</TABLE>
<TABLE>
<CAPTION>
THE
DEFENSIVE THE THE LABOR THE REAL
ANNUAL FUND EQUITY DEFENSIVE SELECT ESTATE
OPERATING EXPENSES SMALL/ EQUITY INTERNATIONAL INVESTMENT THE HIGH-
(AS A PERCENTAGE OF MID-CAP UTILITY EQUITY TRUST YIELD BOND
AVERAGE NET ASSETS) PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C> <C>
Investment Advisory Fees .65%** .35%** .75%** .75%** .45%**
12b-1 Fees None None None None None
Other Expenses .14% .14% .21% .14% .14%
---- ---- ---- ---- ----
Total Operating Expenses After
Voluntary Waiver and Reinvestment .79%** .49%** .96%** .89%** .59%**
====== ====== ====== ====== ======
</TABLE>
** All expense figures are estimates assuming that each Portfolio has
average net assets equal to $75 million. With respect to The
Defensive Equity Small/Mid-Cap Portfolio, The Defensive Equity Utility
Portfolio, The Real Estate Investment Trust Portfolio and The
High-Yield Bond Portfolio, Delaware Investment Advisers has elected
voluntarily to waive that portion, if any, of the annual Investment
Advisory Fee payable by such Portfolios and to reimburse each
Portfolio for its expenses to the extent necessary to ensure that the
expenses of each Portfolio (exclusive of taxes, interest, brokerage
commissions and extraordinary expenses) do not exceed, as a percentage
of average net assets, on an annualized basis, .79%, .49%, .89% and
.59%, respectively, during the period from the commencement of the
public offering of such Portfolios through October 31, 1996.
Similarly, Delaware International, the investment adviser to The Labor
Select International Equity Portfolio, has elected voluntarily to
waive that portion, if any, of the annual Investment Advisory Fee
payable by The Labor Select International Equity Portfolio 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, as a percentage of average net assets, on an annualized basis,
.96% of such Portfolio's average net assets during the period from the
commencement of the public offering of the Portfolio through October
31, 1996. Other Expenses for each of the Portfolios are estimated.
See "MANAGEMENT OF THE FUND" for a recital of the Investment Advisory
Fees to which each adviser is entitled under its Investment Management
Agreement.
-5-
<PAGE> 11
(DPT-I)
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 9 29 50 111
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>
<TABLE>
<CAPTION>
1 year* 3 years*
------ -------
<S> <C> <C>
The Defensive Equity Small/Mid-Cap Portfolio $8 $25
The Defensive Equity Utility Portfolio $5 $16
The Labor Select International Equity Portfolio $10 $31
The Real Estate Investment Trust Portfolio $9 $28
The High-Yield Bond Portfolio $6 $19
</TABLE>
* Assumes net assets of each Portfolio equal to $75 million.
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.
-6-
<PAGE> 12
(DPT-I)
FINANCIAL HIGHLIGHTS
The following financial highlights of The Defensive Equity Portfolio, The
Aggressive Growth Portfolio, The International Equity Portfolio and The Global
Fixed Income Portfolio are derived from the financial statements of each of
those Portfolios of the Fund 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 Annual Report to
shareholders. A copy of the Annual Report (including the report of Ernst &
Young LLP) may be obtained from the Fund upon request at no charge.
Information provided below for The Labor Select International Equity Portfolio
and The Real Estate Investment Trust Portfolio is for their respective date of
initial sale through April 30, 1996 and is unaudited. Except for the initial
sale of shares to Delaware Management Company, Inc., The Defensive Equity
Small/Mid-Cap Portfolio, The Defensive Equity Utility Portfolio, The
Limited-Term Maturity Portfolio, The International Fixed Income Portfolio and
The High-Yield Bond Portfolio have sold no shares to investors. The Fixed
Income Portfolio commenced operations on March 12, 1996. Pursuant to an
undertaking made in the Fund's registration statement, unaudited financial
highlights will be provided for this Portfolio within four to six months of
that date. Consequently, no financial highlights are presented for these
six Portfolios.
-7-
<PAGE> 13
DPT-I-CHT
<TABLE>
<CAPTION>
THE DEFENSIVE
EQUITY PORTFOLIO
-----------------------------------------------------
PERIOD
2/3/92(1)
YEAR ENDED THROUGH
10/31/95 10/31/94 10/31/93 10/31/92
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period . . . . . . . . . . . . . $13.0800 $12.7300 $10.6600 $10.0000
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------
Net Investment Income . . . . . . . . . . . . . . . . . . . . . 0.4303 0.3203 0.2841 0.2291
Net Gains (Losses) on Securities
(both realized and unrealized) . . . . . . . . . . . . . . . 1.9797 0.6527 2.3159 0.5109
------ ------ ------ ------
Total from Investment Operations . . . . . . . . . . . . . . 2.4100 0.9730 2.6000 0.7400
------ ------ ------ ------
LESS DISTRIBUTIONS
- ------------------
Dividends (from net investment income) . . . . . . . . . . . . (0.3400) (0.2800) (0.3200) (0.0800)
Distributions (from capital gains) . . . . . . . . . . . . . . (0.4900) (0.3430) (0.2100) none
Returns of Capital . . . . . . . . . . . . . . . . . . . . . . none none none none
---- ---- ---- ----
Total Distributions . . . . . . . . . . . . . . . . . . . . (0.8300) (0.6230) (0.5300) (0.0800)
-------- -------- -------- --------
Net Asset Value, End of Period . . . . . . . . . . . . . . . . $14.6600 $13.0800 $12.7300 $10.6600
======== ======== ======== ========
- -------------------------------------------------------------------
TOTAL RETURN . . . . . . . . . . . . . . . . . . . . . . . . . 19.77%(2) 7.96%(2) 25.17%(2) 10.13%(2)
- ------------
- -------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------
Net Assets, End of Period (000's omitted) . . . . . . . . . . . $51,947 $37,323 $13,418 $4,473
Ratio of Expenses to Average Daily Net Assets . . . . . . . . . 0.68%(3) 0.68%(3) 0.68%(3) 0.68%(3)
Ratio of Net Investment Income to Average Daily Net Assets . . 3.33%(4) 3.26%(4) 2.90%(4) 3.65%(4)
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . . . . 88% 73% 37% 28%
</TABLE>
- ------------------------------
(1) Date of initial sale; ratios and total return have been annualized.
(2) Total return reflects the expense limitations referenced in Notes 3
and 4.
(3) Ratio of expenses to average daily net assets prior to expense
limitations was 0.71% for the year ended 10/31/95, 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.
(4) Ratio of net investment income to average daily net assets prior to
expense limitations was 3.30% for the year ended 10/31/95,
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.
<PAGE> 14
DPT-I-CHT
<TABLE>
<CAPTION>
THE AGGRESSIVE
GROWTH PORTFOLIO
------------------------------------------------------------
PERIOD
2/27/92(1)
YEAR ENDED THROUGH
10/31/95 10/31/94 10/31/93 10/31/92
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period . . . . . . . . . . . . . $11.0100 $11.2000 $9.0400 $10.0000
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------
Net Investment Income . . . . . . . . . . . . . . . . . . . . . 0.0428 0.0075 0.0181 0.0167
Net Gains (Losses) on Securities
(both realized and unrealized) . . . . . . . . . . . . . . . 2.0552 0.0325 2.1589 (0.9767)
------ ------ ------ --------
Total from Investment Operations . . . . . . . . . . . . . . 2.0980 0.0400 2.1770 (0.9600)
------ ------ ------ --------
LESS DISTRIBUTIONS
- ------------------
Dividends (from net investment income) . . . . . . . . . . . . (0.0120) (0.0200) (0.0170) none
Distributions (from capital gains) . . . . . . . . . . . . . . (0.2360) (0.2100) none none
Returns of Capital . . . . . . . . . . . . . . . . . . . . . . none none none none
---- ---- ---- ----
Total Distributions . . . . . . . . . . . . . . . . . . . . (0.2480) (0.2300) (0.0170) none
-------- -------- -------- ----
Net Asset Value, End of Period . . . . . . . . . . . . . . . . $12.8600 $11.0100 $11.2000 $9.0400
======== ======== ======== =======
- -------------------------------------------------------------------
TOTAL RETURN . . . . . . . . . . . . . . . . . . . . . . . . . 19.61%(2) 0.34%(2) 24.10%(2) (13.89%)(2)
- ------------
- -------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------
Net Assets, End of Period (000's omitted) . . . . . . . . . . . $29,092 $22,640 $20,478 $4,538
Ratio of Expenses to Average Daily Net Assets . . . . . . . . . 0.93%(3) 0.93%(3) 0.93%(3) 0.93%(3)
Ratio of Net Investment Income to Average Daily Net Assets . . 0.37%(4) 0.07%(4) 0.23%(4) 0.28%(4)
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . . . . 64% 43% 81% 34%
</TABLE>
______________________________
(1) Date of initial sale; ratios and total return have been annualized.
(2) Total return reflects the expense limitations referenced in Notes 3
and 4.
(3) Ratio of expenses to average daily net assets prior to expense
limitations was 1.08% for the year ended 10/31/95, 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.
(4) Ratio of net investment income (loss) to average daily net assets
prior to expense limitations was 0.22% for the year ended
10/31/95, (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.
<PAGE> 15
DPT-I-CHT
<TABLE>
<CAPTION>
THE INTERNATIONAL
EQUITY PORTFOLIO
----------------------------------------------------------------
PERIOD
2/4/92(1)
YEAR ENDED THROUGH
10/31/95 10/31/94 10/31/93 10/31/92
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period . . . . . . . . . . . . . $13.1100 $11.9900 $9.5000 $10.0000
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------
Net Investment Income . . . . . . . . . . . . . . . . . . . . . 0.4749 0.1440 0.2414 0.2282
Net Gains (Losses) on Securities
(both realized and unrealized) . . . . . . . . . . . . . . . 0.0011 1.2360 2.5686 (0.6282)
------ ------ ------ --------
Total from Investment Operations . . . . . . . . . . . . . . 0.4760 1.3800 2.8100 (0.4000)
------ ------ ------ --------
LESS DISTRIBUTIONS
- ------------------
Dividends (from net investment income) . . . . . . . . . . . . (0.1700) (0.1600) (0.3200) (0.1000)
Distributions (from capital gains). . . . . . . . . . . . . . . (0.2960) (0.1000) none none
Returns of Capital . . . . . . . . . . . . . . . . . . . . . . none none none none
---- ---- ---- ----
Total Distributions . . . . . . . . . . . . . . . . . . . . (0.4660) (0.2600) (0.3200) (0.1000)
-------- -------- -------- --------
Net Asset Value, End of Period . . . . . . . . . . . . . . . . $13.1200 $13.1100 $11.9900 $9.5000
======== ======== ======== =======
- -------------------------------------------------------------------
TOTAL RETURN . . . . . . . . . . . . . . . . . . . . . . . . . 3.91% 11.66%(2) 30.28%(2) (5.44%)(2)
- ------------
- -------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------
Net Assets, End of Period (000's omitted) . . . . . . . . . . . $156,467 $70,820 $24,288 $5,966
Ratio of Expenses to Average Daily Net Assets . . . . . . . . . 0.90% 0.94%(3) 0.96%(3) 0.96%(3)
Ratio of Net Investment Income to Average Daily Net Assets . . 4.81% 1.36%(4) 2.98%(4) 4.67%(4)
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . . . . 20% 22% 28% 2%
</TABLE>
______________________________
(1) Date of initial sale; ratios and total return have been annualized.
(2) Total return reflects the expense limitations referenced in Notes 3
and 4.
(3) Ratio of expenses to average daily net assets prior to expense
limitations was 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.
(4) Ratio of net investment income to average daily net assets prior to
expense limitations was 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.
<PAGE> 16
DPT-I-CHT
<TABLE>
<CAPTION>
THE GLOBAL
FIXED INCOME PORTFOLIO
------------------------------------------
PERIOD
11/30/92(1)
YEAR ENDED THROUGH
10/31/95 10/31/94 10/31/93
<S> <C> <C> <C>
Net Asset Value, Beginning of Period . . . . . . . . . . . . . $9.7900 $11.0900 $10.0000
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------
Net Investment Income . . . . . . . . . . . . . . . . . . . . . 0.7357 0.4189 0.9547
Net Gains (Losses) on Securities
(both realized and unrealized) . . . . . . . . . . . . . . . 0.9243 (0.1929) 0.7433
------ -------- ------
Total from Investment Operations . . . . . . . . . . . . . . 1.6600 0.2260 1.6980
------ ------ ------
LESS DISTRIBUTIONS
- ------------------
Dividends (from net investment income) . . . . . . . . . . . . (0.4100) (0.9490) (0.6080)
Distributions (from capital gains). . . . . . . . . . . . . . none (0.5770) none
Returns of Capital . . . . . . . . . . . . . . . . . . . . . . none none none
-------- -------- --------
Total Distributions . . . . . . . . . . . . . . . . . . . . (0.4100) (1.5260) (0.6080)
-------- -------- --------
Net Asset Value, End of Period . . . . . . . . . . . . . . . . $11.0400 $9.7900 $11.0900
======== ======= ========
- -------------------------------------------------------------------
TOTAL RETURN . . . . . . . . . . . . . . . . . . . . . . . . . 17.38%(2) (2.07%)(2) 18.96%(2)
- ------------
- -------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------
Net Assets, End of Period (000's omitted) . . . . . . . . . . . $99,161 $42,266 $29,313
Ratio of Expenses to Average Daily Net Assets . . . . . . . . . 0.60%(3) 0.62%(3) 0.62%(3)
Ratio of Net Investment Income to Average Daily Net Assets . . 6.73%(4) 3.62%(4) 10.68%(4)
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . . . . 77% 205% 198%
</TABLE>
______________________________
(1) Date of initial sale; ratios and total return have been annualized.
(2) Total return reflects the expense limitations referenced in Notes 3
and 4.
(3) Ratio of expenses to average daily net assets prior to expense
limitations was 0.68% for the year ended 10/31/95, 0.76% for
the year ended 10/31/94 and 0.88% for the year ended 10/31/93 for The
Global Fixed Income Portfolio.
(4) Ratio of net investment income to average daily net assets prior to
expense limitations was 6.65% for the year ended 10/31/95,
3.48% for the year ended 10/31/94 and 10.42% for the year ended
10/31/93 for The Global Fixed Income Portfolio.
<PAGE> 17
DPT-I-CHT
<TABLE>
<CAPTION>
THE LABOR SELECT THE REAL ESTATE
INTERNATIONAL EQUITY PORTFOLIO INVESTMENT TRUST PORTFOLIO
------------------------------ --------------------------
(UNAUDITED) (UNAUDITED)
PERIOD PERIOD
12/19/95(1) 12/5/95(1)
THROUGH THROUGH
4/30/96 4/30/96
<S> <C> <C>
Net Asset Value, Beginning of Period . . . . . . . . . . . . . $10.0000 $10.0000
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------
Net Investment Income . . . . . . . . . . . . . . . . . . . . . 0.1063 0.2882
Net Gains (Losses) on Securities
(both realized and unrealized) . . . . . . . . . . . . . . . 0.9537 0.3718
------ ------
Total from Investment Operations . . . . . . . . . . . . . . 1.0600 0.6600
------ ------
LESS DISTRIBUTIONS
- ------------------
Dividends (from net investment income) . . . . . . . . . . . . (0.0400) (0.1000)
Distributions (from capital gains) . . . . . . . . . . . . . . none none
Returns of Capital . . . . . . . . . . . . . . . . . . . . . . none none
---- ----
Total Distributions . . . . . . . . . . . . . . . . . . . . (0.0400) (0.1000)
-------- --------
Net Asset Value, End of Period . . . . . . . . . . . . . . . . $11.0200 $10.5600
======== ========
- -------------------------------------------------------------------
TOTAL RETURN . . . . . . . . . . . . . . . . . . . . . . . . . 10.62%(2) 6.63%(2)
- ------------
- -------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------
Net Assets, End of Period (000's omitted) . . . . . . . . . . . $ 16,745 $ 21,849
Ratio of Expenses to Average Daily Net Assets . . . . . . . . . 0.96%(3) 0.89%(3)
Ratio of Net Investment Income to Average Daily Net Assets . . 4.28%(4) 6.88%(4)
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . . . . 9% 106%
</TABLE>
______________________________
(1) Date of initial sale; ratios have been annualized but total return has
not been annualized.
(2) Total return reflects the expense limitations referenced in Notes 3
and 4.
(3) Ratio of expenses to average daily net assets prior to expense
limitations for the period December 19, 1995 through April
30, 1996 was 2.56% for The Labor Select International Equity Portfolio
and for the period December 5, 1995 through April 30, 1996 was 1.05%
for The Real Estate Investment Trust Portfolio.
(4) Ratio of net investment income to average daily net assets prior to
expense limitations for the period December 19, 1995 through
April 30, 1996 was 2.68% for The Labor Select International
Equity Portfolio and for the period December 5, 1995 through April 30,
1996 was 6.72% for The Real Estate Investment Trust Portfolio.
<PAGE> 18
(DPT-I)
DELAWARE POOLED TRUST SUMMARY
THE FUND
The Fund consists of twelve 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 Defensive Equity Utility Portfolio, The Real Estate Investment
Trust Portfolio, 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 Defensive Equity Utility Portfolio, The Real
Estate Investment Trust Portfolio, 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
twelve 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 DEFENSIVE EQUITY SMALL/MID-CAP PORTFOLIO--seeks to realize maximum
long-term total return. 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, have a market capitalization below that of the third decile of companies
registered on the New York Stock Exchange, and which, in Delaware Investment
Advisers' opinion, offer capital gains potential.
THE DEFENSIVE EQUITY UTILITY PORTFOLIO--seeks to realize maximum long-term
total return. The Portfolio seeks to achieve this objective by investing at
least 65% of its total assets in equity securities of utility 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.
THE LABOR SELECT INTERNATIONAL EQUITY PORTFOLIO--seeks to achieve maximum
long-term total return. The Portfolio seeks to achieve this objective 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, and furthermore,
present certain characteristics that are compatible or operate in accordance
with certain investment policies or restrictions followed by organized labor.
-8-
<PAGE> 19
(DPT-I)
THE REAL ESTATE INVESTMENT TRUST PORTFOLIO--seeks to achieve maximum long-term
total return. Capital appreciation is a secondary objective. The Portfolio
seeks to achieve its objectives by investing at least 65% of its total assets
in equity securities of real estate investment trusts.
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.
THE HIGH-YIELD BOND PORTFOLIO--seeks high total return. The Portfolio seeks to
achieve its objective by investing primarily in bonds rated B- or higher by
Standard & Poor's Ratings Group or B3 or higher by Moody's Investors Service,
Inc.
For further information, see "INVESTMENT OBJECTIVES, POLICIES AND RISK
CONSIDERATIONS" and "ADDITIONAL INVESTMENT INFORMATION."
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, The Limited-Term Maturity, The Defensive
Equity Small/Mid-Cap, The Defensive Equity Utility, The Real Estate Investment
Trust and The High-Yield Bond Portfolios. The investment management fees
payable to Delaware Investment Advisers by these Portfolios are, respectively,
.55%, .80%, .40%, .30%, .65%, .35%, .75% and .45% of the respective Portfolio's
average net assets. Lincoln Investment Management, Inc., acts as sub-adviser
to Delaware with respect to The Real Estate Investment Trust Portfolio and
receives 30% of the management fee paid to Delaware. Delaware International
Advisers Ltd. ("Delaware International"), an affiliate of
-9-
<PAGE> 20
(DPT-I)
Delaware, is the investment adviser to The International Equity, The Global
Fixed Income, The International Fixed Income and The Labor Select International
Equity Portfolios. The investment management fees payable to Delaware
International by The International Equity Portfolio, The Global Fixed Income
Portfolio, The International Fixed Income Portfolio and The Labor Select
International Equity Portfolio are, respectively, .75%, .50%, .50% and .75% of
the respective 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 will make no such
payments out of the fees it receives for managing The Defensive Equity
Small/Mid-Cap, The Defensive Equity Utility, The Real Estate Investment Trust
and The High-Yield Bond Portfolios and Delaware International will make no such
payments out of the fees it receives for managing The International Fixed
Income and The Labor Select International Equity Portfolios. See "MANAGEMENT
OF THE FUND."
-10-
<PAGE> 21
(DPT-I)
FUND OFFICERS AND PORTFOLIO MANAGERS
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.
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 affiliates.
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.
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.
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.
-11-
<PAGE> 22
(DPT-I)
TIMOTHY W. SANDERSON
Director/Senior Portfolio Manager - Delaware International Advisers Ltd. (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.
DAVID C. DALRYMPLE
Vice President/Senior Portfolio Manager - The Defensive Equity Small/Mid-Cap
Portfolio
Mr. Dalrymple holds a BS in Business Administration from Clarkson College in
Potsdam, NY, and an MBA from Cornell's Johnson School of Management in Ithaca,
NY. Prior to joining Delaware Management Company in December of 1991, he spent
five years as an assistant portfolio manager for Lord Abbett and Co. in New
York. Mr. Dalrymple is a Chartered Financial Analyst and a member of the
Financial Analysts of Philadelphia. Mr. Dalrymple has managed The Defensive
Equity Small/Mid-Cap Portfolio since its inception.
CLIVE A. GILLMORE
Director/Senior Portfolio Manager - Delaware International Advisers Ltd. (The
Labor Select International Equity Portfolio)
A graduate of the Warwick University, England, and the London Business School
Investment Program, Mr. Gillmore joined Delaware in 1990 after eight years of
investment experience. His most recent position prior to joining Delaware was as
a Pacific Basin equity analyst and senior portfolio manager for Hill Samuel
Investment Advisers Ltd. Prior to that, Mr. Gillmore was an analyst and
portfolio manager for Legal and General Investment in the United Kingdom. Mr.
Gillmore has managed of The Labor Select International Equity Portfolio since
its inception.
GEORGE H. BURWELL
Vice President/Senior Portfolio Manager - The Real Estate Investment Trust
Portfolio
Mr. Burwell holds a BA from the University of Virginia with a major in
Political Science and a minor in Economics. Prior to joining the Delaware
Group in 1992, Mr. Burwell was a portfolio manager for Midlantic Bank in
Edison, New Jersey, where he managed an equity mutual fund and three commingled
funds. He has also held the position of security analyst with Balis & Born in
New York and First Fidelity Bank in New Jersey. Mr. Burwell is a Chartered
Financial Analyst. Mr. Burwell has served as a portfolio manager of The Real
Estate Investment Trust Portfolio since its inception.
-12-
<PAGE> 23
(DPT-I)
BABAK ZENOUZI
Vice President/Portfolio Manager - The Real Estate Investment Trust Portfolio
Mr. Zenouzi holds a BS in Finance and Economics from Babson College in
Wellesley, Massachusetts, and an MS in Finance from Boston College. Prior to
joining Delaware in 1992, he was with The Boston Company where he held the
positions of assistant vice president, senior financial analyst, financial
analyst and portfolio accountant. Mr. Zenouzi has served as a portfolio
manager of The Real Estate Investment Trust Portfolio since its inception.
STEVEN R. BRODY
Senior Vice President/Director of Real Estate Operations - Lincoln Investment
Management, Inc.
Sub-adviser to The Real Estate Investment Trust Portfolio
Mr. Brody, a graduate of Miami (Ohio) University, joined Lincoln following
fifteen years in the commercial mortgage and real estate industry with another
insurance company, a commercial bank and a mortgage banking firm. He is
responsible for Lincoln's mortgage, real estate equity, private placement and
mezzanine finance activities, and the day-to-day operations of Lincoln
Investment Management. Mr. Brody has been active in the Mortgage Bankers
Association of America and the Urban Land Institute and is a Fellow of the Life
Office Management Association. He serves on the boards of Lincoln Investment
Management, Indiana Institute of Technology, and The Malpas Trust. Mr. Brody
has served as a sub- adviser for The Real Estate Investment Trust Portfolio
since its inception.
JOHN F. ROBERTSON
Assistant Vice President/Real Estate Investments - Lincoln Investment
Management, Inc.
Sub-adviser to The Real Estate Investment Trust Portfolio
Mr. Robertson holds a BA from Wabash College where he was graduated magna cum
laude and awarded membership into Phi Beta Kappa, and an MBA with emphasis in
finance and real estate from Indiana University. Prior to joining Lincoln
Investment Management, Inc.'s Real Estate Debt Group in 1993, he was a
consultant with Ernst & Young's Special Services Group where he specialized in
the valuation of all types of commercial real estate. Mr. Robertson has
completed numerous courses toward the MAI designation and is a candidate for
the CFA designation. Mr. Robertson has served as a sub-adviser for The Real
Estate Investment Trust Portfolio since its inception.
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. Mr. Reed has managed The Fixed Income
Portfolio since its inception.
-13-
<PAGE> 24
(DPT-I)
IAN G. SIMS
Director/Senior Portfolio Manager - Delaware International Advisers Ltd. (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.
PAUL A. MATLACK
Vice President/Senior Portfolio Manager - The High-Yield Bond Portfolio
Mr. Matlack is a graduate of the University of Pennsylvania and received his
MBA in Finance from George Washington University. He began his career with
Mellon Bank as a credit specialist analyzing leveraged transactions in the
chemical and pharmaceutical industries. He subsequently served as a loan
officer in Mellon's Corporate Lending Division and in the Special Industries
Group at Provident National Bank, before joining Delaware in 1989. He is a
Chartered Financial Analyst. Mr. Matlack has served as a portfolio manager of
The High-Yield Bond Portfolio since its inception.
GERALD T. NICHOLS
Vice President/Senior Portfolio Manager - The High-Yield Bond Portfolio
Mr. Nichols is a graduate of the University of Kansas, where he received an MS
in Finance and a BS in Business Administration. Prior to joining Delaware in
1989, he was the investment officer for a merchant banking firm with interests
in the insurance and thrift industries. Mr. Nichols began his career in the
high-yield bond market with Waddell and Reed, Inc. in 1983 where, as a
high-yield credit analyst, he followed a variety of industries. He is a
Chartered Financial Analyst. Mr. Nichols has served as a portfolio manager of
The High-Yield Bond Portfolio since its inception.
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."
-14-
<PAGE> 25
(DPT-I)
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 may also 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
From time to time, certain institutional separate accounts advised by Delaware
Investment Advisers or Delaware International may invest in the Fund's
Portfolios. The Portfolios may experience relatively large investments or
redemptions as a result of the institutional separate accounts either
purchasing or redeeming the Portfolios' shares. These transactions will affect
the Portfolios, since Portfolios that experience redemptions may be required to
sell portfolio securities, and Portfolios that receive additional cash will
need to invest it. While it is impossible to predict the overall impact of
these transactions over time, there could be adverse effects on portfolio
management to the extent the Portfolios may be required to sell securities or
invest cash at times when they would not otherwise do so. Delaware Investment
Advisers and Delaware International, representing the interests of the
Portfolios, is committed to minimizing the impact of such transactions on the
Portfolios. In addition, Delaware Investment Advisers and Delaware
International, as adviser to the institutional separate accounts, is also
committed to minimizing the impact on the Portfolios to the extent it is
consistent with pursuing the investment objectives of the institutional
separate accounts.
In cases where a shareholder of any of the Portfolios has an investment
counseling relationship with Delaware Investment Advisers or Delaware
International, Delaware Investment Advisers or Delaware International may, at
its discretion, reduce the shareholder's investment counseling fees by an
amount equal to the pro-rata advisory fees paid by the respective Portfolio.
This procedure will be utilized with clients having contractual relationships
based on total assets managed by Delaware Investment Advisers or Delaware
International to avoid situations where excess advisory fees might be paid to
Delaware Investment Advisers or Delaware International. In no event will a
client pay higher total advisory fees as a result of the client's investment in
a Portfolio.
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.
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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 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.
At such time as the Fund receives appropriate regulatory approvals to do so in
the future, under certain circumstances, the Fund may, at its sole discretion,
allow institutional investors who have an existing investment counseling
relationship with Delaware Investment Advisers or Delaware International to
make investments in any of the Fund's Portfolios by a contribution of
securities in-kind to such Portfolios. 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 Labor Select 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 both The Aggressive Growth Portfolio (which seeks long-term capital
growth) and The Defensive Equity Small/Mid-Cap Portfolio (which seeks to
maximize long-term total return) invest primarily in small- to medium-sized
companies, the Portfolios' investments are likely to involve a higher degree of
liquidity risk and price volatility than if investments were made in larger
capitalization securities. The Aggressive Growth Portfolio and The Real Estate
Investment Trust Portfolio also may, under certain circumstances, use certain
futures contracts and options on futures contracts, as well as options on
stock.
The International Equity, The Labor Select International Equity, The Global
Fixed Income and The International Fixed Income Portfolios will invest in
securities of foreign issuers which normally are denominated in foreign
currencies and may hold foreign currency directly. In addition, The Defensive
Equity Utility, The Real Estate Investment Trust and The High-Yield Bond
Portfolios may invest up to 10% of their total assets in foreign securities.
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. In
addition, The Defensive Equity Utility, The Real Estate Investment Trust and
The International Fixed Income Portfolios 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."
The foreign securities in which The International Equity, The Labor Select
International Equity, The Global Fixed Income and The International Fixed
Income Portfolios (and The Defensive Equity Utility, The Real Estate Investment
Trust and The High-Yield Bond Portfolios, up to 10% of their total assets) 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 Real Estate Investment Trust Portfolio concentrates its investments in the
real estate industry, and The Defensive Equity Utility Portfolio concentrates
its investments in the utility industry. As a consequence, the net asset
values of the Portfolios can be expected to fluctuate in light of the factors
affecting those industries, and may fluctuate more widely than a portfolio that
invests in a broader range of industries. The Defensive Equity Utility and The
Real Estate Investment Trust Portfolios may be more susceptible to any single
economic, political or regulatory occurrence affecting the utility or real
estate industry, respectively.
The High-Yield Bond Portfolio invests in lower rated fixed income securities,
which, while generally having higher yields, are subject to factors, such as
reduced creditworthiness of issuers, increased risks of default and a more
limited and less liquid secondary market than higher rated securities. These
securities are subject to greater volatility and risk of loss of income and
principal than are higher rated securities. See "INVESTMENT OBJECTIVES,
POLICIES AND RISK CONSIDERATIONS" and "ADDITIONAL INVESTMENT INFORMATION -
HIGH-YIELD, HIGH RISK SECURITIES."
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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, for equity transactions, 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 and those
Portfolios, as well as The Real Estate Investment Trust Portfolio, may invest
in mortgage-backed securities. See "ADDITIONAL INVESTMENT
INFORMATION--MORTGAGE-BACKED SECURITIES."
The Real Estate Investment Trust Portfolio, by investing primarily in
securities of real estate investment trusts, is subject to interest rate risk,
in that as interest rates decline, the value of the Portfolio's investment in
real estate investment trusts can be expected to rise. Conversely, when
interest rates rise, the value of the Portfolio's investments in real estate
investment trusts holding fixed rate obligations can be expected to decline.
See "ADDITIONAL INVESTMENT INFORMATION--REITS."
Each of the twelve Portfolios may lend its portfolio securities, may invest in
repurchase agreements and may purchase securities on a when-issued basis.
While The Defensive Equity Utility Portfolio, The Real Estate Investment Trust
Portfolio, 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 each 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 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 Ratings Group ("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.
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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 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
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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 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.,
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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."
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 DEFENSIVE EQUITY SMALL/MID-CAP PORTFOLIO
The Defensive Equity Small/Mid-Cap Portfolio's investment objective is to
realize maximum long-term total return. The Portfolio seeks to achieve this
objective by investing primarily in equity securities of companies which, at
the time of purchase, have dividend yields above the current yield of the S&P
500 Index, have a market capitalization below that of the third decile of
companies registered on the New York Stock Exchange, and, in the investment
adviser's opinion, offer capital gains potential as well.
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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 value of the Portfolio's total assets will be invested in
equity securities of companies that currently have a total market
capitalization of less than $3 billion. Equity securities for this purpose
include 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, and certain
other non-traditional equity securities. See "ADDITIONAL INVESTMENT
INFORMATION--CONVERTIBLE, DEBT AND NON-TRADITIONAL EQUITY SECURITIES" and
"AMERICAN DEPOSITORY RECEIPTS" for further details concerning these and other
investment policies.
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 S&P or Aaa by Moody's) or be of comparable quality
as determined by the investment adviser. See "ADDITIONAL INVESTMENT
INFORMATION" and "APPENDIX A-RATINGS" for further details concerning these and
other investment policies.
The investment adviser seeks to invest in high-yielding equity securities of
small and mid-cap companies and believes that, although capital gains are
important, the dividend return component will be a significant portion of the
expected total return. Further, the investment adviser believes that, although
more volatile, small and mid-cap companies will provide higher returns over the
long-term. In the investment adviser's opinion, a diversified portfolio of
such high-yielding, small and mid-cap companies 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; and 2) market capitalization below that
of the third decile of companies registered on the New York Stock Exchange.
Such companies, in the investment adviser's view, generally are those companies
that currently have a total market capitalization of less than $3 billion at
the time of purchase.
The Portfolio expects to invest in companies in the capitalization range
described above, and 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 providing long-term total
return. Because the Portfolio seeks long-term total return by investing
primarily in small to mid-cap companies, its investments are likely to involve
a higher degree of liquidity risk and price volatility than investments in
larger capitalization securities.
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 generally 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.
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THE DEFENSIVE EQUITY UTILITY PORTFOLIO
The Defensive Equity Utility Portfolio's investment objective is to realize
maximum long-term total return. The Portfolio seeks to achieve this objective
by investing primarily in equity securities of utility companies which, at the
time of purchase, have dividend yields above the current yield of the S&P 500
Index and which, in the investment adviser's opinion, offer capital gains
potential as well. The Portfolio will operate as a nondiversified fund as
defined by the 1940 Act.
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. utility 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 value of the Portfolio's total assets will be invested in
equity securities of utility companies. The Portfolio may invest in the equity
securities of electric utilities, and other regulated utilities including, but
not limited to, natural gas pipelines, water utilities and telephone utilities.
The Portfolio may also invest in the equity securities of utility holding
companies. Equity securities for this purpose include 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 and convertible securities. See
"ADDITIONAL INVESTMENT INFORMATION--CONVERTIBLE, DEBT AND NON-TRADITIONAL
EQUITY SECURITIES" and "AMERICAN DEPOSITORY RECEIPTS" for a further discussion
of these investment policies.
The Portfolio may also invest up to 35% of its total assets in the debt
securities of utility companies. Generally, these debt securities will be
investment grade quality as determined by a nationally-recognized statistical
rating organization (e.g., BBB or better by S&P or Baa or better by Moody's) or
be of comparable quality as determined by the investment adviser. The
Portfolio may invest up to 10% of its assets in fixed income securities rated
below investment grade, including foreign government securities as discussed
below. The Portfolio may also invest up to 10% of its assets in securities of
foreign issuers. See "ADDITIONAL INVESTMENT INFORMATION--FOREIGN INVESTMENT
INFORMATION" and "HIGH-YIELD, HIGH RISK SECURITIES" for a further discussion of
these investment policies.
In connection with the Portfolio's ability to invest up to 10% of its total
assets in the securities of foreign issuers, currency considerations may
present risks if the Portfolio holds international securities. In this regard,
the Portfolio may 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 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 S&P or Aaa by Moody's) or be of comparable quality
as determined by the investment adviser. See "ADDITIONAL INVESTMENT
INFORMATION" for further details concerning these and other investment
policies.
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The investment adviser seeks to invest primarily in high-yielding equity
securities of utility companies and believes that, although capital gains are
important, the dividend return component will be a significant portion of the
expected total return. Further, the investment adviser believes that utility
companies will provide higher income and competitive long-term total returns.
The investment adviser believes that a diversified portfolio of such
high-yielding utility companies will provide more consistent returns than the
broad market, as well as preserve principal in difficult market environments.
Equity securities of companies considered for purchase generally will exhibit a
dividend yield greater than the prevailing yield of the S&P 500 Index.
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 generally not
exceed 100% under normal circumstances. The Portfolio will not maintain
diversity among economic sectors and industries due to the specific nature of
its investment objective, but will not invest, ordinarily, more than 5% of its
total assets, at the time of purchase, in the securities of any one company.
THE LABOR SELECT INTERNATIONAL EQUITY PORTFOLIO
The investment objective of The Labor Select 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 of the United States, and which, in the investment adviser's
opinion, are undervalued at the time of purchase based on rigorous fundamental
analysis employed by the investment adviser. In addition to following these
quantitative guidelines, the Portfolio's investment adviser will select
securities of issuers that present certain characteristics that are compatible
or operate in accordance with certain investment policies or restrictions
followed by organized labor.
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 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 the 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 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 be 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
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 the 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
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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 be 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
primarily quantitatively 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, the impact of currency adjustment on a United States
domiciled, dollar-based investor and the investment guidelines described below.
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.
Supplementing the adviser's quantitative approach to stock selection, the
investment adviser will, in managing the Portfolio, also attempt to follow
certain qualitative investment guidelines which seek to identify issuers that
present certain characteristics that are compatible or operate in accordance
with certain investment policies or restrictions followed by organized labor.
These qualitative investment guidelines include country screens, as well as
additional issuer-specific criteria. The country screens require that the
securities are of issuers domiciled in those countries that are included in the
Morgan Stanley Capital International Europe, Australia and Far East ("EAFE")
Index and Canada, as long as the country does not appear on any list of
prohibited or boycotted nations of the AFL-CIO or certain other labor
organizations. Nations that are presently in the EAFE Index include Japan, the
United Kingdom, Germany, France and The Netherlands. In addition, the
Portfolio will tend to favor investment in issuers located in those countries
that the investment adviser perceives as enjoying favorable relations with the
United States. Pursuant to the Portfolio's issuer-specific criteria, the
Portfolio will (1) invest only in companies which are publicly traded; (2)
focus on companies that show, in the investment adviser's opinion, evidence of
pursuing fair labor practices; (3) focus on companies that have not been
subject to penalties or tariffs imposed by applicable U.S. Government agencies
for unfair trade practices within the previous two years; and (4) not invest in
initial public offerings. In the opinion of the Portfolio's investment
adviser, evidence of pursuing fair labor practices would include whether a
company has demonstrated patterns of non-compliance with applicable labor or
health and safety laws. The qualitative labor sensitivity factors that the
Portfolio's investment adviser will utilize in selecting securities will vary
over time, and will be solely in the adviser's discretion.
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, and which comply with the
parameters described above. 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 foreign countries
frequently are greater. See "ADDITIONAL INVESTMENT INFORMATION--FOREIGN
INVESTMENT INFORMATION."
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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
generally not exceed 100%.
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 may 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 REAL ESTATE INVESTMENT TRUST PORTFOLIO
The investment objective of The Real Estate Investment Trust Portfolio is to
achieve maximum long-term total return. Capital appreciation is a secondary
objective. The Portfolio seeks to achieve its objectives by investing in
securities of companies principally engaged in the real estate industry. Under
normal circumstances, at least 65% of the Portfolio's total assets will be
invested in equity securities of real estate investment trusts ("REITs"). The
Portfolio will operate as a nondiversified fund as defined by the 1940 Act.
The Portfolio invests in equity securities of REITs and other real estate
industry operating companies ("REOCs"). For purposes of the Portfolio's
investments, a REOC is a company that derives at least 50% of its gross
revenues or net profits from either (1) the ownership, development,
construction, financing, management or sale of commercial, industrial or
residential real estate, or (2) products or services related to the real
estate industry, such as building supplies or mortgage servicing. The
Portfolio's investments in equity securities of REITs and REOCs may include,
from time to time, sponsored or unsponsored American Depository Receipts
actively traded in the United States. Equity securities for this purpose
include common stocks, securities convertible into common stocks and securities
having common stock characteristics, such as rights and warrants to purchase
common stocks. The Portfolio may also purchase preferred stock. The Portfolio
may invest up to 10% of its assets in foreign securities, and in convertible
securities. See "ADDITIONAL INVESTMENT INFORMATION--FOREIGN INVESTMENT
INFORMATION," "AMERICAN DEPOSITORY RECEIPTS" and "CONVERTIBLE, DEBT AND
NON-TRADITIONAL EQUITY SECURITIES" for further discussion of these investment
policies. The Portfolio may also invest in mortgage-backed securities. See
"MORTGAGE-BACKED SECURITIES" for more detailed information about this
investment policy.
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 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 S&P or Aaa by Moody's) or be of comparable quality as
determined by the Portfolio's investment adviser. See "ADDITIONAL INVESTMENT
INFORMATION" for further details concerning these and other investment
policies.
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(DPT-I)
Although the Portfolio does not invest directly in real estate, the Portfolio
does invest primarily in REITs, and may purchase equity securities of REOCs.
Thus, because the Portfolio concentrates its investments in the real estate
industry, an investment in the Portfolio may be subject to certain risks
associated with direct ownership of real estate and with the real estate
industry in general. These risks include, among others: possible declines in
the value of real estate; risks related to general and local economic
conditions; possible lack of availability of mortgage funds; overbuilding;
extended vacancies of properties; increases in competition; property taxes and
operating expenses; changes in zoning laws; costs resulting from the clean-up
of, and liability to third parties resulting from, environmental problems;
casualty for condemnation losses, uninsured damages from floods, earthquakes or
other natural disasters; limitations on and variations in rents; and changes in
interest rates.
The Portfolio may invest without limitation in shares of REITs. REITs are
pooled investment vehicles which invest primarily in income-producing real
estate or real estate related loans or interests. REITs are generally
classified as equity REITs, mortgage REITs or a combination of equity and
mortgage REITs. Equity REITs invest the majority of their assets directly in
real property and derive income primarily from the collection of rents. Equity
REITs can also realize capital gains by selling properties that have
appreciated in value. Mortgage REITs invest the majority of their assets in
real estate mortgages and derive income from the collection of interest
payments. Like investment companies such as the Fund, REITs are not taxed on
income distributed to shareholders provided they comply with several
requirements in the Internal Revenue Code of 1986, as amended (the "Code").
REITs are subject to substantial cash flow dependency, defaults by borrowers,
self-liquidation, and the risk of failing to qualify for tax-free pass-through
of income under the Code, and/or to maintain exemptions from the 1940 Act. By
investing in REITs indirectly through the Portfolio, a shareholder bears not
only a proportionate share of the expenses of the Portfolio, but also,
indirectly, similar expenses of the REITs. For a further discussion of the
risks presented by investing in REITs, see "ADDITIONAL INVESTMENT
INFORMATION--REITS."
While the Portfolio does not intend to invest directly in real estate, the
Portfolio could, under certain circumstances, own real estate directly as a
result of a default on securities the Portfolio owns. In addition, if the
Portfolio has rental income or income from the direct disposition of real
property, the receipt of such income may adversely affect the Portfolio's
ability to retain its tax status as a regulated investment company.
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.
In connection with the Portfolio's ability to invest up to 10% of its total
assets in the securities of foreign issuers, currency considerations may
present risks if the Portfolio holds international securities. Currency
considerations carry a special risk for a portfolio of international
securities. In this regard, the Portfolio may actively carry on hedging
activities, and may invest in forward foreign currency exchange contracts to
hedge
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(DPT-I)
currency risks associated with the purchase of individual securities denominated
in a particular currency. See "ADDITIONAL INVESTMENT INFORMATION--FORWARD
FOREIGN CURRENCY EXCHANGE CONTRACTS."
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
generally not exceed 100%.
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 securities"),
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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(DPT-I)
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 as defined by 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.
Government securities 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 adviser 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
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(DPT-I)
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" and "AMERICAN
DEPOSITORY RECEIPTS."
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 as defined by 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."
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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
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 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.
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 adviser 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
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(DPT-I)
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" and "AMERICAN DEPOSITORY RECEIPTS."
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."
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 HIGH-YIELD BOND PORTFOLIO
The High-Yield Bond Portfolio's investment objective is to seek high total
return. The Portfolio seeks to achieve its objective by investing primarily in
bonds rated B- or higher by S&P or B3 or higher by Moody's or, if unrated,
judged to be of comparable quality by the investment adviser.
The Portfolio will invest at least 80% of its assets at the time of purchase
in: (1) corporate bonds that may be rated B- or higher by S&P or B3 or higher
by Moody's, or that may be unrated (which may be more speculative in nature
than rated bonds); (2) securities issued or guaranteed by the U.S. Government,
its agencies or instrumentalities; or (3) commercial paper of companies rated
A-1 or A-2 by S&P or rated P-1 or P-2 by Moody's or, if unrated, judged to be
of comparable quality by the investment adviser. The Portfolio may also invest
in income-producing securities, including common stocks and preferred stocks,
some of which may have convertible features or attached warrants and which may
be speculative. See "ADDITIONAL INVESTMENT INFORMATION--CONVERTIBLE, DEBT AND
NON-TRADITIONAL EQUITY SECURITIES" for a further discussion of these investment
policies. The Portfolio may invest up to 10% of its total assets in securities
of issuers domiciled in foreign countries. 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 S&P or
Aaa by Moody's) or, if unrated, judged to be of comparable quality as
determined by the investment adviser. See "ADDITIONAL INVESTMENT INFORMATION"
for further details concerning these and other investment policies.
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Although the Portfolio does not generally purchase a substantial amount of zero
coupon bonds or pay-in-kind (PIK) bonds, from time to time, the Portfolio may
acquire zero coupon bonds and, to a lesser extent, PIK bonds. Zero coupon
bonds and PIK bonds are generally considered to be more interest-sensitive than
income bearing bonds, to be more speculative than interest-bearing bonds, and
to have certain tax consequences which could, under certain circumstances, be
adverse to the Portfolio. For example, the Portfolio accrues, and is required
to distribute to shareholders income on its zero coupon bonds. However, the
Portfolio may not receive the cash associated with this income until the bonds
are sold or mature. If the Portfolio did not have sufficient cash to make the
required distribution of accrued income, the Portfolio could be required to
sell other securities in its portfolio or to borrow to generate the cash
required.
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. See "ADDITIONAL INVESTMENT INFORMATION--U.S.
GOVERNMENT 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
generally not exceed 100%.
It is anticipated that the Portfolio's assets will be invested primarily in
unrated corporate bonds and bonds rated B- or higher by S&P or B3 or higher by
Moody's, or, if unrated, judged to be of comparable quality by the investment
adviser. The market values of fixed income securities generally fall when
interest rates rise and, conversely, rise when interest rates fall. Lower
rated and unrated fixed income securities tend to reflect short-term corporate
and market developments to a greater extent than higher rated fixed income
securities, which react primarily to fluctuations in the general level of
interest rates. These lower rated or unrated securities generally have higher
yields, but, as a result of factors such as reduced creditworthiness of
issuers, increased risks of default and a more limited and less liquid
secondary market, are subject to greater volatility and risks of loss of income
and principal than are higher rated securities. The investment adviser will
attempt to reduce such risks through portfolio diversification, credit
analysis, and attention to trends in the economy, industries and financial
markets.
Investing in these so-called "junk" or "high-yield" bonds entails certain
risks, including the risk of loss of principal, which may be greater than the
risks involved in investment grade bonds, and which should be considered by
investors contemplating an investment in the Portfolio. Such bonds are
sometimes issued by companies whose earnings at the time of issuance are less
than the projected debt service on the junk bonds. Some of the principal risks
to which junk bonds are subject are discussed below.
Although the market for high-yield bonds has been in existence for many years,
including periods of economic downturns, the high-yield market grew rapidly
during the long economic expansion which took place in the United States during
the 1980s. During the economic expansion, the use of high-yield debt
securities to fund
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highly leveraged corporate acquisitions and restructurings increased
dramatically. As a result, the high-yield market grew substantially during the
economic expansion. Although experts disagree on the impact recessionary
periods have had and will have on the high-yield market, some analysts believe
a protracted economic downturn would severely disrupt the market for high-yield
bonds, would adversely affect the value of outstanding bonds and would
adversely affect the ability of high-yield issuers to repay principal and
interest. Those analysts cite volatility experienced in the high-yield market
in the past as evidence for their position. It is likely that protracted
periods of economic uncertainty would result in increased volatility in the
market prices of high-yield bonds, an increase in the number of high-yield bond
defaults and corresponding volatility in the Portfolio's net asset value.
In addition, if, as a result of volatility in the high-yield market or other
factors, the Portfolio experiences substantial net redemptions of the
Portfolio's shares for a sustained period of time, the Portfolio may be
required to sell securities without regard to the investment merits of the
securities to be sold. If the Portfolio sells a substantial number of
securities to generate proceeds for redemptions, the asset base of the
Portfolio will decrease and the Portfolio's expense ratios may increase.
Furthermore, the secondary market for high-yield securities is currently
dominated by institutional investors, including mutual funds and certain
financial institutions. There is generally no established retail secondary
market for high-yield securities. As a result, the secondary market for
high-yield securities is more limited and less liquid than other secondary
securities markets. The high-yield secondary market is particularly
susceptible to liquidity problems when the institutions which dominate it
temporarily cease buying bonds for regulatory, financial or other reasons, such
as the savings and loan crisis. A less liquid secondary market may have an
adverse effect on the Portfolio's ability to dispose of particular issues, when
necessary, to meet the Portfolio's liquidity needs or in response to a specific
economic event, such as the deterioration in the creditworthiness of the
issuer. In addition, a less liquid secondary market makes it more difficult
for the Portfolio to obtain precise valuations of the high-yield securities in
its portfolio. During periods involving such liquidity problems, judgment
plays a greater role in valuing high-yield securities than is normally the
case. The secondary market for high-yield securities is also generally
considered to be more likely to be disrupted by adverse publicity and investor
perceptions than the more established secondary securities markets. The
Portfolio's privately placed high-yield securities are particularly susceptible
to the liquidity and valuation risks outlined above.
Finally, there are a variety of legislative actions which have been taken or
which are considered from time to time by the United States Congress which
could adversely affect the market for high-yield bonds. For example,
Congressional legislation limited the deductibility of interest paid on certain
high-yield bonds used to finance corporate acquisitions. Also, Congressional
legislation has, with some exceptions, generally prohibited federally-insured
savings and loan institutions from investing in high-yield securities.
Regulatory actions have also affected the high-yield market. For example, many
insurance companies have restricted or eliminated their purchase of high-yield
bonds as a result of, among other factors, actions taken by the National
Association of Insurance Commissioners. If similar legislative and regulatory
actions are taken in the future, they could result in further tightening of the
secondary market for high-yield issues, could reduce the number of new
high-yield securities being issued and could make it more difficult for the
Portfolio to attain its investment objective.
See "ADDITIONAL INVESTMENT INFORMATION--HIGH-YIELD, HIGH RISK SECURITIES" for
further information about high-yield securities.
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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. At such time as the Fund receives appropriate regulatory approvals to
do so in the future, under certain circumstances, the Fund may, at its sole
discretion, allow institutional investors who have an existing investment
counseling relationship with Delaware Investment Advisers or Delaware
International to make investments in the Portfolios by a contribution of
securities in-kind to such Portfolios. 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:
<TABLE>
<CAPTION>
The Morgan Guaranty Trust Company of New York
New York, NY 10015
<S> <C>
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 #001-00-000 (The Defensive Equity Small/Mid-Cap Portfolio)
DDA #001-00-000 (The Defensive Equity Utility Portfolio)
DDA #001-76-554 (The Labor Select International Equity Portfolio)
DDA #001-76-532 (The Real Estate Investment Trust 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)
DDA #001-00-000 (The High-Yield Bond Portfolio)
Attn: Delaware Pooled Trust, Inc.
Ref: (Portfolio name, your account number, your account name)
</TABLE>
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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.
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.
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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 Labor Select International Equity Portfolio, The Global
Fixed Income Portfolio and The International Fixed Income Portfolio may, under
certain circumstances, be required to be redeemed in-kind in portfolio
securities, as noted below.
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 # 215-255-8864
"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
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Portfolio, The Labor Select 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.
REDEMPTIONS IN-KIND OR SIMILAR PROCEDURES (THE INTERNATIONAL EQUITY, THE LABOR
SELECT 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 Labor Select
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.
Institutional investors who have an existing investment counseling relationship
with Delaware Investment Advisers or Delaware International will not be subject
to the Fund's in-kind redemption requirements until such time as the Fund
receives appropriate regulatory approvals to permit such redemptions for the
account of such institutional investors.
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
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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 Labor Select 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.
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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, investors in such securities
look principally to the agency or instrumentality issuing or guaranteeing the
obligation 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 Real Estate Investment Trust, 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
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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.
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.
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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. Each of the Portfolios may invest
in such private-backed securities but, the Portfolios, other than The Fixed
Income Portfolio, will do so (i) only if the securities are 100% collateralized
at the time of issuance by securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities and (ii) currently, only if they
are rated at the time of purchase in the two highest grades by a
nationally-recognized statistical rating agency.
The Fixed Income Portfolio may invest up to 20% of its total assets in CMOs and
REMICs issued by private entities which are not collateralized by securities
issued or guaranteed by the U.S. Government, its agencies or instrumentalities,
so-called non-agency mortgage-backed securities. Investments in these
securities may be made only if the securities (i) are rated at the time of
purchase in the four top rating categories by a nationally-recognized
statistical rating organization (e.g., BBB or better by S&P or Baa or better by
Moody's) and (ii) represent interests in whole-loan mortgages, multi-family
mortgages, commercial mortgages and other mortgage collateral supported by a
first mortgage lien on real estate. Non-agency mortgage-backed securities are
subject to the interest rate and prepayment risks, described above, to which
other CMOs and REMICs issued by private issuers are subject. Non-agency
mortgage-backed securities may also be subject to a greater risk of loss of
interest and principal because they are not collateralized by securities issued
or guaranteed by the U.S. Government. In addition, timely information
concerning the loans underlying these securities may not be as readily
available and the market for these securities may be less liquid than other
CMOs and REMICs.
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,
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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 Defensive Equity Small/Mid-Cap, The
Defensive Equity Utility, The Labor Select International Equity, The Real
Estate Investment Trust, The Global Fixed Income, The International Fixed
Income and The High-Yield Bond Portfolios may invest consistent with the limits
recited above (see "INVESTMENT OBJECTIVES, POLICIES AND RISK CONSIDERATIONS")
are:
(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, in the
case of The Defensive Equity, The Aggressive Growth, The International Equity,
The Global Fixed Income and The International Fixed Income Portfolios, and 15%
of the total assets of a Portfolio, in the case of The Defensive Equity
Small/Mid-Cap, The Defensive Equity Utility, The Real Estate Investment Trust
and The High- Yield Bond Portfolios. 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).
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.
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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 in the case of The Defensive Equity, The Aggressive Growth, The
International Equity, The Global Fixed Income and The International Fixed
Income Portfolios, and 15% of the total assets of a Portfolio, in the case of
The Defensive Equity Small/Mid-Cap, The Defensive Equity Utility, The Labor
Select International Equity, The Real Estate Investment Trust and The
High-Yield Bond Portfolios. 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.
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.
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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 Labor Select International Equity
Portfolio, The Global Fixed Income Portfolio and The International Fixed Income
Portfolio (and The Defensive Equity Utility, The Real Estate Investment Trust
and The High-Yield Bond Portfolios, up to 10% of their total assets) 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 Defensive Equity
Utility, The Labor Select International Equity, The Real Estate Investment
Trust, The Global Fixed Income, The International Fixed Income and The
High-Yield Bond 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.
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
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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 advisers do not believe that
any current repatriation restrictions would affect their decision to invest in
such countries.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
As noted above, the foreign investments made by The International Equity, The
Defensive Equity Utility, The Labor Select International Equity, The Real
Estate Investment Trust, The Global Fixed Income and The International Fixed
Income Portfolios present currency considerations which pose special risks.
The investment advisers use 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 Defensive Equity Utility
Portfolio, The Labor Select International Equity Portfolio, The Real Estate
Investment Trust 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.
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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 the investment advisers, as
appropriate, 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. In
addition, The Defensive Equity Utility Portfolio may invest up to 10% of its
total assets in fixed income securities rated below investment grade. These
securities are rated lower than BBB by S&P and Baa by Moody's or, if unrated,
are considered by the investment adviser to have characteristics similar to
such rated securities. Finally, The High-Yield Bond Portfolio invests
primarily in securities rated B- or higher by S&P or B3 or higher by Moody's,
or, if unrated, judged to be of comparable quality by the investment
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adviser. See "APPENDIX A--RATINGS" to this Prospectus for more rating
information. The discussion in this Section supplements the description of the
risks of high-yield securities found earlier in this Prospectus in "INVESTMENT
OBJECTIVES, POLICIES AND RISK CONSIDERATIONS - THE HIGH-YIELD BOND PORTFOLIO,"
and investors should refer to that Section for a further discussion of the
risks of high-yield bonds.
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 Portfolios' investment advisers intend 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.
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 International Fixed Income and The Global Fixed Income 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 advisers believe 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.
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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 and
The Real Estate Investment Trust 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 Portfolios will only enter
into these transactions for hedging purposes if it is consistent with the
Portfolios' investment objectives and policies and the Portfolios will not
engage in such transactions to the extent that obligations relating to futures
contracts, options on futures contracts and options on securities (see "FUTURES
CONTRACTS AND OPTIONS ON FUTURES CONTRACTS--OPTIONS ON SECURITIES"), in the
aggregate, exceed 25% of the Portfolios' 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 Portfolios 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.
The Aggressive Growth Portfolio and The Real Estate Investment Trust Portfolio
may enter into contracts for the purchase or sale for future delivery of
securities. When a futures contract is sold, the Portfolios incur 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 Portfolios 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 futures contracts and options thereon
would not exceed 20% of the Portfolio's total assets.
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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 and The Real Estate Investment Trust Portfolio
may write covered call options on U.S. securities, purchase call options on
such securities and enter into closing transactions related thereto. A
Portfolio may also purchase put options on U.S. 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. A 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 Portfolios will only write put options on a secured basis
which means that the Portfolios 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. A
Portfolio will only purchase put options if the Portfolio owns the security
covered by the put option at the time of purchase 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 Portfolios offset put options or call
options prior to exercise or expiration. If a 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 Portfolios may use both exchange-traded and over-the-counter options.
Certain over-the-counter options may be illiquid. The Aggressive Growth
Portfolio will only invest in such options to the extent consistent with its
10% limit on investments in illiquid securities, and The Real Estate Investment
Trust Portfolio will only invest in such options to the extent consistent with
its 15% limit on investments in illiquid securities.
With respect to writing covered call options, the Portfolios 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 a Portfolio plus any transaction costs will reduce
any benefit realized by the Portfolio upon exercise of the option. When
writing put options, the Portfolios may be required, when the put is exercised,
to purchase securities at higher prices than current market prices.
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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 the investment adviser at a time when a Portfolio is
using a hedging instrument denominated in one foreign currency to protect the
value of a security denominated in a 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.
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Each Portfolio, other than The Defensive Equity Small/Mid-Cap, The Defensive
Equity Utility, The Labor Select International Equity, The Real Estate
Investment Trust, The High-Yield Bond and The International Fixed Income
Portfolios, may invest no more than 10% of the value of its net assets in
illiquid securities. The Defensive Equity Small/Mid-Cap, The Defensive Equity
Utility, The Labor Select International Equity, The Real Estate Investment
Trust, The High-Yield Bond and The International Fixed Income Portfolios may
each 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 adviser the day-to-day functions of determining whether
or not individual Rule 144A Securities are liquid for purposes of a Portfolio's
limitation on investments in illiquid assets. The Board has instructed each
Portfolio's investment adviser 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% or 15%
limit, as applicable, 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.
CONVERTIBLE, DEBT AND NON-TRADITIONAL EQUITY SECURITIES
From time to time, The Defensive Equity Utility Portfolio may invest in
convertible securities of issuers in the utility industry. In addition, a
portion of The Defensive Equity Small/Mid-Cap and The High-Yield Bond
Portfolios' assets may be invested in convertible and debt securities of
issuers in any industry, and The Real Estate Investment Trust Portfolio's
assets may be invested in convertible securities of issuers in the real estate
industry. A convertible security is a security which may be converted at a
stated price within a specified period of time into a certain quantity of the
common stock of the same or a different issuer. Convertible and debt
securities are senior to common stocks in a corporation's capital structure,
although convertible securities are usually subordinated to similar
nonconvertible securities. Convertible and debt securities provide a fixed
income stream and the opportunity, through its conversion feature, to
participate in the capital appreciation resulting from a market price advance
in the convertible security's underlying common stock. Just as with debt
securities, convertible securities tend to increase in market value when
interest rates decline and tend to decrease in value when interest rates rise.
However, the price of a convertible security is also influenced by the market
value of the security's underlying common stock and tends to increase as the
market value of the underlying stock rises, whereas it tends to decrease as the
market value of the underlying stock declines. Convertible and debt securities
acquired by The Defensive Equity Small/Mid-Cap, The Defensive Equity Utility,
The Real Estate Investment Trust and The High-Yield Bond Portfolios may be
rated below investment grade, or unrated. These lower rated convertible and
debt securities are subject to credit risk considerations substantially similar
to such considerations affecting high risk, high-yield bonds, commonly
referred to as "junk bonds." See "INVESTMENT OBJECTIVES, POLICIES AND RISK
CONSIDERATIONS--THE HIGH-YIELD BOND PORTFOLIO" and "HIGH- YIELD, HIGH RISK
SECURITIES" for a further discussion of these types of investments.
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The Defensive Equity Small/Mid-Cap, The Defensive Equity Utility, The Real
Estate Investment Trust and The High-Yield Bond Portfolios may invest in
convertible preferred stocks that offer enhanced yield features, such as
Preferred Equity Redemption Cumulative Stock ("PERCS"), which provide an
investor, such as a Portfolio, with the opportunity to earn higher dividend
income than is available on a company's common stock. A PERCS is a preferred
stock which generally features a mandatory conversion date, as well as a
capital appreciation limit which is usually expressed in terms of a stated
price. Upon the conversion date, most PERCS convert into common stock of the
issuer (PERCS are generally not convertible into cash at maturity). Under a
typical arrangement, if after a predetermined number of years the issuer's
common stock is trading at a price below that set by the capital appreciation
limit, each PERCS would convert to one share of common stock. If, however, the
issuer's common stock is trading at a price above that set by the capital
appreciation limit, the holder of the PERCS would receive less than one full
share of common stock. The amount of that fractional share of common stock
received by the PERCS holder is determined by dividing the price set by the
capital appreciation limit of the PERCS by the market price of the issuer's
common stock. PERCS can be called at any time prior to maturity, and hence do
not provide call protection. However, if called early, the issuer may pay a
call premium over the market price to the investor. This call premium declines
at a preset rate daily, up to the maturity date of the PERCS.
The Defensive Equity Small/Mid-Cap, The Defensive Equity Utility, The Real
Estate Investment Trust and The High-Yield Bond Portfolios may also invest in
other enhanced convertible securities. These include but are not limited to
ACES (Automatically Convertible Equity Securities), PEPS (Participating Equity
Preferred Stock), PRIDES (Preferred Redeemable Increased Dividend Equity
Securities), SAILS (Stock Appreciation Income Linked Securities), TECONS (Term
Convertible Notes), QICS (Quarterly Income Cumulative Securities and DECS
(Dividend Enhanced Convertible Securities). ACES, PEPS, PRIDES, SAILS, TECONS,
QICS, and DECS all have the following features: they are company-issued
convertible preferred stock; unlike PERCS, they do not have capital
appreciation limits; they seek to provide the investor with high current
income, with some prospect of future capital appreciation; they are typically
issued with three to four-year maturities; they typically have some built-in
call protection for the first two to three years; investors have the right to
convert them into shares of common stock at a preset conversion ratio or hold
them until maturity; and upon maturity, they will automatically convert to
either cash or a specified number of shares of common stock.
REITS
The Real Estate Investment Trust Portfolio's investment in REITs presents
certain further risks that are unique and in addition to the risks associated
with investing in the real estate industry in general. Equity REITs may be
affected by changes in the value of the underlying property owned by the REITs,
while mortgage REITs may be affected by the quality of any credit extended.
REITs are dependent on management skills, are not diversified, and are subject
to the risks of financing projects. REITs whose underlying assets include
long-term health care properties, such as nursing, retirement and assisted
living homes, may be impacted by federal regulations concerning the health care
industry.
REITs (especially mortgage REITs) are also subject to interest rate risks -
when interest rates decline, the value of a REIT's investment in fixed rate
obligations can be expected to rise. Conversely, when interest rates rise, the
value of a REIT's investment in fixed rate obligations can be expected to
decline. In contrast, as
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interest rates on adjustable rate mortgage loans are reset periodically, yields
on a REIT's investments in such loans will gradually align themselves to
reflect changes in market interest rates, causing the value of such investments
to fluctuate less dramatically in response to interest rate fluctuations than
would investments in fixed rate obligations.
REITs may have limited financial resources, may trade less frequently and in a
limited volume, and may be subject to more abrupt or erratic price movements
than other securities.
AMERICAN DEPOSITORY RECEIPTS
The Defensive Equity, The Defensive Equity Small/Mid-Cap, The Defensive Equity
Utility, The Real Estate Investment Trust, The Global Fixed Income and The
International Fixed Income Portfolios may invest in sponsored and unsponsored
American Depository Receipts ("ADRs") that are actively traded in the United
States. ADRs are receipts typically issued by a U.S. bank or trust company
which evidence ownership of underlying securities issued by a foreign
corporation. "Sponsored" ADRs are issued jointly by the issuer of the
underlying security and a depository, and "unsponsored" ADRs are issued without
the participation of the issuer of the deposited security. Holders of
unsponsored ADRs generally bear all the costs of such facilities and the
depository of an unsponsored ADR facility frequently is under no obligation to
distribute shareholder communications received from the issuer of the deposited
security or to pass through voting rights to the holders of such receipts in
respect of the deposited securities. Therefore, there may not be a correlation
between information concerning the issuer of the security and the market value
of an unsponsored ADR.
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INVESTMENT LIMITATIONS
Each Portfolio's investment objectives, their designation as a diversified
portfolio or, in the case of The Defensive Equity Utility, The Real Estate
Investment Trust, 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.
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.
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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 Defensive Equity Small/Mid-Cap, The Defensive Equity
Utility, The Real Estate Investment Trust, The Fixed Income, The Limited-Term
Maturity and The High-Yield Bond Portfolios. Lincoln Investment Management,
Inc. ("Lincoln"), a wholly-owned subsidiary of Lincoln National Corporation,
acts as sub-adviser to Delaware with respect to The Real Estate Investment
Portfolio. In its capacity as sub-adviser, Lincoln furnishes Delaware with
investment recommendations, asset allocation advice, research, economic
analysis and other investment services with respect to the securities in which
The Real Estate Investment Trust Portfolio may invest. Delaware and its
predecessors have been managing the funds in the Delaware Group since 1938. On
October 31, 1995, Delaware and its affiliate, Delaware International, were
supervising in the aggregate more than $27 billion in assets in various
institutional (approximately $16,961,505,000) and investment company
(approximately $10,172,570,000) accounts. Lincoln (formerly named Lincoln
National Investment Management Company) was incorporated in 1930. Lincoln's
primary activity is institutional fixed-income investment management and
consulting. Such activity includes fixed income portfolios, private
placements, real estate debt and equity, and asset/liability management. As of
December 31, 1995, Lincoln had over $37 billion in assets under management.
Lincoln provides investment management services to Lincoln National
Corporation, its principal subsidiaries and affiliated registered investment
companies, and acts as investment adviser to other unaffiliated clients.
Delaware International Advisers Ltd. ("Delaware International") furnishes
investment advisory services to The International Equity Portfolio, The Labor
Select 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 Defensive Equity
Small/Mid-Cap, The Defensive Equity Utility, The Real Estate Investment Trust,
The Fixed Income, The Limited-Term Maturity and The High-Yield Bond
Portfolios. Delaware has also entered into a Sub-Advisory Agreement with
Lincoln with respect to The Real Estate Investment Trust Portfolio. Delaware
International has entered into Investment Advisory Agreements with the Fund on
behalf of The International Equity Portfolio, The Labor Select 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 objectives 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.
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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 International Equity Portfolio .75%
The Defensive Equity Small/Mid-Cap Portfolio .65%
The Defensive Equity Utility Portfolio .35%
The Labor Select International Equity Portfolio .75%
The Real Estate Investment Trust Portfolio .75%*
The Fixed Income Portfolio .40%
The Limited-Term Maturity Portfolio .30%
The Global Fixed Income Portfolio .50%
The International Fixed Income Portfolio .50%
The High-Yield Bond Portfolio .45%
</TABLE>
* Lincoln receives 30% of the advisory fee paid to Delaware for acting as
sub-adviser to Delaware with respect to The Real Estate Investment Trust
Portfolio.
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 October 31, 1996. 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 will make no such
payments out of the fees it receives for managing The Defensive Equity
Small/Mid-Cap, The Defensive Equity Utility, The Real Estate Investment Trust
and The High-Yield Bond Portfolios, and Delaware International will make no
such payments out of the fees it receives for managing The Labor Select
International Equity and The International Fixed Income Portfolios. With
respect to The Defensive Equity, The Aggressive Growth and The Global Fixed
Income Portfolios, the investment management fees earned were 0.54%, 0.79% and
0.50%, respectively, of average daily net assets for the fiscal year ended
October 31, 1995. After considering the waiver of fees by the respective
investment adviser, as described above, the fees paid by The Defensive Equity,
The Aggressive Growth and The Global Fixed Income Portfolios amounted to 0.51%,
0.63% and 0.42%, respectively, of average daily net assets. For the fiscal
year ended October 31, 1995, the investment management fee paid by The
International Equity Portfolio amounted to 0.75% of average daily net assets.
The advisory fees payable by The Aggressive Growth, The International Equity,
The Labor Select International Equity and The Real Estate Investment Trust
Portfolios, while higher than the advisory fees paid by other mutual funds in
general, are comparable to fees paid by other mutual funds with similar
objectives and policies to the Portfolios.
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Delaware is an indirect, wholly-owned subsidiary of Delaware Management
Holdings, Inc. ("DMH"). On April 3, 1995, a merger between DMH and a
wholly-owned subsidiary of Lincoln National Corporation ("Lincoln National")
was completed. DMH, Delaware and Delaware International are now wholly-owned
subsidiaries, and subject to the ultimate control, of Lincoln National.
Lincoln Investment Management, Inc. ("Lincoln"), the sub-adviser to Delaware
with respect to The Real Estate Investment Trust Portfolio, is a wholly-owned
subsidiary of Lincoln National. Delaware, Delaware International and Lincoln
may be deemed to be affiliated persons under the 1940 Act, as the three
companies are each under the ultimate control 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. In connection with
the merger, new Investment Management Agreements between the Fund on behalf of
The Defensive Equity Portfolio, The Aggressive Growth Portfolio, The Fixed
Income Portfolio and The Limited-Term Maturity Portfolio and Delaware, and new
Investment Management Agreements between the Fund on behalf of The
International Equity Portfolio, The Global Fixed Income Portfolio and The
International Fixed Income Portfolio and Delaware International were executed
following shareholder approval. Delaware's address is One Commerce Square,
2005 Market Street, Philadelphia, PA 19103. Delaware International's address
is Veritas House, 125 Finsbury Pavement, London, England EC2A INQ. Lincoln's
address is 200 E. Berry Street, Fort Wayne, IN 46802.
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.
DISTRIBUTOR
Delaware Distributors, L.P. ("DDLP"), 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, DDLP sells shares of the Fund upon the terms and at the current
offering price described in this Prospectus. DDLP is not obligated to sell any
certain number of shares of the Fund. DDLP is an indirect, wholly-owned
subsidiary of DMH.
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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 and The Global Fixed Income Portfolios was 0.68%, 0.93% and 0.60%,
respectively, for the year ended October 31, 1995. These ratios reflect the
waiver of fees by the respective investment adviser, as described above. The
ratio of expenses to average daily net assets for The International Equity
Portfolio was 0.90% for the fiscal year ended October 31, 1995.
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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 may also 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.
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DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
The Fund maintains the following dividend and capital gains policies for its
twelve Portfolios.
The Fixed Income, The Limited-Term Maturity and The International Fixed Income
Portfolios expect to declare dividends daily and distribute them monthly. The
Defensive Equity Utility, The High-Yield Bond and The Global Fixed Income
Portfolios expect to declare dividends monthly and distribute them monthly.
The Defensive Equity Small/Mid-Cap, The Defensive Equity, The International
Equity and The Labor Select International Equity Portfolios expect to declare
and distribute all of their net investment income to shareholders as dividends
quarterly. The Aggressive Growth and The Real Estate Investment Trust
Portfolios expect to declare and distribute all of their net investment income
to shareholders as dividends annually.
Net capital gains, if any, will be distributed annually. Unless a shareholder
elects to receive dividends and capital gains distributions in cash, all
dividends and capital gains distributions shall be automatically paid in
additional shares at net asset value of the Portfolio.
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 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.
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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, whether
received in cash or in additional shares. For corporate investors, dividends
paid by the Equity Oriented Portfolios, with the exception of The International
Equity and The Labor Select International Equity 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, 1995, 39% and 9%, respectively, were eligible for this deduction.
Distributions paid by a Portfolio from long-term capital gains, whether
received in cash or 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, local
or foreign taxes.
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 LABOR SELECT INTERNATIONAL EQUITY
PORTFOLIO, THE GLOBAL FIXED INCOME PORTFOLIO AND THE INTERNATIONAL FIXED INCOME
PORTFOLIO - FOREIGN TAXES
Each of The International Equity Portfolio, The Labor Select 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.
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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
federal, state, local or foreign tax consequences of an investment in the Fund.
Additional information on tax matters is included in the Statement of
Additional Information.
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 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 Labor Select
International Equity Portfolio, The Global Fixed Income Portfolio and The
International Fixed Income Portfolio (and, to a limited extent,
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(DPT-I)
The Defensive Equity Utility Portfolio, The Real Estate Investment Trust
Portfolio and The High-Yield Bond 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 Labor Select
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, where relevant, 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 Labor Select International
Equity Portfolio, The Global Fixed Income Portfolio and The International Fixed
Income Portfolio, the investment adviser) 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 any commission, the size
and difficulty of the order, the reliability, integrity, financial condition,
general execution and operational capabilities of competing broker/dealers, and
any 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.
Subject to best price and execution, 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, 1994 and 1995
for The Defensive Equity Portfolio were 73% and 88%, respectively. The
portfolio turnover rates for the fiscal years ended October 31, 1994 and 1995
for The Aggressive Growth Portfolio were 43% and 64%, respectively. The
portfolio turnover rates for the fiscal years ended October 31, 1994 and 1995
for The International Equity Portfolio were 22% and 20%, respectively. The
portfolio turnover rates for the fiscal years ended October 31, 1994 and 1995
for The Global Fixed Income Portfolio were 205% and 77%, respectively. See
"PORTFOLIO TURNOVER" under "TRADING PRACTICES AND BROKERAGE" in the Statement
of Additional Information.
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(DPT-I)
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 one billion 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 1940 Act.
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.
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(DPT-I)
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.
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(DPT-I)
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.
Moody's applies numerical modifiers 1, 2 and 3 in each generic rating
classification from Aa to B. The modifier 1 indicates that company ranks in
the higher end of its generic category; the modifier 2 indicates a mid-range
ranking; and the modifier 3 indicates that the company ranks in the lower end
of its generic rating category.
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.
PLUS (+) OR MINUS (-) Ratings may be modified by a plus or minus sign,
reflecting the relative standing within the major rating categories.
COMMERCIAL PAPER
Excerpts from Moody's description of its two highest commercial paper ratings:
P-1--the highest grade possessing greatest relative strength; P-2--second
highest grade possessing less relative strength than the highest grade.
Excerpts from S&P's description of its two highest commercial paper ratings:
A-1--judged to be the highest investment grade category possessing the highest
relative strength; A-2--investment grade category possessing less relative
strength than the highest rating.
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(SAI-DPT-I/PART B)
PART B
DELAWARE POOLED TRUST, INC.
STATEMENT OF ADDITIONAL INFORMATION
MAY 29, 1996
Delaware Pooled Trust, Inc. ("Fund") is a no-load, open-end management
investment company. The Fund consists of twelve series ("Portfolios") offering
a broad range of investment choices. The Fund is designed to provide clients
with attractive alternatives for meeting their investment needs. Shares of the
Portfolios are offered with no sales charge or exchange or redemption fee.
This Statement of Additional Information addresses information of the Fund
applicable to each of the twelve Portfolios.
This Statement of Additional Information is not a prospectus but should
be read in conjunction with the Prospectus of the Fund dated May 29, 1996. To
obtain a Prospectus, please write to the Delaware Pooled Trust, Inc. at One
Commerce Square, 2005 Market Street, Philadelphia, PA 19103, Attn: Client
Services or call the Fund at 1-800-231-8002.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
INVESTMENT POLICIES, PORTFOLIO TECHNIQUES AND RISK CONSIDERATIONS
ACCOUNTING AND TAX ISSUES
PERFORMANCE INFORMATION
TRADING PRACTICES AND BROKERAGE
PURCHASING SHARES
DETERMINING NET ASSET VALUE
REDEMPTION AND REPURCHASE
DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS
TAXES
INVESTMENT MANAGEMENT AGREEMENT
OFFICERS AND DIRECTORS
GENERAL INFORMATION
FINANCIAL STATEMENTS
</TABLE>
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(SAI-DPT-I/PART B)
INVESTMENT POLICIES, PORTFOLIO TECHNIQUES AND RISK CONSIDERATIONS
INVESTMENT RESTRICTIONS
The Fund has adopted the following restrictions for each of the
Portfolios (except where otherwise noted) which, along with its respective
investment objective, cannot be changed without approval by the holders of a
"majority" of the respective Portfolio's outstanding shares, which is a vote by
the holders of the lesser of a) 67% or more of the voting securities present in
person or by proxy at a meeting, if the holders of more than 50% of the
outstanding voting securities are present or represented by proxy; or b) more
than 50% of the outstanding voting securities. The percentage limitations
contained in the restrictions and policies set forth herein apply at the time a
Portfolio purchases securities.
Each Portfolio shall not:
1. Make loans, except to the extent that purchases of debt obligations
(including repurchase agreements), in accordance with a Portfolio's investment
objective and policies, are considered loans, and except that each Portfolio
may loan up to 25% of its respective assets to qualified broker/dealers or
institutional investors for their use relating to short sales or other security
transactions.
2. Purchase or sell real estate or real estate limited partnerships,
but this shall not otherwise prevent a Portfolio from investing in securities
secured by real estate or interests therein, and except that The Real Estate
Investment Trust Portfolio may own real estate directly as a result of a default
on securities the Portfolio owns.
3. Engage in the underwriting of securities of other issuers, except
that in connection with the disposition of a security, a Portfolio may be
deemed to be an "underwriter" as that term is defined in the Securities Act of
1933.
4. Make any investment which would cause more than 25% of the market
or other fair value of its respective total assets to be invested in the
securities of issuers all of which conduct their principal business activities
in the same industry, except that The Defensive Equity Utility Portfolio shall
invest in excess of 25% of its total assets in the securities of issuers in the
utility industry, and The Real Estate Investment Trust Portfolio shall invest
in excess of 25% of its total assets in the securities of issuers in the real
estate industry. This restriction does not apply to obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities.
5. Purchase or sell commodities or commodity contracts, except that
The Aggressive Growth Portfolio, The Real Estate Investment Trust Portfolio and
The International Fixed Income Portfolio may enter into futures contracts and
may purchase and sell options on futures contracts in accordance with the
Prospectus, subject to investment restriction 6 below.
6. Enter into futures contracts or options thereon, except that The
Aggressive Growth Portfolio, The Real Estate Investment Trust Portfolio and The
International Fixed Income Portfolio may each enter into futures contracts and
options thereon to the extent that not more than 5% of its assets are required
as futures contract margin deposits and premiums on options and only to the
extent that obligations under such contracts and transactions represent not
more than 20% of its total assets.
7. Make short sales of securities, or purchase securities on margin,
except that The Aggressive Growth Portfolio, The Real Estate Investment Trust
Portfolio and The International Fixed Income Portfolio may satisfy margin
requirements with respect to futures transactions.
8. Purchase or retain the securities of any issuer which has an
officer, director or security holder who is a director or officer of the Fund
or of either of the investment advisers if or so long as the directors and
officers of the Fund and of the investment advisers together own beneficially
more than 5% of any class of securities of such issuer.
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<PAGE> 82
(SAI-DPT-I/PART B)
9. Invest in interests in oil, gas and other mineral leases or other
mineral exploration or development programs.
10. Borrow money, except as a temporary measure for extraordinary
purposes or to facilitate redemptions. Any borrowing will be done from a bank
and to the extent that such borrowing exceeds 5% of the value of its respective
net assets, asset coverage of at least 300% is required. In the event that
such asset coverage shall at any time fall below 300%, a Portfolio shall,
within three days thereafter (not including Sunday or holidays) or such longer
period as the Securities and Exchange Commission ("Commission") may prescribe
by rules and regulations, reduce the amount of its borrowings to such an extent
that the asset coverage of such borrowings shall be at least 300%. No
investment securities will be purchased while a Portfolio has an outstanding
borrowing. A Portfolio will not pledge more than 10% of its respective net
assets. A Portfolio will not issue senior securities as defined in the
Investment Company Act of 1940 (the "1940 Act"), except for notes to banks.
In addition to the restrictions set forth above, in connection with the
qualification of a Portfolio's shares for sale in certain states, a Portfolio
may not invest in warrants if such warrants, valued at the lower of cost or
market, would exceed 5% of the value of a Portfolio's net assets. Included
within such amount, but not to exceed 2% of a Portfolio's net assets may be
warrants which are not listed on the New York Stock Exchange or American Stock
Exchange. Warrants acquired by a Portfolio in units or attached to securities
may be deemed to be without value.
ADDITIONAL FUNDAMENTAL INVESTMENT RESTRICTIONS
The following additional investment restrictions apply to each of the
Portfolios, except The Defensive Equity Small/Mid-Cap Portfolio, The Defensive
Equity Utility Portfolio, The Labor Select International Equity Portfolio, The
Real Estate Investment Trust Portfolio, The International Fixed Income
Portfolio and The High-Yield Bond Portfolio, or as otherwise noted. They
cannot be changed without approval by the holders of a "majority" of the
respective Portfolio's outstanding shares, as described above.
Each Portfolio shall not:
1. As to 75% of its respective total assets, invest more than 5% of
its respective total assets in the securities of any one issuer (other than
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities). This restriction shall also apply to The Defensive Equity
Small/Mid-Cap Portfolio, The Labor Select International Equity Portfolio and
The High-Yield Bond Portfolio. This restriction shall apply to only 50% of the
total assets of The Global Fixed Income Portfolio.
2. Invest in securities of other investment companies, except by
purchase in the open market involving only customary brokers' commissions or in
connection with a merger, consolidation or other acquisition or as may
otherwise be permitted by the 1940 Act.
3. Purchase more than 10% of the outstanding voting securities of any
issuer, or invest in companies for the purpose of exercising control or
management.
4. Write, purchase or sell options, puts, calls or combinations
thereof with respect to securities, except that The Aggressive Growth Portfolio
may: (a) write covered call options with respect to any or all parts of its
portfolio securities; (b) purchase call options to the extent that the premiums
paid on all outstanding call options do not exceed 2% of the Portfolio's total
assets; (c) write secured put options; and (d) purchase put options, if the
Portfolio owns the security covered by the put option at the time of purchase,
and provided that premiums paid on all put options outstanding do not exceed 2%
of its total assets. The Portfolio may sell call or put options previously
purchased and enter into closing transactions with respect to the activities
noted above.
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(SAI-DPT-I/PART B)
5. Invest more than 5% of the value of its respective total assets in
securities of companies less than three years old. Such three-year period
shall include the operation of any predecessor company or companies.
6. Invest more than 10% of its respective total assets in repurchase
agreements maturing in more than seven days and other illiquid assets.
For purposes of investment restriction 6, it is the Fund's policy,
changeable without shareholder vote, that "illiquid assets" include securities
of foreign issuers which are not listed on a recognized U.S. or foreign
exchange and for which a bona fide market does not exist at the time of
purchase or subsequent valuation.
THE DEFENSIVE EQUITY SMALL/MID-CAP PORTFOLIO, THE DEFENSIVE EQUITY UTILITY
PORTFOLIO, THE LABOR SELECT INTERNATIONAL EQUITY PORTFOLIO, THE REAL ESTATE
INVESTMENT TRUST PORTFOLIO, THE INTERNATIONAL FIXED INCOME PORTFOLIO AND THE
HIGH-YIELD BOND PORTFOLIO
The following additional investment restrictions apply to The Defensive
Equity Small/Mid-Cap Portfolio, The Defensive Equity Utility Portfolio, The
Labor Select International Equity Portfolio, The Real Estate Investment Trust
Portfolio, The International Fixed Income Portfolio and The High-Yield Bond
Portfolio. Unlike the investment restrictions listed above, these are
non-fundamental investment restrictions and may be changed by the Fund's Board
of Directors without shareholder approval.
Except as noted below, each of The Defensive Equity Small/Mid-Cap
Portfolio, The Defensive Equity Utility Portfolio, The Labor Select
International Equity Portfolio, The Real Estate Investment Trust Portfolio, The
International Fixed Income Portfolio and The High-Yield Bond Portfolio shall
not:
1. As to 50% of the respective total assets of The Defensive Equity
Utility Portfolio, The Real Estate Investment Trust Portfolio and The
International Fixed Income Portfolio, invest more than 5% of its respective
total assets in the securities of any one issuer (other than obligations issued
or guaranteed by the U.S. Government, its agencies or instrumentalities).
2. Invest in securities of other investment companies, except by
purchase in the open market involving only customary brokers' commissions or in
connection with a merger, consolidation or other acquisition or as may
otherwise be permitted by the 1940 Act.
3. Invest more than 5% of the value of its respective total assets in
securities of companies less than three years old. Such three-year old period
shall include the operation of any predecessor company or companies. This
restriction shall not apply to The Real Estate Investment Trust Portfolio and
its investment in the securities of real estate investment trusts.
4. Purchase more than 10% of the outstanding voting securities of any
issuer, or invest in companies for the purpose of exercising control or
management.
5. Write, purchase or sell options, puts, calls or combinations
thereof with respect to securities, except that The Real Estate Investment
Trust Portfolio may: (a) write covered call options with respect to any or all
parts of its portfolio securities; (b) purchase call options to the extent that
the premiums paid on all outstanding call options do not exceed 2% of the
Portfolio's total assets; (c) write secured put options; and (d) purchase put
options, if the Portfolio owns the security covered by the put option at the
time of purchase, and provided that premiums paid on all put options
outstanding do not exceed 2% of its total assets. The Portfolio may sell call
or put options previously purchased and enter into closing transactions with
respect to the activities noted above.
6. Invest more than 15% of its respective total assets, determined at
the time of purchase, in repurchase agreements maturing in more than seven days
and other illiquid assets.
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(SAI-DPT-I/PART B)
For purposes of investment restriction 5, it is the Fund's policy that
"illiquid assets" include securities of foreign issuers which are not listed on
a recognized U.S. or foreign exchange and for which no bona fide market exists
at the time of purchase.
The following information supplements the information provided in the
Fund's Prospectus.
FOREIGN INVESTMENT INFORMATION (THE INTERNATIONAL EQUITY PORTFOLIO, THE
DEFENSIVE EQUITY UTILITY PORTFOLIO, THE LABOR SELECT INTERNATIONAL EQUITY
PORTFOLIO, THE REAL ESTATE INVESTMENT TRUST PORTFOLIO, THE GLOBAL FIXED INCOME
PORTFOLIO, THE INTERNATIONAL FIXED INCOME PORTFOLIO AND THE HIGH-YIELD BOND
PORTFOLIO)
Investors in The International Equity Portfolio, The Labor Select
International Equity Portfolio, The Global Fixed Income Portfolio and The
International Fixed Income Portfolio (as well as in The Defensive Equity
Utility Portfolio, The Real Estate Investment Trust Portfolio and The
High-Yield Bond Portfolio, each of which possesses a limited ability to invest
in foreign securities) should recognize that investing in securities issued by
foreign corporations and foreign governments involves certain considerations,
including those set forth in the Prospectus, which are not typically associated
with investments in United States issuers. Since the securities of foreign
issuers are frequently denominated in foreign currencies, and since each
Portfolio may temporarily hold uninvested reserves in bank deposits in foreign
currencies, these Portfolios will be affected favorably or unfavorably by
changes in currency rates and in exchange control regulations, and may incur
costs in connection with conversions between various currencies. The
investment policies of each Portfolio, except The High-Yield Bond Portfolio,
permit each to enter into forward foreign currency exchange contracts and
permit The International Fixed Income Portfolio to engage in certain options
and futures activities, in order to hedge holdings and commitments against
changes in the level of future currency rates. See "FOREIGN CURRENCY
TRANSACTIONS (THE INTERNATIONAL EQUITY PORTFOLIO, THE DEFENSIVE EQUITY UTILITY
PORTFOLIO, THE LABOR SELECT INTERNATIONAL EQUITY PORTFOLIO, THE REAL ESTATE
INVESTMENT TRUST PORTFOLIO, THE GLOBAL FIXED INCOME PORTFOLIO AND THE
INTERNATIONAL FIXED INCOME PORTFOLIO)," below.
There has been in the past, and there may be again in the future, an
interest equalization tax levied by the United States in connection with the
purchase of foreign securities such as those purchased by the Portfolios.
Payment of such interest equalization tax, if imposed, would reduce a
Portfolio's rate of return on its investment. Dividends paid by foreign
issuers may be subject to withholding and other foreign taxes which may
decrease the net return on such investments as compared to dividends paid to a
Portfolio by United States issuers. Special rules govern the federal income
tax treatment of certain transactions denominated in terms of a currency other
than the U.S. dollar or determined by reference to the value of one or more
currencies other than the U.S. dollar. The types of transactions covered by
the special rules include, as relevant, the following: (i) the acquisition of,
or becoming the obligor under, a bond or other debt instrument (including, to
the extent provided in Treasury Regulations, preferred stock); (ii) the
accruing of certain trade receivables and payables; and (iii) the entering into
or acquisition of any forward contract and similar financial instrument if such
instrument is not "marked to market." The disposition of a currency other than
the U.S. dollar by a U.S. taxpayer is also treated as a transaction subject to
the special currency rules. With respect to transactions covered by the
special rules, foreign currency gain or loss is calculated separately from any
gain or loss on the underlying transaction and is normally taxable as
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(SAI-DPT-I/PART B)
ordinary gain or loss. A taxpayer may elect to treat as capital gain or loss
foreign currency gain or loss arising from certain identified forward contracts
that are capital assets in the hands of the taxpayer and which are not part of
a straddle. The Treasury Department has authority to issue regulations under
which certain transactions subject to the special currency rules that are part
of a "section 988 hedging transaction" (as defined in the Internal Revenue Code
of 1986, as amended (the "Code"), and the Treasury Regulations) will be
integrated and treated as a single transaction or otherwise treated
consistently for purposes of the Code. Any gain or loss attributable to the
foreign currency component of a transaction engaged in by a Portfolio which is
not subject to the special currency rules (such as foreign equity investments
other than certain preferred stocks) will be treated as capital gain or loss
and will not be segregated from the gain or loss on the underlying transaction.
It is anticipated that some of the non-U.S. dollar denominated investments and
foreign currency contracts the Portfolios may make or enter into will be
subject to the special currency rules described above.
FOREIGN CURRENCY TRANSACTIONS (THE INTERNATIONAL EQUITY PORTFOLIO, THE
DEFENSIVE EQUITY UTILITY PORTFOLIO, THE LABOR SELECT INTERNATIONAL EQUITY
PORTFOLIO, THE REAL ESTATE INVESTMENT TRUST PORTFOLIO, THE GLOBAL FIXED INCOME
PORTFOLIO AND THE INTERNATIONAL FIXED INCOME PORTFOLIO)
The International Equity Portfolio, The Labor Select International Equity
Portfolio, The Global Fixed Income Portfolio and The International Fixed Income
Portfolio (as well as The Defensive Equity Utility Portfolio and The Real
Estate Investment Trust Portfolio, consistent with their limited ability to
invest in foreign securities) may purchase or sell currencies and/or engage in
forward foreign currency transactions in order to expedite settlement of
portfolio transactions and to minimize currency value fluctuations.
Forward foreign currency contracts are traded in the interbank market
conducted directly between currency traders (usually large commercial banks)
and their customers. A forward contract generally has no deposit requirement,
and no commissions are charged at any stage for trades. A Portfolio will
account for forward contracts by marking to market each day at daily exchange
rates.
When a Portfolio enters 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 its assets denominated in
such foreign currency, The Custodian Bank will place or will cause to be placed
cash or liquid equity or debt securities in a separate account of that
Portfolio in an amount not less than the value of that Portfolio's total assets
committed to the consummation of such forward contracts. If the additional
cash or securities placed in the separate account declines, additional cash or
securities will be placed in the account on a daily basis so that the value of
the account will equal the amount of that Portfolio's commitments with respect
to such contracts.
As noted in the Prospectus, The International Fixed Income Portfolio may
also enter into transactions involving foreign currency options, futures
contracts and options on futures contracts, in order to minimize the currency
risk in its investment portfolio.
Foreign currency options are traded in a manner substantially similar to
options on securities. In particular, an option on foreign currency provides
the holder with the right to purchase, in the case of a call option, or to
sell, in the case of a put option, a stated quantity of a particular currency
for a fixed price up to a stated expiration date. The writer of the option
undertakes the obligation to deliver, in the case of a call option, or to
purchase, in the case of a put option, the quantity of the currency called for
in the option, upon exercise of the option by the holder.
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As in the case of other types of options, the holder of an option on
foreign currency is required to pay a one-time, non-refundable premium, which
represents the cost of purchasing the option. The holder can lose the entire
amount of this premium, as well as related transaction costs, but not more than
this amount. The writer of the option, in contrast, generally is required to
make initial and variation margin payments, similar to margin deposits required
in the trading of futures contacts and the writing of other types of options.
The writer is therefore subject to risk of loss beyond the amount originally
invested and above the value of the option at the time it is entered into.
Certain options on foreign currencies, like forward contracts, are traded
over-the-counter through financial institutions acting as market-makers in such
options and the underlying currencies. Such transactions therefore involve
risks not generally associated with exchange-traded instruments. Options on
foreign currencies may also be traded on national securities exchanges
regulated by the Commission or commodities exchanges regulated by the Commodity
Futures Trading Commission.
A foreign currency futures contract is a bilateral agreement providing
for the purchase and sale of a specified type and amount of a foreign currency.
By its terms, a futures contract provides for a specified settlement date on
which, in the case of the majority of foreign currency futures contracts, the
currency underlying the contract is delivered by the seller and paid for by the
purchaser, or on which, in the case of certain futures contracts, the
difference between the price at which the contract was entered into and the
contract's closing value is settled between the purchaser and seller in cash.
Futures contracts differ from options in that they are bilateral agreements,
with both the purchaser and the seller equally obligated to complete the
transactions. In addition, futures contracts call for settlement only on the
expiration date, and cannot be "exercised" at any other time during their term.
The purchase or sale of a futures contract also differs from the purchase
or sale of a security or the purchase of an option in that no purchase price is
paid or received. Instead, an amount of cash or cash equivalents, which varies
but may be as low as 5% or less of the value of the contract, must be deposited
with the broker as "initial margin" as a good faith deposit. Subsequent
payments to and from the broker referred to as "variation margin" are made on a
daily basis as the value of the currency underlying the futures contract
fluctuates, making positions in the futures contract more or less valuable, a
process known as "marking to the market."
A futures contract may be purchased or sold only on an exchange, known as
a "contract market," designated by the Commodity Futures Trading Commission for
the trading of such contract, and only through a registered futures commission
merchant which is a member of such contract market. A commission must be paid
on each completed purchase and sale transaction. The contract market
clearinghouse guarantees the performance of each party to a futures contract,
by in effect taking the opposite side of such contract. At any time prior to
the expiration of a futures contract, a trader may elect to close out its
position by taking an opposite position on the contract market on which the
position was entered into, subject to the availability of a secondary market,
which will operate to terminate the initial position. At that time, a final
determination of variation margin is made and any loss experienced by the
trader is required to be paid to the contract market clearing house while any
profit due to the trader must be delivered to it.
A call option on a futures contract provides the holder with the right to
purchase, or enter into a "long" position in, the underlying futures contract.
A put option on a futures contract provides the holder with the right to sell,
or enter into a "short" position, in the underlying futures contract. In both
cases, the option provides for a fixed exercise price
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up to a stated expiration date. Upon exercise of the option by the holder, the
contract market clearinghouse establishes a corresponding short position for
the writer of the option, in the case of a call option, or a corresponding long
position in the case of a put option and the writer delivers to the holder the
accumulated balance in the writer's margin account which represents the amount
by which the market price of the futures contract at exercise exceeds, in the
case of a call, or is less than, in the case of a put, the exercise price of
the option on the futures contract. In the event that an option written by the
Portfolio is exercised, the Portfolio will be subject to all the risks
associated with the trading of futures contracts, such as payment of variation
margin deposits. In addition, the writer of an option on a futures contract,
unlike the holder, is subject to initial and variation margin requirements on
the option position.
A position in an option on a futures contract may be terminated by the
purchaser or seller prior to expiration by effecting a closing purchase or sale
transaction, subject to the availability of a liquid secondary market, which is
the purchase or sale of an option of the same series (i.e., the same exercise
price and expiration date) as the option previously purchased or sold. The
difference between the premiums paid and received represents the trader's
profit or loss on the transaction.
An option becomes worthless to the holder when it expires. Upon exercise
of an option, the exchange or contract market clearinghouse assigns exercise
notices on a random basis to those of its members which have written options of
the same series and with the same expiration date. A brokerage firm receiving
such notices then assigns them on a random basis to those of its customers
which have written options of the same series and expiration date. A writer
therefore has no control over whether an option will be exercised against it,
nor over the timing of such exercise.
BRADY BONDS (THE GLOBAL FIXED INCOME PORTFOLIO AND THE INTERNATIONAL FIXED
INCOME PORTFOLIO)
The Global Fixed Income Portfolio and The International Fixed Income
Portfolio may invest, within the limits specified in the Prospectus, in Brady
Bonds and other sovereign debt securities of countries that have restructured
or are in the process of restructuring sovereign debt pursuant to the Brady
Plan. Brady Bonds are debt securities issued under the framework of the Brady
Plan, an initiative announced by then 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 "IMF"). The
Brady Plan framework, as it has developed, contemplates the exchange of
commercial bank debt for newly issued bonds (Brady Bonds). The World Bank
and/or the IMF support the restructuring by providing funds pursuant to loan
agreements or other arrangements which enable the debtor nation to
collateralize the new Brady Bonds or to repurchase outstanding bank debt at a
discount. Under these arrangements with the World Bank and/or the IMF, debtor
nations have been required to agree to the implementation of certain domestic
monetary and fiscal reforms. Such reforms have included the liberalization of
trade and foreign investment, the privatization of state-owned enterprises and
the setting of targets for public spending and borrowing. These policies and
programs seek to promote the debtor country's ability to service its external
obligations and promote its economic growth and development. Investors 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.
The investment adviser
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to the Portfolios 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.
To date, Mexico, Costa Rica, Venezuela, Uruguay and Nigeria have issued
approximately $50 billion of Brady Bonds, and Argentina, Brazil and the
Philippines have announced plans to issue approximately $90 billion, based on
current estimates, of Brady Bonds. Investors should recognize that Brady Bonds
have been issued only recently, and accordingly do not have a long payment
history. Agreements implemented under the Brady Plan to date are designed to
achieve debt and debt-service reduction through specific options negotiated by
a debtor nation with its creditors. As a result, the financial packages
offered by each country differ. The types of options have included the
exchange of outstanding commercial bank debt for bonds issued at 100% of face
value of such debt, bonds issued at a discount of face value of such debt,
bonds bearing an interest rate which increases over time and bonds issued in
exchange for the advancement of new money by existing lenders. Certain Brady
Bonds have been collateralized as to principal due at maturity by U.S. Treasury
zero coupon bonds with a maturity equal to the final maturity of such Brady
Bonds, although the collateral is not available to investors until the final
maturity of the Brady Bonds. Collateral purchases are financed by the IMF, the
World Bank and the debtor nations' reserves. In addition, the first two or
three interest payments on certain types of Brady Bonds may be collateralized
by cash or securities agreed upon by creditors.
OPTIONS ON SECURITIES, FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS (THE
AGGRESSIVE GROWTH PORTFOLIO AND THE REAL ESTATE INVESTMENT TRUST PORTFOLIO)
In order to remain fully invested, and to reduce transaction costs, The
Aggressive Growth Portfolio and The Real Estate Investment Trust Portfolio may,
to the limited extent identified in the Prospectus, use futures contracts,
options on futures contracts and options on securities and may enter into
closing transactions with respect to such activities. The Portfolios may only
enter into these transactions for hedging purposes, if it is consistent with
the Portfolios' investment objectives and policies. The Portfolios will not
engage in such transactions to the extent that obligations resulting from these
activities in the aggregate exceed 25% of the Portfolios' assets.
OPTIONS
The Aggressive Growth Portfolio and The Real Estate Investment Trust
Portfolio may purchase call options, write call options on a covered basis,
write secured put options and purchase put options on a covered basis only.
The Portfolios may invest in options that are either exchange-listed or
traded over-the-counter. Certain over-the-counter options may be illiquid.
Thus, it may not be possible to close options positions and this may have an
adverse impact on the Portfolios' ability to effectively hedge their
securities. The Aggressive Growth Portfolio will not invest more than 10% of
its assets in illiquid securities, and The Real Estate Investment Trust
Portfolio will not invest more than 15% of its assets in illiquid securities.
A. COVERED CALL WRITING--The Portfolios may write covered call options
from time to time on such portion of their securities as the investment adviser
determines is appropriate given the limited circumstances under which the
Portfolios intend to engage in this activity. A call option gives the
purchaser of such option the right to buy and the writer (in this case a
Portfolio) the obligation to sell the underlying security at the exercise price
during the option period. If the security rises in value, however, the
Portfolio may not fully participate in the market appreciation.
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During the option period, a covered call option writer may be assigned an
exercise notice by the broker/dealer through whom such call option was sold
requiring the writer to deliver the underlying security against payment of the
exercise price. This obligation is terminated upon the expiration of the
option period or at such earlier time in which the writer effects a closing
purchase transaction. A closing purchase transaction cannot be effected with
respect to an option once the option writer has received an exercise notice for
such option.
With respect to options on actual portfolio securities owned by the
Portfolios, a Portfolio may enter into closing purchase transactions. A
closing purchase transaction is one in which the Portfolio, when obligated as a
writer of an option, terminates its obligation by purchasing an option of the
same series as the option previously written.
Consistent with the limited purposes for which the Portfolios intend to
engage in the writing of covered calls, closing purchase transactions will
ordinarily be effected to realize a profit on an outstanding call option, to
prevent an underlying security from being called, to permit the sale of the
underlying security or to enable the Portfolios to write another call option on
the underlying security with either a different exercise price or expiration
date or both.
The Portfolios may realize a net gain or loss from a closing purchase
transaction depending upon whether the net amount of the original premium
received on the call option is more or less than the cost of effecting the
closing purchase transaction. Any loss incurred in a closing purchase
transaction may be partially or entirely offset by the premium received from a
sale of a different call option on the same underlying security. Such a loss
may also be wholly or partially offset by unrealized appreciation in the market
value of the underlying security. Conversely, a gain resulting from a closing
purchase transaction could be offset in whole or in part by a decline in the
market value of the underlying security.
If a call option expires unexercised, a Portfolio will realize a
short-term capital gain in the amount of the premium on the option, less the
commission paid. Such a gain, however, may be offset by depreciation in the
market value of the underlying security during the option period. If a call
option is exercised, a Portfolio will realize a gain or loss from the sale of
the underlying security equal to the difference between the cost of the
underlying security, and the proceeds of the sale of the security plus the
amount of the premium on the option, less the commission paid.
The market value of a call option generally reflects the market price of
an underlying security. Other principal factors affecting market value include
supply and demand, interest rates, the price volatility of the underlying
security and the time remaining until the expiration date.
The Portfolios will write call options only on a covered basis, which
means that the Portfolios will own the underlying security subject to a call
option at all times during the option period. Unless a closing purchase
transaction is effected, the Portfolios would be required to continue to hold a
security which they might otherwise wish to sell, or deliver a security it
would want to hold. Options written by the Portfolios will normally have
expiration dates between one and nine months from the date written. The
exercise price of a call option may be below, equal to, or above the current
market value of the underlying security at the time the option is written.
B. PURCHASING CALL OPTIONS--The Portfolios may purchase call options to
the extent that premiums paid by the Portfolios do not aggregate more than 2%
of their total assets. When a Portfolio purchases a call option, in return for
a premium paid by the Portfolio to the writer of the option, the Portfolio
obtains the right to buy the security underlying the option at a specified
exercise price at any time during the term of the option. The writer of the
call option, who receives the premium upon writing the option, has the
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obligation, upon exercise of the option, to deliver the underlying security
against payment of the exercise price. The advantage of purchasing call
options is that the Portfolios may alter portfolio characteristics and modify
portfolio maturities without incurring the cost associated with portfolio
transactions.
The Portfolios may, following the purchase of a call option, liquidate
their positions by effecting a closing sale transaction. This is accomplished
by selling an option of the same series as the option previously purchased.
The Portfolios will realize a profit from a closing sale transaction if the
price received on the transaction is more than the premium paid to purchase the
original call option; the Portfolios will realize a loss from a closing sale
transaction if the price received on the transaction is less than the premium
paid to purchase the original call option.
Although the Portfolios will generally purchase only those call options
for which there appears to be an active secondary market, there is no assurance
that a liquid secondary market on an exchange will exist for any particular
option, or at any particular time, and for some options no secondary market on
an exchange may exist. In such event, it may not be possible to effect closing
transactions in particular options, with the result that the Portfolios would
have to exercise their options in order to realize any profit and would incur
brokerage commissions upon the exercise of such options and upon the subsequent
disposition of the underlying securities acquired through the exercise of such
options. Further, unless the price of the underlying security changes
sufficiently, a call option purchased by a Portfolio may expire without any
value to the Portfolio.
C. PURCHASING PUT OPTIONS--The Portfolios may purchase put options to
the extent premiums paid by the Portfolios do not aggregate more than 2% of
their total assets. The Portfolios will, at all times during which they hold a
put option, own the security covered by such option.
A put option purchased by the Portfolios gives them the right to sell one
of their securities for an agreed price up to an agreed date. Consistent with
the limited purposes for which the Portfolios intend to purchase put options,
the Portfolios intend to purchase put options in order to protect against a
decline in the market value of the underlying security below the exercise price
less the premium paid for the option ("protective puts"). The ability to
purchase put options will allow a Portfolio to protect unrealized gain in an
appreciated security in its portfolio without actually selling the security.
If the security does not drop in value, the Portfolio will lose the value of
the premium paid. The Portfolio may sell a put option which it has previously
purchased prior to the sale of the securities underlying such option. Such
sales will result in a net gain or loss depending on whether the amount
received on the sale is more or less than the premium and other transaction
costs paid on the put option which is sold.
The Portfolios may sell a put option purchased on individual portfolio
securities. Additionally, the Portfolios may enter into closing sale
transactions. A closing sale transaction is one in which a Portfolio, when it
is the holder of an outstanding option, liquidates its position by selling an
option of the same series as the option previously purchased.
D. WRITING PUT OPTIONS--A put option written by a Portfolio obligates it
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 Portfolio. During the option period, the Portfolio, as writer
of the put option, may be assigned an exercise notice by the broker/dealer
through whom the option was sold requiring the Portfolio to make payment of the
exercise price against delivery of the underlying security. The obligation
terminates upon expiration of the put option or at such earlier time at which
the writer effects a closing purchase transaction. The Portfolios may write
put options on a secured basis which means that the Portfolios
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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 amount of cash or U.S.
Government securities held in the segregated account will be adjusted on a
daily basis to reflect changes in the market value of the securities covered by
the put option written by the Portfolios. Consistent with the limited purposes
for which the Portfolios intend to engage in the writing of put options,
secured put options will generally be written in circumstances where the
investment adviser wishes to purchase the underlying security for the
Portfolios at a price lower than the current market price of the security. In
such event, a Portfolio would write a secured put option at an exercise price
which, reduced by the premium received on the option, reflects the lower price
it is willing to pay.
Following the writing of a put option, the Portfolios may wish to
terminate the obligation to buy the security underlying the option by effecting
a closing purchase transaction. This is accomplished by buying an option of
the same series as the option previously written. The Portfolios may not,
however, effect such a closing transaction after they have been notified of the
exercise of the option.
FUTURES AND OPTIONS ON FUTURES
Consistent with the limited circumstances under which The Aggressive
Growth Portfolio and The Real Estate Investment Trust Portfolio will use
futures, the Portfolios may enter into contracts for the purchase or sale for
future delivery of securities. While futures contracts provide for the
delivery of securities, deliveries usually do not occur. Contracts are
generally terminated by entering into an offsetting transaction. When a
Portfolio enters into a futures transaction, it must deliver to the futures
commission merchant selected by the Portfolio an amount referred to as "initial
margin." This amount is maintained by the futures commission merchant in an
account at the Portfolio's Custodian Bank. Thereafter, a "variation margin"
may be paid by the Portfolio to, or drawn by the Portfolio from, such account
in accordance with controls set for such account, depending upon changes in the
price of the underlying securities subject to the futures contract.
Consistent with the limited purposes for which the Portfolios may engage
in these transactions, a Portfolio may enter into such futures contracts to
protect against the adverse effects of fluctuations in interest rates without
actually buying or selling the securities. For example, if interest rates are
expected to increase, a Portfolio might enter into futures contracts for the
sale of debt securities. Such a sale would have much the same effect as
selling an equivalent value of the debt securities owned by the Portfolio. If
interest rates did increase, the value of the debt securities in the portfolio
would decline, but the value of the futures contracts to the Portfolio would
increase at approximately the same rate, thereby keeping the net asset value of
the Portfolio from declining as much as it otherwise would have. Similarly,
when it is expected that interest rates may decline, futures contracts may be
purchased to hedge in anticipation of subsequent purchases of securities at
higher prices. Because the fluctuations in the value of futures contracts
should be similar to those of debt securities, a Portfolio could take advantage
of the anticipated rise in value of debt securities without actually buying
them until the market had stabilized. At that time, the futures contracts
could be liquidated and the Portfolio could then buy debt securities on the
cash market.
With respect to options on futures contracts, when a Portfolio is not
fully invested, it may purchase a call option on a futures contract to hedge
against a market advance due to declining interest rates. The purchase of a
call option on a futures contract is similar in some respects to the purchase
of a call option on an individual security. Depending on the pricing of the
option compared to either the price of the futures contract upon which
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it is based, or the price of the underlying debt securities, it may or may not
be less risky than ownership of the futures contract or underlying debt
securities.
The writing of a call option on a futures contract constitutes a partial
hedge against the declining price of the security which is deliverable upon
exercise of the futures contract. If the futures price at the expiration of
the option is below the exercise price, the Portfolio will retain the full
amount of the option premium which provides a partial hedge against any decline
that may have occurred in the Portfolio's holdings. The writing of a put
option on a futures contract constitutes a partial hedge against the increasing
price of the security which is deliverable upon exercise of the futures
contract. If the futures price at the expiration of the option is higher than
the exercise price, the Portfolio will retain the full amount of option premium
which provides a partial hedge against any increase in the price of securities
which the Portfolio intends to purchase.
If a put or call option that a Portfolio has written is exercised, the
Portfolio will incur a loss which will be reduced by the amount of the premium
it receives. Depending on the degree of correlation between changes in the
value of its portfolio securities and changes in the value of its futures
positions, a Portfolio's losses from existing options on futures may, to some
extent, be reduced or increased by changes in the value of portfolio
securities. The purchase of a put option on a futures contract is similar in
some respects to the purchase of protective puts on portfolio securities. For
example, consistent with the limited purposes for which the Portfolios will
engage in these activities, a Portfolio will purchase a put option on a futures
contract to hedge the Portfolio's securities against the risk of rising
interest rates.
To the extent that interest rates move in an unexpected direction, the
Portfolios may not achieve the anticipated benefits of futures contracts or
options on futures contracts or may realize a loss. For example, if a
Portfolio is hedged against the possibility of an increase in interest rates
which would adversely affect the price of securities held in its portfolio and
interest rates decrease instead, the Portfolio will lose part or all of the
benefit of the increased value of its securities which it has because it will
have offsetting losses in its futures position. In addition, in such
situations, if the Portfolio had insufficient cash, it may be required to sell
securities from its portfolio to meet daily variation margin requirements.
Such sales of securities may, but will not necessarily, be at increased prices
which reflect the rising market. The Portfolios may be required to sell
securities at a time when it may be disadvantageous to do so.
Further, with respect to options on futures contracts, the Portfolios may
seek to close out an option position by writing or buying an offsetting
position covering the same securities or contracts and have the same exercise
price and expiration date. The ability to establish and close out positions on
options will be subject to the maintenance of a liquid secondary market, which
cannot be assured.
* * *
From time to time, the Portfolios may also, as noted below, engage in the
following investment techniques:
ASSET-BACKED SECURITIES (THE FIXED INCOME PORTFOLIO AND THE LIMITED-TERM
MATURITY PORTFOLIO)
The Fixed Income and The Limited-Term Maturity Portfolios may invest a
portion of their assets in asset-backed securities. The rate of principal
payment on asset-backed securities generally depends on 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
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the anticipated yield to maturity. The credit quality of most asset-backed
securities depends primarily on the credit quality of the assets underlying
such securities, how well the entities issuing the securities are insulated
from the credit risk of the originator or affiliated entities, and the amount
of credit support provided to the securities.
Asset-backed securities are often backed by a pool of assets representing
the obligations of a number of different parties. To lessen the effect of
failures by obligors on underlying assets to make payments, such securities may
contain elements of credit support. Such credit support falls into two
categories: (i) liquidity protection, and (ii) protection against losses
resulting from ultimate default by an obligor on the underlying assets.
Liquidity protection refers to the provision of advances, generally by the
entity administering the pool of assets, to ensure that the receipt of payments
due on the underlying pool is timely. Protection against losses resulting from
ultimate default enhances the likelihood of payments of the obligations on at
least some of the assets in the pool. Such protection may be provided through
guarantees, insurance policies or letters of credit obtained by the issuer or
sponsor from third parties, through various means of structuring the
transaction or through a combination of such approaches. The Portfolios will
not pay any additional fees for such credit support, although the existence of
credit support may increase the price of a security.
Examples of credit support arising out of the structure of the
transaction include "senior-subordinated securities" (multiple class securities
with one or more classes subordinate to other classes as to the payment of
principal thereof and interest thereon, with the result that defaults on the
underlying assets are borne first by the holders of the subordinated class),
creation of "reserve funds" (where cash or investments, sometimes funded from a
portion of the payments on the underlying assets, are held in reserve against
future losses) and "over collateralization" (where the scheduled payments on,
or the principal amount of, the underlying assets exceeds that required to make
payments of the securities and pay any servicing or other fees). The degree of
credit support provided for each issue is generally based on historical
information respecting the level of credit risk associated with the underlying
assets. Delinquencies or losses in excess of those anticipated could adversely
affect the return on an investment in such issue.
REPURCHASE AGREEMENTS
While each Portfolio is permitted to do so, it normally does not invest
in repurchase agreements, except to invest cash balances or for temporary
defensive purposes.
The funds in the Delaware Group, including the Fund, have obtained an
exemption from the joint-transaction prohibitions of Section 17(d) of the 1940
Act to allow the Delaware Group funds jointly to invest cash balances. Each
Portfolio may invest cash balances in a joint repurchase agreement in
accordance with the terms of the Order and subject generally to the conditions
described below.
A repurchase agreement is a short-term investment by which the purchaser
acquires ownership of a debt security and the seller agrees to repurchase the
obligation at a future time and set price, thereby determining the yield during
the purchaser's holding period. Should an issuer of a repurchase agreement
fail to repurchase the underlying security, the loss to a Portfolio, if any,
would be the difference between the repurchase price and the market value of
the security. Each Portfolio will limit its investments in repurchase
agreements to those which its respective investment adviser, under the
guidelines of the Board of Directors, determines to present minimal credit
risks and which are of high quality. In addition, a Portfolio must have
collateral of at least 100% of the repurchase price, including the portion
representing the Portfolio's yield under such agreements which is monitored on
a daily basis.
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PORTFOLIO LOAN TRANSACTIONS
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.
It is the understanding of the Fund that the staff of the Commission
permits portfolio lending by registered investment companies if certain
conditions are met. These conditions are as follows: 1) each transaction must
have 100% collateral in the form of cash, short-term U.S. Government
securities, or irrevocable letters of credit payable by banks acceptable to the
Fund from the borrower; 2) this collateral must be valued daily and should the
market value of the loaned securities increase, the borrower must furnish
additional collateral to a Portfolio; 3) a Portfolio must be able to terminate
the loan after notice, at any time; 4) a Portfolio must receive reasonable
interest on any loan, and any dividends, interest or other distributions on the
lent securities, and any increase in the market value of such securities; 5) a
Portfolio may pay reasonable custodian fees in connection with the loan; and 6)
the voting rights on the lent securities may pass to the borrower; however, if
the Board of Directors of the Fund know that a material event will occur
affecting an investment loan, they must either terminate the loan in order to
vote the proxy or enter into an alternative arrangement with the borrower to
enable the directors to vote the proxy.
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 respective
investment adviser, under the supervision of 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 respective
investment adviser.
RULE 144A 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. Rule 144A Securities are traded
among qualified institutional investors. While maintaining oversight, the
Board of Directors has delegated to the respective investment adviser the
day-to-day function of determining whether or not individual Rule 144A
Securities are liquid for purposes of each Portfolio's limitation (whether 15%
or 10% of total assets) on investments in illiquid assets. The Board has
instructed the respective investment adviser 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 other 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).
Investing in Rule 144A Securities could have the effect of increasing the
level of a Portfolio's illiquidity to the extent that qualified institutional
buyers become, for a time, uninterested in purchasing these securities. After
the purchase of a Rule 144A Security, however, the Board of Directors and the
respective investment adviser will continue to monitor the liquidity of that
security to ensure that a Portfolio has no more than 10% or 15%, as
appropriate, of its total assets in illiquid securities.
-15-
<PAGE> 95
(SAI-DPT-I/PART B)
ACCOUNTING AND TAX ISSUES
When The Aggressive Growth Portfolio, The Real Estate Investment Trust
Portfolio and The International Fixed Income Portfolio writes a call, or
purchases a put option, an amount equal to the premium received or paid by it
is included in the section of the Portfolio's assets and liabilities as an
asset and as an equivalent liability.
In writing a call, the amount of the liability is subsequently "marked to
market" to reflect the current market value of the option written. The current
market value of a written option is the last sale price on the principal
exchange on which such option is traded or, in the absence of a sale, the mean
between the last bid and ask prices. If an option which a Portfolio has
written expires on its stipulated expiration date, the Portfolio recognizes a
short-term capital gain. If a Portfolio enters into a closing purchase
transaction with respect to an option which the Portfolio has written, the
Portfolio realizes a short-term gain (or loss if the cost of the closing
transaction exceeds the premium received when the option was sold) without
regard to any unrealized gain or loss on the underlying security, and the
liability related to such option is extinguished. If a call option which a
Portfolio has written is exercised, the Portfolio realizes a capital gain or
loss from the sale of the underlying security on foreign currency and the
proceeds from such sale are increased by the premium originally received.
The premium paid by a Portfolio for the purchase of a put option is
reported in the section of the Portfolio's assets and liabilities as an
investment and subsequently adjusted daily to the current market value of the
option. For example, if the current market value of the option exceeds the
premium paid, the excess would be unrealized appreciation and, conversely, if
the premium exceeds the current market value, such excess would be unrealized
depreciation. The current market value of a purchased option is the last sale
price on the principal exchange on which such option is traded or, in the
absence of a sale, the mean between the last bid and ask prices. If an option
which the Portfolio has purchased expires on the stipulated expiration date,
the Portfolio realizes a short-term or long-term capital loss for federal
income tax purposes in the amount of the cost of the option. If the Portfolio
exercises a put option, it realizes a capital gain or loss (long-term or
short-term, depending on the holding period of the underlying security) from
the sale of the underlying security and the proceeds from such sale will be
decreased by the premium originally paid.
OTHER TAX REQUIREMENTS
Each Portfolio has qualified or intends to qualify, and each that has
qualified intends to continue to qualify, as a regulated investment company
under Subchapter M of the Code. Accordingly, a Portfolio will not be subject
to federal income tax to the extent its earnings are distributed. Each
Portfolio must meet several requirements to maintain its status as a regulated
investment company. Among these requirements are: (i) that at least 90% of
its investment company taxable income be derived from dividends, interest,
payment with respect to securities loans and gains from the sale or disposition
of securities or foreign currencies, or other income derived with respect to
its business of investing in such securities or currencies; (ii) that at the
close of each quarter of its taxable year at least 50% of the value of its
assets consist of cash and cash items, government securities, securities of
other regulated investment companies and, subject to certain diversification
requirements, other securities, and, with respect to its remaining assets, no
more than 25% of the value of such assets is invested in the securities (other
than U.S. Government securities and securities of other regulated investment
companies) of any one issuer, or of two or more issuers which are controlled by
a Portfolio and which are engaged in the same or similar trades or businesses;
and (iii) that less than 30% of its gross income be derived from sales of
securities held for less than three months.
-16-
<PAGE> 96
(SAI-DPT-I/PART B)
The requirement that not more than 30% of gross income be derived from
gains from the sale or other disposition of securities held for less than three
months may restrict The Aggressive Growth Portfolio and The Real Estate
Investment Trust Portfolio in their ability to write covered call options on
securities which they have held less than three months, to write options which
expire in less than three months, to sell securities which have been held less
than three months and to effect closing purchase transactions with respect to
options which have been written less than three months prior to such
transactions. Consequently, in order to avoid realizing a gain within the
three-month period, the Portfolios may be required to defer the closing out of
a contract beyond the time when it might otherwise be advantageous to do so.
The Portfolios may also be restricted in the sale of purchased put options and
the purchase of put options for the purpose of hedging underlying securities
because of the application of the short sale holding period rules with respect
to such underlying securities.
The straddle rules of Section 1092 may apply. Generally, the straddle
provisions require the deferral of losses to the extent of unrecognized gains
related to the offsetting positions in the straddle. Excess losses, if any,
can be recognized in the year of loss. Deferred losses will be carried forward
and recognized in the following year, subject to the same limitation.
-17-
<PAGE> 97
(SAI-DPT-I/PART B)
PERFORMANCE INFORMATION
From time to time, the Fund may state each Portfolio's total return in
advertisements and other types of literature. Any statements of total return
performance data will be accompanied by information on the Portfolio's average
annual total rate of return over the most recent one-, five-, and ten-year
periods, as relevant. The Fund may also advertise aggregate and average total
return information of each Portfolio over additional periods of time.
Each Portfolio's average annual total rate of return is based on a
hypothetical $1,000 investment that includes capital appreciation and
depreciation during the stated periods. The following formula will be used for
the actual computations:
n
P(1+T) = ERV
Where: P = a hypothetical initial purchase order of $1,000;
T = average annual total return;
n = number of years;
ERV = redeemable value of the hypothetical $1,000 purchase at
the end of the period.
Aggregate or cumulative total return is calculated in a similar manner,
except that the results are not annualized. Each calculation assumes that all
distributions are reinvested at net asset value.
The performance, as shown below, is the average annual total return
quotations for The Defensive Equity, The Aggressive Growth, The International
Equity and The Global Fixed Income Portfolios through October 31, 1995.
Securities prices fluctuated during the period covered and the past results
should not be considered as representative of future performance.
AVERAGE ANNUAL TOTAL RETURN(1)
<TABLE>
<CAPTION>
THE THE THE
DEFENSIVE AGGRESSIVE INTERNATIONAL
EQUITY GROWTH EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO
1 year 1 year 1 year
ended ended ended
10/31/95 10/31/95 10/31/95
<S> <C> <C>
19.77% 19.61% 3.91%
</TABLE>
<TABLE>
<CAPTION>
3 years 3 years 3 years
ended ended ended
10/31/95 10/31/95 10/31/95
<S> <C> <C>
17.41% 14.20% 14.77%
</TABLE>
<TABLE>
<CAPTION>
Period Period Period
2/3/92(2) 2/27/92(2) 2/4/92(2)
through through through
10/31/95 10/31/95 10/31/95
<S> <C> <C>
15.92% 8.42% 10.46%
</TABLE>
<TABLE>
<CAPTION>
THE
GLOBAL
FIXED
INCOME
PORTFOLIO
1 year
ended
10/31/95
<S> <C>
17.38%
</TABLE>
<TABLE>
<CAPTION>
Period
11/30/92(2)
through
10/31/95
<S> <C>
12.37%
</TABLE>
(1) Certain expenses of the Portfolios have been waived and reimbursed by the
respective investment adviser. In the absence of such waiver and
reimbursement, performance would have been affected negatively.
(2) Date of initial sale.
-18-
<PAGE> 98
(SAI-DPT-I/PART B)
The performance, as shown below, is the aggregate total return quotations
for The Labor Select International Equity Portfolio and The Real Estate
Investment Trust Portfolio through April 30, 1996. Securities prices
fluctuated during the period covered and the past results should not be
considered as representative of future performance.
AGGREGATE TOTAL RETURN(1)
<TABLE>
<S> <C> <C> <C>
THE
LABOR THE
SELECT REAL ESTATE
INTERNATIONAL INVESTMENT
EQUITY TRUST
PORTFOLIO PORTFOLIO
Period Period
12/19/95(2) 12/5/95(2)
through through
4/30/96 10.62% 4/30/96 6.63%
</TABLE>
(1) Certain expenses of the Portfolios have been waived and reimbursed by the
respective investment adviser. In the absence of such waiver and
reimbursement, performance would have been affected negatively.
(2) Date of initial sale; total return for this short of a time period may
not be representative of longer-term results.
The Fund may also quote each Portfolio's current yield, calculated as
described below, in advertisements and investor communications.
The yield computation is determined by dividing the net investment income
per share earned during the period by the maximum offering price per share on
the last day of the period and annualizing the resulting figure, according to
the following formula:
a - b
------ 6
YIELD = 2[(cd + 1) - 1]
Where: a = dividends and interest earned during the period;
b = expenses accrued for the period (net of reimbursements);
c = the average daily number of shares outstanding during the
period that were entitled to receive dividends;
d = the maximum offering price per share on the last day of
the period.
The above formula will be used in calculating quotations of yield, based
on specific 30-day periods identified in advertising by the Portfolio. Yield
quotations are based on the Portfolio's net asset value on the last day of the
period and will fluctuate depending on the period covered. The yield of The
Global Fixed Income Portfolio, as of January 31, 1996, was 7.31%, reflecting
the waiver and reimbursement commitment by its investment adviser.
Investors should note that income earned and dividends paid by The Fixed
Income Portfolio, The Limited-Term Maturity Portfolio, The Global Fixed Income
Portfolio, The International Fixed Income Portfolio and The High-Yield Bond
Portfolio will also vary depending upon fluctuation in interest rates and
performance of each Portfolio. The net asset value of these five Portfolios
will fluctuate in value inversely to movements in interest rates and,
therefore, will tend to rise when interest rates fall and fall when interest
rates rise. Likewise, the net asset value for these Portfolios will vary from
day to day depending upon fluctuation in the prices of the securities held by
each Portfolio. Thus, investors should consider net asset value fluctuation as
well as yield in making an investment decision.
Each Portfolio's total return performance will be computed by adding all
reinvested income and realized securities profits distributions plus the change
in net asset value during a specific period and dividing by the net asset value
at the beginning of the period. The computation will not reflect the impact of
any income taxes payable by shareholders (who are subject to such tax) on the
reinvested distributions included in the calculation. Portfolio shares are
sold without a sales charge. Because security prices fluctuate, past
performance should not be considered as a representation of the results which
may be realized from an investment in the Portfolios in the future.
From time to time, performance of each Portfolio in the Fund may be
compared to various industry indices. For example, the Fund may quote actual
total return performance, dividend results and other performance information of
The Defensive Equity Portfolio, that invests primarily in domestic equities, in
advertising and other types of literature
-19-
<PAGE> 99
(SAI-DPT-I/PART B)
and may compare that information to, or may separately illustrate similar
information reported by the Standard & Poor's 500 Stock Index and the Dow Jones
Industrial Average, and other unmanaged indices. The Standard & Poor's 500
Stock Index and the Dow Jones Industrial Average are industry-accepted
unmanaged indices of generally-conservative securities used for measuring
general market performance. The total return performance reported will
reflect the reinvestment of all distributions on a quarterly basis and market
price fluctuations. The indices do not take into account any management
expenses or other fees. In seeking a particular investment objective, the
Portfolios that invest primarily in equities may include common stocks
considered by the investment adviser to be more aggressive than those tracked
by these indices.
From time to time, the Fund may quote actual total return and/or yield
performance for each Portfolio in advertising and other types of literature
compared to indices or averages of alternative financial products available to
prospective investors. For example, the performance comparisons may include
the average return of various bank instruments, some of which may carry certain
return guarantees, offered by leading banks and thrifts as monitored by Bank
Rate Monitor, and those of generally-accepted corporate bond and government
security price indices of various durations prepared by Lehman Brothers and
Salomon Brothers, Inc. These indices are not managed for any investment goal.
Current interest rate and yield information on government debt
obligations of various durations, as reported weekly by the Federal Reserve
(Bulletin H.15), may also be used. Current industry rate and yield information
on all industry available fixed income securities, as reported weekly by the
Bond Buyer, may also be used in preparing comparative illustrations. In
addition, the Consumer Price Index, the most commonly used measure of
inflation, may be used in preparing performance comparisons. The Consumer
Price Index, as prepared by the U.S. Bureau of Labor Statistics, indicates the
cost fluctuations of a representative group of consumer goods. It does not
represent a return from an investment.
Statistical and/or performance information and various indices compiled
and maintained by organizations such as the following may also be used in
preparing exhibits comparing certain industry trends to comparable Fund
activity and performance:
CDA Technologies, Inc. is a performance evaluation service that
maintains a statistical database of performance, as reported by a diverse
universe of independently-managed mutual funds.
Ibbotson Associates, Inc. is a consulting firm that provides a variety of
historical data including total return, capital appreciation and income
on the stock market as well as other investment asset classes, and
inflation. With its permission, this information will be used primarily
for comparative purposes and to illustrate general financial planning
principles.
Interactive Data Corporation is a statistical access service that
maintains a database of various industry indicators, such as historical
and current price/earnings information and individual equity and fixed
income price and return information.
Compustat Industrial Databases, a service of Standard & Poor's
Corporation, may also be used in preparing performance and historical
stock and bond market exhibits. This firm maintains fundamental databases
that provide financial, statistical and market information covering more
than 7,000 industrial and non-industrial companies.
Russell Indexes is an investment analysis service that provides both
current and historical stock performance information, focusing on the
business fundamentals of those firms issuing the security.
Morgan Stanley Capital International is a research firm that maintains a
statistical database of international securities. It also compiles and
maintains a number of unmanaged indices of international securities.
-20-
<PAGE> 100
(SAI-DPT-I/PART B)
These indices are designed to measure the performance of the stock
markets outside of the USA. Primary coverage of Europe, Canada, Mexico,
Australia and the Far Eastern markets, and that of international industry
groups are included.
Lehman Brothers is a statistical research firm that maintains databases
of U.S. and international bond markets and corporate and
government-backed securities of various maturities. This information, as
well as unmanaged indices compiled and maintained by Lehman Brothers,
will be used in preparing comparative illustrations.
Wellesley Group Inc. is an investment management consulting firm
specializing in investment and market research for endowments and pension
plans. Wellesley Group will be maintaining, on behalf of the Fund, peer
group comparison composites for each Portfolio of the Fund. The peer
group composites will be constructed by selecting publicly-offered mutual
funds that have investment objectives that are similar to those
maintained by each Portfolio in the Fund. Wellesley Group will also be
preparing performance analyses of actual Fund performance, and benchmark
index exhibits, for inclusion in client quarterly review packages.
FT-Actuaries World Indices are jointly compiled by The Financial Times,
Ltd.; Goldman, Sachs & Co.; and Wood Mackenzie & Co., Ltd. in conjunction
with the Institute of Actuaries and the Faculty of Actuaries. Indices
maintained by this group primarily focus on compiling statistical
information on international financial markets and industry sectors,
stock and bond issues and certain fundamental information about the
companies issuing the securities. Statistical information on
international currencies is also maintained.
The Fund may also promote each Portfolio's yield and/or total return
performance and use comparative performance information computed by and
available from certain industry and general market research publications, such
as Lipper Analytical Services, Inc.
The following tables are an example, for purposes of illustration only,
of cumulative total return performance through October 31, 1995 for The
Defensive Equity, The Aggressive Growth, The International Equity and The
Global Fixed Income Portfolios. Cumulative total return performance through
April 30, 1996 for The Labor Select International Equity and The Real Estate
Investment Trust Portfolios is also shown below. For these purposes, the
calculations assume the reinvestment of any capital gains distributions and
income dividends paid during the indicated periods. Comparative information on
the Dow Jones Industrial Average, the Standard & Poor's 500 Stock Index (the
"S&P 500 Index"), the Consumer Price Index, the Wilshire Mid-Cap Index, the
Morgan Stanley Europe, Australia and Far East (EAFE) Index, the Salomon World
Government Bond Index and the NAREIT Equity REIT Index, where applicable, is
also included.
CUMULATIVE TOTAL RETURN(1)
<TABLE>
<CAPTION>
THE
DEFENSIVE DOW S&P
EQUITY JONES 500
PORTFOLIO INDUSTRIAL INDEX
3 months
ended
<S> <C> <C> <C>
10/31/95 2.94% 1.65% 4.11%
</TABLE>
<TABLE>
<CAPTION>
6 months
ended
<S> <C> <C> <C>
10/31/95 10.42% 11.47% 14.44%
</TABLE>
<TABLE>
<CAPTION>
9 months
ended
<S> <C> <C> <C>
10/31/95 21.50% 26.14% 26.02%
</TABLE>
<TABLE>
<CAPTION>
1 year
ended
<S> <C> <C> <C>
10/31/95 19.77% 24.97% 26.39%
</TABLE>
<TABLE>
<CAPTION>
3 years
ended
<S> <C> <C> <C>
10/31/95 61.85% 60.15% 50.80%
</TABLE>
<TABLE>
<CAPTION>
Period
2/3/92(2)
through
<S> <C> <C> <C>
10/31/95 73.84% 57.69% 63.44%
</TABLE>
-21-
<PAGE> 101
(SAI-DPT-I/PART B)
<TABLE>
<CAPTION>
THE
AGGRESSIVE WILSHIRE
GROWTH MID-CAP
PORTFOLIO GROWTH
3 months
ended
<S> <C> <C>
10/31/95 2.39% 0.69%
</TABLE>
<TABLE>
<CAPTION>
6 months
ended
<S> <C> <C>
10/31/95 13.91% 17.91%
</TABLE>
<TABLE>
<CAPTION>
9 months
ended
<S> <C> <C>
10/31/95 21.55% 31.53%
</TABLE>
<TABLE>
<CAPTION>
1 year
ended
<S> <C> <C>
10/31/95 19.61% 27.81%
</TABLE>
<TABLE>
<CAPTION>
3 years
ended
<S> <C> <C>
10/31/95 48.93% 54.68%
</TABLE>
<TABLE>
<CAPTION>
Period
2/27/92(2)
through
<S> <C> <C>
10/31/95 34.64% 64.77%
</TABLE>
<TABLE>
<CAPTION>
THE
INTERNATIONAL S&P
EQUITY 500
PORTFOLIO EAFE INDEX
3 months
ended
<S> <C> <C> <C>
10/31/95 (2.16%) (4.57%) 4.11%
</TABLE>
<TABLE>
<CAPTION>
6 months
ended
<S> <C> <C> <C>
10/31/95 4.44% (1.59%) 14.44%
</TABLE>
<TABLE>
<CAPTION>
9 months
ended
<S> <C> <C> <C>
10/31/95 11.22% 8.17% 26.02%
</TABLE>
<TABLE>
<CAPTION>
1 year
ended
<S> <C> <C> <C>
10/31/95 3.91% (0.36%) 26.39%
</TABLE>
<TABLE>
<CAPTION>
3 years
ended
<S> <C> <C> <C>
10/31/95 51.17% 50.73% 50.80%
</TABLE>
<TABLE>
<CAPTION>
Period
2/4/92(2)
through
<S> <C> <C> <C>
10/31/95 45.06% 33.11% 56.02%
</TABLE>
<TABLE>
<CAPTION>
THE SALOMON
GLOBAL FIXED WORLD
INCOME GOV'T
PORTFOLIO BOND
3 months
ended
<S> <C> <C>
10/31/95 5.41% (0.56%)
</TABLE>
<TABLE>
<CAPTION>
6 months
ended
<S> <C> <C>
10/31/95 11.50% 3.10%
</TABLE>
<TABLE>
<CAPTION>
9 months
ended
<S> <C> <C>
10/31/95 15.37% 14.09%
</TABLE>
<TABLE>
<CAPTION>
1 year
ended
<S> <C> <C>
10/31/95 17.38% 15.20%
</TABLE>
<TABLE>
<CAPTION>
Period
11/30/92(2)
through
<S> <C> <C>
10/31/95 40.57% 35.86%
</TABLE>
<TABLE>
<CAPTION>
THE
LABOR
SELECT
INTERNATIONAL
EQUITY
PORTFOLIO EAFE
Period
12/19/95(3)
through
<S> <C> <C>
4/30/96 10.62% 10.15%
</TABLE>
<TABLE>
<CAPTION>
THE REAL
ESTATE
INVESTMENT NAREIT
TRUST EQUITY
PORTFOLIO REIT
Period
12/5/95(3)
through
<S> <C> <C>
4/30/96 6.63% 2.80%
</TABLE>
(1) Certain expenses of the Portfolios have been waived and reimbursed by the
respective investment adviser. In the absence of such waiver and
reimbursement, performance would have been affected negatively.
(2) Date of initial sale.
(3) Date of initial sale; total return for this short of a time period may not
be representative of longer-term results.
-22-
<PAGE> 102
(SAI-DPT-I/PART B)
In addition, information will be provided that discusses the overriding
investment philosophies of Delaware Investment Advisers, a division of Delaware
Management Company, Inc. ("Delaware"), the investment adviser to The Defensive
Equity, The Aggressive Growth, The Defensive Equity Small/Mid-Cap, The
Defensive Equity Utility, The Real Estate Investment Trust, The Fixed Income,
The Limited-Term Maturity and The High-Yield Bond Portfolios, and Delaware
International Advisers Ltd. ("Delaware International"), an affiliate of
Delaware and the investment adviser to The International Equity, The Labor
Select International Equity, The Global Fixed Income and The International
Fixed Income Portfolios and how those philosophies impact each Portfolio in the
strategies the Fund employs in seeking Portfolio objectives. Since the
investment disciplines being employed for each Portfolio in the Fund are based
on the disciplines and strategies employed by Delaware and Delaware
International to manage institutional separate accounts, investment strategies
and disciplines of these entities may also be discussed.
The Defensive Equity Portfolio's strategy relies on the consistency,
reliability and predictability of corporate dividends. Dividends tend to rise
over time, despite market conditions, and keep pace with rising prices; they
are paid out in "current" dollars. Just as important, current dividend income
can help lessen the effects of adverse market conditions. This equity dividend
discipline, coupled with the potential for capital gains, seeks to provide
investors with a consistently higher total-rate-of-return over time. In
implementing this strategy, the investment adviser seeks to buy securities with
a yield higher than the average of the S&P 500 Index. If a security held by
the Portfolio moves out of the acceptable yield range, it typically is sold.
This strict buy/sell discipline is instrumental in implementing The Defensive
Equity Portfolio strategy.
THE POWER OF COMPOUNDING
When you opt to reinvest your current income for additional Portfolio
shares, your investment is given yet another opportunity to grow. It's called
the Power of Compounding.
COMPOUNDED RETURNS
Results of various assumed fixed rates of return on a $1,000,000
investment compounded monthly for 10 years:
<TABLE>
<CAPTION>
7% 9% 11% 13%
Rate of Rate of Rate of Rate of
Return Return Return Return
------ ------ ------ ------
<S> <C> <C> <C> <C>
12-'85 $1,072,290 $1,093,807 $1,115,719 $1,138,032
12-'86 $1,149,806 $1,196,414 $1,244,829 $1,295,118
12-'87 $1,232,926 $1,308,645 $1,388,879 $1,473,886
12-'88 $1,322,054 $1,431,405 $1,549,598 $1,677,330
12-'89 $1,417,626 $1,565,681 $1,728,916 $1,908,856
12-'90 $1,520,106 $1,712,553 $1,928,984 $2,172,341
12-'91 $1,629,994 $1,873,202 $2,152,204 $2,472,194
12-'92 $1,747,827 $2,048,921 $2,401,255 $2,813,438
12-'93 $1,874,177 $2,241,124 $2,679,125 $3,201,783
12-'94 $2,009,661 $2,451,357 $2,989,150 $3,643,733
</TABLE>
Results of various assumed fixed rates of return on a $1,000,000
investment compounded quarterly for 10 years:
<TABLE>
<CAPTION>
8% 10% 12% 14%
Rate of Rate of Rate of Rate of
Return Return Return Return
------ ------ ------ ------
<S> <C> <C> <C> <C>
12-'85 $1,082,432 $1,103,813 $1,125,509 $1,147,523
12-'86 $1,171,659 $1,218,403 $1,266,770 $1,316,809
12-'87 $1,268,242 $1,344,889 $1,425,761 $1,511,069
12-'88 $1,372,786 $1,484,506 $1,604,706 $1,733,986
12-'89 $1,485,947 $1,638,617 $1,806,111 $1,989,789
12-'90 $1,608,437 $1,808,726 $2,032,794 $2,283,328
12-'91 $1,741,024 $1,996,495 $2,287,927 $2,620,172
12-'92 $1,884,540 $2,203,757 $2,575,083 $3,006,707
12-'93 $2,039,887 $2,432,535 $2,898,278 $3,450,266
12-'94 $2,208,039 $2,685,064 $3,262,038 $3,959,259
</TABLE>
These figures are calculated assuming a fixed constant investment return
and assume no fluctuation in the value of principal. These figures, which do
not reflect payment of applicable taxes, are not intended to be a projection of
future results and do not reflect actual performance results of any of the
Portfolios.
-23-
<PAGE> 103
(SAI-DPT-I/PART B)
TRADING PRACTICES AND BROKERAGE
The Fund (and, in the case of The International Equity, The Labor Select
International Equity, The Global Fixed Income and The International Fixed
Income Portfolios, their investment adviser) selects brokers or dealers to
execute transactions for the purchase or sale of portfolio securities on the
basis of its judgment of their professional capability to provide the service.
The primary consideration is to have brokers or dealers execute transactions at
best price and execution. Best price and execution refers to many factors,
including the price paid or received for a security, the commission charged,
the promptness and reliability of execution, the confidentiality and placement
accorded the order and other factors affecting the overall benefit obtained by
the account on the transaction. A number of trades are made on a net basis
where securities either are purchased directly from the dealer or are sold to
the dealer. In these instances, there is no direct commission charged but
there is a spread (the difference between the buy and sell price) which is the
equivalent of a commission. When a commission is paid, the Fund pays
reasonably competitive brokerage commission rates based upon the professional
knowledge of its trading department (and, in the case of The International
Equity, The Labor Select International Equity, The Global Fixed Income and The
International Fixed Income Portfolios, their investment adviser) as to rates
paid and charged for similar transactions throughout the securities industry.
In some instances, the Fund pays a minimal share transaction cost when the
transaction presents no difficulty.
During the fiscal years ended October 31, 1993, 1994 and 1995, the
aggregate dollar amounts of brokerage commissions paid by The Defensive Equity
Portfolio amounted to $14,686, $59,381 and $108,104, respectively. During the
fiscal years ended October 31, 1993, 1994 and 1995, such payments by The
Aggressive Growth Portfolio amounted to $32,320, $19,391 and $26,361,
respectively. During the fiscal years ended October 31, 1993, 1994 and 1995,
such payments by The International Equity Portfolio amounted to $10,651,
$94,890 and $280,594, respectively. During the period ended October 31, 1993
and for the fiscal years ended October 31, 1994 and 1995, such payments by the
Global Fixed Income Portfolio amounted to $4,595, $12,391 and $1,545,
respectively.
The investment advisers may allocate out of all commission business
generated by all of the funds and accounts under management by them, brokerage
business to brokers or dealers who provide brokerage and research services.
These services include advice, either directly or through publications or
writings, as to the value of securities, the advisability of investing in,
purchasing or selling securities, and the availability of securities or
purchasers or sellers of securities; furnishing of analyses and reports
concerning issuers, securities or industries; providing information on economic
factors and trends; assisting in determining portfolio strategy; providing
computer software and hardware used in security analyses; and providing
portfolio performance evaluation and technical market analyses. Such services
are used by the investment advisers in connection with their investment
decision-making process with respect to one or more funds and accounts they
manage, and may not be used, or used exclusively, with respect to the fund or
account generating the brokerage.
During the fiscal year ended October 31, 1995, portfolio transactions of
The Defensive Equity, The Aggressive Growth, The International Equity and The
Global Fixed Income Portfolios in the amounts of $18,899,257, $7,358,635,
$15,150,785 and $1,299,555, respectively, resulting in brokerage commissions of
$24,293, $17,951, $41,913 and $1,545, respectively, were directed to brokers
for brokerage and research services provided.
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(SAI-DPT-I/PART B)
As provided in the Securities Exchange Act of 1934 and each Portfolio's
Investment Management Agreement, higher commissions are permitted to be paid to
broker/dealers who provide brokerage and research services than to
broker/dealers who do not provide such services if such higher commissions are
deemed reasonable in relation to the value of the brokerage and research
services provided. Although transactions are directed to broker/dealers who
provide such brokerage and research services, the Fund believes that the
commissions paid to such broker/dealers are not, in general, higher than
commissions that would be paid to broker/dealers not providing such services
and that such commissions are reasonable in relation to the value of the
brokerage and research services provided. In some instances, services may be
provided to the investment advisers which constitute in some part brokerage and
research services used by the investment advisers in connection with their
investment decision-making process and constitute in some part services used by
them in connection with administrative or other functions not related to their
investment decision-making process. In such cases, the investment advisers
will make a good faith allocation of brokerage and research services and will
pay out of their own resources for services used by them in connection with
administrative or other functions not related to their investment
decision-making process. In addition, so long as no fund is disadvantaged,
portfolio transactions which generate commissions or their equivalent are
allocated to broker/dealers who provide daily portfolio pricing services to the
Fund and to other funds in the Delaware Group. Subject to best price and
execution, commissions allocated to brokers providing such pricing services may
or may not be generated by the funds receiving the pricing service.
Combined orders for two or more accounts or funds engaged in the purchase
or sale of the same security may be placed if the judgment is made that joint
execution is in the best interest of each participant and will result in best
price and execution. Transactions involving commingled orders are allocated in
a manner deemed equitable to each account or fund. When a combined order is
executed in a series of transactions at different prices, each account
participating in the order may be allocated an average price obtained from the
executing broker. It is believed that the ability of the accounts to
participate in volume transactions will generally be beneficial to the accounts
and funds. Although it is recognized that, in some cases, the joint execution
of orders could adversely affect the price or volume of the security that a
particular account or fund may obtain, it is the opinion of the investment
advisers and the Fund's Board of Directors that the advantages of combined
orders outweigh the possible disadvantages of separate transactions.
Consistent with the Rules of Fair Practice of the National Association of
Securities Dealers, Inc., and subject to seeking best price and execution,
orders may be placed with broker/dealers that have agreed to defray certain
Portfolio expenses, such as custodian fees.
PORTFOLIO TURNOVER
Portfolio trading will be undertaken principally to accomplish each
Portfolio's objective in relation to anticipated movements in the general level
of interest rates. A Portfolio is free to dispose of portfolio securities at
any time, subject to complying with the Code and the 1940 Act, when changes in
circumstances or conditions make such a move desirable in light of the
investment objective. A Portfolio will not attempt to achieve or be limited to
a predetermined rate of portfolio turnover. Such a turnover always will be
incidental to transactions undertaken with a view to achieving a Portfolio's
investment objective.
The degree of portfolio activity may affect brokerage costs of a
Portfolio and taxes payable by a Portfolio's shareholders. A turnover rate of
100% would occur, for example, if all the investments in a Portfolio's
securities at the beginning of the year
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(SAI-DPT-I/PART B)
were replaced by the end of the year. In investing for capital appreciation, a
relevant Portfolio may hold securities for any period of time. Portfolio
turnover will also be increased by The Aggressive Growth Portfolio and The Real
Estate Investment Trust Portfolio if the Portfolio writes a large number of
call options which are subsequently exercised. To the extent a Portfolio
realizes gains on securities held for less than six months, such gains are
taxable to the shareholder subject to tax or to a Portfolio at ordinary income
tax rates. The turnover rate also may be affected by cash requirements from
redemptions and repurchases of Portfolio shares. Total brokerage costs
generally increase with higher portfolio turnover rates.
Under normal circumstances: (1) the annual portfolio turnover rate of The
International Equity Portfolio is not expected to exceed 50%; (2) the annual
portfolio turnover rate of The Global Fixed Income Portfolio, The International
Fixed Income Portfolio and The Limited-Term Maturity Portfolio is not expected
to exceed 200%; (3) the annual portfolio turnover rate of The Defensive Equity
Portfolio, The Aggressive Growth Portfolio, The Defensive Equity Small/Mid-Cap
Portfolio, The Defensive Equity Utility Portfolio, The Labor Select
International Equity Portfolio, The Real Estate Investment Trust Portfolio and
The High-Yield Bond Portfolio is not expected to exceed 100%; and (4) the
annual portfolio turnover rate of The Fixed Income Portfolio is not expected to
exceed 250%. The portfolio turnover rate of a Portfolio is calculated by
dividing the lesser of purchases or sales of securities for the particular
fiscal year by the monthly average of the value of the securities owned by the
Portfolio during the particular fiscal year, exclusive of securities whose
maturities at the time of acquisition are one year or less.
The portfolio turnover rates for the fiscal years ended October 31, 1994
and 1995 were 73% and 88%, respectively, for The Defensive Equity Portfolio,
43% and 64%, respectively, for The Aggressive Growth Portfolio, 22% and 20%,
respectively, for The International Equity Portfolio and 205% and 77%,
respectively, for The Global Fixed Income Portfolio. The portfolio turnover
rate experienced by The Global Fixed Income Portfolio for the period ended
October 31, 1994 was the result of unusual volatility in the European markets
following the breakdown of the prevailing European exchange rate mechanism, the
implementation of an investment strategy designed to avoid certain foreign
withholding taxes and management's shift in country exposure following
modification of the composition of a benchmark index.
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<PAGE> 106
(SAI-DPT-I/PART B)
PURCHASING SHARES
The following supplements the disclosure provided in the Fund's
Prospectus.
Shares of each Portfolio are sold on a continuous basis directly to
institutional investors at the net asset value next determined after the
receipt of a purchase order and a Federal Funds wire as described more fully in
the Prospectus. See "DETERMINING NET ASSET VALUE." The minimum for initial
investments is $1,000,000 for each Portfolio. There are no minimums for
subsequent investments. See the Prospectus for special purchase procedures and
requirements that may be applicable to prospective investors in The
International Equity Portfolio. At such time as the Fund receives appropriate
regulatory approvals to do so in the future, under certain circumstances, the
Fund may, at its sole discretion, allow institutional investors who have an
existing investment counseling relationship with Delaware Investment Advisers
or Delaware International to make investments in the Portfolios by a
contribution of securities in-kind to such Portfolios.
Delaware Distributors, L.P. serves as the national distributor for each
Portfolio's shares. See the Prospectus for information on how to invest. The
Fund reserves the right to suspend sales of Portfolio shares, and reject any
order for the purchase of Portfolio shares if in the opinion of management such
rejection is in the Portfolio's best interest.
Certificates representing shares purchased are not ordinarily issued.
However, such purchases are confirmed to the investor and credited to the
shareholder's account on the books maintained on behalf of the Fund. The
investor will have the same rights of ownership with respect to such shares as
if certificates had been issued. An investor may receive a certificate
representing shares purchased by sending a letter to the Fund requesting the
certificate. No charge is assessed by the Fund for any certificate issued.
Investors who hold certificates representing any of their shares may only
redeem these shares by written requests.
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<PAGE> 107
(SAI-DPT-I/PART B)
DETERMINING NET ASSET VALUE
Orders for purchases of shares of a Portfolio are effected at the net
asset value of that Portfolio next calculated after receipt of the order by the
Fund and Federal Funds wire by the Custodian Bank.
Net asset value is computed at the close of regular trading on the New
York Stock Exchange, generally 4 p.m., Eastern time, on days when the New York
Stock Exchange is open and an order to purchase or sell shares of a Portfolio
has been received or is on hand, having been received since the last previous
computation of net asset value. The New York Stock Exchange is scheduled to be
open Monday through Friday throughout the year except for New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas. When the New York Stock Exchange is closed, the
Fund will generally be closed, pricing calculations will not be made and
purchase and redemption orders will not be processed.
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. 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 ask prices nor less than the current bid prices.
Domestic over-the-counter equities, domestic equity securities that are not
traded and U.S. Government securities (and those of its agencies and
instrumentalities) 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. Net asset value includes interest on fixed income
securities, which is accrued daily. 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 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 Labor
Select International Equity Portfolio, The Global Fixed Income Portfolio and
The International Fixed Income Portfolio (as well as The Defensive Equity
Utility Portfolio, The Real Estate Investment Trust
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<PAGE> 108
(SAI-DPT-I/PART B)
Portfolio and The High-Yield Bond Portfolio, to the limited extent described in
the Prospectus) 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 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 prices 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 contract. Interpolated values will be
derived when the settlement date of the contract is on an interim period for
which quotations are not available.
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<PAGE> 109
(SAI-DPT-I/PART B)
REDEMPTION AND REPURCHASE
The following supplements the disclosure provided in the Fund's
Prospectus.
Each Portfolio may suspend redemption privileges or postpone the date of
payment (i) during any period that the New York Stock Exchange is closed, or
trading on the New York Stock Exchange is restricted as determined by the
Commission, (ii) during any period when an emergency exists as defined by the
rules of the Commission as a result of which it is not reasonably practicable
for a Portfolio to dispose of securities owned by it, or fairly to determine
the value of its assets, and (iii) for such other periods as the Commission may
permit.
No charge is made by any Portfolio for redemptions. Payment for shares
redeemed or repurchased may be made either in cash or in-kind, or partly in
cash and partly in-kind. Any portfolio securities paid or distributed in-kind
would be valued as described in "DETERMINING NET ASSET VALUE." Subsequent
sales by an investor receiving a distribution in-kind could result in the
payment of brokerage commissions. Payment for shares redeemed ordinarily will
be made within three business days, but in no case later than seven days, after
receipt of a redemption request in good order. See "REDEMPTION OF SHARES" in
the Prospectus for special redemption procedures and requirements that may be
applicable to shareholders in The International Equity Portfolio, The Labor
Select International Equity Portfolio, The Global Fixed Income Portfolio and
The International Fixed Income Portfolio. Institutional investors who have an
existing investment counseling relationship with Delaware Investment Advisers
or Delaware International will not be subject to the Fund's in-kind redemption
requirements until such time as the Fund receives appropriate regulatory
approvals to permit such redemptions for the account of such institutional
investors.
The Fund has elected to be governed by Rule 18f-1 under the 1940 Act
pursuant to which the Fund is obligated to redeem shares solely in cash up to
the lesser of $250,000 or 1% of the net asset value of each Portfolio during
any 90-day period for any one shareholder.
The value of a Portfolio's investments is subject to changing market
prices. Redemption proceeds may be more or less than the shareholder's cost
depending upon the market value of the Portfolio's securities. Thus, a
shareholder redeeming shares of a Portfolio may, if such shareholder is subject
to federal income tax, sustain either a gain or loss, depending upon the price
paid and the price received for such shares.
SMALLER ACCOUNTS
Due to the relatively higher cost of maintaining small accounts, the Fund
reserves the right to redeem Portfolio shares in any of its accounts at the
then-current net asset value if as a result of redemption or transfer a
shareholder's investment in a Portfolio has a value of less than $500,000.
However, before the Fund redeems such shares and sends the proceeds to the
shareholder, the shareholder will be notified in writing that the value of the
shares in the account is less than $500,000 and will be allowed 90 days from
that date of notice to make an additional investment to meet the required
minimum. Any redemption in an inactive account established with a minimum
investment may trigger mandatory redemption.
EXPEDITED TELEPHONE REDEMPTIONS
The Fund has available certain redemption privileges, as described below.
They are unavailable to shareholders of The International Equity Portfolio, The
Labor Select International Equity Portfolio, The Global Fixed Income Portfolio
and The International Fixed Income Portfolio whose redemptions trigger the
special in-kind redemption procedures. See the Prospectus. The Fund reserves
the right to suspend or terminate these expedited payment procedures at any
time in the future.
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<PAGE> 110
(SAI-DPT-I/PART B)
Shareholders wishing to redeem shares for which certificates have not
been issued may call the Fund at (1-800-231-8002) prior to 4 p.m., Eastern
time, and have the proceeds mailed to them at the record address. Checks
payable to the shareholder(s) of record will normally be mailed three business
days, but no more than seven days, after receipt of the redemption request.
In addition, redemption proceeds can be transferred to your predesignated
bank account by wire or by check by calling the Fund, as described above. The
Telephone Redemption Option on the Account Registration Form must have been
elected by the shareholder and filed with the Fund before the request is
received. Payment will be made by wire or check to the bank account designated
on the authorization form as follows:
1. PAYMENT BY WIRE: Request that Federal Funds be wired to the bank
account designated on the Account Registration Form. Redemption proceeds will
normally be wired on the next business day following receipt of the redemption
request. There is no charge for this service. If the proceeds are wired to
the shareholder's account at a bank which is not a member of the Federal
Reserve System, there could be a delay in the crediting of the funds to the
shareholder's bank account.
2. PAYMENT BY CHECK: Request a check be mailed to the bank account
designated on the Account Registration Form. Redemption proceeds will normally
be mailed three business days, but no later than seven days, from the date of
the telephone request. This procedure will take longer than the Payment by
Wire option (1 above) because of the extra time necessary for the mailing and
clearing of the check after the bank receives it. If expedited payment under
these procedures could adversely affect a Portfolio, the Fund may take up to
seven days to pay the shareholder.
To reduce the risk of attempted fraudulent use of the telephone
redemption procedure, payment will be made only to the bank account designated
on the Account Registration Form. If a shareholder wishes to change the bank
account designated for such redemption, a written request in accordance with
the instructions set forth in the Prospectus will be required.
EXCHANGE PRIVILEGE
Shares of each Portfolio of the Fund may be exchanged for shares of any
other Portfolio. Exchange requests should be sent to Delaware Pooled Trust,
Inc., One Commerce Square, 2005 Market Street, Philadelphia, PA 19103 Attn:
Client Services.
Any such exchange will be based on the respective net asset values of the
shares involved and will be subject to the minimum investment requirements
noted above. There is no sales commission or charge of any kind and the shares
of the Portfolio into which the exchange is made, if necessary, must be
registered in the state in which the investor is domiciled. Before making an
exchange, a shareholder should consider the investment objectives of the
Portfolio to be purchased.
Exchange requests may be made either by mail, FAX message or by
telephone. Telephone exchanges will be accepted only if the certificates for
the shares to be exchanged are held by the Fund for the account of the
shareholder and the registration of the two accounts will be identical.
Requests for exchanges received prior to 4 p.m., Eastern time, for the
Portfolios will be processed as of the close of business on the same day.
Requests received after this time will be processed on the next business day.
Exchanges may also be subject to limitations as to amounts or frequency, and to
other restrictions established by the Board of Directors to assure that such
exchanges do not disadvantage a Portfolio and its shareholders. Exchanges into
and out of The International Equity Portfolio, The Labor Select International
Equity Portfolio, The Global Fixed Income Portfolio and The International Fixed
Income Portfolio shall be subject to the special purchase and redemption
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(SAI-DPT-I/PART B)
procedures identified in sections of the Prospectus entitled "PURCHASE OF
SHARES" and "REDEMPTION OF SHARES."
For federal income tax purposes, an exchange between Portfolios is a
taxable event for shareholders subject to federal income tax, and, accordingly,
a gain or loss may be realized. 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.
* * *
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.
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<PAGE> 112
(SAI-DPT-I/PART B)
DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS
Each Portfolio has qualified or intends to qualify, and each that has
qualified intends to continue to qualify, as a regulated investment company
under Subchapter M of the Code. As such, the Fund will not be subject to
federal income tax on net investment income and net realized capital gains
which are distributed to shareholders.
The Fund's policy is to distribute substantially all of each Portfolio's
net investment income and any net realized capital gains in the amount and at
the times that will avoid any federal income or excise taxes. Unless a
shareholder elects to receive dividends and capital gains distributions in
cash, all dividends and capital gains distributions shall be automatically
reinvested in the Portfolios of the Fund. The amounts of any dividend or
capital gains distributions cannot be predicted.
All dividends out of net investment income, together with distributions
from short-term capital gains, will be taxable to those shareholders who are
subject to income taxes as ordinary income. (These distributions may be
eligible for the dividends-received deductions for corporations.) Any net
long-term capital gains distributed to those shareholders who are subject to
income tax will be taxable as such, regardless of the length of time a
shareholder has owned their shares. Of the dividends paid by The Defensive
Equity and The Aggressive Growth Portfolios for the fiscal year ended October
31, 1995, 39% and 9%, respectively, were eligible for the dividends-received
deduction for corporations.
Undistributed net investment income is included in the Portfolio's net
assets for the purpose of calculating net asset value per share. Therefore on
the "ex-dividend" date, the net asset value per share excludes the dividend
(i.e., is reduced by the per share amount of the dividend). Dividends paid
shortly after the purchase of shares by an investor, although in effect a
return of capital, are taxable to shareholders who are subject to tax.
Each Portfolio of the Fund is treated as a separate entity (and hence as
a separate "regulated investment company") for federal tax purposes. Any net
capital gains recognized by a Portfolio are distributed to its investors
without need to offset (for federal income tax purposes) such gains against any
net capital losses of another Portfolio.
Each year, the Fund will mail 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.
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<PAGE> 113
(SAI-DPT-I/PART B)
TAXES
The following supplements the tax disclosure provided in the Fund's
Prospectus.
FUTURES CONTRACTS AND STOCK OPTIONS
(THE AGGRESSIVE GROWTH PORTFOLIO AND THE REAL ESTATE INVESTMENT TRUST
PORTFOLIO)
The Aggressive Growth Portfolio's and The Real Estate Investment Trust
Portfolio's transactions in options and futures contracts will be subject to
special tax rules that may affect the amount, timing and character of
distributions to shareholders. For example, certain positions held by a
Portfolio on the last business day of each taxable year will be marked to
market (i.e., treated as if closed out) on such day, and any gain or loss
associated with such positions will be treated as 60% long-term and 40%
short-term capital gain or loss. Certain positions held by a Portfolio that
substantially diminish its risk of loss with respect to other positions in a
Portfolio will constitute "straddles," which are subject to special tax rules
that may cause deferral of the Portfolio's losses, adjustments in the holding
periods of Portfolio securities and conversion of short-term into long-term
capital losses. Certain tax elections exist for straddles which could alter
the effects of these rules. The Portfolios will limit their activities in
options and futures contracts to the extent necessary to meet the requirements
of Subchapter M of the Code.
FORWARD CURRENCY CONTRACTS (THE INTERNATIONAL EQUITY PORTFOLIO, THE DEFENSIVE
EQUITY UTILITY PORTFOLIO, THE LABOR SELECT INTERNATIONAL EQUITY PORTFOLIO, THE
REAL ESTATE INVESTMENT TRUST PORTFOLIO, THE GLOBAL FIXED INCOME PORTFOLIO AND
THE INTERNATIONAL FIXED INCOME PORTFOLIO)
The International Equity Portfolio, The Defensive Equity Utility
Portfolio, The Labor Select International Equity Portfolio, The Real Estate
Investment Trust Portfolio, The Global Fixed Income Portfolio and The
International Fixed Income Portfolio will be required for federal income tax
purposes to recognize any gains and losses on forward currency contracts as of
the end of each taxable year as well as those actually realized during the
year. In most cases, any such gain or loss recognized with respect to a
forward currency contract is considered to be ordinary income or loss.
Furthermore, forward currency futures contracts which are intended to hedge
against a change in the value of securities held by these Portfolios may affect
the holding period of such securities and, consequently, the nature of the gain
or loss on such securities upon disposition.
Special tax considerations also apply with respect to foreign investments
of these Portfolios. For example, certain foreign exchange gains and losses
(including exchange gains and losses on forward currency contracts) realized by
the Portfolio will be treated as ordinary income or losses.
STATE AND LOCAL TAXES
Shares of the Fund are exempt from Pennsylvania county personal property
tax.
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<PAGE> 114
(SAI-DPT-I/PART B)
INVESTMENT MANAGEMENT AGREEMENT
Delaware Investment Advisers, a division of Delaware Management Company,
Inc. ("Delaware"), One Commerce Square, Philadelphia, PA 19103, furnishes
investment management services to The Defensive Equity, The Aggressive Growth,
The Fixed Income, The Limited-Term Maturity, The Defensive Equity
Small/Mid-Cap, The Defensive Equity Utility, The Real Estate Investment Trust
and The High-Yield Bond Portfolios, subject to the supervision and direction of
the Fund's Board of Directors. Delaware International Advisers Ltd. ("Delaware
International"), Veritas House, 125 Finsbury Pavement, London, England EC2A
1NQ, furnishes similar services to The International Equity, The Labor Select
International Equity, The Global Fixed Income and The International Fixed
Income Portfolios, subject to the supervision and direction of the Fund's Board
of Directors. Lincoln Investment Management, Inc. ("Lincoln") serves as
sub-adviser to Delaware with respect to The Real Estate Investment Trust
Portfolio. Lincoln's address is 200 E. Berry Street, Fort Wayne, Indiana
46802.
Delaware and its predecessors have been managing the funds in the
Delaware Group since 1938. The aggregate assets of these funds on October 31,
1995 were approximately $10,172,570,000. Investment advisory services are also
provided to institutional accounts with assets on October 31, 1995 of
approximately $16,961,505,000.
Lincoln (formerly Lincoln National Investment Management Company) was
incorporated in 1930. As of December 31, 1995, Lincoln had over $37 billion in
assets under management.
The Investment Management Agreements for The Defensive Equity, The
Aggressive Growth, The Fixed Income, The Limited-Term Maturity, The
International Equity, The Global Fixed Income and The International Fixed
Income Portfolios are each dated April 3, 1995 and were approved by
shareholders on March 29, 1995. The Investment Management Agreements for The
Defensive Equity Small/Mid-Cap, The Defensive Equity Utility, The Labor Select
International Equity, The Real Estate Investment Trust and The High-Yield Bond
Portfolios are each dated November 29, 1995 and were approved by the initial
shareholders on November 30, 1995. The Sub-Advisory Agreement for The Real
Estate Investment Trust Portfolio is dated November 29, 1995 and was approved
by the initial shareholder on November 30, 1995.
Each such Agreement has an initial term of two years and may be renewed
after its initial term only so long as such renewal and continuance are
specifically approved at least annually by the Board of Directors or by vote of
a majority of the outstanding voting securities of the Portfolio, and only if
the terms of the renewal thereof have been approved by the vote of a majority
of the directors of the Fund who are not parties thereto or interested persons
of any such party, cast in person at a meeting called for the purpose of voting
on such approval. Each Agreement is terminable without penalty on 60 days'
notice by the directors of the Fund or by the investment adviser. Each
Agreement will terminate automatically in the event of its assignment.
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 International Equity Portfolio .75%
The Defensive Equity Small/Mid-Cap Portfolio .65%
The Defensive Equity Utility Portfolio .35%
The Labor Select International Equity Portfolio .75%
The Real Estate Investment Trust Portfolio .75%
The Fixed Income Portfolio .40%
The Limited-Term Maturity Portfolio .30%
The Global Fixed Income Portfolio .50%
The International Fixed Income Portfolio .50%
The High-Yield Bond Portfolio .45%
</TABLE>
-35-
<PAGE> 115
(SAI-DPT-I/PART B)
Delaware has entered into a sub-advisory agreement with Lincoln with
respect to The Real Estate Investment Trust Portfolio. As compensation for its
services as sub-adviser to Delaware, Lincoln is entitled to receive a
sub-advisory fee equal to 30% of the investment management fee under Delaware's
Investment Management Agreement with the Fund on behalf of the Portfolio.
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 from managing The
International Fixed Income and The Labor Select International Equity Portfolios
and Delaware will make no such payments out of the fees it receives from
managing The Defensive Equity Small/Mid-Cap, The Defensive Equity Utility, The
Real Estate Investment Trust and The High-Yield Bond Portfolios.
With respect to The Defensive Equity, The Aggressive Growth, The Fixed
Income and The Limited-Term Maturity Portfolios, Delaware had 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) did not exceed, on an annualized basis, respectively, .68%, .93%,
.53% and .43%, as a percentage of average net assets during the period from the
commencement of the public offering for the Portfolio through October 31, 1992.
These waivers and reimbursement commitments have been extended through October
31, 1996. Similarly, Delaware International, the investment adviser to The
International Equity Portfolio and The International Fixed Income Portfolio,
voluntarily elected to waive that portion, if any, of its annual investment
advisory fees and to reimburse a particular 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) did not
exceed, on an annualized basis, respectively, .96% and .62%, as a percentage of
average net assets. For The International Equity Portfolio, the waiver and
reimbursement commitment applied to the period from the commencement of the
public offering for the Portfolio through October 31, 1992. Such waiver and
reimbursement commitment has been extended through October 31, 1996. For The
International Fixed Income Portfolio the waiver and reimbursement commitment
applied to the period from the commencement of the public offering for the
Portfolio through April 30, 1994. Such waiver and reimbursement commitment for
The International Fixed Income Portfolio has been modified to provide that such
expenses of the Portfolio do not exceed, on an annual basis, .60% through
October 31, 1996. Delaware International, also the investment adviser to The
Global Fixed Income 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) did not exceed, on an annualized basis, .62% from the
commencement of the public offering of the Portfolio through October 31, 1993.
Such waiver and reimbursement commitment had been extended through October 31,
1994, but modified, effective November 1, 1994 through October 31, 1996, to
provide that such expenses of the Portfolio do not exceed, on an annualized
basis, .60%. Amounts will be prorated over each Portfolio's initial fiscal
period from commencement of operations, if less than a complete fiscal year.
With respect to The Defensive Equity Small/Mid-Cap Portfolio, The
Defensive Equity Utility Portfolio, The Real Estate Investment Trust Portfolio
and The High-Yield Bond Portfolio, Delaware Investment Advisers has elected
voluntarily to waive that portion, if any, of the
-36-
<PAGE> 116
(SAI-DPT-I/PART B)
annual Investment Advisory Fee payable by such Portfolios and to reimburse each
Portfolio for its expenses to the extent necessary to ensure that the expenses
of each Portfolio (exclusive of taxes, interest, brokerage commissions and
extraordinary expenses) do not exceed, as a percentage of average net assets,
on an annualized basis, .79%, .49%, .89% and .59%, respectively, during the
period from the commencement of the public offering of such Portfolios through
October 31, 1996. Similarly, Delaware International, the investment adviser to
The Labor Select International Equity Portfolio, has elected voluntarily to
waive that portion, if any, of the annual Investment Advisory Fee payable by
The Labor Select International Equity Portfolio 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% of such
Portfolio's average net assets during the period from the commencement of the
public offering of the Portfolio through October 31, 1996. Other Operating
Expenses for each of the Portfolios are estimated.
For the fiscal years ended October 31, 1993, 1994 and 1995, the
investment management fees earned with respect to The Defensive Equity
Portfolio amounted to $43,337, $121,537, and $255,586, respectively, and no
amount was paid for 1993, $88,345 was paid for 1994 and $237,776 was paid for
1995, due to the waiver of fees noted above. For the fiscal years ended
October 31, 1993, 1994 and 1995, the investment management fees earned with
respect to The Aggressive Growth Portfolio amounted to $110,380, $171,517, and
$202,809, respectively, and $43,519 was paid for 1993, $118,977 was paid for
1994 and $163,397 was paid for 1995, due to the waiver of fees noted above.
For the fiscal years ended October 31, 1993 and 1994, the investment management
fees earned with respect to The International Equity Portfolio amounted to
$95,454 and $390,070, respectively, and $39,792 was paid for 1993 and $374,822
was paid for 1994, due to the waiver of fees noted above. For the fiscal year
ended October 31, 1995, the investment management fee paid by The International
Equity Portfolio was $792,936. For the period November 30, 1992 (date of
initial sale) to October 31, 1993 and for the fiscal years ended October 31,
1994 and 1995, the investment management fees earned with respect to The Global
Fixed Income Portfolio amounted to $107,750, $175,663 and $349,107,
respectively, and $51,238 was paid for 1993, $124,905 was paid for 1994 and
$293,883 was paid for 1995, due to the waiver of fees noted above.
On October 31, 1995, the total net assets of the Fund were $336,708,762,
broken down as follows: The Defensive Equity Portfolio-- $51,947,097; The
Aggressive Growth Portfolio--$29,091,884; The International Equity
Portfolio--$156,467,112; The Fixed Income Portfolio-- $21,000; The Limited-Term
Maturity Portfolio--$21,000; and The Global Fixed Income
Portfolio--$99,160,669.
Delaware is an indirect, wholly-owned subsidiary of Delaware Management
Holdings, Inc. ("DMH").
Except for the expenses borne by the investment advisers under their
respective Investment Management Agreements and the distributor under the
Distribution Agreements, each Portfolio is responsible for all of its own
expenses. Among others, these include each Portfolio's proportionate share of
rent and certain other administrative expenses; the investment management fees;
transfer and dividend disbursing agent fees and costs; custodian expenses;
federal and state securities registration fees; proxy costs; and the costs of
preparing prospectuses and reports sent to shareholders. The ratios of
expenses to average daily net assets for The Defensive Equity, The Aggressive
Growth and The Global Fixed Income Portfolios for the fiscal year ended October
31, 1995 were 0.68%, 0.93% and 0.60%, respectively, which reflect the waiver of
fees by the respective investment adviser, as described above. The ratio of
expenses to average daily net assets for The International Equity Portfolio for
the fiscal year ended October 31, 1995 was 0.90%.
-37-
<PAGE> 117
(SAI-DPT-I/PART B)
By California regulation, the respective investment advisers are required
to waive certain fees and reimburse the Portfolios they manage for certain
expenses to the extent that the Portfolios' operating expenses, exclusive of
taxes, interest, brokerage commissions and extraordinary expenses, exceed 2
1/2% of its first $30 million of average daily net assets, 2% of the next $70
million of average daily net assets and 1 1/2% of any additional average daily
net assets. For the period ended October 31, 1995, no such reimbursement was
necessary or paid.
DISTRIBUTION AND SERVICE
Delaware Distributors, L.P. (which formerly conducted business as
Delaware Distributors, Inc.), located at 1818 Market Street, Philadelphia, PA
19103, serves as the national distributor for The Defensive Equity, The
Aggressive Growth, The Fixed Income, The Limited-Term Maturity, The
International Equity, The Global Fixed Income and The International Fixed
Income Portfolios under separate Distribution Agreements dated April 3, 1995.
It is the national distributor for The Defensive Equity Small/Mid-Cap, The
Defensive Equity Utility, The Labor Select International Equity, The Real
Estate Investment Trust and The High-Yield Bond Portfolios under separate
Distribution Agreements dated November 29, 1995. Delaware Distributors, L.P.
is an affiliate of the investment advisers and bears all of the costs of
promotion and distribution. Prior to January 3, 1995, Delaware Distributors,
Inc. ("DDI") served as the national distributor of the Fund's shares. On that
date, Delaware Distributors, L.P., a newly formed limited partnership,
succeeded to the business of DDI. All officers and employees of DDI became
officers and employees of Delaware Distributors, L.P. DDI is the corporate
general partner of Delaware Distributors, L.P. and both DDI and Delaware
Distributors, L.P. are indirect, wholly-owned subsidiaries of Delaware
Management DMH.
Delaware Service Company, Inc., an affiliate of Delaware, is the Fund's
shareholder servicing, dividend disbursing and transfer agent for each
Portfolio pursuant to an Amended and Restated Shareholders Services Agreement
dated November 29, 1995. Delaware Service Company, Inc.'s principal business
address is 1818 Market Street, Philadelphia, PA 19103. It is also an indirect,
wholly-owned subsidiary of DMH.
-38-
<PAGE> 118
(SAI-DPT-I/PART B)
OFFICERS AND DIRECTORS
The business and affairs of the Fund are managed under the direction
of its Board of Directors. As of April 30, 1996, no one account held 25% or more
of the outstanding shares of any of the Fund's Portfolios.
As of April 30, 1996, management believes the following accounts held
5% or more of the outstanding shares of The Defensive Equity Portfolio:
Northern Trust, Trust PHH Group, P.O. Box 92956, Chicago, IL 60690 held 592,688
shares (13.49%); The Northern Trust Bank, Trust Children's Memorial Hospital,
Self Insurance Foundation Fund A, P.O. Box 92956, Chicago, IL 60690 held
382,786 shares (8.72%); Strafe & Company For Consolidated Products Profit
Sharing Plan, P.O. Box 160, Westerville, OH 43086 held 379,502 shares (8.64%);
Commerce Bank of Kansas City, Trust Burns & McDonnell Employee Stock Ownership
Plan, P.O. Box 412817, Kansas City, MO 64141 held 314,720 shares (7.17%); The
Northern Trust Company, Trust Children's Memorial Pension Trust, P.O. Box 92956
held 309,898 shares (7.10%); Metz Baking Company, Master Pension Trust, 1014
Nebraska Street, Sioux City, IA 51105 held 275,957 shares (6.28%); and
Cherrytrust & Co., FBO Colorado Open Shop, Employers Pension Trust, C/O The
Bank of Cherry Creek NA, 3033 E. First Ave., Denver, CO 80206 held 256,957
shares (5.85%).
As of April 30, 1996, management believes the following accounts held
5% or more of the outstanding shares of The Aggressive Growth Portfolio: Blue
Cross & Blue Shield of Connecticut, Inc., 370 Bassett Rd., North Haven, CT
06473 held 579,915 shares (32.34%); Blue Cross & Blue Shield of Connecticut,
Inc., Employee Retirement Plan, 370 Bassett Rd., North Haven, CT 06473 held
430,627 shares (24.02%); The Hillman Foundation, 2000 Grant Building,
Pittsburgh, PA 15219 held 400,359 shares (22.33%); and St. Elizabeth Hospital
Medical, C1044 Belmont Ave., Youngstown, OH 44504 held 330,878 shares (18.45%).
As of April 30, 1996, management believes the following accounts held
5% or more of the outstanding shares of The International Equity Portfolio:
The Salvation Army, A Georgia Corporation, Board Designated Total Return, 1424
Northeast Expressway, Atlanta, GA 30329 held 2,213,948 shares (15.40%); The
Salvation Army Eastern Territory, 440 West Nyack Road, West Nyack, NY 10994
held 2,169,632 shares (15.10%); Father Flanagan's Foundation Fund, 14100
Crawford Street, Boys Town, NE 68010 held 1,597,522 shares (11.12%); and
Amherst H. Wilder Foundation, 919 Lafond Ave., St. Paul, MN 55104 held 956,116
shares (6.65%).
As of April 30, 1996, management believes the following accounts held
5% or more of the outstanding shares of The Fixed Income Portfolio: Delaware
Management Company, Inc., Attn. Joseph H. Hastings, 17th Fl., 1818 Market
Street, Philadelphia, PA 19103 held 304,448 shares (44.28%); The City of
Groton, 295 Meridian Street, Groton, CT 06340 held 280,699 shares (40.83%); and
City of Easton, Aggregated Pension Trust Fund, 650 Ferry Street, Easton, PA
18042 held 102,366 shares (14.89%).
As of April 30, 1996, management believes the following accounts held
5% or more of the outstanding shares of The Global Fixed Income Portfolio:
Washington Suburban Sanitary Commission Employees Retirement Plan, 14501
Sweitzer Ln., Laurel, MD 20707 held 2,700,476 shares (19.96%); Optima Health
Inc., C/O Chase Manhattan Bank, 770 Broadway, New York, NY 10003 held 2,534,817
shares (18.74%); St. Louis University, 3500 Lindell Blvd., St. Louis, MO 63103
held 2,407,117 shares (17.79%); Amherst H. Wilder Foundation, 919 Lafond Ave.,
St. Paul, MN 55104 held 1,621,519 shares (11.99%); City of Brockton
Contributory Retirement System, 50 School Street, Brockton, MA 02401 held
900,540 shares (6.66%); and Boatmen's Trust Company, Cust. Williams and
Connolly, P.O. Box 14737, St. Louis, MO 63178 held 703,700 shares (5.20%).
As of April 30, 1996, management believes the following accounts held
5% or more of the outstanding shares of The Labor Select International Equity
Portfolio: Operating Engineers LCL 101 Pension, 301 E. Armour Blvd., Suite
203, Kansas City, MO 64111 held 1,018,518 shares (67.02%); The Lincoln National
Life Insurance Company, 1300 S. Clinton St., Fort Wayne, IN 46802 held 501,119
shares (32.96%).
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<PAGE> 119
(SAI-DPT-I/PART B)
As of April 30, 1996, management believes the following accounts held
5% or more or the outstanding shares of The Real Estate Investment Trust
Portfolio: The Lincoln National Life Insurance Company, 1300 S. Clinton St.,
Fort Wayne, IN 46802 held 1,009,775 shares (48.81%); American States Insurance
Company, 500 N. Meridian St., Indianapolis, IN 46204 held 504,887 shares
(24.40%); and The Lincoln National Life Insurance Company, Separate Account No.
5, 1300 S. Clinton St., Fort Wayne, IN 46802 held 498,408 shares (24.09%).
DMH Corp., Delaware Management Company, Inc., Delaware Distributors,
L.P., Delaware Distributors, Inc., Delaware Service Company, Inc., Delaware
Management Trust Company, Delaware International Holdings Ltd., Founders
Holdings, Inc., Delaware International Advisers Ltd., Delaware Capital
Management, Inc. and Delaware Investment & Retirement Services, Inc. are direct
or indirect, wholly-owned subsidiaries of DMH. On April 3, 1995, a merger
between DMH and a wholly-owned subsidiary of Lincoln National Corporation
("Lincoln National") was completed. In connection with the merger, new
Investment Management Agreements between the Fund on behalf of The Defensive
Equity Portfolio, The Aggressive Growth Portfolio, The Fixed Income Portfolio
and The Limited-Term Maturity Portfolio and Delaware, and new Investment
Management Agreements between the Fund on behalf of The International Equity
Portfolio, The Global Fixed Income Portfolio and The International Fixed Income
Portfolio and Delaware International were executed following shareholder
approval. DMH, Delaware and Delaware International are now wholly- owned
subsidiaries, and subject to the ultimate control, 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.
Certain officers and directors of the Fund hold identical positions in
each of the other funds in the Delaware Group. Directors and principal
officers of the Fund are noted below along with their ages and their business
experience for the past five years. Unless otherwise noted, the address of
each officer and director is One Commerce Square, Philadelphia, PA 19103.
*WAYNE A. STORK (58)
Chairman and Director of the Fund, Delaware Distributors, Inc.,
Delaware Capital Management, Inc. and Delaware Investment &
Retirement Services, Inc.
Chairman, President, Chief Executive Officer, Director and/or Trustee
of each of the other 17 investment companies in the Delaware
Group, Delaware Management Holdings, Inc., DMH Corp., Delaware
International Holdings Ltd. and Founders Holdings, Inc.
Chairman, President, Chief Executive Officer, Chief Investment Officer
and Director of Delaware Management Company, Inc.
Chairman, Chief Executive Officer and Director of Delaware
International Advisers Ltd.
Director of Delaware Service Company, Inc.
During the past five years, Mr. Stork has served in various executive
capacities at different times within the Delaware organization.
_____________________________
*Director affiliated with the investment manager of the Fund and considered an
"interested person" as defined in the Investment Company Act of 1940.
-40-
<PAGE> 120
(SAI-DPT-I/PART B)
WINTHROP S. JESSUP (50)
President and Chief Executive Officer of the Fund.
Executive Vice President of the 17 other investment companies in the
Delaware Group and Delaware Management Holdings, Inc.
President and Director of Delaware Capital Management, Inc.
Executive Vice President and Director of DMH Corp., Delaware
Management Company, Inc., Delaware International Holdings Ltd.
and Founders Holdings, Inc.
Vice Chairman and Director of Delaware Distributors, Inc.
Vice Chairman of Delaware Distributors, L.P.
Director of Delaware Service Company, Inc., Delaware International
Advisers Ltd., Delaware Management Trust Company and Delaware
Investment & Retirement Services, Inc.
During the past five years, Mr. Jessup has served in various executive
capacities at different times within the Delaware
organization.
RICHARD G. UNRUH, JR. (56)
Executive Vice President of the Fund and each of the other 17
investment companies in the Delaware Group.
Executive Vice President and Director of Delaware Management Company,
Inc.
Senior Vice President of Delaware Management Holdings, Inc.
Director of Delaware International Advisers Ltd.
During the past five years, Mr. Unruh has served in various executive
capacities at different times within the Delaware
organization.
WALTER P. BABICH (68)
Director and/or Trustee of the Fund and each of the other 17
investment companies in the Delaware Group.
460 North Gulph Road, King of Prussia, PA 19406.
Board Chairman, Citadel Constructors, Inc.
From 1986 to 1988, Mr. Babich was a partner of Irwin & Leighton and
from 1988 to 1991, he was a partner of I&L Investors.
ANTHONY D. KNERR (57)
Director and/or Trustee of the Fund and each of the other 17
investment companies in the Delaware Group.
500 Fifth Avenue, New York, NY 10110.
Founder and Managing Director, Anthony Knerr & Associates.
From 1982 to 1988, Mr. Knerr was Executive Vice President/Finance and
Treasurer of Columbia University, New York. From 1987 to
1989, he was also a lecturer in English at the University. In
addition, Mr. Knerr was Chairman of The Publishing Group,
Inc., New York, from 1988 to 1990. Mr. Knerr founded The
Publishing Group, Inc. in 1988.
ANN R. LEVEN (55)
Director and/or Trustee of the Fund and each of the other 17
investment companies in the Delaware Group.
785 Park Avenue, New York, NY 10021.
Treasurer, National Gallery of Art.
From 1984 to 1990, Ms. Leven was Treasurer and Chief Fiscal Officer of
the Smithsonian Institution, Washington, DC, and from 1975 to
1992, she was Adjunct Professor of Columbia Business School.
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(SAI-DPT-I/PART B)
W. THACHER LONGSTRETH (75)
Director and/or Trustee of the Fund and each of the other 17
investment companies in the Delaware Group.
City Hall, Philadelphia, PA 19107.
Philadelphia City Councilman.
CHARLES E. PECK (70)
Director and/or Trustee of the Fund and each of the other 17
investment companies in the Delaware Group.
P.O. Box 1102, Columbia, MD 21044.
Secretary/Treasurer, Enterprise Homes, Inc.
From 1981 to 1990, Mr. Peck was Chairman and Chief Executive Officer
of The Ryland Group, Inc., Columbia, MD.
DAVID K. DOWNES (56)
Senior Vice President/Chief Administrative Officer/Chief Financial
Officer of the Fund, each of the other 17 investment companies
in the Delaware Group and Delaware Management Company, Inc.
Chairman and Director of Delaware Management Trust Company.
Chief Executive Officer and Director of Delaware Investment &
Retirement Services, Inc.
Senior Vice President/Chief Administrative Officer/Chief Financial
Officer/Treasurer of Delaware Management Holdings, Inc.
Senior Vice President/Chief Financial Officer/Treasurer and Director
of DMH Corp.
Senior Vice President/Chief Administrative Officer and Director of
Delaware Distributors, Inc.
Senior Vice President/Chief Administrative Officer of Delaware
Distributors, L.P.
Senior Vice President/Chief Administrative Officer/Chief Financial
Officer and Director of Delaware Service Company, Inc.
Chief Financial Officer and Director of Delaware International
Holdings Ltd.
Senior Vice President/Chief Financial Officer/Treasurer of Delaware
Capital Management, Inc.
Senior Vice President and Director of Founders Holdings, Inc.
Director of Delaware International Advisers Ltd.
Before joining the Delaware Group in 1992, Mr. Downes was Chief
Administrative Officer, Chief Financial Officer and Treasurer
of Equitable Capital Management Corporation, New York, from
December 1985 through August 1992, Executive Vice President
from December 1985 through March 1992 and Vice Chairman from
March 1992 through August 1992.
GEORGE M. CHAMBERLAIN, JR. (49)
Senior Vice President and Secretary of the Fund, each of the other 17
investment companies in the Delaware Group, Delaware
Management Holdings, Inc. and Delaware Distributors, L.P.
Executive Vice President, Secretary and Director of Delaware
Management Trust Company.
Senior Vice President, Secretary and Director of DMH Corp., Delaware
Management Company, Inc., Delaware Distributors, Inc.,
Delaware Service Company, Inc., Delaware Investment &
Retirement Services, Inc. and Delaware Capital Management, Inc.
Corporate Vice President, Secretary and Director of Founders Holdings,
Inc.
Secretary and Director of Delaware International Holdings Ltd.
Director of Delaware International Advisers Ltd.
Attorney.
During the past five years, Mr. Chamberlain has served in various
capacities at different times within the Delaware
organization.
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<PAGE> 122
(SAI-DPT-I/PART B)
GEORGE E. DEMING (54)
Vice President/Senior Portfolio Manager of The Defensive Equity
Portfolio.
Before joining the Delaware Group in 1978, Mr. Deming was responsible
for portfolio management and institutional sales at White Weld
& Co., Inc. He is a member of the Financial Analysts of
Philadelphia.
During the past five years, Mr. Deming has served in various
capacities at different times within the Delaware
organization.
EDWARD N. ANTOIAN (40)
Vice President/Senior Portfolio Manager of the Fund, of seven other
equity funds in the Delaware Group and of Delaware Management
Company, Inc.
During the past five years, Mr. Antoian has served in such capacities
within the Delaware organization.
GARY A. REED (41)
Vice President/Senior Portfolio Manager of the Fund, of the nine other
income (including tax-exempt) funds in the Delaware Group, of
Delaware Management Company, Inc. and Delaware Capital
Management, Inc.
Vice President/Senior Portfolio Manager of Delaware Capital
Management, Inc.
During the past five years, Mr. Reed has served in such capacities
within the Delaware organization.
GERALD T. NICHOLS (38)
Vice President/Senior Portfolio Manager of the Fund, of nine other
income funds and the closed-end funds in the Delaware Group
and of Delaware Management Company, Inc.
Vice President of Founders Holdings, Inc.
Treasurer and Director of Founders CBO Corporation.
During the past five years, Mr. Nichols has served in various
capacities at different times within the Delaware
organization.
PAUL A. MATLACK (36)
Vice President/Senior Portfolio Manager of the Fund, of nine other
income funds and the closed-end funds in the Delaware Group
and of Delaware Management Company, Inc.
Vice President of Founders Holdings, Inc.
Secretary and Director of Founders CBO Corporation.
During the past five years, Mr. Matlack has served in various
capacities at different times within the Delaware
organization.
GEORGE H. BURWELL (34)
Vice President/Senior Portfolio Manager of the Fund, of the seven
other equity funds in the Delaware Group and of Delaware
Management Company, Inc.
Before joining the Delaware Group in 1992, Mr. Burwell was a portfolio
manager for Midlantic Bank, New Jersey. In addition, he was a
security analyst for Balis & Zorn, New York and for First
Fidelity Bank, New Jersey.
DAVID C. DALRYMPLE (38)
Vice President/Senior Portfolio Manager of the Fund and seven other
equity funds in the Delaware Group.
Before joining the Delaware Group in 1991, Mr. Dalrymple was an
Assistant Portfolio Manager for Lord Abbett and Company, New
York, N.Y. from 1986 to 1991.
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(SAI-DPT-I/PART B)
BABACK ZENOUZI (33)
Vice President/Portfolio Manager of The Real Estate Investment Trust
Portfolio.
Before joining the Delaware Group in 1992, Mr. Zenouzi held positions
of Assistant Vice President, Senior Financial Analyst and
Portfolio Accountant for The Boston Company, Boston, MA from
1986 to 1991.
JOSEPH H. HASTINGS (46)
Vice President/Corporate Controller of the Fund, each of the other 17
investment companies in the Delaware Group, Delaware
Management Holdings, Inc., DMH Corp., Delaware Management
Company, Inc., Delaware Distributors, L.P., Delaware
Distributors, Inc., Delaware Service Company, Inc., Delaware
Capital Management, Inc., Founders Holdings, Inc. and Delaware
International Holdings Ltd.
Chief Financial Officer/Treasurer of Delaware Investment & Retirement
Services, Inc.
Executive Vice President/Chief Financial Officer/Treasurer of Delaware
Management Trust Company.
Assistant Treasurer of Founders CBO Corporation.
1818 Market Street, Philadelphia, PA 19103.
Before joining the Delaware Group in 1992, Mr. Hastings was Chief
Financial Officer for Prudential Residential Services, L.P.,
New York, NY from 1989 to 1992. Prior to that, Mr. Hastings
served as Controller and Treasurer for Fine Homes
International, L.P., Stamford, CT from 1987 to 1989.
MICHAEL P. BISHOF (33)
Vice President/Treasurer of the Fund, each of the other 17 investment
companies in the Delaware Group, Delaware Management Company,
Inc., Delaware Distributors, Inc., Delaware Distributors,
L.P., Delaware Service Company, Inc., Founders Holdings, Inc.
and Founders CBO Corporation.
Vice President/Manager of Investment Accounting of Delaware
International Holdings Ltd.
Before joining the Delaware Group in 1995, Mr. Bishof was a Vice
President for Bankers Trust, New York, NY from 1994 to 1995,
a Vice President for CS First Boston Investment Management,
New York, NY from 1993 to 1994 and an Assistant Vice President
for Equitable Capital Management Corporation, New York, NY
from 1987 to 1993.
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(SAI-DPT-I/PART B)
The following is a compensation table listing for each director
entitled to receive compensation, the aggregate compensation received from the
Fund and the total compensation received from all Delaware Group funds for the
fiscal year ended October 31, 1995 and an estimate of annual benefits to be
received upon retirement under the Delaware Group Retirement Plan for
Directors/Trustees as of April 18, 1996.
<TABLE>
<CAPTION>
PENSION OR
RETIREMENT ESTIMATED TOTAL
BENEFITS ANNUAL COMPENSATION
AGGREGATE ACCRUED BENEFITS FROM ALL 17
COMPENSATION AS PART OF UPON DELAWARE
NAME FROM FUND FUND EXPENSES RETIREMENT* GROUP FUNDS
<S> <C> <C> <C> <C>
W. Thacher Longstreth $2,179 None $30,000 $58,188
Ann R. Leven $2,475 None $30,000 $66,324
Walter P. Babich $2,502 None $30,000 $67,324
Anthony D. Knerr $2,029 None $30,000 $57,635
Charles E. Peck $2,179 None $30,000 $58,188
</TABLE>
* Under the terms of the Delaware Group Retirement Plan for Directors/Trustees,
each disinterested director who, at the time of his or her retirement from the
Board, has attained the age of 70 and served on the Board for at least five
continuous years, is entitled to receive payments from each fund in the
Delaware Group for a period equal to the lesser of the number of years that
such person served as a director or the remainder of such person's life. The
amount of such payments will be equal, on an annual basis, to the amount of
the annual retainer that is paid to directors of each fund at the time of such
person's retirement. If an eligible director retired as of April 18, 1996, he
or she would be entitled to annual payments totaling $30,000, in the
aggregate, from all of the funds in the Delaware Group, based on the number of
funds in the Delaware Group as of that date.
-45-
<PAGE> 125
(SAI-DPT-I/PART B)
GENERAL INFORMATION
CUSTODY ARRANGEMENTS
The Morgan Guaranty Trust Company of New York, 60 Wall Street, New York, NY
10260 serves as the Fund's custodian for domestic securities. With respect to
foreign securities, the Custodian Bank makes arrangements with subcustodians
who were approved by the directors of the Fund in accordance with Rule 17f-5 of
the 1940 Act. In the selection of foreign subcustodians, the directors
consider a number of factors, including, but not limited to, the reliability
and financial stability of the institution, the ability of the institution to
provide efficiently the custodial services required for the Fund, and the
reputation of the institutions in the particular country or region.
CAPITALIZATION
The Fund has a present authorized capitalization of one billion shares of
capital stock with a $.01 par value per share. The Board of Directors has
allocated fifty million shares to each Portfolio. While all shares have equal
voting rights on matters affecting the entire Fund, each Portfolio would vote
separately on any matter which affects only that Portfolio, such as any change
in its own investment objective and policy or action to dissolve a Portfolio
and as otherwise prescribed by the 1940 Act. Shares of each Portfolio have a
priority in that Portfolios' assets, and in gains on and income from the
portfolio of that Portfolio. Shares have no preemptive rights, are fully
transferable and, when issued, are fully paid and nonassessable.
The legality of the issuance of the shares offered hereby, pursuant to
registration under the 1940 Act Rule 24f-2, has been passed upon for the Fund
by Messrs. Stradley, Ronon, Stevens & Young, LLP, Philadelphia, Pennsylvania.
NONCUMULATIVE VOTING
PORTFOLIO SHARES HAVE NONCUMULATIVE VOTING RIGHTS WHICH MEANS THAT THE
HOLDERS OF MORE THAN 50% OF THE SHARES OF THE FUND VOTING FOR THE ELECTION OF
DIRECTORS CAN ELECT ALL THE DIRECTORS IF THEY CHOOSE TO DO SO, AND, IN SUCH
EVENT, THE HOLDERS OF THE REMAINING SHARES WILL NOT BE ABLE TO ELECT ANY
DIRECTORS.
This Part B does not include all of the information contained in the
Registration Statement which is on file with the Securities and Exchange
Commission.
-46-
<PAGE> 126
(SAI-DPT-I/PART B)
FINANCIAL STATEMENTS
Ernst & Young LLP serves as the independent auditor for the Fund and, in its
capacity as such, audits the financial statements contained in the Fund's
Annual Reports. The Defensive Equity, The Aggressive Growth, The International
Equity and The Global Fixed Income Portfolios' Statements of Net Assets,
Statements of Assets and Liabilities, Statements of Operations, Statements of
Changes in Net Assets and Notes to Financial Statements, and The Fixed Income
and The Limited-Term Maturity Portfolios' Statements of Assets and Liabilities
and Notes to Financial Statements as well as the reports of Ernst & Young LLP,
independent auditors, for the fiscal year ended October 31, 1995 are included
in the Fund's Annual Reports to shareholders. The financial statements, the
notes relating thereto and the report of Ernst & Young LLP, listed above are
incorporated by reference from the Annual Reports into this Part B. Unaudited
financial information for the period December 19, 1995 (date of initial public
offering) through April 30, 1996 for The Labor Select International Equity
Portfolio and for the period December 5, 1995 (date of initial public offering)
through April 30, 1996 for The Real Estate Investment Trust Portfolio is
attached to this Part B.
-47-
<PAGE> 127
DELAWARE POOLED TRUST, INC. - THE REAL ESTATE INVESTMENT TRUST
STATEMENT OF NET ASSETS
April 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
NUMBER MARKET
OF SHARES VALUE
<S> <C> <C>
COMMON STOCK - 94.96%
FACTORY OUTLET CENTERS REITS - 2.28%
Chelsea Gca Realty 17,500 $498,750
--------------
HEALTHCARE REITS - 7.37%
Health Care Property Investors 29,000 913,500
Nationwide Health Properties 35,000 695,625
--------------
1,609,125
--------------
HOTELS/DIVERSIFIED REITS - 12.53%
Colonial Properties Trust 32,500 780,000
Felcor Suite Hotels 23,000 669,875
Patriot American Hospitality 26,000 724,750
Starwood Lodging Trust 17,000 563,125
--------------
2,737,750
--------------
MALL REITS - 3.63%
DeBartolo Realty 20,000 310,000
Simon Property Group 21,000 483,000
--------------
793,000
--------------
MANUFACTURED HOUSING REITS - 6.40%
ROC Communities 26,000 614,250
Sun Communities 30,000 783,750
--------------
1,398,000
--------------
MULTIFAMILY REITS - 22.85%
Associated Estates Realty 27,000 543,375
Camden Property Trust 41,000 973,750
Equity Residential Properties 26,300 848,175
Evans Withycombe Residential 22,500 486,563
Oasis Residential 31,200 702,000
Prime Residential 35,000 634,375
Security Capital Pacific Trust 38,500 803,688
--------------
4,991,926
--------------
OFFICE/INDUSTRIAL REITS - 17.27%
Cali Realty 31,000 709,125
Duke Realty Investments 23,000 681,375
First Industrial Realty 27,000 644,625
</TABLE>
<PAGE> 128
<TABLE>
<CAPTION>
<S> <C> <C>
Glenborough Realty Trust 28,500 427,500
Reckson Associates Realty 29,000 862,750
Weeks 18,400 448,500
--------------
3,773,875
--------------
RETAIL STRIP CENTER REITS - 14.17%
Developers Diversified Realty 26,000 757,250
Excel Realty Trust 27,000 513,000
JDN Realty 29,000 609,000
Kimco Realty Corp 25,000 650,000
Vornado Realty Trust 15,000 566,250
--------------
3,095,500
--------------
SELF-STORAGE REITS - 8.46%
Sovran Self Storage 28,000 717,500
Storage Trust Realty 29,000 634,375
Storage USA 15,000 496,875
--------------
1,848,750
--------------
TOTAL COMMON STOCK (COST OF $ 20,466,404) 20,746,676
--------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
CONVERTIBLE BONDS - 1.86% AMOUNT
<S> <C> <C>
OFFICE/INDUSTRIAL REITS - 1.86%
Liberty Property Trust 8.0% 7/1/01 $389,000 408,450
--------------
Total Convertible Bonds (cost of $397,168) 408,450
--------------
REPURCHASE AGREEMENTS - 5.38%
With Chase Manhattan 5.3% 5/1/96
(dated 4/30/96, collateralized by $1,166,000
U.S. Treasury Notes 6.125% due 5/31/97, market value
$ 1,199,387) 1,175,000 1,175,000
--------------
Total Repurchase Agreements (cost of $1,175,000) 1,175,000
--------------
TOTAL MARKET VALUE OF SECURITIES - 102.2%
(COST $22,038,572) $22,330,126
LIABILITIES NET OF RECEIVABLES & OTHER ASSETS- (2.2%) (481,436)
NET ASSETS APPLICABLE TO 2,068,789 SHARES ($ .01 PAR VALUE)
OUTSTANDING; EQUIVALENT TO $10.56 PER SHARE - 100% $21,848,690
==============
- ----------------------------------------------------------------
COMPONENTS OF NET ASSETS AT APRIL 30, 1996
Common Stock, $ .01 par value,
500,000,000 shares authorized to the Fund with
50,000,000 shares allocated to this Series $20,774,369
Accumulated undistributed income:
Net investment income 389,293
Net realized gain on investments 393,474
Net unrealized appreciation of investments 291,554
--------------
Total net assets $21,848,690
==============
</TABLE>
<PAGE> 129
DELAWARE POOLED TRUST, INC.
THE REAL ESTATE INVESTMENT TRUST PORTFOLIO
STATEMENT OF OPERATIONS
PERIOD FROM 12/5/95* TO 4/30/96
(Unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME:
Dividends $ 627,376
Interest 37,049 $ 664,425
----------
EXPENSES:
Management fees 63,834
Professional fees 8,546
Custodian fees 6,449
Salaries 2,579
Dividend disbursing and transfer
agent fees and expenses 1,931
Reports to shareholders 1,728
Registration fees 1,524
Taxes (other than income) 975
Directors' fees 573
Other 1,604
----------
89,743
Less expenses absorbed by Delaware
Management Company, Inc. (13,969) 75,774
---------- ----------
NET INVESTMENT INCOME 588,651
----------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain from security
transactions 393,474
Net unrealized appreciation of
investments during the period 291,554
----------
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS 685,028
----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $1,273,679
==========
</TABLE>
*Date of initial sale
See accompanying notes
<PAGE> 130
DELAWARE POOLED TRUST, INC. -
THE REAL ESTATE INVESTMENT TRUST PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
APRIL 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
PERIOD FROM
12/5/95*
TO
4/30/96
<S> <C>
OPERATIONS:
Net investment income $588,651
Net realized gain on investments 393,474
Net unrealized appreciation during the period 291,554
-----------
Net increase in net assets resulting from operations 1,273,679
-----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (199,358)
Net realized gain from security transactions -
-----------
(199,358)
-----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold 20,575,011
Net asset value of shares issued upon reinvestment
of dividends from net investment income 199,358
-----------
20,774,369
Cost of shares repurchased -
-----------
INCREASE IN NET ASSETS DERIVED FROM
CAPITAL SHARE TRANSACTIONS 20,774,369
-----------
NET INCREASE IN NET ASSETS 21,848,690
NET ASSETS:
Beginning of period -
-----------
End of period (including undistributed net investment
income of $389,293) $ 21,848,690
============
</TABLE>
*Date of initial sale
See accompanying notes
<PAGE> 131
DELAWARE POOLED TRUST, INC. -
THE REAL ESTATE INVESTMENT TRUST PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1996
(Unaudited)
Delaware Pooled Trust, Inc. ("the Fund") is registered as a diversified
open-end investment company under the Investment Company Act of 1940. The Fund
is organized as a Maryland Corporation and offers twelve separate Portfolios
("Portfolio").
The Real Estate Investment Trust Portfolio (the "Portfolio") seeks to achieve
maximum long-term total return and capital appreciation by investing at least
65% of its total assets in equity securities of real estate investment trusts.
1.SIGNIFICANT ACCOUNTING POLICIES
The following accounting policies are in accordance with generally accepted
accounting principles and are consistently followed by the Portfolio for
financial statement preparation:
Security Valuation - Securities listed on an exchange are valued at the last
quoted sales price as of 4:00 pm on the valuation date. Securities not traded
or securities not listed on an exchange are valued at the mean of the last
quoted bid and asked prices. Long-term debt securities are valued by an
independent pricing service when such prices are believed to reflect the fair
value of such securities. Money market instruments having less than 60 days to
maturity are valued at amortized cost.
Federal Income Taxes - The Portfolio intends to continue to qualify as a
regulated investment company and make the requisite distributions to
shareholders. Accordingly, no provisions for federal income taxes is required
in the financial statements.
Repurchase Agreements - The Portfolio may invest in a pooled cash account along
with other members of the Delaware Group of Funds. The aggregated daily
balance of the pooled cash account is invested in repurchase agreements secured
by obligations of the U.S. government. The respective collateral is held by
the Portfolio's custodian bank until maturity of the respective repurchase
agreements. Each repurchase agreement is 100% collateralized. However, in the
event of default or bankruptcy by the counterparty to the agreement,
realization of the collateral may be subject to legal proceedings.
Other - Expenses common to all funds within the Delaware Group of Funds are
allocated amongst the funds on the basis of average net assets. Security
transactions are recorded on the date the securities are purchased or sold
(trade date). Costs used in calculating realized gains and losses on the sale
of investment securities are those of the specific securities sold. Dividend
income is recorded on the ex-dividend date and interest income is recorded on
an accrual basis. Original issue discounts are accreted to interest income
over the lives of the respective securities.
2.INVESTMENT MANAGEMENT AND DISTRIBUTION AGREEMENTS
In accordance with the terms of the Investment Management Agreement, the
Portfolio will pay Delaware Management Company, Inc. (DMC), the Investment
Manager of the Portfolio an annual fee which is calculated daily at the rate of
0.75% of average daily net assets. Lincoln Investment Manager, Inc., an
affiliate of DMC, receive 30% of the advisory fee paid to DMC for acting as
sub-advisor to the Portfolio. DMC has undertaken voluntarily to waive its fee
and reimburse the Real Estate Investment Trust Portfolio to the extent that
annual operating expenses, exclusive of taxes, interest, brokerage commissions
and extraordinary expenses exceed 0.89% of average net assets through October
31, 1996. Total expenses absorbed by DMC for the period ended April 30, 1996
were $13,969. At April 30, 1996, the Portfolio had a liability for Investment
Management fees and other expenses payable to DMC for $52,709 after the fee
waiver.
The Portfolio has engaged Delaware Service Company, Inc. (DSC), an affiliate of
DMC, to serve as dividend disbursing and transfer agent for the Portfolio. For
the period ended April 30, 1996, the Portfolio expensed $1,931 for these
services. At April 30, 1996, the Portfolio had a liability for such fees and
other expenses payable to DSC, Inc. for $1,174.
Certain officers of the Investment Manager are officers, directors, and/or
employees of the Portfolio. These officers, directors, and employees are paid
no compensation by the Portfolio.
Certain fund expenses are paid directly by brokers. The amount of these
expenses is less than 0.01% of the Portfolio's average net assets.
<PAGE> 132
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. INVESTMENTS
During the period ended April 30, 1996, the Portfolio made purchases of
$29,351,914 and sales of $9,003,545 of investment securities other than U.S.
Government securities and temporary cash investments.
At April 30, 1996, net unrealized appreciation for financial reporting and
federal income tax purposes aggregated $291,554 of which $618,423 related to
unrealized appreciation of securities and $326,869 related to unrealized
depreciation of securities.
The realized gain for federal income tax purposes was $393,474 for the period
ended April 30, 1996.
4. CAPITAL STOCK
Transactions in capital stock shares were as follows:
<TABLE>
<CAPTION>
PERIOD FROM
12/5/95*
TO
4/30/96
<S> <C>
Shares sold 2,049,301
Shares issued upon reinvestment of dividends from
net investment income 19,488
---------
2,068,789
Shares repurchased -0-
--------
Net increase 2,068,789
=========
</TABLE>
*Date of initial sale
<PAGE> 133
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5. FINANCIAL HIGHLIGHTS
Selected data for each share of the Portfolio outstanding throughout each
period was as follows:
<TABLE>
<CAPTION>
PERIOD FROM
12/5/95(1)
TO
4/30/96
<S> <C>
Net asset value, beginning of period $10.0000
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.2882
Net realized and unrealized
gain from security transactions 0.3718
--------
Total from investment operations 0.6600
--------
LESS DISTRIBUTIONS:
Dividends from net investment income (0.1000)
Distributions from net realized gain on
security transactions ---
--------
Total distributions (0.1000)
--------
Net asset value, end of period 10.5600
=======
TOTAL RETURN 6.63%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) 21,849
Ratio of expenses to average net assets .89%(2)
Ratio of net investment income to average net assets 6.88%(3)
Portfolio turnover 106%
</TABLE>
- -----------------------------------
(1)Date of initial sale; ratios have been annualized and total return has not
been annualized.
(2)Ratio of expenses to average net assets prior to expense limitations was
1.05% period from 12/5/95 to 4/30/96.
(3)Ratio of net investment income to average net assets prior to expense
limitation was 6.72% for the period from 12/5/95 to 4/30/96.
<PAGE> 134
DELAWARE POOLED TRUST, INC. -
THE LABOR SELECT INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF NET ASSETS
APRIL 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
<S> <C> <C>
COMMON STOCK: 90.33%
AUSTRALIA: 8.41%
Brambles Industries 37,200 $ 510,410
National Australia Bank 52,500 471,418
National Foods 337,000 426,616
---------
1,408,444
---------
BELGIUM: 4.57%
Electrabel 2,725 610,475
G.I.B. Holdings 2,500 154,820
---------
765,295
---------
CANADA: 1.95%
BC Telecom 16,650 325,296
---------
325,296
---------
FRANCE: 8.05%
Alcatel Alsthom 5,250 492,843
Elf Aquitaine 6,800 504,769
Television Francaise 3,240 350,466
---------
1,348,078
---------
GERMANY: 5.59%
Bayer AG 1,030 330,863
Continental AG 9,100 154,466
RWE AG 2,700 104,584
Siemens AG 635 346,382
---------
936,295
---------
HONG KONG: 2.78%
Hong Kong Electric Holdings 80,000 254,421
Wharf Holdings 57,000 211,119
---------
465,540
---------
JAPAN: 14.61%
Canon 24,000 476,556
Eisai 18,300 361,627
Kinki Coca-Cola Bottling 23,000 340,329
Matsushita Electric 29,000 512,164
Nichido Fire & Marine 43,600 366,276
YokohmaReito 27,000 389,207
---------
2,446,159
---------
NETHERLANDS: 7.03%
Elsevier 23,400 351,859
Koninklijke Van Ommeren 10,200 380,464
Royal Dutch Petroleum 2,440 347,129
Unilever 720 98,109
---------
1,177,561
---------
NEW ZEALAND: 4.41%
Carter Holt Harvey 122,000 289,060
Telecom Corp. of New Zealand 106,000 449,887
---------
738,947
---------
</TABLE>
<PAGE> 135
STATEMENT OF NET ASSETS (CONTINUED)
<TABLE>
<S> <C>
SINGAPORE: 2.14%
Jardine Matheson Holdings 44,800 358,400
---------
358,400
---------
SPAIN: 4.16%
Acerinox SA 3,150 355,645
Banco Central Hispanoamer SA 16,300 341,061
---------
696,706
---------
UNITED KINGDOM: 26.63%
Associated British Food plc 52,000 310,564
Bass plc 41,500 488,235
Blue Circle Industries 91,150 512,240
Boots plc 11,875 112,976
British Airways plc 38,800 302,179
British Gas plc 74,250 262,950
Dalgety plc 76,000 445,918
GKN plc 29,000 427,776
Great Universal Stores plc 30,000 326,381
Powergen plc 58,250 487,748
RTZ plc 21,950 344,204
Sears plc 18,780 28,322
Taylor Woodrow plc 156,750 409,281
---------
4,458,774
---------
TOTAL COMMON STOCK
(COST $14,548,485) 15,125,495
==========
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT*
<S> <C> <C>
BONDS: 0.70%
SPAIN: 0.70%
Spanish Government, SP16,000,000 116,980
---------
8.20%, 2/28/09
TOTAL BONDS
(COST $114,154) 116,980
---------
REPURCHASE AGREEMENT: 7.68%
With Chase Manhattan 5.30%
5/1/96 (dated 4/30/96, collateralized
by $1,276,000 U.S. Treasury Notes
6.125% due 5/31/97, market value
$1,312,691) $1,286,000 1,286,000
---------
TOTAL REPURCHASE AGREEMENT
(COST $1,286,000) 1,286,000
-----------
TOTAL MARKET VALUE OF SECURITIES: 98.71%
(COST $15,948,639) $16,528,475
-----------
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES: 1.29% 216,729
-----------
NET ASSETS APPLICABLE TO 1,519,639 SHARES
($0.01 PAR VALUE) OUTSTANDING; EQUIVALENT TO
$11.02 PER SHARE: 100.0% 16,745,204
============
</TABLE>
<PAGE> 136
STATEMENT OF NET ASSETS (CONTINUED)
COMPONENTS OF NET ASSETS AT APRIL 30, 1996:
<TABLE>
<S> <C>
Common Stock, $0.01 par value, 500,000,000 shares
authorized to the Fund with 50,000,000 shares
allocated to this Portfolio $16,012,407
Accumulated undistributed income:
Net investment income 100,818
Net realized loss on investments (8,543)
Net unrealized appreciation of investments
and foreign currencies 640,522
-----------
TOTAL NET ASSETS $16,745,204
===========
</TABLE>
*Principal amount is stated in the currency in which each security is
denominated.
See accompanying notes
<PAGE> 137
DELAWARE POOLED TRUST, INC.
THE LABOR SELECT INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF OPERATIONS
PERIOD FROM 12/19/95* TO 4/30/96
(Unaudited)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends $ 82,643
Interest 29,542 $ 112,185
----------
EXPENSES:
Management fees 20,819
Professional fees 16,598
Registration fees 12,440
Reports to shareholders 9,140
Custodian fees 6,819
Dividend disbursing and transfer
agent fees and expenses 2,888
Salaries 1,083
Directors' fees 573
Taxes (other than income) 362
Other 1,293
----------
72,015
Less expenses absorbed by Delaware International
Advisors Ltd. (45,139) 26,876
---------- ----------
NET INVESTMENT INCOME 85,309
----------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS AND FOREIGN CURRENCIES:
Net realized gain (loss) on:
Investment transactions (8,543)
Foreign currency 35,493
-----------
Net realized gain 26,950
Net unrealized appreciation of
investments and foreign currencies 640,522
----------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS AND FOREIGN CURRENCIES 667,472
----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 752,781
===========
</TABLE>
*Date of initial sale
See accompanying notes
<PAGE> 138
DELAWARE POOLED TRUST, INC. -
THE LABOR SELECT INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
APRIL 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
PERIOD FROM
12/19/95*
TO
4/30/96
<S> <C>
OPERATIONS:
Net investment income $ 85,309
Net realized gain on investments and foreign currencies 26,950
Net unrealized appreciation during the period 640,522
-----------
Net increase in net assets resulting from operations 752,781
-----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (19,984)
Net realized gain from security transactions -
----------
(19,984)
----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold 15,992,423
Net asset value of shares issued upon reinvestment
of dividends from net investment income 19,984
----------
16,012,407
Cost of shares repurchased -
----------
Increase in net assets derived from capital
share transactions 16,012,407
----------
NET INCREASE IN NET ASSETS 16,745,204
NET ASSETS:
Beginning of period -
-----------
End of period (including undistributed net investment
income of $100,818) $ 16,745,204
============
</TABLE>
*Date of initial sale
See accompanying notes
<PAGE> 139
DELAWARE POOLED TRUST, INC. -
THE LABOR SELECT INTERNATIONAL EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1996
(Unaudited)
Delaware Pooled Trust, Inc. ("the Fund") is registered as a diversified
open-end investment company under the Investment Company Act of 1940. The Fund
is organized as a Maryland Corporation and offers twelve separate Portfolios.
1.SIGNIFICANT ACCOUNTING POLICIES
The following accounting policies are in accordance with generally accepted
accounting principles and are consistently followed by the Portfolio for
financial statement preparation:
The Labor Select International Equity Portfolio (the "Portfolio") seeks to
achieve maximum long-term total return by investing primarily in equity
securities of issuers organized outside of the United States which, in the
opinion of the Investment Manager, are undervalued, at the time of purchase.
Security Valuation - Securities listed on an exchange are valued at the last
quoted sales price as of 4:00 pm on the valuation date. Securities not traded
or securities not listed on an exchange are valued at the mean of the last
quoted bid and asked prices. Securities listed on a foreign exchange are
valued at the last quoted sale price before the time when the Portfolio is
valued. Long-term debt securities are valued by an independent pricing service
when such prices are believed to reflect the fair value of such securities.
Money market instruments having less than 60 days to maturity are valued at
amortized cost.
Federal Income Taxes - The Portfolio intends to continue to qualify as a
regulated investment company and make the requisite distributions to
shareholders. Accordingly, no provisions for federal income taxes is required
in the financial statements.
Repurchase Agreements - The Portfolio may invest in a pooled cash account along
with other members of the Delaware Group of Funds. The aggregated daily
balance of the pooled cash account is invested in repurchase agreements secured
by obligations of the U.S. government. The respective collateral is held by
the Portfolio's custodian bank until maturity of the respective repurchase
agreements. Each repurchase agreement is 100% collateralized. However, in the
event of default or bankruptcy by the counterparty to the agreement,
realization of the collateral may be subject to legal proceedings.
Foreign Currencies - The value of all assets and liabilities denominated in
foreign currencies are translated into the U.S. dollars at the exchange rate of
such currencies against the U.S. dollar as of 3:00 pm EST. Forward foreign
currency contracts are valued at the mean between the bid and asked prices of
the contracts. Interpolated values are derived when the settlement date of the
contract is an interim date for which quotations are not available.
Other - Expenses common to all funds within the Delaware Group of Funds are
allocated amongst the funds on the basis of average net assets. Security
transactions are recorded on the date the securities are purchased or sold
(trade date). Costs used in calculating realized gains and losses on the sale
of investment securities are those of the specific securities sold. Dividend
income is recorded on the ex-dividend date and interest income is recorded on
an accrual basis. Original issue discounts are accreted to interest income
over the lives of the respective securities.
Certain fund expenses are paid directly by brokers. The amount of these
expenses is less than 0.01% of the Portfolio's average net assets.
2.INVESTMENT MANAGEMENT AND DISTRIBUTION AGREEMENTS
In accordance with the terms of the Investment Management Agreement, the
Portfolio will pay Delaware International Advisors Ltd. (DIAL), the Investment
Manager of the Portfolio, an annual fee which is calculated daily at the rate
of 0.75% of average daily net assets.
The Portfolio has engaged Delaware Service Company, Inc. (DSC), an affiliate of
DIAL, to serve as dividend disbursing and transfer agent for the Portfolio.
For the period ended April 30, 1996, the Portfolio expensed $2,888 for these
services.
Certain officers of the Investment Manager are officers, directors, and/or
employees of the Portfolio. These officers, directors, and employees are paid
no compensation by the Portfolio.
<PAGE> 140
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. INVESTMENTS
During the period ended April 30, 1996, the Portfolio made purchases of
$14,896,011 and sales of $224,892 of investment securities other than U.S.
government securities and temporary cash investments.
At April 30, 1996, unrealized appreciation for financial reporting and federal
income tax purposes aggregated $579,837 of which $687,209 related to unrealized
appreciation of securities and $107,372 related to unrealized depreciation of
securities.
The realized loss for federal income tax purposes was $8,543 for the period
ended April 30, 1996.
4. CAPITAL STOCK
Transactions in capital stock shares were as follows:
<TABLE>
<CAPTION>
PERIOD FROM
12/19/95*
TO
4/30/96
<S> <C>
Shares sold 1,517,761
Shares issued upon reinvestment of dividend from
net investment income 1,878
----------
1,519,639
Shares repurchased ---
----------
Net increase 1,519,639
=========
</TABLE>
*Date of initial sale
<PAGE> 141
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5. FOREIGN EXCHANGE
The following foreign currency forward contracts were outstanding at April 30,
1996.
<TABLE>
<CAPTION>
UNREALIZED
CONTRACT IN EXCHANGE SETTLEMENT APPRECIATION
TO DELIVER FOR DATE (DEPRECIATION)
<S> <C> <C> <C>
19,829,763 Belgian Francs $ 655,700 6/28/96 23,189
1,078,680 Dutch Guilders 655,700 6/28/96 23,237
965,161 Deutsche Marks 655,700 6/28/96 22,971
3,299,751 French Francs 655,700 6/28/96 13,229
172,931,970 Japanese Yen 1,639,200 6/28/96 (20,921)
--------
$ 61,705
========
</TABLE>
<PAGE> 142
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
6. FINANCIAL HIGHLIGHTS
Selected data for each share of the Portfolio outstanding throughout the period
were as follows:
<TABLE>
<CAPTION>
PERIOD FROM
12/19/95(1)
TO
4/30/96
<S> <C>
Net asset value, beginning of period $10.0000
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.1063
Net realized and unrealized
gain from security transactions 0.9537
--------
Total from investment operations 1.0600
LESS DISTRIBUTIONS:
Dividends from net investment income (0.0400)
Distributions from net realized gain on
security transactions ---
---------
Total distributions (0.0400)
Net asset value, end of period $11.0200
========
TOTAL RETURN 10.62%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $ 16,745
Ratio of expenses to average net assets 0.96%
Ratio of net investment income to average net assets 4.28%
Portfolio turnover 9%
</TABLE>
- -----------------------------------
(1)Date of initial sale; ratios have been annualized and total return has not
been annualized.
(2)Ratio of expenses to average net assets prior to expense limitations was
2.56% period from 12/19/95 to 4/30/96.
(3)Ratio of net investment income to average net assets prior to expense
limitation was 2.68% for the period from 12/19/95 to 4/30/96.
<PAGE> 143
Form N-1A
File No. 33-40991
Delaware Pooled Trust, Inc.
PART C
Other Information
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
Part A - Financial Highlights
*Part B - Statements of Net Assets
Statements of Assets and Liabilities
Statements of Operations
Statements of Changes in Net Assets
Notes to Financial Statements
Accountant's Report
* The financial statements and Accountant's Report listed
above are incorporated into this filing by reference into Part
B from the Registrant's Annual Reports for The Defensive
Equity, The Aggressive Growth, The Global Fixed Income and The
International Equity Portfolios and the Statements of Assets
and Liabilities, Notes to Financial Statements and
Accountant's Reports for The Fixed Income, The International
Fixed Income and The Limited-Term Maturity Portfolios for the
fiscal year ended October 31, 1995. The Registrant's Annual
Reports were filed electronically with the Commission on
January 10, 1996. In addition, the unaudited financial
statements for the five-month period ended April 30, 1996 for
The Labor Select International Equity Portfolio and The Real
Estate Investment Trust Portfolio are included in Part B.
(b) Exhibits:
(1) Articles of Incorporation.
(a) Articles of Incorporation, as amended and
supplemented through November 28, 1995,
incorporated into this filing by
reference to Post-Effective Amendment No.
8 filed September 15, 1995.
(b) Articles Supplementary (November 28, 1995)
incorporated into this filing by
reference to Post-Effective Amendment No.
9 filed November 24, 1995.
(2) By-Laws. By-Laws, as amended to date,
incorporated into this filing by reference to
Post-Effective Amendment No. 8 filed September
15, 1995.
i
<PAGE> 144
Form N-1A
File No. 33-40991
Delaware Pooled Trust, Inc.
(3) Voting Trust Agreement. Inapplicable.
(4) Copies of All Instruments Defining the Rights of
Holders.
(a) Articles of Incorporation and
Articles Supplementary.
(1) Articles Fifth and Ninth of the
Articles of Incorporation
(May 29, 1991), Article Fifth
of Articles of Amendment
(October 10, 1991), Article
Second of Articles
Supplementary (September 21,
1992), Article Second of
Articles Supplementary
(August 3, 1993), Article
Second of Articles
Supplementary (October 12,
1994) incorporated into this
filing by reference to
Post-Effective Amendment No.
8 filed September 15, 1995.
(2) Article Fourth of Articles
Supplementary (November 28,
1995) incorporated into this
filing by reference to
Post-Effective Amendment No.
9 filed November 24, 1995.
(b) By-Laws. Articles II, III and
XIV of the By-Laws incoporated
into this filing by reference
to Post-Effective Amendment
No. 8 filed September 15,
1995.
(5) Investment Management Agreements.
(a)(1) Investment Management
Agreements between Delaware
Management Company, Inc. and
the Registrant on behalf of
The Defensive Equity, The
Aggressive Growth, The Fixed
Income and The Limited-Term
Maturity Portfolios (April 3,
1995) incorporated into this
filing by reference to
Post-Effective Amendment No. 8
filed September 15, 1995.
(a)(2) Investment Management
Agreements between Delaware
International Advisers Ltd.
and the Registrant on behalf
of The International Equity,
The Global Fixed Income and
The International Fixed Income
Portfolios (April 3, 1995)
incorporated into this filing
by reference to Post-Effective
Amendment No. 8 filed
September 15, 1995.
ii
<PAGE> 145
Form N-1A
File No. 33-40991
Delaware Pooled Trust, Inc.
(a)(3) Investment Management
Agreements between Delaware
Management Company, Inc. and
the Registrant on behalf of
The Defensive Equity
Small/Mid-Cap, The Defensive
Equity Utility, The High-Yield
Bond and The Real Estate
Investment Trust Portfolios
(November 29, 1995)
incorporated into this filing
by reference to Post-Effective
Amendment No. 10 filed
February 23, 1996.
(a)(4) Investment Management
Agreement between Delaware
International Advisers Ltd.
and the Registrant on behalf
of The Labor Select
International Equity Portfolio
(November 29, 1995)
incorporated into this filing
by reference to Post-Effective
Amendment No. 10 filed
February 23, 1996.
(b) Sub-Advisory Agreement
(November 29, 1995) between
Delaware Management Company,
Inc. and Lincoln Investment
Management, Inc. on behalf of
the Registrant for The Real
Estate Investment Trust
Portfolio incorporated into
this filing by reference to
Post-Effective Amendment No.
10 filed February 23, 1996.
(6) (a) Distribution Agreements.
(i) Form of Distribution Agreements
(April 3, 1995) between
Delaware Distributors, L.P.
and the Registrant on behalf
of The Defensive Equity, The
Aggressive Growth, The
International Equity, The
Global Fixed Income, The
Fixed Income, The
Limited-Term Maturity and The
International Fixed Income
Portfolios incorporated into
this filing by reference to
Post-Effective Amendment No.
9 filed November 24, 1995.
(ii) Executed Distribution
Agreements (April 3, 1995)
between Delaware
Distributors, L.P. and the
Registrant on behalf of The
Defensive Equity, The
Aggressive Growth, The
International Equity, The
Global Fixed Income, The
Fixed Income, The
Limited-Term Maturity and The
International Fixed Income
Portfolios to be filed by
Post-Effective Amendment.
(iii) Form of Distribution
Agreements (November 29,
1995) between Delaware
Distributors, L.P. and the
Registrant on behalf of The
Defensive Equity
Small/Mid-Cap, The Defensive
Equity Utility, The
High-Yield Bond, The Labor
Select International Equity
and The Real Estate
Investment Trust Portfolios
incorporated into this filing
by reference to
Post-Effective Amendment No.
9 filed November 24, 1995.
iii
<PAGE> 146
Form N-1A
File No. 33-40991
Delaware Pooled Trust, Inc.
(iv) Executed Distribution
Agreements (November 29,
1995) between Delaware
Distributors, L.P. and the
Registrant on behalf of The
Defensive Equity
Small/Mid-Cap, The Defensive
Equity Utility, The
High-Yield Bond, The Labor
Select International Equity
and The Real Estate
Investment Trust Portfolios
to be filed by Post-Effective
Amendment.
(b-d) Inapplicable.
(7) Bonus, Profit Sharing, Pension Contracts.
(a)(1) Amended and Restated Profit
Sharing Plan (November 17,
1994) incorporated into this
filing by reference to
Post-Effective Amendment No. 8
filed September 15, 1995.
(a)(2) Amendment to Profit Sharing
Plan (December 21, 1995)
incorporated into this filing
by reference to Post-Effective
Amendment No. 10 filed
February 23, 1996.
(8) Custodian Agreements.
(a) Custodian Agreements
incorporated into this filing
by reference to Post-Effective
Amendment No. 1 filed May 18,
1992, Post-Effective Amendment
No. 3 filed October 29, 1992,
Post-Effective Amendment No. 6
filed December 29, 1993 and
Post-Effective Amendment No. 9
filed November 24, 1995.
(9) Other Material Contracts. Executed
Third Amended and Restated Shareholders
Services Agreement (November 29, 1995)
between Delaware Service Company, Inc.
and the Registrant on behalf of each
Portfolio incorporated into this filing
by reference to Post-Effective
Amendment No. 10 filed February 23,
1996.
(10) Opinion of Counsel. Filed with letter
relating to Rule 24f-2 on November 17,
1995.
(11) Consent of Auditors. Attached as Exhibit.
(12) Inapplicable.
(13) Undertaking of Initial Shareholder.
Incorporated into this filing by
reference to Pre-Effective Amendment
No. 1 filed August 16, 1991.
iv
<PAGE> 147
Form N-1A
File No. 33-40991
Delaware Pooled Trust, Inc.
(14-15) Inapplicable.
(16) Schedules of Computation for each Performance
Quotation.
(a) Incorporated into this filing
by reference to Post-Effective
Amendment No. 8 filed
September 15, 1995.
(b) Schedules of Computation for
each Performance Quotation for
The Labor Select International
Equity and The Real Estate
Investment Trust Portfolios
attached as Exhibit.
(17) Financial Data Schedules.
(a) Incorporated into this filing
by reference to Post-Effective
Amendment No. 10 filed
February 23, 1996.
(b) Financial Data Schedules for
The Labor Select International
Equity and The Real Estate
Investment Trust Portfolios
attached as Exhibit.
(18) Inapplicable.
(19) Other: Directors' Power of Attorney.
Incorporated into this filing
by reference to Post-Effective
Amendment No. 8 filed
September 15, 1995.
Item 25. Persons Controlled by or under Common Control with
Registrant. None.
Item 26. Number of Holders of Securities.
(1) (2)
<TABLE>
<CAPTION>
Number of
Title of Class Record Holders
-------------- --------------
<S> <C>
The Defensive Equity Portfolio:
Common Stock Par Value 28 Accounts as of
$.01 Per Share April 30, 1996
The Aggressive Growth Portfolio:
Common Stock Par Value 42 Accounts as of
$.01 Per Share April 30, 1996
The International Equity Portfolio:
Common Stock Par Value 34 Accounts as of
$.01 Per Share April 30, 1996
</TABLE>
v
<PAGE> 148
Form N-1A
File No. 33-40991
Delaware Pooled Trust, Inc.
<TABLE>
<CAPTION>
Number of
Title of Class Record Holders
-------------- --------------
<S> <C>
The Global Fixed Income Portfolio:
Common Stock Par Value 17 Accounts as of
$.01 Per Share April 30, 1996
The Fixed Income Portfolio:
Common Stock Par Value 3 Accounts as of
$.01 Per Share April 30, 1996
The Limited-Term
Maturity Portfolio:
Common Stock Par Value 1 Account as of
$.01 Per Share April 30, 1996
The International Fixed
Income Portfolio:
Common Stock Par Value 1 Account as of
$.01 Per Share April 30, 1996
The Defensive Equity Small/
Mid-Cap Portfolio:
Common Stock Par Value 0 Accounts as of
$.01 Per Share April 30, 1996
The Defensive Equity Utility
Portfolio:
Common Stock Par Value 0 Accounts as of
$.01 Per Share April 30, 1996
The High-Yield Bond Portfolio:
Common Stock Par Value 0 Accounts as of
$.01 Per Share April 30, 1996
The Labor Select International
Equity Portfolio:
Common Stock Par Value 6 Accounts as of
$.01 Per Share April 30, 1996
The Real Estate Investment
Trust Portfolio:
Common Stock Par Value 8 Accounts as of
$.01 Per Share April 30, 1996
</TABLE>
vi
<PAGE> 149
Form N-1A
File No. 33-40991
Delaware Pooled Trust, Inc.
Item 27. Indemnification. Incorporated into this filing by
reference to initial Registration Statement filed May
31, 1991.
Item 28. Business and Other Connections of Investment Adviser.
(a) Delaware Management Company, Inc. ("DMC") serves
as investment manager to The Defensive Equity Portfolio, The Aggressive Growth
Portfolio, The Fixed Income Portfolio, The Limited-Term Maturity Portfolio, The
Defensive Equity Small/Mid-Cap Portfolio, The Defensive Equity Utility
Portfolio, The High-Yield Bond Portfolio and The Real Estate Investment Trust
Portfolio. In addition, DMC also serves as investment manager or sub-adviser
to the other funds in the Delaware Group (Delaware Group Delaware Fund, Inc.,
Delaware Group Trend Fund, Inc., Delaware Group Value Fund, Inc., Delaware
Group DelCap Fund, Inc., Delaware Group Decatur Fund, Inc., Delaware Group
Delchester High-Yield Bond Fund, Inc., Delaware Group Government Fund, Inc.,
Delaware Group Limited-Term Government Funds, Inc., Delaware Group Cash
Reserve, Inc., Delaware Group Tax-Free Fund, Inc., DMC Tax-Free Income
Trust-Pennsylvania, Delaware Group Tax-Free Money Fund, Inc., Delaware Group
Premium Fund, Inc., Delaware Group Global & International Funds, Inc., Delaware
Group Dividend and Income Fund, Inc., Delaware Group Global Dividend and Income
Fund, Inc. and Delaware Group Adviser Funds, Inc.) and provides investment
advisory services to institutional accounts, primarily retirement plans and
endowment funds. In addition, certain directors of DMC also serve as
directors/trustees of the other Delaware Group funds, and certain officers are
also officers of these other funds. A company indirectly owned by DMC's parent
company acts as principal underwriter to the funds in the Delaware Group (see
Item 29 below) and another such company acts as the shareholder servicing,
dividend disbursing and transfer agent for all of the other mutual funds in the
Delaware Group.
The following persons serving as directors or officers of DMC have
held the following positions during the past two years:
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with DMC and its Affiliates and
Business Address* Other Positions and Offices Held
- ------------------ ----------------------------------------------------------------------------------
<S> <C>
Wayne A. Stork Chairman of the Board, President, Chief Executive Officer, Chief Investment Officer
and Director of Delaware Management Company, Inc.; Chairman of the Board and Director
of the Registrant, Delaware Distributors, Inc., Delaware Capital Management, Inc. and
Delaware Investment & Retirement Services, Inc.; President, Chairman of the Board,
Chief Executive Officer and Director of each of the other funds in the Delaware Group,
Delaware Management Holdings, Inc., DMH Corp., Delaware International Holdings Ltd.
and Founders Holdings, Inc.; Chairman, Chief Executive Officer and Director of
Delaware International Advisers, Ltd.; and Director of Delaware Service Company, Inc.
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
vii
<PAGE> 150
Form N-1A
File No. 33-40991
Delaware Pooled Trust, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with DMC and its Affiliates and
Business Address* Other Positions and Offices Held
- ------------------ ----------------------------------------------------------------------------------
<S> <C>
Winthrop S. Jessup Executive Vice President and Director of Delaware Management Company, Inc., DMH Corp.,
Delaware International Holdings Ltd. and Founders Holdings, Inc.; President and Chief
Executive Officer of the Registrant; Executive Vice President of each of the other
funds in the Delaware Group and Delaware Management Holdings, Inc.; Vice Chairman of
Delaware Distributors, L.P.; Vice Chairman and Director of Delaware Distributors,
Inc.; Director of Delaware Service Company, Inc., Delaware Management Trust Company,
Delaware International Advisers Ltd. and Delaware Investment & Retirement Services,
Inc.; and President and Director of Delaware Capital Management, Inc.
Richard G. Unruh, Jr. Executive Vice President and Director of Delaware Management Company, Inc.; Executive
Vice President of the Registrant and each of the other funds in the Delaware Group;
Senior Vice President of Delaware Management Holdings, Inc.; and Director of Delaware
International Advisers Ltd.
Board of Directors, Chairman of Finance Committee, Keystone Insurance Company since
1989, 2040 Market Street, Philadelphia, PA; Board of Directors, Chairman of Finance
Committee, Mid Atlantic, Inc. since 1989, 2040 Market Street, Philadelphia, PA
Paul E. Suckow Executive Vice President/Chief Investment Officer, Fixed Income of Delaware Management
Company, Inc., the Registrant and each of the other funds in the Delaware Group;
Senior Vice President/Chief Investment Officer, Fixed Income of Delaware Management
Holdings, Inc.; Senior Vice President and Director of Founders Holdings, Inc.; and
Director of Founders CBO Corporation
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
viii
<PAGE> 151
Form N-1A
File No. 33-40991
Delaware Pooled Trust, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with DMC and its Affiliates and
Business Address* Other Positions and Offices Held
- ------------------ -----------------------------------------------------------------
<S> <C>
David K. Downes Senior Vice President, Chief Administrative Officer and Chief Financial Officer of
Delaware Management Company, Inc., the Registrant and each of the other funds in the
Delaware Group; Chairman and Director of Delaware Management Trust Company; Senior
Vice President, Chief Administrative Officer, Chief Financial Officer and Treasurer of
Delaware Management Holdings, Inc.; Senior Vice President, Chief Financial Officer,
Treasurer and Director of DMH Corp.; Senior Vice President and Chief Administrative
Officer of Delaware Distributors, L.P.; Senior Vice President, Chief Administrative
Officer and Director of Delaware Distributors, Inc.; Senior Vice President, Chief
Administrative Officer, Chief Financial Officer and Director of Delaware Service
Company, Inc.; Chief Financial Officer and Director of Delaware International Holdings
Ltd.; Senior Vice President, Chief Financial Officer and Treasurer of Delaware Capital
Management, Inc.; Senior Vice President and Director of Founders Holdings, Inc.; Chief
Executive Officer and Director of Delaware Investment & Retirement Services, Inc.; and
Director of Delaware International Advisers Ltd.
Chief Executive Officer, Chief Financial Officer and Treasurer of Forewarn, Inc. since
1992, 8 Clayton Place, Newtown Square, PA
George M. Chamberlain, Jr. Senior Vice President, Secretary and Director of Delaware Management Company, Inc.,
DMH Corp., Delaware Distributors, Inc., Delaware Service Company, Inc., Delaware
Capital Management, Inc. and Delaware Investment & Retirement Services, Inc.; Senior
Vice President and Secretary of the Registrant, each of the other funds in the
Delaware Group, Delaware Distributors, L.P. and Delaware Management Holdings, Inc.;
Executive Vice President, Secretary and Director of Delaware Management Trust Company;
Secretary and Director of Delaware International Holdings Ltd.; Corporate Vice
President, Secretary and Director of Founders Holdings, Inc.; and Director of Delaware
International Advisers Ltd.
Director of ICI Mutual Insurance Co. since 1992, P.O. Box 730, Burlington, VT
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
ix
<PAGE> 152
Form N-1A
File No. 33-40991
Delaware Pooled Trust, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with DMC and its Affiliates and
Business Address* Other Positions and Offices Held
- ------------------ --------------------------------------------------------------------------------
<S> <C>
Richard J. Flannery Managing Director/Corporate Tax & Affairs of Delaware Management Company, Inc.,
Delaware Management Holdings, Inc., DMH Corp., Delaware Distributors, L.P., Delaware
Distributors, Inc., Delaware Service Company, Inc., Delaware Management Trust Company,
Founders CBO Corporation, Delaware Capital Management, Inc. and Delaware Investment &
Retirement Services, Inc.; Vice President of the Registrant and each of the other
funds in the Delaware Group; Managing Director/Corporate Tax & Affairs and Director of
Founders Holdings, Inc.; Managing Director and Director of Delaware International
Holdings Ltd.; and Director of Delaware International Advisers Ltd.
Limited Partner of Stonewall Links, L.P. since 1991, Bulltown Rd., Elverton, PA;
Director and Member of Executive Committee of Stonewall Links, Inc. since 1991,
Bulltown Rd., Elverton, PA
Michael P. Bishof(1) Vice President and Treasurer of Delaware Management Company, Inc., the Registrant,
each of the other funds in the Delaware Group, Delaware Distributors, L.P., Delaware
Distributors, Inc., Delaware Service Company, Inc., Founders Holdings, Inc. and
Founders CBO Corporation; and Vice President and Manager of Investment Accounting of
Delaware International Holdings Ltd.
Eric E. Miller Vice President and Assistant Secretary of Delaware Management Company, Inc., the
Registrant, each of the other funds in the Delaware Group, Delaware Management
Holdings, Inc., DMH Corp., Delaware Distributors, L.P., Delaware Distributors Inc.,
Delaware Service Company, Inc., Delaware Management Trust Company, Founders Holdings,
Inc., Delaware Capital Management, Inc. and Delaware Investment & Retirement Services,
Inc.
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
x
<PAGE> 153
Form N-1A
File No. 33-40991
Delaware Pooled Trust, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with DMC and its Affiliates and
Business Address* Other Positions and Offices Held
- ------------------ ---------------------------------------------------------------------------------
<S> <C>
Richelle S. Maestro Vice President and Assistant Secretary of Delaware Management Company, Inc., the
Registrant, each of the other funds in the Delaware Group, Delaware Management
Holdings, Inc., Delaware Distributors, L.P., Delaware Distributors, Inc., Delaware
Service Company, Inc., DMH Corp., Delaware Management Trust Company, Delaware Capital
Management, Inc., Founders Holdings, Inc. and Delaware Investment & Retirement
Services, Inc.; and Assistant Secretary of Founders CBO Corporation and Delaware
International Holdings Ltd.
General Partner of Tri-R Associates since 1989, 10001 Sandmeyer Ln., Philadelphia, PA
John M. Zerr(2) Vice President and Assistant Secretary of Delaware Management Company, Inc., the
Registrant, each of the other funds in the Delaware Group, DMH Corp., Delaware
Distributors, L.P., Delaware Capital Management, Inc. and Delaware Investment &
Retirement Services, Inc.
Secretary and Counsel of Renovisions, Inc. since 1990, 4284 South Dixi Road, Resaca,
GA
Joseph H. Hastings Vice President/Corporate Controller of Delaware Management Company, Inc., the
Registrant, each of the other funds in the Delaware Group, Delaware Management
Holdings, Inc., DMH Corp., Delaware Distributors, L.P., Delaware Distributors, Inc.,
Delaware Service Company, Inc., Delaware Capital Management, Inc., Founders Holdings,
Inc. and Delaware International Holdings Ltd.; Executive Vice President, Chief
Financial Officer and Treasurer of Delaware Management Trust Company; Chief Financial
Officer and Treasurer of Delaware Investment & Retirement Services, Inc.; and
Assistant Treasurer of Founders CBO Corporation
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
xi
<PAGE> 154
Form N-1A
File No. 33-40991
Delaware Pooled Trust, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with DMC and its Affiliates and
Business Address* Other Positions and Offices Held
- ------------------ ---------------------------------------------------------------------------------
<S> <C>
Bruce A. Ulmer Vice President/Director of Internal Audit of Delaware Management Company, Inc., the
Registrant, each of the other funds in the Delaware Group, Delaware Management
Holdings, Inc., DMH Corp. and Delaware Management Trust Company; and Vice
President/Internal Audit of Delaware Investment & Retirement Services, Inc.
Steven T. Lampe(3) Vice President/Taxation of Delaware Management Company, Inc., the Registrant, each of
the other funds in the Delaware Group, Delaware Management Holdings, Inc., DMH Corp.,
Delaware Distributors, L.P., Delaware Distributors, Inc., Delaware Service Company,
Inc., Delaware Management Trust Company, Founders Holdings, Inc., Founders CBO
Corporation, Delaware Investment & Retirement Services, Inc. and Delaware Capital
Management, Inc.
Lisa O. Brinkley(4) Vice President/Compliance of Delaware Management Company, Inc., the Registrant, each
of the other funds in the Delaware Group, DMH Corp., Delaware Distributors, L.P.,
Delaware Distributors, Inc., Delaware Service Company, Inc., Delaware Management Trust
Company, Delaware Capital Management, Inc. and Delaware Investment & Retirement
Services, Inc.
Rosemary E. Milner Vice President/Legal of Delaware Management Company, Inc., the Registrant, each of the
other funds in the Delaware Group, Delaware Distributors, L.P. and Delaware
Distributors, Inc.
Douglas L. Anderson Vice President/Operations of Delaware Management Company, Inc., Delaware Service
Company, Inc. and Delaware Investment & Retirement Services, Inc.; and Vice
President/Operations and Director of Delaware Management Trust Company
Michael T. Taggart Vice President/Facilities Management and Administrative Services of Delaware
Management Company, Inc.
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
xii
<PAGE> 155
Form N-1A
File No. 33-40991
Delaware Pooled Trust, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with DMC and its Affiliates and
Business Address* Other Positions and Offices Held
- ------------------ ---------------------------------------------------------------------------------
<S> <C>
Gerald T. Nichols Vice President/Senior Portfolio Manager of Delaware Management Company, Inc., the
Registrant, each of the tax-exempt funds, the fixed income funds and the closed-end
funds in the Delaware Group; Vice President of Founders Holdings, Inc.; and Treasurer
and Director of Founders CBO Corporation
J. Michael Pokorny Vice President/Senior Portfolio Manager of Delaware Management Company, Inc., the
Registrant, each of the tax-exempt funds and the fixed income funds in the Delaware
Group
Gary A. Reed Vice President/Senior Portfolio Manager of Delaware Management Company, Inc., the
Registrant, each of the tax-exempt funds and the fixed income funds in the Delaware
Group and Delaware Capital Management, Inc.
Paul A. Matlack Vice President/Senior Portfolio Manager of Delaware Management Company, Inc., the
Registrant, each of the tax-exempt funds, the fixed income funds and the closed-end
funds in the Delaware Group; Vice President of Founders Holdings, Inc.; and Secretary
and Director of Founders CBO Corporation
Patrick P. Coyne Vice President/Senior Portfolio Manager of Delaware Management Company, Inc., the
Registrant, each of the tax-exempt funds and the fixed income funds in the Delaware
Group
Roger A. Early(5) Vice President/Senior Portfolio Manager of Delaware Management Company, Inc., the
Registrant, each of the tax-exempt funds and the fixed income funds in the Delaware
Group
Edward N. Antoian Vice President/Senior Portfolio Manager of Delaware Management Company, Inc., the
Registrant and each of the equity funds in the Delaware Group
General Partner of Zeke Investment Partners since 1991, 569 Canterbury Lane, Berwyn,
PA
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
xiii
<PAGE> 156
Form N-1A
File No. 33-40991
Delaware Pooled Trust, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with DMC and its Affiliates and
Business Address* Other Positions and Offices Held
- ------------------ --------------------------------------------------------------------------------
<S> <C>
George H. Burwell Vice President/Senior Portfolio Manager of Delaware Management Company, Inc., the
Registrant and each of the equity funds in the Delaware Group
John B. Fields Vice President/Senior Portfolio Manager of Delaware Management Company, Inc., the
Registrant, each of the equity funds in the Delaware Group and Delaware Capital
Management, Inc.
David C. Dalrymple Vice President/Senior Portfolio Manager of Delaware Management Company, Inc., the
Registrant and each of the equity funds in the Delaware Group
George E. Deming Vice President/Senior Portfolio Manager of The Defensive Equity Portfolio; and
Director of Delaware International Advisers, Ltd.
Babak Zenouzi Vice President/Portfolio Manager of The Real Estate Investment Trust Portfolio
Faye P. Staples(6) Vice President/Human Resources of Delaware Management Company, Inc., Delaware
Distributors, L.P. and Delaware Distributors, Inc.; and Vice President/Director of
Human Resources of Delaware Service Company, Inc.
Daniel H. Carlson(7) Vice President/Marketing Manager of Delaware Management Company, Inc.
</TABLE>
(1) VICE PRESIDENT/GLOBAL INVESTMENT MANAGEMENT OPERATIONS, Bankers
Trust and VICE PRESIDENT, CS First Boston Investment Management
prior to June 1995.
(2) ATTORNEY, Ballard, Spahr, Andrews and Ingersoll prior to July
1995.
(3) TAX MANAGER, Price Waterhouse prior to October 1995.
(4) VICE PRESIDENT AND COMPLIANCE OFFICER, Banc One Securities
Corporation prior to June 1994 and ASSISTANT VICE PRESIDENT AND
COMPLIANCE OFFICER, Aetna Life and Casualty prior to March 1993.
(5) SENIOR VICE PRESIDENT AND PORTFOLIO MANAGER, Federated Investors
prior to July 1994.
(6) VICE PRESIDENT/HUMAN RESOURCES, Nova Care prior to September
1995.
(7) PRINCIPAL AND CONSULTANT, Buck Consultants prior to October
1995.
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
xiv
<PAGE> 157
Form N-1A
File No. 33-40991
Delaware Pooled Trust, Inc.
(b) Delaware International Advisers Ltd. ("Delaware
International") serves as investment manager to The International Equity
Portfolio, The Global Fixed Income Portfolio, The International Fixed Income
Portfolio and The Labor Select International Equity Portfolio and other
institutional accounts. Delaware International also serves as investment
manager or sub-adviser to Delaware Group Premium Fund, Inc., Delaware Group
Global & International Funds, Inc. and Delaware Group Global Dividend and
Income Fund, Inc.
The following persons serving as directors or officers
of Delaware International have held the following positions during the past two
years:
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with Delaware International Advisers Ltd.
Business Address and its Affiliates and Other Positions and Offices Held
- ------------------ ------------------------------------------------------------------
<S> <C>
*Wayne A. Stork Chairman of the Board, Chief Executive Officer and Director of Delaware International
Advisers Ltd.; Chairman of the Board and Director of the Registrant, Delaware
Distributors, Inc., Delaware Capital Management, Inc. and Delaware Investment &
Retirement Services, Inc.; President, Chief Executive Officer, Chairman of the Board
and Director of each of the other funds in the Delaware Group, Delaware Management
Holdings, Inc., DMH Corp., Delaware International Holdings Ltd. and Founders Holdings,
Inc.; Chairman of the Board, President, Chief Executive Officer, Chief Investment
Officer and Director of Delaware Management Company, Inc.; and Director of Delaware
Service Company, Inc.
**G. Roger H. Kitson Vice Chairman and Director of Delaware International Advisers Ltd.
**David G. Tilles Managing Director, Chief Investment Officer and Director of Delaware International
Advisers Ltd.
**John Emberson Secretary/Compliance Officer/Finance Director and Director of Delaware International
Advisers Ltd.
</TABLE>
*Business address is 1818 Market Street, Philadelphia, PA 19103.
**Business address is Veritas House, 125 Finsbury Pavement, London,
England EC2A 1NQ.
xv
<PAGE> 158
Form N-1A
File No. 33-40991
Delaware Pooled Trust, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with Delaware International Advisers Ltd.
Business Address and its Affiliates and Other Positions and Offices Held
- ------------------ ------------------------------------------------------------------
<S> <C>
*David K. Downes Director of Delaware International Advisers Ltd.; Senior Vice President, Chief
Administrative Officer, Chief Financial Officer and Treasurer of Delaware Management
Holdings, Inc.; Senior Vice President, Chief Administrative Officer, Chief Financial
Officer of Delaware Management Company, Inc., the Registrant and each of the other
funds in the Delaware Group; Chairman and Director of Delaware Management Trust
Company; Senior Vice President, Chief Financial Officer, Treasurer and Director of DMH
Corp.; Senior Vice President and Chief Administrative Officer of Delaware
Distributors, L.P.; Senior Vice President, Chief Administrative Officer and Director
of Delaware Distributors, Inc; Senior Vice President, Chief Administrative Officer,
Chief Financial Officer and Director of Delaware Service Company, Inc.; Chief
Financial Officer and Director of Delaware International Holdings Ltd.; Senior Vice
President, Chief Financial Officer and Treasurer of Delaware Capital Management, Inc.;
Senior Vice President, and Director of Founders Holdings, Inc.; and Chief Executive
Officer and Director of Delaware Investment & Retirement Services, Inc.
Chief Executive Officer, Chief Financial Officer and Treasurer of Forewarn, Inc. since
1992, 8 Clayton Place, Newtown Square, PA
*George M. Chamberlain, Jr. Director of Delaware International Advisers Ltd.; Senior Vice President and Secretary
of the Registrant, each of the other funds in the Delaware Group, Delaware
Distributors, L.P. and Delaware Management Holdings, Inc.; Senior Vice President,
Secretary and Director of Delaware Management Company, Inc., DMH Corp., Delaware
Distributors, Inc., Delaware Service Company, Inc., Delaware Capital Management, Inc.
and Delaware Investment & Retirement Services, Inc.; Executive Vice President,
Secretary and Director of Delaware Management Trust Company; Corporate Vice President,
Secretary and Director of Founders Holdings, Inc.; and Secretary and Director of
Delaware International Holdings Ltd.
Director of ICI Mutual Insurance Co. since 1992, P.O. Box 730, Burlington, VT
</TABLE>
*Business address is 1818 Market Street, Philadelphia, PA 19103.
**Business address is Veritas House, 125 Finsbury Pavement, London,
England EC2A 1NQ.
xvi
<PAGE> 159
Form N-1A
File No. 33-40991
Delaware Pooled Trust, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with Delaware International Advisers Ltd.
Business Address and its Affiliates and Other Positions and Offices Held
- ------------------ ------------------------------------------------------------------
<S> <C>
*Winthrop S. Jessup Director of Delaware International Advisers Ltd., Delaware Management Trust Company,
Delaware Service Company, Inc. and Delaware Investment & Retirement Services, Inc.;
President and Chief Executive Officer of the Registrant; Executive Vice President of
each of the other funds in the Delaware Group and Delaware Management Holdings, Inc.;
Executive Vice President and Director of DMH Corp., Delaware Management Company, Inc.,
Delaware International Holdings Ltd. and Founders Holdings, Inc.; Vice Chairman of
Delaware Distributors, L.P.; Vice Chairman and Director of Delaware Distributors,
Inc.; and President and Director of Delaware Capital Management, Inc.
*Richard G. Unruh, Jr. Director of Delaware International Advisers Ltd.; Executive Vice President and
Director of Delaware Management Company, Inc.; Executive Vice President of the
Registrant and each of the other funds in the Delaware Group; and Senior Vice
President of Delaware Management Holdings, Inc.
Board of Directors, Chairman of Finance Committee, Keystone Insurance Company since
1989, 2040 Market Street, Philadelphia, PA; Board of Directors, Chairman of Finance
Committee, Mid Atlantic, Inc. since 1989, 2040 Market Street, Philadelphia, PA
</TABLE>
*Business address is 1818 Market Street, Philadelphia, PA 19103.
**Business address is Veritas House, 125 Finsbury Pavement, London,
England EC2A 1NQ.
xvii
<PAGE> 160
Form N-1A
File No. 33-40991
Delaware Pooled Trust, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with Delaware International Advisers Ltd.
Business Address and its Affiliates and Other Positions and Offices Held
- ------------------ ------------------------------------------------------------------
<S> <C>
*Richard J. Flannery Director of Delaware International Advisers Ltd; Vice President of the Registrant and
each of the other funds in the Delaware Group; Managing Director/Corporate Tax &
Affairs of Delaware Management Holdings, Inc., DMH Corp., Delaware Management Company,
Inc., Delaware Distributors, L.P., Delaware Distributors, Inc., Delaware Service
Company, Inc., Delaware Management Trust Company, Founders CBO Corporation, Delaware
Capital Management, Inc. and Delaware Investment & Retirement Services, Inc.; Managing
Director/Corporate & Tax Affairs and Director of Founders Holdings, Inc.; and Managing
Director and Director of Delaware International Holdings Ltd.
Limited Partner of Stonewall Links, L.P. since 1991, Bulltown Rd., Elverton, PA;
Director and Member of Executive Committee of Stonewall Links, Inc. since 1991,
Bulltown Rd., Elverton, PA
*John C. E. Campbell Director of Delaware International Advisers Ltd.
*George E. Deming Director of Delaware International Advisers Ltd.
**Timothy W. Sanderson Senior Portfolio Manager, Deputy Compliance Officer, Director Equity Research and
Director of Delaware International Advisers Ltd.
**Clive A. Gillmore Senior Portfolio Manager, Director U.S. Mutual Fund Liaison and Director of Delaware
International Advisers Ltd.
**Hamish O. Parker Senior Portfolio Manager, Director U.S. Marketing Liaison and Director of Delaware
International Advisers Ltd.
**Ian G. Sims Senior Portfolio Manager, Deputy Managing Director and Director of Delaware
International Advisers Ltd.
**Elizabeth A. Desmond Senior Portfolio Manager of Delaware International Advisers Ltd.
**Gavin A. Hall Senior Portfolio Manager of Delaware International Advisers Ltd.
</TABLE>
*Business address is 1818 Market Street, Philadelphia, PA 19103.
**Business address is Veritas House, 125 Finsbury Pavement, London,
England EC2A 1NQ.
xviii
<PAGE> 161
Form N-1A
File No. 33-40991
Delaware Pooled Trust, Inc.
(c) Lincoln Investment Management Company, Inc.
serves as sub-adviser to The Real Estate Investment Trust Portfolio. Lincoln
Investment Management Company, Inc. also serves as sub-adviser to Delaware
Group Adviser Funds, Inc. and investment manager to Lincoln National
Convertible Securities Fund, Inc., Lincoln National Income Fund, Inc., Lincoln
National Aggressive Growth Fund, Inc., Lincoln National Bond Fund, Inc.,
Lincoln National Capital Appreciation Fund, Inc., Lincoln National
Equity-Income Fund, Inc., Lincoln National Global Asset Allocation Fund, Inc.,
Lincoln National Growth and Income Fund, Inc., Lincoln National International
Fund, Inc., Lincoln National Managed Fund, Inc., Lincoln National Money Market
Fund, Inc., Lincoln National Social Awareness Fund, Inc., Lincoln National
Special Opportunities Fund, Inc., Lincoln Advisors Fund, Inc. (a retail mutual
fund complex) and to other clients. Lincoln Investment Management, Inc. is
registered with the Securities and Exchange Commission as an investment adviser
and has acted as an investment adviser to investment companies for over 40
years.
Information regarding the officers and directors of
Lincoln Investment Management Company, Inc. and the positions they held during
the past two years follows:
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with Lincoln Investment Management Company,
Business Address* Inc. and its Affiliates and Other Positions and Offices Held
- ------------------ ------------------------------------------------------------------------
<S> <C>
H. Thomas McMeekin President and Director of Lincoln Investment Management, Inc.,
Lincoln National Convertible Securities Fund, Inc. and Lincoln National Income Fund,
Inc.; President, Chief Executive Officer and Director of Lincoln National Mezzanine
Corporation; Executive Vice President (previously Senior Vice President) and Chief
Investment Officer of Lincoln National Corporation; and Director of Lincoln Advisor
Funds, Inc., The Lincoln National Life Insurance Company, Lynch & Mayer, Inc. and
Vantage Global Advisors, Inc.
Dennis A. Blume Senior Vice President and Director of Lincoln Investment Management, Inc. and Lincoln
National Realty Corporation; Vice President of Lincoln Advisor Funds, Inc.; and
Director of Lynch & Mayer, Inc. and Vantage Global Advisors, Inc.
</TABLE>
*Business address of each is 200 East Berry Street, Fort Wayne, IN 46802.
xix
<PAGE> 162
Form N-1A
File No. 33-40991
Delaware Pooled Trust, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with Lincoln Investment Management Company,
Business Address* Inc. and its Affiliates and Other Positions and Offices Held
- ------------------ ------------------------------------------------------------------------
<S> <C>
Steven R. Brody Director, Senior Vice President and Assistant Treasurer of Lincoln Investment
Management, Inc.; Vice President, Treasurer and Chief Financial Officer of Lincoln
Advisor Funds, Inc.; Director and Vice President of Lincoln National Mezzanine
Corporation; Vice President of The Lincoln National Life Insurance Company; Director
of Lincoln National Realty Corporation; Treasurer of Lincoln National Convertible
Securities Fund, Inc. and Lincoln National Income Fund, Inc.; and Assistant Treasurer
of Lincoln Financial Group, Inc., Lincoln National Aggressive Growth Fund, Inc.,
Lincoln National Bond Fund, Inc., Lincoln National Capital Appreciation Fund, Inc.,
Lincoln National Equity-Income Fund, Inc., Lincoln National Global Asset Allocation
Fund, Inc., Lincoln National Growth and Income Fund, Inc., Lincoln National Health &
Casualty Insurance Company, Lincoln National International Fund, Inc., Lincoln
National Life Reinsurance Company, Lincoln National Managed Fund, Inc., Lincoln
National Money Market Fund, Inc., Lincoln National Reassurance Company, Lincoln
National Social Awareness Fund, Inc. and Lincoln National Special Opportunities Fund,
Inc.
Ann L. Warner Senior Vice President (previously Vice President) of Lincoln Investment Management,
Inc.; Director of Lincoln National Convertible Securities Fund, Inc.; Director and
Vice President of Lincoln National Income Fund, Inc.; and Vice President of Lincoln
Advisor Funds, Inc.
JoAnn E. Becker Vice President of Lincoln Investment Management, Inc., Lincoln Advisor Funds, Inc. and
The Lincoln National Life Insurance Company; and Director of LNC Equity Sales
Corporation, The Richard Leahy Corporation and Professional Financial Planning, Inc.
David A. Berry Vice President of Lincoln Investment Management, Inc., Lincoln Advisor Funds, Inc.,
Lincoln National Convertible Securities Fund, Inc. and Lincoln National Income Fund,
Inc.
Anne E. Bookwalter Vice President (previously Second Vice President) of Lincoln
Investment Management, Inc.; and Director of Professional Financial Planning, Inc.
</TABLE>
*Business address of each is 200 East Berry Street, Fort Wayne, IN 46802.
xx
<PAGE> 163
Form N-1A
File No. 33-40991
Delaware Pooled Trust, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with Lincoln Investment Management Company,
Business Address* Inc. and its Affiliates and Other Positions and Offices Held
- ------------------ ------------------------------------------------------------------------
<S> <C>
Philip C. Byrde Vice President of Lincoln Investment Management, Inc.
Patrick R. Chasey Vice President of Lincoln Investment Management, Inc.
Garrett W. Cooper Vice President of Lincoln Investment Management, Inc.
David C. Fischer Vice President of Lincoln Investment Management, Inc. and
Lincoln National Income Fund, Inc.
Luc N. Girard Vice President of Lincoln Investment Management, Inc. and The Lincoln National Life
Insurance Company
Donald P. Groover Vice President of Lincoln Investment Management, Inc.
Previously Senior Economist/Senior Consultant, Chalke, Inc., Chantilly, VA
William N. Holm, Jr. Vice President of Lincoln Investment Management, Inc.; and Vice President and Director
of Lincoln National Mezzanine Corporation
Jennifer C. Hom Vice President (previously Portfolio Manager) of Lincoln Investment Management, Inc.
John A. Kellogg Vice President of Lincoln Investment Management, Inc. and Lincoln National Realty
Corporation
Timothy H. Kilfoil Vice President of Lincoln Investment Management, Inc.
Lawrence T. Kissko Vice President of Lincoln Investment Management, Inc.; Vice President and Director
Lincoln National Realty Corporation; and Vice President of The Lincoln National Life
Insurance Company
Walter M. Korinke Vice President of Lincoln Investment Management, Inc.
Lawrence M. Lee Vice President of Lincoln Investment Management, Inc. and Lincoln National Realty
Corporation
</TABLE>
*Business address of each is 200 East Berry Street, Fort Wayne, IN 46802.
xxi
<PAGE> 164
Form N-1A
File No. 33-40991
Delaware Pooled Trust, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with Lincoln Investment Management Company,
Business Address* Inc. and its Affiliates and Other Positions and Offices Held
- ------------------ ------------------------------------------------------------------------
<S> <C>
Thomas A. McAvity, Jr. Vice President of Lincoln Investment Management, Inc.
John David Moore Vice President of Lincoln Investment Management, Inc.
Oliver H. G. Nichols Vice President of Lincoln Investment Management, Inc., The Lincoln National Life
Insurance Company and Lincoln National Realty Corporation
David C. Patch Vice President of Lincoln Investment Management, Inc.
Joseph T. Pusateri Vice President of Lincoln Investment Management, Inc. and Lincoln National Realty
Corporation
Gregory E. Reed Vice President of Lincoln Investment Management, Inc.
Bill L. Sanders Vice President of Lincoln Investment Management, Inc.; and Sales Vice President of The
Lincoln National Life Insurance Company
Roy D. Shimer Vice President of Lincoln Investment Management, Inc.
Gerald M. Weiss Vice President of Lincoln Investment Management, Inc.
Jon A. Boscia Director (previously President) of Lincoln Investment Management, Inc.; Director of
Lincoln National Foundation, Inc. and First Penn-Pacific Life Insurance Company;
President, Chief Operating Officer and Director of The Lincoln National Life Insurance
Company; and President of Lincoln Financial Group, Inc.
</TABLE>
*Business address of each is 200 East Berry Street, Fort Wayne, IN 46802.
xxii
<PAGE> 165
Form N-1A
File No. 33-40991
Delaware Pooled Trust, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with Lincoln Investment Management Company,
Business Address* Inc. and its Affiliates and Other Positions and Offices Held
- ------------------ ------------------------------------------------------------------------
<S> <C>
Janet C. Whitney Vice President and Treasurer of Lincoln Investment Management, Inc., The Financial
Alternative, Inc., Financial Alternative Resources, Inc., Financial Choices, Inc.,
Financial Investments, Inc., Financial Investment Services, Inc., The Financial
Resources Department, Inc., Investment Alternatives, Inc., The Investment Center,
Inc., The Investment Group, Inc., LNC Administrative Services Corporation, LNC Equity
Sales Corporation, The Richard Leahy Corporation, Lincoln National Aggressive Growth
Fund, Inc., Lincoln National Bond Fund, Inc., Lincoln National Capital Appreciation
Fund, Inc., Lincoln National Equity-Income Fund, Inc., Lincoln National Global Assets
Allocation Fund, Inc., Lincoln National Growth and Income Fund, Inc., Lincoln National
Health & Casualty Insurance Company, Lincoln National Intermediaries, Inc., Lincoln
National International Fund, Inc., Lincoln National Managed Fund, Inc., Lincoln
National Management Services, Inc., Lincoln National Mezzanine Corporation, Lincoln
National Money Market Fund, Inc. Lincoln National Realty Corporation, Lincoln National
Risk Management, Inc., Lincoln National Social Awareness Fund, Inc., Lincoln National
Special Opportunities Fund, Inc., Lincoln National Structured Settlement, Inc.,
Personal Financial Resources, Inc., Personal Investment Services, Inc., Special Pooled
Risk Administrators, Inc., Underwriters & Management Services, Inc.; Vice President
and Treasurer (previously Vice President and General Auditor) of Lincoln National
Corporation; and Assistant Treasurer of First Penn-Pacific Life Insurance Company
</TABLE>
*Business address of each is 200 East Berry Street, Fort Wayne, IN 46802.
xxiii
<PAGE> 166
Form N-1A
File No. 33-40991
Delaware Pooled Trust, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with Lincoln Investment Management Company,
Business Address* Inc. and its Affiliates and Other Positions and Offices Held
- ------------------ ------------------------------------------------------------------------
<S> <C>
C. Suzanne Womack Secretary of Lincoln Investment Management, Inc., Corporate Benefit Systems Services
Corporation, The Financial Alternative, Inc., Financial Alternative Resources, Inc.,
Financial Choices, Inc., The Financial Resources Department, Inc., Financial
Investment Services, Inc., Financial Investments, Inc., Insurance Services, Inc.,
Investment Alternatives, Inc., The Investment Center, Inc. (TN), The Investment Group,
Inc., LNC Administrative Services Corporation, LNC Equity Sales Corporation, The
Richard Leahy Corporation, Lincoln Advisor Funds, Inc., Lincoln Life Improved Housing,
Inc., Lincoln National (China) Inc., Lincoln National Convertible Securities Fund,
Inc., Lincoln National Health & Casualty Insurance Company, Lincoln National Income
Fund, Inc., Lincoln National Intermediaries, Inc., Lincoln National Life Reinsurance
Company, Lincoln National Management Services, Inc., Lincoln National Mezzanine
Corporation, Lincoln National Realty Corporation, Lincoln National Reassurance
Company, Lincoln National Reinsurance Company (Barbados) Limited, Lincoln National
Reinsurance Company Limited, Lincoln National Risk Management, Inc., Lincoln National
Structured Settlement, Inc., Old Fort Insurance Company, Ltd., Personal Financial
Resources, Inc., Personal Investment Services, Inc., Professional Financial Planning,
Inc., Reliance Life Insurance Company of Pittsburgh, Special Pooled Risk
Administrators, Inc. and Underwriters & Management Services, Inc.; Vice President,
Secretary and Director of Lincoln National Foundation, Inc.; Secretary and Assistant
Vice President of Lincoln National Corporation and The National Life Insurance
Company; and Assistant Secretary of Lincoln National Aggressive Growth Fund, Inc.,
Lincoln National Bond Fund, Inc., Lincoln National Capital Appreciation Fund, Inc.,
Lincoln National Equity-Income Fund, Inc., Lincoln National Global Asset Allocation
Fund, Inc., Lincoln National Growth and Income Fund, Inc., Lincoln National
International Fund, Inc., Lincoln National Managed Fund, Inc., Lincoln National Money
Market Fund, Inc., Lincoln National Social Awareness Fund, Inc., Lincoln National
Special Opportunities Fund, Inc. and Lincoln National Variable Annuity Funds A & B
</TABLE>
*Business address of each is 200 East Berry Street, Fort Wayne, IN 46802.
xxiv
<PAGE> 167
Form N-1A
File No. 33-40991
Delaware Pooled Trust, Inc.
Item 29. Principal Underwriters.
(a) Delaware Distributors, L.P. serves as
principal underwriter for all the mutual
funds in the Delaware Group.
(b) Information with respect to each director,
officer or partner of principal underwriter:
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address* with Underwriter with Registrant
- ------------------ -------------------- ---------------------
<S> <C> <C>
Delaware Distributors, Inc. General Partner None
Delaware Management Limited Partner Investment Manager to
Company, Inc. The Defensive Equity,
The Aggressive Growth,
The Fixed Income,
The Limited-Term
Maturity, The Defensive
Equity Small/Mid-Cap,
The Defensive Equity
Utility, The High-Yield
Bond and The Real Estate
Investment Trust
Portfolios
Delaware Capital
Management, Inc. Limited Partner None
Winthrop S. Jessup Vice Chairman President and Chief
Executive Officer
Keith E. Mitchell President and Chief None
Executive Officer
David K. Downes Senior Vice President and Senior Vice President/
Chief Administrative Officer Chief Administrative
Officer/Chief Financial
Officer
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
xxv
<PAGE> 168
Form N-1A
File No. 33-40991
Delaware Pooled Trust, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address* with Underwriter with Registrant
- ------------------ -------------------- ---------------------
<S> <C> <C>
George M. Chamberlain, Jr. Senior Vice President/ Senior Vice President/
Secretary Secretary
J. Lee Cook Senior Vice President/ None
Eastern Sales Division
Thomas E. Sawyer Senior Vice President/ None
Western Sales Division
Stephen H. Slack Senior Vice President/ None
Wholesaler
William F. Hostler Senior Vice President/ None
Marketing Services
Dana B. Hall Senior Vice President/ None
Key Accounts
Minette van Noppen Senior Vice President/ None
Retirement Services
J. Chris Meyer Senior Vice President/ None
Product Development
Richard J. Flannery Managing Director/Corporate Vice President
& Tax Affairs
Eric E. Miller Vice President/ Vice President/
Assistant Secretary Assistant Secretary
Richelle S. Maestro Vice President/ Vice President/
Assistant Secretary Assistant Secretary
John M. Zerr Vice President/ Vice President/
Assistant Secretary Assistant Secretary
Michael P. Bishof Vice President/Treasurer Vice President/Treasurer
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
xxvi
<PAGE> 169
Form N-1A
File No. 33-40991
Delaware Pooled Trust, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address* with Underwriter with Registrant
- ------------------ -------------------- ---------------------
<S> <C> <C>
Joseph H. Hastings Vice President/ Vice President/
Corporate Controller Corporate Controller
Steven T. Lampe Vice President/Taxation Vice President/Taxation
Rosemary E. Milner Vice President/Legal Vice President/Legal
Lisa O. Brinkley Vice President/ Vice President/
Compliance Compliance
Daniel H. Carlson Vice President/ None
Marketing
Diane M. Anderson Vice President/ None
Retirement Services
Denise F. Guerriere Vice President/Client Services None
Julia R. Vander Els Vice President/ None
Client Services
Jerome J. Alrutz Vice President/ None
Client Services
Joanne A. Mettenheimer Vice President/ None
National Accounts
Christopher H. Price Vice President/Annuity None
Marketing & Administration
Thomas S. Butler Vice President/ None
DDI Administration
Steven J. DeAngelis Vice President/ None
Product Development
Susan T. Friestedt Vice President/Customer None
Service
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
xxvii
<PAGE> 170
Form N-1A
File No. 33-40991
Delaware Pooled Trust, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address* with Underwriter with Registrant
- ------------------ -------------------- ---------------------
<S> <C> <C>
Dinah J. Huntoon Vice President/National None
Accounts
Ellen M. Krott Vice President/ None
Communications
Holly W. Riemel Vice President/ None
Telemarketing
Frank Albanese Vice President/Wholesaler None
William S. Carroll Vice President/Wholesaler None
William S. Castetter Vice President/Wholesaler None
Thomas J. Chadie Vice President/Wholesaler None
Douglas R. Glennon Vice President/Wholesaler None
Alan D. Kessler Vice President/Wholesaler None
William M. Kimbrough Vice President/Wholesaler None
Mac McAuliffe Vice President/Wholesaler None
Patrick L. Murphy Vice President/Wholesaler None
Henry W. Orvin Vice President/Wholesaler None
Philip G. Rickards Vice President/Wholesaler None
Michael W. Rose Vice President/Wholesaler None
Robert E. Stansbury Vice President/Wholesaler None
Larry D. Stone Vice President/Wholesaler None
Faye P. Staples Vice President/Human Resources None
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
xxviii
<PAGE> 171
Form N-1A
File No. 33-40991
Delaware Pooled Trust, Inc.
(c) Not Applicable.
Item 30. Location of Accounts and Records.
All accounts and records are maintained in the
Philadelphia office - 1818 Market Street, Philadelphia,
PA 19103 or One Commerce Square, Philadelphia, PA 19103.
Item 31. Management Services. None.
Item 32. Undertakings.
(a) Not Applicable.
(b) The Registrant hereby undertakes to file a
post-effective amendment, using financial
statements which need not be certified, within four
to six months from the initial public offering of
shares of The Limited-Term Maturity, The
International Fixed Income, The Fixed Income, The
Defensive Equity Small/Mid-Cap, The Defensive
Equity Utility and The High-Yield Bond Portfolios.
(c) The Registrant undertakes to furnish each person to
whom a prospectus is delivered with a copy of the
Registrant's latest annual report to shareholders,
upon request and without charge.
(d) The Registrant hereby undertakes to promptly call a
meeting of shareholders for the purpose of voting
upon the question of removal of any director when
requested in writing to do so by the record holders
of not less than 10% of the outstanding shares.
xxix
<PAGE> 172
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, this Registrant certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in this City of Philadelphia and Commonwealth of Pennsylvania on
this 22nd day of May, 1996.
DELAWARE POOLED TRUST, INC.
By/s/ Wayne A. Stork
----------------------------------
Wayne A. Stork
Chairman of the Board
and Director
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
- ----------------------------------------------- ----------------------------------------------- -----------------
<S> <C> <C>
Chairman of the Board
/s/ Wayne A. Stork and Director May 22, 1996
- --------------------------------------------------
Wayne A. Stork
Senior Vice President/Chief Administrative
Officer/Chief Financial Officer (Principal
Financial Officer and Principal
/s/ David K. Downes Accounting Officer) May 22, 1996
- --------------------------------------------------
David K. Downes
/s/Walter P. Babich * Director May 22, 1996
- --------------------------------------------------
Walter P. Babich
/s/Anthony D. Knerr * Director May 22, 1996
- --------------------------------------------------
Anthony D. Knerr
/s/Ann R. Leven * Director May 22, 1996
- --------------------------------------------------
Ann R. Leven
/s/W. Thacher Longstreth * Director May 22, 1996
- --------------------------------------------------
W. Thacher Longstreth
/s/Charles E. Peck * Director May 22, 1996
- --------------------------------------------------
Charles E. Peck
*By/s/ Wayne A. Stork
--------------------------------------------
Wayne A. Stork
as Attorney-in-Fact for
each of the persons indicated
</TABLE>
<PAGE> 173
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Exhibits
to
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
<PAGE> 174
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Exhibit
- ----------- -------
<S> <C>
EX-99.B11 Consent of Auditors
EX-99.B16B Schedules of Computation for each Performance Quotation for The Labor Select International
Equity and The Real Estate Investment Trust Portfolios
EX-27 Financial Data Schedules for The Labor Select International Equity and The Real Estate
Investment Trust Portfolios
</TABLE>
<PAGE> 1
Consent of Independent Auditors
We consent to the references to our firm under the captions "Financial
Highlights" in the Prospectus and "Financial Statements" in the Statement of
Additional Information of Delaware Pooled Trust, Inc. and to the incorporation
by reference in this Post-Effective Amendment No. 11 to the Registration
Statement (Form N-1A) (No. 33-40991) of Delaware Pooled Trust, Inc. of our
report dated December 8, 1995, included in the 1995 Annual Report to
Shareholders of Delaware Pooled Trust, Inc.
Philadelphia, Pennsylvania /s/ Ernst & Young LLP
May 23, 1996 Ernst & Young LLP
<PAGE> 1
<TABLE>
<CAPTION>
DELAWARE GROUP POOLED TRUST
REAL ESTATE INVESTMENT TRUST
TOTAL RETURN PERFORMANCE
LIFE OF FUND
- ------------------------------------------------------------------------------------------------
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $10.00
Initial Shares 100.000
</TABLE>
<TABLE>
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1996 100.000 $0.100 0.978 100.978
- ------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Ending Shares 100.978
Ending NAV x $10.56
----------
Investment Return $1,066.33
</TABLE>
<TABLE>
<CAPTION>
Total Return Performance
- ------------------------
<S> <C>
Investment Return $1,066.33
Less: Initial Investment $1,000.00
---------
$66.33 / $1,000.00 x 100
Total Return: 6.63%
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION>
DELAWARE GROUP POOLED TRUST
LABOR SELECT INTERNATIONAL EQUITY
TOTAL RETURN PERFORMANCE
LIFE OF FUND
- ------------------------------------------------------------------------------------------------
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $10.00
Initial Shares 100.000
</TABLE>
<TABLE>
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1996 100.000 $0.040 0.377 100.377
- ------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Ending Shares 100.377
Ending NAV x $11.02
----------
Investment Return $1,106.15
</TABLE>
<TABLE>
<CAPTION>
Total Return Performance
- ------------------------
<S> <C>
Investment Return $1,106.15
Less: Initial Investment $1,000.00
----------
$106.15 / $1,000.00 x 100
Total Return: 10.62%
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
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<NAME> DELAWARE POOLED TRUST, INC
<SERIES>
<NUMBER> 10
<NAME> THE LABOR SELECT SELECT INTERNATIONAL EQUITY PORTFOLIO
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<PERIOD-END> APR-30-1996
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<INVESTMENTS-AT-VALUE> 16,528,475
<RECEIVABLES> 225,741
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 112,270
<TOTAL-ASSETS> 16,866,486
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<SENIOR-EQUITY> 15,196
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<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000875352
<NAME> DELAWARE POOLED TRUST, INC.
<SERIES>
<NUMBER> 11
<NAME> THE REAL ESTATE INVESTMENT TRUST PORTFOLIO
<S> <C>
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<OTHER-ITEMS-ASSETS> 6,871
<TOTAL-ASSETS> 21,897,929
<PAYABLE-FOR-SECURITIES> 445,429
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 85,246
<TOTAL-LIABILITIES> 530,675
<SENIOR-EQUITY> 20,688
<PAID-IN-CAPITAL-COMMON> 20,753,681
<SHARES-COMMON-STOCK> 2,068,789
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 389,293
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<DISTRIBUTIONS-OF-INCOME> 199,358
<DISTRIBUTIONS-OF-GAINS> 0
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<NUMBER-OF-SHARES-SOLD> 2,049,301
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<SHARES-REINVESTED> 19,488
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</TABLE>
