<PAGE>
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PROSPECTUS
MARCH 10, 1995
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INTERNATIONAL EQUITY FUND INSTITUTIONAL
GLOBAL BOND FUND INSTITUTIONAL
GLOBAL ASSETS FUND INSTITUTIONAL
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1818 Market Street
Philadelphia, PA 19103
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For more information about the
International Equity Fund Institutional
Class, the Global Bond Fund Institutional
Class and the Global Assets Fund
Institutional Class call the Delaware
Group at 800-828-5052.
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TABLE OF CONTENTS
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Cover Page 1
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Synopsis 2
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Summary of Expenses 4
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Financial Highlights 5
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Investment Objectives and Policies
Investment Strategy 6
Special Risk Considerations 13
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Buying Shares 15
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Redemption and Exchange 17
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Dividends and Distributions 19
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Taxes 19
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Calculation of Net Asset Value Per Share 20
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Management of the Fund 21
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Appendix A--Ratings 25
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Delaware Group Global & International Funds, Inc. (the
"Fund") is a professionally-managed mutual fund of the series
type. This Prospectus describes shares of the International
Equity Series, the Global Bond Series and the Global Assets
Series (individually and collectively, the "Series"). The
International Equity Series' objective is to achieve
long-term growth without undue risk to principal. This
Series seeks to achieve its objective by investing primarily
in securities that provide the potential for capital
appreciation and income. The Global Bond Series' objective
is to achieve current income consistent with the preservation
of principal. This Series seeks to achieve its objective by
investing primarily in fixed income securities that may also
provide the potential for capital appreciation. The Global
Assets Series' objective is to achieve long-term total
return. This Series seeks to achieve its objective by
investing in securities which, in Delaware International
Advisers Ltd.'s ("Delaware International" or the "Manager")
opinion, will provide higher current income than a portfolio
comprised exclusively of equity securities, along with the
potential for capital growth. This Series will invest in
both equity and fixed income securities. See Investment
Objectives and Policies.
The International Equity Series offers the International
Equity Fund Institutional Class; the Global Bond Series
offers the Global Bond Fund Institutional Class; and the
Global Assets Series offers the Global Assets Fund
Institutional Class (individually, the "Class" and
collectively, the "Classes").
Shares of each Class are available for purchase only by
certain enumerated institutions and are offered at net asset
value without the imposition of a front-end or contingent
deferred sales charge and without a 12b-1 charge. See Buying
Shares.
This Prospectus relates only to the Classes and sets
forth information that you should read and consider before
you invest. Please retain it for future reference. Part B
of the Fund's registration statement, dated March 10, 1995,
as it may be amended from time to time, contains additional
information about the Fund and has been filed with the
Securities and Exchange Commission. Part B is incorporated
by reference into this Prospectus and is available, without
charge, by writing to Delaware Distributors, L.P. at the
above address or by calling the above number. Each Series'
financial statements appear in its Annual Report, which will
accompany any response to requests for Part B.
The International Equity Series also offers the
International Equity Fund A Class and the International
Equity Fund B Class. The Global Bond Series also offers the
Global Bond Fund A Class and the Global Bond Fund B Class and
the Global Assets Series also offers the Global Assets Fund A
Class and the Global Assets Fund B Class. Shares of the
International Equity Fund A Class, the Global Bond Fund A
Class and the Global Assets Fund A Class carry a front-end
sales charge and are subject to ongoing distribution
expenses. Shares of the International Equity Fund B Class,
the Global Bond Fund B Class and the Global Assets Fund B
Class are subject to ongoing distribution expenses and a
contingent deferred sales charge upon redemption.
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.
BE SURE TO CONSULT YOUR FINANCIAL ADVISER WHEN MAKING
INVESTMENTS. MUTUAL FUNDS CAN BE A VALUABLE PART OF YOUR
FINANCIAL PLAN; HOWEVER SHARES OF THE FUND ARE NOT FDIC OR
NCUSIF INSURED, ARE NOT GUARANTEED BY ANY CREDIT UNION OR ANY
BANK, ARE NOT OBLIGATIONS OF ANY CREDIT UNION OR ANY BANK,
AND INVOLVE INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL. SHARES OF THE FUND ARE NOT CREDIT UNION OR BANK
DEPOSITS.
<PAGE>
SYNOPSIS
Capitalization
The Fund offers the International Equity Series
consisting of the International Equity Fund Institutional
Class, the International Equity Fund A Class and the
International Equity Fund B Class, the Global Bond Series
consisting of the Global Bond Fund Institutional Class, the
Global Bond Fund A Class and the Global Bond Fund B Class,
and the Global Assets Series consisting of the Global Assets
Fund Institutional Class, the Global Assets Fund A Class and
the Global Assets Fund B Class. The Fund has a present
authorized capitalization of five hundred million shares of
capital stock with a $.01 par value per share. Fifty million
shares of that stock have been allocated to each class. See
Shares under Management of the Fund.
Investment Manager, Distributor and Service Agent
Delaware International Advisers Ltd. ("Delaware
International" or the "Manager") is the investment manager
for each Series and, in that capacity, provides advice to
each Series with respect to its investments. Delaware
Management Company, Inc. ("DMC" or the "Sub-Adviser") is the
investment sub-adviser for the Global Assets Series and, in
that capacity, provides advice with respect to that Series'
investments in U.S. securities. Delaware Distributors, L.P.
(the "Distributor") is the national distributor for each
Series and for all of the other mutual funds in the Delaware
Group. Delaware Service Company, Inc. (the "Transfer Agent")
is the shareholder servicing, dividend disbursing and
transfer agent for each Series and for all of the other
mutual funds in the Delaware Group. See Management of the
Fund.
Purchase Price
Shares of each Class offered by this Prospectus are
available at net asset value, without a front-end or
contingent deferred sales charge and are not subject to
distribution fees under a Rule 12b-1 distribution plan. See
Buying Shares.
Investment Objectives
The investment objective of the International Equity
Series is to achieve long-term growth without undue risk to
principal. This Series seeks to achieve its objective by
investing primarily in equity securities that provide the
potential for capital appreciation and income. The Series is
an international fund. As such, at least 65% of the Series'
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 outside of the United States. See
Investment Objectives and Policies.
The investment objective of the Global Bond Series is to
achieve current income consistent with preservation of
principal. This Series seeks to achieve its objective by
investing primarily in fixed income securities that may also
provide the potential for capital appreciation. The Series
is a global fund. As such, at least 65% of the Series'
assets will be invested 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.
See Investment Objectives and Policies.
The investment objective of the Global Assets Series is
to achieve long-term total return. This Series seeks to
achieve its objective by investing in securities which, in
the Manager's or Sub-Adviser's opinion, will provide higher
current income than a portfolio comprised exclusively of
equity securities, along with the potential for capital
growth. The Series will invest in both equity and fixed
income securities. The Series is a global fund. As such, at
least 65% of the Series' assets will be invested in
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. It is anticipated that a portion of the
Series' assets may be invested in warrants. See Investment
Objectives and Policies.
Open-End Investment Company
The Fund, which was organized as a Maryland corporation
in 1991, is an open-end, registered management investment
company. The International Equity Series operates as a
diversified fund for purposes of the Investment Company Act
of 1940 (the "1940 Act"). The Global Bond Series and the
Global Assets Series operate as nondiversified funds for the
purposes of the 1940 Act. See Shares under Management of the
Fund.
<PAGE>
Investment Management Fees
Delaware International furnishes investment management
services to each Series, subject to the supervision and
direction of the Fund's Board of Directors. Under the
Investment Management Agreement between each Series and
Delaware International, the annual compensation paid to
Delaware International is equal to .75% of a Series' average
daily net assets, less a proportionate share of all
directors' fees paid to the unaffiliated directors by the
Series. The fee paid to Delaware International is higher
than the investment advisory fee paid by most investment
companies. Delaware International believes that its fee is
in line with the fees paid by other international equity
funds. Delaware International has entered into a
sub-advisory agreement with DMC with respect to the
management of the Global Assets Series' investments in U.S.
securities. DMC will receive from Delaware International 25%
of the investment management fees under Delaware
International's Investment Management Agreement with the Fund
on behalf of the Global Assets Series. See Management of the
Fund.
Redemption and Exchange
Shares of each Class are redeemed or exchanged at the
net asset value calculated after receipt of the redemption or
exchange request. See Redemption and Exchange.
Risk Factors
Prospective investors should consider a number of
factors:
1. Investing in securities of non-United States
companies which are generally denominated in foreign
currencies and utilization of forward foreign currency
exchange contracts involve certain considerations comprising
both risk and opportunity not typically associated with
investing in United States companies. See Special Risk
Considerations.
2. Each Series may invest in repurchase agreements
(which involve risks of loss if a seller defaults on its
obligation under the agreement). See Repurchase Agreements
under Investment Strategy.
3. Each Series may lend portfolio securities to
creditworthy institutions; the principal risk to the Series
is the risk that the borrower fails to return the borrowed
security. The Series will require borrowers to deliver
collateral to the Series before lending securities. See
Portfolio Loan Transactions under Investment Strategy.
4. Each Series has the right to engage in options and
futures transactions for hedging purposes, to counterbalance
portfolio volatility and, in connection with futures
transactions, will maintain certain collateral in special
accounts established by futures commission merchants in the
care of the Morgan Guaranty Trust Company of New York (the
"Custodian Bank"). While the Series does not engage in
options and futures for speculative purposes, there are risks
which result from the use of these instruments by the Series,
and an investor should carefully review the descriptions of
such in this Prospectus. The Fund is not registered as a
commodity pool operator nor is the Manager registered as a
commodities trading adviser, in reliance upon various
exemptive rules. See Options and Futures Contracts and
Options on Futures Contracts under Investment Strategy and
Special Risk Considerations.
5. The Global Bond Series may invest in interest rate
swaps for hedging purposes which could subject the Series to
increased risks. See Interest Rate Swaps under Investment
Strategy and Special Risk Considerations.
6. The Global Assets Series may invest up to 15% of
its assets in high yield, high risk U.S. securities ("junk
bonds"). Greater risks may be involved with an investment in
this Series. See High Yield, High Risk Securities under
Investment Strategy.
7. Each Series may invest in the markets of certain
emerging countries which may be subject to a greater degree
of economic, political and social instability than is the
case in the United States and Western European markets. See
Special Risk Considerations.
8. While the Global Bond Series and the Global Assets
Series each intend to seek to qualify as a "diversified"
investment company under provisions of Subchapter M of the
Internal Revenue Code, neither Series will be diversified
under the 1940 Act. Thus, while at least 50% of a Series'
total assets will be represented by cash, cash items, and
other securities limited in respect of any one issuer to an
amount not greater than 5% of the Series' total assets, it
will not satisfy the 1940 Act requirement in this respect,
which applies that test to 75% of the Series' 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.
<PAGE>
SUMMARY OF EXPENSES
International
Equity Fund
Shareholder Transaction Expenses Institutional Class
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Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price).......... None
Maximum Sales Charge Imposed on
Reinvested Dividends
(as a percentage of offering price)........ None
Redemption Fees.............................. None*
Exchange Fees................................ None**
Annual Operating Expenses International
(as a percentage of average Equity Fund
daily net assets) Institutional Class
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Management Fees.............................. 0.73%
12b-1 Fees................................... None
Other Operating Expenses..................... 0.79%
-----
Total Operating Expenses................ 1.52%
=====
Global Bond Fund
Shareholder Transaction Expenses Institutional Class
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Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price)........... None
Maximum Sales Charge Imposed on
Reinvested Dividends
(as a percentage of offering price)........... None
Redemption Fees............................... None*
Exchange Fees................................. None**
Annual Operating Expenses
(as a percentage of Global Bond Fund
average daily net assets) Institutional Class
-------------------------------------------------------------
Management Fees After Voluntary Waiver........ 0.16%***
12b-1 Fees.................................... None
Other Operating Expenses...................... 0.79%***
--------
Total Operating Expenses................. 0.95%***
=======
Global Assets Fund
Shareholder Transaction Expenses Institutional Class
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Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price)............ None
Maximum Sales Charge Imposed on
Reinvested Dividends
(as a percentage of offering price)............ None
Redemption Fees................................ None*
Exchange Fees.................................. None**
Annual Operating Expenses
(as a percentage of Global Assets Fund
average daily net assets Institutional Class
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Management Fees After Voluntary Waiver........... 0.16%***
12b-1 Fees....................................... None
Other Operating Expenses......................... 0.79%***
--------
Total Operating Expenses.................... 0.95%***
========
The purpose of this table is to assist the investor in
understanding the various costs and expenses that an investor
in each Class will bear directly or indirectly. *CoreStates
Bank, N.A. currently charges $7.50 per redemption for
redemptions payable by wire. **Exchanges are subject to the
requirements of each fund and a front-end sales charge may
apply. ***"Other Operating Expenses" for the Global Bond
Fund Institutional Class and the Global Assets Fund
Institutional Class are based on estimated amounts for the
first full fiscal year of these Classes, derived from
expenses paid by the Fund's International Equity Series
during its most recent fiscal year. Delaware International
has elected voluntarily to waive that portion, if any, of the
annual management fees payable by the Global Bond Series and
the Global Assets Series to the extent necessary to ensure
that the Total Operating Expenses of the Global Bond Fund
Institutional Class and the Global Assets Fund Institutional
Class do not exceed 0.95% through May 31, 1995. Total
Operating Expenses assume that the voluntary waiver has been
in effect. If the voluntary waivers were not in effect, it
is estimated that the Total Operating Expenses (as a
percentage of average daily net assets) would be 1.52%
reflecting Management Fees of 0.73% for the Global Bond Fund
Institutional Class' and the Global Assets Fund Institutional
Class' first full fiscal year. See International Equity Fund
A Class, International Equity Fund B Class, Global Bond Fund
A Class, Global Bond Fund B Class, Global Assets Fund A Class
and Global Assets Fund B Class for expense information about
those classes.
The following example illustrates the expenses that an
investor would pay on a $1,000 investment over various time
periods assuming (1) a 5% annual rate of return and (2)
redemption at the end of each time period. As noted in the
table above, the Fund charges no redemption fees.
International Equity 1 year 3 years 5 years 10 years
Fund Institutional Class ------ ------- ------- --------
$15 $48 $83 $181
Global Bond Fund 1 year 3 years 5 years 10 years
Institutional Class ------ ------- ------- --------
$10 $30 $53 $117
Global Assets Fund 1 year 3 years 5 years 10 years
Institutional Class ------ ------- ------ --------
$10 $30 $53 $117
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.
<PAGE>
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FINANCIAL HIGHLIGHTS
The following financial highlights are derived from the
financial statements of Delaware Group Global & International
Funds, Inc. - International Equity Series and have been
audited by Ernst & Young LLP, independent auditors. The data
should be read in conjunction with the financial statements,
related notes, and the report of Ernst & Young LLP covering
such financial information and highlights, all of which are
incorporated by reference into Part B. Further information
about the International Equity Series' performance is
contained in its Annual Report to shareholders. A copy of
the Series' Annual Report (including the report of Ernst &
Young LLP) may be obtained from the Fund upon request at no
charge. Shares of the Global Bond Series and the Global
Assets Series were not offered prior to December 27, 1994
and, therefore, no financial highlights are provided below
for those Series.
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<TABLE>
<CAPTION>
INTERNATIONAL EQUITY SERIES
Institutional Class Shares
Period
11/9/92(3)
Year Ended through
11/30/94 11/30/93(3) 11/30/92
<S> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $11.290 $9.590 $9.520
Income From
Investment
Operations
- ------------
Net Investment
Income................. 0.166 0.594 0.021
Net Gains (Losses) on
Securities (both realized
and unrealized)........ 0.899 1.581 0.049
----- ----- -----
Total From Investment
Operations............ 1.065 2.175 0.070
----- ----- -----
Less Distributions
Dividends From Net
Investment Income..... (0.245) (0.475) none
Distributions From
Capital Gains......... (0.140) none none
Returns of Capital.... none none none
---- ---- ----
Total Distributions.. (0.385) (0.475) none
------- ------- ----
Net Asset Value,
End of Period......... $11.970 $11.290 $9.590
- -----------------------------------------------------------------
Total Return 9.47%(4) 23.52%(4) (0.15%)(4)
- ---------------
- -----------------------------------------------------------------
Ratios/Supplemental Data
- -----------------------------
Net Assets,
End of Period
(000's omitted)....... $7,613 $3,959 $1,120
Ratio of Expenses to
Average Daily
Net Assets............ 1.26%(8) 0.95%(8) 0.95%(8)
Ratio of Net Investment
Income to Average Daily
Net Assets............ 1.52%(9) 4.21%(9) 2.74%(9)
Portfolio Turnover Rate 27% 24% 12%
</TABLE>
<TABLE>
Period
Year 10/31/91(1)(2)
Ended through
11/30/92(1) 11/30/91
<S> <C> <C>
Net Asset Value,
Beginning of Period.... $9.650 $10.000
Income From
Investment
Operations
- ------------
Net Investment
Income................. 0.162 (0.004)
Net Gains (Losses) on
Securities (both realized
and unrealized)........ (0.172) (0.346)
------- -------
Total From Investment
Operations............ (0.010) (0.350)
------- -------
Less Distributions
Dividends From Net
Investment Income..... (0.050) none
Distributions From
Capital Gains......... none none
Returns of Capital.... none none
---- ----
Total Distributions.. (0.050) none
------- ----
Net Asset Value,
End of Period......... $9.590 $9.650
- -----------------------------------------------------------------
Total Return (0.15%)(4)(5) (3.50%)(4)(5)
- ---------------
- -----------------------------------------------------------------
Ratios/Supplemental Data
- -----------------------------
Net Assets,
End of Period
(000's omitted)....... $4,604 $723
Ratio of Expenses to
Average Daily
Net Assets............ 1.25%(6) (2)
Ratio of Net Investment
Income to Average Daily
Net Assets............ 2.44%(7) (2)
Portfolio Turnover Rate 12% (2)
</TABLE>
(1) The per share data for the International Equity Fund
Institutional Class are derived from the International
Equity Fund A Class (formerly known as International
Equity Fund (class) and reflect the impact of Rule 12b-1
distribution expenses paid by the International Equity
Fund A Class. International Equity Fund Institutional
Class shares are not subject to Rule 12b-1 distribution
expenses and, beginning November 9, 1992, the per share
data do not reflect the deduction of such expenses.
Total return has been annualized and does not reflect the
maximum front-end sales charge applicable to the
International Equity Fund A Class.
(2) Date of initial sale of the International Equity Fund A
Class. The ratios of expenses and net investment income
to average daily net assets and portfolio turnover have
been omitted as management believes such ratios for this
relatively short period are not meaningful.
(3) The per share data are derived from the International
Equity Fund Institutional Class (formerly known as
International Equity Fund (Institutional) class) which
commenced operations on November 9, 1992. Ratios for the
period November 9, 1992 through November 30, 1992 have
been annualized and the total return reflects the
performance of the International Equity Fund A Class from
December 1, 1991 to November 8, 1992 and the performance
of the International Equity Fund
Institutional Class from November 9, 1992 to November 30,
1992.
(4) Total return reflects the voluntary fee waiver described
under Management of the Fund.
(5) Does not reflect maximum front-end sales charge,
currently, 5.75% nor the 1% Limited CDSC that would apply
in the event of certain redemptions within 12 months of
purchase.
(6) Ratio of expenses to average daily net assets prior to
expense limitation was 5.67% for the International Equity
Fund A Class.
(7) Ratio of net investment income (loss) to average daily
net assets prior to expense limitation was (2.00%) for
the International Equity Fund A Class.
(8) Ratio of expenses to average daily net assets prior to
expense limitation was 1.52% for the year ended November
30, 1994, 1.86% for the year ended November 30, 1993 and
5.37% for the period ended November 30, 1992 for the
International Equity Fund Institutional Class.
(9) Ratio of net investment income (loss) to average daily
net assets prior to expense limitation was 1.26% for the
year ended November 30, 1994, 3.30% for the year ended
November 30, 1993 and (1.70%) for the period ended
November 30, 1992 for the International Equity Fund
Institutional Class.
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
The objective of the International Equity Series is to
achieve long-term growth without undue risk to principal.
The Series seeks to achieve this objective by investing
primarily in securities that provide the potential for
capital appreciation and income. The Series is an
international fund. Under normal circumstances, at least 65%
of the Series' assets will be invested in the 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.
The objective of the Global Bond Series is to achieve
current income consistent with the preservation of investors'
principal. The Series seeks to achieve this objective by
investing primarily in fixed income securities that may also
provide the potential for capital appreciation. The Series
is a global fund. Under normal circumstances, at least 65%
of the Series' 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.
The objective of the Global Assets Series is to achieve
long-term total return for investors. The Series seeks to
achieve this objective by investing in securities which, in
the Manager's or Sub-Adviser's opinion, will provide higher
current income than a portfolio comprised exclusively of
equity securities, along with the potential for capital
growth. The Series is a global fund. Under normal
circumstances, at least 65% of the Series' assets will be
invested in the 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.
Each Series may invest in securities issued in any
currency and may hold foreign currency. 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 ("ECU"). For
purposes of the 1940 Act, the International Equity Series
will operate as a diversified fund and the Global Bond Series
and the Global Assets Series will each operate as a
nondiversified fund.
INVESTMENT STRATEGY
International Equity Series--The Series will attempt to
achieve its objective by investing in a broad range of equity
securities including common stocks, preferred stocks,
convertible securities and warrants. The Manager will employ
a dividend discount analysis across country boundaries and
will also use a purchasing power parity approach to
identifying currencies and markets that are overvalued or
undervalued relative to the U.S. dollar.
With a dividend discount analysis, the Manager looks at
future anticipated dividends and discounts the value of those
dividends back to what they would be worth if they were being
paid today. The Manager uses this technique to attempt to
compare the value of different investments. With a
purchasing power parity approach, the Manager attempts to
identify the amount 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 should 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.
The Series may also invest in sponsored or unsponsored
American Depository Receipts or European Depository Receipts.
While the Series may purchase securities in any foreign
country, developed and underdeveloped, or emerging market
countries, it is currently anticipated that the countries in
which the Series may invest will include, but not be limited
to, Canada, Germany, the United Kingdom, France, the
Netherlands, Belgium, Spain, Switzerland, Japan, Australia,
Hong Kong and Singapore/Malaysia. 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. Any investment the Series 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.
<PAGE>
The Series 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 (the "1933 Act"). Rule 144A permits many
privately placed and legally restricted securities to be
freely traded among certain institutional buyers such as the
Series. See Rule 144A Securities. The Series may invest no
more than 10% of the value of its net assets in illiquid
securities. The Series will not concentrate its investments
in any particular industry, which means that it will not
invest 25% or more of its total assets in any one industry.
For temporary defensive purposes, the Series 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. Any
corporate debt obligations will be rated AA or better by
Standard & Poor's Corporation ("S&P"), or Aa or better by
Moody's Investors Service, Inc. ("Moody's"), or if unrated,
will be determined to be of comparable quality by the
Manager. For example, the Series may enter the global fixed
income markets when the Manager believes that the global
equity markets are excessively volatile or overvalued so that
the Series' objective cannot be achieved in such markets. In
addition, the Series may invest in the U.S. fixed income
markets for temporary defensive purposes when the Manager
believes that the international equity and fixed income
markets are evidencing such excessive volatility or
overvaluation. The Series may also invest in the securities
listed for defensive investing pending investment of proceeds
from new sales of Series shares and to maintain sufficient
cash to meet redemption requests.
Global Bond Series--The Series will attempt to achieve
its objective by investing at least 65% of its assets in a
broad range of fixed income securities, including foreign and
U.S. government securities and 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 the Manager. The Series may also invest in zero
coupon bonds and in the debt securities of supranational
entities denominated in any currency. Generally, the value
of fixed income securities moves inversely to the movement of
market interest rates. The value of the Series' portfolio
securities and, thus, an investor's shares will be affected
by changes in such rates.
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 Series currently
anticipates that a large percentage of its assets will be
invested in U.S. and foreign government securities and
securities of supranational entities.
With respect to U.S. government securities, the Series
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 Series 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.
With respect to securities issued by foreign governments,
their agencies, instrumentalities or political subdivisions,
the Series 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 Manager to be of
comparable quality.
<PAGE>
From time to time, the Series may find opportunities to
pursue its objective outside of the fixed income markets, but
in no event will such investments exceed 5% of the Series'
net assets.
The Series may also invest in sponsored or unsponsored
American Depository Receipts or European Depository Receipts.
While the Series may purchase securities of issuers in any
foreign country, developed and underdeveloped, or emerging
market countries, it is currently anticipated that the
countries in which the Series may invest will include, but
not be limited to, Canada, Germany, the United Kingdom,
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 such countries. Any investment the Series 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.
The Series may invest in restricted securities, including
Rule 144A Securities. See Rule 144A Securities. The Series
may invest no more than 10% of the value of its net assets in
illiquid securities. The Series will not concentrate its
investments in any particular industry, which means that it
will not invest 25% or more of its total assets in any one
industry.
It is anticipated that the average weighted maturity of
the portfolio will be in the five-to-ten year range. If,
however, the Manager anticipates a declining interest rate
environment, the average weighted maturity may be extended
past ten years. Conversely, if the Manager anticipates a
rising rate environment, the average weighted maturity may be
shortened to less than five years.
Global Assets Series--The Series will attempt to achieve
its objective by investing in a broad range of equity and
fixed income securities. In selecting securities investments
for the Series, the Manager will consider an issuer's
competitive position, cost structure and liquidity. Equity
securities in which the Series may invest include convertible
securities, common stocks, preferred stocks and warrants
issued in foreign countries or in the United States. In
selecting equity securities in which the Series may invest,
the Manager will use a dividend discount analysis and a
purchasing power parity approach.
Generally, fixed income securities in which the Series
may invest include foreign and U.S. government securities and
debt obligations of foreign and U.S. companies which are
investment grade as determined by any nationally- recognized
statistical rating organization, such as those rated BBB or
better by S&P, or Baa or better by Moody's, or if unrated,
are determined to be of comparable quality by the Manager.
Debt obligations rated BBB and Baa have speculative
characteristics. However, the Series may also invest up to
15% of its net assets in high yield, high risk U.S. fixed
income securities. These securities are rated lower than BBB
by S&P and Baa by Moody's or, if unrated, are considered by
the Manager or Sub-Adviser to be of equivalent quality. The
Series will not invest in securities which are rated lower
than C by S&P or Ca by Moody's or, if unrated, are considered
by the Manager or Sub-Adviser to be of a quality that is
lower than such ratings. See Appendix A - Ratings to this
Prospectus for more rating information. Fixed income
securities of this type are considered to be of poor standing
and predominantly speculative. Such securities are subject
to a substantial degree of credit risk. See High Yield, High
Risk Securities. With respect to U.S. government securities,
the Series may invest only in securities issued or guaranteed
as to the payment of principal and interest by the United
States government, and those of its agencies or
instrumentalities which are backed by the full faith and
credit of the United States.
<PAGE>
With respect to securities issued by foreign governments,
their agencies, instrumentalities or political subdivisions,
the Series will invest only 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 Manager to be of
comparable quality.
It is anticipated that a portion of the Series' assets
may be invested in warrants. Warrants permit the Manager to
establish an equity position in selected securities by
committing a lower proportion of the portfolio to equities.
The Manager's intention is to invest the difference between
the cost of the warrant and the equivalent equity security in
high quality debt instruments. The Series may, at any given
time, be fully invested in either the equity or fixed income
markets, depending upon investment opportunities available in
each.
The Series may also invest in zero coupon bonds and in
the debt securities of supranational entities denominated in
any currency. See Global Bond Series.
The Series may also invest in sponsored or unsponsored
American Depository Receipts or European Depository Receipts.
While the Series may purchase securities of issuers in any
foreign country, developed and underdeveloped, or emerging
growth countries, it is currently anticipated that the
countries in which the Series may invest in addition to the
United States, will include, but are not limited to, Canada,
Germany, the United Kingdom, France, the Netherlands,
Belgium, Spain, Switzerland, Ireland, Denmark, Portugal,
Italy, Austria, Norway, Sweden, Finland, Luxembourg, Greece,
Japan, Australia, Hong Kong, Singapore/Malaysia, Indonesia,
Korea, Malaysia, the Philippines, Taiwan and Thailand. With
respect to certain countries, namely Korea and Taiwan,
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.
Any investment the Series 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.
The Series may invest in restricted securities, including
Rule 144A Securities. See Rule 144A Securities. The Series
may invest no more than 10% of the value of its net assets in
illiquid securities. The Series will not concentrate its
investments in any particular industry, which means that it
will not invest 25% or more of its total assets in any one
industry.
High Yield, High Risk Securities
The Global Assets Series may invest up to 15% of its
assets in high yield, high risk U.S. fixed income securities
(commonly known as junk bonds). In the past, in the opinion
of the Manager and the Sub-Adviser, 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 Manager and the Sub-Adviser intend to
maintain an adequately diversified portfolio of these bonds.
While diversification can help to reduce the effect of an
individual default on the Series, there can be no assurance
that diversification will protect the Series from widespread
bond defaults brought about by a sustained economic downturn.
Medium- and low-grade bonds held by the Series 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 a
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 Series' net asset value per share.
<PAGE>
Foreign Currency Transactions
Although the Fund values its assets daily in terms of
U.S. dollars, it does not intend to convert its holdings of
foreign currencies into U.S. dollars on a daily basis. Each
Series 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.
Each Series may conduct its foreign currency exchange
transactions on a spot (i.e., cash) basis at the spot rate
prevailing in the foreign currency exchange market or through
entering into contracts to purchase or sell foreign
currencies at a future date (i.e., a "forward foreign
currency" contract or "forward" contract). A 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. The
Series will convert currency on a spot basis from time to
time, and investors should be aware of the costs of currency
conversion.
A Series 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, the
Series 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.
When the Manager believes that the currency of a
particular country may suffer a significant decline against
the U.S. dollar or against another currency, the Series may
enter into a forward foreign currency 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 Series' securities denominated in such
foreign currency.
A Series will not enter into forward contracts or
maintain a net exposure to such contracts where the
consummation of the contracts would obligate the Series to
deliver an amount of foreign currency in excess of the value
of the Series' securities or other assets denominated in that
currency.
At the maturity of a forward contract, a Series 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 Series may
realize a gain or loss from currency transactions.
A Series also may purchase and write put and call options
on foreign currencies (traded on U.S. and foreign exchanges
or over-the-counter) for hedging purposes to protect against
declines in the U.S. dollar cost of foreign securities held
by the Series and against increases in the U.S. dollar cost
of such securities to be acquired. Call options on foreign
currency written by a Series will be covered, which means
that the Series will own the underlying foreign currency.
With respect to put options on foreign currency written by a
Series, the Series will establish a segregated account with
its Custodian Bank consisting of cash, U.S. government
securities or other high-grade liquid debt securities in an
amount equal to the amount the Series will be required to pay
upon exercise of the put. See Special Risk Considerations.
Repurchase Agreements
Each Series also may use repurchase agreements that are
at least 100% collateralized by securities in which the
Series can invest directly. Repurchase agreements help a
Series to invest cash on a temporary basis. A Series may
invest cash balances in joint repurchase agreements with
other Delaware Group funds. Under a repurchase agreement, a
Series acquires ownership and possession of a security, and
the seller agrees to buy the security back at a specified
time and higher price. If the seller is unable to repurchase
the security, the Series could experience delays in
liquidating the securities. To minimize this possibility,
the Manager, pursuant to direction from the Board of
Directors of the Fund, considers the creditworthiness of
banks and dealers when entering into repurchase agreements.
<PAGE>
Portfolio Loan Transactions
Each Series 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 Series 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, the Series will only enter into loan arrangements
after a review of all pertinent facts by the Manager, 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 Manager.
Borrowings
Each Series may borrow money as a temporary measure for
extraordinary purposes or to facilitate redemptions. A
Series will not borrow money in excess of one-third of the
value of its net assets. A Series has no intention of
increasing its net income through borrowing. Any borrowing
will be done from a bank and, to the extent that such
borrowing exceeds 5% of the value of the Series' 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
Series shall, within three days thereafter (not including
Sunday or holidays) or such longer period as the U.S.
Securities and Exchange 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%. A Series will not pledge more than 10% of its
net assets, or issue senior securities as defined in the 1940
Act, except for notes to banks. Investment securities will
not be purchased while a Series has an outstanding borrowing.
Rule 144A Securities
While maintaining oversight, the Board of Directors has
delegated to the Manager the day-to-day functions of
determining whether or not individual Rule 144A Securities
are liquid for purposes of each Series' 10% limitation on
investments in illiquid assets. The Board has instructed the
Manager to consider the following factors in determining the
liquidity of a Rule 144A Security: (i) the frequency of
trades and trading volume for the security; (ii) whether at
least three dealers are willing to purchase or sell the
security and the number of potential purchasers; (iii)
whether at least two dealers are making a market in the
security; and (iv) the nature of the security and the nature
of the marketplace trades (e.g., the time needed to dispose
of the security, the method of soliciting offers, and the
mechanics of transfer).
If the Manager determines that a Rule 144A Security which
was previously determined to be liquid is no longer liquid
and, as a result, a Series' holdings of illiquid securities
exceed the Series' 10% limit on investment in such
securities, the Manager will determine what action shall be
taken to ensure that the Series continues to adhere to such
limitation.
Options
The Manager may employ options techniques in an attempt
to protect appreciation attained and to take advantage of the
liquidity available in the options market. Each Series may
purchase call options on foreign or U.S. securities and
indices and enter into related closing transactions. A
Series may also purchase put options on such securities and
indices and enter into related closing transactions.
A call option enables the purchaser, in return for the
premium paid, to purchase securities from the writer of the
option at an agreed price up to an agreed date. The
advantage is that the purchaser may hedge against an increase
in the price of securities it ultimately wishes to buy or
take advantage of a rise in a particular index. A Series
will only purchase call options to the extent that premiums
paid on all outstanding call options do not exceed 2% of its
total assets.
A put option enables the purchaser of the option, in
return for the premium paid, to sell the security underlying
the option to the writer at the exercise price during the
option period, and the writer of the option has the
obligation to purchase the security from the purchaser of the
option. A Series will only purchase put options to the
extent that the premiums on all outstanding put options do
not exceed 2% of its total assets. The advantage is that the
purchaser can be protected should the market value of the
security decline or should a particular index decline.
An option on a securities index gives the purchaser of
the option, in return for the premium paid, the right to
receive from the seller cash equal to the difference between
the closing price of the index and the exercise price of the
option.
Closing transactions essentially let a Series offset put
options or call options prior to exercise or expiration. If
a Series cannot effect closing transactions, it may have to
hold a security it would otherwise sell or deliver a security
it might want to hold.
Each Series may use both Exchange-traded and
over-the-counter options. Certain over-the-counter options
may be illiquid. A Series will only invest in such options
to the extent consistent with its 10% limit on investment in
illiquid securities. See Special Risk Considerations.
<PAGE>
Futures Contracts and Options on Futures Contracts
The principal purpose of the purchase or sale of futures
contracts for a Series is to protect the Series against the
fluctuations in interest or exchange rates which otherwise
might adversely affect the value of the Series' portfolio
securities or adversely affect the prices of securities which
the Series intends to purchase at a later date without
actually buying or selling such securities.
Each Series may enter into contracts for the purchase or
sale for future delivery of securities or foreign currencies.
A purchase of a futures contract means the acquisition of a
contractual right to obtain delivery to a Series of the
securities or foreign currency called for by the contract at
a specified price during a specified future month. When a
futures contract is sold, a Series incurs a contractual
obligation to deliver the securities or foreign currency
underlying the contract at a specified price on a specified
date during a specified future month. A Series may 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 may
engage in such transactions to the extent that obligations
relating to such futures and related options on futures
transactions represent not more than 20% of its assets.
A Series may also purchase and write options to buy or
sell futures contracts. Options on futures are similar to
options on securities 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.
When a Series enters into a futures transaction, it must
deliver to the futures commission merchant selected by the
Series an amount referred to as "initial margin." This
amount is maintained by the futures commission merchant in an
account at the Custodian Bank. Thereafter, a "variation
margin" may be paid by a Series to, or drawn by the Series
from, such account in accordance with controls set for such
accounts, depending upon changes in the price of the
underlying securities subject to the futures contract. See
Special Risk Considerations.
Interest Rate Swaps
In order to attempt to protect the Global Bond Series'
investments from interest rate fluctuations, the Series may
engage in interest rate swaps. The Series intends to use
interest rate swaps as a hedge and not as a speculative
investment. Interest rate swaps involve the exchange by the
Series with another party of their respective rights to
receive interest, e.g., an exchange of fixed rate payments
for floating rate payments. For example, if the Series holds
an interest- paying security whose interest rate is reset
once a year, it may swap the right to receive interest at
this fixed rate for the right to receive interest at a rate
that is reset daily. Such a swap position would offset
changes in the value of the underlying security because of
subsequent changes in interest rates. This would protect the
Series from a decline in the value of the underlying security
due to rising rates, but would also limit its ability to
benefit from falling interest rates.
The Series may enter into interest rate swaps on either
an asset-based or liability-based basis, depending upon
whether it is hedging its assets or its liabilities, and will
usually enter into interest rate swaps on a net basis, i.e.,
the two payment streams are netted out, with the Series
receiving or paying, as the case may be, only the net amount
of the two payments. Inasmuch as these hedging transactions
are entered into for non-speculative purposes and not for
the purpose of leveraging the Series' investments, the
Manager and the Series believe such obligations do not
constitute senior securities and, accordingly, will not treat
them as being subject to its borrowing restrictions. The net
amount of the excess, if any, of the Series' obligations over
its entitlement with respect to each interest rate swap will
be accrued on a daily basis and an amount of cash or
high-quality liquid securities having an aggregate net asset
value at least equal to the accrued excess will be maintained
in a segregated account by the Custodian Bank. If the Series
enters into an interest rate swap on other than a net basis,
the Series would maintain a segregated account in the full
amount accrued on a daily basis of the Series' obligations
with respect to the swap.
* * *
<PAGE>
Each Series' investment objective, the Fund's designation
as an open-end investment company, the International Equity
Series' designation as a diversified fund, the Global Bond
and the Global Assets Series' designations as nondiversified
funds, and their policies concerning portfolio lending,
borrowing and concentration may not be changed unless
authorized by the vote of a majority of the Series'
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 Series' voting securities
present in person or represented by proxy if the holders of
more than 50% of the outstanding voting securities of such
Series are present or represented by proxy; or b) more than
50% of the outstanding voting securities. Part B lists other
more specific investment restrictions of the Series which may
not be changed without a majority shareholder vote. A brief
discussion of those factors that materially affected the
International Equity Series' performance during its most
recently completed fiscal year appears in the Series' Annual
Report.
The remaining investment policies are not fundamental and
may be changed by the Board of Directors of the Fund without
a shareholder vote. See Special Risk Considerations.
SPECIAL RISK CONSIDERATIONS
Shareholders should understand that all investments
involve risk and there can be no guarantee against loss
resulting from an investment in a Series, nor can there be
any assurance that the Series' investment objective will be
attained.
Each Series has the right to purchase securities in any
foreign country, developed and underdeveloped, or emerging
growth countries. 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 less publicly available information about issuers
than is available in reports about companies in the United
States. 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. Further, a
Series 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. 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. The foreign securities markets of many of the
countries in which a Series 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 relatively unstable
governments, economies based on only a few industries, and
securities markets that trade a small number of securities.
Prices on these exchanges tend to be volatile and, in the
past, securities in these countries have offered greater
potential for gain (as well as loss) than securities of
companies located in developed countries. Further,
investments by foreign investors are subject to a variety of
restrictions in many emerging countries. These restrictions
may take the form of prior governmental approval, limits on
the amount or type of securities held by foreigners, and
limits on the types of companies in which foreigners may
invest. Additional restrictions may be imposed at any time
by these or other countries in which a Series invests. In
addition, the repatriation of both investment income and
capital from several foreign countries is restricted and
controlled under certain regulations, including, in some
cases, the need for certain governmental consents. Although
these restrictions may in the future make it undesirable to
invest in emerging countries, the Manager does not believe
that any current repatriation restrictions would affect its
decision to invest in such countries. Countries such as
those in which a Series may invest have historically
experienced and may continue to experience, high rates of
inflation, 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. Additional 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.
In purchasing put and call options, the premium paid by a
Series plus any transaction costs will reduce any benefit
realized by the Series upon exercise of the option.
<PAGE>
To the extent that interest or exchange rates or
securities prices move in an unexpected direction, a Series
may not achieve the anticipated benefits of investing in
futures contracts and options thereon, or may realize a loss.
To the extent that the Series 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 could
prevent the Series from closing out its positions relating to
futures.
As in the case of other kinds of options, the writing of
an option on foreign currency will constitute only a partial
hedge, up to the amount of the premium received, and a Series
could be required to purchase or sell foreign currencies at
disadvantageous exchange rates, thereby incurring losses.
The purchase of an option on foreign currency may constitute
an effective hedge against fluctuations in exchange rates,
although, in the event of rate movements adverse to the
Series' position, the Series may forfeit the entire amount of
the premium plus related transaction costs.
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 the Series 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 Series 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 the
portfolio security if its market value exceeds the amount of
foreign currency the Series is obligated to
deliver.
The Global Bond and Global Assets Series may also invest
in zero coupon bonds. The market prices of zero coupon
securities are generally more volatile than the market prices
of securities that pay interest periodically and are likely
to respond to changes in interest rates to a greater degree
than do non-zero coupon securities having similar maturities
and credit quality. Current federal income tax law requires
that a holder of a taxable zero coupon security report as
income each year the portion of the original issue discount
of such security that accrues that year, even though the
holder receives no cash payments of interest during the year.
Each Series has qualified as a regulated investment company
under the Internal Revenue Code. Accordingly, during periods
when a Series receives no interest payments on its zero
coupon securities, it will be required, in order to maintain
its desired tax treatment, to distribute cash approximating
the income attributable to such securities. Such
distribution may require the sale of portfolio securities to
meet the distribution requirements and such sales may be
subject to the risk factor discussed above.
The use of interest rate swaps by the Global Bond Series
involves investment techniques and risks different from those
associated with ordinary portfolio securities transactions.
If the Manager is incorrect in its forecasts of market
values, interest rates and other applicable factors, the
investment performance of the Series will be less favorable
than it would have been if this investment technique were
never used. Interest rate swaps do not involve the delivery
of securities or other underlying assets or principal. Thus,
if the other party to an interest rate swap defaults, the
Series' risk of loss consists of the net amount of interest
payments that the Series is contractually entitled to
receive.
The Global Assets Series may invest up to 15% of its net
assets in high yield, high risk U.S. fixed income securities.
These securities are rated lower than BBB by S&P and Baa by
Moody's or, if unrated, are considered by the Manager or
Sub-Adviser to be of equivalent quality. See Global Assets
Series and High Yield, High Risk Securities. 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.
While the Global Bond and the Global Assets Series each
intend to seek to qualify as a "diversified" investment
company under provisions of Subchapter M of the Internal
Revenue Code, neither will be diversified under the 1940 Act.
Thus, while at least 50% of each such Series' total assets
will be represented by cash, cash items, and other securities
limited in respect of any one issuer to an amount not greater
than 5% of the Series' total assets, it will not satisfy the
1940 Act requirement in this respect, which applies that test
to 75% of the Series' 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.
<PAGE>
BUYING SHARES
The Distributor serves as the national distributor for
the Fund. Shares of each Class may be purchased directly by
contacting the Fund or its agent or through authorized
investment dealers. All purchases are at net asset value.
There is no sales charge.
Investment instructions given on behalf of participants
in an employer-sponsored retirement plan are made in
accordance with directions provided by the employer.
Employees considering purchasing shares of a Class as part of
their retirement program should contact their employer for
details.
Shares of each Class 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 DMC or its affiliates and securities dealer firms
with a selling agreement with the Distributor; (c)
institutional advisory accounts of DMC or its affiliates and
those having client relationships with Delaware Investment
Advisers, a division of DMC or its 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)
banks, trust companies and similar financial institutions
investing for their own account or for the account of their
trust customers for whom such financial institution is
exercising investment discretion in purchasing shares of a
Class; 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.
International Equity Fund A Class, International Equity Fund
B Class, Global Bond Fund A Class, Global Bond Fund B Class,
Global Assets Fund A Class and Global Assets Fund B Class
In addition to offering the International Equity Fund
Institutional Class, the Global Bond Fund Institutional Class
and the Global Assets Fund Institutional Class of shares, the
respective Series also offer the International Equity Fund A
Class and the International Equity Fund B Class, the Global
Bond Fund A Class and the Global Bond Fund B Class, and the
Global Assets Fund A Class and the Global Assets Fund B
Class, which are described in a separate prospectus relating
only to those classes. Shares of such classes may be
purchased through authorized investment dealers or directly
by contacting the Fund or its agent. The International
Equity Fund A Class, the Global Bond Fund A Class and the
Global Assets Fund A Class carry a front-end sales charge and
have annual 12b-1 expenses equal to a maximum of .30%. The
maximum front-end sales charge as a percentage of the
offering price with respect to the International Equity Fund
A Class and the Global Assets Fund A Class is 5.75% (6.10% as
a percentage of the amount invested) and with respect to the
Global Bond Fund A Class is 4.75% (4.99% as a percentage of
the amount invested) and is reduced on certain transactions
of $100,000 or more. The International Equity Fund B Class,
the Global Bond Fund B Class and the Global Assets Fund B
Class have no front-end sales charge but are subject to
annual 12b-1 expenses equal to a maximum of 1%. Shares of
the International Equity Fund B Class, Global Bond Fund B
Class and Global Assets Fund B Class and certain shares of
the International Equity Fund A Class, Global Bond Fund A
Class and Global Assets Fund A Class may be subject to a
contingent deferred sales charge upon redemption. Sales or
service compensation available in respect of such classes,
therefore, differs from that available in respect of the
International Equity Fund Institutional Class, the Global
Bond Fund Institutional Class and the Global Assets Fund
Institutional Class. All three classes of shares of a Series
have a proportionate interest in the underlying portfolio of
securities of that Series. Total Operating Expenses incurred
by the International Equity Fund A Class as a percentage of
average daily net assets for the fiscal year ended November
30, 1994 were 1.56%, inclusive of 12b-1 fees, after voluntary
fee waivers and expense reimbursements by the Manager. Based
on expenses derived from the International Equity Fund A
Class during the year ended November 30, 1994, the expenses
of the International Equity Fund B Class are expected to be
2.52%, inclusive of 12b-1 fees, for its fiscal year ended
November 30, 1995. Total Operating Expenses expected to be
incurred by the Global Bond Fund A Class and the Global
Assets Fund A Class are expected to be 1.25%, inclusive of
12b-1 fees, after voluntary fee waivers and expense
reimbursements by the Manager. Total Operating Expenses
expected to be incurred by the Global Bond Fund B Class and
the Global Assets Fund B Class are expected to be 1.95%,
inclusive of 12b-1 fees, after voluntary fee waivers and
expense reimbursements by the Manager. See Part B for
performance information about the International Equity Fund A
Class and the International Equity Fund B Class. To obtain a
prospectus relating to the International Equity Fund A Class,
the International Equity Fund B Class, the Global Bond Fund A
Class, the Global Bond Fund B Class, the Global Assets Fund A
Class and the Global Assets Fund B Class, contact the
Distributor.
<PAGE>
HOW TO BUY SHARES
The Fund makes it easy to invest by mail, by wire, by
exchange and by arrangement with your investment dealer. In
all instances, investors must qualify to purchase shares of
each Class.
Investing Directly by Mail
1. Initial Purchases--An Investment Application must be
completed, signed and sent with a check payable to the
specific Class selected (for example, if you want to purchase
shares of the Institutional Class of the International Equity
Series, make the check payable to the International Equity
Fund Institutional Class) to 1818 Market Street,
Philadelphia, PA 19103.
2. Subsequent Purchases--Additional purchases may be made at
any time by mailing a check payable to the specific Class
selected. Your check should be identified with your name(s)
and account number.
Investing Directly by Wire
You may purchase shares by requesting your bank to
transmit funds by wire to CoreStates Bank, N.A., ABA
#031000011, account number 0114-2596 (include your name(s)
and your account number for the Class in which you are
investing).
1. Initial Purchases--Before you invest, telephone the
Fund's Client Services Department to get an account number at
800-828-5052. If you do not call first, it may delay
processing your investment. In addition, you must promptly
send your Investment Application to the specific Class
selected, to 1818 Market Street, Philadelphia, PA 19103.
2. Subsequent Purchases--You may make additional investments
anytime by wiring funds to CoreStates Bank, N.A., as
described above. You must advise your Client Services
Representative by telephone at 800-828-5052 prior to sending
your wire.
Investing by Exchange
If you have an investment in another mutual fund in the
Delaware Group and you qualify to purchase shares of a Class,
you may write and authorize an exchange of part or all of
your investment into the Class. Shares of the International
Equity Fund B Class, the Global Bond Fund B Class and the
Global Assets Fund B Class and the Class B Shares of the
other funds in the Delaware Group offering such a class of
shares may not be exchanged into the Classes. If you wish to
open an account by exchange, call your Client Services
Representative at 800-828- 5052 for more information.
Investing through Your Investment Dealer
You can make a purchase of Class shares through most
investment dealers who,as part of the service they provide,
must transmit orders promptly. They may charge for this
service.
Purchase Price and Effective Date
The purchase price (net asset value) of the shares of
each Series is determined as of the close of regular trading
on the New York Stock Exchange (ordinarily, 4 p.m., Eastern
time) on days when such exchange is open.
The effective date of a purchase made through an
investment dealer is the date the order is received by the
Fund. The effective date of a direct purchase is the day
your wire, electronic transfer or check is received, unless
it is received after the time the share price is determined,
as noted above. Those received after such time will be
effective the next business day.
The Conditions of Your Purchase
The Fund reserves the right to reject any purchase or
exchange. If a purchase is cancelled because your check is
returned unpaid, you are responsible for any loss incurred.
The Fund can redeem shares from your account(s) to reimburse
itself for any loss, and you may be restricted from making
future purchases in any of the funds in the Delaware Group.
The Fund reserves the right, upon 60 days' written notice, to
redeem accounts that remain under $250 as a result of
redemptions.
<PAGE>
REDEMPTION AND EXCHANGE
Redemption and exchange requests made on behalf of
participants in an employer-sponsored retirement plan are
made in accordance with directions provided by the employer.
Employees should therefore contact their employer for
details.
Your shares will be redeemed or exchanged based on the
net asset value next determined after we receive your request
in good order. Redemption or exchange requests received in
good order after the time the offering price of shares is
determined, as noted above, will be processed on the next
business day. See Purchase Price and Effective Date under
Buying Shares. Except as otherwise noted below, for a
redemption request to be in "good order," you must provide
your Class account number, account registration, and the
total number of shares or dollar amount of the transaction.
With regard to exchanges, you must also provide the name of
the fund you want to receive the proceeds. Exchange
instructions and redemption requests must be signed by the
record owner(s) exactly as the shares are registered. You
may request a redemption or an exchange by calling the Fund
at 800-828-5052.
The Fund will honor written redemption requests of
shareholders who recently purchased shares by check, but will
not mail the proceeds until it is reasonably satisfied the
purchase check has cleared, which may take up to 15 days from
the purchase date. The Fund will not honor telephone
redemptions for Class shares recently purchased by check
unless it is reasonably satisfied that the purchase check has
cleared. You can avoid this potential delay if you purchase
shares by wiring Federal Funds. The Fund reserves the right
to reject a written or telephone redemption request or delay
payment of redemption proceeds if there has been a recent
change to the shareholder's address of record.
Shares of a Class may be exchanged into any other
Delaware Group mutual fund provided: (1) the investment
satisfies the eligibility and other requirements set forth in
the prospectus of the fund being acquired, including the
payment of any applicable front-end sales charge; and (2) the
shares of the fund being acquired are in a state where that
fund is registered. If exchanges are made into other shares
that are eligible for purchase only by those permitted to
purchase shares of the Classes, such shares will be exchanged
at net asset value. Shares of a Class may not be exchanged
into the Class B Shares of the funds in the Delaware Group.
The Fund reserves the right to reject exchange requests at
any time. The Fund may suspend or terminate, or amend the
terms of, the exchange privilege upon 60 days' written notice
to shareholders.
Different redemption and exchange methods are outlined
below. There is no fee charged by the Fund or the
Distributor for redeeming or exchanging your shares. You may
also have your investment dealer arrange to have your shares
redeemed or exchanged. Your investment dealer may charge for
this service.
All authorizations given by shareholders with respect to
an account, including selection of any of the features
described below, shall continue in effect until revoked or
modified in writing and until such time as such written
revocation or modification has been received by the Fund or
its agent.
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.
Written Redemption and Exchange
You can write to the Fund at 1818 Market Street,
Philadelphia, PA 19103 to redeem some or all of your Class
shares or to request an exchange of any or all your Class
shares into another mutual fund in the Delaware Group,
subject to the same conditions and limitations as other
exchanges noted above. The request must be signed by all
owners of the account or your investment dealer of record.
For redemptions of more than $50,000, or when the
proceeds are not sent to the shareholder(s) at the address of
record, the Fund requires a signature by all owners of the
account and may require a signature guarantee. 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. The Fund may require further
documentation from corporations, executors, retirement plans,
administrators, trustees or guardians.
The redemption request is effective at the net asset
value next determined after it is received in good order.
Payment is normally mailed the next business day, but no
later than seven days, after receipt of your request. The
Fund does not issue certificates for shares unless you submit
a specific request. If your shares are in certificate form,
the certificate must accompany your request and also be in
good order.
Shareholders also may submit their written request for
redemption or exchange by facsimile transmission at the
following number: 215-972-8864.
<PAGE>
Telephone Redemption and Exchange
To get the added convenience of the telephone redemption
and exchange methods, you must have the Transfer Agent hold
your shares (without charge) for you. If you choose to have
your shares in certificate form, you can only redeem or
exchange by written request and you must return your
certificates.
The Telephone Redemption service enabling redemption
proceeds to be mailed to the account address of record and
the Telephone Exchange service, both of which are described
below, are automatically provided unless the Fund receives
written notice from the shareholder to the contrary. The
Fund reserves the right to modify, terminate or suspend these
procedures upon 60 days' written notice to shareholders. It
may be difficult to reach the Fund by telephone during
periods when market or economic conditions lead to an
unusually large volume of telephone requests.
Neither the Fund nor the Transfer Agent is responsible
for any shareholder loss incurred in acting upon written or
telephone instructions for redemption or exchange of Class
shares which are reasonably believed to be genuine. With
respect to such telephone transactions, the Fund 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
Fund or the Transfer Agent 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. By
exchanging shares by telephone, the shareholder is
acknowledging prior receipt of a prospectus for the fund into
which shares are being exchanged.
Telephone Redemption-Check to Your Address of Record
You or your investment dealer of record can have
redemption proceeds of $50,000 or less mailed to you at your
record address. Checks will be payable to the shareholder(s)
of record. Payment is normally mailed the next business day,
but no more than seven days, after receipt of the request.
Telephone Redemption-Proceeds to Your Bank
Redemption proceeds of $1,000 or more can be transferred
to your predesignated bank account by wire or by check. You
should authorize this service when you open your account. If
you change your predesignated bank account, the Fund requires
a written authorization and may require that you have your
signature guaranteed. For your protection, your
authorization must be on file. If you request a wire, your
funds will normally be sent the next business day.
CoreStates Bank, N.A.'s fee (currently $7.50) will be
deducted from your redemption. If you ask for a check, it
will normally be mailed the next business day, but no later
than seven days, after receipt of your request to your
predesignated bank account. There are no fees for this
method, but the mail time may delay getting funds into your
bank account. Simply call your Client Services
Representative prior to the time the net asset value is
determined, as noted above.
Telephone Exchange
You or your investment dealer of record can exchange
shares into any fund in the Delaware Group under the same
registration. As with the written exchange service,
telephone exchanges are subject to the same conditions and
limitations as other exchanges noted above. Telephone
exchanges may be subject to limitations as to amounts or
frequency.
<PAGE>
DIVIDENDS AND DISTRIBUTIONS
The Fund declares a dividend on each Series to all
shareholders of record of the Classes of that Series at the
time the offering price of shares is determined. See
Purchase Price and Effective Date under Buying Shares. Thus,
when redeeming shares, dividends continue to be credited up
to and included the date of redemption.
The International Equity Series and the Global Assets
Series will normally make payments from net investment income
on a quarterly basis. The Global Bond Series will normally
make payments from net investment income on a monthly basis.
During the fiscal year ended November 30, 1994, dividends
totaling $0.245 per share of the International Equity Fund
Institutional Class were paid from net investment income.
Payments from net realized securities profits of a
Series, if any, will be distributed annually in the quarter
following the close of the fiscal year. During the fiscal
year ended November 30, 1994, a distribution of $0.140 per
share of the International Equity Fund Institutional Class
was paid from net realized securities profits.
Each class of the Series will share proportionately in
the investment income and expenses of that Series, except
that the Classes will not incur any distribution fee under
the Series' 12b-1 Plans which apply to the International
Equity Fund A Class and the International Equity Fund B
Class, the Global Bond Fund A Class and the Global Bond Fund
B Class, and the Global Assets Fund A Class and the Global
Assets Fund B Class.
Both dividends and distributions, if any, are
automatically reinvested in your account at net asset value.
In addition, in order to satisfy certain distribution
requirements of the Tax Reform Act of 1986, a Series may
declare special year-end dividend and capital gains
distributions during October, November or December to
shareholders of record on a date in such month. Such
distributions, if received by shareholders by January 31, are
deemed to have been paid by the Series and received by
shareholders on the earlier of the date paid or December 31
of the prior year. On January 5, 1995, a dividend of $0.130
per share of the International Equity Fund Institutional
Class was paid from net investment income to shareholders of
record December 27, 1994. On the same date, a distribution
of $0.470 per share of the International Equity Fund
Institutional Class was paid from realized securities profits
to shareholders of record December 27, 1994.
TAXES
Each Series has qualified, and intends to continue to
qualify, as a regulated investment company under Subchapter M
of the Internal Revenue Code (the "Code"). As such, each
Series 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.
Each Series intends to distribute substantially all of
its net investment income and net capital gains, if any.
Dividends from net investment income or net short-term
capital gains will be taxable to you as ordinary income, even
though received in additional shares. It is expected that
either none or only a nominal portion of a Series' dividends
will be eligible for the dividends-received deduction for
corporations.
Distributions paid by a Series from long-term capital
gains, received 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 the Series. A Series does not seek to
realize any particular amount of capital gains during a year;
rather, realized gains are a byproduct of Series 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
Series 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.
Although dividends generally will be treated as
distributed when paid, dividends which are declared in
October, November, or December to shareholders of record on a
specified date in one of those months, but which, for
operational reasons, may not be paid to the shareholder until
the following January, will be treated for tax purposes as if
paid by a Series and received by the shareholder on December
31 of the year declared.
The sale of shares of a Series 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 series or portfolios of a mutual fund).
Any loss incurred on sale or exchange of a Series' shares
which had been 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.
<PAGE>
A Series may be subject to foreign withholding taxes on
income from certain of its foreign securities. If more than
50% in value of the total assets of a Series at the end of
its fiscal year are invested in securities of foreign
corporations, the Series may elect to pass-through to its
shareholders a pro-rata share of foreign income taxes paid by
the Series. If this election is made, shareholders will be
(i) required to include in their gross income their pro-rata
share of foreign source income (including any foreign taxes
paid by the Series), and (ii) entitled to either deduct (as
an itemized deduction in the case of individuals) their share
of such foreign taxes in computing their taxable income or to
claim a credit for such taxes against their U.S. income tax,
subject to certain limitations under the Code. Shareholders
will be informed by a Series at the end of each calendar year
regarding the availability of any credits on and the amount
of foreign source income to be included in their income tax
returns.
In addition to federal taxes, shareholders may be subject
to state and local taxes on distributions. Distributions of
interest income and capital gains realized from certain types
of U.S. government securities may be exempt from state
personal income taxes. Shares of the Series are exempt from
Pennsylvania county personal property taxes.
Each year, the Fund will mail you information on the tax
status of a Series' dividends and distributions. You will
also receive each year information as to the portion of
dividend income, if any, that is derived from U.S. government
securities that are exempt from state income tax. Of course,
shareholders who are not subject to tax on their income would
not be required to pay tax on amounts distributed to them by
the Series.
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 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
Series.
See Accounting and Tax Issues in Part B for additional
information on tax matters relating to the Series and their
shareholders.
CALCULATION OF NET ASSET VALUE PER SHARE
The purchase and redemption price of Class shares is the
net asset value ("NAV") per share next determined after the
order is received. The NAV is computed as of the close of
regular trading on the New York Stock Exchange, (ordinarily,
4 p.m., Eastern time) on days when such exchange is open.
The NAV per share for each Series is computed by adding
the value of all securities and other assets in the Series'
portfolio, deducting any liabilities of that Series (expenses
and fees are accrued daily) and dividing by the number of
that Series' shares outstanding. Portfolio securities for
which market quotations are available are priced at market
value. Debt securities are priced at fair value by an
independent pricing service using methods approved by the
Fund's Board of Directors. Short-term investments having a
maturity of less than 60 days are valued at amortized cost,
which approximates market value. All other securities are
valued at their fair value as determined in good faith and in
a method approved by the Fund's Board of Directors.
A Series' portfolio securities, 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 a Series may
be significantly affected by such trading on days when
shareholders have no access to the Series.
Each share of a Series' three classes will bear,
pro-rata, all of the common expenses of the Series. The net
asset values of all outstanding shares of each class of a
Series will be computed on a pro-rata basis for each
outstanding share based on the proportionate participation in
that Series represented by the value of shares of that class.
All income earned and expenses incurred by a Series will be
borne on a pro-rata basis by each outstanding share of a
class, based on each class' percentage in the Series
represented by the value of shares of such classes, except
that the Classes will not incur any of the expenses under the
respective Series' 12b-1 Plans and the International Equity
Fund A and B Classes, the Global Bond Fund A and B Classes,
and the Global Assets Fund A and B Classes alone will bear
the 12b-1 Plan fees payable under their respective Plans.
Due to the specific distribution expenses and other costs
that will be allocable to each class, the net asset value of
and dividends paid to each class of a particular Series will
vary.
<PAGE>
MANAGEMENT OF THE FUND
Directors
The business and affairs of the Fund are managed under
the direction of its Board of Directors. Part B contains
additional information regarding the directors and officers.
Investment Manager and Sub-Adviser
Delaware International Advisers Ltd. ("Delaware
International" or the "Manager") furnishes investment
management services to the Fund. Delaware International is
affiliated with Delaware Management Company, Inc. ("DMC" or
the "Sub-Adviser") which manages the U.S. securities portion
of the Global Assets Series.
DMC and its predecessors have been managing the funds in
the Delaware Group since 1938. On November 30, 1994,
Delaware International and DMC were supervising in the
aggregate more than $24 billion in assets in the various
institutional (approximately $15,544,258,000) and investment
company (approximately $9,237,192,000) accounts.
DMC is an indirect, wholly-owned subsidiary of Delaware
Management Holdings, Inc. ("DMH"). Delaware International is
also controlled by DMH through several subsidiaries. By
reason of its percentage ownership of DMH common stock and
through Voting Trust Agreements with certain other DMH
shareholders, Legend Capital Group, L.P. ("Legend") controls
DMH, DMC and the Manager. As General Partners of Legend,
Leonard M. Harlan and John K. Castle have the ability to
direct the voting of more than a majority of the shares of
DMH common stock and thereby control DMC and the Manager.
On December 12, 1994, DMH entered into a merger agreement
with Lincoln National Corporation ("Lincoln National") and a
newly-formed subsidiary of Lincoln National. Pursuant to
that agreement, the new subsidiary will be merged with and
into DMH. This merger will result in DMH becoming a
wholly-owned subsidiary of Lincoln National. The transaction
is expected to close in the early spring of 1995, subject to
the receipt of all regulatory approvals and satisfaction of
conditions precedent to closing, including the approval
described below. 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.
The Manager manages the Series' investments and for its
services, the Manager is paid an annual fee equal to .75% of
the Series' average daily net assets, less a proportionate
share of all directors' fees paid to the unaffiliated
directors by the Series. Beginning June 1, 1994, Delaware
International had elected voluntarily to waive that portion,
if any, of the annual management fees payable by the Series
to the extent necessary to insure that the Total Operating
Expenses (exclusive of taxes, interest, brokerage commissions
and extraordinary expenses) of the Class did not exceed 1.50%
through November 30, 1994. Prior to June 1, 1994, a waiver
and reimbursement commitment was in place to ensure expenses
did not exceed 0.95% (exclusive of taxes, interest, brokerage
commissions and extraordinary expenses). Delaware
International has elected voluntarily to waive that portion,
if any, of the annual management fees payable by the Global
Bond Series and the Global Assets Series to the extent
necessary to ensure that the Total Operating Expenses
(exclusive of taxes, interest, brokerage commissions and
extraordinary expenses) of the Global Bond Fund Institutional
Class and the Global Assets Fund Institutional Class do not
exceed .95% through May 31, 1995. The fee paid to Delaware
International is higher than the investment advisory fee paid
by most investment companies which are not international
equity funds. With respect to the International Equity
Series, the investment management fee earned for the fiscal
year ended November 30, 1994 was 0.73% of average daily net
assets, of which 0.47% of average daily net assets was paid
by the Series. The Manager has offices located at Veritas
House, 125 Finsbury Pavement, London, England EC2A 1NQ.
Subject to the overall supervision of the Manager, the
Sub-Adviser manages the U.S. securities portion of the Global
Assets Series' portfolio and furnishes the Manager with
investment recommendations, asset allocation advice, research
and other investment services with respect to U.S.
securities. For the services provided to the Manager, the
Manager pays the Sub- Adviser a monthly fee equal to 25% of
the fee paid to the Manager under the terms of the Investment
Management Agreement.
<PAGE>
Completion of the above-described merger transaction will
result in an assignment, and consequently a termination, of
the existing investment management agreement between the
Manager and the Fund and, in the case of the Global Assets
Series, the Sub- Adviser. Series shareholders will be asked
to vote on a new investment management agreement with the
Manager and, in the case of the Global Assets Series, the
Sub-Adviser, to become effective at or about the time the
transaction is to be completed. It is not anticipated that
there will be any changes in the compensation or other
material terms of the existing investment management
agreement as a result of the transaction. Details of the
transaction are included in the proxy materials furnished to
shareholders entitled to vote at the shareholder meeting
called to consider the matter.
Clive A. Gillmore has primary responsibility for making
day-to-day investment decisions for the International Equity
Series and the Global Assets Series. He has been the senior
portfolio manager for these Series since their inception. A
graduate of the University of Warwick and having begun his
career at Legal and General Investment Management, Mr.
Gillmore joined the Delaware Group in 1990 after eight years
of investment experience. His most recent position prior to
joining the Delaware Group was as a Pacific Basin equity
analyst and senior portfolio manager for Hill Samuel
Investment Advisers Ltd. Mr. Gillmore completed the London
Business School Investment program.
In making investment decisions for these Series, Mr.
Gillmore regularly consults with an international equity team
of seven members, three of whom research the Pacific Basin
and four of whom research the European Markets. Mr. Gillmore
also regularly consults with David G. Tilles. Mr. Tilles,
who is Chief Investment Officer for Delaware International,
is a graduate of the University of Warwick with a BS in
management sciences. Before joining the Delaware Group in
1990, he was Chief Investment Officer of Hill Samuel
Investment Advisers Ltd. He is a member of the Institute of
Investment Management & Research and the Operational Research
Society.
George H. Burwell has responsibility for making
investment decisions for the U.S. equity portion of the
Global Assets Series and has had such responsibility for this
Series since its inception. 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 Chartered
Financial Analyst.
In making investment decisions for this Series, Mr.
Burwell regularly consults with Wayne A. Stork and Richard G.
Unruh. Mr. Stork is Chairman of DMC and the Fund's Board of
Directors and a member of the Board of DMC and the Manager.
He is a graduate of Brown University and attended New York
University's Graduate School of Business Administration.
Mr. Stork joined the Delaware Group in 1962 and has served in
various executive capacities at different times within the
Delaware organization. A graduate of Brown University, Mr.
Unruh received his MBA from the University of Pennsylvania's
Wharton School and joined the Delaware Group in 1982 after 19
years of investment management experience with Kidder,
Peabody & Co. Inc. Mr. Unruh was named an executive vice
president of the Fund in 1994. He is also a member of the
Board of Directors of DMC and the Manager and was named an
executive vice president of DMC in 1994. He is on the Board
of Directors of Keystone Insurance Company and AAA Mid-
Atlantic and is a former president and current member of the
Advisory Council of the Bond Club of Philadelphia.
Paul A. Matlack, Gerald T. Nichols and James R. Raith,
Jr. have responsibility for making investment decisions for
the high-yield securities portion of the Global Assets
Series. They have had such responsibility since the Series'
inception. A Chartered Financial Analyst, Mr. Matlack is a
graduate of the University of Pennsylvania with an MBA in
Finance from George Washington University. He began his
career at Mellon Bank as a credit specialist, and later
served as a corporate loan officer for Mellon Bank and then
Provident National Bank.
Mr. Nichols is a graduate of the University of Kansas,
where he received a BS in Business Administration and an MS
in Finance. Prior to joining the Delaware Group, he was a
high-yield credit analyst at Waddell & Reed, Inc. and
subsequently the investment officer for a private merchant
banking firm. He is a Chartered Financial Analyst.
Mr. Raith is a 1973 graduate of Holy Cross University and
received his MBA in Finance from Tulane University in 1975.
Before joining the Delaware Group in 1987, he held portfolio
management positions in both fixed income and equity
management including managing life insurance reserves at ICH
Corporation and managing high-yield pension assets for
Firestone Tire and Rubber. Mr. Raith also managed separate
accounts for the Delaware Group's Institutional clients.
<PAGE>
In making investment decisions for this Series, Mr.
Matlack, Mr. Nichols and Mr. Raith regularly consult with
Paul E. Suckow. Mr. Suckow is DMC's Chief Investment Officer
for Fixed Income. A Chartered Financial Analyst, he is a
graduate of Bradley University with an MBA from Western
Illinois University. Mr. Suckow was a fixed income portfolio
manager at the Delaware Group from 1981 to 1985. He returned
to the Delaware Group in 1993 after eight years with
Oppenheimer Management Corporation.
Ian G. Sims has primary responsibility for making
day-to-day investment decisions for the Global Bond Series.
He has been the senior portfolio manager for this Series
since its inception. Mr. Sims is a graduate of the University
of Newcastle-Upon-Tyne. He joined Delaware International 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 International, he was a senior
fixed income and currency portfolio manager with Hill Samuel
Investment Advisers Ltd.
In making investment decisions for the Global Bond
Series, Mr. Sims regularly consults with Hywel Morgan and
Christopher A. Moth. Mr. Morgan was educated at the
University of Wales and was subsequently an Economics
Lecturer at Dundee University. Prior to joining Delaware
International, he was Associate Director of the international
fixed income department and head of the credit review
committee at Hill Samuel Investment Management responsible
for over $500 million in multi-currency fixed interest
accounts. His prior experience included working as an
economic adviser for Credit Suisse and the Economic
Intelligence Unit. Mr. Morgan started his business career as
a Corporate Economist & Strategist at Ford of Europe and Esso
Petroleum. Mr. Moth is a graduate of The City University
London. Mr. Moth joined Delaware in 1992. He previously
worked at the Guardian Royal Exchange in an actuarial
capacity where he was responsible for technical analysis,
quantitative models and projections. Mr. Moth has been
awarded the certificate in Finance & Investment from the
Institute of Actuaries in London. It is not anticipated that
there will be any changes in the personnel responsible for
managing the Series as a result of the above-described merger
transaction.
Portfolio Trading Practices
A Series normally will not invest for short-term trading
purposes. However, a Series may sell securities without
regard to the length of time they have been held. The degree
of portfolio activity will affect brokerage costs of a Series
and may affect taxes payable by the Series' shareholders to
the extent of any net realized capital gains. It is
anticipated that the portfolio turnover rate of each Series
will not exceed 100%. During the past two fiscal years, the
International Equity Series' portfolio turnover rate was 24%
for 1993 and 27% for 1994.
The Manager and the Sub-Adviser use their best efforts to
obtain the best available price and most favorable execution
for portfolio transactions. Orders may be placed with
brokers or dealers who provide brokerage and research
services to the Manager and the Sub-Advisor or their advisory
clients. These services may be used by the Manager and the
Sub-Adviser in servicing any of their accounts. Subject to
best price and execution, the Manager and the Sub-Adviser may
consider a broker/dealer's sales of a Series' shares in
placing portfolio orders and may place orders with
broker/dealers that have agreed to defray certain Series
expenses such as custodian fees.
Performance Information
From time to time, each Series may quote total return
performance of its respective Class in advertising and other
types of literature. The Global Bond Series may also quote
the yield of its Class in advertisements 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. Each presentation will
include the average annual total return for one-, five- and
ten-year (or life of fund, if applicable) periods. A Series
may also advertise aggregate and average total return
information concerning the Class over additional periods of
time. The current yield will be calculated by dividing the
annualized net investment income earned by the Global Bond
Fund Institutional Class during a recent 30-day period by the
net asset value per share on the last day of the period. The
yield formula 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.
Because securities prices fluctuate, investment results
of the Classes will fluctuate over time and past performance
should not be considered as a representation of future
results.
<PAGE>
Statements and Confirmations
You will receive quarterly statements of your account as
well as confirmations of all investments and redemptions.
You should examine statements and confirmations immediately
and promptly report any discrepancy by calling your Client
Services Representative.
Financial Information about the Fund
Each fiscal year, you will receive an audited annual
report and an unaudited semi-annual report. These reports
provide detailed information about each Series' investments
and performance. The Fund's fiscal year ends on November 30.
Distribution and Service
The Distributor, Delaware Distributors, L.P. (which
formerly conducted business as Delaware Distributors, Inc.),
serves as the national distributor for the International
Equity Series under an Amended and Restated Distribution
Agreement dated September 6, 1994 and for the Global Bond
Series and the Global Assets Series under separate Amended
and Restated Distribution Agreements dated December 27, 1994.
It bears all of the costs of promotion and distribution.
The Transfer Agent, Delaware Service Company, Inc.,
serves as the shareholder servicing, dividend disbursing and
transfer agent for each Series under separate Agreements
dated October 25, 1991. The unaffiliated directors review
service fees paid to the Transfer Agent. Certain
recordkeeping and other shareholder services that otherwise
would be performed by the Transfer Agent may be performed by
certain other entities and the Transfer Agent may elect to
enter into an agreement to pay such other entities for those
services. In addition, participant account maintenance fees
may be assessed for certain recordkeeping provided as part of
retirement plan and administration service packages. These
fees are based on the number of participants in the plan and
the various services selected by the employer. Fees will be
quoted upon request and are subject to change.
The Distributor and the Transfer Agent are also indirect,
wholly-owned subsidiaries of DMH.
Expenses
Each Series is responsible for all of its own expenses
other than those borne by the Manager under the Investment
Management Agreement and those borne by the Distributor under
the Distribution Agreements. The ratio of operating expenses
to average daily net assets for the International Equity Fund
Institutional Class was 1.26% for the fiscal year ended
November 30, 1994. The expense ratio of that Class reflects
the waiver of fees described above. The ratios of expenses
to average daily net assets expected to be incurred by the
Global Bond Fund Institutional Class and the Global Assets
Fund Institutional Class are 0.95%, reflecting the waiver of
fees described above.
Shares
The Fund is an open-end management investment company.
The Fund was organized as a Maryland corporation on May 30,
1991.
The shares of each Series have a par value of $.01 and
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 conversion, exchange,
dividends, retirement or other features and have no
preemptive rights. All Fund shares have noncumulative voting
rights which means that the holders of more than 50% of the
Fund's shares voting for the election of directors can elect
100% of the directors if they choose to do so. Under
Maryland law, the Fund is not required, and does not intend,
to hold annual meetings of shareholders unless, under certain
circumstances, it is required to do so under the 1940 Act.
Shareholders of 10% or more of the Fund's shares may request
that a special meeting be called to consider the removal of a
director.
The International Equity Series also offers the
International Equity Fund A Class and the International
Equity Fund B Class of shares, the Global Bond Series also
offers the Global Bond Fund A Class and the Global Bond Fund
B Class, and the Global Assets Series also offers the Global
Assets Fund A Class and the Global Assets Fund B Class, which
represent proportionate interests in the assets of the
respective Series and have the same voting and other rights
and preferences as the respective Class, except that shares
of the Classes are not subject to, and may not vote on
matters affecting, the Distribution Plans under Rule 12b-1
relating to A Class and B Class shares of a Series.
Prior to September 6, 1994, the International Equity Fund
Institutional Class was known as the International Equity
Fund (Institutional) class and the International Equity Fund
A Class was known as the International Equity Fund class.
<PAGE>
APPENDIX A--RATINGS
Bonds
Excerpts from Moody's description of its bond ratings:
Aaa--judged to be the best quality. They carry the smallest
degree of investment risk; Aa--judged to be of high quality
by all standards; A--possess favorable attributes and are
considered "upper medium" grade obligations; Baa--considered
as medium grade obligations. Interest payments and principal
security appear adequate for the present but certain
protective elements may be lacking or may be
characteristically unreliable over any great length of time;
Ba--judged to have speculative elements; their future cannot
be considered as well assured. Often the protection of
interest and principal payments may be very moderate and
thereby not well safeguarded during both good and bad times
over the future. Uncertainty of position characterizes bonds
in this class; B--generally lack characteristics of the
desirable investment. Assurance of interest and principal
payments or of maintenance of other terms of the contract
over any long period of time may be small; Caa--are of poor
standing. Such issues may be in default or there may be
present elements of danger with respect to principal or
interest; Ca--represent obligations which are speculative in
a high degree. Such issues are often in default or have
other marked shortcomings; C--the lowest rated class of bonds
and issues so rated can be regarded as having extremely poor
prospects of ever attaining any real investment standing.
Excerpts from S&P's description of its bond ratings:
AAA--highest grade obligations. They possess the ultimate
degree of protection as to principal and interest; AA--also
qualify as high grade obligations, and in the majority of
instances differ from AAA issues only in a small degree;
A--strong ability to pay interest and repay principal
although more susceptible to changes in circumstances;
BBB--regarded as having an adequate capacity to pay interest
and repay principal; BB, B, CCC, CC--regarded, on balance, as
predominantly speculative with respect to capacity to pay
interest and repay principal in accordance with the terms of
the obligation. BB indicates the lowest degree of
speculation and CC the highest degree of speculation. While
such debt will likely have some quality and protective
characteristics, these are outweighed by large uncertainties
or major risk exposures to adverse conditions; C--reserved
for income bonds on which no interest is being paid; D--in
default, and payment of interest and/or repayment of
principal is in arrears.
<PAGE>
For more information contact the Delaware Group at
800-828-5052.
INVESTMENT MANAGER
Delaware International Advisers Ltd.
Veritas House (Photo of George Washington
125 Finsbury Pavement crossing the
London, England EC2A 1NQ Delaware River)
SUB-ADVISER
Delaware Management Company, Inc.
One Commerce Square
Philadelphia, PA 19103
NATIONAL DISTRIBUTOR
Delaware Distributors, L.P.
1818 Market Street
Philadelphia, PA 19103
SHAREHOLDER SERVICING,
DIVIDEND DISBURSING AND TRANSFER AGENT
Delaware Service Company, Inc.
1818 Market Street
Philadelphia, PA 19103
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young
One Commerce Square
Philadelphia, PA 19103
INDEPENDENT AUDITORS
Ernst & Young LLP
Two Commerce Square
Philadelphia, PA 19103
CUSTODIAN
Morgan Guaranty Trust Company of New York
60 Wall Street
New York, NY 10260
-----------------------------------------
INTERNATIONAL EQUITY FUND INSTITUTIONAL
GLOBAL BOND FUND INSTITUTIONAL
GLOBAL ASSETS FUND INSTITUTIONAL
-----------------------------------------
-------------------
P R O S P E C T U S
MARCH 10, 1995
-------------------
DELAWARE
GROUP
-----
Supplement Dated April 15, 1995
to the Current Prospectuses
of the Following Delaware Group Funds
Delaware Group Global & International Funds, Inc.-
Global Assets Series, Global Bond Series, International
Equity Series
On March 29, 1995, shareholders of each of the Global Assets
Series, Global Bond Series and International Equity Series of
Delaware Group Global & International Funds, Inc. (the "Fund")
approved a new Investment Management Agreement with Delaware
International Advisers Ltd. ("Delaware International"), an
indirect wholly-owned subsidiary of Delaware Management Holdings,
Inc. ("DMH"). In addition, shareholders of Global Assets Series
approved a new Sub-Advisory Agreement between Delaware
International and Delaware Management Company, Inc. ("DMC"), an
indirect wholly-owned subsidiary of DMH and an affiliate of
Delaware International. The approval of new Agreements was
subject to the completion of the merger (the "Merger") between
DMH and a wholly-owned subsidiary of Lincoln National Corporation
("Lincoln National") which occurred on April 3, 1995.
Accordingly, the previous Investment Management Agreements
terminated and the new Investment Management Agreements became
effective on that date.
As a result of the Merger, Delaware International, DMC and
their two affiliates, Delaware Service Company, Inc., the Fund's
shareholder servicing, dividend disbursing and transfer agent,
and Delaware Distributors, L.P., the Fund's national distributor
became indirect wholly-owned subsidiaries of Lincoln National.
Lincoln National, with headquarters in Fort Wayne, Indiana, is a
diversified organization with operations in many aspects of the
financial services industry, including insurance and investment
management.
Under the new Agreements, Delaware International and DMC
will be paid at the same annual fee rates and on the same terms
as they were under the previous Agreements. In addition, the
investment approach and operation of each series of the Fund will
remain substantially unchanged.
