<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
File No. 33-40991
File No. 811-6322
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REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
-----
Pre-Effective Amendment No. ____
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Post-Effective Amendment No. __22__ X
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AND
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REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
-----
Amendment No. __22__
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: August 31, 1998
---------------
It is proposed that this filing will become effective:
__________ immediately upon filing pursuant to paragraph (b)
__________ on (date) pursuant to paragraph (b)
__________ 60 days after filing pursuant to paragraph (a)(1)
__________ on (date) pursuant to paragraph (a)(1)
____X_____ 75 days after filing pursuant to paragraph (a)(2)
__________ on (date) pursuant to paragraph (a)(2) of Rule 485
<PAGE>
Title of Securities Being Registered
------------------------------------
The Large-Cap Value Equity Portfolio
The Intermediate Fixed Income Portfolio
The Aggressive Growth Portfolio
The Limited-Term Maturity Portfolio
The International Equity Portfolio
The Global Fixed Income Portfolio
The Small/Mid-Cap Value Equity Portfolio
The International Fixed Income Portfolio
The Labor Select International Equity Portfolio
The High-Yield Bond Portfolio
The Real Estate Investment Trust Portfolio class
REIT Fund A Class
REIT Fund B Class
REIT Fund C Class
REIT Fund Institutional Class
The Real Estate Investment Trust Portfolio II
The Global Equity Portfolio
The Emerging Markets Portfolio
The Aggregate Fixed Income Portfolio
The Diversified Core Fixed Income Portfolio
The International Mid-Cap Sub Portfolio
The Small-Cap Growth Equity Portfolio
The Growth and Income Portfolio
<PAGE>
--- C O N T E N T S ---
This Post-Effective Amendment No. 22 to Registration File No. 33-40991 includes
the following:
1. Facing Page
2. Contents Page
3. Cross-Reference Sheet
4. Part A - Prospectuses
5. Part B - Statement of Additional Information
6. Part C - Other Information
7. Signatures
The Prospectus (Part A) and Statement of Additional Information (Part
B) contained in this Registration Statement relates to two Registrants:
Delaware Pooled Trust, Inc. and Delaware Group Foundation Funds. This
Registration Statement contains only one Part C, that of the Registrant.
A separate Registration Statement, which incorporates by reference
the combined Part A and Part B and includes its own Part C, is being filed for
Delaware Group Foundation Funds; however this Registration Statement contains
only those exhibits which relate to Delaware Pooled Trust, Inc.
<PAGE>
CROSS-REFERENCE SHEET
---------------------
PART A
------
Item No. Description Location in Prospectus*/**
- - -------- ----------- --------------------------
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
* Relates to all Portfolios, except REIT Fund A Class, REIT Fund B Class, REIT
Fund C Class and REIT Fund Institutional Class of The Real Estate Investment
Trust Portfolio and The International Mid-Cap Sub Portfolio which are
described in separate prospectuses and are covered by separate cross-reference
sheets, which appear next in this filing.
** The Supplement to the Prospectus dated June 5, 1998 is incorporated into
this filing by reference to the electronic filing of that Supplement made
pursuant to Rule 497(e) on June 4, 1998.
<PAGE>
<TABLE>
<CAPTION>
CROSS-REFERENCE SHEET
---------------------
PART A
------
Location in
Item No. Description Prospectuses
- - -------- ----------- ------------
The Real Estate Investment
Trust Portfolio
REIT Fund A Class/ REIT Fund
REIT Fund B Class/ Institutional
REIT Fund C Class Class
<S> <C> <C>
1 Cover Page...................................................... Cover Page Cover Page
2 Synopsis........................................................ Fund Expenses Fund Expenses
3 Condensed Financial Information................................. Financial Financial
Highlights Highlights
4 General Description of Registrant .............................. Investment Investment
Objective, Policies Objective, Policies
and Risk and Risk
Considerations Considerations
5 Management of the Fund ......................................... Management Management
of the Fund of the Fund
6 Capital Stock and Other Securities ............................. Dividends and Capital Dividends and
Gains Distributions; Capital Gains
Taxes Distributions;
Taxes
7 Purchase of Securities Being Offered............................ Cover; Purchase of Cover;
Shares; Management Purchase of
of the Fund Shares;
Management of
the Fund
8 Redemption or Repurchase........................................ Purchase of Shares; Purchase of
Redemption of Shares Shares;
Redemption of
Shares
9 Legal Proceedings............................................... None None
</TABLE>
The Registrant's REIT Fund A Class, B Class and C Class Prospectus and
REIT Fund Institutional Class Prospectus dated December 24, 1997, are
incorporated into this filing by reference to the electronic filing of
those Prospectuses made pursuant to Rule 497(c) on January 2, 1998. In
addition, the Supplement to the REIT Fund A, B and C Class Prospectus
dated May 1, 1998 is incorporated into this filing by reference to the
electronic filing of that Supplement made pursuant to Rule 497(e) on
May 1, 1998.
<PAGE>
CROSS-REFERENCE SHEET
---------------------
PART A
------
Item No. Description Location in Prospectus
- - ------- ----------- ----------------------
The International Mid-Cap
Sub Portfolio
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
The International Mid-Cap Sub Portfolio Prospectus dated
December 24, 1997, is incorporated into this filing by reference
to the electronic filing of that Prospectus made pursuant to
Rule 497(c) on January 2, 1998.
<PAGE>
PART B
------
Location in Statement
Item No. Description of Additional Information
- - -------- ----------- -------------------------
All Portfolios
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
<PAGE>
PART C
------
Item No. Description Location in Part C
- - -------- ----------- ------------------
All Portfolios
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
<PAGE>
The Registrant's REIT Fund A Class, B Class and C Class Prospectus and REIT
Fund Institutional Class Prospectus dated December 24, 1997, are incorporated
into this filing by reference to the electronic filing of those Prospectuses
made pursuant to Rule 497(c) on January 2, 1998. In addition, the Supplement
to the REIT Fund A, B and C Class Prospectus dated May 1, 1998 is incorporated
by reference into this filing by reference to the electronic filing of that
Supplement made pursuant to Rule 497(e) on May 1, 1998.
The Supplement to the Prospectus dated June 5, 1998 is incorporated into this
filing by reference to the electronic filing of that Supplement made pursuant
to Rule 497(e) on June 4, 1998.
The International Mid-Cap Sub Portfolio Prospectus dated December 24, 1997, is
incorporated into this filing by reference to the electronic filing of that
Prospectus made pursuant to Rule 497(c) on January 2, 1998.
<PAGE>
DELAWARE POOLED TRUST
Delaware Pooled Trust, Inc. ("Fund") is an open-end management investment
company. This Prospectus offers 19 portfolios (collectively, the
"Portfolios," or, individually, a "Portfolio"), which provide no-load
investment alternatives for institutional clients and high net-worth
individuals. 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 Aggressive Growth Portfolio The Aggregate Fixed Income Portfolio
The Large-Cap Value Equity Portfolio The Diversified Core Fixed Income Portfolio
(formerly named The Defensive Equity Portfolio) The Intermediate Fixed Income Portfolio
The Emerging Markets Portfolio (formerly named The Fixed Income Portfolio)
The Global Equity Portfolio The Global Fixed Income Portfolio
The International Equity Portfolio The High-Yield Bond Portfolio
The Labor Select International Equity Portfolio The International Fixed Income Portfolio
The Real Estate Investment Trust Portfolio The Limited-Term Maturity Portfolio
The Real Estate Investment Trust Portfolio II
The Small/Mid-Cap Value Equity Portfolio
(formerly named The Defensive Equity Small/Mid-Cap Portfolio)
The Small-Cap Growth Equity Portfolio
The Growth and Income Portfolio
</TABLE>
In addition, investors may make investments in The Asset Allocation Portfolio.
That Portfolio is a "fund of funds" which primarily invests in several of the
Portfolios of the Fund. The Asset Allocation Portfolio is a series of Delaware
Group Foundation Funds ("Foundation Funds") which is also an open-end
management investment company. Although The Asset Allocation Portfolio is
technically not a Portfolio of the Fund, all references herein to "Portfolio"
or "the Fund" shall be deemed to also include the Asset
Allocation Portfolio, where appropriate.
The Fund is designed to meet the investment needs of discerning institutional
investors and high net-worth individuals who desire experienced investment
management and place a premium on personal service.
The High-Yield Bond Portfolio invests up to 100% and The Diversified Core
Fixed Income Portfolio invest up to 30% of their respective assets in lower
rated fixed-income securities issued by U.S. companies, 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 and The Diversified
Core Fixed Income 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 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 _________________,
1998, 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:
-1-
<PAGE>
Delaware Pooled Trust, Inc.*
One Commerce Square
2005 Market Street
Philadelphia, PA 19103
1-800-231-8002
*Correspondence relating to The Asset Allocation Portfolio will be forwarded
to Foundations Funds.
The Securities and Exchange Commission also maintains a Web site
(http://www.sec.gov) that contains the Statement of Additional Information,
material we incorporated by reference, and other information regarding
registrants that electronically file with the Securities and Exchange
Commission.
The Real Estate Investment Trust Portfolio offers five classes of shares. This
Prospectus relates only to The Real Estate Investment Trust Portfolio class,
which was offered for sale to investors beginning November 3, 1997. The
other classes are subject to sales charges and/or other expenses, which may
affect their performance. To obtain the Prospectus that relates to such other
classes write to Delaware Distributors, L.P. at 1818 Market Street,
Philadelphia, PA 19103 or call 1-800-523- 1918 for Class A, B and C shares or
1-800-828-5052 for institutional class shares. References to The Real Estate
Investment Trust Portfolio in this Prospectus shall mean The Real Estate
Investment Trust Portfolio class, unless otherwise noted.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page Page
---- ----
<S> <C> <C> <C>
Fund Expenses Investment Limitations
Financial Highlights Management of the Fund
Delaware Pooled Trust Summary Shareholder Services
Fund Officers and Portfolio Managers Dividends and Capital Gains Distributions
Risk Factors Taxes
Investment Objectives, Policies Valuation of Shares
and Risk Considerations Portfolio Transactions
Purchase of Shares Performance Information
Redemption of Shares General Information
Additional Investment Information 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:
_________________, 1998
-2-
<PAGE>
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 Asset Allocation Portfolio, The Aggregate Fixed Income
Portfolio, The Diversified Core Fixed Income Portfolio, The Limited-Term
Maturity Portfolio, The International Fixed Income Portfolio, The
Small/Mid-Cap Value Equity Portfolio, The Small-Cap Growth Equity Portfolio,
The Growth and Income Portfolio, The Global Equity Portfolio, The Emerging
Markets Portfolio and The Real Estate Investment Trust Portfolio II, the
amounts set forth below corresponding to the caption "Other Expenses" are
based on estimates for the initial fiscal year in which they conduct
operations. For The Real Estate Investment Trust Portfolio, "Other Expenses"
represent an estimate of the expenses anticipated for the initial fiscal year
in which The Real Estate Investment Trust Portfolio class is to be offered.
That class of shares was made available for the first time on October 14,
1997. The estimate for the new class' expenses is based on the actual results
for the most recently completed fiscal year for the only class offered by the
Portfolio prior to October 14, 1997. See "FINANCIAL HIGHLIGHTS." With respect
to The Large-Cap Value Equity Portfolio, The Aggressive Growth Portfolio, The
International Equity Portfolio, The Intermediate Fixed Income Portfolio, The
High-Yield Bond Portfolio, The Global Fixed Income Portfolio and The Labor
Select International Equity 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.
-3-
<PAGE>
<TABLE>
<CAPTION>
The
The Intermed-
Shareholder Large-Cap The The Inter- iate The The Global The Inter-
Transaction Value Aggressive national Fixed Limited- Fixed national
Expenses Equity Growth Equity Income Term Income Fixed Income
Portfolio Portfolio Portfolio Portfolio Maturity Portfolio Portfolio
Portfolio
<S> <C> <C> <C> <C> <C> <C> <C>
Sales Charge
Imposed on
Purchases None None None None None None None
Sales Charge
Imposed on
Reinvested None None None None None None None
Dividends
Redemption Fees None None None None None None None
Exchange Fees None None None None None None None
==================== =============== =============== =============== ============= ============ ============== =================
</TABLE>
<TABLE>
<CAPTION>
Annual Fund
Operating The
Expenses (as Intermed-
a percentage The The The iate The
of average Large-Cap Aggressive International Fixed The Limited- The Global International
net assets) Value Equity Growth Equity Income Term Maturity Fixed Income Fixed Income
Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
<S> <C> <C> <C> <C> <C> <C> <C>
Investment Advisory
Fees After Voluntary 0.54%* 0.33%* 0.75%* 0.09%* 0.22%* 0.45%* 0.24%*
Waiver and Payment
12b-1 Fees None None None None None None None
Other Expenses 0.12% 0.60% 0.18% 0.44% 0.21% 0.15% 0.36%
----- ----- ----- ----- ----- ----- -----
Total Fund Operating
Expenses After
Voluntary Waiver and
Payment 0.66%* 0.93%* 0.93%* 0.53%* 0.43%* 0.60%* 0.60%*
===== ===== ===== ===== ===== ===== =====
====================== ============ ============= ============== ============ ============== ============= ===============
</TABLE>
-4-
<PAGE>
* The above information for The Large-Cap Value Equity Portfolio, The
Aggressive Growth Portfolio, The International Equity Portfolio, The
Intermediate Fixed Income Portfolio and The Global Fixed Income Portfolio
reflects the expenses these Portfolios incurred for the Fund's fiscal year
ended October 31, 1997. For The Limited-Term Maturity Portfolio, which has
not yet commenced operations, "Other Expenses" are based on estimates for
its first full year of operations. The International Fixed Income Portfolio
did not sell shares publicly until April 11, 1997; consequently, "Other
Expenses" for this Portfolio are based on estimated amounts derived from
The Global Fixed Income Portfolio assuming the voluntary waiver of fees in
effect.
With respect to The Large-Cap Value Equity Portfolio, The Aggressive Growth
Portfolio, The Intermediate Fixed Income Portfolio and The Limited-Term
Maturity Portfolio, Delaware Management Company ("Delaware"), the
investment adviser for these Portfolios, has elected voluntarily to waive
that portion, if any, of the annual Investment Advisory Fees payable by a
Portfolio and to pay a Portfolio's expenses to the extent necessary to
ensure that "Total Fund Operating 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,
0.68%, 0.93%, 0.53% and 0.43%, respectively, during the period from
November 1, 1997 through October 31, 1998. In the absence of such voluntary
waivers and payments, "Investment Advisory Fees" (as a percentage of net
assets) would have been, or are estimated to be, 0.55%, 0.80%, 0.40% and
0.30%, respectively, and "Total Fund Operating Expenses" (as a percentage
of average net assets) would have been or are estimated to be 0.67%, 1.40%,
0.84% and 0.51%, respectively, for The Large-Cap Value Equity, The
Aggressive Growth, The Intermediate Fixed Income and The Limited-Term
Maturity Portfolios.
Similarly, Delaware International Advisers Ltd. ("Delaware International"),
the investment adviser to The International Equity Portfolio, The Global
Fixed Income Portfolio and The International Fixed Income Portfolio, has
elected voluntarily to waive that portion, if any, of its annual Investment
Advisory Fees and to pay the Portfolio's 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, 0.96%, 0.60%
and 0.60%, respectively, during the period from November 1, 1997 through
October 31, 1998. In the absence of such voluntary waivers and payments,
"Investment Advisory Fees" (as a percentage of net assets) would have been
0.50% and 0.50%, respectively, and "Total Fund Operating Expenses" (as a
percentage of average net assets) would have been 0.65%, and 0.86%,
respectively for The Global Fixed Income and The International Fixed Income
Portfolios. The actual "Total Operating Expenses" of The International
Equity Portfolio were 0.93% for the fiscal year ended October 31, 1997 and
therefore the voluntary waiver and payment noted above was not triggered.
-5-
<PAGE>
<TABLE>
<CAPTION>
The The The The
Small/ Labor Real Real The
Mid-Cap Select Estate Estate High- The
Shareholder Value International Investment Investment Yield Global
Transaction Equity Equity Trust Trust Bond Equity
Expenses Portfolio Portfolio Portfolio Portfolio II Portfolio Portfolio
- - --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales Charge
Imposed on None None None None None None
Purchases
- - --------------------------------------------------------------------------------------------
Sales Charge
Imposed on None None None None None None
- - --------------------------------------------------------------------------------------------
Reinvested
Dividends
- - --------------------------------------------------------------------------------------------
Purchase
Reimbursement None None None None None 0.40%
Fees*
- - --------------------------------------------------------------------------------------------
Redemption
Reimbursement None None None None None 0.30%
Fees*
- - --------------------------------------------------------------------------------------------
Exchange Fees None None None None None None
===========================================================================================
</TABLE>
[RESTUB FROM TABLE ABOVE]
<TABLE>
<CAPTION>
The The
The Diversified Small/Mid-
Aggregate The Core The Cap The
Shareholder Fixed Emerging Fixed Asset Growth Growth and
Transaction Income Markets Income Allocation Equity Income
Expenses Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
- - -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales Charge
Imposed on None None None None None None
Purchases
- - -----------------------------------------------------------------------------------------------------------------
Sales Charge
Imposed on None None None None None None
Reinvested
Dividends
- - -----------------------------------------------------------------------------------------------------------------
Purchase
Reimbursement None 0.75% None None None None
Fees*
- - -----------------------------------------------------------------------------------------------------------------
Redemption
Reimbursement None 0.75% None None None None
Fees*
- - -----------------------------------------------------------------------------------------------------------------
Exchange Fees None None None None None None
==================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
The The The The
Annual Fund Small/ Labor Real Real The
Operating Mid-Cap Select Estate Estate High-
Expenses (as Value International Investment Investment Yield
a percentage of Equity Equity Trust Trust Bond
average net assets) Portfolio Portfolio Portfolio PortfolioII Portfolio
- - ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment
Advisory Fees After
Voluntary Waiver
and Payment 0.35%** 0.57%** 0.55%** 0.55%** 0.19%**
- - ------------------------------------------------------------------------------------------
12b-1 Fees None None None None None
- - ------------------------------------------------------------------------------------------
Other Expenses 0.54% 0.32% 0.31% 0.31% 0.40%
---- ---- ---- ---- ----
- - ------------------------------------------------------------------------------------------
Total Fund
Operating Expenses
After Voluntary
Waiver and
Payment 0.89%** 0.89%** 0.86%** 0.86%** 0.59%**
==== ==== ==== ==== ====
==========================================================================================
</TABLE>
RESTUBBED TABLE
<TABLE>
<CAPTION>
The The
Annual Fund The Diversified Small/Mid-
Operating The Aggregate The Core The Cap The
Expenses (as Global Fixed Emerging Fixed Asset Growth Growth and
a percentage of Equity Income Markets Income Allocation Equity 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 Payment 0.00%** 0.03%** 0.72%** 0.22%** 0.00%** 0.00%** 0.00%**
- - ---------------------------------------------------------------------------------------------------------------
12b-1 Fees None None None None None None None
- - ---------------------------------------------------------------------------------------------------------------
Other Expenses 0.96% 0.50% 0.83% 0.35% 0.00% 0.00% 0.00%
---- ---- ---- ---- ---- ---- ----
- - ---------------------------------------------------------------------------------------------------------------
Total Fund
Operating Expenses
After Voluntary
Waiver and
Payment 0.96%** 0.53%** 1.55%** 0.57%** 0.00%** 0.00%** 0.00%**
==== ==== ==== ==== ==== ==== ====
===============================================================================================================
</TABLE>
-6-
<PAGE>
* A purchase reimbursement fee and a redemption reimbursement fee each
equal to 0.75% (as a percentage of the dollar amount purchased or
redeemed, as the case may be) are assessed against investors in shares of
The Emerging Markets Portfolio. For The Global Equity Portfolio those
fees are 0.40% for purchases and 0.30% for redemptions. Both fees are
paid to the Portfolio that assess them. These fees are designed to
reflect an approximation of the brokerage and related transaction costs
associated with the investment of an investor's purchase amount or the
disposition of assets to meet redemptions, and to limit the extent to
which The Emerging Markets Portfolio or The Global Equity Portfolio (and,
indirectly, the Portfolio's existing shareholders) would have to bear
such costs. In lieu of the purchase reimbursement fee, investors in The
Global Equity Portfolio may elect to invest by a contribution of
securities or follow procedures that have the same economic effect as
such a contribution. See "HOW TO INVEST," "PURCHASE OF SHARES," "HOW TO
REDEEM," "REDEMPTION OF SHARES" and "PURPOSE OF REIMBURSEMENT FEES -- THE
EMERGING MARKETS AND THE GLOBAL EQUITY PORTFOLIOS."
** The above information for The Labor Select International Equity Portfolio
and The High-Yield Bond Portfolio reflects the expenses the Portfolios
incurred for the Fund's fiscal year ended October 31, 1997. Since The
Small/Mid-Cap Value Equity Portfolio, The Real Estate Investment Trust
Portfolio II, The Aggregate Fixed Income Portfolio , The Diversified
Core Fixed Income Portfolio, The Asset Allocation Portfolio, The
Small-Cap Growth Equity Portfolio and The Growth and Income Portfolio
have not commenced operations as of October 31, 1997; the Fund did not
commence selling shares of The Real Estate Investment Trust Portfolio
until November 3, 1997 (the Fund did not commence selling shares of The
Global Equity Portfolio until October 15, 1997; and The Emerging Markets
Portfolio did not sell shares until April 14, 1997), "Other Expenses" is
based on estimated amounts each Portfolio expects to pay during their
first full fiscal year of operations. For The Real Estate Investment
Trust Portfolio and The Real Estate Investment Trust Portfolio II, "Other
Expenses" are estimates based on the expenses incurred by the REIT Fund A
Class, absent 12b-1 expenses, which is the original class of shares of
The Real Estate Investment Trust Portfolio for the Fund's fiscal year
ended October 31, 1997. Such original class of shares, like The Real
Estate Investment Trust Portfolio class being offered in this Prospectus,
carried no front-end sales charge and was not subject to Rule 12b-1
expenses. Effective October 14, 1997, that original class was
redesignated REIT Fund A Class, which is offered by a separate
prospectus.
With respect to The Small/Mid-Cap Value Equity Portfolio, The High-Yield
Bond Portfolio, The Aggregate Fixed Income Portfolio , The Diversified
Core Fixed Income Portfolio and The Asset Allocation Portfolio, The
Small-Cap Growth Equity Portfolio and The Growth and Income Portfolio,
Delaware, the investment adviser for these Portfolios, has elected
voluntarily to waive that portion, if any, of the annual Investment
Advisory Fee payable by each such Portfolio and to pay such Portfolio's
expenses to the extent necessary to ensure that "Total Operating
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, 0.89%, 0.59%, 0.53% , 0.57%,
0.00%, 0.00% and 0.00%, respectively, during the period from the
commencement of the public offering of such Portfolio through October
31, 1998. With respect to The Real Estate Investment Trust Portfolio and
The Real Estate Investment Trust Portfolio II, the voluntary waiver and
commitment to pay expenses would limit the relevant expenses to 0.86%
through October 31, 1998. The expense cap for The Real Estate
Investment Trust Portfolio through October 14, 1997 was 0.89%. In the
absence of such voluntary waivers and payments, "Investment Advisory
Fees" (as a percentage of average net assets) would be 0.75%, 0.45%,
0.75%, 0.40% , 0.43%, 0.00%, 0.00% and 0.00% and
-7-
<PAGE>
"Total Fund Operating Expenses" (as a percentage of average net assets)
would have been or are estimated to be 1.29%, 0.79%, 1.06%, 0.90% ,
0.78%, 0.00%, 0.00% and 0.00%, respectively, for The Small/Mid-Cap Value
Equity Portfolio, The High-Yield Bond Portfolio, The Real Estate
Investment Trust Portfolio II, The Aggregate Fixed Income Portfolio ,
The Diversified Core Fixed Income Portfolio, The Asset Allocation
Portfolio, The Small-Cap Growth Equity Portfolio and The Growth and
Income Portfolio; for The Real Estate Investment Trust Portfolio,
"Investment Advisory Fees" (as a percentage of average daily net assets)
are estimated to be 0.75% and"Total Fund Operating Expenses" are
estimated to be 1.23%, based on the original class' data, adjusted to
reflect an anticipated increase in shareholder service and other
expenses.
Similarly, Delaware International, the investment adviser to The Labor
Select International Equity Portfolio, The Global Equity Portfolio and
The Emerging Markets Portfolio, has elected voluntarily to waive that
portion, if any, of the annual Investment Advisory Fee payable by each
such Portfolio and to pay such Portfolio's expenses to the extent
necessary to ensure that "Total Operating 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, 0.96%, 0.96% and 1.55%, respectively, during the period
from the commencement of the public offering of the Portfolio through
October 31, 1998. Separately, with respect to The Emerging Markets
Portfolio, Delaware International has elected voluntarily to limit its
annual Investment Advisory Fee to no more than 1.00% of the Portfolio's
average daily net assets during the period from October 1, 1997 through
October 31, 1998. The effect of the current fee waiver with respect to
"Total Operating Expenses" and the 1.00% fee limitation set forth in the
preceding two sentences with respect to The Emerging Markets Portfolio is
that the annual Investment Advisory Fee paid to Delaware International on
behalf of that Portfolio will be an amount equal to the lesser of 1.00%
or the amount necessary to limit "Total Operating Expenses" of the
Portfolio (exclusive of taxes, interest, brokerage commissions and
extraordinary expenses) to no more than 1.55% of average net assets, on
an annualized basis. Delaware International has also voluntarily agreed
that the annual Investment Advisory Fee payable to Delaware International
on behalf of The Emerging Markets Portfolio will not exceed 1.00% unless
shareholders of the Portfolio have been notified of the change to the
1.00% fee limitation at least one year in advance of such increase. In
the absence of such voluntary waivers and payments, "Investment Advisory
Fees" (as a percentage of average net assets) would be 0.75%, 0.75% and
1.20%, respectively, and "Total Fund Operating Expenses" (as a percentage
of average net assets) would have been or are estimated to be 1.06%,
2.95% and 2.02%, respectively, for The Labor Select International Equity
Portfolio, The Global Equity Portfolio and The Emerging Markets
Portfolio.
-8-
<PAGE>
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. The following examples also assume the
voluntary waiver of the management fee and/or other payments of expenses by
the investment adviser as discussed in this Prospectus. For The Emerging
Markets and The Global Equity Portfolios, the expenses include the purchase
reimbursement and redemption reimbursement fees payable to the Portfolios. No
other Portfolio charges these fees.
<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
------ ------- ------- --------
<S> <C> <C> <C> <C>
The Large-Cap Value Equity Portfolio $7 $21 $37 $ 82
The Aggressive Growth Portfolio 9 30 51 114
The International Equity Portfolio 9 30 51 114
The Labor Select International Equity Portfolio 9 28 49 110
The Intermediate Fixed Income Portfolio 5 17 30 66
The High-Yield Bond Portfolio 6 19 33 74
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
1 year 3 years
------ -------
The Small/Mid-Cap Value Equity Portfolio* $ 9 $28
The Global Equity Portfolio* 17 37
The Real Estate Investment Trust Portfolio** 9 27
The Real Estate Investment Trust Portfolio II** 9 27
The Emerging Markets Portfolio* 31 64
The Aggregate Fixed Income Portfolio* 5 17
The Diversified Core Fixed Income Portfolio* 6 18
The Asset Allocation Portfolio* 0 00
The Small-Cap Growth Equity Portfolio* 0 00
The Growth and Income Portfolio* 0 00
</TABLE>
For The Emerging Markets and The Global Equity Portfolios, the only Portfolios
subject to a redemption reimbursement fee, you would pay the following
expenses on the same investment, assuming no redemption:
<TABLE>
<CAPTION>
1 year 3 years
------ -------
<S> <C> <C>
The Emerging Markets Portfolio $23 $56
The Global Equity Portfolio 14 34
</TABLE>
* Assumes net assets of each Portfolio equal to $75 million.
** Based upon the expenses incurred by the original class of shares of The
Real Estate Investment Trust Portfolio, which has been redesignated REIT
Fund A Class of shares, absent front-end sales charges and 12b-1
expenses, for the Fund's fiscal year ended October 31, 1997. REIT Fund A
Class carried no front-end sales charges or Rule 12b-1 distribution fees
through October 14, 1997 and is offered by a separate prospectus.
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.
-9-
<PAGE>
FINANCIAL HIGHLIGHTS
The following financial highlights are derived from the financial statements
of Delaware Pooled Trust, Inc. for The Large-Cap Value Equity Portfolio
(formerly known as The Defensive Equity Portfolio), The Aggressive Growth
Portfolio, The International Equity Portfolio, The Global Fixed Income
Portfolio, The Labor Select International Equity Portfolio, The Real Estate
Investment Trust Portfolio, The Intermediate Fixed Income Portfolio (formerly
known as The Fixed Income Portfolio), The High-Yield Bond Portfolio, The
International Fixed Income Portfolio, The Emerging Markets Portfolio and The
Global Equity Portfolio and are incorporated by reference into the Statement
of Additional Information, and have been audited by Ernst & Young LLP,
independent auditors. The data should be read in conjunction with the
financial statements and related notes. Further information about the
performance of these Portfolios is contained in their Annual Report.
Unaudited financial highlights for the period ended April 30, 1998 are also
provided below for each Portfolio other than The Limited-Term Maturity, The
Asset Allocation Portfolio, The Small-Cap Growth Equity and The Growth and
Income Portfolios. The data should be read in conjunction with the financial
statements and related notes for the period ended April 30, 1998, all of which
are incorporated by reference into the Statement of Additional Information.
Further information about the performance of
these Portfolios is contained in their Semi-Annual Report.
The Annual Report (which includes related notes and the report of Ernst &
Young LLP), the Semi-Annual Report and the Statement of Additional Information
may be obtained from the Fund upon request at no charge.
As of the date of this Prospectus, The Limited-Term Maturity Portfolio, The
Asset Allocation Portfolio, The Small-Cap Growth Equity Portfolio and The
Growth and Income Portfolio have sold no shares to public investors and, thus,
financial highlights are not provided for these Portfolios.
-10-
<PAGE>
<TABLE>
<CAPTION>
The Large-Cap Value Equity Portfolio (1)
-----------------------------------------------------------------------------------
Unaudited
Period Period
11/1/97 2/3/92(3)
through Year ended through
4/30/98(2) 10/31/97 10/31/96 10/31/95 10/31/94 10/31/93 10/31/92
---------- -------- ---------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........... $00.0000 $16.4600 $14.6600 $13.0800 $12.7300 $10.6600 $10.0000
-------- -------- -------- -------- -------- -------- --------
Income From Investment Operations
Net Investment Income.......................... 0.0000 0.3807 0.4404 0.4303 0.3203 0.2841 0.2291
Net Gains (Losses) on Securities
(both realized and unrealized).............. 0.0000 3.5993 2.9596 1.9797 0.6527 2.3159 0.5109
-------- -------- -------- -------- -------- -------- --------
Total from Investment Operations......... 0.0000 3.9800 3.4000 2.4100 0.9730 2.6000 0.7400
-------- -------- -------- -------- -------- -------- --------
Less Dividends and Distributions
Dividends (from net investment income)......... (0.0000) (0.4100) (0.4400) (0.3400) (0.2800) (0.3200) (0.0800)
Distributions (from capital gains)............. (0.0000) (1.5000) (1.1600) (0.4900) (0.3430) (0.2100) none
-------- -------- -------- -------- -------- -------- --------
Total Dividends and Distributions........ (0.0000) (1.9100) (1.6000) (0.8300) (0.6230) (0.5300) (0.0800)
-------- -------- -------- -------- -------- -------- --------
Net Asset Value, End of Period................. $00.0000 $18.5300 $16.4600 $14.6600 $13.0800 $12.7300 $10.6600
======== ======== ======== ======== ======== ======== ========
- - -----------------------
Total Return................................... 00.00% 26.73%(4) 24.87%(4) 19.77%(4) 7.96%(4) 25.17%(4) 10.13%(4)
- - -----------------------
Ratios/Supplemental Data
Net Assets, End of Period (000's omitted)...... $00,000 $81,102 $67,179 $51,947 $37,323 $13,418 $4,473
Ratio of Expenses to Average Daily Net Assets.. 0.00% 0.66% 0.67% 0.68% 0.68% 0.68% 0.68%
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitations............. 0.00% 0.67% 0.70% 0.71% 0.82% 1.38% 2.38%
Ratio of Net Investment Income to Average
Daily Net Assets............................. 0.00% 2.15% 2.85% 3.33% 3.26% 2.90% 3.65%
Ratio of Net Investment Income to Average
Daily Net Assets Prior to Expense
Limitations................................. 0.00% 2.14% 2.83% 3.30% 3.12% 2.20% 1.95%
Portfolio Turnover Rate........................ 00% 73% 74% 88% 73% 37% 28%
Average Commission Rate Paid................... $0.0000 $0.0600 $0.0600 N/A N/A N/A N/A
</TABLE>
- - --------------
(1) Formerly known as The Defensive Equity Portfolio.
(2) Ratios have been annualized but total return has not been annualized.
(3) Date of initial sale; ratios and total return have been annualized.
(4) Total return reflects the expense limitations referenced in Fund Expenses.
-11-
<PAGE>
<TABLE>
<CAPTION>
The Aggressive Growth Portfolio
----------------------------------------------------------------------------------
Unaudited
Period Period
11/1/97 2/3/92(3)
through Year ended through
4/30/98(2) 10/31/97 10/31/96 10/31/95 10/31/94 10/31/93 10/31/92
----------- -------- ---------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........... $00.0000 $14.5700 $12.8600 $11.0100 $11.2000 $9.0400 $10.0000
-------- -------- -------- -------- -------- -------- --------
Income From Investment Operations
Net Investment Income (Loss)................... (0.0000) (0.1165) (0.0188) 0.0428 0.0075 0.0181 0.0167
Net Gains (Losses) on Securities
(both realized and unrealized).............. 0.0000 1.6065 2.3913 2.0552 0.0325 2.1589 (0.9767)
Total from Investment Operations......... 0.0000 1.4900 2.3725 2.0980 0.0400 2.1770 (0.9600)
-------- -------- -------- -------- -------- -------- --------
Less Dividends and Distributions
Dividends (from net investment income)......... (0.0000) none (0.0425) (0.0120) (0.0200) (0.0170) none
Distributions (from capital gains)............. (0.0000) (2.3800) (0.6200) (0.2360) (0.2100) none none
-------- -------- -------- -------- -------- -------- --------
Total Dividends and Distributions........ (0.0000) (2.3800) (0.6625) (0.2480) (0.2300) (0.0170) none
-------- -------- -------- -------- -------- -------- --------
Net Asset Value, End of Period................. $00.0000 $13.6800 $14.5700 $12.8600 $11.0100 $11.2000 $9.0400
======== ======== ======== ======== ======== ======== ========
- - ------------------------
Total Return................................... 00.00% 11.84%(3) 19.19%(3) 19.61%(3) 0.34%(3) 24.10%(3) (13.89%)(3)
- - ------------------------
Ratios/Supplemental Data
Net Assets, End of Period (000's omitted)...... $00,000 $10,317 $28,526 $29,092 $22,640 $20,478 $4,538
Ratio of Expenses to Average Daily Net Assets.. 0.00% 0.93% 0.90% 0.93% 0.93% 0.93% 0.93%
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitations............. 0.00% 1.40% 1.01% 1.08% 1.17% 1.40% 2.56%
Ratio of Net Investment Income (Loss) to
Average Daily Net Assets................ (0.00%) (0.29%) (0.18%) 0.37% 0.07% 0.23% 0.28%
Ratio of Net Investment Income (Loss) to
Average Daily Net Assets
Prior to Expense Limitations............. (0.00%) (0.76%) (0.29%) 0.22% (0.17%) (0.24%) (1.35%)
Portfolio Turnover Rate........................ 000% 117% 95% 64% 43% 81% 34%
Average Commission Rate Paid................... $0.0000 $0.0600 $0.0600 N/A N/A N/A N/A
</TABLE>
(1) Ratios have been annualized but total return has not been annualized.
(2) Date of initial sale; ratios and total return have been annualized.
(3) Total return reflects the expense limitations referenced in Fund Expenses.
-12-
<PAGE>
<TABLE>
<CAPTION>
The International Equity Portfolio
---------------------------------------------------------------------------------------
Unaudited
Period Period
11/1/97 Year ended 2/4/92(2)
through ---------- through
4/30/98(1) 10/31/97 10/31/96 10/31/95 10/31/94 10/31/93 10/31/92
---------- -------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period..... $00.0000 $14.7800 $13.1200 $13.1100 $11.9900 $9.5000 $10.0000
-------- -------- -------- -------- -------- ------- --------
Income From Investment Operations
Net Investment Income.................... 0.0000 0.3287 0.5063 0.4749 0.1440 0.2414 0.2282
Net Gains (Losses) on Securities
(both realized and unrealized)........ 0.0000 1.2713 1.7937 0.0011 1.2360 2.5686 (0.6282)
Total from Investment Operations... 0.0000 1.6000 2.3000 0.4760 1.3800 2.8100 (0.4000)
Less Dividends and Distributions
Dividends (from net investment income)... (0.0000) (0.5200) (0.4900) (0.1700) (0.1600) (0.3200) (0.1000)
Distributions (from capital gains)....... (0.0000) none (0.1500) (0.2960) (0.1000) none none
Total Dividends and Distributions.. (0.0000) (0.5200) (0.6400) (0.4660) (0.2600) (0.3200) (0.1000)
-------- -------- -------- -------- -------- -------- --------
Net Asset Value, End of Period........... $00.0000 $15.8600 $14.7800 $13.1200 $13.1100 $11.9900 $9.5000
======== ======== ======== ======== ======== ======== =======
Total Return............................. 00.00% 11.01% 18.12% 3.91% 11.66%(3) 30.28%(3) (5.44%)(3)
Ratios/Supplemental Data
Net Assets, End of Period
(000's omitted)....................... $000,000 $500,196 $299,950 $156,467 $70,820 $24,288 $5,966
Ratio of Expenses to Average Daily
Net Assets............................ 0.00% 0.93% 0.89% 0.90% 0.94% 0.96% 0.96%
Ratio of Expenses to Average Daily
Net Assets Prior to Expense
Limitations........................... 0.00% 0.93% 0.89% 0.90% 0.97% 1.38% 2.94%
Ratio of Net Investment Income to
Average Daily Net Assets.............. 0.00% 2.21% 4.36% 4.81% 1.36% 2.98% 4.67%
Ratio of Net Investment Income to Average
Daily Net Assets Prior to Expense
Limitations........................... 0.00% 2.21% 4.36% 4.81% 1.33% 2.56% 2.69%
Portfolio Turnover Rate.................. 0% 8% 8% 20% 22% 28% 2%
Average Commission Rate Paid............. $0.0000 $0.0217 $0.0198 N/A N/A N/A N/A
</TABLE>
- - -------------------------
(1) Ratios have been annualized but total return has not been annualized.
(2) Date of initial sale; ratios and total return have been annualized.
(3) Total return reflects the expense limitations referenced in Fund Expenses.
-13-
<PAGE>
<TABLE>
<CAPTION>
The Global Fixed Income Portfolio
-----------------------------------------------------------------------------
Unaudited
Period Period
11/1/97 Year ended 11/30/92(2)
through ---------- through
4/30/98(1) 10/31/97 10/31/96 10/31/95 10/31/94 10/31/93
---------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period..... $00.0000 $11.6200 $11.0400 $9.7900 $11.0900 $10.0000
-------- -------- -------- -------- -------- --------
Income From Investment Operations
Net Investment Income.................... 0.0000 0.7205 0.7774 0.7357 0.4189 0.9547
Net Gains (Losses) on Securities
(both realized and unrealized)........ (0.0000) (0.1155) 0.7246 0.9243 (0.1929) 0.7433
Total from Investment Operations... 0.0000 0.6050 1.5020 1.6600 0.2260 1.6980
Less Dividends and Distributions
Dividends (from net investment income)... (0.0000) (0.8350) (0.7200) (0.4100) (0.9490) (0.6080)
Distributions (from capital gains)....... (0.0000) (0.1700) (0.2020) none (0.5770) none
Total Dividends and Distributions.. (0.0000) (1.0050) (0.9220) (0.4100) (1.5260) (0.6080)
-------- -------- -------- -------- -------- --------
Net Asset Value, End of Period........... $00.0000 $11.2200 $11.6200 $11.0400 $9.7900 $11.0900
======== ======== ======== ======== ======== ========
Total Return............................. 0.00% 5.59%(3) 16.40%(3) 17.38%(3) 2.07%(3) 18.96%(3)
Ratios/Supplemental Data
Net Assets, End of Period
(000's omitted)....................... $000,000 $431,076 $252,068 $99,161 $42,266 $29,313
Ratio of Expenses to Average Daily
Net Assets............................ 0.00% 0.60% 0.60% 0.60% 0.62% 0.62%
Ratio of Expenses to Average Daily
Net Assets Prior to Expense
Limitations........................... 0.00% 0.65% 0.66% 0.68% 0.76% 0.88%
Ratio of Net Investment Income to
Average Daily Net Assets.............. 0.00% 6.28% 8.52% 6.73% 3.62% 10.68%
Ratio of Net Investment Income to Average
Daily Net Assets Prior to Expense
Limitations........................... 0.00% 6.23% 8.46% 6.65% 3.48% 10.42%
Portfolio Turnover Rate.................. 000% 114% 63% 77% 205% 198%
</TABLE>
- - -------------------------
(1) Ratios have been annualized but total return has not been annualized.
(2) Date of initial sale; ratios and total return have been annualized.
(3) Total return reflects the expense limitations referenced in Fund Expenses.
-14-
<PAGE>
<TABLE>
<CAPTION>
The Labor Select The Real Estate
International Equity Portfolio Investment Trust Portfolio(3)
------------------------------ ----------------------------
Unaudited Unaudited
Period Period Period Period
11/1/97 12/19/95(2) 11/1/97 Year 12/6/95(2)
through Year Ended through through Ended through
4/30/98(1) 10/31/97 10/31/96 4/30/98(1) 10/31/97 10/31/96
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.............. $00.0000 $11.6900 $10.0000 $00.0000 $12.4900 $10.0000
-------- -------- -------- -------- -------- --------
Income From Investment Operations
Net Investment Income............................. 0.0000 0.4740 0.4785 0.0000 0.6162 0.6515
Net Gains (Losses) on Securities
(both realized and unrealized)................. 0.0000 1.3460 1.3115 0.0000 4.6638 1.9385
Total from Investment Operations............ 0.0000 1.8200 1.7900 0.0000 5.2800 2.5900
Less Dividends and Distributions
Dividends (from net investment income)............ (0.0000) (0.5200) (0.1000) (0.0000) (0.7200) (0.1000)
Distributions (from capital gains)................ (0.0000) none none (0.0000) (0.7900) none
Total Dividends and Distributions........... (0.0000) (0.5200) (0.1000) (0.0000) (1.5100) (0.1000)
-------- -------- -------- -------- -------- --------
Net Asset Value, End of Period.................... $00.0000 $12.9900 $11.6900 $00.0000 $16.2600 $12.4900
======== ======== ======== ======== ======== ========
- - ------------------------------
Total Return...................................... 00.00% 16.01%(5) 17.97%(5) 00.00% 46.50%(5) 26.12%(5)
-------- -------- -------- -------- -------- --------
- - ------------------------------
Ratios/Supplemental Data
Net Assets, End of Period (000's omitted)......... $00,000 $50,896 $23,154 $00,000 $60,089 $26,468
Ratio of Expenses to Average Daily Net Assets..... 0.00% 0.89% 0.92% 0.00% 0.82% 0.89%
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitations................. 0.00% 1.06% 1.30% 0.00% 0.99% 1.02%
Ratio of Net Investment Income
to Average Daily Net Assets...................... 0.00% 2.37% 6.64% 0.00% 4.25% 6.70%
Ratio of Net Investment Income
to Average Daily Net Assets
Prior to Expense Limitations..................... 0.00% 2.20% 6.26% 0.00% 4.08% 6.57%
Portfolio Turnover Rate........................... 00% 11% 7% 00% 58% 109%
Average Commission Rate Paid...................... $0.0000 $0.0263 $0.0330 $0.0000 $0.0576 $0.0600
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
The Intermediate Fixed
Income Portfolio (4)
-----------------------
Unaudited
Period Period
11/1/97 Year 3/12/96(2)
through Ended through
4/30/98(1) 10/31/97 10/31/96
-------- -------- --------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period.............. $00.0000 $10.0100 $10.0000
-------- -------- --------
Income From Investment Operations
Net Investment Income............................. 0.0000 0.6053 0.3856
Net Gains (Losses) on Securities
(both realized and unrealized)................. 0.0000 0.0800 0.0100
Total from Investment Operations............ 0.0000 0.6853 0.3956
Less Dividends and Distributions
Dividends (from net investment income)............ (0.0000) (0.6053) (0.3856)
Distributions (from capital gains)................ (0.0000) none none
Total Dividends and Distributions........... (0.0000) (0.6053) (0.3856)
-------- -------- --------
Net Asset Value, End of Period.................... $00.0000 $10.0900 $10.0100
======== ======== ========
- - ------------------------------
Total Return...................................... 00.00% 7.09%(5) 4.08%(5)
-------- -------- --------
- - ------------------------------
Ratios/Supplemental Data
Net Assets, End of Period (000's omitted)......... $00,000 $30,366 $10,518
Ratio of Expenses to Average Daily Net Assets..... 0.00% 0.53% 0.53%
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitations................. 0.00% 0.84% 1.20%
Ratio of Net Investment Income
to Average Daily Net Assets...................... 0.00% 6.05% 6.14%
Ratio of Net Investment Income
to Average Daily Net Assets
Prior to Expense Limitations..................... 0.00% 5.74% 5.47%
Portfolio Turnover Rate........................... 000% 205% 232%
Average Commission Rate Paid...................... $0.0000 N/A N/A
</TABLE>
- - ----------------
(1) Ratios have been annualized but total return has not been annualized.
(2) Date of initial sale; ratios have been annualized, but total return has
not been annualized.
(3) December 6, 1995 is the date of initial sale of the original (and then
only) class of shares offered by The Real Estate Investment Trust
Portfolio. Data presented above is for that class of shares which, as of
October 14, 1997, was redesignated the "REIT Fund A Class" and is offered
in a separate prospectus. The shares being offered in this Prospectus were
offered for sale beginning October 14, 1997 and are designated in the
Fund's charter as "The Real Estate Investment Trust Portfolio class"; like
the original class, prior to its redesignation, The Real Estate Investment
Trust Portfolio class carries no front-end or contingent deferred sales
charges and is not subject to Rule 12b-1 Distribution Plan fees.
(4) Formerly known as The Fixed Income Portfolio.
(5) Total return reflects the expense limitations referenced in Fund Expenses.
-15-
<PAGE>
<TABLE>
<CAPTION>
The High-Yield The International
Bond Portfolio Fixed Income Portfolio
-------------- ----------------------
Unaudited Unaudited
Period Period Period Period
11/1/97 12/2/96(2) 11/1/97 4/11/97(2)
through through through through
4/30/98(1) 10/31/97 4/30/98(1) 10/31/97
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period..................... $00.0000 $10.0000 $00.0000 $10.0000
-------- -------- -------- --------
Income From Investment Operations
Net Investment Income.................................... 0.0000 0.7875 0.0000 0.2359
Net Gains (Losses) on Securities
(both realized and unrealized)........................ 0.0000 0.9575 0.0000 0.4741
Total from Investment Operations................... 0.0000 1.7450 0.0000 0.7100
-------- -------- -------- --------
Less Dividends and Distributions
Dividends (from net investment income)................... (0.0000) (0.5650) (0.0000) (0.0500)
Distributions (from capital gains)....................... none none none none
Total Dividends and Distributions................. (0.0000) (0.5650) (0.0000) (0.0500)
Net Asset Value, End of Period........................... $00.0000 $11.1800 $00.0000 $10.6600
======== ======== ======== ========
- - ------------------------------
Total Return............................................. 00.00% 17.92%(2)(3) 00.00% 7.11%(2)(3)
-------- -------- -------- --------
- - ------------------------------
Ratios/Supplemental Data
Net Assets, End of Period (000's omitted)................ $00,000 $11,348 $00,000 $33,734
Ratio of Expenses to Average Daily Net Assets............ 0.00% 0.59% 0.00% 0.60%
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitations........................ 0.00% 0.79% 0.00% 0.86%
Ratio of Net Investment Income to Average Daily Net Assets 0.00% 9.05% 0.00% 6.05%
Ratio of Net Investment Income to Average Daily Net Assets
Prior to Expense Limitations........................ 0.00% 8.85% 0.00% 5.79%
Portfolio Turnover Rate.................................. 000% 281% 000% 145%
Average Commission Rate Paid............................. $0.0000 N/A $0.0000 N/A
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
The Emerging The Global
Markets Portfolio Equity Portfolio
----------------- -----------------
Unaudited Unaudited
Period Period Period Period
11/1/97 4/14/97(2) 11/1/97 10/15/97(2)
through through through through
4/30/98(1) 10/31/97 4/30/98(1) 10/31/97
-------- -------- -------- -------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period..................... $00.0000 $10.0000 $00.0000 $8.5000
-------- -------- -------- -------
Income From Investment Operations
Net Investment Income.................................... 0.0000 0.0279 0.0000 0.0092
Net Gains (Losses) on Securities
(both realized and unrealized)........................ (0.0000) (0.8279) (0.0000) (0.3892)
Total from Investment Operations................... (0.0000) (0.8000) (0.0000) (3.8000)
-------- -------- -------- -------
Less Dividends and Distributions
Dividends (from net investment income)................... (0.0000) none (0.0000) none
Distributions (from capital gains)....................... none none none none
Total Dividends and Distributions................. (0.0000) none (0.0000) none
Net Asset Value, End of Period........................... $00.0000 $9.2000 $00.0000 $8.1200
======== ======= ======== =======
- - ------------------------------
Total Return............................................. 00.00% (8.00%)(2)(3) 00.00% (4.47%)(2)(3)
-------- -------- -------- -------
- - ------------------------------
Ratios/Supplemental Data
Net Assets, End of Period (000's omitted)................ $00,000 $18,565 $00,000 $2,855
Ratio of Expenses to Average Daily Net Assets............ 0.00% 1.55% 0.00% 0.96%
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitations........................ 0.00% 2.02% 0.00% 2.95%
Ratio of Net Investment Income to Average Daily Net Assets 0.00% 0.74% 0.00% 2.54%
Ratio of Net Investment Income to Average Daily Net Assets
Prior to Expense Limitations........................ 0.00% 0.27% 0.00% 0.55%
Portfolio Turnover Rate.................................. 00% 46% 0% 0%
Average Commission Rate Paid............................. $0.0000 $0.0049 $0.0000 $0.0169
</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 Fund Expenses.
(3) Total return for this short of a time period may not be representative of
longer term results.
-16-
<PAGE>
<TABLE>
<CAPTION>
The Small/ Mid Cap The Real Estate
Value Equity Portfolio Investment Trust Portfolio II
Period Period
00/0/97 00/0/97
through through
4/30/98(1) 4/30/98(1)
---------------------- ------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period......................... $00.0000 $00.0000
-------- --------
Income From Investment Operations
Net Investment Income........................................ 0.0000 0.0000
Net Gains (Losses) on Securities (both realized and unrealized) 0.0000 0.0000
Total from Investment Operations....................... 0.0000 0.0000
Less Dividends and Distributions
Dividends (from net investment income)....................... (0.0000) (0.0000)
Distributions (from capital gains)........................... none none
---- ----
Total Dividends and Distributions...................... (0.0000) (0.0000)
-------- --------
Net Asset Value, End of Period............................... $00.0000 $00.0000
======== ========
_________________________________________
Total Return................................................. 00.00% 00.00%
------ ------
_________________________________________
Ratios/Supplemental Data
- - ------------------------
Net Assets, End of Period (000's omitted).................... $00,000 $00,000
Ratio of Expenses to Average Daily Net Assets................ 0.00% 0.00%
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitations........................... 0.00% 0.00%
Ratio of Net Investment Income to Average Daily Net Assets... 0.00% 0.00%
Ratio of Net Investment Income to Average Daily Net Assets
Prior to Expense Limitations........................... 0.00% 0.00%
Portfolio Turnover Rate...................................... 000% 000%
Average Commission Rate Paid................................. $0.0000 $0.0000
</TABLE>
[RESTUBBED TABLE]
<TABLE>
<CAPTION>
The Aggregate The Diversified Core
Fixed Income Portfolio Fixed Income Portfolio
Period Period
00/0/97 00/0/97
through through
4/30/98(1) 4/30/98(1)
----------------------- --------------------
<S> <C> <C>
Net Asset Value, Beginning of Period......................... $00.0000 $00.0000
-------- --------
Income From Investment Operations
Net Investment Income........................................ 0.0000 0.0000
Net Gains (Losses) on Securities (both realized and unrealized) 0.0000 0.0000
Total from Investment Operations....................... 0.0000 0.0000
Less Dividends and Distributions
Dividends (from net investment income)....................... (0.0000) (0.0000)
Distributions (from capital gains)........................... none none
---- ----
Total Dividends and Distributions...................... (0.0000) (0.0000)
-------- --------
Net Asset Value, End of Period............................... $00.0000 $00.0000
======== ========
________________________________________
Total Return................................................. 00.00% 00.00%
------ ------
_______________________________________
Ratios/Supplemental Data
- - ------------------------
Net Assets, End of Period (000's omitted).................... 00,000 $00,000
Ratio of Expenses to Average Daily Net Assets................ 0.00% 0.00%
Prior to Expense Limitations........................... 0.00% 0.00%
0.00% 0.00%
- - ---------------------------------------------------------- ----- -----
Ratio of Net Investment Income to Average Daily Net Assets
Prior to Expense Limitations........................... 0.00% 0.00%
Portfolio Turnover Rate...................................... 000% 000%
Average Commission Rate Paid................................. $0.0000 $0.0000
</TABLE>
________________________
(1) Date of initial sale; ratios have been annualized, but total return has not
beeen annualized.
(2) Total return reflects the expense limitations referenced in Fund Expenses.
(3) Total return for this short of a time period may not be representative of
longer term results.
-17-
<PAGE>
DELAWARE POOLED TRUST SUMMARY
THE FUND
This Prospectus offers 19 Portfolios providing eligible 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 Real Estate Investment Trust Portfolio, The Real Estate
Investment Trust Portfolio II, The Global Fixed Income Portfolio, The
International Fixed Income Portfolio , The Emerging Markets Portfolio and The
Asset Allocation Portfolio, is a diversified fund as defined by the Investment
Company Act of 1940 ("1940 Act"). The Real Estate Investment Trust Portfolio,
The Real Estate Investment Trust Portfolio II, The Global Fixed Income
Portfolio, The International Fixed Income Portfolio , The Emerging Markets
Portfolio and The Asset Allocation Portfolio are nondiversified funds as
defined by the 1940 Act. The investment objectives and principal policies of
each of the 19 Portfolios are as follows:
The Aggressive Growth Portfolio--seeks to realize maximum long-term capital
growth. The Portfolio seeks to achieve this objective 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, significant
long-term growth potential.
The Large-Cap Value Equity Portfolio--seeks to realize maximum long-term total
return, consistent with reasonable risk. The Portfolio seeks to achieve this
objective 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 Emerging Markets Portfolio--seeks to achieve long-term capital
appreciation. The Portfolio seeks to achieve its objective by investing
primarily in equity securities of issuers located or operating in emerging
countries.
The Global Equity Portfolio-- seeks to achieve long-term growth without undue
risk to principal. The Portfolio seeks to achieve this objective by investing
in global equity securities that provide the potential for capital
appreciation and income.
The 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, are undervalued, at
the time of purchase, based on rigorous fundamental analysis conducted by the
investment adviser.
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,
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.
The Real Estate Investment Trust Portfolio and The Real Estate Investment
Trust Portfolio II--seek to achieve maximum long-term total return. Capital
appreciation is a secondary objective. Each Portfolio seeks to
-18-
<PAGE>
achieve its objectives by investing in securities of companies principally
engaged in the real estate industry. Under normal circumstances, investments
will be made primarily in equity securities of real estate investment trusts.
The Real Estate Investment Trust Portfolio and The Real Estate Investment
Trust Portfolio II are sometimes referred to collectively as "The Real Estate
Investment Trust Portfolios" in this Prospectus.
The Small/Mid-Cap Value Equity 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, are dividend
paying, and, generally represent the smallest 30% in terms of market
capitalization of U.S. equity securities listed on a national securities
exchange or the National Association of Securities Dealers Automated Quotation
System ("NASDAQ"), and which, in Delaware Investment Advisers' opinion, offer
capital gains potential.
The Aggregate Fixed Income Portfolio--seeks to realize maximum long-term total
return, consistent with reasonable risk. The Portfolio seeks to achieve this
objective by investing in a diversified portfolio of fixed-income obligations.
The Portfolio will include U.S. government securities, mortgage-backed
securities, corporate bonds and other fixed-income securities. The benchmark
against which its performance will be measured is the Lehman Brothers
Aggregate Bond Index.
The Diversified Core Fixed Income Portfolio--seeks to realize maximum
long-term total return, consistent with reasonable risk. The Portfolio seeks
to achieve its objective by using a multi-sector investment approach,
investing its assets principally in the following sectors of the fixed-income
securities markets: investment grade fixed-income securities; high yield,
higher risk securities; and foreign government and other foreign fixed-income
securities.
The Intermediate Fixed Income Portfolio--seeks to realize maximum long-term
total return, consistent with reasonable risk. The Portfolio seeks to achieve
this objective 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 benchmark against which its performance will be measured is
the Lehman Brothers Government/Corporate Intermediate Bond Index.
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 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, a Division of McGraw Hill ("S&P") or B3 or
higher by Moody's Investors Service, Inc. ("Moody's") or, if unrated, judged
to be of comparable quality by the Portfolio's investment adviser.
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.
-19-
<PAGE>
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 Asset Allocation Portfolio--seeks capital appreciation with current income
as a secondary objective. The Portfolio seeks to achieve its objective by
investing primarily in domestic equity and fixed income securities, including
domestic equity and fixed income Portfolios of the Fund. The Portfolio may
also invest in international and fixed income securities, including
international and fixed income Portfolios of the Fund. The Portfolios will
generally invest at least 20% of its net assets in fixed income securities,
including fixed-income Portfolios of the Fund.
The Small-Cap Growth Equity Portfolio--seeks to realize long-term capital
growth. The Portfolio seeks to achieve its objective by investing primarily in
equity securities of companies which Delaware believes have potential for high
earnings growth and which generally represent the smallest 25% in terms of
market capitalization of U.S. equity securities listed on a national securities
exchange or NASDAQ.
The Growth and Income Portfolio--seeks to realize capital appreciation and
income. The Portfolio seeks to achieve these objectives by investing primarily
in income-producing common stocks, with a focus on common stocks that Delaware
believes have potential for above average dividend increases over time.
For further information, see "INVESTMENT OBJECTIVES, POLICIES AND RISK
CONSIDERATIONS" and "ADDITIONAL INVESTMENT INFORMATION."
INVESTMENT MANAGEMENT
Delaware acts as investment advisor to The Asset Allocation, The Small-Cap
Growth Equity and The Growth and Income Portfolios, acts as investment adviser
to The Large-Cap Value Equity, The Aggressive Growth, The Aggregate Fixed
Income, The Diversified Core Fixed Income, The Intermediate Fixed Income, The
Limited-Term Maturity, The Small/Mid-Cap Value Equity, The Real Estate
Investment Trust and The High-Yield Bond Portfolios. The investment management
fees payable to Delaware by these Portfolios are, respectively, 0.00%, 0.00%,
0.00%, 0.55%, 0.80%, 0.40%, 0.43%, 0.40%, 0.30%, 0.75%, 0.75% (for each of The
Real Estate Investment Trust Portfolios) and 0.45% 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
Portfolios and receives 30% of the management fees paid to Delaware. Delaware
International, an affiliate of Delaware, acts as sub-adviser to Delaware with
respect to The Diversified Core Fixed Income Portfolio and receives from
Delaware an amount equal to the management fee paid to Delaware times a ratio,
the numerator of which is the average daily net assets represented by foreign
assets and the denominator of which is the average daily net assets of the
Portfolios, such amount to be calculated at the same time and measured over
the same period as the management fee.
Delaware International is the investment adviser to The International Equity,
The Global Fixed Income, The International Fixed Income, The Labor Select
International Equity, The Global Equity and The Emerging Markets Portfolios.
The investment management fees payable to Delaware International by The
International Equity, The Global Fixed Income, The International Fixed Income,
The Labor Select International Equity, The Global Equity and The Emerging
Markets Portfolios are, respectively, 0.75%, 0.50%, 0.50%, 0.75%, 0.75% and
1.20% of the
-20-
<PAGE>
respective Portfolio's average net assets. Delaware acts as sub-adviser to
Delaware International with respect to The Global Equity Portfolio managing
the U.S. securities portion of the Portfolio and receives 50% of the
management fee paid to Delaware International.
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 Small/Mid-Cap Value Equity, The Real Estate Investment Trust,
The Aggregate Fixed Income, The Diversified Core Fixed Income , The
High-Yield Bond, The Asset Allocation, The Small-Cap Growth Equity and The
Growth and Income Portfolios and Delaware International will make no such
payments out of the fees it receives for managing The International Fixed
Income, The Labor Select International Equity and The Emerging Markets
Portfolios.
See "MANAGEMENT OF THE FUND."
-21-
<PAGE>
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.
Jeffrey J. Nick
President and Chief Executive Officer
Mr. Nick is a graduate of Princeton University with a BA in English
Literature. While pursuing his baccalaureate degree from Princeton, Mr. Nick
had the opportunity to study in Germany at Bonn University. This was followed
by studies at the University of Chicago, which led to an MBA in Finance and
Marketing. Mr. Nick joined Lincoln National Corporation in its US headquarters
in 1989 as Senior Vice President responsible for corporate planning and
development for Lincoln National Corporation. He held this position until
1992. From 1992 to 1996, Mr. Nick was Managing Director of Lincoln National UK
plc. Before joining Lincoln, his career included assignments in management
consultancy (with Arthur D. Little, Inc.) and merchant banking (Chase
Investment Bank). Mr. Nick is President, Chief Executive Officer and Director
of the Delaware Group of Funds, Delaware Management Holdings, Inc. and Lincoln
National Investment Companies, Inc.
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 Large-Cap Value 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
Large-Cap Value Equity Portfolio since its inception.
Gerald S. Frey
Vice President/Senior Portfolio Manager - The Aggressive Growth and The
Small-Cap Growth Equity Portfolios
Mr. Frey holds a BA in Economics from Bloomsburg University and attended
Wilkes College and New York University. He has approximately 20 years'
experience in the money management business. Prior to joining the Delaware
Group in 1996, he was a Senior Director with Morgan Grenfell Capital
Management in New York. Mr. Frey has managed The Aggressive Growth Portfolio
since June 1996 and will manage The Small-Cap Growth Equity Portfolio when it
commences operations.
-22-
<PAGE>
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.
Clive A. Gillmore
Director/Senior Portfolio Manager - Delaware International Advisers Ltd. (The
Labor Select International Equity Portfolio and The Emerging Markets
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 and
The Emerging Markets Portfolio since their respective dates of inception.
Robert Akester
Senior Portfolio Manager - Delaware International Advisers Ltd. (The Emerging
Markets Portfolio)
Prior to joining Delaware in 1996, Mr. Akester, who began his investment
career in 1969, was most recently a Director of Hill Samuel Investment
Advisers Ltd., which he joined in 1985. His prior experience included working
as a Senior Analyst and head of the South-East Asian Research team at James
Capel, and as a Fund Manager at Prudential Assurance Co., Ltd. Mr. Akester
holds a BS in Statistics and Economics from University College, London and is
an associate of the Institute of Actuaries, with a certificate in Finance and
Investment. Mr. Akester has managed The Emerging Markets Portfolio since its
inception.
Babak Zenouzi
Vice President/Portfolio Manager - The Real Estate Investment Trust Portfolios
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 managed The Real Estate
Investment Trust Portfolio and The Real Estate Investment Trust Portfolio II
since their respective dates of inception.
Gary A. Reed
Vice President/Senior Portfolio Manager - The Intermediate Fixed Income
Portfolio, The Aggregate Fixed Income Portfolio and The Limited-Term Maturity
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 Intermediate
Fixed Income Portfolio and The Aggregate Fixed Income Portfolio since
their respective dates of inception and will manage The Limited-Term Maturity
Portfolio when it commences operations.
-23-
<PAGE>
Elizabeth Desmond
Senior Portfolio Manager - Delaware International Advisers Ltd. (The Global
Equity Portfolio)
Ms. Desmond is a graduate of Wellesley College and the masters program in East
Asian studies at Stanford University. After working for the Japanese
government for two years, she began her investment career as a Pacific Basin
investment manager with Shearson Lehman Global Asset Management. Prior to
joining Delaware International in the Spring of 1991, she was a Pacific Basin
equity analyst and senior portfolio manager at Hill Samuel Investment Advisers
Ltd. Ms. Desmond is a CFA charterholder. Ms. Desmond has managed the foreign
securities component of The Global Equity Portfolio since its inception.
Robert L. Arnold
Vice President/Portfolio Manager - The Global Equity Portfolio
Mr. Arnold holds a BS from Carnegie Mellon University and earned an MBA from
the University of Chicago. Before acting as a portfolio manager at Delaware,
he was a financial analyst focusing on the financial services industry,
including banks, thrifts, insurance companies and consumer finance companies.
Prior to joining Delaware in March 1992, he was a planning analyst with
Chemical Bank in New York. He began his investment career as a management
consultant with Arthur Young in Philadelphia. When The Global Equity Portfolio
commences operations, Delaware will act as sub-adviser, managing the U.S.
securities portion of the Portfolio. In that capacity, Mr. Arnold will furnish
investment recommendations, asset allocation advice, research and other
services with respect to U.S. securities. Mr. Arnold has managed the U.S.
component of The Global Equity Portfolio since its inception.
Ian G. Sims
Director/Senior Portfolio Manager - Delaware International Advisers Ltd. (The
Global Fixed Income Portfolio, The International Fixed Income Portfolio and
The Diversified Core 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 , The
International Fixed Income Portfolio and the foreign component of The
Diversified Core Fixed Income Portfolio since their respective dates of
inception.
Paul A. Matlack
Vice President/Senior Portfolio Manager - The High-Yield Bond Portfolio and
The Diversified Core Fixed Income 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 CFA
charterholder. Mr. Matlack has managed The High-Yield Bond Portfolio and
the U.S. high-yield component of The Diversified Core Fixed Income Portfolio
since their respective dates of inception.
-24-
<PAGE>
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 CFA
charterholder. Mr. Nichols has managed The High-Yield Bond Portfolio since its
inception.
Roger A. Early
Vice President/Senior Portfolio Manager - The Diversified Core Fixed Income
Portfolio
Mr. Early has an undergraduate degree in economics from the University of
Pennsylvania's Wharton School and an MBA in finance and accounting from the
University of Pittsburgh. He is also a CPA and a CFA charterholder. Prior to
joining the Delaware Group, Mr. Early was a portfolio manager for Federated
Investment Counseling's fixed-income group, with over $1 billion in assets.
Mr. Early has managed The Diversified Core Fixed Income Portfolio since
its date of inception.
Frank X. Morris
Vice President/Portfolio Manager - The Small/Mid-Cap Value Equity Portfolio
Mr. Morris received a bachelor's degree at Providence College and an MBA
degree at Widener University. He joined Delaware in 1997. He previously served
as vice president and director of equity research at PNC Asset Management. He
is president of the Financial Analysis Society of Philadelphia and is a member
of the Association of Investment Management and Research and the National
Association of Petroleum Investment Analysts. Mr. Morris has managed The
Small/Mid-Cap Value Equity Portfolio since its date of inception.
James F. Stanley
Vice President/Portfolio Manager - The Small/Mid-Cap Value Equity Portfolio
Mr. Stanley, a chartered financial analyst, earned a bachelor's degree in
finance at the University of Rochester. He joined Delaware in 1997. He
previously served as a senior managing equity analyst covering the chemical,
building products, and housing industries at Dreyfus Corporation; initially he
was a research associate at the firm. Mr. Stanley has managed The
Small/Mid-Cap Value Equity Portfolio since its date of inception.
J. Paul Dokas
Vice President/Portfolio Manager - The Small/Mid-Cap Value Equity Portfolio
and The Asset Allocation Portfolio
Mr. Dokas holds a BBA in Business from Loyola College and an MBA in Business
from the University of Maryland. Prior to joining the Delaware Group in 1997,
he was a Director of Trust Investments for Bell Atlantic Corporation in
Philadelphia. Mr. Dokas is a CFA charterholder. Mr. Dokas has managed The
Small/Mid-Cap Value Equity Portfolio since its date of inception and will
manage The Asset Allocation Portfolio when it commences operations.
George H. Burwell
Vice President/Senior Portfolio Manager - The Growth and Income Portfolio
Mr. Burwell holds a BA from the University of Virginia. 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. Mr. Burwell is a CFA charterholder. Mr. Burwell will manage
The Growth and Income Portfolio when it commences operations.
-25-
<PAGE>
ADMINISTRATIVE SERVICES
Delaware Service Company, Inc., an affiliate of Delaware Management Company
and Delaware International Advisers Ltd., provides the Fund with
administrative, dividend disbursing, accounting and transfer agency services.
See "MANAGEMENT OF THE FUND."
SPECIAL REPORTS AND OTHER SERVICES
The Fund provides client shareholders with annual audited financial reports
and unaudited semi-annual financial reports. In addition, the investment
advisers' dedicated service staff 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
*Correspondence relating to The Asset Allocation Portfolio will be forwarded
to Foundation Funds.
From time to time, certain institutional separate accounts advised by Delaware
International and an affiliate of Delaware, 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 and
Delaware International, representing the interests of the Portfolios, are
committed to minimizing the impact of such transactions on the Portfolios. In
addition, the advisers to the institutional separate accounts, are 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.
If permitted under applicable law, in cases where a shareholder of any of the
Portfolios has an investment counseling relationship with Delaware , Delaware
International or their affiliates, Delaware 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 would be utilized with clients having contractual relationships
based on total assets managed by Delaware , Delaware International or their
affiliates to avoid situations where excess advisory fees might be paid to
Delaware 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.
Such reductions
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would not apply to The Asset Allocation Portfolio to the extent that management
fees of the Portfolios are indirectly charged to shareholders of The Asset
Allocation Portfolio.
See "SHAREHOLDER SERVICES."
CUSTODIAL SERVICES
The Chase Manhattan Bank, 4 Chase Metrotech Center, Brooklyn, NY 11245 serves
as custodian for The Global Fixed Income, The International Equity, The Labor
Select International Equity, The Real Estate Investment Trust, The High-Yield
Bond, The International Fixed Income, The Global Equity, The Aggregate Fixed
Income, The Diversified Core Fixed Income , The Emerging Markets, The Asset
Allocation, The Small-Cap Growth Equity and The Growth and Income Portfolios.
Bankers Trust Company, One Bankers Trust Plaza, New York, NY 10006 serves as
custodian for The Large-Cap Value Equity, The Aggressive Growth, The
Intermediate Fixed Income, The Limited-Term Maturity and The Small/Mid-Cap
Value Equity Portfolios.
HOW TO INVEST
Shares of each Portfolio are offered directly to institutions and high
net-worth individual investors at net asset value with no sales commissions or
12b-1 charges. In the case of The Emerging Markets and The Global Equity
Portfolios, there is a purchase reimbursement fee that applies to all
purchases, whether pursuant to the exchange privilege or otherwise. That fee
which is paid by investors to the relevant Portfolio equals 0.75% of the
dollar amount invested for The Emerging Markets Portfolio and 0.40% of the
dollar amount invested for The Global Equity Portfolio. This purchase
reimbursement fee is deducted automatically from the amount invested; it
cannot be paid separately. This purchase reimbursement fee does not apply to
investments in the Portfolios that are made by contributions of securities
in-kind or reinvestments of dividends or other distributions. See "PURPOSE OF
REIMBURSEMENT FEES --THE EMERGING MARKETS AND THE GLOBAL EQUITY PORTFOLIOS"
and "EXCHANGE PRIVILEGE" under "SHAREHOLDER SERVICES." 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, eligible 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.
Eligible investors in The Global Equity Portfolio may elect to pay the
purchase reimbursement fee or to invest by a contribution in-kind in
securities or by following another procedure that would have the same economic
effect as an in-kind purchase. 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 eligible investors who have an
existing investment counseling relationship with Delaware International or
an affiliate of Delaware to make investments in any of the Fund's Portfolios
by a contribution of securities in-kind to such Portfolios. See "PURCHASE OF
SHARES."
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HOW TO REDEEM
Shares of each Portfolio, except The Emerging Markets and The Global Equity
Portfolios, may be redeemed at any time, without cost, at the net asset value
per share of the relevant Portfolio next determined after receipt of the
redemption request. For The Emerging Markets and The Global Equity Portfolios,
shares may be redeemed at any time at the net asset value per share of the
relevant Portfolio next determined after receipt of the redemption request,
less a redemption reimbursement fee equal to 0.75% of such value in the case
of The Emerging Markets Portfolio and 0.30% in the case of The Global Equity
Portfolio. The fee is deducted automatically from the redemption proceeds. The
fee also applies in the case of an exchange of shares of The Emerging Markets
Portfolio or The Global Equity Portfolio for shares of another Portfolio. See
"EXCHANGE PRIVILEGE" under "SHAREHOLDER SERVICES" and "PURPOSE OF
REIMBURSEMENT FEES -- THE EMERGING MARKETS AND THE GLOBAL EQUITY PORTFOLIOS."
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, The International Fixed Income, The Global Equity and
The Emerging Markets 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. If a redemption of shares of The Emerging Markets Portfolio or The
Global Equity Portfolio is made in-kind, the redemption reimbursement fee that
is otherwise applicable will not be assessed. 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 each of The Aggressive Growth Portfolio and The Small-Cap Growth
Equity Portfolio (both of which seek long-term capital growth) as well as
The Small/Mid-Cap Value Equity 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 International Equity, The Labor Select International Equity, The Global
Fixed Income, The International Fixed Income, The Global Equity and The
Emerging Markets Portfolios will invest in securities of foreign issuers which
normally are denominated in foreign currencies and may hold foreign currency
directly. In addition, The Growth and Income Portfolio may invest up to 5% of
its assets, The Real Estate Investment Trust , The High-Yield Bond and The
Small-Cap Growth Equity Portfolios may invest up to 10% of their respective
total assets and The Diversified Core Fixed Income Portfolio may invest up to
20% of its total assets in foreign securities. Investments in securities of
non-United States issuers which are generally denominated in foreign
currencies involve certain risk and opportunity considerations not typically
associated with investing in United States companies. 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 Real Estate Investment Trust, The International Fixed Income,
The Global Equity, The Diversified Core Fixed Income and The Emerging Markets
Portfolios may engage in foreign currency options and futures transactions.
For a discussion of the risks associated with foreign securities see "FOREIGN
INVESTMENT INFORMATION" and for those concerning these hedging instruments see
"FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS," "FUTURES CONTRACTS AND OPTIONS
ON FUTURES CONTRACTS," "OPTIONS," "RISKS OF TRANSACTIONS IN OPTIONS, FUTURES
AND FORWARD CONTRACTS," all of which references appear under the heading
"ADDITIONAL INVESTMENT INFORMATION."
The International Equity, The Labor Select International Equity, The Global
Equity, The Global Fixed Income, The International Fixed Income, and to a more
limited extent, The Real Estate Investment Trust, The Diversified Core Fixed
Income and The High-Yield Bond Portfolios may commit their assets eligible for
foreign investment to securities of issuers located in emerging markets. The
Emerging Markets Portfolio will invest its assets primarily in securities of
companies that are located or operated in emerging markets. Investments in
securities of companies in emerging markets present a greater degree of risk
than tends to be the case for foreign investments in Western Europe and other
developed markets. Among other things, there is a greater possibility of
expropriation, nationalization, confiscatory taxation, income earned or other
special taxes, foreign exchange restrictions, limitations on the repatriation
of income and capital from investments, defaults in foreign government debt,
and economic, political or social instability. In addition, in many emerging
markets, there is substantially less publicly available information about
issuers and the information that is available tends to be of a lesser quality.
Economic markets and structures tend to be less mature and diverse and the
securities markets which are subject to less government regulation or
supervision may also be smaller, less liquid and subject to greater price
volatility. See "ADDITIONAL INVESTMENT INFORMATION--FOREIGN INVESTMENT
INFORMATION" for a more extensive discussion of these and other factors.
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The foreign securities in which The International Equity, The Labor Select
International Equity, The Global Fixed Income, The International Fixed Income,
The Global Equity and The Emerging Markets Portfolios (and The Real Estate
Investment Trust, The High-Yield Bond , The Diversified Core Fixed Income,
The Small-Cap Growth Equity and The Growth and Income Portfolios, up to 10%,
10%, 10%, 20%, 10% and 5% of their total assets, respectively) 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 Aggressive Growth, The Small/Mid-Cap Value Equity, The Real Estate
Investment Trust, The Small-Cap Growth Equity, The Growth and Income, The
Global Equity, The Diversified Core Fixed Income and The Emerging Markets
Portfolios also may, under certain circumstances, use certain futures
contracts and options on futures contracts, as well as options on securities.
The Portfolios will only enter into these transactions for hedging purposes.
See "FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS", "OPTIONS" and "RISKS
OF TRANSACTIONS IN OPTIONS, FUTURES AND FORWARD CONTRACTS," all of which
references appear under the heading "ADDITIONAL INVESTMENT INFORMATION."
The Real Estate Investment Trust Portfolios concentrate their investments in
the real estate industry. As a consequence, the net asset value of each
Portfolio can be expected to fluctuate in light of the factors affecting that
industry, and may fluctuate more widely than a portfolio that invests in a
broader range of industries. Each Portfolio may be more susceptible to any
single economic, political or regulatory occurrence affecting the real estate
industry.
The Real Estate Investment Trust and The Growth and Income Portfolios, by
investing primarily in securities of real estate investment trusts, are
subject to interest rate risk, in that as interest rates decline, the value of
each Portfolio's investments in real estate investment trusts can be expected
to rise. Conversely, when interest rates rise, the value of each Portfolio's
investments in real estate investment trusts holding fixed rate obligations
can be expected to decline. See "ADDITIONAL INVESTMENT INFORMATION--REITS."
The High-Yield Bond Portfolio invests primarily 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. The Diversified Core Fixed Income Portfolio may invest up to 30%
of its total assets in such 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."
The Emerging Markets Portfolio may invest up to 35% of its assets in
high-yield, high risk fixed-income securities, including Brady Bonds.
Consequently, greater investment risks may be involved with an investment in
this Portfolio. See "ADDITIONAL INVESTMENT INFORMATION--HIGH-YIELD, HIGH RISK
SECURITIES."
The Intermediate Fixed Income, The Aggregate Fixed Income, The Limited-Term
Maturity, The Global Fixed Income, The International Fixed Income and The
Diversified Core 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 Intermediate Fixed Income, The Aggregate Fixed
Income and The Diversified Core Fixed Income Portfolios 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
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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 Aggregate Fixed Income, The Diversified Core Fixed Income, The
Intermediate Fixed Income, The Limited-Term Maturity, The Growth and Income
and The Global Fixed Income Portfolios may invest in collateralized mortgage
obligations and those Portfolios, as well as The Real Estate Investment Trust
Portfolios, may invest in mortgage-backed securities. See "ADDITIONAL
INVESTMENT INFORMATION--MORTGAGE-BACKED SECURITIES."
Each of the 19 Portfolios may lend its portfolio securities, may invest in
repurchase agreements and may purchase securities on a when-issued basis.
While The Real Estate Investment Trust Portfolios, The Global Fixed Income
Portfolio, The International Fixed Income Portfolio , The Emerging Markets
Portfolio and The Asset Allocation Portfolio intend to seek to qualify as
"diversified" investment companies 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.
The Asset Allocation Portfolio's assets may be primarily invested in a
combination of the Portfolios. As a result, The Asset Allocaton Portfolio is
subject to the same risks as any of the Portfolios of the Fund in which it
invests. Moreover, The Asset Allocation Portfolio's investment performance may
be directly related to the investment performance of the underlying Portfolios
held by it. The ability of The Asset Allocation Portfolio to meet its
investment objective may thus be directly related to the ability of the
Portfolios of the Fund to meet their objectives as well as the allocation
among those underlying Portfolios by Delaware. There can be no assurance that
the investment objective of The Asset Allocation Portfolio or any of the
Portfolios of the Fund will be achieved.
Because The Asset Allocation Portfolio and the other Portfolios of the Fund
are separately managed, it is possible that certain underlying Portfolios in
which The Asset Allocation Portfolio invests may be acquiring securities at
the same time that other Portfolios of the Fund in which that Portfolio invests
are selling the same security. Similarly, it is possible that The Asset
Allocation Portfolio may directly acquire a security at the same time that a
Portfolio of the Fund in which it invests is selling the same security, or vice
versa. This practice could result in higher indirect transactions costs for
The Asset Allocation Portfolio, and thus adversely affect The Asset Allocation
Portfolio's returns, than would be the case if it were only investing directly
in securities.
Delaware has adopted Asset Allocation Guidelines (the "Guidelines") which
govern The Asset Allocation Portfolio's purchases and redemptions of shares of
the Portfolios of the Fund. Pursuant to these Guidelines, if the Manager
anticipates that The Asset Allocation Portfolio's allocation transaction will
disrupt the investment activities of a Portfolio of the Fund, the portfolio
managers of the relevant Portfolios will confer on steps to minimize adverse
effects on both The Asset Allocation Portfolio and the Portfolio of the Fund,
such as staggering the timing and amounts of such allocation transactions. In
addition, Delaware will attempt to minimize the number and size of allocation
transactions taking place at any one time while
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attempting to avoid losing investment opportunities for The Asset Allocation
Portfolio. As a result, The Asset Allocation Portfolio may, on occasion, be
unable to purchase or redeem shares of a Portfolio of the Fund as quickly or
in such amounts as they otherwise would in the absence of such Guidelines.
Such delays or changes in amounts may decrease the total return and/or
increase the volatility of The Asset Allocation Portfolio.
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, other than The Asset
Allocation, The Small-Cap Growth Equity and the Growth and Income Portfolios
is fundamental and may only be changed by a majority approval of that
Portfolio's shareholders. With respect to the The Asset Allocation, The
Small-Cap Growth Equity and the Growth and Income Portfolios, it is the Board
of Directors or Trustees policy to notify shareholders prior to a material
change in a Portfolio's objective. Unless otherwise noted, the investment
policies described below are not fundamental policies and may be changed
without shareholder approval. The Asset Allocation Portfolio may invest in the
Portfolios of the Fund. The Asset Allocation Portfolio may also invest
directly in the same kinds of securities, and may use the same investment
techniques, as any of the Portfolios of the Fund.
THE LARGE-CAP VALUE EQUITY PORTFOLIO
The Large-Cap Value 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 Depositary
Receipts actively traded in the United States. See "ADDITIONAL INVESTMENT
INFORMATION -- DEPOSITARY RECEIPTS" for a further description of American
Depositary Receipts. 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 S&P
or Aaa by Moody's) or be of comparable quality as determined by the investment
adviser. Appendix A--Ratings to 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
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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. See "PORTFOLIO TRANSACTIONS." 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.
Under normal market conditions, the Portfolio invests at least 65% of its
total assets in growth-oriented common stocks of domestic corporations. Such
companies, in the investment adviser's view, generally are those companies
that currently 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" for further
details concerning these and other investment policies.
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.
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The Portfolio will not invest 25% or more of its total assets in securities of
companies which conduct their principal business activities in specific
industries. The Portfolio expects to invest in small- to medium-sized
companies that have been in existence for at least three years (including the
operation of any predecessor company) but which have the potential, in the
investment adviser's judgment, for significant long-term capital growth. The
investment adviser assesses economic, industry, market and company
developments to select investments in promising emerging growth companies that
are expected to benefit from new technology, new products or services,
research discoveries, rejuvenated management and the like. However, the
Portfolio may invest in any equity security which, in the investment adviser's
judgment, provides the potential for significant capital appreciation.
The investment adviser believes that consistent earnings per share growth is
just as important as high absolute growth. Because the Portfolio seeks
long-term capital growth by investing primarily in small- to medium-sized
companies, its investments are likely to involve a higher degree of liquidity
risk and price volatility than larger capitalization securities.
The investment adviser does not normally intend to respond to short-term
market fluctuations or to acquire securities for the purpose of short-term
trading; however, the investment adviser may take advantage of short-term
opportunities that are consistent with its investment objective. It is
anticipated that the annual turnover rate of the Portfolio, under normal
circumstances, will not exceed 100%. See "PORTFOLIO TRANSACTIONS."
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, under normal market conditions, 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 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. See "ADDITIONAL INFORMATION" for further details
concerning these and other investment policies.
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
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entity established or financially supported by the national governments of one
or more countries to promote development or reconstruction. They include: The
World Bank, European Investment Bank, Asian Development Bank, European
Economic Community and the Inter-American Development Bank. Such fixed-income
securities will be, at the time of purchase, of the highest quality (e.g., AAA
by S&P or Aaa by Moody's) or of comparable quality as determined by the
Portfolio's investment adviser. The Portfolio may also invest in sponsored and
unsponsored American Depositary Receipts, European Depositary Receipts or
Global Depositary Receipts ("Depositary Receipts"). See "ADDITIONAL INVESTMENT
INFORMATION--DEPOSITARY RECEIPTS" for a further description of Depositary
Receipts.
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 market 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."
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THE SMALL/MID-CAP VALUE EQUITY PORTFOLIO
The Small/Mid-Cap Value Equity 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, pay dividends, generally represent the smallest 30% in terms of
market capitalization of U.S. equity securities listed on a national
securities exchange or NASDAQ, and, 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 Depositary
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 described above. 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
"DEPOSITARY 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 dividend paying 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 dividend paying, 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) dividend paying; and 2)
generally represent the smallest 30% in terms of market capitalization of U.S.
equity securities listed on a national securities exchange or NASDAQ.
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 Portfolio may also invest
in futures contracts and options on futures contracts subject to certain
limitations. See "FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS" under
"ADDITIONAL INVESTMENT INFORMATION."
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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. See "PORTFOLIO TRANSACTIONS." 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 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, under normal market conditions, 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 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
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.
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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."
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%. See "PORTFOLIO TRANSACTIONS."
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 PORTFOLIOS
The investment objective of each of The Real Estate Investment Trust
Portfolios is to achieve maximum long-term total return. Capital appreciation
is a secondary objective. Each 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 each Portfolio's total
assets will be invested in equity securities of real estate investment trusts
("REITs"). Each Portfolio will operate as a nondiversified fund as defined by
the 1940 Act.
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The Portfolios invest in equity securities of REITs and other real estate
industry operating companies ("REOCs"). For purposes of the Portfolios'
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
Portfolios' investments in equity securities of REITs and REOCs may include,
from time to time, sponsored or unsponsored American Depositary 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. Each Portfolio may also purchase preferred stock. Each
Portfolio may invest up to 10% of its assets in foreign securities, and in
convertible securities. See "ADDITIONAL INVESTMENT INFORMATION--FOREIGN
INVESTMENT INFORMATION," "DEPOSITARY RECEIPTS" and "CONVERTIBLE, DEBT AND
NON-TRADITIONAL EQUITY SECURITIES" for further discussion of these investment
policies. Each Portfolio may also invest in mortgage-backed securities. See
"MORTGAGE-BACKED SECURITIES" for more detailed information about this
investment policy.
Each 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,
each 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.
Although the Portfolios do not invest directly in real estate, the Portfolios
do invest primarily in REITs, and may purchase equity securities of REOCs.
Thus, because the Portfolio concentrate their investments in the real estate
industry, an investment in either 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 Portfolios 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 either 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."
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While the Portfolios do not intend to invest directly in real estate, either
Portfolio could, under certain circumstances, own real estate directly as a
result of a default on securities that it owns. In addition, if either
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.
Each 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 each 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 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%. See "PORTFOLIO TRANSACTIONS."
THE GLOBAL EQUITY PORTFOLIO
The objective of The Global Equity Portfolio is to achieve long-term growth
without undue risk to principal. The Portfolio seeks to achieve this objective
by investing in global equity securities that provide the potential for
capital appreciation and income. The Portfolio is a global fund. Under normal
circumstances, at least 65% of the Portfolio's assets will be invested in
equity 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. The Portfolio will invest in
a broad range of equity securities including common stocks, preferred stocks,
convertible securities and warrants. The Portfolio may also invest in
sponsored or unsponsored Depositary Receipts. See "DEPOSITARY RECEIPTS" under
"ADDITIONAL INVESTMENT INFORMATION."
The Portfolio will attempt to achieve its objective by investing in securities
traded in equity markets and currencies that Delaware International and
Delaware Investment Advisers (with respect to U.S. securities) believe offer
the best relative value within the global investment universe. A dividend
discount model will be employed to assess value across country boundaries.
When using a dividend discount analysis to value individual equity markets,
Delaware International and Delaware Investment Advisers (with respect to U.S.
securities) will look at future anticipated dividends and discount the value
of those dividends back to what they would be worth if they were being paid
today. Delaware International and Delaware Investment Advisers (with respect
to U.S. securities) will use this technique to attempt to compare the value of
different investments.
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In a global portfolio, currency return is also an integral component of an
investment's total return. Delaware International and Delaware Investment
Advisers (with respect to U.S. securities) will use a purchasing power parity
approach to access the value of individual currencies. Purchasing power parity
attempts to identify the amounts of goods and services that a dollar will buy
in the United States and compare that to the amount of a foreign currency
required to buy the same amount of goods and services in another country.
Eventually, currencies should trade at levels that would make it possible for
the dollar to buy the same amount of goods and services overseas as in the
United States. When the dollar buys less, the foreign currency may be
considered to be overvalued. When the dollar buys more, the currency may be
considered to be undervalued.
Simultaneous with identifying the most attractive equity markets and
currencies, Delaware International and Delaware Investment Advisers (with
respect to U.S. securities) will attempt to purchase undervalued securities.
Individual equity securities around the world will be selected on the basis of
an analysis of the issuing company's operations, financial statements and each
company's current valuation. In the selection process, Delaware International
and Delaware Investment Advisers (with respect to U.S. securities) will place
special emphasis on present dividend yield and expectations for dividend
growth.
The Portfolio may purchase securities in any foreign country, developed and
underdeveloped, or emerging market countries. 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 such countries. See "ADDITIONAL INVESTMENT
INFORMATION" for further details concerning these and other investment
policies.
The Portfolio may also seek to achieve growth through investment of up to 35%
of its assets in income producing debt securities such as U.S. or foreign
government or corporate bonds. In addition, for temporary defensive purposes,
the Portfolio may invest all or a substantial portion of its assets in high
quality debt instruments issued by foreign governments, their agencies,
instrumentalities or political subdivisions, the U.S. government, its agencies
or instrumentalities (and which are backed by the full faith and credit of the
U.S. government), or issued by foreign or U.S. companies and certain
short-term instruments. See "ADDITIONAL INVESTMENT INFORMATION" for further
details concerning these instruments. For example, the Portfolio may invest in
U.S. fixed-income markets when Delaware International believes that the global
equity markets are excessively volatile or overvalued so that the Fund's
objective cannot be achieved in such markets. Any corporate debt obligations
will be rated AA or better by Standard & Poor's Ratings Group ("S&P"), Aa or
better by Moody's Investors Service, Inc. ("Moody's"), or have an equivalent
rating from another nationally recognized statistical rating organization, or
if unrated, will be determined to be of comparable quality by Delaware
International or Delaware Investment Advisers, as relevant. The Portfolio may
also invest in the securities listed above pending investment of proceeds from
new sales of Portfolio shares and to maintain sufficient cash to meet
redemption requests.
It is anticipated that the annual portfolio turnover rate, under normal
circumstances, will not exceed 100%. See "PORTFOLIO TRANSACTIONS."
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THE EMERGING MARKETS PORTFOLIO
The objective of The Emerging Markets Portfolio is to achieve long-term
capital appreciation. The Portfolio seeks to achieve this objective by
investing primarily in equity securities of issuers located or operating in
emerging countries. The Portfolio is an international fund. Under normal
circumstances, at least 65% of the Portfolio's assets will be invested 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
emerging countries. The Portfolio will attempt to achieve its objective by
investing in a broad range of equity securities, including common stocks,
preferred stocks, convertible securities and warrants issued by companies
located or operating in emerging countries.
The Portfolio considers an "emerging country" to be any country which is
generally recognized to be an emerging or developing country by the
international financial community, including the World Bank and the
International Finance Corporation, as well as countries that are classified by
the United Nations or otherwise regarded by their authorities as developing.
In addition, any country that is included in the IFC Free Index or MSCI EMF
Index will be considered to be an "emerging country." As of the date of this
Prospectus, there are more than 130 countries which, in Delaware
International's judgment, are generally considered to be emerging or
developing countries by the international financial community, approximately
40 of which currently have stock markets. Within this group of developing or
emerging countries are included almost every nation in the world, except the
United States, Canada, Japan, Australia, New Zealand and most nations located
in Western and Northern Europe.
Currently, investing in many emerging countries is not feasible, or may, in
Delaware International's opinion, involve unacceptable political risks. The
Portfolio will focus its investments in those emerging countries where
Delaware International considers the economies to be developing strongly and
where the markets are becoming more sophisticated. Delaware International
believes that investment opportunities may result from an evolving long-term
international trend favoring more market-oriented economies, a trend that may
particularly benefit certain countries having developing markets. This trend
may be facilitated by local or international political, economic or financial
developments that could benefit the capital markets in such countries.
In considering possible emerging countries in which the Portfolio may invest,
Delaware International will place particular emphasis on certain factors, such
as economic conditions (including growth trends, inflation rates and trade
balances), regulatory and currency controls, accounting standards and
political and social conditions. It is currently anticipated that the
countries in which the Portfolio may invest will include, but not be limited
to, Argentina, Brazil, Chile, China, Columbia, The Czech Republic, Egypt,
Greece, Hong Kong, Hungary, India, Indonesia, Israel, Jamaica, Jordan, Kenya,
Korea, Malaysia, Mexico, Nigeria, Pakistan, Peru, the Philippines, Poland,
Portugal, Russia, South Africa, Sri Lanka, Taiwan, Thailand, Turkey, Venezuela
and Zimbabwe. As markets in other emerging countries develop, Delaware
International expects to expand and further diversify the countries in which
the Portfolio invests.
Although not an exclusive list of criteria to be considered by Delaware
International, an emerging country equity security is one issued by a company
that, in the opinion of Delaware International, exhibits one or more of the
following characteristics: (i) its principal securities trading market is an
emerging country, as defined above; (ii) while traded in any market, alone or
on a consolidated basis, the company derives 50% or more of its annual
revenues from either goods produced, sales made or services performed in
emerging countries; or (iii) it is organized under the laws of, and has a
principal office in, an emerging country. Determinations as to eligibility
will be made by Delaware International based on publicly available information
and inquiries made of the companies. See "ADDITIONAL INVESTMENT
INFORMATION--FOREIGN INVESTMENT INFORMATION."
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The Portfolio may invest in Depositary Receipts. See "DEPOSITARY RECEIPTS" and
"INVESTMENT COMPANY SECURITIES" under "ADDITIONAL INVESTMENT INFORMATION."
The Portfolio also may invest in convertible preferred stocks that offer
enhanced yield features, such as Preferred Equity Redemption Cumulative Stock,
and certain other non-traditional equity securities. See "ADDITIONAL
INVESTMENT INFORMATION--CONVERTIBLE, DEBT AND NON-TRADITIONAL EQUITY
SECURITIES."
Up to 35% of the Portfolio's net assets may be invested in fixed-income
securities issued by emerging country companies, and foreign governments,
their agencies, instrumentalities or political subdivisions, all of which may
be high-yield, high risk fixed-income securities rated lower than BBB by S&P
and Baa by Moody's or, if unrated, are considered by Delaware International to
be of equivalent quality and which present special investment risks. The
Portfolio may also invest in Brady Bonds and zero coupon bonds. See
"HIGH-YIELD, HIGH RISK SECURITIES" and "ZERO COUPON AND PAY-IN-KIND BONDS"
under "ADDITIONAL INVESTMENT INFORMATION." The Portfolio may invest in
securities issued in any currency and may hold foreign currency. Securities of
issuers within a given country may be dominated in the currency of another
country or in multinational currency units, including ECU. See "ADDITIONAL
INVESTMENT INFORMATION--FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS."
For temporary defensive purposes, the Portfolio may invest all or a
substantial portion of its assets in the high quality debt instruments in
which The International Equity Portfolio may invest. See "INVESTMENT
OBJECTIVES, POLICIES AND RISK CONSIDERATIONS--THE INTERNATIONAL EQUITY
PORTFOLIO."
See "ADDITIONAL INVESTMENT INFORMATION" for a further discussion about the
above and other securities and investment practices.
It is anticipated that the annual portfolio turnover rate, under normal
circumstances, will not exceed 100%. See "PORTFOLIO TRANSACTIONS."
THE INTERMEDIATE FIXED INCOME PORTFOLIO
The Intermediate 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. The benchmark against which the
Portfolio's performance will be measured is the Lehman Brothers
Government/Corporate Intermediate Bond Index.
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 as 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.
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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," "ASSET-BACKED 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 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.
THE AGGREGATE FIXED INCOME PORTFOLIO
The Aggregate 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. The benchmark against which the
Portfolio's performance will be measured is the Lehman Brothers Aggregate Bond
Index.
It seeks maximum long-term total return by investing in debt securities having
a broad range of maturities. However, the Portfolio typically will have 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," "ASSET-BACKED
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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 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.
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
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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."
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. 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. See "ADDITIONAL INVESTMENT INFORMATION" for further
details concerning these and other investment policies.
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
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sponsored or unsponsored American Depositary Receipts or European Depositary
Receipts. While the Portfolio may purchase securities of issuers in any
foreign country, developed or underdeveloped, it is currently anticipated that
the countries in which the Portfolio may invest will include, but not be
limited to, Canada, Germany, the United Kingdom, New Zealand, France, The
Netherlands, Belgium, Spain, Switzerland, Ireland, Denmark, Portugal, Italy,
Austria, Norway, Sweden, Finland, Luxembourg, Japan and Australia. With
respect to certain countries, investments by an investment company may only be
made through investments in closed-end investment companies that in turn are
authorized to invest in the securities of issuers in such countries. Any
investment the Portfolio may make in other investment companies is limited in
amount by the 1940 Act and would involve the indirect payment of a portion of
the expenses, including advisory fees, of such other investment companies. See
"ADDITIONAL INVESTMENT INFORMATION--FOREIGN INVESTMENT INFORMATION" and
"DEPOSITARY 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
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made. The investment adviser's management approach is long-term in
orientation, but, it is expected that the annual turnover of the portfolio
will be approximately 200% under normal circumstances. See "PORTFOLIO
TRANSACTIONS" and "TAXES."
The Portfolio will attempt to achieve its objective by investing in a broad
range of fixed-income securities, including debt obligations of foreign
companies which are generally rated A or better by S&P or Moody's or, if
unrated, are deemed to be of comparable quality by Delaware International, as
well as, foreign government securities with the 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. See
"ADDITIONAL INVESTMENT INFORMATION" for further details about these and other
investment policies.
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 Depositary
Receipts or European Depositary 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
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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 "DEPOSITARY
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.
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.
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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%. See "PORTFOLIO TRANSACTIONS."
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 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
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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.
THE DIVERSIFIED CORE FIXED INCOME PORTFOLIO
The objective of the Portfolio is to seek to provide investors with maximum
long-term total return, consistent with reasonable risk. The Portfolio will
seek to achieve its objective by allocating its investments principally among
the following three sectors of the fixed-income securities markets:
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(1) a U.S. investment grade sector, consisting of investment grade debt
obligations issued or guaranteed by the U.S. government, its agencies or
instrumentalities, or by U.S. companies;
(2) a U.S. high-yield sector, consisting of high-yielding, lower-rated or
unrated fixed-income securities issued by U.S. companies; and
(3) an international sector, consisting of obligations of foreign governments,
their agencies and instrumentalities, and other fixed-income securities of
issuers in foreign countries and denominated in foreign currencies.
The investment adviser will determine the amount of assets of the Portfolio
that will be allocated to each of the three sectors in which the Portfolio
will invest, based on its analysis of economic and market conditions and its
assessment of the returns and potential for appreciation that can be achieved
from investments in each of the three sectors. The investment adviser will
periodically reallocate the Portfolio's assets, as it deems necessary, and,
the relative proportion of the Portfolio's assets to be allocated among
sectors is described below.
U.S. Investment Grade Sector
Under normal circumstances, between 50% and 90% of the Portfolio's total
assets will be invested in the U.S. investment grade sector. In managing the
Portfolio's assets allocated to the investment grade sector, the investment
manager will invest principally in debt obligations issued or guaranteed by
the U.S. government, its agencies or instrumentalities and by U.S.
corporations. The corporate debt obligations in which the Portfolio may invest
include bonds, notes, debentures and commercial paper of U.S. companies.
The U.S. government securities in which the Portfolio may invest 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. See "U.S. GOVERNMENT SECURITIES" under "ADDITIONAL INVESTMENT
INFORMATION" for a discussion of these types of securities.
The investment grade sector of the Portfolio's assets may also be invested in
mortgage-backed securities issued or guaranteed by the U.S. government, its
agencies or instrumentalities or by government sponsored corporations. Other
mortgage-backed securities in which the Portfolio may invest are issued by
certain private, non-government entities. Two principal types of
mortgage-backed securities are collateralized mortgage obligations (CMOs) and
real estate mortgage investment conduits (REMICs). See "MORTGAGE-BACKED
SECURITIES" under "ADDITIONAL INVESTMENT INFORMATION" for a discussion of
these types of securities. Subject to the quality limitations set forth in
this Prospectus, the Portfolio 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, recreational vehicle and other
loans, wholesale dealer floor plans and leases. See "ASSET-BACKED SECURITIES"
under "ADDITIONAL INVESTMENT INFORMATION."
Securities purchased by the Portfolio within the investment grade sector will
be rated in one of the four highest rating categories or will be unrated
securities that are of comparable quality as determined by the investment
manager. The four highest rating categories are, for example, AAA, AA, A or
BBB by S&P and Fitch, or Aaa, Aa, A or Baa by Moody's. Debt securities within
the top three categories comprise what are known as high-grade bonds and are
regarded as having a strong capacity to pay principal and interest. Securities
in the fourth category, known as medium-grade bonds, are regarded as having an
adequate capacity to pay principal and interest but with
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greater vulnerability to adverse economic conditions and speculative
characteristics. See Appendix A - Ratings in this Prospectus for more rating
information.
U.S. High-Yield Sector
Under normal circumstances, between 5% and 30% of the Portfolio's total assets
will be allocated to the U.S. high-yield sector. The investment adviser will
invest the Portfolio's assets that are allocated to the domestic high-yield
sector primarily in those securities having a liberal and consistent yield and
those tending to reduce the risk of market fluctuations. The Portfolio may
invest in domestic corporate debt obligations, including, notes, which may be
convertible or non-convertible, commercial paper, units consisting of bonds
with stock or warrants to buy stock attached, debentures, convertible
debentures, zero coupon bonds and pay-in-kind securities ("PIKs").
See "ZERO COUPON BONDS AND PAY-IN-KIND BONDS" under "ADDITIONAL INVESTMENT
INFORMATION."
The Portfolio will invest in both rated and unrated bonds. The rated bonds
that the Portfolio may purchase in this sector will generally be rated BB or
lower by Standard & Poor's Rating Group ("S&P") or Fitch Investors Service,
Inc. ("Fitch"), Ba or lower by Moody's Investors Service, Inc. ("Moody's"), or
similarly rated by another nationally recognized statistical rating
organization. See Appendix A--Ratings in this Prospectus for more rating
information and "HIGH YIELD, HIGH RISK SECURITIES" under "ADDITIONAL
INVESTMENT INFORMATION" and "INVESTMENT OBJECTIVES, POLICIES AND RISK
CONSIDERATIONS - THE HIGH-YIELD BOND PORTFOLIO" for a description of the risks
associated with investing in lower-rated fixed-income securities. Unrated
bonds may be more speculative in nature than rated bonds.
International Sector
Under normal circumstances, between 5% and 20% of the Portfolio's total assets
will be invested in the international sector. Delaware International, the
sub-adviser will invest the assets of the Portfolio that are allocated to the
international sector primarily in fixed-income securities of issuers organized
or having a majority of their assets or deriving a majority of their operating
income in foreign countries. These fixed-income securities include foreign
government securities, debt obligations of foreign companies, and securities
issued by supranational entities.
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
International Bank for Reconstruction and Development (more commonly known as
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.
The Portfolio may invest in securities issued in any currency and may hold
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 the European Currency Unit. The Portfolio will, 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. See "FORWARD FOREIGN
CURRENCY EXCHANGE CONTRACTS" and "RISKS OF OPTIONS, FUTURES AND FUTURES
CONTRACTS" under "ADDITIONAL INVESTMENT INFORMATION" for a further description
of the Portfolio's foreign currency transactions.
The Portfolio will invest in both rated and unrated foreign securities. It may
purchase securities of issuers in any foreign country, developed and
underdeveloped. These investments may include direct obligations of issuers
located in emerging markets countries and so-called Brady Bonds. However,
investments in emerging markets,
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Brady Bonds and in foreign securities that are rated below investment grade
(e.g. lower than BBB by S&P), or if unrated, judged to be of comparable
quality by the sub-adviser, will in the aggregate be limited to no more than
5% of the Portfolio's total assets. See, "FOREIGN INVESTMENT INFORMATION" and
"HIGH-YIELD, HIGH RISK SECURITIES" under "ADDITIONAL INVESTMENT INFORMATION"
for a description and discussion of the risks of investing in emerging markets
securities, Brady Bonds and securities rated lower than investment grade.
The Portfolio may invest in sponsored and unsponsored American Depositary
Receipts, European Depositary Receipts, or Global Depositary Receipts. See
"DEPOSITARY RECEIPTS" under "ADDITIONAL INVESTMENT INFORMATION". The Portfolio
may also invest in zero coupon bonds and may purchase shares of other
investment companies. See "ZERO COUPON AND PAY-IN-KIND BONDS" and "INVESTMENT
COMPANY SECURITIES" under "ADDITIONAL INVESTMENT INFORMATION".
In unusual market conditions, in order to meet redemption requests, for
temporary defensive purposes, and pending investment, the Portfolio may hold a
substantial portion of its assets in cash or short-term fixed-income
obligations. See, "ADDITIONAL INVESTMENT INFORMATION--SHORT TERM INVESTMENTS."
The Portfolio may also use a wide range of hedging instruments, including
options, futures contracts and options on futures contracts subject to certain
limitations. See "FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS",
"OPTIONS" and "RISKS OF OPTIONS, FUTURES AND FUTURES CONTRACTS" under
"ADDITIONAL INVESTMENT INFORMATION". The Portfolio may invest in repurchase
agreements, but it normally does so only to invest cash balances. The
Portfolio is permitted to borrow money.
THE GROWTH AND INCOME PORTFOLIO
The Portfolio's investment objective is capital appreciation and income. The
Portfolio will seek to achieve its objectives by investing primarily in
income-producing common stocks, with a focus on common stocks that the
investment adviser believes have the potential for above average dividend
increases over time. Under normal circumstances, the Portfolio will generally
invest at least 65% of its total assets in dividend paying common stocks.
In selecting stocks for the Portfolio, the investment adviser will focus
primarily on dividend paying common stock issued by companies with market
capitalization in excess of $100 million but is not precluded from purchasing
shares of companies with market capitalizations of less than $100 million. In
seeking stocks with potential for above average dividend increases, the
investment adviser will consider such factors as the historical growth rate of
a Company's dividend, the frequency of prior dividend increases, the issuing
company's potential to generate cash flows and the price/earnings multiple of
the stock relative to the market. The investment adviser will generally avoid
stocks that it believes are overvalued and may select stocks with current
dividend yields that are lower than the current yield of the Standard & Poor's
500 Stock Index ("S&P 500") in exchange for anticipated dividend growth.
While management believes that the Portfolio's objectives may best be attained
by investing in common stocks, the Portfolio may also invest in other
securities including, but not limited to, convertible and preferred
securities, shares or convertible bonds issued by real estate investment trust
(REITS), rights and warrants to purchase common stock and various types of
fixed-income securities, such as U.S. government and government agency
securities, corporate debt securities, and bank obligations, and may also
engage in options and futures transactions. See "CONVERTIBLE, DEBT AND
NON-TRADITIONAL EQUITY
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SECURITIES", "MORTGAGE-BACKED SECURITIES", "REITS", "OPTIONS" AND "FUTURES
CONTRACTS AND OPTIONS ON FUTURES CONTRACTS" under "ADDITIONAL INVESTMENT
INFORMATION". The Portfolio may invest up to 5% of its assets in foreign
securities and, without limitation in sponsored and unsponsored ADRs that are
actively traded in the U.S. See "DEPOSITARY RECEIPTS" under "ADDITIONAL
INVESTMENT INFORMATION".
In addition, in unusual market conditions, in order to meet redemption
requests, for temporary defensive purposes and pending investment, the
Portfolio may hold a substantial portion of its assets in cash or short-term
fixed-income obligations. See "SHORT-TERM INVESTMENTS" under "ADDITIONAL
INVESTMENT INFORMATION" for a discussion of this and other investment
policies.
THE SMALL-CAP GROWTH EQUITY PORTFOLIO
The Portfolio's investment objective is long-term capital appreciation. The
Portfolio seeks to achieve its investment objective by investing primarily (at
least 65% of its total assets) in equity securities (including convertible
securities) of companies which the investment adviser believes have the
potential for high earnings growth and which generally represent the smallest
25% in terms of market capitalization of U.S. equity securities listed on a
national securities exchange or NASDAQ. The Portfolio has been designed to
provide investors with potentially greater long-term rewards than provided by
an investment in a fund that seeks capital appreciation from common stocks of
companies with more established earnings histories.
The Portfolio will invest in equity securities of companies the investment
adviser believes to be undervalued and to have the potential for high earnings
growth. Companies in which the Portfolio invests generally will meet one or
more of the following criteria: high historical earnings-per-share ("EPS")
growth; high projected future EPS growth; an increase in research analyst
earnings estimates; attractive relative price to earning ratios; and high
relative discounted cash flows. In selecting the Portfolio's investments, the
investment adviser also focuses on companies with capable management teams,
strong industry positions, sound capital structures, high returns on equity,
high reinvestment rates and conservative financial accounting policies.
In pursuing its objective, the Portfolio anticipates that it will invest
substantially all, and under normal conditions not less than 65%, of its
assets in common stocks, preferred stocks, convertible bonds, convertible
debentures, convertible notes, convertible preferred stocks and warrants or
rights. To the extent that the Portfolio invests in convertible debt
securities, those securities will be purchased on the basis of their equity
characteristics, and ratings, if any, of those securities will not be an
important factor in their selection. In addition, under normal market
conditions, no more than 35% of the Portfolio's total assets may be invested
in debt securities of corporate and governmental issues. See "CONVERTIBLE,
DEBT AND NON-TRADITIONAL EQUITY SECURITIES" under "ADDITIONAL INVESTMENT
INFORMATION".
At no time will the investments of the Portfolio in bank obligations,
including time deposits, exceed 25% of the value of the Portfolio's assets.
The Portfolio may engage in options and futures transactions. See "OPTIONS"
and "FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS" under "ADDITIONAL
INVESTMENT INFORMATION." The Portfolio may also invest up to 10% of its assets
in foreign securities which may include Global Depositary Receipts and,
without limitation, in sponsored and unsponsored ADRs that are
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actively traded in the U.S. See "DEPOSITARY RECEIPTS" under "ADDITIONAL
INVESTMENT INFORMATION."
In addition, in unusual market conditions, in order to meet redemption
requests, for temporary defensive purposes and pending investment, the
Portfolio may hold a substantial portion of its assets in cash or short-term
fixed-income obligations. See "SHORT-TERM INVESTMENTS" under "ADDITIONAL
INVESTMENT INFORMATION" for a discussion of these and other investment
policies.
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THE ASSET ALLOCATION PORTFOLIO
The investment objective of the Portfolio is to seek capital appreciation with
current income as a secondary objective. The Portfolio seeks to achieve its
objective by investing primarily in domestic equity and fixed income
securities, including domestic equity and fixed income Portfolios of the Fund.
The Portfolio may also invest in international equity and fixed income
securities, including international equity and fixed income Portfolios of the
Fund. The Portfolio will generally invest at least 20% of its net assets in
fixed income securities, including fixed-income Portfolios of the Fund.
The Portfolio will pursue its investment objective through active asset
allocation implemented primarily with investments in a combination of the
Portfolios of the Fund. The Portfolio may also separately invest directly in
the same securities and employ the same investment strategies as any of the
Portfolios of the Fund, to the extent consistent with the Portfolio's
investment objectives. The Portfolio will invest directly in securities or
other investment instruments for such purposes as avoiding undue disruption of
the activities of the Portfolios of the Fund, hedging of the Portfolios'
investment positions, or to make investments in asset classes not available in
the Portfolios of the Fund. While it is anticipated that at most times the
Portfolio will be primarily invested in the Portfolios of the Fund, it is
possible, from time to time, for the Portfolio to be substantially invested
directly in securities. The investment objective of the Portfolio is
considered a "non-fundamental policy," which means that it may be changed
without approval of the Portfolio's shareholders. There is no assurance that
the Portfolio will achieve its objective.
As described above, the Portfolios of the Fund include funds investing in U.S.
and foreign stocks, bonds, and money market instruments. At any point in time,
it can be expected that the Portfolio will invest in a different combination
of securities and Portfolios of the Fund. In allocating the Portfolio's assets,
Delaware will evaluate the expected return of the Portfolios of the Fund, the
volatility of the Portfolios of the Fund (i.e., the variability of returns from
one period to the next), and the correlation of the Portfolios of the Fund (i.e.
the degree to which the Portfolios of the Fund move together).
The allocation of the assets of the Portfolio will be determined by Delaware.
Delaware is the investment manager for the Portfolio. Delaware or its
affiliates also serve as the investment manager to each Portfolio of the Fund.
In determining the asset allocation of the Portfolio, Delaware will establish
an allocation according to asset classes and will implement such allocation
through investment in an appropriate combination of securities and Portfolios
of the Fund.
The Portfolios of the Fund that will currently be considered for investment by
The Asset Allocation Portfolio are listed below, grouped within broad asset
classes. The asset class headings below are provided for convenience and are
approximate in nature. For more detailed information on the investment
policies of each Portfolio of the Fund, see the discussion of each such
Portfolio in this section. The list of Portfolios of the Fund may change from
time to time, and Portfolios of the Fund may be added or deleted upon the
recommendation of Delaware without shareholder approval.
Asset Class Portfolios of the Fund
----------- ----------------------
U.S. Equity The Aggressive Growth Portfolio
The Large-Cap Value Equity Portfolio
The Growth and Income Portfolio
The Small-Cap Growth Equity Portfolio
The Global Equity Portfolio
The Real Estate Investment Trust Portfolio II
The Small/Mid-Cap Value Equity Portfolio
International Equity The Emerging Markets Portfolio
The Global Equity Portfolio
The International Equity Portfolio
The Labor Select International Equity Portfolio
Fixed Income The Aggregate Fixed Income Portfolio
The Diversified Core Fixed Income Portfolio
The Intermediate Fixed Income Portfolio
The Global Fixed Income Portfolio
The High-Yield Bond Portfolio
The International Fixed Income Portfolio
The Limited-Term Maturity Portfolio
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The percentage ranges targeted for the Portfolio by broad asset class are set
forth below. The percentage ranges applicable to each asset class for the
Portfolio may be changed from time to time by Delaware without the approval of
shareholders.
Percentage Ranges of Investment in Asset Classes
Asset Class [_______________]
----------- -----------------
U.S. Equity 30%-70%
International Equity 5%-30%
Fixed Income 20%-65%
Cash 0%-35%
The Portfolio will generally at all times be invested in at least three
Portfolios of the Fund, consistent with the table above. The Portfolio may
invest up to 100% of its total assets in cash or other money market
instruments for temporary, defensive purposes.
The Portfolio will indirectly bear its pro rata share of the fees and expenses
incurred by the Portfolios of the Fund that are applicable to direct
shareholders of such Portfolios of the Fund. The investment returns of the
Portfolio, therefore, will be net of the expenses of the Portfolios of the Fund
in which it is invested.
The Portfolio is subject to an exemptive order from the SEC which permits the
Portfolio to invest directly in the same securities which the Portfolios of
the Fund may invest. Pursuant to the order, the Portfolio may, to the extent
consistent with its investment objective, invest its assets directly in the
same types of securities as those in which the Portfolios of the Fund invest.
In addition, pursuant to the order, the Portfolio may, to the extent
consistent with its investment objective, engage directly in the same types of
investment strategies as those in which each Portfolio of the Fund may engage.
The Portfolio uses such investment strategies to hedge investment positions,
including investments directly in securities and investments in the Portfolios
of the Fund, to protect the Portfolio against a decline in an underlying
Portfolio's value. The Portfolio does not intend to engage in these investment
strategies for non-hedging purposes such that more than 5% of its assets will
be exposed.
The value of the Portfolio's shares will increase as the value of the
securities owned by the Portfolio increases and will decrease as the value of
the Portfolio's investments decrease. In addition, the Portfolio's share
prices and yields will fluctuate in response to movements in the securities
markets as a whole.
The Portfolio's assets may be primarily invested in a combination of the
underlying Portfolios. As a result, the Portfolio's investment performance may
be directly related to the investment performance of the underlying Portfolios
held by it. The ability of the Portfolio to meet its investment objective may
thus be directly related to the ability of the Portfolios of the Fund to meet
their objectives as well as the allocation among those Portfolios of the Fund
by the Manager. There can be no assurance that the investment objective of the
Portfolio or any Portfolio of the Fund will be achieved.
As described in this section, the underlying Portfolios may engage in a
variety of investment strategies which involve certain risks. Moreover, the
Portfolio may, pursuant to an exemptive order granted by the SEC, to the
extent consistent with its investment objectives, invest in the same
securities and employ the same investment strategies as any of the Portfolios
of the Fund. The Portfolio may therefore be subject to some of
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the risks resulting from these strategies. The Portfolio, to the extent
consistent with its investment objectives, and certain of the Portfolios of
the Fund, may purchase foreign securities; purchase high yielding, high risk
debt securities (commonly referred to as "junk bonds"); enter into foreign
currency transactions; engage in options transactions; engage in futures
contracts and options on futures; purchase zero coupon bonds and pay-in-kind
bonds; purchase restricted and illiquid securities; enter into forward roll
transactions; purchase securities on a when-issued or delayed delivery basis;
enter into repurchase agreements; borrow money; loan portfolio securities and
engage in various other investment strategies. Further information on these
investment strategies can be found under "ADDITIONAL INVESTMENT INFORMATION"
and in the Statement of Additional Information.
Because the underlying Portfolios are separately managed, it is possible that
certain Portfolios of the Fund in which the Portfolio invests may be acquiring
securities at the same time that other underlying Portfolios in which the
Portfolio invests are selling the same security. Similarly, it is possible
that the Portfolio may directly acquire a security at the same time that a
Portfolio of the Fund in which it invests is selling the same security, or vice
versa. This practice could result in higher indirect transactions costs for
the Portfolio, and thus adversely effect the Portfolio's returns, than would
be the case if the Portfolio were only investing directly in securities.
The Portfolio is considered a nondiversified investment company under the
regulations which govern mutual funds because it may invest in a limited
number of securities and underlying Portfolios. As a result, the Portfolio may
be subject to greater risk with respect to its individual portfolio than a
fund that is more broadly diversified among a number of issuers. However, most
of the Portfolios of the Fund themselves are diversified investment companies.
The Portfolio may not concentrate in any particular industry, sector or
foreign government security (except for investment companies, to the extent
that it is considered an industry or sector).
Delaware has adopted Asset Allocation Guidelines (the "Guidelines") which
govern the Portfolio's purchases and redemptions of shares of the Portfolios
of the Fund. Pursuant to these Guidelines, if the Asset Allocation Portfolio's
manager anticipates that the Portfolio's allocation transaction will disrupt
the investment activities of a Portfolio of the Fund, the Asset Allocation
Portfolio's manager and the manager of the relevant Portfolio of the Fund will
confer on steps to minimize adverse effects on both the Portfolio and the
Portfolio of the Fund, such as staggering the timing and amounts of such
allocation transactions. In addition, the Asset Allocation Portfolio's manager
will attempt to minimize the number and size of allocation transactions taking
place at any one time while attempting to avoid losing investment
opportunities for the Portfolio. As a result, the Portfolio may, on occasion,
be unable to purchase or redeem shares of an underlying Portfolio as quickly
or in such amounts as they otherwise would in the absence of such Guidelines.
Such delays or changes in amounts may decrease the total return and/or
increase the volatility of the Portfolio.
* * *
For a description of the Portfolios' other investment policies and a further
discussion of some of the policies described above, see "ADDITIONAL INVESTMENT
INFORMATION."
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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 Chase Manhattan Bank or Bankers
Trust Company ("Custodian Banks"). In addition, a purchase reimbursement fee
equal to 0.75% of the dollar amount invested is charged to investors in shares
of The Emerging Markets Portfolio and paid to the Portfolio; for The Global
Equity Portfolio, the reimbursement fee paid to the Portfolio is equal to
0.40% of the dollar amount invested. See "HOW TO INVEST" and "PURPOSE OF
REIMBURSEMENT FEES -- THE EMERGING MARKETS AND THE GLOBAL EQUITY PORTFOLIOS."
Shares of The International Equity Portfolio may, under certain circumstances,
be required to be purchased in-kind, as noted below. Eligible investors in The
Global Equity Portfolio may elect to follow these procedures in lieu of paying
a purchase reimbursement fee. 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 eligible 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.
The minimum initial investment for a Portfolio is $1,000,000.
By Federal Funds Wire
Purchases of shares of a Portfolio may be made by having your bank wire
Federal Funds to CoreStates Bank, N.A. as described below. 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
CoreStates Bank, N.A., Philadelphia, PA, ABA #031000011, DSC Wire Purchase
Bank Account #1412893401. The funds should be sent to the attention of
Delaware Pooled Trust, Inc. (be sure to have your bank include the name of the
Portfolio(s) selected, the account number assigned to you and your account
name). Federal Funds purchase orders will be accepted only on a day on which
the Fund, the NYSE and the Custodian Banks 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
*Account registrations for The Asset Allocation Portfolio will be forwarded to
Foundation Funds.
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By Mail
Purchases of shares of a Portfolio may also be made by mailing a check payable
to the specific Portfolio selected to the above address (be sure to complete
an Investment Application before sending your check).
Purchase Price
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-Kind Purchases or Similar Procedures (The International Equity and The
Global Equity Portfolios)
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 Banks
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. In lieu of paying the purchase
reimbursement fee otherwise payable by investors in The Global Equity
Portfolio, such investors may follow the same procedures required for The
International Equity Portfolio. See "VALUATION OF SHARES." Investors in The
International Equity Portfolio required to follow these procedures and those
proposing to invest in The Global Equity Portfolio electing to do so 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 CoreStates Bank, N.A. 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 by submitting a request in accordance with the instructions
provided below. The Fund will redeem shares of each Portfolio, other than The
Emerging Markets and The Global Equity Portfolios, without cost at its net
asset value next determined after receipt of your redemption request. For
redemptions of shares of The Emerging Markets Portfolio, a redemption
reimbursement fee equal to 0.75% of the amount redeemed is deducted
automatically and paid to the Portfolio; for The Global Equity Portfolio, the
reimbursement fee paid to the Portfolio is equal to 0.30% of the amount
redeemed. See "HOW TO REDEEM" and "PURPOSE OF REIMBURSEMENT FEES -- THE
EMERGING MARKETS AND THE GLOBAL EQUITY PORTFOLIOS." On days that the Fund, the
NYSE and the Custodian Banks 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, except the reimbursement fee assessed to
investors in The Emerging Markets Portfolio and The Global Equity Portfolio.
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, The
International Fixed Income Portfolio, The Global Equity Portfolio and The
Emerging Markets 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
*Requests relating to The Asset Allocation Portfolio will be forwarded to
Foundation Funds.
"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.
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By Telephone
If you have previously elected the Telephone Redemption Option on the Account
Registration Form, you can request a redemption of your shares by calling the
Fund and requesting the redemption proceeds be wired to the commercial bank or
account designation identified in the Account Registration Form. Shares cannot
be redeemed by telephone if stock certificates are held for those shares or,
in the case of The International Equity Portfolio, The Labor Select
International Equity Portfolio, The Global Fixed Income Portfolio, The
International Fixed Income Portfolio, The Global Equity Portfolio or The
Emerging Markets 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 priced 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, The International Fixed
Income, The Global Equity and the Emerging Markets 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, The
International Fixed Income Portfolio, The Global Equity Portfolio or The
Emerging Markets Portfolio will, under normal circumstances, and if applicable
law permits, 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 will 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.
Eligible 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 eligible investors.
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IMPORTANT REDEMPTION INFORMATION
Because the Fund's shares are sold to institutions and high net-worth
individuals investors with a relatively high investment minimum, Fund
shareholders likely will hold a significant number of Fund shares. For this
reason, the Fund requests that shareholders proposing to make a large
redemption order give the Fund at least ten days advanced notice of any such
order. This request can easily be satisfied by calling the Fund at
(1-800-231-8002), and giving notification of your future intentions. Once a
formal redemption order is received, the Fund, in the case of redemptions to
be made in cash, normally will make payment for all shares redeemed under this
procedure within three business days of receipt of the order. In no event,
however, will payment be made more than seven days after receipt of a
redemption request in good order. The Fund may suspend the right of redemption
or postpone the date at times when the NYSE is closed, or under any emergency
circumstances as determined by the Securities and Exchange Commission
("Commission").
With respect to The International Equity, The Labor Select International
Equity, The Global Fixed Income, The International Fixed Income, The Global
Equity and The Emerging Markets 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.
PURPOSE OF REIMBURSEMENT FEES -- THE EMERGING MARKETS AND THE GLOBAL EQUITY
PORTFOLIOS
The purchase and redemption transaction fees are designed to reflect an
approximation of the brokerage and related transaction costs associated with
the investment of an investor's purchase amount or the disposition of assets
to meet redemptions, and to limit the extent to which The Emerging Markets
Portfolio or The Global Equity Portfolio (and, indirectly, the Portfolio's
existing shareholders) would have to bear such costs. These costs include: (1)
brokerage costs; (2) market impact costs, i.e., the increase in markets prices
which may result when a Portfolio purchases or sells thinly traded stocks; and
(3) the effect of the "bid-asked" spread in international markets.
The fees represent the manager's estimate of the brokerage and other
transaction costs incurred by a Portfolio in purchasing and selling portfolio
securities, especially international stocks. Without the fee, a Portfolio
would incur these costs directly, resulting in reduced investment performance
for all its shareholders. With the fee, the transaction costs of purchasing
and selling stocks are borne not by all existing shareholders, but only by
those investors making transactions. Also, when a portfolio acquires
securities of companies in emerging markets, transaction costs incurred when
purchasing or selling stocks are extremely high. There are three components of
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transaction costs - brokerage fees, the difference between the bid/asked
spread and market impact. Each one of these factors is significantly more
expensive in emerging market countries than in the United States, because of
less competition among brokers, lower utilization of technology on the part of
the exchanges and brokers, the lack of derivative instruments and generally
less liquid markets. Consequently, brokerage commissions are high, bid/asked
spreads are wide, and the market impact is significant in those markets. In
addition to these customary costs, most foreign countries have exchange fees
or stamp taxes.
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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 Aggregate Fixed Income, The Diversified
Core Fixed Income, The Intermediate Fixed Income, The Limited-Term Maturity ,
The Global Fixed Income, The Asset Allocation and The Growth and Income
Portfolios may invest in mortgage-backed securities issued or guaranteed by
the U.S. government, its agencies or instrumentalities or by government
sponsored corporations. Those securities include, but are not limited to, GNMA
certificates. Such securities differ from other fixed-income securities in
that principal is paid back by the borrower over the length of the loan rather
than returned in a lump sum at maturity. When prevailing interest rates rise,
the value of a GNMA security may decrease as do other debt securities. When
prevailing interest rates decline, however, the value of GNMA securities may
not rise on a comparable basis with
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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
Intermediate Fixed Income Portfolio and The Aggregate 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 (and, in the case of The Growth and Income
Portfolio, the four) highest grades by a nationally-recognized statistical
rating agency.
The Intermediate Fixed Income Portfolio, The Aggregate Fixed Income Portfolio
, The Diversified Core Fixed Income Portfolio and The Asset Allocation
Portfolio each 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 Intermediate Fixed Income, The Aggregate Fixed Income, The Diversified
Core Fixed Income , The Limited-Term Maturity, The Asset Allocation, The
Growth and Income Portfolios may also invest in securities which are backed by
assets such as receivables on home equity and credit card loans, receivables
regarding automobile, mobile home and recreational vehicle loans, wholesale
dealer floor plans and leases or other loans or financial receivables
currently available or which may be developed in the future. All such
securities must be rated in one of the four highest rating categories by a
reputable credit rating agency (e.g., BBB by S&P or Baa 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 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 or the concentration of collateral in a particular
geographic area. 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
tends to be less of a risk of
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substantial prepayment than with mortgage-backed securities but the risk of
such a prepayment does exist. See "MORTGAGE-BACKED SECURITIES," above. Such
asset-backed securities do, however, involve certain risks not associated with
mortgage-backed securities, including the risk that security interests cannot
be adequately or in many cases, ever, established and other risks which may be
peculiar to particular classes of collateral. For example, 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 Large-Cap Value Equity, The Aggressive
Growth, The International Equity, The Small/Mid-Cap Value Equity, The
Diversified Core Fixed Income, The Labor Select International Equity, The Real
Estate Investment Trust, The Global Fixed Income, The International Fixed
Income, The High-Yield Bond, The Global Equity , The Emerging Markets, The
Asset Allocation, The Small-Cap Growth Equity and The Growth and Income
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 Large-Cap Value 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 Small/Mid-Cap
Value Equity, The Diversified Core Fixed Income, The Labor Select
International Equity, The Real Estate Investment Trust, The Global Equity, The
Emerging Markets , The High-Yield Bond, The Asset Allocation, The Small-Cap
Growth Equity and The Growth and Income 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;
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(3) Short-term corporate obligations with the highest quality rating by a
nationally-recognized statistical rating organization (e.g., AAA by S&P or Aaa
by Moody's) or, if not so rated, of comparable quality as determined by a
Portfolio's investment adviser;
(4) U.S. government securities (see "U.S. GOVERNMENT SECURITIES"); and
(5) Repurchase agreements collateralized by securities listed above.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES
Each Portfolio of the Fund may purchase securities on a when-issued or delayed
delivery basis. In such transactions, instruments are purchased with payment
and delivery taking place in the future in order to secure what is considered
to be an advantageous yield or price at the time of the transaction. Delivery
of and payment for these securities may take as long as a month or more after
the date of the purchase commitment. Each Portfolio will maintain with its
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 Large-Cap Value 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 Large-Cap Value Equity Small/Mid-Cap, The Labor Select International
Equity, The Real Estate Investment Trust , The High-Yield Bond, The Asset
Allocation, The Small-Cap Growth Equity and The Growth and Income 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.
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SECURITIES LENDING ACTIVITIES
Each Portfolio may loan up to 25% of its assets to qualified broker/dealers or
institutional investors for their use relating to short sales or other
security transactions.
The major risk to which a Portfolio would be exposed on a loan transaction is
the risk that the borrower would go bankrupt at a time when the value of the
security goes up. Therefore, a Portfolio will only enter into loan
arrangements after a review of all pertinent facts by the investment adviser,
subject to overall supervision by the Board of Directors, including the
creditworthiness of the borrowing broker, dealer or institution and then only
if the consideration to be received from such loans would justify the risk.
Creditworthiness will be monitored on an ongoing basis by the investment
adviser.
BORROWING FROM BANKS
Each Portfolio may borrow money as a temporary measure or to facilitate
redemptions. No Portfolio has the intention of increasing its net income
through borrowing. Any borrowing will be done from a bank and, consistent with
Commission rules. See the Statement of Additional Information.
FOREIGN INVESTMENT INFORMATION
The International Equity Portfolio, The Labor Select International Equity
Portfolio, The Global Equity Portfolio, The Emerging Markets Portfolio, The
Global Fixed Income Portfolio and The International Fixed Income Portfolio
(and The Real Estate Investment Trust, The High-Yield Bond , The Diversified
Core Fixed Income, The Asset Allocation, The Small-Cap Growth Equity and The
Growth and Income Portfolios, up to 10%, 10%, 20%, 10% and 5% and 20%,
respectively, of their total assets) will invest in securities of foreign
issuers and may hold foreign currency. Each of these Portfolios has the right
to purchase securities in any developed, underdeveloped or emerging country.
The Emerging Markets Portfolio, under normal market conditions, will invest at
least 65% of its total assets in securities of issuers in emerging markets.
Investors should consider carefully the substantial risks involved in
investing in securities issued by companies and governments of foreign
nations. These risks are in addition to the usual risks inherent in domestic
investments. There is the possibility of expropriation, nationalization or
confiscatory taxation, taxation of income earned in foreign nations or other
taxes imposed with respect to investments in foreign nations, foreign exchange
control (which may include suspension of the ability to transfer currency from
a given country), default in foreign government securities, political or
social instability or diplomatic developments which could affect investments
in securities of issuers in those nations.
In addition, in many countries, there is substantially less publicly available
information about issuers than is available in reports about companies in the
United States and this information tends to be of a lesser quality. Foreign
companies are not subject to uniform accounting, auditing and financial
reporting standards, and auditing practices and requirements may not be
comparable to those applicable to United States companies. In particular, the
assets and profits appearing on the financial statements of a developing or
emerging country issuer may not reflect its financial position or results of
operations in the way they would be reflected had the financial statements
been prepared in accordance with United States generally accepted accounting
principles. Also, for an issuer that keeps accounting records in local
currency, inflation accounting rules may require for both tax and accounting
purposes, that certain assets and liabilities be restated on the issuer's
balance sheet in order to express items in terms of currency or constant
purchasing power. Inflation accounting may indirectly generate losses or
profits.
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Consequently, financial data may be materially affected by restatements for
inflation and may not accurately reflect the real condition of those issuers
and securities markets.
It is also expected that the expenses for custodial arrangements of The
International Equity, The Labor Select International Equity, The Real Estate
Investment Trust, The Diversified Core Fixed Income, The Global Fixed Income,
The International Fixed Income, The High-Yield Bond, The Global Equity , The
Emerging Markets, The Asset Allocation, The Small-Cap Growth Equity and The
Growth and Income Portfolios' foreign securities will be somewhat greater than
the expenses for the custodial arrangements for U.S. securities of equal
value. Dividends and interest paid by foreign issuers may be subject to
withholding and other foreign taxes. Although in some countries a portion of
these taxes is recoverable, the non-recovered portion of foreign withholding
taxes will reduce the income a Portfolio receives from the companies
comprising the Portfolio's investments. See "TAXES."
Further, a Portfolio may encounter difficulty or be unable to pursue legal
remedies and obtain judgments in foreign courts. Commission rates on
securities transactions in foreign countries, which are sometimes fixed rather
than subject to negotiation as in the United States, are likely to be higher.
Further, the settlement period of securities transactions in foreign markets
may be longer than in domestic markets, and may be subject to administrative
uncertainties. In many foreign countries, there is less government supervision
and regulation of business and industry practices, stock exchanges, brokers
and listed companies than in the United States, and capital requirements for
brokerage firms are generally lower. The foreign securities markets of many of
the countries in which a Portfolio may invest may also be smaller, less liquid
and subject to greater price volatility than those in the United States.
Compared to the United States and other developed countries, emerging
countries may have volatile social conditions, relatively unstable governments
and political systems, economies based on only a few industries and economic
structures that are less diverse and mature, and securities markets that trade
a small number of securities, which can result in a low or nonexistent volume
of trading. Prices in these securities markets 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.
Until recently, there has been an absence of a capital market structure or
market-oriented economy in certain emerging countries. Further, investments
and opportunities for investments by foreign investors are subject to a
variety of national policies and restrictions in many emerging countries.
These restrictions may take the form of prior governmental approval, limits on
the amount or type of securities held by foreigners, limits on the types of
companies in which foreigners may invest and prohibitions on foreign
investments in issuers or industries deemed sensitive to national interests.
Additional restrictions may be imposed at any time by these or other countries
in which a Portfolio invests. Also, 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
governmental consents. Although these restrictions may in the future make it
undesirable to invest in emerging countries, the investment managers for the
Portfolios do not believe that any current repatriation restrictions would
affect their decision to invest in such countries. Countries such as those in
which a Portfolio may invest, and in which The Emerging Markets Portfolio will
primarily invest, have historically experienced and may continue to
experience, substantial, and in some periods extremely high rates of inflation
for many years, high interest rates, exchange rate fluctuations or currency
depreciation, large amounts of external debt, balance of payments and trade
difficulties and extreme poverty and unemployment. Other factors which may
influence the ability or willingness to service debt include, but are not
limited to, a country's cash flow situation, the availability of sufficient
foreign exchange on the date a payment is due, the relative size of its debt
service burden to the economy as a whole, its government's policy towards the
International Monetary Fund, the World Bank and other international agencies
and the political constraints to which a government debtor may be subject.
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With respect to investment in debt issues of foreign governments, the ability
of a foreign government or government-related issuer to make timely and
ultimate payments on its external debt obligations will also be strongly
influenced by the issuer's balance of payments, including export performance,
its access to international credits and investments, fluctuations in interest
rates and the extent of its foreign reserves. A country whose exports are
concentrated in a few commodities or whose economy depends on certain
strategic imports could be vulnerable to fluctuations in international prices
of these commodities or imports. To the extent that a country receives payment
for its exports in currencies other than dollars, its ability to make debt
payments denominated in dollars could be adversely affected. If a foreign
government or government-related issuer cannot generate sufficient earnings
from foreign trade to service its external debt, it may need to depend on
continuing loans and aid from foreign governments, commercial banks and
multilateral organizations, and inflows of foreign investment. The commitment
on the part of these foreign governments, multilateral organizations and
others to make such disbursements may be conditioned on the government's
implementation of economic reforms and/or economic performance and the timely
service of its obligations. Failure to implement such reforms, achieve such
levels of economic performance or repay principal or interest when due may
curtail the willingness of such third parties to lend funds, which may further
impair the issuer's ability or willingness to service its debts in a timely
manner. The cost of servicing external debt will also generally be adversely
affected by rising international interest rates because many external debt
obligations bear interest at rates which are adjusted based upon international
interest rates. The ability to service external debt will also depend on the
level of the relevant government's international currency reserves and its
access to foreign exchange. Currency devaluations may affect the ability of a
government issuer to obtain sufficient foreign exchange to service its
external debt.
As a result of the foregoing, a foreign governmental issuer may default on its
obligations. If such a default occurs, a Portfolio may have limited effective
legal recourse against the issuer and/or guarantor. Remedies must, in some
cases, be pursued in the courts of the defaulting party itself, and the
ability of the holder of foreign government and government-related debt
securities to obtain recourse may be subject to the political climate in the
relevant country. In addition, no assurance can be given that the holders of
commercial bank debt will not contest payments to the holders of other foreign
government and government-related debt obligations in the event of default
under their commercial bank loan agreements.
Among the foreign government and government related issuers in which The
Emerging Markets, The International Fixed Income, The Global Fixed Income ,
The Diversified Core Fixed Income and The Asset Allocation Portfolios may
invest are certain high-yield securities, including so-called Brady Bonds.
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 "BRADY BONDS" in the
Statement of Additional Information for further information.
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The issuers of the foreign government and government-related high-yield
securities, including Brady Bonds, in which The Emerging Markets, The
International Fixed Income, The Global Fixed Income , The Diversified Core
Fixed Income and The Asset Allocation Portfolios expect to invest have in the
past experienced substantial difficulties in servicing their external debt
obligations, which have led to defaults on certain obligations and the
restructuring of certain indebtedness. Restructuring arrangements have
included, among other things, reducing and rescheduling interest and principal
payments by negotiating new or amended credit agreements or converting
outstanding principal and unpaid interest to Brady Bonds, and obtaining new
credit to finance interest payments. Holders of certain foreign government and
government-related high yield securities may be requested to participate in
the restructuring of such obligations and to extend further loans to their
issuers. There can be no assurance that the Brady Bonds and other foreign
government and government-related high yield securities in which The Emerging
Markets, The International Fixed Income, The Global Fixed Income , The
Diversified Core Fixed Income and The Asset Allocation Portfolios may invest
will not be subject to similar defaults or restructuring arrangements which
may adversely affect the value of such investments. Furthermore, certain
participants in the secondary market for such debt may be directly involved in
negotiating the terms of these arrangements and may therefore have access to
information not available to other market participants.
With respect to forward foreign currency exchange, 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. See "FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS," below.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
As noted above, the foreign investments made by The International Equity, The
Labor Select International Equity, The Real Estate Investment Trust, The
Diversified Core Fixed Income, The Global Fixed Income, The International
Fixed Income, The Global Equity , The Emerging Markets, The Asset Allocation,
The Small-Cap Growth Equity and The Growth and 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, The Labor Select International Equity, The
Real Estate Investment Trust, The Diversified Core Fixed Income, The Global
Fixed Income, The International Fixed Income, The Global Equity , The
Emerging Markets, The Asset Allocation, The Small-Cap Growth Equity and The
Growth and Income Portfolios 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
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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.
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.
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HIGH-YIELD, HIGH RISK SECURITIES
The International Fixed Income Portfolio, The Global Fixed Income and The
Diversified Core Fixed Income Portfolio and The Asset Allocation Portfolio may
invest up to 5%, 5% , 20%, and 55%, respectively, of its assets in high risk,
high-yield fixed-income securities of foreign governments, including, with
specified limitations, so-called Brady Bonds. The Emerging Markets Portfolio
may invest up to 35% of its net assets in fixed-income securities issued by
emerging country companies, and foreign governments, their agencies and
instrumentalities or political sub-divisions, all of which may be high-yield,
high risk securities, including Brady Bonds. For a description of Brady Bonds
and their attendant risks, see "ADDITIONAL INVESTMENT INFORMATION -FOREIGN
INVESTMENT INFORMATION." These high-yield, high risk 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.
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 adviser. In its U.S. high yield sector,
The Diversified Core Fixed Income Portfolio, under normal circumstances,
invests between 5% and 30% in U.S. Bonds generally rated BB or lower by S&P or
Fitch or Ba or lower by Moody's or similarly rated by another nationally
recognized statistical rating organization. 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.
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FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS
In order to remain fully invested, to facilitate investments in portfolio
securities and to reduce transaction costs, The Aggressive Growth, The
Small/Mid-Cap Value Equity, The Real Estate Investment Trust, The Diversified
Core Fixed Income, The Global Equity , The Emerging Markets, The Asset
Allocation, The Small-Cap Growth Equity and The Growth and Income Portfolios
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. For the same purposes, The Growth and Income Portfolio may also
enter into futures contracts on stock indices and purchases or sell options on
stock index futures and stock indices and may enter into closing transactions
with respect to these 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, The Global Equity, The Emerging
Markets , The Diversified Core Fixed Income and The Asset Allocation
Portfolios 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 to hedge or "cross
hedge" the currency risks associated with its investments, as described under
"FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS," above.
The Aggressive Growth, The Small/Mid-Cap Value Equity, The Real Estate
Investment Trust, The Diversified Core Fixed Income, The Global Equity , The
Emerging Markets, The Asset Allocation, The Small-Cap Growth Equity and The
Growth and Income Portfolios may enter into contracts for the purchase or sale
for future delivery of securities. A futures contract is a bilateral
agreement providing for the purchase and sale of a specified type and amount
of a financial instrument, or for the making and acceptance of a cash
settlement, at a stated time in the future for a fixed price. By its terms, a
futures contract provides for a specified settlement date on which the
securities underlying the contracts are delivered, or in the case of
securities index 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 the 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 transaction. 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. This
amount is generally maintained in a segregated account at the custodian bank.
Subsequent payments to and from the broker, referred to as "variation margin,"
are made on a daily basis as the value of the index or instrument underlying
the futures contract fluctuates, making positions in the futures contract more
or less valuable, a process known as "marking to the market."
Foreign currency futures contracts operate similarly to futures contracts
concerning securities. When The International Fixed Income, The Global Equity,
The Emerging Markets , The Diversified Core Fixed Income or
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The Asset Allocation Portfolios 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 in which the Portfolio's may invest and enter into related closing
transactions. 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. In the case of
an option that is in-the-money at the time of purchase, the in-the-money
amount may be excluded in calculating the 5%.
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, The Real Estate Investment Trust, The Diversified Core
Fixed Income, The Global Equity , The Emerging Markets, The Asset Allocation,
The Small-Cap Growth Equity and The Growth and Income Portfolios may write
covered call options on 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. Each Portfolio will only write put options on a secured basis
which means that the Portfolio will maintain, in a segregated account with its
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.
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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, The Diversified Core Fixed Income, The Global Equity , The
Emerging Markets, The Asset Allocation, The Small-Cap Growth Equity and The
Growth and Income Portfolios will only invest in such options to the extent
consistent with their 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.
Options on Stock Indices
The Global Equity Portfolio, The Diversified Core Fixed Income Portfolio ,
The Emerging Markets, The Asset Allocation, The Small-Cap Growth Equity and
The Growth and Income Portfolio also may acquire options on stock indices. A
stock index assigns relative values to the common stocks included in the index
with the index fluctuating with changes in the market values of the underlying
stock. Options on stock indices are similar to options on stocks, but have
different delivery requirements. The Growth and Income and The Small-Cap
Growth Equity Portfolios may write call options on stock indices. See "OPTIONS
ON STOCK INDICES" in the Statement of Additional Information.
Options on Foreign Currencies
The International Fixed Income, The Global Equity, The Emerging Markets , The
Diversified Core Fixed Income and The Asset Allocation Portfolios may purchase
call options and write covered call options on foreign currencies and enter
into related closing transactions. A Portfolio may also purchase put options
and write secured put options on foreign currencies and enter into related
closing transactions. A 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 a Portfolio's position, a 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
a Portfolio could be required to purchase or sell foreign currencies at
disadvantageous exchange rates, thereby incurring losses.
A Portfolio will write call options only if they are "covered" and put options
only if they are secured. A call written by a Portfolio will be considered
covered if a 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
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option written by a Portfolio will be considered secured if, so long as a
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.
Each Portfolio, other than The Diversified Core Fixed Income, The Aggregate
Fixed Income, The Small/Mid-Cap Value Equity, The Labor Select International
Equity, The Real Estate Investment Trust, The High-Yield Bond , The
International Fixed Income, The Asset Allocation, The Small-Cap Growth Equity
and The Growth and Income Portfolios, may invest no more than 10% of the value
of its net assets in illiquid securities. The Diversified Core Fixed Income,
The Aggregate Fixed Income, The Small/Mid-Cap Value Equity, The Labor Select
International Equity, The Real Estate Investment Trust, The High-Yield Bond,
The International Fixed Income, The Global Equity , The Emerging Markets, The
Asset Allocation, The Small-Cap Growth Equity and The Growth and 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
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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
A portion of The Small/Mid-Cap Value Equity , The High-Yield Bond, The Asset
Allocation, The Small-Cap Growth Equity and The Growth and Income Portfolios'
assets may be invested in convertible and debt securities of issuers in any
industry, and The Real Estate Investment Trust Portfolios' 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. Investments in debt securities by The Small-Cap
Growth Equity Portfolio will be limited to those that are, at the time of
investment, within the four highest grades assigned by a nationally recognized
statistical rating agency (e.g., Baa or higher by Moody's or BBB or higher by
Standard & Poor's) or deemed to be of comparable quality by the investment
adviser. Convertible and debt securities acquired by The Small/Mid-Cap Value
Equity, The Real Estate Investment Trust, The High-Yield Bond, The Asset
Allocation and The Growth and Income (as to no more than 5% of its assets)
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.
The Small/Mid-Cap Value Equity, The Real Estate Investment Trust, The
High-Yield Bond , The Emerging Markets and The Asset Allocation 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
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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 Small/Mid-Cap Value Equity, The Real Estate Investment Trust, The
High-Yield Bond , The Emerging Markets and The Asset Allocation 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 Portfolios' and The Asset Allocation
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 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.
DEPOSITARY RECEIPTS
The Large-Cap Value Equity, The International Equity, The Diversified Core
Fixed Income, The Small/Mid-Cap Value Equity, The Real Estate Investment
Trust, The Global Fixed Income, The International Fixed Income, The Global
Equity , The Emerging Markets, The Asset Allocation, The Small-Cap Growth
Equity and The Growth and Income Portfolios may invest in sponsored and
unsponsored American Depositary Receipts ("ADRs") that are actively traded in
the United States. The Global Fixed Income , International Fixed Income
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and The Asset Allocation Portfolios may also invest in sponsored and
unsponsored European Depositary Receipts ("EDRs") and The International
Equity, The Global Equity , The Emerging Markets and The Asset Allocation
Portfolios may also invest in sponsored and unsponsored EDRs and Global
Depositary Receipts ("GDRs"). The Small-Cap Growth Equity Portfolio may also
invest in sponsored and unsponsored GDRs. Subject to its 10% limit on
investments in foreign securities.
ADRs are receipts typically issued by a U.S. bank or trust company which
evidence ownership of underlying securities issued by a foreign corporation.
EDRs and GDRs are receipts issued by non-U.S. Banks or trust companies and
foreign branches of U.S. banks that evidence ownership of the underlying
foreign or U.S. securities. "Sponsored" ADRs, EDRs or GDRs are issued jointly
by the issuer of the underlying security and a Depositary, and "unsponsored"
ADRs, EDRs or GDRs are issued without the participation of the issuer of the
deposited security. Holders of unsponsored ADRs, EDRs or GDRs generally bear
all the costs of such facilities and the Depositary of an unsponsored ADR, EDR
or GDR 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, EDR or GDR. ADRs may be listed on a national securities
exchange or may be traded in the over-the-counter market. EDRs and GDRs traded
in the over-the-counter market which do not have an active or substantial
secondary market will be considered illiquid and therefore will be subject to
a Portfolio's limitation with respect to such securities. ADR prices are
denominated in U.S. dollars although the underlying securities are denominated
in a foreign currency. Investments in ADRs, EDRs and GDRs involve risks
similar to those accompanying direct investments in foreign securities.
INVESTMENT COMPANY SECURITIES
Any investments that The Emerging Markets Portfolio, The Global Equity
Portfolio , The Diversified Core Fixed Income Portfolio, The Asset Allocation
Portfolio, The Small-Cap Growth Equity Portfolio and The Growth and Income
Portfolio make in either closed-end or open-end investment companies will be
limited by the 1940 Act, and would involve an indirect payment of a portion of
the expenses, including advisory fees, of such other investment companies.
Under the 1940 Act's current limitations, the Portfolios may not (1) own
more than 3% of the voting stock of another investment company; and (2) invest
more than 5% of the Portfolio's total assets in the shares of any one
investment company; nor (3) invest more than 10% of the Portfolio's total
assets in shares of other investment companies. These percentage limitations
also apply to the Portfolio's investments in unregistered investment
companies. Each Portfolio in which The Asset Allocation Portfolio invests may
not operate as a "fund of funds" by investing in other registered open-end
investment companies or registered unit investment trusts that are part of the
Delaware Investments family of funds.
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ZERO COUPON AND PAY-IN-KIND BONDS
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. PIK bonds pay interest
through the issuance to holders of additional securities. 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's authorized to invest in them. For example, with
zero coupon bonds, the Portfolio accrues, and is required to distribute to
shareholders, income on such 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.
INVESTMENT LIMITATIONS
Each Portfolio's investment objectives (except for The Asset Allocation, The
Small-Cap Growth Equity and The Growth and Income Portfolios), their
designation as a diversified portfolio or, in the case of The Global Fixed
Income , The Emerging Markets and The Asset Allocation 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" in this Prospectus 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 (trustees in the case of The Asset Allocation
Portfolio) 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. The business and affairs of
Foundation Funds and its series, The Asset Allocation Portfolio, are managed
under the direction of Foundation Funds' Board of Trustees. See "FUND OFFICERS
AND PORTFOLIO MANAGERS" under "DELAWARE POOLED TRUST SUMMARY" in this
Prospectus and the Fund's Statement of Additional Information for additional
information about the Fund's and Foundation Funds' officers and
directors/trustees.
Investment Advisers
Delaware Management Company ("Delaware"), a series of Delaware Management
Business Trust, furnishes investment advisory services to The Large-Cap Value
Equity, The Aggressive Growth, The Small/Mid-Cap Value Equity, The Aggregate
Fixed Income, The Diversified Core Fixed Income, The Real Estate Investment
Trust, The Intermediate Fixed Income, The Limited-Term Maturity , The
High-Yield Bond, The Asset Allocation, The Small-Cap Growth Equity and The
Growth and Income Portfolios and furnishes sub-investment advisory services to
The Global Equity Portfolio related to the U.S. securities portion of that
Portfolio. 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 Trust Portfolios. 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 Portfolios may invest. Delaware and its predecessors have been managing
the funds in the Delaware Group since 1938. On July 31, 1998, Delaware and
its affiliates within the Delaware Group, including Delaware International,
were supervising in the aggregate more than $00 billion in assets in various
institutional or separately managed (approximately $00,000,000,000) and
investment company (approximately $00,000,000,000) 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 July 31, 1998, Lincoln had over $00
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, The Labor Select
International Equity, The Global Fixed Income, The International Fixed Income,
The Global Equity and The Emerging Markets Portfolios and furnishes
sub-advisory services to The Diversified Core Fixed Income Portfolio related
to the foreign securities portion of that 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 Large-Cap Value Equity, The Aggressive Growth, The Small/Mid-Cap
Value Equity, The Diversified Core Fixed Income, The Aggregate Fixed Income,
The Real Estate Investment Trust, The Intermediate Fixed Income, The
Limited-Term Maturity, The High-Yield Bond, The Asset Allocation, The
Small-Cap Growth Equity and The Growth and Income Portfolios. Delaware has
also entered into a Sub-Advisory Agreement with Lincoln with respect to The
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Real Estate Investment Trust Portfolios and with Delaware International with
respect to The Diversified Core Fixed Income Portfolio. Delaware International
has entered into Investment Advisory Agreements with the Fund on behalf of The
International Equity, The Labor Select International Equity, The Global Fixed
Income, The International Fixed Income, The Global Equity and The Emerging
Markets Portfolios. Delaware acts as sub-adviser to Delaware International
with respect to The Global Equity Portfolio managing the U.S. securities
portion of that 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.
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:
Portfolio Rate
The Large-Cap Value Equity Portfolio 0.55%
The Aggressive Growth Portfolio 0.80%
The International Equity Portfolio 0.75%
The Small/Mid-Cap Value Equity Portfolio 0.75%
The Labor Select International Equity Portfolio 0.75%
The Real Estate Investment Trust Portfolio 0.75%*
The Real Estate Investment Trust Portfolio II 0.75%*
The Global Equity Portfolio 0.75%**
The Diversified Core Fixed Income Portfolio 0.43%***
The Aggregate Fixed Income Portfolio 0.40%
The Emerging Markets Portfolio 1.20%****
The Intermediate Fixed Income Portfolio 0.40%
The Limited-Term Maturity Portfolio 0.30%
The Global Fixed Income Portfolio 0.50%
The International Fixed Income Portfolio 0.50%
The High-Yield Bond Portfolio 0.45%
The Asset Allocation Portfolio 0.00%
The Small-Cap Growth Equity Portfolio 0.75%
The Growth and Income Portfolio 0.55%
* 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
Portfolios.
** Delaware receives 50% of the advisory fee paid to Delaware International
for acting as sub-adviser to Delaware International with respect to the
U.S. securities portion of The Global Equity Portfolio.
*** Delaware International receives from Delaware, a sub-advisory fee for
managing the foreign securities portion of The Diversified Core Fixed
Income Portfolio based on the proportion of the Portfolio's average daily
net assets allocated to foreign securities. See, "INVESTMENT MANAGEMENT."
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**** Delaware International has elected voluntarily to limit its annual
Investment Advisory Fee to no more than 1.00% of The Emerging Markets
Portfolio's average daily net assets during the period from October 1,
1997 through October 31, 1998. The effect of the current fee waiver of
1.55% with respect to "Total Operating Expenses" and the 1.00% fee
limitation with respect to The Emerging Markets Portfolio is that the
annual Investment Advisory Fee paid to Delaware International on behalf
of that Portfolio will be an amount equal to the lesser of 1.00% or the
amount necessary to limit "Total Operating Expenses" of the Portfolio
(exclusive of taxes, interest, brokerage commissions and extraordinary
expenses) to no more than 1.55% of average net assets, on an annualized
basis. Delaware International has also voluntarily agreed that the annual
Investment Advisory Fee payable to Delaware International on behalf of
The Emerging Markets Portfolio will not exceed 1.00% unless shareholders
of the Portfolio have been notified of the change to the 1.00% fee
limitation at least one year in advance of such increase.
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 pay 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, 1998. 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 Small/Mid-Cap Value
Equity, The Aggregate Fixed Income, The Diversified Core Fixed Income, The
Real Estate Investment Trust , The High-Yield Bond, The Asset Allocation, The
Small-Cap Growth Equity and The Growth and Income Portfolios and Delaware
International will make no such payments out of the fees it receives for
managing The Labor Select International Equity, The International Fixed
Income, The Global Equity and The Emerging Markets Portfolios.
For the fiscal year ended October 31, 1997, the investment management fees
accrued and paid by the Portfolios (as a percentage of average daily net
assets) were as follows:
<TABLE>
<CAPTION>
Investment Investment
Management Management
Fees Fees
Portfolio Accrued Paid
<S> <C> <C>
The Large-Cap Value Equity Portfolio 0.55% 0.54%
The Aggressive Growth Portfolio 0.80% 0.33%
The Global Fixed Income Portfolio 0.50% 0.45%
The Intermediate Fixed Income Portfolio 0.40% 0.09%
The Labor Select International Equity Portfolio 0.75% 0.57%
The High-Yield Bond Portfolio(1) 0.45%(5) 0.19%(5)
The International Fixed Income Portfolio(2) 0.50%(5) 0.24%(5)
The Emerging Markets Portfolio(3) 1.20%(5) 0.72%(5)
The Global Equity Portfolio(4) 0.75%(5) none
</TABLE>
(1) Commenced operations on December 2, 1996.
(2) Commenced operations on April 11, 1997.
(3) Commenced operations on April 14, 1997.
(4) Commenced operations on October 15, 1997.
(5) Annualized.
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For the fiscal year ended October 31, 1997, 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, The Real Estate Investment
Trust, The Global Equity and The Emerging Markets 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.
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 indirect, 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 Portfolios 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 Large-Cap Value Equity Portfolio, The Aggressive Growth Portfolio, The
Intermediate 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 3rd Floor, 80 Cheapside, London EC2V 6EE. Lincoln's
address is 200 E. Berry Street, Fort Wayne, IN 46802.
The Real Estate Investment Trust Portfolio II - Past Performance of Previous
Fund
The investment objectives, policies and strategies of The Real Estate
Investment Trust Portfolio and The Real Estate Investment Trust Portfolio II
are identical. Mr. Zenouzi makes comparable selections of securities for each
Portfolio. The table below presents total return performance as of October 31,
1997 on an annualized basis for The Real Estate Investment Trust Portfolio
compared with The NAREIT Equity REIT Index:
Since Inception
(12/6/95)
The Real Estate Investment Trust Portfolio (1) 37.78%
The NAREIT Equity REIT Index (2) 29.48%
(1) The historical performance presented above is that of the original (and,
prior to October 14, 1997, only) class of shares ("Original Class")
offered by The Real Estate Investment Trust Portfolio. The Original
Class, like the only class of shares offered by The Real Estate
Investment Trust Portfolio II, did not carry a front-end sales charge and
was not subject to Rule 12b-1 distribution expenses. Total return
reflects changes in share prices and reinvestment of dividends and
distributions and is net of all expenses. The expense ratio of the
Original Class of The Real Estate Investment Trust Portfolio was capped
at 0.89% since inception. The Original Class has been redesignated "REIT
Fund A Class" and is now being offered in a separate prospectus.
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(2) The NAREIT Equity REIT Index is an unmanaged index and a theoretical
measure of the performance of real estate investment trust stocks in
aggregate rather than an actual available investment.
Please note that this historical performance presented above is for The Real
Estate Investment Trust Portfolio, a separate Portfolio of the Fund, and its
performance is not indicative of the potential performance of The Real Estate
Investment Trust Portfolio II. Share prices and investment returns will
fluctuate reflecting market conditions.
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 Banks, 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.
Delaware Service Company, Inc. also provides accounting services to the Fund
pursuant to the terms of a separate Fund Accounting Agreement.
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.
* * *
As with other mutual funds, financial and business organizations and individuals
around the world, each Portfolio could be adversely affected if the computer
systems used by its service providers do not properly process and calculate
date-related information from and after January 1, 2000. This is commonly known
as the "Year 2000 Problem." The Fund is taking steps to obtain satisfactory
assurances that the Portfolio's major service providers are taking steps
reasonably designed to address the Year 2000 Problem with respect to the
computer systems that such service providers use. There can be no assurances
that these steps will be sufficient to avoid any adverse impact on the business
of any of the Portfolios.
Several European countries are participating in the European Economic and
Monetary Union, which will establish a common European currency for
participating countries. This currency will commonly be known as the "Euro." It
is anticipated that each such participating country will replace its existing
currency with the Euro on January 1, 1999. Additional European countries may
elect to participate after that date. Each Portfolio investing in securities of
participating countries could be adversely affected if the computer systems used
by its major service providers are not properly prepared to handle the
implementation of this single currency or the adoption of the Euro by additional
countries in the future. The Fund is taking steps to obtain satisfactory
assurances that the major service providers of affected Portfolios are taking
steps reasonably designed to address these matters with respect to the computer
systems that such service providers use. There can be no assurances that these
steps will be sufficient to avoid any adverse impact on the business of any
Portfolio.
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. For the fiscal
year ended October 31, 1997, the ratios of expenses to average daily net
assets for The Large-Cap Value Equity, The Aggressive Growth, The Global Fixed
Income, The Labor Select International Equity, The Real Estate Investment
Trust Portfolio, The International Equity Portfolio and The Intermediate Fixed
Income Portfolio were 0.66%, 0.93%, 0.60%, 0.89%, 0.82%, 0.93% and 0.53%,
respectively. For each Portfolio other than The International Equity
Portfolio, these ratios reflect the waiver and payment of fees by the
respective investment adviser, as described above.
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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 other Portfolios
or the institutional class shares of the other funds in the Delaware Group
based on the respective net asset values of the shares involved and as long as
a Portfolio's minimum is satisfied. With respect to exchanges involving The
Emerging Markets Portfolio or The Global Equity Portfolio, however, an
investor will be assessed a purchase reimbursement fee by the respective
Portfolio when exchanging from another Portfolio into The Emerging Markets
Portfolio or The Global Equity Portfolio and a shareholder of The Emerging
Markets Portfolio or The Global Equity Portfolio will be assessed a redemption
reimbursement fee by the respective Portfolio when exchanging out of The
Emerging Markets Portfolio or The Global Equity Portfolio into another
Portfolio. See "HOW TO INVEST," "HOW TO REDEEM" and "PURPOSE OF REIMBURSEMENT
FEES -- THE EMERGING MARKETS AND THE GLOBAL EQUITY PORTFOLIOS." There are no
minimum purchase requirements for the institutional class shares of the other
Delaware Group funds, but certain eligibility requirements must be satisfied.
Exchange requests should be sent to Delaware Pooled Trust, Inc., One Commerce
Square, 2005 Market Street, Philadelphia, PA 19103, Attn: Client Services
(exchanges involving The Asset Allocation Portfolio will be forwarded to
Foundation Funds). 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
19 Portfolios.
The Intermediate Fixed Income and The Limited-Term Maturity Portfolios expect
to declare dividends daily and distribute them monthly. The High-Yield Bond
and The Global Fixed Income Portfolios expect to declare dividends monthly and
distribute them monthly. The Aggregate Fixed Income, The Diversified Core
Fixed Income, The Large-Cap Value Equity and The International Equity, The
Labor Select International Equity and The International Fixed Income Portfolios
and The Real Estate Investment Trust Portfolio expect to declare and
distribute all of their net investment income to shareholders as dividends
quarterly. The Aggressive Growth, The Small/Mid-Cap Value Equity, The Global
Equity, The Small-Cap Growth Equity, The Asset Allocation, The Growth and
Income and The Emerging Markets Portfolios and The Real Estate Investment
Trust Portfolio II 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 has qualified or intends to qualify, and each intends to
continue to qualify, as a regulated investment company under the Internal
Revenue Code of 1986, as amended (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 and it satisfies
certain other requirements relating to the sources of its income and
diversification of its assets.
On August 5, 1997, President Clinton signed into law the Taxpayer Relief Act
of 1997 (the "1997 Act"). This new law makes sweeping changes in the Internal
Revenue Code (the "Code"). Because many of these changes are complex, and only
indirectly affect a Portfolio and its distributions to you, they are discussed
in the Statement of Additional Information. Changes in the treatment of
capital gains, however, are discussed in this section.
The Treatment of Capital Gain Distributions under the Taxpayer Relief Act of
1997 The 1997 Act creates a category of long-term capital gain for individuals
that will be taxed at new lower tax rates. For investors who are in the 28% or
higher federal income tax brackets, these gains will be taxed at a maximum of
20%. For investors who are in the 15% federal income tax bracket, these gains
will be taxed at a maximum of 10%. Capital gain distributions will qualify for
these new maximum tax rates, depending on when a Portfolio's securities were
sold and how long they were held by a Portfolio before they were sold.
Investors who want more information on holding periods and other qualifying
rules relating to these new rates should review the expanded discussion in the
Statement of Additional Information, or should contact their own tax advisers.
The Fund will advise you in its annual information reporting at calendar year
end of the amount of its capital gain distributions which will qualify for
these maximum federal tax rates.
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, The Labor Select International Equity, The Global Equity
and The Emerging Markets 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 Large-Cap Value Equity and The Real
Estate Investment Trust Portfolios for the fiscal year ended October 31, 1997,
40% and 62%, respectively, were eligible for this deduction. None of the
dividends paid by The Aggressive Growth Portfolio for the fiscal year ended
October 31, 1997 qualified 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 by-product 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.
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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.
In addition to the federal taxes described above, shareholders may or may not
be subject to various state and local taxes. For example, distributions of
interest income and capital gains realized from certain types of U.S.
government securities may be exempt from state personal income taxes. Because
investors' state and local taxes may be different than the federal taxes
described above, investors should consult their own tax advisers. 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, The International Fixed Income
Portfolio, The Global Equity Portfolio and The Emerging Markets Portfolio -
Foreign Taxes
Each of The International Equity, The Labor Select International Equity, The
Global Fixed Income, The International Fixed Income, The Global Equity and The
Emerging Markets Portfolios may elect to "pass-through" to its shareholders
the amount of foreign income taxes paid by such Portfolio. A Portfolio will
make such an election only if it deems it to be in the best interests of its
shareholders.
If this election is made, shareholders of a Portfolio will be required to
include in their gross income their pro-rata share of foreign taxes paid by
the Portfolio. However, shareholders will be able to treat their pro-rata
share of foreign taxes as either an itemized deduction or a foreign tax credit
(but not both) against U.S. income taxes on their tax return.
The tax discussion set forth above is included for general information only.
Prospective investors should consult their own tax advisers concerning the
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.
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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, The Labor Select International
Equity, The Global Fixed Income, The International Fixed Income, The Global
Equity and The Emerging Markets Portfolios (and, to a limited extent, The Real
Estate Investment Trust, The Diversified Core Fixed Income , The High-Yield
Bond, The Asset Allocation, The Small-Cap Growth Equity and The Growth and
Income Portfolios) 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 Banks. 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.
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PORTFOLIO TRANSACTIONS
In purchasing and selling securities for each of the Portfolios, the Fund
(and, in the case of The International Equity, The Labor Select International
Equity, The Global Fixed Income, The International Fixed Income, The Global
Equity, The Diversified Core Fixed Income , The Emerging Markets and The Asset
Allocation, The Small-Cap Growth Equity and The Growth and Income Portfolios,
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, The
Labor Select International Equity, The Global Fixed Income, The International
Fixed Income, The Global Equity, The Diversified Core Fixed Income, The
Emerging Markets, The Asset Allocation, The Small-Cap Growth Equity and The
Growth and Income Portfolios, 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.
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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.
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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 two 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. Foundation Funds was organized as a
Delaware business trust on October 24, 1997.
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/trustees can elect 100% of
the directors/trustees 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 class of shares of a Portfolio when
otherwise expressly required by law. Neither the Fund nor Foundation Funds
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. Under Foundation Funds' Declaration of
Trust and By-Laws, it is also not required, and does not intend, to hold
annual meetings unless required to do so by the 1940 Act.
The Asset Allocation, The Small-Cap Growth Equity Portfolio and The Growth and
Income Portfolio reserves the right to operate in a "master-feeder" structure,
that is, to invest its assets in another mutual fund with the same investment
objective and substantially similar investment policies as those of the
respective Portfolio. Each Portfolio has no present intention to operate in a
master-feeder structure; however, should the Board of Directors or Trustees
approve the implementation of a master-feeder structure for a Portfolio,
shareholders will be notified prior to the implementation of the new
structure.
Lincoln National Corporation Employees' Retirement Trust (the "Trust") made an
investment in The Emerging Markets Portfolio, which could result in the Trust
owning approximately 100% of the outstanding shares of The Emerging Markets
Portfolio. Subject to certain limited exceptions, there would be no limitation
on the Trust's ability to redeem its shares of the Portfolios and it may elect
to do so at any time.
Lincoln National Life Insurance Company ("LNLIC") made an investment in each
of The Global Equity Portfolio, The Real Estate Investment Trust Portfolio,
The Real Estate Investment Trust Portfolio II, The Diversified Core Fixed
Income Portfolio, The Aggregate Fixed Income Portfolio and The Small/Mid-Cap
Value Equity Portfolio, and will make an investment in each of The Asset
Allocation, The Small-Cap Growth Equity Portfolio and The Growth and Income
Portfolio, which could result in LNLIC owning approximately 100% of the
outstanding shares of the respective Portfolios. Subject to certain limited
exceptions, there would be no limitation on LNLIC's ability to redeem its
shares of the Portfolio and it may elect to do so at any time.
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Custodian Banks
The Chase Manhattan Bank, 4 Chase Metrotech Center, Brooklyn, NY 11245 serves
as custodian for The Global Fixed Income, The International Equity, The Labor
Select International Equity, The Real Estate Investment Trust, The High-Yield
Bond, The International Fixed Income, The Global Equity, The Emerging Markets,
The Diversified Core Fixed Income, The Aggregate Fixed Income, The Asset
Allocation, The Small-Cap Growth Equity and The Growth and Income Portfolios
and The Real Estate Investment Trust Portfolio II. Bankers Trust Company, One
Bankers Trust Plaza, New York, NY 10006 serves as custodian for The Large-Cap
Value Equity, The Aggressive Growth, The Intermediate Fixed Income, The
Limited-Term Maturity and The Small/Mid-Cap Value Equity Portfolios.
Independent Auditors
Ernst & Young LLP, Two Commerce Square, 2001 Market Street, Suite 4000,
Philadelphia, PA 19103, serves as independent auditors for the Fund and for
the Foundations Funds.
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
Neither the Fund nor Foundation Funds is involved in any litigation.
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APPENDIX A--RATINGS
The High-Yield Bond Portfolio's assets are invested primarily in securities
rated B- or higher by S&P or B3 or higher by Moody's and in unrated corporate
bonds. These credit ratings evaluate only the safety of principal and interest
and do not consider the market value risk associated with high-yield
securities. The table set forth below shows the percentage of the Portfolio's
securities included in each of the specified rating categories and shows the
percentage of the Fund's assets held in U.S. government securities. Certain
securities may not be rated because the rating agencies were either not asked
to provide ratings (e.g., many issuers of privately placed bonds do not seek
ratings) or because the rating agencies declined to provide a rating for some
reason, such as insufficient data. The table below shows the percentage of the
Portfolio's securities which are not rated. The information contained in the
table was prepared based on a dollar weighted average of the Portfolio's
composition based on month end data for the Portfolio's fiscal year ended
October 31, 1997. The paragraphs following the table contain excerpts from
Moody's and S&P's rating descriptions.
Average Weighted
Rating Moody's and/or S&P Percentage of Portfolio
- - ------------------------- -----------------------
United States Treasury Obligations 0.00%
Aaa/AAA 2.73
Aa/AA 0.00
A/A 0.00
Baa/BBB 0.00
Ba/BB 5.81
B/B 89.54
Caa/CCC 0.00
Not Rated/Other 1.92
General Rating Information
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.
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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.
Excerpts from Fitch's description of its bond ratings: AAA--Bonds considered
to be investment grade and of the highest credit quality. The obligor has an
exceptionally strong ability to pay interest and repay principal, which is
unlikely to be affected by reasonably foreseeable events; AA--Bonds considered
to be investment grade and of very high credit quality. The obligor's ability
to pay interest and repay principal is very strong, although not quite as
strong as bonds rated AAA. Because bonds rated in the AAA and AA categories
are not significantly vulnerable to foreseeable future developments,
short-term debt of these issuers is generally rated F-1+; A--Bonds considered
to be investment grade and of high credit quality. The obligor's ability to
pay interest and repay principal is considered to be strong, but may be more
vulnerable to adverse changes in economic conditions and circumstances that
bonds with higher ratings; BBB--Bonds considered to be investment grade and of
satisfactory credit quality. The obligor's ability to pay interest and repay
principal is considered to be adequate. Adverse changes in economic conditions
and circumstances, however, are more likely to have adverse impact on these
bonds, and therefore impair timely payment. The likelihood that the ratings of
these bonds will fall below investment grade is higher than for bonds with
higher ratings; BB--Bonds are considered speculative. The obligor's ability to
pay interest and repay principal may be affected over time by adverse economic
changes. However, business and financial alternatives can be identified which
could assist the obligor in satisfying its debt service requirements; B--Bonds
are considered highly speculative. While bonds in this class are currently
meeting debt service requirements, the probability of continued timely payment
of principal and interest reflects the obligor's limited margin of safety and
the need for reasonable business and economic activity throughout the life of
the issue; CCC--Bonds have certain identifiable characteristics which, if not
remedied, may lead to default. The ability to meet obligations requires an
advantageous business and economic environment; CC--Bonds are minimally
protected. Default in payment of interest and/or principal seems probable over
time; C--Bonds are in imminent default in payment of interest or principal;
and DDD, DD and D--Bonds are in default on interest and/or principal payments.
Such bonds are extremely speculative and should be valued on the basis of
their ultimate recovery value in liquidation or reorganization of the obligor.
"DDD" represents the highest potential for recovery on these bonds, and "D"
represents the lowest potential for recovery.
Plus and minus signs are used with a rating symbol to indicate the relative
position of a credit within the rating category. Plus and minus signs,
however, are not used in the "AAA" category.
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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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<PAGE>
PART B
DELAWARE POOLED TRUST, INC.
STATEMENT OF ADDITIONAL INFORMATION
AUGUST , 1998
-----------------------------------
Delaware Pooled Trust, Inc. ("Pooled Trust, Inc.") is an open-end
management investment company. Pooled Trust, Inc. consists of 18 series
("Portfolios") offering a broad range of investment choices. Pooled Trust,
Inc. is designed to provide clients with attractive alternatives for meeting
their investment needs. This Statement of Additional Information (Part B of
Pooled Trust, Inc.'s registration statement) addresses information of Pooled
Trust, Inc. applicable to each of the 18 Portfolios. In addition,
investors may make investments in The Asset Allocation Portfolio. That
Portfolio is a "fund of funds" which primarily invests in several of the
Portfolios of Pooled Trust, Inc. The Asset Allocation Portfolio is a series of
Delaware Group Foundation Funds ("Foundation Funds") which is also an open-end
management investment company. Although the Asset Allocation Portfolio is
technically not a Portfolio of the Fund, all references herein to "Portfolio"
or "the Fund" shall be deemed to also include The Asset Allocation Portfolio,
where appropriate.
This Statement of Additional Information is not a prospectus but
should be read in conjunction with the related Prospectus for each
Portfolio. To obtain the proper Prospectus for the Portfolios, please write to
the Delaware Pooled Trust, Inc. at One Commerce Square, 2005 Market Street,
Philadelphia, PA 19103, Attn: Client Services or call Pooled Trust, Inc. at
1-800-231-8002. Correspondence relating to The Asset Allocation Portfolio will
be forwarded to Foundation Funds. To obtain the Prospectus for the Class A, B
and C Shares or the Institutional Class of The Real Estate Investment Trust
Portfolio, write to the Distributor at 1818 Market Street, Philadelphia, PA
19103 or call 1-800-523-1918 for the Class A, B and C Shares or
1-800-828-5052 for the Institutional Class.
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<PAGE>
(DPT19-SAI/PART B)
TABLE OF CONTENTS
Page
----
Investment Policies, Portfolio Techniques and Risk Considerations
Accounting and Tax Issues
Performance Information
Trading Practices and Brokerage
Purchasing Shares
Determining Offering Price and Net Asset Value
Redemption and Repurchase
Dividends and Capital Gain Distributions
Taxes
Investment Management Agreements
Officers and Directors
Exchange Privilege
General Information
Appendix A--IRA Information
Financial Statements
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<PAGE>
(DPT19-SAI/PART B)
INVESTMENT POLICIES, PORTFOLIO TECHNIQUES AND RISK CONSIDERATIONS
Investment Restrictions
Pooled Trust, Inc. 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 (other than The International Mid-Cap Sub Portfolio,
The Small/Mid-Cap Value Equity Portfolio, The Global Equity Portfolio, The
Emerging Markets Portfolio, The Aggregate Fixed Income Portfolio and The
Diversified Core Fixed Income 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 and The Real Estate Investment Trust Portfolio II
(collectively, "The Real Estate Investment Trust Portfolios") may each 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 each of The Real Estate Investment Trust
Portfolios 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 Portfolios
and The International Fixed Income Portfolio may enter into futures contracts
and may purchase and sell options on futures contracts in accordance with the
related 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 Portfolios 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.
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7. Make short sales of securities, or purchase securities on margin,
except that The Aggressive Growth Portfolio, The Real Estate Investment Trust
Portfolios 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 Pooled
Trust, Inc. or of either of the investment advisers if or so long as the
directors and officers of Pooled Trust, Inc. and of the investment advisers
together own beneficially more than 5% of any class of securities of such
issuer.
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 International Mid-Cap Sub Portfolio, The Small/Mid-Cap
Value Equity Portfolio, The Labor Select International Equity Portfolio, The
Real Estate Investment Trust Portfolios, The International Fixed Income
Portfolio, The High-Yield Bond Portfolio, The Emerging Markets Portfolio, The
Aggregate Fixed Income Portfolio and The Diversified Core Fixed Income
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 (other than The International Mid-Cap Sub Portfolio,
The Small/Mid-Cap Value Equity Portfolio, The Labor Select International
Equity Portfolio, The Real Estate Investment Trust Portfolios, The
International Fixed Income Portfolio, The High-Yield Bond Portfolio, The
Emerging Markets Portfolio, The Aggregate Fixed Income Portfolio and The
Diversified Core Fixed Income 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 Labor Select
International Equity Portfolio and The
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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.
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 Pooled Trust, Inc.'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 Labor Select International Equity Portfolio, The Real Estate Investment
Trust Portfolios, The International Fixed Income Portfolio and The High-Yield
Bond Portfolio
The following additional investment restrictions apply to The Labor
Select International Equity Portfolio, The Real Estate Investment Trust
Portfolios, 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 Pooled Trust,
Inc.'s Board of Directors without shareholder approval.
Except as noted below, each of The Labor Select International Equity
Portfolio, The Real Estate Investment Trust Portfolios, The International
Fixed Income Portfolio and The High-Yield Bond Portfolio shall not:
1. As to 50% of the respective total assets of The Real Estate
Investment Trust Portfolios 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).
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<PAGE>
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 Portfolios and
their investments 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 each of The Real Estate
Investment Trust Portfolios 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. Each 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.
For purposes of investment restriction 6, it is Pooled Trust, Inc.'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 International Mid-Cap Sub Portfolio, The Small/Mid-Cap Value Equity
Portfolio, The Global Equity Portfolio, The Emerging Markets Portfolio, The
Aggregate Fixed Income Portfolio and The Diversified Core Fixed Income
Portfolio
Pooled Trust, Inc. has adopted the following restrictions for The
International Mid-Cap Sub Portfolio, The Small/Mid-Cap Value Equity Portfolio,
The Global Equity Portfolio, The Emerging Markets Portfolio, The Aggregate
Fixed Income Portfolio and The Diversified Core Fixed Income Portfolio (except
where otherwise noted) which, along with each such Portfolio's investment
objective, cannot be changed without approval by a "majority" of the
Portfolio's outstanding shares, as described above. The percentage limitations
contained in these restrictions and policies apply at the time a Portfolio
purchases securities.
Except as noted below, each of The International Mid-Cap Sub Portfolio, The
Small/Mid-Cap Value Equity Portfolio, The Global Equity Portfolio, The
Emerging Markets Portfolio, The Aggregate Fixed Income Portfolio and The
Diversified Core Fixed Income Portfolio shall not:
1. As to 75% of its total assets, invest more than 5% of its 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 not apply to The International Mid-Cap Sub Portfolio and The
Emerging Markets Portfolio.
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<PAGE>
2. Invest 25% or more of its total assets in any one industry
provided that there is no limitation with respect to investments in
obligations issued or guaranteed as to principal or interest by the U.S.
Government, its agencies or instrumentalities.
3. Make loans other than by the purchase of all or a portion of a
publicly or privately distributed issue of bonds, debentures or other debt
securities of the types commonly offered publicly or privately and purchased
by financial institutions (including repurchase agreements), whether or not
the purchase was made upon the original issuance of the securities, and except
that the Portfolio may loan its assets to qualified broker/dealers or
institutional investors.
4. Engage in underwriting of securities of other issuers, except that
portfolio securities, including securities purchased in private placements,
may be acquired under circumstances where, if sold, the Portfolio might be
deemed to be an underwriter under the Securities Act of 1933. No limit is
placed on the proportion of the Portfolio's assets which may be invested in
such securities.
5. Borrow money or issue senior securities, except to the extent
permitted by the 1940 Act or any rule or order thereunder or interpretation
thereof. Subject to the foregoing, the Portfolio may engage in short sales,
purchase securities on margin, and write put and call options.
6. Purchase or sell physical commodities or physical commodity
contracts, including physical commodity options or futures contracts in a
contract market or other futures market.
7. Purchase or sell real estate; provided that the Portfolio may
invest in securities secured by real estate or interests therein or issued by
companies which invest in real estate or interests therein.
The Small-Cap Growth Equity Portfolio, The Growth and Income Portfolio and
The Asset Allocation Portfolio
Pooled Trust, Inc. has adopted the following restrictions for The
Small-Cap Growth Equity Portfolio and The Growth and Income Portfolio and
Foundation Funds has adopted the following restrictions for The Asset
Allocation Portfolio. These restrictions cannot be changed without approval by
a "majority" of the Portfolio's outstanding shares, as described above. Except
with respect to borrowing, the percentage limitations contained in these
restrictions and policies apply at the time a Portfolio purchases securities.
Each of The Small-Cap Growth Equity Portfolio, The Growth and Income Portfolio
and The Asset Allocation Portfolio shall not:
1. Make investments that will result in the concentration (as that
term may be defined in the 1940 Act, any rule or order thereunder, or U.S.
Securities and Exchange Commission ("SEC") staff interpretation thereof) of
its investments in the securities of issuers primarily engaged in the same
industry, provided that this restriction does not limit the Fund from
investing in obligations issued or guaranteed by the U.S. government, its
agencies or instrumentalities, or in certificates of deposit.
2. Borrow money or issue senior securities, except as the 1940 Act,
any rule or order thereunder, or SEC staff interpretation thereof, may
permit.
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<PAGE>
3. Underwrite the securities of other issuers, except that a
Portfolio may engage in transactions involving the acquisition, disposition or
resale of its portfolio securities, under circumstances where it may be
considered to be an underwriter under the Securities Act of 1933.
4. Purchase or sell real estate, unless acquired as a result of
ownership of securities or other instruments and provided that this
restriction does not prevent the Fund from investing in issuers which invest,
deal or otherwise engage in transactions in real estate or interests therein,
or investing in securities that are secured by real estate or interests
therein.
5. Purchase or sell physical commodities, unless acquired as a result
of ownership of securities or other instruments and provided that this
restriction does not prevent a Portfolio from engaging in transactions
involving futures contracts and options thereon or investing in securities
that are secured by physical commodities.
6. Make loans, provided that this restriction does not prevent the
Fund from purchasing debt obligations, entering into repurchase agreements,
loaning its assets to broker/dealers or institutional investors and investing in
loans, including assignments and participation interests.
In addition to the fundamental policies and investment restrictions
described above, and the various general investment policies described in the
Prospectus, The Small-Cap Growth Equity Portfolio, The Growth and Income
Portfolio and The Asset Allocation Portfolio will be subject to the following
investment restrictions (except as otherwise noted), which are considered
non-fundamental and may be changed by the Board of Directors or Trustees, as
applicable, without shareholder approval.
1. The Small-Cap Growth Equity Portfolio, The Growth and Income
Portfolio and The Asset Allocation Portfolio are permitted to invest in other
investment companies, including open-end, closed-end or unregistered
investment companies, either within the percentage limits set forth in the
1940 Act, any rule or order thereunder, or SEC staff interpretation thereof,
or without regard to percentage limits in connection with a merger,
reorganization, consolidation or other similar transaction. However, neither
The Small-Cap Growth Equity Portfolio or The Growth and Income Portfolio may
operate as a "fund of funds" which invests primarily in the shares of other
investment companies as permitted by Section 12(d)(1)(F) or (G) of the 1940
Act, if its own shares are utilized as investments by such a "fund of funds."
2. A Portfolio may not invest more than 15% of its net assets in
securities which it can not sell or dispose of in the ordinary course of
business within seven days at approximately the value at which the Fund has
valued the investment.
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Foreign Investment Information (The International Mid-Cap Sub Portfolio, The
International Equity Portfolio, The Labor Select International Equity
Portfolio, The Real Estate Investment Trust Portfolios, The Global Fixed
Income Portfolio, The International Fixed Income Portfolio, The High-Yield
Bond Portfolio, The Diversified Core Fixed Income Portfolio, The Emerging
Markets Portfolio, The Global Equity Portfolio, The Asset Allocation
Portfolio, The Small-Cap Growth Equity Portfolio and The Growth and Income
Portfolio)
Investors in The International Mid-Cap Sub Portfolio, The
International Equity Portfolio, The Labor Select International Equity
Portfolio, The Global Fixed Income Portfolio, The International Fixed Income
Portfolio, The Emerging Markets Portfolio and The Global Equity Portfolio (as
well as in The Real Estate Investment Trust Portfolios, The Diversified Core
Fixed Income Portfolio, The High-Yield Bond Portfolio, The Asset
Allocation Portfolio, The Small-Cap Growth Equity Portfolio and The Growth and
Income 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 related 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, The Diversified Core Fixed
Income Portfolio, The Emerging Markets Portfolio, The Global Equity
Portfolio, The Asset Allocation Portfolio, The Small-Cap Growth Equity
Portfolio and The Growth and 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 International Mid-Cap Sub Portfolio, The
Labor Select International Equity Portfolio, The Real Estate Investment Trust
Portfolios, The Global Fixed Income Portfolio, The International Fixed Income
Portfolio, The Emerging Markets Portfolio, The Global Equity Portfolio,
The Diversified Core Fixed Income Portfolio, The Asset Allocation Portfolio,
The Small-Cap Growth Equity Portfolio and The Growth and 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
ordinary gain or loss. A taxpayer may elect to treat as capital gain or loss
foreign currency
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<PAGE>
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.
As disclosed in the related Prospectus, there are a number of risks
involved in investing in foreign securities, including securities of issuers
in emerging market countries in which The Emerging Markets, The International
Mid-Cap Sub, The International Equity, The Labor Select International Equity,
The Global Equity, The International Fixed Income, The Global Fixed Income
(and with respect to The Real Estate Investment Trust, The High Yield Bond,
The Diversified Core Fixed Income Portfolios, The Asset Allocation Portfolio,
The Small-Cap Growth Equity Portfolio and The Growth and Income Portfolio as
to 10%, 10%, 10%, 5%, 0%, 0% and 0% of their assets, respectively) Portfolios
may invest. For example, the assets and profits appearing on the financial
statements of a developing or emerging country issuer may not reflect its
financial position or results of operations in the way they would be reflected
had the financial statements been prepared in accordance with United States
generally accepted accounting principles. Also, for an issuer that keeps
accounting records in a local currency, inflation accounting rules may require
both tax and accounting purposes, that certain assets and liabilities be
restated on the issuer's balance sheet in order to express items in terms of
currency or constant purchasing power. Inflation accounting may indirectly
generate losses on profits.
With reference to the Portfolios' investments in foreign government
securities, there is the risk that a foreign governmental issuer may default
on its obligations. If such a default occurs, a Portfolio may have limited
effective legal recourse against the issuer and/or guarantor. Remedies must,
in some cases, be pursued in the courts of the defaulting party itself, and
the ability of the holder of foreign government and government-related debt
securities to obtain recourse may be subject to the political climate in the
relevant country. In addition, no assurance can be given that the holders of
commercial bank debt will not contest payments to the holders of other foreign
government and government-related debt obligations in the event of default
under their commercial bank loan agreements.
The issuers of foreign government and government-related debt
securities have in the past experienced substantial difficulties in servicing
their external debt obligations, which have led to defaults on certain
obligations and the restructuring of certain indebtedness. Restructuring
arrangements have included, among other things, reducing and rescheduling
interest and principal payments by negotiating new or amended credit
agreements or converting outstanding principal and unpaid interest to Brady
Bonds, and obtaining new credit to finance interest payments. Holders of
certain foreign government and government-related high-yield securities may be
requested to participate in the restructuring of such obligations and to
extend further loans to their issuers. There can be no assurance that Brady
Bonds and other foreign government and government-related securities will not
be subject to similar defaults or restructuring arrangements which may
adversely affect the value of such investments. Furthermore, certain
participants in the secondary market for such debt may be directly involved in
negotiating the terms of these arrangements and may therefore have access to
information not available to other market participants.
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<PAGE>
Investments and opportunities for investments by foreign investors in
emerging market countries are subject to a variety of national policies and
restrictions. These restrictions may take the form of prior governmental
approval, limits on the amount or type of securities held by foreigners,
limits on the types of companies in which foreigners may invest and
prohibitions on foreign investments in issuers or industries deemed sensitive
to national interests. Additional restrictions may be imposed at any time by
these or other countries in which the Portfolios' invest. Although these
restrictions may in the future make it undesirable to invest in emerging
countries, a Portfolio's adviser or sub-adviser, as relevant, does not believe
that any current registration restrictions would affect its decision to invest
in such countries.
As disclosed in the Prospectus for The International Mid-Cap Sub
Portfolio, the foreign fixed-income securities in which the Portfolio may
invest may be U.S. dollar or foreign currency denominated, including ECU. Such
securities 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 Work Bank, European Investment Bank, Asian
Development Bank, European Economic Community and the Inter-American
Development Bank. Such fixed-income securities will be typically rated, at the
time of purchase, AA or higher by Standard & Poor's Ratings Group or Aa or
higher by Moody's Investor Service, Inc. or of comparable quality as
determined by the Portfolio's investment adviser.
Foreign Currency Transactions (The International Equity Portfolio, The
International Mid-Cap Sub Portfolio, The Labor Select International Equity
Portfolio, The Real Estate Investment Trust Portfolios, The Global Fixed
Income Portfolio, The International Fixed Income Portfolio, The Emerging
Markets Portfolio, The Global Equity Portfolio, The Diversified Core Fixed
Income Portfolio, The Asset Allocation Portfolio, The Small-Cap Growth Equity
Portfolio and The Growth and Income Portfolio)
The International Equity Portfolio, The International Mid-Cap Sub
Portfolio, The Labor Select International Equity Portfolio, The Global Fixed
Income Portfolio, The International Fixed Income Portfolio, The Emerging
Markets Portfolio and The Global Equity Portfolio (as well as The Real Estate
Investment Trust Portfolios, The Diversified Core Fixed Income Portfolio,
The Asset Allocation Portfolio, The Small-Cap Growth Equity Portfolio and The
Growth and Income 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, its 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.
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As noted in the related Prospectus, The International Fixed Income
Portfolio, The Emerging Markets Portfolio, The Global Equity Portfolio,
The Diversified Core Fixed Income Portfolio and The Asset Allocation 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.
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
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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 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, The International Fixed Income
Portfolio, The Diversified Core Fixed Income Portfolio, The Emerging Markets
Portfolio and The Asset Allocation Portfolio)
The Global Fixed Income Portfolio, The International Fixed Income
Portfolio, The Diversified Core Fixed Income Portfolio, The Emerging
Markets Portfolio and The Asset Allocation Portfolio may invest, within the
limits specified in the related 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
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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 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, The Real Estate Investment Trust Portfolios, The
Diversified Core Fixed Income Portfolio, The Emerging Markets Portfolio,
The Global Equity Portfolio, The Asset Allocation Portfolio, The Small-Cap
Growth Equity Portfolio and The Growth and Income Portfolio)
In order to remain fully invested, and to reduce transaction costs,
The Aggressive Growth Portfolio, The Real Estate Investment Trust Portfolios,
The Diversified Core Fixed Income Portfolio, The Emerging Markets Portfolio,
The Global Equity Portfolio, The Asset Allocation Portfolio, The Small-Cap
Growth Equity Portfolio and The Growth and Income Portfolio may, to the
limited extent identified in the related 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.
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Options
The Aggressive Growth Portfolio, The Real Estate Investment Trust
Portfolios, The Emerging Markets Portfolio, The Global Equity Portfolio,
The Asset Allocation Portfolio, The Small-Cap Growth Equity Portfolio and The
Growth and Income Portfolio may purchase call options, write call options on a
covered basis, purchase put options and write put options. Writing put options
will require the Portfolio to segregate assets sufficient to cover the put while
the option is outstanding.
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
Portfolios, The Diversified Core Fixed Income Portfolio, The Emerging Markets
Portfolio, The Global Equity Portfolio, The Asset Allocation Portfolio, The
Small-Cap Growth Equity Portfolio and The Growth and Income Portfolio will not
invest more than 15% of their respective 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.
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
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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
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.
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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 Aggressive Growth, The Real Estate Investment Trust
and The Diversified Core Fixed Income 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. A Portfolio may write put
options only if the Portfolio will maintain in a segregated account with its
Custodian Bank, cash, U.S. government securities or other assets in an amount
not less than the exercise price of the option at all times during the option
period. The amount of cash, U.S. government securities or other assets 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, such 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
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.
Options on Stock Indices
The Emerging Markets Portfolio, The Global Equity Portfolio, The
Diversified Core Fixed Income Portfolio, The Asset Allocation Portfolio, The
Small-Cap Growth Equity Portfolio and The Growth
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and Income Portfolio may acquire options on stock indices. A stock index
assigns relative values to the common stocks included in the index with the
index fluctuating with changes in the market values of the underlying common
stock.
Options on stock indices are similar to options on stocks but have
different delivery requirements. Stock options provide the right to take or
make delivery of the underlying stock at a specified price. A stock index
option gives the holder the right to receive a cash "exercise settlement
amount" equal to (i) the amount by which the fixed exercise price of the
option exceeds (in the case of a put) or is less than (in the case of a call)
the closing value of the underlying index on the date of exercise, multiplied
by (ii) a fixed "index multiplier." Receipt of this cash amount will depend
upon the closing level of the stock index upon which the option is based being
greater than (in the case of a call) or less than (in the case of a put) the
exercise price of the option. The amount of cash received will be equal to
such difference between the closing price of the index and exercise price of
the option expressed in dollars times a specified multiple. The writer of the
option is obligated, in return for the premium received to make delivery of
this amount. Gain or loss to a Portfolio on transactions in stock index
options will depend on price movements in the stock market generally (or in a
particular industry or segment of the market) rather than price movements of
individual securities. As with stock options, a Portfolio may offset its
position in stock index options prior to expiration by entering into a closing
transaction on an Exchange or it may let the option expire unexercised.
A stock index fluctuates with changes in the market values of the
stock so included. Some stock index options are based on a broad market index
such as the Standard & Poor's 500 or the New York Stock Exchange Composite
Index, or a narrower market index such as the Standard & Poor's 100. Indices
are also based on an industry or market segment such as the AMEX Oil and Gas
Index or the Computer and Business Equipment Index. Options on stock indices
are currently traded on domestic exchanges such as: The Chicago Board Options
Exchange, the New York Stock Exchange and American Stock Exchange as well as
on foreign exchanges.
A Portfolio's ability to hedge effectively all or a portion of its
securities through transactions in options on stock indices depends on the
degree to which price movements in the Portfolio's securities. Since a
Portfolio will not duplicate the components of an index, the correlation will
not be exact. Consequently, a Portfolio bears the risk that the prices of the
securities being hedged will not move in the same amount as the hedging
instrument. It is also possible that there may be a negative correlation
between the index or other securities which would result in a loss on both
such securities and the hedging instrument.
Positions in stock index options may be closed out only on an
Exchange which provides a secondary market. There can be no assurance that a
liquid secondary market will exist for any particular stock index option.
Thus, it may not be possible to close such an option. The inability to close
options positions could have an adverse impact on a Portfolio's ability
effectively to hedge its securities. A Portfolio will enter into an option
position only if there appears to be a liquid secondary market for such
options.
A Portfolio will not engage in transactions in options on stock
indices for speculative purposes but only to protect appreciation attained and
to take advantage of the liquidity available in the option markets.
Futures and Options on Futures
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Consistent with the limited circumstances under which The Aggressive
Growth Portfolio, The Real Estate Investment Trust Portfolios, The Diversified
Core Fixed Income Portfolio, The Emerging Markets Portfolio, The Global
Equity Portfolio, The Asset Allocation Portfolio, The Small-Cap Growth Equity
Portfolio and The Growth and Income 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 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
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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 Intermediate Fixed Income Portfolio, The
Limited-Term Maturity Portfolio, The Aggregate Fixed Income Portfolio, The
Diversified Core Fixed Income Portfolio, The Asset Allocation Portfolio and
The Growth and Income Portfolio)
The Intermediate Fixed Income Portfolio, The Limited-Term Maturity
Portfolio, The Aggregate Fixed Income Portfolio, The Diversified Core
Fixed Income Portfolio, The Asset Allocation Portfolio and The Growth and
Income Portfolio may each 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 or the concentration of collateral in a
particular geographic area. Therefore, the yield may be difficult to predict
and actual yield to maturity may be more or less than 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
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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.
High-Yield Securities (The High Yield Bond Portfolio, The Diversified
Core Fixed Income Portfolio and The Asset Allocation Portfolio)
The High Yield Bond Portfolio, The Diversified Core Fixed Income
Portfolio and The Asset Allocation Portfolio may invest their assets in
high-yielding, lower rated or unrated fixed-income securities (commonly known
as "junk bonds") issued by U.S. companies or, in the case of The Diversified
Core Fixed Income Portfolio and The Asset Allocation Portfolio, also in
foreign companies. Among the possible risks of investing in high-yield
securities are the possibility of legislative and regulatory action and
proposals. 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 securities. For example,
Congressional legislation limited the deductibility of interest paid on
certain high-yield securities 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
purchases of high-yield securities 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 Portfolios to attain their investment
objective.
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 Investments family, including Pooled Trust,
Inc. and Foundation Funds, have obtained an exemption from the
joint-transaction prohibitions of Section 17(d) of the 1940 Act to allow such
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
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<PAGE>
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 or Trustees, as applicable, determines to present minimal credit
risks and which are of high quality. In addition, a Portfolio must have
collateral of at least 102% 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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<PAGE>
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 Pooled Trust, Inc. and Foundation Funds,
as applicable, 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 Pooled Trust, Inc. 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 or Trustees of Pooled Trust, Inc. or Foundation
Funds, as applicable, 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 or
Trustees as applicable, 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.
Restricted and 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 or Trustees, as applicable, 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 Boards have 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 or Trustees, as applicable, 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.
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<PAGE>
The International Mid-Cap Sub Portfolio, The Diversified Core Fixed
Income Portfolio, The Asset Allocation Portfolio, The Small-Cap Growth Equity
Portfolio and The Growth and Income Portfolio may purchase privately-placed
securities whose resale is restricted under applicable securities laws. Such
restricted securities generally offer a higher return potential than
comparable registered securities but involve some additional risk since they
can be resold only in privately-negotiated transactions or after registration
under applicable securities laws. The registration process may involve delays
which would result in the Portfolio obtaining a less favorable price on a
resale. The International Mid-Cap Sub Portfolio, Diversified Core Fixed Income
Portfolio, The Asset Allocation Portfolio, The Small-Cap Growth Equity
Portfolio and The Growth and Income Portfolio will not purchase illiquid
assets if more than 15% of its net assets would then consist of such illiquid
securities.
Non-Traditional Equity Securities (The International Mid-Cap Sub Portfolio,
The Emerging Markets Portfolio and The Asset Allocation Portfolio)
The International Mid-Cap Sub Portfolio, The Emerging Markets
Portfolio and The Asset Allocation Portfolio 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. 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 International Mid-Cap Sub Portfolio, The Emerging Markets
Portfolio and The Asset Allocation Portfolio 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 (Stocks 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.
U.S. Government Securities
As disclosed in the Prospectus for The International Mid-Cap Sub
Portfolio, the Portfolio may invest in U.S. government securities for
temporary purposes and otherwise (see "INVESTMENT OBJECTIVES,
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<PAGE>
POLICIES AND RISK CONSIDERATIONS"). Such securities may 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.
CONCENTRATION
In applying The Small-Cap Growth Equity Portfolio's, The Growth and
Income Portfolio's and The Asset Allocation Portfolio's policy on
concentration: (i) utility companies will be divided according to their
services, for example, gas, gas transmission, electric and telephone will each
be considered a separate industry; (ii) financial service companies will be
classified according to the end users of their services, for example,
automobile finance, bank finance and diversified finance will each be
considered a separate industry; and (iii) asset backed securities will be
classified according to the underlying assets securing such securities.
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<PAGE>
ACCOUNTING AND TAX ISSUES
When The Aggressive Growth Portfolio, either of The Real Estate
Investment Trust Portfolios, The International Fixed Income Portfolio, The
Emerging Markets Portfolio, The Global Equity Portfolio, The Diversified
Core Fixed Income Portfolio, The Asset Allocation Portfolio, The Small-Cap
Growth Equity Portfolio or The Growth and 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.
Options on Certain Stock Indices
Accounting for options on certain stock indices will be in accordance
with generally accepted accounting principles. The amount of any realized gain
or loss on closing out such a position will result in a realized gain or loss
for tax purposes. Such options held by a Portfolio at the end of each fiscal
year on a broad-based stock index will be required to be "marked to market"
for federal income tax purposes. Generally, 60% of any net gain or loss
recognized on such deemed sales or on any actual sales will be treated as
long-term capital gain or loss, and the remainder will be treated as
short-term capital gain or loss.
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. As such, a Portfolio will not be subject to
federal income tax, or to any excise tax, to the extent its earnings are
distributed as provided in the Code and it satisfies other requirements
relating to the sources of its income and diversification of its assets.
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<PAGE>
In order to qualify as a regulated investment company for federal
income tax purposes, each Portfolio must meet certain specific requirements,
including:
(i) The Portfolio must maintain a diversified portfolio of
securities, wherein no security (other than U.S. government securities and
securities of other regulated investment companies) can exceed 25% of the
Portfolio's total assets, and, with respect to 50% of the Portfolio's total
assets, no investment (other than cash and cash items, U.S. government
securities and securities of other regulated investment companies) can exceed
5% of the Portfolio's total assets;
(ii) The Portfolio must derive at least 90% of its gross income from
dividends, interest, payments with respect to securities loans, and gains from
the sale or disposition of stock and securities or foreign currencies, or
other income derived with respect to its business of investing in such stock,
securities, or currencies;
(iii) The Portfolio must distribute to its shareholders at least 90%
of its net investment income and net tax-exempt income for each of its fiscal
years, and
(iv) The Portfolio must realize less than 30% of its gross income for
each fiscal year from gains from the sale of securities and certain other
assets that have been held by the Portfolio for less than three months
("short-short income"). The Taxpayer Relief Act of 1997 (the "1997 Act")
repealed the 30% short-short income test for tax years of regulated investment
companies beginning after August 5, 1997; however, this rule may have
continuing effect in some states for purposes of classifying the Portfolio as
a regulated investment company.
The Code requires the Portfolios to distribute at least 98% of its
taxable ordinary income earned during the calendar year and 98% of its capital
gain net income earned during the 12 month period ending October 31 (in
addition to amounts from the prior year that were neither distributed nor
taxed to a Portfolio) to you by December 31 of each year in order to avoid
federal excise taxes. The Portfolios intend as a matter of policy to declare
and pay sufficient dividends in December or January (which are treated by you
as received in December) but does not guarantee and can give no assurances
that its distributions will be sufficient to eliminate all such taxes.
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 year that unrealized losses exceed unrealized gains.
The 1997 Act has also added new provisions for dealing with
transactions that are generally called "Constructive Sale Transactions." Under
these rules, the Portfolio must recognize gain (but not loss) on any
constructive sale of an appreciated financial position in stock, a partnership
interest or certain debt instruments. The Portfolio will generally be treated
as making a constructive sale when it: 1) enters into a short sale on the same
or substantially identical property; 2) enters into an offsetting notional
principal contract; or 3) enters into a futures or forward contract to deliver
the same or substantially identical property. Other transactions (including
certain financial instruments called collars) will be treated as constructive
sales as provided in Treasury regulations to be published. There are also
certain exceptions that apply for transactions that are closed before the end
of the 30th day after the close of the taxable year.
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<PAGE>
Investment in Foreign Currencies and Foreign Securities--Certain of
the Portfolios are authorized to invest certain limited amounts in foreign
securities. Such investments, if made, will have the following additional tax
consequences to each Portfolio:
Under the Code, gains or losses attributable to fluctuations in
foreign currency exchange rates which occur between the time a Portfolio
accrues income (including dividends), or accrues expenses which are
denominated in a foreign currency, and the time a Portfolio actually collects
such income or pays such expenses generally are treated as ordinary income or
loss. Similarly, on the disposition of debt securities denominated in a
foreign currency and on the disposition of certain options, futures, forward
contracts, gain or loss attributable to fluctuations in the value of foreign
currency between the date of acquisition of the security or contract and the
date of its disposition are also treated as ordinary gain or loss. These gains
or losses, referred to under the Code as "Section 988" gains or losses, may
increase or decrease the amount of a Portfolio's net investment company
taxable income, which, in turn, will affect the amount of income to be
distributed to you by a Portfolio.
If a Portfolio's Section 988 losses exceed a Portfolio's other net
investment company taxable income during a taxable year, a Portfolio generally
will not be able to make ordinary dividend distributions to you for that year,
or distributions made before the losses were realized will be recharacterized
as return of capital distributions of federal income tax purposes, rather than
as an ordinary dividend or capital gain distribution. If a distribution is
treated as a return of capital, your tax basis in your Portfolio shares will
be reduced by a like amount (to the extent of such basis), and any excess of
the distribution over your tax basis in your Portfolio shares will be treated
as capital gain to you.
The 1997 Act generally requires that foreign income be translated
into U.S. dollars at the average exchange rate for the tax year in which the
transactions are conducted. Certain exceptions apply to taxes paid more than
two years after the taxable year to which they relate. This new law may
require a Portfolio to track and record adjustments to foreign taxes paid on
foreign securities in which it invests. Under a Portfolio's current reporting
procedure, foreign security transactions are recorded generally at the time of
each transaction using the foreign currency spot rate available for the date
of each transaction. Under the new law, a Portfolio will be required to record
a fiscal year end (and at calendar year end for excise tax purposes) an
adjustment that reflects the difference between the spot rates recorded for
each transaction and the year-end average exchange rate for all of a
Portfolio's foreign securities transactions. There is a possibility that the
mutual fund industry will be given relief from this new provision, in which
case no year-end adjustments will be required.
The Portfolios may be subject to foreign withholding taxes on income
from certain of its foreign securities. If more than 50% of the total assets
of a Portfolio at the end of its fiscal year are invested in securities of
foreign corporations, a Portfolio may elect to pass-through to you your pro
rata share of foreign taxes paid by a Portfolio. If this election is made, you
will be: (i) required to include in your gross income your pro rata share of
foreign source income (including any foreign taxes paid by a Portfolio); and
(ii) entitled to either deduct your share of such foreign taxes in computing
your taxable income or to claim a credit for such taxes against your U.S.
income tax, subject to certain limitations under the Code. You will be
informed by a Portfolio at the end of each calendar year regarding the
availability of any such foreign tax credits and the amount of foreign source
income (including any foreign taxes paid by a Portfolio). If a Portfolio
elects to pass-through to you the foreign income taxes that it has paid, you
will be informed at the end of the calendar year of the amount of foreign
taxes paid and foreign source income that must be included on your federal
income tax return. If a Portfolio invests 50% or less of its total assets in
securities of foreign corporations, it will not be entitled to pass-through to
you your pro-rata shares of foreign taxes paid by a Portfolio. In this case,
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<PAGE>
these taxes will be taken as a deduction by a Portfolio, and the income
reported to you will be the net amount after these deductions. The 1997 Act
also simplifies the procedures by which investors in funds that invest in
foreign securities can claim tax credits on their individual income tax
returns for the foreign taxes paid by a Portfolio. These provisions will allow
investors who pay foreign taxes of $300 or less on a single return or $600 or
less on a joint return during any year (all of which must be reported on IRS
Form 1099-DIV from a Portfolio to the investor) to claim a tax credit against
their U.S. federal income tax for the amount of foreign taxes paid by a
Portfolio. This process will allow you, if you qualify, to bypass the
burdensome and detailed reporting requirements on the foreign tax credit
schedule (Form 1116) and report your foreign taxes paid directly on page 2 of
Form 1040. You should note that this simplified procedure will not be
available until calendar year 1998.
Investment in Passive Foreign Investment Company securities--The
Portfolios may invest in shares of foreign corporations which may be
classified under the Code as passive foreign investment companies ("PFICs").
In general, a foreign corporation is classified as a PFIC if at least one-half
of its assets constitute investment-type assets or 75% or more of its gross
income is investment-type income. If a Portfolio receives an "excess
distribution" with respect to PFIC stock, the Portfolio itself may be subject
to U.S. federal income tax on a portion of the distribution, whether or not
the corresponding income is distributed by a Portfolio to you. In general,
under the PFIC rules, an excess distribution is treated as having been
realized ratably over the period during which a Portfolio held the PFIC
shares. A Portfolio itself will be subject to tax on the portion, if any, of
an excess distribution that is so allocated to prior Portfolio taxable years,
and an interest factor will be added to the tax, as if the tax had been
payable in such prior taxable years. In this case, you would not be permitted
to claim a credit on your own tax return for the tax paid by a Portfolio.
Certain distributions from a PFIC as well as gain from the sale of PFIC shares
are treated as excess distributions. Excess distributions are characterized as
ordinary income even though, absent application of the PFIC rules, certain
distribution might have been classified as capital gain. This may have the
effect of increasing Portfolio distributions to you that are treated as
ordinary dividends rather than long-term capital gain dividends.
A Portfolio may be eligible to elect alternative tax treatment with
respect to PFIC shares. Under an election that currently is available in some
circumstances, a Portfolio generally would be required to include in its gross
income its share of the earnings of a PFIC on a current basis, regardless of
whether distributions are received from the PFIC during such period. If this
election were made, the special rules, discussed above, relating to the
taxation of excess distributions, would not apply. In addition, the 1997 Act
provides for another election that would involve marking-to-market the
Portfolio's PFIC shares at the end of each taxable year (and on certain other
dates as prescribed in the Code), with the result that unrealized gains would
be treated as though they were realized. The Portfolio would also be allowed
an ordinary deduction for the excess, if any, of the adjusted basis of its
investment in the PFIC stock over its fair market value at the end of the
taxable year. This deduction would be limited to the amount of any net
mark-to-market gains previously included with respect to that particular PFIC
security. If a Portfolio were to make this second PFIC election, tax at the
Portfolio level under the PFIC rules would generally be eliminated.
The application of the PFIC rules may affect, among other things, the
amount of tax payable by a Portfolio (if any), the amounts distributable to
you by a Portfolio, the time at which these distributions must be made, and
whether these distributions will be classified as ordinary income or capital
gain distributions to you.
You should be aware that it is not always possible at the time shares
of a foreign corporation are acquired to ascertain that the foreign
corporation is a PFIC, and that there is always a possibility that a foreign
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<PAGE>
corporation will become a PFIC after a Portfolio acquires shares in that
corporation. While a Portfolio will generally seek to avoid investing in PFIC
shares to avoid the tax consequences detailed above, there are no guarantees
that it will do so and it reserves the right to make such investments as a
matter of its fundamental investment policy.
Most foreign exchange gains are classified as ordinary income which
will be taxable to you as such when distributed. Similarly, you should be
aware that any foreign exchange losses realized by a Portfolio, including any
losses realized on the sale of foreign debt securities, are generally treated
as ordinary losses for federal income tax purposes. This treatment could
increase or reduce a Portfolio's income available for distribution to you, and
may cause some or all of a Portfolio's previously distributed income to be
classified as a return of capital.
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<PAGE>
PERFORMANCE INFORMATION
From time to time, Pooled Trust, Inc. may state each Portfolio's
total return and each Portfolio class' 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 or the Portfolio class'
average annual total rate of return over the most recent one-, five-, and
ten-year periods, as relevant. Pooled Trust, Inc. may also advertise aggregate
and average total return information of each Portfolio and Portfolio class
over additional periods of time.
Average annual total rate of return for each Portfolio and Portfolio
class 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,
after deduction of the maximum front-end sales charge
in the case of REIT Fund A Class of The Real Estate
Investment Trust Portfolio;
T = average annual total return;
n = number of years;
ERV = redeemable value of the hypothetical $1,000 purchase
at the end of the period, after deduction of the
applicable CDSC, if any, in the case of REIT Fund B
Class and REIT Fund C Class of The Real Estate
Investment Trust Portfolio.
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 total return for REIT Fund A Class of The Real Estate Investment
Trust Portfolio at offer reflects the maximum front-end sales charge of 4.75%
paid on the purchase of shares. The total return for REIT Fund A Class at net
asset value (NAV) does not reflect the payment of any front-end sales charge.
The Limited CDSC, applicable only to certain redemptions of those shares, will
not be deducted from any computation of total return. See the Prospectus for
REIT Fund A Class for a description of the Limited CDSC and the limited
instances in which it applies. The Fund may also present total return
information for The Real Estate Investment Trust Portfolio that does not
reflect the deduction of the maximum front-end sales charge with respect to
REIT Fund A Class.
The performance, as shown below, is the average annual total return
quotations for The Large-Cap Value Equity Portfolio, The Aggressive Growth
Portfolio, The International Equity Portfolio, The Global Fixed Income
Portfolio, The Labor Select International Equity Portfolio, The Intermediate
Fixed Income Portfolio, The Real Estate Investment Trust Portfolios, The
High-Yield Bond Portfolio, The International Fixed Income Portfolio and The
Emerging Markets Portfolio through April 30, 1998. Securities prices
fluctuated during the period covered and the past results should not be
considered as representative of future performance.
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<TABLE>
<CAPTION>
Average Annual Total Return(1)
The The
Large-Cap Aggressive
Value Equity Growth
Portfolio Portfolio
<S> <C> <C> <C> <C>
1 year ended 1 year ended
4/30/98 00.00% 4/30/98 00.00%
3 years ended 3 years ended
4/30/98 00.00% 4/30/98 00.00%
5 years ended 5 years ended
4/30/98 00.00% 4/30/98 00.00%
Period 2/3/92(2) Period 2/27/92(2)
through 4/30/98 00.00% through 4/30/98 00.00%
The
The Global
International Fixed
Equity Income
Portfolio Portfolio
1 year ended 1 year ended
4/30/98 00.00% 4/30/98 00.00%
3 years ended 3 years ended
4/30/98 00.00% 4/30/98 00.00%
5 years ended 5 years ended
4/30/98 00.00% 4/30/98 00.00%
Period 2/4/92(2) Period 11/30/92(2)
through 4/30/98 00.00% through 4/30/98 00.00%
</TABLE>
(1) Certain expenses of the Portfolios have been waived and paid by the
respective investment adviser. In the absence of such waiver and
payment, performance would have been affected negatively.
(2) Date of initial sale.
-32-
<PAGE>
Average Annual Total Return(1)
The
Labor The
Select Intermediate
International Fixed
Equity Income
Portfolio Portfolio
1 year ended 1 year ended
4/30/98 00.00% 4/30/98 00.00%
Period Period
12/19/95(2) 3/12/96(2)
through through
4/30/98 00.00% 4/30/98 00.00%
(1) Certain expenses of the Portfolios have been waived and paid by the
respective investment adviser. In the absence of such waiver and
payment, performance would have been affected negatively.
(2) Date of initial sale.
<TABLE>
<CAPTION>
Average Annual Total Return(1)
The
The International The
High-Yield Fixed Emerging
Bond Income Markets
Portfolio Portfolio Portfolio
<S> <C> <C> <C> <C> <C> <C>
1 year ended 1 year ended 1 year ended
4/30/98 00.00% 4/30/98 0.00% 4/30/98 0.00%
Period Period Period
12/2/96(2) 4/11/97(2) 4/14/97(2)
through through through
4/30/98 00.00% 4/30/98 0.00% 4/30/98 0.00%
</TABLE>
(1) Certain expenses of the Portfolios have been waived and paid by the
respective investment adviser. In the absence of such waiver and
payment, performance would have been affected negatively.
(2) Date of initial sale.
-33-
<PAGE>
Average Annual Total Return(1)
The Real Estate Investment Trust Portfolio
The Real Estate
Investment Trust
Portfolio Class (2)
1 year ended
4/30/98 00.00%
Period
12/6/95(3)
through
4/30/98 00.00%
(1) Certain expenses of the Portfolios have been waived and paid by the
investment adviser. In the absence of such waiver and payment,
performance would have been affected negatively.
(2) Shares of The Real Estate Investment Trust Portfolio class were made
available for sale beginning October 14, 1997. Pursuant to applicable
regulation, total return shown for the class is that of the original
(and then only) class of shares offered by The Real Estate Investment
Trust Portfolio. That original class has been redesignated REIT Fund A
Class. Like The Real Estate Investment Trust Portfolio class, the
original class, prior to its redesignation, did not carry a front-end
sales charge and was not subject to Rule 12b-1 distribution
expenses.
(3) Date of initial sale of the original class (now REIT Fund A Class).
Average Annual Total Return(1)
The Real Estate Investment Trust Portfolio
REIT Fund REIT Fund REIT Fund
A Class A Class Institutional Class(3)
(at Offer)(2) (at NAV)
1 year ended
4/30/98 00.00% 00.00% 00.00%
Period
12/6/95(4)
through
4/30/98 00.00% 00.00% 00.00%
(1) Certain expenses of the Portfolios have been waived and paid by the
investment adviser. In the absence of such waiver and payment,
performance would have been affected negatively.
-34-
<PAGE>
(2) The total return presented above is based upon the performance of the
original (and then only) class of shares offered by The Real Estate
Investment Trust Portfolio, which did not carry a front-end sales charge
and was not subject to Rule 12b-1 distribution expenses. That original
class has been redesignated REIT Fund A Class. Effective October 14,
1997, a front-end sales charge of 4.75% was imposed on sales of
those shares and effective November 3, 1997 the class was subject to
annual 12b-1 distribution expenses of up to 0.30% of average daily net
assets of the class. These performance numbers are calculated giving
effect to the sales charge. For periods prior to November 3, 1997,
no adjustment has been made to reflect the effect of 12b-1 payments.
Performance on and after November 3, 1997 will be affected by 12b-1
payments. REIT Fund A Class is subject to other expenses (at a
higher rate than applicable to the original class) which may affect
performance of the Class.
(3) Shares of REIT Fund Institutional Class were made available for sale
beginning October 14, 1997. Pursuant to applicable regulation, total
return shown for the class is that of the original (and then only) class
of shares offered by The Real Estate Investment Trust Portfolio. That
original class has been redesignated REIT Fund A Class. Like REIT Fund
Institutional Class, the original class, prior to its redesignation, did
not carry a front-end sales charge and was not subject to Rule 12b-1
distribution expenses. REIT Fund Institutional Class is subject to
other expenses (at a higher rate than applicable to the original class)
which may affect performance of the Class.
(4) Date of initial sale of the original class (now REIT Fund A Class).
Pooled Trust, Inc. 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[(-------- + 1) -- 1]
cd
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.
-35-
<PAGE>
The above formula will be used in calculating quotations of yield, based
on specific 30-day periods identified in advertising by a 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 30-day yields
for The Global Fixed Income Portfolio, The Intermediate Fixed Income
Portfolio, The High-Yield Bond Portfolio and The International Fixed Income
Portfolio as of April 30, 1998 were 0.00%, 0.00%, 0.00% and 0.00%,
respectively. Each yield reflects the waiver and reimbursement commitment by
its investment adviser.
Investors should note that income earned and dividends paid by The
Intermediate Fixed Income Portfolio, The Limited-Term Maturity Portfolio, The
Global Fixed Income Portfolio, The International Fixed Income Portfolio, The
High-Yield Bond Portfolio, The Aggregate Fixed Income Portfolio and The
Diversified Core Fixed Income Portfolio will also vary depending upon
fluctuation in interest rates and performance of each Portfolio.
The net asset value of these seven 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, except for REIT Fund A
Class, REIT Fund B Class and REIT Fund C Class of The Real Estate Investment
Trust Portfolio. 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.
Pooled Trust, Inc. may promote the total return performance of The Real
Estate Investment Trust Portfolio II by comparison to the original class
(prior to its redesignation as REIT Fund A Class) of The Real Estate
Investment Trust Portfolio.
From time to time, each Portfolio may also quote its actual total
return performance, dividend results and other performance information
in advertising and other types of literature. This information may be
compared to that of other mutual funds with similar investment objectives and
to stock, bond and other relevant indices or to rankings prepared by
independent services or other financial or industry publications that monitor
the performance of mutual funds. For example, the performance of a
Portfolio may be compared to data prepared by Lipper Analytical Services,
Inc., Morningstar, Inc., or to the S&P 500 Index, the Dow Jones Industrial
Average, the Morgan Stanley Capital International (MSCI), Europe, Australia
and Far East (EAFE) Index, the MSCI Emerging Markets Free Index, or the
Salomon Brothers World Government Bond Index. Performance also may be compared
to data prepared by Lipper Analytical Services, Inc., Morningstar, Inc. or the
performance of unmanaged indices compiled or maintained by statistical
research firms such as Lehman Brothers or Salomon Brothers, Inc.
-36-
<PAGE>
Salomon Brothers and Lehman Brothers are statistical research firms that
maintain databases of international market, bond market, corporate and
government-issued securities of various maturities. This information, as well
as unmanaged indices compiled and maintained by these firms, will be used in
preparing comparative illustrations. In addition, the performance of multiple
indices compiled and maintained by these firms may be combined to create a
blended performance result for comparative purposes. Generally, the indices
selected will be representative of the types of securities in which a
Portfolio may invest and the assumptions that were used in calculating the
blended performance will be described.
Lipper Analytical Services, Inc. maintains statistical performance
databases, as reported by a diverse universe of independently-managed mutual
funds. Morningstar, Inc. is a mutual fund rating service that rates mutual
funds on the basis of risk-adjusted performance. Rankings that compare a
Portfolio's performance to another fund in appropriate categories over
specific time periods also may be quoted in advertising and other types of
literature. The S&P 500 and the Dow Jones Industrial Average are
industry-accepted unmanaged indices of generally-conservative securities used
for measuring general market performance. Similarly, the MSCI EAFE Index, the
MSCI Emerging Markets Free Index, and the Salomon Brothers World Government
Bond Index are industry-accepted unmanaged indices of equity securities in
developed countries and global debt securities, respectively, used for
measuring general market performance. The total return performance reported
for these indices will reflect the reinvestment of all distributions on a
quarterly basis and market price fluctuations. The indices do not take into
account any sales charges or other fees. A direct investment in an unmanaged
index is not possible.
Comparative information on the Consumer Price Index may also be included
in advertisements or other literature. The Consumer Price Index, as prepared
by the U.S. Bureau of Labor Statistics, is the most commonly used measure of
inflation. It indicates the cost fluctuations of a representative group of
consumer goods. It does not represent a return from an investment.
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. As well, 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.
A Portfolio may also promote its yield and/or total return performance
and use comparative performance information computed by and available from
certain industry and general market research and publications, such as Lipper
Analytical Services, Inc. and Morningstar, Inc.
The performance of multiple indices compiled and maintained by
statistical research firms, such as Morgan Stanley, Salomon Brothers and
Lehman Brothers, may be combined to create a blended performance result for
comparative purposes. Generally, the indices selected will be representative
of the types of securities in which a Portfolio may invest and the assumptions
that were used in calculating the blended performance will be described.
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 Pooled Trust, Inc.,
peer group comparison composites for each Portfolio. The peer group composites
will be constructed
-37-
<PAGE>
by selecting publicly-offered mutual funds that have investment objectives
that are similar to those maintained by each Portfolio. Wellesley Group
will also be preparing performance analyses of actual Portfolio
performance, and benchmark index exhibits, for inclusion in client quarterly
review packages.
Ibbotson Associates of Chicago, Illinois ("Ibbotson") provides
historical returns of the capital markets in the United States, including
common stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury
bills, the U.S. rate of inflation (based on the Consumer Price Index), and
combinations of various capital markets. The performance of these capital
markets is based on the returns of different indices. A Portfolio may use the
performance of these capital markets in order to demonstrate general
risk-versus-reward investment scenarios. Performance comparisons may also
include the value of a hypothetical investment in any of these capital
markets. The risks associated with the security types in any capital market
may or may not correspond directly to those of the Portfolio. A Portfolio may
also compare performance to that of other compilations or indices that may be
developed and made available in the future.
A Portfolio may include discussions or illustrations of the potential
investment goals of a prospective investor (including materials that describe
general principles of investing, such as asset allocation, diversification,
risk tolerance, and goal setting, questionnaires designed to help create a
personal financial profile, worksheets used to project savings needs based on
assumed rates of inflation and hypothetical rates of return and action plans
offering investment alternatives), investment management techniques, policies
or investment suitability of a Portfolio (such as value investing, market
timing, dollar cost averaging, asset allocation, constant ratio transfer,
automatic account rebalancing, the advantages and disadvantages of investing
in tax-deferred and taxable investments or global or international
investments), economic and political conditions, the relationship between
sectors of the economy and the economy as a whole, the effects of inflation
and historical performance of various asset classes, including but not limited
to, stocks, bonds and Treasury bills. From time to time advertisements, sales
literature, communications to shareholders or other materials may summarize
the substance of information contained in shareholder reports (including the
investment composition of a Portfolio), as well as the views as to current
market, economic, trade and interest rate trends, legislative, regulatory and
monetary developments, investment strategies and related matters believed to
be of relevance to a Portfolio. In addition, selected indices may be used to
illustrate historic performance of selected asset classes. The Portfolio may
also include in advertisements, sales literature, communications to
shareholders or other materials, charts, graphs or drawings which illustrate
the potential risks and rewards of investment in various investment vehicles,
including but not limited to, domestic and international stocks, and/or bonds,
treasury bills and shares of a Portfolio. In addition, advertisements, sales
literature, communications to shareholders or other materials may include a
discussion of certain attributes or benefits to be derived by an investment in
a Fund and/or other mutual funds, shareholder profiles and hypothetical
investor scenarios, timely information on financial management, tax and
retirement planning (such as information on Roth IRAs and Education IRAs) and
investment alternative to certificates of deposit and other financial
instruments. Such sales literature, communications to shareholders or other
materials may include symbols, headlines or other material which highlight or
summarize the information discussed in more detail therein.
Materials may refer to the CUSIP numbers of a Portfolio and may
illustrate how to find the listings of a Portfolio in newspapers and
periodicals. Materials may also include discussions of other Portfolios,
products, and services.
-38-
<PAGE>
A Portfolio may quote various measures of volatility and benchmark
correlation in advertising. In addition, the Portfolio may compare these
measures to those of other funds. Measures of volatility seek to compare the
historical share price fluctuations or total returns to those of a benchmark.
Measures of benchmark correlation indicate how valid a comparative benchmark
may be. Measures of volatility and correlation may be calculated using
averages of historical data. A Portfolio may advertise its current interest
rate sensitivity, duration, weighted average maturity or similar maturity
characteristics. Advertisements and sales materials relating to a Portfolio
may include information regarding the background and experience of its
portfolio managers.
The following tables are an example, for purposes of illustration only,
of cumulative total return performance through April 30, 1998 for each
Portfolio, other than The Limited-Term Maturity Portfolio, The International
Mid-Cap Sub Portfolio, The Asset Allocation Portfolio, The Small-Cap Growth
Equity Portfolio and The Growth and Income Portfolio. For these purposes, the
calculations assume the reinvestment of any capital gains distributions and
income dividends paid during the indicated periods.
<TABLE>
<CAPTION>
Cumulative Total Return(1)
The The
Large-Cap Aggressive
Value Equity Growth
Portfolio Portfolio
<S> <C> <C> <C> <C>
3 months ended 3 months ended
4/30/98 00.00% 4/30/98 00.00%
6 months ended 6 months ended
4/30/98 00.00% 4/30/98 00.00%
9 months ended 9 months ended
4/30/98 00.00% 4/30/98 00.00%
1 year ended 1 year ended
4/30/98 00.00% 4/30/98 00.00%
3 years ended 3 years ended
4/30/98 00.00% 4/30/98 00.00%
5 years ended 5 years ended
4/30/98 00.00% 4/30/98 00.00%
Period 2/3/92(2) Period 2/27/92(2)
through 4/30/98 00.00% through 4/30/98 00.00%
</TABLE>
(1) Certain expenses of the Portfolios have been waived and paid by the
respective investment adviser. In the absence of such waiver and
payment, performance would have been affected negatively.
(2) Date of initial sale.
-39-
<PAGE>
<TABLE>
<CAPTION>
Cumulative Total Return(1)
The The
International Global Fixed
Equity Income
Portfolio Portfolio
<S> <C> <C> <C> <C>
3 months ended 3 months ended
4/30/98 00.00% 4/30/98 00.00%
6 months ended 6 months ended
4/30/98 00.00% 4/30/98 00.00%
9 months ended 9 months ended
4/30/98 00.00% 4/30/98 00.00%
1 year ended 1 year ended
4/30/98 00.00% 4/30/98 00.00%
3 years ended 3 years ended
4/30/98 00.00% 4/30/98 00.00%
5 years ended Period 11/30/92(2)
4/30/98 00.00% through 4/30/98 00.00%
Period 2/4/92(2)
through 4/30/98 00.00%
</TABLE>
(1) Certain expenses of the Portfolios have been waived and paid by the
respective investment adviser. In the absence of such waiver and
payment, performance would have been affected negatively.
(2) Date of initial sale.
-40-
<PAGE>
<TABLE>
<CAPTION>
Cumulative Total Return(1)
The
Intermediate
Fixed The High-
Income Yield Bond
Portfolio Portfolio
<S> <C> <C> <C> <C>
3 months ended 3 months ended
4/30/98 00.00% 4/30/98 00.00%
6 months ended 6 months ended
4/30/98 00.00% 4/30/98 00.00%
9 months ended 9 months ended
4/30/98 00.00% 4/30/98 00.00%
1 year ended 1 year ended
4/30/98 00.00% 4/30/98 00.00%
Period 3/12/96(2) Period 12/2/96(2)
through 4/30/98 00.00% through 4/30/98 00.00%
</TABLE>
(1) Certain expenses of the Portfolios have been waived and paid by the
respective investment adviser. In the absence of such waiver and
payment, performance would have been affected negatively.
(2) Date of initial sale.
Cumulative Total Return(1)
The Real Estate Investment Trust Portfolio
The Real Estate
Investment Trust
Portfolio Class (2)
3 months ended 4/30/98 00.00%
6 months ended 4/30/98 00.00%
9 months ended 4/30/98 00.00%
1 year ended 4/30/98 00.00%
-41-
<PAGE>
Period 12/6/95(3) through 4/30/98 00.00%
(1) Certain expenses of the Portfolio have been waived and paid by the
investment adviser. In the absence of such waiver and payment,
performance would have been affected negatively.
(2) Shares of The Real Estate Investment Trust Portfolio class were made
available for sale beginning October 14, 1997. Pursuant to applicable
regulation, total return shown for the class is that of the original
(and then only) class of shares offered by The Real Estate Investment
Trust Portfolio. That original class has been redesignated REIT Fund
A Class. Like The Real Estate Investment Trust Portfolio class, the
original class, prior to its redesignation, did not carry a front-end
sales charge and was not subject to Rule 12b-1 distribution expenses.
(3) Date of initial sale of the original class (now REIT Fund A Class).
-42-
<PAGE>
Cumulative Total Return(1)
The Real Estate Investment Trust Portfolio
REIT Fund REIT Fund
A Class Institutional
(at Offer)(2) Class (3)
3 months ended
4/30/98 00.00% 00.00%
6 months ended
4/30/98 00.00%(5) 00.00%
9 months ended
4/30/98 00.00% 00.00%
1 year ended
4/30/98 00.00% 00.00%
Period 12/6/95(4)
through 4/30/98 00.00% 00.00%
(1) Certain expenses of the Portfolio have been waived and paid by the
investment adviser. In the absence of such waiver and payment,
performance would have been affected negatively.
(2) The total return presented above is based upon the performance of the
original (and then only) class of shares offered by The Real Estate
Investment Trust Portfolio, which did not carry a front-end sales
charge and was not subject to Rule 12b-1 distribution expenses. That
original class has been redesignated REIT Fund A Class. Effective
October 14, 1997, a front-end sales charge of 4.75% was imposed
on sales of those shares and effective November 3, 1997 the class
was subject to annual 12b-1 distribution expenses of up to 0.30% of
average daily net assets of the class. These performance numbers are
calculated giving effect to the sales charge. For periods prior
to November 3, 1997, no adjustment has been made to reflect the
effect of 12b-1 payments. Performance on and after November 3,
1997 will be affected by 12b-1 payments. REIT Fund A Class is
subject to other expenses (at a higher rate than applicable to the
original class) which may affect performance of the Class.
(3) Shares of REIT Fund Institutional Class were made available for sale
beginning October 14, 1997. Pursuant to applicable regulation, total
return shown for the class is that of the original (and then only)
class of shares offered by The Real Estate Investment Trust
Portfolio. That original class has been redesignated REIT Fund A
Class. Like REIT Fund Institutional Class, the original class, prior
to its redesignation, did not carry a front-end sales charge and was
not subject to Rule 12b-1 distribution expenses. REIT Institutional
Class is subject to other expenses (at a higher rate than
applicable to the original class) which may affect performance of the
Class.
(4) Date of initial sale of the original class (now REIT Fund A Class).
-43-
<PAGE>
(5) Cumulative total return at net asset value was 00.00% for the six
months ended April 30, 1998.
<TABLE>
<CAPTION>
Cumulative Total Return(1)
The
Labor The
Select International
International Fixed
Equity Income
Portfolio Portfolio
<S> <C> <C> <C> <C>
3 months ended 3 months ended
4/30/98 00.00% 4/30/98 00.00%
6 months ended 6 months ended
4/30/98 00.00% 4/30/98 00.00%
9 months ended 9 months ended
4/30/98 00.00% 4/30/98 00.00%
1 year ended 1 year ended
4/30/98 00.00% 4/30/98 00.00%
Period 12/19/95(2) Period 4/11/97(2)
through 4/30/98 00.00% through 4/30/98 00.00%
The The
Emerging Global
Markets Equity
Portfolio Portfolio
3 months ended 3 months ended
4/30/98 00.00% 4/30/98 00.00%
6 months ended 6 months ended
4/30/98 00.00% 4/30/98 00.00%
9 months ended Period 10/15/97(3)
4/30/98 00.00% through 4/30/98 00.00%
1 year ended
4/30/98 00.00%
Period 4/14/97(2)
through 4/30/98 00.00%
</TABLE>
(1) Certain expenses of the Portfolio have been waived and paid by the
investment adviser. In the absence of such waiver and payment,
performance would have been affected negatively.
-44-
<PAGE>
(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.
Cumulative Total Return(1)
The Real Estate
Investment Trust
Portfolio II
3 months ended 4/30/98 00.00%
Period / /97(2)
through 4/30/98 00.00%
(1) Certain expenses of the Portfolio have been waived and paid by the
investment adviser. In the absence of such waiver and payment,
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.
In addition, information will be provided that discusses the
overriding investment philosophies of Delaware Management Company
("Delaware"), the investment adviser to The Large-Cap Value Equity, The
Aggressive Growth, The Small/Mid-Cap Value Equity, The Real Estate Investment
Trust, The Intermediate Fixed Income, The Aggregate Fixed Income, The
Limited-Term Maturity, The High-Yield Bond, The Diversified Core Fixed
Income The Asset Allocation, The Small-Cap Growth Equity and The Growth and
Income Portfolios, and Delaware International Advisers Ltd. ("Delaware
International"), an affiliate of Delaware and the investment adviser to The
International Equity, The International Mid-Cap Sub, The Labor Select
International Equity, The Global Fixed Income, The International Fixed Income,
The Emerging Markets and The Global Equity Portfolios and the sub-adviser to
The Diversified Core Fixed Income Portfolio and how those philosophies impact
each Portfolio in the strategies Pooled Trust, Inc. employs in seeking
Portfolio objectives. Since the investment disciplines being employed for each
Portfolio in Pooled Trust, Inc. 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 Large-Cap Value 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 Large-Cap Value Equity Portfolio strategy.
-45-
<PAGE>
TRADING PRACTICES AND BROKERAGE
Pooled Trust, Inc. (and, in the case of The International Equity, The
International Mid-Cap Sub, The Labor Select International Equity, The Global
Fixed Income, The International Fixed Income, The Emerging Markets, The Global
Equity and The Diversified Core Fixed Income Portfolios, their investment
adviser or sub-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, Pooled Trust, Inc. pays
reasonably competitive brokerage commission rates based upon the professional
knowledge of its trading department (and, in the case of The International
Equity, The International Mid-Cap Sub, The Labor Select International Equity,
The Global Fixed Income, The International Fixed Income, The Emerging Markets,
The Global Equity and The Diversified Core Fixed Income Portfolios, their
investment adviser or sub-adviser) as to rates paid and charged for similar
transactions throughout the securities industry. In some instances, Pooled
Trust, Inc. pays a minimal share transaction cost when the transaction
presents no difficulty.
Securities transactions for The International Equity, The
International Mid-Cap Sub, The Labor Select International Equity, The Global
Equity, The Emerging Markets, The Global Fixed Income, The International Fixed
Income, The High Yield Bond, The Real Estate Investment Trust and The
Diversified Core Fixed Income Portfolios may be effected in foreign markets
which may not allow negotiation of commissions or where it is customary to pay
fixed rates.
During the fiscal years ended October 31, 1995, 1996 and 1997, the
aggregate dollar amounts of brokerage commissions paid by the Portfolios
listed below amounted to the following:
<TABLE>
<CAPTION>
1997 1996 1995
---- ----------------------
<S> <C> <C> <C>
The Large-Cap Value Equity Portfolio $137,685 $117,326 $108,104
The Aggressive Growth Portfolio $66,754 46,384 26,361
The International Equity Portfolio $618,700 398,781 280,594
The Global Fixed Income Portfolio --- --- 1,545
The Labor Select International Equity Portfolio(1) $72,413 78,514 N/A
The Real Estate Investment Trust Portfolio(2) $111,633 122,865 N/A
The Emerging Markets Portfolio(3) $92,535 N/A N/A
The Global Equity Portfolio(4) $5,176 N/A N/A
(1) Commenced operations on December 19, 1995.
(2) Commenced operations on December 6, 1995.
(3) Commenced operations on April 14, 1997.
(4) Commenced operations on October 15, 1997.
</TABLE>
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<PAGE>
The investment advisers or sub-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, 1997, portfolio transactions
of the following Portfolios in the amounts listed below, resulting in
brokerage commissions in the amounts listed below, were directed to brokers
for brokerage and research services provided:
<TABLE>
<CAPTION>
Portfolio Brokerage
Transactions Commissions
Amounts Amounts
------------------------------------
<S> <C> <C>
The Large-Cap Value Equity Portfolio $10,302,300 $11,904
The Aggressive Growth Portfolio 8,559,187 17,899
The International Equity Portfolio 37,630,165 107,244
The Labor Select International Equity Portfolio 5,600,920 16,999
The Real Estate Investment Trust Portfolio 18,902,123 39,120
The Emerging Markets Portfolio(1) 196,846 176
</TABLE>
(1) Commenced operations on April 14, 1997.
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, Pooled Trust, Inc. 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 Pooled Trust, Inc. and to other funds in the
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<PAGE>
Delaware Investments family. 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, the Board of Directors of Pooled Trust, Inc. and
the Board of Trustees of Foundation Funds that the advantages of combined
orders outweigh the possible disadvantages of separate transactions.
Consistent with the Conduct Rules 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 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, either of The Real Estate Investment Trust
Portfolios, The International Equity Portfolio, The Emerging Markets
Portfolio, The Global Equity Portfolio, The Diversified Core Fixed Income
Portfolio, The Asset Allocation Portfolio, The Small-Cap Growth Equity
Portfolio and The Growth and Income 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
Large-Cap Value Equity Portfolio, The Aggressive Growth Portfolio, The
Small/Mid-Cap Value Equity Portfolio, The Labor Select International Equity
Portfolio, The Real Estate Investment Trust Portfolios, The Emerging Markets
Portfolio, The Global Equity Portfolio, The
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<PAGE>
High-Yield Bond Portfolio and The Growth and Income Portfolio is not expected
to exceed 100%; (4) the annual portfolio turnover rate of The Intermediate
Fixed Income Portfolio and The Aggregate Fixed Income Portfolio is not
expected to exceed 250%; (5) the annual portfolio turnover rate of The
International Mid-Cap Sub Portfolio is not expected to exceed 50%; (6) the
annual portfolio turnover rate of The Diversified Core Fixed Income
Portfolio is not expected to exceed 50%; (7) the annual portfolio turnover
rate of the The Small-Cap Growth Equity Portfolio is not expected to exceed
00%; and (8) the annual portfolio turnover rate of The Asset Allocation
Portfolio is not expected to exceed 00%. 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 of the following Portfolios for the past
two fiscal years were as follows:
<TABLE>
<CAPTION>
October 31, 1997 October 31, 1996
---------------- ----------------
<S> <C> <C>
The Large-Cap Value Equity Portfolio 73% 74%
The Aggressive Growth Portfolio 117% 95%
The International Equity Portfolio 8% 8%
The Global Fixed Income Portfolio 114% 63%
The Labor Select International Equity Portfolio(1) 11% 7%*
The Real Estate Investment Trust Portfolio(2) 58% 109%*
The Intermediate Fixed Income Portfolio(3) 205% 232%*
The High-Yield Bond Portfolio(4) 281%* N/A
The International Fixed Income Portfolio(5) 145%* N/A
The Emerging Markets Portfolio(6) 46%* N/A
The Global Equity Portfolio(7) 0% N/A
</TABLE>
*Annualized
(1) Commenced operations on December 19, 1995.
(2) Commenced operations on December 6, 1995.
(3) Commenced operations on March 12, 1996.
(4) Commenced operations on December 2, 1996.
(5) Commenced operations on April 11, 1997.
(6) Commenced operations on April 14, 1997.
(7) Commenced operations on October 15, 1997.
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<PAGE>
PURCHASING SHARES
The following supplements the disclosure provided in Pooled Trust,
Inc.'s Prospectuses.
Delaware Distributors, L.P. serves as the national distributor for
each Portfolio's shares. See the related Prospectus for information on how to
invest. Pooled Trust, Inc. or Foundation Funds, as applicable, 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
unless a shareholder submits a specific request. Certificates are not issued
in the case of Class B Shares or Class C Shares of The Real Estate Investment
Trust Portfolio or The International Mid-Cap Sub Portfolio shares or in the
case of any retirement plan account including self-directed IRAs. However,
purchases not involving the issuance of certificates are confirmed to the
investor and credited to the shareholder's account on the books maintained on
behalf of Pooled Trust, Inc. The investor will have the same rights of
ownership with respect to such shares as if certificates had been issued. An
investor that is permitted to obtain a certificate may receive a certificate
representing full share denominations purchased by sending a letter signed by
each owner of the account to the Transfer Agent requesting the certificate. No
charge is assessed by Pooled Trust, Inc. for any certificate issued. A
shareholder may be subject to fees for replacement of a lost or stolen
certificate, under certain conditions, including the cost of obtaining a bond
covering the lost or stolen certificate. Please contact the Portfolios for
further information. Investors who hold certificates representing any of their
shares may only redeem those shares by written request. The investor's
certificate(s) must accompany such request.
Purchasing Shares (The Real Estate Investment Trust Portfolio class of The
Real Estate Investment Trust Portfolio and all other Portfolios except The
International Mid-Cap Sub Portfolio)
Shares of each Portfolio are sold on a continuous basis directly to
institutions and high net-worth individuals 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 related Prospectus. In addition, for purchases of
shares in The Emerging Markets Portfolio, a purchase reimbursement fee of
0.75% of the dollar amount invested is charged to investors and paid to the
Portfolio to help defray expenses of investing purchase proceeds. For The
Global Equity Portfolio, the purchase reimbursement fee is equal to 0.40% of
the dollar amount invested. In lieu of paying that fee, an investor in The
Global Equity Portfolio may elect to invest by a contribution of in-kind
securities or may follow another procedure that has the same economic impact
on the Portfolio and its shareholders. See "DETERMINING OFFERING PRICE AND NET
ASSET VALUE." The minimum for initial investments is $1,000,000 for each
Portfolio. There are no minimums for subsequent investments. See the related
Prospectus for special purchase procedures and requirements that may be
applicable to prospective investors in The International Equity Portfolio and
The Global Equity Portfolio. At such time as Pooled Trust, Inc. receives
appropriate regulatory approvals to do so in the future, under certain
circumstances, Pooled Trust, Inc. may, at its sole discretion, allow eligible
investors who have an existing investment counseling relationship with
Delaware International or an affiliate of Delaware to make investments
in the Portfolios by a contribution of securities in-kind to such Portfolios.
Purchasing Shares (The International Mid-Cap Sub Portfolio)
Shares of The International Mid-Cap Sub Portfolio are offered and
sold on a continuous basis to investors who currently have, or concurrently
with their investment establish, an investment advisory relationship with
Delaware International with respect to equity securities and who have
authorized Delaware
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<PAGE>
International to allocate a portion of those assets to the Portfolio. Shares
are sold at the net asset value next determined after the receipt of a
purchase order as described more fully in the related Prospectus. In addition,
a purchase reimbursement fee of 0.60% of the dollar amount invested is charged
to investors and paid to the Portfolio to help defray expenses of investing
purchase proceeds. The purchase reimbursement fee does not apply to
investments that are made by securities in-kind or by an alternative method
agreed to by the Portfolio that will have the same economic effect as an
in-kind purchase or to reinvestments of dividends or other distributions. See
"DETERMINING OFFERING PRICE AND NET ASSET VALUE." There are no minimum initial
or subsequent investment amounts for The International Mid-Cap Sub Portfolio.
Purchasing Shares (REIT Fund A, B, C and Institutional Classes of The Real
Estate Investment Trust Portfolio)
The minimum initial purchase is generally $1,000 for REIT Fund A
Class ("Class A Shares"), REIT Fund B Class ("Class B Shares") and REIT Fund C
Class ("Class C Shares"). Subsequent purchases must generally be at least
$100. The initial and subsequent investment minimums for Class A Shares will
be waived for purchases by officers, directors and employees of any fund in
the Delaware Investments family, the Manager or any of the Manager's
affiliates if the purchases are made pursuant to a payroll deduction program.
Shares purchased pursuant to the Uniform Gifts to Minors Act or the Uniform
Transfers to Minors Act and shares purchased in connection with an Automatic
Investing Plan are subject to a minimum initial purchase of $250 and a minimum
subsequent purchase of $25. Accounts opened under an Asset Planner Service
are subject to a minimum initial investment of $2,000 per Asset Planner
strategy selected. There are no minimum purchase requirements for REIT Fund
Institutional Class ("Institutional Class Shares").
Each purchase of Class B Shares is subject to a maximum purchase
limitation of $250,000. For Class C Shares, each purchase must be in an amount
that does not exceed $1,000,000. See Investment Plans for purchase limitations
applicable to retirement plans. Pooled Trust, Inc. will reject any purchase
order for more than $250,000 of Class B Shares and $1,000,000 or more of Class
C Shares. An investor may exceed these limitations by making cumulative
purchases over a period of time. In doing so, an investor should keep in mind,
however, that reduced front-end sales charges apply to investments of $100,000
or more in Class A Shares, and that Class A Shares are subject to lower annual
12b-1 Plan expenses than Class B Shares and Class C Shares and generally are
not subject to a CDSC.
The NASD has adopted Conduct Rules, as amended, relating to
investment company sales charges. Pooled Trust, Inc. and the Distributor
intend to operate in compliance with these rules.
Class A Shares are purchased at the offering price, which reflects a
maximum front-end sales charge of 4.75%; however, lower front-end sales
charges apply for larger purchases. See the table in the appropriate
Prospectus. Class A Shares are also subject to annual 12b-1 Plan expenses for
the life of the investment.
Class B Shares are purchased at net asset value and are subject to a
CDSC of: (i) 4% if shares are redeemed within two years of purchase; (ii) 3%
if shares are redeemed during the third or fourth year following purchase;
(iii) 2% if shares are redeemed during the fifth year following purchase; and
(iv) 1% if shares are redeemed during the sixth year following purchase. Class
B Shares are also subject to annual 12b-1 Plan expenses which are higher than
those to which Class A Shares are subject and are assessed against the Class B
Shares for approximately eight years after purchase. See Automatic Conversion
of Class B Shares under Classes of Shares in the related Prospectus.
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<PAGE>
Class C Shares are purchased at net asset value and are subject to a
CDSC of 1% if shares are redeemed within 12 months following purchase. Class C
Shares are also subject to annual 12b-1 Plan expenses for the life of the
investment which are equal to those to which Class B Shares are subject.
Institutional Class Shares are purchased at net asset value per share
without the imposition of a front-end or contingent deferred sales charge or
12b-1 Plan expenses.
Class A Shares, Class B Shares, Class C Shares and Institutional
Class Shares represent a proportionate interest in the Portfolio's assets and
will receive a proportionate interest in the Portfolio's income, before
application, as to the Class A, Class B and Class C Shares, of any expenses
under Pooled Trust, Inc.'s 12b-1 Plans.
Alternative Purchase Arrangements
The alternative purchase arrangements of Class A, Class B and Class C
Shares permit investors to choose the method of purchasing shares that is most
suitable for their needs given the amount of their purchase, the length of
time they expect to hold their shares and other relevant circumstances.
Investors should determine whether, given their particular circumstances, it
is more advantageous to purchase Class A Shares and incur a front-end sales
charge and, absent any applicable fee waiver, annual 12b-1 Plan expenses of up
to a maximum of 0.30% of the average daily net assets of Class A Shares, or
to purchase either Class B or Class C Shares and have the entire initial
purchase amount invested in the Portfolio with the investment thereafter
subject to a CDSC and annual 12b-1 Plan expenses.
Class A Shares
Purchases of $100,000 or more of Class A Shares at the offering price
carry reduced front-end sales charges and may include a series of
purchases over a 13-month period under a Letter of Intention signed by the
purchaser. See Front-End Sales Charge Alternative - Class A Shares in the
appropriate Prospectus for a table illustrating reduced front-end sales
charge. See also Special Purchase Features - Class A Shares, below for more
information on ways in which investors can avail themselves of reduced
front-end sales charges and other purchase features.
Certain dealers who enter into an agreement to provide extra
training and information on Delaware Investments ]products and services
and who increase sales of funds in the Delaware Investments family may
receive an additional commission of up to 0.15% of the offering price in
connection with sales of Class A Shares. Such dealers must meet certain
requirements in terms of organization and distribution capabilities and their
ability to increase sales. The Distributor should be contacted for further
information on these requirements as well as the basis and circumstances upon
which the additional commission will be paid. Participating dealers may be
deemed to have additional responsibilities under the securities laws.
Dealer's Commission
As described more fully in the related Prospectus, for initial
purchases of Class A Shares of $1,000,000 or more, a dealer's commission may
be paid by the Distributor to financial advisers through whom such purchases
are effected. See Front-End Sales Charge Alternative - Class A Shares in the
related Prospectus for the applicable schedule and further details.
Contingent Deferred Sales Charge - Class B Shares and Class C Shares
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<PAGE>
Class B and Class C Shares are purchased without a front-end sales
charge. Class B Shares redeemed within six years of purchase may be subject to
a CDSC at the rates set forth above, and Class C Shares redeemed within 12
months of purchase may be subject to a CDSC of 1%. CDSCs are charged as a
percentage of the dollar amount subject to the CDSC. The charge will be
assessed on an amount equal to the lesser of the net asset value at the time
of purchase of the shares being redeemed or the net asset value of those
shares at the time of redemption. No CDSC will be imposed on increases in net
asset value above the initial purchase price, nor will a CDSC be assessed on
redemptions of shares acquired through reinvestment of dividends or capital
gains distributions. See Waiver of Contingent Deferred Sales Charge - Class B
and Class C Shares under Redemption and Exchange in the related Prospectus
for a list of the instances in which the CDSC is waived.
During the seventh year after purchase and, thereafter, until
converted automatically into Class A Shares, Class B Shares, will still be
subject to the annual 12b-1 Plan expenses of up to 1% of average daily net
assets of those shares. At the end of approximately eight years after
purchase, the investor's Class B Shares will be automatically converted into
Class A Shares of the the Portfolio. See Automatic Conversion of Class B
Shares under Classes of Shares in the related Prospectus. Such conversion will
constitute a tax-free exchange for federal income tax purposes. See Taxes in
the related Prospectus.
Plans Under Rule 12b-1
Pursuant to Rule 12b-1 under the 1940 Act, Pooled Trust, Inc. has
adopted a separate plan for each of Class A Shares, the Class B Shares and the
Class C Shares of The Real Estate Investment Trust Portfolio (the "Plans").
Each Plan permits the Portfolio to pay for certain distribution, promotional
and related expenses involved in the marketing of only the Class to which the
Plan applies.
The Plans permit the Portfolio, pursuant to the Distribution
Agreement, to pay out of the assets of Class A Shares, Class B Shares and
Class C Shares monthly fees to the Distributor for its services and expenses
in distributing and promoting sales of shares of such classes. These expenses
include, among other things, preparing and distributing advertisements, sales
literature and prospectuses and reports used for sales purposes, compensating
sales and marketing personnel, and paying distribution and maintenance fees to
securities brokers and dealers who enter into agreements with the Distributor.
The Plan expenses relating to Class B and Class C Shares are also used to pay
the Distributor for advancing the commission costs to dealers with respect to
the initial sale of such shares.
In addition, the Portfolio may make payments out of the assets of
Class A, Class B and Class C Shares directly to other unaffiliated parties,
such as banks, who either aid in the distribution of shares of, or provide
services to, such classes.
The maximum aggregate fee payable by the Portfolio under the Plans,
and the Portfolio's Distribution Agreement, is on an annual basis up to 0.30%
of Class A Shares' average daily net assets for the year, and up to 1% (0.25%
of which are service fees to be paid to the Distributor, dealers and others
for providing personal service and/or maintaining shareholder accounts) of
each of Class B Shares' and Class C Shares' average daily net assets for the
year. Pooled Trust, Inc.'s Board of Directors may reduce these amounts at any
time. Pursuant to Board action, the maximum aggregate fee payable by Class A
Shares is 0.25%.
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<PAGE>
All of the distribution expenses incurred by the Distributor and
others, such as broker/dealers, in excess of the amount paid on behalf of
Class A, Class B and Class C Shares would be borne by such persons without any
reimbursement from such Classes. Subject to seeking best price and execution,
the Classes may, from time to time, buy or sell portfolio securities from or
to firms which receive payments under the Plans.
From time to time, the Distributor may pay additional amounts from
its own resources to dealers for aid in distribution or for aid in providing
administrative services to shareholders.
The Plans and the Distribution Agreement, as amended, have been
approved by the Board of Directors of Pooled Trust, Inc., including a majority
of the directors who are not "interested persons" (as defined in the 1940 Act)
of Pooled Trust, Inc. and who have no direct or indirect financial interest in
the Plans by vote cast in person at a meeting duly called for the purpose of
voting on the Plans and such Agreement. Continuation of the Plans and the
Distribution Agreement, as amended, must be approved annually by the Board of
Directors in the same manner, as specified above.
Each year, the directors must determine whether continuation of the
Plans is in the best interest of shareholders of, respectively, the Class A
Shares, Class B Shares and Class C Shares and that there is a reasonable
likelihood of the Plan relating to a Class providing a benefit to that Class.
The Plans and the Distribution Agreement, as amended, may be terminated at any
time without penalty by a majority of those directors who are not "interested
persons" or by a majority vote of the outstanding voting securities of the
relevant Class. Any amendment materially increasing the maximum percentage
payable under the Plans must likewise be approved by a majority vote of the
outstanding voting securities of the relevant Class, as well as by a majority
vote of those directors who are not "interested persons." With respect to the
Class A Share Plan, any material increase in the maximum percentage payable
thereunder must also be approved by a majority of the outstanding voting
securities of the Class B Shares. Also, any other material amendment to the
Plans must be approved by a majority vote of the directors including a
majority of the noninterested directors of Pooled Trust, Inc. having no
interest in the Plans. In addition, in order for the Plans to remain
effective, the selection and nomination of directors who are not "interested
persons" of Pooled Trust, Inc. must be effected by the directors who
themselves are not "interested persons" and who have no direct or indirect
financial interest in the Plans. Persons authorized to make payments under the
Plans must provide written reports at least quarterly to the Board of
Directors for their review.
Other Payments to Dealers - Class A, Class B and Class C Shares From time
to time, at the discretion of the Distributor, all
registered broker/dealers whose aggregate sales of the Class A, B and C Shares
exceed certain limits as set by the Distributor, may receive from the
Distributor an additional payment of up to 0.25% of the dollar amount of such
sales. The Distributor may also provide additional promotional incentives or
payments to dealers that sell shares of the funds in the Delaware
Investments family. In some instances, these incentives or payments may be
offered only to certain dealers who maintain, have sold or may sell certain
amounts of shares. The Distributor may also pay a portion of the expense of
preapproved dealer advertisements promoting the sale of shares of funds in the
Delaware Investments family.
Special Purchase Features - Class A Shares
Buying Class A Shares at Net Asset Value
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<PAGE>
Class A Shares may be purchased without a front-end sales charge
under the Dividend Reinvestment Plan and, under certain circumstances, the
Exchange Privilege and the 12-Month Reinvestment Privilege.
Current and former officers, trustees and employees of Pooled Trust,
Inc., any other fund in the Delaware Investments family, the Manager, the
Manager's affiliates or any of the Manager's affiliates that may in the future
be created, legal counsel to the funds and registered representatives and
employees of broker/dealers who have entered into Dealer's Agreements with the
Distributor may purchase Class A Shares of the Portfolio and any of the funds
in the Delaware Investments family, including any fund that may be
created, at net asset value per share. Family members of such persons at their
direction, and any employee benefit plan established by any of the foregoing
funds, corporations, counsel or broker/dealers may also purchase Class A
Shares at net asset value. Class A Shares may also be purchased at net asset
value by current and former officers, directors and employees (and members of
their families) of the Dougherty Financial Group LLC. Purchases of Class A
Shares may also be made by clients of registered representatives of an
authorized investment dealer at net asset value within 12 months after the
registered representative changes employment, if the purchase is funded by
proceeds from an investment where a front-end sales charge, contingent
deferred sales charge or other sales charge has been assessed.
Purchases of Class A Shares may also be made at net asset value by
bank employees who provide services in connection with agreements between the
bank and unaffiliated brokers or dealers concerning sales of shares of funds
in the Delaware Investments family. Officers, directors and key employees
of institutional clients of the Manager, or any of its affiliates, may
purchase Class A Shares at net asset value. Moreover, purchases may be
effected at net asset value for the benefit of the clients of brokers, dealers
and registered investment advisers affiliated with a broker or dealer, if such
broker, dealer or investment adviser has entered into an agreement with the
Distributor providing specifically for the purchase of Class A Shares in
connection with special investment products, such as wrap accounts or similar
fee based programs. Such purchasers are required to sign a letter stating that
the purchase is for investment only and that the securities may not be resold
except to the issuer. Such purchasers may also be required to sign or deliver
such other documents as The Real Estate Investment Trust Portfolio may
reasonably require to establish eligibility for purchase at net asset value.
Investors in Delaware-Voyageur Unit Investment Trusts may reinvest
monthly dividend checks and/or repayment of invested capital into Class A
Shares of any of the funds in the Delaware Investments family at net
asset value.
Purchases of Class A Shares at net asset value may also be made by
the following: financial institutions investing for the account of their trust
customers if they are not eligible to purchase shares of the Institutional
Class; any group retirement plan (excluding defined benefit pension plans), or
such plans of the same employer, for which plan participant records are
maintained on the Delaware Investment & Retirement Services, Inc. ("DIRSI")
proprietary record keeping system that (i) has in excess of $500,000 of plan
assets invested in Class A Shares of funds in the Delaware Investments
family and any stable value product available through the funds in the
Delaware Investments family, or (ii) is sponsored by an employer that has
at any point after May 1, 1997 had more than 100 employees while such plan has
held Class A Shares of a fund in the Delaware Investments family and such
employer has properly represented to DIRSI in writing that it has the
requisite number of employees and has received written confirmation back from
DIRSI.
Investments in Class A Shares made by plan level and/or participant
retirement accounts that are for the purpose of repaying a loan taken from
such accounts will be made at net asset value. Loan repayments made to
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<PAGE>
a Delaware Investments account in connection with loans originated from
accounts previously maintained by another investment firm will also be
invested at net asset value.
The Portfolio must be notified in advance that the trade qualifies
for purchase at net asset value.
Letter of Intention
The reduced front-end sales charges described above with respect to
the Class A Shares are also applicable to the aggregate amount of purchases
made by any such purchaser previously enumerated within a 13-month period
pursuant to a written Letter of Intention provided by the Distributor and
signed by the purchaser, and not legally binding on the signer or Pooled
Trust, Inc., which provides for the holding in escrow by the Transfer Agent of
5% of the total amount of Class A Shares intended to be purchased until such
purchase is completed within the 13-month period. A Letter of Intention may be
dated to include shares purchased up to 90 days prior to the date the Letter
is signed. The 13-month period begins on the date of the earliest purchase. If
the intended investment is not completed, except as noted below, the purchaser
will be asked to pay an amount equal to the difference between the front-end
sales charge on the Class A Shares purchased at the reduced rate and the
front-end sales charge otherwise applicable to the total shares purchased. If
such payment is not made within 20 days following the expiration of the
13-month period, the Transfer Agent will surrender an appropriate number of
the escrowed shares for redemption in order to realize the difference. Such
purchasers may include the value (at offering price at the level designated in
their Letter of Intention) of all their shares of the Portfolio and of any
class of any of the other mutual funds in the Delaware Investments family
(except shares of any fund in the Delaware Investments family which
does not carry a front-end sales charge, CDSC or Limited CDSC, other than
shares of Delaware Group Premium Fund, Inc. beneficially owned in connection
with the ownership of variable insurance products, unless they were acquired
through an exchange from a Delaware Investments fund which carried a
front-end sales charge, CDSC or Limited CDSC) previously purchased and still
held as of the date of their Letter of Intention toward the completion of such
Letter.
Employers offering a Delaware Investments retirement plan may
also complete a Letter of Intention to obtain a reduced front-end sales charge
on investments of Class A Shares made by the plan. The aggregate investment
level of the Letter of Intention will be determined and accepted by the
Transfer Agent at the point of plan establishment. The level and any reduction
in front-end sales charge will be based on actual plan participation and the
projected investments in funds in the Delaware Investments family that are
offered with a front-end sales charge, CDSC or Limited CDSC for a 13-month
period. The Transfer Agent reserves the right to adjust the signed Letter of
Intention based on this acceptance criteria. The 13-month period will begin on
the date this Letter of Intention is accepted by the Transfer Agent. If actual
investments exceed the anticipated level and equal an amount that would
qualify the plan for further discounts, any front-end sales charges will be
automatically adjusted. In the event this Letter of Intention is not fulfilled
within the 13-month period, the plan level will be adjusted (without
completing another Letter of Intention) and the employer will be billed for
the difference in front-end sales charges due, based on the plan's assets
under management at that time. Employers may also include the value (at
offering price at the level designated in their Letter of Intention) of all
their shares intended for purchase that are offered with a front-end sales
charge, CDSC or Limited CDSC of any class. Class B Shares and Class C Shares
of the Portfolio and other funds in the Delaware Investments family which
offer corresponding classes of shares may also be aggregated for this purpose.
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Combined Purchases Privilege
In determining the availability of the reduced front-end sales charge
previously set forth with respect to Class A Shares, purchasers may combine
the total amount of any combination of Class A Shares, Class B Shares and/or
Class C Shares of the Portfolio, as well as shares of any other class of any
of the other funds in the Delaware Investments family (except shares of
any Delaware Investments fund which does not carry a front-end sales
charge, CDSC or Limited CDSC, other than shares of Delaware Group Premium
Fund, Inc. beneficially owned in connection with the ownership of variable
insurance products, unless they were acquired through an exchange from a fund
in the Delaware Investments family which carried a front-end sales charge,
CDSC or Limited CDSC). In addition, assets held by investment advisory clients
of the Manager or its affiliates in a stable value account may be combined
with other Delaware Investments fund holdings.
The privilege also extends to all purchases made at one time by an
individual; or an individual, his or her spouse and their children under 21;
or a trustee or other fiduciary of trust estates or fiduciary accounts for the
benefit of such family members (including certain employee benefit programs).
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Right of Accumulation
In determining the availability of the reduced front-end sales charge
with respect to Class A Shares, purchasers may also combine any subsequent
purchases of Class A Shares, Class B Shares and Class C Shares of the
Portfolio, as well as shares of any other class of any of the other fund in
the Delaware Investments family which offer such classes (except shares of
any Delaware Investments fund which does not carry a front-end sales
charge, CDSC or Limited CDSC, other than shares of Delaware Group Premium
Fund, Inc. beneficially owned in connection with the ownership of variable
insurance products, unless they were acquired through an exchange from shares
from a fund in the Delaware Investments family which carried a front-end
sales charge, CDSC or Limited CDSC). If, for example, any such purchaser has
previously purchased and still holds Class A Shares and/or shares of any other
of the classes described in the previous sentence with a value of $40,000 and
subsequently purchases $60,000 at offering price of additional shares of Class
A Shares, the charge applicable to the $60,000 purchase would be 3.75%. For
the purpose of this calculation, the shares presently held shall be valued at
the public offering price that would have been in effect were the shares
purchased simultaneously with the current purchase. Investors should refer to
the table of sales charges for Class A Shares to determine the applicability
of the Right of Accumulation to their particular circumstances.
12-Month Reinvestment Privilege
Holders of Class A Shares (and of the Institutional Class holding
shares which were acquired through an exchange from one of the other mutual
funds in the Delaware Investments family offered with a front-end sales
charge) who redeem such shares of the Portfolio have one year from the date of
redemption to reinvest all or part of their redemption proceeds in Class A
Shares of the Portfolio or in Class A Shares of any of the other funds in the
Delaware Investments family, subject to applicable eligibility and minimum
purchase requirements, in states where shares of such other funds may be sold,
at net asset value without the payment of a front-end sales charge. This
privilege does not extend to Class A Shares where the redemption of the shares
triggered the payment of a Limited CDSC. Persons investing redemption proceeds
from direct investments in mutual funds in the Delaware Investments family
offered without a front-end sales charge will be required to pay the
applicable sales charge when purchasing Class A Shares. The reinvestment
privilege does not extend to a redemption of either Class B Shares or Class C
Shares.
Any such reinvestment cannot exceed the redemption proceeds (plus any
amount necessary to purchase a full share). The reinvestment will be made at
the net asset value next determined after receipt of remittance. A redemption
and reinvestment could have income tax consequences. It is recommended that a
tax adviser be consulted with respect to such transactions. Any reinvestment
directed to a fund in which the investor does not then have an account will be
treated like all other initial purchases of a fund's shares. Consequently, an
investor should obtain and read carefully the prospectus for the fund in which
the investment is intended to be made before investing or sending money. The
prospectus contains more complete information about the fund, including
charges and expenses.
Investors should consult their financial advisers or the Transfer
Agent, which also serves as the Portfolio's shareholder servicing agent, about
the applicability of the Limited CDSC (see Contingent Deferred Sales Charge
for Certain Redemptions of Class A Shares Purchased at Net Asset Value under
Redemption and Exchange in the related Prospectus) in connection with the
features described above
Group Investment Plans
Group Investment Plans which are not eligible to purchase shares of
the Institutional Class may also benefit from the reduced front-end sales
charges for investments in Class A Shares set forth in the table in
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the related Prospectus, based on total plan assets. If a company has more than
one plan investing in the Delaware Investments family, then the total amount
invested in all plans would be used in determining the applicable front-end
sales charge reduction upon each purchase, both initial and subsequent, upon
notification to the Portfolio at the time of each such purchase. Employees
participating in such Group Investment Plans may also combine the investments
made in their plan account when determining the applicable front-end sales
charge on purchases to non-retirement Delaware Investments accounts if they so
notify the Portfolio in connection with each purchase. For other retirement
plans and special services, see Retirement Plans for the Fund Classes under
Investment Plans for information about Retirement Plans.
Institutional Class Shares
Institutional Class Shares are available for purchase only by: (a)
retirement plans introduced by persons not associated with brokers or dealers
that are primarily engaged in the retail securities business and rollover
individual retirement accounts from such plans; (b) tax-exempt employee
benefit plans of Delaware, Delaware International or their affiliates and
securities dealer firms with a selling agreement with the Distributor; (c)
institutional advisory accounts of Delaware, Delaware International or their
affiliates and those having client relationships with the DMC, DIA, Ltd. or
their affiliates and their corporate sponsors, as well as subsidiaries and
related employee benefit plans and rollover individual retirement accounts
from such institutional advisory accounts; (d) a bank, trust company and
similar financial institution investing for its own account or for the account
of its trust customers for whom such financial institution is exercising
investment discretion in purchasing Institutional Class Shares, except where
the investment is part of a program that requires payment to the financial
institution of a Rule 12b-1 Plan fee; and (e) registered investment advisers
investing on behalf of clients that consist solely of institutions and high
net-worth individuals having at least $1,000,000 entrusted to the adviser for
investment purposes, but only if the adviser is not affiliated or associated
with a broker or dealer and derives compensation for its services exclusively
from its clients for such advisory services.
Institutional Class Shares are available for purchase at net asset
value, without the imposition of a front-end or contingent deferred sales
charge and are not subject to Rule 12b-1 expenses.
Investment Plans
Reinvestment Plan/Open Account
Unless otherwise designated by shareholders in writing, dividends
from net investment income and distributions from realized securities profits,
if any, will be automatically reinvested in additional shares of the
respective Class (based on the net asset value in effect on the payable date)
and will be credited to the shareholder's account on that date. All dividends
and distributions of the Institutional Class Shares are reinvested in the
accounts of the holders of such shares (based on the net asset value in effect
on the reinvestment date). A confirmation of each dividend payment from net
investment income will be mailed to shareholders quarterly. A confirmation of
any distributions from realized securities profits will be mailed to
shareholders in the first quarter of the fiscal year.
Under the Reinvestment Plan/Open Account, shareholders may purchase
and add full and fractional shares to their plan accounts at any time either
through their investment dealers or by sending a check or money order to The
Portfolio. Such purchases, which must meet the minimum subsequent purchase
requirements stated in the related Prospectus and this Statement of Additional
Information, are made for Class A Shares at the public offering price and for
Class B Shares, Class C Shares and Institutional Class Shares at the net asset
value,
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at the end of the day of receipt. A reinvestment plan may be terminated at any
time. This plan does not assure a profit nor protect against depreciation in a
declining market.
Reinvestment of Dividends in Other Funds in the Delaware Investments Family
Subject to applicable eligibility and minimum initial purchase
requirements of each fund and the limitations set forth below, holders of
Class A, Class B and Class C Shares may automatically reinvest their dividends
and/or distributions in any of the mutual funds in the Delaware Investments
family, including the Portfolio, in states where their shares may be sold.
Such investments will be at net asset value at the close of business on the
reinvestment date without any front-end sales charge or service fee. The
shareholder must notify the Transfer Agent in writing and must have
established an account in the fund into which the dividends and/or
distributions are to be invested. Any reinvestment directed to a fund in which
the investor does not then have an account, will be treated like all other
initial purchases of a fund's shares. Consequently, an investor should obtain
and read carefully the prospectus for the fund in which the investment is
intended to be made before investing or sending money. The prospectus contains
more complete information about the fund, including charges and expenses. See
also Additional Methods of Adding to Your Investment - Dividend Reinvestment
Plan under How to Buy Shares in the related Prospectus.
Subject to the following limitations, dividends and/or distributions
from other funds in the Delaware Investments family may be invested in
shares of the Portfolio, provided an account has been established. Dividends
from Class A Shares may not be directed to Class B Shares or Class C Shares.
Dividends from Class B Shares may only be directed to other Class B Shares and
dividends from Class C Shares may only be directed to other Class C Shares.
See Appendix B-Classes Offered in the related Prospectus for the funds in the
Delaware Investments family that are eligible for investment by holders of
Portfolio shares.
This option is not available to participants in the following plans:
SAR/SEP, SEP/IRA, SIMPLE IRA, SIMPLE 401(k), Profit Sharing and Money Purchase
Pension Plans, 401(k) Defined Contribution Plans, 403(b)(7) Deferred
Compensation Plans or 457 Deferred Compensation Plans.
Investing by Electronic Fund Transfer
Direct Deposit Purchase Plan--Investors may arrange for the Portfolio
to accept for investment in Class A, Class B or Class C Shares, through an
agent bank, preauthorized government or private recurring payments. This
method of investment assures the timely credit to the shareholder's account of
payments such as social security, veterans' pension or compensation benefits,
federal salaries, Railroad Retirement benefits, private payroll checks,
dividends, and disability or pension fund benefits. It also eliminates lost,
stolen and delayed checks.
Automatic Investing Plan--Shareholders of Class A, Class B and Class
C Shares may make automatic investments by authorizing, in advance, monthly
payments directly from their checking account for deposit into their Portfolio
account. This type of investment will be handled in either of the following
ways. (1) If the shareholder's bank is a member of the National Automated
Clearing House Association ("NACHA"), the amount of the investment will be
electronically deducted from his or her account by Electronic Fund Transfer
("EFT"). The shareholder's checking account will reflect a debit each month at
a specified date although no check is required to initiate the transaction.
(2) If the shareholder's bank is not a member of NACHA, deductions will be
made by preauthorized checks, known as Depository Transfer Checks. Should the
shareholder's bank become a member of NACHA in the future, his or her
investments would be handled electronically through EFT.
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This option is not available to participants in the following plans:
SAR/SEP, SEP/IRA, SIMPLE IRA, SIMPLE 401(k), Profit Sharing and Money Purchase
Pension Plans, 401(k) Defined Contribution Plans, 403(b)(7) Deferred
Compensation Plans or 457 Deferred Compensation Plans.
* * *
Initial investments under the Direct Deposit Purchase Plan and the
Automatic Investing Plan must be for $250 or more and subsequent investments
under such plans must be for $25 or more. An investor wishing to take
advantage of either service must complete an authorization form. Either
service can be discontinued by the shareholder at any time without penalty by
giving written notice.
Payments to the Portfolio from the federal government or its agencies
on behalf of a shareholder may be credited to the shareholder's account after
such payments should have been terminated by reason of death or otherwise. Any
such payments are subject to reclamation by the federal government or its
agencies. Similarly, under certain circumstances, investments from private
sources may be subject to reclamation by the transmitting bank. In the event
of a reclamation, the Portfolio may liquidate sufficient shares from a
shareholder's account to reimburse the government or the private source. In
the event there are insufficient shares in the shareholder's account, the
shareholder is expected to reimburse the Portfolio.
Direct Deposit Purchases by Mail
Shareholders may authorize a third party, such as a bank or employer,
to make investments directly to their Portfolio accounts. The Portfolio will
accept these investments, such as bank-by-phone, annuity payments and payroll
allotments, by mail directly from the third party. Investors should contact
their employers or financial institutions who in turn should contact the
Portfolio for proper instructions.
Wealth Builder Option
Shareholders can use the Wealth Builder Option to invest in Class A
Shares, Class B Shares or Class C Shares through regular liquidations of
shares in their accounts in other mutual funds in the Delaware Investments
family. Shareholders of the Classes may elect to invest in one or more of the
other mutual funds in the Delaware Investments family through the Wealth
Builder Option. See Wealth Builder Option and Redemption and Exchange in the
related Prospectus.
Under this automatic exchange program, shareholders can authorize
regular monthly investments (minimum of $100 per fund) to be liquidated from
their account and invested automatically into other mutual funds in the
Delaware Investments family, subject to the conditions and limitations set
forth in the related Prospectus. The investment will be made on the 20th day
of each month (or, if the fund selected is not open that day, the next
business day) at the public offering price or net asset value, as applicable,
of the fund selected on the date of investment. No investment will be made for
any month if the value of the shareholder's account is less than the amount
specified for investment.
Periodic investment through the Wealth Builder Option does not
insure profits or protect against losses in a declining market. The price of
the fund into which investments are made could fluctuate. Since this program
involves continuous investment regardless of such fluctuating value, investors
selecting this option should consider their financial ability to continue to
participate in the program through periods of low fund share prices. This
program involves automatic exchanges between two or more fund accounts and is
treated as a purchase of shares of the fund into which investments are made
through the program. See Exchange Privilege
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for a brief summary of the tax consequences of exchanges. Shareholders can
terminate their participation at any time by giving written notice to the fund
from which exchanges are made.
This option is not available to participants in the following plans:
SAR/SEP, SEP/IRA, SIMPLE IRA, SIMPLE 401(k), Profit Sharing and Money Purchase
Pension Plans, 401(k) Defined Contribution Plans, 403(b)(7) Deferred
Compensation Plans or 457 Deferred Compensation Plans. This option also is not
available to shareholders of the Institutional Class.
Asset Planner
To invest in Delaware Investments funds using the Asset
Planner asset allocation service, you should complete a Asset Planner
Account Registration Form, which is available only from a financial adviser or
investment dealer. Effective as of September 1, 1997, the Asset Planner
Service is only available to financial advisers or investment dealers who have
previously used this service.
The Asset Planner service offers a choice of four predesigned
asset allocation strategies (each with a different risk/reward profile) in
predetermined percentages in Delaware Investments funds. With the help of
a financial adviser, you may also design a customized asset allocation
strategy.
The sales charge on an investment through the Asset Planner service
is determined by the individual sales charges of the underlying funds and
their percentage allocation in the selected Strategy. Exchanges from existing
Delaware Investments accounts into the Asset Planner service may be made
at net asset value under the circumstances described under Investing by
Exchange in the Prospectus. The minimum initial investment per Strategy is
$2,000; subsequent investments must be at least $100. Individual fund minimums
do not apply to investments made using the Asset Planner service. Generally,
only shares within the same class may be used within the same Strategy.
However, Class A Shares of The Real Estate Investment Trust Portfolio and of
other funds in the Delaware Investments family may be used in the same
Strategy with consultant class shares that are offered by certain other
funds in the Delaware Investments family.
An annual maintenance fee, currently $35 per Strategy, is due at the
time of initial investment and by September 30th of each subsequent year. The
fee, payable to Delaware Service Company, Inc. to defray extra costs
associated with administering the Asset Planner service, will be deducted
automatically from one of the funds within your Asset Planner account if not
paid by September 30th. However, effective November 1, 1996, the annual
maintenance fee is waived until further notice. Investors who utilize the
Asset Planner for an IRA will continue to pay an annual IRA fee of $15 per
Social Security number.
Investors will receive a customized quarterly Strategy Report
summarizing all Asset Planner investment performance and account activity
during the prior period. Confirmation statements will be sent following all
transactions other than those involving a reinvestment of distributions.
Certain shareholder services are not available to investors using the
Asset Planner service, due to its special design. These include Delaphone,
Checkwriting, Wealth Builder Option and Letter of Intention. Systematic
Withdrawal Plans are available after the account has been open for two years.
Retirement Plans for the Fund Classes
An investment in a Portfolio may be suitable for tax-deferred
retirement plans. Delaware
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Investments offers a full spectrum of retirement plans, including the
401(k) deferred compensation plan, Individual Retirement Account ("IRA")
and the new Roth IRA and Education IRA.
Among the retirement plans the Delaware Investments offers, Class B
Shares are available for investment only by Individual Retirement Accounts,
SIMPLE IRAs, Roth IRAs, Education IRAs, Simplified Employee Pension Plans,
Salary Reduction Simplified Employee Pension Plans and 403(b) and 457 Deferred
Compensation Plans. The CDSC may be waived on certain redemptions of Class
B Shares and Class C Shares. See Waiver of Contingent Deferred Sales Charge
under Redemption and Exchange in the Prospectus for Class B Shares and
Class C Shares for a list of the instances in which the CDSC is waived.
Purchases of Class B Shares are subject to a maximum purchase
limitation of $250,000 for retirement plans. Purchases of Class C Shares must
be in an amount that is less than $1,000,000 for such plans. The maximum
purchase limitations apply only to the initial purchase of shares by the
retirement plan.
Minimum investment limitations generally applicable to other
investors do not apply to retirement plans other than Individual Retirement
Accounts, for which there is a minimum initial purchase of $250 and a
minimum subsequent purchase of $25 regardless of which Class is
selected. Retirement plans may be subject to plan establishment fees, annual
maintenance fees and/or other administrative or trustee fees. Fees are based
upon the number of participants in the plan as well as the services selected.
Additional information about fees is included in retirement plan materials.
Fees are quoted upon request. Annual maintenance fees may be shared by
Delaware Management Trust Company, the Transfer Agent, other affiliates of the
Manager and others that provide services to such plans.
Certain shareholder investment services available to non-retirement
plan shareholders may not be available to retirement plan shareholders.
Certain retirement plans may qualify to purchase Institutional Class
Shares. For additional information on any of the Plans and Delaware's
retirement services, call the Shareholder Service Center telephone number.
It is advisable for an investor considering any one of the retirement
plans described below to consult with an attorney, accountant or a qualified
retirement plan consultant. For further details, including applications for
any of these plans, contact your investment dealer or the Distributor.
Taxable distributions from the retirement plans described below may
be subject to withholding.
Please contact your investment dealer or the Distributor for the
special application forms required for the plans described below.
Prototype Profit Sharing or Money Purchase Pension Plans
Prototype Plans are available for self-employed individuals,
partnerships, corporations and other eligible forms of organizations.
These plans can be maintained as Section 401(k), profit sharing or money
purchase pension plans. Contributions may be invested only in Class A Shares
and Class C Shares.
Individual Retirement Account ("IRA")
A document is available for an individual who wants to establish an
IRA and make contributions which may be tax-deductible, even if the individual
is already participating in an employer-sponsored retirement plan.
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Even if contributions are not deductible for tax purposes, as indicated below,
earnings will be tax-deferred. In addition, an individual may make
contributions on behalf of a spouse who has no compensation for the year;
however, participation may be restricted based on certain income limits.
IRA Disclosures
The Taxpayer Relief Act of 1997 provides new opportunities for
investors. Individuals have five types of tax-favored IRA accounts that can be
utilized depending on the individual's circumstances. A new Roth IRA and
Education IRA are available in addition to the existing deductible IRA and
non-deductible IRA.
Deductible and Non-deductible IRAs
An individual can contribute up to $2,000 in his or her IRA each
year. Contributions may or may not be deductible depending upon the taxpayer's
adjusted gross income ("AGI") and whether the taxpayer is an active
participant in an employer sponsored retirement plan. Even if a taxpayer is an
active participant in an employer sponsored retirement plan, the full $2,000
is still available if the taxpayer's AGI is below $30,000 ($50,000 for
taxpayers filing joint returns) for years beginning after December 31, 1997. A
partial deduction is allowed for married couples with income between $50,000
and $60,000, and for single individuals with incomes between $30,000 and
$40,000. These income phase-out limits reach $80,000-$100,000 in 2007 for
joint filers and $50,000-$60,000 in 2005 for single filers. No deductions are
available for contributions to IRAs by taxpayers whose AGI after IRA
deductions exceeds the maximum income limit established for each year and who
are active participants in an employer sponsored retirement plan.
Taxpayers who are not allowed deductions on IRA contributions still
can make non-deductible IRA contributions of as much as $2,000 for each
working spouse and defer taxes on interest or other earnings from the IRAs.
Under the new law, a married individual is not considered an active
participant in an employer sponsored retirement plan merely because the
individual's spouse is an active participant if the couple's combined AGI is
below $150,000. The maximum deductible IRA contribution for a married
individual who is not an active participant, but whose spouse is, is phased
out for combined AGI between $150,000 and $160,000.
Conduit (Rollover) IRAs
Certain individuals who have received or are about to receive
eligible rollover distributions from an employer-sponsored retirement plan or
another IRA may rollover the distribution tax-free to a Conduit IRA. The
rollover of the eligible distribution must be completed by the 60th day after
receipt of the distribution; however, if the rollover is in the form of a
direct trustee-to-trustee transfer without going through the distributee's
hand, the 60-day limit does not apply.
A distribution qualifies as an "eligible rollover distribution" if it
is made from a qualified retirement plan, a 403(b) plan or another IRA and
does not constitute one of the following:
(i) Substantially equal periodic payments over the employee's life or
life expectancy or the joint lives or life expectancies of the employee and
his/her designated beneficiary;
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(ii) Substantially equal installment payments for a period certain of
10 or more years;
(iii) A distribution, all of which represents a required minimum
distribution after attaining age 70
1/2;
(iv) A distribution due to a Qualified Domestic Relations Order to an
alternate payee who is not the spouse (or former spouse) of the employee; and
(v) A distribution of after-tax contributions which is not includable
in income.
Roth IRAs
For taxable years beginning after December 31, 1997, non-deductible
contributions of up to $2,000 per year can be made to a new Roth IRA. The
$2,000 annual limit is reduced by any contributions to a deductible or
nondeductible IRA for the same year. The maximum contribution that can be made
to a Roth IRA is phased out for single filers with AGI between $95,000 and
$110,000, and for couples filing jointly with AGI between $150,000 and
$160,000. Qualified distributions from a Roth IRA would be exempt from federal
taxes. Qualified distributions are distributions (1) made after the
five-taxable year period beginning with the first taxable year for which a
contribution was made to a Roth IRA and (2) that are (a) made on or after the
date on which the individual attains age 59 1/2, (b) made to a beneficiary on
or after the death of the individual, (c) attributed to the individual being
disabled, or (d) for a qualified special purpose (e.g., first time homebuyer
expenses).
Distributions that are not qualified distributions would always be
tax-free if the amount of the distribution is less than the aggregate
principal contributions.
Taxpayers with AGI of $100,000 or less are eligible to convert an
existing IRA (deductible, nondeductible and conduit) to a Roth IRA. Earnings
and contributions from a deductible IRA are subject to a tax upon conversion;
however, no 10% excise tax for early withdrawal would apply. If the conversion
is done prior to January 1, 1999, then the income from the conversion can be
included in income ratably over a four-year period beginning with the year of
conversion.
Education IRAs
For taxable years beginning after December 31, 1997, an Education IRA
has been created exclusively for the purpose of paying qualified higher
education expenses. Taxpayers can make non-deductible contributions up to $500
per year per beneficiary. The $500 annual limit is in addition to the $2,000
annual contribution limit applicable to IRAs and Roth IRAs. Eligible
contributions must be in cash and made prior to the date the beneficiary
reaches age 18. Similar to the Roth IRA, earnings would accumulate tax-free.
There is no requirement that the contributor be related to the beneficiary,
and there is no limit on the number of beneficiaries for whom one contributor
can establish Education IRAs. In addition, multiple Education IRAs can be
created for the same beneficiaries, however, the contribution limit of all
contributions for a single beneficiary cannot exceed $500 annually.
This $500 annual contribution limit for Education IRAs is phased out
ratably for single contributors with modified AGI between $95,000 and
$110,000, and for couples filing jointly with modified AGI of between $150,000
and $160,000. Individuals with modified AGI above the phase-out
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range are not allowed to make contributions to an Education IRA established on
behalf of any other individual.
Distributions from an Education IRA are excludable from gross income
to the extent that the distribution does not exceed qualified higher education
expenses incurred by the beneficiary during the year the distribution is made
regardless of whether the beneficiary is enrolled at an eligible educational
institution on a full-time, half-time, or less than half-time basis.
Any balance remaining in an Education IRA at the time a beneficiary
becomes 30 years old must be distributed, and the earnings portion of such a
distribution will be includible in gross income of the beneficiary and subject
to an additional 10% penalty tax if the distribution is not for qualified
higher educations expenses. Tax-free (and penalty-free) transfers and
rollovers of account balances from one Education IRA benefiting one
beneficiary to another Education IRA benefiting a different beneficiary (as
well as redesignations of the named beneficiary) is permitted, provided that
the new beneficiary is a member of the family of the old beneficiary and that
the transfer or rollover is made before the time the old beneficiary reaches
age 30 and the new beneficiary reaches age 18.
A company or association may establish a Group IRA or Group Roth IRA
for employees or members who want to purchase shares of the Portfolio.
Investments generally must be held in the IRA until age 59 1/2 in
order to avoid premature distribution penalties, but distributions generally
must commence no later than April 1 of the calendar year following the year in
which the participant reaches age 70 1/2. Individuals are entitled to revoke
the account, for any reason and without penalty, by mailing written notice of
revocation to Delaware Management Trust Company within seven days after the
receipt of the IRA Disclosure Statement or within seven days after the
establishment of the IRA, except, if the IRA is established more than seven
days after receipt of the IRA Disclosure Statement, the account may not be
revoked. Distributions from the account (except for the pro-rata portion of
any nondeductible contributions) are fully taxable as ordinary income in the
year received. Excess contributions removed after the tax filing deadline,
plus extensions, for the year in which the excess contributions were made are
subject to a 6% excise tax on the amount of excess. Premature distributions
(distributions made before age 59 1/2, except for death, disability and
certain other limited circumstances) will be subject to a 10% excise tax on
the amount prematurely distributed, in addition to the income tax resulting
from the distribution. For information concerning the applicability of a
CDSC upon redemption of Class B Shares and Class C Shares, see Contingent
Deferred Sales Charge - Class B Shares and Class C Shares under Classes of
Shares in the Prospectus for Class B Shares and Class C Shares.
Effective January 1, 1997, the 10% premature distribution penalty
will not apply to distributions from an IRA that are used to pay medical
expenses in excess of 7.5% of adjusted gross income or to pay health insurance
premiums by an individual who has received unemployment compensation for 12
consecutive weeks. In addition, effective January 1, 1998, the new law allows
for premature distribution without a 10% penalty if (i) the amounts are used
to pay qualified higher education expenses (including graduate level courses)
of the taxpayer, the taxpayer's spouse or any child or grandchild of the
taxpayer or the taxpayer's spouse, or (ii) used to pay acquisition costs of a
principle residence for the purchase of a first-time home by the taxpayer,
taxpayer's spouse or any child or grandchild of the taxpayer or the taxpayer's
spouse. A qualified first-time homebuyer is someone who has had no ownership
interest in a residence during the past two years. The aggregate amount of
distribution for first-time home purchases
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cannot exceed a lifetime cap of $10,000.
Simplified Employee Pension Plan ("SEP/IRA")
A SEP/IRA may be established by an employer who wishes to sponsor a
tax-sheltered retirement program by making contributions on behalf of all
eligible employees. Each of the Classes is available for investment by a
SEP/IRA.
Salary Reduction Simplified Employee Pension Plan ("SAR/SEP") Although new
SAR/SEP plans may not be established after December 31,
1996, existing plans may continue to be maintained by employers having 25 or
fewer employees. An employer may elect to make additional contributions to
such existing plans.
Prototype 401(k) Defined Contribution Plan
Section 401(k) of the Code permits employers to establish qualified
plans based on salary deferral contributions. Effective January 1, 1997,
non-governmental tax-exempt organizations may establish 401(k) plans. Plan
documents are available to enable employers to establish a plan. An employer
may also elect to make profit sharing contributions and/or matching
contributions with investments in only Class A Shares and Class C Shares or
certain other funds in the Delaware Investments family. Purchases under
the Plan may be combined for purposes of computing the reduced front-end
sales charge applicable to Class A Shares as set forth in the table in the
related Prospectus.
Deferred Compensation Plan for Public Schools and Non-Profit Organizations
("403(b)(7)")
Section 403(b)(7) of the Code permits public school systems and
certain non-profit organizations to use mutual fund shares held in a custodial
account to fund deferred compensation arrangements for their employees. A
custodial account agreement is available for those employers who wish to
purchase shares of any of the Classes in conjunction with such an arrangement.
Applicable front-end sales charges with respect to Class A Shares for such
purchases are set forth in the table in the related Prospectus.
Deferred Compensation Plan for State and Local Government Employees ("457")
Section 457 of the Code permits state and local governments, their
agencies and certain other entities to establish a deferred compensation plan
for their employees who wish to participate. This enables employees to defer a
portion of their salaries and any federal (and possibly state) taxes thereon.
Such plans may invest in shares of the Portfolio. Although investors may
use their own plan, there is available a Delaware Investments 457 Deferred
Compensation Plan. Interested investors should contact the Distributor or
their investment dealers to obtain further information. Applicable front-end
sales charges for such purchases of Class A Shares are set forth in the table
in the related Prospectus.
SIMPLE IRA
A SIMPLE IRA combines many of the features of an IRA and a 401(k)
Plan but is easier to administer than a typical 401(k) Plan. It requires
employers to make contributions on behalf of their employees and also has a
salary deferral feature that permits employees to defer a portion of their
salary into the plan on a pre-tax basis. A SIMPLE IRA is available only to
plan sponsors with 100 or fewer employees.
SIMPLE 401(k)
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A SIMPLE 401(k) is like a regular 401(k) except that it is available
only to plan sponsors 100 or fewer employees and, in exchange for
mandatory plan sponsor contributions, discrimination testing is not required.
DETERMINING OFFERING PRICE AND NET ASSET VALUE
The Real Estate Investment Trust Portfolio Class of The Real Estate Investment
Trust Portfolio and all other Portfolios
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
Pooled Trust, Inc. and Federal Funds wire by the Portfolio's Custodian Bank,
plus in the case of The International Mid-Cap Sub Portfolio, The Emerging
Markets Portfolio and the Global Equity Portfolio, any applicable purchase
reimbursement fee equal to 0.60%, 0.75% and 0.40%, respectively, of the dollar
amount invested.
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, Martin Luther King, Jr.'s Birthday, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas. When
the New York Stock Exchange is closed, Pooled Trust, Inc. will generally be
closed, pricing calculations will not be made and purchase and redemption
orders will not be processed.
Class A, B and C Shares and Institutional Class Shares of The Real Estate
Investment Trust Portfolio
Orders for purchases of Class A Shares are effected at the offering
price next calculated by the Fund in which shares are being purchased after
receipt of the order by Pooled Trust, Inc., its agent or certain other
authorized persons. See Distribution and Service under Investment Management
Agreements. Orders for purchases of Class B Shares, Class C Shares and the
Institutional Classes are effected at the net asset value per share next
calculated after receipt of the order by the Fund, its agent or certain other
authorized persons. Selling dealers are responsible for transmitting orders
promptly.
The offering price for Class A Shares consists of the net asset value
per share plus any applicable front-end sales charges. Offering price and net
asset value are computed as of the close of regular trading on the New York
Stock Exchange (ordinarily, 4 p.m., Eastern time) on days when the Exchange is
open. The New York Stock Exchange is scheduled to be open Monday through
Friday throughout the year except for New Year's Day, Martin Luther King,
Jr.'s Birthday, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving and Christmas. When the New York Stock Exchange is
closed, Pooled Trust, Inc. will generally be closed, pricing calculations will
not be made and purchase and redemption orders will not be processed.
Each Class will bear, pro-rata, all of the common expenses of the
Portfolio. The net asset values of all outstanding shares of each Class will
be computed on a pro-rata basis for each outstanding share based on the
proportionate participation in the Portfolio represented by the value of
shares of that Class. All income earned and expenses incurred by the Portfolio
will be borne on a pro-rata basis by each outstanding share of a Class, based
on each Class' percentage in the Portfolio represented by the value of shares
of such Classes, except that
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the Class A, Class B and Class C Shares alone will bear the 12b-1 Plan
expenses payable under their respective Plans. Due to the specific
distribution expenses and other costs that would be allocable to each Class,
the dividends paid to each Class of The Real Estate Investment Trust Portfolio
may vary. However, the net asset value per share of each Class is expected to
be equivalent.
* * *
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
Board of Directors or Trustees, as applicable.
The securities in which The International Equity Portfolio, The
International Mid-Cap Sub Portfolio, The Labor Select International Equity
Portfolio, The Global Fixed Income Portfolio, The International Fixed Income
Portfolio, The Emerging Markets Portfolio and The Global Equity Portfolio (as
well as The Real Estate Investment Trust Portfolios, The High-Yield Bond
Portfolio, The Diversified Core Fixed Income Portfolio The Asset
Allocation Portfolio, The Small-Cap Growth Equity Portfolio and The Growth and
Income 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
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holidays or 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 Banks. 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. Foreign securities and the prices of
foreign securities denominated in foreign currencies are translated into
U.S. dollars at the mean between the bid and offer quotations of such
currencies based on rates in effect as of the close of the London Stock
Exchange.
REDEMPTION AND REPURCHASE
The following supplements the disclosure provided in Pooled Trust,
Inc.'s Prospectuses.
The Real Estate Investment Trust Portfolio Class of The Real Estate Investment
Trust Portfolio and all other Portfolios
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, except that
shareholders that redeem shares of The International Mid-Cap Sub-Portfolio,
The Emerging Markets Portfolio and The Global Equity Portfolio are assessed by
the relevant Portfolio a redemption reimbursement fee of 0.50%, 0.75% and
0.30%, respectively. Payment for shares redeemed or repurchased may be made
either in cash or in-kind, or partly in cash and partly in-kind. If a
redemption of shares is made in-kind, the redemption reimbursement fee that is
otherwise applicable will not be assessed. Any portfolio securities paid or
distributed in-kind would be valued as described in "DETERMINING OFFERING
PRICE AND 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 related Prospectus
for special redemption procedures and requirements that may be applicable to
shareholders in The International Equity Portfolio, The International Mid-Cap
Sub Portfolio, The Labor Select International Equity Portfolio, The Global
Fixed Income Portfolio, The International Fixed Income Portfolio and The
Global Equity Portfolio. Under certain circumstances, eligible investors who
have an existing investment counseling relationship with Delaware Investment
Advisers or Delaware International will not be subject to Pooled Trust, Inc.'s
in-kind redemption requirements until such time as Pooled Trust, Inc. receives
appropriate regulatory approvals to permit such redemptions for the account of
such investors.
Pooled Trust, Inc. has elected to be governed by Rule 18f-1 under the
1940 Act pursuant to which Pooled Trust, Inc. 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.
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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.
Small Accounts
For all Portfolios except The International Mid-Cap Sub Portfolio,
due to the relatively higher cost of maintaining small accounts, Pooled Trust,
Inc. 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 Pooled Trust, Inc. 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.
* * *
Pooled Trust, Inc. has available certain redemption privileges, as
described below. They are unavailable to shareholders of The International
Equity Portfolio, The International Mid-Cap Sub Portfolio, The Labor Select
International Equity Portfolio, The Global Fixed Income Portfolio, The
International Fixed Income Portfolio and The Global Equity Portfolio whose
redemptions trigger the special in-kind redemption procedures. See the related
Prospectus. The Portfolios reserve the right to suspend or terminate these
expedited payment procedures at any time in the future.
Expedited Telephone Redemptions
Shareholders wishing to redeem shares for which certificates have not
been issued may call Pooled Trust, Inc. at (1-800-231-8002) prior to 4 p.m.,
Eastern time, and have the proceeds mailed to them at the record address.
Redemptions involving The Asset Allocation Portfolio will be forwarded to
Foundation Funds. Checks payable to the shareholder(s) of record will normally
be mailed three business days, but no later 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 Pooled Trust, Inc.,
as described above. The Telephone Redemption Option on the Account
Registration Form must have been elected by the shareholder and filed with
Pooled Trust, Inc. 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
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(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, Pooled Trust, Inc. 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 Pooled Trust, Inc. may be exchanged for
shares of any other Portfolio or for the institutional classes of the other
funds in the Delaware Investments family. Exchange requests should be sent to
Delaware Pooled Trust, Inc., One Commerce Square, 2005 Market Street,
Philadelphia, PA 19103 Attn: Client Services. Exchanges involving The Asset
Allocation Portfolio will be forwarded to Foundation Funds.
Any such exchange will be calculated on the basis of 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, except for the special purchase and redemption reimbursement fees
for exchanges involving shares of The International Mid-Cap Sub Portfolio, The
Emerging Markets Portfolio and The Global Equity Portfolio. See Exchange
Privilege under Shareholder Services in the related Prospectus. The shares of
a Portfolio into which an exchange is made, if necessary, must be authorized
for sale 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 Pooled Trust, Inc. 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 or Trustees, as
applicable, 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, The International Fixed Income Portfolio and The Global
Equity Portfolio shall be subject to the special purchase and redemption
procedures identified in sections of the related 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. Pooled Trust, Inc. reserves the
right to suspend or terminate or amend the terms of the exchange privilege
upon 60 days' written notice to client shareholders.
* * *
Neither Pooled Trust, Inc., the Portfolios nor the Portfolios'
transfer agent, Delaware Service Company, Inc., is responsible for any losses
incurred in acting upon written or telephone instructions for redemption or
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exchange of Portfolio shares which are reasonably believed to be genuine. With
respect to such telephone transactions, Pooled Trust, Inc. 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, Pooled Trust, Inc. 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.
Class A, B and C Shares and Institutional Class Shares of The Real Estate
Investment Trust Portfolio
Any shareholder may require The Real Estate Investment Trust
Portfolio to redeem shares by sending a written request, signed by the record
owner or owners exactly as the shares are registered, to the Portfolio, at
1818 Market Street, Philadelphia, PA 19103. In addition, certain expedited
redemption methods described below are available when stock certificates have
not been issued. Certificates are issued for the Class A Shares and
Institutional Class Shares only if a shareholder specifically requests them.
Certificates are not issued for Class B Shares or Class C Shares. If stock
certificates have been issued for shares being redeemed, they must accompany
the written request. For redemptions of $50,000 or less paid to the
shareholder at the address of record, the request must be signed by all owners
of the shares or the investment dealer of record, but a signature guarantee is
not required. When the redemption is for more than $50,000, or if payment is
made to someone else or to another address, signatures of all record owners
are required and a signature guarantee is required. Each signature guarantee
must be supplied by an eligible guarantor institution. The Portfolio reserves
the right to reject a signature guarantee supplied by an eligible institution
based on its creditworthiness. The Portfolio may request further documentation
from corporations, retirement plans, executors, administrators, trustees or
guardians.
In addition to redemption of Portfolio shares, the Distributor,
acting as agent of The Real Estate Investment Trust Portfolio, offers to
repurchase Portfolio shares from broker/dealers acting on behalf of
shareholders. The redemption or repurchase price, which may be more or less
than the shareholder's cost, is the net asset value per share next determined
after receipt of the request in good order by the Portfolio, its agent or
certain other authorized persons, subject to any applicable CDSC or Limited
CDSC. See Distribution and Service under Investment Management Agreements.
This is computed and effective at the time the offering price and net asset
value are determined. See Determining Offering Price and Net Asset Value. The
Portfolio and the Distributor end their business days at 5 p.m., Eastern time.
This offer is discretionary and may be completely withdrawn without further
notice by the Distributor.
Orders for the repurchase of Portfolio shares which are submitted to
the Distributor prior to the close of its business day will be executed at the
net asset value per share computed that day (subject to any applicable CDSC or
Limited CDSC), if the repurchase order was received by the broker/dealer from
the shareholder prior to the time the offering price and net asset value are
determined on such day. The selling dealer has the responsibility of
transmitting orders to the Distributor promptly. Such repurchase is then
settled as an ordinary transaction with the broker/dealer (who may make a
charge to the shareholder for this service) delivering the shares repurchased.
Certain redemptions of Class A Shares purchased at net asset value
may result in the imposition of a Limited CDSC. See Contingent Deferred Sales
Charge for Certain Redemptions of Class A Shares Purchased at Net Asset Value
under Redemption and Exchange in the related Prospectus. Redemptions of Class
B Shares are subject to the following CDSC: (i) 4% if shares are redeemed
within two years of purchase; (ii) 3% if shares are redeemed during the third
or fourth year following purchase; (iii) 2% if shares are redeemed during
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the fifth year following purchase; and (iv) 1% if shares are redeemed during
the sixth year following purchase. Class C Shares are subject to a CDSC of 1%
if shares are redeemed within 12 months following purchase. See Contingent
Deferred Sales Charge under Classes of Shares in the related Prospectus.
Except for the applicable CDSC or Limited CDSC, and with respect to the
expedited payment by wire described below, for which there is currently a
$7.50 bank wiring cost, neither The Portfolio nor its Distributor charges a
fee for redemptions or repurchases, but such fees could be charged at any time
in the future.
Payment for shares redeemed will ordinarily be mailed the next
business day, but in no case later than seven days, after receipt of a
redemption request in good order; provided, however, that each commitment to
mail or wire redemption proceeds by a certain time, as described below, is
modified by the qualifications described in the next paragraph.
The Portfolio will process written or telephone redemption requests
to the extent that the purchase orders for the shares being redeemed have
already been settled. The Portfolio will honor the redemption requests as to
shares for which a check was tendered as payment, but the Portfolio will not
mail or wire the proceeds until it is reasonably satisfied that the check has
cleared. This potential delay can be avoided by making investments by wiring
Federal Funds.
If a shareholder has been credited with a purchase by a check which
is subsequently returned unpaid for insufficient funds or for any other
reason, the Portfolio will automatically redeem from the shareholder's account
the shares purchased by the check plus any dividends earned thereon.
Shareholders may be responsible for any losses to the Portfolio or to the
Distributor.
In case of a suspension of the determination of the net asset value
because the New York Stock Exchange is closed for other than weekends or
holidays, or trading thereon is restricted or an emergency exists as a result
of which disposal by the Portfolio of securities owned by it is not reasonably
practical, or it is not reasonably practical for the Portfolio fairly to value
its assets, or in the event that the Securities and Exchange Commission has
provided for such suspension for the protection of shareholders, the Portfolio
may postpone payment or suspend the right of redemption or repurchase. In such
case, the shareholder may withdraw the request for redemption or leave it
standing as a request for redemption at the net asset value next determined
after the suspension has been terminated.
Payment for shares redeemed or repurchased may be made either in cash
or kind, or partly in cash and partly in kind. Any portfolio securities paid
or distributed in kind would be valued as described in Determining Offering
Price and Net Asset Value. Subsequent sale by an investor receiving a
distribution in kind could result in the payment of brokerage commissions.
However, Pooled Trust, Inc. has elected to be governed by Rule 18f-1 under the
1940 Act pursuant to which the Portfolio is obligated to redeem shares solely
in cash up to the lesser of $250,000 or 1% of the net asset value of the
Portfolio during any 90-day period for any one shareholder.
The value of the Portfolio's investments is subject to changing
market prices. Thus, a shareholder reselling shares to the Portfolio may
sustain either a gain or loss, depending upon the price paid and the price
received for such shares.
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Small Accounts
Before the Portfolio involuntarily redeems shares from an account
that, under the circumstances listed in the related Prospectus, has remained
below the minimum amounts required by the Portfolio's Prospectus 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 $1,000 and will be allowed
60 days from that date of notice to make an additional investment to meet the
required minimum of $1,000. See The Conditions of Your Purchase under How to
Buy Shares in the related Prospectus. Any redemption in an inactive account
established with a minimum investment may trigger mandatory redemption. No
CDSC or Limited CDSC will apply to the redemptions described in this
paragraph.
* * *
The Portfolio has made available certain redemption privileges, as
described below. The Portfolio reserves the right to suspend or terminate
these expedited payment procedures upon 60 days' written notice to
shareholders.
Expedited Telephone Redemptions
Holders of Class A Shares, Class B Shares and Class C Shares or their
investment dealers of record wishing to redeem any amount of shares of $50,000
or less for which certificates have not been issued may call the Shareholder
Service Center at 800-523-1918 or, in the case of shareholders of the
Institutional Class, their Client Services Representative at 800-828-5052
prior to the time the offering price and net asset value are determined, as
noted above, and have the proceeds mailed to them at the record address.
Checks payable to the shareholder(s) of record will normally be mailed the
next business day, but no later than seven days, after the receipt of the
redemption request. This option is only available to individual, joint and
individual fiduciary-type accounts.
In addition, redemption proceeds of $1,000 or more can be transferred
to your predesignated bank account by wire or by check by calling the phone
number listed above. An authorization form must have been completed by the
shareholder and filed with the Portfolio 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 authorization form. Redemption proceeds will
normally be wired on the next business day following receipt of the redemption
request. There is a $7.50 wiring fee (subject to change) charged by CoreStates
Bank, N.A. which will be deducted from the withdrawal proceeds each time the
shareholder requests a redemption from Class A Shares, Class B Shares or Class
C Shares. 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 authorization form. Redemption proceeds will normally be
mailed the next business day, 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.
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<PAGE>
Redemption Requirements: In order to change the name of the bank and
the account number it will be necessary to send a written request to the
Portfolio and a signature guarantee may be required. Each signature guarantee
must be supplied by an eligible guarantor institution. The Portfolio reserves
the right to reject a signature guarantee supplied by an eligible institution
based on its creditworthiness.
To reduce the shareholder's risk of attempted fraudulent use of the
telephone redemption procedure, payment will be made only to the bank account
designated on the authorization form.
If expedited payment under these procedures could adversely affect
the Portfolio, the Portfolio may take up to seven days to pay the shareholder.
Neither the Portfolio nor its Transfer Agent is responsible for any
shareholder loss 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 Portfolio will
follow reasonable procedures to confirm that instructions communicated by
telephone are genuine (including verification of a form of personal
identification) as, if it does not, the Portfolio or the Transfer Agent may be
liable for any losses due to unauthorized or fraudulent transactions.
Telephone instructions received by Class A, B and C shareholders are generally
tape recorded. A written confirmation will be provided for all purchase,
exchange and redemption transactions initiated by telephone.
Systematic Withdrawal Plans
Shareholders of Class A Shares, Class B Shares and Class C Shares who
own or purchase $5,000 or more of shares at the offering price or net asset
value, as applicable for which certificates have not been issued may establish
a Systematic Withdrawal Plan for monthly withdrawals of $25 or more, or
quarterly withdrawals of $75 or more, although the Fund does not recommend any
specific amount of withdrawal. This $5,000 minimum does not apply for the
Portfolio's prototype retirement plans. Shares purchased with the initial
investment and through reinvestment of cash dividends and realized securities
profits distributions will be credited to the shareholder's account and
sufficient full and fractional shares will be redeemed at the net asset value
calculated on the third business day preceding the mailing date.
Checks are dated either the 1st or the 15th of the month, as selected
by the shareholder (unless such date falls on a holiday or a weekend), and are
normally mailed within two business days. Both ordinary income dividends and
realized securities profits distributions will be automatically reinvested in
additional shares of the Class at net asset value. This plan is not
recommended for all investors and should be started only after careful
consideration of its operation and effect upon the investor's savings and
investment program. To the extent that withdrawal payments from the plan
exceed any dividends and/or realized securities profits distributions paid on
shares held under the plan, the withdrawal payments will represent a return of
capital and the share balance may in time be depleted, particularly in a
declining market.
The sale of shares for withdrawal payments constitutes a taxable
event and a shareholder may incur a capital gain or loss for federal income
tax purposes. This gain or loss may be long-term or short-term depending on
the holding period for the specific shares liquidated. Premature withdrawals
from retirement plans may have adverse tax consequences.
Withdrawals under this plan made concurrently with the purchases of
additional shares may be disadvantageous to the shareholder. Purchases of
Class A Shares through a periodic investment program in a
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<PAGE>
fund managed by the Manager must be terminated before a Systematic Withdrawal
Plan with respect to such shares can take effect, except if the shareholder is
a participant in one of our retirement plans or is investing in Delaware
Investments funds which do not carry a sales charge. Redemptions of Class A
Shares pursuant to a Systematic Withdrawal Plan may be subject to a Limited
CDSC if the purchase was made at net asset value and a dealer's commission has
been paid on that purchase. Redemptions of Class B Shares or Class C Shares
pursuant to a Systematic Withdrawal Plan may be subject to a CDSC, unless the
annual amount selected to be withdrawn is less than 12% of the account balance
on the date that the Systematic Withdrawal Plan was established. See Waiver of
Contingent Deferred Sales Charge - Class B and Class C Shares and Waiver of
Limited Contingent Deferred Sales Charge - Class A Shares under Redemption and
Exchange in the related Prospectus. Shareholders should consult their
financial adviser to determine whether a Systematic Withdrawal Plan would be
suitable for them.
An investor wishing to start a Systematic Withdrawal Plan must
complete an authorization form. If the recipient of Systematic Withdrawal Plan
payments is other than the registered shareholder, the shareholder's signature
on this authorization must be guaranteed. Each signature guarantee must be
supplied by an eligible guarantor institution. The Fund reserves the right to
reject a signature guarantee supplied by an eligible institution based on its
creditworthiness. This plan may be terminated by the shareholder or the
Transfer Agent at any time by giving written notice.
The Systematic Withdrawal Plan is not available for the Institutional
Class Shares.
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<PAGE>
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, a Portfolio will not be subject to
federal income tax, or to any excise tax, to the extent its earnings are
distributed as provided in the Code and it satisfies other requirements
relating to the sources of its income and diversification of its assets.
Pooled Trust, Inc.'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 Pooled Trust, Inc. 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 Large-Cap Value Equity Portfolio and The Real Estate Investment
Trust Portfolio for the fiscal year ended October 31, 1997, 40% and 62%,
respectively, were eligible for the dividends-received deduction for
corporations. For the fiscal year ended October 31, 1997, no portion of the
dividends paid by The Aggressive Growth Portfolio qualified for the
dividends-received deduction.
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 Pooled Trust, Inc. 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, Pooled Trust, Inc. will mail information to investors 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.
Each class of shares of The Real Estate Investment Trust Portfolio
will share proportionately in the investment income and expenses of the
Portfolio, except that Class A Shares, Class B Shares and Class C Shares alone
will incur distribution fees under their respective 12b-1 plans.
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<PAGE>
TAXES
The following supplements the tax disclosure provided in the
Prospectuses.
Under the Taxpayer Relief act of 1997 (the "1997 Act"), a Portfolio
is required to track its sales of portfolio securities and to report its
capital gain distributions to you according to the following categories of
holding periods:
"Pre-Act long-term capital gains": securities sold by a Portfolio
before May 7, 1997, that were held for more than 12 months. These
gains will be taxable to individual investors at a maximum rate of
28%.
"Mid-term capital gains" or "28 percent rate gain": securities sold
by a Portfolio after July 28, 1997 that were held more than one year
but not more than 18 months. These gains will be taxable to
individual investors at a maximum rate of 28%.
"1997 Act long-term capital gains" or "20 percent rate gain":
securities sold by a Portfolio between May 7, 1997 and July 28, 1997
that were held for more than 12 months, and securities sold by the
Portfolio after July 28, 1997 that were held for more than 18 months.
These gains will be taxable to individual investors at a maximum rate
of 20% for investors in the 28% or higher federal income tax
brackets, and at a maximum rate of 10% for investors in the 15%
federal income tax bracket.
"Qualified 5-year gains": For individuals in the 15% bracket,
qualified 5-year gains are net gains on securities held for more than
5 years which are sold after December 31, 2000. For individuals
who are subject to tax at higher rate brackets, qualified 5-year
gains are net gains on securities which are purchased after December
31, 2000 and are held for more than 5 years. Taxpayers subject to tax
at a higher rate brackets may also make an election for shares held
on January 1, 2001 to recognize gain on their shares (any loss is
disallowed) in order to qualify such shares as qualified 5-year
property as though purchased after December 31, 2000. These gains
will be taxable to individual investors at a maximum rate of 18% for
investors in the 28% or higher federal income tax brackets, and at a
maximum rate of 8% for investors in the 15% federal income tax
bracket when sold after the 5 year holding period.
A portion of each Portfolio's dividends may qualify for the
dividends-received deduction for corporations provided in the federal income
tax law. The portion of dividends paid by a Portfolio that so qualifies will
be designated each year in a notice mailed to a Portfolio's shareholders, and
cannot exceed the gross amount of dividends received by a Portfolio from
domestic (U.S.) corporations that would have qualified for the
dividends-received deduction in the hands of a Portfolio if the Portfolio was
a regular corporation. The availability of the dividends-received deduction is
subject to certain holding period and debt financing restrictions imposed
under the Code on the corporation claiming the deduction. Under the 1997 Act,
the amount that a Portfolio may designate as eligible for the
dividends-received deduction will be reduced or eliminated if the shares on
which the dividends earned by a Portfolio were debt-financed or held by a
Portfolio for less than a 46-day period during a 90-day period beginning 45
days before the ex-dividend date and ending 45 days after the ex-dividend
date. Similarly, if your Portfolio shares are debt-financed or held by you for
less than a 46-day period during a 90-day period beginning 45 days before the
ex-dividend date and ending 45 days after the
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<PAGE>
ex-dividend date, then the dividends-received deduction for Portfolio
dividends on your shares may also be reduced or eliminated. Even if designated
as dividends eligible for the dividends-received deduction, all dividends
(including any deducted portion) must be included in your alternative minimum
taxable income calculation.
Shareholders will be notified annually by Pooled Trust, Inc. as to
the federal income tax status of dividends and distributions paid by their
Portfolio.
In addition to the federal taxes described above, shareholders may or
may not be subject to various state and local taxes. Because shareholders'
state and local taxes may be different than the federal taxes described above,
shareholders should consult their own tax advisers.
See also Other Tax Requirements under Accounting and Tax Issues in
this Part B.
Futures Contracts and Stock Options
(The Aggressive Growth Portfolio, The Real Estate Investment Trust Portfolios,
The Emerging Markets Portfolio, The Global Equity Portfolio , The
Diversified Core Fixed Income Portfolio, The Asset Allocation Portfolio, The
Small-Cap Growth Equity Portfolio and The Growth and Income Portfolio)
The Aggressive Growth Portfolio's, The Real Estate Investment Trust
Portfolios', The Emerging Markets Portfolio's, The Global Equity Portfolio's,
The Diversified Core Fixed Income Portfolio's, The Asset Allocation
Portfolio's, The Small-Cap Growth Equity Portfolio's and The Growth and Income
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 International Mid-Cap Sub Portfolio,
The Labor Select International Equity Portfolio, The Real Estate Investment
Trust Portfolios, The Global Fixed Income Portfolio, The Emerging Markets
Portfolio, The International Fixed Income Portfolio, The Global Equity
Portfolio, The Diversified Core Fixed Income Portfolio, The Asset
Allocation Portfolio, The Small-Cap Growth Equity Portfolio and The Growth and
Income Portfolio)
The International Equity Portfolio, The International Mid-Cap Sub
Portfolio, The Labor Select International Equity Portfolio, The Real Estate
Investment Trust Portfolios, The Global Fixed Income Portfolio, The
International Fixed Income Portfolio, The Emerging Markets Portfolio, The
Global Equity Portfolio., The Diversified Core Fixed Income Portfolio, The
Asset Allocation Portfolio, The Small-Cap Growth Equity Portfolio and The
Growth and 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
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<PAGE>
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 Pooled Trust, Inc. are exempt from Pennsylvania county
personal property tax.
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<PAGE>
INVESTMENT MANAGEMENT AGREEMENTS
Delaware Management Company ("Delaware"), One Commerce Square,
Philadelphia, PA 19103, furnishes investment management services to The
Large-Cap Value Equity, The Aggressive Growth, The Intermediate Fixed Income,
The Aggregate Fixed Income, The Limited-Term Maturity, The Small/Mid-Cap Value
Equity, The Real Estate Investment Trust, The High-Yield Bond, The
Diversified Core Fixed Income and The Asset Allocation, The Small-Cap Growth
Equity and The Growth and Income Portfolios, subject to the supervision and
direction of Board of Directors or Trustees of Pooled Trust, Inc. or, as
applicable, Foundation Funds. Delaware International Advisers Ltd. ("Delaware
International"), Third Floor, 80 Cheapside, London, England EC2V 6EE,
furnishes similar services to The International Equity, The International
Mid-Cap Sub Portfolio, The Labor Select International Equity, The Global Fixed
Income, The International Fixed Income, The Emerging Markets and The Global
Equity Portfolios, and provides sub-advisory services to The Diversified Core
Fixed Income Portfolio subject to the supervision and direction of Pooled
Trust, Inc.'s Board of Directors. Lincoln Investment Management, Inc.
("Lincoln") serves as sub-adviser to Delaware with respect to The Real Estate
Investment Trust Portfolios. Lincoln's address is 200 E. Berry Street, Fort
Wayne, Indiana 46802.
Delaware and its predecessors have been managing the funds in the
Delaware Investments family since 1938. On July 31, 1998, Delaware
and its affiliates within Delaware Investments, including Delaware
International Advisers Ltd., were managing in the aggregate more than $00
billion in assets in the various institutional or separately managed
(approximately $00,000,000,000) and investment company
($00,000,000,000) accounts.
Lincoln (formerly Lincoln National Investment Management Company) was
incorporated in 1930. As of July 31, 1998, Lincoln had over $00
billion in assets under management.
The Investment Management Agreements for The Large-Cap Value Equity,
The Aggressive Growth, The Intermediate 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 Small/Mid-Cap Value Equity, 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. The Investment Management Agreement
for The Emerging Markets Portfolio is dated April 14, 1997 and was approved by
the initial shareholder on that date. The Investment Management Agreements for
The Global Equity Portfolio and The Real Estate Investment Trust Portfolio II
are both dated October 14, 1997 and were approved by the initial shareholder
as of October 14, 1997; the Sub-Advisory Agreement between Delaware and
Lincoln is dated as of October 14, 1997 and was approved by the initial
shareholder on that date. The Investment Management Agreements for the
International Mid-Cap Sub Portfolio, The Aggregate Fixed Income Portfolio and
The Diversified Core Fixed Income Portfolio are each dated December 24, 1997
and were approved by the initial shareholders on that date. The Sub-Advisory
Agreement between Delaware and Delaware International relating to the
Diversified Core Fixed Income Portfolio is dated December 24, 1997 and was
approved by the initial shareholder on that date. The Investment Management
Agreements for The Asset Allocation Portfolio, The Small-Cap Growth Equity
Portfolio and The Growth and Income Portfolio are each dated _________, 1998
and were approved by the initial shareholder on ________, 1998.
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<PAGE>
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
Trustees, as applicable, 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 or trustees of Pooled
Trust, Inc. or Foundation Funds 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 Pooled Trust, Inc., the trustees of
Foundation Funds 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 (or, in the case of The International Mid-Cap Sub Portfolio, a
comprehensive management 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:
Portfolio Rate
The Large-Cap Value Equity Portfolio 0.55%
The Aggressive Growth Portfolio 0.80%
The International Equity Portfolio 0.75%
The International Mid-Cap Sub Portfolio 0.70%*
The Small/Mid-Cap Value Equity Portfolio 0.75%
The Labor Select International Equity Portfolio 0.75%
The Real Estate Investment Trust Portfolio 0.75%**
The Real Estate Investment Trust Portfolio II 0.75%**
The Intermediate Fixed Income Portfolio 0.40%
The Aggregate Fixed Income Portfolio 0.40%
The Limited-Term Maturity Portfolio 0.30%
The Global Fixed Income Portfolio 0.50%
The International Fixed Income Portfolio 0.50%
The High-Yield Bond Portfolio 0.45%
The Emerging Markets Portfolio 1.20%***
The Global Equity Portfolio 0.75%****
The Diversified Core Fixed Income Portfolio 0.43%****
The Asset Allocation Portfolio
The Small-Cap Growth Equity Portfolio
The Growth and Income Portfolio
* Under The Investment Management Agreement between Pooled Trust, Inc. on
behalf of The International Mid-Cap Sub Portfolio and Delaware
International, Delaware International provides both investment advisory
services and pays for all of the ordinary operating expenses of the
Portfolio; and the Portfolio pays Delaware International a comprehensive
management fee to cover all such services and expenses as described
below.
** Delaware has entered into a sub-advisory agreement with Lincoln with
respect to The Real Estate Investment Trust Portfolios. As compensation
for its services as sub-adviser to Delaware, Lincoln is
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entitled to receive a sub-advisory fee equal to 30% of the investment
management fee under Delaware's Investment Management Agreement with Pooled
Trust, Inc. on behalf of the Portfolio.
*** Delaware International has elected voluntarily to limit its annual
Investment Advisory Fee to no more than 1.00% of The Emerging Markets
Portfolio's average daily net assets during the period from October 1,
1997 through October 31, 1998. The effect of the current fee waiver of
1.55% with respect to "Total Operating Expenses" and the 1.00% fee
limitation with respect to The Emerging Markets Portfolio is that the
annual Investment Advisory Fee paid to Delaware International on behalf
of that Portfolio will be an amount equal to the lesser of 1.00% or the
amount necessary to limit "Total Operating Expenses" of the Portfolio
(exclusive of taxes, interest, brokerage commissions and extraordinary
expenses) to no more than 1.55% of average net assets, on an annualized
basis. Delaware International has also voluntarily agreed that the
annual Investment Advisory Fee payable to Delaware International on
behalf of The Emerging Markets Portfolio will not exceed 1.00% unless
shareholders of the Portfolio have been notified of the change to the
1.00% fee limitation at least one year in advance of such increase.
**** Delaware has entered into sub-advisory agreements with Delaware
International with respect to The Global Equity Portfolio and The
Diversified Core Fixed Income Portfolio. As compensation for its
services as sub-adviser to Delaware, Delaware International is entitled
to receive sub-advisory fees equal to 50% of the investment management
fees under Delaware's Investment Management Agreement with Pooled Trust,
Inc. on behalf of The Global Equity Portfolio. With respect to The
Diversified Core Fixed Income Portfolio, as compensation for Delaware
International's services as sub-adviser to Delaware, Delaware
International is entitled to receive sub-advisory fees from Delaware an
amount equal to the management fee paid to Delaware times a ratio; the
numerator of which is the average daily net assets ----- represented by
foreign assets and the denominator of which is the average daily net
assets of The Diversified Core Fixed Income Portfolio, such amount to be
calculated at the same time and measured over the same period as the
management fee.
Under the terms of the Investment Management Agreement for The
International Mid-Cap Sub Portfolio, Delaware International pays the
Portfolio's proportionate share of the fees paid to unaffiliated directors by
Pooled Trust, Inc. 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 Pooled
Trust, Inc., except that Delaware International will make no such payments out
of the fees it receives from managing The International Fixed Income, The
Emerging Markets, The Labor Select International Equity and The Global Equity
Portfolios, and Delaware will make no such payments out of the fees it
receives from managing The Small/Mid-Cap Value Equity, The Real Estate
Investment Trust, The High-Yield Bond, The Diversified Core Fixed Income,
The Asset Allocation, The Small-Cap Growth Equity and The Growth and Income
Portfolios.
Delaware, or as applicable Delaware International, has elected
voluntarily to waive that portion, if any of the annual investment advisory
fees payable by a particular Portfolio and to pay 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, the following percentages of
average daily net assets from the commencement of operations (unless otherwise
noted) through April 30, 1998:
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Portfolio
The Large-Cap Value Equity Portfolio 0.68%
The Aggressive Growth Portfolio 0.93%
The International Equity Portfolio 0.96%
The International Mid-Cap Sub Portfolio 0.70%
The Small/Mid-Cap Value Equity Portfolio 0.89%
The Labor Select International Equity Portfolio 0.92%
The Real Estate Investment Trust Portfolio 0.86%*
The Real Estate Investment Trust Portfolio II 0.86%
The Intermediate Fixed Income Portfolio 0.53%
The Aggregate Fixed Income Portfolio 0.53%
The Limited-Term Maturity Portfolio 0.43%
The Global Fixed Income Portfolio 0.60%**
The International Fixed Income Portfolio 0.60%***
The High-Yield Bond Portfolio 0.59%
The Emerging Markets Portfolio 1.55%
The Global Equity Portfolio 0.96%
The Diversified Core Fixed Income Portfolio 0.57%
The Asset Allocation Portfolio
The Small-Cap Growth Equity Portfolio
The Growth and Income Portfolio
* With respect to REIT Fund A Class, REIT Fund B Class, REIT Fund C Class
and REIT Fund Institutional Class of The Real Estate Investment Trust
Portfolio, Delaware has elected voluntarily to waive that portion, if
any, of the annual Investment Advisory Fee payable by such classes and
to reimburse each class for its expenses to the extent necessary to
ensure that the expenses of each class (exclusive of taxes, interest,
brokerage commissions, extraordinary expenses) do not exceed, as a
percentage of average net assets, on an annualized basis, 1.11% for
Class A Shares, 1.86% for each of the Class B and C Shares and 0.86% for
each of the Institutional Class shares and The Real Estate Investment
Trust class during the period from the commencement of the public
offering of such classes through April 30, 1998. The expense cap for The
Real Estate Investment Trust Portfolio that was in effect from the
commencement of operations through October 14, 1997 was 0.89%.
** Delaware International voluntarily elected to waive that portion, if
any, of its annual investment advisory fees and to pay The Global Fixed
Income 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, 0.62% as a percentage of average net assets for the period from
the commencement of the public offering for the Portfolio through
October 31, 1994. Such waiver was modified effective November 1, 1994 to
provide that such expenses of the Portfolio do not exceed, on an
annualized basis, 0.60%.
*** Delaware International voluntarily elected to waive that portion, if
any, of its annual investment advisory fees and to pay The International
Fixed Income Portfolio for its respective 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, 0.62% as a percentage of average net
assets for the period from the commencement of the public offering for
the Portfolio
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<PAGE>
through April 30, 1994. Such waiver for The International Fixed Income
Portfolio was modified effective May 1, 1994 to provide that such
expenses of the Portfolio do not exceed, on an annual basis, 0.60%.
Investment management fees incurred for the last three fiscal years
with respect to each Portfolio follows:
<TABLE>
<CAPTION>
Portfolio October 31, 1997 October 31, 1996 October 31, 1995
- - --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
The Large-Cap Value Equity Portfolio $441,785 earned $343,114 earned $255,586 earned
$433,247 paid $328,126 paid $237,776 paid
$8,538 waived $14,988 waived $17,810 waived
The Aggressive Growth Portfolio $156,524 earned $214,315 earned $202,809 earned
$64,669 paid $185,753 paid $163,397 paid
$91,855 waived $28,562 waived $39,412 waived
The International Equity Portfolio $3,119,494 paid $1,632,036 paid $792,936 earned
$374,822 paid
$15,248 waived
The Global Fixed Income Portfolio $1,591,678 earned $762,870 earned $349,107 earned
$1,425,392 paid $661,220 paid $293,883 paid
$166,286 waived $101,650 waived $55,224 waived
The Labor Select International $291,778 earned $100,144 earned N/A
Equity Portfolio(1) $222,760 paid $50,055 paid
$69,018 waived $50,089 waived
The Real Estate Investment $354,157 earned $153,313 earned N/A
Trust Portfolio(2) $273,770 paid $127,250 paid
$80,387 waived $26,063 waived
The Intermediate Fixed Income $84,846 earned $19,389 earned N/A
Portfolio(3) $18,659 paid $-0- paid
$66,187 waived $19,389 waived
The High-Yield Bond Portfolio(4) $27,213 earned N/A N/A
$13,551 paid
$13,662 waived
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Portfolio October 31, 1997 October 31, 1996 October 31, 1995
- - --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
The International Fixed Income $61,031 earned N/A N/A
Portfolio(5) $29,230 paid
$31,801 waived
The Emerging Markets Portfolio(6) $89,760 earned N/A N/A
$54,085 paid
$35,675 waived
The Global Equity Portfolio(7) $941 earned N/A N/A
$941 waived
</TABLE>
(1) Commenced operations on December 19, 1995.
(2) Commenced operations on December 6, 1995.
(3) Commenced operations on March 12, 1996.
(4) Commenced operations on December 2, 1996.
(5) Commenced operations on April 11, 1997.
(6) Commenced operations on April 14, 1997.
(7) Commenced operations on October 15, 1997.
On October 31, 1997, the total net assets of Pooled Trust, Inc. were
$1,230,563,646, broken down as follows:
The Large-Cap Value Equity Portfolio $81,101,898
The Aggressive Growth Portfolio $10,317,447
The International Equity Portfolio $500,195,661
The Global Fixed Income Portfolio $431,075,603
The Labor Select International Equity Portfolio $50,895,705
The Real Estate Investment Trust Portfolio $60,089,209
The Intermediate Fixed Income Portfolio $30,366,196
The High-Yield Bond Portfolio $11,347,586
The Emerging Markets Portfolio $18,564,600
The Global Equity Portfolio $2,854,885
The International Fixed Income Portfolio $33,733,856
The Limited-Term Maturity Portfolio $21,000
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, except for The International Mid-Cap
Sub Portfolio as described below, is responsible for all of its own expenses.
Among others, these expenses 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
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<PAGE>
shareholders. Under the terms of The International Mid-Cap Sub Portfolio's
Investment Management Agreement, Delaware International pays all employee and
ordinary operating costs of the Portfolio including, for example, investment
advisory fees, rent, shareholder services, transfer agency and accounting
services, custody fees, and ordinary fees of independent accountants and legal
counsel. Excluded from the definition of ordinary operating costs are
interest, taxes, dues, brokerage fees, extraordinary legal and accounting fees
and expenses, and fees or other charges of governments and their agencies,
including the cost of registering the Portfolio's shares with the Commission
and qualifying the Portfolio's shares for sale in any jurisdiction, all of
which are borne by the Portfolio.
Distribution and Service
Delaware Distributors, L.P., located at 1818 Market Street,
Philadelphia, PA 19103, serves as the national distributor for each Portfolio
under separate Distribution Agreements dated as follows:
The Large-Cap Value Equity Portfolio April 3, 1995
The Aggressive Growth Portfolio April 3, 1995
The Intermediate Fixed Income Portfolio April 3, 1995
The Limited-Term Maturity Portfolio April 3, 1995
The International Equity Portfolio April 3, 1995
The Global Fixed Income Portfolio April 3, 1995
The International Fixed Income Portfolio April 3, 1995
The Real Estate Investment Trust Portfolio November 29, 1995
The Small/Mid-Cap Value Equity Portfolio November 29, 1995
The Labor Select International Equity Portfolio November 29, 1995
The High-Yield Bond Portfolio November 29, 1995
The Emerging Markets Portfolio April 14, 1997
The Global Equity Portfolio October 14, 1997
The Real Estate Investment Trust Portfolio II October 14, 1997.
4 The International Mid-Cap Sub Portfolio December 24, 1997
The Aggregate Fixed Income Portfolio December 24, 1997
The Diversified Core Fixed Income Portfolio December 24, 1997.
The Asset Allocation Portfolio
The Small-Cap Growth Equity Portfolio
The Growth and Income Portfolio
Delaware Distributors, L.P. is an affiliate of the investment advisers
and bears all of the costs of promotion and distribution.
Delaware Service Company, Inc., an affiliate of Delaware, is Pooled
Trust, Inc.'s shareholder servicing, dividend disbursing and transfer agent
for each Portfolio pursuant to an Amended and Restated Shareholders Services
Agreement dated __________, 1998. Delaware Service Company, Inc. also
provides accounting services to the Portfolio pursuant to the terms of a
separate Fund Accounting Agreement. 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.
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<PAGE>
OFFICERS AND DIRECTORS
The business and affairs of Pooled Trust, Inc. and Foundation Funds are
managed under the direction of its Board of Directors or Trustees, as
applicable.
As of July 31, 1998, [no one account held 25% or more of the
outstanding shares of any of Pooled Trust, Inc.'s Portfolios or Foundation
Funds' portfolios]. As of July 31, 1998, [the directors and officers of Pooled
Trust, Inc., as a group, owned less than 1% of the outstanding shares of The
Real Estate Investment Trust Portfolio; they did not hold shares of any of the
other Portfolios]. As of July 31, 1998, [the trustees and officers of
Foundation Funds, as a group, owned %.].
As of July 31, 1998,[ management believes the following accounts
held of record 5% or more of the outstanding shares of a Portfolio. Management
has no knowledge of beneficial ownership.
<TABLE>
<CAPTION>
Portfolio Name and Address of Account Share Amount Percentage
- - --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
The Large-Cap Value
Equity Portfolio Northern Trust
TRST PHH Group
P.O. Box 92956
Chicago, IL 60675 571,287 13.21%
Commerce Bank of Kansas City
Trust Burns & McDonnell
Employee Stock Ownership Plan
P.O. Box 419248
Kansas City, MO 64141 309,930 7.16%
Lasalle National Bank Trustee
FBO Metz Baking Company
P.O. Box 1443
Chicago, IL 60690 301,089 6.96%
Strafe & Co.
For Consolidated Products
Profit Sharing Plan
P.O. Box 160
Westerville, OH 43086 297,029 6.86%
Cherrytrust & Co.
FBO Colorado Open Shop
Employers Pension Trust
C/O The Bank of Cherry Creek NA
3033 E. First Ave
Denver, CO 80206 290,753 6.72%
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Portfolio Name and Address of Account Share Amount Percentage
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
The Large-Cap The Northern Trust Company
Value Equity TRST Children's Memorial
Portfolio Pension Trust
P.O. Box 92956
Chicago, IL 60675 281,372 6.50%
Mac & Co.
A/C LNFF5033902
Mutual Funds Operations
P.O. Box 3198
Pittsburgh, PA 15230 252,178 5.83%
The Aggressive
Growth Portfolio St. Elizabeth Hospital Medical Center
1044 Belmont Ave.
Youngstown, OH 44504 394,130 52.27%
Crestar Bank
Cust the College of William and Mary
P.O. Box 8795
Blow Memorial Hall
Williamsburg, VA 23187 112,336 14.90%
The City of Groton
295 Meridian Street
Groton, CT 06340 67,993 9.01%
NCSC Staff Pension Plan
Defined Benefit
8403 Colesville Rd. Ste 1200
Silver Spring, MD 20910 60,869 8.07%
Philadelphia Association of Zeta Psi
Fraternity U/T/A E W Weil
613 Kirsch Avenue
Wayne, PA 19087 56,419 7.48%
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Portfolio Name and Address of Account Share Amount Percentage
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
The International
Equity Portfolio Father Flanagan's Foundation Fund
14100 Crawford St.
Boys Town, NE 68010 2,928,202 9.26%
The Salvation Army
Eastern Territory
440 West Nyack Road
West Nyack, NY 10994 2,711,245 8.57%
The Salvation Army
Central Territory
10 West Algonquin Road
Des Plaines, IL 60016 2,088,806 6.60%
Mac & Co.
A/C LCPF0763222
Mutual Fund Operations
P.O. Box 3198
Pittsburgh, PA 15230 1,502,955 4.75%
The Intermediate
Fixed Income
Portfolio Northumberland City
Employees Retirement Fund
Cust. Northern Central Bank
c/o Keystone Financial Trust Operation
P.O. Box 2450
Altoona, PA 16603 636,886 21.12%
Patterson & Co.
c/o CoreStates Bank
P.O. Box 7829
Philadelphia, PA 19101 423,831 14.05%
Crestar Bank
Cust The College of William and Mary
Room 224 Private Funds Office
Blow Memorial Hall
P.O. Box 8795
Williamsburg, VA 23187 339,768 11.26%
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Portfolio Name and Address of Account Share Amount Percentage
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
The Intermediate Delaware Management Company
Fixed Income Attn. Joe Hastings
Portfolio 1818 Market Street
Philadelphia, PA 19103 334,860 11.10%
The City of Groton
295 Meridian Street
Groton, CT 06340 327,732 10.86%
NCSC Staff Pension Plan
Defined Benefit
8403 Colesville Rd. Ste 1200
Silver Spring, MD 20910 301,861 10.01%
Our Sunday Visitor Inc.
200 Noll Plaza
Huntington, IN 46750 196,297 6.50%
The Global
Fixed Income
Portfolio Saxon & Co.
FBO Western Pennsylvania Teamsters
& Employers Pension Fund
P.O. Box 7780-1888
Philadelphia, PA 19183 4,086,122 10.33%
Bost & Co.
Mutual Funds Operations
P.O. Box 3198
Pittsburgh, PA 15230 3,778,259 9.55%
Bankers Trust Co
FBO SLU Delaware Fund
Attn: Tom DeAngelo
34 Exchange Place MS 3029
Jersey City, NJ 07302 3,293,630 8.33%
Washington Suburban Sanitary Commission
Employees Retirement Plan
14501 Sweitzer Ln.
Laurel, MD 20707 3,009,346 7.61%
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Portfolio Name and Address of Account Share Amount Percentage
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
The Global Wachovia Bank Trustee
Fixed Income BFI Employee Benefit Plan
Portfolio 301 N. Main St.
P.O. Box 3073
Winston Salem, NC 27150 2,018,724 5.10%
The Labor Select
International Equity
Portfolio Operating Engineers
LCL 101 Pension
301 E. Armour Blvd. Suite 203
Kansas City, MO 64111 1,069,050 27.23%
Operating Engineers Pension Trust Fund
8401 Corporate Drive Suite 200
Landover, MD 20785 417,445 10.63%
Keystone District Council of Carpenters
Pension Fund
524 S. 22nd Street
Harrisburg, PA 17104 407,993 10.39%
First of America Trust Company
Cust Plumbers and Steamfitters
Local 137 Pension Trust
International Portfolio
P.O. Box 4042
Kalamazoo, MI 49002 369,671 9.41%
Inland Boatmen's Union of the
Pacific National Pension Plan
1220 SW Morrison St., Ste 300
Portland, OR 97205 227,248 5.79%
Carpenters 626 Pension Fund
P.O. Box 740
Davis Road and Oakwood Lane
Valley Forge, PA 19482 226,663 5.77%
</TABLE>
-93-
<PAGE>
<TABLE>
<CAPTION>
Portfolio Name and Address of Account Share Amount Percentage
- - ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
The Labor Select
International Equity Bot Hudson County Carpenters Pension Fund
Portfolio c/o I.E. Shaffer & Co.
P.O. Box 1025
West Trenton, NJ 08628 212,601 5.41%
The Real Estate
Investment
Trust Portfolio Delaware Management Company, Inc.
A Class Attn: Joseph H. Hastings
1818 Market St., 17th floor
Philadelphia, PA 19103 2,998 23.64%
DMTC C/F the 403(b)(7) Plan of Joanne Marriot 5
Viewside Dr.
Ellington, CT 06029 1,210 9.54%
NFSC FEBO Richard P. Privette
3907 Brandon Park Dr.
Garland, TX 75044 1,191 9.39%
DMTC C/F the 403(b)(7) Plan of
John S. Watts
P.O.Box 341
12 Laurel Rd.
Ellington, CT 06029 849 6.69%
The High-Yield
Bond Portfolio Schwartz 1996 Charitable Remainder Unitrust
c/o TCS Group, L.L.C.
1200 Shermer Road Suite 212
Northbrook, IL 60062 314,652 31.26%
Chicago Trust Co.
FBO Lincoln National Corp.
Employees Retirement Plan
c/o Marshall & Ilsley Trust Co.
P.O. Box 2977
Milwaukee, WI 53201 317,850 31.18%
Mac & Co LCWF
Mutual Funds Operations
P.O. Box 3198
Pittsburgh PA 15320 127,944 12.55%
</TABLE>
-94-
<PAGE>
<TABLE>
<CAPTION>
Portfolio Name and Address of Account Share Amount Percentage
- - ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
The High-Yield Trust Seven Hundred Thirty
Bond Portfolio U/A/D 4/2/94
c/o TCS Group, L.L.C.
1200 Shermer Road Suite 212
Northbrook, IL 60062 114,515 11.23%
Trust Four Hundred Thirty
U/A/D 4/2/94
c/o TCS Group, L.L.C.
1200 Shermer Road Suite 212
Northbrook, IL 60062 114,515 11.23%
The International
Fixed Income
Portfolio Montgomery County Public Schools
Employee's Pension & Retirement System
850 Hungerford Dr. Rm 154
Rockville, MD 20850 1,751,894 55.34%
Adventist Health System Sunbelt
Healthcare Corp.- Core
111 N. Orlando Ave.
Winter Park, FL 32789 1,188,200 37.53%
The Emerging
Markets
Portfolio Father Flanagan's Trust Fund
14100 Crawford St.
Boys Town, NE 68010 887,311 43.95%
Burlington Northern Santa Fe
Retirement Plan
1700 E. Golf Rd.
Schaumburg, IL 60173 548,947 27.19%
Chicago Trust Company
FBO Lincoln National Corp.
Employees Retirement Trust
1000 N. Water St. TR 4
Milwaukee, WI 53202 538,808 26.69%
</TABLE>
-95-
<PAGE>
DMH Corp., Delvoy, Inc., Delaware Management Business Trust, Delaware
Management Company (a series of Delaware Management Business Trust), Delaware
Management Company, Inc., Delaware Investment Advisers, (a series of Delaware
Management Business Trust), 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 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. In connection with
the merger, new Investment Management Agreements between Pooled Trust, Inc. on
behalf of The Large-Cap Value Equity Portfolio, The Aggressive Growth
Portfolio, The Intermediate Fixed Income Portfolio and The Limited-Term
Maturity Portfolio and Delaware, and new Investment Management Agreements
between Pooled Trust, Inc. 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 indirect, 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 Pooled Trust, Inc. and Foundation
Funds hold identical positions in each of the other funds in the Delaware
Investments family. Directors or Trustees, as applicable, and principal
officers of Pooled Trust, Inc. and Foundation Funds 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.
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<PAGE>
*Wayne A. Stork (61)
Chairman and Director and/or Trustee of Pooled Trust, Inc. and
Foundation Funds, 32 other investment companies in the Delaware
Investments family and Delaware Capital Management, Inc.
Chairman, President, Chief Executive Officer and Director of DMH
Corp., Delaware Distributors, Inc.
and Founders Holdings, Inc.
Chairman, President, Chief Executive Officer, Chief Investment
Officer and Director/Trustee of
Delaware Management Company, Inc. and Delaware Management
Business Trust
Chairman, President, Chief Executive Officer and Chief Investment
Officer of Delaware Management Company (a series of Delaware
Management Business Trust)
Chairman, Chief Executive Officer and Chief Investment Officer of
Delaware Investment Advisers (a series of Delaware Management
Business Trust)
Chairman, Chief Executive Officer and Director of Delaware International
Advisers Ltd., Delaware International Holdings Ltd. and Delaware
Management Holdings, Inc.
President and Chief Executive Officer of Delvoy, Inc.
Chairman of Delaware Distributors, L.P.
Director of Delaware Service Company, Inc. and Delaware Investment &
Retirement Services, Inc.
During the past five years, Mr. Stork has served in various executive
capacities at different times within the Delaware organization.
*Jeffrey J. Nick (45)
President, Chief Executive Officer and Director of the Pooled Trust,
Inc. and Foundation Funds and 32 other investment companies in
Delaware Investments family
President and Director of Delaware the Management Holdings, Inc.
President, Chief Executive Officer and Director of Lincoln National
Investment Companies, Inc.
President of Lincoln Funds Corporation Director of Delaware International
Advisers Ltd.
From 1992 to 1996, Mr. Nick was Managing Director of Lincoln National UK
plc and from 1989 to 1992, he was Senior Vice President
responsible for corporate planning and development for Lincoln
National Corporation.
Richard G. Unruh, Jr. (58)
Executive Vice President of Pooled Trust, Inc., Foundation Funds, 32
other investment companies in the Delaware Investments family,
Delaware Management Holdings, Inc., Delaware Management Company
(a series of Delaware Management Business Trust) and Delaware
Capital Management, Inc.
President of Delaware Investment Advisers (a series of Delaware
Management Business Trust)
Executive Vice President and Director/Trustee of Delaware Management
Company, Inc. and Delaware Management Business Trust
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.
- - ----------------------
*Director affiliated with the Portfolio's investment manager and considered
an "interested person" as defined in the 1940 Act.
-97-
<PAGE>
Paul E. Suckow (51)
Executive Vice President/Chief Investment Officer, Fixed Income of Pooled
Trust, Inc., Foundation Funds 32 other investment companies in
the Delaware Investments family, Delaware Management Company,
Inc., Delaware Management Company (a series of Delaware
Management Business Trust), Delaware Investment Advisers (a
series of Delaware Management Business Trust) and Delaware
Management Holdings, Inc.
Executive Vice President and Director of Founders Holdings, Inc.
Executive Vice President of Delaware Capital Management, Inc. and
Delaware Management Business Trust Director of Founders CBO
Corporation
Director of HYPPCO Finance Company Ltd.
Before returning to Delaware Investments in 1993, Mr. Suckow was
Executive Vice President and Director of Fixed Income for
Oppenheimer Management Corporation, New York, NY from 1985 to
1992. Prior to that, Mr. Suckow was a fixed-income portfolio
manager for Delaware Investments.
David K. Downes (58)
Executive Vice President, Chief Operating Officer, Chief Financial
Officer of Pooled Trust, Inc., Foundation Funds, 32 other
investment companies in the Delaware Investments family,
Delaware Management Holdings, Inc., Founders CBO Corporation,
Delaware Capital Management, Inc., Delaware Management
Company (a series of Delaware Management Business Trust),
Delaware Investment Advisers (a series of Delaware
Management Business Trust) and Delaware Distributors, L.P.
Executive Vice President, Chief Financial Officer, Chief Administrative
Officer and Trustee of Delaware Management Business Trust
Executive Vice President, Chief Operating Officer, Chief Financial
Officer and Director of Delaware Management Company, Inc.,
DMH Corp., Delaware Distributors, Inc., Founders Holdings,
Inc. and Delvoy, Inc.
President, Chief Executive Officer, Chief Financial Officer and
Director of Delaware Service Company, Inc.
President, Chief Operating Officer, Chief Financial Officer and
Director of Delaware International Holdings Ltd.
Chairman,Chief Executive Officer and Director of Delaware Management
Trust Company and Delaware Investment & Retirement Services,
Inc.
Director of Delaware International Advisers Ltd. Vice
President of Lincoln Funds Corporation During the past five
years, Mr. Downes has served in various executive capacities
at different times within the Delaware organization.
Walter P. Babich (70)
Director and/or Trustee of Pooled Trust, Inc., Foundation Funds and
32 other investment companies in the Delaware Investments
family 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.
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<PAGE>
John H. Durham (61)
Director and/or Trustee of Pooled Trust, Inc., Foundation Funds and
17 other investment companies in the Delaware Investments
family
Partner, Complete Care Services
120 Gibraltar Road, Horsham, PA 19044
Mr. Durham served as Chairman of the Board of each fund in the Delaware
Investments family from 1986 to 1991; President of each fund from
1977 to 1990; and Chief Executive Officer of each fund from 1984
to 1990. Prior to 1992, with respect to Delaware Management
Holdings, Inc., Delaware Management Company, Delaware
Distributors, Inc. and Delaware Service Company, Inc., Mr. Durham
served as a director and in various executive capacities at
different times.
Anthony D. Knerr (59)
Director and/or Trustee of Pooled Trust, Inc., Foundation Funds and
32 other investment companies in the Delaware Investments family
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 (57)
Director and/or Trustee of Pooled Trust, Inc., Foundation Funds
and 32 other investment companies in the Delaware Investments
family
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.
W. Thacher Longstreth (77)
Director and/or Trustee of Pooled Trust, Inc., Foundation Funds and
32 other investment companies in the Delaware Investments
family
City Hall, Philadelphia, PA 19107
Philadelphia City Councilman.
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<PAGE>
Thomas F. Madison (62)
Director and/or Trustee of Pooled Trust, Inc., Foundation Funds and
32 other investment companies in the Delaware Investments
family
200 South Fifth Street, Suite 2100, Minneapolis, Minnesota 55402
President and Chief Executive Officer, MLM Partners, Inc.
Mr. Madison has also been Chairman of the Board of Communications
Holdings, Inc. since 1996.
From February to September 1994, Mr. Madison served as Vice
Chairman--Office of the CEO of The Minnesota Mutual Life
Insurance Company and from 1988 to 1993, he was President of
U.S. WEST Communications--Markets.
Charles E. Peck (72)
Director and/or Trustee of Pooled Trust, Inc., Foundation Funds
and 32 other investment companies in the Delaware Investments
family
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.
George M. Chamberlain, Jr. (51)
Senior Vice President, Secretary and General Counsel of Pooled Trust,
Inc., Foundation Funds, 32 other investment companies in the
Delaware Investments family, Delaware Distributors, L.P.,
Delaware Management Company (a series of Delaware Management
Business Trust), Delaware Investment Advisers (a series of
Delaware Management Business Trust) and Delaware Management
Holdings, Inc.
Senior Vice President, Secretary, General Counsel and Director/Trustee
of DMH Corp., Delaware Management Company, Inc., Delaware
Distributors, Inc., Delaware Service Company, Inc., Founders
Holdings, Inc., Delaware Investment & Retirement Services, Inc.,
Delaware Capital Management, Inc., Delvoy, Inc. and Delaware
Management Business Trust
Executive Vice President, Secretary, General Counsel and Director of
Delaware Management Trust Company
Senior Vice President and Director of Delaware International Holdings
Ltd.
Director of Delaware International Advisers Ltd.
Secretary of Lincoln Funds Corporation Attorney.
During the past five years, Mr. Chamberlain has served in various
executive capacities at different times within the Delaware
organization.
Joseph H. Hastings (48)
Senior Vice President/Corporate Controller of Pooled Trust, Inc.,
Foundation Funds, 32 other investment companies
in the Delaware Investments family and Founders
Holdings, Inc.
Senior Vice President/Corporate Controller and Treasurer of
Delaware Management Holdings, Inc., DMH Corp., Delaware
Management Company, Inc., Delaware Management Company (a
series of Delaware Management Business Trust), Delaware
Distributors, L.P., Delaware
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<PAGE>
Distributors, Inc., Delaware Service Company, Inc., Delaware
Capital Management, Inc., Delaware International Holdings
Ltd., Delvoy, Inc. and Delaware Management Business Trust
Chief Financial Officer/Treasurer of Delaware Investment &
Retirement Services, Inc. Executive Vice President/Chief
Financial Officer/Treasurer of Delaware Management Trust Company
Senior Vice President/Assistant Treasurer of Founders
CBO Corporation Treasurer of Lincoln Funds Corporation
During the past five years, Mr. Hastings has served in various
executive capacities at different times within the Delaware
organization.
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<PAGE>
Michael P. Bishof (36)
Senior Vice President/Treasurer of Pooled Trust, Inc., Foundation
Funds, 32 other investment companies in the Delaware
Investments family and Founders Holdings, Inc.
Senior Vice President/Investment Accounting of Delaware Management
Company, Inc., Delaware Management Company (a series of
Delaware Management Business Trust) and Delaware Service
Company, Inc.
Senior Vice President and Treasurer/Manager of Investment Accounting
of Delaware Distributors, L.P. and Delaware Investment
Advisers (a series of Delaware Management Business Trust)
Senior Vice President and Manager of Investment Accounting of Delaware
International Holdings Ltd. Assistant Treasurer of Founders
CBO Corporation Before joining Delaware Investments 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.
George E. Deming (56)
Vice President/Senior Portfolio Manager of The Large-Cap Value Equity
Portfolio.
Vice President/Senior Portfolio Manager of Delaware Investment Advisers
(a series of Delaware Management Business Trust).
Before joining Delaware Investments 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.
Gerald S. Frey (52)
Vice President/Senior Portfolio Manager of Pooled Trust, Inc., of
seven other investment companies in the Delaware Investments
family and of Delaware Management Company, Inc. and Delaware
Management Company (a series of Delaware Management Business
Trust)
Before joining Delaware Investments in 1996, Mr. Frey was a Senior
Director with Morgan Grenfell Capital Management, New York,
NY from 1986 to 1995.
Gary A. Reed (43)
Vice President/Senior Portfolio Manager of Pooled Trust, Inc., of
nine other investment companies in the Delaware Investments
family, Delaware Management Company, Inc., Delaware
Investment Advisers (a series of Delaware Management
Business Trust) and Delaware Management Company (a series of
Delaware Management Business Trust) 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.
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<PAGE>
Gerald T. Nichols (40)
Vice President/Senior Portfolio Manager of Pooled Trust, Inc., of
11 other investment companies in the Delaware
Investments family, Delaware Management Company, Inc.,
Delaware Investment Advisers (a series of Delaware
Management Business Trust) and Delaware Management Company
(a series of Delaware Management Business Trust)
Vice President of Founders Holdings, Inc.
Treasurer/Assistant Secretary 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 (38)
Vice President/Senior Portfolio Manager of Pooled Trust, Inc., of 11
other investment companies in the Delaware Investments
family, Delaware Management Company, Inc., Delaware
Investment Advisers (a series of Delaware Management
Business Trust) and Delaware Management Company (a series of
Delaware Management Business Trust)
Vice President of Founders Holdings, Inc.
President 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.
Babak Zenouzi (35)
Vice President/Senior Portfolio Manager of Pooled Trust, Inc., of nine
other investment companies in the Delaware Investments
family, Delaware Management Company, Inc. and Delaware
Management Company (a series of Delaware Management Business
Trust)
Vice President/Assistant Portfolio Manager of Delaware Investment
Advisers.
Before joining Delaware Investments 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.
Roger A. Early (44)
Vice President/Senior Portfolio Manager of Pooled Trust, Inc. and
each of the tax-exempt and the fixed income funds in the
Delaware Investments family, Delaware Management Company,
Inc., Delaware Investment Advisers (a series of Delaware
Management Business Trust) and Delaware Management Company (a
series of Delaware Management Business Trust)
Before joining Delaware Investments, Mr. Early was a portfolio
manager for Federated Investment Counseling's fixed-income
group, with over $1 billion in assets.
Frank X. Morris (37)
Vice President/Portfolio Manager of Pooled Trust, Inc.
Vice President/Senior Portfolio Manager of Delaware Investment Advisers
(a series of Delaware Management Business Trust)
Before joining Delaware Investments in 1997, he served as vice president
and director of equity research at PNC Asset Management.
Mr. Morris is president of the Financial Analysis Society of
Philadelphia and is a member of the Association of Investment
Management and Research and the National Association of
Petroleum Investment Analysts.
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James F. Stanley (31)
Vice President/Portfolio Manager of Pooled Trust, Inc.
Vice President ofDelaware Investment Advisers (a series of Delaware
Management Business Trust)
Before joining Delaware Investments in 1997, Mr. Stanley served as a
senior managing equity analyst covering the chemical, building
products, and housing industries at Dreyfus Corporation.
J. Paul Dokas (38)
Vice President/Portfolio Manager of Pooled Trust, Inc. and Foundation
Funds
Vice President/DIA Equity of Delaware Investment Advisers (a series
of Delaware Management Business Trust)
Before joining Delaware Investments in 1997, he was a Director of Trust
Investments for Bell Atlantic Corporation in Philadelphia.
George H. Burwell (36)
Vice President/Senior Portfolio Manager of Pooled Trust, Inc., seven
other investment companies in Delaware Investments, Delaware
Management Company, Inc. and Delaware Management Company (a
series of Delaware Management Business Trust)
Before joining Delaware Investments 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.
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With respect to Pooled Trust, Inc., the following is a compensation
table listing for each director entitled to receive compensation, the
aggregate compensation received from Pooled Trust, Inc. and the total
compensation received from all Delaware Investments funds for the fiscal
year ended October 31, 1997 and an estimate of annual benefits to be received
upon retirement under the Delaware Group Retirement Plan for
Directors/Trustees as of October 31, 1997. Only the independent directors of
Pooled Trust, Inc. receive compensation from the Fund.
<TABLE>
<CAPTION>
Pension or Total
Retirement Estimated Compensation
Aggregate Benefits Annual from 33
Compensation Accrued Benefits Delaware
from Pooled as Part of Upon Investment
Name Trust, Inc. Fund Expenses Retirement(1) Companies(2)
<S> <C> <C> <C> <C>
W. Thacher Longstreth $3,384 None $38,000 $58,618
Ann R. Leven $3,738 None $38,000 $63,743
Walter P. Babich $3,669 None $38,000 $62,743
Anthony D. Knerr $3,669 None $38,000 $62,743
Charles E. Peck $3,286 None $38,000 $55,432
Thomas F. Madison(3) $1,680 None $38,000 $30,913
John H. Durham(4) N/A None N/A N/A
- - --------------------------------------------------------------------------------------------------------------
</TABLE>
With respect to Foundation Funds, the following is a compensation
table listing for each trustee entitled to receive compensation, the aggregate
compensation expected to be received from Foundation Funds during its fiscal
year and the total compensation expected to be received from all funds in the
Delaware Investments family during the Trust's fiscal year and an estimate of
annual benefits to be received upon retirement under the Delaware Group
Retirement Plan for Directors/Trustees as of September 30, 1998. Only the
independent directors of Foundation Funds receive compensation from the Trust.
<TABLE>
<CAPTION>
Pension or Total
Aggregate Retirement Estimated Compensation
Compensation Benefits Annual from
expected to be Accrued Benefits Delaware
received from as Part Upon Investment
the Trust of the Trust Retirement(1) Companies(2)
Name
<S> <C> <C> <C> <C>
W. Thacher Longstreth $0,000 None $38,500 $00,000
Ann R. Leven $0,000 None $38,500 $00,000
Walter P. Babich $0,000 None $38,500 $00,000
Anthony D. Knerr $0,000 None $38,500 $00,000
Charles E. Peck $0,000 None $38,500 $00,000
Thomas F. Madison(3) $0,000 None $38,500 $00,000
John H. Durham(4) $0,000 None $31,000 $00,000
</TABLE>
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(1) Under the terms of the Delaware Group Retirement Plan for
Directors/Trustees, each disinterested director/trustee 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 investment company in the
Delaware Investments family for which he or she serves as a director
or trustee for a period equal to the lesser of the number of years
that such person served as a director or trustee 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/trustees of each investment company at the time of such
person's retirement. If an eligible director/trustee retired as of,
1998, he or she would be entitled to annual payments totaling the
amounts noted above, in the aggregate, from all of the investment
companies in the Delaware Investments family for which he or she
served as director or trustee, based on the number of investment
companies in the Delaware Investments family as of that date.
(2) Each independent director/trustee (other than John H. Durham)
currently receives a total annual retainer fee of $38,500 for serving
as a director or trustee for all 34 investment companies in Delaware
Investments, plus $3,145 for each Board Meeting attended. John H.
Durham currently receives a total annual retainer fee of $31,000 for
serving as a director or trustee for 19 investment companies in
Delaware Investments, plus $1,757.50 for each Board Meeting attended.
Ann R. Leven, Walter P. Babich, and Anthony D. Knerr serve on the
Fund's audit committee; Ms. Leven is the chairperson. Members of the
audit committee currently receive additional annual compensation of
$5,000 from all investment companies, in the aggregate, with the
exception of the chairperson, who receives $6,000.
(3) Thomas F. Madison joined the Board of Directors/Trustees on April 30,
1997.
(4) John H. Durham joined the Board of Directors/Trustees of Pooled
Trust, Inc. and Foundation Funds and 17 other investment companies in
Delaware Investments on April 16, 1998.
EXCHANGE PRIVILEGE
The Real Estate Investment Trust Portfolio
(Class A Shares, Class B Shares, Class C Shares and Institutional Class Shares)
The exchange privileges available for shareholders of the Class A
Shares, Class B Shares, Class C Shares and Institutional Class Shares of The
Real Estate Investment Trust Portfolio and for shareholders of the classes of
the other funds in the Delaware Investments family are set forth in the
relevant prospectuses for such classes. The following supplements that
information. The Portfolio may modify, terminate or suspend the exchange
privilege upon 60 days' notice to shareholders.
All exchanges involve a purchase of shares of the fund into which the
exchange is made. As with any purchase, an investor should obtain and
carefully read that fund's prospectus before buying shares in an exchange. The
prospectus contains more complete information about the fund, including
charges and expenses. A shareholder requesting such an exchange will be sent a
current prospectus and an authorization form for any of the other mutual funds
in the Delaware Investments family. Exchange instructions must be signed
by the record owner(s) exactly as the shares are registered.
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An exchange constitutes, for tax purposes, the sale of one fund or
series and the purchase of another. The sale may involve either a capital gain
or loss to the shareholder for federal income tax purposes.
In addition, investment advisers and dealers may make exchanges
between funds in the Delaware Investments family on behalf of their
clients by telephone or other expedited means. This service may be
discontinued or revised at any time by the Transfer Agent. Such exchange
requests may be rejected if it is determined that a particular request or the
total requests at any time could have an adverse effect on any of the funds.
Requests for expedited exchanges may be submitted with a properly completed
exchange authorization form, as described above.
Telephone Exchange Privilege
Shareholders owning shares for which certificates have not been
issued or their investment dealers of record may exchange shares by telephone
for shares in other mutual funds in the Delaware Investments family. This
service is automatically provided unless the Portfolio receives written notice
from the shareholder to the contrary.
Shareholders or their investment dealers of record may contact the
Shareholder Service Center at 800-523-1918 or, in the case of shareholders of
the Institutional Class, their Client Services Representative at 800-828-5052
to effect an exchange. The shareholder's current Fund account number must be
identified, as well as the registration of the account, the share or dollar
amount to be exchanged and the fund into which the exchange is to be made.
Requests received on any day after the time the offering price and net asset
value are determined will be processed the following day. See Determining
Offering Price and Net Asset Value. Any new account established through the
exchange will automatically carry the same registration, shareholder
information and dividend option as the account from which the shares were
exchanged. The exchange requirements of the fund into which the exchange is
being made, such as sales charges, eligibility and investment minimums, must
be met. (See the prospectus of the fund desired or inquire by calling the
Transfer Agent or, as relevant, your Client Services Representative.) Certain
funds are not available for retirement plans.
The telephone exchange privilege is intended as a convenience to
shareholders and is not intended to be a vehicle to speculate on short-term
swings in the securities market through frequent transactions in and out of
the funds in the Delaware Investments family. Telephone exchanges may be
subject to limitations as to amounts or frequency. The Transfer Agent and the
Portfolio reserve the right to record exchange instructions received by
telephone and to reject exchange requests at any time in the future.
As described in the Portfolio's Prospectuses, neither the Portfolio
nor the Transfer Agent is responsible for any shareholder loss incurred in
acting upon written or telephone instructions for redemption or exchange of
Portfolio shares which are reasonably believed to be genuine.
Right to Refuse Timing Accounts
With regard to accounts that are administered by market timing
services ("Timing Firms") to purchase or redeem shares based on changing
economic and market conditions ("Timing Accounts"), the Portfolio will refuse
any new timing arrangements, as well as any new purchases (as opposed to
exchanges) in Delaware Investments funds from Timing Firms. The Portfolio
reserves the right to temporarily or permanently terminate the exchange
privilege or reject any specific purchase order for any person whose
transactions seem to follow a timing pattern who: (i) makes an exchange
request out of the Portfolio within two weeks of an earlier exchange request
out of the Portfolio, or (ii) makes more than two exchanges out of the
Portfolio per
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calendar quarter, or (iii) exchanges shares equal in value to at least $5
million, or more than 1/4 of 1% of the Portfolio's net assets. Accounts under
common ownership or control, including accounts administered so as to redeem
or purchase shares based upon certain predetermined market indicators, will be
aggregated for purposes of the exchange limits.
Restrictions on Timed Exchanges
Timing Accounts operating under existing timing agreements may only
execute exchanges between the following eight Delaware Investments funds:
(1) Decatur Income Fund, (2) Decatur Total Return Fund, (3) Delaware Fund, (4)
Limited-Term Government Fund, (5) Tax-Free USA Fund, (6) Delaware Cash
Reserve, (7) Delchester Fund and (8) Tax-Free Pennsylvania Fund. No other
Delaware Investments funds are available for timed exchanges. Assets
redeemed or exchanged out of Timing Accounts in Delaware Investments funds
not listed above may not be reinvested back into that Timing Account. The
Portfolio reserves the right to apply these same restrictions to the
account(s) of any person whose transactions seem to follow a timing pattern
(as described above).
The Portfolio also reserves the right to refuse the purchase side of
an exchange request by any Timing Account, person, or group if, in the
Manager's judgment, the Portfolio would be unable to invest effectively in
accordance with its investment objectives and policies, or would otherwise
potentially be adversely affected. A shareholder's purchase exchanges may be
restricted or refused if the Portfolio receives or anticipates simultaneous
orders affecting significant portions of the Portfolio's assets. In
particular, a pattern of exchanges that coincide with a "market timing"
strategy may be disruptive to the Portfolio and therefore may be refused.
Except as noted above, only shareholders and their authorized brokers
of record will be permitted to make exchanges or redemptions.
* * *
Following is a summary of the investment objectives of the other
Delaware Investments funds:
Delaware Fund seeks long-term growth by a balance of capital
appreciation, income and preservation of capital. It uses a dividend-oriented
valuation strategy to select securities issued by established companies that
are believed to demonstrate potential for income and capital growth. Devon
Fund seeks current income and capital appreciation by investing primarily in
income-producing common stocks, with a focus on common stocks the Manager
believes have the potential for above average dividend increases over time.
Trend Fund seeks long-term growth by investing in common stocks
issued by emerging growth companies exhibiting strong capital appreciation
potential.
Small Cap Value Fund seeks capital appreciation by investing
primarily in common stocks whose market values appear low relative to their
underlying value or future potential.
DelCap Fund seeks long-term capital growth by investing in common
stocks and securities convertible into common stocks of companies that have a
demonstrated history of growth and have the potential to support continued
growth.
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Decatur Income Fund seeks the highest possible current income by
investing primarily in common stocks that provide the potential for income and
capital appreciation without undue risk to principal. Decatur Total Return
Fund seeks long-term growth by investing primarily in securities that provide
the potential for income and capital appreciation without undue risk to
principal. Blue Chip Fund seeks to achieve long-term capital appreciation.
Current income is a secondary objective. It seeks to achieve these objectives
by investing primarily in equity securities and any securities that are
convertible into equity securities. Social Awareness Fund seeks to achieve
long-term capital appreciation. It seeks to achieve this objective by
investing primarily in equity securities of medium- to large-sized companies
expected to grow over time that meet the Fund's "Social Criteria" strategy.
Delchester Fund seeks as high a current income as possible by
investing principally in high yield, high risk corporate bonds, and also in
U.S. government securities and commercial paper. Strategic Income Fund seeks
to provide investors with high current income and total return by using a
multi-sector investment approach, investing principally in three sectors of
the fixed-income securities markets: high yield, higher risk securities,
investment grade fixed-income securities and foreign government and other
foreign fixed-income securities. High-Yield Opportunities Fund seeks to
provide investors with total return and, as a secondary objective, high
current income.
U.S. Government Fund seeks high current income by investing primarily
in long-term U.S. government debt obligations issued or guaranteed by the U.S.
government, its agencies or instrumentalities.
Limited-Term Government Fund seeks high, stable income by investing
primarily in a portfolio of short- and intermediate-term securities issued or
guaranteed by the U.S. government, its agencies or instrumentalities and
instruments secured by such securities. U.S. Government Money Fund seeks
maximum current income with preservation of principal and maintenance of
liquidity by investing only in short-term securities issued or guaranteed as
to principal and interest by the U.S. government, its agencies or
instrumentalities, and repurchase agreements collateralized by such
securities, while maintaining a stable net asset value.
Delaware Cash Reserve seeks the highest level of income consistent
with the preservation of capital and liquidity through investments in
short-term money market instruments, while maintaining a stable net asset
value.
Tax-Free USA Fund seeks high current income exempt from federal
income tax by investing in municipal bonds of geographically-diverse issuers.
Tax-Free Insured Fund invests in these same types of securities but with an
emphasis on municipal bonds protected by insurance guaranteeing principal and
interest are paid when due. Tax-Free USA Intermediate Fund seeks a high level
of current interest income exempt from federal income tax, consistent with the
preservation of capital by investing primarily in municipal bonds.
Tax-Free Money Fund seeks high current income, exempt from federal
income tax, by investing in short-term municipal obligations, while
maintaining a stable net asset value.
Tax-Free New Jersey Fund seeks a high level of current interest
income exempt from federal income tax and New Jersey state and local taxes,
consistent with preservation of capital. Tax-Free Ohio Fund seeks a high level
of current interest income exempt from federal income tax and Ohio state and
local taxes, consistent with preservation of capital. Tax-Free Pennsylvania
Fund seeks a high level of current interest income
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<PAGE>
exempt from federal income tax and Pennsylvania state and local taxes,
consistent with the preservation of capital.
International Equity Fund seeks to achieve long-term growth without
undue risk to principal by investing primarily in international securities
that provide the potential for capital appreciation and income. Global Bond
Fund seeks to achieve current income consistent with the preservation of
principal by investing primarily in global fixed-income securities that may
also provide the potential for capital appreciation. Global Assets Fund seeks
to achieve long-term total return by investing in global securities which will
provide higher current income than a portfolio comprised exclusively of equity
securities, along with the potential for capital growth. Emerging Markets Fund
seeks long-term capital appreciation by investing primarily in equity
securities of issuers located or operating in emerging countries.
U.S. Growth Fund seeks to maximize capital appreciation by investing
in companies of all sizes which have low dividend yields, strong balance
sheets and high expected earnings growth rates relative to their industry.
Overseas Equity Fund seeks to maximize total return (capital appreciation and
income), principally through investments in an internationally diversified
portfolio of equity securities. New Pacific Fund seeks long-term capital
appreciation by investing primarily in companies which are domiciled in or
have their principal business activities in the Pacific Basin.
Delaware Group Premium Fund, Inc. offers 16 funds available
exclusively as funding vehicles for certain insurance company separate
accounts. Decatur Total Return Series seeks the highest possible total rate of
return by selecting issues that exhibit the potential for capital appreciation
while providing higher than average dividend income. Delchester Series seeks
as high a current income as possible by investing in rated and unrated
corporate bonds, U.S. government securities and commercial paper. Capital
Reserves Series seeks a high stable level of current income while minimizing
fluctuations in principal by investing in a diversified portfolio of short-and
intermediate-term securities. Cash Reserve Series seeks the highest level of
income consistent with preservation of capital and liquidity through
investments in short-term money market instruments. DelCap Series seeks
long-term capital appreciation by investing its assets in a diversified
portfolio of securities exhibiting the potential for significant growth.
Delaware Series seeks a balance of capital appreciation, income and
preservation of capital. It uses a dividend-oriented valuation strategy to
select securities issued by established companies that are believed to
demonstrate potential for income and capital growth. International Equity
Series seeks long-term growth without undue risk to principal by investing
primarily in equity securities of foreign issuers that provide the potential
for capital appreciation and income. Small Cap Value Series seeks capital
appreciation by investing in small cap common stocks whose market values
appear low relative to their underlying value or future earnings and growth
potential. Emphasis will also be placed on securities of companies that may be
temporarily out of favor or whose value is not yet recognized by the market.
Trend Series seeks long-term capital appreciation by investing primarily in
small-cap common stocks and convertible securities of emerging and other
growth-oriented companies. These securities will have been judged to be
responsive to changes in the market place and to have fundamental
characteristics to support growth. Income is not an objective. Global Bond
Series seeks to achieve current income consistent with the preservation of
principal by investing primarily in global fixed-income securities that may
also provide the potential for capital appreciation. Strategic Income Series
seeks high current income and total return by using a multi-sector investment
approach, investing primarily in three sectors of the fixed-income securities
markets: high-yield, higher risk securities; investment grade fixed-income
securities; and foreign government and other foreign fixed-income securities.
Devon Series seeks current income and capital appreciation by investing
primarily in income-producing common stocks, with a focus on common stocks
that the investment manager
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believes have the potential for above-average dividend increases over time.
Emerging Markets Series seeks to achieve long-term capital appreciation by
investing primarily in equity securities of issuers located or operating in
emerging countries. Convertible Securities Series seeks a high level of total
return on its assets through a combination of capital appreciation and current
income by investing primarily in convertible securities. Social Awareness
Series seeks to achieve long-term capital appreciation by investing primarily
in equity securities of medium to large-sized companies expected to grow over
time that meet the Series' "Social Criteria" strategy. REIT Series seeks to
achieve maximum long-term total return, with capital appreciation as a
secondary objective, by investing in securities of companies primarily engaged
in the real estate industry.
Delaware-Voyageur US Government Securities Fund seeks to provide a
high level of current income consistent with the prudent investment risk by
investing in U.S. Treasury bills, notes, bonds, and other obligations issued
or unconditionally guaranteed by the full faith and credit of the U.S.
Treasury, and repurchase agreements fully secured by such obligations.
Delaware-Voyageur Tax-Free Arizona Insured Fund seeks to provide a
high level of current income exempt from federal income tax and the Arizona
personal income tax, consistent with the preservation of capital.
Delaware-Voyageur Minnesota Insured Fund seeks to provide a high level of
current income exempt from federal income tax and the Minnesota personal
income tax, consistent with the preservation of capital.
Delaware-Voyageur Tax-Free Minnesota Intermediate Fund seeks to
provide a high level of current income exempt from federal income tax and the
Minnesota personal income tax, consistent with preservation of capital. The
Fund seeks to reduce market risk by maintaining an average weighted maturity
from five to ten years.
Delaware-Voyageur Tax-Free California Insured Fund seeks to provide a
high level of current income exempt from federal income tax and the California
personal income tax, consistent with the preservation of capital.
Delaware-Voyageur Tax-Free Florida Insured Fund seeks to provide a high level
of current income exempt from federal income tax, consistent with the
preservation of capital. The Fund will seek to select investments that will
enable its shares to be exempt from the Florida intangible personal property
tax. Delaware-Voyageur Tax-Free Florida Fund seeks to provide a high level of
current income exempt from federal income tax, consistent with the
preservation of capital. The Fund will seek to select investments that will
enable its shares to be exempt from the Florida intangible personal property
tax. Delaware-Voyageur Tax-Free Kansas Fund seeks to provide a high level of
current income exempt from federal income tax, the Kansas personal income tax
and the Kansas Intangible personal property tax, consistent with the
preservation of capital. Delaware-Voyageur Tax-Free Missouri Insured Fund
seeks to provide a high level of current income exempt from federal income tax
and the Missouri personal income tax, consistent with the preservation of
capital. Delaware-Voyageur Tax-Free New Mexico Fund seeks to provide a high
level of current income exempt from federal income tax and the New Mexico
personal income tax, consistent with the preservation of capital.
Delaware-Voyageur Tax-Free Oregon Insured Fund seeks to provide a high level
of current income exempt from federal income tax and the Oregon personal
income tax, consistent with the preservation of capital. Delaware-Voyageur
Tax-Free Utah Fund seeks to provide a high level of current income exempt from
federal income tax, consistent with the preservation of capital.
Delaware-Voyageur Tax-Free Washington Insured Fund seeks to provide a high
level of current income exempt from federal income tax, consistent with the
preservation of capital.
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Delaware-Voyageur Tax-Free Florida Intermediate Fund seeks to provide
a high level of current income exempt from federal income tax, consistent with
the preservation of capital. The Fund will seek to select investments that
will enable its shares to be exempt from the Florida intangible personal
property tax. The Fund seeks to reduce market risk by maintaining an average
weighted maturity from five to ten years.
Delaware-Voyageur Tax-Free Arizona Fund seeks to provide a high level
of current income exempt from federal income tax and the Arizona personal
income tax, consistent with the preservation of capital. Delaware-Voyageur
Tax-Free California Fund seeks to provide a high level of current income
exempt from federal income tax and the California personal income tax,
consistent with the preservation of capital. Delaware-Voyageur Tax-Free Iowa
Fund seeks to provide a high level of current income exempt from federal
income tax and the Iowa personal income tax, consistent with the preservation
of capital. Delaware-Voyageur Tax-Free Idaho Fund seeks to provide a high
level of current income exempt from federal income tax and the Idaho personal
income tax, consistent with the preservation of capital. Delaware-Voyageur
Minnesota High Yield Municipal Bond Fund seeks to provide a high level of
current income exempt from federal income tax and the Minnesota personal
income tax primarily through investment in medium and lower grade municipal
obligations. National High Yield Municipal Fund seeks to provide a high level
of income exempt from federal income tax, primarily through investment in
medium and lower grade municipal obligations. Delaware-Voyageur Tax-Free New
York Fund seeks to provide a high level of current income exempt from federal
income tax and the personal income tax of the state of New York and the city
of New York, consistent with the preservation of capital. Delaware-Voyageur
Tax-Free Wisconsin Fund seeks to provide a high level of current income exempt
from federal income tax and the Wisconsin personal income tax, consistent with
the preservation of capital.
Delaware-Voyageur Tax-Free Colorado Fund seeks to provide a high
level of current income exempt from federal income tax and the Colorado
personal income tax, consistent with the preservation of capital.
Aggressive Growth Fund seeks long-term capital appreciation, which
the Fund attempts to achieve by investing primarily in equity securities
believed to have the potential for high earnings growth. Although the Fund, in
seeking its objective, may receive current income from dividends and interest,
income is only an incidental consideration in the selection of the Fund's
investments. Growth Stock Fund has an objective of long-term capital
appreciation. The Fund seeks to achieve its objective from equity securities
diversified among individual companies and industries. Tax-Efficient Equity
Fund seeks to obtain for taxable investors a high total return on an after-tax
basis. The Fund will attempt to achieve this objective by seeking to provide a
high long-term after-tax total return through managing its portfolio in a
manner that will defer the realization of accrued capital gains and minimize
dividend income.
Delaware-Voyageur Tax-Free Minnesota Fund seeks to provide a high
level of current income exempt from federal income tax and the Minnesota
personal income tax, consistent with the preservation of capital.
Delaware-Voyageur Tax-Free North Dakota Fund seeks to provide a high level of
current income exempt from federal income tax and the North Dakota personal
income tax, consistent with the preservation of capital.
For more complete information about any of the funds in the Delaware
Investments family, including charges and expenses, you can obtain a
prospectus from the Distributor. Read it carefully before you invest or
forward funds.
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Each of the summaries above is qualified in its entirety by the
information contained in each fund's prospectus(es).
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GENERAL INFORMATION
Delaware furnishes investment management services to The Large-Cap
Value Equity, The Aggressive Growth, The Intermediate Fixed Income, The
Aggregate Fixed Income, The Limited-Term Maturity, The Small/Mid-Cap Value
Equity, The Real Estate Investment Trust, The High-Yield Bond, The Diversified
Core Fixed Income, The Asset Allocation, The Small-Cap Growth Equity and The
Growth and Income Portfolios. Delaware International furnishes similar
services to The International Equity, The International Mid-Cap Sub, The Labor
Select International Equity, The Global Fixed Income, The International Fixed
Income, The Emerging Markets and The Global Equity Portfolios and also serves
as sub-adviser to The Diversified Core Fixed Income Portfolio. Delaware and
Delaware International also provide investment management services to certain
of the other funds in the Delaware Investments family. While investment
decisions of the Portfolios are made independently from those of the other
funds and accounts, investment decisions for such other funds and accounts may
be made at the same time as investment decisions for the Portfolios.
Delaware or Delaware International also manages the investment
options for Delaware Medallion (SM) III Variable Annuity. Medallion is issued
by Allmerica Financial Life Insurance and Annuity Company (First Allmerica
Financial Life Insurance Company in New York and Hawaii). Delaware Medallion
offers various investment series ranging from domestic equity funds,
international equity and bond funds and domestic fixed income funds. Each
investment series available through Medallion utilizes an investment strategy
and discipline the same as or similar to one of the Delaware Investments
mutual funds available outside the annuity. See Delaware Group Premium Fund,
Inc., above.
Access persons and advisory persons of the Delaware Investments
funds, as those terms are defined in SEC Rule 17j-1 under the 1940 Act, who
provide services to Delaware, Delaware International or their affiliates,
are permitted to engage in personal securities transactions subject to the
exceptions set forth in Rule 17j-1 and the following general restrictions and
procedures: (1) certain blackout periods apply to personal securities
transactions of those persons; (2) transactions must receive advance clearance
and must be completed on the same day as the clearance is received; (3)
certain persons are prohibited from investing in initial public offerings of
securities and other restrictions apply to investments in private placements
of securities; (4) opening positions may only be closed-out at a profit after
a 60-day holding period has elapsed; and (5) the Compliance Officer must be
informed periodically of all securities transactions and duplicate copies of
brokerage confirmations and account statements must be supplied to the
Compliance Officer.
The Distributor acts as national distributor for each Portfolio and
for the other mutual funds in the Delaware Investments family. As
previously described, prior to January 3, 1995, DDI served as the national
distributor for the Portfolios' shares.
The Transfer Agent, an affiliate of Delaware and Delaware
International, acts as shareholder servicing, dividend disbursing and transfer
agent for the Portfolios and for the other mutual funds in the Delaware
Investments family. The Transfer Agent's compensation for providing services
to the Portfolios of Pooled Trust, Inc. (other than The Real Estate Investment
Trust Portfolio effective October 14, 1997) is $25,000 annually. The Transfer
Agent will bill, and Pooled Trust, Inc. (in the case of The International
Mid-Cap Sub Portfolio, Delaware International) will pay, such compensation
monthly allocated among the current Portfolios (other than The Real Estate
Investment Trust Portfolio) based on the relative percentage of assets of each
Portfolio at the time of billing and adjusted appropriately to reflect the
length of time a particular Portfolio is in
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operation during any billing period. The Transfer Agent is paid a fee by The
Real Estate Investment Trust Portfolio for providing these services consisting
of an annual per account charge of $5.50 plus transaction charges for
particular services according to a schedule. The Transfer Agent is paid a fee
by The Asset Allocation Portfolio for providing these services consisting of
an annual per account charge of $ plus transaction charges for particular
services according to a schedule. Compensation is fixed each year and approved
by the Board of Directors/Trustees, including a majority of the
disinterested directors. The Transfer Agent also provides accounting services
to the Portfolios. Those services include performing all functions related to
calculating each Portfolio's net asset value and providing all financial
reporting services, regulatory compliance testing and other related accounting
services. For its services, the Transfer Agent is paid a fee based on total
assets of all funds in the Delaware Investments family for which it
provides such accounting services. Such fee is equal to 0.25% multiplied by
the total amount of assets in the complex for which the Transfer Agent
furnishes accounting services, where such aggregate complex assets are $10
billion or less, and 0.20% of assets if such aggregate complex assets exceed
$10 billion. The fees are charged to each fund, including the Portfolios, on
an aggregate pro-rata basis. The asset-based fee payable to the Transfer Agent
is subject to a minimum fee calculated by determining the total number of
investment portfolios and associated classes.
Custody Arrangements
The Chase Manhattan Bank, 4 Chase Metrotech Center, Brooklyn, NY
11245 serves as custodian for The Global Fixed Income, The International
Equity, The International Mid-Cap Sub, The Labor Select International Equity,
The Real Estate Investment Trust, The High-Yield Bond, The Emerging Markets,
The International Fixed Income, The Aggregate Fixed Income, The Diversified
Core Fixed Income, The Global Equity, The Asset Allocation, The Small-Cap
Growth Equity and The Growth and Income Portfolios. Bankers Trust Company, One
Bankers Trust Plaza, New York, NY 10006 serves as custodian for The Large-Cap
Value Equity, The Aggressive Growth, The Intermediate Fixed Income, The
Limited-Term Maturity and The Small/Mid-Cap Value Equity Portfolios. The Chase
Manhattan Bank serves as custodian for all Portfolios with respect to foreign
securities.
With respect to foreign securities, The Chase Manhattan Bank makes
arrangements with subcustodians who were approved by the directors of Pooled
Trust, Inc. 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 Portfolios, and the reputation of the
institutions in the particular country or region.
Capitalization
Pooled Trust, Inc. has a present authorized capitalization of two
billion shares of capital stock with a $.01 par value per share. The Board of
Directors has allocated fifty million shares to each Portfolio.
Foundation Funds currently offers four portfolios of shares.
Foundation Funds has an unlimited authorized number of shares of beneficial
interest with no par value allocated to each portfolio.
While all shares have equal voting rights on matters affecting
Pooled Trust, Inc. or Foundation Funds, as applicable, 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
-115-
<PAGE>
and income from the portfolio of that Portfolio. Shares have no preemptive
rights, are fully transferable and, when issued, are fully paid and
nonassessable.
Effective December 24, 1997, the name of The Defensive Equity
Small/Mid-Cap Portfolio was changed to The Small/Mid-Cap Value Equity
Portfolio, the name of The Fixed Income Portfolio was changed to The
Intermediate Fixed Income Portfolio and the name of The Defensive Equity
Portfolio was changed to The Large-Cap Value Equity Portfolio.
Noncumulative Voting
Portfolio shares have noncumulative voting rights which means that
the holders of more than 50% of the shares of Pooled Trust, Inc. 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 Statement of Additional Information does not include all of the
information contained in the Registration Statement which is on file with the
Securities and Exchange Commission.
-116-
<PAGE>
FINANCIAL STATEMENTS
Ernst & Young LLP serves as independent auditors for Delaware Pooled
Trust, Inc. ("Pooled Trust, Inc.") and, in its capacity as such, audits the
financial statements contained in Pooled Trust, Inc.'s Annual Reports. The
Real Estate Investment Trust, The Large-Cap Value Equity (formerly known as
The Defensive Equity), The Aggressive Growth, The International Equity, The
Global Fixed Income, The Labor Select International Equity, The Intermediate
Fixed Income (formerly known as The Fixed Income ), The High-Yield Bond, The
Emerging Markets, The Global Equity and The International Fixed Income
Portfolios' Statements of Net Assets, Statements of Operations, Statements of
Changes in Net Assets and Notes to Financial Statements, and The Limited-Term
Maturity Portfolio's Statement of Assets and Liabilities and Notes to
Financial Statements as well as the reports of Ernst & Young LLP for the
fiscal year ended October 31, 1997 are included in Pooled Trust, Inc.'s Annual
Reports to shareholders. The financial statements, the notes relating thereto
and the reports of Ernst & Young LLP listed above are incorporated by
reference from the Annual Reports into this Statement of Additional
Information.
Ernst & Young LLP serves as the independent auditors for Delaware Group
Foundation Funds and, in its capacity as such, will audit the annual financial
statements of The Asset Allocation Portfolio.
Unaudited financial statements and the notes relating thereto for each
Portfolio other than The International Mid-Cap Sub Portfolio, The Asset
Allocation Portfolio, The Small-Cap Growth Equity Portfolio and The Growth and
Income Portfolio are incorporated by reference from the Semi-Annual Reports
into this Statement of Additional Information.
-117-
<PAGE>
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 Part B by reference
from the Registrant's Annual Reports for the fiscal
year ended October 31, 1997. The unaudited financial
statements will be incorporated into Part B by
reference from the Registrant's Semi-Annual Reports for
the period ended ended April 30, 1998 and will be
filed in Post-Effective Amendment No. 23.
(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 and
Post-Effective Amendment No. 9
filed November 24, 1995.
(b) Executed Articles Supplementary
(January 14, 1997) incorporated
into this filing by reference to
Post-Effective Amendment No. 14
filed January 16, 1997.
(c) Articles Supplementary (April 14,
1997) incorporated into this
filing by reference to
Post-Effective Amendment No. 16
filed May 23, 1997.
(d) Articles Supplementary (October 9,
1997) incorporated into this
filing by reference to
Post-Effective Amendment No. 20
filed October 24, 1997.
(e) Articles of Amendment to Articles
of Incorporation (October 9, 1997)
incorporated into this filing by
reference to Post-Effective
Amendment No. 20 filed October 24,
1997.
(f) Form of Articles Supplementary
(1997) incorporated into this
filing by reference to
Post-Effective Amendment No. 21
filed December 23, 1997.
(g) Form of Articles of Amendment
(1997) to Articles of
Incorporation incorporated into
this filing by reference to
Post-Effective Amendment No. 22
filed December 23, 1997.
<PAGE>
Part C - Other Information
(continued)
(h) Form of Articles of Supplementary
(1998) to Articles of
Incorporation to be filed by
Amendment.
(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.
(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.
(3) Article Second of Articles
Supplementary (April 14, 1997)
incorporated into this filing by
reference to Post-Effective
Amendment No. 16 filed May 23,
1997.
(4) Article Fourth of Articles
Supplementary (October 9, 1997)
incorporated into this filing by
reference to Post-Effective
Amendment No. 20 filed October
24, 1997.
(5) Article Fourth of Articles of
Amendment (October 9, 1997)
incorporated into this filing by
reference to Post-Effective
Amendment No. 20 filed October
24, 1997.
(6) Article Third of Articles
Supplementary (1997)
incorporated into this filing by
reference to Post-Effective
Amendment No. 21 filed December
23, 1997.
(7) Articles Supplementary (1998) to
be filed by Amendment.
(b) By-Laws. Articles II, III and XIV of the
By-Laws incorporated into this filing by
reference to Post-Effective Amendment No.
8 filed September 15, 1995.
<PAGE>
Part C - Other Information
(continued)
(5) Investment Management Agreements.
(a)(1) Executed Investment Management Agreements
between Delaware Management Company, Inc.
and the Registrant on behalf of The
Defensive Equity (to be renamed The
Large-Cap Value Equity), The Aggressive
Growth, The Fixed Income (to be renamed
The Intermediate 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) Executed 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.
(a)(3) Executed Investment Management Agreements
between Delaware Management Company, Inc.
and the Registrant on behalf of The
Defensive Equity Small/Mid-Cap (to be
renamed Small/Mid-Cap Value Equity), 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) Executed 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.
(a)(5) Executed Investment Management Agreement
(April 14, 1997) between Delaware
International Advisers Ltd. and the
Registrant on behalf of The Emerging
Markets Portfolio incorporated into this
filing by reference to Post-Effective
Amendment No. 17 filed August 1, 1997.
(a)(6) Form of Investment Management Agreement
(1997) between Delaware International
Advisers Ltd. and the Registrant on
behalf of The Global Equity Portfolio
incorporated into this filing by
reference to Post-Effective Amendment No.
20 filed October 24, 1997.
(a)(7) Form of Investment Management Agreement
(1997) between Delaware Management
Company, Inc. and the Registrant on
behalf of The Real Estate Investment
Trust Portfolio II incorporated into this
filing by reference to Post-Effective
Amendment No. 20 filed October 24, 1997.
(a)(8) Form of Investment Management Agreement
(1997) between Delaware Management
Company, Inc. and the Registrant on
behalf of The Aggregate Fixed Income
Portfolio incorporated into this filing
by reference to Post-Effective Amendment
No. 21 filed December 23, 1997.
<PAGE>
Part C - Other Information
(continued)
(a)(9) Form of Investment Management Agreement
(1997) between Delaware Management
Company, Inc. and the Registrant on
behalf of The Diversified Core Fixed
Income Portfolio incorporated into this
filing by reference to Post-Effective
Amendment No. 21 filed December 23, 1997.
(a)(10) Form of Investment Management Agreement
(1998) between Delaware Management
Company and the Registrant on behalf of
The Small-Cap Growth Equity Portfolio
attached as Exhibit.
(a)(11) Form of Investment Management Agreement
(1998) between Delaware Management
Company and the Registrant on behalf of
The Growth and Income Portfolio attached
as Exhibit.
(b)(1) Executed 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.
(b)(2) Form of Sub-Advisory Agreement (1997)
between Delaware International Advisers
Ltd. and Delaware Management Company,
Inc. on behalf of The Global Equity
Portfolio incorporated into this filing
by reference to Post-Effective Amendment
No. 20 filed October 24, 1997.
(b)(3) Form of Sub-Advisory Agreement (1997)
between Delaware Management Company, Inc.
and Lincoln Investment Management, Inc.
on behalf of The Real Estate Investment
Trust Portfolio II incorporated into this
filing by reference to Post-Effective
Amendment No. 20 filed October 24, 1997.
(b)(4) Form of Sub-Advisory Agreement (1997)
between Delaware Management Company, Inc.
and Delaware International Advisers Ltd.
on behalf of The Diversified Core Fixed
Income Portfolio incorporated into this
filing by reference to Post-Effective
Amendment No. 21 filed December 21, 1997.
(6)(a) Distribution Agreements.
(i) Form of Distribution Agreements
(April 1995) between Delaware
Distributors, L.P. and the
Registrant on behalf of The
Defensive Equity (to be renamed
The Large-Cap Value Equity), The
Aggressive Growth, The
International Equity, The Global
Fixed Income, The Fixed Income
(to be renamed The Intermediate
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 October 24,
1995.
(ii) Form of Distribution Agreements
(November 1995) between Delaware
Distributors, L.P. and the
Registrant on behalf of The
Defensive Equity Small/Mid-Cap
(to be renamed Small/Mid-Cap
Value Equity), The High-Yield
Bond, The Labor Select
International Equity and The Real
<PAGE>
Part C - Other Information
(continued)
Estate Investment Trust Portfolios
incorporated into this filing by
reference to Post-Effective
Amendment No. 9 filed October 24,
1995.
(iii) Executed Distribution Agreement
(April 14, 1997) between Delaware
Distributors, L.P. and the
Registrant on behalf of The
Emerging Markets Portfolio
incorporated into this filing by
reference to Post-Effective
Amendment No. 17 filed August 1,
1997.
(iv) Form of Distribution Agreement
(1997) between Delaware
Distributors, L.P. and the
Registrant on behalf of The
Global Equity Portfolio
incorporated into this filing by
reference to Post-Effective
Amendment No. 20 filed October
24, 1997.
(v) Form of Distribution Agreement
(1997) between Delaware
Distributors, L.P. and the
Registrant on behalf of The Real
Estate Investment Trust Portfolio
II incorporated into this filing
by reference to Post-Effective
Amendment No. 20 filed October
24, 1997.
(vi) Form of Amended and Restated
Distribution Agreement (1997) for
The Real Estate Investment Trust
Portfolio incorporated into this
filing by reference to
Post-Effective Amendment No. 20
filed October 24, 1997.
(vii) Form of Distribution Agreement
(1997) between Delaware
Distributors, L.P. and the
Registrant on behalf of The
Aggregate Fixed Income Portfolio
incorporated into this filing by
reference to Post-Effective
Amendment No. 21 filed December
23, 1997.
(viii) Form of Distribution Agreement
(1997) between Delaware
Distributors, L.P. and the
Registrant on behalf of The
Diversified Core Fixed Income
Portfolio incorporated into this
filing by reference to
Post-Effective Amendment No. 21
filed December 23, 1997.
(ix) Form of Distribution Agreement
(1998) between Delaware
Distributors, L.P. and the
Registrant on behalf of The
Small-Cap Growth Equity Portfolio
attached as Exhibit.
(x) Form of Distribution Agreement
(1998) between Delaware
Distributors, L.P. and the
Registrant on behalf of The
Growth and Income Portfolio
attached as Exhibit.
(b) Administration and Service Agreement.
Form of Administration and Service
Agreement (as amended November 1995)
(Module) incorporated into this filing by
reference to Post-Effective Amendment No.
17 filed August 1, 1997.
(c) Dealer's Agreement. Dealer's Agreement
(as amended November 1995) (Module)
incorporated into this filing by
reference to Post-Effective Amendment No.
17 filed August 1, 1997.
<PAGE>
Part C - Other Information
(continued)
(d) Mutual Fund Agreement for the Delaware
Group of Funds (as amended November 1995)
(Module) incorporated into this filing by
reference to Post-Effective Amendment No.
17 filed August 1, 1997.
(7) Bonus, Profit Sharing, Pension Contracts.
(a) 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.
(b) 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) Executed Custodian Agreement (1996)
between the Registrant and Bankers Trust
Company on behalf of The Defensive Equity
(to be renamed The Intermediate Fixed
Income), The Aggressive Growth, The Fixed
Income, The Limited-Term Maturity and The
Defensive Equity Small/Mid-Cap (to be
renamed The Small/Mid-Cap Value Equity)
Portfolios incorporated into this filing
by reference to Post-Effective Amendment
No. 12 filed August 23, 1996.
(b) Form of Securities Lending Agreement
(1996) between the Registrant and Bankers
Trust Company on behalf of The Defensive
Equity (to be renamed The Large-Cap Value
Equity), The Aggressive Growth, The Fixed
Income (to be renamed The Intermediate
Fixed Income), The Limited-Term Maturity
and The Defensive Equity Small/Mid-Cap
(to be renamed The Small/Mid-Cap Value
Equity) Portfolios incorporated into this
filing by reference to Post-Effective
Amendment No. 12 filed August 23, 1996.
(c) Executed Custodian Agreement (1996)
between the Registrant and The Chase
Manhattan Bank on behalf of The Global
Fixed Income, The International Equity,
The Labor Select International Equity,
The Real Estate Investment Trust, The
High-Yield Bond and The International
Fixed Income Portfolios incorporated into
this filing by reference to
Post-Effective Amendment No. 12 filed
August 23, 1996.
<PAGE>
Part C - Other Information
(continued)
(d) Form of Securities Lending Agreement
(1996) between the Registrant and The
Chase Manhattan Bank on behalf of The
Global Fixed Income, The International
Equity, The Labor Select International
Equity, The Real Estate Investment Trust,
The High-Yield Bond and The International
Fixed Income Portfolios incorporated into
this filing by reference to
Post-Effective Amendment No. 12 filed
August 23, 1996.
(e) Form of Securities Lending Agreement
(1997) between the Registrant and The
Chase Manhattan Bank on behalf of The
Emerging Markets Portfolio incorporated
into this filing by reference to
Post-Effective Amendment No. 14 filed
January 16, 1997.
(f) Form of Custodian Agreement (1997)
between the Registrant and The Chase
Manhattan Bank on behalf of The Global
Equity Portfolio and The Real Estate
Investment Trust Portfolio II
incorporated into this filing by
reference to Post-Effective Amendment No.
17 filed August 1, 1997.
(g) Proposed Securities Lending Agreement
(1997) between Registrant and The Chase
Manhattan Bank on behalf of The Aggregate
Fixed Income Portfolio and The
Diversified Core Fixed Income Portfolio
incorporated into this filing by
reference to Post-Effective Amendment No.
20 filed October 24, 1997.
(h) Amendment to Custodian Agreement (1997)
between the Registrant and The Chase
Manhattan Bank incorporated into this
filing by reference to Post-Effective
Amendment No. 21 filed December 23, 1997.
(i) Letter (April 14, 1997) to add The
Emerging Markets Portfolio to the
Custodian Agreement between the
Registrant and The Chase Manhattan Bank
attached as Exhibit.
(j) Letter (October 14, 1997) to add The
Global Equity Portfolio and The Real
Estate Investment Trust Portfolio II to
the Custodian Agreement between the
Registrant and The Chase Manhattan Bank
attached as Exhibit.
(k) Letter (December 24, 1997) to add The
Aggregate Fixed Income Portfolio and The
Diversified Core Fixed Income Portfolio
to the Custodian Agreement between the
Registrant and The Chase Manhattan Bank
attached as Exhibit.
(l) Form of letter to add The Small-Cap
Growth Equity Portfolio and The Growth
and Income Portfolio to the Custodian
Agreement between the Registrant and The
Chase Manhattan Bank attached as Exhibit.
(9) Other Material Contracts.
(a) Executed Fourth Amended and Restated
Shareholders Services Agreement (April
1997) between Delaware Service Company,
Inc. and the Registrant on behalf of each
Portfolio incorporated into this filing
by reference to Post-Effective Amendment
No. 17 filed August 1, 1997.
<PAGE>
Part C - Other Information
(continued)
(b) Form of Fifth Amended and Restated
Shareholders Services Agreement (October
1997) between Delaware Service Company,
Inc. and the Registrant on behalf of each
Portfolio incorporated into this filing
by reference to Post-Effective Amendment
No. 20 filed October 24, 1997.
(c) Form of Sixth Amended and Restated
Shareholders Services Agreement (1997)
between Delaware Service Company, Inc.
and the Registrant on behalf of each
Portfolio incorporated into this filing
by reference to Post-Effective Amendment
No. 21 filed December 23, 1997.
(d) Form of Seventh Amended and Restated
Shareholder Services Agreement (1998)
between Delaware Service Company, Inc.
and the Registrant on behalf of each
Portfolio attached as Exhibit.
(e) Executed Delaware Group of Funds Fund
Accounting Agreement (August 19, 1996)
between Delaware Service Company, Inc.
and the Registrant on behalf of each Fund
incorporated into this filing by
reference to Post-Effective Amendment No.
16 filed May 23, 1997.
(i) Amendment No. 8 to Delaware Group
of Funds Fund Accounting
Agreement attached as Exhibit.
(ii) Amendment No. 9 to Delaware Group
of Funds Fund Accounting
Agreement attached as Exhibit.
(iii) Form of Amendment No. 10 to
Delaware Group of Funds Fund
Accounting Agreement attached as
Exhibit.
(10) Opinion of Counsel. Attached as Exhibit.
(11) Consent of Auditors. To be filed by
Post-Effective Amendment.
(12) Inapplicable.
(13) Undertaking of Initial Shareholder. Incorporated
into this filing by reference to Pre-Effective
Amendment No. 1 filed August 16, 1991.
(14) Inapplicable
(15) Plan Under Rule 12b-1.
(a) Form of 12b-1 Plan for REIT Fund Class A
incorporated into this filing by
reference to Post-Effective Amendment No.
21 filed December 23, 1997.
(b) Form of 12b-1 Plan for REIT Fund Class B
incorporated into this filing by
reference to Post-Effective Amendment No.
21 filed December 23, 1997.
(c) Form of 12b-1 Plan for REIT Fund Class C
incorporated into this filing by
reference to Post-Effective Amendment No.
21 filed December 23, 1997.
<PAGE>
Part C - Other Information
(continued)
(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,
Post-Effective Amendment No. 11 filed May
24, 1996, Post-Effective Amendment No. 12
filed August 23, 1996, Post-Effective
Amendment No. 13 filed January 15, 1997,
Post-Effective Amendment No. 16 filed May
23, 1997, Post-Effective Amendment No. 19
filed October 10, 1997 and Post-Effective
Amendment No. 21 filed December 23, 1997.
(17) Financial Data Schedules.
(a) Financial Data Schedules for the fiscal
year ended October 31, 1997 incorporated
into this filing by reference to
Post-Effective Amendment No. 21 filed
December 23, 1997.
(b) Financial Data Schedules for the period
ended April 30, 1998 will be filed by
Amendment.
(18) Plan under Rule 18f-3.
(a) Form of Rule 18f-3 Plan incorporated into
this filing by reference to
Post-Effective Amendment No. 20 filed
October 24, 1997.
(b) Amended Appendix A to Rule 18f-3 Plan
incorporated into this filing by
reference to Post-Effective Amendment No.
20 filed October 24, 1997.
(19) Other: Directors' Power of Attorney.
(a) Incorporated into this filing by
reference to Post-Effective Amendment No.
21 filed December 23, 1997.
(b) Director's Power of Attorney for John H.
Durham attached as Exhibit.
Item 25. Persons Controlled by or under Common Control with Registrant. None.
<PAGE>
Part C - Other Information
(continued)
Item 26. Number of Holders of Securities.
(1) (2)
Number of
Title of Class Record Holders
-------------- --------------
The Defensive Equity Portfolio:
Common Stock Par Value 39 Accounts as of
$.01 Per Share May 31,1998
The Aggressive Growth Portfolio:
Common Stock Par Value 12 Accounts as of
$.01 Per Share May 31,1998
The International Equity Portfolio:
Common Stock Par Value 136 Accounts as of
$.01 Per Share May 31,1998
The Global Fixed Income Portfolio:
Common Stock Par Value 79 Accounts as of
$.01 Per Share May 31,1998
The Fixed Income Portfolio:
Common Stock Par Value 16 Accounts as of
$.01 Per Share May 31,1998
The Limited-Term
Maturity Portfolio:
Common Stock Par Value 3 Accounts as of
$.01 Per Share May 31,1998
<PAGE>
Part C - Other Information
(continued)
(1) (2)
Number of
Title of Class Record Holders
-------------- --------------
The International Fixed
Income Portfolio:
Common Stock Par Value 10 Accounts as of
$.01 Per Share May 31,1998
The Defensive Equity Small/
Mid-Cap Portfolio:
Common Stock Par Value 2 Accounts as of
$.01 Per Share May 31,1998
The High-Yield Bond Portfolio:
Common Stock Par Value 11 Accounts as of
$.01 Per Share May 31,1998
The Labor Select International
Equity Portfolio:
Common Stock Par Value 20 Accounts as of
$.01 Per Share May 31,1998
The Emerging Markets Portfolio:
Common Stock Par Value 19 Accounts as of
$.01 Per Share May 31,1998
The Global Equity Portfolio:
Common Stock Par Value 2 Accounts as of
$.01 Per Share May 31,1998
The Real Estate Investment
Trust Portfolio class:
Common Stock Par Value 5 Accounts as of
$.01 Per Share May 31,1998
REIT Fund A Class:
Common Stock Par Value 1,085 Accounts as of
$.01 Per Share May 31,1998
REIT Fund B Class:
Common Stock Par Value 716 accounts as of
$.01 Per Share May 31,1998
<PAGE>
Part C - Other Information
(continued)
(1) (2)
Number of
Title of Class Record Holders
-------------- --------------
REIT Fund C Class:
Common Stock Par Value 182 Accounts as of
$.01 Per Share May 31,1998
REIT Fund Institutional Class:
Common Stock Par Value 6 Accounts as of
$.01 Per Share May 31,1998
The Real Estate Investment Trust Portfolio II:
Common Stock Par Value 5 Accounts as of
$.01 Per Share May 31,1998
The Aggregate Fixed Income Portfolio:
Common Stock Par Value 2 Accounts as of
$.01 Per Share May 31,1998
The Diversified Core Fixed Income Portfolio
Common Stock Par Value 2 Accounts as of
$.01 Per Share May 31,1998
The International Mid-Cap Sub Portfolio
Common Stock Par Value 0 Accounts as of
$.01 Per Share May 31,1998
The Small-Cap Growth Equity Portfolio
Common Stock Par Value 0 Accounts as of
$.01 Per Share May 31, 1998
The Growth and Income Portfolio
Common Stock Par Value 0 Accounts as of
$.01 Per Share May 31, 1998
The Asset Allocation Portfolio
Common Stock par Value 0 Accounts as of
$.01 Per Share May 31, 1998
Item 27. Indemnification. Incorporated into this filing by reference to
initial Registration Statement filed May 31, 1991.
<PAGE>
Part C - Other Information
(continued)
Item 28. Business and Other Connections of Investment Adviser.
(a) Delaware Management Company (the "Manager"), a series of
Delaware Management Business Trust, serves as investment manager to the
Registrant and also serves as investment manager or sub-adviser to certain of
the other funds in the Delaware Investments family (Delaware Group Equity
Funds I, Inc., Delaware Group Equity Funds II, Inc., Delaware Group Equity
Funds III, Inc., Delaware Group Equity Funds IV, Inc., Delaware Group Equity
Funds V, Inc., Delaware Group Government Fund, Inc., Delaware Group Income
Funds, Inc., Delaware Group Limited-Term Government Funds, Inc., Delaware
Group Cash Reserve, Inc., Delaware Group Tax-Free Fund, Inc., Delaware Group
State Tax-Free Income Trust, Delaware Group Tax-Free Money Fund, Inc.,
Delaware Group Premium Fund, Inc., Delaware Group Global & International
Funds, Inc., Delaware Group Adviser Funds, Inc., Delaware Group Dividend and
Income Fund, Inc., Delaware Group Global Dividend and Income Fund, Inc.,
Delaware Group Foundation Funds, Inc., Voyageur Intermediate Tax-Free Funds,
Inc., Voyageur Tax-Free Funds, Inc., Voyageur Funds, Inc., Voyageur Insured
Funds, Inc., Voyageur Investment Trust, Voyageur Investment Trust II, Voyageur
Mutual Funds, Inc., Voyageur Mutual Funds II, Inc., Voyageur Mutual Funds III,
Inc., Voyageur Arizona Municipal Income Fund, Inc., Voyageur Colorado Insured
Municipal Income Fund, Inc., Voyageur Florida Insured Municipal Income Fund,
Voyageur Minnesota Municipal Fund, Inc., Voyageur Minnesota Municipal Fund II,
Inc. and Voyageur Minnesota Municipal Fund III, Inc.). In addition, certain
officers of the Manager also serve as directors/trustees of the other funds in
the Delaware Investments family, and certain officers are also officers of
these other funds. A company indirectly owned by the Manager's indirect parent
company acts as principal underwriter to the mutual funds in the Delaware
Investments family (see Item 29 below) and another such company acts as the
shareholder services, dividend disbursing, accounting servicing and transfer
agent for all of the mutual funds in the Delaware Investments family.
<PAGE>
Part C - Other Information
(continued)
The following persons serving as officers of the Manager have
held the following positions during the past two years:
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- - ------------------ -----------------------------------------------
Wayne A. Stork Chairman of the Board, President, Chief
Executive Officer, Chief Investment Officer
and Director/Trustee of Delaware Management
Company, Inc. and Delaware Management
Business Trust; Chairman of the Board,
President, Chief Executive Officer, Chief
Investment Officer of Delaware Management
Company (a series of Delaware Management
Business Trust); Chairman of the Board,
President, Chief Executive Officer and
Director of DMH Corp., Delaware Distributors,
Inc. and Founders Holdings, Inc.; Chairman,
Chief Executive Officer and Chief Investment
Officer of Delaware Investment Advisers (a
series of Delaware Management Business
Trust); Chairman, Chief Executive Officer and
Director of Delaware International Holdings
Ltd. and Delaware International Advisers
Ltd.; Chairman of the Board and Director of
the Registrant, each of the other funds in
the Delaware Investments family, Delaware
Management Holdings, Inc., and Delaware
Capital Management, Inc.; Chairman of
Delaware Distributors, L.P.; President and
Chief Executive Officer of Delvoy, Inc.; and
Director and/or Trustee of Delaware Service
Company, Inc. and Delaware Investment &
Retirement Services, Inc.
Richard G. Unruh, Jr. Executive Vice President of the Registrant,
each of the other funds in the Delaware
Investments family, Delaware Management
Holdings, Inc., Delaware Capital Management,
Inc. and Delaware Management Company (a
series of Delaware Management Business
Trust); Executive Vice President and
Director/Trustee of Delaware Management
Company, Inc. and Delaware Management
Business Trust; President of Delaware
Investment Advisers (a series of Delaware
Management Business Trust); 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, AAA Mid Atlantic, Inc. since 1989,
2040 Market Street, Philadelphia, PA; Board
of Directors, Metron, Inc. since 1995, 11911
Freedom Drive, Reston, VA
Paul E. Suckow Executive Vice President/Chief Investment
Officer, Fixed Income of Delaware Management
Company, Inc., Delaware Management Company (a
series of Delaware Management Business
Trust), Delaware Investment Advisers (a
series of Delaware Management Business
Trust), the Registrant, each of the other
funds in the Delaware Investments family and
Delaware Management Holdings, Inc.; Executive
Vice President and Director of Founders
Holdings, Inc.; Executive Vice President of
Delaware Capital Management, Inc. and
Delaware Management Business Trust; and
Director of Founders CBO Corporation
Director, HYPPCO Finance Company Ltd.
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
Part C - Other Information
(continued)
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- - ------------------ -----------------------------------------------
David K. Downes Executive Vice President, Chief Operating
Officer, Chief Financial Officer and Director
of Delaware Management Company, Inc., DMH
Corp, Delaware Distributors, Inc., Founders
Holdings, Inc. and Delvoy, Inc.; Executive
Vice President, Chief Financial Officer,
Chief Administrative Officer and Trustee of
Delaware Management Business Trust; Executive
Vice President, Chief Operating Officer and
Chief Financial Officer of the Registrant and
each of the other funds in the Delaware
Investments family, Delaware Management
Holdings, Inc., Founders CBO Corporation,
Delaware Capital Management, Inc., Delaware
Management Company (a series of Delaware
Management Business Trust), Delaware
Investment Advisers (a series of Delaware
Management Business Trust) and Delaware
Distributors, L.P.; President, Chief
Executive Officer, Chief Financial Officer
and Director of Delaware Service Company,
Inc.; President, Chief Operating Officer,
Chief Financial Officer and Director of
Delaware International Holdings Ltd.;
Chairman, Chief Executive Officer and
Director of Delaware Investment & Retirement
Services, Inc.; Chairman and Director of
Delaware Management Trust Company; Director
of Delaware International Advisers Ltd.; and
Vice President of Lincoln Funds Corporation
Chief Executive Officer and Director of
Forewarn, Inc. since 1993, 8 Clayton Place,
Newtown Square, PA
George M. Chamberlain, Jr. Senior Vice President, General Counsel,
Secretary and Director/Trustee of Delaware
Management Company, Inc., DMH Corp., Delaware
Distributors, Inc., Delaware Service Company,
Inc., Founders Holdings, Inc., Delaware
Capital Management, Inc., Delaware Investment
& Retirement Services, Inc., Delvoy, Inc. and
Delaware Management Business Trust; Senior
Vice President, Secretary and General Counsel
of the Registrant, each of the other funds in
the Delaware Investments family, Delaware
Distributors, L.P., Delaware Management
Company (a series of Delaware Management
Business Trust), Delaware Investment Advisers
(a series of Delaware Management Business
Trust) and Delaware Management Holdings,
Inc.; Senior Vice President and Director of
Delaware International Holdings Ltd.;
Executive Vice President, Secretary, General
Counsel and Director of Delaware Management
Trust Company; Director of Delaware
International Advisers Ltd.; Secretary of
Lincoln Funds Corporation
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
Part C - Other Information
(continued)
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- - ------------------ -----------------------------------------------
Richard J. Flannery Senior Vice President/Corporate and
International Affairs of the Registrant, each
of the other funds in the Delaware
Investments family, Delaware Management
Holdings, Inc., DMH Corp., Delaware
Management Company, Inc., Delaware
Distributors, Inc., Delaware Distributors,
L.P., Delaware Management Trust Company,
Delaware Capital Management, Inc., Delaware
Service Company, Inc., Delaware Management
Company (a series of Delaware Management
Business Trust), Delaware Investment Advisers
(a series of Delaware Management Business
Trust) and Delaware Investment & Retirement
Services, Inc.; Executive Vice
President/Corporate & International Affairs
and Director of Delaware International
Holdings Ltd.; Senior Vice President/
Corporate and International Affairs and
Director of Founders Holdings, Inc. and
Delvoy, Inc.; Senior Vice President of
Founders CBO Corporation; and Director of
Delaware International Advisers Ltd.
Director, HYPPCO Finance Company 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 Senior Vice President and Treasurer of the
Registrant, each of the other funds in the
Delaware Investments family and Founders
Holdings, Inc.; Senior Vice
President/Investment Accounting of Delaware
Management Company, Inc., Delaware Management
Company (a series of Delaware Management
Business Trust) and Delaware Service Company,
Inc.; Senior Vice President and Treasurer/
Manager, Investment Accounting of Delaware
Distributors, L.P. and Delaware Investment
Advisers (a series of Delaware Management
Business Trust); Assistant Treasurer of
Founders CBO Corporation; and Senior Vice
President and Manager of Investment
Accounting of Delaware International Holdings
Ltd.
Joseph H. Hastings Senior Vice President/Corporate Controller
and Treasurer of Delaware Management
Holdings, Inc., DMH Corp., Delaware
Management Company, Inc., Delaware
Distributors, Inc., Delaware Capital
Management, Inc., Delaware Distributors,
L.P., Delaware Service Company, Inc.,
Delaware International Holdings Ltd.,
Delaware Management Company (a series of
Delaware Management Business Trust), Delvoy,
Inc. and Delaware Management Business Trust;
Senior Vice President/Corporate Controller of
the Registrant, each of the other funds in
the Delaware Investments family and Founders
Holdings, Inc.; Executive Vice President,
Chief Financial Officer and Treasurer of
Delaware Management Trust Company; Chief
Financial Officer and Treasurer of Delaware
Investment & Retirement Services, Inc.;
Senior Vice President/Assistant Treasurer of
Founders CBO Corporation; and Treasurer of
Lincoln Funds Corporation.
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
Part C - Other Information
(continued)
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- - ------------------ -----------------------------------------------
Michael T. Taggart Senior Vice President/Facilities Management
and Administrative Services of Delaware
Management Company, Inc. and Delaware
Management Company (a series of Delaware
Management Business Trust)
Douglas L. Anderson Senior Vice President/Operations of Delaware
Management Company, Inc., Delaware Management
Company (a series of Delaware Management
Business Trust), Delaware Investment and
Retirement Services, Inc. and Delaware
Service Company, Inc.; Senior Vice President/
Operations and Director of Delaware
Management Trust Company
James L. Shields Senior Vice President/Chief Information
Officer of Delaware Management Company, Inc.,
Delaware Management Company (a series of
Delaware Management Business Trust), Delaware
Service Company, Inc. and Delaware Investment
& Retirement Services, Inc.
Eric E. Miller Vice President, Assistant Secretary and
Deputy General Counsel of the Registrant and
each of the other funds in the Delaware
Investments family, Delaware Management
Company, Inc., Delaware Management Company (a
series of Delaware Management Business
Trust), Delaware Investment Advisers (a
series of Delaware Management Business
Trust), 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.;
Assistant Secretary of Delaware Management
Business Trust; and Vice President and
Assistant Secretary of Delvoy, Inc.
Richelle S. Maestro Vice President and Assistant Secretary of the
Registrant, each of the other funds in the
Delaware Investments family, Delaware
Management Company, Inc., Delaware Management
Company (a series of Delaware Management
Business Trust), Delaware Investment Advisers
(a series of Delaware Management Business
Trust), 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.,
Delaware Investment & Retirement Services,
Inc., Founders Holdings, Inc. and Delvoy,
Inc.; Vice President and Secretary of
Delaware International Holdings Ltd.; and
Secretary of Founders CBO Corporation
Partner of Tri-R Associates since 1989, 10001
Sandmeyer Lane, Philadelphia, PA
Richard Salus(1) Vice President/Assistant Controller of
Delaware Management Company, Inc., Delaware
Management Company (a series of Delaware
Management Business Trust) and Delaware
Management Trust Company
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
Part C - Other Information
(continued)
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- - ------------------ -----------------------------------------------
Bruce A. Ulmer Vice President/Director of LNC Internal Audit
of the Registrant, each of the other funds in
the Delaware Investments family, Delaware
Management Company, Inc., Delaware Management
Company (a series of Delaware Management
Business Trust), Delaware Management
Holdings, Inc., DMH Corp., Delaware
Management Trust Company and Delaware
Investment & Retirement Services, Inc.; Vice
President/Director of Internal Audit of
Delvoy, Inc.
Joel A. Ettinger(2) Vice President/Director of Taxation of the
Registrant, each of the other funds in the
Delaware Investments family, Delaware
Management Company, Inc., Delaware Management
Company (a series of Delaware Management
Business Trust) and Delaware Management
Holdings, Inc.
Christopher Adams Vice President/Strategic Planning of Delaware
Management Company, Inc., Delaware Management
Company (a series of Delaware Management
Business Trust) and Delaware Service Company,
Inc.
Susan L. Hanson Vice President/Strategic Planning of Delaware
Management Company, Inc., Delaware Management
Company (a series of Delaware Management
Business Trust) and Delaware Service Company,
Inc.
Dennis J. Mara(3) Vice President/Acquisitions of Delaware
Management Company, Inc. and Delaware
Management Company (a series of Delaware
Management Business Trust)
Scott Metzger Vice President/Business Development of
Delaware Management Company, Inc., Delaware
Management Company (a series of Delaware
Management Business Trust) and Delaware
Service Company, Inc.
Lisa O. Brinkley Vice President/Compliance of the Registrant,
Delaware Management Company, Inc., each of
the other funds in the Delaware Investments
family, Delaware Management Company (a series
of Delaware Management Business Trust), 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.; Vice President/Compliance Officer of
Delaware Management Business Trust; and Vice
President of Delvoy, Inc.
Mary Ellen Carrozza Vice President/Client Services of Delaware
Management Company, Inc., Delaware Management
Company (a series of Delaware Management
Business Trust), Delaware Investment Advisers
(a series of Delaware Management Business
Trust) and the Registrant
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
Part C - Other Information
(continued)
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- - ------------------ -----------------------------------------------
Gerald T. Nichols Vice President/Senior Portfolio Manager of
Delaware Management Company, Inc., Delaware
Management Company (a series of Delaware
Management Business Trust), Delaware
Investment Advisers (a series of Delaware
Management Business Trust), the Registrant
and 20 other investment companies in the
Delaware Investments family; Vice President
of Founders Holdings, Inc.; and Treasurer,
Assistant Secretary and Director of Founders
CBO Corporation
Paul A. Matlack Vice President/Senior Portfolio Manager of
Delaware Management Company, Inc., Delaware
Management Company (a series of Delaware
Management Business Trust), Delaware
Investment Advisers (a series of Delaware
Management Business Trust), the Registrant
and 20 other investment companies in the
Delaware Investments family; Vice President
of Founders Holdings, Inc.; and President and
Director of Founders CBO Corporation
Gary A. Reed Vice President/Senior Portfolio Manager of
Delaware Management Company, Inc., Delaware
Management Company (a series of Delaware
Management Business Trust), Delaware
Investment Advisers (a series of Delaware
Management Business Trust), the Registrant,
17 investment companies in the Delaware
Investments family and Delaware Capital
Management, Inc.
Patrick P. Coyne Vice President/Senior Portfolio Manager of
Delaware Management Company, Inc., Delaware
Management Company (a series of Delaware
Management Business Trust), Delaware
Investment Advisers (a series of Delaware
Management Business Trust), the Registrant,
17 other investment companies in the Delaware
Investments family and Delaware Capital
Management, Inc.
Roger A. Early Vice President/Senior Portfolio Manager of
Delaware Management Company, Inc., Delaware
Management Company (a series of Delaware
Management Business Trust), Delaware
Investment Advisers (a series of Delaware
Management Business Trust), the Registrant
and 17 other investment companies in the
Delaware Investments family
Mitchell L. Conery(4) Vice President/Senior Portfolio Manager of
Delaware Management Company, Inc., Delaware
Management Company (a series of Delaware
Management Business Trust), Delaware
Investment Advisers (a series of Delaware
Management Business Trust), the Registrant,
17 other investment companies in the Delaware
Investments family and Delaware Capital
Management, Inc.
George H. Burwell Vice President/Senior Portfolio Manager of
Delaware Management Company, Inc., Delaware
Management Company (a series of Delaware
Management Business Trust), the Registrant
and 10 investment companies in the Delaware
Investments family
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
Part C - Other Information
(continued)
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- - ------------------ -----------------------------------------------
John B. Fields Vice President/Senior Portfolio Manager of
Delaware Management Company, Inc., Delaware
Management Company (a series of Delaware
Management Business Trust), Delaware
Investment Advisers (a series of Delaware
Management Business Trust), the Registrant,
ten investment companies in the Delaware
Investments family, Delaware Capital
Management, Inc. and Trustee of Delaware
Management Business Trust
Gerald S. Frey Vice President/Senior Portfolio Manager of
Delaware Management Company, Inc., Delaware
Management Company (a series of Delaware
Management Business Trust), Delaware
Investment Advisers (a series of Delaware
Management Business Trust), the Registrant
and 10 investment companies in the Delaware
Investments family
Christopher Beck(5) Vice President/Senior Portfolio Manager of
Delaware Management Company, Inc., Delaware
Management Company (a series of Delaware
Management Business Trust), Delaware
Investment Advisers (a series of Delaware
Management Business Trust), the Registrant
and 10 investment companies in the Delaware
Investments family
Elizabeth H. Howell(6) Vice President/Senior Portfolio Manager of
Delaware Management Company, Inc., Delaware
Management Company (a series of Delaware
Management Business Trust), the Registrant
and seven other investment companies in the
Delaware Investments family
Andrew M. McCullagh, Jr.(7) Vice President/Senior Portfolio Manager of
Delaware Management Company, Inc., Delaware
Management Company (a series of Delaware
Management Business Trust) the Registrant and
eight other investment companies in the
Delaware Investments family
Babak Zenouzi Vice President/Senior Portfolio Manager of
Delaware Management Company, Inc., Delaware
Management Company (a series of Delaware
Management Business Trust), the Registrant
and 13 investment companies in the Delaware
Investments family
J. Paul Dokas(8) Vice President/Portfolio Manager of Delaware
Management Company, Inc., Delaware Management
Company (a series of Delaware Management
Business Trust), the Registrant and one other
investment company in the Delaware
Investments family
Cynthia Isom Vice President/Portfolio Manager of Delaware
Management Company, Inc., Delaware Management
Company (a series of Delaware Management
Business Trust), the Registrant and 17 other
investment companies in the Delaware
Investments family
Paul Grillo Vice President/Portfolio Manager of Delaware
Management Company, Inc., Delaware Management
Company (a series of Delaware Management
Business Trust), Delaware Investment Advisers
(a series of Delaware Management Business
Trust), the Registrant and 19 other
investment companies in the Delaware
Investments family
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
Part C - Other Information
(continued)
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- - ------------------ -----------------------------------------------
Marshall T. Bassett Vice President/Portfolio Manager of Delaware
Management Company, Inc., Delaware Management
Company (a series of Delaware Management
Business Trust), Delaware Investment Advisers
(a series of Delaware Management Business
Trust), the Registrant and each of the other
funds in the Delaware Investments family
John Heffern Vice President/Portfolio Manager of Delaware
Management Company, Inc., Delaware Management
Company (a series of Delaware Management
Business Trust), the Registrant and each of
the other funds in the Delaware Investments
family
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
(1) SENIOR MANAGER, Ernst & Young LLP prior to December 1996.
(2) TAX PRINCIPAL, Ernst & Young LLP prior to April 1998.
(3) CORPORATE CONTROLLER, IIS prior to July 1997.
(4) INVESTMENT OFFICER, Travelers Insurance prior to January 1997.
(5) SENIOR PORTFOLIO MANAGER, Pitcairn Trust Company prior to May 1997.
(6) SENIOR PORTFOLIO MANAGER, Voyageur Fund Managers, Inc. prior to May 1997.
(7) SENIOR VICE PRESIDENT, SENIOR PORTFOLIO MANAGER, Voyageur Asset
Management LLC prior to May 1997.
(8) DIRECTOR OF TRUST INVESTMENTS, Bell Atlantic Corporation prior to
February 1997.
(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, The Labor Select International Equity Portfolio, The Emerging
Markets Portfolio, The Global Equity Portfolio and The International Mid-Cap
Sub Portfolio. In addition, Delaware International also serves as investment
manager or sub-adviser to certain of the other funds in the Delaware
Investments family (Delaware Group Income Funds, Inc., Delaware Group Premium
Fund, Inc., Delaware Group Global & International Funds, Inc. and Delaware
Group Global Dividend and Income Fund, Inc.) and provides investment advisory
services to institutional accounts primarily retirement plans and endowment
funds.
<PAGE>
Part C - Other Information
(continued)
Information regarding the officers and directors of Delaware
International and the positions they have held with the Registrant during the
past two fiscal years is provided below.
Positions and Offices with Delaware
Name and Principal International Advisers Ltd. and its Affiliates
Business Address and Other Positions and Offices Held
- - ---------------- ----------------------------------------------
*Wayne A. Stork Chairman, Chief Executive Officer and
Director of Delaware International Holdings
Ltd. and Delaware International Advisers
Ltd.; Chairman of the Board, President, Chief
Executive Officer, Chief Investment Officer
and Director/Trustee of Delaware Management
Company, Inc. and Delaware Management
Business Trust; Chairman of the Board,
President, Chief Executive Officer, Chief
Investment Officer of Delaware Management
Company (a series of Delaware Management
Business Trust); Chairman of the Board,
President, Chief Executive Officer and
Director of DMH Corp., Delaware Distributors,
Inc. and Founders Holdings, Inc.; Chairman of
the Board and Director of the Registrant,
each of the other funds in the Delaware
Investments family, Delaware Management
Holdings, Inc., and Delaware Capital
Management, Inc.; Chairman of Delaware
Distributors, L.P.; President and Chief
Executive Officer of Delvoy, Inc.; Director
and/or Trustee of Delaware Service Company,
Inc. and Delaware Investment & Retirement
Services, Inc.; and Chairman, Chief Executive
Officer and Chief Investment Officer of
Delaware Investment Advisers (a series of
Delaware Management Business Trust)
* Jeffrey J. Nick Director of Delaware International Advisers
Ltd.; President, Chief Executive Officer and
Director and/or Trustee of the Registrant and
each of the other investment companies in the
Delaware Investments family; President and
Director of Delaware Management Holdings,
Inc.; President, Chief Executive Officer and
Director of Lincoln National Investment
Companies, Inc.; and President of Lincoln
Funds Corporation
**David G. Tilles Managing Director, Chief Investment Officer
and Director of Delaware International
Advisers Ltd. and Chief Investment Officer
and Director of Delaware International
Holdings, Ltd.
**G. Roger H. Kitson Vice Chairman and Director of Delaware
International Advisers Ltd.
**Ian G. Sims Deputy Managing Director/ Chief Investment
Officer/Global Fixed Income and Director of
Delaware International Advisers Ltd.
**John Emberson Secretary, Compliance Officer, Finance
Director and Director of Delaware
International Advisers Ltd.
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
** Business address of each is Third Floor, 80 Cheapside, London,
England EC2V 6EE.
<PAGE>
Part C - Other Information
(continued)
Positions and Offices with Delaware
Name and Principal International Advisers Ltd. and its Affiliates
Business Address and Other Positions and Offices Held
- - ---------------- ----------------------------------------------
**Nigel G. May Senior Portfolio Manager/Head of Pacific
Basin Group and Director of Delaware
International Advisers Ltd.
**Elizabeth A. Desmond Senior Portfolio Manager/Head of European
Group and Director of Delaware International
Advisers Ltd.
*David K. Downes Director of Delaware International Advisers
Ltd.; Executive Vice President, Chief
Operating Officer and Chief Financial Officer
of the Registrant and each of the other funds
in the Delaware Investments family, Delaware
Management Holdings, Inc., Founders CBO
Corporation, Delaware Capital Management,
Inc., Delaware Management Company (a series
of Delaware Management Business Trust),
Delaware Investment Advisers (a series of
Delaware Management Business Trust) and
Delaware Distributors, L.P.; President, Chief
Executive Officer, Chief Financial Officer
and Director of Delaware Service Company,
Inc.; Executive Vice President, Chief
Operating Officer, Chief Financial Officer
and Director of Delaware Management Company,
Inc., DMH Corp, Delaware Distributors, Inc.,
Founders Holdings, Inc. and Delvoy, Inc.;
Executive Vice President, Chief Financial
Officer, Chief Administrative Officer and
Trustee of Delaware Management Business
Trust; President, Chief Operating Officer,
Chief Financial Officer and Director of
Delaware International Holdings Ltd.;
Chairman, Chief Executive Officer and
Director of Delaware Investment & Retirement
Services, Inc.; Chairman and Director of
Delaware Management Trust Company; and Vice
President of Lincoln Funds Corporation
Chief Executive Officer and Director of
Forewarn, Inc. since 1993, 8 Clayton Place,
Newtown Square, PA
*Richard G. Unruh, Jr. Director of Delaware International Advisers
Ltd.; President of Delaware Investment
Advisers (a series of Delaware Management
Business Trust); Executive Vice President of
the Registrant, each of the other funds in
the Delaware Investments family, Delaware
Management Holdings, Inc., Delaware Capital
Management, Inc. and Delaware Management
Company (a series of Delaware Management
Business Trust); and Executive Vice President
and Director/Trustee of Delaware Management
Company, Inc. and Delaware Management
Business Trust
Board of Directors, Chairman of Finance
Committee, Keystone Insurance Company since
1989, 2040 Market Street, Philadelphia, PA;
Board of Directors, Chairman of Finance
Committee, AAA Mid Atlantic, Inc. since 1989,
2040 Market Street, Philadelphia, PA; Board
of Directors, Metron, Inc. since 1995, 11911
Freedom Drive, Reston, VA
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
** Business address of each is Third Floor, 80 Cheapside, London,
England EC2V 6EE.
<PAGE>
Part C - Other Information
(continued)
Positions and Offices with Delaware
Name and Principal International Advisers Ltd. and its Affiliates
Business Address and Other Positions and Offices Held
- - ---------------- ----------------------------------------------
*Richard J. Flannery Director of Delaware International Advisers
Ltd.; Senior Vice President/Corporate and
International Affairs of the Registrant, each
of the other funds in the Delaware
Investments family, Delaware Management
Holdings, Inc., DMH Corp., Delaware
Management Company, Inc., Delaware
Distributors, Inc., Delaware Distributors,
L.P., Delaware Management Trust Company,
Delaware Capital Management, Inc., Delaware
Service Company, Inc., Delaware Management
Company (a series of Delaware Management
Business Trust), Delaware Investment Advisers
(a series of Delaware Management Business
Trust) and Delaware Investment & Retirement
Services, Inc.; Executive Vice
President/Corporate & International Affairs
and Director of Delaware International
Holdings Ltd.; Senior Vice President/
Corporate and International Affairs and
Director of Founders Holdings, Inc. and
Delvoy, Inc.; and Senior Vice President of
Founders CBO Corporation
Director, HYPPCO Finance Company 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.; Executive Vice President of Delaware
Investment Advisers
*George M. Chamberlain, Jr. Director of Delaware International Advisers
Ltd.; Senior Vice President, General Counsel,
Secretary and Director/Trustee of Delaware
Management Company, Inc., DMH Corp., Delaware
Distributors, Inc., Delaware Service Company,
Inc., Founders Holdings, Inc., Delaware
Capital Management, Inc., Delaware Investment
& Retirement Services, Inc., Delvoy, Inc. and
Delaware Management Business Trust; Senior
Vice President, Secretary and General Counsel
of the Registrant, each of the other funds in
the Delaware Investments family, Delaware
Distributors, L.P., Delaware Management
Company (a series of Delaware Management
Business Trust), Delaware Investment Advisers
(a series of Delaware Management Business
Trust) and Delaware Management Holdings,
Inc.; Senior Vice President and Director of
Delaware International Holdings Ltd.;
Executive Vice President, Secretary, General
Counsel and Director of Delaware Management
Trust Company; and Secretary of Lincoln Funds
Corporation
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
** Business address of each is Third Floor, 80 Cheapside, London,
England EC2V 6EE.
<PAGE>
Part C - Other Information
(continued)
Positions and Offices with Delaware
Name and Principal International Advisers Ltd. and its Affiliates
Business Address and Other Positions and Offices Held
- - ---------------- ----------------------------------------------
*George E. Deming Director of Delaware International Advisers
Ltd.; Vice President/Senior Portfolio Manager
of Delaware Investment Advisers
**Timothy W. Sanderson Senior Portfolio Manager, Deputy Compliance
Officer, Director Equity Research, Chief
Investment Officer 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.
**Gavin A. Hall Senior Portfolio Manager of Delaware
International Advisers Ltd.
**Robert Akester Senior Portfolio Manager of Delaware
International Advisers Ltd.
**Hywel Morgan Senior Portfolio Manager of Delaware
International Advisers Ltd.
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
** Business address of each is Third Floor, 80 Cheapside, London,
England EC2V 6EE.
(c) Lincoln Investment Management Company, Inc. serves as
sub-adviser to The Real Estate Investment Trust Portfolio and The Real Estate
Investment Trust Portfolio II. 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. and to
other clients. Lincoln Investment Management Company, 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.
<PAGE>
Part C - Other Information
(continued)
Information regarding the officers and directors of Lincoln
Investment Management Company, Inc. and the positions they held during the
past two years follows:
Positions and Offices with Lincoln Investment
Name and Principal Management Company, Inc. and its Affiliates and
Business Address Other Positions and Offices Held
- - ---------------- -----------------------------------------------
*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
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; and Director of
Lynch & Mayer, Inc. and Vantage Global
Advisors, Inc.
*Steven R. Brody Director, Senior Vice President of Lincoln
Investment Management, 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.; Second Vice President of Lincoln Life &
Annuity Company of New York; Director of
Lincoln National Convertible Securities Fund,
Inc.; and Director and Vice President of
Lincoln National Income Fund, Inc.
*JoAnn E. Becker Vice President of Lincoln Investment
Management, 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 National
Convertible Securities Fund, Inc. and Lincoln
National Income Fund, Inc.; and Second Vice
President of Lincoln Life & Annuity Company
of New York
* Business address is 200 East Berry Street, Fort Wayne, IN 46802.
** Business address is 1300 S. Clinton Street, Fort Wayne, IN 46802.
<PAGE>
Part C - Other Information
(continued)
Positions and Offices with Lincoln Investment
Name and Principal Management Company, Inc. and its Affiliates and
Business Address Other Positions and Offices Held
- - ---------------- -----------------------------------------------
*Anne E. Bookwalter Vice President (previously Second Vice
President) of Lincoln Investment Management,
Inc.; and Director of Professional Financial
Planning, Inc.
*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
*John David Moore Vice President of Lincoln Investment
Management, Inc.
* Business address is 200 East Berry Street, Fort Wayne, IN 46802.
** Business address is 1300 S. Clinton Street, Fort Wayne, IN 46802.
<PAGE>
Part C - Other Information
(continued)
Positions and Offices with Lincoln Investment
Name and Principal Management Company, Inc. and its Affiliates and
Business Address Other Positions and Offices Held
- - ---------------- -----------------------------------------------
*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
*Milton W. Shuey 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., Lincoln
Life & Annuity Company of New York and First
Penn-Pacific Life Insurance Company;
President, Chief Executive Officer and
Director of The Lincoln National Life
Insurance Company; and President of Lincoln
Financial Group, Inc.
* Business address is 200 East Berry Street, Fort Wayne, IN 46802.
** Business address is 1300 S. Clinton Street, Fort Wayne, IN 46802.
<PAGE>
Part C - Other Information
(continued)
Positions and Offices with Lincoln Investment
Name and Principal Management Company, Inc. and its Affiliates and
Business Address Other Positions and Offices Held
- - ---------------- -----------------------------------------------
*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
* Business address is 200 East Berry Street, Fort Wayne, IN 46802.
** Business address is 1300 S. Clinton Street, Fort Wayne, IN 46802.
<PAGE>
Part C - Other Information
(continued)
Positions and Offices with Lincoln Investment
Name and Principal Management Company, Inc. and its Affiliates and
Business Address Other Positions and Offices Held
- - ---------------- -----------------------------------------------
*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 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., Lincoln
National Variable Annuity Funds A & B and
Lincoln Life & Annuity Company of New York
* Business address is 200 East Berry Street, Fort Wayne, IN 46802.
** Business address is 1300 S. Clinton Street, Fort Wayne, IN 46802.
<PAGE>
Part C - Other Information
(continued)
Item 29. Principal Underwriters.
(a) Delaware Distributors, L.P. serves as principal underwriter for
all the mutual funds in the Delaware Investments family.
(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 Investment
Advisers Limited Partner None
Delaware Capital
Management, Inc. Limited Partner None
Wayne A. Stork Chairman Chairman
Bruce D. Barton President and Chief Executive None
Officer
David K. Downes Executive Vice President, Executive Vice President, Chief
Chief Operating Officer Operating Officer and Chief
and Chief Financial Officer Financial Officer
George M. Chamberlain, Jr. Senior Vice President/Secretary/ Senior Vice President/
General Counsel Secretary/General Counsel
Richard J. Flannery Senior Vice President/Corporate Senior Vice President/
and International Affairs Corporate and International Affairs
Joseph H. Hastings Senior Vice President/Corporate Senior Vice President/
Controller & Treasurer Corporate Controller
Terrence P. Cunningham Senior Vice President/Financial None
Institutions
Thomas E. Sawyer Senior Vice President/ None
National Sales Director
Mac McAuliffe Senior Vice President/Sales None
Manager, Western Division
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
Part C - Other Information
(continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
- - ------------------ ---------------- ---------------
<S> <C> <C>
J. Chris Meyer Senior Vice President/ None
Director Product Management
William M. Kimbrough Senior Vice President/Wholesaler None
Daniel J. Brooks Senior Vice President/Wholesaler None
Bradley L. Kolstoe Senior Vice President/Western None
Division Sales Manager
Henry W. Orvin Senior Vice President/Eastern None
Division Sales Manager
Michael P. Bishof Senior Vice President and Treasurer/ Senior Vice
Manager, Investment Accounting President/Treasurer
Eric E. Miller Vice President/Assistant Secretary/ Vice President/Assistant Secretary/
Deputy General Counsel Deputy General Counsel
Richelle S. Maestro Vice President/ Vice President/
Assistant Secretary Assistant Secretary
Lisa O. Brinkley Vice President/Compliance Vice President/Compliance
Daniel H. Carlson Vice President/Strategic Marketing None
Diane M. Anderson Vice President/Plan Record Keeping None
and Administration
Anthony J. Scalia Vice President/Defined Contribution None
Sales, SW Territory
Courtney S. West Vice President/Defined Contribution None
Sales, NE Territory
Denise F. Guerriere Vice President/Client Services None
Gordon E. Searles Vice President/Client Services None
Lori M. Burgess Vice President/Client Services None
Julia R. Vander Els Vice President/Participant Services None
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
Part C - Other Information
(continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
- - ------------------ ---------------- ---------------
<S> <C> <C>
Jerome J. Alrutz Vice President/Retail Sales None
Scott Metzger Vice President/Business Development Vice President/Business
Development
Stephen C. Hall Vice President/Institutional Sales None
Gregory J. McMillan Vice President/ National Accounts None
Holly W. Reimel Vice President/Manager, National None
Accounts
Christopher H. Price Vice President/Manager, None
Insurance
Stephen J. DeAngelis Vice President/Product None
Development
Andrew W. Whitaker Vice President/Financial Institutions None
Jesse Emery Vice President/ Marketing None
Communications
Darryl S. Grayson Vice President, Broker/Dealer None
Internal Sales
Dinah J. Huntoon Vice President/Product None
Manager Equity
Soohee Lee Vice President/Fixed Income None
Product Management
Michael J. Woods Vice President/UIT Product None
Management
Ellen M. Krott Vice President/Marketing None
Dale L. Kurtz Vice President/Marketing Support None
David P. Anderson Vice President/Wholesaler None
Lee D. Beck Vice President/Wholesaler None
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
Part C - Other Information
(continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
- - ------------------ ---------------- ---------------
<S> <C> <C>
Gabriella Bercze Vice President/Wholesaler None
Terrence L. Bussard Vice President/Wholesaler None
William S. Carroll Vice President/Wholesaler None
William L. Castetter Vice President/Wholesaler None
Thomas J. Chadie Vice President/Wholesaler None
Thomas C. Gallagher Vice President/Wholesaler None
Douglas R. Glennon Vice President/Wholesaler None
Ronald A. Haimowitz Vice President/Wholesaler None
Christopher L. Johnston Vice President/Wholesaler None
Michael P. Jordan Vice President/Wholesaler None
Jeffrey A. Keinert Vice President/Wholesaler None
Thomas P. Kennett Vice President/ Wholesaler None
Debbie A. Marler Vice President/Wholesaler None
Nathan W. Medin Vice President/Wholesaler None
Roger J. Miller Vice President/Wholesaler None
Patrick L. Murphy Vice President/Wholesaler None
Stephen C. Nell Vice President/Wholesaler None
Julia A. Nye Vice President/Wholesaler None
Joseph T. Owczarek Vice President/Wholesaler None
Mary Ellen Pernice-Fadden Vice President/Wholesaler None
Mark A. Pletts Vice President/Wholesaler None
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
Part C - Other Information
(continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
- - ------------------ ---------------- ---------------
<S> <C> <C>
Philip G. Rickards Vice President/Wholesaler None
Laura E. Roman Vice President/Wholesaler None
Linda Schulz Vice President/Wholesaler None
Edward B. Sheridan Vice President/Wholesaler None
Robert E. Stansbury Vice President/Wholesaler None
Julia A. Stanton Vice President/Wholesaler None
Larry D. Stone Vice President/Wholesaler None
Edward J. Wagner Vice President/Wholesaler None
Wayne W. Wagner Vice President/Wholesaler None
John A. Wells Vice President/Marketing Technology None
Scott Whitehouse Vice President/Wholesaler None
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
(c) Inapplicable.
Item 30. Location of Accounts and Records.
All accounts and records are maintained in the Philadelphia
office at 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) Not Applicable.
(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) Not Applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, this Registrant 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 15th day of June, 1998.
DELAWARE POOLED TRUST, INC.
By /s/ Wayne A. Stork
---------------------
Wayne A. Stork
Chairman
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:
Signature Title Date
--------- ----- ----
/s/ Wayne A. Stork Chairman and Director June 15, 1998
- - -------------------------
Wayne A. Stork
/s/ David K. Downes Executive Vice President/Chief
- - ------------------------- Operating Officer/Chief Financial
David K. Downes Officer (Principal Financial Officer
and Principal Accounting Officer) June 15, 1998
/s/ Jeffrey J. Nick
- - -------------------------
Jeffrey J. Nick
Director June 15, 1998
/s/ Charles E. Peck
- - -------------------------
Charles E. Peck
Director June 15, 1998
/s/ Thomas F. Madison
- - -------------------------
Thomas F. Madison
Director June 15, 1998
/s/ John H. Durham
- - -------------------------
John H. Durham
Director June 15, 1998
/s/ Ann R. Leven
- - -------------------------
Ann R. Leven
Director June 15, 1998
/s/ Walter P. Babich
- - -------------------------
Walter P. Babich
Director June 15, 1998
/s/ Anthony D. Knerr
- - -------------------------
Anthony D. Knerr
Director June 15, 1998
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Exhibits
to
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Exhibit
- - ----------- -------
EX-99.B5A10 Form of Investment Management Agreement
(1998) between Delaware Management Company
and the Registrant on behalf of The Small-Cap
Growth Equity Portfolio
EX-99.B5A11 Form of Investment Management Agreement
(1998) between Delaware Management Company
and the Registrant on behalf of The Growth
and Income Portfolio
EX-99.B6AIX Form of Distribution Agreement (1998) between
Delaware Distributors, L.P. and the
Registrant on behalf of The Small-Cap Growth
Equity Portfolio
EX-99.B6AX Form of Distribution Agreement (1998) between
Delaware Distributors, L.P. and the
Registrant on behalf of The Growth and Income
Portfolio
EX-99.B8I Letter (April 14, 1997) to add The Emerging
Markets Portfolio to the Custodian Agreement
between the Registrant and The Chase
Manhattan Bank
EX-99.B8J Letter (October 14, 1997) to add The Global
Equity Portfolio and The Real Estate
Investment Trust Portfolio II to the
Custodian Agreement between the Registrant
and The Chase Manhattan Bank
EX-99.B8K Letter (December 24, 1997) to add The
Aggregate Fixed Income Portfolio and The
Diversified Core Fixed Income Portfolio to
the Custodian Agreement between the
Registrant and The Chase Manhattan Bank
EX-99.B8L Form of Letter to add The Small-Cap Growth
Equity Portfolio and The Growth and Income
Portfolio to the Custodian Agreement between
the Registrant and The Chase Manhattan Bank
EX-99.B9D Form of Seventh Amended and Restated
Shareholders Services Agreement (1998)
between Delaware Service Company, Inc. and
the Registrant on behalf of each Portfolio
EX-99.B9EI Amendment No. 8 to Delaware Group of
Funds Fund Accounting Agreement
EX-99.B9EII Form of Amendment No. 9 to Delaware Group of
Funds Fund Accounting Agreement
EX-99.B9EIII Form of Amendment No. 10 to Delaware Group of
Funds Fund Accounting Agreement
EX-99.B10 Opinion of Counsel
EX-99.B19 Directors' Power of Attorney for John H.
Durham
<PAGE>
FORM A
INVESTMENT MANAGEMENT AGREEMENT
SUBJECT TO BOARD APPROVAL
EX-99.B5A10
Exhibit 24(b)(5)(a)(10)
DELAWARE POOLED TRUST, INC.
THE SMALL-CAP GROWTH EQUITY PORTFOLIO
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT, made by and between DELAWARE POOLED TRUST, INC. (the
"Fund"), a Maryland corporation, for The Small-Cap Growth Equity Portfolio
(the "Portfolio"), and DELAWARE MANAGEMENT COMPANY (the "Investment Manager"),
a series of Delaware Management Business Trust, a Delaware business trust.
W I T N E S S E T H:
WHEREAS, the Fund has been organized and operates as an investment
company registered under the Investment Company Act of 1940 and engages in the
business of investing and reinvesting its assets in securities; and
WHEREAS, the Investment Manager is a registered Investment Adviser
under the Investment Advisers Act of 1940 and engages in the business of
providing investment management services; and
WHEREAS, the Investment Manager serves as the investment manager for
other portfolios of the Fund, and the Fund desires to retain the Investment
Manager to serve as the investment manager for this Portfolio effective as of
the date of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and each of the parties hereto intending to be legally bound, it is
agreed as follows:
1. The Fund hereby employs the Investment Manager to manage the
investment and reinvestment of the Portfolio's assets and to administer its
affairs, subject to the direction of the Board and officers of the Fund for
the period and on the terms hereinafter set forth. The Investment Manager
hereby accepts such employment and agrees during such period to render the
services and assume the obligations herein set forth for the compensation
herein provided. The Investment Manager shall, for all purposes herein, be
deemed to be an independent contractor, shall not in any way be deemed an
agent of the Fund and shall, unless otherwise expressly provided and
authorized, have no authority to act for or represent the Fund in any way. The
Investment Manager shall regularly make decisions as to what securities to
purchase and sell on behalf of the Portfolio, and shall give written
instructions to the Trading Department
-1-
<PAGE>
maintained by the Fund for implementation of such decisions, and shall furnish
the Board of Directors of the Fund with such information and reports regarding
the Portfolio's investments as the Investment Manager deems appropriate or as
the Directors of the Fund may reasonably request.
2. The Fund shall conduct its own business and affairs and shall bear
the expenses and salaries necessary and incidental thereto including, but not
in limitation of the foregoing, the costs incurred in: the maintenance of its
corporate existence; the maintenance of its own books, records and procedures;
dealing with its own shareholders; the payment of dividends; transfer of
stock, including issuance, redemption and repurchase of shares; preparation of
share certificates; reports and notices to shareholders; calling and holding
of shareholders' meetings; miscellaneous office expenses; brokerage
commissions; custodian fees; legal and accounting fees; taxes; and federal and
state registration fees. The Portfolio shall bear all of its own
organizational costs.
Directors, officers and employees of the Investment Manager
may be directors, officers and employees of the funds of which Delaware
Management Company, Inc. is Investment Manager. Directors, officers and
employees of the Investment Manager who are directors, officers and/or
employees of the funds shall not receive any compensation from the funds for
acting in such dual capacity.
In the conduct of the respective businesses of the parties
hereto and in the performance of this Agreement, the Fund and Investment
Manager may share facilities common to each, with appropriate proration of
expenses between them.
3. (a) The Fund shall place and execute its own orders for the
purchase and sale of portfolio securities with broker/dealers. Subject to the
primary objective of obtaining the best available prices and execution, the
Fund will place orders for the purchase and sale of portfolio securities with
such broker/dealers selected from among those designated from time to time by
the Investment Manager, who provide statistical, factual and financial
information and services to the Fund, to the Investment Manager, or to any
other fund for which the Investment Manager provides investment advisory
services and/or with broker/dealers who sell shares of the Fund or who sell
shares of any other fund for which the Investment Manager provides investment
advisory services. Broker/dealers who sell shares of the funds of which
Delaware Management Company, Inc. is investment manager, shall only receive
orders for the purchase or sale of portfolio securities to the extent that the
placing of such orders is in compliance with the Rules of the Securities and
Exchange Commission and the National Association of Securities Dealers, Inc.
(b) Notwithstanding the provisions of subparagraph (a) above
and subject to such policies and procedures as may be adopted by the Board of
Directors and officers of the Fund, the Investment Manager may ask the Fund,
and the Fund may agree, to pay a member of an exchange, broker or dealer an
amount of commission for effecting a securities transaction in excess of the
amount of commission another member of an exchange, broker or dealer would
have charged for effecting that transaction, in such instances where it, and
the Investment
-2-
<PAGE>
Manager, have determined in good faith that such amount of commission was
reasonable in relation to the value of the brokerage and research services
provided by such member, broker or dealer, viewed in terms of either that
particular transaction or the Investment Manager's overall responsibilities
with respect to the Fund and to other funds or other advisory accounts for
which the Investment Manager exercises investment discretion.
4. As compensation for the services to be rendered to the Fund by the
Investment Manager under the provisions of this Agreement, the Fund shall pay
to the Investment Manager a fee calculated in accordance with the following
schedule: ____
If this Agreement is terminated prior to the end of any
calendar month, the management fee shall be prorated for the portion of any
month in which this Agreement is in effect according to the proportion which
the number of calendar days during which the Agreement is in effect bears to
the number of calendar days in the month, and shall be payable within 10 days
after the date of termination.
5. The services to be rendered by the Investment Manager to the Fund
under the provisions of this Agreement are not to be deemed to be exclusive,
and the Investment Manager shall be free to render similar or different
services to others so long as its ability to render the services provided for
in this Agreement shall not be impaired thereby.
6. The Investment Manager, its directors, officers, employees, agents
and shareholders may engage in other businesses, may render investment
advisory services to other investment companies, or to any other corporation,
association, firm or individual, and may render underwriting services to the
Fund or to any other investment company, corporation, association, firm or
individual.
7. In the absence of willful misfeasance, bad faith, gross
negligence, or a reckless disregard of the performance of duties of the
Investment Manager to the Fund, the Investment Manager shall not be subject to
liabilities to the Fund or to any shareholder of the Fund for any action or
omission in the course of, or connected with, rendering services hereunder or
for any losses that may be sustained in the purchase, holding or sale of any
security, or otherwise.
8. This Agreement shall be executed and become effective as of the
date written below [if approved by the vote of a majority of the outstanding
voting securities of the Portfolio]. It shall continue in effect for a period
of two years from such date and may be renewed thereafter only so long as such
renewal and continuance is specifically approved at least annually by the
Board of Directors of the Fund or by vote of a majority of the outstanding
voting securities of the Portfolio and only if the terms and the renewal
hereof have been approved by the vote of a majority of the Directors of the
Fund who are not parties hereto or interested persons of any such party, cast
in person at a meeting called for the purpose of voting on such approval.
Notwithstanding the foregoing, this Agreement may be terminated by the Fund at
any time, without the payment of a penalty, on sixty days' written notice to
the Investment Manager of the
-3-
<PAGE>
Fund's intention to do so, pursuant to action by the Board of Directors of the
Fund or pursuant to vote of a majority of the outstanding voting securities of
the Portfolio. The Investment Manager may terminate this Agreement at any
time, without the payment of penalty, on sixty days' written notice to the
Fund of its intention to do so. Upon termination of this Agreement, the
obligations of all the parties hereunder shall cease and terminate as of the
date of such termination, except for any obligation to respond for a breach of
this Agreement committed prior to such termination, and except for the
obligation of the Fund to pay to the Investment Manager the fee provided in
paragraph 4 hereof, prorated to the date of termination. This Agreement shall
automatically terminate in the event of its assignment.
9. This Agreement shall extend to and bind the heirs, executors,
administrators and successors of the parties hereto.
10. For the purposes of this Agreement, the terms "vote of a majority
of the outstanding voting securities;" "interested persons;" and "assignment"
shall have the meanings defined in the Investment Company Act of 1940.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement by having it signed by their duly authorized officers as of the ____
day of _______________, 199_.
DELAWARE POOLED TRUST, INC. DELAWARE MANAGEMENT COMPANY, a series of
for THE SMALL-CAP GROWTH Delaware Management Business Trust
EQUITY PORTFOLIO
By: By:
Name: Name:
Title: Title:
Attest: Attest:
Name: Name:
Title: Title:
-4-
<PAGE>
FORM A
INVESTMENT MANAGEMENT AGREEMENT
SUBJECT TO BOARD APPROVAL
EX-99.B5A11
Exhibit 24(b)(5)(a)(11)
DELAWARE POOLED TRUST, INC.
THE GROWTH AND INCOME PORTFOLIO
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT, made by and between DELAWARE POOLED TRUST, INC. (the
"Fund"), a Maryland corporation, for The Growth and Income Portfolio (the
"Portfolio"), and DELAWARE MANAGEMENT COMPANY (the "Investment Manager"), a
series of Delaware Management Business Trust, a Delaware business trust.
W I T N E S S E T H:
WHEREAS, the Fund has been organized and operates as an investment
company registered under the Investment Company Act of 1940 and engages in the
business of investing and reinvesting its assets in securities; and
WHEREAS, the Investment Manager is a registered Investment Adviser
under the Investment Advisers Act of 1940 and engages in the business of
providing investment management services; and
WHEREAS, the Investment Manager serves as the investment manager for
other portfolios of the Fund, and the Fund desires to retain the Investment
Manager to serve as the investment manager for this Portfolio effective as of
the date of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and each of the parties hereto intending to be legally bound, it is
agreed as follows:
1. The Fund hereby employs the Investment Manager to manage the
investment and reinvestment of the Portfolio's assets and to administer its
affairs, subject to the direction of the Board and officers of the Fund for
the period and on the terms hereinafter set forth. The Investment Manager
hereby accepts such employment and agrees during such period to render the
services and assume the obligations herein set forth for the compensation
herein provided. The Investment Manager shall, for all purposes herein, be
deemed to be an independent contractor, shall not in any way be deemed an
agent of the Fund and shall, unless otherwise expressly provided and
authorized, have no authority to act for or represent the Fund in any way. The
Investment Manager shall regularly make decisions as to what securities to
purchase and sell on behalf of the Portfolio, and shall give written
instructions to the Trading Department maintained by the Fund for
implementation of such decisions, and shall furnish the Board of
<PAGE>
Directors of the Fund with such information and reports regarding the
Portfolio's investments as the Investment Manager deems appropriate or as the
Directors of the Fund may reasonably request.
2. The Fund shall conduct its own business and affairs and shall
bear the expenses and salaries necessary and incidental thereto including, but
not in limitation of the foregoing, the costs incurred in: the maintenance of
its corporate existence; the maintenance of its own books, records and
procedures; dealing with its own shareholders; the payment of dividends;
transfer of stock, including issuance, redemption and repurchase of shares;
preparation of share certificates; reports and notices to shareholders;
calling and holding of shareholders' meetings; miscellaneous office expenses;
brokerage commissions; custodian fees; legal and accounting fees; taxes; and
federal and state registration fees. The Portfolio shall bear all of its own
organizational costs.
Directors, officers and employees of the Investment Manager
may be directors, officers and employees of the funds of which Delaware
Management Company, Inc. is Investment Manager. Directors, officers and
employees of the Investment Manager who are directors, officers and/or
employees of the funds shall not receive any compensation from the funds for
acting in such dual capacity.
In the conduct of the respective businesses of the parties
hereto and in the performance of this Agreement, the Fund and Investment
Manager may share facilities common to each, with appropriate proration of
expenses between them.
3. (a) The Fund shall place and execute its own orders for the
purchase and sale of portfolio securities with broker/dealers. Subject to the
primary objective of obtaining the best available prices and execution, the
Fund will place orders for the purchase and sale of portfolio securities with
such broker/dealers selected from among those designated from time to time by
the Investment Manager, who provide statistical, factual and financial
information and services to the Fund, to the Investment Manager, or to any
other fund for which the Investment Manager provides investment advisory
services and/or with broker/dealers who sell shares of the Fund or who sell
shares of any other fund for which the Investment Manager provides investment
advisory services. Broker/dealers who sell shares of the funds of which
Delaware Management Company, Inc. is investment manager, shall only receive
orders for the purchase or sale of portfolio securities to the extent that the
placing of such orders is in compliance with the Rules of the Securities and
Exchange Commission and the National Association of Securities Dealers, Inc.
(b) Notwithstanding the provisions of subparagraph (a) above
and subject to such policies and procedures as may be adopted by the Board of
Directors and officers of the Fund, the Investment Manager may ask the Fund,
and the Fund may agree, to pay a member of an exchange, broker or dealer an
amount of commission for effecting a securities transaction in excess of the
amount of commission another member of an exchange, broker or dealer would
have charged for effecting that transaction, in such instances where it, and
the Investment Manager, have determined in good faith that such amount of
commission was reasonable in
-2-
<PAGE>
relation to the value of the brokerage and research services provided by such
member, broker or dealer, viewed in terms of either that particular
transaction or the Investment Manager's overall responsibilities with respect
to the Fund and to other funds or other advisory accounts for which the
Investment Manager exercises investment discretion.
4. As compensation for the services to be rendered to the Fund
by the Investment Manager under the provisions of this Agreement, the Fund
shall pay to the Investment Manager a fee calculated in accordance with the
following schedule: ____
If this Agreement is terminated prior to the end of any
calendar month, the management fee shall be prorated for the portion of any
month in which this Agreement is in effect according to the proportion which
the number of calendar days during which the Agreement is in effect bears to
the number of calendar days in the month, and shall be payable within 10 days
after the date of termination.
5. The services to be rendered by the Investment Manager to the
Fund under the provisions of this Agreement are not to be deemed to be
exclusive, and the Investment Manager shall be free to render similar or
different services to others so long as its ability to render the services
provided for in this Agreement shall not be impaired thereby.
6. The Investment Manager, its directors, officers, employees,
agents and shareholders may engage in other businesses, may render investment
advisory services to other investment companies, or to any other corporation,
association, firm or individual, and may render underwriting services to the
Fund or to any other investment company, corporation, association, firm or
individual.
7. In the absence of willful misfeasance, bad faith, gross
negligence, or a reckless disregard of the performance of duties of the
Investment Manager to the Fund, the Investment Manager shall not be subject to
liabilities to the Fund or to any shareholder of the Fund for any action or
omission in the course of, or connected with, rendering services hereunder or
for any losses that may be sustained in the purchase, holding or sale of any
security, or otherwise.
8. This Agreement shall be executed and become effective as of
the date written below [if approved by the vote of a majority of the
outstanding voting securities of the Portfolio]. It shall continue in effect
for a period of two years from such date and may be renewed thereafter only so
long as such renewal and continuance is specifically approved at least
annually by the Board of Directors of the Fund or by vote of a majority of the
outstanding voting securities of the Portfolio and only if the terms and the
renewal hereof have been approved by the vote of a majority of the Directors
of the Fund who are not parties hereto or interested persons of any such
party, cast in person at a meeting called for the purpose of voting on such
approval. Notwithstanding the foregoing, this Agreement may be terminated by
the Fund at any time, without the payment of a penalty, on sixty days' written
notice to the Investment Manager of the Fund's intention to do so, pursuant to
action by the Board of Directors of the Fund or pursuant to
-3-
<PAGE>
vote of a majority of the outstanding voting securities of the Portfolio. The
Investment Manager may terminate this Agreement at any time, without the
payment of penalty, on sixty days' written notice to the Fund of its intention
to do so. Upon termination of this Agreement, the obligations of all the
parties hereunder shall cease and terminate as of the date of such
termination, except for any obligation to respond for a breach of this
Agreement committed prior to such termination, and except for the obligation
of the Fund to pay to the Investment Manager the fee provided in paragraph 4
hereof, prorated to the date of termination. This Agreement shall
automatically terminate in the event of its assignment.
9. This Agreement shall extend to and bind the heirs,
executors, administrators and successors of the parties hereto.
10. For the purposes of this Agreement, the terms "vote of a
majority of the outstanding voting securities;" "interested persons;" and
"assignment" shall have the meanings defined in the Investment Company Act of
1940.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement by having it signed by their duly authorized officers as of the ____
day of _______________, 199_.
DELAWARE POOLED TRUST, INC. DELAWARE MANAGEMENT COMPANY, a
for THE GROWTH AND INCOME series of Delaware Management Business Trust
PORTFOLIO
By: By:
Name: Name:
Title: Title:
Attest: Attest:
Name: Name:
Title: Title:
-4-
<PAGE>
Form
Subject to Board Approval
EX-99.B6AIX
Exhibit 24(b)(6)(a)(ix)
DELAWARE POOLED TRUST, INC.
THE SMALL-CAP GROWTH EQUITY PORTFOLIO
DISTRIBUTION AGREEMENT
Agreement made as of this day of , 199 by and between DELAWARE
POOLED TRUST, INC., a Maryland corporation (the "Fund") for The Small-Cap Growth
Equity Portfolio (the "Portfolio"), and DELAWARE DISTRIBUTORS, L.P. (the
"Distributor"), a Delaware limited partnership.
WITNESSETH
----------
WHEREAS, the Fund is a series investment company regulated by Federal
and State regulatory bodies, and
WHEREAS, the Distributor is engaged in the business of promoting the
distribution of the securities of investment companies and, in connection
therewith and acting solely as agent for such investment companies and not as
principal, advertising, promoting, offering and selling their securities to
the public, and
WHEREAS, the Fund desires to distribute its Portfolio securities
(collectively, the "shares") with the assistance of the Distributor as
underwriter,
NOW, THEREFORE, the parties hereto, intending to be legally
bound hereby, agree as follows:
1. The Fund hereby engages the Distributor to promote the
distribution of Portfolio shares and, in connection
therewith and as agent for the Fund and not as principal, to
advertise, promote, offer and sell Portfolio shares to the
classes of investors described in the Portfolio's
Prospectus, as such may be amended from time to time.
2. The Distributor agrees to serve as distributor of Portfolio
shares and, as agent for the Fund and not as principal, to
advertise, promote and use its best efforts to sell
Portfolio shares wherever their sale is legal, either
through dealers or otherwise, in such manner, not
inconsistent with the law and the provisions of this
Agreement and the Fund's Registration Statement under the
Securities Act of 1933 and the Prospectus contained therein
as may be determined by the Fund from time to time. The
Distributor will bear all costs of financing any activity
which is primarily intended to result in the sale of
Portfolio shares, including, but not necessarily limited to,
advertising, compensation of underwriters, dealers and sales
personnel, the printing and mailing of sales literature and
distribution of Portfolio shares.
<PAGE>
3. (a) The Fund agrees to make available for sale by
the Fund through the Distributor all or such part
of the authorized but unissued Portfolio shares as
the Distributor shall require from time to time,
all subject to the further provisions of this
Agreement, and except with the Distributor's
written consent or as provided in Paragraph 3(b)
hereof, it will not sell Portfolio shares other
than through the efforts of the Distributor.
(b) The Fund reserves the right from time to time
(1) to sell and issue shares other than for cash;
(2) to issue shares in exchange for substantially all
of the assets of any corporation or trust, or in
exchange for shares of any corporation or trust;
(3) to pay stock dividends to its shareholders, or
to pay dividends in cash or stock at the option of
its shareholders, or to sell stock to existing
shareholders to the extent of dividends payable
from time to time in cash, or to split up or
combine its outstanding shares of common stock;
(4) to offer shares for cash to its shareholders as
a whole, by the use of transferable rights or
otherwise, and to sell and issue shares pursuant to
such offers; and (5) to act as its own distributor
in any jurisdiction where the Distributor is not
registered as a broker-dealer.
4. The Fund warrants the following:
(a) The Fund is, or will be, a properly registered
investment company, and any and all Portfolio
shares which it will sell through the Distributor
are, or will be, properly registered with the
Securities and Exchange Commission ("SEC").
(b) The provisions of this Agreement do not violate the
terms of any instrument by which the Fund is bound,
nor do they violate any law or regulation of any
body having jurisdiction over the Fund or its
property.
5. (a) The Fund will supply to the Distributor a
conformed copy of the Registration Statement, all
amendments thereto, all exhibits, and each
Prospectus.
(b) The Fund will register or qualify Portfolio shares
for sales in such states as is deemed desirable.
(c) The Fund, without expense to the Distributor,
(1) will give and continue to give such
financial statements and other information
as may be required by the SEC or the
proper public bodies of the states in
which the shares may be qualified;
(2) from time to time, will furnish the
Distributor as soon as reasonably
practicable the following information:
(a) true copies of its periodic reports to
shareholders, and unaudited quarterly
balance sheets and income statements for
the period from the beginning of the then
current fiscal year to such balance sheet
dates; and (b) a profit and loss statement
and a balance sheet at the end of each
fiscal half year accompanied by a copy of
the certificate or report thereon of an
independent public
- 2 -
<PAGE>
accountant (who may be the regular
accountant for the Fund), provided that in
lieu of furnishing at the end of any
fiscal half year a statement of profit and
loss and a balance sheet certified by an
independent public accountant as above
required, the Fund may furnish a true copy
of its detailed semi-annual report to its
shareholders;
(3) will promptly advise the Distributor in
person or by telephone or telegraph, and
promptly confirm such advice in writing,
(a) when any amendment or supplement to
the Registration Statement becomes
effective, (b) of any request by the SEC
for amendments or supplements to the
Registration Statement or the Prospectus
or for additional information, and (c) of
the issuance by the SEC of any Stop Order
suspending the effectiveness of the
Registration Statement, or the initiation
of any proceedings for that purpose;
(4) if at any time the SEC shall issue any
Stop Order suspending the effectiveness of
the Registration Statement, will make
every reasonable effort to obtain the
lifting of such order at the earliest
possible moment;
(5) will from time to time, use its best
efforts to keep a sufficient supply of
Portfolio shares authorized, any increases
being subject to the approval of
shareholders, as may be required;
(6) before filing any further amendment to the
Registration Statement or to the
Prospectus, will furnish the Distributor
copies of the proposed amendment and will
not, at any time, whether before or after
the effective date of the Registration
Statement, file any amendment to the
Registration Statement or supplement to
the Prospectus of which the Distributor
shall not previously have been advised or
to which the Distributor shall reasonably
object (based upon the accuracy or
completeness thereof) in writing;
(7) will continue to make available to its
shareholders (and forward copies to the
Distributor) such periodic, interim and
any other reports as are now, or as
hereafter may be, required by the
provisions of the Investment Company Act
of 1940; and
(8) will, for the purpose of computing the
offering price of Portfolio shares, advise
the Distributor within one hour after the
close of the New York Stock Exchange (or
as soon as practicable thereafter) on each
business day upon which the New York Stock
Exchange may be open of the net asset
value per share of Portfolio shares of
common stock outstanding, determined in
accordance with any applicable provisions
of law and the provisions of the Articles
of Incorporation, as amended, of the Fund
as of the close of business on such
business day. In the event that prices are
to be calculated more than once daily, the
Fund will promptly advise the
- 3 -
<PAGE>
Distributor of the time of each
calculation and the price computed at each
such time.
6. The Distributor agrees to submit to the Fund, prior to its
use, the form of all sales literature proposed to be
generally disseminated by or for the Distributor on behalf
of the Fund, all advertisements proposed to be used by the
Distributor, and all sales literature or advertisements
prepared by or for the Distributor for such dissemination or
for use by others in connection with the sale of Portfolio
shares. The Distributor also agrees that the Distributor
will submit such sales literature and advertisements to the
NASD, SEC or other regulatory agency as from time to time
may be appropriate, considering practices then current in
the industry. The Distributor agrees not to use or to permit
others to use such sales literature or advertisements
without the written consent of the Fund if any regulatory
agency expresses objection thereto or if the Fund delivers
to the Distributor a written objection thereto.
7. The purchase price of each share sold hereunder shall be the
net asset value per share of Portfolio shares outstanding,
determined by the Fund in accordance with any applicable
provision of law, the provisions of its Articles of
Incorporation and the Conduct Rules of the National
Association of Securities Dealers, Inc.
8. The responsibility of the Distributor hereunder shall be
limited to the promotion of sales of Portfolio shares. The
Distributor shall undertake to promote such sales solely as
agent of the Fund, and shall not purchase or sell such
shares as principal. Orders for Portfolio shares and payment
for such orders shall be directed to the Fund for acceptance
or to the Fund's agent, Delaware Service Company, Inc.
("DSC") for acceptance on behalf of the Fund. The
Distributor is not empowered to approve orders for sales of
Portfolio shares or accept payment for such orders. Sales of
Portfolio shares shall be deemed to be made when and where
accepted by the Fund or by DSC on behalf of the Fund.
9. With respect to the apportionment of costs between the Fund
and the Distributor of activities with which both are
concerned, the following will apply:
(a) The Fund and the Distributor will cooperate in
preparing the Registration Statements, the
Prospectus, and all amendments, supplements and
replacements thereto. The Fund will pay all costs
incurred in the preparation of the Fund's
registration statement, including typesetting, the
costs incurred in printing and mailing prospectuses
to its own shareholders and fees and expenses of
counsel and accountants.
(b) The Distributor will pay the costs incurred in
printing and mailing copies of prospectuses to
prospective investors.
(c) The Distributor will pay advertising and
promotional expenses, including the costs of
literature sent to prospective investors.
(d) The Fund will pay the costs and fees incurred in
registering Portfolio shares with the various
states and with the SEC.
- 4 -
<PAGE>
(e) The Distributor will pay the costs of any
additional copies of the Fund reports and other
Fund literature supplied to the Distributor by the
Fund for sales promotion purposes.
10. The Distributor may engage in other business, provided such
other business does not interfere with the performance by
the Distributor of its obligations under this Agreement. The
Distributor may serve as distributor for and promote the
distribution of and sell and offer for sale the securities
of other investment companies.
11. The Fund agrees to indemnify, defend and hold harmless from
the assets of the Portfolio, the Distributor and each
person, if any, who controls the Distributor within the
meaning of Section 15 of the Securities Act of 1933, from
and against any and all losses, damages, or liabilities to
which, jointly or severally, the Distributor or such
controlling person may become subject, insofar as the
losses, damages or liabilities arise out of the performance
of its duties hereunder, except that the Fund shall not be
liable for indemnification of the Distributor or any
controlling person thereof for any liability to the Fund or
its security holders to which they would otherwise be
subject by reason of willful misfeasance, bad faith, or
gross negligence in the performance of their duties
hereunder or by reason of their reckless disregard of their
obligations and duties under this Agreement.
12. Copies of financial reports, registration statements and
prospectuses, as well as demands, notices, requests,
consents, waivers, and other communications in writing which
it may be necessary or desirable for either party to deliver
or furnish to the other will be duly delivered or furnished,
if delivered to such party at its address shown below during
regular business hours, or if sent to that party by
registered mail or by prepaid telegram filed with an office
or with an agent of Western Union, in all cases within the
time or times herein prescribed, addressed to the recipient
at 1818 Market Street, Philadelphia, Pennsylvania 19103, or
at such other address as the Fund or the Distributor may
designate in writing and furnish to the other.
13. This Agreement shall not be assigned, as that term is
defined in the Investment Company Act of 1940, by the
Distributor and shall terminate automatically in the event
of its attempted assignment by the Distributor. This
Agreement shall not be assigned by the Fund without the
written consent of the Distributor signed by its duly
authorized officers and delivered to the Fund. Except as
specifically provided in the indemnification provisions
contained in Paragraph 11 hereof, this Agreement and all
conditions and provisions hereof are for the sole and
exclusive benefit of the parties hereto and their legal
successors and no express or implied provision of this
Agreement is intended or shall be construed to give any
person other than the parties hereto and their legal
successors, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provisions
herein contained. The Distributor shall look only to the
assets of the Portfolio to meet the obligations of, or
claims against, the Fund under this Agreement and not to the
holder of any share of the Fund.
14. (a) This Agreement shall remain in force for a
period of two years from the date of this Agreement
and from year to year thereafter, but only so long
as such continuance is specifically approved at
least annually by the Board of Directors
- 5 -
<PAGE>
or by vote of a majority of the outstanding voting
securities of the Portfolio and only if the terms
and the renewal thereof have been approved by the
vote of a majority of the Directors of the Fund,
who are not parties hereto or interested persons of
any such party, cast in person at a meeting called
for the purpose of voting on such approval.
(b) The Distributor may terminate this Agreement on
written notice to the Fund at any time in case the
effectiveness of the Registration Statement shall
be suspended, or in case Stop Order proceedings are
initiated by the SEC in respect of the Registration
Statement and such proceedings are not withdrawn or
terminated within thirty days. The Distributor may
also terminate this Agreement at any time by giving
the Fund written notice of its intention to
terminate it at the expiration of three months from
the date of delivery of such written notice of
intention to the Fund.
(c) The Fund may terminate this Agreement at any time
on at least thirty days prior written notice to the
Distributor (1) if proceedings are commenced by the
Distributor or any of its partners for the
Distributor's liquidation or dissolution or the
winding up of the Distributor's affairs; (2) if a
receiver or trustee of the Distributor or any of
its property is appointed and such appointment is
not vacated within thirty days thereafter; (3) if,
due to any action by or before any court or any
federal or state commission, regulatory body, or
administrative agency or other governmental body,
the Distributor shall be prevented from selling
securities in the United States or because of any
action or conduct on the Distributor's part, sales
of Portfolio shares are not qualified for sale. The
Fund may also terminate this Agreement at any time
upon prior written notice to the Distributor of its
intention to so terminate at the expiration of
three months from the date of the delivery of such
written notice to the Distributor.
15. The validity, interpretation and construction of this
Agreement, and of each part hereof, will be governed by the
laws of the Commonwealth of Pennsylvania.
- 6 -
<PAGE>
16. In the event any provision of this Agreement is determined
to be void or unenforceable, such determination shall not
affect the remainder of the Agreement, which shall continue
to be in force.
DELAWARE DISTRIBUTORS, L.P.
By: DELAWARE DISTRIBUTORS, INC.,
General Partner
Attest:
____________________________ By:________________________________
Name: Name:
Title: Title:
DELAWARE POOLED TRUST, INC.
for THE SMALL-CAP GROWTH EQUITY
PORTFOLIO
Attest:
___________________________ By:________________________________
Name: Name:
Title: Title:
- 7 -
<PAGE>
Form
Subject to Board Approval
EX-99.B6AX
Exhibit 24(b)(6)(a)(x)
DELAWARE POOLED TRUST, INC.
THE GROWTH AND INCOME PORTFOLIO
DISTRIBUTION AGREEMENT
Agreement made as of this day of , 199 by and between DELAWARE
POOLED TRUST, INC., a Maryland corporation (the "Fund") for The Growth and
Income Portfolio (the "Portfolio"), and DELAWARE DISTRIBUTORS, L.P. (the
"Distributor"), a Delaware limited partnership.
WITNESSETH
----------
WHEREAS, the Fund is a series investment company regulated by Federal
and State regulatory bodies, and
WHEREAS, the Distributor is engaged in the business of promoting the
distribution of the securities of investment companies and, in connection
therewith and acting solely as agent for such investment companies and not as
principal, advertising, promoting, offering and selling their securities to
the public, and
WHEREAS, the Fund desires to distribute its Portfolio securities
(collectively, the "shares") with the assistance of the Distributor as
underwriter,
NOW, THEREFORE, the parties hereto, intending to be legally
bound hereby, agree as follows:
1. The Fund hereby engages the Distributor to promote the
distribution of Portfolio shares and, in connection
therewith and as agent for the Fund and not as principal, to
advertise, promote, offer and sell Portfolio shares to the
classes of investors described in the Portfolio's
Prospectus, as such may be amended from time to time.
2. The Distributor agrees to serve as distributor of Portfolio
shares and, as agent for the Fund and not as principal, to
advertise, promote and use its best efforts to sell Portfolio
shares wherever their sale is legal, either through dealers or
otherwise, in such manner, not inconsistent with the law and
the provisions of this Agreement and the Fund's Registration
Statement under the Securities Act of 1933 and the Prospectus
contained therein as may be determined by the Fund from time
to time. The Distributor will bear all costs of financing any
activity which is primarily intended to result in the sale of
Portfolio shares, including, but not necessarily limited to,
advertising, compensation of underwriters, dealers and sales
personnel, the printing and mailing of sales literature and
distribution of Portfolio shares.
- 1 -
<PAGE>
3. (a) The Fund agrees to make available for sale by
the Fund through the Distributor all or such part
of the authorized but unissued Portfolio shares as
the Distributor shall require from time to time,
all subject to the further provisions of this
Agreement, and except with the Distributor's
written consent or as provided in Paragraph 3(b)
hereof, it will not sell Portfolio shares other
than through the efforts of the Distributor.
(b) The Fund reserves the right from time to time
(1) to sell and issue shares other than for cash;
(2) to issue shares in exchange for substantially
all of the assets of any corporation or trust, or
in exchange for shares of any corporation or trust;
(3) to pay stock dividends to its shareholders, or
to pay dividends in cash or stock at the option of
its shareholders, or to sell stock to existing
shareholders to the extent of dividends payable
from time to time in cash, or to split up or
combine its outstanding shares of common stock;
(4) to offer shares for cash to its shareholders as
a whole, by the use of transferable rights or
otherwise, and to sell and issue shares pursuant to
such offers; and (5) to act as its own distributor
in any jurisdiction where the Distributor is not
registered as a broker-dealer.
4. The Fund warrants the following:
(a) The Fund is, or will be, a properly registered
investment company, and any and all Portfolio
shares which it will sell through the Distributor
are, or will be, properly registered with the
Securities and Exchange Commission ("SEC").
(b) The provisions of this Agreement do not violate the
terms of any instrument by which the Fund is bound,
nor do they violate any law or regulation of any
body having jurisdiction over the Fund or its
property.
5. (a) The Fund will supply to the Distributor a conformed
copy of the Registration Statement, all amendments
thereto, all exhibits, and each Prospectus.
(b) The Fund will register or qualify Portfolio shares
for sales in such states as is deemed desirable.
(c) The Fund, without expense to the Distributor,
(1) will give and continue to give such
financial statements and other information
as may be required by the SEC or the
proper public bodies of the states in
which the shares may be qualified;
(2) from time to time, will furnish the
Distributor as soon as reasonably
practicable the following information:
(a) true copies of its periodic reports to
shareholders, and unaudited quarterly
balance sheets and income statements for
the period from the beginning of the then
current fiscal year to such balance sheet
dates; and (b) a profit and loss statement
and a balance sheet at the end of each
fiscal half year accompanied by a copy of
the certificate or report thereon of an
independent public
- 2 -
<PAGE>
accountant (who may be the regular
accountant for the Fund), provided that in
lieu of furnishing at the end of any
fiscal half year a statement of profit and
loss and a balance sheet certified by an
independent public accountant as above
required, the Fund may furnish a true copy
of its detailed semi-annual report to its
shareholders;
(3) will promptly advise the Distributor in
person or by telephone or telegraph, and
promptly confirm such advice in writing,
(a) when any amendment or supplement to
the Registration Statement becomes
effective, (b) of any request by the SEC
for amendments or supplements to the
Registration Statement or the Prospectus
or for additional information, and (c) of
the issuance by the SEC of any Stop Order
suspending the effectiveness of the
Registration Statement, or the initiation
of any proceedings for that purpose;
(4) if at any time the SEC shall issue any
Stop Order suspending the effectiveness of
the Registration Statement, will make
every reasonable effort to obtain the
lifting of such order at the earliest
possible moment;
(5) will from time to time, use its best
efforts to keep a sufficient supply of
Portfolio shares authorized, any increases
being subject to the approval of
shareholders, as may be required;
(6) before filing any further amendment to the
Registration Statement or to the
Prospectus, will furnish the Distributor
copies of the proposed amendment and will
not, at any time, whether before or after
the effective date of the Registration
Statement, file any amendment to the
Registration Statement or supplement to
the Prospectus of which the Distributor
shall not previously have been advised or
to which the Distributor shall reasonably
object (based upon the accuracy or
completeness thereof) in writing;
(7) will continue to make available to its
shareholders (and forward copies to the
Distributor) such periodic, interim and
any other reports as are now, or as
hereafter may be, required by the
provisions of the Investment Company Act
of 1940; and
(8) will, for the purpose of computing the
offering price of Portfolio shares, advise
the Distributor within one hour after the
close of the New York Stock Exchange (or
as soon as practicable thereafter) on each
business day upon which the New York Stock
Exchange may be open of the net asset
value per share of Portfolio shares of
common stock outstanding, determined in
accordance with any applicable provisions
of law and the provisions of the Articles
of Incorporation, as amended, of the Fund
as of the close of business on such
business day. In the event that prices are
to be calculated more than once daily, the
Fund will promptly advise the
- 3 -
<PAGE>
Distributor of the time of each
calculation and the price computed at each
such time.
6. The Distributor agrees to submit to the Fund, prior to its
use, the form of all sales literature proposed to be
generally disseminated by or for the Distributor on behalf
of the Fund, all advertisements proposed to be used by the
Distributor, and all sales literature or advertisements
prepared by or for the Distributor for such dissemination or
for use by others in connection with the sale of Portfolio
shares. The Distributor also agrees that the Distributor
will submit such sales literature and advertisements to the
NASD, SEC or other regulatory agency as from time to time
may be appropriate, considering practices then current in
the industry. The Distributor agrees not to use or to permit
others to use such sales literature or advertisements
without the written consent of the Fund if any regulatory
agency expresses objection thereto or if the Fund delivers
to the Distributor a written objection thereto.
7. The purchase price of each share sold hereunder shall be the
net asset value per share of Portfolio shares outstanding,
determined by the Fund in accordance with any applicable
provision of law, the provisions of its Articles of
Incorporation and the Conduct Rules of the National
Association of Securities Dealers, Inc.
8. The responsibility of the Distributor hereunder shall be
limited to the promotion of sales of Portfolio shares. The
Distributor shall undertake to promote such sales solely as
agent of the Fund, and shall not purchase or sell such
shares as principal. Orders for Portfolio shares and payment
for such orders shall be directed to the Fund for acceptance
or to the Fund's agent, Delaware Service Company, Inc.
("DSC") for acceptance on behalf of the Fund. The
Distributor is not empowered to approve orders for sales of
Portfolio shares or accept payment for such orders. Sales of
Portfolio shares shall be deemed to be made when and where
accepted by the Fund or by DSC on behalf of the Fund.
9. With respect to the apportionment of costs between the Fund
and the Distributor of activities with which both are
concerned, the following will apply:
(a) The Fund and the Distributor will cooperate in
preparing the Registration Statements, the
Prospectus, and all amendments, supplements and
replacements thereto. The Fund will pay all costs
incurred in the preparation of the Fund's
registration statement, including typesetting, the
costs incurred in printing and mailing prospectuses
to its own shareholders and fees and expenses of
counsel and accountants.
(b) The Distributor will pay the costs incurred in
printing and mailing copies of prospectuses to
prospective investors.
(c) The Distributor will pay advertising and
promotional expenses, including the costs of
literature sent to prospective investors.
(d) The Fund will pay the costs and fees incurred in
registering Portfolio shares with the various
states and with the SEC.
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<PAGE>
(e) The Distributor will pay the costs of any
additional copies of the Fund reports and other
Fund literature supplied to the Distributor by the
Fund for sales promotion purposes.
10. The Distributor may engage in other business, provided such
other business does not interfere with the performance by
the Distributor of its obligations under this Agreement. The
Distributor may serve as distributor for and promote the
distribution of and sell and offer for sale the securities
of other investment companies.
11. The Fund agrees to indemnify, defend and hold harmless from
the assets of the Portfolio, the Distributor and each
person, if any, who controls the Distributor within the
meaning of Section 15 of the Securities Act of 1933, from
and against any and all losses, damages, or liabilities to
which, jointly or severally, the Distributor or such
controlling person may become subject, insofar as the
losses, damages or liabilities arise out of the performance
of its duties hereunder, except that the Fund shall not be
liable for indemnification of the Distributor or any
controlling person thereof for any liability to the Fund or
its security holders to which they would otherwise be
subject by reason of willful misfeasance, bad faith, or
gross negligence in the performance of their duties
hereunder or by reason of their reckless disregard of their
obligations and duties under this Agreement.
12. Copies of financial reports, registration statements and
prospectuses, as well as demands, notices, requests,
consents, waivers, and other communications in writing which
it may be necessary or desirable for either party to deliver
or furnish to the other will be duly delivered or furnished,
if delivered to such party at its address shown below during
regular business hours, or if sent to that party by
registered mail or by prepaid telegram filed with an office
or with an agent of Western Union, in all cases within the
time or times herein prescribed, addressed to the recipient
at 1818 Market Street, Philadelphia, Pennsylvania 19103, or
at such other address as the Fund or the Distributor may
designate in writing and furnish to the other.
13. This Agreement shall not be assigned, as that term is defined
in the Investment Company Act of 1940, by the Distributor
and shall terminate automatically in the event of its
attempted assignment by the Distributor. This Agreement
shall not be assigned by the Fund without the written
consent of the Distributor signed by its duly authorized
officers and delivered to the Fund. Except as specifically
provided in the indemnification provisions contained in
Paragraph 11 hereof, this Agreement and all conditions and
provisions hereof are for the sole and exclusive benefit of
the parties hereto and their legal successors and no express
or implied provision of this Agreement is intended or shall
be construed to give any person other than the parties
hereto and their legal successors, any legal or equitable
right, remedy or claim under or in respect of this Agreement
or any provisions herein contained. The Distributor shall
look only to the assets of the Portfolio to meet the
obligations of, or claims against, the Fund under this
Agreement and not to the holder of any share of the Fund.
14. (a) This Agreement shall remain in force for a period of two
years from the date of this Agreement and from year to
year thereafter, but only so long as such continuance is
specifically approved at least annually by the Board of
Directors
- 5 -
<PAGE>
or by vote of a majority of the outstanding voting
securities of the Portfolio and only if the terms and
the renewal thereof have been approved by the vote of a
majority of the Directors of the Fund, who are not
parties hereto or interested persons of any such party,
cast in person at a meeting called for the purpose of
voting on such approval.
(b) The Distributor may terminate this Agreement on written
notice to the Fund at any time in case the effectiveness
of the Registration Statement shall be suspended, or in
case Stop Order proceedings are initiated by the SEC in
respect of the Registration Statement and such
proceedings are not withdrawn or terminated within
thirty days. The Distributor may also terminate this
Agreement at any time by giving the Fund written notice
of its intention to terminate it at the expiration of
three months from the date of delivery of such written
notice of intention to the Fund.
(c) The Fund may terminate this Agreement at any time on at
least thirty days prior written notice to the
Distributor (1) if proceedings are commenced by the
Distributor or any of its partners for the Distributor's
liquidation or dissolution or the winding up of the
Distributor's affairs; (2) if a receiver or trustee of
the Distributor or any of its property is appointed and
such appointment is not vacated within thirty days
thereafter; (3) if, due to any action by or before any
court or any federal or state commission, regulatory
body, or administrative agency or other governmental
body, the Distributor shall be prevented from selling
securities in the United States or because of any action
or conduct on the Distributor's part, sales of Portfolio
shares are not qualified for sale. The Fund may also
terminate this Agreement at any time upon prior written
notice to the Distributor of its intention to so
terminate at the expiration of three months from the
date of the delivery of such written notice to the
Distributor.
15. The validity, interpretation and construction of this
Agreement, and of each part hereof, will be governed by the
laws of the Commonwealth of Pennsylvania.
- 6 -
<PAGE>
16. In the event any provision of this Agreement is determined
to be void or unenforceable, such determination shall not
affect the remainder of the Agreement, which shall continue
to be in force.
DELAWARE DISTRIBUTORS, L.P.
By: DELAWARE DISTRIBUTORS, INC.,
General Partner
Attest:
____________________________ By:_________________________________
Name: Name:
Title: Title:
DELAWARE POOLED TRUST, INC.
for THE GROWTH AND INCOME PORTFOLIO
Attest:
___________________________ By:________________________________
Name: Name:
Title: Title:
- 7 -
<PAGE>
EX-99.B8I
Exhibit 24(b)(8)(I)
As of April 14, 1997
VIA UPS OVERNIGHT
- - -----------------
The Chase Manhattan Bank
4 Chase MetroTech Center
Brooklyn, New York 11245
Attention: Global Custody Division
Re: Global Custody Agreement, Effective May 1, 1996
between The Chase Manhattan Bank and those registered
investment companies (and on behalf of certain series
thereof), listed on Schedule A attached thereto
("Agreement")
-----------------------------------------------------------------------
Ladies and Gentlemen:
Pursuant to the provisions of Section 1 of the Agreement, the undersigned, on
behalf of Delaware Pooled Trust, Inc. for the benefit of The Emerging Markets
Portfolio ("Portfolio")hereby appoints The Chase Manhattan Bank to provide
custodial services for the Portfolio under and in accordance with the terms of
the Agreement and accordingly, requests that the Portfolio be added to
Schedule A to the Agreement effective April 14, 1997. Kindly acknowledge your
agreement to provide such services and to add the Portfolio to Schedule A by
signing in the space provided below.
DELAWARE POOLED TRUST, INC.
on behalf of The Emerging
Markets Portfolio
/s/David K. Downes
By:_________________________________
David K. Downes
Its: Executive Vice President
Chief Operating Officer
Chief Financial Officer
AGREED:
/s/Rosemary M. Stidmon
By:__________________________
Rosemary M. Stidmon, Vice President
Its:_________________________
<PAGE>
EX-99.B8J
Exhibit 24(b)(8)(J)
As of October 14, 1997
VIA UPS OVERNIGHT
- - -----------------
The Chase Manhattan Bank
4 Chase MetroTech Center
Brooklyn, New York 11245
Attention: Global Custody Division
Re: Global Custody Agreement, Effective May 1, 1996
between The Chase Manhattan Bank and those registered
investment companies (and on behalf of certain series
thereof), listed on Schedule A attached thereto
("Agreement")
-----------------------------------------------------------------------
Ladies and Gentlemen:
Pursuant to the provisions of Section 1 of the Agreement, the undersigned, on
behalf of Delaware Pooled Trust, Inc. for the benefit of The Real Estate
Investment Trust Portfolio II and The Global Equity Portfolio (each a
"Portfolio") hereby appoints The Chase Manhattan Bank to provide custodial
services for each of these two Portfolios under and in accordance with the
terms of the Agreement and accordingly, requests that the Portfolios be added
to Schedule A to the Agreement effective October 14, 1997. Kindly acknowledge
your agreement to provide such services and to add the Portfolios to Schedule
A by signing in the space provided below.
DELAWARE POOLED TRUST, INC.
on behalf of The Real Estate
Investment Trust Portfolio II and
The Global Equity Portfolio
/s/David K. Downes
By:_________________________________
David K. Downes
Its: Executive Vice President
Chief Operating Officer
Chief Financial Officer
AGREED:
THE CHASE MANHATTAN BANK
/s/Rosemary M. Stidmon
By:__________________________
Rosemary M. Stidmon, Vice President
Its:_________________________
<PAGE>
EX-99.B8K
Exhibit 24(b)(8)(K)
As of December 24, 1997
VIA UPS OVERNIGHT
- - -----------------
The Chase Manhattan Bank
4 Chase MetroTech Center
Brooklyn, New York 11245
Attention: Global Custody Division
Re: Global Custody Agreement, Effective May 1, 1996
between The Chase Manhattan Bank and those registered
investment companies (and on behalf of certain series
thereof), listed on Schedule A attached thereto
("Agreement")
-----------------------------------------------------------------------
Ladies and Gentlemen:
Pursuant to the provisions of Section 1 of the Agreement, the undersigned, on
behalf of Delaware Pooled Trust, Inc. for the benefit of The Aggregate Fixed
Income Portfolio and The Diversified Core Fixed Income Portfolio (each a
"Portfolio") hereby appoints The Chase Manhattan Bank to provide custodial
services for two Portfolios under and in accordance with the terms of the
Agreement and accordingly, requests that the Portfolios be added to Schedule A
to the Agreement effective December 24, 1997. Kindly acknowledge your
agreement to provide such services and to add these Portfolios to Schedule A
by signing in the space provided below.
DELAWARE POOLED TRUST, INC.
on behalf of The Aggregate Fixed Income
Portfolio and The Diversified Core Fixed
Income Portfolio
/s/David K. Downes
By:_________________________________
David K. Downes
Its: Executive Vice President
Chief Operating Officer
Chief Financial Officer
AGREED:
THE CHASE MANHATTAN BANK
/s/Rosemary M. Stidmon
By:__________________________
Rosemary M. Stidmon, Vice President
Its:_________________________
<PAGE>
EX-99.B8L
Exhibit 24(b)(8)(L)
As of August , 1998
VIA UPS OVERNIGHT
- - -----------------
The Chase Manhattan Bank
4 Chase MetroTech Center
Brooklyn, New York 11245
Attention: Global Custody Division
Re: Global Custody Agreement, Effective May 1, 1996
between The Chase Manhattan Bank and those registered
investment companies (and on behalf of certain series
thereof), listed on Schedule A attached thereto
("Agreement")
-----------------------------------------------------------------------
Ladies and Gentlemen:
Pursuant to the provisions of Section 1 of the Agreement, the undersigned, on
behalf of Delaware Pooled Trust, Inc. for the benefit of The Small-Cap Growth
Equity Portfolio and The Growth and Income Portfolio (each a "Portfolio")
hereby appoints The Chase Manhattan Bank to provide custodial services for two
Portfolios under and in accordance with the terms of the Agreement and
accordingly, requests that the Portfolios be added to Schedule A to the
Agreement effective December 24, 1997. Kindly acknowledge your agreement to
provide such services and to add these Portfolios to Schedule A by signing in
the space provided below.
DELAWARE POOLED TRUST, INC.
on behalf of The ASmall-Cap Growth Equity
Portfolio and The Growth and Income Portfolio
By:_________________________________
David K. Downes
Its: Executive Vice President
Chief Operating Officer
Chief Financial Officer
AGREED:
THE CHASE MANHATTAN BANK
By:__________________________
Its:_________________________
<PAGE>
Form
Subject to Board Approval
EX-99.B9D
Exhibit 24(b)(9)(D)
DELAWARE POOLED TRUST, INC.
SEVENTH AMENDED AND RESTATED SHAREHOLDERS SERVICES AGREEMENT
THIS AGREEMENT, made as of this 24th day of December, 1997 by and
between DELAWARE POOLED TRUST, INC. (the "Fund"), a Maryland Corporation, for
THE AGGRESSIVE GROWTH PORTFOLIO, THE LARGE-CAP VALUE EQUITY PORTFOLIO, THE
SMALL/MID-CAP VALUE EQUITY PORTFOLIO, THE EMERGING MARKETS PORTFOLIO, THE
INTERMEDIATE FIXED INCOME PORTFOLIO, THE GLOBAL FIXED INCOME PORTFOLIO, THE
HIGH-YIELD BOND PORTFOLIO, THE INTERNATIONAL EQUITY PORTFOLIO, THE
INTERNATIONAL FIXED INCOME PORTFOLIO, THE LABOR SELECT INTERNATIONAL EQUITY
PORTFOLIO, THE LIMITED-TERM MATURITY PORTFOLIO, THE REAL ESTATE INVESTMENT
TRUST PORTFOLIO, THE REAL ESTATE INVESTMENT TRUST PORTFOLIO II, THE GLOBAL
EQUITY PORTFOLIO, THE AGGREGATE FIXED INCOME PORTFOLIO, THE DIVERSIFIED CORE
FIXED INCOME PORTFOLIO, THE SMALL-CAP GROWTH EQUITY PORTFOLIO and THE GROWTH
AND INCOME PORTFOLIO (individually, a "Portfolio" and collectively,
"Portfolios"), and DELAWARE SERVICE COMPANY, INC. ("DSC"), a Delaware
corporation.
W I T N E S S E T H:
WHEREAS, the Investment Management Agreements between the Fund on
behalf of the Portfolios and Delaware Management Company, Inc. and Delaware
International Advisers Ltd. provide that the Fund shall conduct its own
business and affairs and shall bear the expenses and salaries necessary and
incidental thereto including, but not in limitation of the foregoing, the
costs incurred in: the maintenance of its corporate existence; the maintenance
of its own books, records and procedures; dealing with its own shareholders;
the payment of dividends; transfer of stock, including issuance, redemption
and repurchase of shares; preparation of share certificates; reports and
notices to stockholders; calling and holding of stockholders' meetings;
miscellaneous office expenses; brokerage commissions; custodian fees; legal
and accounting fees; taxes; and federal and state registration fees;
WHEREAS, the Fund and DSC desire to have a written agreement
concerning the performance of the foregoing services and providing
compensation therefor; and
WHEREAS, the Fund and DSC previously consolidated and restated the
separate Shareholder Services Agreements dated November 12, 1991 for The
Large-Cap Value Equity Portfolio (formerly The Defensive Equity Portfolio),
The Aggressive Growth Portfolio, The International Equity Portfolio, The
Intermediate Fixed Income Portfolio (formerly The Fixed Income Portfolio) and
The Limited-Term Maturity Portfolio into a combined agreement including The
Global Fixed Income Portfolio; such
1
<PAGE>
Amended and Restated Shareholder Services Agreement was dated November 2, 1992
("1992 Agreement"); and
WHEREAS, the 1992 Agreement was amended on February 28, 1994 to
include The International Fixed Income Portfolio ("Second Amended and Restated
Agreement"); and
WHEREAS, the Second Amended and Restated Agreement was amended on
November 29, 1995, to include The Small/Mid-Cap Value Equity Portfolio
(formerly The Defensive Equity Small/Mid-Cap Portfolio), The Defensive Equity
Utility Portfolio, The High-Yield Bond Portfolio, The Labor Select
International Equity Portfolio and The Real Estate Investment Trust Portfolio
("Third Amended and Restated Agreement");
WHEREAS, the Third Amended and Restated Agreement was amended on
April 14, 1997 to include The Emerging Markets Portfolio ("Fourth Amended and
Restated Agreement");
WHEREAS, the Fund and DSC amended the Fourth Amended and Restated
Agreement on October 14, 1997 to modify the compensation schedule as it
applies to The Real Estate Investment Trust Portfolio, to reflect the
restructuring of that Portfolio to add retail classes of shares, to add The
Real Estate Investment Trust Portfolio II and The Global Equity Portfolio and
to reflect the deletion of The Defensive Equity Utility Portfolio, shares of
which were deregistered by action of the Fund's Board ("Fifth Amended and
Restated Agreement"); and
WHEREAS, the Fund and DSC wish to amend the Fifth Amended and
Restated Agreement to add The Diversified Core Fixed Income Portfolio and The
Aggregate Fixed Income Portfolio;
WHEREAS, the Fund and DSC wish to amend the sixth Amended and
Restated Agreement to add The Diversified Core Fixed Income Portfolio and The
Aggregate Fixed Income Portfolio;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth, and intending legally to be bound, it is agreed:
I. APPOINTMENT AS AGENT
1.1 The Fund hereby appoints DSC Shareholder Services Agent for the
Portfolios to provide as agent for the Fund services as Transfer Agent,
Dividend Disbursing Agent and Shareholder Servicing Agent and DSC hereby
accepts such appointment and agrees to provide the Fund, as its agent, the
services described herein.
1.2 The Fund shall pay DSC and DSC shall accept, for the services
provided hereunder, the compensation provided for in Section VIII hereof. The
Fund also shall reimburse DSC for expenses incurred or advanced by it for the
Fund in connection with its services hereunder.
II. DOCUMENTATION
2.1 The Fund represents that it has provided or made available to DSC
(or has given DSC an opportunity to examine) copies of, and DSC represents
that it has received from the Fund (or is otherwise familiar with), the
following documents:
2
<PAGE>
(a) The Articles of Incorporation or other documents
evidencing the Fund's form of organization and any current amendments or
supplements thereto.
(b) The By-Laws of the Fund;
(c) Any resolution or other action of the Fund or the Board
of Directors of the Fund establishing or affecting the rights, privileges or
other status of each class or series of shares of the Fund, including those
relating to the Portfolios or altering or abolishing each such class or
series;
(d) A certified copy of a resolution of the Board of
Directors of the Fund appointing DSC as Shareholder Services Agent for the
Portfolios and authorizing the execution of this Agreement;
(e) The forms of share certificates of the Portfolios in the
forms approved by the Board of Directors of the Fund;
(f) A copy of the Fund's currently effective Prospectuses
and Statement of Additional Information under the Securities Act of 1933, if
effective;
(g) Copies of all account application forms and other
documents relating to stockholder accounts in the Portfolios;
(h) Copies of documents relating to Plans of the Fund for
the purchase, sale or repurchase of its shares, including periodic payment or
withdrawal plans, reinvestment plans or retirement plans;
(i) Any opinion of counsel to the Fund relating to the
authorization and validity of the shares of the Portfolios issued or proposed
to be issued under the law of the State of the Fund's organization, including
the status thereof under any applicable securities laws;
(j) A certified copy of any resolution of the Board of
Directors of the Fund authorizing any person to give instructions to DSC under
this Agreement (with a specimen signature of such person if not already
provided), setting forth the scope of such authority; and
(k) Any amendment, revocation or other documents altering,
adding, qualifying or repealing any document or authority called for under
this Section 2.1.
2.2 The Fund and DSC may consult as to forms or documents that may be
required in performing services hereunder.
2.3 The Fund shall provide or make available to DSC a certified copy
of any resolution of the stockholders or the Board of Directors of the Fund
providing for a dividend, capital gains distribution, distribution of capital,
stock dividend, stock split or other similar action affecting the
authorization or issuance of shares of the Fund or the payment of dividends.
2.4 In the case of any recapitalization or other capital adjustment
requiring a change in the form of stock certificates or the books recording
the same, the Fund shall deliver or make available to DSC:
3
<PAGE>
(a) A certified copy of any document authorizing or
effecting such change;
(b) Written instructions from an authorized officer
implementing such change; and
(c) An opinion of counsel to the Fund as to the validity of
such action, if requested by DSC.
2.5 The Fund warrants the following:
(a) The Fund is, or will be, a properly registered
investment company under the Investment Company Act of 1940 and any and all
Portfolio shares which it issues will be properly registered and lawfully
issued under applicable federal and state laws.
(b) The provisions of this contract do not violate the terms
of any instrument by which the Fund is bound; nor do they violate any law or
regulation of any body having jurisdiction over the Fund or its property.
2.6 DSC warrants the following:
(a) DSC is and will be properly registered as a transfer
agent under the Securities and Exchange Act of 1934 and is duly authorized to
serve, and may lawfully serve as such.
(b) The provisions of this contract do not violate the terms
of any instrument by which DSC is bound; nor do they violate any law or
regulation of any body having jurisdiction over DSC or its property.
III. STOCK CERTIFICATES
3.1 The Fund shall furnish or authorize DSC to obtain, at the Fund's
expense, a sufficient supply of blank stock certificates for the Portfolios,
and from time to time will replenish such supply upon the request of DSC. The
Fund agrees to indemnify and exonerate, save and hold DSC harmless, from and
against any and all claims or demands that may be asserted against DSC
concerning the genuineness of any stock certificate supplied to DSC pursuant
to this Section.
3.2 DSC shall safeguard, and shall account to the Fund, upon its
demand for, all such stock certificates: (a) as issued, showing to whom
issued, or (b) as unissued, establishing the safekeeping, cancellation or
destruction thereof.
3.3 The Fund shall promptly inform DSC in writing of any change in
the officers authorized to sign stock certificates or in the form thereof. If
an officer whose manual or facsimile signature is affixed to any blank share
certificate shall die, resign or be removed prior to the issuance of such
certificate, DSC may nevertheless issue such certificate notwithstanding such
death, resignation or removal, and the Fund shall with respect thereto
promptly provide to DSC any approval, adoption or ratification as may be
required by DSC.
IV. TRANSFER AGENT
4.1 As Transfer Agent for the Fund, DSC shall issue, redeem and
transfer shares of the Portfolios, and, in connection therewith but not in
limitation thereof, it shall:
4
<PAGE>
(a) Upon receipt of authority to issue shares, determine the
total shares to be issued and issue such shares by crediting shares to
accounts created and maintained in the registration forms provided; as
applicable, prepare, issue and deliver stock certificates.
(b) Upon proper transfer authorization, transfer shares by
debiting transferor-stockholder accounts and crediting such shares to accounts
created and/or maintained for transferee-stockholders; if applicable, issue
and/or cancel stock certificates.
(c) Upon proper redemption authorization, determine the
total shares redeemed and to be redeemed; determine the total redemption
payments made and to be made; redeem shares by debiting stockholder accounts;
as applicable receive and cancel stock certificates for shares redeemed; and
remit or cause to be remitted the redemption proceeds to stockholders.
(d) Create and maintain accounts; reconcile and control cash
due and paid, shares issued and to be issued, cash remitted and to be remitted
and shares debited and credited to accounts; provide such notices,
instructions or authorizations as the Fund may require.
4.2 DSC shall not be required to issue, transfer or redeem Portfolio
shares upon receipt of DSC from the Fund, or from any federal or state
regulatory agency or authority, written notice that the issuance, transfer or
redemption of Portfolio shares has been suspended or discontinued.
V. DIVIDEND DISBURSING AGENT
5.1 As Dividend Disbursing Agent for the Portfolios, DSC shall
disburse and cause to be disbursed to stockholders of each Portfolio's
dividends, capital gains distributions or any payments from other sources as
directed by the Fund. In connection therewith, but not in the limitation
thereof, DSC shall:
(a) Calculate the total disbursement due and payable and the
disbursement to each stockholder as to shares owned, in accordance with the
Fund's authorization.
(b) Calculate the total disbursements for each stockholder,
as aforesaid, to be disbursed in cash; prepare and mail checks therefor.
(c) Calculate the total disbursement for each stockholder of
each Portfolio, as aforesaid, for which Portfolio shares are to be issued and
authorized and instruct the issuance of Portfolio shares therefor in
accordance with Section IV hereof.
(d) Prepare and mail or deliver such forms and notices
pertaining to disbursements as required by federal or state authority.
(e) Create and maintain records, reconcile and control
disbursements to be made and made, both as to cash and shares, as aforesaid;
provide such notices, instruction or authorization as the Fund may require.
5
<PAGE>
5.2 DSC shall not be required to make any disbursement upon the
receipt of DSC from the Fund, or from any federal or state agency or
authority, written notice that such disbursement shall not be made.
VI. SHAREHOLDER SERVICING AGENT
6.1 As Shareholder Servicing Agent for the Portfolios, DSC shall
provide those services ancillary to, but in implementation of, the services
provided under Sections I through V hereof, and those generally defined and
accepted as shareholder services. In connection therewith, but not in
limitation thereof, DSC shall:
(a) Except where instructed in writing by the Fund not to do
so, and where in compliance with applicable law, accept orders on behalf of
the Fund; receive and process investments and applications; remit to the Fund
or its custodian payments for shares acquired and to be issued; and direct the
issuance of shares in accordance with Section IV hereof.
(b) Receive, record and respond to communications of
stockholders and their agents.
(c) As instructed by the Fund, prepare and mail stockholder
account information, mail Portfolio stockholder reports and Portfolio
prospectuses.
(d) Prepare and mail proxies and material for Fund
stockholder meetings, receive and process proxies from stockholders, and
deliver such proxies as directed by the Fund.
(e) Administer investment plans offered by the Fund to
investors and stockholders of each Portfolio, including retirement plans,
including activities not otherwise provided in Section I through V of this
Agreement.
VII. PERFORMANCE OF DUTIES
7.1 The parties hereto intend that Portfolio stockholders and their
stockholdings shall be confidential, and any information relating thereto
shall be released by DSC only to those persons or authorities who DSC has
reason to believe are authorized to receive such information; or, as
instructed by the Fund.
7.2 DSC may, in performing this Agreement, require the Fund or the
Fund's distributor to provide it with an adequate number of copies of
prospectuses, reports or other documents required to be furnished to investors
or stockholders.
7.3 DSC may request or receive instructions from the Fund and may, at
the Fund's expense, consult with counsel for the Fund or its own counsel with
respect to any matter arising in connection with the performance of its duties
hereunder, and shall not be liable for any action taken or omitted by it in
good faith in accordance with such instructions or opinions of counsel.
7.4 DSC shall maintain reasonable insurance coverage for errors and
omissions and reasonable bond coverage for fraud.
6
<PAGE>
7.5 Upon notice thereof to the Fund, DSC may employ others to provide
services to DSC in its performance of this Agreement.
7.6 Personnel and facilities of DSC used to perform services
hereunder may be used to perform similar services to other funds of the
Delaware Group and to others, and may be used to perform other services for
the Fund, the other funds of the Delaware Group and others.
7.7 DSC shall provide its services as transfer agent hereunder in
accordance with Section 17 of the Securities Exchange Act of 1934, and the
rules and regulations thereunder. Further, the parties intend that the
processes, procedures, safeguards and controls employed should be those
generally applied and accepted for the type services provided hereunder by
other institutions providing the same or similar services, and, those which
should provide efficient, safe and economical services so as to promote
promptness and accuracy and to maintain the integrity of the Fund's records.
7.8 The Fund and DSC may, from time to time, set forth in writing
Guidelines For Selective Procedures to be applicable to the services
hereunder.
7
<PAGE>
VIII. COMPENSATION
8.1 The Fund and DSC acknowledge that because DSC has common
ownership and close management ties with the Fund's investment advisor and the
Fund's distributor and serves the other funds of the Delaware Group (DSC
having been originally established to provide the services hereunder for the
funds of the Delaware Group), advantages and benefits to the Fund in the
employment of DSC hereunder can be available which may not generally be
available to it from others providing similar services.
8.2 The Fund and DSC further acknowledge that the compensation by the
Fund to DSC is intended to induce DSC to provide services under this Agreement
of a nature and quality which the Board of Directors of the Fund, including a
majority who are not parties to this Agreement or interested person of the
parties hereto, has determined after due consideration to be necessary for the
conduct of the business of the Fund, in the best interests of the Fund, the
Portfolios and their stockholders.
8.3 Compensation by the Fund to DSC hereunder shall be determined in
accordance with Schedule A hereto as it shall be amended from time to time as
provided for herein and which is incorporated herein as a part hereof.
8.4 Compensation as provided in Schedule A shall be reviewed and
approved in the manner set forth in Section 10.1 hereof by the Board of
Directors of the Fund at least annually and may be reviewed and approved more
frequently at the request of either party. The Board may request, and DSC
shall provide, such information as the Board may reasonably require to
evaluate the basis of and approve the compensation.
IX. STANDARD OF CARE
9.1 The Fund acknowledges that DSC shall not be liable for, and in
the absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of the performance of its duties under this Agreement, agrees to
indemnify DSC against, any claim or deficiency arising from the performance of
DSC's duties hereunder, including DSC's costs, counsel fees and expenses
incurred in investigation or defending any such claim or any administrative or
other proceeding, and acknowledges that any risk of loss or damage arising
from the conduct of the Fund's affairs in accordance herewith or in accordance
with Guidelines or instructions given hereunder, shall be borne by the Fund.
X. CONTRACTUAL STATUS
10.1 This Agreement shall be executed and become effective on the
date first written above if approved by a vote of the Board of Directors of
the Fund, including an affirmative vote of a majority of the non-interested
members of the Board, cast in person at a meeting called for the purpose of
voting on such approval. It shall continue in effect for an indeterminate
period, and is subject to termination on sixty (60) days notice by either
party unless earlier terminated or amended by agreement among the parties.
Compensation under this Agreement shall require approval by a majority vote of
the Board of Directors of the Fund, including an affirmative vote of the
majority of the non-interested members of the Board cast in person at a
meeting called for the purpose of voting on such approval.
10.2 This Agreement may not be assigned without the approval of the
Fund.
8
<PAGE>
10.3 This Agreement shall be governed by the laws of the Commonwealth
of Pennsylvania.
DELAWARE SERVICE COMPANY, INC.
ATTEST: ____________________ By: ______________________________________________
Name: Name:
Title: Title:
DELAWARE POOLED TRUST, INC. for
THE AGGRESSIVE GROWTH PORTFOLIO
THE LARGE-CAP VALUE EQUITY PORTFOLIO
THE SMALL/MID-CAP VALUE EQUITY PORTFOLIO
THE EMERGING MARKETS PORTFOLIO
THE INTERMEDIATE FIXED INCOME PORTFOLIO
THE GLOBAL FIXED INCOME PORTFOLIO
THE HIGH-YIELD BOND PORTFOLIO
THE INTERNATIONAL EQUITY PORTFOLIO
THE INTERNATIONAL FIXED INCOME PORTFOLIO
THE LABOR SELECT INTERNATIONAL EQUITY PORTFOLIO
THE LIMITED-TERM MATURITY PORTFOLIO
THE REAL ESTATE INVESTMENT TRUST PORTFOLIO
THE REAL ESTATE INVESTMENT TRUST PORTFOLIO II
THE GLOBAL EQUITY PORTFOLIO
THE DIVERSIFIED CORE FIXED INCOME PORTFOLIO
THE AGGREGATE FIXED INCOME PORTFOLIO
THE SMALL-CAP GROWTH EQUITY PORTFOLIO
THE GROWTH AND INCOME PORTFOLIO
ATTEST: ____________________ By: _____________________________________________
Name: Name:
Title: Title:
9
<PAGE>
SCHEDULE A
----------
DELAWARE POOLED TRUST, INC.
(THE "FUND")
SEVENTH AMENDED AND RESTATED
SHAREHOLDERS SERVICES AGREEMENT
COMPENSATION SCHEDULE
1. Delaware Service Company, Inc. ("DSC") will determine and report to the
Fund, at least annually, the compensation for services to be provided to
the Fund for DSC's forthcoming fiscal year or period.
2. In determining such compensation, DSC will fix and report a fee to be
charged per account and/or transaction, as may be applicable, for
services provided. DSC will bill, and the Fund will pay, such
compensation monthly.
3. For the period commencing on January 1, 1997, the charge will consist of
two charges for all the Funds in the Delaware Group, except the Delaware
Group Premium Fund, Inc. and the Delaware Pooled Trust, Inc. (other than
with respect to The Real Estate Investment Trust Portfolio effective
October 14, 1997), an annual charge and a per transaction charge for each
account on the transfer agent's records and each account on an automated
retirement processing system. These charges are as follows:
10
<PAGE>
SCHEDULE A
----------
DELAWARE POOLED TRUST, INC.
(THE "FUND")
SEVENTH AMENDED AND RESTATED
SHAREHOLDERS SERVICES AGREEMENT
COMPENSATION SCHEDULE
CONTINUED
11
<PAGE>
EX-99.B9EI
Exhibit 24(b)(9)(e)(i)
AMENDMENT NO. 8
to
SCHEDULE A
of
DELAWARE GROUP OF FUNDS*
FUND ACCOUNTING AGREEMENT
Delaware Group Adviser Funds, Inc.
Corporate Income Fund (liquidated September 19, 1997)
Enterprise Fund (liquidated September 19, 1997)
Federal Bond Fund (liquidated September 19, 1997)
New Pacific Fund
U.S. Growth Fund
Overseas Equity Fund (formerly World Growth Fund)
Delaware Group Cash Reserve, Inc.
Delaware Group Equity Funds I, Inc. (formerly Delaware)
Delaware Fund
Devon Fund
Delaware Group Equity Funds II, Inc. (formerly Decatur)
Blue Chip Fund (New)
Decatur Income Fund
Decatur Total Return Fund
Quantum Fund (New)
Delaware Group Equity Funds III, Inc. (formerly Trend)
Trend Fund
Delaware Group Equity Funds IV, Inc. (formerly DelCap)
Capital Appreciation Fund (New)
DelCap Fund
Delaware Group Equity Funds V, Inc. (formerly Value)
Small Cap Value Fund (formerly Value Fund)
Retirement Income Fund (New)
- - ------------------
*Except as otherwise noted, all Portfolios included on this Schedule
A are Existing Portfolios for purposes of the compensation described on
Schedule B to that Fund Accounting Agreement between Delaware Service Company,
Inc. and the Delaware Group of Funds dated as of August 19, 1996
("Agreement"). All portfolios added to this Schedule A by amendment executed
by a Company on behalf of such Portfolio hereof shall be a New Portfolio for
purposes of Schedule B to the Agreement.
<PAGE>
Delaware Group Foundation Funds (New)
Balanced Portfolio (New)
Growth Portfolio (New)
Income Portfolio (New)
Delaware Group Government Fund, Inc.
Government Income Series (U.S. Government Fund )
Delaware Group Global & International Funds, Inc.
Emerging Markets Fund (New)
Global Assets Fund
Global Bond Fund
International Equity Fund
Global Equity Fund (New)
International Small Cap Fund (New)
Delaware Group Income Funds, Inc. (formerly Delchester)
Delchester Fund
High-Yield Opportunities Fund (New)
Strategic Income Fund (New)
Delaware Group Limited-Term Government Funds, Inc.
Limited-Term Government Fund
U. S. Government Money Fund
Delaware Pooled Trust, Inc.
The Aggressive Growth Portfolio
The Large-Cap Value Equity Portfolio
(formerly The Defensive Equity Portfolio)
The Small/Mid-Cap Value Equity Portfolio (New)
(formerly The Defensive Equity Small/Mid-Cap Portfolio)
The Defensive Equity Utility Portfolio (deregistered January 14, 1997)
The Emerging Markets Portfolio (New)
The Intermediate Fixed Income Portfolio
(formerly The Fixed Income Portfolio)
The Global Fixed Income Portfolio
The High-Yield Bond Portfolio (New)
The International Equity Portfolio
The International Fixed Income Portfolio (New)
The Labor Select International Equity Portfolio
The Limited-Term Maturity Portfolio (New)
The Real Estate Investment Trust Portfolio
The Global Equity Portfolio (New)
The Real Estate Investment Trust Portfolio II (New)
The Diversified Core Fixed Income Portfolio (New)
The Aggregate Fixed Income Portfolio (New)
2
<PAGE>
Delaware Group Premium Fund, Inc.
Capital Reserves Series
Cash Reserve Series
Convertible Securities Series (New)
Decatur Total Return Series
Delaware Series
Delchester Series
Devon Series (New)
Emerging Markets Series (New)
DelCap Series
Global Bond Series (New)
International Equity Series
Quantum Series (New)
Strategic Income Series (New)
Trend Series
Value Series
Delaware Group Tax-Free Fund, Inc.
Tax-Free Insured Fund
Tax-Free USA Fund
Tax-Free USA Intermediate Fund
Delaware Group Tax-Free Money Fund, Inc.
Delaware Group State Tax-Free Income Trust (formerly DMCT Tax-Free Income
Trust-Pennsylvania)
Tax-Free Pennsylvania Fund
Tax-Free New Jersey Fund (New)
Tax-Free Ohio Fund (New)
Voyageur Funds, Inc.
Voyageur U.S. Government Securities Fund (New)
Voyageur Insured Funds, Inc.
Arizona Insured Tax Free Fund (New)
Colorado Insured Fund (New)
Minnesota Insured Fund (New)
National Insured Tax Free Fund (New)
Voyageur Intermediate Tax Free Funds, Inc.
Arizona Limited Term Tax Free Fund (New)
California Limited Term Tax Free Fund (New)
Colorado Limited Term Tax Free Fund (New)
Minnesota Limited Term Tax Free Fund (New)
National Limited Term Tax Free Fund (New)
3
<PAGE>
Voyageur Investment Trust
California Insured Tax Free Fund (New)
Florida Insured Tax Free Fund (New)
Florida Tax Free Fund (New)
Kansas Tax Free Fund (New)
Missouri Insured Tax Free Fund (New)
New Mexico Tax Free Fund (New)
Oregon Insured Tax Free Fund (New)
Utah Tax Free Fund (New)
Washington Insured Tax Free Fund (New)
Voyageur Investment Trust II
Florida Limited Term Tax Free Fund (New)
Voyageur Mutual Funds, Inc.
Arizona Tax Free Fund (New)
California Tax Free Fund (New)
Iowa Tax Free Fund (New)
Idaho Tax Free Fund (New)
Minnesota High Yield Municipal Bond Fund (New)
National High Yield Municipal Bond Fund (New)
National Tax Free Fund (New)
New York Tax Free Fund (New)
Wisconsin Tax Free Fund (New)
Voyageur Mutual Funds II, Inc.
Colorado Tax Free Fund (New)
Voyageur Mutual Funds III, Inc.
Aggressive Growth Fund (New)
Growth Stock Fund (New)
International Equity Fund (New)
Tax Efficient Equity Fund (New)
Voyageur Tax Free Funds, Inc.
Minnesota Tax Free Fund (New)
North Dakota Tax Free Fund (New)
4
<PAGE>
Dated as of December 18, 1997
DELAWARE SERVICE COMPANY, INC.
/s/David K. Downes
By: ---------------------------------------------------------------
David K. Downes
President, Chief Executive Officer and Chief Financial Officer
DELAWARE GROUP ADVISER FUNDS, INC.
DELAWARE GROUP CASH RESERVE, INC.
DELAWARE GROUP EQUITY FUNDS I, INC.
DELAWARE GROUP EQUITY FUNDS II, INC.
DELAWARE GROUP EQUITY FUNDS III, INC.
DELAWARE GROUP EQUITY FUNDS IV, INC.
DELAWARE GROUP EQUITY FUNDS V, INC.
DELAWARE GROUP FOUNDATION FUNDS
DELAWARE GROUP GOVERNMENT FUND, INC.
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
DELAWARE GROUP INCOME FUNDS, INC.
DELAWARE GROUP LIMITED-TERM GOVERNMENT FUNDS, INC.
DELAWARE POOLED TRUST, INC.
DELAWARE GROUP PREMIUM FUND, INC.
DELAWARE GROUP STATE TAX-FREE INCOME TRUST
DELAWARE GROUP TAX-FREE FUND, INC.
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
VOYAGEUR FUNDS, INC.
VOYAGEUR INSURED FUNDS, INC.
VOYAGEUR INTERMEDIATE TAX FREE FUNDS, INC.
VOYAGEUR INVESTMENT TRUST
VOYAGEUR INVESTMENT TRUST II
VOYAGEUR MUTUAL FUNDS, INC.
VOYAGEUR MUTUAL FUNDS II, INC.
VOYAGEUR MUTUAL FUNDS III, INC.
/s/ Wayne A. Stork
By: ----------------------------------------------------------------
Wayne A. Stork
Chairman
5
<PAGE>
EX-99.B9EII
Exhibit 24(b)(9)(e)(ii)
AMENDMENT NO. 9
to
SCHEDULE A
of
DELAWARE GROUP OF FUNDS*
FUND ACCOUNTING AGREEMENT
Delaware Group Adviser Funds, Inc.
Corporate Income Fund (liquidated September 19, 1997)
Enterprise Fund (liquidated September 19, 1997)
Federal Bond Fund (liquidated September 19, 1997)
New Pacific Fund
U.S. Growth Fund
Overseas Equity Fund (formerly World Growth Fund)
Delaware Group Cash Reserve, Inc.
Delaware Group Equity Funds I, Inc. (formerly Delaware)
Delaware Fund
Devon Fund
Delaware Group Equity Funds II, Inc. (formerly Decatur)
Blue Chip Fund (New)
Decatur Income Fund
Decatur Total Return Fund
Quantum Fund (New)
Delaware Group Equity Funds III, Inc. (formerly Trend)
Trend Fund
Delaware Group Equity Funds IV, Inc. (formerly DelCap)
Capital Appreciation Fund (New)
DelCap Fund
Delaware Group Equity Funds V, Inc. (formerly Value)
Small Cap Value Fund (formerly Value Fund)
Retirement Income Fund (New)
- - ------------------
*Except as otherwise noted, all Portfolios included on this Schedule
A are Existing Portfolios for purposes of the compensation described on
Schedule B to that Fund Accounting Agreement between Delaware Service Company,
Inc. and the Delaware Group of Funds dated as of August 19, 1996
("Agreement"). All portfolios added to this Schedule A by amendment executed
by a Company on behalf of such Portfolio hereof shall be a New Portfolio for
purposes of Schedule B to the Agreement.
<PAGE>
Delaware Group Foundation Funds (New)
Balanced Portfolio (New)
Growth Portfolio (New)
Income Portfolio (New)
Delaware Group Government Fund, Inc.
Government Income Series (U.S. Government Fund )
Delaware Group Global & International Funds, Inc.
Emerging Markets Fund (New)
Global Assets Fund
Global Bond Fund
International Equity Fund
Global Equity Fund (New)
International Small Cap Fund (New)
Delaware Group Income Funds, Inc. (formerly Delchester)
Delchester Fund
High-Yield Opportunities Fund (New)
Strategic Income Fund (New)
Delaware Group Limited-Term Government Funds, Inc.
Limited-Term Government Fund
U. S. Government Money Fund
Delaware Pooled Trust, Inc.
The Aggressive Growth Portfolio
The Large-Cap Value Equity Portfolio
(formerly The Defensive Equity Portfolio)
The Small/Mid-Cap Value Equity Portfolio (New)
(formerly The Defensive Equity Small/Mid-Cap Portfolio)
The Defensive Equity Utility Portfolio (deregistered January 14, 1997)
The Emerging Markets Portfolio (New)
The Intermediate Fixed Income Portfolio
(formerly The Fixed Income Portfolio)
The Global Fixed Income Portfolio The High-Yield Bond Portfolio (New)
The International Equity Portfolio
The International Fixed Income Portfolio (New)
The Labor Select International Equity Portfolio
The Limited-Term Maturity Portfolio (New)
The Real Estate Investment Trust Portfolio
The Global Equity Portfolio (New)
The Real Estate Investment Trust Portfolio II (New)
The Diversified Core Fixed Income Portfolio (New)
The Aggregate Fixed Income Portfolio (New)
2
<PAGE>
Delaware Group Premium Fund, Inc.
Capital Reserves Series
Cash Reserve Series
Convertible Securities Series (New)
Decatur Total Return Series
Delaware Series
Delchester Series
Devon Series (New)
Emerging Markets Series (New)
DelCap Series
Global Bond Series (New)
International Equity Series
Quantum Series (New)
REIT Series (New)
Strategic Income Series (New)
Trend Series
Value Series
Delaware Group Tax-Free Fund, Inc.
Tax-Free Insured Fund
Tax-Free USA Fund
Tax-Free USA Intermediate Fund
Delaware Group Tax-Free Money Fund, Inc.
Delaware Group State Tax-Free Income Trust (formerly DMCT Tax-Free Income
Trust-Pennsylvania)
Tax-Free Pennsylvania Fund
Tax-Free New Jersey Fund (New)
Tax-Free Ohio Fund (New)
Voyageur Funds, Inc.
Voyageur U.S. Government Securities Fund (New)
Voyageur Insured Funds, Inc.
Arizona Insured Tax Free Fund (New)
Colorado Insured Fund (New)
Minnesota Insured Fund (New)
National Insured Tax Free Fund (New)
Voyageur Intermediate Tax Free Funds, Inc.
Arizona Limited Term Tax Free Fund (New)
California Limited Term Tax Free Fund (New)
Colorado Limited Term Tax Free Fund (New)
Minnesota Limited Term Tax Free Fund (New)
National Limited Term Tax Free Fund (New)
3
<PAGE>
Voyageur Investment Trust
California Insured Tax Free Fund (New)
Florida Insured Tax Free Fund (New)
Florida Tax Free Fund (New)
Kansas Tax Free Fund (New)
Missouri Insured Tax Free Fund (New)
New Mexico Tax Free Fund (New)
Oregon Insured Tax Free Fund (New)
Utah Tax Free Fund (New)
Washington Insured Tax Free Fund (New)
Voyageur Investment Trust II
Florida Limited Term Tax Free Fund (New)
Voyageur Mutual Funds, Inc.
Arizona Tax Free Fund (New)
California Tax Free Fund (New)
Iowa Tax Free Fund (New)
Idaho Tax Free Fund (New)
Minnesota High Yield Municipal Bond Fund (New)
National High Yield Municipal Bond Fund (New)
National Tax Free Fund (New)
New York Tax Free Fund (New)
Wisconsin Tax Free Fund (New)
Voyageur Mutual Funds II, Inc.
Colorado Tax Free Fund (New)
Voyageur Mutual Funds III, Inc.
Aggressive Growth Fund (New)
Growth Stock Fund (New)
International Equity Fund (New)
Tax Efficient Equity Fund (New)
Voyageur Tax Free Funds, Inc.
Minnesota Tax Free Fund (New)
North Dakota Tax Free Fund (New)
4
<PAGE>
Dated as of March 31, 1998
DELAWARE SERVICE COMPANY, INC.
By:
--------------------------------------------------------------
David K. Downes
President, Chief Executive Officer and Chief Financial Officer
DELAWARE GROUP ADVISER FUNDS, INC.
DELAWARE GROUP CASH RESERVE, INC.
DELAWARE GROUP EQUITY FUNDS I, INC.
DELAWARE GROUP EQUITY FUNDS II, INC.
DELAWARE GROUP EQUITY FUNDS III, INC.
DELAWARE GROUP EQUITY FUNDS IV, INC.
DELAWARE GROUP EQUITY FUNDS V, INC.
DELAWARE GROUP FOUNDATION FUNDS
DELAWARE GROUP GOVERNMENT FUND, INC.
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
DELAWARE GROUP INCOME FUNDS, INC.
DELAWARE GROUP LIMITED-TERM GOVERNMENT FUNDS, INC.
DELAWARE POOLED TRUST, INC.
DELAWARE GROUP PREMIUM FUND, INC.
DELAWARE GROUP STATE TAX-FREE INCOME TRUST
DELAWARE GROUP TAX-FREE FUND, INC.
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
VOYAGEUR FUNDS, INC.
VOYAGEUR INSURED FUNDS, INC.
VOYAGEUR INTERMEDIATE TAX FREE FUNDS, INC.
VOYAGEUR INVESTMENT TRUST
VOYAGEUR INVESTMENT TRUST II
VOYAGEUR MUTUAL FUNDS, INC.
VOYAGEUR MUTUAL FUNDS II, INC.
VOYAGEUR MUTUAL FUNDS III, INC.
By:
---------------------------------------------------------------
Wayne A. Stork
Chairman
5
<PAGE>
EX-99.B9EIII
Exhibit 24(b)(9)(e)(iii)
AMENDMENT NO. 10
to
SCHEDULE A
of
DELAWARE GROUP OF FUNDS*
FUND ACCOUNTING AGREEMENT
Delaware Group Adviser Funds, Inc.
Corporate Income Fund (liquidated September 19, 1997)
Enterprise Fund (liquidated September 19, 1997)
Federal Bond Fund (liquidated September 19, 1997)
New Pacific Fund
U.S. Growth Fund
Overseas Equity Fund (formerly World Growth Fund)
Delaware Group Cash Reserve, Inc.
Delaware Group Equity Funds I, Inc. (formerly Delaware)
Delaware Fund
Devon Fund
Delaware Group Equity Funds II, Inc. (formerly Decatur)
Blue Chip Fund (New)
Decatur Income Fund
Decatur Total Return Fund
Social Awareness Fund (formerly Quantum Fund) (New)
Delaware Group Equity Funds III, Inc. (formerly Trend)
Trend Fund
Delaware Group Equity Funds IV, Inc. (formerly DelCap)
Capital Appreciation Fund (New)
DelCap Fund
Delaware Group Equity Funds V, Inc. (formerly Value)
Small Cap Value Fund (formerly Value Fund)
Retirement Income Fund (New)
- - ------------------
*Except as otherwise noted, all Portfolios included on this Schedule
A are Existing Portfolios for purposes of the compensation described on
Schedule B to that Fund Accounting Agreement between Delaware Service Company,
Inc. and the Delaware Group of Funds dated as of August 19, 1996
("Agreement"). All portfolios added to this Schedule A by amendment executed
by a Company on behalf of such Portfolio hereof shall be a New Portfolio for
purposes of Schedule B to the Agreement.
<PAGE>
Delaware Group Foundation Funds (New)
Balanced Portfolio (New)
Growth Portfolio (New)
Income Portfolio (New)
The Asset Allocation Portfolio (New)
Delaware Group Government Fund, Inc.
Government Income Series (U.S. Government Fund )
Delaware Group Global & International Funds, Inc.
Emerging Markets Fund (New)
Global Assets Fund
Global Bond Fund
International Equity Fund
Global Equity Fund (New)
International Small Cap Fund (New)
Delaware Group Income Funds, Inc. (formerly Delchester)
Delchester Fund
High-Yield Opportunities Fund (New)
Strategic Income Fund (New)
Delaware Group Limited-Term Government Funds, Inc.
Limited-Term Government Fund
U. S. Government Money Fund
Delaware Pooled Trust, Inc.
The Aggressive Growth Portfolio
The Large-Cap Value Equity Portfolio
(formerly The Defensive Equity Portfolio)
The Small/Mid-Cap Value Equity Portfolio (New)
(formerly The Defensive Equity Small/Mid-Cap Portfolio)
The Defensive Equity Utility Portfolio (deregistered January 14, 1997)
The Emerging Markets Portfolio (New)
The Intermediate Fixed Income Portfolio
(formerly The Fixed Income Portfolio)
The Global Fixed Income Portfolio
The High-Yield Bond Portfolio (New)
The International Equity Portfolio
The International Fixed Income Portfolio (New)
The Labor Select International Equity Portfolio
The Limited-Term Maturity Portfolio (New)
The Real Estate Investment Trust Portfolio
The Global Equity Portfolio (New)
The Real Estate Investment Trust Portfolio II (New)
The Diversified Core Fixed Income Portfolio (New)
The Aggregate Fixed Income Portfolio (New)
The Small-Cap Growth Equity Portfolio (New)
The Growth and Income Portfolio (New)
2
<PAGE>
Delaware Group Premium Fund, Inc.
Capital Reserves Series
Cash Reserve Series
Convertible Securities Series (New)
Decatur Total Return Series
Delaware Series
Delchester Series
Devon Series (New)
Emerging Markets Series (New)
DelCap Series
Global Bond Series (New)
International Equity Series
Social Awareness Series (formerly Quantum Series) (New)
REIT Series (New)
Strategic Income Series (New)
Trend Series
Small Cap Value Series (formerly Value Series)
Delaware Group Tax-Free Fund, Inc.
Tax-Free Insured Fund
Tax-Free USA Fund
Tax-Free USA Intermediate Fund
Delaware Group Tax-Free Money Fund, Inc.
Delaware Group State Tax-Free Income Trust (formerly DMCT Tax-Free Income
Trust-Pennsylvania)
Tax-Free Pennsylvania Fund
Tax-Free New Jersey Fund (New)
Tax-Free Ohio Fund (New)
Voyageur Funds, Inc.
Voyageur US Government Securities Fund (New)
Voyageur Insured Funds, Inc.
Arizona Insured Tax Free Fund (New)
Colorado Insured Fund (New)
Minnesota Insured Fund (New)
National Insured Tax Free Fund (New)
Voyageur Intermediate Tax Free Funds, Inc.
Arizona Limited Term Tax Free Fund (New)
California Limited Term Tax Free Fund (New)
Colorado Limited Term Tax Free Fund (New)
Minnesota Limited Term Tax Free Fund (New)
National Limited Term Tax Free Fund (New)
3
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Voyageur Investment Trust
California Insured Tax Free Fund (New)
Florida Insured Tax Free Fund (New)
Florida Tax Free Fund (New)
Kansas Tax Free Fund (New)
Missouri Insured Tax Free Fund (New)
New Mexico Tax Free Fund (New)
Oregon Insured Tax Free Fund (New)
Utah Tax Free Fund (New)
Washington Insured Tax Free Fund (New)
Voyageur Investment Trust II
Florida Limited Term Tax Free Fund (New)
Voyageur Mutual Funds, Inc.
Arizona Tax Free Fund (New)
California Tax Free Fund (New)
Iowa Tax Free Fund (New)
Idaho Tax Free Fund (New)
Minnesota High Yield Municipal Bond Fund (New)
National High Yield Municipal Bond Fund (New)
National Tax Free Fund (New)
New York Tax Free Fund (New)
Wisconsin Tax Free Fund (New)
Voyageur Mutual Funds II, Inc.
Colorado Tax Free Fund (New)
Voyageur Mutual Funds III, Inc.
Aggressive Growth Fund (New)
Growth Stock Fund (New)
International Equity Fund (New)
Tax Efficient Equity Fund (New)
Voyageur Tax Free Funds, Inc.
Minnesota Tax Free Fund (New)
North Dakota Tax Free Fund (New)
4
<PAGE>
Dated as of August , 1998
DELAWARE SERVICE COMPANY, INC.
By:
--------------------------------------------------------------
David K. Downes
President, Chief Executive Officer and Chief Financial Officer
DELAWARE GROUP ADVISER FUNDS, INC.
DELAWARE GROUP CASH RESERVE, INC.
DELAWARE GROUP EQUITY FUNDS I, INC.
DELAWARE GROUP EQUITY FUNDS II, INC.
DELAWARE GROUP EQUITY FUNDS III, INC.
DELAWARE GROUP EQUITY FUNDS IV, INC.
DELAWARE GROUP EQUITY FUNDS V, INC.
DELAWARE GROUP FOUNDATION FUNDS
DELAWARE GROUP GOVERNMENT FUND, INC.
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
DELAWARE GROUP INCOME FUNDS, INC.
DELAWARE GROUP LIMITED-TERM GOVERNMENT FUNDS, INC.
DELAWARE POOLED TRUST, INC.
DELAWARE GROUP PREMIUM FUND, INC.
DELAWARE GROUP STATE TAX-FREE INCOME TRUST
DELAWARE GROUP TAX-FREE FUND, INC.
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
VOYAGEUR FUNDS, INC.
VOYAGEUR INSURED FUNDS, INC.
VOYAGEUR INTERMEDIATE TAX FREE FUNDS, INC.
VOYAGEUR INVESTMENT TRUST
VOYAGEUR INVESTMENT TRUST II
VOYAGEUR MUTUAL FUNDS, INC.
VOYAGEUR MUTUAL FUNDS II, INC.
VOYAGEUR MUTUAL FUNDS III, INC.
By: ---------------------------------------------------------------------
Wayne A. Stork
Chairman
5
<PAGE>
EX-99.B10
Exhibit 24(b)(10)
Stradley, Ronon, Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, Pennsylvania 19103-7098
(215) 564-8000
Direct Dial: (215) 564-8115
Delaware Pooled Trust, Inc.
1818 Market Street
Philadelphia, PA 19103
Re: Legal Opinion-Securities Act of 1933
Ladies and Gentlemen:
We have examined the Articles of Incorporation, as amended and supplemented
(the "Articles"), of Delaware Pooled Trust, Inc. (the "Fund"), a series
corporation organized under Maryland law, the By-Laws of the Fund, and its
proposed form of Share Certificates (if any), all as amended to date, and the
various pertinent corporate proceedings we deem material. We have also
examined the Notification of Registration and the Registration Statements
filed under the Investment Company Act of 1940 as amended, (the "Investment
Company Act") and the Securities Act of 1933 as amended, (the "Securities
Act"), all as amended to date, as well as other items we deem material to this
opinion.
The Fund is authorized by the Articles to issue two billion (2,000,000,000)
shares of common stock at a par value of $0.01 and currently issues shares of
The Aggressive Growth Portfolio, The International Equity Portfolio, The
Intermediate Fixed-Income Portfolio, The Limited-Term Maturity Portfolio, The
Global Fixed-Income Portfolio, The International Fixed-Income Portfolio, The
Large Cap Value Equity Portfolio, The Aggregate Fixed Income Portfolio, The
Diversified Core Fixed Income Portfolio, The International Mid-Cap Sub
Portfolio, The Small/Mid-Cap Value Equity Portfolio, The High-Yield Bond
Portfolio, The Labor Select International Equity Portfolio, The Emerging
Markets Portfolio, The Global Equity Portfolio, The Real Estate Investment
Trust Portfolio, The Real Estate Investment Trust Portfolio II. In addition,
The Fund intends to issues shares of The Growth and Income Portfolio and The
Small Cap Growth Equity Portfolio. The Articles also empower the Board to
designate any additional series or classes and allocate shares to such series
or classes.
The Fund has filed with the U.S. Securities and Exchange Commission, a
registration statement under the Securities Act, which registration statement
is deemed to register an indefinite number of shares of the Fund pursuant to
the provisions of Section 24(f) of the Investment Company Act. You have
further advised us that the Fund has filed, and each year hereafter will
timely file, a Notice pursuant to Rule 24f-2 under the Investment Company Act
perfecting the registration of the shares sold by the Fund during each fiscal
year during which such registration of an indefinite number of shares remains
in effect.
You have also informed us that the shares of the Fund have been, and will
continue to be, sold in accordance with the Fund's usual method of
distributing its registered shares, under which prospectuses are made
available for delivery to offerees and purchasers of such shares in accordance
with Section 5(b) of the Securities Act.
Based upon the foregoing information and examination, so long as the Fund
remains a valid and subsisting entity under the laws of its state of
organization, and the registration of an indefinite number of shares of the
Fund remains effective, the authorized shares of the Fund when issued for the
consideration set by the Board of Directors pursuant to the Articles, and
subject to compliance with Rule 24f-2, will be legally
<PAGE>
outstanding, fully-paid, and non-assessable shares, and the holders of such
shares will have all the rights provided for with respect to such holding by
the Articles and the laws of the State of Maryland.
We hereby consent to the use of this opinion, in lieu of any other, as an
exhibit to the Registration Statement of the Fund, along with any amendments
thereto, covering the registration of the shares of the Fund under the
Securities Act and the applications, registration statements or notice
filings, and amendments thereto, filed in accordance with the securities laws
of the several states in which shares of the Fund are offered, and we further
consent to reference in the registration statement of the Fund to the fact
that this opinion concerning the legality of the issue has been rendered by
us.
Very truly yours,
STRADLEY, RONON, STEVENS & YOUNG, LLP
BY: /s/ Bruce G. Leto
Bruce G. Leto
<PAGE>
EX-99.B19
EX-99.B19B
Exhibit 24(b)(19)(b)
POWER OF ATTORNEY
The undersigned, a member of the Boards of Directors/Trustees of the Delaware
Group Funds listed on Exhibit A to this Power of Attorney, hereby constitutes
and appoints on behalf of each of the Funds listed on Exhibit A, Wayne A.
Stork, Jeffrey J. Nick and Walter P. Babich and any one of them acting singly,
his true and lawful attorneys-in-fact, in his name, place, and stead, to
execute and cause to be filed with the Securities and Exchange Commission and
other federal or state government agency or body, such registration
statements, and any and all amendments thereto as either of such designees may
deem to be appropriate under the Securities Act of 1933, as amended, the
Investment Company Act of 1940, as amended, and all other applicable federal
and state securities laws.
IN WITNESS WHEREOF, the undersigned have executed this instrument as of this
16th day of April, 1998.
/s/ John H. Durham
- - ---------------------
John H. Durham
<PAGE>
POWER OF ATTORNEY
EXHIBIT A
DELAWARE GROUP FUNDS
DELAWARE GROUP EQUITY FUNDS I, INC.
DELAWARE GROUP EQUITY FUNDS II, INC.
DELAWARE GROUP EQUITY FUNDS III, INC.
DELAWARE GROUP EQUITY FUNDS IV, INC.
DELAWARE GROUP EQUITY FUNDS V, INC.
DELAWARE GROUP INCOME FUNDS, INC.
DELAWARE GROUP GOVERNMENT FUND, INC.
DELAWARE GROUP CASH RESERVE, INC.
DELAWARE GROUP LIMITED-TERM GOVERNMENT FUNDS, INC.
DELAWARE GROUP TAX-FREE FUND, INC.
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
DELAWARE GROUP ADVISER FUNDS, INC.
DELAWARE POOLED TRUST, INC.
DELAWARE GROUP PREMIUM FUND, INC.
DELAWARE GROUP STATE TAX-FREE INCOME TRUST
DELAWARE GROUP DIVIDEND AND INCOME FUND, INC.
DELAWARE GROUP GLOBAL DIVIDEND AND INCOME FUND, INC.
DELAWARE GROUP FOUNDATION FUNDS
