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PROSPECTUS
MARCH 10, 1995
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INTERNATIONAL EQUITY FUND
GLOBAL BOND FUND
GLOBAL ASSETS FUND
A CLASS SHARES
B CLASS SHARES
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1818 Market Street
Philadelphia, PA 19103
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For Prospectus and Performance:
Nationwide 800-523-4640
Philadelphia 215-988-1333
Information on Existing Accounts:
(SHAREHOLDERS ONLY)
Nationwide 800-523-1918
Philadelphia 215-988-1241
Dealer Services:
(BROKER/DEALERS ONLY)
Nationwide 800-362-7500
Philadelphia 215-988-1050
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TABLE OF CONTENTS
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Cover Page 1
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Synopsis 3
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Summary of Expenses 5
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Financial Highlights 7
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Investment Objectives and Policies
Investment Strategy 9
Special Risk Considerations 14
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The Delaware Difference
Plans and Services 16
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Retirement Planning 18
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Buying Shares 19
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Redemption and Exchange 26
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Dividends and Distributions 29
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Taxes 30
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Calculation of Offering Price and
Net Asset Value Per Share 31
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Management of the Fund 32
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Appendix A--Ratings 36
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(Photo of The Tower of London appears in background)
<PAGE>
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 A Class ("Class A Shares") and the International
Equity Fund B Class ("Class B Shares"); the Global Bond Series
offers the Global Bond Fund A Class ("Class A Shares") and the
Global Bond Fund B Class ("Class B Shares"); and the Global
Assets Series offers the Global Assets Fund A Class ("Class A
Shares") and the Global Assets Fund B Class ("Class B Shares"),
(collectively, the "Classes").
Class A Shares may be purchased at the public offering
price, which is equal to the next determined net asset value per
share, plus a front-end sales charge, and Class B Shares may be
purchased at a price equal to the next determined net asset value
per share. The Class A Shares of the International Equity Series
and the Global Assets Series are subject to a maximum front-end
sales charge of 5.75% and the Class A Shares of the Global Bond
Series are subject to a maximum front-end sales charge of 4.75%
and each are subject to annual 12b-1 Plan expenses. The Class B
Shares are subject to a contingent deferred sales charge ("CDSC")
which may be imposed on redemptions made within six years of
purchase and 12b-1 Plan expenses which are higher than those to
which Class A Shares are subject and are assessed against the
Class B Shares for no longer than approximately eight years after
purchase. See Summary of Expenses, and Automatic Conversion of
Class B Shares under Buying Shares. These alternatives permit an
investor to choose the method of purchasing shares that is most
beneficial given the amount of the purchase, the length of time
the investor expects to hold the shares and other circumstances.
See Buying Shares.
The minimum initial investment with respect to the
International Equity Fund A Class and the Global Assets Fund A
Class is $250 and with respect to the Global Bond Fund A Class
and each of the Class B Shares is $1,000. Subsequent investments
must be at least $25 with respect to the Class A Shares and $100
with respect to the Class B Shares. Class B Shares are also
subject to a maximum purchase limitation of $250,000. The Fund
will therefore reject any order for purchase of more than
$250,000 for Class B Shares. 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 Series 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 numbers. 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 Institutional Class, the Global Bond
Series also offers the Global Bond Fund Institutional Class and
the Global Assets Series also offers the Global Assets Fund
Institutional Class. Those classes are available for purchase
only by certain enumerated institutions, have no front-end or
contingent deferred sales charge and are not subject to annual
12b-1 Plan expenses.
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 A Class, the International
Equity Fund B Class and the International Equity Fund
Institutional Class, the Global Bond Series, consisting of the
Global Bond Fund A Class, the Global Bond Fund B Class and the
Global Bond Fund Institutional Class, and the Global Assets
Series, consisting of the Global Assets Fund A Class, the Global
Assets Fund B Class and the Global Assets Fund Institutional
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 have been allocated to each class of
each Series. 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' investment in U.S.
securities. Delaware Distributors, L.P. (the "Distributor") is
the national distributor for the Fund 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 the Fund and for all
of the other mutual funds in the Delaware Group. See Management
of the Fund.
Sales Charge
The price of the Class A Shares of the International Equity
Series and the Global Assets Series includes a maximum front-end
sales charge of 5.75% of the offering price, which is equivalent
to 6.10% of the amount invested and the price of the Class A
Shares of the Global Bond Series includes a maximum front-end
sales charge of 4.75% of the offering price, which is equivalent
to 4.99% of the amount invested. The front-end sales charges are
reduced on certain transactions of at least $100,000 but under
$1,000,000. For purchases of $1,000,000 or more, the front-end
sales charge is eliminated. Class A Shares are also subject to
annual 12b-1 Plan expenses.
The price of the Class B Shares is equal to the net asset
value per share. Class B Shares are subject to a CDSC of: (i) 4%
if shares are redeemed within two years of purchase; (ii) 3% if
shares are redeemed during the third or fourth year following
purchase; (iii) 2% if shares are redeemed during the fifth year
following purchase; and (iv) 1% if shares are redeemed during the
sixth year following purchase. Class B Shares are also subject
to annual 12b-1 Plan expenses for no longer than approximately
eight years after purchase. See Buying Shares and Automatic
Conversion of Class B Shares thereunder; and Distribution (12b-1)
and Service under Management of the Fund.
Minimum Investment
The minimum initial investment for the Class A Shares of the
International Equity Series and the Global Assets Series is $250
and for the Class A Shares of the Global Bond Series and each of
the Class B Shares is $1,000 (see Part B or contact your
investment dealer for each Retirement Plan minimum), and
subsequent investments must be at least $25 for the Class A
Shares and $100 for the Class B Shares. Class B Shares are also
subject to a maximum purchase limitation of $250,000. 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 high
yield, high risk 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
The Class A Shares of the Series are redeemed or exchanged
at the net asset value calculated after receipt of the redemption
or exchange request. Neither the Fund nor the Distributor
assesses a charge for redemptions or exchanges of Class A Shares,
except for certain redemptions of shares purchased at net asset
value which may be subject to a contingent deferred sales charge
if such purchases triggered the payment of a dealer's commission.
See Contingent Deferred Sales Charge for Certain Purchases of
Class A Shares Made at Net Asset Value under Redemption and
Exchange. The Class B Shares are redeemed or exchanged at the
net asset value calculated after receipt of the redemption or
exchange request, less, in the case of redemptions, any
applicable CDSC. Neither the Fund nor the Distributor assesses
any additional charges for redemptions or exchanges of the Class
B Shares. 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
A general comparison of the sales arrangements and other
expenses applicable to the Class A and Class B Shares of each
Series follows:
International
Equity Series
Class A Class B
Shareholder Transaction Expenses Shares Shares
- --------------------------------------------------------
Maximum Sales Charge Imposed on
Purchases (as a percentage of
offering price).................... 5.75% None
Maximum Sales Charge Imposed on
Reinvested Dividends (as a
percentage of offering price)...... None None
Contingent Deferred Sales Charge
(as a percentage of original
purchase price or redemption
proceeds, whichever is lower)...... None* 4.00%*
Redemption Fees....................... None** None**
Global Bond
Series
Class A Class B
Shareholder Transaction Expenses Shares Shares
- ----------------------------------------------------------
Maximum Sales Charge Imposed on
Purchases (as a percentage of
offering price)................. 4.75% None
Maximum Sales Charge Imposed on
Reinvested Dividends (as a
percentage of offering price)... None None
Contingent Deferred Sales Charge
(as a percentage of original
purchase price or redemption
proceeds, as applicable)........ None* 4.00%*
Redemption Fees.................... None** None**
Global Assets
Series
Class A Class B
Shareholder Transaction Expenses Shares Shares
- ----------------------------------------------------------
Maximum Sales Charge Imposed on
Purchases (as a percentage of
offering price)................. 5.75% None
Maximum Sales Charge Imposed on
Reinvested Dividends (as a
percentage of offering price)... None None
Contingent Deferred Sales Charge
(as a percentage of original
purchase price or redemption
proceeds, as applicable)........ None* 4.00%*
Redemption Fees.................... None** None**
International
Annual Operating Expenses Equity Series
(as a percentage of average Class A Class B
daily net assets) Shares Shares
- ----------------------------------------------------------
Management Fees.................... 0.73% 0.73%
12b-1 Expenses (including
service fees)................... 0.30%+ 1.00%+
Other Operating Expenses........... 0.79% 0.79%***
- ----------------------------------------------------------
Total Operating Expenses........ 1.82% 2.52%
===== =====
Global Bond
Annual Operating Expenses Series
(as a percentage of average Class A Class B
daily net assets) Shares Shares
- -----------------------------------------------------------
Management Fees
After Voluntary Waiver.......... 0.16%++ 0.16%++
12b-1 Fees (including
service fees)................... 0.30%+ 1.00%+
Other Operating Expenses........... 0.79%++ 0.79%++
------- -------
Total Operating Expenses........ 1.25% 1.95%
======= =======
Global Assets
Annual Operating Expenses Series
(as a percentage of average Class A Class B
daily net assets) Shares Shares
- ------------------------------------------------------------
Management Fees
After Voluntary Waiver.......... 0.16%++ 0.16%++
12b-1 Fees (including
service fees)..................... 0.30%+ 1.00%+
Other Operating Expenses........... 0.79%++ 0.79%++
------- -------
Total Operating Expenses 1.25% 1.95%
======= =======
The purpose of this table is to assist the investor in
understanding the various costs and expenses that an investor in
Class A Shares or Class B Shares of a Series will bear directly
or indirectly.
*With respect to the Class A Shares, purchases of $1 million or
more may be made at net asset value; however, if in connection
with any such purchase, certain dealer commissions are paid to
financial advisers through whom such purchases are effected, a
contingent deferred sales charge of 1% will be imposed in the
event of certain redemptions within 12 months of purchase
("Limited CDSC"). The Class B Shares are subject to a CDSC of:
(i) 4% if shares are redeemed within two years of purchase; (ii)
3% if shares are redeemed during the third or fourth year
following purchase; (iii) 2% if shares are redeemed during the
fifth year following purchase; (iv) 1% if shares are redeemed
during the sixth year following purchase; and (v) 0% thereafter.
See Deferred Sales Charge Alternative - Class B Shares under
Buying Shares; and Contingent Deferred Sales Charge for Certain
Purchases of Class A Shares Made at Net Asset Value under
Redemption and Exchange.
**CoreStates Bank, N.A. currently charges $7.50 per redemption
for redemptions payable by wire.
***"Other Operating Expenses" for Class B Shares of the
International Equity Series are estimates derived from the
expenses for Class A Shares of that Series as of November 30,
1994.
+Class A Shares and Class B Shares are subject to separate 12b-1
Plans. Long-term shareholders may pay more than the economic
equivalent of the maximum front-end sales charges permitted by
rules of the National Association of Securities Dealers, Inc.
(the "NASD"). See Distribution (12b-1) and Service.
++"Other Operating Expenses" for 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 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 Class A Shares of those Series do not
exceed 1.25% and of the Class B Shares of those Series do not
exceed 1.95% (in both cases, exclusive of taxes, interest,
brokerage commissions and extraordinary expenses, but inclusive
of 12b-1 fees) through May 31, 1995. If the voluntary expense
waiver were not in effect, the Total Operating Expenses, as a
percentage of average daily net assets, are estimated to be
approximately 1.82%, 2.52%, 1.82% and 2.52% for the first full
fiscal year of 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, respectively, reflecting Management Fees of 0.73%.
The information in the above table has been adjusted to reflect
that waiver.
Also, see International Equity Fund Institutional Class,
Global Bond Fund Institutional Class and Global Assets Fund
Institutional Class for expense information about those classes.
<PAGE>
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 with respect to the
Class A Shares and, if shares are redeemed within six years after
purchase, the Fund charges a CDSC with respect to the Class B
Shares.
International
Equity Fund 1 year 3 years 5 years 10 years
A Class ------ ------- ------- --------
$75(1) $111 $150 $259
Global Bond 1 year 3 years 5 years 10 years
Fund A Class ------ ------- ------- --------
$60(1) $85 $113 $191
Global Assets 1 year 3 years 5 years 10 years
Fund A Class ------ ------- ------- --------
$70(1) $95 $122 $200
International
Equity Fund 1 year 3 years 5 years 10 years
B Class ------ ------- ------- --------
$66 $108 $154 $268(2)
Global Bond 1 year 3 years 5 years 10 years
Fund B Class ------ ------- ------- --------
$60 $91 $125 $209(2)
Global Assets 1 year 3 years 5 years 10 years
Fund B Class ------ ------- ------- --------
$60 $91 $125 $209(2)
An investor would pay the following expenses on the same
$1,000 investment assuming no redemption at the end of the
period:
International
Equity Fund 1 year 3 years 5 years 10 years
A Class ------ ------- ------- --------
$75 $111 $150 $259
Global Bond 1 year 3 years 5 years 10 years
Fund A Class ------ ------- ------- --------
$60 $85 $113 $191
Global Assets 1 year 3 years 5 years 10 years
Fund A Class ------ ------- ------- --------
$70 $95 $122 $200
International
Equity Fund 1 year 3 years 5 years 10 years
B Class ------ ------- ------- --------
$26 $78 $134 $268(2)
Global Bond 1 year 3 years 5 years 10 years
Fund B Class ------ ------- ------- --------
$20 $61 $105 $209(2)
Global Assets 1 year 3 years 5 years 10 years
Fund B Class ------ ------- ------- --------
$20 $61 $105 $209(2)
(1) Under certain circumstances, a Limited CDSC, which has not
been reflected in this calculation, may be imposed in the
event of certain redemptions within 12 months of purchase.
See Contingent Deferred Sales Charge for Certain Purchases of
Class A Shares Made at Net Asset Value under Redemption and
Exchange.
(2) At the end of no more than approximately eight years after
purchase, Class B Shares of a Series will be automatically
converted into Class A Shares of that Series. The example
above assumes conversion of Class B Shares at the end of year
eight. However, the conversion may occur as late as three
months after the eighth anniversary of purchase, during which
time the higher 12b-1 Plan fees payable by Class B Shares
will continue to be assessed. See Automatic Conversion of
Class B Shares under Buying Shares for a description of the
automatic conversion feature. Years nine and ten reflect
expenses of the Class A Shares. The conversion will
constitute a tax-free exchange for federal income tax
purposes. See Taxes.
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.
- -----------------------------------------------------------------
<TABLE>
<CAPTION>
International Equity
Series
Class A Shares
- --------------------------------------------
Period
10/31/91(1)
Year Ended through
11/30/94 11/30/93 11/30/92 11/30/91
<S> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.......... $11.250 $9.590 $9.650 $10.000
Income From Investment Operations
- ---------------------------------
Net Investment Income........... 0.140 0.499 0.162 (0.004)
Net Gains (Losses) on Securities
(both realized and unrealized).. 0.925 1.636 (0.172) (0.346)
----- ----- ------- -------
Total From Investment
Operations......... 1.065 2.135 (0.010) (0.350)
----- ----- ------- -------
Less Distributions
- ----------------------
Dividends From Net
Investment Income.......... (0.255) (0.475) (0.050) none
------- ------- ------- -------
Distributions From
Capital Gains.............. (0.140) none none none
Returns of Capital............ none none none none
------- ------- ------- -------
Total Distributions... (0.395) (0.475) (0.050) none
------- ------- ------- -------
Net Asset Value,
End of Period................ $11.920 $11.250 $9.590 $9.650
======= ======= ====== ======
- --------------------------------
Total Return(2)................. 9.23%(2) 23.08%(2) (0.15%)(2) (3.50%)(2)
- ------------------
- ---------------------------------------------------------------
Ratios/Supplemental Data
- -----------------------------
Net Assets, End of Period
(000's omitted)............. $53,736 $31,673 $4,604 $723
Ratio of Expenses to Average
Daily Net Assets............. 1.56%(4) 1.25%(4) 1.25%(4) (3)
Ratio of Net Investment
Income to Average
Daily Net Assets............. 1.22%(5) 3.91%(5) 2.44%(5) (3)
Portfolio Turnover Rate........ 27% 24% 12% (3)
</TABLE>
(1) Date of initial sale; total return has been annualized.
(2) Does not reflect maximum sales charge of 5.75% nor the 1%
Limited CDSC that would apply in the event of certain
redemptions within 12 months of purchase. See Contingent
Deferred Sales Charge for Certain Purchases of Class A Shares
Made at Net Asset Value under Redemption and Exchange. Total
return reflects the expense limitations referenced in Notes 5
and 6.
(3) 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.
(4) Ratio of expenses to average daily net assets prior to
expense limitation was 1.82% for the year ended November 30,
1994, 2.16% for the year ended November 30, 1993 and 5.67%
for the year ended November 30, 1992.
(5) Ratio of net investment income (loss) to average daily net
assets prior to expense limitation was 0.96% for the year
ended November 30, 1994, 3.00% for the year ended November
30, 1993 and (2.00%) for the year ended November 30, 1992.
<PAGE>
FINANCIAL HIGHLIGHTS
(Continued)
International Equity Series
Class B Shares
------------------------------------------
Period
9/6/94(1)
through
11/30/94
Net Asset Value, Beginning of Period............... $12.860
Income From Investment Operations
- ----------------------------------------
Net Investment Income.............................. 0.036
Net Gains or Losses on Securities
(both realized and unrealized)............ (0.966)
-------
Total From Investment Operations............. (0.930)
-------
Less Distributions
- ----------------------
Dividends (from net investment income)............. (0.030)
Distributions (from capital gains)................. none
Returns of Capital................................. none
-------
Total Distributions...................... (0.030)
-------
Net Asset Value, End of Period..................... $11.900
========
- -----------------------------------------
Total Return(2).................................. (7.24%)
- -----------------
- ------------------------------------
Ratios/Supplemental Data
- -----------------------------
Net Assets, End of Period (000's omitted).......... $624
Ratio of Expenses to Average Daily Net Assets...... 2.26%(3)
Ratio of Net Investment Income to Average
Daily Net Assets................................ 0.52%(4)
Portfolio Turnover Rate............................ 27%
(1) Date of initial public offering; ratios have been annualized
and total return has not been annualized.
(2) Does not reflect contingent deferred sales charge which
varies from 1%-4% depending upon the holding period. Total
return reflects the expense limitations referenced in Notes 4
and 5.
(3) Ratio of expenses to average daily net assets prior to
expense limitation was 2.52% for the period September 6, 1994
to November 30, 1994.
(4) Ratio of net investment income to average daily net assets
prior to expense limitation was 0.26% for the period
September 6, 1994 to November 30, 1994.
<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.
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.
<PAGE>
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.
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
<PAGE>
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.
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.
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.
<PAGE>
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.
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.
<PAGE>
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.
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.
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.
<PAGE>
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>
THE DELAWARE DIFFERENCE
PLANS AND SERVICES
The Delaware Difference is our commitment to provide you with
superior information and quality service on your investments in
the Delaware Group of funds.
SHAREHOLDER PHONE DIRECTORY
Investor Information Center
800-523-4640
(Philadelphia 215-988-1333)
Fund Information
Literature
Price, Yield and
Performance Figures
Shareholder Service Center
800-523-1918
(Philadelphia 215-988-1241)
Information on Existing
Regular Investment
Accounts and Retirement
Plan Accounts
Wire Investments
Wire Liquidations
Telephone Liquidations
Telephone Exchanges
Delaphone
800-362-FUND
(800-362-3863)
Shareholder Services
During business hours, you can call the Fund's Shareholder
Service Center. The representatives can answer any of your
questions about your account, the Series, the various service
features and other funds in the Delaware Group.
Performance Information
During business hours, you can call the Investor Information
Center to get current performance information.
Delaphone Service
Delaphone is an account inquiry service for investors with
Touch-Tone(R) phone service. It enables you to get information
on your account faster than the mailed statements and
confirmations seven days a week, 24 hours a day.
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 the Shareholder Service Center.
Duplicate Confirmations
If your investment dealer is noted on your investment
application, we will send your dealer a duplicate confirmation.
This makes it easier for your investment dealer to help you
manage your investments.
Tax Information
Each year, the Fund will mail you information on the tax
status of your dividends and distributions.
Dividend Reinvestment Plan
You can elect to have your distributions (capital gains
and/or dividend income) paid to you by check or reinvested in
your account. Also, you may be permitted to invest your
distributions in certain other funds in the Delaware Group,
subject to the exceptions noted below as well as the eligibility
and minimum purchase requirements set forth in each fund's
prospectus.
Reinvestments of distributions into Class A Shares of a
Series or other Delaware Group funds may be effected without a
front-end sales charge. Class B Shares of a Series or other
Delaware Group funds acquired through reinvestments of
distributions will not be subject to a contingent deferred sales
charge if those shares are later redeemed. See Automatic
Conversion of Class B Shares under Buying Shares for information
concerning the automatic conversion of Class B Shares acquired by
reinvesting dividends.
Holders of Class A Shares of a Series may not reinvest their
distributions in the Class B Shares of any fund in the Delaware
Group, including the Series. Holders of Class B Shares of a
Series may reinvest their distributions only in the Class B
Shares of the funds in the Delaware Group which offer that class
of shares (the "Class B Funds"). See Class B Funds under Buying
Shares for a list of the funds offering Class B Shares. For more
information about reinvestments, please call the Shareholder
Service Center.
<PAGE>
Exchange Privilege
The Exchange Privilege permits shareholders to exchange all
or part of their shares into shares of the other funds in the
Delaware Group, subject to the exceptions noted below as well as
the eligibility and minimum purchase requirements set forth in
each fund's prospectus. Shareholders of Class B Shares of a
Series are permitted to exchange all or part of their Class B
Shares only into the corresponding class of shares of the Class B
Funds, subject to the minimum purchase and other requirements set
forth in each fund's prospectus. Exchanges are not permitted
between Class A Shares and Class B Shares of any of the funds of
the Delaware Group. See Redemption and Exchange.
Except as noted below, permissible exchanges can be made
without payment of a front-end sales charge or the imposition of
a contingent deferred sales charge at the time of the exchange,
as applicable. Persons exchanging into the Class A Shares from a
fund in the Delaware Group offered without a front-end sales
charge may be required to pay the applicable front-end sales
charge. See Investing by Exchange under How to Buy Shares and
Redemption and Exchange.
See Redemption and Exchange for additional information on
exchanges.
Wealth Builder Option
You may be permitted to elect to have amounts in your account
automatically invested in shares of the other funds in the
Delaware Group. Investments under this feature are exchanges and
are therefore subject to the same conditions and limitations as
other exchanges of Class A and Class B Shares. See Redemption
and Exchange.
Right of Accumulation
With respect to Class A Shares, the Right of Accumulation
feature allows the combining of Class A Shares and Class B Shares
of a Series that are currently owned with the dollar amount of
new purchases of Class A Shares for a reduced front-end sales
charge. Under the Combined Purchases Privilege, this includes
certain shares owned in other funds in the Delaware Group. See
Buying Shares.
Letter of Intention
With respect to Class A Shares, the Letter of Intention
feature permits the aggregation of purchases over a 13-month
period to obtain a reduced front-end sales charge. See Part B.
12-Month Reinvestment Privilege
The 12-Month Reinvestment Privilege permits shareholders to
reinvest proceeds of Class A Shares redeemed, within one year
from the redemption, without a front-end sales charge. See Part
B.
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 the Series' investments and
performance. The Fund's fiscal year ends on November 30.
<PAGE>
RETIREMENT PLANNING
An investment in a Series may also be suitable for tax-
deferred Retirement Plans. Among the Retirement Plans noted
below, Class B Shares are available for investment only by
Individual Retirement Accounts, Simplified Employee Pension
Plans, 457 Deferred Compensation Plans and 403(b)(7) Deferred
Compensation Plans.
Prototype Profit Sharing and Money Purchase Pension Plans are
each subject to a one-time fee of $200 per plan, or $300 for
paired plans. No such fee is charged for owner-only plans. All
Prototype Profit Sharing and Money Purchase Pension Plans are
subject to an annual maintenance fee of $30 per participant
account. Each of the other Retirement Plans described below
(other than 401(k) Defined Contribution Plans) is subject to an
annual maintenance fee of $15 for each participant's account,
regardless of the number of funds selected. Annual maintenance
fees for 401(k) Defined Contribution Plans are based on the
number of participants in the Plan and the services selected by
the employer. Fees are quoted upon request. All of the fees
noted above are subject to change. Additional information about
fees is contained in Part B. The minimum initial investment in
the Classes (as available) for each Plan is $250; subsequent
investments must be at least $25.
Certain shareholder investment services available to non-
retirement plan shareholders may not be available to Retirement
Plan shareholders. Certain Retirement Plans may qualify to
purchase the International Equity Fund Institutional Class, the
Global Bond Fund Institutional Class and the Global Assets Fund
Institutional Class. For additional information on any of the
Plans and Delaware's retirement services, call the Shareholder
Service Center or see Part B.
Individual Retirement Account ("IRA")
Individuals, even if they participate in an employer-
sponsored retirement plan, may establish their own retirement
program for investments in each of the Classes. Contributions to
an IRA may be tax-deductible and earnings are tax-deferred.
Under the Tax Reform Act of 1986, the tax deductibility of IRA
contributions is restricted, and in some cases eliminated, for
individuals who participate in certain employer-sponsored
retirement plans and whose annual income exceeds certain limits.
Existing IRAs and future contributions up to the IRA maximums,
whether deductible or not, still earn on a tax-deferred basis.
Simplified Employee Pension Plan ("SEP/IRA")
A SEP/IRA may be established by an employer who wishes to
sponsor a tax-sheltered retirement program by making
contributions on behalf of all eligible employees. Each of the
Classes is available for investment by a SEP/IRA.
Salary Reduction Simplified Employee Pension Plan ("SAR/SEP")
Offers employers with 25 or fewer eligible employees the
ability to establish a SEP/IRA that permits salary deferral
contributions. An employer may also elect to make additional
contributions to this Plan. Class B Shares are not available for
purchase by such Plans.
403(b)(7) Deferred Compensation Plan
Permits employees of public school systems or of certain
types of non-profit organizations to enter into a deferred
compensation arrangement for the purchase of shares of each of
the Classes.
457 Deferred Compensation Plan
Permits employees of state and local governments and certain
other entities to enter into a deferred compensation arrangement
for the purchase of shares of each of the Classes.
Prototype Profit Sharing or Money Purchase Pension Plan
Offers self-employed individuals, partnerships and
corporations a tax-qualified plan which provides for the
investment of contributions in Class A Shares. Class B Shares
are not available for purchase by such Plans.
Prototype 401(k) Defined Contribution Plan
Permits employers to establish a tax-qualified plan based on
salary deferral contributions. An employer may elect to make
profit sharing contributions and/or matching contributions into
the Plan. Class B Shares are not available for purchase by such
Plans.
<PAGE>
BUYING SHARES
Purchase Amounts
The minimum initial purchase with respect to the Class A
Shares of the International Equity Series and the Global Assets
Series is $250 and with respect to the Class A Shares of the
Global Bond Series and each of the Class B Shares is $1,000.
Subsequent purchases must be $25 or more with respect to the
Class A Shares and $100 or more with respect to the Class B
Shares. Retirement Plans have other minimums. Refer to Part B
or call the Shareholder Service Center for more information on
these Plans. Class B Shares are also subject to a maximum
purchase limitation of $250,000.
Alternative Purchase Arrangements
Shares of each Series may be purchased at a price equal to
the next determined net asset value per share, plus a sales
charge which may be imposed, at the election of the purchaser, at
the time of the purchase with respect to Class A Shares ("front-
end sales charge alternative") or on a contingent deferred basis
with respect to Class B Shares ("deferred sales charge
alternative").
Class A Shares. An investor who elects the front-end sales
charge alternative acquires Class A Shares. Although Class A
Shares incur a sales charge when they are purchased, generally
they are not subject to any sales charge when they are redeemed,
but are subject to annual 12b-1 Plan expenses of up to a maximum
of .30% of average daily net assets of such shares. See
Contingent Deferred Sales Charge for Certain Purchases of Class A
Shares Made at Net Asset Value and Distribution (12b-1) and
Service. Certain purchases of Class A Shares qualify for reduced
front-end sales charges. See Front-End Sales Charge Alternative
- - Class A Shares, below.
Class B Shares. An investor who elects the deferred sales
charge alternative acquires Class B Shares. Class B Shares do
not incur a front-end sales charge when they are purchased, but
they are subject to a sales charge if they are redeemed within
six years of purchase and are subject to annual 12b-1 Plan
expenses of up to a maximum of 1% (.25% of which are service fees
to be paid by the Series to the Distributor, dealers or others
for providing personal service and/or maintaining shareholder
accounts) of average daily net assets of such shares for no
longer than approximately eight years after purchase. Class B
Shares permit all of the investor's dollars to work from the time
the investment is made. The higher 12b-1 Plan expenses paid by
Class B Shares will cause such shares to have a higher expense
ratio and to pay lower dividends than those related to the Class
A Shares. At the end of no more than approximately eight years
after purchase, the Class B Shares are automatically converted
into Class A Shares. See Automatic Conversion of Class B Shares.
Such conversion will constitute a tax-free exchange for federal
income tax purposes. See Taxes.
The alternative purchase arrangements permit investors in the
Series to choose the method of purchasing shares that is most
beneficial given the amount of their purchase, the length of time
they expect to hold their shares and other relevant
circumstances. Investors should determine whether under their
particular circumstances it is more advantageous to incur a
front-end sales charge by purchasing Class A Shares or to have
the entire initial purchase price invested in a Series with the
investment thereafter being subject to a CDSC, if shares are
redeemed within six years of purchase, by purchasing Class B
Shares.
As an illustration, investors who qualify for significantly
reduced front-end sales charges on purchases of Class A Shares,
as described below, might elect the front-end sales charge
alternative because similar sales charge reductions are not
available for purchases under the deferred sales charge
alternative. Moreover, shares acquired under the front-end sales
charge alternative are subject to annual 12b-1 Plan expenses of
up to .30%, whereas shares acquired under the deferred sales
charge alternative are subject to higher annual 12b-1 Plan
expenses of 1% for no more than approximately eight years after
purchase. See Automatic Conversion of Class B Shares. However,
because front-end sales charges are deducted at the time of
purchase, such investors would not have all their funds invested
initially. Certain other investors might determine it to be more
advantageous to have all their funds invested initially, although
they would be subject to a CDSC for up to six years after
purchase as well as annual 12b-1 Plan expenses of 1% until the
shares are automatically converted into Class A Shares. The 12b-
1 Plan distribution expenses with respect to the Class B Shares
will be offset to the extent any return is realized on the
additional funds initially invested under the deferred sales
charge alternative. However, there can be no assurance as to the
return, if any, that will be realized on such additional funds.
For the distribution and related services provided to, and
the expenses borne on behalf of, a Series, the Distributor and
others will be paid, in the case of the Class A Shares, from the
proceeds of the front-end sales charge and 12b-1 Plan fees and,
in the case of the Class B Shares, from the proceeds of the 12b-1
Plan fees and, if applicable, the CDSC incurred upon redemption
within six years of purchase. Sales personnel may receive
different compensation for selling Class A or Class B Shares.
INVESTORS SHOULD UNDERSTAND THAT THE PURPOSE AND FUNCTION OF THE
12B-1 PLAN AND THE CDSC WITH RESPECT TO THE CLASS B SHARES ARE
THE SAME AS THOSE OF THE 12B-1 PLAN AND THE FRONT-END SALES
CHARGE WITH RESPECT TO THE CLASS A SHARES IN THAT THE FEES AND
CHARGES PROVIDE FOR THE FINANCING OF THE DISTRIBUTION OF THE
RESPECTIVE CLASSES. SEE 12B-1 DISTRIBUTION PLANS - CLASS A AND
CLASS B SHARES.
<PAGE>
Dividends paid by a Series with respect to the Class A and
Class B Shares, to the extent any dividends are paid, will be
calculated in the same manner at the same time, on the same day
and will be in the same amount, except that the additional amount
of 12b-1 Plan expenses relating to the Class B Shares will be
borne exclusively by such shares. See Calculation of Offering
Price and Net Asset Value Per Share. The shareholders of the
Class A and Class B Shares each have an exchange privilege by
which they may exchange their Class A Shares or Class B Shares
for the Class A Shares or Class B Shares, respectively, of
certain other Delaware Group funds. See Exchange Privilege under
The Delaware Difference and Redemption and Exchange.
The NASD has adopted amendments to its Rules of Fair Practice
relating to investment company sales charges. The Fund and the
Distributor intend to operate in compliance with these rules with
respect to both Class A and Class B Shares.
Front-End Sales Charge Alternative - Class A Shares
Class A Shares may be purchased at the offering price which
reflects a maximum front-end sales charge of 5.75% with respect
to the International Equity Series and the Global Assets Series
and 4.75% with respect to the Global Bond Series. See
Calculation of Offering Price and Net Asset Value Per Share.
Lower sales charges apply for larger purchases. See the tables
below. The Class A Shares represent a proportionate interest in
a respective Series' assets and are subject to annual 12b-1 Plan
expenses. See Distribution (12b-1) and Service under Management
of the Fund.
Reduced Front-End Sales Charges
Purchases of $100,000 or more at the offering price carry a
reduced front-end sales charge as shown in the following tables.
International Equity Fund A Class and Global Assets Fund A Class
- -----------------------------------------------------------------
Dealer's
Front-End Sales Charge Concession**
Amount of Purchase as % of as % of
Offering Amount Offering
Price Invested Price
- -----------------------------------------------------------------
Less than $100,000 5.75% 6.10% 5.00%
$100,000 but under $250,000 4.75 4.99 4.00
$250,000 but under $500,000 3.50 3.63 3.00
$500,000 but under $1,000,000* 3.00 3.09 2.60
- -----------------------------------------------------------------
Global Bond Fund A Class
- -----------------------------------------------------------------
Front-End Sales Charge Dealer's
as % of Concession**
Amount of Purchase Offering Amount as % of
Price Invested Offering
Price
- -----------------------------------------------------------------
Less than $100,000 4.75% 4.99% 4.00%
$100,000 but under $250,000 3.75 3.90 3.00
$250,000 but under $500,000 2.50 2.56 2.00
$500,000 but under $1,000,000* 2.00 2.04 1.60
* There is no front-end sales charge on purchases of $1 million
or more but, under certain limited circumstances, a 1% Limited
CDSC may apply with respect to Class A Shares.
- -----------------------------------------------------------------
The Fund must be notified when a sale takes place which would
qualify for the reduced front-end sales charge on the basis of
previous purchases and current purchases. The reduced front-end
sales charge will be granted upon confirmation of the
shareholder's holdings by the Fund. Such reduced front-end sales
charges are not retroactive.
From time to time, upon written notice to all of its dealers, the
Distributor may hold special promotions for specified periods
during which the Distributor may reallow dealers up to the full
front-end sales charge shown above. In addition, certain dealers
who enter into an agreement to provide extra training and
information on Delaware Group products and services and who
increase sales of Delaware Group funds may receive an additional
concession of up to .15% of the offering price. Dealers who
receive 90% or more of the sales charge may be deemed to be
underwriters under the 1933 Act.
** Financial institutions or their affiliated brokers may receive
an agency transaction fee in the percentages set forth above.
- -----------------------------------------------------------------
<PAGE>
For initial purchases of Class A Shares of $1,000,000 or more
made on or after June 1, 1993, a dealer's commission may be paid
by the Distributor to financial advisers through whom such
purchases are effected in accordance with the following schedule:
Dealer's
Commission
----------
(as a percent-
Amount age of amount
of Purchase purchased)
- -----------
Up to $2 million 1.00%
Next $1 million up to $3 million .75
Next $2 million up to $5 million .50
Amount over $5 million .25
In determining a financial adviser's eligibility for the
dealer's commission, purchases of Class A Shares of other
Delaware Group funds as to which Limited CDSC applies may be
aggregated with those of the Class A Shares of a Series.
Financial advisers should contact the Distributor concerning the
applicability and calculation of the dealer's commission in the
case of combined purchases. Financial advisers also may be
eligible for a dealer's commission in connection with certain
purchases made under a Letter of Intention or pursuant to an
investor's Right of Accumulation. The Distributor also should be
consulted concerning the availability of and program for these
payments.
An exchange from other Delaware Group funds will not qualify
for payment of the dealer's commission, unless such exchange is
from a Delaware Group fund with assets as to which a dealer's
commission or similar payment has not been previously paid. The
schedule and program for payment of the dealer's commission are
subject to change or termination at any time by the Distributor
in its discretion.
Redemptions of Class A Shares purchased at net asset value
may result in the imposition of a Limited CDSC if the dealer's
commission described above was paid in connection with the
purchase of those shares. See Contingent Deferred Sales Charge
for Certain Purchases of Class A Shares Made at Net Asset Value
under Redemption and Exchange.
Combined Purchases Privilege
By combining your holdings in the Class A Shares of a Series
with your holdings in the Class B Shares of that Series and,
except as noted below, shares of the other funds in the Delaware
Group, you can reduce the front-end sales charges on any
additional purchases of Class A Shares. Except for shares of
Delaware Group Premium Fund, Inc. beneficially owned in
connection with ownership of variable insurance products, shares
of other funds which do not carry a front-end sales charge or
CDSC may not be included unless they were acquired through an
exchange from one of the other Delaware Group funds which carried
such a front-end sales charge or CDSC.
This privilege permits you to combine your purchases and
holdings with those of your spouse, your children under 21 and
any trust, fiduciary or retirement account for the benefit of
such family members.
It also permits you to use these combinations under a Letter
of Intention. This allows you to make purchases over a 13-month
period and qualify the entire purchase for a reduction in front-
end sales charges on Class A Shares.
Combined purchases of $1,000,000 or more, including certain
purchases made pursuant to a Right of Accumulation or under a
Letter of Intention, may trigger the payment of a dealer's
commission and the applicability of a Limited CDSC. Investors
should consult their financial advisers or the Transfer Agent
about the operation of these features. See Reduced Front-End
Sales Charges under Buying Shares.
Buying at Net Asset Value
Class A Shares of a Series may be purchased at net asset
value under the Delaware Group Dividend Reinvestment Plan and,
under certain circumstances, the 12-month Reinvestment Privilege
and the Exchange Privilege. (See The Delaware Difference and
Redemption and Exchange for additional information.)
Purchases of Class A Shares may be made at net asset value by
officers, directors and employees (including former officers and
directors and former employees who had been employed for at least
ten years) and members of their immediate families of the
Manager, any affiliate, any of the funds in the Delaware Group,
certain of their agents and registered representatives and
employees of authorized investment dealers and by employee
benefit plans for such entities. Individual purchases include
retirement accounts and must be for accounts in the name of the
individual or a qualifying family member. Purchases of Class A
Shares may be made by clients of registered representatives of an
authorized investment dealer at net asset value within six months
of a change of the registered representative's employment, if the
purchase is funded by proceeds from an investment where a front-
end sales charge has been assessed and the redemption of the
investment did not result in the imposition of a contingent
deferred sales charge or other redemption charge. Purchases of
Class A Shares also may be made at net asset value by bank
employees that provide services in connection with agreements
between the bank and unaffiliated brokers or dealers concerning
sales of Class A Shares. Also, officers, directors and key
employees of institutional clients of the Manager, the Sub-
Adviser or any of their affiliates may purchase Class A Shares at
net asset value. Moreover, purchases may be effected at net
asset value for the benefit of the clients of brokers, dealers
and registered investment advisers affiliated with a broker or
dealer, if such broker, dealer or investment adviser has entered
into an agreement with the Distributor providing specifically for
the purchase of Class A Shares in connection with special
investment products, such as wrap accounts or similar fee based
programs.
Investments in Class A Shares made by plan level and/or
participant retirement accounts that are for the purpose of
repaying a loan taken from such accounts will be made at net
asset value. Loan repayments made to a Delaware Group account in
connection with loans originated from accounts previously
maintained by another investment firm will also be invested at
net asset value.
The Fund must be notified in advance that an investment
qualifies for purchase of Class A Shares at net asset value.
<PAGE>
Group Investment Plans
Group Investment Plans (e.g., SEP/IRA, SAR/SEP, Prototype
Profit Sharing, Pension and 401(k) Defined Contribution Plans)
may also benefit from the reduced front-end sales charges
relating to the Class A Shares set forth in the tables on page
20, based on total plan assets. In addition, 403(b)(7) and
457 Retirement Plan Accounts may also benefit from a reduced
front-end sales charge on Class A Shares based on the total
amount invested by all participants in the plan by satisfying the
following criteria: (i) the employer for which the plan was
established has 250 or more eligible employees and the plan lists
only one broker of record, or (ii) the plan includes employer
contributions and the plan lists only one broker of record. If a
company has more than one plan investing in the Delaware Group of
funds, then the total amount invested in all plans would be used
in determining the applicable front-end sales charge reduction.
Employees participating in such Group Investment Plans may also
combine the investments made in their plan account when
determining the front-end sales charge on purchases to non-
retirement Delaware Group investment accounts.
For additional information on these Plans, including Plan
forms, applications, minimum investments and any applicable
account maintenance fees, contact your investment dealer or the
Distributor.
For other Retirement Plans and special services, see
Retirement Planning.
Deferred Sales Charge Alternative - Class B Shares
Class B Shares of a Series may be purchased at net asset
value without the imposition of a front-end sales charge. The
Class B Shares are being sold without a front-end sales charge so
that a Series will invest the full amount of the investor's
purchase payment. The Distributor currently anticipates
compensating dealers or brokers for selling Class B Shares at the
time of purchase from its own funds in an amount equal to no more
than 4% of the dollar amount purchased. As discussed below,
however, Class B Shares are subject to annual 12b-1 Plan expenses
and, if shares are redeemed within six years of purchase, a CDSC.
Proceeds from the CDSC and the annual 12b-1 Plan fees are
paid to the Distributor and others for the distribution and
related services provided to, and the related expenses borne on
behalf of, a Series for the benefit of the Class B Shares in
connection with the sale of the Class B Shares, including the
compensation paid to dealers or brokers for selling Class B
Shares. Payments to the Distributor and others under the 12b-1
Plan relating to the Class B Shares may be, annually, in an
amount equal to no more than 1%. The combination of the CDSC and
the proceeds of the 12b-1 Plan fees facilitates the ability of a
Series to sell the Class B Shares without a front-end sales
charge being deducted at the time of purchase.
Shareholders of the Class B Shares exercising the exchange
privilege described below will continue to be subject to the CDSC
schedule of the Class B Shares described in this Prospectus.
Such schedule may be higher than the CDSC schedule relating to
the Class B Shares acquired as a result of the exchange. See
Redemption and Exchange.
Automatic Conversion of Class B Shares
Except for shares acquired through a reinvestment of
dividends, Class B Shares of a Series held for eight years after
purchase are eligible for automatic conversion into Class A
Shares of that Series. The Fund will effect conversions of Class
B Shares into Class A Shares only four times in any calendar
year, on the last business day of the second full week of March,
June, September and December (each, a "Conversion Date"). If the
eighth anniversary after a purchase of Class B Shares falls on a
Conversion Date, an investor's Class B Shares will be converted
on that date. If the eighth anniversary occurs between
Conversion Dates, an investor's Class B Shares will be converted
on the next Conversion Date after such anniversary.
Consequently, if a shareholder's eighth anniversary falls on the
day after a Conversion Date, that shareholder will have to hold
Class B Shares for as long as an additional three months after
the eighth anniversary after purchase before the shares will
automatically convert into Class A Shares.
Class B Shares of a fund acquired through reinvestment of
dividends will convert to the corresponding Class A Shares of
that fund (or, in the case of Delaware Group Cash Reserve, Inc.,
the Delaware Cash Reserve Consultant Class) pro-rata with Class B
Shares of that fund not acquired through dividend reinvestment.
All such automatic conversions of Class B Shares will
constitute tax-free exchanges for federal income tax purposes.
See Taxes.
Contingent Deferred Sales Charge
Class B Shares redeemed within six years of purchase may be
subject to a CDSC at the rates set forth below, charged as a
percentage of the dollar amount subject thereto. The charge will
be assessed on an amount equal to the lesser of the net asset
value at the time of purchase of the shares being redeemed or the
net asset value of the shares at the time of redemption. For
purposes of this formula, the "net asset value at the time of
purchase" will be the net asset value at purchase of the Class B
Shares of the Series even if those shares are later exchanged for
Class B Shares of another Delaware Group fund and, in the event
of an exchange of the shares, the "net asset value of such shares
at the time of redemption" will be the net asset value of the
shares into which the shares have been exchanged. Accordingly,
no CDSC will be imposed on increases in net asset value above the
initial purchase price. In addition, no CDSC will be assessed on
redemption of shares received upon reinvestment of dividends or
capital gains distributions.
The following table sets forth the rates of the CDSC for the
Class B Shares of a Series:
Contingent Deferred
Sales Charge (as a
Percentage of
Dollar Amount
Year After Purchase Made Subject to Charge)
- ------------------------ --------------------
0-2 4%
3-4 3%
5 2%
6 1%
7 and thereafter None
<PAGE>
During the seventh year after purchase and, thereafter, until
converted automatically into Class A Shares of a Series, the
Class B Shares will continue to be subject to annual 12b-1 Plan
expenses of 1% of average daily net assets representing those
shares. See Automatic Conversion of Class B Shares above.
Investors are reminded that the Class A Shares into which the
Class B Shares will convert are subject to ongoing annual 12b-1
Plan expenses of up to a maximum of .30% of average daily net
assets representing such shares.
In determining whether a CDSC is applicable to a redemption,
the calculation will be determined in a manner that results in
the lowest applicable rate being charged. Therefore, with
respect to the Class B Shares, it will be assumed that the
redemption is first for shares held over six years or shares
acquired pursuant to reinvestment of dividends or distributions
and then of shares held longest during the six-year period. The
charge will not be applied to dollar amounts representing an
increase in the net asset value since the time of purchase. All
investments made during a calendar month, regardless of when
during the month the investment occurred, will age one month on
the last day of that month and each subsequent month.
The CDSC is waived on redemptions of Class B Shares in
connection with the following redemptions: (i) redemptions
effected pursuant to the Fund's right to liquidate a
shareholder's account if the aggregate net asset value of the
shares held in the account is less than the then- effective
minimum account size; (ii) returns of excess contributions to an
IRA or 403(b)(7) Deferred Compensation Plan; (iii) required
minimum distributions from an IRA, 403(b)(7) Deferred
Compensation Plan, or 457 Deferred Compensation Plan; and (iv)
distributions from an IRA, 403(b)(7) Deferred Compensation Plan
or 457 Deferred Compensation Plan due to death or disability.
12b-1 Distribution Plans - Class A and Class B Shares
Pursuant to the distribution plans adopted by the Fund
pursuant to Rule 12b-1 under the 1940 Act, a Series is permitted
to pay the Distributor annual distribution fees payable monthly
of .30% of the average daily net assets of the Class A Shares and
1% of the average daily net assets of the Class B Shares in order
to compensate the Distributor for providing distribution and
related services and bearing certain expenses of each Class. The
Class B Shares' 12b-1 Plan is designed to permit an investor to
purchase Class B Shares through dealers or brokers without the
assessment of a front-end sales charge and at the same time
permit the Distributor to compensate dealers and brokers in
connection with the sale of the Class B Shares. In this regard,
the purpose and function of the 12b-1 Plan and the CDSC with
respect to the Class B Shares are the same as those of the front-
end sales charge and 12b-1 Plan with respect to the Class A
Shares in that the fees and charges provide for the financing of
the distribution of the respective Classes. For more detailed
discussion of the 12b-1 Plans relating to the Class A and Class B
Shares, see Distribution (12b-1) and Service.
Other Payments to Dealers - Class A and Class B Shares
In addition, from time to time at the discretion of the
Distributor, all registered broker/dealers whose aggregate sales
of the Classes exceed certain limits as set by the Distributor,
may receive from the Distributor an additional payment of up to
.25% of the dollar amount of such sales. The Distributor may
also provide additional promotional incentives or payments to
dealers that sell shares of the Delaware Group of funds. In some
instances, these incentives or payments may be offered only to
certain dealers who maintain, have sold or may sell certain
amounts of shares.
In connection with the promotion of Delaware Group fund
shares, the Distributor may, from time to time, pay to
participate in dealer-sponsored seminars and conferences,
reimburse dealers for expenses incurred in connection with
preapproved seminars, conferences and advertising and may, from
time to time, pay or allow additional promotional incentives to
dealers, which shall include non-cash concessions, such as
certain luxury merchandise or a trip to or attendance at a
business or investment seminar at a luxury resort, as part of
preapproved sales contests. In addition, as noted above, the
Distributor may pay dealers a commission in connection with net
asset value purchases.
Class B Funds
The following funds currently offer Class B Shares: DMC Tax-
Free Income Trust-Pennsylvania, Delaware Group Delchester High-
Yield Bond Fund, Inc., Delaware Group Government Fund, Inc.,
Treasury Reserves Intermediate Series of Delaware Group Treasury
Reserves, Inc., Delaware Group Cash Reserve, Inc., Tax-Free USA
Fund, Tax-Free Insured Fund and Tax-Free USA Intermediate Fund of
Delaware Group Tax-Free Fund, Inc., Delaware Group DelCap Fund,
Inc., Delaware Fund and Dividend Growth Fund of Delaware Group
Delaware Fund, Inc., Delaware Group Value Fund, Inc., Decatur
Income Fund and Decatur Total Return Fund of Delaware Group
Decatur Fund, Inc., Delaware Group Trend Fund, Inc. and each
Series of the Fund.
International Equity Fund Institutional Class, Global Bond Fund
Institutional Class and Global Assets Fund Institutional Class
In addition to offering the Class A and Class B Shares of
each Series, the Fund also offers the International Equity Fund
Institutional Class, the Global Bond Fund Institutional Class and
the Global Assets Fund Institutional Class of shares, which are
described in a separate prospectus relating to those classes of
shares. Those classes may be purchased 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
<PAGE>
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. Such International
Equity Fund Institutional Class, Global Bond Fund Institutional
Class and Global Assets Fund Institutional Class shares generally
are distributed directly by the Distributor and do not have a
front-end or contingent deferred sales charge or a 12b-1 fee.
Sales or service compensation available in respect of such
classes, therefore, differs from that available in respect of the
Class A Shares and the Class B Shares of a Series. 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
Institutional Class as a percentage of average daily net assets
for the fiscal year ended November 30, 1994 were 1.26%,
reflecting the voluntary waiver of expenses by the Manager. See
Part B for performance information about the International Equity
Fund Institutional Class. Total Operating Expenses expected to
be incurred by the Global Bond Fund Institutional Class and the
Global Assets Fund Institutional Class are each 0.95%, after
voluntary fee waivers and expense reimbursements by the Manager.
To obtain a prospectus which describes the International Equity
Fund Institutional Class, the Global Bond Fund Institutional
Class and the Global Assets Fund Institutional Class, contact the
Distributor.
Dividend Orders
Some shareholders want the dividends earned in one fund
automatically invested in another Delaware Group fund with a
different investment objective. For more information on the
requirements of the other funds, see Dividend Reinvestment Plan
under The Delaware Difference or call the Shareholder Service
Center.
HOW TO BUY SHARES
The Fund makes it easy to invest by mail, by wire, by
exchange and by arrangement with your investment dealer.
Investing through Your Investment Dealer
You can make a purchase of shares of the Classes through most
investment dealers who, as part of the service they provide, must
transmit orders promptly. They may charge for this service. If
you want a dealer but do not have one, we can refer you to one.
Investing 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 wish to buy Class A Shares
of the International Equity Series, make the check payable to
International Equity Fund A Class) to 1818 Market Street,
Philadelphia, PA 19103.
2. Subsequent Purchases-Additional purchases may be made at
anytime by mailing a check payable to the specific Class
selected. Your check should be identified with your name(s) and
account number. An investment slip (similar to a deposit slip)
is provided at the bottom of transaction confirmations and
dividend statements that you will receive from the Fund, and
should be used when you are making additional purchases. You can
expedite processing by including an investment slip with your
check when making additional purchases. Your investment may be
delayed if you send additional purchases by certified mail.
Investing 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
Shareholder Service Center to get an account number. 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 should advise the Fund's Shareholder Service Center
by telephone of each wire you send.
If you want to wire investments to a Retirement Plan Account,
call the Shareholder Service Center for special wiring
instructions.
Investing by Exchange
If you have an investment in another mutual fund in the
Delaware Group, you may write and authorize an exchange of part
or all of your investment into shares of a Series. If you wish
to open an account by exchange, call the Shareholder Service
Center for more information.
<PAGE>
Exchanges will not be permitted between Class A Shares and
Class B Shares of a Series or between the Class A Shares and
Class B Shares of any other funds or series in the Delaware
Group. Class B Shares of any of the Class B Funds may be
exchanged for Class B Shares of a Series. Class B Shares of a
Series acquired by exchange will continue to carry the contingent
deferred sales charge and the automatic conversion schedules of
the fund or series from which the exchange is made. The holding
period of the Class B Shares of a Series will be added to that of
the exchanged shares for purposes of determining the time of the
automatic conversion into Class A Shares of that Series.
Permissible exchanges into the Classes of a Series will be
made without a front-end sales charge imposed by the Fund or, at
the time of the exchange, a contingent deferred sales charge
imposed by the fund or series from which the exchange is being
made, except for exchanges into Class A Shares from funds not
subject to a front-end sales charge (unless such shares were
acquired in an exchange from a fund subject to such a charge or
such shares were acquired through the reinvestment of dividends).
Additional Methods of Adding to Your Investment
Call the Shareholder Service Center for more information if
you wish to use the following services:
1. Direct Deposit
You may wish your employer or bank to make regular
investments directly to your account for you (for example:
payroll deduction, pay by phone, annuity payments). The Series
also accepts preauthorized recurring government and private
payments by Electronic Fund Transfer, which avoids mail time and
check clearing holds on payments such as social security, federal
salaries, Railroad Retirement benefits, etc.
2. Automatic Investing Plan
The Automatic Investing Plan enables you to make regular
monthly investments without writing or mailing checks. You may
authorize the Fund to transfer a designated amount monthly from
your checking account to your Class account. Many shareholders
use this as an automatic savings plan for IRAs and other
purposes. Shareholders should allow a reasonable amount of time
for initial purchases and changes to these plans to become
effective.
This option is not available to participants in the following
plans: SAR/SEP, SEP/IRA, Profit Sharing and Money Purchase
Pension Plans, 401(k) Defined Contribution Plans, 403(b)(7)
Deferred Compensation Plans or 457 Deferred Compensation Plans.
* * *
Should investments by these two methods be reclaimed or
returned for some reason, a Series has the right to liquidate
your shares to reimburse the government or transmitting bank. If
there are insufficient funds in your Class account, you are
obligated to reimburse the Series.
Purchase Price and Effective Date
The offering price and net asset value of the Class A and
Class B Shares of each Series are 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 offering price or net asset value of shares 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. An
investor making the minimum initial investment will be subject to
involuntary redemption without the imposition of a CDSC or
Limited CDSC if he or she redeems any portion of his or her
account.
<PAGE>
REDEMPTION AND EXCHANGE
You can redeem or exchange your shares in a number of
different ways. The exchange service is useful if your
investment requirements change and you want an easy way to invest
in other equity funds, tax-advantaged funds, bond funds or money
market funds. This service is also useful if you are
anticipating a major expenditure and want to move a portion of
your investment into a fund that has the checkwriting feature.
Exchanges are subject to the requirements of each fund and all
exchanges of shares from one fund or class to another pursuant to
this privilege constitute taxable events. See Taxes. You may
want to call us for more information or consult your financial
adviser or investment dealer to discuss which funds in the
Delaware Group will best meet your changing objectives, and the
consequences of any exchange transaction.
Your shares will be redeemed or exchanged based on the net
asset value next determined after we receive your request in good
order subject, in the case of a redemption, to any applicable
CDSC or Limited CDSC. Redemption or exchange requests received
in good order after the time the offering price and net asset
value of shares are 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. If a holder of
Class B Shares submits a redemption request for a specific dollar
amount, the Fund will redeem that number of shares necessary to
deduct the applicable CDSC and tender to the shareholder the
requested amount to the extent enough shares are then held in the
shareholder account. 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
800-523-1918 (in Philadelphia, 215-988-1241). 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.
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.
Class A Shares may be exchanged for certain of the shares of
the other funds in the Delaware Group, including other Class A
Shares, subject to the eligibility and minimum purchase
requirements set forth in each fund's prospectus. All Delaware
Group funds offer Class A Shares. Class A Shares may not be
exchanged for Class B Shares of the funds offering such shares.
Class B Shares of a Series may be exchanged only for the Class B
Shares of any of the Class B Funds. See Exchange Privilege under
The Delaware Difference. In each instance, permissible exchanges
are subject to the minimum purchase and other requirements set
forth in each prospectus.
Permissible exchanges may be made at net asset value
provided: (1) the investment satisfies the eligibility and
minimum purchase requirements set forth in the prospectus of the
fund being acquired; and (2) the shares of the fund being
acquired are in a state where that fund is registered.
There is no front-end sales charge or fee for exchanges made
between shares of funds which both carry a front-end sales
charge. Any applicable front-end sales charge will apply to
exchanges from shares of funds not subject to a front-end sales
charge, except for transfers involving assets that were
previously invested in a fund with a front-end sales charge
and/or transfers involving the reinvestment of dividends.
Holders of the Class B Shares that exchange their shares
("outstanding Class B Shares") for the Class B Shares of other
Class B Funds ("new Class B Shares") will not be subject to a
CDSC that might otherwise be due upon redemption of the
outstanding Class B Shares. However, such shareholders will
continue to be subject to the CDSC and automatic conversion
schedules of the outstanding Class B Shares described in this
Prospectus and any CDSC assessed upon redemption will be charged
by the Fund. Such schedule may be higher than the CDSC schedule
relating to the new Class B Shares acquired as a result of the
exchange. For purposes of computing the CDSC that may be payable
upon a disposition of the new Class B Shares, the holding period
for the outstanding Class B Shares is added to the holding period
of the new Class B Shares. The automatic conversion schedule of
the outstanding Class B Shares may be longer than that of the new
Class B Shares. Consequently, an investment in new Class B
Shares by exchange may subject an investor to the higher 12b-1
fees applicable to Class B Shares for a longer time than if the
investment in new Class B Shares were made directly.
Different redemption and exchange methods are outlined below.
Except for the CDSC with respect to redemption of Class B Shares
and the Limited CDSC with respect to certain redemptions of Class
A Shares purchased at net asset value, there is no fee charged by
the Fund or the Distributor for redeeming or exchanging your
shares, but such fees could be charged in the future. 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
<PAGE>
exchange. The prospectus contains more complete information
about the fund, including charges and expenses.
Written Redemption
You can write to the Fund at 1818 Market Street,
Philadelphia, PA 19103 to redeem some or all of your Class A or
Class B Shares. 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 signature guarantee
for each owner. 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. Class B
Shares may be subject to a CDSC and Class A Shares may be subject
to a Limited CDSC with respect to certain shares purchased at net
asset value. Payment is normally mailed the next business day,
but no later than seven days, after receipt of your request. If
your Class A Shares are in certificate form, the certificate must
accompany your request and also be in good order. The Fund only
issues certificates for Class A Shares if a shareholder submits a
specific request. The Fund does not issue certificates for Class
B Shares.
Written Exchange
You can also write to the Fund (at 1818 Market Street,
Philadelphia, PA 19103) to request an exchange of any or all of
your Class A or Class B Shares into another mutual fund in the
Delaware Group, subject to the same conditions and limitations as
other exchanges noted above.
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
Class A Shares in certificate form, you can only redeem or
exchange by written request and you must return your
certificates.
The Telephone Redemption service enabling you to have
redemption proceeds mailed to your 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 Series 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. Instructions received by telephone are
generally tape recorded, and 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
The Telephone Redemption feature is a quick and easy method
to redeem shares. 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 your request. This
service is only available to individual, joint and individual
fiduciary-type accounts.
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 an
Authorization Form with 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.
Except for any CDSC which may be applicable to the Class B Shares
and the Limited CDSC which may be applicable to purchases made at
net asset value with respect to the Class A Shares, there are no
fees for this method, but the mail time may delay getting funds
into your bank account. Simply call the Fund's Shareholder
Service Center prior to the time the offering price and net asset
value are determined, as noted above.
If expedited payment by check or wire could adversely affect
the Series, the Fund may take up to seven days to pay.
Telephone Exchange
The Telephone Exchange feature is a convenient and efficient
way to adjust your investment holdings as your liquidity
requirements and investment objectives change. You or your
investment dealer of record can exchange Class A or Class B
Shares into any fund in the Delaware Group under the same
registration, subject to the same conditions and limitations as
other exchanges noted above. As with the written exchange
service, telephone exchanges are subject to the requirements of
each fund, as described above. Telephone exchanges may be
subject to limitations as to amounts or frequency.
Systematic Withdrawal Plan for Class A Shares
1. Regular Plans
This plan provides holders of the Class A Shares with a
consistent monthly (or quarterly) payment. This is particularly
useful to shareholders living on fixed incomes,
since it can provide them with a stable supplemental amount.
With accounts of at least $5,000 you may elect monthly
withdrawals of $25 (quarterly $75) or more. The Fund does not
recommend any particular monthly amount, as each
<PAGE>
shareholder's situation and needs vary. Payments are normally
made by check.
In the alternative, you may elect to have your payments
transferred from your Series account to your predesignated bank
account through the Delaware Group's MoneyLine service. Your
funds will normally be credited to your bank account after two
business days. Except with respect to the Limited CDSC which may
be applicable to Class A Shares as noted below, there are no fees
for this method. You can initiate this service by completing an
Authorization Agreement. If the name and address on your bank
account are not identical to the name and address on your Series
account, you must have your signature guaranteed. Please call
the Shareholder Service Center for additional information.
2. Retirement Plans
For shareholders eligible under the applicable Retirement
Plan to receive benefits in periodic payments, the Fund's
Systematic Withdrawal Plan provides you with maximum flexibility.
A number of formulas are available for calculating your
withdrawals depending upon whether the distributions are required
or optional. Withdrawals must be for $25 or more; however, no
minimum account balance is required. The MoneyLine service
described above is not available with respect to Retirement
Plans.
* * *
Shareholders should not purchase Class A Shares while
participating in a Systematic Withdrawal Plan. Also, redemptions
of Class A Shares pursuant to a Systematic Withdrawal Plan may be
subject to a Limited CDSC if the original purchase was made
within the 12 months prior to the withdrawal at net asset value
and a dealer's commission has been paid on that purchase. See
Contingent Deferred Sales Charge for Certain Purchases of Class A
Shares Made at Net Asset Value. For more information on both of
these plans, call the Shareholder Service Center.
The Systematic Withdrawal Plan is not available with respect
to the Class B Shares.
Wealth Builder Option
Shareholders may elect to invest in other mutual funds in the
Delaware Group through our Wealth Builder Option. Under this
automatic exchange program, shareholders can authorize regular
monthly amounts (minimum of $100 per fund) to be liquidated from
their Class account and invested automatically into one or more
funds in the Delaware Group. Investments under this option are
exchanges and are therefore subject to the same conditions and
limitations as other exchanges of Class A and Class B Shares
noted above.
Shareholders can also use the Wealth Builder Option to invest
in the Series through regular liquidations of shares in their
accounts in other funds in the Delaware Group, subject to the
same conditions and limitations as other exchanges noted above.
Shareholders can terminate their participation at any time by
written notice to the Fund. See Redemption and Exchange.
This option is not available to participants in the following
plans: SAR/SEP, SEP/IRA, Profit Sharing and Money Purchase
Pension Plans, 401(k) Defined Contribution Plans, 403(b)(7)
Deferred Compensation Plans or 457 Deferred Compensation Plans.
Contingent Deferred Sales Charge for Certain Purchases of Class A
Shares Made at Net Asset Value
For purchases of Class A Shares, a Limited CDSC will be
imposed by the Fund upon certain redemptions of Class A Shares
(or shares into which such Class A Shares are exchanged) made
within 12 months of purchase, if such purchases were made at net
asset value and triggered the payment by the Distributor of the
dealer's commission described above. See Buying Shares.
The Limited CDSC will be paid to the Distributor and will be
equal to the lesser of 1% of (1) the net asset value at the time
of purchase of the Class A Shares being redeemed or (2) the net
asset value of such Class A Shares at the time of redemption.
For purposes of this formula, the "net asset value at the time of
purchase" will be the net asset value at purchase of the Class A
Shares even if those shares are later exchanged for shares of
another Delaware Group fund and, in the event of an exchange of
Class A Shares, the "net asset value of such shares at the time
of redemption" will be the net asset value of the shares into
which the Class A Shares have been exchanged.
Redemptions of such Class A Shares held for more than 12
months will not be subjected to the Limited CDSC and an exchange
of such Class A Shares into another Delaware Group fund will not
trigger the imposition of the Limited CDSC at the time of such
exchange. The period a shareholder owns shares into which Class
A Shares are exchanged will count towards satisfying the 12-month
holding period. The Fund assesses the Limited CDSC if such 12-
month period is not satisfied irrespective of whether the
redemption triggering its payment is of the Class A Shares of a
Series or the Class A Shares into which the Class A Shares of
that Series have been exchanged.
In determining whether a Limited CDSC is payable, it will be
assumed that shares not subject to the Limited CDSC are the first
redeemed followed by other shares held for the longest period of
time. The Limited CDSC will not be imposed upon shares
representing reinvested dividends or capital gains distributions,
or upon amounts representing share appreciation. All investments
made during a calendar month, regardless of when during the month
the investment occurred, will age one month on the last day of
that month and each subsequent month.
The Limited CDSC will be waived in the following instances:
(i) redemptions effected pursuant to the Fund's right to
liquidate a shareholder's account if the aggregate net asset
value of the shares held in the account is less than the then-
effective minimum account size; (ii) distributions to
participants from a retirement plan qualified under section
401(a) or 401(k) of the Internal Revenue Code of 1986, as amended
("the Code"), or due to death of a participant in such a plan;
(iii) redemptions pursuant to the direction of a participant or
beneficiary of a retirement plan qualified under section 401(a)
or 401(k) of the Code with respect to that retirement plan; (iv)
distributions from a section 403(b)(7) Plan or an IRA due to
death, disability, or attainment of age 59 1/2; (v) tax-free
returns of excess contributions to an IRA; (vi) distributions by
other employee benefit plans to pay benefits; (vii) distributions
described in (ii), (iv), and (vi) above pursuant to a systematic
withdrawal plan; and (viii) redemptions by the classes of
shareholders who are permitted to purchase shares at net asset
value, regardless of the size of the purchase (see Buying at Net
Asset Value).
<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 including the
date of redemption.
The International Equity and 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 $0.255 and $0.030 per
share of the Class A Shares and the Class B Shares, respectively,
of the International Equity Series were paid from net investment
income.
Payment by check of cash dividends will ordinarily be mailed
within three business days after the payable date. 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 Class A Shares of the
International Equity Series was paid from realized securities
profits.
Each of the Classes of a Series will share proportionately in
the investment income and expenses of that Series, except that:
(i) the per share dividends and distributions on the Class B
Shares of a Series will be lower than the per share dividends and
distributions on the Class A Shares of that Series as a result of
the higher expenses under the 12b-1 Plan relating to the Class B
Shares; and (ii) the per share dividends and distributions on
both the Class A Shares of a Series and the Class B Shares of
that Series will be lower than the per share dividends and
distributions on the Institutional Class of that Series as such
class will not incur any expenses under the Rule 12b-1 Plans.
See Distribution (12b-1) and Service under Management of the
Fund.
Both dividends and distributions, if any, are automatically
reinvested in your account at net asset value, unless you elect
otherwise. Any check in payment of dividends or other
distributions which cannot be delivered by the Post Office or
which remains uncashed for a period of more than one year may be
reinvested in the shareholder's account at the then-current net
asset value and the dividend option may be changed from cash to
reinvest. If you elect to take your dividends and distributions
in cash and such dividends and distributions are in an amount of
$25 or more, you may elect the Delaware Group's MoneyLine service
to enable such payments to be transferred from your Series
account to your predesignated bank account. Your funds will
normally be credited to your bank account after two business
days. There are no fees for this method. See Systematic
Withdrawal Plan for Class A Shares under Redemption and Exchange
for information regarding authorization of this service. This
service is not available with respect to Retirement Plans. (See
The Delaware Difference for more information on reinvestment
options.)
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
$0.095 and $0.085 per share of the Class A Shares and the Class B
Shares, respectively, of the International Equity Series was paid
from net investment income. On the same date, a distribution of
$0.470 per share of the Class A Shares and the Class B Shares of
the International Equity Series was paid from realized securities
profits to shareholders of record December 27, 1994.
<PAGE>
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, whether received in cash or
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 deductions for corporations.
Distributions paid by a Series from long-term capital gains,
whether received in cash or in additional shares, are taxable to
those investors who are subject to income taxes as long-term
capital gains, regardless of the length of time an investor has
owned shares in 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. All or a portion of the sales charge incurred in
purchasing a Series' shares will be excluded from the federal tax
basis of any of such shares sold or exchanged within ninety (90)
days of their purchase (for purposes of determining gain or loss
upon sale of such shares) if the sale proceeds are reinvested in
the Series or in another fund in the Delaware Group of funds and
a sales charge that would otherwise apply to the reinvestment is
reduced or eliminated. Any portion of such sales charge excluded
from the tax basis of the shares sold will be added to the tax
basis of the shares acquired in the reinvestment.
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.
The automatic conversion of Class B Shares into Class A
Shares of the relevant Series at the end of no longer than
approximately eight years after purchase will constitute a tax-
free exchange for federal tax purposes. Shareholders should
consult their own tax advisers regarding specific questions as to
federal, state, local or foreign taxes. See Automatic Conversion
of Class B Shares under Buying Shares.
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 its
shareholders.
<PAGE>
CALCULATION OF OFFERING PRICE AND NET ASSET VALUE PER SHARE
Class A Shares are purchased at the offering price and Class
B Shares are purchased at the net asset value ("NAV") per share.
The offering price of the Class A Shares consists of the NAV per
share next determined after the order is received, plus any
applicable front-end sales charges. The offering price and NAV
are 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 International Equity Fund Institutional Class,
the Global Bond Fund Institutional Class and the Global Assets
Fund Institutional Class will not incur any distribution fees
under the respective Series' 12b-1 Plans and the Class A and
Class B Shares of each Series alone will bear the 12b-1 Plan
expenses 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 each Series' investments and for its
services, the Manager is paid an annual fee equal to .75% of each
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 elected
voluntarily to waive that portion, if any, of the annual
management fees payable by the International Equity Series to the
extent necessary to insure that the Total Operating Expenses
(exclusive of taxes, interest, brokerage commissions,
extraordinary expenses and 12b-1 expenses) of the Class A Shares
of this Series did not exceed 1.50% through November 30, 1994.
Through November 30, 1994, this waiver and reimbursement noted
above also applied to Class B Shares of this Series. Prior to
June 1, 1994, a waiver and reimbursement commitment was in place
to ensure expenses of the Class A Shares of the International
Equity Series did not exceed 1.25% (exclusive of taxes, interest
brokerage commissions and extraordinary expenses, but inclusive
of 12b-1 fees). 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 insure that the Total Operating Expenses
(exclusive of taxes, interest, brokerage commissions and
extraordinary expenses, but inclusive of 12b-1 fees) of the Class
A Shares of these Series do not exceed 1.25% and of the Class B
Shares of these Series do not exceed 1.95% 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.
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.
<PAGE>
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.
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-Adviser or their advisory clients. These
services may be used by the Manager and the Sub-Adviser in
servicing any of their respective accounts. Subject to best
price and execution, the Manager and 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.
<PAGE>
Performance Information
From time to time, each Series may quote total return
performance of their respective Classes in advertising and other
types of literature. The Global Bond Series may also quote the
yield of its Classes in advertising and other types of
literature. Total return will be based on a hypothetical $1,000
investment, reflecting the reinvestment of all distributions at
net asset value and (i) in the case of Class A Shares, the impact
of the maximum front-end sales charge at the beginning of each
specified period and (ii) in the case of Class B Shares, the
deduction of any applicable CDSC at the end of the relevant
period. Each presentation will include the average annual total
return for one-, five- and ten-year (or life of fund, if
applicable) periods, as relevant. A Series may also advertise
aggregate and average total return information concerning a Class
over additional periods of time. In addition, each Series may
present total return information that does not reflect the
deduction of the maximum front-end sales charge or any applicable
CDSC. In this case, such total return information would be more
favorable than total return information which includes deductions
of the maximum front-end sales charge or any applicable CDSC.
The current yield of each class of the Global Bond Series will
be calculated by dividing the annualized net investment income
earned by the Class during a recent 30-day period by the maximum
offering price 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.
Distribution (12b-1) 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 as of September
6, 1994 and for the Global Bond Series and Global Assets Series
under separate Distribution Agreements dated December 27, 1994.
The Fund has adopted a distribution plan under Rule 12b-1 for
the Class A Shares of each Series and a separate distribution
plan under Rule 12b-1 for the Class B Shares of each Series (the
"Plans"). Each Plan permits the Fund to pay the Distributor from
the assets of the respective Classes a monthly fee for its
services and expenses in distributing and promoting sales of
shares. These expenses include, among other things, preparing
and distributing advertisements, sales literature, and
prospectuses and reports used for sales purposes, compensating
sales and marketing personnel, holding special promotions for
specified periods of time, and paying distribution and
maintenance fees to brokers, dealers and others. In connection
with the promotion of Class A and Class B Shares, the Distributor
may, from time to time, pay to participate in dealer-sponsored
seminars and conferences, and reimburse dealers for expenses
incurred in connection with preapproved seminars, conferences and
advertising. The Distributor may pay or allow additional
promotional incentives to dealers as part of preapproved sales
contests and/or to dealers who provide extra training and
information concerning a Class and increase sales of the Class.
In addition, the Fund may make payments from the assets of the
respective Class directly to others, such as banks, who aid in
the distribution of Class shares or provide services in respect
of a Class, pursuant to service agreements with the Fund.
The 12b-1 Plan expenses relating to the Class B Shares of a
Series are also used to pay the Distributor for advancing the
commission costs to dealers with respect to the initial sale of
such shares.
The aggregate fees paid by a Series from the assets of the
respective Class to the Distributor and others under the Plans
may not exceed .30% of the Class A Shares' average daily net
assets in any year, and 1% (.25% of such amount representing
service fees to be paid by the Fund to the Distributor, dealers
and others, for providing personal service and/or maintaining
shareholder accounts) of the Class B Shares' average daily net
assets in any year. The Class A and Class B Shares will not
incur any distribution expenses beyond these limits, which may
not be increased without shareholder approval. The Distributor
may, however, incur additional expenses and make additional
payments to dealers from its own resources to promote the
distribution of shares of the Classes.
The Plans do not apply to the Institutional Class of shares
of each Series. Those shares are not included in calculating the
Plans' fees, and the Plans are not used to assist in the
distribution and marketing of the shares of the Institutional
Class of each Series.
While payments pursuant to the Plans may not exceed .30%
annually with respect to the Class A Shares and 1% annually with
respect to the Class B Shares, the Plans do not limit fees to
amounts actually expended by the Distributor. It is therefore
possible that the Distributor may realize a profit in any
particular year. However, the Distributor currently expects that
its distribution expenses will likely equal or exceed payments to
it under the Plans. The monthly fees paid to the Distributor are
subject to the review and approval of the Fund's unaffiliated
directors, who may reduce the fees or terminate the Plans at any
time.
The staff of the Securities and Exchange Commission ("SEC")
has proposed amendments to Rule 12b-1 and other related
regulations that could impact distribution plans under Rule 12b-
1. The Fund intends to amend the Series' Plans, if necessary, to
comply with any new rules or regulations the SEC may adopt with
respect to Rule 12b-1.
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 of the Fund review service fees paid
to the Transfer Agent.
The Distributor and the Transfer Agent are also indirect,
wholly-owned subsidiaries of DMH.
<PAGE>
Expenses
Each Series is responsible for all of its own expenses other
than those borne by the Manager under the Investment Management
Agreements and those borne by the Distributor under the
Distribution Agreements. The ratio of expenses to average daily
net assets of the Class A Shares of the International Equity
Series for the fiscal year ended November 30, 1994 was 1.56%,
reflecting the impact of its 12b-1 Plan and the waiver of fees
described above. Based on expenses derived from the Class A
Shares of the International Equity Series during the fiscal year
ended November 30, 1994, the expenses of the Class B Shares of
the International Equity Series are expected to be 2.52%,
reflecting the impact of its 12b-1 Plan, for the fiscal year
ended November 30, 1995. The expenses of the Class A Shares of
the Global Bond and Global Assets Series are expected to be
1.25%, reflecting the impact of their respective 12b-1 Plan and
the waiver of fees described above. The expenses of the Class B
Shares of the Global Bond and the Global Assets Series are
expected to be 1.95%, reflecting the impact of their respective
12b-1 Plans and 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, the Global Bond Series and
the Global Assets Series also offer, respectively, the
International Equity Fund Institutional Class, the Global Bond
Fund Institutional Class and the Global Assets Fund Institutional
Class of shares as well as Class A and Class B Shares. Shares of
each class of a Series represent proportionate interests in the
assets of that Series and have the same voting and other rights
and preferences as the other classes of the Series, except that
shares of the International Equity Fund Institutional Class, the
Global Bond Fund Institutional Class and the Global Assets Fund
Institutional Class are not
subject to, and may not vote on matters affecting, the
Distribution Plans under Rule 12b-1 relating to the Class A and
Class B Shares. Similarly, the shareholders of the Class A
Shares may not vote on matters affecting a Series' Plan under
Rule 12b-1 relating to the Class B Shares, and the shareholders
of the Class B Shares may not vote on matters affecting a Series'
Plan under Rule 12b-1 relating to the Class A Shares.
Prior to September 6, 1994, the International Equity Fund A
Class was known as the International Equity Fund class and the
International Equity Fund Institutional Class was known as the
International Equity Fund (Institutional) 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>
The Delaware Group includes 22 different funds with a wide
range of investment objectives. Stock funds, income funds, tax-
free funds, money market funds and closed-end equity funds give
investors the ability to create a portfolio that fits their
personal financial goals. For more information contact your
financial adviser or call the Delaware Group at 800-523-4640, in
Philadelphia 215-988-1333.
INVESTMENT MANAGER
Delaware International Advisers Ltd.
Veritas House
125 Finsbury Pavement
London, England EC2A 1NQ
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
GLOBAL BOND FUND
GLOBAL ASSETS FUND
-----------------------------
A CLASS
-----------------------------
B CLASS
-----------------------------
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.
