<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
File 33-41034
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
Pre-Effective Amendment No.
---------
Post-Effective Amendment No. 11 / X /
---------
AND
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / X /
Amendment No. 11
-------
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
--------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
1818 Market Street, Philadelphia, Pennsylvania 19103
---------------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (215) 751-2923
--------------
George M. Chamberlain, Jr., 1818 Market Street, Philadelphia, PA 19103
----------------------------------------------------------------------
(Name and Address of Agent for Service)
Approximate Date of Public Offering: January 31, 1996
----------------
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b)
--------
X on January 31, 1996 pursuant to paragraph (b)
--------
60 days after filing pursuant to paragraph (a)(1)
--------
on (date) pursuant to paragraph (a)(1)
--------
75 days after filing pursuant to paragraph (a)(2)
--------
on (date) pursuant to paragraph (a)(2) of Rule 485.
--------
Registrant has registered an indefinite amount of securities under
the Securities Act of 1933 pursuant to Section 24(f) of the
Investment Company Act of 1940. Registrant's 24f-2 Notice for its most
recent fiscal year was filed on January 26, 1996.
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
--- C O N T E N T S ---
This Post-Effective Amendment No. 11 to Registration File No. 33-41034
includes the following:
1. Facing Page
2. Contents Page
3. Cross-Reference Sheet
4. Part A - Prospectuses
5. Part B - Statement of Additional Information
6. Part C - Other Information
7. Signatures
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
CROSS-REFERENCE SHEET*
PART A
<TABLE>
<CAPTION>
Location in
Item No. Description Prospectuses
- -------- ----------- -------------
<S> <C> <C> <C>
A Classes/ Institutional
B Classes/ Classes
C Classes
1 Cover Page..................................................... Cover Cover
2 Synopsis....................................................... Synopsis, Synopsis,
Summary of Summary of
Expenses Expenses
3 Condensed Financial Information................................ Financial Financial
Highlights Highlights
4 General Description of Registrant ............................. Investment Investment
Objectives and Objectives and
Policies, Shares Policies, Shares
5 Management of the Fund ........................................ Management of Management of
the Fund the Fund
6 Capital Stock and Other Securities ............................ Delaware Dividends and
Difference, Distributions,
Dividends and Taxes,
Distributions, Shares
Taxes, Shares
7 Purchase of Securities Being Offered........................... Cover, Cover,
Buying Shares, Buying Shares,
Calculation of Calculation of
Offering Price Net Asset
and Net Asset Value Per Share,
Value Per Share, Management of
Management of the Fund
the Fund
8 Redemption or Repurchase....................................... Buying Shares, Buying Shares,
Redemption and Redemption and
Exchange Exchange
9 Pending Legal Proceedings...................................... None None
</TABLE>
* This filing relates to the International Equity Fund A Class, the
International Equity Fund B Class, the International Equity Fund C Class and
the International Equity Fund Institutional Class of the International
Equity Series; the Global Bond Fund A Class, the Global Bond Fund B Class,
the Global Bond Fund C Class and the Global Bond Fund Institutional Class of
the Global Bond Series; and the Global Assets Fund A Class, the Global
Assets Fund B Class, the Global Assets Fund C Class and the Global Assets
Fund Institutional Class of the Global Assets Series. The Class A Shares,
the Class B Shares and the Class C Shares of each Series are combined in one
prospectus, and the Institutional Class of each Series is combined in one
prospectus. The three Series (and twelve classes) have a common Part B and
Part C.
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
CROSS-REFERENCE SHEET
PART B
<TABLE>
<CAPTION>
Location in Statement
Item No. Description of Additional Information
- -------- ----------- -------------------------
<S> <C> <C>
10 Cover Page..................................................... Cover
11 Table of Contents.............................................. Table of Contents
12 General Information and History................................ General Information
13 Investment Objectives and Policies............................. Investment Policies and
Portfolio Techniques
14 Management of the Registrant................................... Officers and Directors
15 Control Persons and Principal Holders of Securities ........... Officers and Directors
16 Investment Advisory and Other Services......................... Plans Under Rule 12b-1 for
the Fund Classes (under
Purchasing Shares), Investment
Management Agreement and Sub-
Advisory Agreement, Officers and
Directors, General Information,
Financial Statements
17 Brokerage Allocation........................................... Trading Practices and Brokerage
18 Capital Stock and Other Securities............................. Capitalization and
Noncumulative Voting
(under General Information)
19 Purchase, Redemption and Pricing of Securities
Being Offered................................................. Purchasing Shares,
Determining Offering Price
and Net Asset Value,
Redemption and Repurchase,
Exchange Privilege
20 Tax Status..................................................... Accounting and Tax Issues
21 Underwriters .................................................. Purchasing Shares
22 Calculation of Performance Data................................ Performance Information
23 Financial Statements........................................... Financial Statements
</TABLE>
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
CROSS-REFERENCE SHEET
Part C
<TABLE>
<CAPTION>
Location in
PART C
-----------
<S> <C> <C>
24 Financial Statements and Exhibits...................................... Item 24
25 Persons Controlled by or under Common
Control with Registrant................................................ Item 25
26 Number of Holders of Securities........................................ Item 26
27 Indemnification........................................................ Item 27
28 Business and Other Connections of Investment Adviser................... Item 28
29 Principal Underwriters................................................. Item 29
30 Location of Accounts and Records....................................... Item 30
31 Management Services.................................................... Item 31
32 Undertakings........................................................... Item 32
</TABLE>
<PAGE>
- ---------------------------------------------------------
INTERNATIONAL EQUITY FUND
GLOBAL BOND FUND
GLOBAL ASSETS FUND
- ---------------------------------------------------------
A CLASS
- ---------------------------------------------------------
B CLASS
- ---------------------------------------------------------
C CLASS
- ---------------------------------------------------------
P R O S P E C T U S
- ---------------------------------------------------------
JANUARY 31, 1996
The Delaware Group includes funds with a wide range of investment
objectives. Stock funds, income funds, tax-free funds, money market funds,
global and international 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 Delaware Group at
800-523-4640.
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
DELAWARE
GROUP
---------
<PAGE>
INTERNATIONAL EQUITY FUND PROSPECTUS
GLOBAL BOND FUND JANUARY 31, 1996
GLOBAL ASSETS FUND
A CLASS SHARES
B CLASS SHARES
C CLASS SHARES
-------------------------------------------------------------
1818 Market Street, Philadelphia, PA 19103
For Prospectus and Performance: Nationwide 800-523-4640
Information on Existing Accounts: (SHAREHOLDERS ONLY)
Nationwide 800-523-1918
Dealer Services: (BROKER/DEALERS ONLY)
Nationwide 800-362-7500
Delaware Group Global & International Funds, Inc. (the "Company") 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 a "Fund" and collectively, the "Funds"). The
International Equity Series' objective is to achieve long-term growth without
undue risk to principal. This Fund 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 Fund 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 Fund 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 Fund 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"), the International Equity Fund B Class ("Class B
Shares") and the International Equity Fund C Class ("Class C Shares"); the
Global Bond Series offers the Global Bond Fund A Class ("Class A Shares"), the
Global Bond Fund B Class ("Class B Shares") and the Global Bond Fund C Class
("Class C Shares"); and the Global Assets Series offers the Global Assets Fund A
Class ("Class A Shares"), the Global Assets Fund B Class ("Class B Shares") and
the Global Assets Fund C Class ("Class C Shares"), (collectively, the "Fund
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. Class B Shares and Class C Shares may be purchased at a price equal to
the next determined net asset value per share. Class A Shares are subject to a
maximum front-end sales charge of 4.75% and annual 12b-1 Plan expenses of up to
-1-
<PAGE>
.30%. 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 annual
12b-1 Plan expenses of 1% which are assessed against the Class B Shares for
approximately eight years after purchase. See Automatic Conversion of Class B
Shares under Buying Shares. Class C Shares are subject to a CDSC which may be
imposed on redemptions made within 12 months of purchase and annual 12b-1 Plan
expenses of 1%, which are assessed against Class C Shares for the life of the
investment. See Summary of Expenses. These alternatives permit an investor to
choose the method of purchasing shares that is most suitable for his or her
needs. In choosing the most suitable class, an investor should consider the
differences among the three Classes, including the effects of sales charges and
12b-1 Plan expenses, given the amount of the purchase, the length of time the
investor expects to hold the shares and other circumstances. See Buying Shares.
This Prospectus relates only to the Fund Classes and sets forth
information that you should read and consider before you invest. Please retain
it for future reference. Part B of the Company's registration statement, dated
January 31, 1996, as it may be amended from time to time, contains additional
information about the Company's three Funds 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. The
Funds' financial statements appear in their 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 investors. A prospectus for those classes can be obtained by writing
to Delaware Distributors, L.P. at the above address or by calling the above
numbers.
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<PAGE>
TABLE OF CONTENTS
Cover Page Retirement Planning
Synopsis Buying Shares
Summary of Expenses Redemption and Exchange
Financial Highlights Dividends and Distributions
Investment Objectives and Policies Taxes
Investment Strategy Calculation of Offering Price and
Special Risk Considerations Net Asset Value Per Share
The Delaware Difference Management of the Company
Plans and Services Appendix A--Investment Illustrations
Appendix B--Ratings
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 COMPANY
ARE NOT FDIC OR NCUSIF INSURED, ARE NOT GUARANTEED BY ANY BANK OR ANY CREDIT
UNION, ARE NOT OBLIGATIONS OF ANY BANK OR ANY CREDIT UNION, AND INVOLVE
INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. SHARES OF THE COMPANY
ARE NOT BANK OR CREDIT UNION DEPOSITS.
-3-
<PAGE>
SYNOPSIS
Capitalization
The Company offers the International Equity Series, consisting of the
International Equity Fund A Class, the International Equity Fund B Class, the
International Equity Fund C 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, the Global Bond Fund C 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, the Global
Assets Fund C Class and the Global Assets Fund Institutional Class. The Company
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 of the A Class and the Institutional Class of shares of each
Fund, and twenty-five million shares have been allocated to each of the B Class
and C Class of shares of each Fund. See Shares under Management of the Company.
Investment Manager, Distributor and Service Agent
Delaware International Advisers Ltd. ("Delaware International" or the
"Manager") is the investment manager for each Fund and, in that capacity,
provides advice to each Fund 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 Fund's investment in U.S. securities. Delaware
Distributors, L.P. (the "Distributor") is the national distributor for the
Company 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 Company and for all of the other
mutual funds in the Delaware Group. See Management of the Company.
Sales Charges
The price of the Class A Shares includes a maximum front-end sales
charge of 4.75% of the offering price, which, based on the net asset values of
the Class A Shares as of the end of the Company's most recent fiscal year, is
equivalent to 5.01% with respect to the International Equity Fund A Class, 4.96%
with respect to the Global Assets Fund A Class and 4.99% with respect to the
Global Bond Fund A Class, 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 subject to annual 12b-1 Plan expenses.
The price of 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 subject to annual 12b-1 Plan expenses for
approximately eight years after purchase. See Automatic Conversion of Class B
Shares under Buying Shares.
The price of Class C Shares is equal to the net asset value per share.
Class C Shares are subject to a CDSC of 1% if shares are redeemed within 12
months of purchase. Class C Shares are subject to annual 12b-1 Plan expenses for
the life of the investment.
See Buying Shares and Distribution (12b-1) and Service under Management
of the Company.
Purchase Amounts
Generally, the minimum initial investment is $1,000 for Class A Shares,
Class B Shares and Class C Shares. Subsequent investments in any Class generally
must be at least $100. Each purchase of Class B Shares is subject to a maximum
purchase limitation of $250,000. For Class C Shares, each purchase must be in
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<PAGE>
an amount that is less than $1,000,000. An investor may exceed these maximum
purchase limitations for Class B Shares and Class C Shares by making cumulative
purchases over a period of time. An investor should keep in mind, however, that
reduced front-end sales charges apply to investments of $100,000 or more of
Class A Shares, which are subject to lower annual 12b-1 Plan expenses than Class
B Shares and Class C Shares and generally are not subject to a CDSC. The minimum
and maximum purchase amounts for retirement plans may vary. 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 Fund seeks to
achieve its objective by investing primarily in equity securities that provide
the potential for capital appreciation and income. The Fund is an international
fund. As such, at least 65% of the Fund's assets will be invested in equity
securities of issuers organized or having a majority of their assets in or
deriving a majority of their operating income in at least three different
countries outside of the United States. For further details, see Investment
Objectives and Policies.
The investment objective of the Global Bond Series is to achieve
current income consistent with preservation of principal. This Fund seeks to
achieve its objective by investing primarily in fixed income securities that may
also provide the potential for capital appreciation. The Fund is a global fund.
As such, at least 65% of the Fund's 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. For further details, see
Investment Objectives and Policies.
The investment objective of the Global Assets Series is to achieve
long-term total return. This Fund 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 Fund will invest in both equity
and fixed income securities. The Fund is a global fund. As such, at least 65% of
the Fund's 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 Fund's assets may be invested in warrants.
For further details, see Investment Objectives and Policies.
Open-End Investment Company
The Company, 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 as defined under the Investment Company
Act of 1940 (the "1940 Act"). The Global Bond Series and the Global Assets
Series operate as nondiversified funds as defined under the 1940 Act. See Shares
under Management of the Company.
Investment Management Fees
Delaware International furnishes investment management services to each
Fund, subject to the supervision and direction of the Company's Board of
Directors. Under the Investment Management Agreement between each Fund and
Delaware International, the annual compensation paid to Delaware International
is equal to .75% of a Fund's average daily net assets, less a proportionate
share of all directors' fees paid to the unaffiliated directors by the Fund. The
fees paid to Delaware International are higher than the investment advisory fees
paid by most investment companies. Delaware International believes that its fees
are in line with the fees paid by other similar funds. Delaware International
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<PAGE>
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 Company on behalf of the Global Assets Series. See Management
of the Company.
Redemption and Exchange
Class A Shares of a Fund may be redeemed or exchanged at the net asset
value calculated after receipt of the redemption or exchange request. Neither
the Company 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 CDSC if such purchases triggered the
payment of a dealer's commission. See Front-End Sales Charge Alternative - Class
A Shares under Buying Shares and Contingent Deferred Sales Charge for Certain
Redemptions of Class A Shares Made at Net Asset Value under Redemption and
Exchange. Class B Shares and Class C Shares may be redeemed or exchanged at the
net asset value calculated after receipt of the redemption or exchange request
subject, in the case of redemptions, to any applicable CDSC. Neither the Company
nor the Distributor assesses any charges other than the CDSC for redemptions or
exchanges of Class B Shares or Class C Shares. There are certain limitations on
an investor's ability to exchange shares between the various classes of shares
that are offered. 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 Fund 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 Fund may lend portfolio securities to creditworthy
institutions; the principal risk to the Fund is the risk that the borrower fails
to return the borrowed security. The Fund will require borrowers to deliver
collateral to the Fund before lending securities. See Portfolio Loan
Transactions under Investment Strategy.
4. Each Fund 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
Funds do not engage in options and futures for speculative purposes, there are
risks which result from the use of these instruments by the Funds, and an
investor should carefully review the descriptions of such in this Prospectus.
The Company is not registered as a commodity pool operator nor is the Manager
registered as a commodities trading adviser, in reliance upon various exemptive
rules. Certain options and futures may be considered to be derivative
securities. 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 Fund to increased risks. Interest rate swaps
may be considered to be derivative securities. 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 Fund. See High Yield, High Risk Securities under
Investment Strategy.
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<PAGE>
7. Each Fund 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, as amended (the "Code"), neither
Fund will be diversified under the 1940 Act. Thus, while at least 50% of a
Fund's 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 a Fund's total assets, it will not satisfy the 1940 Act requirement in this
respect, which applies that test to 75% of a Fund's assets. A nondiversified
portfolio is believed to be subject to greater risk because adverse effects on
the portfolio's security holdings may affect a larger portion of the overall
assets.
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<PAGE>
SUMMARY OF EXPENSES
A general comparison of the sales arrangements and other expenses
applicable to Class A, Class B and Class C Shares of each Fund follows:
<TABLE>
<CAPTION>
International Equity Fund
Class A Class B Class C
Shareholder Transaction Expenses Shares Shares Shares
<S> <C> <C> <C>
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price)............................. 4.75% None None
Maximum Sales Charge Imposed on Reinvested
Dividends (as a percentage of offering price)................... None None None
Maximum Contingent Deferred Sales Charge
(as a percentage of original purchase price or
redemption proceeds, whichever is lower)........................ None* 4.00%* 1.00%*
Redemption Fees................................................. None** None** None**
</TABLE>
<TABLE>
<CAPTION>
Annual Operating Expenses International Equity Fund
(as a percentage of average Class A Class B Class C
daily net assets) Shares Shares Shares
<S> <C> <C> <C>
Management Fees (after voluntary waivers)....................... 0.53%++ 0.53%++ 0.53%++
12b-1 Expenses (including service fees)......................... 0.30%+ 1.00%+ 1.00%+
Other Operating Expenses........................................ 1.02%++ 1.02%++ 1.02%***/++
----- ----- -----
Total Operating Expenses (after voluntary waivers).............. 1.85%++ 2.55%++ 2.55%++
===== ===== =====
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Global Bond Fund
Class A Class B Class C
Shareholder Transaction Expenses Shares Shares Shares
<S> <C> <C> <C>
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price)............................. 4.75% None None
Maximum Sales Charge Imposed on Reinvested
Dividends (as a percentage of offering price)................... None None None
Maximum Contingent Deferred Sales Charge
(as a percentage of original purchase price or
redemption proceeds, whichever is lower)........................ None* 4.00%* 1.00%*
Redemption Fees................................................. None** None** None**
</TABLE>
<TABLE>
<CAPTION>
Annual Operating Expenses Global Bond Fund
(as a percentage of average Class A Class B Class C
daily net assets) Shares Shares Shares
<S> <C> <C> <C>
Management Fees (after voluntary waivers)....................... 0.00%++ 0.00%++ 0.00%++
12b-1 Expenses (including service fees)......................... 0.30%+ 1.00%+ 1.00%+
Other Operating Expenses (after reimbursements)................. 0.95%++ 0.95%++ 0.95%***/++
----- ----- -----
Total Operating Expenses
(after voluntary waivers and reimbursements).................... 1.25%++ 1.95%++ 1.95%++
===== ===== =====
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Global Assets Fund
Class A Class B Class C
Shareholder Transaction Expenses Shares Shares Shares
<S> <C> <C> <C>
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price)............................. 4.75% None None
Maximum Sales Charge Imposed on Reinvested
Dividends (as a percentage of offering price)................... None None None
Maximum Contingent Deferred Sales Charge
(as a percentage of original purchase price or
redemption proceeds, whichever is lower)........................ None* 4.00%* 1.00%*
Redemption Fees................................................. None** None** None**
</TABLE>
<TABLE>
<CAPTION>
Annual Operating Expenses Global Assets Fund
(as a percentage of average Class A Class B Class C
daily net assets) Shares Shares Shares
<S> <C> <C> <C>
Management Fees (after voluntary waivers)....................... 0.00%++ 0.00%++ 0.00%++
12b-1 Expenses (including service fees)......................... 0.30%+ 1.00%+ 1.00%+
Other Operating Expenses (after reimbursements)................. 0.95%++ 0.95%++ 0.95%***/++
----- ----- -----
Total Operating Expenses
(after voluntary waivers and reimbursements).................... 1.25%++ 1.95%++ 1.95%++
===== ===== =====
</TABLE>
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<PAGE>
The purpose of these tables is to assist the investor in understanding
the various costs and expenses that an investor in Class A Shares, Class B
Shares or Class C Shares of a Fund will bear directly or indirectly.
*With respect to 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 the financial adviser through whom such
purchase is effected, a CDSC of 1% will be imposed on certain redemptions within
12 months of purchase ("Limited CDSC"). 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.
Class C Shares are subject to a CDSC of 1% if the shares are redeemed within 12
months of purchase. See Contingent Deferred Sales Charge for Certain Redemptions
of Class A Shares Made at Net Asset Value under Redemption and Exchange and
Deferred Sales Charge Alternative - Class B Shares and Level Sales Charge
Alternative - Class C Shares under Buying Shares.
**CoreStates Bank, N.A. currently charges $7.50 per redemption for
redemptions payable by wire.
***All annual operating expense information (other than 12b-1
expenses), including information concerning voluntary waivers for Class C Shares
of each Fund are estimates derived from the expenses for Class A Shares of that
Fund as of November 30, 1995.
+Class A Shares, Class B Shares and Class C 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 under Management of the Company.
++Delaware International has elected voluntarily to waive that portion,
if any, of the annual management fees payable by the International Equity
Series, the Global Bond Series and the Global Assets Series and to reimburse a
respective Fund's expenses to the extent necessary to ensure that the Total
Operating Expenses (after voluntary waivers and reimbursements) of the Class A
Shares of those Funds do not exceed 1.85%, 1.25% and 1.25%, respectively, and of
the Class B Shares of those Funds do not exceed 2.55%, 1.95% and 1.95%,
respectively (in all three cases, exclusive of taxes, interest, brokerage
commissions and extraordinary expenses, but inclusive of 12b-1 fees) through May
31, 1996. Total Operating Expenses for the International Equity Series' fiscal
year ended November 30, 1995 were 2.07% for Class A Shares and 2.77% for Class B
Shares, reflecting Management Fees of 0.74%. Total Operating Expenses for the
International Equity Series will be lowered to the amount noted in the previous
sentence as a result of the voluntary waiver. Absent the voluntary fee waiver
and reimbursements for the Global Bond Series and the Global Assets Series, the
Total Operating Expenses, as a percentage of average daily net assets would have
been, annualized, 12.34%, 13.04%, 7.55% and 8.25% for the period December 27,
1994 (date of initial public offering) through November 30, 1995 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, respectively, reflecting Management Fees of
0.40% for the Global Bond Series and 0.56% for the Global Assets Series. The
information in the above tables have been adjusted to reflect the waivers.
Also, see International Equity Fund Institutional Class, Global Bond
Fund Institutional Class and Global Assets Fund Institutional Class under Buying
Shares for expense information about those classes.
-11-
<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, (2) redemption at the end of each time period and (3) with
respect to Class B Shares and Class C Shares, payment of a CDSC at the time of
redemption, if applicable.
International
Equity Fund 1 year 3 years 5 years 10 years
A Class ------ ------- ------- --------
$65(1) $103 $143 $254
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 ------ ------- ------- --------
$60(1) $85 $113 $191
International
Equity Fund 1 year 3 years 5 years 10 years
B Class ------ ------- ------- --------
$66 $109 $156 $271(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)
International
Equity Fund 1 year 3 years 5 years 10 years
C Class ------ ------- ------- --------
$36 $79 $136 $289
Global Bond 1 year 3 years 5 years 10 years
Fund C Class ------ ------- ------- --------
$30 $61 $105 $227
Global Assets 1 year 3 years 5 years 10 years
Fund C Class ------ ------- ------- --------
$30 $61 $105 $227
-12-
<PAGE>
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 ------ ------- ------- --------
$65 $103 $143 $254
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 ------ ------- ------- --------
$60 $85 $113 $191
International
Equity Fund 1 year 3 years 5 years 10 years
B Class ------ ------- ------- --------
$26 $79 $136 $271(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)
International
Equity Fund 1 year 3 years 5 years 10 years
C Class ------ ------- ------- --------
$26 $79 $136 $289
Global Bond 1 year 3 years 5 years 10 years
Fund C Class ------ ------- ------- --------
$20 $61 $105 $227
Global Assets 1 year 3 years 5 years 10 years
Fund C Class ------ ------- ------- --------
$20 $61 $105 $227
(1) Generally, the Company does not assess a redemption charge upon redemption
of Class A Shares. Under certain circumstances, however, a Limited CDSC,
which has not been reflected in this calculation, may be imposed on
certain redemptions within 12 months of purchase. See Contingent Deferred
Sales Charge for Certain Redemptions of Class A Shares Made at Net Asset
Value under Redemption and Exchange.
(2) At the end of approximately eight years after purchase, Class B Shares of
a Fund will be automatically converted into Class A Shares of that Fund.
The example above assumes conversion of Class B Shares at the end of the
eighth year. 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.
Information for the ninth and tenth years reflects expenses of the Class A
Shares. See Automatic Conversion of Class B Shares under Buying Shares for
a description of the automatic conversion feature.
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.
-13-
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
The following financial highlights are derived from the financial statements of
the International Equity Series, Global Bond Series and Global Assets Series of
the Delaware Group Global & International Funds, Inc. and have been audited by
Ernst & Young LLP, independent auditors. The data should be read in conjunction
with the financial statements, related notes, and the report of Ernst & Young
LLP covering such financial information and highlights, all of which are
incorporated by reference into Part B. Further information about each Fund's
performance is contained in its Annual Report to shareholders. A copy of the
Funds' Annual Report (including the report of Ernst & Young LLP) may be obtained
from the Company upon request at no charge.
- --------------------------------------------------------------------------------
-14-
<PAGE>
<TABLE>
<CAPTION>
International Equity Fund
Class A Shares
------------------------------------------------------------------
Period
10/31/91(1)
Year Ended through
11/30/95 11/30/94 11/30/93 11/30/92 11/30/91
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period................ $11.920 $11.250 $9.590 $9.650 $10.000
Income From Investment Operations
- ---------------------------------
Net Investment Income............................... 0.297 0.140 0.499 0.162 (0.004)
Net Gains (Losses) on Securities
(both realized and unrealized)..................... 0.628 0.895 1.636 (0.172) (0.346)
----- ----- ----- ------- -------
Total From Investment Operations................ 0.925 1.035 2.135 (0.010) (0.350)
----- ----- ----- ------- -------
Less Distributions
- ------------------
Dividends from Net Investment Income................ (0.185) (0.225) (0.475) (0.050) none
Distributions from Capital Gains.................... (0.470) (0.140) none none none
Returns of Capital.................................. none none none none none
---- ---- ---- ---- ----
Total Distributions............................. (0.655) (0.365) (0.475) (0.050) none
------- ------- ------- ------- ----
Net Asset Value, End of Period...................... $12.190 $11.920 $11.250 $9.590 $9.650
======= ======= ======= ====== ======
- ----------------------------------------------------
Total Return(2)..................................... 8.17%(2) 9.23%(2)(3) 23.08%(2)(3) (0.15%)(2)(3) (3.50%)(2)(3)
- ------------
- ----------------------------------------------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period (000's omitted)........... $62,251 $53,736 $31,673 $4,604 $723
Ratio of Expenses to Average Daily Net Assets....... 2.07% 1.56% 1.25% 1.25% (4)
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitation........................ 2.07% 1.82% 2.16% 5.67% ---
Ratio of Net Investment Income to Average
Daily Net Assets................................... 2.57% 1.22% 3.91% 2.44% (4)
Ratio of Net Investment Income to Average Daily Net
Assets Prior to Expense Limitation................. 2.57% 0.96% 3.00% (2.00%) ---
Portfolio Turnover Rate............................. 21% 27% 24% 12% (4)
</TABLE>
- ---------
(1) Ratios have been annualized but total return for the limited period
between December 1, 1999 through May 31, 1995 has not been annualized.
(2) Does not reflect maximum sales charge that is or was in effect, 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
Redemptions of Class A Shares Made at Net Asset Value under Redemption and
Exchange.
(3) Total return reflects the expense limitations referenced under Management
of the Company.
(4) 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.
<PAGE>
<TABLE>
<CAPTION>
International Equity Fund International Equity Fund
Class B Shares Class C Shares
----------------------------- ----------------------------
Period Period
Year 9/6/94(1) 11/29/95(2)
Ended through through
11/30/95 11/30/94 11/30/95
<S> <C> <C> <C>
Net Asset Value, Beginning of Period................ $11.900 $12.860 $12.240
Income From Investment Operations
- ---------------------------------
Net Investment Income............................... 0.278 0.036 none
Net Gains (Losses) on Securities
(both realized and unrealized)..................... 0.567 (0.966) (0.050)
----- ------- -------
Total From Investment Operations................ 0.845 (0.930) (0.050)
----- ------- -------
Less Distributions
- ------------------
Dividends from Net Investment Income................ (0.145) (0.030) none
Distributions from Capital Gains.................... (0.470) none none
Returns of Capital.................................. none none none
---- ---- ----
Total Distributions............................. (0.615) (0.030) none
------- ------- ----
Net Asset Value, End of Period...................... $12.130 $11.900 $12.190
======= ======= =======
- ----------------------------------------------------
Total Return........................................ 7.46%(3) (7.24%)(3)(4) (5)
- ------------
- ----------------------------------------------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period (000's omitted)........... $3,471 $624 $5
Ratio of Expenses to Average Daily Net Assets....... 2.77% 2.26% (5)
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitation........................ 2.77% 2.52% (5)
Ratio of Net Investment Income to
Average Daily Net Assets........................... 1.81% 0.52% (5)
Ratio of Net Investment Income to Average Daily Net
Assets Prior to Expense Limitation................. 1.81% 0.26% (5)
Portfolio Turnover Rate............................. 21% 27% (5)
</TABLE>
- ------------
(1) Date of initial public offering; ratios have been annualized but total
return has not been annualized.
(2) Date of initial public offering.
(3) Does not reflect any applicable CDSC.
(4) Total return reflects the expense limitations referenced under Management
of the Company.
(5) The ratios of expenses and net investment income to average daily net
assets, total return and portfolio turnover have been omitted as
management believes that such ratios, total return and portfolio turnover
for this relatively short period are not meaningful.
<PAGE>
Global Bond Fund
Class A Shares
----------------
Period
12/27/94(1)
through
11/30/95
Net Asset Value, Beginning of Period................ $10.000
Income From Investment Operations
- ---------------------------------
Net Investment Income............................... 0.659
Net Gains (Losses) on Securities
(both realized and unrealized)..................... 1.171
-----
Total From Investment Operations................ 1.830
-----
Less Distributions
- ------------------
Dividends from Net Investment Income................ (0.600)
Distributions from Capital Gains.................... none
Returns of Capital.................................. none
-------
Total Distributions............................. (0.600)
-------
Net Asset Value, End of Period...................... $11.230
=======
- ----------------------------------------------------
Total Return(2)..................................... 18.79%(2)
- ------------
- ----------------------------------------------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period (000's omitted)........... $889
Ratio of Expenses to Average Daily Net Assets....... 1.25%
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitation........................ 12.34%
Ratio of Net Investment Income to
Average Daily Net Assets........................... 7.70%
Ratio of Net Investment Income to Average Daily Net
Assets Prior to Expense Limitation................. (3.39%)
Portfolio Turnover Rate............................. 98%
- ----------
(1) Date of initial sale; ratios have been annualized but total return has not
been annualized.
(2) Does not reflect maximum sales charge that is or was in effect, 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
Redemptions of Class A Shares Made at Net Asset Value under Redemption and
Exchange. Total return reflects the expense limitations referenced under
Ratios/Supplemental Data in the Chart.
<PAGE>
<TABLE>
<CAPTION>
Global Bond Fund Global Bond Fund
Class B Shares Class C Shares
Period Period
12/27/94(1) 11/29/95(2)
through through
11/30/95 11/30/95
<S> <C> <C>
Net Asset Value, Beginning of Period................ $10.000 $11.330
Income From Investment Operations
- ---------------------------------
Net Investment Income............................... 0.565 none
Net Gains (Losses) on Securities
(both realized and unrealized)..................... 1.205 (0.036)
----- -------
Total From Investment Operations................ 1.770 (0.036)
----- -------
Less Distributions
- ------------------
Dividends from Net Investment Income................ (0.540) (0.054)
Distributions from Capital Gains.................... none none
Returns of Capital.................................. none none
---- ----
Total Distributions............................. (0.540) (0.054)
------- -------
Net Asset Value, End of Period...................... $11.230 $11.240
======= =======
- ----------------------------------------------------
Total Return........................................ 18.23%(3) (4)
- ------------
- ----------------------------------------------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period (000's omitted)........... $115 $5
Ratio of Expenses to Average Daily Net Assets....... 1.95% (4)
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitation........................ 13.04% (4)
Ratio of Net Investment Income to
Average Daily Net Assets........................... 7.00% (4)
Ratio of Net Investment Income to Average Daily Net
Assets Prior to Expense Limitation................. (4.09%) (4)
Portfolio Turnover Rate............................. 98% (4)
</TABLE>
- ----------
(1) Date of initial public offering; ratios have been annualized but total
return has not been annualized.
(2) Date of initial public offering.
(3) Does not reflect any applicable CDSC. Total return reflects the expense
limitations referenced under Ratios/Supplemental Data in the Chart.
(4) The ratios of expenses and net investment income to average daily net
assets, total return and portfolio turnover have been omitted as
management believes that such ratios, total return and portfolio turnover
for this relatively short period are not meaningful.
<PAGE>
Global Assets Fund
Class A Shares
------------------
Period
12/27/94(1)
through
11/30/95
Net Asset Value, Beginning of Period................ $10.000
Income From Investment Operations
- ---------------------------------
Net Investment Income............................... 0.301
Net Gains (Losses) on Securities
(both realized and unrealized)..................... 1.839
-----
Total From Investment Operations................ 2.140
-----
Less Distributions
- ------------------
Dividends from Net Investment Income................ (0.240)
Distributions from Capital Gains.................... none
Returns of Capital.................................. none
-------
Total Distributions............................. (0.240)
-------
Net Asset Value, End of Period...................... $11.900
=======
- ----------------------------------------------------
Total Return(2)..................................... 21.48%(2)
- ------------
- ----------------------------------------------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period (000's omitted)........... $3,122
Ratio of Expenses to Average Daily Net Assets....... 1.25%
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitation........................ 7.55%
Ratio of Net Investment Income to
Average Daily Net Assets........................... 4.75%
Ratio of Net Investment Income to Average Daily Net
Assets Prior to Expense Limitation................. (1.55%)
Portfolio Turnover Rate............................. 57%
- ----------
(1) Date of initial sale; ratios have been annualized but total return has not
been annualized.
(2) Does not reflect maximum sales charge that is or was in effect, 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
Redemptions of Class A Shares Made at Net Asset Value under Redemption and
Exchange. Total return reflects the expense limitations referenced under
Ratios/Supplemental Data in the Chart.
<PAGE>
<TABLE>
<CAPTION>
Global Assets Fund Global Assets Fund
Class B Shares Class C Shares
------------------ ------------------
Period Period
12/27/94(1) 11/29/95(2)
through through
11/30/95 11/30/95
<S> <C> <C>
Net Asset Value, Beginning of Period................ $10.000 $11.940
Income From Investment Operations
- ---------------------------------
Net Investment Income............................... 0.212 none
Net Gains (Losses) on Securities
(both realized and unrealized)..................... 1.848 (0.050)
----- -------
Total From Investment Operations................ 2.060 (0.050)
----- -------
Less Distributions
- ------------------
Dividends from Net Investment Income................ (0.180) none
Distributions from Capital Gains.................... none none
Returns of Capital.................................. none none
---- ----
Total Distributions................................ (0.180) none
------- ----
Net Asset Value, End of Period...................... $11.880 $11.890
======= =======
- ----------------------------------------------------
Total Return........................................ 20.73%(3) (4)
- ------------
- ----------------------------------------------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period (000's omitted)........... $613 $5
Ratio of Expenses to Average Daily Net Assets....... 1.95% (4)
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitation........................ 8.25% (4)
Ratio of Net Investment Income to
Average Daily Net Assets........................... 4.05% (4)
Ratio of Net Investment Income to Average Daily Net
Assets Prior to Expense Limitation................. (2.25%) (4)
Portfolio Turnover Rate............................. 57% (4)
</TABLE>
- ----------
(1) Date of initial public offering; ratios have been annualized but total
return has not been annualized.
(2) Date of initial public offering.
(3) Does not reflect any applicable CDSC. Total return reflects the expense
limitations referenced under Ratios/Supplemental Data in the Chart.
(4) The ratios of expenses and net investment income to average daily net
assets, total return and portfolio turnover have been omitted as
management believes that such ratios, total return and portfolio turnover
for this relatively short period are not meaningful.
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
The objective of the International Equity Series is to achieve
long-term growth without undue risk to principal. The Fund seeks to achieve this
objective by investing primarily in securities that provide the potential for
capital appreciation and income. The Fund is an international fund. Under normal
circumstances, at least 65% of the Fund's 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 Fund seeks to
achieve this objective by investing primarily in fixed income securities that
may also provide the potential for capital appreciation. The Fund is a global
fund. Under normal circumstances, at least 65% of the Fund's assets will be
invested in the fixed income securities of issuers organized or having a
majority of their assets in or deriving a majority of their operating income in
at least three different countries, one of which may be the United States.
The objective of the Global Assets Series is to achieve long-term total
return for investors. The Fund 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 Fund is a global fund. Under
normal circumstances, at least 65% of the Fund's 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 Fund 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 Fund 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 Fund may also invest in
sponsored or unsponsored American Depository Receipts or European Depository
Receipts.
-15-
<PAGE>
While the Fund may purchase securities in any foreign country,
developed and underdeveloped, or emerging market countries, it is currently
anticipated that the countries in which the Fund 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
Fund 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 Fund 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 Fund. See Rule 144A
Securities. The Fund may invest no more than 10% of the value of its net assets
in illiquid securities. The Fund will not concentrate its investments in any
particular industry, which means that it will not invest 25% or more of its
total assets in any one industry.
For temporary defensive purposes, the Fund 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 Ratings Group ("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 Fund may enter the global
fixed income markets when the Manager believes that the global equity markets
are excessively volatile or overvalued so that the Fund's objective cannot be
achieved in such markets. In addition, the Fund 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 Fund may also invest in the securities listed
for defensive investing pending investment of proceeds from new sales of Fund
shares and to maintain sufficient cash to meet redemption requests.
Global Bond Series--The Fund 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 Fund 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 Fund's 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.
-16-
<PAGE>
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 Fund 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 Fund 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 Fund 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 Fund 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 Fund may find opportunities to pursue its
objective outside of the fixed income markets, but in no event will such
investments exceed 5% of the Fund's net assets.
The Fund may also invest in sponsored or unsponsored American
Depository Receipts or European Depository Receipts. While the Fund 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 Fund 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 Fund 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 Fund may invest in restricted securities, including Rule 144A
Securities. See Rule 144A Securities. The Fund may invest no more than 10% of
the value of its net assets in illiquid securities. The Fund 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 Fund will attempt to achieve its objective by
investing in a broad range of equity and fixed income securities. In selecting
securities investments for the Fund, the Manager will consider an issuer's
competitive position, cost structure and liquidity. Equity securities in which
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the Fund 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 Fund may invest, the Manager will use a
dividend discount analysis and a purchasing power parity approach.
Generally, fixed income securities in which the Fund 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 Fund may also invest up to 15% of its net assets
in high yield, high risk U.S. fixed income securities. These securities are
rated lower than BBB by S&P and Baa by Moody's or, if unrated, are considered by
the Manager or Sub-Adviser to be of equivalent quality. The Fund 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 B 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 Fund 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 Fund 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 Fund's 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 Fund may, at any given time, be fully invested in either the
equity or fixed income markets, depending upon investment opportunities
available in each.
The Fund may also invest in zero coupon bonds and in the debt
securities of supranational entities denominated in any currency. See Global
Bond Series.
The Fund may also invest in sponsored or unsponsored American
Depository Receipts or European Depository Receipts. While the Fund 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 Fund 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 Fund may make in other
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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 Fund may invest in restricted securities,
including Rule 144A Securities. See Rule 144A Securities. The Fund may invest no
more than 10% of the value of its net assets in illiquid securities. The Fund
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 opinions 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
Fund, there can be no assurance that diversification will protect the Fund from
widespread bond defaults brought about by a sustained economic downturn.
Medium- and low-grade bonds held by the Fund 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 Fund's
net asset value per share.
Foreign Currency Transactions
Although the Company 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 Fund 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 Fund 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 Funds will convert
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currency on a spot basis from time to time, and investors should be aware of the
costs of currency conversion.
A Fund may enter into forward contracts to "lock in" the price of a
security it has agreed to purchase or sell, in terms of U.S. dollars or other
currencies in which the transaction will be consummated. By entering into a
forward contract for the purchase or sale, for a fixed amount of U.S. dollars or
foreign currency, of the amount of foreign currency involved in the underlying
security transaction, a Fund 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, a Fund 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 Fund's securities
denominated in such foreign currency.
A Fund will not enter into forward contracts or maintain a net exposure
to such contracts where the consummation of the contracts would obligate the
Fund to deliver an amount of foreign currency in excess of the value of the
Fund's securities or other assets denominated in that currency.
At the maturity of a forward contract, a Fund 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. A Fund may realize a gain or loss from currency transactions.
A Fund 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 Fund and against increases in the U.S. dollar cost of
such securities to be acquired. Call options on foreign currency written by a
Fund will be covered, which means that the Fund will own the underlying foreign
currency. With respect to put options on foreign currency written by a Fund, the
Fund 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 Fund will be required to pay upon exercise of
the put. See Special Risk Considerations.
Repurchase Agreements
Each Fund also may use repurchase agreements that are at least 100%
collateralized by securities in which the Fund can invest directly. Repurchase
agreements help a Fund to invest cash on a temporary basis. A Fund may invest
cash balances in joint repurchase agreements with other Delaware Group funds.
Under a repurchase agreement, a Fund 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 Fund could
experience delays in liquidating the securities. To minimize this possibility,
the Manager, pursuant to direction from the Board of Directors of the Company,
considers the creditworthiness of banks and dealers when entering into
repurchase agreements.
Portfolio Loan Transactions
Each Fund 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.
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The major risk to which a Fund would be exposed on a loan transaction
is the risk that the borrower would go bankrupt at a time when the value of the
security goes up. Therefore, a Fund 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 Fund may borrow money as a temporary measure for extraordinary
purposes or to facilitate redemptions. A Fund will not borrow money in excess of
one-third of the value of its net assets. A Fund 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 Fund's 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 Fund 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 Fund 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 Fund 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 Fund's 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
Fund's holdings of illiquid securities exceed a Fund's 10% limit on investment
in such securities, the Manager will determine what action to take to ensure
that the Fund continues to adhere to such limitation.
Options
The Manager may employ options techniques in an attempt to protect
appreciation attained and to take advantage of the liquidity available in the
options market. Each Fund may purchase call options on foreign or U.S.
securities and indices and enter into related closing transactions. A Fund 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 Fund will only purchase call options to the extent
that premiums paid on all outstanding call options do not exceed 2% of its total
assets.
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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 Fund
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 Fund offset put options or call
options prior to exercise or expiration. If a Fund 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 Fund may use both Exchange-traded and over-the-counter options.
Certain over-the-counter options may be illiquid. A Fund 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 Fund is to protect the Fund against the fluctuations in interest or exchange
rates which otherwise might adversely affect the value of the Fund's portfolio
securities or adversely affect the prices of securities which the Fund intends
to purchase at a later date without actually buying or selling such securities.
Each Fund 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 Fund 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 Fund 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 Fund 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 Fund 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 Fund enters into a futures transaction, it must
deliver to the futures commission merchant selected by the Fund 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 Fund to, or drawn by the Fund 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 Fund may engage in interest rate swaps. The Fund
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intends to use interest rate swaps as a hedge and not as a speculative
investment. Interest rate swaps involve the exchange by the Fund 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 Fund 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 Fund 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 Fund 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 Fund 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 Fund's investments, the Manager and the Fund
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 Fund's 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 Fund enters into an interest rate swap on
other than a net basis, the Fund would maintain a segregated account in the full
amount accrued on a daily basis of the Fund's obligations with respect to the
swap.
* * *
Each Fund's investment objective, the Company'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 that Fund's outstanding voting securities. A "majority vote of the
outstanding voting securities" is the vote by the holders of the lesser of a)
67% or more of a Fund's voting securities present in person or represented by
proxy if the holders of more than 50% of the outstanding voting securities of
such Fund 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 Funds which may not be changed without a majority
shareholder vote. A brief discussion of those factors that materially affected
each Fund's performance during its most recently completed fiscal year appears
in the Fund's Annual Report.
The remaining investment policies are not fundamental and may be
changed by the Board of Directors of the Company 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 Fund,
nor can there be any assurance that the Fund's investment objective will be
attained.
Each Fund has the right to purchase securities in any foreign country,
developed and underdeveloped, or emerging growth countries. Investors should
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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
Fund 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 Fund 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 Fund 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 Fund 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.
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In purchasing put and call options, the premium paid by a Fund plus any
transaction costs will reduce any benefit realized by the Fund upon exercise of
the option.
To the extent that interest or exchange rates or securities prices move
in an unexpected direction, a Fund may not achieve the anticipated benefits of
investing in futures contracts and options thereon, or may realize a loss. To
the extent that the Fund 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
Fund 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 Fund 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 a Fund's position, the Fund may forfeit the entire amount of the
premium plus related transaction costs.
With respect to forward foreign currency contracts, the precise
matching of forward contract amounts and the value of the securities involved is
generally not possible since the future value of such securities in foreign
currencies will change as a consequence of market movements in the value of
those securities between the date the forward contract is entered into and the
date it matures. The projection of short-term currency strategy is highly
uncertain.
It is impossible to forecast the market value of portfolio securities
at the expiration of the contract. Accordingly, it may be necessary for a Fund
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 Fund 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 Fund 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 Fund has qualified as a regulated
investment company under the Code. Accordingly, during periods when a Fund
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 Fund will be less favorable than it would have been if this
investment technique were never used. Interest rate swaps do not involve the
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delivery of securities or other underlying assets or principal. Thus, if the
other party to an interest rate swap defaults, the Fund's risk of loss consists
of the net amount of interest payments that the Fund 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 Code, neither will be diversified under the 1940 Act. Thus, while at
least 50% of each such Fund's 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 Fund's total assets, it will not satisfy the 1940 Act
requirement in this respect, which applies that test to 75% of the Fund's
assets. A nondiversified portfolio is believed to be subject to greater risk
because adverse effects on the portfolio's security holdings may affect a larger
portion of the overall assets.
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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
Company Information
Literature
Price, Yield and
Performance Figures
Shareholder Service Center
800-523-1918
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 Company's Shareholder Service
Center. Our representatives can answer any questions about your account, the
Funds, 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. Delaphone is available
seven days a week, 24 hours a day.
Statements and Confirmations
You will receive quarterly statements of your account summarizing all
transactions during the period. A confirmation statement will be sent following
all transactions other than those involving a reinvestment of distributions. 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 Company will mail to 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 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.
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Reinvestments of distributions into Class A Shares of a Fund or of
other Delaware Group funds are made without a front-end sales charge.
Reinvestments of distributions into Class B Shares of a Fund or of other
Delaware Group funds and Class C Shares of a Fund or of other Delaware Group
funds are also made without any sales charge and will not be subject to a CDSC
if 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 Fund may not reinvest their
distributions into Class B Shares or Class C Shares of any fund in the Delaware
Group, including that Fund. Holders of Class B Shares of a Fund may reinvest
their distributions only into Class B Shares of the funds in the Delaware Group
which offer that class of shares (the "Class B Funds"). Similarly, holders of
Class C Shares of a Fund may reinvest their distributions only into Class C
Shares of the funds in the Delaware Group which offer that class of shares (the
"Class C Funds"). See Class B Funds and Class C Funds under Buying Shares for a
list of the funds offering those classes of shares. For more information about
reinvestments, call the Shareholder Service Center.
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
certain exceptions and limitations. For additional information on exchanges, see
Investing by Exchange under How to Buy Shares and Redemption and Exchange.
Wealth Builder Option
You may 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, Class B and Class C Shares. See Redemption and
Exchange.
Right of Accumulation
With respect to Class A Shares, the Right of Accumulation feature
allows you to combine the value of your current holdings of Class A Shares,
Class B Shares and Class C Shares of a Fund with the dollar amount of new
purchases of Class A Shares to qualify for a reduced front-end sales charge.
Under the Combined Purchases Privilege, you may also include certain shares that
you own in other funds in the Delaware Group. See Buying Shares.
Letter of Intention
The Letter of Intention feature permits you to obtain a reduced
front-end sales charge on purchases of Class A Shares by aggregating certain of
your purchases of Delaware Group fund shares over a 13-month period. See Buying
Shares and Part B.
12-Month Reinvestment Privilege
The 12-Month Reinvestment Privilege permits you to reinvest proceeds of
Class A Shares, within one year of the date of redemption, without a front-end
sales charge. See Part B.
Delaware Group Asset Planner
Delaware Group Asset Planner is an asset allocation service that gives
investors, working with a professional financial adviser, the ability to more
easily design and maintain investments in a diversified selection of Delaware
Group mutual funds. The Asset Planner service offers a choice of four
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<PAGE>
pre-designed allocation strategies (each with a different risk/reward profile)
made up of separate investments in predetermined percentages of Delaware Group
funds. With the guidance of a financial adviser, investors may also tailor a
Strategy that meets their personal needs and goals. See How to Buy Shares under
Buying Shares.
Financial Information about the Company
Each fiscal year, you will receive an audited annual report and an
unaudited semi-annual report. These reports provide detailed information about
each Fund's investments and performance. The Company's fiscal year ends on
November 30.
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<PAGE>
RETIREMENT PLANNING
An investment in a Fund may 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.
Retirement plans may be subject to plan establishment fees, annual
maintenance fees and/or other administrative or trustee fees. Fees are based
upon the number of participants in the plan as well as the services selected.
Additional information about fees is included in retirement plan materials. Fees
are quoted upon request.
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 or Class C 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 for investment in Class A or Class C Shares. Class C
Shares are not available for purchase by such plans.
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<PAGE>
Allied Plans
Class A Shares are available for purchase by participants in 401(k)
Defined Contribution Plans ("Allied Plans") which are made available under a
joint venture agreement between the Distributor and another institution through
which mutual funds are marketed and which allow investments in Class A Shares of
designated Delaware Group funds ("eligible Delaware Group fund shares"), as well
as shares of designated classes of non-Delaware Group funds ("eligible
non-Delaware Group fund shares"). Class B Shares and Class C Shares are not
eligible for purchase by Allied Plans.
With respect to purchases made in connection with an Allied Plan, the
value of eligible Delaware Group and eligible non-Delaware Group fund shares
held by the Allied Plan may be combined with the dollar amount of new purchases
by that Allied Plan to obtain a reduced front-end sales charge on additional
purchases of eligible Delaware Group fund shares. See Front-End Sales Charge
Alternative - Class A Shares under Buying Shares.
Participants in Allied Plans may exchange all or part of their eligible
Delaware Group fund shares for other eligible Delaware Group fund shares or for
eligible non-Delaware Group fund shares at net asset value without payment of a
front-end sales charge. However, exchanges of eligible fund shares, both
Delaware Group and non-Delaware Group, which were not subject to a front end
sales charge, will be subject to the applicable sales charge if exchanged for
eligible Delaware Group fund shares to which a sales charge applies. No sales
charge will apply if the eligible fund shares were previously acquired through
the exchange of eligible shares on which a sales charge was already paid or
through the reinvestment of dividends. See Investing by Exchange.
The Limited CDSC is applicable to redemptions of net asset value
purchases from an Allied Plan on which a dealer's commission has been paid.
Waivers of the Limited CDSC, as described below under Waiver of Limited
Contingent Deferred Sales Charge - Class A Shares, apply to redemptions by
participants in Allied Plans, except in the case of exchanges between eligible
Delaware Group and non-Delaware Group fund shares. When eligible Delaware Group
fund shares are exchanged into eligible non-Delaware Group fund shares, the
Limited CDSC will be imposed at the time of the exchange, unless the joint
venture agreement specifies that the amount of the CDSC will be paid by the
financial adviser or selling dealer. See Contingent Deferred Sales Charge for
Certain Redemptions of Class A Shares Made at Net Asset Value under Redemption
and Exchange.
A dealer's commission may be payable on purchases of eligible Delaware
Group fund shares under an Allied Plan. In determining a financial adviser's
eligibility for a dealer's commission on net asset value purchases of eligible
Delaware Group fund shares in connection with Allied Plans, all participant
holdings in the Allied Plan will be aggregated. See Front-End Sales Charge
Alternative - Class A Shares under Buying Shares.
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<PAGE>
BUYING SHARES
Purchase Amounts
Generally, the minimum initial purchase is $1,000 for Class A Shares,
Class B Shares and Class C Shares. Subsequent purchases of shares of any Class
generally must be $100 or more. Shares purchased under the Uniform Gifts to
Minors Act or Uniform Transfers to Minors Act are subject to a minimum initial
purchase of $250 and a minimum subsequent purchase of $25. In addition, there is
a maximum purchase limitation of $250,000 on each purchase of Class B Shares;
for Class C Shares, each purchase must be in an amount that is less than
$1,000,000. An investor may exceed these maximum purchase limitations by making
cumulative purchases over a period of time. In doing so, an investor should keep
in mind that reduced front-end sales charges are available on investments of
$100,000 or more in Class A Shares, and that Class A Shares (i) are subject to
lower annual 12b-1 Plan expenses than Class B Shares and Class C Shares and (ii)
generally are not subject to a CDSC.
For retirement plans, the maximum purchase limitations apply only to
the initial purchase of Class B Shares or Class C Shares by the plan. Minimum
purchase requirements do not apply to retirement plans other than IRAs for which
there is a minimum initial purchase of $250, and a minimum subsequent purchase
of $25, regardless of which class is selected.
Alternative Purchase Arrangements
Shares may be purchased at a price equal to the next determined net
asset value per share, subject to 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") or Class C
Shares ("level sales charge alternative").
Class A Shares. An investor who elects the front-end sales charge
alternative acquires Class A Shares. Class A Shares incur a sales charge when
they are purchased but generally are not subject to any sales charge when they
are redeemed. Class A Shares 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 Redemptions 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 to the Distributor, dealers or others for providing personal service and/or
maintaining shareholder accounts) of average daily net assets of such shares for
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
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<PAGE>
higher expense ratio and to pay lower dividends than those related to the Class
A Shares. At the end of approximately eight years after purchase, the Class B
Shares will automatically be converted into Class A Shares. See Automatic
Conversion of Class B Shares, below.
Class C Shares. An investor who elects the level sales charge
alternative acquires Class C Shares. Class C Shares do not incur a front-end
sales charge when they are purchased, but are subject to a sales charge if they
are redeemed within 12 months 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 to
the Distributor, dealers or others for providing personal service and/or
maintaining shareholder accounts) of average daily net assets of such shares for
the life of the investment. The higher 12b-1 Plan expenses paid by Class C
Shares will cause such shares to have a higher expense ratio and to pay lower
dividends than those related to the Class A Shares. Unlike Class B Shares, Class
C Shares do not convert to another class.
The alternative purchase arrangements described above permit investors
in a Fund to choose the method of purchasing shares that is most suitable given
the amount of their purchase, the length of time they expect to hold their
shares and other relevant circumstances. Investors should determine whether
given their particular circumstances, it is more advantageous to purchase Class
A Shares and incur a front-end sales charge, purchase Class B Shares and have
the entire initial purchase amount invested in the Fund with their investment
being subject to a CDSC if they redeem shares within six years of purchase, or
purchase Class C Shares and have the entire initial purchase amount invested in
the Fund with their investment being subject to a CDSC if they redeem shares
within 12 months of purchase. In addition, investors should consider the level
of annual 12b-1 Plan expenses to which each of the Classes is subject and, in
comparing Class B Shares to Class C Shares, the desirability of an automatic
conversion feature, which is available only for 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 either the deferred sales
charge alternative or the level 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 Class B Shares acquired under the
deferred sales charge alternative are subject to higher annual 12b-1 Plan
expenses of up to 1% for approximately eight years after purchase (see Automatic
Conversion of Class B Shares) and Class C Shares acquired under the level sales
charge alternative are subject to annual 12b-1 Plan expenses of up to 1% for the
life of the investment. However, because front-end sales charges are deducted
from the purchase amount at the time of purchase, investors who buy Class A
Shares would not have their full purchase amount invested in the Fund.
Certain other investors might determine it to be more advantageous to
purchase Class B Shares and have all their money 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 up to 1% until the shares are automatically
converted into Class A Shares. Still other investors might determine it to be
more advantageous to purchase Class C Shares and have all of their funds
invested initially, recognizing that they would be subject to a CDSC for just 12
months after purchase but that Class C Shares do not offer a conversion feature,
so their shares would be subject to annual 12b-1 Plan expenses of up to 1% for
the life of the investment. The higher 12b-1 Plan expenses on Class B Shares
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<PAGE>
and Class C Shares will be offset to the extent return is realized on the
additional money initially invested under the deferred sales charge alternative
or the level sales charge alternative. However, there can be no assurance as to
the return, if any, that will be realized on such additional money.
Prospective investors should refer to Appendix A to this Prospectus for
an illustration of the potential impact on a long-term shareholder's investment
in the Fund under each of the purchase options.
For the distribution and related services provided to, and the expenses
borne on behalf of, a Fund, 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 and the Class C Shares, from
the proceeds of the 12b-1 Plan fees and, if applicable, the CDSC incurred upon
redemption. Sales personnel may receive different compensation for selling Class
A, Class B and Class C Shares. Investors should understand that the purpose and
function of the respective 12b-1 Plans and CDSCs applicable to the Class B and
Class C Shares are the same as those of the 12b-1 Plan and the front-end sales
charge applicable to Class A Shares in that such fees and charges provide for
the financing of the distribution of the respective classes. See 12b-1
Distribution Plans - Class A, Class B and Class C Shares.
Dividends paid by a Fund with respect to the Class A, Class B and Class
C 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 and
Class C Shares will be borne exclusively by such shares. See Calculation of
Offering Price and Net Asset Value Per Share.
The NASD has adopted certain rules relating to investment company sales
charges. The Company and the Distributor intend to operate in compliance with
these rules.
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<PAGE>
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 4.75%. See Calculation of Offering Price and
Net Asset Value Per Share.
Purchases of $100,000 or more carry a reduced front-end sales charge as
shown in the following tables.
International Equity Fund A Class, Global Assets Fund A Class and Global
Bond Fund A Class
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Dealer's
Front-End Sales Charge as % of Commission***
Amount of Purchase Offering Amount as % of
Price Invested** Offering Price
- --------------------------------------------------------------------------------------------------------------------------
International Global Global
Equity Fund Assets Fund Bond Fund
<S> <C> <C> <C> <C> <C>
Less than $100,000 4.75% 5.01% 4.96% 4.99% 4.00%
$100,000 but under $250,000 3.75 3.86 3.87 3.92 3.00
$250,000 but under $500,000 2.50 2.55 2.61 2.59 2.00
$500,000 but under $1,000,000* 2.00 2.06 2.02 2.05 1.60
</TABLE>
* There is no front-end sales charge on purchases of Class A Shares of $1
million or more but, under certain limited circumstances, a 1% Limited CDSC
may apply upon redemption of such shares.
** Based on the net asset value per share of the Class A Shares as of the end
of the Company's most recent fiscal year.
*** Financial institutions or their affiliated brokers may receive an agency
transaction fee in the percentages set forth above.
- --------------------------------------------------------------------------------
The Company must be notified when a sale takes place which would qualify for
the reduced front-end sales charge on the basis of previous or current
purchases. The reduced front-end sales charge will be granted upon
confirmation of the shareholder's holdings by the Company. 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 to dealers up to the full amount of the
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 commission 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.
- --------------------------------------------------------------------------------
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<PAGE>
For initial purchases of Class A Shares of $1,000,000 or more, a
dealer's commission may be paid by the Distributor to financial advisers through
whom such purchases are made, 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 a Limited CDSC applies may be aggregated with those of the Class A Shares
of a Fund. 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. Financial advisers should contact the
Distributor concerning the applicability and calculation of the dealer's
commission in the case of combined purchases.
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 Redemptions of Class A Shares Made at Net
Asset Value under Redemption and Exchange.
Combined Purchases Privilege
By combining your holdings of Class A Shares of a Fund with your
holdings of Class B Shares and/or Class C Shares of that Fund and shares of the
other funds in the Delaware Group, except those noted below, you can reduce the
front-end sales charges on any additional purchases of Class A Shares. Shares of
Delaware Group Premium Fund, Inc., beneficially owned in connection with
ownership of variable insurance products, may be combined with other Delaware
Group fund holdings. Shares of other funds that do not carry a front-end sales
charge or CDSC may not be included unless they were acquired through an exchange
from a Delaware Group fund that does carry 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. A Letter of Intention 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 at net asset value 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 Shareholder Service Center about the operation of these
features. See Front-End Sales Charge Alternative - Class A Shares under Buying
Shares.
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<PAGE>
Buying at Net Asset Value
Class A Shares of a Fund 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 current
and former officers, directors and employees (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 who provide services in
connection with agreements between the bank and unaffiliated brokers or dealers
concerning sales of shares of Delaware Group funds. Officers, directors and key
employees of institutional clients of the Manager or any of its affiliates may
purchase Class A Shares at net asset value. Moreover, purchases may be effected
at net asset value for the benefit of the clients of brokers, dealers and
registered investment advisers affiliated with a broker or dealer, if such
broker, dealer or investment adviser has entered into an agreement with the
Distributor providing specifically for the purchase of Class A Shares in
connection with special investment products, such as wrap accounts or similar
fee based programs.
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 Company must be notified in advance that an investment qualifies
for purchase of Class A Shares at net asset value.
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 table on page 35, based on total plan assets. In addition, 403(b)(7) and 457
Retirement Plan Accounts may 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 will
be aggregated to determine the applicable front-end sales charge reduction on
each purchase, both initial and subsequent, if, at the time of each such
purchase, the company notifies Delaware that it qualifies for the reduction.
Employees participating in such Group Investment Plans may also combine the
investments held in their plan account to determine the front-end sales charge
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<PAGE>
applicable to purchases in non-retirement Delaware Group investment accounts if,
at the time of each such purchase, they notify the Company that they are
eligible to combine purchase amounts held in their plan account.
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 may be purchased at net asset value without the
imposition of a front-end sales charge and, as a result, a Fund 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 assets 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 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 providing distribution and related services, and
bearing expenses in connection with the sale of Class B Shares. These payments
support the compensation paid to dealers or brokers for selling Class B Shares.
Payments to the Distributor and others under the Class B 12b-1 Plan may be in an
amount equal to no more than 1% annually. The combination of the CDSC and the
proceeds of the 12b-1 Plan fees facilitates the ability of a Fund to sell the
Class B Shares without deducting a front-end sales charge at the time of
purchase.
Shareholders of a Fund's Class B Shares exercising the exchange
privilege described below will continue to be subject to the CDSC schedule for
the Funds' Class B Shares described in this Prospectus, even after the exchange.
Such CDSC 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 Fund held for eight years after purchase are eligible for automatic
conversion into Class A Shares of that Fund. The Company 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 three additional months after the eighth
anniversary of 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.
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<PAGE>
Level Sales Charge Alternative - Class C
Shares
Class C Shares may be purchased at net asset value without the
imposition of a front-end sales charge and, as a result, the Company will invest
the full amount of the investor's purchase payment. The Distributor currently
anticipates compensating dealers or brokers for selling Class C Shares at the
time of purchase from its own assets in an amount equal to no more than 1% of
the dollar amount purchased. As discussed below, however, Class C Shares are
subject to annual 12b-1 Plan expenses and, if redeemed within 12 months of
purchase, a CDSC.
Proceeds from the CDSC and the annual 12b-1 Plan fees are paid to the
Distributor and others for providing distribution and related services and
bearing related expenses in connection with the sale of Class C Shares. These
payments support the compensation paid to dealers or brokers for selling Class C
Shares. Payments to the Distributor and others under the Class C 12b-1 Plan may
be in an amount equal to no more than 1% annually.
Shareholders of a Fund's Class C Shares who exercise the exchange
privilege described below will continue to be subject to the CDSC schedule for
the Fund's Class C Shares as described in this Prospectus. See Redemption and
Exchange.
Contingent Deferred Sales Charge - Class B
Shares and Class C Shares
Class B Shares redeemed within six years of purchase may be subject to a
CDSC at the rates set forth below, and Class C Shares redeemed within 12 months
of purchase may be subject to a CDSC of 1%. CDSCs are charged as a percentage of
the dollar amount subject to the CDSC. The charge will be assessed on an amount
equal to the lesser of the net asset value at the time of purchase of the shares
being redeemed or the net asset value of those shares at redemption. No CDSC
will be imposed on increases in net asset value above the initial purchase
price. In addition, no CDSC will be assessed on redemptions of shares received
through reinvestments of dividends or capital gains distributions. For purposes
of this formula, the "net asset value at the time of purchase" will be the net
asset value at purchase of either the Class B Shares or the Class C Shares of a
Fund, even if those shares are later exchanged for Class B Shares or Class C
Shares of another Delaware Group fund. 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 that were acquired in the exchange.
The following table sets forth the rates of the CDSC for the Class B
Shares of each Fund:
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
During the seventh year after purchase and, thereafter, until converted
automatically into Class A Shares of a Fund, the Class B Shares will still be
subject to annual 12b-1 Plan expenses of up to 1% of average daily net assets of
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 of Class B
Shares, it will be assumed that shares held for more than six years are redeemed
first, followed by shares acquired through the reinvestment of dividends or
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distributions, and finally by shares held longest during the six-year period.
With respect to Class C Shares, it will be assumed that shares held for more
than 12 months are redeemed first, followed by shares acquired through the
reinvestment of dividends or distributions, and finally by shares held for 12
months or less. All investments made during a calendar month, regardless of what
day of 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 certain redemptions of Class B Shares and Class C
Shares. See Waiver of Contingent Deferred Sales Charge - Class B and Class C
Shares under Redemption and Exchange.
12b-1 Distribution Plans - Class A, Class B and
Class C Shares
Under the distribution plans adopted by the Company in accordance with
Rule 12b-1 under the 1940 Act, a Fund is permitted to pay the Distributor annual
distribution fees of up to .30% of the average daily net assets of a Fund's
Class A Shares, 1% of the average daily net assets of a Fund's Class B Shares
and 1% of the average daily net assets of a Fund's Class C Shares. These fees,
which are payable monthly, compensate the Distributor for providing distribution
and related services and bearing certain expenses of each Class. The 12b-1 Plans
applicable to the Class B Shares and the Class C Shares are designed to permit
an investor to purchase Class B Shares or Class C Shares through dealers or
brokers without the assessment of a front-end sales charge while enabling the
Distributor to compensate dealers and brokers for the sale of such shares. For a
more detailed discussion of the 12b-1 Plans relating to the Class A, Class B,
and Class C Shares, see Distribution (12b-1) and Service under Management of the
Company.
Other Payments to Dealers -- Class A, Class B
and Class C 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.
Subject to pending amendments to the NASD's Rules of Fair Practice, 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. Payment of non-cash compensation to dealers is
currently under review by the NASD and the Securities and Exchange Commission.
It is likely that the NASD's Rules of Fair Practice will be amended such that
the ability of the Distributor to pay non-cash compensation as described above
will be restricted in some fashion. The Distributor intends to comply with the
NASD's Rules of Fair Practice as they may be amended. In addition, as noted
above, the Distributor may pay dealers a commission in connection with net asset
value purchases.
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Class B Funds and Class C Funds
The following funds currently offer Class B Shares and Class C Shares:
DMC Tax-Free Income Trust-Pennsylvania, Delaware Group Delchester High-Yield
Bond Fund, Inc., Delaware Group Government Fund, Inc., Limited-Term Government
Fund of Delaware Group Limited-Term Government Funds, 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 Devon 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 Fund of the Company.
International Equity Fund Institutional Class,
Global Bond Fund Institutional Class and
Global Assets Fund Institutional Class
In addition to offering the Class A, Class B and Class C Shares of each
Fund, the Company 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 and is available for purchase only by
certain investors. 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 sales charge, a CDSC or a Limited CDSC and are not subject to 12b-1
Plan distribution expenses. 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 by writing to the address or by calling the telephone number listed
on the cover of this Prospectus.
Dividend Orders
You may have the dividends earned in one fund automatically invested in
another Delaware Group fund with a different investment objective. For more
information, see Dividend Reinvestment Plan under The Delaware Difference or
call the Shareholder Service Center.
HOW TO BUY SHARES
The Company 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 or, in the case of a retirement
account, an appropriate retirement plan 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 any time 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 Company. Use of this investment slip
can help expedite processing of your check when making additional purchases.
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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 Company's Shareholder
Service Center to get an account number. If you do not call first, processing of
your investment may be delayed. In addition, you must promptly send your
Investment Application or, in the case of a retirement account, an appropriate
retirement plan 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
Company'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.
Delaware Group Asset Planner
To invest in Delaware Group funds using the Asset Planner service, you
should complete a Delaware Group Asset Planner Account Registration Form, which
is available only from a financial adviser. The sales charge on the investment
is determined by the individual sales charges of the underlying funds and their
percentage allocation in the selected Strategy. The minimum initial investment
per Strategy is $2,000; subsequent investments must be at least $100. Individual
fund minimums do not apply to investments made using the Asset Planner service.
Class A, Class B and Class C Shares are available for use inside the Asset
Planner service; however, only "like" class shares may be used within the same
Strategy.
An annual maintenance fee, currently $35 per Strategy, is due at the
time of initial investment and by September 30th of each subsequent year. The
fee, payable to Delaware Service Company, Inc. to defray extra costs associated
with administering the Asset Planner service, will be deducted automatically
from one of your Company accounts if not paid by September 30th. See Part B.
Investors will receive a customized quarterly Strategy Report
summarizing all Delaware Group Asset Planner investment performance and account
activity during the prior period. Confirmation statements will be sent following
all transactions other than those involving a reinvestment of distributions.
Certain shareholder services are not available to investors using the
Asset Planner service, due to its special design. These include Delaphone,
Checkwriting, Wealth Builder Option and Letter of Intention. Systematic
Withdrawal Plans are available after the account has been open for two years.
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 Fund. If you wish to open an account by exchange, call the
Shareholder Service Center for more information. All exchanges are subject to
the eligibility and minimum purchase requirements set forth in each fund's
prospectus.
Shareholders of Class A Shares may exchange all or part of their shares
for certain of the shares of other funds in the Delaware Group, including other
Class A Shares, but may not exchange their shares for Class B Shares or Class C
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Shares of the Fund or for any Class B Shares or Class C Shares of any other fund
in the Delaware Group. Shareholders of Class B Shares of a Fund are permitted to
exchange all or part of their Class B Shares only into the corresponding class
of shares of the Class B Funds. Similarly, shareholders of Class C Shares of a
Fund are permitted to exchange all or part of their Class C Shares only into the
corresponding class of shares of the Class C Funds. Class B Shares and Class C
Shares of a Fund acquired by exchange will continue to carry the CDSC and, in
the case of Class B Shares, the automatic conversion schedule of the fund from
which the exchange is made. The holding period of the Class B Shares of a Fund
acquired by exchange will be added to that of the shares that were exchanged for
purposes of determining the time of the automatic conversion into Class A Shares
of that Fund.
Permissible exchanges into Class A Shares of a Fund will be made without
a front-end sales charge imposed by the Fund, except for exchanges 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). Permissible exchanges into Class B
Shares or Class C Shares of the Fund will be made without the imposition of a
CDSC by the fund from which the exchange is being made at the time of the
exchange.
See Allied Plans under Retirement Planning for information on exchanges
by participants in an Allied Plan.
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 have your employer or bank make regular investments directly to
your account for you (for example: payroll deduction, pay by phone, annuity
payments). The Company 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 Company to
transfer a designated amount monthly from your checking account to your Fund
account. Many shareholders use this as an automatic savings plan. 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, the Company has the right to liquidate your shares to reimburse the
government or transmitting bank. If there are insufficient funds in your
account, you are obligated to reimburse the Fund.
Purchase Price and Effective Date
The offering price and net asset value of the Class A, Class B and Class
C Shares are determined as of the close of regular trading on the New York Stock
Exchange (ordinarily, 4 p.m., Eastern time) on days when the Exchange is open.
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The effective date of a purchase made through an investment dealer is
the date the order is received by the Company. 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. Purchase orders received after such time will be
effective the next business day.
The Conditions of Your Purchase
The Company reserves the right to reject any purchase order. If a
purchase is canceled because your check is returned unpaid, you are responsible
for any loss incurred. The Company 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 Company reserves the
right to reject purchase orders paid by third-party checks or checks that are
not drawn on a domestic branch of a United States financial institution. If a
check drawn on a foreign financial institution is accepted, you may be subject
to additional bank charges for clearance and currency conversion.
The Company also reserves the right, following shareholder notification,
to charge a service fee on non-retirement accounts that have remained below the
minimum stated account balance for a period of three or more consecutive months.
Holders of such accounts may be notified of their insufficient account balance
and advised that they have until the end of the current calendar quarter to
raise their balance to the stated minimum. If the account has not reached the
minimum balance requirement by that time, the Company will charge a $9 fee for
that quarter and each subsequent calendar quarter until the account is brought
up to the minimum balance. The service fee will be deducted from the account
during the first week of each calendar quarter for the previous quarter, and
will be used to help defray the cost of maintaining low-balance accounts. No
fees will be charged without proper notice, and no CDSC will apply to such
assessments.
The Company also reserves the right, upon 60 days' written notice, to
involuntarily redeem accounts that remain under a Class' minimum initial
purchase amount as a result of redemptions. An investor making the minimum
initial investment may 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.
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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
constitute taxable events. See Taxes. Further, in order for an exchange to be
processed, shares of the fund being acquired must be registered in the state
where the acquiring shareholder resides. You may want to 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. You may also call the Delaware Group directly for fund information.
Your shares will be redeemed or exchanged at a price 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. A shareholder submitting a redemption request may indicate that he or
she wishes to receive redemption proceeds of a specific dollar amount. In the
case of such a request, and in the case of certain redemptions from retirement
plan accounts, the Company will redeem the number of shares necessary to deduct
the applicable CDSC in the case of Class B and Class C Shares or, if applicable,
the Limited CDSC in the case of Class A Shares and tender to the shareholder the
requested amount, assuming the shareholder holds enough shares in his or her
account for the redemption to be processed in this manner. Otherwise, the amount
tendered to the shareholder upon redemption will be reduced by the amount of the
applicable CDSC or Limited CDSC.
Except as noted below, for a redemption request to be in "good order,"
you must provide your account number, account registration, and the total number
of shares or dollar amount of the transaction. For exchange requests, 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 Company at 800-523-1918. The Company may suspend,
terminate, or amend the terms of, the exchange privilege upon 60 days' written
notice to shareholders.
The Company will honor written redemption requests of shareholders who
recently purchased shares by check, but will not mail the proceeds until it is
reasonably satisfied that the purchase check has cleared, which may take up to
15 days from the purchase date. The Company will not honor telephone redemptions
for 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 Company 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.
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
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previously invested in a fund with a front-end sales charge and/or transfers
involving the reinvestment of dividends.
Holders of Class B Shares or Class C Shares that exchange their shares
("Original Shares") for Class B Shares of other Class B Funds or Class C Shares
of other Class C Funds, as applicable (in each case, "New Shares"), will not be
subject to a CDSC that might otherwise be due upon redemption of the Original
Shares. However, such shareholders will continue to be subject to the CDSC and,
in the case of Class B Shares, the automatic conversion schedule of the Original
Shares as described in this Prospectus and any CDSC assessed upon redemption
will be charged by the Company. In an exchange of Class B Shares, a Fund's CDSC
schedule may be higher than the CDSC schedule relating to the New Shares
acquired as a result of the exchange. For purposes of computing the CDSC that
may be payable upon a disposition of the New Shares, the period of time that an
investor held the Original Shares is added to the period of time that an
investor held the New Shares. With respect to Class B Shares, the automatic
conversion schedule of the Original Shares may be longer than that of the New
Shares. Consequently, an investment in New Shares by exchange may subject an
investor to the higher 12b-1 fees applicable to Class B Shares of a Fund for a
longer period of time than if the investment in New Shares were made directly.
Various redemption and exchange methods are outlined below. Except for
the CDSC applicable to certain redemptions of Class B Shares and Class C Shares
and the Limited CDSC applicable 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 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, including selection of any of
the features described below, shall continue in effect until such time as a
written revocation or modification has been received by the Company or its
agent.
All exchanges involve a purchase of shares of the fund into which the
exchange is made. As with any purchase, an investor should obtain and carefully
read that fund's prospectus before buying shares in an exchange. The prospectus
contains more complete information about the fund, including charges and
expenses.
Written Redemption
You can write to the Company at 1818 Market Street, Philadelphia, PA
19103 to redeem some or all of your 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 Company requires a signature by all owners of the
account and a signature guarantee for each owner. Each signature guarantee must
be supplied by an eligible guarantor institution. The Company reserves the right
to reject a signature guarantee supplied by an eligible institution based on its
creditworthiness. The Company may require further documentation from
corporations, executors, retirement plans, administrators, trustees or
guardians.
Payment is normally mailed the next business day, but no later than
seven days, after receipt of your redemption request. If your Class A Shares are
in certificate form, the certificate must accompany your request and also be in
good order. The Company issues certificates for Class A Shares only if a
shareholder submits a specific request. The Company does not issue certificates
for Class B or Class C Shares.
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Written Exchange
You may also write to the Company (at 1818 Market Street, Philadelphia,
PA 19103) to request an exchange of any or all of your 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 may only
redeem or exchange by written request and you must return your certificates.
The Telephone Redemption - Check to Your Address of Record service and
the Telephone Exchange service, both of which are described below, are
automatically provided unless you notify the Company in writing that you do not
wish to have such service available with respect to your account. The Company
reserves the right to modify, terminate or suspend these procedures upon 60
days' written notice to shareholders. It may be difficult to reach the Company
by telephone during periods when market or economic conditions lead to an
unusually large volume of telephone requests.
Neither the Company nor the Transfer Agent is responsible for any
shareholder loss incurred in acting upon written or telephone instructions for
redemption or exchange of Fund shares which are reasonably believed to be
genuine. With respect to such telephone transactions, the Company 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 Company 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, you are acknowledging prior receipt of a
prospectus for the fund into which your 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 address of record. Checks will be payable
to the shareholder(s) of record. Payment is normally mailed the next business
day, but no later than seven days, after receipt of the 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 Company 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 Class
B and Class C Shares and the Limited CDSC which may be applicable to certain
Class A Shares, there are no fees for this redemption method, but the mail time
may delay getting funds into your bank account. Simply call the Company's
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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 a Fund, the
Company 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 your
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 Plans
1. Regular Plans
This plan provides shareholders 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 Company does not recommend any particular monthly amount, as each
shareholder's situation and needs vary. Payments are normally made by check. You
may elect to have your payments transferred from your Fund account to your
predesignated bank account through the Delaware Group's MoneyLine service. Your
funds will normally be credited to your bank account two business days after the
payment date. Except for the Limited CDSC which may be applicable to Class A
Shares and the CDSC which may be applicable to Class B Shares and Class C Shares
as noted below, there are no fees for this redemption method. You can initiate
the MoneyLine 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
Fund 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 Company'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 for retirement plans.
* * *
Shareholders should not purchase Class A Shares while participating in a
Systematic Withdrawal Plan. Also, redemptions of Class A Shares via a Systematic
Withdrawal Plan may be subject to a Limited CDSC if the original purchase was
made at net asset value within the 12 months prior to the withdrawal and a
dealer's commission was paid on that purchase. See Contingent Deferred Sales
Charge for Certain Redemptions of Class A Shares Made at Net Asset Value, below.
With respect to Class B Shares and Class C Shares redeemed via a
Systematic Withdrawal Plan, any applicable CDSC will be waived if, on the date
that the Plan is established, the annual amount selected to be withdrawn is less
than 12% of the account balance. If the annual amount selected to be withdrawn
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exceeds 12% of the account balance on the date that the Systematic Withdrawal
Plan is established, all redemptions under the Plan will be subject to the
applicable CDSC. Whether a waiver of the CDSC is available or not, the first
shares to be redeemed for each Systematic Withdrawal Plan payment will be those
not subject to a CDSC because they have either satisfied the required holding
period or were acquired through the reinvestment of distributions. The 12%
annual limit will be reset on the date that any Systematic Withdrawal Plan is
modified (for example, a change in the amount selected to be withdrawn or the
frequency or date of withdrawals), based on the balance in the account on that
date. See Waiver of Contingent Deferred Sales Charge - Class B and Class C
Shares, below.
For more information on Systematic Withdrawal Plans, call the
Shareholder Service Center.
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 Fund account and invested automatically into an account
in one or more funds in the Delaware Group. If, in connection with the Wealth
Builder Option, a shareholder wishes to open a new account in such other fund or
funds to receive the automatic investment, such new account must meet such other
fund's minimum initial purchase requirements. Investments under this option are
exchanges and are therefore subject to the same conditions and limitations as
other exchanges noted above.
Shareholders can use the Wealth Builder Option to invest in the Funds
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 Company. 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
Redemptions of Class A Shares Made at Net
Asset Value
A Limited CDSC will be imposed by the Company 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
acquired in the exchange.
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
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Class A Shares are exchanged will count towards satisfying the 12-month holding
period. The Company 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 Fund or the Class A Shares acquired in the exchange.
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 what day of the month the investment
occurred, will age one month on the last day of that month and each subsequent
month.
Waiver of Limited Contingent Deferred Sales
Charge - Class A Shares
The Limited CDSC for Class A Shares on which a dealer's commission has
been paid will be waived in the following instances: (i) redemptions that result
from a 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 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) 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, under Buying Shares).
Waiver of Contingent Deferred Sales Charge -
Class B and Class C Shares
The CDSC on certain redemptions of Class B Shares is waived in
connection with the following redemptions: (i) redemptions that result from a
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 account if the redemption results from the death of all
registered owners of the account (in the case of accounts established under the
Uniform Gifts to Minors or Uniform Transfers to Minors Acts or trust accounts,
the waiver applies upon the death of all beneficial owners) or a total and
permanent disability (as defined in Section 72 of the Code) of all registered
owners occurring after the purchase of the shares being redeemed.
The CDSC on certain redemptions of Class C Shares is waived in
connection with the following redemptions: (i) redemptions that result from a
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, 403(b)(7) Deferred
Compensation Plan, Profit Sharing Plan, Money Purchase Pension Plan or 401(k)
Defined Contribution Plan; (iii) required minimum distributions from an IRA,
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403(b)(7) Deferred Compensation Plan, 457 Deferred Compensation Plan, Profit
Sharing Plan, Money Purchase Pension Plan or 401(k) Defined Contribution Plan;
(iv) distributions from a 403(b)(7) Deferred Compensation Plan, 457 Deferred
Compensation Plan, Profit Sharing Plan or 401(k) Defined Contribution Plan,
under hardship provisions of the plan; (v) distributions from a 403(b)(7)
Deferred Compensation Plan, 457 Deferred Compensation Plan, Profit Sharing Plan,
Money Purchase Pension Plan or a 401(k) Defined Contribution Plan upon
attainment of normal retirement age under the plan or upon separation from
service; (vi) distributions from an IRA on or after attainment of age 59 1/2;
and (vii) distributions from an account if the redemption results from the death
of all registered owners of the account (in the case of accounts established
under the Uniform Gifts to Minors or Uniform Transfers to Minors Acts or trust
accounts, the waiver applies upon the death of all beneficial owners) or a total
and permanent disability (as defined in Section 72 of the Code) of all
registered owners occurring after the purchase of the shares being redeemed.
In addition, the CDSC will be waived on Class B and Class C Shares
redeemed in accordance with a Systematic Withdrawal Plan if the annual amount
selected to be withdrawn under the Plan does not exceed 12% of the value of the
account on the date that the Systematic Withdrawal Plan was established or
modified.
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DIVIDENDS AND DISTRIBUTIONS
The Company declares a dividend on each Fund to all shareholders of
record of the Classes of that Fund 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 declare and
normally make payments from net investment income on a quarterly basis. The
Global Bond Series will declare and normally make payments from net investment
income on a monthly basis.
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 Fund, if any, will be distributed annually in the
quarter following the close of the fiscal year.
Each of the Classes of a Fund will share proportionately in the
investment income and expenses of that Fund, except that the per share dividends
from net investment income on the Class A Shares, Class B Shares and Class C
Shares will vary due to the expenses under the 12b-1 Plan applicable to each
Class. Generally, the dividends per share on Class B Shares and Class C Shares
can be expected to be lower than the dividends per share on Class A Shares
because the expenses under the 12b-1 Plans relating to Class B and Class C
Shares will be higher than the expenses under the 12b-1 Plan relating to Class A
Shares. See Distribution (12b-1) and Service under Management of the Company.
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
United States 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 choose Delaware Group's
MoneyLine service and have such payments transferred from your Fund account to
your predesignated bank account. Your funds will normally be credited to your
bank account two business days after the payment date. There are no fees for the
MoneyLine service. See Systematic Withdrawal Plans under Redemption and Exchange
for information regarding authorization of this service. This service is not
available for retirement plans. (See The Delaware Difference for more
information on reinvestment options.)
In addition to the dividends from net investment income and
distributions from realized securities profits that a Fund may declare and make,
as noted above, in order to satisfy certain distribution requirements of the Tax
Reform Act of 1986, a Fund 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 Fund and received by
shareholders on the earlier of the date paid or December 31 of the prior year.
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TAXES
Each Fund has qualified, and intends to continue to qualify, as a
regulated investment company under Subchapter M of the Code. As such, each Fund
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 Fund 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 Fund's dividends will be eligible for the
dividends-received deductions for corporations.
Distributions paid by a Fund 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 Fund. A Fund does not seek to realize
any particular amount of capital gains during a year; rather, realized gains are
a byproduct of Fund 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 Fund 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 in such a month, 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 Fund and received by the shareholder on December 31 of the year
declared.
The sale of shares of a Fund 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 Fund's 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 acquiring a Fund's shares will be excluded from the
federal tax basis of any of such shares sold or exchanged within 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 Fund 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 Fund 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 Fund at the end of its fiscal year are invested in securities of foreign
corporations, the Fund may elect to pass-through to its shareholders a pro-rata
share of foreign income taxes paid by the Fund. 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
Fund), 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
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a Fund 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 Fund at the end of approximately eight years after purchase will be
tax-free for federal tax purposes. 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 each Fund are exempt from Pennsylvania
county personal property taxes.
Each year, the Company will mail to you information on the tax status of
a Fund's 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 Funds.
The Company 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. Investors should consult their own tax advisers concerning the federal,
state, local or foreign tax consequences of an investment in the Fund.
See Accounting and Tax Issues in Part B for additional information on
tax matters relating to each Fund and its shareholders.
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CALCULATION OF OFFERING PRICE AND
NET ASSET VALUE PER SHARE
Class A Shares are purchased at the offering price per share, while
Class B Shares and Class C Shares are purchased at the net asset value ("NAV")
per share. The offering price per share of Class A Shares consists of the NAV
per share next computed 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 the Exchange is open.
The NAV per share for each Fund is computed by adding the value of all
securities and other assets in the Fund's portfolio, deducting any liabilities
of that Fund (expenses and fees are accrued daily) and dividing by the number of
that Fund's 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 Company'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 Company's Board of Directors.
A Fund's 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
Fund may be significantly affected by such trading on days when shareholders
have no access to the Fund.
Each share of a Fund's four classes will bear, pro-rata, all of the
common expenses of the Fund. The net asset values of all outstanding shares of
each class of a Fund will be computed on a pro-rata basis for each outstanding
share based on the proportionate participation in that Fund represented by the
value of shares of that class. All income earned and expenses incurred by a Fund
will be borne on a pro-rata basis by each outstanding share of a class, based on
each class' percentage in the Fund 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 Fund's 12b-1
Plans and the Class A, Class B and Class C Shares of each Fund alone will bear
the 12b-1 Plan expenses payable under their respective 12b-1 Plans. Due to the
specific distribution expenses and other costs that will be allocable to each
class, the net asset value of each class of a particular Fund will vary.
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MANAGEMENT OF THE COMPANY
Directors
The business and affairs of the Company 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 Company. 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, 1995, Delaware International and DMC were
supervising in the aggregate more than $27 billion in assets in various
institutional (approximately $17,389,902,000) and investment company
(approximately $10,383,560,000) accounts.
DMC is an indirect, wholly-owned subsidiary of Delaware Management
Holdings, Inc. ("DMH"). Delaware International is also controlled by DMH through
several subsidiaries. On April 3, 1995, a merger between DMH and a wholly-owned
subsidiary of Lincoln National Corporation ("Lincoln National") was completed.
DMH, the Manager and the Sub-Adviser are now wholly-owned subsidiaries, and
subject to the ultimate control, of Lincoln National. Lincoln National, with
headquarters in Fort Wayne, Indiana, is a diversified organization with
operations in many aspects of the financial services industry, including
insurance and investment management. In connection with the merger, new
Investment Management Agreements between the Company on behalf of each Fund and
the Manager and a new Sub-Advisory Agreement between the Manager of the Global
Assets Series and the Sub-Adviser were executed following shareholder approval.
The Manager manages each Fund's investments and for its services, the
Manager is paid an annual fee equal to .75% of each Fund's average daily net
assets, less a proportionate share of all directors' fees paid to the
unaffiliated directors by the Fund. Beginning December 1, 1995, 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 ensure that the Total Operating Expenses (exclusive of taxes,
interest, brokerage commissions, extraordinary expenses, but inclusive of 12b-1
expenses) of the Class A Shares of this Fund do not exceed 1.85% and of the
Class B Shares and Class C Shares of this Fund do not exceed 2.55% through May
31, 1996. From June 1, 1994 through November 30, 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 ensure
that the Total Operating Expenses (exclusive of taxes, interest, brokerage
commissions, extraordinary expenses and 12b-1 expenses) of the Class A Shares of
this Fund did not exceed 1.50%. Through November 30, 1994, this waiver and
reimbursement noted above also applied to Class B Shares of this Fund. 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 ensure that the Total Operating Expenses (exclusive of taxes, interest,
brokerage commissions and extraordinary expenses, but inclusive of 12b-1 fees)
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of the Class A Shares of these Funds do not exceed 1.25% and of the Class B
Shares and Class C Shares of these Funds do not exceed 1.95% through May 31,
1996. The investment management fees payable to Delaware International by the
Funds are higher than those paid by most investment companies, but Delaware
International believes they are in line with fees paid by other similar funds.
With respect to the International Equity Series, the investment management fee
paid for the fiscal year ended November 30, 1995 was 0.74% of average daily net
assets. With respect to the Global Bond Series, the investment management fee
earned for the fiscal year ended November 30, 1995 was 0.40%, annualized, of
average daily net assets. With respect to the Global Assets Series, the
investment management fee earned for the fiscal year ended November 30, 1995 was
0.56%, annualized, of average daily net assets. 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.
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 Funds since their
inception. A graduate of the University of Warwick and having begun his career
at Legal and General Investment Management, Mr. Gillmore joined the Delaware
Group in 1990 after eight years of investment experience. His most recent
position prior to joining the Delaware Group was as a Pacific Basin equity
analyst and senior portfolio manager for Hill Samuel Investment Advisers Ltd.
Mr. Gillmore completed the London Business School Investment program.
In making investment decisions for these Funds, 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 Fund 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 Fund, Mr. Burwell regularly
consults with Wayne A. Stork and Richard G. Unruh, Jr. Mr. Stork is Chairman of
DMC and the Company'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
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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 Company 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.
Paul A. Matlack and Gerald T. Nichols have responsibility for making
investment decisions for the high-yield securities portion of the Global Assets
Series. They have had such responsibility since the Fund's 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.
In making investment decisions for this Fund, Mr. Matlack and Mr.
Nichols 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 Fund 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.
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Portfolio Trading Practices
A Fund normally will not invest for short-term trading purposes.
However, a Fund 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 Fund and may affect taxes payable by the Fund's shareholders to the extent
that net capital gains are realized. It is anticipated that the portfolio
turnover rate of each Fund will not exceed 100%. During the past two fiscal
years, the International Equity Series' portfolio turnover rate was 27% for 1994
and 21% for 1995. During the period December 27, 1994 (date of initial public
offering) through November 30, 1995, the annualized portfolio turnover rates of
the Global Bond Series and the Global Assets Series were 98% and 57%,
respectively.
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 Fund's shares in placing
portfolio orders and may place orders with broker/dealers that have agreed to
defray certain Fund expenses such as custodian fees.
Performance Information
From time to time, each Fund may quote total return performance of its
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
and Class C 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 Fund may also advertise aggregate and average total return
information concerning a Class over additional periods of time. In addition,
each Fund 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
each Fund under separate Distribution Agreements dated April 3, 1995, as amended
on November 29, 1995.
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The Company has adopted a separate distribution plan under Rule 12b-1
for each of a Fund's Class A Shares, Class B Shares and Class C Shares (the
"Plans"). Each Plan permits a 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, Class B and Class C 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, a 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 Company.
The Plan expenses relating to each of the Class B Shares and Class C
Shares of a Fund 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 Fund from the assets of the respective
Classes 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 which are
service fees to be paid by the Fund to the Distributor, dealers and others, for
providing personal service and/or maintaining shareholder accounts) of each of
the Class B Shares' and the Class C Shares' average daily net assets in any
year. The Class A, Class B and Class C 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 any Fund.
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 any Fund.
While payments pursuant to the Plans may not exceed .30% annually with
respect to the Class A Shares and 1% annually with respect to each of the Class
B Shares and the Class C 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 Company's unaffiliated directors, who may reduce the
fees or terminate the Plans at any time.
The Transfer Agent, Delaware Service Company, Inc., serves as the
shareholder servicing, dividend disbursing and transfer agent for each Fund
under separate Agreements dated October 25, 1991. The directors of the Company
annually review service fees paid to the Transfer Agent.
The Distributor and the Transfer Agent are also indirect, wholly-owned
subsidiaries of DMH.
-60-
<PAGE>
Expenses
Each Fund 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 ratios of expenses to
average daily net assets of the Class A Shares and the Class B Shares of the
International Equity Series for the fiscal year ended November 30, 1995 were
2.07% and 2.77%, respectively. The annualized ratios of expenses to average
daily net assets of the Class A Shares and the Class B Shares of the Global Bond
Series for the period December 27, 1994 (date of initial public offering)
through November 30, 1995 were 1.25% and 1.95%, respectively. The annualized
ratios of expenses to average daily net assets of the Class A Shares and the
Class B Shares of the Global Assets Series for the period December 27, 1994
(date of initial public offering) through November 30, 1995 were 1.25% and
1.95%, respectively. The ratios reflect the impact of each Class' 12b-1 Plan.
The ratios for the Global Assets Series and the Global Bond Series also reflect
the waiver of fees described above. The Company anticipates that the expense
ratios for Class C Shares of a Fund will be identical to the expense ratios for
Class B Shares of the same Fund.
Shares
The Company is an open-end management investment company. The Company
was organized as a Maryland corporation on May 30, 1991.
The shares of each Fund 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 Company shares
have noncumulative voting rights which means that the holders of more than 50%
of the Company's shares voting for the election of directors can elect 100% of
the directors if they choose to do so. Under Maryland law, the Company 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 Company'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 Shares, Class B
Shares and Class C Shares. Shares of each class of a Fund represent
proportionate interests in the assets of that Fund and have the same voting and
other rights and preferences as the other classes of the Fund, 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 12b-1 Plans. Similarly,
as a general matter, shareholders of Class A Shares, Class B Shares and Class C
Shares may vote only on matters affecting the 12b-1 Plan that relates to the
class of shares that they hold. However, the Class B Shares of a Fund may vote
on any proposal to increase materially the fees to be paid by that Fund under
the 12b-1 Plan relating to the respective 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.
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<PAGE>
APPENDIX A - INVESTMENT ILLUSTRATIONS
Global Bond Series
Illustrations of the Potential Impact on Investment Based on Purchase Option
$10,000 Purchase
<TABLE>
<CAPTION>
Scenario 1 Scenario 2 Scenario 3 Scenario 4
No Redemption Redeem 1st Year Redeem 3rd Year Redeem 5th Year
--------------------------- --------------------------- --------------------------- ---------------------------
Year Class A Class B Class C Class A Class B Class C Class A Class B Class C Class A Class B Class C
- ---- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0 9,525 10,000 10,000 9,525 10,000 10,000 9,525 10,000 10,000 9,525 10,000 10,000
1 10,192 10,630 10,630 10,192 10,230 10,530+ 10,192 10,630 10,630 10,192 10,630 10,630
2 10,905 11,300 11,300 10,905 11,300 11,300 10,905 11,300 11,300
3 11,669 12,012 12,012 11,669 11,712 12,012+ 11,669 12,012 12,012
4 12,485 12,768 12,768 12,485 12,768 12,768
5 13,359 13,573 13,573 13,359 13,373 13,573+
6 14,294 14,428 14,428
7 15,295 15,337 15,337
8 16,366+ 16,303 16,303
9 17,511 17,444* 17,330
10 18,737 18,665* 18,422
</TABLE>
* This assumes that Class B Shares were converted to Class A Shares at the end
of the eighth year.
$250,000 Purchase
<TABLE>
<CAPTION>
Scenario 1 Scenario 2 Scenario 3 Scenario 4
No Redemption Redeem 1st Year Redeem 3rd Year Redeem 5th Year
----------------------------- ---------------------------- --------------------------- ---------------------------
Year Class A Class B Class C Class A Class B Class C Class A Class B Class C Class A Class B Class C
- ---- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0 243,750 250,000 250,000 243,750 250,000 250,000 243,750 250,000 250,000 243,750 250,000 250,000
1 260,813 265,750 265,750 260,813 255,750 263,250+ 260,813 265,750 265,750 260,813 265,750 265,750
2 279,069 282,492 282,492 279,069 282,492 282,492 279,069 282,492 282,492
3 298,604 300,289 300,289 298,604 292,789 300,289+ 298,604 300,289 300,289
4 319,507+ 319,207 319,207 319,507+ 319,207 319,207
5 341,872 339,318 339,318 341,872 334,318 339,318
6 365,803 360,395 360,695
7 391,409 383,418 383,418
8 418,808 407,574 407,574
9 448,124 436,104* 433,251
10 479,493 466,631* 460,546
</TABLE>
*This assumes that Class B Shares convert to Class A Shares at the end of the
eighth year.
Assumes a hypothetical return for Class A of 7% per year, a hypothetical return
for Class B of 6.3% for years 1-8 and 7% for years 9-10, and a hypothetical
return for Class C of 6.3%. Hypothetical returns vary due to the different
expense structure for each Class and do not represent actual performance.
Class A purchase subject to appropriate sales charge breakpoint (4.75% @
$10,000; 3.75% @ $100,000; 2.50% @ $250,000).
Class B purchase assessed appropriate CDSC upon redemption (4%-4%-3%-3%-2%-1% in
years 1-2-3-4-5-6).
Class C purchase assessed 1% CDSC upon redemption in year 1.
Figures marked "+" identify which class offers the greater return potential
based on investment amount and holding period.
<PAGE>
APPENDIX A - INVESTMENT ILLUSTRATIONS
International Equity and Global Asset Series
Illustrations of the Potential Impact on Investment Based on Purchase Option
$10,000 Purchase
<TABLE>
<CAPTION>
Scenario 1 Scenario 2 Scenario 3 Scenario 4
No Redemption Redeem 1st Year Redeem 3rd Year Redeem 5th Year
--------------------------- ------------------------- ------------------------- -------------------------
Year Class A Class B Class C Class A Class B Class C Class A Class B Class C Class A Class B Class C
- ---- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0 9,525 10,000 10,000 9,525 10,000 10,000 9,525 10,000 10,000 9,525 10,000 10,000
1 10,478 10,930 10,930 10,478 10,530 10,830+ 10,478 10,930 10,930 10,478 10,930 10,930
2 11,525 11,946 11,946 11,525 11,946 11,946 11,525 11,946 11,946
3 12,678 13,058 13,058 12,678 12,758 13,058+ 12,678 13,058 13,058
4 13,946 14,272 14,272 13,946 14,272 14,272
5 15,340 15,599 15,599 15,340 15,399 15,599+
6 16,874 17,050 17,050
7 18,562 18,636 18,636
8 20,418+ 20,369 20,369
9 22,459 22,405* 22,263
10 24,705 24,646* 24,333
</TABLE>
*This assumes that Class B Shares were converted to Class A Shares at the end of
the eighth year.
$250,000 Purchase
<TABLE>
<CAPTION>
Scenario 1 Scenario 2 Scenario 3 Scenario 4
No Redemption Redeem 1st Year Redeem 3rd Year Redeem 5th Year
----------------------------- ---------------------------- --------------------------- ---------------------------
Year Class A Class B Class C Class A Class B Class C Class A Class B Class C Class A Class B Class C
- ---- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0 243,750 250,000 250,000 243,750 250,000 250,000 243,750 250,000 250,000 243,750 250,000 250,000
1 268,125 273,250 273,250 268,125 263,250 270,750+ 268,125 273,250 273,250 268,125 273,250 273,250
2 294,938 298,662 298,662 294,938 298,662 298,662 294,938 298,662 298,662
3 324,431 326,438 326,438 324,431 318,938 326,438+ 324,431 326,438 326,438
4 356,874+ 356,797 356,797 356,874+ 356,797 356,797
5 392,562 389,979 389,979 392,562 384,979 389,979
6 431,818 426,247 426,247
7 475,000 465,888 465,888
8 522,500 509,215 509,215
9 574,750 560,137* 556,572
10 632,225 616,150* 608,333
</TABLE>
*This assumes that Class B Shares were converted to Class A Shares at the end of
the eighth year.
Assumes a hypothetical return for Class A of 10% per year, a hypothetical return
for Class B of 9.3% for years 1-8 and 10% for years 9-10, and a hypothetical
return for Class C of 9.3% per year.
Hypothetical returns vary due to the different expense structures for each Class
and do not represent actual performance.
Class A purchase subject to appropriate sales charge breakpoint (4.75% @
$10,000; 3.75% @ $100,000; 2.50% @ $250,000).
Class B purchase assessed appropriate CDSC upon redemption (4%-4%-3%-3%-2%-1% in
years 1-2-3-4-5-6).
Class C purchase assessed 1% CDSC upon redemption in year 1.
Figures marked "+" identify which class offers the greater return potential
based on investment amount and holding period
<PAGE>
APPENDIX B--RATINGS
The Global Assets Series has the ability to invest up to 15% of its net
assets in high yield, high risk fixed income securities. The table set forth
below shows asset composition, based on rating categories, of such securities
held by the Fund. Certain securities may not be rated because the rating
agencies were either not asked to provide ratings (e.g., many issuers of
privately placed bonds do not seek ratings) or because the rating agencies
declined to provide a rating for some reason, such as insufficient data. The
table below shows the percentage of the Fund's high yield, high risk securities
which are not rated. The information contained in the table was prepared based
on a dollar weighted average of the Fund's portfolio composition based on month
end data for the fiscal year ended November 30, 1995. The paragraphs following
the table contain excerpts from Moody's and S&P's rating descriptions. These
credit ratings evaluate only the safety of principal and interest and do not
consider the market value risk associated with high yield securities.
Rating Moody's Average Weighted
and/or Percentage of
S&P Portfolio
Baa/BBB 0.44%
Ba/BB 9.93%
B/B 1.74%
Not Rated/Other 0.41%
General Rating Information
Bonds
Excerpts from Moody's description of its bond ratings: Aaa--judged to be
the best quality. They carry the smallest degree of investment risk; Aa--judged
to be of high quality by all standards; A--possess favorable attributes and are
considered "upper medium" grade obligations; Baa--considered as medium grade
obligations. Interest payments and principal security appear adequate for the
present but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time; Ba--judged to have
speculative elements; their future cannot be considered as well assured. Often
the protection of interest and principal payments may be very moderate and
thereby not well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class; B--generally lack
characteristics of the desirable investment. Assurance of interest and principal
payments or of maintenance of other terms of the contract over any long period
of time may be small; Caa--are of poor standing. Such issues may be in default
or there may be present elements of danger with respect to principal or
interest; Ca--represent obligations which are speculative in a high degree. Such
issues are often in default or have other marked shortcomings; C--the lowest
rated class of bonds and issues so rated can be regarded as having extremely
poor prospects of ever attaining any real investment standing.
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
-62-
<PAGE>
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.
-63-
<PAGE>
- ---------------------------------------------------------
INTERNATIONAL EQUITY FUND
INSTITUTIONAL
GLOBAL BOND FUND INSTITUTIONAL
GLOBAL ASSETS FUND INSTITUTIONAL
- ---------------------------------------------------------
- ---------------------------------------------------------
P R O S P E C T U S
- ---------------------------------------------------------
JANUARY 31, 1996
For more information contact Delaware Group at 800-828-5052.
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
DELAWARE
GROUP
--------
<PAGE>
INTERNATIONAL EQUITY FUND INSTITUTIONAL PROSPECTUS
GLOBAL BOND FUND INSTITUTIONAL JANUARY 31, 1996
GLOBAL ASSETS FUND INSTITUTIONAL
------------------------------------------------------------------------
1818 Market Street, Philadelphia, PA 19103
For more information about the International Equity Fund Institutional Class,
the Global Bond Fund Institutional Class and the Global Assets Fund
Institutional Class call Delaware Group at 800-828-5052.
Delaware Group Global & International Funds, Inc. (the "Company") 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 the "Fund" and collectively, the "Funds"). The
International Equity Series' objective is to achieve long-term growth without
undue risk to principal. This Fund 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 Fund 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 Fund 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 Fund will invest in both
equity and fixed income securities. See Investment Objectives and Policies.
The International Equity Series offers the International Equity Fund
Institutional Class; the Global Bond Series offers the Global Bond Fund
Institutional Class; and the Global Assets Series offers the Global Assets Fund
Institutional Class (individually, the "Class" and collectively, the "Classes").
Shares of each Class are available for purchase only by certain
enumerated institutions and are offered at net asset value without the
imposition of a front-end or contingent deferred sales charge and without a
12b-1 charge. See Buying Shares.
This Prospectus relates only to the Classes and sets forth information
that you should read and consider before you invest. Please retain it for future
reference. Part B of the Company's registration statement, dated January 31,
1996, as it may be amended from time to time, contains additional information
about the Company and has been filed with the Securities and Exchange
Commission. Part B is incorporated by reference into this Prospectus and is
available, without charge, by writing to Delaware Distributors, L.P. at the
above address or by calling the above number. The Funds' financial statements
appear in their Annual Report, which will accompany any response to requests for
Part B.
The International Equity Series also offers the International Equity
Fund A Class, the International Equity Fund B Class and the International Equity
Fund C Class. The Global Bond Series also offers the Global Bond Fund A Class,
the Global Bond Fund B Class and the Global Bond Fund C Class and the Global
Assets Series also offers the Global Assets Fund A Class, the Global Assets Fund
B Class and the Global Assets Fund C Class. Shares of these classes are subject
to sales charges and other expenses, which may affect their performance. A
prospectus for these classes can be obtained by writing to Delaware
Distributors, L.P. at the above address or by calling 800-523-4640.
-1-
<PAGE>
TABLE OF CONTENTS
Cover Page Buying Shares
Synopsis Redemption and Exchange
Summary of Expenses Dividends and Distributions
Financial Highlights Taxes
Investment Objectives and Policies Calculation of Net Asset Value Per Share
Investment Strategy Management of the Company
Special Risk Considerations Appendix A--Ratings
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 COMPANY
ARE NOT FDIC OR NCUSIF INSURED, ARE NOT GUARANTEED BY ANY BANK OR ANY CREDIT
UNION, ARE NOT OBLIGATIONS OF ANY BANK OR ANY CREDIT UNION, AND INVOLVE
INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. SHARES OF THE COMPANY
ARE NOT BANK OR CREDIT UNION DEPOSITS.
-2-
<PAGE>
SYNOPSIS
Capitalization
The Company offers the International Equity Series, consisting of the
International Equity Fund A Class, the International Equity Fund B Class, the
International Equity Fund C 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, the Global Bond Fund C 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, the Global
Assets Fund C Class and the Global Assets Fund Institutional Class. The Company
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 of the A Class and the Institutional Class of shares of each
Fund, and twenty-five million shares have been allocated to each of the B Class
and C Class of shares of each Fund. See Shares under Management of the Company.
Investment Manager, Distributor and Service Agent
Delaware International Advisers Ltd. ("Delaware International" or the
"Manager") is the investment manager for each Fund and, in that capacity,
provides advice to each Fund 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 Fund's investment in U.S. securities. Delaware
Distributors, L.P. (the "Distributor") is the national distributor for the
Company 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 Company and for all of the other
mutual funds in the Delaware Group. See Management of the Company.
Purchase Price
Shares of each Class offered by this Prospectus are available at net
asset value, without a front-end or contingent deferred sales charge and are not
subject to distribution fees under a Rule 12b-1 distribution plan. See Buying
Shares.
Investment Objectives
The investment objective of the International Equity Series is to
achieve long-term growth without undue risk to principal. This Fund seeks to
achieve its objective by investing primarily in equity securities that provide
the potential for capital appreciation and income. The Fund is an international
fund. As such, at least 65% of the Fund's assets will be invested in equity
securities of issuers organized or having a majority of their assets in or
deriving a majority of their operating income in at least three different
countries outside of the United States. For further details, see Investment
Objectives and Policies.
The investment objective of the Global Bond Series is to achieve
current income consistent with preservation of principal. This Fund seeks to
achieve its objective by investing primarily in fixed income securities that may
also provide the potential for capital appreciation. The Fund is a global fund.
As such, at least 65% of the Fund's 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. For further details, see
Investment Objectives and Policies.
The investment objective of the Global Assets Series is to achieve
long-term total return. This Fund seeks to achieve its objective by investing in
securities which, in the Manager's or Sub-Adviser's opinion, will provide higher
-3-
<PAGE>
current income than a portfolio comprised exclusively of equity securities,
along with the potential for capital growth. The Fund will invest in both equity
and fixed income securities. The Fund is a global fund. As such, at least 65% of
the Fund's 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 Fund's assets may be invested in warrants.
For further details, see Investment Objectives and Policies.
Open-End Investment Company
The Company, 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 as defined under the Investment Company
Act of 1940 (the "1940 Act"). The Global Bond Series and the Global Assets
Series operate as nondiversified funds as defined under the 1940 Act. See Shares
under Management of the Company.
Investment Management Fees
Delaware International furnishes investment management services to each
Fund, subject to the supervision and direction of the Company's Board of
Directors. Under the Investment Management Agreement between each Fund and
Delaware International, the annual compensation paid to Delaware International
is equal to .75% of a Fund's average daily net assets, less a proportionate
share of all directors' fees paid to the unaffiliated directors by the Fund. The
fees paid to Delaware International are higher than the investment advisory fees
paid by most investment companies. Delaware International believes that its fees
are in line with the fees paid by other similar 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 Company on behalf of the Global Assets Series. See Management
of the Company.
Redemption and Exchange
Shares of each Class are redeemed or exchanged at the net asset value
calculated after receipt of the redemption or exchange request. See Redemption
and Exchange.
Risk Factors
Prospective investors should consider a number of factors:
1. Investing in securities of non-United States companies which are
generally denominated in foreign currencies and utilization of forward foreign
currency exchange contracts involve certain considerations comprising both risk
and opportunity not typically associated with investing in United States
companies. See Special Risk Considerations.
2. Each Fund 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.
-4-
<PAGE>
3. Each Fund may lend portfolio securities to creditworthy
institutions; the principal risk to the Fund is the risk that the borrower fails
to return the borrowed security. The Fund will require borrowers to deliver
collateral to the Fund before lending securities. See Portfolio Loan
Transactions under Investment Strategy.
4. Each Fund 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
Funds do not engage in options and futures for speculative purposes, there are
risks which result from the use of these instruments by the Funds, and an
investor should carefully review the descriptions of such in this Prospectus.
The Company is not registered as a commodity pool operator nor is the Manager
registered as a commodities trading adviser, in reliance upon various exemptive
rules. Certain options and futures may be considered to be derivative
securities. 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 Fund to increased risks. Interest rate swaps
may be considered to be derivative securities. 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 Fund. See High Yield, High Risk Securities under
Investment Strategy.
7. Each Fund 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, as amended (the "Code"), neither
Fund will be diversified under the 1940 Act. Thus, while at least 50% of a
Fund's 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 a Fund's total assets, it will not satisfy the 1940 Act requirement in this
respect, which applies that test to 75% of a Fund's assets. A nondiversified
portfolio is believed to be subject to greater risk because adverse effects on
the portfolio's security holdings may affect a larger portion of the overall
assets.
-5-
<PAGE>
SUMMARY OF EXPENSES
<TABLE>
<CAPTION>
International
Equity Fund
Shareholder Transaction Expenses Institutional Class
------------------------------------------------------------------------------------------
<S> <C>
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price)......................................... None
Maximum Sales Charge Imposed on Reinvested Dividends
(as a percentage of offering price)......................................... None
Redemption Fees............................................................. None*
Exchange Fees............................................................... None**
Annual Operating Expenses International Equity Fund
(as a percentage of average daily net assets) Institutional Class
------------------------------------------------------------------------------------------
Management Fees (after voluntary waiver).................................... 0.53%***
12b-1 Fees.................................................................. None
Other Operating Expenses.................................................... 1.02%***
Total Operating Expenses (after voluntary waiver)...................... 1.55%***
=====
Global Bond Fund
Shareholder Transaction Expenses Institutional Class
------------------------------------------------------------------------------------------
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price)......................................... None
Maximum Sales Charge Imposed on Reinvested Dividends
(as a percentage of offering price)......................................... None
Redemption Fees............................................................. None*
Exchange Fees............................................................... None**
Annual Operating Expenses Global Bond Fund
(as a percentage of average daily net assets) Institutional Class
------------------------------------------------------------------------------------------
Management Fees (after voluntary waiver).................................... 0.00%****
12b-1 Fees.................................................................. None
Other Operating Expenses (after reimbursements)............................. 0.95%****
----
Total Operating Expenses (after voluntary waiver and reimbursements)... 0.95%****
=====
</TABLE>
-6-
<PAGE>
<TABLE>
<CAPTION>
Global Assets Fund
Shareholder Transaction Expenses Institutional Class
------------------------------------------------------------------------------------------
<S> <C>
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price)......................................... None
Maximum Sales Charge Imposed on Reinvested Dividends
(as a percentage of offering price)......................................... None
Redemption Fees............................................................. None*
Exchange Fees............................................................... None**
Annual Operating Expenses Global Assets Fund
(as a percentage of average daily net assets) Institutional Class
------------------------------------------------------------------------------------------
Management Fees (after voluntary waiver).................................... 0.00%****
12b-1 Fees.................................................................. None
Other Operating Expenses (after reimbursements)............................. 0.95%****
----
Total Operating Expenses (after voluntary waiver)...................... 0.95%****
=====
</TABLE>
The purpose of these tables is to assist the investor in understanding
the various costs and expenses that an investor in each Class will bear directly
or indirectly.
*CoreStates Bank, N.A. currently charges $7.50 per redemption for
redemptions payable by wire.
**Exchanges are subject to the requirements of each fund and a
front-end sales charge may apply.
***Delaware International has elected voluntarily to waive that
portion, if any, of the annual management fees payable by the International
Equity Series and to reimburse the Fund's expenses to the extent necessary to
ensure that the Total Operating Expenses (after voluntary waiver and
reimbursements) of the International Equity Fund Institutional Class do not
exceed 1.55% through May 31, 1996. Total Operating Expenses assume that the
voluntary waiver has been in effect. Total Operating Expenses (as a percentage
of average daily net assets) for the fiscal year ended November 30, 1995 were
1.77% for the International Equity Fund Institutional Class, reflecting
Management Fees of 0.74%. Total Operating Expenses for the International Equity
Series will be lowered to the amount noted in the previous sentence as a result
of the voluntary waiver.
****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 and to reimburse a Fund's expenses to the extent
necessary to ensure that the Total Operating Expenses (after voluntary waiver)
of the Global Bond Fund Institutional Class and the Global Assets Fund
Institutional Class do not exceed 0.95% through May 31, 1996. Total Operating
Expenses assume that the voluntary waiver has been in effect. Absent the
voluntary fee waiver and reimbursement, Total Operating Expenses (as a
percentage of average daily net assets) for the period December 27, 1994 (date
of initial public offering) through November 30, 1995 would have been 7.25% for
the Global Assets Fund Institutional Class and 12.04% for the Global Bond Fund
Institutional Class, reflecting Management Fees of 0.56% for the Global Assets
Fund Institutional Class and 0.40% for the Global Bond Fund Institutional Class.
-7-
<PAGE>
See International Equity Fund A Class, International Equity Fund B
Class, International Equity Fund C Class, Global Bond Fund A Class, Global Bond
Fund B Class, Global Bond Fund C Class, Global Assets Fund A Class, Global
Assets Fund B Class and Global Assets Fund C Class for expense information about
those classes.
The following example illustrates the expenses that an investor would
pay on a $1,000 investment over various time periods, assuming (1) a 5% annual
rate of return and (2) redemption at the end of each time period. As noted in
the table above, the Fund charges no redemption fees.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
International Equity 1 year 3 years 5 years 10 years
------ ------- ------- --------
Fund Institutional Class $16 $49 $84 $185
Global Bond Fund 1 year 3 years 5 years 10 years
------ ------- ------- --------
Institutional Class $10 $30 $53 $117
Global Assets Fund 1 year 3 years 5 years 10 years
------ ------- ------- --------
Institutional Class $10 $30 $53 $117
</TABLE>
This example should not be considered a representation of past or future
expenses or performance. Actual expenses may be greater or less than those
shown.
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
The following financial highlights are derived from the financial statements of
the International Equity Series, Global Bond Series and Global Assets Series of
the Delaware Group Global & International Funds, Inc. and have been audited by
Ernst & Young LLP, independent auditors. The data should be read in conjunction
with the financial statements, related notes, and the report of Ernst & Young
LLP covering such financial information and highlights, all of which are
incorporated by reference into Part B. Further information about each Fund's
performance is contained in its Annual Report to shareholders. A copy of the
Funds' Annual Report (including the report of Ernst & Young LLP) may be obtained
from the Company upon request at no charge.
- --------------------------------------------------------------------------------
-8-
<PAGE>
<TABLE>
<CAPTION>
International Equity Series
Institutional Class Shares
----------------------------------------------------------------------
Period Period
11/9/92(1) Year 10/31/91(2)(3)
Year Ended through Ended through
11/30/95 11/30/94 11/30/93 11/30/92 11/30/92(2) 11/30/91
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period...................... $11.970 $11.290 $9.590 $9.520 $9.650 $10.000
Income From Investment Operations
- ---------------------------------
Net Investment Income..................................... 0.323 0.166 0.594 0.021 0.162 (0.004)
Net Gains (Losses) on Securities
(both realized and unrealized).................. 0.637 0.899 1.581 0.049 (0.172) (0.346)
----- ----- ----- ----- ------- -------
Total From Investment Operations...................... 0.960 1.065 2.175 0.070 (0.010) (0.350)
----- ----- ----- ----- ------- -------
Less Distributions
- ------------------
Dividends From Net Investment Income...................... (0.220) (0.245) (0.475) none (0.050) none
Distributions From Capital Gains.......................... (0.470) (0.140) none none none none
Returns of Capital........................................ none none none none none none
---- ---- ---- ---- ---- ----
Total Distributions................................... (0.690) (0.385) (0.475) none (0.050) none
------- ------- ------- ---- ------- ----
Net Asset Value, End of Period............................ $12.240 $11.970 $11.290 $9.590 $9.590 $9.650
======= ======= ======= ====== ====== ======
- ----------------------------------------------------------
Total Return ........................................... 8.46% 9.47%(4) 23.52%(4) (0.15%)(4) (0.15%)(4)(5) (3.50%)(4)(5)
- ------------
- --------------------------------------------------------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period (000's omitted)................. $11,660 $7,613 $3,959 $1,120 $4,604 $723
Ratio of Expenses to Average Daily Net Assets............. 1.77% 1.26% 0.95% 0.95% 1.25% (3)
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitation........................... 1.77% 1.52% 1.86% 5.37% 5.67% ---
Ratio of Net Investment Income to Average Daily Net Assets 2.87% 1.52% 4.21% 2.74% 2.44% (3)
Ratio of Net Investment Income to Average Daily Net Assets
Prior to Expense Limitation........................... 2.87% 1.26% 3.30% (1.70%) 2.00% ---
Portfolio Turnover Rate................................... 21% 27% 24% 12% 12% (3)
</TABLE>
- ------------
(1) The per share data are derived from the International Equity Fund
Institutional Class (formerly known as International Equity Fund
(Institutional) class) which commenced operations on November 9, 1992.
Ratios for the period November 9, 1992 through November 30, 1992 have been
annualized and the total return reflects the performance of the
International Equity Fund A Class from December 1, 1991 to November 8, 1992
and the performance of the International Equity Fund Institutional Class
from November 9, 1992 to November 30, 1992.
(2) The per share data for the International Equity Fund Institutional Class
are derived from the International Equity Fund A Class (formerly known as
International Equity Fund class) and reflect the impact of Rule 12b-1
distribution expenses paid by the International Equity Fund A Class.
International Equity Fund Institutional Class shares are not subject to
Rule 12b-1 distribution expenses and, beginning November 9, 1992, the per
share data do not reflect the deduction of such expenses. Total return has
been annualized.
(3) Date of initial sale of the International Equity Fund A Class. The ratios
of expenses and net investment income to average daily net assets and
portfolio turnover have been omitted as management believes such ratios for
this relatively short period are not meaningful.
(4) Total return reflects the voluntary fee waiver described under Management
of the Company.
(5) Does not reflect maximum front-end sales charge, currently 5.75%, nor the
1% Limited CDSC that would apply in the event of certain redemptions within
12 months of purchase.
<PAGE>
GLOB-CHT
Global Bond Series
Institutional Class Shares
--------------------------
Period
12/27/94(1)
through
11/30/95
Net Asset Value, Beginning of Period...................... $10.000
Income From Investment Operations
- ---------------------------------
Net Investment Income..................................... 0.782
Net Gains (Losses) on Securities
(both realized and unrealized).................. 1.088
-----
Total From Investment Operations...................... 1.870
-----
Less Distributions
- ------------------
Dividends From Net Investment Income...................... (0.600)
Distributions From Capital Gains.......................... none
Returns of Capital........................................ none
Total Distributions................................... (0.600)
-------
Net Asset Value, End of Period............................ $11.270
=======
- ----------------------------------------------------------
Total Return(2)........................................... 19.21%(2)
- ----------------------------------------------------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period (000's omitted)................. $897
Ratio of Expenses to Average Daily Net Assets............. 0.95%
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitation........................... 12.04%
Ratio of Net Investment Income to Average Daily Net Assets 8.00%
Ratio of Net Investment Income to Average Daily Net Assets
Prior to Expense Limitation........................... (3.09%)
Portfolio Turnover Rate................................... 98%
- ------------
(1) Date of initial public offering; ratios have been annualized but total
return has not been annualized.
(2) Total return reflects the voluntary fee waiver described under Management
of the Company.
<PAGE>
Global Assets Series
Institutional Class Shares
--------------------------
Period
12/27/94(1)
through
11/30/95
Net Asset Value, Beginning of Period...................... $10.000
Income From Investment Operations
- ---------------------------------
Net Investment Income..................................... 0.473
Net Gains (Losses) on Securities
(both realized and unrealized).................. 1.697
-----
Total From Investment Operations...................... 2.170
-----
Less Distributions
- ------------------
Dividends From Net Investment Income...................... (0.240)
Distributions From Capital Gains.......................... none
Returns of Capital........................................ none
-------
Total Distributions................................... (0.240)
-------
Net Asset Value, End of Period............................ $11.930
=======
- ----------------------------------------------------------
Total Return(2)........................................... 21.88%(2)
- ----------------------------------------------------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period (000's omitted)................. $2,191
Ratio of Expenses to Average Daily Net Assets............. 0.95%
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitation........................... 7.25%
Ratio of Net Investment Income to Average Daily Net Assets 5.05%
Ratio of Net Investment Income to Average Daily Net Assets
Prior to Expense Limitation........................... (1.25%)
Portfolio Turnover Rate................................... 57%
- ------------
(1) Date of initial public offering; ratios have been annualized but total
return has not been annualized.
(2) Total return reflects the voluntary fee waiver described under Management
of the Company.
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
The objective of the International Equity Series is to achieve
long-term growth without undue risk to principal. The Fund seeks to achieve this
objective by investing primarily in securities that provide the potential for
capital appreciation and income. The Fund is an international fund. Under normal
circumstances, at least 65% of the Fund's 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 Fund seeks to
achieve this objective by investing primarily in fixed income securities that
may also provide the potential for capital appreciation. The Fund is a global
fund. Under normal circumstances, at least 65% of the Fund's assets will be
invested in the fixed income securities of issuers organized or having a
majority of their assets in or deriving a majority of their operating income in
at least three different countries, one of which may be the United States.
The objective of the Global Assets Series is to achieve long-term
total return for investors. The Fund 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 Fund is a global
fund. Under normal circumstances, at least 65% of the Fund's 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 Fund 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 Fund 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 Fund may also invest in
sponsored or unsponsored American Depository Receipts or European Depository
Receipts.
-9-
<PAGE>
While the Fund may purchase securities in any foreign country,
developed and underdeveloped, or emerging market countries, it is currently
anticipated that the countries in which the Fund 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
Fund 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 Fund 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 Fund. See Rule 144A
Securities. The Fund may invest no more than 10% of the value of its net assets
in illiquid securities. The Fund will not concentrate its investments in any
particular industry, which means that it will not invest 25% or more of its
total assets in any one industry.
For temporary defensive purposes, the Fund 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 Ratings Group ("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 Fund may enter the global
fixed income markets when the Manager believes that the global equity markets
are excessively volatile or overvalued so that the Fund's objective cannot be
achieved in such markets. In addition, the Fund 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 Fund may also invest in the securities listed
for defensive investing pending investment of proceeds from new sales of Fund
shares and to maintain sufficient cash to meet redemption requests.
Global Bond Series--The Fund 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 Fund 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 Fund's 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.
-10-
<PAGE>
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 Fund 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 Fund 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 Fund 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 Fund 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 Fund may find opportunities to pursue its
objective outside of the fixed income markets, but in no event will such
investments exceed 5% of the Fund's net assets.
The Fund may also invest in sponsored or unsponsored American
Depository Receipts or European Depository Receipts. While the Fund 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 Fund 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 Fund 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 Fund may invest in restricted securities, including Rule 144A
Securities. See Rule 144A Securities. The Fund may invest no more than 10% of
the value of its net assets in illiquid securities. The Fund 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 Fund will attempt to achieve its objective
by investing in a broad range of equity and fixed income securities. In
selecting securities investments for the Fund, the Manager will consider an
issuer's competitive position, cost structure and liquidity. Equity securities
-11-
<PAGE>
in which the Fund 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 Fund may invest, the Manager
will use a dividend discount analysis and a purchasing power parity approach.
Generally, fixed income securities in which the Fund 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 Fund may also invest up to 15% of its
net assets in high yield, high risk U.S. fixed income securities. These
securities are rated lower than BBB by S&P and Baa by Moody's or, if unrated,
are considered by the Manager or Sub-Adviser to be of equivalent quality. The
Fund 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 Fund 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 Fund 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 Fund's 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 Fund may, at any given time, be fully invested in either the
equity or fixed income markets, depending upon investment opportunities
available in each.
The Fund may also invest in zero coupon bonds and in the debt
securities of supranational entities denominated in any currency. See Global
Bond Series.
The Fund may also invest in sponsored or unsponsored American
Depository Receipts or European Depository Receipts. While the Fund 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 Fund 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 Fund may make in other
-12-
<PAGE>
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 Fund may invest in restricted securities, including Rule 144A
Securities. See Rule 144A Securities. The Fund may invest no more than 10% of
the value of its net assets in illiquid securities. The Fund 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 opinions 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
Fund, there can be no assurance that diversification will protect the Fund from
widespread bond defaults brought about by a sustained economic downturn.
Medium- and low-grade bonds held by the Fund 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 Fund's
net asset value per share.
Foreign Currency Transactions
Although the Company 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 Fund 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 Fund 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
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parties, at a price set at the time of the contract. The Funds will convert
currency on a spot basis from time to time, and investors should be aware of the
costs of currency conversion.
A Fund may enter into forward contracts to "lock in" the price of a
security it has agreed to purchase or sell, in terms of U.S. dollars or other
currencies in which the transaction will be consummated. By entering into a
forward contract for the purchase or sale, for a fixed amount of U.S. dollars or
foreign currency, of the amount of foreign currency involved in the underlying
security transaction, a Fund 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, a Fund 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 Fund's securities
denominated in such foreign currency.
A Fund will not enter into forward contracts or maintain a net
exposure to such contracts where the consummation of the contracts would
obligate the Fund to deliver an amount of foreign currency in excess of the
value of the Fund's securities or other assets denominated in that currency.
At the maturity of a forward contract, a Fund 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. A Fund may realize a gain or loss from currency transactions.
A Fund 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 Fund and against increases in the U.S. dollar cost of
such securities to be acquired. Call options on foreign currency written by a
Fund will be covered, which means that the Fund will own the underlying foreign
currency. With respect to put options on foreign currency written by a Fund, the
Fund 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 Fund will be required to pay upon exercise of
the put. See Special Risk Considerations.
Repurchase Agreements
Each Fund also may use repurchase agreements that are at least 100%
collateralized by securities in which the Fund can invest directly. Repurchase
agreements help a Fund to invest cash on a temporary basis. A Fund may invest
cash balances in joint repurchase agreements with other Delaware Group funds.
Under a repurchase agreement, a Fund 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 Fund could
experience delays in liquidating the securities. To minimize this possibility,
the Manager, pursuant to direction from the Board of Directors of the Company,
considers the creditworthiness of banks and dealers when entering into
repurchase agreements.
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Portfolio Loan Transactions
Each Fund 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 Fund would be exposed on a loan transaction
is the risk that the borrower would go bankrupt at a time when the value of the
security goes up. Therefore, a Fund 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 Fund may borrow money as a temporary measure for extraordinary
purposes or to facilitate redemptions. A Fund will not borrow money in excess of
one-third of the value of its net assets. A Fund 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 Fund's 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 Fund 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 Fund 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 Fund 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 Fund's 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
Fund's holdings of illiquid securities exceed a Fund's 10% limit on investment
in such securities, the Manager will determine what action to take to ensure
that the Fund continues to adhere to such limitation.
Options
The Manager may employ options techniques in an attempt to protect
arppreciation attained and to take advantage of the liquidity available in the
options market. Each Fund may purchase call options on foreign or U.S.
securities and indices and enter into related closing transactions. A Fund 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
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in the price of securities it ultimately wishes to buy or take advantage of a
rise in a particular index. A Fund 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 Fund
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 Fund offset put options or call
options prior to exercise or expiration. If a Fund 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 Fund may use both Exchange-traded and over-the-counter options.
Certain over-the-counter options may be illiquid. A Fund 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 Fund is to protect the Fund against the fluctuations in interest or exchange
rates which otherwise might adversely affect the value of the Fund's portfolio
securities or adversely affect the prices of securities which the Fund intends
to purchase at a later date without actually buying or selling such securities.
Each Fund 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 Fund 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 Fund 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 Fund 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 Fund 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 Fund enters into a futures transaction, it must
deliver to the futures commission merchant selected by the Fund 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 Fund to, or drawn by the Fund 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.
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Interest Rate Swaps
In order to attempt to protect the Global Bond Series' investments
from interest rate fluctuations, the Fund may engage in interest rate swaps. The
Fund intends to use interest rate swaps as a hedge and not as a speculative
investment. Interest rate swaps involve the exchange by the Fund 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 Fund 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 Fund 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 Fund 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 Fund 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 Fund's investments, the Manager and the Fund
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 Fund's 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 Fund enters into an interest rate swap on
other than a net basis, the Fund would maintain a segregated account in the full
amount accrued on a daily basis of the Fund's obligations with respect to the
swap.
* * *
Each Fund's investment objective, the Company'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 that Fund's outstanding voting securities. A "majority vote of the
outstanding voting securities" is the vote by the holders of the lesser of a)
67% or more of a Fund's voting securities present in person or represented by
proxy if the holders of more than 50% of the outstanding voting securities of
such Fund 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 Funds which may not be changed without a majority
shareholder vote. A brief discussion of those factors that materially affected
each Fund's performance during its most recently completed fiscal year appears
in the Fund's Annual Report.
The remaining investment policies are not fundamental and may be
changed by the Board of Directors of the Company 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 Fund,
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nor can there be any assurance that the Fund's investment objective will be
attained.
Each Fund 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
Fund 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 Fund 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 Fund 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 Fund 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
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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 Fund plus
any transaction costs will reduce any benefit realized by the Fund upon exercise
of the option.
To the extent that interest or exchange rates or securities prices
move in an unexpected direction, a Fund may not achieve the anticipated benefits
of investing in futures contracts and options thereon, or may realize a loss. To
the extent that the Fund 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
Fund 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 Fund 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 a Fund's position, the Fund may forfeit the entire amount of the
premium plus related transaction costs.
With respect to forward foreign currency contracts, the precise
matching of forward contract amounts and the value of the securities involved is
generally not possible since the future value of such securities in foreign
currencies will change as a consequence of market movements in the value of
those securities between the date the forward contract is entered into and the
date it matures. The projection of short-term currency strategy is highly
uncertain.
It is impossible to forecast the market value of portfolio securities
at the expiration of the contract. Accordingly, it may be necessary for a Fund
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 Fund 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 Fund 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 Fund has qualified as a regulated
investment company under the Code. Accordingly, during periods when a Fund
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
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performance of the Fund 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 Fund's risk of loss consists
of the net amount of interest payments that the Fund 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 Code, neither will be diversified under the 1940 Act. Thus, while at
least 50% of each such Fund's 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 Fund's total assets, it will not satisfy the 1940 Act
requirement in this respect, which applies that test to 75% of the Fund's
assets. A nondiversified portfolio is believed to be subject to greater risk
because adverse effects on the portfolio's security holdings may affect a larger
portion of the overall assets.
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BUYING SHARES
The Distributor serves as the national distributor for the Company.
Shares of each Class may be purchased directly by contacting the Company or its
agent or through authorized investment dealers. All purchases of shares of each
Class are made at net asset value. There is no front-end or contingent deferred
sales charge.
Investment instructions given on behalf of participants in an
employer-sponsored retirement plan are made in accordance with directions
provided by the employer. Employees considering purchasing shares of a Class as
part of their retirement program should contact their employer for details.
Shares of each Class are available for purchase only by: (a)
retirement plans introduced by persons not associated with brokers or dealers
that are primarily engaged in the retail securities business and rollover
individual retirement accounts from such plans; (b) tax-exempt employee benefit
plans of DMC or its affiliates and securities dealer firms with a selling
agreement with the Distributor; (c) institutional advisory accounts of DMC or
its affiliates and those having client relationships with Delaware Investment
Advisers, a division of DMC or its affiliates and their corporate sponsors, as
well as subsidiaries and related employee benefit plans and rollover individual
retirement accounts from such institutional advisory accounts; (d) banks, trust
companies and similar financial institutions investing for their own account or
for the account of their trust customers for whom such financial institution is
exercising investment discretion in purchasing shares of a Class; and (e)
registered investment advisers investing on behalf of clients that consist
solely of institutions and high net- worth individuals having at least
$1,000,000 entrusted to the adviser for investment purposes, but only if the
adviser is not affiliated or associated with a broker or dealer and derives
compensation for its services exclusively from its clients for such advisory
services.
International Equity Fund A Class, International Equity Fund B Class,
International Equity Fund C Class, Global Bond Fund A Class, Global Bond Fund B
Class, Global Bond Fund C Class, Global Assets Fund A Class, Global Assets Fund
B Class and Global Assets Fund C Class
In addition to offering the International Equity Fund Institutional
Class, the Global Bond Fund Institutional Class and the Global Assets Fund
Institutional Class of shares, the respective Funds also offer the International
Equity Fund A Class, the International Equity Fund B Class and the International
Equity Fund C Class, the Global Bond Fund A Class, the Global Bond Fund B Class
and the Global Bond Fund C Class, and the Global Assets Fund A Class, the Global
Assets Fund B Class and the Global Assets Fund C Class, which are described in a
separate prospectus relating only to those classes. Shares of such classes may
be purchased through authorized investment dealers or directly by contacting the
Company or its agent. The International Equity Fund A Class, the Global Bond
Fund A Class and the Global Assets Fund A Class carry a front-end sales charge
and have annual 12b-1 expenses equal to a maximum of .30%. The maximum front-end
sales charge as a percentage of the offering price of the International Equity
Fund A Class, the Global Bond Fund A Class and the Global Assets Fund A Class is
4.75% and is reduced on certain transactions of $100,000 or more. The
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International Equity Fund B Class, International Equity Fund C Class, Global
Bond Fund B Class, Global Bond Fund C Class, Global Assets Fund B Class and
Global Assets Fund C Class have no front-end sales charge, but are subject to
annual 12b-1 expenses equal to a maximum of 1%. Shares of the International
Equity Fund B Class, International Equity Fund C Class, Global Bond Fund B
Class, Global Bond Fund C Class, Global Assets Fund B Class, Global Assets Fund
C Class and certain shares of the International Equity Fund A Class, Global Bond
Fund A Class and Global Assets Fund A Class may be subject to a contingent
deferred sales charge upon redemption. To obtain a prospectus relating to those
classes, contact the Distributor by writing to the address or by calling the
phone number listed on the cover of this Prospectus.
HOW TO BUY SHARES
The Company makes it easy to invest by mail, by wire, by exchange and
by arrangement with your investment dealer. In all instances, investors must
qualify to purchase shares of each Class.
Investing Directly by Mail
1. Initial Purchases--An Investment Application or, in the case of a retirement
plan account, an appropriate retirement plan application, must be completed,
signed and sent with a check payable to the specific Class selected (for
example, if you want to purchase shares of the Institutional Class of the
International Equity Series, make the check payable to the International Equity
Fund Institutional Class) to 1818 Market Street, Philadelphia, PA 19103.
2. Subsequent Purchases--Additional purchases may be made at any time by mailing
a check payable to the specific Class selected. Your check should be identified
with your name(s) and account number.
Investing Directly by Wire
You may purchase shares by requesting your bank to transmit funds by
wire to CoreStates Bank, N.A., ABA #031000011, account number 0114-2596 (include
your name(s) and your account number for the Class in which you are investing).
1. Initial Purchases--Before you invest, telephone the Company's Client Services
Department to get an account number at 800-828-5052. If you do not call first,
it may delay processing your investment. In addition, you must promptly send
your Investment Application or, in the case of a retirement plan account, an
appropriate retirement plan application, to the Class selected by you, to 1818
Market Street, Philadelphia, PA 19103.
2. Subsequent Purchases--You may make additional investments anytime by wiring
funds to CoreStates Bank, N.A., as described above. You must advise your Client
Services Representative by telephone at 800-828-5052 prior to sending your wire.
Investing by Exchange
If you have an investment in another mutual fund in the Delaware Group
and you qualify to purchase shares of a Class, you may write and authorize an
exchange of part or all of your investment into the Class. However, shares of
the International Equity Fund B Class, the International Equity Fund C Class,
the Global Bond Fund B Class, the Global Bond C Class, the Global Assets Fund B
Class and the Global Assets Fund C Class and the Class B Shares and Class C
Shares of the other funds in the Delaware Group offering such a class of shares
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may not be exchanged into the Classes. If you wish to open an account by
exchange, call your Client Services Representative at 800-828-5052 for more
information.
Investing through Your Investment Dealer
You can make a purchase of Class shares through most investment
dealers who, as part of the service they provide, must promptly transmit orders
to the Company. They may charge for this service.
Purchase Price and Effective Date
The purchase price (net asset value) of the shares of each Fund is
determined as of the close of regular trading on the New York Stock Exchange
(ordinarily, 4 p.m., Eastern time) on days when the Exchange is open.
The effective date of a purchase made through an investment dealer is
the date the order is received by the Company. The effective date of a direct
purchase is the day your wire, electronic transfer or check is received, unless
it is received after the time the share price is determined, as noted above.
Purchase orders received after such time will be effective the next business
day.
The Conditions of Your Purchase
The Company reserves the right to reject any purchase or exchange. If
a purchase is canceled because your check is returned unpaid, you are
responsible for any loss incurred. The Company 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 Company
reserves the right to reject purchases by third-party checks or checks that are
not drawn on a domestic branch of a United States financial institution. If a
check drawn on a foreign financial institution is accepted, you may be subject
to additional bank charges for clearance and currency conversion.
The Company also reserves the right, upon 60 days' written notice, to
involuntarily redeem accounts that remain under $250 as a result of redemptions.
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REDEMPTION AND EXCHANGE
Redemption and exchange requests made on behalf of participants in an
employer-sponsored retirement plan are made in accordance with directions
provided by the employer. Employees should therefore contact their employer for
details.
Your shares will be redeemed or exchanged at a price based on the net
asset value next determined after we receive your request in good order.
Redemption or exchange requests received in good order after the time the
offering price of shares is determined, as noted above, will be processed on the
next business day. See Purchase Price and Effective Date under Buying Shares.
Except as otherwise noted below, for a redemption request to be in "good order,"
you must provide your Class account number, account registration, and the total
number of shares or dollar amount of the transaction. For exchange requests, 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 also request a redemption
or an exchange by calling the Company at 800-828-5052.
The Company will honor written redemption requests of shareholders who
recently purchased shares by check, but will not mail the proceeds until it is
reasonably satisfied that the purchase check has cleared, which may take up to
15 days from the purchase date. The Company will not honor telephone redemptions
for 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 Company reserves the right to
reject a written or telephone redemption request or delay payment of redemption
proceeds if there has been a recent change to the shareholder's address of
record.
Shares of a Class may be exchanged into any other Delaware Group
mutual fund, provided: (1) the investment satisfies the eligibility and other
requirements set forth in the prospectus of the fund being acquired, including
the payment of any applicable front-end sales charge; and (2) the shares of the
fund being acquired are in a state where that fund is registered. If exchanges
are made into other shares that are eligible for purchase only by those
permitted to purchase shares of the Classes, such shares will be exchanged at
net asset value. Shares of a Class may not be exchanged into the Class B Shares
or Class C Shares of the funds in the Delaware Group. The Company may suspend,
terminate or amend the terms of the exchange privilege upon 60 days' written
notice to shareholders.
Various redemption and exchange methods are outlined below. No fee is
charged by the Company or the Distributor for redeeming or exchanging your
shares. You may also have your investment dealer arrange to have your shares
redeemed or exchanged. Your investment dealer may charge for this service.
All authorizations given by shareholders, including selection of any
of the features described below, shall continue in effect until such time as a
written revocation or modification has been received by the Company or its
agent.
All exchanges involve a purchase of shares of the fund into which the
exchange is made. As with any purchase, an investor should obtain and carefully
read that fund's prospectus before buying shares in an exchange. The prospectus
contains more complete information about the fund, including charges and
expenses.
Written Redemption and Exchange
You can write to the Company at 1818 Market Street, Philadelphia, PA
19103 to redeem some or all of your Class shares or to request an exchange of
any or all your Class shares into another mutual fund in the Delaware Group,
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subject to the same conditions and limitations as other exchanges noted above.
The request must be signed by all owners of the account or your investment
dealer of record.
For redemptions of more than $50,000, or when the proceeds are not
sent to the shareholder(s) at the address of record, the Company requires a
signature by all owners of the account and may require a signature guarantee.
Each signature guarantee must be supplied by an eligible guarantor institution.
The Company reserves the right to reject a signature guarantee supplied by an
eligible institution based on its creditworthiness. The Company may require
further documentation from corporations, executors, retirement plans,
administrators, trustees or guardians.
The redemption request is effective at the net asset value next
determined after it is received in good order. Payment is normally mailed the
next business day, but no later than seven days, after receipt of your
redemption request. The Company issues certificates for Class shares only if you
submit a specific request. If your shares are in certificate form, the
certificate must accompany your request and also be in good order.
Shareholders also may submit their written request for redemption or
exchange by facsimile transmission at the following number: 215-255-8864.
Telephone Redemption and Exchange
To get the added convenience of the telephone redemption and exchange
methods, you must have the Transfer Agent hold your shares (without charge) for
you. If you choose to have your shares in certificate form, you may only redeem
or exchange by written request and you must return your certificates.
The Telephone Redemption - Check to Your Address of Record service and
the Telephone Exchange service, both of which are described below, are
automatically provided unless you notify the Company in writing that you do not
wish to have such service available with respect to your account. The Company
reserves the right to modify, terminate or suspend these procedures upon 60
days' written notice to shareholders. It may be difficult to reach the Company
by telephone during periods when market or economic conditions lead to an
unusually large volume of telephone requests.
Neither the Company nor the Transfer Agent is responsible for any
shareholder loss incurred in acting upon written or telephone instructions for
redemption or exchange of Fund shares which are reasonably believed to be
genuine. With respect to such telephone transactions, the Company 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 Company or the Transfer Agent may be liable for any losses due to
unauthorized or fraudulent transactions. A written confirmation will be provided
for all purchase, exchange and redemption transactions initiated by telephone.
By exchanging shares by telephone, you are acknowledging prior receipt of a
prospectus for the fund into which your shares are being exchanged.
Telephone Redemption-Check to Your Address of Record
You or your investment dealer of record can have redemption proceeds
of $50,000 or less mailed to you at your address of record. Checks will be
payable to the shareholder(s) of record. Payment is normally mailed the next
business day, but no later than seven days, after receipt of the request.
Telephone Redemption-Proceeds to Your Bank
Redemption proceeds of $1,000 or more can be transferred to your
predesignated bank account by wire or by check. You should authorize this
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service when you open your account. If you change your predesignated bank
account, the Company requires a written authorization and may require that you
have your signature guaranteed. For your protection, your authorization must be
on file. If you request a wire, your funds will normally be sent the next
business day. CoreStates Bank, N.A.'s fee (currently $7.50) will be deducted
from your redemption. If you ask for a check, it will normally be mailed the
next business day, but no later than seven days, after receipt of your request
to your predesignated bank account. There are no fees for this redemption
method, but the mail time may delay getting funds into your bank account. Simply
call your Client Services Representative prior to the time the net asset value
is determined, as noted above.
Telephone Exchange
You or your investment dealer of record can exchange shares into any
fund in the Delaware Group under the same registration. As with the written
exchange service, telephone exchanges are subject to the same conditions and
limitations as other exchanges noted above. Telephone exchanges may be subject
to limitations as to amounts or frequency.
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DIVIDENDS AND DISTRIBUTIONS
The Company declares a dividend on each Fund to all shareholders of
record of the Classes of that Fund 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 Series and the Global Assets Series will
normally declare and make payments from net investment income on a quarterly
basis. The Global Bond Series will normally declare and make payments from net
investment income on a monthly basis. Payments from net realized securities
profits of a Fund, if any, will be distributed annually in the quarter following
the close of the fiscal year.
Each class of each Fund will share proportionately in the investment
income and expenses of that Fund, except that the Classes will not incur any
distribution fee under the Company's 12b-1 Plans which apply to the
International Equity Fund A Class, B Class and C Class, the Global Bond Fund A
Class, B Class and C Class, and the Global Assets Fund A Class, B Class and C
Class.
Both dividends and distributions, if any, are automatically reinvested
in your account at net asset value.
In addition to the dividends from net investment income and
distributions from realized securities profits that a Fund may declare and make,
as noted above, in order to satisfy certain distribution requirements of the Tax
Reform Act of 1986, a Fund 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 Funds and received by
shareholders on the earlier of the date paid or December 31 of the prior year.
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TAXES
Each Fund 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 Fund 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 Fund intends to distribute substantially all of its net
investment income and net capital gains, if any. Dividends from net investment
income or net short-term capital gains will be taxable to you as ordinary
income, even though received in additional shares. It is expected that either
none or only a nominal portion of a Fund's dividends will be eligible for the
dividends-received deduction for corporations.
Distributions paid by a Fund from long-term capital gains, received in
additional shares, are taxable to those investors who are subject to income
taxes as long-term capital gains, regardless of the length of time an investor
has owned shares in the Fund. A Fund does not seek to realize any particular
amount of capital gains during a year; rather, realized gains are a byproduct of
Fund 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 Fund 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 in such a month, 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 Fund and received by the shareholder on December 31 of the year
declared.
The sale of shares of a Fund 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 Fund's 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.
A Fund 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 Fund at the end of its fiscal year are invested in securities of foreign
corporations, the Fund may elect to pass-through to its shareholders a pro-rata
share of foreign income taxes paid by the Fund. 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
Fund), 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 Fund at the end of each calendar year regarding the availability of any
credits on and the amount of foreign source income to be included in their
income tax returns.
In addition to federal taxes, shareholders may be subject to state and
local taxes on distributions. Distributions of interest income and capital gains
realized from certain types of U.S. Government securities may be exempt from
state personal income taxes. Shares of a Fund are exempt from Pennsylvania
county personal property taxes.
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Each year, the Company will mail you information on the tax status of
a Fund's 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 Fund.
The Company 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. Investors should consult their own tax advisers concerning the federal,
state, local or foreign tax consequences of an investment in the Fund.
See Accounting and Tax Issues in Part B for additional information on
tax matters relating to the Funds and their shareholders.
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CALCULATION OF NET ASSET VALUE PER SHARE
The purchase and redemption price of Class shares is the net asset
value ("NAV") per share of the Class next computed after the order is received.
The NAV is computed as of the close of regular trading on the New York Stock
Exchange, (ordinarily, 4 p.m., Eastern time) on days when the Exchange is open.
The NAV per share for each Fund is computed by adding the value of all
securities and other assets in a Fund's portfolio, deducting any liabilities of
that Fund (expenses and fees are accrued daily) and dividing by the number of
that Fund's 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 Company'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 Company's Board of Directors.
A Fund's 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
Fund may be significantly affected by such trading on days when shareholders
have no access to the Funds.
Each share of a Fund's four classes will bear, pro-rata, all of the
common expenses of that Fund. The net asset values of all outstanding shares of
each class of a Fund will be computed on a pro-rata basis for each outstanding
share based on the proportionate participation in that Fund represented by the
value of shares of that class. All income earned and expenses incurred by a Fund
will be borne on a pro-rata basis by each outstanding share of a class, based on
each class' percentage in the Fund represented by the value of shares of such
classes, except that the Classes will not incur any of the expenses under the
respective Fund's 12b-1 Plans and the International Equity Fund A, B and C
Classes, the Global Bond Fund A, B and C Classes, and the Global Assets Fund A,
B and C Classes alone will bear the 12b-1 Plan fees payable under their
respective Plans. Due to the specific distribution expenses and other costs that
will be allocable to each class, the net asset value of and dividends paid to
each class of a particular Fund will vary.
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MANAGEMENT OF THE COMPANY
Directors
The business and affairs of the Company 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 Company. 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, 1995, Delaware International and DMC were
supervising in the aggregate more than $27 billion in assets in various
institutional (approximately $17,389,902,000) and investment company
(approximately $10,383,560,000) accounts.
DMC is an indirect, wholly-owned subsidiary of Delaware Management
Holdings, Inc. ("DMH"). Delaware International is also controlled by DMH through
several subsidiaries. On April 3, 1995, a merger between DMH and a wholly-owned
subsidiary of Lincoln National Corporation ("Lincoln National") was completed.
DMH, the Manager and the Sub-Adviser are now wholly-owned subsidiaries, and
subject to the ultimate control, of Lincoln National. Lincoln National, with
headquarters in Fort Wayne, Indiana, is a diversified organization with
operations in many aspects of the financial services industry, including
insurance and investment management. In connection with the merger, new
Investment Management Agreements between the Company on behalf of each Fund and
the Manager and a new Sub-Advisory Agreement between the Manager on behalf of
the Global Assets Series and the Sub-Adviser were executed following shareholder
approval.
The Manager manages each Fund's investments and for its services, the
Manager is paid an annual fee equal to .75% of a Fund's average daily net
assets, less a proportionate share of all directors' fees paid to the
unaffiliated directors by the Fund. Beginning December 1, 1995, 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 ensure that the Total Operating Expenses (exclusive of taxes,
interest, brokerage commissions and extraordinary expenses) of the International
Equity Fund Institutional Class does not exceed 1.55% through May 31, 1996. From
June 1, 1994 through November 30, 1994, Delaware International had elected
voluntarily to waive that portion, if any, of the annual management fees payable
by the International Equity Series to the extent necessary to ensure that the
Total Operating Expenses (exclusive of taxes, interest, brokerage commissions
and extraordinary expenses) of the Class did not exceed 1.50%. Prior to June 1,
1994, a waiver and reimbursement commitment was in place to ensure expenses did
not exceed 0.95% (exclusive of taxes, interest, brokerage commissions and
extraordinary expenses). Delaware International has elected voluntarily to waive
that portion, if any, of the annual management fees payable by the Global Bond
Series and the Global Assets Series to the extent necessary to ensure that the
Total Operating Expenses (exclusive of taxes, interest, brokerage commissions
and extraordinary expenses) of the Global Bond Fund Institutional Class and the
Global Assets Fund Institutional Class do not exceed 0.95% through May 31, 1996.
The investment management fees payable to Delaware International by the Funds
are higher than
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those paid by most investment companies, but Delaware International believes
they are in line with fees paid by other similar funds. With respect to the
International Equity Series, the investment management paid for the fiscal year
ended November 30, 1995 was 0.74% of average daily net assets. With respect to
the Global Bond Series, the investment management fee earned for the fiscal year
ended November 30, 1995 was 0.40%, annualized, of average daily net assets. With
respect to the Global Assets Series, the investment management fee earned for
the fiscal year ended November 30, 1995 was 0.56%, annualized, of average daily
net assets. 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.
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 Funds since their
inception. A graduate of the University of Warwick and having begun his career
at Legal and General Investment Management, Mr. Gillmore joined the Delaware
Group in 1990 after eight years of investment experience. His most recent
position prior to joining the Delaware Group was as a Pacific Basin equity
analyst and senior portfolio manager for Hill Samuel Investment Advisers Ltd.
Mr. Gillmore completed the London Business School Investment program.
In making investment decisions for these Funds, 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 formaking investment decisions
for the U.S. equity portion of the Global Assets Series and has had such
responsibility for this Fund 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 Fund, Mr. Burwell regularly
consults with Wayne A. Stork and Richard G. Unruh, Jr. Mr. Stork is Chairman of
DMC and the Company'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
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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 Company 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.
Paul A. Matlack and Gerald T. Nichols have responsibility for making
investment decisions for the high-yield securities portion of the Global Assets
Series. They have had such responsibility since the Fund's 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.
In making investment decisions for this Fund, Mr. Matlack and Mr.
Nichols 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 Fund 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.
Portfolio Trading Practices
A Fund normally will not invest for short-term trading purposes.
However, a Fund may sell securities without regard to the length of time they
have been held. The degree of portfolio activity will affect brokerage costs of
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a Fund and may affect taxes payable by the Fund's shareholders to the extent of
any net realized capital gains. It is anticipated that the portfolio turnover
rate of each Fund will not exceed 100%. During the past two fiscal years, the
International Equity Series' portfolio turnover rates were 27% for 1994 and 21%
for 1995. During the period December 27, 1994 (date of initial public offering)
through November 30, 1995, the annualized portfolio turnover rates of the Global
Bond Series and the Global Assets Series were 98% and 57%, respectively.
The Manager and the Sub-Adviser use their best efforts to obtain the
best available price and most favorable execution for portfolio transactions.
Orders may be placed with brokers or dealers who provide brokerage and research
services to the Manager and the Sub-Advisor or their advisory clients. These
services may be used by the Manager and the Sub-Adviser in servicing any of
their accounts. Subject to best price and execution, the Manager and the
Sub-Adviser may consider a broker/dealer's sales of a Fund's shares in placing
portfolio orders and may place orders with broker/dealers that have agreed to
defray certain Fund expenses such as custodian fees.
Performance Information
From time to time, each Fund may quote total return performance of its
respective Class in advertising and other types of literature. The Global Bond
Series may also quote the yield of its Class in advertisements and other types
of literature.
Total return will be based on a hypothetical $1,000 investment,
reflecting the reinvestment of all distributions at net asset value. Each
presentation will include the average annual total return for one-, five- and
ten-year (or life of fund, if applicable) periods. A Fund may also advertise
aggregate and average total return information concerning the Class over
additional periods of time.
The current yield will be calculated by dividing the annualized net
investment income earned by the Global Bond Fund Institutional Class during a
recent 30-day period by the net asset value per share on the last day of the
period. The yield formula provides for semi-annual compounding which assumes
that net investment income is earned and reinvested at a constant rate and
annualized at the end of a six-month period.
Because securities prices fluctuate, investment results of the Classes
will fluctuate over time and past performance should not be considered as a
representation of future results.
Statements and Confirmations
You will receive quarterly statements of your account summarizing all
transactions during the period. A confirmation statement will be sent following
all transactions other than those involving a reinvestment of distributions. You
should examine statements and confirmations immediately and promptly report any
discrepancy by calling your Client Services Representative.
Financial Information about the Company
Each fiscal year, you will receive an audited annual report and an
unaudited semi-annual report. These reports provide detailed information about
each Fund's investments and performance. The Company's fiscal year ends on
November 30.
Distribution and Service
The Distributor, Delaware Distributors, L.P. (which formerly conducted
business as Delaware Distributors, Inc.), serves as the national distributor for
each Fund under separate Distribution Agreements dated April 3, 1995, as amended
on November 29, 1995. The Distributor bears all of the costs of promotion and
distribution.
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The Transfer Agent, Delaware Service Company, Inc., serves as the
shareholder servicing, dividend disbursing and transfer agent for each Fund
under separate Agreements dated October 25, 1991. The directors annually review
service fees paid to the Transfer Agent. Certain recordkeeping and other
shareholder services that otherwise would be performed by the Transfer Agent may
be performed by certain other entities and the Transfer Agent may elect to enter
into an agreement to pay such other entities for those services. In addition,
participant account maintenance fees may be assessed for certain recordkeeping
provided as part of retirement plan and administration service packages. These
fees are based on the number of participants in the plan and the various
services selected. Fees will be quoted upon request and are subject to change.
The Distributor and the Transfer Agent are indirect, wholly-owned
subsidiaries of DMH.
Expenses
Each Fund 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 for the International Equity Fund Institutional Class
was 1.77% for the fiscal year ended November 30, 1995. The ratio of expenses to
average daily net assets for each of the Global Bond Fund Institutional Class
and the Global Assets Fund Institutional Class from December 27, 1994 (date of
initial public offering) through November 30, 1995 was 0.95%, annualized,
reflecting the waiver of fees described above.
Shares
The Company is an open-end management investment company. The Company
was organized as a Maryland corporation on May 30, 1991.
The shares of each Fund 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
Company shares have noncumulative voting rights which means that the holders of
more than 50% of the Company's shares voting for the election of directors can
elect 100% of the directors if they choose to do so. Under Maryland law, the
Company 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 Company's shares may request
that a special meeting be called to consider the removal of a director.
The International Equity Series also offers the International Equity
Fund A Class, the International Equity Fund B Class and the International Equity
Fund C Class, the Global Bond Series also offers the Global Bond Fund A Class,
the Global Bond Fund B Class and the Global Bond Fund C Class, and the Global
Assets Series also offers the Global Assets Fund A Class, the Global Assets Fund
B Class and the Global Assets Fund C Class, which represent proportionate
interests in the assets of the respective Fund and have the same voting and
other rights and preferences as the respective Class, except that shares of the
Classes are not subject to, and may not vote on matters affecting, the
Distribution Plans under Rule 12b-1 relating to A Class, B Class and C Class
shares of a Fund.
Prior to September 6, 1994, the International Equity Fund
Institutional Class was known as the International Equity Fund (Institutional)
class and the International Equity Fund A Class was known as the International
Equity Fund class.
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APPENDIX A--RATINGS
The Global Assets Series has the ability to invest up to 15% of its
net assets in high yield, high risk fixed income securities. The table set forth
below shows asset composition, based on rating categories, of such securities
held by the Fund. Certain securities may not be rated because the rating
agencies were either not asked to provide ratings (e.g., many issuers of
privately placed bonds do not seek ratings) or because the rating agencies
declined to provide a rating for some reason, such as insufficient data. The
table below shows the percentage of the Fund's high yield, high risk securities
which are not rated. The information contained in the table was prepared based
on a dollar weighted average of the Fund's portfolio composition based on month
end data for the fiscal year ended November 30, 1995. The paragraphs following
the table contain excerpts from Moody's and S&P's rating descriptions. These
credit ratings evaluate only the safety of principal and interest and do not
consider the market value risk associated with high yield securities.
Rating Moody's Average Weighted
and/or Percentage of
S&P Portfolio
Baa/BBB 0.44%
Ba/BB 9.93%
B/B 1.74%
Not Rated/Other 0.41%
General Rating Information
Bonds
Excerpts from Moody's description of its bond ratings: Aaa--judged to be
the best quality. They carry the smallest degree of investment risk; Aa--judged
to be of high quality by all standards; A--possess favorable attributes and are
considered "upper medium" grade obligations; Baa-- considered as medium grade
obligations. Interest payments and principal security appear adequate for the
present but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time; Ba--judged to have
speculative elements; their future cannot be considered as well assured. Often
the protection of interest and principal payments may be very moderate and
thereby not well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class; B--generally lack
characteristics of the desirable investment. Assurance of interest and principal
payments or of maintenance of other terms of the contract over any long period
of time may be small; Caa--are of poor standing. Such issues may be in default
or there may be present elements of danger with respect to principal or
interest; Ca--represent obligations which are speculative in a high degree. Such
issues are often in default or have other marked shortcomings; C--the lowest
rated class of bonds and issues so rated can be regarded as having extremely
poor prospects of ever attaining any real investment standing.
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
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<PAGE>
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.
-37-
<PAGE>
- ---------------------------------------------------------
DELAWARE GROUP
- ---------------------------------------------------------
GLOBAL & INTERNATIONAL FUNDS, INC.
- ---------------------------------------------------------
INTERNATIONAL EQUITY SERIES
- ---------------------------------------------------------
GLOBAL BOND SERIES
- ---------------------------------------------------------
GLOBAL ASSETS SERIES
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PART B
STATEMENT OF
ADDITIONAL INFORMATION
- ---------------------------------------------------------
JANUARY 31, 1996
The Delaware Group includes funds with a wide range of investment
objectives. Stock funds, income funds, tax-free funds, money market funds,
global and international funds and closed-end equity funds give investors the
ability to create a portfolio that fits their personal financial goals. For more
information, shareholders of the Fund Classes should contact their financial
adviser or call Delaware Group at 800-523-4640 and shareholders of the
Institutional Classes should contact Delaware Group at 800-828-5052.
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
DELAWARE
GROUP
--------
<PAGE>
- -------------------------------------------------------------------------------
PART B--STATEMENT OF ADDITIONAL INFORMATION
JANUARY 31, 1996
- -------------------------------------------------------------------------------
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
- -------------------------------------------------------------------------------
1818 Market Street
Philadelphia, PA 19103
- -------------------------------------------------------------------------------
For more information about the International Equity Fund
Institutional Class, the Global Bond Fund Institutional Class
and the Global Assets Fund Institutional Class: 800-828-5052
For Prospectus and Performance of the International Equity Fund A Class, the
International Equity Fund B Class, the International Equity Fund C Class, the
Global Bond Fund A Class, the Global Bond Fund B Class, the Global Bond Fund C
Class, the Global Assets Fund A Class, the Global Assets Fund B Class and the
Global Assets Fund C Class: Nationwide 800-523-4640
Information on Existing Accounts of the Fund Classes:
(SHAREHOLDERS ONLY) Nationwide 800-523-1918
Dealer Services:
(BROKER/DEALERS ONLY) Nationwide 800-362-7500
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TABLE OF CONTENTS
- -------------------------------------------------------------------------------
Cover Page
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Investment Policies and Portfolio Techniques
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Accounting and Tax Issues
- -------------------------------------------------------------------------------
Performance Information
- -------------------------------------------------------------------------------
Trading Practices and Brokerage
- -------------------------------------------------------------------------------
Purchasing Shares
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Investment Plans
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Determining Offering Price and
Net Asset Value
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Redemption and Repurchase
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Distributions
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Investment Management Agreement and Sub-Advisory Agreement
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Officers and Directors
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Exchange Privilege
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General Information
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Appendix A -- IRA Information
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Financial Statements
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-1-
<PAGE>
Delaware Group Global & International Funds, Inc. (the "Company") is a
professionally-managed mutual fund of the series type presently offering three
series of portfolios: the International Equity Series, the Global Bond Series
and the Global Assets Series (individually, a "Fund" and collectively, the
"Funds").
Each Fund of the Company offers three retail classes: the International
Equity Fund A Class, the Global Bond Fund A Class and the Global Assets Fund A
Class (the "Class A Shares"); the International Equity Fund B Class, the Global
Bond Fund B Class and the Global Assets Fund B Class (the "Class B Shares"); and
the International Equity Fund C Class, the Global Bond Fund C Class and the
Global Assets Fund C Class (the "Class C Shares"). (Class A Shares, Class B
Shares and Class C Shares are collectively referred to as the "Fund Classes.")
Each Fund also offers an institutional class: the International Equity Fund
Institutional Class, the Global Bond Fund Institutional Class and the Global
Assets Fund Institutional Class (collectively, the "Institutional Classes").
Class B Shares, Class C Shares and Institutional Class shares of each
Fund may be purchased at a price equal to the next determined net asset value
per share. 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. Class A Shares are subject to a maximum front-end sales charge of
4.75% and annual 12b-1 Plan expenses of up to .30%. 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 annual 12b-1 Plan expenses of
up to 1% which are assessed against Class B Shares for approximately eight years
after purchase. See Automatic Conversion of Class B Shares under Buying Shares
in the Prospectus for the Fund Classes. Class C Shares are subject to a CDSC
which may be imposed on redemptions made within 12 months of purchase and annual
12b-1 Plan expenses of up to 1%, which are assessed against the Class C Shares
for the life of the investment.
This Statement of Additional Information ("Part B" of the registration
statement) supplements the information contained in the current Prospectus of
the Fund Classes dated January 31, 1996, and the current Prospectus of the
Institutional Classes dated January 31, 1996, as they may be amended from time
to time. It should be read in conjunction with the respective class' Prospectus.
Part B is not itself a prospectus but is, in its entirety, incorporated by
reference into each class' Prospectus. A Prospectus for each class may be
obtained by writing or calling your investment dealer or contacting the
Company's national distributor, Delaware Distributors, L.P. (the "Distributor"),
1818 Market Street, Philadelphia, PA 19103.
All references to "shares" in this Part B refer to all classes of
shares of the Company, except where noted.
-2-
<PAGE>
INVESTMENT POLICIES AND PORTFOLIO
TECHNIQUES
Investment Restrictions
The Company has adopted the following restrictions for each Fund (except
where otherwise noted) which, along with its investment objective, cannot be
changed without approval by the holders of a "majority" of the respective Fund's
outstanding shares, which is a vote by the holders of the lesser of a) 67% or
more of the voting securities present in person or by proxy at a meeting, if the
holders of more than 50% of the outstanding voting securities are present or
represented by proxy; or b) more than 50% of the outstanding voting securities.
The percentage limitations contained in the restrictions and policies set forth
herein apply at the time of purchase of securities.
Each Fund shall not:
1. For the International Equity Series, as to 75% of its total assets, and
for the Global Bond and Global Assets Series, as to 50% of their respective
total assets, invest more than 5% of their respective total assets in the
securities of any one issuer (other than obligations issued, or guaranteed by,
the U.S. Government, its agencies or instrumentalities).
2. Invest in securities of other open-end investment companies, except as
part of a merger, consolidation or other acquisition. This limitation does not
prohibit a Fund from investing in the securities of closed-end investment
companies at customary brokerage commission rates.
3. Make loans, except to the extent that purchases of debt obligations
(including repurchase agreements) in accordance with a Fund's investment
objective and policies, are considered loans and except that a Fund 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.
4. Purchase or sell real estate or real estate limited partnerships, but
this shall not prevent a Fund from investing in securities secured by real
estate or interests therein.
5. For the International Equity Series, purchase more than 10% of the
outstanding voting securities of any issuer, or invest in companies for the
purpose of exercising control or management.
6. Engage in the underwriting of securities of other issuers, except that,
in connection with the disposition of a security, a Fund may be deemed to be an
"underwriter" as that term is defined in the Securities Act of 1933.
7. Make any investment which would cause 25% or more of its total assets
to be invested in the securities of issuers all of which conduct their principal
business activities in the same industry. This restriction does not apply to
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.
8. For the International Equity Series, write, purchase or sell options,
puts, calls or combinations thereof, except that such Fund may: (a) purchase
call options to the extent that the premiums paid on all outstanding call
options do not exceed 2% of such Fund's total assets; (b) write secured put
options; (c) write covered call options; and (d) purchase put options if such
Fund owns the security covered by the put option at the time of purchase, and
provided that premiums paid on all put options outstanding do not exceed 2% of
its total assets. Such Fund may sell put or call options previously purchased
and enter into closing transactions with respect to the activities noted above.
9. Purchase or sell commodities or commodity contracts, except that each
Fund may enter into futures contracts and options on futures contracts in
accordance with their respective prospectuses, subject to investment restriction
10 below.
10. Enter into futures contracts or options thereon, except that a Fund
may enter into futures contracts and options thereon to the extent that not more
than 5% of the a Fund's assets are required as futures contract margin deposits
and premiums on options and only to the extent that obligations under such
contracts and transactions represent not more than 20% of a Fund's assets.
11. Make short sales of securities, or purchase securities on margin,
except that a Fund may satisfy margin requirements with respect to futures
transactions.
12. For the International Equity Series, invest more than 5% of the value
of its total assets in securities of companies less than three years old. Such
three-year period shall include the operation of any predecessor company or
companies.
-3-
<PAGE>
13. For the International Equity Series, purchase or retain the securities
of any issuer which has an officer, director or security holder who is a
director or officer of the Company or of its investment manager if or so long as
the directors and officers of the Company and of its investment manager together
own beneficially more than 5% of any class of securities of such issuer.
14. For the International Equity Series, invest in interests in oil, gas
or other mineral exploration or development programs or leases.
15. For the International Equity Series, invest more than 10% of the
Fund's total assets in repurchase agreements maturing in more than seven days
and other illiquid assets.
16. Borrow money in excess of one-third of the value of its net assets and
then only as a temporary measure for extraordinary purposes or to facilitate
redemptions. Any borrowing will be done from a bank and to the extent that such
borrowing exceeds 5% of the value of a Fund's 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 Fund shall, within three days thereafter (not including
Sunday or holidays) or such longer period as the Securities and Exchange
Commission (the "SEC") 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 Fund will not pledge more than 10% of its net assets.
A Fund will not issue senior securities as defined in the Investment Company Act
of 1940, except for notes to banks.
Although not considered to be a fundamental policy, restriction 5 above
will also apply to the Company as a whole. In addition, although not considered
a fundamental policy, for purposes of restriction 15 above, securities of
foreign issuers which are not listed on a recognized domestic or foreign
exchange or for which a bona fide market does not exist at the time of purchase
or subsequent valuation are included in the category of illiquid assets. As to
the International Equity Series and the Global Assets Series, although not
considered to be a fundamental investment restriction, each Fund will invest no
more than 5% of their respective assets in warrants. Investment restrictions 5,
8, 12, 13, 14, and 15 above are nonfundamental policies of the Global Bond
Series and the Global Assets Series.
Foreign Securities
Investors should recognize that investing in foreign issuers involves
certain considerations, including those set forth in the Funds' Prospectuses,
which are not typically associated with investing in United States issuers.
Since the stocks of foreign companies are frequently denominated in foreign
currencies, and since a Fund may temporarily hold uninvested reserves in bank
deposits in foreign currencies, a Fund will be affected favorably or unfavorably
by changes in currency rates and in exchange control regulations, and may incur
costs in connection with conversions between various currencies. The investment
policies of each Fund permit it to enter into forward foreign currency exchange
contracts in order to hedge each Fund's holdings and commitments against changes
in the level of future currency rates. Such contracts involve an obligation to
purchase or sell a specific currency at a future date at a price set at the time
of the contract.
There has been in the past, and there may be again in the future, an
interest equalization tax levied by the United States in connection with the
purchase of foreign securities such as those purchased by a Fund. Payment of
such interest equalization tax, if imposed, would reduce a Fund's rate of return
on its investment. Dividends paid by foreign issuers may be subject to
withholding and other foreign taxes which may decrease the net return on such
investments as compared to dividends paid to a Fund by United States
corporations. Special rules govern the federal income tax treatment of certain
transactions denominated in terms of a currency other than the U.S. dollar or
determined by reference to the value of one or more currencies other than the
U.S. dollar. The types of transactions covered by the special rules generally
include the following: (i) the acquisition of, or becoming the obligor under, a
bond or other debt instrument (including, to the extent provided in Treasury
Regulations, preferred stock); (ii) the accruing of certain trade receivables
and payables; and (iii) the entering into or acquisition of any forward
contract, futures contract, option and similar financial instruments other than
-4-
<PAGE>
any "regulated futures contract" or "nonequity option" marked to market. The
disposition of a currency other than the U.S. dollar by a U.S. taxpayer is also
treated as a transaction subject to the special currency rules. However, foreign
currency-related regulated futures contracts and nonequity options are generally
not subject to the special currency rules, if they are or would be treated as
sold for their fair market value at year-end under the marking to market rules
applicable to other futures contracts, unless an election is made to have such
currency rules apply. With respect to transactions covered by the special rules,
foreign currency gain or loss is calculated separately from any gain or loss on
the underlying transaction and is normally taxable as ordinary gain or loss. A
taxpayer may elect to treat as capital gain or loss foreign currency gain or
loss arising from certain identified forward contracts, futures contracts and
options that are capital assets in the hands of the taxpayer and which are not
part of a straddle. Certain transactions subject to the special currency rules
that are part of a "section 988 hedging transaction" (as defined in the Internal
Revenue Code of 1986 (the "Code"), as amended, and the Treasury Regulations)
will be integrated and treated as a single transaction or otherwise treated
consistently for purposes of the Code. The income tax effects of integrating and
treating a transaction as a single transaction are generally to create a
synthetic debt instrument that is subject to the original discount provisions.
It is anticipated that some of the non-U.S. dollar denominated investments and
foreign currency contracts each Fund may make or enter into will be subject to
the special currency rules described above.
Repurchase Agreements
While each Fund is permitted to do so, it normally does not invest in
repurchase agreements, except to invest cash balances.
The funds in the Delaware Group have obtained an exemption from the
joint-transaction prohibitions of Section 17(d) of the Investment Company Act of
1940 to allow the Delaware Group funds jointly to invest cash balances. Each
Fund may invest cash balances in a joint repurchase agreement in accordance with
the terms of the Order and subject generally to the conditions described below.
A repurchase agreement is a short-term investment by which the purchaser
acquires ownership of a debt security and the seller agrees to repurchase the
obligation at a future time and set price, thereby determining the yield during
the purchaser's holding period. Should an issuer of a repurchase agreement fail
to repurchase the underlying security, the loss to a Fund, if any, would be the
difference between the repurchase price and the market value of the security.
Each Fund will limit its investments in repurchase agreements to those which
Delaware International Advisers Ltd. (the "Manager"), under the guidelines of
the Board of Directors, determines to present minimal credit risks and which are
of high quality. In addition, a Fund must have collateral of at least 100% of
the repurchase price, including the portion representing a Fund's yield under
such agreements which is monitored on a daily basis.
Portfolio Loan Transactions
Each Fund may loan up to 25% of its assets to qualified broker/dealers or
institutional investors for their use relating to short sales or other security
transactions.
It is the understanding of the Manager that the staff of the SEC permits
portfolio lending by registered investment companies if certain conditions are
met. These conditions are as follows: 1) each transaction must have 100%
collateral in the form of cash, short-term U.S. Government securities, or
irrevocable letters of credit payable by banks acceptable to the Company from
the borrower; 2) this collateral must be valued daily and should the market
value of the loaned securities increase, the borrower must furnish additional
collateral to the Fund; 3) the Fund must be able to terminate the loan after
notice, at any time; 4) the Fund must receive reasonable interest on any loan,
and any dividends, interest or other distributions on the lent securities, and
any increase in the market value of such securities; 5) the Fund may pay
reasonable custodian fees in connection with the loan; and 6) the voting rights
on the lent securities may pass to the borrower; however, if the directors of
the Company know that a material event will occur affecting an investment loan,
they must either terminate the loan in order to vote the proxy or enter into an
alternative arrangement with the borrower to enable the directors to vote the
proxy.
-5-
<PAGE>
The major risk to which a Fund would be exposed on a loan transaction is
the risk that the borrower would go bankrupt at a time when the value of the
security goes up. Therefore, a Fund will only enter into loan arrangements after
a review of all pertinent facts by the Manager, under the supervision of the
Board of Directors, including the creditworthiness of the borrowing broker,
dealer or institution and then only if the consideration to be received from
such loans would justify the risk. Creditworthiness will be monitored on an
ongoing basis by the Manager.
Foreign Currency Transactions
A Fund may purchase or sell currencies and/or engage in forward foreign
currency transactions in order to expedite settlement of portfolio transactions
and to minimize currency value fluctuations.
Forward foreign currency contracts are traded in the interbank market
conducted directly between currency traders (usually large commercial banks) and
their customers. A forward contract generally has no deposit requirement, and no
commissions are charged at any stage for trades. A Fund will account for forward
contracts by marking to market each day at daily exchange rates.
When a Fund enters into a forward contract to sell, for a fixed amount of
U.S. dollars or other appropriate currency, the amount of foreign currency
approximating the value of some or all of a Fund's assets denominated in such
foreign currency, the Fund's Custodian Bank or subcustodian will place cash or
liquid high grade debt securities in a separate account of the Fund in an amount
not less than the value of the Fund's total assets committed to the consummation
of such forward contracts. If the additional cash or securities placed in the
separate account declines, additional cash or securities will be placed in the
account on a daily basis so that the value of the account will equal the amount
of a Fund's commitments with respect to such contracts.
Options
Each Fund may purchase call options or purchase put options and will not
engage in option strategies for speculative purposes.
Each Fund may invest in options that are either listed on U.S. or
recognized foreign exchanges or traded over-the counter. Certain
over-the-counter options may be illiquid. Thus, it may not be possible to close
options positions and this may have an adverse impact on a Fund's ability to
effectively hedge its securities. A Fund will not, however, invest more than 10%
of its assets in illiquid securities.
Purchasing Call Options--Each Fund may purchase call options to the extent
that premiums paid by the Fund do not aggregate more than 2% of the Fund's total
assets. When a Fund purchases a call option, in return for a premium paid by a
Fund to the writer of the option, the Fund obtains the right to buy the security
underlying the option at a specified exercise price at any time during the term
of the option. The writer of the call option, who receives the premium upon
writing the option, has the obligation, upon exercise of the option, to deliver
the underlying security against payment of the exercise price. The advantage of
purchasing call options is that a Fund may alter portfolio characteristics and
modify portfolio maturities without incurring the cost associated with portfolio
transactions.
A Fund may, following the purchase of a call option, liquidate its
position by effecting a closing sale transaction. This is accomplished by
selling an option of the same series as the option previously purchased. A Fund
will realize a profit from a closing sale transaction if the price received on
the transaction is more than the premium paid to purchase the original call
option; a Fund will realize a loss from a closing sale transaction if the price
received on the transaction is less than the premium paid to purchase the
original call option.
-6-
<PAGE>
Although a Fund will generally purchase only those call options for which
there appears to be an active secondary market, there is no assurance that a
liquid secondary market on an Exchange will exist for any particular option, or
at any particular time, and for some options no secondary market on an Exchange
may exist. In such event, it may not be possible to effect closing transactions
in particular options, with the result that a Fund would have to exercise its
options in order to realize any profit and would incur brokerage commissions
upon the exercise of such options and upon the subsequent disposition of the
underlying securities acquired through the exercise of such options. Further,
unless the price of the underlying security changes sufficiently, a call option
purchased by a Fund may expire without any value to the Fund.
Purchasing Put Options--Each Fund may invest up to 2% of its total assets
in the purchase of put options. A Fund will, at all times during which it holds
a put option, own the security covered by such option.
A put option purchased by a Fund gives it the right to sell one of its
securities for an agreed price up to an agreed date. A Fund intends to purchase
put options in order to protect against a decline in the market value of the
underlying security below the exercise price less the premium paid for the
option ("protective puts"). The ability to purchase put options will allow a
Fund to protect unrealized gain in an appreciated security in its portfolio
without actually selling the security. If the security does not drop in value, a
Fund will lose the value of the premium paid. A Fund may sell a put option which
it has previously purchased prior to the sale of the securities underlying such
option. Such sale will result in a net gain or loss depending on whether the
amount received on the sale is more or less than the premium and other
transaction costs paid on the put option which is sold.
A Fund may sell a put option purchased on individual portfolio securities.
Additionally, a Fund may enter into closing sale transactions. A closing sale
transaction is one in which a Fund, when it is the holder of an outstanding
option, liquidates its position by selling an option of the same series as the
option previously purchased.
Futures
Each Fund may enter into contracts for the purchase or sale for future
delivery of securities or foreign currencies. While futures contracts provide
for the delivery of securities, deliveries usually do not occur. Contracts are
generally terminated by entering into an offsetting transaction. When a Fund
enters into a futures transaction, it must deliver to the futures commission
merchant selected by the Fund an amount referred to as "initial margin." This
amount is maintained by the futures commission merchant in an account at the
Fund's Custodian Bank. Thereafter, a "variation margin" may be paid by a Fund
to, or drawn by the Fund 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.
In addition, when a Fund engages in futures transactions, to the extent
required by the SEC, it will maintain with its Custodian, assets in a segregated
account to cover its obligations with respect to such contracts, which assets
will consist of cash, cash equivalents or high quality debt securities from its
portfolio in an amount equal to the difference between the fluctuating market
value of such futures contracts and the aggregate value of the margin payments
made by a Fund with respect to such futures contracts.
Each Fund may enter into such futures contracts to protect against the
adverse affects of fluctuations in interest or foreign exchange rates without
actually buying or selling the securities or foreign currency. For example, if
interest rates are expected to increase, a Fund might enter into futures
contracts for the sale of debt securities. Such a sale would have much the same
effect as selling an equivalent value of the debt securities owned by a Fund. If
interest rates did increase, the value of the debt securities in the portfolio
would decline, but the value of the futures contracts to a Fund would increase
at approximately the same rate, thereby keeping the net asset value of the Fund
from declining as much as it otherwise would have. Similarly, when it is
expected that interest rates may decline, futures contracts may be purchased to
hedge in anticipation of subsequent purchases of securities at higher prices.
-7-
<PAGE>
Since the fluctuations in the value of futures contracts should be similar to
those of debt securities, a Fund could take advantage of the anticipated rise in
value of debt securities without actually buying them until the market had
stabilized. At that time, the futures contracts could be liquidated and the Fund
could then buy debt securities on the cash market.
With respect to options on futures contracts, when a Fund is not fully
invested, it may purchase a call option on a futures contract to hedge against a
market advance due to declining interest rates. The purchase of a call option on
a futures contract is similar in some respects to the purchase of a call option
on an individual security. Depending on the pricing of the option compared to
either the price of the futures contract upon which it is based, or the price of
the underlying debt securities, it may or may not be less risky than ownership
of the futures contract or underlying debt securities. As with the purchase of
futures contracts, when a Fund is not fully invested, it may purchase a call
option on a futures contract to hedge against a market advance due to declining
interest rates.
The writing of a call option on a futures contract constitutes a partial
hedge against the declining price of the security or foreign currency which is
deliverable upon exercise of the futures contract. If the futures price at the
expiration of the option is below the exercise price, a Fund will retain the
full amount of the option premium which provides a partial hedge against any
decline that may have occurred in the Fund's portfolio holdings. The writing of
a put option on a futures contract constitutes a partial hedge against the
increasing price of the security or foreign currency which is deliverable upon
exercise of the futures contract. If the futures price at the expiration of the
option is higher than the exercise price, the Fund will retain the full amount
of the option premium which provides a partial hedge against any increase in the
price of securities which the Fund intends to purchase.
If a put or call option a Fund has written is exercised, the Fund will
incur a loss which will be reduced by the amount of the premium it receives.
Depending on the degree of correlation between changes in the value of its
portfolio securities and changes in the value of its futures positions, a Fund's
losses from existing options on futures may, to some extent, be reduced or
increased by changes in the value of portfolio securities. The purchase of a put
option on a futures contract is similar in some respects to the purchase of
protective puts on portfolio securities. For example, a Fund will purchase a put
option on a futures contract to hedge the Fund's portfolio against the risk of
rising interest rates.
To the extent that interest rates move in an unexpected direction, a Fund
may not achieve the anticipated benefits of futures contracts or options on
futures contracts or may realize a loss. For example, if a Fund is hedged
against the possibility of an increase in interest rates which would adversely
affect the price of securities held in its portfolio and interest rates decrease
instead, the Fund will lose part or all of the benefit of the increased value of
its securities which it has because it will have offsetting losses in its
futures position. In addition, in such situations, if the Fund had insufficient
cash, it may be required to sell securities from its portfolio to meet daily
variation margin requirements. Such sales of securities may, but will not
necessarily, be at increased prices which reflect the rising market. A Fund may
be required to sell securities at a time when it may be disadvantageous to do
so.
Further, with respect to options on futures contracts, a Fund may seek to
close out an option position by writing or buying an offsetting position
covering the same securities or contracts and have the same exercise price and
expiration date. The ability to establish and close out positions on options
will be subject to the maintenance of a liquid secondary market, which cannot be
assured.
-8-
<PAGE>
Options on Foreign Currencies
Each Fund may purchase and write options on foreign currencies for hedging
purposes in a manner similar to that in which futures contracts on foreign
currencies, or forward contracts, will be utilized. For example, a decline in
the dollar value of a foreign currency in which portfolio securities are
denominated will reduce the dollar value of such securities, even if their value
in the foreign currency remains constant. In order to protect against such
diminutions in the value of portfolio securities, a Fund may purchase put
options on the foreign currency. If the value of the currency does decline, a
Fund will have the right to sell such currency for a fixed amount in dollars and
will thereby offset, in whole or in part, the adverse effect on its portfolio
which otherwise would have resulted.
Conversely, where a rise in the dollar value of a currency in which
securities to be acquired are denominated is projected, thereby increasing the
cost of such securities, a Fund may purchase call options thereon. The purchase
of such options could offset, at least partially, the effects of the adverse
movement in exchange rates. As in the case of other types of options, however,
the benefit to a Fund deriving from purchases of foreign currency options will
be reduced by the amount of the premium and related transaction costs. In
addition, where currency exchange rates do not move in the direction or to the
extent anticipated, a Fund could sustain losses on transactions in foreign
currency options which would require it to forego a portion or all of the
benefits of advantageous changes in such rates.
A Fund may write options on foreign currencies for the same types of
hedging purposes. For example, where a Fund anticipates a decline in the dollar
value of foreign currency denominated securities due to adverse fluctuations in
exchange rates, it could, instead of purchasing a put option, write a call
option on the relevant currency. If the expected decline occurs, the option will
most likely not be exercised, and the diminution in the value of portfolio
securities will be offset by the amount of the premium received.
Similarly, instead of purchasing a call option to hedge against an
anticipated increase in the dollar cost of securities to be acquired, a Fund
could write a put option on the relevant currency which, if rates move in the
manner projected, will expire unexercised and allow a Fund to hedge such
increased cost up to the amount of the premium. As in the case of other types of
options, however, the writing of a foreign currency option will constitute only
a partial hedge up to the amount of the premium, and only if rates move in the
expected direction. If this does not occur, the option may be exercised and the
Fund would be required to purchase or sell the underlying currency at a loss
which may not be offset by the amount of the premium. Through the writing of
options on foreign currencies, a Fund also may be required to forego all or a
portion of the benefit which might otherwise have been obtained from favorable
movements in exchange rates.
Each Fund intends to write covered call options on foreign currencies. A
call option written on a foreign currency by a Fund is "covered" if the Fund
owns the underlying foreign currency covered by the call or has an absolute and
immediate right to acquire that foreign currency without additional cash
consideration (or for additional cash consideration held in a segregated account
by the Custodian Bank) upon conversion or exchange of other foreign currency
held in its portfolio. A call option is also covered if the Fund has a call on
the same foreign currency and in the same principal amount as the call written
where the exercise price of the call held (a) is equal to or less than the
exercise price of the call written, or (b) is greater than the exercise price of
the call written if the difference is maintained by the Fund in cash, U.S.
Government securities or other high-grade liquid debt securities in a segregated
account with its Custodian Bank.
With respect to writing put options, at the time the put is written, a
Fund 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 in value to the amount the Fund will be required to pay upon
exercise of the put. The account will be maintained until the put is exercised,
has expired, or the Fund has purchased a closing put of the same series as the
one previously written.
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<PAGE>
In order to comply with the securities laws of one state, a Fund will not
write put or call options if the aggregate value of the securities underlying
the calls or obligations underlying the puts determined as of the date the
options are sold exceed 25% of the Fund's net assets. Should state laws change
or the Company receive a waiver of their application for a Fund, the Funds
reserve the right to increase this percentage.
Options on Stock Indices
A stock index assigns relative values to the common stocks included in the
index with the index fluctuating with changes in the market values of the
underlying common stock.
Options on stock indices are similar to options on stocks but have
different delivery requirements. Stock options provide the right to take or make
delivery of the underlying stock at a specified price. A stock index option
gives the holder the right to receive a cash "exercise settlement amount" equal
to (i) the amount by which the fixed exercise price of the option exceeds (in
the case of a put) or is less than (in the case of a call) the closing value of
the underlying index on the date of exercise, multiplied by (ii) a fixed "index
multiplier." Receipt of this cash amount will depend upon the closing level of
the stock index upon which the option is based being greater than (in the case
of a call) or less than (in the case of a put) the exercise price of the option.
The amount of cash received will be equal to such difference between the closing
price of the index and exercise price of the option expressed in dollars times a
specified multiple. The writer of the option is obligated, in return for the
premium received, to make delivery of this amount. Gain or loss to a Fund on
transactions in stock index options will depend on price movements in the stock
market generally (or in a particular industry or segment of the market) rather
than price movements of individual securities.
As with stock options, a Fund may offset its position in stock index
options prior to expiration by entering into a closing transaction on an
Exchange or it may let the option expire unexercised.
A stock index fluctuates with changes in the market values of the stock so
included. Some stock index options are based on a broad market index such as the
Standard & Poor's 500 or the New York Stock Exchange Composite Index, or a
narrower market index such as the Standard & Poor's 100. Indices are also based
on an industry or market segment such as the AMEX Oil and Gas Index or the
Computer and Business Equipment Index. Options on stock indices are currently
traded on domestic exchanges such as: The Chicago Board Options Exchange, New
York Stock Exchange and American Stock Exchange as well as on foreign exchanges.
A Fund's ability to hedge effectively all or a portion of its securities
through transactions in options on stock indices depends on the degree to which
price movements in the underlying index correlate with price movements in the
Fund's portfolio securities. Since a Fund's portfolio will not duplicate the
components of an index, the correlation will not be exact. Consequently, a Fund
bears the risk that the prices of the securities being hedged will not move in
the same amount as the hedging instrument. It is also possible that there may be
a negative correlation between the index or other securities which would result
in a loss on both such securities and the hedging instrument.
Positions in stock index options may be closed out only on an Exchange
which provides a secondary market. There can be no assurance that a liquid
secondary market will exist for any particular stock index option. Thus, it may
not be possible to close such an option. The inability to close options
positions could have an adverse impact on a Fund's ability effectively to hedge
its securities. A Fund will enter into an option position only if there appears
to be a liquid secondary market for such options.
A Fund will not engage in transactions in options on stock indices for
speculative purposes but only to protect appreciation attained and to take
advantage of the liquidity available in the option markets.
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<PAGE>
Rule 144A Securities
A Fund may invest in restricted securities, including unregistered
securities eligible for resale without registration pursuant to Rule 144A ("Rule
144A Securities") under the Securities Act of 1933 (the "1933 Act"). Rule 144A
Securities may be freely traded among qualified institutional investors without
registration under the 1933 Act.
Investing in Rule 144A Securities could have the effect of increasing the
level of a Fund's illiquidity to the extent that qualified institutional buyers
become, for a time, uninterested in purchasing these securities. After the
purchase of a Rule 144A Security, however, the Board of Directors and the
Manager will continue to monitor the liquidity of that security to ensure that a
Fund has no more than 10% of its net assets in illiquid securities.
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<PAGE>
ACCOUNTING AND TAX ISSUES
When a Fund writes a call, or purchases a put option, an amount equal to
the premium received or paid by it is included in the Fund's assets and
liabilities as an asset and as an equivalent liability.
In writing a call, the amount of the liability is subsequently "marked to
market" to reflect the current market value of the option written. The current
market value of a written option is the last sale price on the principal
Exchange on which such option is traded or, in the absence of a sale, the mean
between the last bid and asked prices. If an option which a Fund has written
expires on its stipulated expiration date, the Fund recognizes a capital gain.
If a Fund enters into a closing purchase transaction with respect to an option
which the Fund has written, the Fund realizes a gain (or loss if the cost of the
closing transaction exceeds the premium received when the option was sold)
without regard to any unrealized gain or loss on the underlying security, and
the liability related to such option is extinguished. If a call option which a
Fund has written is exercised, the Fund realizes a capital gain or loss from the
sale of the underlying security and the proceeds from such sale are increased by
the premium originally received.
The premium paid by a Fund for the purchase of a put option is recorded in
the Fund's assets and liabilities as an investment and subsequently adjusted
daily to the current market value of the option. For example, if the current
market value of the option exceeds the premium paid, the excess would be
unrealized appreciation and, conversely, if the premium exceeds the current
market value, such excess would be unrealized depreciation. The current market
value of a purchased option is the last sale price on the principal Exchange on
which such option is traded or, in the absence of a sale, the mean between the
last bid and asked prices. If an option which a Fund has purchased expires on
the stipulated expiration date, the Fund realizes a short-term or long-term
capital loss for federal income tax purposes in the amount of the cost of the
option. If a Fund exercises a put option, it realizes a capital gain or loss
(long-term or short-term, depending on the holding period of the underlying
security) from the sale of the underlying security and the proceeds from such
sale will be decreased by the premium originally paid.
-12-
<PAGE>
Options on Certain Stock Indices
Accounting for options on certain stock
indices will be in accordance with generally accepted accounting principles. The
amount of any realized gain or loss on closing out such a position will result
in a realized gain or loss for tax purposes. Such options held by a Fund at the
end of each fiscal year on a broad-based stock index will be required to be
"marked to market" for federal income tax purposes. Generally, 60 percent of any
net gain or loss recognized on such deemed sales or on any actual sales will be
treated as long-term capital gain or loss, and the remainder will be treated as
short-term capital gain or loss.
Other Tax Requirements
Each Fund has qualified, and intends to continue to qualify, as a
regulated investment company under Subchapter M of the Code. The Company must
meet several requirements to maintain its status as a regulated investment
company. Among these requirements are that at least 90% of its investment
company taxable income be derived from dividends, interest, payment with respect
to securities loans and gains from the sale or disposition of securities; that
at the close of each quarter of its taxable year at least 50% of the value of
its assets consist of cash and cash items, government securities, securities of
other regulated investment companies and, subject to certain diversification
requirements, other securities; and that less than 30% of its gross income be
derived from sales of securities held for less than three months.
The requirement that not more than 30% of the Company's gross income be
derived from gains from the sale or other disposition of securities held for
less than three months may restrict a Fund in its ability to write covered call
options on securities which it has held less than three months, to write options
which expire in less than three months, to sell securities which have been held
less than three months and to effect closing purchase transactions with respect
to options which have been written less than three months prior to such
transactions. Consequently, in order to avoid realizing a gain within the
three-month period, a Fund may be required to defer the closing out of a
contract beyond the time when it might otherwise be advantageous to do so. A
Fund may also be restricted in the sale of purchased put options and the
purchase of put options for the purpose of hedging underlying securities because
of the application of the short sale holding period rules with respect to such
underlying securities.
The straddle rules of Section 1092 may apply. Generally, the straddle
provisions require the deferral of losses to the extent of unrecognized gains
related to the offsetting positions in the straddle. Excess losses, if any, can
be recognized in the year of loss. Deferred losses will be carried forward and
will be subject to the same limitation in subsequent years.
The federal income tax rules governing the taxation of interest rate swaps
are not entirely clear and may require the Global Bond Series to treat payments
received under such arrangements as ordinary income and to amortize such
payments under certain circumstances. The Global Bond Series will limit its
activity in this regard in order to maintain its qualification as a regulated
investment company.
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<PAGE>
PERFORMANCE INFORMATION*
From time to time, each Fund may state its Classes' total return in
advertisements and other types of literature. Any statements of total return
performance data for a Class will be accompanied by information on the average
annual compounded rate of return for that Class over, as relevant, the most
recent one-, five- and ten-year (or life of fund, if applicable) periods. Each
Fund may also advertise aggregate and average total return information of its
Classes over additional periods of time.
The average annual total rate of return for each Class is based on a
hypothetical $1,000 investment that includes capital appreciation and
depreciation during the stated periods. The following formula will be used for
the actual computations:
n
P(1 + T) = ERV
Where: P = a hypothetical initial purchase order
of $1,000 from which, in the case
of only Class A Shares, the
maximum front-end sales charge is
deducted;
T = average annual total return;
n = number of years;
ERV = redeemable value of the hypothetical $1,000 purchase at the
end of the period after the deduction of the applicable CDSC,
if any, with respect to Class B Shares and Class C Shares.
*In the case of Class A Shares, the Limited CDSC, applicable only to
certain redemptions of those shares, will not be deducted from any computation
of total return. See the Prospectus for the Fund Classes for a description of
the Limited CDSC and the limited instances in which it applies. All references
to a CDSC will apply to Class B Shares or Class C Shares.
Aggregate or cumulative total return is calculated in a similar manner,
except that the results are not annualized. Each calculation assumes the maximum
front-end sales charge, if any, is deducted from the initial $1,000 investment
at the time it is made with respect to Class A Shares and that all distributions
are reinvested at net asset value, and, with respect to Class B Shares and Class
C Shares, reflects the deduction of the CDSC that would be applicable upon
complete redemption of such shares. In addition, each Fund may present total
return information that does not reflect the deduction of the maximum front-end
sales charge or any applicable CDSC.
The performance of the International Equity Fund A Class, the
International Equity Fund B Class and the International Equity Fund
Institutional Class, as shown below, is the average annual total return
quotations through November 30, 1995, computed as described above. Class C
Shares commenced operations on November 29, 1995 and therefore total return for
such a short period of time is not included. The average annual total return for
the International Equity Fund A Class at offer reflects the maximum front-end
sales charges paid on the purchase of shares. The average annual total return
for International Equity Fund A Class at net asset value (NAV) does not reflect
the payment of the maximum front-end sales charge of 4.75%.
The average annual total return for International Equity Fund B Class
including deferred sales charge reflects the deduction of the applicable CDSC
that would be paid if the shares were redeemed on November 30, 1995. The average
annual total return for International Equity Fund B Class excluding deferred
sales charge assumes the shares were not redeemed on November 30, 1995 and
therefore does not reflect the deduction of a CDSC.
Pursuant to applicable regulation, total return shown for the
International Equity Fund Institutional Class for the periods prior to the
commencement of operations of such Class is calculated by taking the performance
of the International Equity Fund A Class and adjusting it to reflect the
elimination of all front-end sales charges. However, for those periods, no
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<PAGE>
adjustment has been made to eliminate the impact of 12b-1 payments, and
performance would have been affected had such an adjustment been made.
Securities prices fluctuated during the periods covered and the past
results should not be considered as representative of future performance.
Average Annual Total Return(1)
International International International
Equity Fund Equity Fund Equity Fund
A Class A Class Institutional
(at Offer)(3) (at NAV) Class(2)
1 year
ended
11/30/95 3.07% 8.17% 8.46%
3 years
ended
11/30/95 11.46% 13.29% 13.61%
Period
10/31/91(4)
through
11/30/95 7.32% 8.61% 8.83%
International International
Equity Fund Equity Fund
B Class B Class
(Including (Excluding
Deferred Sales Deferred Sales
Charge) Charge)
1 year
ended
11/30/95 3.46% 7.46%
Period
9/6/94(5)
through
5/31/95 (3.32%) (0.26%)
(1) Beginning December 1, 1995, the Manager had elected voluntarily to waive
that portion, if any, of the annual management fees payable by the
International Equity Series to the extent necessary to ensure that the Total
Operating Expenses of the International Equity Fund A Class, International
Equity Fund Institutional Class and International Equity Fund B Class do not
exceed 1.85%, 1.55% and 2.55%, respectively, (exclusive of taxes, interest,
brokerage commissions and extraordinary expenses, but inclusive of 12b-1
expenses) through May 31, 1996. From June 1, 1994, through November 30,
1994, a waiver and reimbursement commitment was in place to ensure that
Total Operating Expenses of the International Equity Fund A Class and the
International Equity Fund Institutional Class did not exceed 1.50%
(exclusive of taxes, interest, brokerage commissions, extraordinary expenses
and 12b-1 expenses) through November 30, 1994. Through November 30, 1994,
this waiver was also applicable to the International Equity Fund B Class.
Prior to June 1, 1994, a waiver and reimbursement commitment was in place to
ensure that expenses did not exceed 1.25% (exclusive of taxes, interest,
brokerage commissions and extraordinary expenses, but inclusive of 12b-1
fees) for the International Equity Fund A Class and .95% (exclusive of
taxes, interest, brokerage commissions and extraordinary expenses) for the
International Equity Fund Institutional Class. In the absence of such
waiver, performance would have been affected negatively.
(2) Date of initial public offering was November 9, 1992.
(3) Prior to November 29, 1995, the maximum front-end sales charge was 5.75%.
Effective November 29, 1995, the maximum front-end sales charge was reduced
to 4.75%. The above performance numbers are calculated using 4.75% as the
applicable sales charge, and are more favorable than they would have been
had they been calculated using the former front-end sales charge.
(4) Date of initial public offering of International Equity Fund A Class.
(5) Date of initial public offering of International Equity Fund B Class.
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<PAGE>
The performance for the Class A Shares, Class B Shares and the
Institutional Class of the Global Bond Series and the Global Assets Series, as
shown below, is aggregate total return through November 30, 1995. Class C Shares
commenced operations on November 29, 1995 and therefore total return for such a
short period of time is not included. The aggregate total return for the Class A
Shares of these Funds at offer reflects the maximum front-end sales charge paid
on the purchase of shares. The aggregate total return for the Class A Shares of
these Funds at net asset value (NAV) does not reflect the deduction of the
maximum front-end sales charge of 4.75%.
The aggregate total return for the Class B Shares of these Funds
including deferred sales charge reflects the deduction of the applicable CDSC
that would be paid if the shares were redeemed on November 30, 1995. The
aggregate total return for the Class B Shares of these Funds excluding deferred
sales charge assumes the shares were not redeemed on November 30, 1995 and
therefore does not reflect the deduction of a CDSC.
Aggregate Total Return(1)
Global Bond Global Bond Global Bond
Fund A Fund A Fund
Class Class Institutional
(at Offer) (at NAV) Class
Period
12/27/94(2)
through
11/30/95 13.14% 18.79% 19.21%
Global Bond Global Bond
Fund B Fund B
Class Class
(Including (Excluding
Deferred Sales Deferred Sales
Charge) Charge)
Period
12/27/94(2)
through
11/30/95 14.23% 18.23%
Global Assets Global Assets Global Assets
Fund A Fund A Fund
Class Class Institutional
(at Offer)(3) (at NAV) Class
Period
12/27/94(2)
through
11/30/95 15.69% 21.48% 21.88%
Global Assets Global Assets
Fund B Fund B
Class(3) Class(3)
(Including (Excluding
Deferred Sales Deferred Sales
Charge) Charge)
Period
12/27/94(2)
through
11/30/95 16.73% 20.73%
(1) The Manager had elected to voluntarily waive that portion, if any, of the
annual management fees payable by the Global Bond Series and the Global
Asset Series to ensure that the Total Operating Expenses of the Class A
Shares and Institutional Class shares of each Fund, respectively, do not
exceed 1.25% and .95%, respectively, and of the Class B Shares of each Fund,
respectively, do not exceed 1.95% (in each case, exclusive of taxes,
interest, brokerage commissions and extraordinary expenses, but inclusive of
12b-1 expenses) through May 31, 1996.
(2) Date of initial public offering; total return for this short of a time
period may not be representative of longer-term results.
(3) Prior to November 29, 1995, the maximum front-end sales charge was 5.75%.
Effective November 29, 1995, the maximum front-end sales charge was reduced
to 4.75%. The above performance numbers are calculated using 4.75% as the
applicable sales charge, and are more favorable than they would have been
had they been calculated using the former front-end sales charge.
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<PAGE>
Each Fund may also state total return performance for its Classes in
the form of an average annual return. This average annual return figure will be
computed by taking the sum of a Class' annual returns, then dividing that figure
by the number of years in the overall period indicated. The computation will
reflect the impact of the maximum front-end sales charge or CDSC, if any, paid
on the illustrated investment amount against the first year's return. From time
to time, each Fund may quote actual total return performance for its Classes in
advertising and other types of literature compared to indices or averages of
alternative financial products available to prospective investors. For example,
the performance comparisons may include the average return of various bank
instruments, some of which may carry certain return guarantees offered by
leading banks and thrifts as monitored by Bank Rate Monitor, and those of
generally-accepted corporate bond and government security price indices of
various durations prepared by Lehman Brothers and Salomon Brothers, Inc. These
indices are not managed for any investment goal.
Total return performance for a Class will be computed by adding all
reinvested income and realized securities profits distributions plus the change
in net asset value during a specific period and dividing by the offering price
at the beginning of the period. It will also reflect, as applicable, the maximum
front-end sales charge or CDSC paid with respect to the illustrated investment
amount, but not any income taxes payable by shareholders on the reinvested
distributions included in the calculation. Because securities prices fluctuate,
past performance should not be considered as a representation of the results
which may be realized from an investment in a Fund in the future.
From time to time, each Fund may also quote its Classes' actual total
return performance, dividend results and other performance information of each
Class in advertising and other types of literature and may compare that
information to, or may separately illustrate similar information reported by,
the Standard & Poor's 500 Stock Index and the Dow Jones Industrial Average and
other unmanaged indices.
The Standard & Poor's 500 Stock Index and the Dow Jones Industrial
Average are industry-accepted unmanaged indices of generally-conservative
securities used for measuring general market performance. The total return
performance reported for these indices will reflect the reinvestment of all
distributions on a quarterly basis and market price fluctuations. The indices do
not take into account any sales charges or other fees.
As stated in the Company's Prospectuses, the Company may also quote the
current yield of each Class of the Global Bond Series in advertisements and
investor communications.
The yield computation is determined by dividing the net investment
income per share earned during the period by the maximum offering price per
share on the last day of the period and annualizing the resulting figure,
according to the following formula.
a-b
---
YIELD = 2[( cd + 1)(6) - 1]
Where: a = dividends and interest earned during
the period;
b = expenses accrued for the period (net
of reimbursements);
c = the average daily number of shares
outstanding during the period that
were entitled to receive dividends;
d = the maximum offering price per
share on the last day of the period.
The above formula will be used in calculating quotations of yield, based
on specific 30-day periods identified in advertising by the Company. Yield
assumes the maximum front-end sales charge, if any, and does not reflect the
deduction of any CDSC or Limited CDSC. The yields of the Global Bond Fund A
Class, the Global Bond Fund B Class and the Global Bond Fund Institutional Class
as of November 30, 1995, were 6.60%, 6.20% and 7.20%, respectively, reflecting
the waiver of fees by the Manager. Information regarding Global Bond Fund C
Class is not included because such Class was not offered to the public until
November 29, 1995. Actual yield may be affected by variations in sales charges
on investments.
-17-
<PAGE>
Past performance, such as yields quoted in advertisements, should not be
considered as representative of the results which may be realized from an
investment in a Fund in the future.
Investors should note that the income earned and dividends paid by the
Global Bond Series and the Global Assets Series will vary with the fluctuation
of interest rates and performance of the portfolio to the extent of a Fund's
investments in debt securities. The net asset value of any Fund may change.
Unlike money market funds, the Funds invest in longer-term securities that
fluctuate in value and do so in a manner inversely correlated with changing
interest rates. A Fund's net asset value will tend to rise when interest rates
fall. Conversely, a Fund's net asset value will tend to fall as interest rates
rise. Normally, fluctuations in interest rates have a greater effect on the
prices of longer-term bonds. The value of the securities held in a Fund will
vary from day to day and investors should consider the volatility of a Fund's
net asset value as well as its yield before making a decision to invest.
Comparative information on the Consumer Price Index may also be included.
The Consumer Price Index, as prepared by the U.S. Bureau of Labor Statistics, is
the most commonly used measure of inflation. It indicates the cost fluctuations
of a representative group of consumer goods. It does not represent a return from
an investment.
Statistical and performance information and various indices compiled and
maintained by organizations such as the following, may also be used in preparing
exhibits comparing certain industry trends to comparable Fund activity and
performance and in illustrating general financial planning principles. Any
indices used are not managed for any investment goal.
CDA Technologies, Inc. is a performance evaluation service that maintains
a statistical database of performance, as reported by a diverse universe
of independently-managed mutual funds.
Ibbotson Associates, Inc. is a consulting firm that provides a variety of
historical data including total return, capital appreciation and income on
the stock market as well as other investment asset classes, and inflation.
With their permission, this information will be used primarily for
comparative purposes and to illustrate general financial planning
principles.
Interactive Data Corporation is a statistical access service that
maintains a database of various international industry indicators, such as
historical and current price/earning information, individual equity and
fixed income price and return information.
Compustat Industrial Databases, a service of Standard & Poor's, may also
be used in preparing performance and historical stock and bond market
exhibits. This firm maintains fundamental databases that provide
financial, statistical and market information covering more than 7,000
industrial and non-industrial companies.
Russell Indexes is an investment analysis service that provides both
current and historical stock performance information, focusing on the
business fundamentals of those firms issuing the security.
Morgan Stanley Capital International is a statistical and research firm
that maintains a statistical database of international securities. This
firm also compiles and maintains a number of unmanaged indices of
international securities. These indices are designed to measure the
performance of the stock markets of the USA, Europe, Canada, Mexico,
Australia and the Far East, and that of international industry groups.
-18-
<PAGE>
FT-Actuaries World Indices are jointly compiled by The Financial Times,
Ltd.; Goldman, Sachs & Co.; and Wood Mackenzie & Co., Ltd. in conjunction
with the Institute of Actuaries and the Faculty of Actuaries. Indices
maintained by this group primarily focus on compiling statistical
information on international financial markets and industry sectors, stock
and bond issues and certain fundamental information about the companies
issuing the securities. Statistical information on international
currencies is also maintained.
Salomon Brothers is a statistical research firm that maintains databases
of international markets and bond markets (corporate and government-issued
securities). This information, as well as unmanaged indices compiled and
maintained by Salomon, will be used in preparing comparative
illustrations.
Current interest rate and yield information on government debt obligations
of various durations, as reported weekly by the Federal Reserve (Bulletin H.15),
may also be used. As well, current industry rate and yield information on all
industry available fixed income securities, as reported weekly by The Bond
Buyer, may also be used in preparing comparative illustrations.
Each Fund may also promote its classes' yield and/or total return
performance and use comparative performance information computed by and
available from certain industry and general market research and publications,
such as Lipper Analytical Services, Inc., IBC/Donoghue's Money Market Report and
Morningstar, Inc.
The performance of the Class A Shares, Class B Shares and Institutional
Classes, as shown below, reflects maximum sales charges, if any, but not any
income taxes payable by shareholders on the reinvested distributions included in
the calculations. The performance of Class B Shares is calculated both with the
applicable CDSC included and excluded. The net asset value of a class fluctuates
so shares, when redeemed, may be worth more or less than the original
investment, and a class' results should not be considered as representative of
future performance. For these purposes, the calculations assume the reinvestment
of any realized securities profits distributions and income dividends paid
during the indicated periods.
The following tables are examples, for purposes of illustration only, of
cumulative total return performance for the Class A Shares, the Class B Shares
and the Institutional Class of the International Equity Series, Global Bond
Series and Global Assets Series through November 30, 1995. Class C Shares of
each Fund commenced operations on November 29, 1995 and therefore total return
for such a short period of time is not included. Pursuant to applicable
regulation, total return shown for the International Equity Fund Institutional
Class for the periods prior to the commencement of operations of such Class is
calculated by taking the performance of the International Equity Fund A Class
and adjusting it to reflect the elimination of all sales charges. However, for
those periods, no adjustment has been made to eliminate the impact of 12b-1
payments, and performance may have been affected had such an adjustment been
made.
Cumulative Total Return(1)
International International
Equity Fund Equity Fund
A Class Institutional
(at Offer)(3) Class(2)
3 months
ended
11/30/95 (4.38%) 0.49%
6 months
ended
11/30/95 (1.68%) 3.29%
9 months
ended
11/30/95 3.92% 9.24%
1 year
ended
11/30/95 3.07% 8.46%
3 years
ended
11/30/95 38.49% 46.64%
10/31/91(4)
through
11/30/95 33.45% 41.31%
-19-
<PAGE>
International International
Equity Fund Equity Fund
B Class B Class
(Including (Excluding
Deferred Sales Deferred Sales
Charge) Charge)
3 months
ended
11/30/95 (3.67%) 0.33%
6 months
ended
11/30/95 (1.12%) 2.88%
9 months
ended
11/30/95 4.47% 8.47%
1 year
ended
11/30/95 3.46% 7.46%
Period
9/6/94(5)
through
11/30/95 (3.72%) (0.26%)
(1) Beginning December 1, 1995, the Manager had elected voluntarily to waive
that portion, if any, of the annual management fees payable by the
International Equity Series to the extent necessary to ensure that the Total
Operating Expenses of the International Equity Fund A Class, International
Equity Fund Institutional Class and International Equity Fund B Class do not
exceed 1.85%, 1.55% and 2.55%, respectively, (exclusive of taxes, interest,
brokerage commissions and extraordinary expenses, but inclusive of 12b-1
expenses) through May 31, 1996. From June 1, 1994, through November 30,
1994, a waiver and reimbursement commitment was in place to ensure that
Total Operating Expenses of the International Equity Fund A Class and the
International Equity Fund Institutional Class did not exceed 1.50%
(exclusive of taxes, interest, brokerage commissions, extraordinary expenses
and 12b-1 expenses) through November 30, 1994. Through November 30, 1994,
this waiver was also applicable to the International Equity Fund B Class.
Prior to June 1, 1994, a waiver and reimbursement commitment was in place to
ensure that expenses did not exceed 1.25% (exclusive of taxes, interest,
brokerage commissions and extraordinary expenses, but inclusive of 12b-1
fees) for the International Equity Fund A Class and .95% (exclusive of
taxes, interest, brokerage commissions and extraordinary expenses) for the
International Equity Fund Institutional Class. In the absence of such
waiver, performance would have been affected negatively.
(2) Date of initial public offering was November 9, 1992.
(3) Prior to November 29, 1995, the maximum front-end sales charge was 5.75%.
Effective November 29, 1995, the maximum front-end sales charge was reduced
to 4.75%. The above performance numbers are calculated using 4.75% as the
applicable sales charge, and are more favorable than they would have been
had they been calculated using the former front-end sales charge.
(4) Date of initial public offering of International Equity Fund A Class.
(5) Date of initial public offering of International Equity Fund B Class.
-20-
<PAGE>
Cumulative Total Return(1)
Global Global
Bond Bond
Global Fund B Fund B
Global Bond Class Class
Bond Fund (Including (Excluding
Fund Institu- Deferred Deferred
A Class tional Sales Sales
(at Offer) Class Charge) Charge)
3 months
ended
11/30/95 0.91% 6.15% 1.89% 5.89%
6 months
ended
11/30/95 4.28% 9.78% 5.23% 9.23%
9 months
ended
11/30/95 10.58% 16.41% 11.42% 15.42%
Period
12/27/94(2)
through
11/30/95 13.14% 19.21% 14.23% 18.23%
(1) The Manager had elected to voluntarily waive that portion, if any, of the
annual management fees payable by the Global Bond Series to ensure that the
Total Operating Expenses of the Class A Shares and Institutional Class
shares of this Fund, respectively, do not exceed 1.25% and .95% and of the
Class B Shares of this Fund, do not exceed 1.95% (in each case, exclusive of
taxes, interest, brokerage commissions and extraordinary expenses, but
inclusive of 12b-1 expenses) through May 31, 1996.
(2) Date of initial public offering; total return for this short of a time
period may not be representative of longer-term results.
Cumulative Total Return(1)
Global Global
Assets Assets
Global Fund B Fund B
Global Assets Class Class
Assets Fund (Including (Excluding
Fund Institu- Deferred Deferred
A Class tional Sales Sales
(at Offer)(3) Class Charge) Charge)
3 months
ended
11/30/95 (1.39%) 3.63% (0.62%) 3.38%
6 months
ended
11/30/95 3.49% 8.88% 4.25% 8.25%
9 months
ended
11/30/95 12.27% 18.10% 12.98% 16.98%
Period
12/27/94(2)
through
11/30/95 15.69% 21.88% 16.73% 20.73%
(1) The Manager had elected to voluntarily waive that portion, if any, of the
annual management fees payable by the Global Assets Series to ensure that
the Total Operating Expenses of the Class A Shares and Institutional Class
shares of this Fund, respectively, do not exceed 1.25% and .95% and of the
Class B Shares of this Fund do not exceed 1.95% (in each case, exclusive of
taxes, interest, brokerage commissions and extraordinary expenses, but
inclusive of 12b-1 expenses) through May 31, 1996.
(2) Date of initial public offering; total return for this short of a time
period may not be representative of longer-term results.
(3) Prior to November 29, 1995, the maximum front-end sales charge was 5.75%.
Effective November 29, 1995, the maximum front-end sales charge was reduced
to 4.75%. The above performance numbers are calculated using 4.75% as the
applicable sales charge, and are more favorable than they would have been
had they been calculated using the former front-end sales charge.
-21-
<PAGE>
Because every investor's goals and risk threshold are different, the
Distributor, as distributor for the Company and other mutual funds in the
Delaware Group, will provide general information about investment alternatives
and scenarios that will allow investors to assess their personal goals. This
information will include general material about investing as well as materials
reinforcing various industry-accepted principles of prudent and responsible
personal financial planning. One typical way of addressing these issues is to
compare an individual's goals and the length of time the individual has to
attain these goals to his or her risk threshold. In addition, the Distributor
may also provide information that discusses the overriding investment philosophy
of Delaware Management Company, Inc. ("DMC" or the "Sub-Adviser"), Delaware
Investment Advisers, a division of DMC, and the Manager, an affiliate of DMC,
and how that philosophy impacts Company investment disciplines and strategies
employed in seeking each Fund's objectives. The Distributor may also from time
to time cite general or specific information about the institutional clients of
DMC, including the number of such clients serviced by DMC.
THE POWER OF COMPOUNDING
When you opt to reinvest your current income for additional Company
shares, your investment is given yet another opportunity to grow. It's called
the Power of Compounding and the following charts illustrate just how powerful
it can be.
Compounded Returns
Results for various assumed fixed rates of return on a $10,000 investment
compounded monthly for 10 years:
6% 8% 10% 12%
Rate of Rate of Rate of Rate of
Return Return Return Return
12-'85 $10,617 $10,830 $11,047 $11,268
12-'86 $11,272 $11,729 $12,204 $12,697
12-'87 $11,967 $12,702 $13,482 $14,308
12-'88 $12,705 $13,757 $14,894 $16,122
12-'89 $13,488 $14,898 $16,453 $18,167
12-'90 $14,320 $16,135 $18,176 $20,471
12-'91 $15,203 $17,474 $20,079 $23,067
12-'92 $16,141 $18,924 $22,182 $25,993
12-'93 $17,137 $20,495 $24,504 $29,290
12-'94 $18,194 $22,196 $27,070 $33,004
Results of various assumed fixed rates of return on a $10,000
investment compounded quarterly for 10 years:
6% 8% 10% 12%
Rate of Rate of Rate of Rate of
Return Return Return Return
12-'85 $10,614 $10,824 $11,038 $11,255
12-'86 $11,265 $11,717 $12,184 $12,668
12-'87 $11,956 $12,682 $13,449 $14,258
12-'88 $12,690 $13,728 $14,845 $16,047
12-'89 $13,468 $14,859 $16,386 $18,061
12-'90 $14,295 $16,084 $18,087 $20,328
12-'91 $15,172 $17,410 $19,965 $22,879
12-'92 $16,103 $18,845 $22,038 $25,751
12-'93 $17,091 $20,399 $24,326 $28,983
12-'94 $18,140 $22,080 $26,851 $32,620
The figures are calculated assuming a fixed constant investment return and
assume no fluctuation in the value of principal. These figures, which do not
reflect payment of applicable taxes or sales charges, are not intended to be a
projection of investment results and do not reflect the actual performance
results of any of the classes.
-22-
<PAGE>
TRADING PRACTICES AND BROKERAGE
The Manager selects brokers or dealers to execute transactions on behalf
of each Fund for the purchase or sale of portfolio securities on the basis of
its judgment of their professional capability to provide the service. The
Sub-Adviser performs this function with respect to transactions on behalf of the
Global Assets Series for the purchase and sale of U.S. securities. The primary
consideration is to have brokers or dealers execute transactions at best price
and execution. Best price and execution refers to many factors, including the
price paid or received for a security, the commission charged, the promptness
and reliability of execution, the confidentiality and placement accorded the
order and other factors affecting the overall benefit obtained by the account on
the transaction. A number of trades are made on a net basis where the Company
either buys securities directly from the dealer or sells them to the dealer. In
these instances, there is no direct commission charged but there is a spread
(the difference between the buy and sell price) which is the equivalent of a
commission. When a commission is paid, the Company pays reasonably competitive
brokerage commission rates based upon the professional knowledge of the Manager
or the Sub-Adviser as to rates paid and charged for similar transactions
throughout the securities industry. In some instances, the Company may pay a
minimal share transaction cost when the transaction presents no difficulty.
During the fiscal years ended November 30, 1993, 1994 and 1995, the
aggregate dollar amounts of brokerage commissions paid by the International
Equity Series were $71,517, $137,192 and $85,113, respectively. During the
period December 27, 1994 (date of initial public offering) through November 30,
1995, the aggregate dollar amounts of brokerage commissions paid by the Global
Assets Series were $5,155, respectively.
The Manager or the Sub-Advisor may allocate out of all commission business
generated by all of the funds and accounts under its management, brokerage
business to brokers or dealers who provide brokerage and research services.
These services include advice, either directly or through publications or
writings, as to the value of securities, the advisability of investing in,
purchasing or selling securities, and the availability of securities or
purchasers or sellers of securities; furnishing of analyses and reports
concerning issuers, securities or industries; providing information on economic
factors and trends; assisting in determining portfolio strategy; providing
computer software and hardware used in security analyses; and providing
portfolio performance evaluation and technical market (SAI-DGG&I/PART B)
analyses. Such services are used by the Manager or the Sub-Adviser in connection
with its investment decision-making process with respect to one or more funds
and accounts managed by it, and may not be used, or used exclusively, with
respect to the fund or account generating the brokerage.
During the fiscal year ended November 30, 1995, portfolio transactions of
the International Equity Series in the amount of $1,343,368, resulting in
brokerage commissions of $2,827, was directed to brokers for brokerage and
research services provided. During the period December 27, 1994 (date of initial
public offering) through November 30, 1995, portfolio transactions of the Global
Assets Series in the amount of $236,045, resulting in brokerage commissions of
$503, were directed to brokers for brokerage and research services provided.
As provided in the Securities Exchange Act of 1934 and each Fund's
Investment Management Agreement, higher commissions are permitted to be paid to
broker/dealers who provide brokerage and research services than to
broker/dealers who do not provide such services if such higher commissions are
deemed reasonable in relation to the value of the brokerage and research
services provided. Although transactions are directed to broker/dealers who
provide such brokerage and research services, the Company believes that the
commissions paid to such broker/dealers are not, in general, higher than
commissions that would be paid to broker/dealers not providing such services and
that such commissions are reasonable in relation to the value of the brokerage
-23-
<PAGE>
and research services provided. In some instances, services may be provided to
the Manager or the Sub-Adviser which constitute in some part brokerage and
research services used by the Manager or the Sub-Adviser in connection with its
investment decision-making process and constitute in some part services used by
the Manager or the Sub-Adviser in connection with administrative or other
functions not related to its investment decision-making process. In such cases,
the Manager or the Sub-Adviser will make a good faith allocation of brokerage
and research services and will pay out of its own resources for services used by
the Manager or the Sub-Adviser in connection with administrative or other
functions not related to its investment decision-making process. In addition, so
long as no fund is disadvantaged, portfolio transactions which generate
commissions or their equivalent are allocated to broker/dealers who provide
daily portfolio pricing services to the Company and to other funds in the
Delaware Group. Subject to best price and execution, commissions allocated to
brokers providing such pricing services may or may not be generated by the funds
receiving the pricing service.
The Manager or the Sub-Adviser may place a combined order for two or more
accounts or funds engaged in the purchase or sale of the same security if, in
its judgment, joint execution is in the best interest of each participant and
will result in best price and execution. Transactions involving commingled
orders are allocated in a manner deemed equitable to each account or fund. When
a combined order is executed in a series of transactions at different prices,
each account participating in the order may be allocated an average price
obtained from the executing broker. It is believed that the ability of the
accounts to participate in volume transactions will generally be beneficial to
the accounts and funds. Although it is recognized that, in some cases, the joint
execution of orders could adversely affect the price or volume of the security
that a particular account or fund may obtain, it is the opinion of the Manager,
the Sub-Adviser and the Company's Board of Directors that the advantages of
combined orders outweigh the possible disadvantages of separate transactions.
Consistent with the Rules of Fair Practice of the National Association of
Securities Dealers, Inc. (the "NASD"), and subject to seeking best price and
execution, the Company may place orders with broker/dealers that have agreed to
defray certain Fund expenses such as custodian fees, and may, at the request of
the Distributor, give consideration to sales of shares of a Fund as a factor in
the selection of brokers and dealers to execute Fund portfolio transactions.
Portfolio Turnover
A Fund is free to dispose of portfolio securities at any time, subject to
complying with the Code and the Investment Company Act of 1940, when changes in
circumstances or conditions make such a move desirable in light of the
investment objective. A Fund will not attempt to achieve or be limited to a
predetermined rate of portfolio turnover, such a turnover always being
incidental to transactions undertaken with a view to achieving a Fund's
investment objective.
The degree of portfolio activity may affect brokerage costs of a Fund and
taxes payable by a Fund's shareholders. A turnover rate of 100% would occur, for
example, if all the investments in the Fund's portfolio at the beginning of the
year were replaced by the end of the year. In investing for capital
appreciation, a Fund may hold securities for any period of time. Portfolio
turnover will also be increased if a Fund writes a large number of call options
which are subsequently exercised. To the extent a Fund realizes gains on
securities held for less than six months, such gains are taxable to the
shareholder or to the Fund at ordinary income tax rates. The turnover rate also
may be affected by cash requirements from redemptions and repurchases of Fund
shares. Total brokerage costs generally increase with higher portfolio turnover
rates.
Under certain market conditions, a Fund may experience a high rate of
portfolio turnover which could exceed 100%. The portfolio turnover rate of a
Fund is calculated by dividing the lesser of purchases or sales of portfolio
securities for the particular fiscal year by the monthly average of the value of
the portfolio securities owned by the Fund during the particular fiscal year,
exclusive of securities whose maturities at the time of acquisition are one year
or less.
-24-
<PAGE>
During the past two fiscal years, the International Equity Series'
portfolio turnover rates were 27% for 1994 and 21% for 1995. During the period
December 27, 1994 (date of initial public offering) through November 30, 1995,
the annualized portfolio turnover rates for the Global Bond Series and the
Global Assets Series were 98% and 57%, respectively.
PURCHASING SHARES
The Distributor serves as the national distributor for each Fund's classes
of shares and has agreed to use its best efforts to sell shares of the Company.
See the Prospectuses for additional information on how to invest. Shares of the
Company are offered on a continuous basis and may be purchased through
authorized investment dealers or directly by contacting the Company or its
agent.
The minimum initial investment generally is $1,000 for Class A Shares,
Class B Shares and Class C Shares. Subsequent purchases generally must be at
least $100. The initial and subsequent investment minimums for Class A Shares
will be waived for purchases by officers, directors and employees of any
Delaware Group fund, the Manager or Sub-Adviser or any of their affiliates if
the purchases are made pursuant to a payroll deduction program. Shares purchased
pursuant to the Uniform Gifts to Minors Act or Uniform Transfers to Minors Act
and shares purchased in connection with an Automatic Investing Plan are subject
to a minimum initial purchase of $250 and a minimum subsequent purchase of $25.
Accounts opened under the Delaware Group Asset Planner service are subject to a
minimum initial investment of $2,000 per Asset Planner Strategy selected. There
are no minimum purchase requirements for the Institutional Classes, but certain
eligibility requirements must be satisfied.
There is a maximum purchase limitation of $250,000 with respect to each
purchase of Class B Shares; for Class C Shares, each purchase must be in an
amount that is less than $1,000,000. (See Investment Plans for purchase
limitations applicable to each of the Company's master retirement plans.) The
Company will reject any order for purchase of more than $250,000 of Class B
Shares and $1,000,000 or more for Class C Shares. An investor may exceed these
limitations by making cumulative purchases over a period of time. An investor
should keep in mind, however, that reduced front-end sales charges apply to
investments of $100,000 or more in Class A Shares, which are subject to a lower
annual 12b-1 Plan expense charge than Class B Shares and Class C Shares and
generally are not subject to a CDSC.
Selling dealers have the responsibility of transmitting orders promptly.
The Company reserves the right to reject any order for the purchase of its
shares if in the opinion of management such rejection is in the Company's best
interest.
The NASD has adopted Rules of Fair Practice relating to investment company
sales charges. The Company and the Distributor intend to operate in compliance
with these rules.
Class A Shares are purchased at the offering price which reflects a
maximum front-end sales charge of 4.75%; however, lower front-end sales charges
apply for larger purchases. See the table below. Class A Shares are also subject
to annual 12b-1 Plan expenses.
Class B Shares are purchased at net asset value and are subject to a CDSC
of: (i) 4% if shares are redeemed within two years of purchase; (ii) 3% if
shares are redeemed during the third or fourth year following purchase; (iii) 2%
if shares are redeemed during the fifth year following purchase; and (iv) 1% if
shares are redeemed during the sixth year following purchase. Class B Shares are
also subject to annual 12b-1 Plan expenses which are higher than those to which
Class A Shares are subject and are assessed against Class B Shares for
approximately eight years after purchase. See Automatic Conversion of Class B
Shares under Buying Shares in the Fund Classes' Prospectus.
Class C Shares are purchased at net asset value and are subject to a CDSC
of 1% if shares are redeemed within 12 months following purchase. Class C Shares
are also subject to annual 12b-1 Plan expenses for the life of the investment
which are equal to those to which Class B Shares are subject.
Shares of the Institutional Classes are purchased at the net asset value
per share without the imposition of a front-end or contingent deferred sales
charge or 12b-1 Plan expenses. See Determining Offering Price and Net Asset
Value and Plans Under Rule 12b-1 for the Fund Classes in this Part B.
Institutional Class shares, Class A Shares, Class B Shares and Class C
Shares represent a proportionate interest in a Fund's assets and will receive a
proportionate interest in that Fund's income, before application, as to the
Class A, Class B and Class C Shares, of any expenses under the Company's 12b-1
Plans.
-25-
<PAGE>
Certificates representing shares purchased are not ordinarily issued
unless a shareholder submits a specific request. Certificates are not issued in
the case of Class B Shares or Class C Shares. However, purchases not involving
the issuance of certificates are confirmed to the investor and credited to the
shareholder's account on the books maintained by Delaware Service Company, Inc.
(the "Transfer Agent"). The investor will have the same rights of ownership with
respect to such shares as if certificates had been issued. An investor that is
permitted to obtain a certificate may receive a certificate representing shares
purchased by sending a letter to the Transfer Agent requesting the certificate.
No charge is made for any certificate issued. Investors who hold certificates
representing any of their shares may only redeem those shares by written
request. The investor's certificate(s) must accompany such request.
Alternative Purchase Arrangements
The alternative purchase arrangements of Class A Shares, Class B Shares
and Class C Shares of each Fund permit investors to choose the method of
purchasing shares that is most suitable for their needs given the amount of
their purchase, the length of time they expect to hold their shares and other
relevant circumstances. Investors should determine whether, under their
particular circumstances, it is more advantageous to purchase Class A Shares of
a Fund and incur a front-end sales charge and annual 12b-1 Plan expenses of up
to a maximum of .30% of the average daily net assets of Class A Shares or to
purchase either Class B or Class C Shares of a Fund and have the entire initial
purchase amount invested in the Fund with the investment thereafter subject to a
CDSC and annual 12b-1 Plan expenses. Class B Shares are subject to a CDSC if the
shares are redeemed within six years of purchase, and Class C Shares are subject
to a CDSC if the shares are redeemed within 12 months of purchase. Class B and
Class C Shares are each subject to annual 12b-1 Plan expenses of up to a maximum
of 1% (.25% of which are service fees to be paid to the Distributor, dealers or
others for providing personal service and/or maintaining shareholder accounts)
of average daily net assets of the respective class. Class B Shares will
automatically convert to Class A Shares at the end of approximately eight years
after purchase and, thereafter be subject to annual 12b-1 Plan expenses of up to
a maximum of .30% of average daily net assets of such shares. Unlike Class B
Shares, Class C Shares do not convert into another class.
Class A Shares - International Equity Series, Global Bond Series and Global
Assets Series
Purchases of $100,000 or more of Class A Shares at the offering price
carry reduced front-end sales charges as shown in the accompanying tables, and
may include a series of purchases over a 13-month period under a Letter of
Intention signed by the purchaser. See Special Purchase Features - Class A
Shares, below for more information on ways in which investors can avail
themselves of reduced front-end sales charges and other purchase features.
-26-
<PAGE>
International Equity Fund A Class
Global Bond Fund A Class
Global Assets Fund A Class
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
Dealer's
Front-End Sales Charge as % of Commission***
Amount of Purchase Offering Amount as % of
Price Invested** Offering Price
- -------------------------------------------------------------------------------------------------------------------------------
International Global Global
Equity Fund Bond Fund Assets Fund
<S> <C> <C> <C> <C> <C>
Less than $100,000 4.75% 5.01% 4.96% 4.99% 4.00%
$100,000 but under $250,000 3.75 3.86 3.87 3.92 3.00
$250,000 but under $500,000 2.50 2.55 2.61 2.59 2.00
$500,000 but under $1,000,000* 2.00 2.06 2.02 2.05 1.60
</TABLE>
* There is no front-end sales charge on purchases of $1 million or more of
Class A Shares but, under certain limited circumstances, a 1% contingent
deferred sales charge may apply upon redemption of such shares. The
contingent deferred sales charge ("Limited CDSC") that may be applicable
arises only in the case of certain net asset value purchases which have
triggered the payment of a dealer's commission.
** Based on the net asset values per share of Class A Shares as of the end of
the Company's most recent fiscal year.
*** Financial institutions or their affiliated brokers may receive an agency
transaction fee in the percentages set forth above.
- -------------------------------------------------------------------------------
The Company must be notified when a sale takes place which would qualify
for the reduced front-end sales charge on the basis of previous purchases
or current purchases. The reduced front-end sales charge will be granted
upon confirmation of the shareholder's holdings by the Company. 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 to dealers up to the full amount of the
front-end sales charges shown above. Dealers who receive 90% or more of
the sales charge may be deemed to be underwriters under the 1933 Act.
- -------------------------------------------------------------------------------
-27-
<PAGE>
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 commission of up to .15% of the
offering price in connection with sales of Class A Shares. Such dealers must
meet certain requirements in terms of organization and distribution capabilities
and their ability to increase sales. The Distributor should be contacted for
further information on these requirements as well as the basis and circumstances
upon which the additional commission will be paid. Participating dealers may be
deemed to have additional responsibilities under the securities laws.
Dealer's Commission
For initial purchases of Class A Shares of $1,000,000 or more, a dealer's
commission may be paid by the Distributor to financial advisers through whom
such purchases are effected 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 a Limited CDSC applies (see Redemption and Repurchase) may be aggregated
with those of Class A Shares of a Fund. 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.
Financial advisers should contact the Distributor concerning the applicability
and calculation of the dealer's commission in the case of combined purchases.
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.
Contingent Deferred Sales Charge - Class B
Shares and Class C Shares
Class B and Class C Shares are purchased without the imposition of a
front-end sales charge. Class B Shares redeemed within six years of purchase may
be subject to a CDSC at the rates set forth below, and Class C Shares redeemed
within 12 months of purchase may be subject to a CDSC of 1%. CDSC fees are
charged as a percentage of the dollar amount subject to the CDSC. The charge
will be assessed on an amount equal to the lesser of the net asset value at the
time of purchase of the shares being redeemed or the net asset value of those
shares at the time of redemption. No CDSC will be imposed on increases in net
asset value above the initial purchase price. In addition, no CDSC will be
assessed on redemption of shares received through the reinvestment of dividends
or capital gains distributions. See Waiver of Contingent Deferred Sales Charge -
Class B and Class C Shares under Redemption and Exchange in the Fund Classes'
Prospectus for a list of the instances in which the CDSC is waived.
The following table sets forth the rates of the CDSC for Class B Shares of
each Fund:
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
During the seventh year after purchase and, thereafter, until converted
automatically into Class A Shares of a Fund, Class B Shares will still be
subject to the annual 12b-1 Plan expenses of up to 1% of average daily net
assets of those shares. At the end of approximately eight years after purchase,
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the investor's Class B Shares will be automatically converted into Class A
Shares of the Fund. See Automatic Conversion of Class B Shares under Buying
Shares in the Fund Classes' Prospectus. Such conversion will constitute a
tax-free exchange for federal income tax purposes. See Taxes in the Prospectus
for the Fund Classes.
Plans Under Rule 12b-1 for the Fund Classes
Pursuant to Rule 12b-1 under the Investment Company Act of 1940, the
Company has adopted a separate plan for each of the Class A Shares, the Class B
Shares and the Class C Shares of a Fund (the "Plans"). Each Plan permits a Fund
to pay for certain distribution, promotional and related expenses involved in
the marketing of only the class to which the Plan applies. The Plans do not
apply to the Institutional Classes of shares. Such shares are not included in
calculating the Plans' fees, and the Plans are not used to assist in the
distribution and marketing of shares of the Institutional Classes. Shareholders
of the Institutional Classes may not vote on matters affecting the Plans.
The Plans permit a Fund, pursuant to its Distribution Agreement, to pay
out of the assets of the Class A Shares, Class B Shares and Class C Shares
monthly fees to the Distributor for its services and expenses in distributing
and promoting sales of shares of such classes. These expenses include, among
other things, preparing and distributing advertisements, sales literature and
prospectuses and reports used for sales purposes, compensating sales and
marketing personnel, and paying distribution and maintenance fees to securities
brokers and dealers who enter into dealer's agreements with the Distributor. The
Plan expenses relating to Class B and Class C Shares are also used to pay the
Distributor for advancing the commission costs to dealers with respect to the
initial sale of such shares.
In addition, a Fund may make payments out of the assets of the Class A
Shares, Class B Shares and Class C Shares directly to other unaffiliated
parties, such as banks, who either aid in the distribution of shares of, or
provide services to, such classes.
The maximum aggregate fee payable by a Fund under the Plans and that
Fund's Distribution Agreement, is on an annual basis up to .30% of the Class A
Shares' average daily net assets for the year, and up to 1% (.25% of which are
service fees to be paid to the Distributor, dealers and others for providing
personal service and/or maintaining shareholder accounts) of each of the Class B
Shares' and the Class C Shares' average daily net assets for the year. The
Company's Board of Directors may reduce these amounts at any time.
All of the distribution expenses incurred by the Distributor and others,
such as broker/dealers, in excess of the amount paid on behalf of Class A, Class
B and Class C Shares would be borne by such persons without any reimbursement
from such classes. Subject to seeking best price and execution, a Fund may, from
time to time, buy or sell portfolio securities from or to firms which receive
payments under the Plans.
From time to time, the Distributor may pay additional amounts from its
own resources to dealers for aid in distribution or for aid in providing
administrative services to shareholders.
The Plans and the Distribution Agreements, as amended, have been approved
by the Board of Directors of the Company, including a majority of the directors
who are not "interested persons" (as defined in the Investment Company Act of
1940) of the Company and who have no direct or indirect financial interest in
the Plans, by vote cast in person at a meeting duly called for the purpose of
voting on the Plans and such Distribution Agreements. Continuation of the Plans
and the Distribution Agreements, as amended, must be approved annually by the
Board of Directors in the same manner as specified above.
Each year, the directors must determine whether continuation of the Plans
is in the best interest of shareholders of, respectively, Class A Shares, Class
B Shares and Class C Shares and that there is a reasonable likelihood of the
Plan relating to a Fund Class providing a benefit to that class. The Plans and
the Distribution Agreements, as amended, may be terminated at any time without
penalty by a majority of those directors who are not "interested persons" or by
a majority vote of the outstanding voting securities of the relevant Fund Class.
Any amendment materially increasing the percentage payable under the Plans must
likewise be approved by a majority vote of the outstanding voting securities of
the relevant Fund Class, as well as by a majority vote of those directors who
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are not "interested persons." With respect to the Class A Shares' Plans, any
material increase in the maximum percentage payable thereunder must be approved
by a majority of the outstanding voting Class B Shares of the relevant Fund.
Also, any other material amendment to the Plans must be approved by a majority
vote of the directors including a majority of the noninterested directors of the
Company having no interest in the Plans. In addition, in order for the Plans to
remain effective, the selection and nomination of directors who are not
"interested persons" of the Company must be effected by the directors who
themselves are not "interested persons" and who have no direct or indirect
financial interest in the Plans. Persons authorized to make payments under the
Plans must provide written reports at least quarterly to the Board of Directors
for their review.
For the fiscal year ended November 30, 1995, payments from the
International Equity Fund A Class pursuant to its Plan amounted to $173,135 and
such payments were used for the following purposes: Annual/Semi-Annual Reports -
$2,191; Broker Trails - $136,499; Commission to Wholesalers $9,976;
Promotional-Other - $13,908; Promotional-Broker Meetings - $1,896; Advertising -
$128; and Prospectus Printing - $8,537. For the fiscal year ended November 30,
1995, payments from the International Equity Fund B Class pursuant to its Plan
amounted to $17,353 and such payments were used for the following purposes:
Broker Sales Charges - $6,773; Broker Trails - $4,138; Commission to Wholesalers
- - $960; Telephone - $13; Promotional-Broker Meetings - $93; and Interest on
Broker Sales Charges - $5,376. For the period November 29, 1995 (date of initial
public offering) through November 30, 1995, there were no payments from the
International Equity Fund C Class pursuant to its Plan.
For the period December 27, 1994 (date of initial public offering)
through November 30, 1995, payments from the Global Bond Fund A Class pursuant
to its Plan amounted to $1,228 and such payments were used for the following
purposes: Broker Trails - $642; and Commission to Wholesalers - $304; and
Promotional-Other - $282. For the period December 27, 1994 (date of initial
public offering) through November 30, 1995, payments from the Global Bond Fund B
Class pursuant to its Plan amounted to $321 and such payments were used for the
following purposes: Broker Sales Charges - $70; Broker Trails - $80; Commission
to Wholesalers - $3; Telephone - $3; Wholesaler Expenses - $2;
Promotional-Broker Meetings - $42; Dealer Service Expenses - $45; and Interest
on Broker Sales Charges - $76. For the period November 29, 1995 (date of initial
public offering) through November 30, 1995, there were no payments from the
Global Bond Fund C Class pursuant to its Plan.
For the period December 27, 1994 (date of initial public offering)
through November 30, 1995, payments from the Global Assets Fund A Class pursuant
to its Plan amounted to $1,824 and such payments were used for the following
purposes: Broker Trails - $1,107; Commission to Wholesalers $353;
Promotional-Other - $358; and Promotional- Broker Meetings - $6. For the period
December 27, 1994 (date of initial public offering) through November 30, 1995,
payments from the Global Assets Fund B Class pursuant to its Plan amounted to
$724 and such payments were used for the following purposes: Broker Sales
Charges - $231; Broker Trails - $194; Commission to Wholesalers - $10;
Wholesaler Expenses - $1; Telephone - $7, Promotional-Broker Meetings $31;
Dealer Service Expenses - $35; and Interest on Broker Sales Charges - $215. For
the period November 29, 1995 (date of initial public offering) through November
30, 1995, there were no payments from the Global Assets Fund C Class pursuant to
its Plan.
The staff of the SEC has proposed amendments to Rule 12b-1 and other
related regulations that could impact Rule 12b-1 Distribution Plans. The Company
intends to amend the Plans, if necessary, to comply with any new rules or
regulations the SEC may adopt with respect to Rule 12b-1.
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<PAGE>
Other Payments to Dealers - Class A, Class B and Class C Shares
From time to time, at the discretion of the Distributor, all registered
broker/dealers whose aggregate sales of Fund 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.
Payments to dealers made in connection with seminars, conferences or
contests relating to the promotion of fund shares may be in an amount up to 100%
of the expenses incurred or awards made. The Distributor may also pay a portion
of the expense of preapproved dealer advertisements promoting the sale of
Delaware Group fund shares.
Special Purchase Features - Class A Shares
Buying at Net Asset Value
Class A Shares may be purchased without a front-end sales charge under
the Dividend Reinvestment Plan and, under certain circumstances, the 12-Month
Reinvestment Privilege and the Exchange Privilege.
Current and former officers, directors and employees of the Company, any
other fund in the Delaware Group, the Sub-Adviser, including the Manager, or any
of the Sub-Adviser's affiliates that may in the future be created, legal counsel
to the funds, and registered representatives, and employees of broker/dealers
who have entered into Dealer's Agreements with the Distributor may purchase
Class A Shares and any such class of shares of any of the funds in the Delaware
Group, including any fund that may be created, at the net asset value per share.
Spouses, parents, brothers, sisters and children (regardless of age) of such
persons at their direction, and any employee benefit plan established by any of
the foregoing funds, corporations, counsel or broker/dealers may also purchase
Class A Shares at net asset value. Purchases of Class A Shares may also 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 charges. Purchases of Class A Shares also may be made at net asset
value by bank employees who provide services in connection with agreements
between the bank and unaffiliated brokers or dealers concerning sales of shares
of Delaware Group funds. 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. Such purchasers are required to sign a letter stating that the
purchase is for investment only and that the securities may not be resold except
to the issuer. Such purchasers may also be required to sign or deliver such
other documents as the Company may reasonably require to establish eligibility
for purchase at net asset value. The Company must be notified in advance that
the trade qualifies for purchase at net asset value.
Beginning May 25, 1995, Class A Shares of each Fund may be purchased at
net asset value by any investor within 90 days after a redemption of shares from
a fund outside the Delaware Group of funds provided that: 1) the redeemed shares
were purchased no more than five years before the proposed purchase of Class A
Shares of a Fund; and 2) a front-end sales charge was paid in connection with
the purchase of the redeemed shares or a CDSC was paid upon their redemption.
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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.
Letter of Intention
The reduced front-end sales charges described above with respect to Class
A Shares are also applicable to the aggregate amount of purchases made by any
such purchaser previously enumerated within a 13-month period pursuant to a
written Letter of Intention provided by the Distributor and signed by the
purchaser, and not legally binding on the signer or the Company, which provides
for the holding in escrow by the Transfer Agent of 5% of the total amount of the
Class A Shares intended to be purchased until such purchase is completed within
the 13-month period. A Letter of Intention may be dated to include shares
purchased up to 90 days prior to the date the Letter is signed. The 13-month
period begins on the date of the earliest purchase. If the intended investment
is not completed, except as noted below, the purchaser will be asked to pay an
amount equal to the difference between the front-end sales charge on Class A
Shares purchased at the reduced rate and the front-end sales charge otherwise
applicable to the total shares purchased. If such payment is not made within 20
days following the expiration of the 13-month period, the Transfer Agent will
surrender an appropriate number of the escrowed shares for redemption in order
to realize the difference. Such purchasers may include the value (at offering
price at the level designated in their Letter of Intention) of all their shares
of a Fund and of any class of any of the other mutual funds in the Delaware
Group (except shares of any Delaware Group fund which do not carry a front-end
sales charge, CDSC or Limited CDSC, other than shares of Delaware Group Premium
Fund, Inc. beneficially owned in connection with the ownership of variable
insurance products, unless they were acquired through an exchange from a
Delaware Group fund which carried a front-end sales charge, CDSC or Limited
CDSC) previously purchased and still held as of the date of their Letter of
Intention toward the completion of such Letter. For purposes of satisfying an
investor's obligation under a Letter of Intention, Class B Shares and Class C
Shares of a Fund and the corresponding classes of shares of other Delaware Group
funds which offer such shares may be aggregated with Class A Shares of the Fund
and the corresponding class of shares of the other Delaware Group funds.
Employers offering a Delaware Group retirement plan may also complete a
Letter of Intention to obtain a reduced front-end sales charge on investments of
Class A Shares made by the plan. The aggregate investment level of the Letter of
Intention will be determined and accepted by the Transfer Agent at the point of
plan establishment. The level and any reduction in front-end sales charge will
be based on actual plan participation and the projected investments in Delaware
Group funds that are offered with a front-end sales charge, CDSC or Limited CDSC
for a 13-month period. The Transfer Agent reserves the right to adjust the
signed Letter of Intention based on this acceptance criteria. The 13-month
period will begin on the date this Letter of Intention is accepted by the
Transfer Agent. If actual investments exceed the anticipated level and equal an
amount that would qualify the plan for further discounts, any front-end sales
charges will be automatically adjusted. In the event this Letter of Intention is
not fulfilled within the 13-month period, the plan level will be adjusted
(without completing another Letter of Intention) and the employer will be billed
for the difference in front-end sales charges due, based on the plan's assets
under management at that time. Employers may also include the value (at offering
price at the level designated in their Letter of Intention) of all their shares
intended for purchase that are offered with a front-end sales charge, CDSC or
Limited CDSC of any class. Class B Shares and Class C Shares of a Fund and other
Delaware Group funds which offer corresponding classes of shares may also be
aggregated for this purpose.
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Combined Purchases Privilege
In determining the availability of the reduced front-end sales charge
previously set forth with respect to Class A Shares, purchasers may combine the
total amount of any combination of the Fund Classes' shares as well as shares of
any other class of any of the other Delaware Group funds (except shares of any
Delaware Group fund which do not carry a front-end sales charge, CDSC or Limited
CDSC, other than shares of Delaware Group Premium Fund, Inc. beneficially owned
in connection with the ownership of variable insurance products, unless they
were acquired through an exchange from a Delaware Group fund which carried a
front-end sales charge, CDSC or Limited CDSC).
The privilege also extends to all purchases made at one time by an
individual; or an individual, his or her spouse and their children under 21; or
a trustee or other fiduciary of trust estates or fiduciary accounts for the
benefit of such family members (including certain employee benefit programs).
Right of Accumulation
In determining the availability of the reduced front-end sales charge
with respect to Class A Shares, purchasers may also combine any subsequent
purchases of Class A Shares, Class B Shares and Class C Shares of the Fund
Classes as well as shares of any other class of any of the other Delaware Group
funds which offer such classes (except shares of any Delaware Group fund which
do not carry a front-end sales charge, CDSC or Limited CDSC, other than shares
of Delaware Group Premium Fund, Inc. beneficially owned in connection with the
ownership of variable insurance products, unless they were acquired through an
exchange from a Delaware Group fund which carried a front-end sales charge, CDSC
or Limited CDSC). Using the International Equity Fund A Class as an example, if
any such purchaser has previously purchased and still holds shares of that class
and/or shares of any other of the classes described in the previous sentence
with a value of $40,000 and subsequently purchases $60,000 at offering price of
additional shares of Class A Shares, the charge applicable to the $60,000
purchase would currently be 3.75%. For the purpose of this calculation, the
shares presently held shall be valued at the public offering price that would
have been in effect were the shares purchased simultaneously with the current
purchase. Investors should refer to the table of sales charges for Class A
Shares to determine the applicability of the Right of Accumulation to their
particular circumstances.
12-Month Reinvestment Privilege
Holders of Class A Shares (and of the Institutional Classes holding
shares which were acquired through an exchange of one of the other mutual funds
in the Delaware Group offered with a front-end sales charge) who redeem such
shares of a Fund have one year from the date of redemption to reinvest all or
part of their redemption proceeds in Class A Shares of that Fund or in Class A
Shares of any of the other funds in the Delaware Group, subject to applicable
eligibility and minimum purchase requirements, in states where shares of such
other funds may be sold, at net asset value without the payment of a front-end
sales charge. This privilege does not extend to Class A Shares where the
redemption of the shares triggered the payment of a Limited CDSC. Persons
investing redemption proceeds from direct investments in mutual funds in the
Delaware Group offered without a front-end sales charge will be required to pay
the applicable sales charge when purchasing Class A Shares. The reinvestment
privilege does not extend to a redemption of either Class B or Class C Shares.
Any such reinvestment cannot exceed the redemption proceeds (plus any
amount necessary to purchase a full share). The reinvestment will be made at the
net asset value next determined after receipt of remittance. A redemption and
reinvestment could have income tax consequences. It is recommended that a tax
adviser be consulted with respect to such transactions. Any reinvestment
directed to a fund in which the investor does not then have an account will be
treated like all other initial purchases of a fund's shares. Consequently, an
investor should obtain and read carefully the prospectus for the fund in which
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the investment is proposed to be made before investing or sending money. The
prospectus contains more complete information about the fund, including charges
and expenses.
Investors should consult their financial advisers or the Transfer Agent,
which also serves as the Company's shareholder servicing agent, about the
applicability of the Limited CDSC (see Contingent Deferred Sales Charge for
Certain Redemptions of Class A Shares Made at Net Asset Value under Redemption
and Exchange in the Fund Classes' Prospectus) in connection with the features
described above.
Group Investment Plans
Group Investment Plans that are not eligible to purchase shares of the
Institutional Classes may also benefit from the reduced front-end sales charges
for investments in Class A Shares set forth in the table on page , based on
total plan assets. 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 upon each purchase,
both initial and subsequent, upon notification to the Company at the time of
each such purchase. Employees participating in such Group Investment Plans may
also combine the investments made in their plan account when determining the
applicable front-end sales charge on purchases to non-retirement Delaware Group
investment accounts if they so notify the Company in connection with each
purchase. For other retirement plans and special services, see Retirement Plans
for the Fund Classes under Investment Plans.
The Institutional Classes
Each Fund's Institutional Class is available for purchase only by: (a)
retirement plans introduced by persons not associated with brokers or dealers
that are primarily engaged in the retail securities business and rollover
individual retirement accounts from such plans; (b) tax-exempt employee benefit
plans of the Manager, the Sub-Adviser or their affiliates and securities dealer
firms with a selling agreement with the Distributor; (c) institutional advisory
accounts of the Manager, the Sub-Adviser or their affiliates and those having
client relationships with Delaware Investment Advisers, a division of the
Sub-Adviser, or its affiliates and their corporate sponsors, as well as
subsidiaries and related employee benefit plans and rollover individual
retirement accounts from such institutional advisory accounts; (d) banks, trust
companies and similar financial institutions investing for their own account or
for the account of their trust customers for whom such financial institution is
exercising investment discretion in purchasing shares of an Institutional 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.
Shares of the Institutional Classes are available for purchase at net
asset value, without the imposition of a front-end or contingent deferred sales
charge and are not subject to Rule 12b-1 expenses.
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INVESTMENT PLANS
Reinvestment Plan/Open Account
Unless otherwise designated by shareholders in writing, dividends from
net investment income and distributions from realized securities profits, if
any, will be automatically reinvested in additional shares of the respective
Fund Class in which an investor has an account (based on the net asset value in
effect on the reinvestment date) and will be credited to the shareholder's
account on that date. All dividends and distributions of an Institutional Class
are reinvested in the account of the holders of such shares (based on the net
asset value of the Fund in effect on the reinvestment date). A confirmation of
each dividend payment from net investment income and of distributions from
realized securities profits, if any, will be mailed to shareholders in the first
quarter of the fiscal year.
Under the Reinvestment Plan/Open Account, shareholders may purchase and
add full and fractional shares to their plan accounts at any time either through
their investment dealers or by sending a check or money order to the Funds. Such
purchases, which must meet the minimum subsequent purchase requirements set
forth in the Prospectuses and this Part B, are made, for Class A Shares at the
public offering price, and for Class B Shares, Class C Shares and Institutional
Classes at the net asset value, at the end of the day of receipt. A reinvestment
plan may be terminated at any time. This plan does not assure a profit nor
protect against depreciation in a declining market.
Reinvestment of Dividends in Other Delaware Group Funds
Subject to applicable eligibility and minimum initial purchase
requirements and the limitations set forth below, holders of Class A, Class B
and Class C Shares may automatically reinvest dividends and/or distributions
from a Fund in any of the other mutual funds in the Delaware Group, including
the Funds, in states where their shares may be sold. Such investments will be at
net asset value at the close of business on the reinvestment date without any
front-end sales charge or service fee. The shareholder must notify the Transfer
Agent in writing and must have established an account in the fund into which the
dividends and/or distributions are to be invested. Any reinvestment directed to
a fund in which the investor does not then have an account will be treated like
all other initial purchases of a fund's shares. Consequently, an investor should
obtain and read carefully the prospectus for the fund in which the investment is
proposed to be made before investing or sending money. The prospectus contains
more complete information about the fund, including charges and expenses. See
also Dividend Reinvestment Plan in the Prospectus for the Fund Classes.
Subject to the following limitations, dividends and/or distributions from
other funds in the Delaware Group may be invested in shares of a Fund, provided
an account has been established. Dividends from Class A Shares may not be
directed to Class B Shares or Class C Shares of another fund in the Delaware
Group. Dividends from Class B Shares may only be directed to Class B Shares of
another fund in the Delaware Group that offers such class of shares. Dividends
from Class C Shares may only be directed to Class C Shares of another fund in
the Delaware Group that offers such class of shares. See Class B Funds and Class
C Funds under Buying Shares in the Prospectus for the Fund Classes for the funds
in the Delaware Group that are eligible for investment by holders of Company
shares.
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.
Investing by Electronic Fund Transfer
Direct Deposit Purchase Plan--Investors may arrange for a Fund to accept
for investment in Class A, Class B or Class C Shares, through an agent bank,
preauthorized government or private recurring payments. This method of
investment assures the timely credit to the shareholder's account of payments
such as social security, veterans' pension or compensation benefits, federal
salaries, Railroad Retirement benefits, private payroll checks, dividends, and
disability or pension fund benefits. It also eliminates lost, stolen and delayed
checks.
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Automatic Investing Plan--Shareholders of Class A Shares, Class B Shares
and Class C Shares may make automatic investments by authorizing, in advance,
monthly payments directly from their checking account for deposit into their
Fund account. This type of investment will be handled in either of the two ways
noted below. (1) If the shareholder's bank is a member of the National Automated
Clearing House Association ("NACHA"), the amount of the investment will be
electronically deducted from his or her account by Electronic Fund Transfer
("EFT"). The shareholder's checking account will reflect a debit each month at a
specified date although no check is required to initiate the transaction. (2) If
the shareholder's bank is not a member of NACHA, deductions will be made by
preauthorized checks, known as Depository Transfer Checks. Should the
shareholder's bank become a member of NACHA in the future, his or her
investments would be handled electronically through EFT.
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.
* * *
Initial investments under the Direct Deposit Purchase Plan and the
Automatic Investing Plan must be for $250 or more and subsequent investments
must be for $25 or more. An investor wishing to take advantage of either service
must complete an authorization form. Either service can be discontinued by the
shareholder at any time without penalty by giving written notice.
Payments to a Fund from the federal government or its agencies on behalf
of a shareholder may be credited to the shareholder's account after such
payments should have been terminated by reason of death or otherwise. Any such
payments are subject to reclamation by the federal government or its agencies.
Similarly, under certain circumstances, investments from private sources may be
subject to reclamation by the transmitting bank. In the event of a reclamation,
a Fund may liquidate sufficient shares from a shareholder's account to reimburse
the government or the private source. In the event there are insufficient shares
in the shareholder's account, the shareholder is expected to reimburse the Fund.
Direct Deposit Purchases by Mail
Shareholders may authorize a third party,
such as a bank or employer, to make investments directly to their Fund accounts.
A Fund will accept these investments, such as bank-by-phone, annuity payments
and payroll allotments, by mail directly from the third party. Investors should
contact their employers or financial institutions who in turn should contact the
Company for proper instructions.
Retirement Plans for the Fund Classes
An investment in the Fund may 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. The CDSC may be waived on certain redemptions of
Class B Shares and Class C Shares. See Waiver of Contingent Deferred Sales
Charge - Class B and Class C Shares under Redemption and Exchange in the
Prospectus for the Fund Classes for a list of the instances in which the CDSC is
waived.
Each purchase of Class B Shares is subject to a maximum purchase
limitation of $250,000 for retirement plans. Each purchase of Class C Shares
must be in an amount that is less than $1,000,000 for such plans. The maximum
purchase limitations apply only to the initial purchase of shares by the
retirement plan.
Minimum investment limitations generally applicable to other investors do
not apply to retirement plans other than Individual Retirement Accounts
("IRAs"), for which there is a minimum initial purchase of $250 and a minimum
subsequent purchase of $25 regardless of which class is selected. Retirement
plans may be subject to plan establishment fees, annual maintenance fees and/or
other administrative or trustee fees. Fees are based upon the number of
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participants in the plan as well as the services selected. Additional
information about fees is included in retirement plan materials. Fees are quoted
upon request. Annual maintenance fees may be shared by Delaware Management Trust
Company, the Transfer Agent, other affiliates of the Manager and others that
provide services to such plans.
Certain shareholder investment services available to non-retirement plan
shareholders may not be available to retirement plan shareholders. Certain
retirement plans may qualify to purchase shares of the Institutional Classes.
See The Institutional Classes above. For additional information on any of the
plans and Delaware's retirement services, call the Shareholder Service Center
telephone number.
It is advisable for an investor considering any one of the retirement
plans described below to consult with an attorney, accountant or a qualified
retirement plan consultant. For further details, including applications for any
of these plans, contact your investment dealer or the Distributor.
Taxable distributions from the retirement plans described below may be
subject to withholding.
Please contact your investment dealer or the Distributor for the special
application forms required for the plans described below.
Prototype Profit Sharing or Money Purchase Pension Plans
Prototype plans are available for self-employed individuals, partnerships
and corporations which replace the former Keogh and corporate retirement plans.
These plans contain profit sharing or money purchase pension plan provisions.
Contributions may be invested only in Class A and Class C Shares.
Individual Retirement Account ("IRA")
A document is available for an individual who
wants to establish an IRA by making contributions which may be tax-deductible,
even if the individual is already participating in an employer-sponsored
retirement plan. Even if contributions are not deductible for tax purposes, as
indicated below, earnings will be tax-deferred. In addition, an individual may
make contributions on behalf of a spouse who has no compensation for the year or
elects to be treated as having no compensation for the year. Investments in each
of the Fund Classes are permissible.
The Tax Reform Act of 1986 (the "Act") restructured, and in some cases
eliminated, the tax deductibility of IRA contributions. Under the Act, the full
deduction for IRAs ($2,000 for each working spouse and $2,250 for one-income
couples) was retained for all taxpayers who are not covered by an
employer-sponsored retirement plan. Even if a taxpayer (or his or her spouse) is
covered by an employer-sponsored retirement plan, the full deduction is still
available if the taxpayer's adjusted gross income is below $25,000 ($40,000 for
taxpayers filing joint returns). A partial deduction is allowed for married
couples with incomes between $40,000 and $50,000, and for single individuals
with incomes between $25,000 and $35,000. The Act does not permit deductions for
contributions to IRAs by taxpayers whose adjusted gross income before IRA
deductions exceeds $50,000 ($35,000 for singles) and who are active participants
in an employer-sponsored retirement plan. Taxpayers who are not allowed
deductions on IRA contributions still can make nondeductible IRA contributions
of as much as $2,000 for each working spouse ($2,250 for one-income couples),
and defer taxes on interest or other earnings from the IRAs. Special rules apply
for determining the deductibility of contributions made by married individuals
filing separate returns.
A company or association may establish a Group IRA for employees or
members who want to purchase shares of a Fund. Purchases of $1 million or more
of Class A Shares qualify for purchase at net asset value but may, under certain
circumstances, be subject to a Limited CDSC. See Purchasing Shares concerning
reduced front-end sales charges applicable to Class A Shares.
Investments generally must be held in the IRA until age 59 1/2 in order
to avoid premature distribution penalties, but distributions generally must
commence no later than April 1 of the calendar year following the year in which
the participant reaches age 70 1/2. Individuals are entitled to revoke the
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account, for any reason and without penalty, by mailing written notice of
revocation to Delaware Management Trust Company within seven days after the
receipt of the IRA Disclosure Statement or within seven days after the
establishment of the IRA, except, if the IRA is established more than seven days
after receipt of the IRA Disclosure Statement, the account may not be revoked.
Distributions from the account (except for the pro-rata portion of any
nondeductible contributions) are fully taxable as ordinary income in the year
received. Excess contributions removed after the tax filing deadline, plus
extensions, for the year in which the excess contributions were made are subject
to a 6% excise tax on the amount of excess. Premature distributions
(distributions made before age 59 1/2, except for death, disability and certain
other limited circumstances) will be subject to a 10% excise tax on the amount
prematurely distributed, in addition to the income tax resulting from the
distribution. See Class B Shares and Class C Shares under Alternative Purchase
Arrangements, Contingent Deferred Sales Charge - Class B Shares and Class C
Shares, and Waiver of Contingent Deferred Sales Charge - Class B and Class C
Shares in the Fund Classes' Prospectus concerning the applicability of a CDSC
upon redemption.
See Appendix A for additional IRA information.
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 Fund Classes is available for
investment by a SEP/IRA.
Salary Reduction Simplified Employee Pension Plan ("SAR/SEP")
Employers with 25 or fewer eligible employees can establish this plan
which permits employer contributions and salary deferral contributions in Class
A Shares and Class C Shares only.
Prototype 401(k) Defined Contribution Plan
Section 401(k) of the Code permits employers to establish qualified plans
based on salary deferral contributions. Plan documents are available to enable
employers to establish a plan. An employer may also elect to make profit sharing
contributions and/or matching contributions with investments in only Class A
Shares and Class C Shares or certain other funds in the Delaware Group.
Purchases under the plan may be combined for purposes of computing the reduced
front-end sales charge applicable to Class A Shares as set forth in the table on
page 27.
Deferred Compensation Plan for Public Schools and Non-Profit Organizations
("403(b)(7)")
Section 403(b)(7) of the Code permits public school systems and certain
non-profit organizations to use mutual fund shares held in a custodial account
to fund deferred compensation arrangements for their employees. A custodial
account agreement is available for those employers who wish to purchase any of
the Fund Classes in conjunction with such an arrangement. Applicable front-end
sales charges with respect to Class A Shares for such purchases are set forth in
the table on page 27.
Deferred Compensation Plan for State and Local Government Employees ("457")
Section 457 of the Code permits state and local governments, their
agencies and certain other entities to establish a deferred compensation plan
for their employees who wish to participate. This enables employees to defer a
portion of their salaries and any federal (and possibly state) taxes thereon.
Such plans may invest in shares of any of the Fund Classes. Although investors
may use their own plan, there is available a Delaware Group 457 Deferred
Compensation Plan. Interested investors should contact the Distributor or their
investment dealers to obtain further information. Applicable front-end sales
charges for such purchases of Class A Shares are set forth in the table on
page 27.
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DETERMINING OFFERING PRICE AND NET
ASSET VALUE
Orders for purchases of Class A Shares are effected at the offering price
next calculated by a Fund after receipt of the order by the Company or its
agent. Orders for purchases of Class B Shares, Class C Shares and the
Institutional Classes are effected at the net asset value per share next
calculated after receipt of the order by the Company or its agent. Selling
dealers have the responsibility of transmitting orders promptly.
The offering price for Class A Shares consists of the net asset value per
share plus any applicable front-end sales charges. Offering price and net asset
value are computed as of the close of regular trading on the New York Stock
Exchange (ordinarily, 4 p.m., Eastern time) on days when the Exchange is open.
The New York Stock Exchange is scheduled to be open Monday through Friday
throughout the year except for New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas. When the
New York Stock Exchange is closed, the Company will generally be closed, pricing
calculations will not be made and purchase and redemption orders will not be
processed.
An example showing how to calculate the net asset value per share and, in
the case of Class A Shares, the offering price per share, is included in the
Funds' financial statements which are incorporated by reference into this Part
B.
Each Fund's net asset value per share is computed by adding the value of
all the securities and other assets in the Fund's portfolio, deducting any
liabilities of the Fund, and dividing by the number of Fund shares outstanding.
Expenses and fees are accrued daily. In determining a Fund's total net assets,
portfolio securities primarily listed or traded on a national or foreign
securities exchange, except for bonds, are valued at the last sale price on that
exchange. Exchange traded options are valued at the last reported sale price or,
if no sales are reported, at the mean between bid and asked prices. Non-exchange
traded options are valued at fair value using a mathematical model. Futures
contracts are valued at their daily quoted settlement price. For valuation
purposes, foreign securities initially expressed in foreign currency values will
be converted into U.S. dollar values at the mean between the bid and offered
quotations of such currencies against U.S. dollars as last quoted by any
recognized dealer or major bank which is a regular participant in the
institutional foreign exchange markets. Securities not traded on a particular
day, over-the-counter securities, and government and agency securities are
valued at the mean value between bid and asked prices. Money market instruments
having a maturity of less than 60 days are valued at amortized cost. Debt
securities (other than short-term obligations) are valued on the basis of
valuations provided by a pricing service when such prices are believed to
reflect the fair value of such securities. Use of a pricing service has been
approved by the Board of Directors. Prices provided by a pricing service take
into account appropriate factors such as institutional trading in similar groups
of securities, yield, quality, coupon rate, maturity, type of issue, trading
characteristics and other market data. Subject to the foregoing, securities for
which market quotations are not readily available and other assets are valued at
fair value as determined in good faith and in a method approved by the Board of
Directors.
Each class of a Fund will bear, pro-rata, all of the common expenses of
that Fund. The net asset values of all outstanding shares of each class of a
Fund will be computed on a pro-rata basis for each outstanding share based on
the proportionate participation in a Fund represented by the value of shares of
that class. All income earned and expenses incurred by a Fund will be borne on a
pro-rata basis by each outstanding share of a class, based on each class'
percentage in a Fund represented by the value of shares of such classes, except
that the Institutional Classes will not incur any of the expenses under the
Company's 12b-1 Plans and shares of the Fund Classes alone will bear the 12b-1
Plan fees payable under their respective Plans. Due to the specific distribution
expenses and other costs that will be allocable to each class, the net asset
value of each class of a Fund will vary.
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REDEMPTION AND REPURCHASE
Any shareholder may require the Company to redeem Fund shares by sending
a written request, signed by the record owner or owners exactly as the shares
are registered, to the Company, 1818 Market Street, Philadelphia, PA 19103. In
addition, certain redemption methods described below are available when stock
certificates have not been issued. The Company only issues certificates for
Class A Shares and Institutional Class shares if a shareholder specifically
requests them. The Company does not issue certificates for Class B Shares or
Class C Shares. If stock certificates have been issued for shares being
redeemed, they must accompany the written request. For redemptions of $50,000 or
less paid to the shareholder at the address of record, the Company requires a
request signed by all owners of the shares or the investment dealer of record,
but does not require signature guarantees. When the redemption is for more than
$50,000, or if payment is made to someone else or to another address, signatures
of all record owners are required and a signature guarantee may be required.
Each signature guarantee must be supplied by an eligible guarantor institution.
The Company reserves the right to reject a signature guarantee supplied by an
eligible institution based on its creditworthiness. The Company may request
further documentation from corporations, retirement plans, executors,
administrators, trustees or guardians.
In addition to redemption of Fund shares by the Company, the Distributor,
acting as agent of the Company, offers to repurchase Fund shares from
broker/dealers acting on behalf of shareholders. The redemption or repurchase
price, which may be more or less than the shareholder's cost, is the net asset
value per share next determined after receipt of the request in good order by
the Company or its agent, subject to any applicable CDSC or Limited CDSC. This
is computed and effective at the time the offering price and net asset value are
determined. See Determining Offering Price and Net Asset Value. The Company and
the Distributor end their business day at 5 p.m., Eastern time. This offer is
discretionary and may be completely withdrawn without further notice by the
Distributor.
Orders for the repurchase of Fund shares which are submitted to the
Distributor prior to the close of its business day will be executed at the net
asset value per share computed that day (subject to any applicable CDSC or
Limited CDSC), if the repurchase order was received by the broker/dealer from
the shareholder prior to the time the offering price and net asset value are
determined on such day. The selling dealer has the responsibility of
transmitting orders to the Distributor promptly. Such repurchase is then settled
as an ordinary transaction with the broker/dealer (who may make a charge to the
shareholder for this service) delivering the shares repurchased.
Certain redemptions of Class A Shares purchased at net asset value may
result in the imposition of a Limited CDSC. See Contingent Deferred Sales Charge
for Certain Redemptions of Class A Shares Made at Net Asset Value under
Redemption and Exchange in the Prospectus for the Fund Classes. 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 C Shares are subject to a CDSC of 1% if shares are
redeemed within 12 months following purchase. See Contingent Deferred Sales
Charge - Class B Shares and Class C Shares under Buying Shares in the Prospectus
for the Fund Classes. Except for the applicable CDSC or Limited CDSC and, with
respect to the expedited payment by wire described below, for which there is
currently a $7.50 bank wiring cost, neither the Company nor the Distributor
charges a fee for redemptions or repurchases, but such fees could be charged at
any time in the future.
Payment for shares redeemed will ordinarily be mailed the next business
day, but in no case later than seven days, after receipt of a redemption request
in good order.
If a shareholder who recently purchased shares by check seeks to redeem
all or a portion of those shares in a written request, the Company will honor
the redemption request but will not mail the proceeds until it is reasonably
satisfied of the collection of the investment check. This potential delay can be
avoided by making investments by wiring Federal Funds.
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If a shareholder has been credited with a purchase by a check which is
subsequently returned unpaid for insufficient funds or for any other reason, the
Company will automatically redeem from the shareholder's account the Fund shares
purchased by the check plus any dividends earned thereon. Shareholders may be
responsible for any losses to the Fund or to the Distributor.
In case of a suspension of the determination of the net asset value
because the New York Stock Exchange is closed for other than weekends or
holidays, or trading thereon is restricted or an emergency exists as a result of
which disposal by a Fund of securities owned by it is not reasonably practical,
or it is not reasonably practical for a Fund fairly to value its assets, or in
the event that the SEC has provided for such suspension for the protection of
shareholders, a Fund may postpone payment or suspend the right of redemption or
repurchase. In such case, the shareholder may withdraw the request for
redemption or leave it standing as a request for redemption at the net asset
value next determined after the suspension has been terminated.
Payment for shares redeemed or repurchased may be made either in cash or
kind, or partly in cash and partly in kind. Any portfolio securities paid or
distributed in kind would be valued as described in Determining Offering Price
and Net Asset Value. Subsequent sale by an investor receiving a distribution in
kind could result in the payment of brokerage commissions. However, the Company
has elected to be governed by Rule 18f-1 under the Investment Company Act of
1940 pursuant to which the Company is obligated to redeem Fund shares solely in
cash up to the lesser of $250,000 or 1% of the net asset value of the Fund
during any 90-day period for any one shareholder.
The value of a Fund's investment is subject to changing market prices.
Thus, a shareholder reselling shares to a Fund may sustain either a gain or
loss, depending upon the price paid and the price received for such shares.
Small Accounts
Before the Company involuntarily redeems shares from an account that,
under the circumstances listed in the relevant Prospectus, has remained below
the minimum amounts required by the Company's Prospectuses and sends the
proceeds to the shareholder, the shareholder will be notified in writing that
the value of the shares in the account is less than the minimum required and
will be allowed 60 days from the date of notice to make an additional investment
to meet the required minimum. See The Conditions of Your Purchase under Buying
Shares in the Company's Prospectuses. Any redemption in an inactive account
established with a minimum investment may trigger mandatory redemption. No CDSC
or Limited CDSC will apply to the redemptions described in this paragraph.
With respect to the International Equity Series and the Global Assets
Series only, effective November 29, 1995, the minimum initial investment in
Class A Shares was increased from $250 to $1,000. Class A accounts that were
established before November 29, 1995 and maintain a balance in excess of $250
will not presently be subject to the $9 quarterly service fee that may be
assessed on accounts with balances below the stated minimum nor subject to
involuntarily redemption.
* * *
The Company has available certain redemption privileges, as described
below. The Company reserves the right to suspend or terminate these expedited
payment procedures upon 60 days' written notice to shareholders.
Expedited Telephone Redemptions
Shareholders of the Fund Classes or their investment dealers of record
wishing to redeem any amount of shares of $50,000 or less for which certificates
have not been issued may call the Company at 800-523-1918 or, in the case of
shareholders of the Institutional Classes, their Client Services Representative
at 800-828-5052 prior to the time the offering price and net asset value are
determined, as noted above, and have the proceeds mailed to them at the record
address. Checks payable to the shareholder(s) of record will normally be mailed
the next business day, but no later than seven days, after the receipt of the
redemption request. This option is only available to individual, joint and
individual fiduciary-type accounts.
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In addition, redemption proceeds of $1,000 or more can be transferred to
your predesignated bank account by wire or by check by calling the Company, as
described above. An authorization form must have been completed by the
shareholder and filed with the Company before the request is received. Payment
will be made by wire or check to the bank account designated on the
authorization form as follows:
1. Payment by Wire: Request that Federal Funds be wired to the bank
account designated on the authorization form. Redemption proceeds will normally
be wired on the next business day following receipt of the redemption request.
There is a $7.50 wiring fee (subject to change) charged by CoreStates Bank, N.A.
which will be deducted from the withdrawal proceeds each time the shareholder
requests a redemption. If the proceeds are wired to the shareholder's account at
a bank which is not a member of the Federal Reserve System, there could be a
delay in the crediting of the funds to the shareholder's bank account.
2. Payment by Check: Request a check be mailed to the bank account
designated on the authorization form. Redemption proceeds will normally be
mailed the next business day, but no later than seven days, from the date of the
telephone request. This procedure will take longer than the Payment by Wire
option (1 above) because of the extra time necessary for the mailing and
clearing of the check after the bank receives it.
Redemption Requirements: In order to change the name of the bank and the
account number it will be necessary to send a written request to the Company and
a signature guarantee may be required. Each signature guarantee must be supplied
by an eligible guarantor institution. The Company reserves the right to reject a
signature guarantee supplied by an eligible institution based on its
creditworthiness.
To reduce the shareholder's risk of attempted fraudulent use of the
telephone redemption procedure, payment will be made only to the bank account
designated on the authorization form.
The Company will not honor telephone redemptions for Fund shares recently
purchased by check unless it is reasonably satisfied that the purchase check has
cleared.
If expedited payment under these procedures could adversely affect a
Fund, the Company may take up to seven days to pay the shareholder.
Neither the Company nor the Transfer Agent is responsible for any
shareholder loss incurred in acting upon written or telephone instructions for
redemption or exchange of Fund shares which are reasonably believed to be
genuine. With respect to such telephone transactions, the Company 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 Company or the Transfer Agent may be liable for any losses due to
unauthorized or fraudulent transactions. Telephone instructions received by
shareholders of the Fund Classes are generally tape recorded. A written
confirmation will be provided for all purchase, exchange and redemption
transactions initiated by telephone.
Systematic Withdrawal Plans
Shareholders of Class A, Class B and Class C Shares who own or purchase
$5,000 or more of shares at the offering price, or net asset value, as
applicable, for which certificates have not been issued may establish a
Systematic Withdrawal Plan for monthly withdrawals of $25 or more, or quarterly
withdrawals of $75 or more, although the Company does not recommend any specific
amount of withdrawal. This $5,000 minimum does not apply for a Fund's prototype
retirement plans. Shares purchased with the initial investment and through
reinvestment of cash dividends and realized securities profits distributions
will be credited to the shareholder's account and sufficient full and fractional
shares will be redeemed at the net asset value calculated on the third business
day preceding the mailing date.
Checks are dated either the 1st or the 15th of the month, as selected by
the shareholder (unless such date falls on a holiday or a weekend) and are
normally mailed within two business days. Both ordinary income dividends and
realized securities profits distributions will be automatically reinvested in
additional shares of a class at net asset value. This plan is not recommended
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for all investors and should be started only after careful consideration of its
operation and effect upon the investor's savings and investment program. To the
extent that withdrawal payments from the plan exceed any dividends and/or
realized securities profits distributions paid on shares held under the plan,
the withdrawal payments will represent a return of capital and the share balance
may in time be depleted, particularly in a declining market.
The sale of shares for withdrawal payments constitutes a taxable event
and a shareholder may incur a capital gain or loss for federal income tax
purposes. This gain or loss may be long-term or short-term depending on the
holding period for the specific shares liquidated. Premature withdrawals from
retirement plans may have adverse tax consequences.
Withdrawals under this plan by the holders of Class A Shares or any
similar plan of any other investment company charging a front-end sales charge
made concurrently with the purchases of the Class A Shares of this or the shares
of any other investment company will ordinarily be disadvantageous to the
shareholder because of the payment of duplicative sales charges. Shareholders
should not purchase Class A Shares while participating in a Systematic
Withdrawal Plan and a periodic investment program in a fund managed by the
Manager must be terminated before a Systematic Withdrawal Plan can take effect,
except if the shareholder is a participant in one of our retirement plans or is
investing in Delaware Group funds which do not carry a sales charge. Also,
redemptions of Class A Shares pursuant to a Systematic Withdrawal Plan may be
subject to a Limited CDSC if the purchase was made at net asset value and a
dealer's commission has been paid on that purchase. Redemptions of Class B
Shares or Class C Shares pursuant to a Systematic Withdrawal Plan may be subject
to a CDSC, unless the annual amount selected to be withdrawn is less than 12% of
the account balance on the date that the Systematic Withdrawal Plan was
established. See Waiver of Contingent Deferred Sales Charge - Class B and Class
C Shares and Waiver of Limited Contingent Deferred Sales Charge - Class A Shares
under Redemption and Exchange in the Prospectus for the Fund Classes.
An investor wishing to start a Systematic Withdrawal Plan must complete
an authorization form. If the recipient of Systematic Withdrawal Plan payments
is other than the registered shareholder, the shareholder's signature on this
authorization must be guaranteed. Each signature guarantee must be supplied by
an eligible guarantor institution. The Company reserves the right to reject a
signature guarantee supplied by an eligible institution based on its
creditworthiness. This plan may be terminated by the shareholder or the Transfer
Agent at any time by giving written notice.
The Systematic Withdrawal Plan is not available for the Institutional
Classes.
Wealth Builder Option
Shareholders of the Fund Classes may elect to invest in one or more of
the other mutual funds in the Delaware Group through our Wealth Builder Option.
Under this automatic exchange program, shareholders can authorize regular
monthly investments (minimum of $100 per fund) to be liquidated from their
account and invested automatically into other mutual funds in the Delaware
Group, subject to the conditions and limitations set forth in the Fund Classes'
Prospectus. See Wealth Builder Option and Redemption and Exchange in the
Prospectus for the Fund Classes.
The investment will be made on the 20th day of each month (or, if the
fund selected is not open that day, the next business day) at the public
offering price or net asset value, as applicable, of the fund selected on the
date of investment. No investment will be made for any month if the value of the
shareholder's account is less than the amount specified for investment.
Periodic investment through the Wealth Builder Option does not insure
profits or protect against losses in a declining market. The price of the fund
into which investments are made could fluctuate. Since this program involves
continuous investment regardless of such fluctuating value, investors selecting
this option should consider their financial ability to continue to participate
in the program through periods of low fund share prices. This program involves
automatic exchanges between two or more fund accounts and is treated as a
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purchase of shares of the fund into which investments are made through the
program. See Exchange Privilege for a brief summary of the tax consequences of
exchanges.
Shareholders can also use the Wealth Builder Option to invest in the Fund
Classes through regular liquidations of shares in their accounts in other mutual
funds in the Delaware Group, subject to the conditions and limitations described
in the Fund Classes' Prospectus. Shareholders can terminate their participation
at any time by written notice to the Company.
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. This option also is not available to shareholders
of the Institutional Classes.
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DISTRIBUTIONS
The International Equity Series and the Global Assets Series will
normally declare and make payments from net investment income on a quarterly
basis. The Global Bond Series will normally declare and make payments from net
investment income on a monthly basis.
Payments from net realized securities profits of a Fund, if any, will be
distributed annually in the quarter following the close of the fiscal year.
Dividend payments of $1.00 or less will be automatically reinvested,
notwithstanding a shareholder's election to receive dividends in cash. If such a
shareholder's dividends increase to greater than $1.00, the shareholder would
have to file a new election in order to begin receiving dividends in cash again.
Any check in payment of dividends or other distributions which cannot be
delivered by the United States 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. A Fund may deduct from a shareholder's account the costs of
the Fund's effort to locate a shareholder if a shareholder's mail is returned by
the Post Office or the Fund is otherwise unable to locate the shareholder or
verify the shareholder's mailing address. These costs may include a percentage
of the account when a search company charges a percentage fee in exchange for
their location services. See also Other Tax Requirements under Accounting and
Tax Issues.
Each class of shares of a Fund will share proportionately in the
investment income and expenses of that Fund, except that Class A Shares, Class B
Shares and Class C Shares alone will incur distribution fees under their
respective 12b-1 Plans. See Plans Under Rule 12b-1 for the Fund Classes.
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INVESTMENT MANAGEMENT AGREEMENT AND SUB-ADVISORY AGREEMENT
Delaware International Advisers Ltd. ("Delaware International" or the
"Manager"), located at Veritas House, 125 Finsbury Pavement, London, England
EC2A 1NQ, furnishes investment management services to each Fund, subject to the
supervision and direction of the Company's Board of Directors. Delaware
International is affiliated with Delaware Management Company, Inc. ("DMC").
Delaware International has entered into a Sub- Advisory Agreement with DMC for
the Global Assets Series.
DMC and its predecessors have been managing the funds in the Delaware
Group since 1938. The aggregate assets of these funds on November 30, 1995 were
approximately $10,383,560,000. Investment advisory services are also provided to
institutional accounts with assets on November 30, 1995 of approximately
$17,389,902,000.
The Investment Management Agreement for each Fund and the Sub-Advisory
Agreement for the Global Assets Series are dated April 3, 1995 and were approved
by shareholders on March 29, 1995.
The Agreements have an initial term of two years and may be further
renewed after their initial terms only so long as such renewal and continuance
are specifically approved at least annually by the Board of Directors or by vote
of a majority of the outstanding voting securities of the Fund, and only if the
terms of the renewal thereof have been approved by the vote of a majority of the
directors of the Company who are not parties thereto or interested persons of
any such party, cast in person at a meeting called for the purpose of voting on
such approval. The Agreements are terminable without penalty on 60 days' notice
by the directors of the Company or by the Manager. The Agreements will terminate
automatically in the event of their assignment.
The Manager manages each Fund's investments. The compensation paid by
each Fund for investment management services is equal to 1/16 of 1% of each
Fund's respective average daily net assets during the month (the equivalent of
.75 of 1% per year), less all directors' fees paid to the unaffiliated directors
by the Fund. This fee may be higher than that paid by most funds which are not
international equity funds.
Under the Sub-Advisory Agreement, DMC manages the Global Assets Series'
investments in U.S. securities. DMC will receive from the Manager, 25% of the
investment management fees under the Manager's Investment Management Agreement
with the Company on behalf of the Global Assets Series.
On November 30, 1995, the total net assets of the Company were
$85,224,032, broken down as follows: International Equity Series - $77,386,950;
Global Bond Series - $1,905,845 and Global Assets Series - $5,931,237.
Beginning December 1, 1995, Delaware International had elected
voluntarily to waive that portion, if any, of the annual management fees payable
by the International Equity Series, the Global Bond Series and the Global Assets
Series to the extent necessary to ensure that the Total Operating Expenses (i)
of the Class A Shares of those Funds do not exceed 1.85%, 1.25% and 1.25%,
respectively, (ii) of the Class B Shares of those Funds do not exceed 2.55%,
1.95% and 1.95%, respectively, and (iii) of the Institutional Classes of those
Funds do not exceed 1.55%, 0.95% and 0.95%, respectively (in each case,
exclusive of taxes, interest, brokerage commissions and extraordinary expenses,
but inclusive of 12b-1 expenses) through May 31, 1996.
From June 1, 1994 through November 30, 1994, Delaware International
elected voluntarily to waive that portion, if any, of the annual management fees
payable by the International Equity Series and to reimburse the Fund to the
extent necessary to ensure that the Total Operating Expenses of the
International Equity Fund A Class and the International Equity Fund
Institutional Class did not exceed 1.50% (exclusive of taxes, interest,
brokerage commissions, extraordinary expenses and, in the case of the
International Equity Fund A Class, 12b-1 expenses). Through November 30, 1994,
-46-
<PAGE>
the waiver and reimbursement noted above with respect to the International
Equity Fund A Class also applied to the International Equity Fund B Class. Prior
to June 1, 1994, a waiver and reimbursement commitment was in place to ensure
expenses did not exceed 1.25% (exclusive of taxes, interest, brokerage
commissions and extraordinary expenses, but inclusive of 12b-1 expenses) and
0.95% (exclusive of taxes, interest, brokerage commissions and extraordinary
expenses) for the International Equity Fund A Class and the International Equity
Fund Institutional Class, respectively. Delaware International has also elected
to voluntarily waive that portion, if any, of the annual management fees payable
by the Global Bond Series and the Global Assets Series to ensure that the Total
Operating Expenses of these Funds (exclusive of taxes, interest, brokerage
commissions, extraordinary expenses and, in the case 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, 12b-1 expenses) do not exceed 0.95% through November
30, 1995.
For the fiscal year ended November 30, 1993, the Manager voluntarily
waived its entire investment management fee of $146,221, and reimbursed the
International Equity Series for expenses in the amount of $36,188. For the
fiscal year ended November 30, 1994, the investment management fee of the
International Equity Series amounted to $415,544 of which $149,271 was waived
and $266,273 was paid. For the fiscal year ended November 30, 1995, the
investment management fee paid by the International Equity Series was $512,638.
For the period December 27, 1994 (date of initial public offering) though
November 30, 1995, the Manager voluntarily waived its entire investment
management fees in the amounts of $4,777 and $12,907, respectively, for the
Global Bond Series and the Global Assets Series and reimbursed these Funds in
the amounts of $128,531and $131,397, respectively.
Delaware International and DMC are controlled and indirectly,
wholly-owned by Delaware Management Holdings, Inc.
Except for those expenses borne by the Manager under the Investment
Management Agreements and the Distributor under the Distribution Agreements,
each Fund is responsible for all of its own expenses. Among others, these
include each Fund's proportionate share of rent and certain other administrative
expenses; the investment management fees; transfer and dividend disbursing agent
fees and costs; custodian expenses; federal and state securities registration
fees; proxy costs; and the costs of preparing prospectuses and reports sent to
shareholders.
For the fiscal year ended November 30, 1995, the ratios of expenses to
average net assets for the Class A Shares, the Class B Shares and the
Institutional Class of the International Equity Series were 2.07%, 2.77% and
1.77%, respectively. For the period December 27, 1994 (date of initial public
offering) through November 30, 1995, the ratios of expenses to average net
assets for the Class A Shares, the Class B Shares and the Institutional Class of
the Global Bond Series were, annualized, 1.25%, 1.95% and 0.95%, respectively.
For the period December 27, 1994 (date of initial public offering) through
November 30, 1995, the ratios of expenses to average net assets for the Class A
Shares, the Class B Shares and the Institutional Class of the Global Assets
Series were, annualized, 1.25%, 1.95% and 0.95%, respectively. The ratios for
the Class A Shares and the Class B Shares for each Fund reflect the impact of
its 12b-1 Plan. The ratios for the Global Bond Series and the Global Assets
Series reflect the waiver of fees noted above. The Company anticipates that the
ratio of expenses to average daily net assets of Class C Shares of a Fund will
be identical to that of Class B Shares of the same Fund.
By California regulation, the Manager is required to waive certain fees
and reimburse the Fund for certain expenses to the extent that the Fund's
operating expenses, exclusive of taxes, interest, brokerage commissions and
extraordinary expenses, exceed 2 1/2% of its first $30 million of average daily
net assets, 2% of the next $70 million of average daily net assets and 1 1/2% of
any additional average daily net assets. For the fiscal year ended November 30,
1995, no such reimbursement was necessary or paid for any of the Funds.
-47-
<PAGE>
Distribution and Service
The Distributor, Delaware Distributors, L.P. (which formerly conducted
business as Delaware Distributors, Inc.), located at 1818 Market Street, serves
as the national distributor of each Fund's shares under separate Distribution
Agreements dated April 3, 1995, as amended on November 29, 1995. The Distributor
is an affiliate of the Manager and bears all of the costs of promotion and
distribution, except for payments by each Fund on behalf of its respective Class
A Shares, Class B Shares and Class C Shares under the 12b-1 Plan for each class.
Prior to January 3, 1995, Delaware Distributors, Inc. ("DDI") served as the
national distributor of the Fund's shares. On that date, Delaware Distributors,
L.P., a newly formed limited partnership, succeeded to the business of DDI. All
officers and employees of DDI became officers and employees of Delaware
Distributors, L.P. DDI is the corporate general partner of Delaware
Distributors, L.P. and both DDI and Delaware Distributors, L.P. are indirect,
wholly-owned subsidiaries of Delaware Management Holdings, Inc.
The Transfer Agent, Delaware Service Company, Inc., another affiliate of
the Manager located at 1818 Market Street, Philadelphia, PA 19103, serves as the
Fund's shareholder servicing, dividend disbursing and transfer agent pursuant to
a Shareholders Services Agreement dated October 25, 1991. The Transfer Agent is
also an indirect, wholly-owned subsidiary of Delaware Management Holdings, Inc.
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<PAGE>
OFFICERS AND DIRECTORS
The business and affairs of the Company are managed under the direction
of its Board of Directors.
Certain officers and directors of the Company hold identical positions in
each of the other funds in the Delaware Group. On December 31, 1995, the
Company's officers and directors owned less than 1% of the outstanding shares of
the International Equity Fund A Class, the International Equity Fund B Class and
the International Equity Fund C Class, respectively, and approximately 8.91% of
the outstanding shares of the International Equity Fund Institutional Class;
approximately 6.41% and 28.06%, respectively, of the outstanding shares of the
Global Bond Fund A Class and the Global Bond Fund Institutional Class and less
than 1% of the outstanding shares of the Global Bond Fund B Class and Global
Bond Fund C Class, respectively; and approximately 29.85% of the outstanding
shares of the Global Assets Fund Institutional Class and less than 1% of the
outstanding shares of the Global Assets Fund A Class and the Global Assets Fund
B Class and the Global Assets Fund C Class, respectively.
As of December 31, 1995, the Company believes the following accounts held
5% or more of the outstanding shares of the International Equity Fund B Class,
International Equity Fund C Class and International Equity Fund Institutional
Class: Merrill, Lynch, Pierce, Fenner & Smith Inc., Mutual Fund Operations,
Attention Book Entry, 4800 Deer Lake Drive East, 3rd Fl., Jacksonville, FL 32246
held of record for the benefit of others 25,283 shares (7.96%) and Fox &
Company, P.O. Box 976, New York, NY 10268 held 17,416 shares (5.48%) of the
outstanding shares of the International Equity Fund B Class. Dain Bosworth, Inc.
FBO SMACNA Northern IL, Inc., 4010 E. State Street, Room 204, Rockford, IL 61108
held 831 shares (40.71%); and Delaware Management Company, Inc., Attn. Joseph H.
Hastings, 1818 Market Street, Philadelphia, PA 19103 held 433 shares (21.21%) of
the outstanding shares of the International Equity Fund C Class. Price
Waterhouse, LLP 401(k) Savings Plan, National Administrative Center, P.O. Box
30004, Tampa, FL 33630 held 428,356 shares (42.44%) and Delaware Management
Company, Inc. Employee Profit Sharing Trust, 1818 Market Street, Philadelphia,
PA 19103 held 274,831 shares (27.23%) of the outstanding shares of the
International Equity Fund Institutional Class. Shares held by Delaware
Management Company, Inc. Employee Profit Sharing Trust are beneficially owned by
the participants in that plan.
As of December 31, 1995, the Company believes the following accounts held
5% or more of the outstanding shares of, respectively, the Global Bond Fund A
Class, Global Bond Fund B Class, Global Bond Fund C Class and Global Bond Fund
Institutional Class: Prudential Securities FBO Russell W. Bagley IRA dtd 4/13/95
5700 Northwood Rdg., Bloomington, MN 55437 held 9,400 shares (10.80%); U.S.
Clearing Corp., Cust Rosemary A. Thies IRA, 10001 W. Frontage Rd. 165, South
Gate, CA 90280 held 6,928 shares (7.96%); Paul E. Suckow, 1219 Denbigh Ln.,
Radnor, PA 19087 held 5,581 shares (6.41%); and Brian F. Wruble, 7801 Huron
Street, Philadelphia, PA 19118 held 5,570 shares (6.40%) of the outstanding
shares of the Global Bond Fund A Class. Prudential Securities FBO Warren
Stratton TTEE Canfield Children's Trust UA dtd 4/14/94, 71 Pilgrim Drive,
Bedford, NH 03110 held 2,250 shares (19.37%); Merrill, Lynch, Pierce, Fenner &
Smith Inc., Mutual Fund Operations, Attention Book Entry, 4800 Deer Lake Drive
East, 3rd Fl., Jacksonville, FL 32246 held of record for the benefit of others
1,975 shares (17%); Prudential Securities FBO Warren Stratton TTEE Canfield
Grandchildren's Trust UA dtd 4/14/94, 71 Pilgrim Drive, Bedford, NH 03110 held
1,549 shares (13.33%); Colleen C. Reynolds, 19 Westview Dr., Danielson, CT 06239
held 1,444 shares (12.43%); and Prudential Securities FBO Warren Stratton TTEE
Christopher Canfield Trust UA dtd 4/14/94, 71 Pilgrim Drive, Bedford, NH 03110
held 1,003 shares (8.63%) of the outstanding shares of the Global Bond Fund B
Class. Delaware Management Company, Inc., Attn. Joseph H. Hastings, 1818 Market
Street, Philadelphia, PA 19103 held 481 shares (72.11%); and Robert M. Weiss MD,
Profit Sharing Plan DTD, Robert M. Weiss trustee FBO Susan Zoeller, 6017
Benchmark Trail, Floyds Knobs, IN 47119 held 185 shares (27.73%) of the
outstanding shares of the Global Bond Fund C Class. Delaware Management Company,
Inc. Employee Profit Sharing Trust, 1818 Market Street, Philadelphia, PA 19103
held 50,717 shares (53.15%); and Delaware Management Company, Inc., c/o Joseph
H. Hastings, 1818 Market Street, Philadelphia, PA 19103 held 44,692 shares
(46.84%) of the outstanding shares of the Global Bond Fund Institutional Class.
As participants in the elaware Management Company, Inc. Employee Profit Sharing
-49-
<PAGE>
Trust, John S. Connors held 11,306 shares (11.84%), Richard G. Unruh held 11,198
shares (11.75%) and Edward N. Antoian and Dennis L. Adams separately held 11,173
shares (11.71%) of the outstanding shares of the Global Bond Fund Institutional
Class. Shares held by Delaware Management Company, Inc. Employee Profit Sharing
Trust are beneficially owned by the participants in that plan, including those
named in the previous sentence.
As of December 31, 1995, the Company believes the following accounts held
5% or more of the outstanding shares of, respectively, the Global Assets Fund B
Class, Global Assets Fund C Class and Global Assets Fund Institutional Class:
Merrill, Lynch, Pierce, Fenner & Smith Inc., Mutual Fund Operations, Attention
Book Entry, P.O. Box 41621, Jacksonville, FL 32203 held of record for the
benefit of others 17,130 shares (26.53%); and Prudential Securities FBO Warren
K. Stratton and Joanne K. Stratton co-ttees The WK Stratton JB Stratton Living
Trust UA dtd 7/24/91, Bedford, NH 03110 held 6,653 shares (10.30%) of the
outstanding shares of the Global Assets Fund B Class. Delaware Management
Company, Inc., Attn. Joseph H. Hastings, 1818 Market Street, Philadelphia, PA
19103 held 447 shares (63.94%); and Robert M. Weiss MD, Profit Sharing Plan DTD,
Robert M. Weiss trustee FBO Susan Zoeller, 6017 Benchmark Trail, Floyds Knobs,
IN 47119 held 252 shares (36.05%) of the outstanding shares of the Global Assets
Fund C Class. Delaware Management Company, Inc. Employee Profit Sharing Trust,
1818 Market Street, Philadelphia, PA 19103 held 118,959 shares (58.36%) and
Delaware Management Company, Inc., c/o Joseph H. Hastings, 1818 Market Street,
Philadelphia, PA 19103 held 84,859 shares (41.63%) of the outstanding shares of
the Global Assets Fund Institutional Class. As participants in the Delaware
Management Company, Inc. Employee Profit Sharing Trust, John J. O'Connor held
18,952 shares (9.29%), Richard G. Unruh held 12,743 shares (6.25%) and Edward N.
Antoian held 10,607 shares (5.20%) of the outstanding shares of the Global
Assets Fund Institutional Class. Shares held by Delaware Management Company,
Inc. Employee Profit Sharing Trust are beneficially owned by the participants in
that plan, including those named in the previous sentence.
DMH Corp., Delaware Management Company, Inc., Delaware Distributors,
L.P., Delaware Distributors, Inc., Delaware Service Company, Inc., Delaware
Management Trust Company, Delaware International Holdings Ltd., Founders
Holdings, Inc., Delaware International Advisers Ltd., Delaware Investment
Counselors, Inc. and Delaware Investment & Retirement Services, Inc. are direct
or indirect, wholly-owned subsidiaries of Delaware Management Holdings, Inc.
("DMH"). On April 3, 1995, a merger between DMH and a wholly-owned subsidiary of
Lincoln National Corporation ("Lincoln National") was completed. In connection
with the merger, new Investment Management Agreements between the Company on
behalf of each Fund and the Manager and a new Sub-Advisory Agreement between the
Manager and the Sub-Adviser on behalf of the Global Assets Series and the
Sub-Adviser were executed following shareholder approval. DMH, the Manager and
the Sub-Adviser are now wholly-owned subsidiaries, and subject to the ultimate
control, of Lincoln National. Lincoln National, with headquarters in Fort Wayne,
Indiana, is a diversified organization with operations in many aspects of the
financial services industry, including insurance and investment management.
Directors and principal officers of the Company are noted below along
with their ages and their business experience for the past five years. Unless
otherwise noted, the address of each officer and director is One Commerce
Square, Philadelphia, PA 19103.
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<PAGE>
*Wayne A. Stork (58)
Chairman, President, Chief Executive Officer, Director and/or Trustee of
the Company, 15 other companies in the Delaware Group (which
excludes Delaware Pooled Trust, Inc.), Delaware Management Holdings,
Inc., DMH Corp., Delaware International Holdings Ltd. and Founders
Holdings, Inc.
Chairman and Director of Delaware Pooled Trust, Inc., Delaware Investment
Counselors, Inc. and Delaware Investment & Retirement Services, Inc.
Chairman, Chief Executive Officer, Chief Investment Officer and Director
of Delaware Management Company, Inc.
Chairman, Chief Executive Officer and Director of Delaware International
Advisers Ltd.
Director of Delaware Distributors, Inc. and Delaware Service Company,
Inc.
During the past five years, Mr. Stork has served in various executive
capacities at different times within the Delaware organization.
Winthrop S. Jessup (50)
Executive Vice President of the Company and 15 other companies in the
Delaware Group (which excludes Delaware Pooled Trust, Inc.) and
Delaware Management Holdings, Inc.
President and Chief Executive Officer of Delaware Pooled Trust, Inc.
President and Director of Delaware Investment Counselors, Inc.
Executive Vice President and Director of DMH Corp., Delaware Management
Company, Inc., Delaware International Holdings Ltd. and Founders
Holdings, Inc.
Vice Chairman and Director of Delaware Distributors, Inc.
Vice Chairman of Delaware Distributors, L.P.
Director of Delaware Service Company, Inc., Delaware International
Advisers Ltd., Delaware Management Trust Company and Delaware
Investment & Retirement Services, Inc.
During the past five years, Mr. Jessup has served in various executive
capacities at different times within the Delaware organization.
Richard G. Unruh, Jr. (56)
Executive Vice President of the Company and each of the other 16
companies in the Delaware Group.
Executive Vice President and Director of Delaware Management Company,
Inc.
Senior Vice President of Delaware Management Holdings, Inc.
Director of Delaware International Advisers Ltd.
During the past five years, Mr. Unruh has served in various executive
capacities at different times within the Delaware organization.
Walter P. Babich (68)
Director and/or Trustee of the Company and each of the other 16 companies
in the Delaware Group.
460 North Gulph Road, King of Prussia, PA 19406.
Board Chairman, Citadel Constructors, Inc.
From 1986 to 1988, Mr. Babich was a partner of Irwin & Leighton and from
1988 to 1991, he was a partner of I&L Investors.
- -------------
*Director affiliated with the investment manager of the Company and considered
an "interested person" as defined in the Investment Company Act of 1940.
-51-
<PAGE>
Anthony D. Knerr (57)
Director and/or Trustee of the Company and each of the other 16 companies
in the Delaware Group.
500 Fifth Avenue, New York, NY 10110.
Consultant, Anthony Knerr & Associates.
From 1982 to 1988, Mr. Knerr was Executive Vice President/Finance and
Treasurer of Columbia University, New York. From 1987 to 1989, he
was also a lecturer in English at the University. In addition,
Mr. Knerr was Chairman of The Publishing Group, Inc., New York, from
1988 to 1990. Mr. Knerr founded The Publishing Group, Inc. in 1988.
Ann R. Leven (55)
Director and/or Trustee of the Company and each of the other 16 companies
in the Delaware Group.
785 Park Avenue, New York, NY 10021.
Treasurer, National Gallery of Art.
From 1984 to 1990, Ms. Leven was Treasurer and Chief Fiscal Officer of
the Smithsonian Institution, Washington, DC, and from 1975 to 1994,
she was Adjunct Professor of Columbia Business School.
W. Thacher Longstreth (75)
Director and/or Trustee of the Company and each of the other 16 companies
in the Delaware Group.
1617 John F. Kennedy Boulevard, Philadelphia, PA 19103.
Vice Chairman, Packquisition Corp., a financial printing, commercial
printing and information processing firm.
Philadelphia City Councilman.
President, MLW, Associates.
Director, Tasty Baking Company.
Director, Healthcare Services Group.
Charles E. Peck (70)
Director and/or Trustee of the Company and each of the other 16 companies
in the Delaware Group.
P.O. Box 1102, Columbia, MD 21044.
Secretary, Enterprise Homes, Inc.
From 1981 to 1990, Mr. Peck was Chairman and Chief Executive Officer of
The Ryland Group, Inc., Columbia, MD.
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<PAGE>
David K. Downes (56)
Senior Vice President/Chief Administrative Officer/Chief Financial
Officer of the Company, each of the other 16 companies in the
Delaware Group and Delaware Management Company, Inc.
Chairman and Director of Delaware Management Trust Company.
Chief Executive Officer and Director of Delaware Investment & Retirement
Services, Inc.
Senior Vice President/Chief Administrative Officer/Chief Financial
Officer/Treasurer of Delaware Management Holdings, Inc.
Senior Vice President/Chief Financial Officer/Treasurer and Director of
DMH Corp.
Senior Vice President/Chief Administrative Officer and Director of
Delaware Distributors, Inc.
Senior Vice President/Chief Administrative Officer of Delaware
Distributors, L.P.
Senior Vice President/Chief Administrative Officer/Chief Financial
Officer and Director of Delaware Service Company, Inc.
Chief Financial Officer and Director of Delaware International Holdings
Ltd.
Senior Vice President/Chief Financial Officer/Treasurer of Delaware
Investment Counselors, Inc.
Senior Vice President/Chief Financial Officer and Director of Founders
Holdings, Inc.
Director of Delaware International Advisers Ltd.
Before joining the Delaware Group in 1992, Mr. Downes was Chief
Administrative Officer, Chief Financial Officer and Treasurer of
Equitable Capital Management Corporation, New York, from December
1985 through August 1992, Executive Vice President from December
1985 through March 1992, and Vice Chairman from March 1992 through
August 1992.
George M. Chamberlain, Jr. (48)
Senior Vice President and Secretary of the Company, each of the other 16
companies in the Delaware Group, Delaware Management Holdings, Inc.,
Delaware Distributors, L.P. and Delaware Investment Counselors, Inc.
Executive Vice President, Secretary and Director of Delaware Management
Trust Company.
Senior Vice President, Secretary and Director of DMH Corp., Delaware
Management Company, Inc., Delaware Distributors, Inc., Delaware
Service Company, Inc., Delaware Investment & Retirement
Services, Inc. and Founders Holdings, Inc.
Secretary and Director of Delaware International Holdings Ltd.
Director of Delaware International Advisers Ltd.
Attorney.
During the past five years, Mr. Chamberlain has served in various
capacities at different times within the Delaware organization.
Paul E. Suckow (48)
Senior Vice President/Chief Investment Officer, Fixed Income of the
Company, each of the other 16 companies in the Delaware Group,
Delaware Management Holdings, Inc. and Delaware Management
Company, Inc.
Senior Vice President and Director of Founders Holdings, Inc.
Director of Founders CBO Corporation.
Before returning to the Delaware Group in 1993, Mr. Suckow was Executive
Vice President and Director of Fixed Income for Oppenheimer
Management Corporation, New York, NY from 1985 to 1992. Prior to
that, Mr. Suckow was a fixed income portfolio manager for the
Delaware Group.
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<PAGE>
George H. Burwell (34)
Vice President/Senior Portfolio Manager of the Company, of seven other
equity companies in the Delaware Group and of Delaware Management
Company, Inc.
Before joining the Delaware Group in 1992, Mr. Burwell was a portfolio
manager for Midlantic Bank, New Jersey. In addition, he was a
security analyst for Balis & Zorn, New York and for First Fidelity
Bank, New Jersey.
Paul A. Matlack (36)
Vice President/Senior Portfolio Manager of the Company, of nine other
income companies and the closed-end funds in the Delaware Group and
of Delaware Management Company, Inc.
Vice President of Founders Holdings, Inc.
Secretary and Director of Founders CBO Corporation.
During the past five years, Mr. Matlack has served in various capacities
at different times within the Delaware organization.
Gerald T. Nichols (37)
Vice President/Senior Portfolio Manager of the Company, of nine other
income companies and the closed-end funds in the Delaware Group and
of Delaware Management Company, Inc.
Vice President of Founders Holdings, Inc.
Treasurer and Director of Founders CBO Corporation.
During the past five years, Mr. Nichols has served in various capacities
at different times within the Delaware organization.
Joseph H. Hastings (46)
Vice President/Corporate Controller of the Company, each of the other 16
companies in the Delaware Group, Delaware Management Holdings, Inc.,
DMH Corp., Delaware Management Company, Inc., Delaware Distributors,
L.P., Delaware Distributors, Inc., Delaware Service Company, Inc.,
Delaware Investment Counselors, Inc., Founders Holdings, Inc. and
Delaware International Holdings Ltd.
Chief Financial Officer/Treasurer of Delaware Investment & Retirement
Services, Inc.
Executive Vice President/Chief Financial Officer/Treasurer of Delaware
Management Trust Company.
Assistant Treasurer of Founders CBO Corporation.
1818 Market Street, Philadelphia, PA 19103.
Before joining the Delaware Group in 1992, Mr. Hastings was Chief
Financial Officer for Prudential Residential Services, L.P., New
York, NY from 1989 to 1992. Prior to that, Mr. Hastings served as
Controller and Treasurer for Fine Homes International, L.P.,
Stamford, CT from 1987 to 1989.
Michael P. Bishof (33)
Vice President/Treasurer of the Company, each of the other 16 companies
in the Delaware Group, Delaware Management Company, Inc., Delaware
Distributors, Inc., Delaware Distributors, L.P., Delaware Service
Company, Inc., and Founders Holdings, Inc.
Assistant Treasurer of Founders CBO Corporation.
Vice President/Manager of Investment Accounting of Delaware
International Holdings Ltd.
Before joining the Delaware Group in 1995, Mr. Bishof was a Vice
President for Bankers Trust, New York, NY from 1994 to 1995, a Vice
President for CS First Boston Investment Management, New York, NY
from 1993 to 1994 and an Assistant Vice President for Equitable
Capital Management Corporation, New York, NY from 1987 to 1993.
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<PAGE>
The following is a compensation table listing for each director entitled
to receive compensation, the aggregate compensation received from the Company
and the total compensation received from all Delaware Group funds for the fiscal
year ended November 30, 1995 and an estimate of annual benefits to be received
upon retirement under the Delaware Group Retirement Plan for Directors/Trustees
as of November 30, 1995.
<TABLE>
<CAPTION>
Pension or
Retirement Estimated Total
Benefits Annual Compensation
Aggregate Accrued Benefits from all 17
Compensation as Part of Upon Delaware
Name from Company Company Expenses Retirement* Group Funds
<S> <C> <C> <C> <C>
W. Thacher Longstreth $2,179 None $18,100 $58,188
Ann R. Leven $2,474 None $18,100 $66,324
Walter P. Babich $2,503 None $18,100 $67,324
Anthony D. Knerr $2,239 None $18,100 $62,613
Charles E. Peck $2,179 None $18,100 $58,188
</TABLE>
* Under the terms of the Delaware Group Retirement Plan for
Directors/Trustees, each disinterested director who, at the time of his or
her retirement from the Board, has attained the age of 70 years and served
on the Board for at least five continuous years, is entitled to receive
payments from each fund in the Delaware Group for a period equal to the
lesser of the number of years that such person served as a director or the
remainder of such person's life. The amount of such payments will be equal,
on an annual basis, to the amount of the annual retainer that is paid to
directors of each fund at the time of such person's retirement. If an
eligible director retired as of November 30, 1995, he or she would be
entitled to annual payments totaling $18,100, in the aggregate, from all of
the funds in the Delaware Group, based on the number of funds in the
Delaware Group as of that date.
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<PAGE>
EXCHANGE PRIVILEGE
The exchange privileges available for shareholders of the Company's
classes and for shareholders of classes of other funds in the Delaware Group are
set forth in the relevant prospectuses for such classes. The following
supplements that information. The Company may modify, terminate or suspend the
exchange privilege upon 60 days' notice to shareholders.
All exchanges involve a purchase of shares of the fund into which the
exchange is made. As with any purchase, an investor should obtain and carefully
read that fund's prospectus before buying shares in an exchange. The prospectus
contains more complete information about the fund, including charges and
expenses. A shareholder requesting an exchange will be sent a current prospectus
and an authorization form for any of the other mutual funds in the Delaware
Group. Exchange instructions must be signed by the record owner(s) exactly as
the shares are registered.
An exchange constitutes, for tax purposes, the sale of one fund or series
and the purchase of another. The sale may involve either a capital gain or loss
to the shareholder for federal income tax purposes.
In addition, investment advisers and dealers may make exchanges between
funds in the Delaware Group on behalf of their clients by telephone or other
expedited means. This service may be discontinued or revised at any time by the
Transfer Agent. Such exchange requests may be rejected if it is determined that
a particular request or the total requests at any time could have an adverse
effect on any of the funds. Requests for expedited exchanges may be submitted
with a properly completed exchange authorization form, as described above.
Telephone Exchange Privilege
Shareholders owning shares for which certificates have not been issued or
their investment dealers of record may exchange shares by telephone for shares
in other mutual funds in the Delaware Group. This service is automatically
provided unless the Company receives written notice from the shareholder to the
contrary.
Shareholders or their investment dealers of record may contact the
Transfer Agent at 800-523-1918 or, in the case of shareholders of the
Institutional Classes, their Client Services Representative at 800-828-5052, to
effect an exchange. The shareholder's current Fund account number must be
identified, as well as the registration of the account, the share or dollar
amount to be exchanged and the fund into which the exchange is to be made.
Requests received on any day after the time the offering price and net asset
value are determined will be processed the following day. See Determining
Offering Price and Net Asset Value. Any new account established through the
exchange will automatically carry the same registration, shareholder information
and dividend option as the account from which the shares were exchanged. The
exchange requirements of the fund into which the exchange is being made, such as
sales charges, eligibility and investment minimums, must be met. (See the
prospectus of the fund desired or inquire by calling the Transfer Agent or, as
relevant, your Client Services Representative.) Certain funds are not available
for retirement plans.
The telephone exchange privilege is intended as a convenience to
shareholders and is not intended to be a vehicle to speculate on short-term
swings in the securities market through frequent transactions in and out of the
funds in the Delaware Group. Telephone exchanges may be subject to limitations
as to amounts or frequency. The Transfer Agent and the Company reserve the right
to record exchange instructions received by telephone and to reject exchange
requests at any time.
As described in the Company's Prospectuses, neither the Company nor the
Transfer Agent is responsible for any shareholder loss incurred in acting upon
written or telephone instructions for redemption or exchange of Fund shares
which are reasonably believed to be genuine.
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<PAGE>
Right to Refuse Timing Accounts
With regard to accounts that are administered by market timing services
("Timing Firms") to purchase or redeem shares based on changing economic and
market conditions ("Timing Accounts"), the Company will refuse any new Timing
Arrangements, as well as any new purchases (as opposed to exchanges) in Delaware
Group funds from Timing Firms. The Company reserves the right to temporarily or
permanently terminate the exchange privilege or reject any specific purchase
order for any person whose transactions seem to follow a timing pattern who: (i)
makes an exchange request out of the Company within two weeks of an earlier
exchange request out of the Company, or (ii) makes more than two exchanges out
of the Company per calendar quarter, or (iii) exchanges shares equal in value to
at least $5 million, or more than 1/4 of 1% of the Company's net assets.
Accounts under common ownership or control, including accounts administered so
as to redeem or purchase shares based upon certain predetermined market
indicators, will be aggregated for purposes of the exchange limits.
Restrictions on Timed Exchanges
Timing Accounts operating under existing Timing Agreements may only
execute exchanges between the following eight Delaware Group funds: (1) Decatur
Income Fund, (2) Decatur Total Return Fund, (3) Delaware Fund, (4) Limited-Term
Government Fund, (5) Tax-Free USA Fund, (6) Delaware Cash Reserve, (7)
Delchester Fund and (8) Tax-Free Pennsylvania Fund. No other Delaware Group
funds are available for Timed Exchanges. Assets redeemed or exchanged out of
Timing Accounts in Delaware Group funds not listed above may not be reinvested
back into that Timing Account. The Company reserves the right to apply these
same restrictions to the account(s) of any person whose transactions seem to
follow a timing pattern (as described above).
The Company also reserves the right to refuse the purchase side of an
exchange request by any Timing Account, person, or group if, in the Manager's
judgment, the Company would be unable to invest effectively in accordance with
its investment objectives and policies, or would otherwise potentially be
adversely affected. A shareholder's purchase exchanges may be restricted or
refused if the Company receives or anticipates simultaneous orders affecting
significant portions of the Company's assets. In particular, a pattern of
exchanges that coincide with a "market timing" strategy may be disruptive to the
Company and therefore may be refused.
Except as noted above, only shareholders and their authorized brokers of
record will be permitted to make exchanges or redemptions.
Following is a summary of the investment objectives of the other Delaware
Group funds:
Delaware Fund seeks long-term growth by a balance of capital
appreciation, income and preservation of capital. It uses a dividend-oriented
valuation strategy to select securities issued by established companies that are
believed to demonstrate potential for income and capital growth. Devon Fund
seeks current income and capital appreciation by investing primarily in
income-producing common stocks, with a focus on common stocks the Manager
believes have the potential for above average dividend increases over time.
Trend Fund seeks long-term growth by investing in common stock issued by
emerging growth companies exhibiting strong capital appreciation potential.
Value Fund seeks capital appreciation by investing primarily in common
stocks whose market values appear low relative to their underlying value or
future potential.
DelCap Fund seeks long-term capital growth by investing in common stocks
and securities convertible into common stocks of companies that have a
demonstrated history of growth and have the potential to support continued
growth.
Decatur Income Fund seeks the highest possible current income by
investing primarily in common stocks that provide the potential for income and
capital appreciation without undue risk to principal. Decatur Total Return Fund
seeks long-term growth by investing primarily in securities that provide the
potential for income and capital appreciation without undue risk to principal.
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<PAGE>
Delchester Fund seeks as high a current income as possible by investing
principally in corporate bonds, and also in U.S. Government securities and
commercial paper.
U.S. Government Fund seeks high current income by investing primarily in
long-term U.S. Government debt obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities.
Limited-Term Government Fund seeks high, stable income by investing
primarily in a portfolio of short- and intermediate-term securities issued or
guaranteed by the U.S. Government, its agencies or instrumentalities and
instruments secured by such securities. U.S. Government Money Fund seeks maximum
current income with preservation of principal and maintenance of liquidity by
investing only in short-term securities issued or guaranteed as to principal and
interest by the U.S. Government, its agencies or instrumentalities, and
repurchase agreements collateralized by such securities, while maintaining a
stable net asset value.
Delaware Cash Reserve seeks the highest level of income consistent with
the preservation of capital and liquidity through investments in short-term
money market instruments, while maintaining a stable net asset value.
Tax-Free USA Fund seeks high current income exempt from federal income
tax by investing in municipal bonds of geographically-diverse issuers. Tax-Free
Insured Fund invests in these same types of securities but with an emphasis on
municipal bonds protected by insurance guaranteeing principal and interest are
paid when due. Tax-Free USA Intermediate Fund seeks a high level of current
interest income exempt from federal income tax, consistent with the preservation
of capital by investing primarily in municipal bonds.
Tax-Free Money Fund seeks high current income, exempt from federal income
tax, by investing in short-term municipal obligations, while maintaining a
stable net asset value.
Tax-Free Pennsylvania Fund seeks a high level of current interest income
exempt from federal and, to the extent possible, certain Pennsylvania state and
local taxes, consistent with the preservation of capital.
Delaware Group Premium Fund offers nine series available exclusively as
funding vehicles for certain insurance company separate accounts. Equity/Income
Series seeks the highest possible total rate of return by selecting issues that
exhibit the potential for capital appreciation while providing higher than
average dividend income. High Yield Series seeks as high a current income as
possible by investing in rated and unrated corporate bonds, U.S. Government
securities and commercial paper. Capital Reserves Series seeks a high stable
level of current income while minimizing fluctuations in principal by investing
in a diversified portfolio of short- and intermediate-term securities. Money
Market Series seeks the highest level of income consistent with preservation of
capital and liquidity through investments in short-term money market
instruments. Growth Series seeks long-term capital appreciation by investing its
assets in a diversified portfolio of securities exhibiting the potential for
significant growth. Multiple Strategy Series seeks a balance of capital
appreciation, income and preservation of capital. It uses a dividend-oriented
valuation strategy to select securities issued by established companies that are
believed to demonstrate potential for income and capital growth. International
Equity Series seeks long-term growth without undue risk to principal by
investing primarily in equity securities of foreign issuers that provide the
potential for capital appreciation and income. Value Series seeks capital
appreciation by investing in small- to mid-cap common stocks whose market value
appears low relative to their underlying value or future earnings and growth
potential. Emphasis will also be placed on securities of companies that may be
temporarily out of favor or whose value is not yet recognized by the market.
Emerging Growth Series seeks long-term capital appreciation by investing
primarily in small-cap common stocks and convertible securities of emerging and
other growth-oriented companies. These securities will have been judged to be
responsive to changes in the market place and to have fundamental
characteristics to support growth. Income is not an objective.
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<PAGE>
For more complete information about any of these funds, including charges
and expenses, you can obtain a prospectus from the Distributor. Read it
carefully before you invest or forward funds.
Each of the summaries above is qualified in its entirety by the
information contained in each fund's prospectus(es).
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<PAGE>
GENERAL INFORMATION
Delaware International is the investment manager of each Fund of the
Company and DMC is the sub-adviser to the Global Assets Series. Delaware
International, or its affiliate DMC, also manages the other funds in the
Delaware Group. DMC, through a separate division, also manages private
investment accounts. While investment decisions of each Fund are made
independently from those of the other funds and accounts, they may make
investment decisions at the same time.
Access persons and advisory persons of the Delaware Group of funds, as
those terms are defined in SEC Rule 17j-1 under the 1940 Act, who provide
services to Delaware Management Company, Inc., Delaware International Advisers
Ltd. or their affiliates, are permitted to engage in personal securities
transactions subject to the exceptions set forth in Rule 17j-1 and the following
general restrictions and procedures: (1) certain blackout periods apply to
personal securities transactions of those persons; (2) transactions must receive
advance clearance and must be completed on the same day as the clearance is
received; (3) certain persons are prohibited from investing in initial public
offerings of securities and other restrictions apply to investments in private
placements of securities; (4) opening positions may only be closed-out at a
profit after a 60-day holding period has elapsed; and (5) the Compliance Officer
must be informed periodically of all securities transactions and duplicate
copies of brokerage confirmations and account statements must be supplied to the
Compliance Officer.
The Distributor acts as national distributor for the Company and for the
other mutual funds in the Delaware Group. As previously described, prior to
January 3, 1995, DDI served as the national distributor for the Company. In
their capacities as the national distributor, DDI and the Distributor received
net commissions from the Company on behalf of the Class A Shares, after
reallowances to dealers, as follows:
International Equity Fund
Total
Amount of
Fiscal Under- Amounts Net
Year writing Reallowed Commission
Ended Commissions to Dealers to Distributor
11/30/95 $299,368 $259,217 $40,151
11/30/94 653,278 564,877 88,401
11/30/93 377,504 326,612 50,892
Global Bond Fund(1)
Total
Amount of
Fiscal Under- Amounts Net
Year writing Reallowed Commission
Ended Commissions to Dealers to Distributor
11/30/95 $5,712 $4,661 $1,051
Global Assets Fund(1)
Total
Amount of
Fiscal Under- Amounts Net
Year writing Reallowed Commission
Ended Commissions to Dealers to Distributor
11/30/95 $27,931 $24,095 $3,836
(1) Date of initial public offering was December 27, 1994.
For the fiscal year ended November 30, 1993, no Limited CDSC payments
were made with respect to the International Equity Fund A Class. For the fiscal
year ended November 30, 1994, in its capacity as the Company's national
distributor, DDI received Limited CDSC payments in the amount of $3,644 with
respect to the International Equity Fund A Class. For the fiscal year ended
November 30, 1995, in their capacities as the Company's national distributor,
DDI and the Distributor received Limited CDSC payments in the amount of $3,911
with respect to the International Equity Fund A Class. For the period September
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<PAGE>
6, 1994 (date of initial public offering) through November 30, 1994, DDI also
received CDSC payments in the amount of $1,283 with respect to the International
Equity Fund B Class. For the fiscal year ended November 30, 1995, in their
capacities as the Company's national distributor, DDI and the Distributor
received CDSC payments in the amount of $2,602 with respect to the International
Equity Fund B Class. For the period November 29, 1995 (date of initial public
offering) through November 30, 1995, no CDSC payments were made with respect to
the International Equity Fund C Class.
For the period December 27, 1994 (date of initial public offering)
through November 30, 1995, no Limited CDSC payments were made with respect to
the Global Bond Fund A Class. For the period December 27, 1994 (date of initial
public offering) through November 30, 1995, no CDSC payments were made with
respect to the Global Bond Fund B Class. For the period November 29, 1995 (date
of initial public offering) through November 30, 1995, no CDSC payments were
made with respect to the Global Bond Fund C Class.
For the period December 27, 1994 (date of initial public offering)
through November 30, 1995, no Limited CDSC payments were made with respect to
the Global Assets Fund A Class. For the period December 27, 1994 (date of
initial public offering) through November 30, 1995, the Distributor received
CDSC payments in the amount of $340 with respect to the Global Assets Fund B
Class. For the period November 29, 1995 (date of initial public offering)
through November 30, 1995, no CDSC payments were made with respect to the Global
Assets Fund C Class.
Effective as of January 3, 1995, all such payments described above have
been paid to the Distributor.
The Transfer Agent, an affiliate of Delaware International and DMC, acts
as shareholder servicing, dividend disbursing and transfer agent for the Company
and for the other mutual funds in the Delaware Group. The Transfer Agent is paid
a fee by each Fund for providing these services consisting of an annual per
account charge of $5.50 for the International Equity and Global Assets Series
and $11.00 for the Global Bond Series plus transaction charges for particular
services according to a schedule. Compensation is fixed each year and approved
by the Board of Directors, including a majority of the unaffiliated directors.
DMC and its affiliates own the name "Delaware Group." Under certain
circumstances, including the termination of the Company's advisory relationship
with Delaware International and DMC or its distribution relationship with the
Distributor, DMC and its affiliates could cause the Company to delete the words
"Delaware Group" from the Company's name.
Morgan Guaranty Trust Company of New York ("Morgan"), 60 Wall Street, New
York, NY 10260, is custodian of the Company's securities and cash. As custodian
for the Company, Morgan maintains a separate account or accounts for the
Company; receives, holds and releases portfolio securities on account of the
Company; receives and disburses money on behalf of the Company; and collects and
receives income and other payments and distributions on account of the Company's
portfolio securities.
The legality of the issuance of the shares offered hereby, registered
pursuant to Rule 24f-2 under the Investment Company Act of 1940, has been passed
upon for the Company by Stradley, Ronon, Stevens & Young, Philadelphia,
Pennsylvania.
Capitalization
The Company has a present authorized capitalization of five hundred
million shares of capital stock with a $.01 par value per share. The Board of
Directors has allocated fifty million shares to each Fund's classes of shares.
Prior to November 9, 1992, each Fund of the Company offered one retail class of
shares, from November 9, 1992 to September 5, 1994, the International Equity
Series offered two classes of shares and from September 6, 1994 to November 28,
1995, the International Equity Series offered three classes of shares. Beginning
December 27, 1994 to November 28, 1995, the Global Assets Series and the Global
Bond Series offered three classes of shares. Beginning November 29, 1995, each
Fund of the Company began offering four classes of shares. Each class of shares
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<PAGE>
in the respective Fund represents a proportionate interest in the assets of that
Fund, and each has the same voting and other rights and preferences as the other
classes, except that shares of the Institutional Classes may not vote on any
matter affecting the Fund Classes' Distribution Plans under Rule 12b-1.
Similarly, as a general matter, shareholders of Class A Shares, Class B Shares
and Class C Shares may vote only on matters affecting the 12b-1 Plan that
relates to the class of shares that they hold. However, Class B Shares of a Fund
may vote on any proposal to increase materially the fees to be paid by a Fund
under the Rule 12b-1 Plan relating to the respective Class A Shares. General
expenses of a Fund will be allocated on a pro-rata basis to the respective
classes according to asset size, except that expenses of the Rule 12b-1 Plans of
the Fund Classes will be allocated solely to the respective class. While all
shares have equal voting rights on matters affecting the entire Company, each
Fund would vote separately on any matter which affects only that Fund, such as
any change in its own investment objective and policy or action to dissolve the
Fund and as otherwise prescribed by the Investment Company Act of 1940. Shares
of each Fund have a priority in that Fund's assets, and in gains on and income
from the portfolio of that Fund. Shares have no preemptive rights, are fully
transferable and, when issued, are fully paid and nonassessable.
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.
Noncumulative Voting
These shares have noncumulative voting rights which means that the
holders of more than 50% of the shares of the Company voting for the election of
directors can elect all the directors if they choose to do so, and, in such
event, the holders of the remaining shares will not be able to elect any
directors.
This Part B does not include all of the information contained in the
Registration Statement which is on file with the SEC.
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<PAGE>
APPENDIX A--IRA INFORMATION
The Tax Reform Act of 1986 restructured, and in some cases eliminated,
the tax deductibility of IRA contributions. Under the Act, the full deduction
for IRAs ($2,000 for each working spouse and $2,250 for one- income couples) was
retained for all taxpayers who are not covered by an employer-sponsored
retirement plan. Even if a taxpayer (or his or her spouse) is covered by an
employer-sponsored retirement plan, the full deduction is still available if the
taxpayer's adjusted gross income is below $25,000 ($40,000 for taxpayers filing
joint returns). A partial deduction is allowed for married couples with incomes
between $40,000 and $50,000, and for single individuals with incomes between
$25,000 and $35,000. The Act does not permit deductions for contributions to
IRAs by taxpayers whose adjusted gross income before IRA deductions exceeds
$50,000 ($35,000 for singles) and who are active participants in an
employer-sponsored retirement plan. Taxpayers who were not allowed deductions on
IRA contributions still can make nondeductible IRA contributions of as much as
$2,000 for each working spouse ($2,250 for one-income couples), and defer taxes
on interest or other earnings from the IRAs. Special rules apply for determining
the deductibility of contributions made by married individuals filing separate
returns.
As illustrated in the following tables, maintaining an Individual
Retirement Account remains a valuable opportunity.
For many, an IRA will continue to offer both an up-front tax break with
its tax deduction each year and the real benefit that comes with tax-deferred
compounding. For others, losing the tax deduction will impact their taxable
income status each year. Over the long term, however, being able to defer taxes
on earnings still provides an impressive investment opportunity--a way to have
money grow faster due to tax-deferred compounding.
Even if your IRA contribution is no longer deductible, the benefits of
saving on a tax-deferred basis can be substantial. Additional exhibits found in
this Appendix A illustrate the benefits of tax-deferred versus taxable
compounding. For illustration purposes, each reflects a constant 10% rate of
return, with the reinvestment of all proceeds compounded at a frequency
indicated at the top of each exhibit. When used in advertising and other
promotional materials, the rate of return and compounding frequency used
(monthly compounding for the Global Bond Series, and quarterly for the Global
Assets and International Equity Series) will reflect the actual annualized
return experienced by each Fund or a representative average return of each
Fund's peer mutual funds. The tables do not take into account any sales charges
or fees. Of course, earnings accumulated in your IRA will be subject to tax upon
withdrawal.
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<PAGE>
The first table reflects a constant 10% rate of return, compounded
annually, with the reinvestment of all proceeds. The tables do not take into
account any sales charges or fees. If you choose a mutual fund with a
fluctuating net asset value, like any Fund of Delaware Group Global &
International Funds, Inc., your bottom line at retirement could be lower--it
could also be much higher.
$2,000 Invested Annually Assuming a 10% Annualized Return
<TABLE>
<CAPTION>
15% Tax Bracket Single - $0-$22,750
---------------
Joint - $0-$38,000
How Much You
End of Cumulative How Much You Have With Full
Year Investment Amount Have Without IRA IRA Deduction
<S> <C> <C> <C>
1 $ 2,000 $ 1,844 $ 2,200
5 10,000 10,929 13,431
10 20,000 27,363 35,062
15 30,000 52,074 69,899
20 40,000 89,231 126,005
25 50,000 145,103 216,364
30 60,000 229,114 361,887
35 70,000 355,438 596,254
40 80,000 545,386 973,704
</TABLE>
[Without IRA--investment of $1,700 ($2,000 less 15%) earning 8.5%
(10% less 15%)]
<TABLE>
<CAPTION>
28% Tax Bracket Single - $22,751-$55,100
---------------
Joint - $38,001-$91,850
End of Cumulative How Much You How Much You Have with Full IRA
Year Investment Amount Have Without IRA No Deduction Deduction
<S> <C> <C> <C> <C>
1 $ 2,000 $ 1,544 $ 1,584 $ 2,200
5 10,000 8,913 9,670 13,431
10 20,000 21,531 25,245 35,062
15 30,000 39,394 50,328 69,899
20 40,000 64,683 90,724 126,005
25 50,000 100,485 155,782 216,364
30 60,000 151,171 260,559 361,887
35 70,000 222,927 429,303 596,254
40 80,000 324,512 701,067 973,704
</TABLE>
[Without IRA--investment of $1,440 ($2,000 less 28%) earning 7.2% (10% less
28%)] [With IRA--No Deduction--investment of $1,440 ($2,000 less 28%) earning
10%]
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<PAGE>
<TABLE>
<CAPTION>
31% Tax Bracket Single - $55,101-$115,000
--------------- Joint - $91,851-$140,000
End of Cumulative How Much You How Much You Have with Full IRA
Year Investment Amount Have Without IRA No Deduction Deduction
<S> <C> <C> <C> <C>
1 $ 2,000 $ 1,475 $ 1,518 $ 2,200
5 10,000 8,467 9,268 13,431
10 20,000 20,286 24,193 35,062
15 30,000 36,787 48,231 69,899
20 40,000 59,821 86,943 126,005
25 50,000 91,978 149,291 216,364
30 60,000 136,868 249,702 361,887
35 70,000 199,536 411,415 596,254
40 80,000 287,021 671,855 973,704
</TABLE>
[Without IRA--investment of $1,380 ($2,000 less 31%) earning 6.9% (10% less
31%)] [With IRA--No Deduction--investment of $1,380 ($2,000 less 31%) earning
10%]
<TABLE>
<CAPTION>
36% Tax Bracket* Single - $115,001-$250,000
---------------- Joint - $140,001-$250,000
End of Cumulative How Much You How Much You Have with Full IRA
Year Investment Amount Have Without IRA No Deduction Deduction
<S> <C> <C> <C> <C>
1 $ 2,000 $ 1,362 $ 1,408 $ 2,200
5 10,000 7,739 8,596 13,431
10 20,000 18,292 22,440 35,062
15 30,000 32,683 44,736 69,899
20 40,000 52,308 80,643 126,005
25 50,000 79,069 138,473 216,364
30 60,000 115,562 231,608 361,887
35 70,000 165,327 381,602 596,254
40 80,000 233,190 623,170 973,704
</TABLE>
[Without IRA--investment of $1,280 ($2,000 less 36%) earning 6.4% (10% less
36%)] [With IRA--No Deduction--investment of $1,280 ($2,000 less 36%) earning
10%]
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<PAGE>
<TABLE>
<CAPTION>
39.6% Tax Bracket* Single - over $250,000
------------------
Joint - over $250,000
End of Cumulative How Much You How Much You Have with Full IRA
Year Investment Amount Have Without IRA No Deduction Deduction
<S> <C> <C> <C> <C>
1 $ 2,000 $ 1,281 $ 1,329 $ 2,200
5 10,000 7,227 8,112 13,431
10 20,000 16,916 21,178 35,062
15 30,000 29,907 42,219 69,899
20 40,000 47,324 76,107 126,005
25 50,000 70,677 130,684 216,364
30 60,000 101,986 218,580 361,887
35 70,000 143,965 360,137 596,254
40 80,000 200,249 588,117 973,704
</TABLE>
[Without IRA--investment of $1,208 ($2,000 less 39.6%) earning 6.04% (10% less
39.6%)] [With IRA--No Deduction--investment of $1,208 ($2,000 less 39.6% earning
10%]
* For tax years beginning after 1992, a 36% tax rate applies to all taxable
income in excess of the maximum dollar amounts subject to the 31% tax rate.
In addition, a 10% surtax (not applicable to capital gains) applies to
certain high-income taxpayers. It is computed by applying a 39.6% rate to
taxable income in excess of $250,000. The above tables do not reflect the
personal exemption phaseout nor the limitations of itemized deductions that
may apply.
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<PAGE>
$2,000 SINGLE INVESTMENT AT A RETURN OF 10% COMPOUNDED MONTHLY
<TABLE>
<CAPTION>
TAXABLE - TAXABLE - TAXABLE - TAXABLE - TAXABLE - TAX
YEARS 39.6%* 36%* 31% 28% 15% DEFERRED
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
10 $ 3,653 $ 3,787 $ 3,980 $ 4,100 $ 4,665 $ 5,414
15 4,938 5,210 5,614 5,870 7,125 8,908
20 6,673 7,169 7,918 8,405 10,882 14,656
30 12,190 13,572 15,756 17,231 25,385 39,675
40 22,267 25,696 31,351 35,323 59,214 107,401
</TABLE>
$2,000 INVESTED ANNUALLY AT A RETURN OF 10% COMPOUNDED MONTHLY
<TABLE>
<CAPTION>
TAXABLE - TAXABLE - TAXABLE - TAXABLE - TAXABLE - TAX
YEARS 39.6%* 36%* 31% 28% 15% DEFERRED
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
10 $ 28,276 $ 28,891 $ 29,773 $ 30,317 $ 32,819 $ 36,018
15 50,241 51,913 54,348 55,875 63,110 72,877
20 79,928 83,590 89,014 92,468 109,373 133,521
30 174,276 187,150 206,891 219,878 287,948 397,466
40 346,618 383,214 441,441 481,071 704,501 1,111,974
</TABLE>
* For tax years beginning after 1992, a 36% tax rate applies to all taxable
income in excess of the maximum dollar amounts subject to the 31% tax rate.
In addition, a 10% surtax (not applicable to capital gains) applies to
certain high-income taxpayers. It is computed by applying a 39.6% rate to
taxable income in excess of $250,000. The above tables do not reflect the
personal exemption phaseout nor the limitations of itemized deductions that
may apply.
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<PAGE>
$2,000 SINGLE INVESTMENT AT A RETURN OF 10% COMPOUNDED QUARTERLY
<TABLE>
<CAPTION>
TAXABLE - TAXABLE - TAXABLE - TAXABLE - TAXABLE - TAX
YEARS 39.6%* 36%* 31% 28% 15% DEFERRED
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
10 $ 3,642 $ 3,774 $ 3,964 $ 4,083 $ 4,638 $ 5,370
15 4,915 5,184 5,581 5,833 7,062 8,800
20 6,633 7,121 7,857 8,334 10,755 14,419
30 12,081 13,436 15,572 17,012 24,939 38,716
40 22,001 25,352 30,865 34,728 57,831 103,956
</TABLE>
$2,000 INVESTED ANNUALLY AT A RETURN OF 10% COMPOUNDED QUARTERLY
<TABLE>
<CAPTION>
TAXABLE - TAXABLE - TAXABLE - TAXABLE - TAXABLE - TAX
YEARS 39.6%* 36%* 31% 28% 15% DEFERRED
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
10 $ 28,226 $ 28,833 $ 29,702 $ 30,239 $ 32,699 $ 35,834
15 50,104 51,753 54,152 55,654 62,755 72,298
20 79,629 83,239 88,573 91,966 108,525 132,049
30 173,245 185,894 205,256 217,971 284,358 390,394
40 343,773 379,596 436,523 475,187 692,097 1,084,066
</TABLE>
* For tax years beginning after 1992, a 36% tax rate applies to all taxable
income in excess of the maximum dollar amounts subject to the 31% tax rate.
In addition, a 10% surtax (not applicable to capital gains) applies to
certain high-income taxpayers. It is computed by applying a 39.6% rate to
taxable income in excess of $250,000. The above tables do not reflect the
personal exemption phaseout nor the limitations of itemized deductions that
may apply.
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<PAGE>
THE VALUE OF STARTING YOUR IRA EARLY
The following illustrates how much more you would have contributing
$2,000 each January--the earliest opportunity--compared to contributing on April
15th of the following year--the latest, for each tax year.
After 5 years $3,528 more
10 years $6,113
20 years $17,228
30 years $47,295
Compounded returns for the longest period of time is the key. The above
illustration assumes a 10% rate of return and the reinvestment of all proceeds.
And it pays to shop around. If you get just 2% more per year, it can make
a big difference when you retire. A constant 8% versus 10% return, both
compounded monthly, illustrates the point. This chart is based on a yearly
investment of $2,000 on January 1. After 30 years the difference can mean as
much as 50% more!
8% Return 10% Return
--------- ----------
10 years $31,828 $36,018
20 years $102,476 $133,521
30 years $259,288 $397,466
The statistical exhibits above are for illustration purposes only and do
not reflect the actual performance for any Fund of Delaware Group Global &
International Funds, Inc. either in the past or in the future.
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<PAGE>
FINANCIAL STATEMENTS
Ernst & Young LLP serves as the independent auditors for the Company and,
in its capacity as such, audits the financial statements contained in the
Company's Annual Report. The International Equity Series, Global Bond Series
and Global Assets Series of Delaware Group Global & International Funds, Inc.
Statement of Net Assets, Statement of Operations, Statement of Changes in Net
Assets and Notes to Financial Statements for the fiscal year ended November 30,
1995, as well as the reports of Ernst & Young LLP, independent auditors, are
included in the Fund's Annual Report to shareholders. The financial statements,
the notes relating thereto and the reports of Ernst & Young LLP listed above are
incorporated by reference from the Annual Report into this Part B.
-70-
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
PART C
Other Information
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
Part A - Financial Highlights
*Part B - Statement of Net Assets
Statement of Operations
Statement of Changes in Net Assets
Notes to Financial Statements
Accountant's Reports
* The financial statements and Accountant's Report listed above
relating to the International Equity Series, the Global Assets
Series and Global Bond Series are incorporated by reference
into Part B from the Registrant's Annual Report for the fiscal
year ended November 30, 1995 and are herein included as an
Exhibit.
(b) Exhibits:
(1) Articles of Incorporation.
(a) Articles of Incorporation, as amended and
supplemented through November 27, 1995,
incorporated into this filing by reference
to Post-Effective Amendment No. 10 filed
November 27, 1995.
(b) Executed Articles Supplementary (November
28, 1995) attached as Exhibit.
(2) By-Laws. By-Laws, as amended through June 30,
1995, incorporated into this filing by reference
to Post-Effective Amendment No. 9 filed
June 30, 1995.
(3) Voting Trust Agreement. Inapplicable.
i
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
(4) Copies of All Instruments Defining the Rights of
Holders.
------------------------------------------------
(a) Articles of Incorporation, Articles of
Amendment and Articles Supplementary.
(i) Article Fifth and Article Ninth of the
Articles of Incorporation (May 30,
1991), Article Second of Articles
Supplementary (May 22, 1992 and
September 6, 1994), Article Second of
Certificate of Correction to Articles
Supplementary (December 28, 1994)
incorporated into this filing by
reference to Post-Effective Amendment
No. 10 filed November 27, 1995.
(ii) Executed Articles Supplementary
(November 28, 1995) attached as
Exhibit 24(b)(1)(b).
(b) By-Laws. Article II and Article III, as
amended, and Article XIV incorporated into
this filing by reference to Post-Effective
Amendment No. 9 filed June 30, 1995.
(5) Investment Management Agreements. Investment
Management Agreements between Delaware
International Advisers Ltd. and the Registrant
on behalf of each Series dated April 3, 1995 and
Sub-Advisory Agreement between Delaware
International Advisers Ltd. and Delaware
Management Company, Inc. on behalf of the Global
Assets Series dated April 3, 1995 incorporated
into this filing by reference to Post-Effective
Amendment No. 9 filed June 30, 1995.
(6) (a) Distribution Agreements.
(i) Form of Distribution Agreement (April
1995) incorporated into this filing by
reference to Post-Effective Amendment
No. 10 filed November 27, 1995.
(ii) Form of Amendment No. 1 to
Distribution Agreement (November 1995)
incorporated into this filing by
reference to Post-Effective Amendment
No. 10 filed November 27, 1995.
(b) Administration and Service Agreement. Form
of Administration and Service Agreement (as
amended November 1995) incorporated into
this filing by reference to Post-Effective
Amendment No. 10 filed November 27, 1995.
ii
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
(c) Dealer's Agreement. Form of Dealer's
Agreement (as amended November 1995)
incorporated into this filing by reference
to Post- Effective Amendment No. 10 filed
November 27, 1995.
(d) Mutual Fund Agreement for the Delaware Group
of Funds (November 1995) included as Module.
(7) Bonus, Profit Sharing, Pension Contracts.
(a) Amended and Restated Profit Sharing Plan
incorporated into this filing by reference
to Post-Effective Amendment No. 9 filed June
30, 1995.
(b) Amendment to Profit Sharing Plan (December
21, 1995) included as Module.
(8) Custodian Agreements. Incorporated into this
filing by reference to Post- Effective Amendment
No. 1 filed March 30, 1992.
(9) Other Material Contracts. Shareholders Services
Agreements incorporated into this filing by
reference to Post-Effective Amendment No. 1
filed March 30, 1992.
(10) Opinion of Counsel. Filed with letter relating
to Rule 24f-2 on January 26, 1996.
(11) Consent of Auditors. Attached as Exhibit.
(12) Inapplicable.
(13) Undertaking of Initial Shareholder. Incorporated
into this filing by reference to Pre-Effective
Amendment No. 1 filed August 22, 1991.
(14) Model Plans. Incorporated into this filing by
reference to Post-Effective Amendment No. 5
filed March 24, 1994 and Post-Effective
Amendment No. 8 filed March 3, 1995.
(15) Plans under Rule 12b-1.
(a) Form of Plan under Rule 12b-1 for Class A of
each Series (November 1995) incorporated
into this filing by reference to
Post-Effective Amendment No. 10 filed
November 27, 1995.
iii
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
(b) Form of Plan under Rule 12b-1 for Class B of
each Series (November 1995) incorporated
into this filing by reference to
Post-Effective Amendment No. 10 filed
November 27, 1995.
(c) Form of Plan under Rule 12b-1 for Class C of
each Series (November 1995) incorporated
into this filing by reference to
Post-Effective Amendment No. 10 filed
November 27, 1995.
(16) Schedules of Computation for each Performance
Quotation. Incorporated into this filing by
reference to Post-Effective Amendment No. 9
filed June 30, 1995.
Schedules of Computation for each Performance
Quotation for periods not previously
electronically filed for each Series attached as
Exhibit.
(17) Financial Data Schedules. Attached as Exhibit.
(18) Plan under Rule 18f-3. Plan under Rule 18f-3
included as Module.
(19) Other: Directors' Power of Attorney.
Incorporated into this filing by
reference to Post-Effective Amendment
No. 9 filed June 30, 1995.
(20) Other: Financial Statements. The Registrant's
financial statements for the fiscal year
ended November 30, 1995 attached as
Exhibit.
Item 25. Persons Controlled by or under Common Control with Registrant.
None.
Item 26. Number of Holders of Securities.
(1) (2)
Number of
Title of Class Record Holders
-------------- --------------
Delaware Group Global & International
Funds, Inc.'s
International Equity Series:
International Equity Fund A Class
Common Stock 5,792 Accounts as of
$.01 Par Value Per Share December 31, 1995
International Equity Fund B Class
Common Stock 459 Accounts as of
$.01 Par Value Per Share December 31, 1995
iv
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
Number of
Title of Class Record Holders
-------------- --------------
International Equity Fund C Class
Common Stock 2 Accounts as of
$.01 Par Value Per Share December 31, 1995
International Equity Fund Institutional
Class Common Stock 33 Accounts as of
$.01 Par Value Per Share December 31, 1995
Delaware Group Global & International
Funds, Inc.'s
Global Bond Series:
Global Bond Fund A Class
Common Stock 85 Accounts as of
$.01 Par Value Per Share December 31, 1995
Global Bond Fund B Class
Common Stock 16 Accounts as of
$.01 Par Value Per Share December 31, 1995
Global Bond Fund C Class
Common Stock 2 Accounts as of
$.01 Par Value Per Share December 31, 1995
Global Bond Fund Institutional Class
Common Stock 3 Accounts as of
$.01 Par Value Per Share December 31, 1995
Delaware Group Global & International
Funds, Inc.'s
Global Assets Series:
Global Assets Fund A Class
Common Stock 436 Accounts as of
$.01 Par Value Per Share December 31, 1995
Global Assets Fund B Class
Common Stock 91 Accounts as of
$.01 Par Value Per Share December 31, 1995
v
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
Number of
Title of Class Record Holders
-------------- --------------
Global Assets Fund C Class
Common Stock 2 Accounts as of
$.01 Par Value Per Share December 31, 1995
Global Assets Fund Institutional Class
Common Stock 3 Accounts as of
$.01 Par Value Per Share December 31, 1995
Item 27. Indemnification. Incorporated into this filing by reference to
initial Registration Statement filed June 4, 1991 and Article XIV
of the By-Laws incorporated into this filing by reference to Post-
Effective Amendment No. 9 filed June 30, 1995.
Item 28. Business and Other Connections of Investment Adviser.
Delaware International Advisers Ltd. ("Delaware International")
serves as investment manager to the International Equity Series, the Global Bond
Series and the Global Assets Series of the Registrant, The International Equity
Portfolio, The Global Fixed Income Portfolio, The International Fixed Income
Portfolio and The Labor Select International Equity Portfolio of Delaware Pooled
Trust, Inc., and the International Equity Series of Delaware Group Premium Fund,
Inc., and serves as sub-investment manager to Delaware Group Global Dividend and
Income Fund, Inc., and provides investment advisory services to institutional
accounts, primarily retirement plans and endowment funds.
The following persons serving as directors or officers of Delaware
International have held the following positions during the past two years:
vi
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with Delaware InternationalAdvisers Ltd.
Business Address and its Affiliates and Other Positions and Offices Held
- ------------------ ------------------------------------------------------------------------------
<S> <C>
*Wayne A. Stork Chairman of the Board, Chief Executive Officer and Director of Delaware
International Advisers Ltd.; President, Chief Executive Officer, Chairman of
the Board and Director of the Registrant, and with the exception of Delaware
Pooled Trust, Inc., each of the other funds in the Delaware Group, Delaware
Management Holdings, Inc., DMH Corp., Delaware International Holdings
Ltd. and Founders Holdings, Inc.; Chairman of the Board and Director of
Delaware Pooled Trust, Inc., Delaware Investment Counselors, Inc. and
Delaware Investment & Retirement Services, Inc.; Chairman of the Board,
Chief Executive Officer, Chief Investment Officer and Director of Delaware
Management Company, Inc.; and Director of Delaware Distributors, Inc. and
Delaware Service Company, Inc.
**G. Roger H. Kitson Vice Chairman and Director of Delaware International Advisers Ltd.
**David G. Tilles Managing Director, Chief Investment Officer and Director of Delaware
International Advisers Ltd.
**John Emberson Secretary/Compliance Officer/Finance Director and Director of Delaware
International Advisers Ltd.
</TABLE>
* Business address is 1818 Market Street, Philadelphia, PA 19103.
** Business address is Veritas House, 125 Finsbury Pavement, London, England
EC2A 1NQ.
vii
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with Delaware InternationalAdvisers Ltd.
Business Address and its Affiliates and Other Positions and Offices Held
- ------------------ ------------------------------------------------------------------------------
<S> <C>
*David K. Downes Director of Delaware International Advisers Ltd.; Senior Vice President,
Chief Administrative Officer, Chief Financial Officer and Treasurer of
Delaware Management Holdings, Inc.; Senior Vice President/Chief
Administrative Officer/Chief Financial Officer of Delaware Management
Company, Inc., the Registrant and each of the other funds in the Delaware
Group; Chairman and Director of Delaware Management Trust Company;
Senior Vice President, Chief Financial Officer, Treasurer and Director of
DMH Corp.; Senior Vice President and Chief Administrative Officer of
Delaware Distributors, L.P.; Senior Vice President, Chief Administrative
Officer and Director of Delaware Distributors, Inc.; Senior Vice President,
Chief Administrative Officer, Chief Financial Officer and Director of
Delaware Service Company, Inc.; Chief Financial Officer and Director of
Delaware International Holdings Ltd.; Senior Vice President, Chief Financial
Officer and Treasurer of Delaware Investment Counselors, Inc.; Senior Vice
President, Chief Financial Officer and Director of Founders Holdings, Inc.;
and Chief Executive Officer and Director of Delaware Investment &
Retirement Services, Inc.
Chief Executive Officer, Chief Financial Officer and Treasurer of Forewarn,
Inc. since 1992, 8 Clayton Place, Newtown Square, PA
*Winthrop S. Jessup Director of Delaware International Advisers Ltd., Delaware Service
Company, Inc., Delaware Management Trust Company and Delaware
Investment & Retirement Services, Inc.; Executive Vice President of the
Registrant and, with the exception of Delaware Pooled Trust, Inc., each of
the other funds in the Delaware Group and Delaware Management Holdings,
Inc.; President and Chief Executive Officer of Delaware Pooled Trust, Inc.;
Executive Vice President and Director of DMH Corp., Delaware
Management Company, Inc., Delaware International Holdings Ltd. and
Founders Holdings, Inc.; Vice Chairman of Delaware Distributors, L.P.;
Vice Chairman and Director of Delaware Distributors, Inc.; and President
and Director of Delaware Investment Counselors, Inc.
</TABLE>
* Business address is 1818 Market Street, Philadelphia, PA 19103.
** Business address is Veritas House, 125 Finsbury Pavement, London, England
EC2A 1NQ.
viii
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with Delaware InternationalAdvisers Ltd.
Business Address and its Affiliates and Other Positions and Offices Held
- ------------------ ------------------------------------------------------------------------------
<S> <C>
*Richard G. Unruh, Jr. Director of Delaware International Advisers Ltd.; Executive Vice President
and Director of Delaware Management Company, Inc.; Executive Vice
President of the Registrant and each of the other funds in the Delaware
Group; and Senior Vice President of Delaware Management Holdings, Inc.
Board of Directors, Chairman of Finance Committee, Keystone Insurance Company
since 1989, 2040 Market Street, Philadelphia, PA; Board of Directors,
Chairman of Finance Committee, Mid Atlantic, Inc. since 1989, 2040 Market
Street, Philadelphia, PA
*Richard J. Flannery Director of Delaware International Advisers Ltd.; Managing
Director/Corporate Tax & Affairs of Delaware Management Holdings, Inc.,
DMH Corp., Delaware Management Company, Inc., Delaware Distributors,
L.P., Delaware Distributors, Inc., Delaware Service Company, Inc.,
Delaware Management Trust Company, Delaware Investment Counselors,
Inc., Founders CBO Corporation and Delaware Investment & Retirement
Services, Inc.; Vice President of the Registrant and each of the other funds
in the Delaware Group; Managing Director/Corporate & Tax Affairs and
Director of Founders Holdings, Inc.; and Managing Director and Director of
Delaware International Holdings Ltd.
Limited Partner of Stonewall Links, L.P. since 1991, Bulltown Rd.,
Elverton, PA; Director and Member of Executive Committee of Stonewall
Links, Inc. since 1991, Bulltown Rd., Elverton, PA
*John C. E. Campbell Director of Delaware International Advisers Ltd.
</TABLE>
* Business address is 1818 Market Street, Philadelphia, PA 19103.
** Business address is Veritas House, 125 Finsbury Pavement, London, England
EC2A 1NQ.
ix
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with Delaware InternationalAdvisers Ltd.
Business Address and its Affiliates and Other Positions and Offices Held
- ------------------ ------------------------------------------------------------------------------
<S> <C>
*George M. Chamberlain, Jr. Director of Delaware International Advisers Ltd.; Senior Vice President and
Secretary of the Registrant, each of the other funds in the Delaware Group,
Delaware Distributors, L.P., Delaware Management Holdings, Inc. and
Delaware Investment Counselors, Inc.; Senior Vice President, Secretary and
Director of Delaware Management Company, Inc., DMH Corp., Delaware
Distributors, Inc., Delaware Service Company, Inc., Founders Holdings, Inc.
and Delaware Investment & Retirement Services, Inc.; Executive Vice
President, Secretary and Director of Delaware Management Trust Company;
and Secretary and Director of Delaware International Holdings Ltd.
Director of ICI Mutual Insurance Co. since 1992, P.O. Box 730, Burlington, VT
*George E. Deming Director of Delaware International Advisers Ltd.
**Timothy W. Sanderson Senior Portfolio Manager/Deputy Compliance Officer/Director Equity
Research and Director of Delaware International Advisers Ltd.
**Clive A. Gillmore Senior Portfolio Manager/Director U.S. Mutual Fund Liaison and Director
of Delaware International Advisers Ltd.
**Hamish O. Parker Senior Portfolio Manager/Director U.S. Marketing Liaison and Director of
Delaware International Advisers Ltd.
**Ian G. Sims Senior Portfolio Manager/Deputy Managing Director and Director of
Delaware International Advisers Ltd.
**Elizabeth A. Desmond Senior Portfolio Manager of Delaware International Advisers Ltd.
**Gavin A. Hall Senior Portfolio Manager of Delaware International Advisers Ltd.
</TABLE>
* Business address is 1818 Market Street, Philadelphia, PA 19103.
** Business address is Veritas House, 125 Finsbury Pavement, London, England
EC2A 1NQ.
x
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
Delaware Management Company, Inc. ("DMC"), an affiliate of Delaware
International, serves as sub-investment manager to a portion of the portfolio of
the Global Assets Series and as investment manager to other funds in the
Delaware Group (Delaware Group Delaware Fund, Inc., Delaware Group Trend Fund,
Inc., Delaware Group Value Fund, Inc., Delaware Group DelCap Fund, Inc.,
Delaware Group Decatur Fund, Inc., Delaware Group Delchester High-Yield Bond
Fund, Inc., Delaware Group Government Fund, Inc., Delaware Group Limited-Term
Government Funds, Inc., Delaware Group Cash Reserve, Inc., Delaware Group
Tax-Free Fund, Inc., DMC Tax-Free Income Trust-Pennsylvania, Delaware Group Tax-
Free Money Fund, Inc., Delaware Group Premium Fund, Inc., Delaware Pooled Trust,
Inc., Delaware Group Dividend and Income Fund, Inc. and Delaware Group Global
Dividend and Income Fund, Inc.) and provides investment advisory services to
institutional accounts, primarily retirement plans and endowment funds. In
addition, certain directors of DMC also serve as directors/trustees of the other
Delaware Group funds, and certain officers are also officers of these other
funds. A company owned by DMC's parent company acts as principal underwriter to
the mutual funds in the Delaware Group (see Item 29 below) and another such
company acts as the shareholder servicing, dividend disbursing and transfer
agent for all of the mutual funds in the Delaware Group.
The following persons serving as directors or officers of DMC have
held the following positions during the past two years:
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with Delaware InternationalAdvisers Ltd.
Business Address* and its Affiliates and Other Positions and Offices Held
- ------------------ ------------------------------------------------------------------------------
<S> <C>
Wayne A. Stork Chairman of the Board, Chief Executive Officer, Chief Investment Officer and
Director of Delaware Management Company, Inc.; President, Chief Executive
Officer, Chairman of the Board and Director of the Registrant and, with the
exception of Delaware Pooled Trust, Inc., each of the other funds in the
Delaware Group, Delaware Management Holdings, Inc., DMH Corp., Delaware
International Holdings Ltd. and Founders Holdings, Inc.; Chairman of the Board
and Director of Delaware Pooled Trust, Inc., Delaware Investment Counselors,
Inc. and Delaware Investment & Retirement Services, Inc.; Chairman, Chief
Executive Officer and Director of Delaware International Advisers Ltd.; and
Director of Delaware Distributors, Inc. and Delaware Service Company, Inc.
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
xi
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with DMC and its
Business Address* Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------
<S> <C>
Winthrop S. Jessup Executive Vice President and Director of Delaware Management Company,
Inc., DMH Corp., Delaware International Holdings Ltd. and Founders
Holdings, Inc.; Executive Vice President of the Registrant and, with the
exception of Delaware Pooled Trust, Inc., each of the other funds in the
Delaware Group and Delaware Management Holdings, Inc.; President and
Chief Executive Officer of Delaware Pooled Trust, Inc.; Vice Chairman of
Delaware Distributors, L.P.; Vice Chairman and Director of Delaware
Distributors, Inc.; Director of Delaware Service Company, Inc., Delaware
Management Trust Company, Delaware International Advisers Ltd. and
Delaware Investment & Retirement Services, Inc.; and President and
Director of Delaware Investment Counselors, Inc.
Richard G. Unruh, Jr. Executive Vice President and Director of Delaware Management Company, Inc.;
Executive Vice President of the Registrant and each of the other funds
in the Delaware Group; Senior Vice President of Delaware Management Holdings, Inc.;
and Director of Delaware International Advisers Ltd.
Board of Directors, Chairman of Finance Committee, Keystone Insurance Company
since 1989, 2040 Market Street, Philadelphia, PA; Board of Directors, Chairman
of Finance Committee, Mid Atlantic, Inc. since 1989, 2040 Market Street,
Philadelphia, PA
Paul E. Suckow Senior Vice President/Chief Investment Officer, Fixed Income of Delaware
Management Company, Inc., the Registrant, each of the other funds in the Delaware
Group and Delaware Management Holdings, Inc.; Senior Vice President and Director of
Founders Holdings, Inc.; and Director of Founders CBO Corporation
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
xii
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with DMC and its
Business Address* Affiliates and Other Positions and Offices Held
- ------------------- --------------------------------------------------------------------------------
<S> <C>
David K. Downes Senior Vice President, Chief Administrative Officer and Chief Financial
Officer of Delaware Management Company, Inc., the Registrant and each of
the other funds in the Delaware Group; Chairman and Director of Delaware
Management Trust Company; Senior Vice President, Chief Administrative
Officer, Chief Financial Officer and Treasurer of Delaware Management
Holdings, Inc.; Senior Vice President, Chief Financial Officer, Treasurer and
Director of DMH Corp.; Senior Vice President and Chief Administrative
Officer of Delaware Distributors, L.P.; Senior Vice President, Chief
Administrative Officer and Director of Delaware Distributors, Inc.; Senior
Vice President, Chief Administrative Officer, Chief Financial Officer and
Director of Delaware Service Company, Inc.; Chief Financial Officer and
Director of Delaware International Holdings Ltd.; Senior Vice President,
Chief Financial Officer and Treasurer of Delaware Investment Counselors,
Inc.; Senior Vice President, Chief Financial Officer and Director of
Founders Holdings, Inc.; Chief Executive Officer and Director of Delaware
Investment & Retirement Services, Inc.; and Director of Delaware
International Advisers Ltd.
Chief Executive Officer, Chief Financial Officer and Treasurer of Forewarn,
Inc. since 1992, 8 Clayton Place, Newtown Square, PA
George M. Chamberlain, Jr. Senior Vice President, Secretary and Director of Delaware Management
Company, Inc., DMH Corp., Delaware Distributors, Inc., Delaware Service
Company, Inc., Founders Holdings, Inc. and Delaware Investment &
Retirement Services, Inc.; Senior Vice President and Secretary of the
Registrant, each of the other funds in the Delaware Group, Delaware
Distributors, L.P., Delaware Investment Counselors, Inc. and Delaware
Management Holdings, Inc.; Executive Vice President, Secretary and
Director of Delaware Management Trust Company; Secretary and Director
of Delaware International Holdings Ltd.; and Director of Delaware
International Advisers Ltd.
Director of ICI Mutual Insurance Co. since 1992, P.O. Box 730, Burlington, VT
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
xiii
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with DMC and its
Business Address* Affiliates and Other Positions and Offices Held
- ---------------------- ----------------------------------------------------------------------------
<S> <C>
Richard J. Flannery Managing Director/Corporate Tax & Affairs of Delaware Management
Company, Inc., Delaware Management Holdings, Inc., DMH Corp.,
Delaware Distributors, L.P., Delaware Distributors, Inc., Delaware Service
Company, Inc., Delaware Management Trust Company, Delaware
Investment Counselors, Inc., Founders CBO Corporation and Delaware
Investment & Retirement Services, Inc.; Vice President of the Registrant
and each of the other funds in the Delaware Group; Managing
Director/Corporate Tax & Affairs and Director of Founders Holdings, Inc.;
Managing Director and Director of Delaware International Holdings Ltd.;
and Director of Delaware International Advisers Ltd.
Limited Partner of Stonewall Links, L.P. since 1991, Bulltown Rd.,
Elverton, PA; Director and Member of Executive Committee of Stonewall
Links, Inc. since 1991, Bulltown Rd., Elverton, PA
Michael P. Bishof(1) Vice President and Treasurer of Delaware Management Company, Inc., the
Registrant, each of the other funds in the Delaware Group, Delaware
Distributors, L.P., Delaware Distributors, Inc., Delaware Service Company,
Inc. and Founders Holdings, Inc.; Assistant Treasurer of Founders CBO
Corporation; and Vice President and Manager of Investment Accounting of
Delaware International Holdings Ltd.
Eric E. Miller Vice President and Assistant Secretary of Delaware Management Company,
Inc., the Registrant, each of the other funds in the Delaware Group,
Delaware Management Holdings, Inc., DMH Corp., Delaware Distributors,
L.P., Delaware Distributors, Inc., Delaware Service Company, Inc.,
Delaware Management Trust Company, Founders Holdings, Inc., Delaware
Investment Counselors, Inc. and Delaware Investment & Retirement
Services, Inc.
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
xiv
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with DMC and its
Business Address* Affiliates and Other Positions and Offices Held
- ----------------------- ----------------------------------------------------------------------------
<S> <C>
Richelle S. Maestro Vice President and Assistant Secretary of Delaware Management Company,
Inc., the Registrant, each of the other funds in the Delaware Group,
Delaware Management Holdings, Inc., Delaware Distributors, L.P.,
Delaware Distributors, Inc., Delaware Service Company, Inc., DMH Corp.,
Delaware Management Trust Company, Delaware Investment Counselors,
Inc., Delaware Investment & Retirement Services, Inc. and Founders
Holdings, Inc.; and Assistant Secretary of Founders CBO Corporation and
Delaware International Holdings Ltd.
General Partner of Tri-R Associates since 1989, 10001 Sandmeyer Ln.,
Philadelphia, PA
John M. Zerr(2) Vice President and Assistant Secretary of Delaware Management Company,
Inc., the Registrant, each of the other funds in the Delaware Group, DMH
Corp., Delaware Distributors, L.P., Delaware Distributors, Inc., Delaware
Service Company, Inc., Delaware Management Trust Company, Delaware
Investment Counselors, Inc. and Delaware Investment & Retirement
Services, Inc.
Secretary and Counsel of Renovisions, Inc. since 1990, 4284 South Dixi
Road, Resaca, GA
Joseph H. Hastings Vice President/Corporate Controller of Delaware Management Company,
Inc., the Registrant, each of the other funds in the Delaware Group,
Delaware Management Holdings, Inc., DMH Corp., Delaware Distributors,
L.P., Delaware Distributors, Inc., Delaware Service Company, Inc.,
Delaware Investment Counselors, Inc., Founders Holdings, Inc. and
Delaware International Holdings Ltd.; Executive Vice President, Chief
Financial Officer and Treasurer of Delaware Management Trust Company;
Chief Financial Officer and Treasurer of Delaware Investment & Retirement
Services, Inc.; and Assistant Treasurer of Founders CBO Corporation
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
xv
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with DMC and its
Business Address* Affiliates and Other Positions and Offices Held
- ----------------------- ------------------------------------------------------------------------------
<S> <C>
Bruce A. Ulmer Vice President/Director of Internal Audit of Delaware Management Company,
Inc., the Registrant, each of the other funds in the Delaware Group, Delaware
Management Holdings, Inc., DMH Corp. and Delaware Management Trust
Company; and Vice President/Internal Audit of Delaware Investment &
Retirement Services, Inc.
Steven T. Lampe(3) Vice President/Taxation of Delaware Management Company, Inc., the
Registrant, each of the other funds in the Delaware Group, Delaware
Management Holdings, Inc., DMH Corp., Delaware Distributors, L.P.,
Delaware Distributors, Inc., Delaware Service Company, Inc., Delaware
Management Trust Company, Founders Holdings, Inc., Founders CBO
Corporation and Delaware Investment Counselors, Inc.
Lisa O. Brinkley(4) Vice President/Compliance of Delaware Management Company, Inc., the
Registrant, each of the other funds in the Delaware Group, DMH Corp., Delaware
Distributors, L.P., Delaware Distributors, Inc., Delaware Service Company,
Inc., Delaware Management Trust Company, Delaware Investment Counselors, Inc.
and Delaware Investment & Retirement Services, Inc.
Rosemary E. Milner Vice President/Legal of Delaware Management Company, Inc., the
Registrant, each of the other funds in the Delaware Group, Delaware
Distributors, L.P. and Delaware Distributors, Inc.
Douglas L. Anderson(5) Vice President/Operations of Delaware Management Company, Inc.,
Delaware Service Company, Inc. and Delaware Investment & Retirement
Services, Inc.; and Vice President/Operations and Director of Delaware
Management Trust Company
Michael T. Taggart Vice President/Facilities Management and Administrative Services of
Delaware Management Company, Inc.
Gerald T. Nichols Vice President/Senior Portfolio Manager of Delaware Management
Company, Inc., the Registrant, each of the tax-exempt funds, the fixed income
funds and the closed-end funds in the Delaware Group; Vice President of
Founders Holdings, Inc.; and Treasurer and Director of Founders CBO Corporation
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
xvi
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with DMC and its
Business Address* Affiliates and Other Positions and Offices Held
- ----------------------- ----------------------------------------------------------------------------
<S> <C>
J. Michael Pokorny Vice President/Senior Portfolio Manager of Delaware Management
Company, Inc., the Registrant, each of the tax-exempt funds and the fixed
income funds in the Delaware Group
Gary A. Reed Vice President/Senior Portfolio Manager of Delaware Management Company, Inc.,
the Registrant, each of the tax-exempt funds and the fixed income funds in
the Delaware Group and Delaware Investment Counselors, Inc.
Paul A. Matlack Vice President/Senior Portfolio Manager of Delaware Management Company, Inc.,
the Registrant, each of the tax-exempt funds, the fixed income funds and the
closed-end funds in the Delaware Group; Vice President of Founders Holdings,
Inc.; and Secretary and Director of Founders CBO Corporation
Patrick P. Coyne Vice President/Senior Portfolio Manager of Delaware Management Company, Inc.,
the Registrant, each of the tax-exempt funds and the fixed income funds in
the Delaware Group
Roger A. Early(6) Vice President/Senior Portfolio Manager of Delaware Management Company, Inc.,
the Registrant, each of the tax-exempt funds and the fixed income funds in
the Delaware Group
Edward N. Antoian Vice President/Senior Portfolio Manager of Delaware Management
Company, Inc., the Registrant and each of the equity funds in the Delaware
Group
General Partner of Zeke Investment Partners since 1991, 569 Canterbury
Lane, Berwyn, PA
George H. Burwell Vice President/Senior Portfolio Manager of Delaware Management
Company, Inc., the Registrant and each of the equity funds in the Delaware
Group
John B. Fields Vice President/Senior Portfolio Manager of Delaware Management Company, Inc.,
the Registrant, each of the equity funds in the Delaware Group and Delaware
Investment Counselors, Inc.
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
xvii
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with DMC and its
Business Address* Affiliates and Other Positions and Offices Held
- ----------------------- ---------------------------------------------------------------------------
<S> <C>
Edward A. Trumpbour Vice President/Senior Portfolio Manager of Delaware Management
Company, Inc., the Registrant and each of the equity funds in the Delaware
Group
David C. Dalrymple Vice President/Senior Portfolio Manager of Delaware Management
Company, Inc., the Registrant and each of the equity funds in the Delaware
Group
Faye P. Staples(7) Vice President/Human Resources of Delaware Management Company, Inc.,
Delaware Distributors, L.P. and Delaware Distributors, Inc.; and Vice
President/Director of Human Resources of Delaware Service Company, Inc.
</TABLE>
1 VICE PRESIDENT/GLOBAL INVESTMENT MANAGEMENT OPERATIONS, Bankers Trust and
VICE PRESIDENT, CS First Boston Investment Management prior to June 1995.
2 ATTORNEY, Ballard, Spahr, Andrews and Ingersoll prior to July 1995.
3 TAX MANAGER, Price Waterhouse prior to October 1995.
4 VICE PRESIDENT AND COMPLIANCE OFFICER, Banc One Securities Corporation
prior to June 1994 and ASSISTANT VICE PRESIDENT AND
COMPLIANCE OFFICER, Aetna Life and Casualty prior to March 1993.
5 VICE PRESIDENT OF OPERATIONS, Supervised Service Company prior to
March 1994.
6 SENIOR VICE PRESIDENT AND PORTFOLIO MANAGER, Federated Investors prior to
July 1994.
7 VICE PRESIDENT/HUMAN RESOURCES, Nova Care prior to September 1995.
Item 29. Principal Underwriters.
(a) Delaware Distributors, L.P. serves as principal
underwriter for all the mutual funds in the Delaware
Group.
(b) Information with respect to each director, officer or
partner of principal underwriter:
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address* with Underwriter with Registrant
- ----------------------------- ----------------------- -------------------------
<S> <C> <C>
Delaware Distributors, Inc. General Partner None
Delaware Management Sub-Investment Manager
Company, Inc. Limited Partner to Global Assets Series
Delaware Investment
Counselors, Inc. Limited Partner None
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
xviii
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address* with Underwriter with Registrant
- ----------------------------- ----------------------- -------------------------
<S> <C> <C>
Winthrop S. Jessup Vice Chairman Executive Vice President
Keith E. Mitchell President and Chief None
Executive Officer
David K. Downes Senior Vice President and Senior Vice President/Chief
Chief Administrative Officer Administrative Officer/Chief
Financial Officer
George M. Chamberlain, Jr. Senior Vice President/ Senior Vice President/
Secretary Secretary
J. Lee Cook Senior Vice President/ None
National Sales Manager
Stephen H. Slack Senior Vice President/ None
Wholesaler
William F. Hostler Senior Vice President/ None
Marketing Services
Minette van Noppen Senior Vice President/ None
Retirement Services
Richard J. Flannery Managing Director/Corporate Vice President
& Tax Affairs
Eric E. Miller Vice President/ Vice President/
Assistant Secretary Assistant Secretary
Richelle S. Maestro Vice President/ Vice President/
Assistant Secretary Assistant Secretary
John M. Zerr Vice President/ Vice President/
Assistant Secretary Assistant Secretary
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
xix
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address* with Underwriter with Registrant
- ----------------------------- ----------------------- -------------------------
<S> <C> <C>
Michael P. Bishof Vice President/Treasurer Vice President/Treasurer
Joseph H. Hastings Vice President/ Vice President/
Corporate Controller Corporate Controller
Steven T. Lampe Vice President/Taxation Vice President/Taxation
Lisa O. Brinkley Vice President/ Vice President/
Compliance Compliance
Rosemary E. Milner Vice President/Legal Vice President/Legal
Diane M. Anderson Vice President/ None
Retirement Services
Denise F. Guerriere Vice President/Client Services None
Julia R. Vander Els Vice President/ None
Retirement Services
Jerome J. Alrutz Vice President/ None
Retirement Services
Joanne A. Mettenheimer Vice President/ None
National Accounts
Christopher H. Price Vice President/Annuity None
Marketing & Administration
Thomas S. Butler Vice President/ None
DDI Administration
Frank Albanese Vice President/Wholesaler None
William S. Carroll Vice President/Wholesaler None
William S. Castetter Vice President/Wholesaler None
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
xx
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address* with Underwriter with Registrant
- ----------------------------- ----------------------- -------------------------
<S> <C> <C>
Thomas J. Chadie Vice President/Wholesaler None
Robert M. Frank Vice President/Wholesaler None
Douglas R. Glennon Vice President/Wholesaler None
Alan D. Kessler Vice President/Wholesaler None
William M. Kimbrough Vice President/Wholesaler None
Mac McAuliffe Vice President/Wholesaler None
Patrick L. Murphy Vice President/Wholesaler None
Henry W. Orvin Vice President/Wholesaler None
Philip G. Rickards Vice President/Wholesaler None
Michael W. Rose Vice President/Wholesaler None
Thomas E. Sawyer Vice President/Wholesaler None
Robert E. Stansbury Vice President/Wholesaler None
Larry D. Stone Vice President/Wholesaler None
Faye P. Staples Vice President/Human Resources None
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
(c) Not Applicable.
Item 30. Location of Accounts and Records.
All accounts and records are maintained in Philadelphia at 1818
Market Street, Philadelphia, PA 19103 or One Commerce Square,
Philadelphia, PA 19103.
Item 31. Management Services. None.
xxi
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
Item 32. Undertakings.
(a) Not Applicable.
(b) Not Applicable.
(c) The Registrant hereby undertakes to furnish each person to
whom a prospectus is delivered with a copy of the
Registrant's latest annual report to shareholders, upon
request and without charge.
(d) The Registrant hereby undertakes to promptly call a
meeting of shareholders for the purpose of voting upon the
question of removal of any director when requested in
writing to do so by the record holders of not less than
10% of the outstanding shares.
xxii
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, this Registrant certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in this City of Philadelphia and Commonwealth of Pennsylvania on
this 26th day of January, 1996.
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
By/s/Wayne A. Stork
---------------------------------
Wayne A. Stork
Chairman of the Board, President,
Chief Executive Officer and Director
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
- ---------------------------------------------- ------------------------------------------- ----------------
<S> <C> <C>
Chairman of the Board, President,
/s/Wayne A. Stork Chief Executive Officer and Director January 26, 1996
- ----------------------------------------------
Wayne A. Stork
Senior Vice President/Chief Financial
Officer/Chief Administrative Officer
(Principal Financial Officer and
/s/David K. Downes Principal Accounting Officer) January 26, 1996
- ----------------------------------------------
David K. Downes
/s/Walter P. Babich * Director January 26, 1996
- ----------------------------------------------
Walter P. Babich
/s/Anthony D. Knerr * Director January 26, 1996
- ----------------------------------------------
Anthony D. Knerr
/s/Ann R. Leven * Director January 26, 1996
- ----------------------------------------------
Ann R. Leven
/s/W. Thacher Longstreth * Director January 26, 1996
- ----------------------------------------------
W. Thacher Longstreth
/s/Charles E. Peck * Director January 26, 1996
- ----------------------------------------------
Charles E. Peck
</TABLE>
*By/s/Wayne A. Stork
---------------------------------
Wayne A. Stork
as Attorney-in-Fact for
each of the persons indicated
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Exhibits
to
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Exhibit
- ----------- -------
EX-99.B1B Executed Articles Supplementary (November
28, 1995)
EX-99.B6D Mutual Fund Agreement for the Delaware
(Module Name Group of Funds (November 1995)
MFAGMT95)
EX-99.B7B Amendment to Profit Sharing Plan (December
(Module Name 21, 1995)
AMEND_PROF_SHAR)
EX-99.B11 Consent of Auditors
EX-99.B16 Schedules of Computation for each
Performance Quotation for each Series for
periods not previously shown
EX-27 Financial Data Schedules
EX-99.B18 Plan under Rule 18f-3 (November 1995)
(Module Name
MOD18F3)
EX-99.B20 Financial Statements: The Registrant's
financial statements for the fiscal year
ended November 30, 1995
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
ARTICLES SUPPLEMENTARY
TO
ARTICLES OF INCORPORATION
Delaware Group Global & International Funds, Inc., a
Maryland corporation having its principal office in Baltimore, Maryland (the
"Corporation"), hereby certifies, in accordance with Section 2-208 of the
Maryland General Corporation Law, to the State Department of Assessments and
Taxation of Maryland that:
FIRST: The Corporation has authority to issue a total of
Five Hundred Million (500,000,000) shares of common stock with a par value of
One Cent ($0.01) per share of the Corporation ("Common Stock"), having an
aggregate par value of Five Million Dollars ($5,000,000). Of such Five Hundred
Million (500,000,000) shares of Common Stock, One Hundred Fifty Million
(150,000,000) shares have been allocated to each of the International Equity
Series, Global Assets Series and Global Bond Series of the Common Stock. Fifty
Million (50,000,000) shares of the International Equity Series of the Common
Stock have been allocated to each of the International Equity Fund class, the
International Equity Fund (Institutional) class and the International Equity
Fund B Class of such series. Fifty Million (50,000,000) shares of the Global
Bond Series of the Common Stock have been allocated to each of the Global Bond
Fund A Class, the Global Bond Fund Institutional Class and the Global Bond Fund
B Class of such series. Fifty Million (50,000,000) shares of the Global Assets
Series of the Common Stock have been allocated to each of the Global Assets Fund
A Class, Global Assets Fund Institutional Class and Global Assets Fund B Class
of such series.
SECOND: The Board of Directors of the Corporation, at a
meeting held on July 20, 1995, adopted a resolution taking the following
actions:
1. Classifying a fourth class of shares of the International
Equity Series of the Common Stock as the International
Equity Fund C Class (the "Equity C Class") and reclassifying
and allocating Twenty-Five Million (25,000,000) shares of
authorized and unissued Common Stock, previously classified
and allocated to the International Equity Fund B Class of
the International Equity Series of the Common Stock, to the
Equity C Class.
2. Classifying a fourth class of shares of the Global Bond
Series of the Common Stock as the Global Bond Fund C Class
(the "Bond C Class") and reclassifying and allocating
Twenty-Five Million (25,000,000) shares of authorized and
unissued Common Stock, previously classified and allocated
<PAGE>
to the Global Bond Fund B Class of the Global Bond Series of
the Common Stock, to the Bond C Class.
3. Classifying a fourth class of shares of the Global Assets
Series of the Common Stock as the Global Assets Fund C Class
(the "Assets C Class") and reclassifying and allocating
Twenty-Five Million (25,000,000) shares of authorized and
unissued Common Stock, previously classified and allocated
to the Global Assets Fund B Class of the Global Assets
Series of the Common Stock, to the Assets C Class.
THIRD: The shares of the Equity C Class shall represent
proportionate interests in the same portfolio of investments as the shares of
the International Equity Fund class, International Equity Fund (Institutional)
class and International Equity Fund B Class of the International Equity Series
of the Common Stock. The shares of the Equity C Class shall have the same
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications, or terms or conditions of
redemption as the shares of the International Equity Fund class, International
Equity Fund (Institutional) class and International Equity Fund B Class of the
International Equity Series of the Common Stock, all as set forth in the
Articles of Incorporation of the Corporation, except for the differences
hereinafter set forth:
1. The dividends and distributions of investment income and
capital gains with respect to shares of the Equity C Class
shall be in such amounts as may be declared from time to
time by the Board of Directors, and such dividends and
distributions may vary with respect to such class from the
dividends and distributions of investment income and capital
gains with respect to shares of the other classes of the
International Equity Series of the Common Stock to reflect
differing allocations of the expenses of the Corporation
among the shares of such classes and any resultant
difference among the net asset values per share of the
shares of such classes, to such extent and for such purposes
as the Board of Directors may deem appropriate. The
allocation of investment income and capital gains and
expenses and liabilities of the Corporation among the four
classes of the International Equity Series of the Common
Stock shall be determined by the Board of Directors in a
manner that is consistent with the order, as applicable,
dated September 6, 1994 (Investment Company Act of 1940
Release No. 20529) issued by the Securities and Exchange
Commission, and any amendments to such order, any future
order or any Multiple Class Plan adopted by the Corporation
in accordance with Rule 18f-3 under the Investment Company
Act of 1940, as amended, that modifies or supersedes such
order.
2. Except as may otherwise be required by law pursuant to
any applicable order, rule or interpretation issued by the
Securities and Exchange Commission, or otherwise, the
holders of shares of the Equity C Class shall have (i)
exclusive voting rights with respect to any matter
<PAGE>
submitted to a vote of stockholders that affects only
holders of shares of the Equity C Class, including without
limitation the provisions of any Distribution Plan adopted
pursuant to Rule 12b-1 under the Investment Company Act of
1940, as amended (a "Distribution Plan") applicable to
shares of the Equity C Class, and (ii) no voting rights with
respect to the provisions of any Distribution Plan
applicable to any other class of Common Stock or with regard
to any other matter submitted to a vote of stockholders
which does not affect holders of shares of the Equity C
Class.
3. The shares of the Equity C Class shall not automatically
convert into shares of the International Equity Fund class
of the International Equity Series of the Common Stock as do
the shares of the International Equity Fund B Class of the
International Equity Series of the Common Stock.
FOURTH: The shares of the Bond C Class shall represent
proportionate interests in the same portfolio of investments as the shares of
the Global Bond Fund A Class, Global Bond Fund Institutional Class and Global
Bond Fund B Class of the Global Bond Series of the Common Stock. The shares of
the Bond C Class shall have the same preferences, conversion or other rights,
voting powers, restrictions, limitations as to dividends, qualifications, or
terms or conditions of redemption as the shares of the Global Bond Fund A Class,
Global Bond Fund Institutional Class and Global Bond Fund B Class of the Global
Bond Series of the Common Stock, all as set forth in the Articles of
Incorporation of the Corporation, except for the differences hereinafter set
forth:
1. The dividends and distributions of investment income and
capital gains with respect to shares of the Bond C Class
shall be in such amounts as may be declared from time to
time by the Board of Directors, and such dividends and
distributions may vary with respect to such class from the
dividends and distributions of investment income and capital
gains with respect to shares of the other classes of the
Global Bond Series of the Common Stock to reflect differing
allocations of the expenses of the Corporation among the
shares of such classes and any resultant difference among
the net asset values per share of the shares of such
classes, to such extent and for such purposes as the Board
of Directors may deem appropriate. The allocation of
investment income and capital gains and expenses and
liabilities of the Corporation among the four classes of the
Global Bond Series of the Common Stock shall be determined
by the Board of Directors in a manner that is consistent
with the order, as applicable, dated September 6, 1994
(Investment Company Act of 1940 Release No. 20529) issued by
the Securities and Exchange Commission, and any amendments
to such order, any future order or any Multiple Class Plan
adopted by the Corporation in accordance with Rule 18f-3
under the Investment Company Act of 1940, as amended, that
modifies or supersedes such order.
<PAGE>
2. Except as may otherwise be required by law pursuant to
any applicable order, rule or interpretation issued by the
Securities and Exchange Commission, or otherwise, the
holders of shares of the Bond C Class shall have (i)
exclusive voting rights with respect to any matter submitted
to a vote of stockholders that affects only holders of
shares of the Bond C Class, including without limitation the
provisions of any Distribution Plan applicable to shares of
the Bond C Class, and (ii) no voting rights with respect to
the provisions of any Distribution Plan applicable to any
other class of Common Stock or with regard to any other
matter submitted to a vote of stockholders which does not
affect holders of shares of the Bond C Class.
3. The shares of the Bond C Class shall not automatically
convert into shares of the Global Bond Fund A Class of the
Global Bond Series of the Common Stock as do the shares of
the Global Bond Fund B Class of the Global Bond Series of
the Common Stock.
FIFTH: The shares of the Assets C Class shall represent
proportionate interests in the same portfolio of investments as the shares of
the Global Assets Fund A Class, Global Assets Fund Institutional Class and
Global Assets Fund B Class of the Global Assets Series of the Common Stock. The
shares of the Assets C Class shall have the same preferences, conversion or
other rights, voting powers, restrictions, limitations as to dividends,
qualifications, or terms or conditions of redemption as the shares of the Global
Assets Fund A Class, Global Assets Fund Institutional Class and Global Assets
Fund B Class of the Global Assets Series of the Common Stock, all as set forth
in the Articles of Incorporation of the Corporation, except for the differences
hereinafter set forth:
1. The dividends and distributions of investment income and
capital gains with respect to shares of the Assets C Class
shall be in such amounts as may be declared from time to
time by the Board of Directors, and such dividends and
distributions may vary with respect to such class from the
dividends and distributions of investment income and capital
gains with respect to shares of the other classes of the
Global Assets Series of the Common Stock to reflect
differing allocations of the expenses of the Corporation
among the shares of such classes and any resultant
difference among the net asset values per share of the
shares of such classes, to such extent and for such purposes
as the Board of Directors may deem appropriate. The
allocation of investment income and capital gains and
expenses and liabilities of the Corporation among the four
classes of the Global Assets Series of the Common Stock
shall be determined by the Board of Directors in a manner
that is consistent with the order, as applicable, dated
September 6, 1994 (Investment Company Act of 1940 Release
No. 20529) issued by the Securities and Exchange Commission,
and any amendments to such order, any future order or any
Multiple Class Plan adopted by the Corporation in accordance
with Rule 18f-3 under the Investment Company Act of 1940, as
amended, that modifies or supersedes such order.
<PAGE>
2. Except as may otherwise be required by law pursuant to
any applicable order, rule or interpretation issued by the
Securities and Exchange Commission, or otherwise, the
holders of shares of the Assets C Class shall have (i)
exclusive voting rights with respect to any matter submitted
to a vote of stockholders that affects only holders of
shares of the Assets C Class, including without limitation
the provisions of any Distribution Plan applicable to shares
of the Assets C Class, and (ii) no voting rights with
respect to the provisions of any Distribution Plan
applicable to any other class of Common Stock or with regard
to any other matter submitted to a vote of stockholders
which does not affect holders of shares of the Assets C
Class.
3. The shares of the Assets C Class shall not automatically
convert into shares of the Global Assets Fund A Class of the
Global Assets Series of the Common Stock as do the shares of
the Global Assets Fund B Class of the Global Assets Series
of the Common Stock.
SIXTH: The shares of the International Equity Fund B Class
of the International Equity Series of the Common Stock, Global Bond Fund B Class
of the Global Bond Series of the Common Stock and Global Assets Fund B Class of
the Global Assets Series of the Common Stock reclassified as shares of the
Equity C Class, Bond C Class and Assets C Class, respectively, pursuant to these
Articles Supplementary have been reclassified by the Board of Directors pursuant
to authority contained in the Articles of Incorporation of the Corporation.
SEVENTH: These Articles Supplementary shall become effective
on November 28, 1995.
IN WITNESS WHEREOF, Delaware Group Global & International
Funds, Inc. has caused these Articles Supplementary to be signed in its name and
on its behalf this 14th day of November, 1995.
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
By: /s/George M. Chamberlain, Jr.
-------------------------------
George M. Chamberlain, Jr.
Senior Vice President
ATTEST:
/s/Richelle S. Maestro
- ----------------------
Richelle S. Maestro
Assistant Secretary
<PAGE>
THE UNDERSIGNED, Senior Vice President of DELAWARE GROUP
GLOBAL & INTERNATIONAL FUNDS, INC., who executed on behalf of the said
Corporation the foregoing Articles Supplementary, of which this instrument is
made a part, hereby acknowledges, in the name of and on behalf of said
Corporation, said Articles Supplementary to be the corporate act of said
Corporation and further certifies that, to the best of his knowledge,
information and belief, the matters and facts set forth therein with respect to
the authorization and approval thereof are true in all material respects, under
the penalties of perjury.
/s/George M. Chamberlain, Jr.
- -----------------------------
George M. Chamberlain, Jr.
Senior Vice President
<PAGE>
MUTUAL FUND AGREEMENT
FOR THE DELAWARE GROUP OF FUNDS
Gentlemen:
We are the national distributor for the Delaware Group of Funds with exclusive
right to sell and distribute Fund shares. (The term "Funds" in this Agreement
refers to each or any of the Funds that from time to time comprise the Delaware
Group and for whom we act as distributor.) You have indicated that you wish to
act as agent for your customers in connection with the purchase, sale and
redemption of Fund shares and desire to provide certain services to your
customers relating to their ownership of Fund shares, all in accordance with the
terms of this Agreement.
AGENT FOR CUSTOMERS: In placing orders for the purchase and sale of Fund shares,
you will be acting as agent for your customers and will not have any authority
to act as agent for us, any of the Funds or any of our affiliates or
representatives. Neither you nor any of your employees or agents are authorized
to make any representations concerning the Funds or Fund shares except those
contained in the then current "Prospectus" and in written information issued by
the Fund or by us as a supplement to the Prospectus. In purchasing Fund shares
your customers may rely on such authorized information.
OFFERING PRICE TO PUBLIC: Orders for shares received from you and accepted by
the Fund or its agent, Delaware Service Co., Inc., will be at the public
offering price applicable to each order as set forth in the Prospectus. The
manner of computing the net asset value, the public offering price and the
effective time of orders received from you are described in the Prospectus for
each Fund. We reserve the right at any time, without notice, to suspend the sale
of Fund shares or withdraw the public offering.
SALES, ORDERS AND CONFIRMATIONS: All orders must be made subject to
confirmation. Your orders must be wired, telephoned or written to the Fund or
its agent. You agree to place orders on behalf of your customers for the number
of shares, and at the price, as in bona fide orders from your customers. We will
not accept any conditional orders. We will send a written confirmation of each
trade indicating that the trade was on a fully disclosed basis to your customer.
It is agreed and understood that, whether shares are registered in the
purchaser's name, in your name or in the name of your nominee, your customer
will have full beneficial ownership of the Fund shares.
AGENCY FEES: On each order accepted by us for a Fund with a sales charge, we
understand that you will charge your customer an agency commission or agency
transaction fee ("agency fee") as set forth in the schedule of sales concessions
and agency fees set forth in that Fund's Prospectus, as it may be amended from
time to time. This fee shall be subject to the provisions of all terms set forth
in the Prospectus for volume purchases and special plans and accounts (e.g.
retirement plans, letters of intent, etc.) You will not receive from us a
<PAGE>
dealer's concession or similar allowance out of the sales charge. In accordance
with interpretations by the Staff of the Securities and Exchange Commission (the
"Commission"), the agency fee will be your sole charge to your customers for
placing such orders. You may elect to make payments in either of two ways: (a)
you may send us the public offering price for the Fund shares purchased less the
amount of the agency fee due you or (b) you or your customer may send us the
entire public offering price for the Fund shares and we will, on a periodic
basis, remit to you the agency fee due. You will notify us in writing of which
method of payment you elect. If any shares sold to your customer under the terms
of this Agreement are repurchased by the Fund or by us, or are tendered to a
Fund for redemption or repurchase, within seven (7) business days after the date
of the confirmation of the original purchase order, you will promptly refund to
us full agency fee paid or allowed to you on such shares.
PAYMENT AND ISSUANCE OF CERTIFICATES: Regardless of the payment method elected,
Fund shares purchased by you for your customers hereunder shall be paid for in
full by check payable to the Fund at its office within three business days after
our acceptance of your order. If not so paid, the Fund reserves the right,
without notice, to cancel the sale and to hold you responsible for any loss,
including lost profit, sustained by us or the Fund in consequence. Certificates
representing Fund shares will not be issued unless a specific request is
received from you or your customer. Certificates, if requested, will be issued
in the names indicated by registration instructions accompanying payment.
REDEMPTION: The Prospectus describes the provisions whereby the Fund, under all
ordinary circumstances, will repurchase its shares from shareholders on demand.
You agree that you will not make any representations to shareholders relating to
the purchase of their Fund shares other than the statements contained in the
Prospectus and the underlying organizational documents of the Fund, to which it
refers, and that you will quote to your customers as the redemption price only
the price determined by the Fund.
12b-1 PLAN: With respect to any Fund that has a Distribution Plan under Rule
12b-1 (a "12b-1Plan") of the Investment Company Act of 1940 (the "1940 Act"), we
expect you will provide shareholder and administrative services to your
customers who own Fund shares, such as: answering inquiries regarding the Fund;
assisting in changing dividend options, account designations and addresses;
establishing and maintaining shareholder accounts and records; arranging for
bank wires; or such other services as the Fund may require to the extent
permitted by applicable statutes, rules or regulations. You will promptly answer
all written complaints received by you relating to Fund accounts or promptly
forward such complaints to us and assist us in answering such complaints. For
such services we will pay you a fee as set by us from time to time, based on a
portion of the net asset value of the accounts of your clients in the Fund. We
are permitted to make this payment under the terms of the 12b-1 Plan adopted by
2
<PAGE>
certain of the Funds, as such 12b-1 Plans may be in effect from time to time.
Each Fund reserves the right, at any time, to suspend payments under its 12b-1
Plan. You will furnish the Fund and us with such information as may be
reasonably requested by the Fund or its directors or trustees or by us with
respect to fees paid to you pursuant to this Agreement. In accordance with
interpretations and rulings to the Staff of the Commission, you will not charge
your customers any fees for services for which you are being compensated under a
12b-1 Plan of a Fund.
SALES OF NO-LOAD - NON 12b-1 PLAN FUNDS: In connection with any orders placed by
you on behalf of your customers for shares of Funds that do not charge a sales
load and do not have a 12b-1 Plan, we understand that you may charge your
customers a limited service or transaction fee, in accordance with
interpretations and rulings of the Staff of the Commission.
LEGAL COMPLIANCE: This Agreement and any transaction with or payment to you
pursuant to the terms hereof is conditioned on your representation to us that,
as of the date of this Agreement you are and at all times during its
effectiveness you will be (a) a registered broker-dealer under the Securities
Exchange Act of 1934 and qualified under applicable state securities laws, if
any, to act as a broker or dealer in securities, and a member in good standing
of the National Association of Securities Dealers, Inc. (the "NASD"); or (b) a
"bank" as defined in Section 3(a)(6) of the Securities and Exchange Act of 1934
(or other financial institution) and not otherwise required to register as a
broker or dealer under such Act. You agree to notify us promptly in writing if
this representation ceases to be true. You also agree that you will comply with
the rules of the NASD including, in particular, Sections 2 and 26 of Article III
thereof, to the extent applicable, that you will maintain adequate records with
respect to your customers and their transactions, and that such transactions
will be without recourse against you by your customers. We recognize that, in
addition to applicable provisions of state and federal securities laws, you may
be subject to the provisions of the Glass-Steagall Act and other laws governing,
among other things, the conduct of activities by federal and state chartered and
supervised financial institutions and their affiliated organizations. Because
you will be the only one having a direct relationship with the customer, you
will be responsible in that relationship for insuring compliance with all laws
and regulations, including those of all applicable federal and state regulatory
authorities and bodies having jurisdiction over you or your customers to the
extent applicable to securities purchases hereunder.
BLUE SKY MATTERS: We shall have no obligation or responsibility with respect to
your right to sell Fund shares in any state or jurisdiction. From time to time
we shall furnish you with information identifying the states under the
securities laws of which it is believed a Fund's shares may be sold. You will
not transact orders for Fund shares in states which we indicate Fund shares may
not be sold.
LITERATURE: We will furnish you with copies of each Fund's Prospectus, sales
literature and other information made publicly available by the Fund, in
3
<PAGE>
reasonable quantities upon your request. We shall file Fund sales literature and
promotional material with the NASD and SEC as required. You may not publish or
use any sales literature or promotional material with respect to the Funds
without our prior review and written approval.
CUSTOMERS: The name of your customers will remain your sole property and will
not be used by us except for servicing or informational mailings and other
correspondence in the normal course of business.
NOTICES AND COMMUNICATIONS: All communications from you should be addressed to
us at 1818 Market Street, Philadelphia, PA 19103. Any notice from us to you
shall be deemed to have been duly given if mailed or telegraphed to you at the
address set forth above. Each of us may change the address to which notices
shall be sent by notice to the other in accordance with the terms hereof.
TERMINATION: This Agreement may be terminated by either party at any time by
written notice to that effect. Notwithstanding the termination of this
Agreement, you shall remain liable for any amounts otherwise owing to us or the
Fund and for your portion of any transfer tax or other liability which may be
asserted or assessed against the Fund, us or any one or more of our dealers,
based upon the claim that you and such dealers or any of them constitute a
partnership, an unincorporated business or other separate entity.
AMENDMENT: This Agreement may be amended or revised at any time by us upon
notice to you and, unless you promptly notify us in writing to the contrary, you
will be deemed to have accepted such modifications.
GENERAL: Your acceptance hereof will constitute an obligation on your part to
observe all the terms and conditions hereof. In the event you breach any of the
terms and conditions of this Agreement, you will indemnify us, the Funds, and
our affiliates for any damages, losses, costs and expenses (including reasonable
attorneys' fees) arising out of or relating to such breach. Nothing contained
herein shall constitute you, us and any dealers an association or partnership.
All references in this Agreement to the "Prospectus" include the Statement of
Additional Information incorporated by reference therein and any stickers or
supplements thereto, provided that any requirement in this Agreement to deliver
a copy of the Prospectus shall not include the Statement of Additional
Information unless requested by the customer. This Agreement is to be construed
in accordance with the laws of the State of Delaware.
4
<PAGE>
Please confirm this Agreement by executing one copy of this Agreement below and
returning it to us. Keep the enclosed duplicate copy for your records.
Date: DELAWARE DISTRIBUTORS, L.P.
----------------------------
BY: DELAWARE DISTRIBUTORS, INC.
General Partner
BY:
--------------------------------
Accepted and Agreed to:
- ---------------------------------
(Name of Firm)
BY:
------------------------------
Name:
Title:
5
AMENDMENT NO. 1
TO THE
SECOND AMENDMENT AND RESTATEMENT OF THE
PROFIT SHARING PLAN OF
DELAWARE GROUP DELAWARE FUND, INC.
EFFECTIVE APRIL 1, 1989
This Amendment is made this 21st day of December, 1995, by Delaware
Group Delaware fund, Inc. (the "Employer").
WITNESSETH:
-----------
WHEREAS, the Employer adopted the second amendment and restatement of
the Profit Sharing Plan of Delaware Management Company, Inc. (the "Plan"),
effective April 1, 1989; and
WHEREAS, the Employer desires to clarify the provisions of the Plan
pertaining to the crediting of service for vesting purposes.
NOW THEREFORE, Section 2.28 of the Plan is hereby amended as follows:
"2.28 "Year of Service" shall mean the completion by an Employee of
1,000 or more Hours of Service during his initial Eligibility
Computation Period and during any Plan Year, beginning with the Plan
Year which commences after the Employee first performs an Hour of
Service. However, for the period from October 1, 1988 through March 31,
1990, an Employee shall be given credit for a Year of Service if he
completes 1,000 Hours of Service during the period October 1, 1988 to
September 30, 1989 and shall be given credit for an additional Year of
Service if he completes 1,000 Hours of Service during the period April
1, 1989 to March 31, 1990. For purposes of determining a Participant's
nonforfeitable right to his Employer Contribution Account, Years of
Service shall include an Employee's prior service with Delaware
Management Company, Inc. or any other Entity required to be aggregated
with Delaware Management Company, Inc. under Sections 414(b) or (c) of
the Code."
IN WITNESS WHEREOF, the Employer has caused this Amendment to be
executed by its duly authorized officers and its corporate seal to be impressed
hereon the date first written above.
ATTEST: DELAWARE GROUP DELAWARE FUND, INC.
/s/ George M. Chamberlain, Jr. By: /s/ Wayne A. Stork
- ------------------------------- -------------------------
Senior Vice President/Secretary Chairman
<PAGE>
Consent of Independent Auditors
We consent to the references to our firm under the captions "Financial
Highlights" in the Prospectuses for the A Class, B Class, and C Class and for
the Institutional Class of the International Equity Series, Global Bond Series,
and Global Assets Series and "Financial Statements" in the Statement of
Additional Information and to the incorporation by reference in this
Post-Effective Amendment No. 11 to the Registration Statement (Form N-1A)
(No. 33-41034) of Delaware Group Global & International Fund, Inc. of our
report dated January 12, 1996, included in the 1995 Annual Report to
Shareholders of Delaware Group Global & International Fund, Inc.
/s/ ERNST & YOUNG LLP
-------------------------
Ernst & Young LLP
Philadelphia, Pennsylvania
January 26, 1996
<PAGE>
Report of Independent Auditors
To the Shareholders and Board of Directors
Delaware Group Global & International Fund, Inc.
We have audited the accompanying statements of net assets and statements of
assets and liabilities of the International Equity Series, Global Assets Series,
and Global Bond Series of Delaware Group Global & International Fund, Inc. (the
"Fund") as of November 30, 1995, and the related statements of operations for
the year then ended of the International Equity Series and for the period from
the date of initial public offering (December 27, 1994) to November 30, 1995 of
the Global Assets Series and Global Bond Series, the statements of changes in
net assets for each of the two years then ended of the International Equity
Series and for the period from the date of initial public offering (December 27,
1994) to November 30, 1995 of the Global Assets Series and Global Bond Series,
and the financial highlights for each period from the date of initial public
offering of each Series through November 30, 1995. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and the
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
November 30, 1995, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
International Equity Series, Global Assets Series, and Global Bond Series of
Delaware Group Global & International Fund, Inc. at November 30, 1995, the
results of operations for the year then ended of the International Equity Series
and for the period from the date of initial public offering (December 27, 1994)
to November 30, 1995 of the Global Assets Series and Global Bond Series, and the
changes in net assets for each of the two years then ended of the International
Equity Series and for the period from the date of initial public offering
(December 27, 1994) to November 30, 1995 of the Global Assets Series and Global
Bond Series, in conformity with generally accepted accounting principles.
/s/ ERNST & YOUNG LLP
-------------------------
Ernst & Young LLP
Philadelphia, Pennsylvania
January 12, 1996
<PAGE>
DELAWARE GROUP INTERNATIONAL EQUITY FUND B
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1995
- ------------------------------------------------------------
Average Annual Compounded Rate of Return:
n
P(1 + T) = ERV
ONE
YEAR
- ----------------
1
$1000(1 - T) = $1,034.61
T = 3.46%
LIFE OF
FUND
- ----------------
1.23561644
$1000(1 - T) = $959.10
T = -3.32%
<PAGE>
DELAWARE GROUP INTERNATIONAL EQUITY FUND B
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1995
- --------------------------------------------------------------------------
Average Annual Compounded Rate of Return:
n
P(1 + T) = ERV
ONE
YEAR
- ----------------
1
$1000(1 - T) = $1,074.61
T = 7.46%
LIFE OF
FUND
- ----------------
1.23561644
$1000(1 - T) = $996.83
T = -.26%
<PAGE>
DELAWARE GROUP INTERNATIONAL EQUITY FUND B
TOTAL RETURN PERFORMANCE
NINE MONTHS (INCLUDING CDSC)
- --------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning OFFER $11.24
Initial Shares 88.968
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ----------------------------------------------------------------------------
1994 88.968 $0.060 0.453 89.421
- ----------------------------------------------------------------------------
Ending Shares 89.421
Ending NAV $12.13
---------
$1,084.68
Less CDSC $40.00
---------
Investment Return $1,044.68
Total Return Performance
- ------------------------
Investment Return $1,044.68
Less Initial Investment $1,000.00
---------
$44.68/$1,000.00 x 100
Total Return: 4.47%
<PAGE>
DELAWARE GROUP INTERNATIONAL EQUITY FUND B
TOTAL RETURN PERFORMANCE
NINE MONTHS (EXCLUDING CDSC)
- --------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning OFFER $11.24
Initial Shares 88.968
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- --------------------------------------------------------------------------
1994 88.968 $0.060 0.453 89.421
- --------------------------------------------------------------------------
Ending Shares 89.421
Ending NAV $12.13
---------
Investment Return $1,084.68
Total Return Performance
- ------------------------
Investment Return $1,084.68
Less Initial Investment $1,000.00
---------
$84.68/$1,000.00 x 100
Total Return: 8.47%
<PAGE>
DELAWARE GROUP INTERNATIONAL EQUITY FUND B
TOTAL RETURN PERFORMANCE
ONE YEAR (INCLUDING CDSC)
- --------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning OFFER $11.90
Initial Shares 84.034
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- --------------------------------------------------------------------------
1994 84.034 $0.615 4.557 88.591
- --------------------------------------------------------------------------
Ending Shares 88.591
Ending NAV $12.13
---------
$1,074.61
Less CDSC $40.00
---------
Investment Return $1,034.61
Total Return Performance
- ------------------------
Investment Return $1,034.61
Less Initial Investment $1,000.00
---------
$34.61/$1,000.00 x 100
Total Return: 3.46%
<PAGE>
DELAWARE GROUP INTERNATIONAL EQUITY FUND B
TOTAL RETURN PERFORMANCE
ONE YEAR (EXCLUDING CDSC)
- --------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning OFFER $11.90
Initial Shares 84.034
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- --------------------------------------------------------------------------
1994 84.034 $0.615 4.557 88.591
- --------------------------------------------------------------------------
Ending Shares 88.591
Ending NAV $12.13
---------
Investment Return $1,074.61
Total Return Performance
- ------------------------
Investment Return $1,074.61
Less Initial Investment $1,000.00
---------
$74.61/$1,000.00 x 100
Total Return: 7.46%
<PAGE>
DELAWARE GROUP GLOBAL BOND FUND A
TOTAL RETURN PERFORMANCE
SIX MONTHS
- --------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning OFFER $11.13
Initial Shares 89.847
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- --------------------------------------------------------------------------
1995 89.847 $0.360 3.014 92.861
- --------------------------------------------------------------------------
Ending Shares 92.861
Ending NAV x $11.23
---------
Investment Return $1,042.83
Total Return Performance
- ------------------------
Investment Return $1,042.83
Less Initial Investment $1,000.00
---------
$42.83/$1,000.00 x 100
Total Return: 4.28%
<PAGE>
DELAWARE GROUP GLOBAL BOND FUND A
TOTAL RETURN PERFORMANCE
NINE MONTHS
- --------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning OFFER $10.68
Initial Shares 93.633
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- --------------------------------------------------------------------------
1995 93.633 $0.540 4.833 98.466
- --------------------------------------------------------------------------
Ending Shares 98.466
Ending NAV x $11.23
---------
Investment Return $1,105.77
- ------------------------
Investment Return $1,105.77
Less Initial Investment $1,000.00
---------
$105.77/$1,000.00 x 100
Total Return: 10.58%
<PAGE>
DELAWARE GROUP GLOBAL BOND FUND B
TOTAL RETURN PERFORMANCE
SIX MONTHS (INCLUDING CDSC)
- --------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning OFFER $10.60
Initial Shares 94.340
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- --------------------------------------------------------------------------
1994 94.340 $0.324 2.842 97.182
- --------------------------------------------------------------------------
Ending Shares 97.182
Ending NAV $11.24
---------
$1,092.33
Less CDSC $40.00
---------
Investment Return $1,052.33
Total Return Performance
------------------------
Investment Return $1,052.33
Less Initial Investment $1,000.00
---------
$52.33/$1,000.00 x 100
Total Return: 5.23%
<PAGE>
DELAWARE GROUP GLOBAL BOND FUND B
TOTAL RETURN PERFORMANCE
SIX MONTHS (EXCLUDING CDSC)
- --------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning OFFER $10.60
Initial Shares 94.340
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- --------------------------------------------------------------------------
1994 94.340 $0.324 2.842 97.182
- --------------------------------------------------------------------------
Ending Shares 97.182
Ending NAV $11.24
---------
Investment Return $1,092.33
Total Return Performance
- ------------------------
Investment Return $1,092.33
Less Initial Investment $1,000.00
---------
$92.33/$1,000.00 x 100
Total Return: 9.23%
<PAGE>
DELAWARE GROUP GLOBAL BOND FUND B
TOTAL RETURN PERFORMANCE
NINE MONTHS (INCLUDING CDSC)
- --------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning OFFER $10.19
Initial Shares 98.135
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- --------------------------------------------------------------------------
1994 98.135 $0.486 4.548 102.683
- --------------------------------------------------------------------------
Ending Shares 102.683
Ending NAV $11.24
---------
$1,154.16
Less CDSC $40.00
---------
Investment Return $1,114.16
Total Return Performance
- ------------------------
Investment Return $1,114.16
Less Initial Investment $1,000.00
---------
$114.16/$1,000.00 x 100
Total Return: 11.42%
<PAGE>
DELAWARE GROUP GLOBAL BOND FUND B
TOTAL RETURN PERFORMANCE
NINE MONTHS (EXCLUDING CDSC)
- --------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning OFFER $10.19
Initial Shares 98.135
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- --------------------------------------------------------------------------
1994 98.135 $0.486 4.548 102.683
- --------------------------------------------------------------------------
Ending Shares 102.683
Ending NAV $11.24
----------
Investment Return $1,154.16
Total Return Performance
- ------------------------
Investment Return $1,154.16
Less Initial Investment $1,000.00
---------
$154.16/$1,000.00 x 100
Total Return: 15.42%
<PAGE>
DELAWARE GROUP GLOBAL BOND FUND INSTITUTIONAL
TOTAL RETURN PERFORMANCE
SIX MONTHS
- --------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning OFFER $10.61
Initial Shares 94.251
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- --------------------------------------------------------------------------
1995 94.251 $0.360 3.154 97.405
- --------------------------------------------------------------------------
Ending Shares 97.405
Ending NAV x $11.27
---------
Investment Return $1,097.75
Total Return Performance
- ------------------------
Investment Return $1,097.75
Less Initial Investment $1,000.00
---------
$97.75/$1,000.00 x 100
Total Return: 9.78%
<PAGE>
DELAWARE GROUP GLOBAL BOND FUND INSTITUTIONAL
TOTAL RETURN PERFORMANCE
NINE MONTHS
- --------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning OFFER $10.18
Initial Shares 98.232
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- --------------------------------------------------------------------------
1995 98.232 $0.540 5.060 103.292
- --------------------------------------------------------------------------
Ending Shares 103.292
Ending NAV x $11.27
-----------
Investment Return $1,164.10
- ------------------------
Investment Return $1,164.10
Less Initial Investment $1,000.00
-----------
$164.10 / $1,000.00 x 100
Total Return: 16.41%
<PAGE>
DELAWARE GROUP GLOBAL ASSETS FUND A
TOTAL RETURN PERFORMANCE
SIX MONTHS
- --------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning OFFER $11.65
Initial Shares 85.837
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- --------------------------------------------------------------------------
1995 85.837 $0.160 1.203 87.040
- --------------------------------------------------------------------------
Ending Shares 87.040
Ending NAV x $11.89
-----------
Investment Return $1,034.91
Total Return Performance
- ------------------------
Investment Return $1,034.91
Less Initial Investment $1,000.00
-----------
$34.91 / $1,000.00 x 100
Total Return: 3.49%
<PAGE>
DELAWARE GROUP GLOBAL ASSETS FUND A
TOTAL RETURN PERFORMANCE
NINE MONTHS
- --------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning OFFER $10.82
Initial Shares 92.421
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- --------------------------------------------------------------------------
1995 92.421 $0.240 2.002 94.423
- --------------------------------------------------------------------------
Ending Shares 94.423
Ending NAV x $11.89
-----------
Investment Return $1,122.69
- ------------------------
Investment Return $1,122.69
Less Initial Investment $1,000.00
-----------
$122.69 / $1,000.00 x 100
Total Return: 12.27%
<PAGE>
DELAWARE GROUP GLOBAL ASSETS FUND B
TOTAL RETURN PERFORMANCE
SIX MONTHS (INCLUDING CDSC)
- --------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning OFFER $11.09
Initial Shares 90.171
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- --------------------------------------------------------------------------
1994 90.171 $0.120 0.948 91.119
- --------------------------------------------------------------------------
Ending Shares 91.119
Ending NAV x $11.88
-----------
$1,082.49
Less CDSC $40.00
-----------
Investment Return $1,042.49
Total Return Performance
------------------------
Investment Return $1,042.49
Less Initial Investment $1,000.00
-----------
$42.49 / $1,000.00 x 100
Total Return: 4.25%
<PAGE>
DELAWARE GROUP GLOBAL ASSETS FUND B
TOTAL RETURN PERFORMANCE
SIX MONTHS (EXCLUDING CDSC)
- --------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning OFFER $11.09
Initial Shares 90.171
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- --------------------------------------------------------------------------
1994 90.171 $0.120 0.948 91.119
- --------------------------------------------------------------------------
Ending Shares 91.119
Ending NAV $11.88
-----------
Investment Return $1,082.49
Total Return Performance
- ------------------------
Investment Return $1,082.49
Less Initial Investment $1,000.00
-----------
$82.49 / $1,000.00 x 100
Total Return: 8.25%
<PAGE>
DELAWARE GROUP GLOBAL ASSETS FUND B
TOTAL RETURN PERFORMANCE
NINE MONTHS (INCLUDING CDSC)
- --------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning OFFER $10.32
Initial Shares 96.899
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- --------------------------------------------------------------------------
1994 96.899 $0.180 1.572 98.471
- --------------------------------------------------------------------------
Ending Shares 98.471
Ending NAV $11.88
-----------
$1,169.84
Less CDSC $40.00
-----------
Investment Return $1,129.84
Total Return Performance
- ------------------------
Investment Return $1,129.84
Less Initial Investment $1,000.00
-----------
$129.84 / $1,000.00 x 100
Total Return: 12.98%
<PAGE>
DELAWARE GROUP GLOBAL ASSETS FUND B
TOTAL RETURN PERFORMANCE
NINE MONTHS (EXCLUDING CDSC)
- --------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning OFFER $10.32
Initial Shares 96.899
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- --------------------------------------------------------------------------
1994 96.899 $0.180 1.572 98.471
- --------------------------------------------------------------------------
Ending Shares 98.471
Ending NAV $11.88
-----------
Investment Return $1,169.84
Total Return Performance
- ------------------------
Investment Return $1,169.84
Less Initial Investment $1,000.00
-----------
$169.84 / $1,000.00 x 100
Total Return: 16.98%
<PAGE>
DELAWARE GROUP GLOBAL ASSETS FUND INSTITUTIONAL
TOTAL RETURN PERFORMANCE
SIX MONTHS
- ------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning OFFER $11.11
Initial Shares 90.009
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- --------------------------------------------------------------------------
1995 90.009 $0.160 1.260 91.269
- --------------------------------------------------------------------------
Ending Shares 91.269
Ending NAV x $11.93
-----------
Investment Return $1,088.84
Total Return Performance
- ------------------------
Investment Return $1,088.84
Less Initial Investment $1,000.00
-----------
$88.84 / $1,000.00 x 100
Total Return: 8.88%
<PAGE>
DELAWARE GROUP GLOBAL ASSETS FUND INSTITUTIONAL
TOTAL RETURN PERFORMANCE
NINE MONTHS
- -----------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning OFFER $10.32
Initial Shares 96.899
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- --------------------------------------------------------------------------
1995 96.899 $0.240 2.096 98.995
- --------------------------------------------------------------------------
Ending Shares 98.995
Ending NAV x $11.93
-----------
Investment Return $1,181.01
- ------------------------
Investment Return $1,181.01
Less Initial Investment $1,000.00
-----------
$181.01 / $1,000.00 x 100
Total Return: 18.10%
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000875610
<NAME> DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
<SERIES>
<NUMBER> 011
<NAME> INTERNATIONAL EQUITY FUND A CLASS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> NOV-30-1995
<PERIOD-END> NOV-30-1995
<INVESTMENTS-AT-COST> 72,971,480
<INVESTMENTS-AT-VALUE> 76,308,160
<RECEIVABLES> 771,578
<ASSETS-OTHER> 448,066
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 77,527,804
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 140,854
<TOTAL-LIABILITIES> 140,854
<SENIOR-EQUITY> 63,469
<PAID-IN-CAPITAL-COMMON> 71,963,231
<SHARES-COMMON-STOCK> 5,107,965
<SHARES-COMMON-PRIOR> 4,509,439
<ACCUMULATED-NII-CURRENT> 1,004,623
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 928,156
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3,427,471
<NET-ASSETS> 62,251,378
<DIVIDEND-INCOME> 2,394,866
<INTEREST-INCOME> 436,962
<OTHER-INCOME> 0
<EXPENSES-NET> 1,415,608
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</TABLE>
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<CIK> 0000875610
<NAME> DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
<SERIES>
<NUMBER> 012
<NAME> INTERNATIONAL EQUITY FUND B CLASS
<S> <C>
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<TABLE> <S> <C>
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<CIK> 0000875610
<NAME> DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
<SERIES>
<NUMBER> 013
<NAME> INTERNATIONAL EQUITY FUND C CLASS
<S> <C>
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<TABLE> <S> <C>
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<CIK> 0000875610
<NAME> DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
<SERIES>
<NUMBER> 014
<NAME> INTERNATIONAL EQUITY FUND INSTITUTIONAL CLASS
<S> <C>
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000875610
<NAME> DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
<SERIES>
<NUMBER> 021
<NAME> GLOBAL BOND FUND A CLASS
<S> <C>
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<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000875610
<NAME> DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
<SERIES>
<NUMBER> 022
<NAME> GLOBAL BOND FUND B CLASS
<S> <C>
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<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000875610
<NAME> DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
<SERIES>
<NUMBER> 023
<NAME> GLOBAL BOND FUND C CLASS
<S> <C>
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000875610
<NAME> DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
<SERIES>
<NUMBER> 024
<NAME> GLOBAL BOND FUND INSTITUTIONAL CLASS
<S> <C>
<PERIOD-TYPE> 12-MOS
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000875610
<NAME> DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
<SERIES>
<NUMBER> 031
<NAME> GLOBAL ASSETS FUND A CLASS
<S> <C>
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000875610
<NAME> DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
<SERIES>
<NUMBER> 032
<NAME> GLOBAL ASSETS FUND B CLASS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> NOV-30-1995
<PERIOD-END> NOV-30-1995
<INVESTMENTS-AT-COST> 5,892,757
<INVESTMENTS-AT-VALUE> 6,064,812
<RECEIVABLES> 182,038
<ASSETS-OTHER> 86,820
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 6,333,670
<PAYABLE-FOR-SECURITIES> 166,031
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 236,402
<TOTAL-LIABILITIES> 402,433
<SENIOR-EQUITY> 4,982
<PAID-IN-CAPITAL-COMMON> 5,549,593
<SHARES-COMMON-STOCK> 51,632
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 60,410
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 142,396
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 173,856
<NET-ASSETS> 613,547
<DIVIDEND-INCOME> 35,943
<INTEREST-INCOME> 95,061
<OTHER-INCOME> 0
<EXPENSES-NET> 23,894
<NET-INVESTMENT-INCOME> 107,110
<REALIZED-GAINS-CURRENT> 147,186
<APPREC-INCREASE-CURRENT> 173,856
<NET-CHANGE-FROM-OPS> 428,152
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,244
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 52,254
<NUMBER-OF-SHARES-REDEEMED> 729
<SHARES-REINVESTED> 107
<NET-CHANGE-IN-ASSETS> 5,896,237
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 12,907
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 168,198
<AVERAGE-NET-ASSETS> 83,316
<PER-SHARE-NAV-BEGIN> 10.000
<PER-SHARE-NII> 0.212
<PER-SHARE-GAIN-APPREC> 1.848
<PER-SHARE-DIVIDEND> 0.180
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 11.880
<EXPENSE-RATIO> 1.950
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000875610
<NAME> DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
<SERIES>
<NUMBER> 033
<NAME> GLOBAL ASSETS FUND C CLASS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> NOV-30-1995
<PERIOD-END> NOV-30-1995
<INVESTMENTS-AT-COST> 5,892,757
<INVESTMENTS-AT-VALUE> 6,064,812
<RECEIVABLES> 182,038
<ASSETS-OTHER> 86,820
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 6,333,670
<PAYABLE-FOR-SECURITIES> 166,031
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 236,402
<TOTAL-LIABILITIES> 402,433
<SENIOR-EQUITY> 4,982
<PAID-IN-CAPITAL-COMMON> 5,549,593
<SHARES-COMMON-STOCK> 423
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 60,410
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 142,396
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 173,856
<NET-ASSETS> 5,031
<DIVIDEND-INCOME> 35,943
<INTEREST-INCOME> 95,061
<OTHER-INCOME> 0
<EXPENSES-NET> 23,894
<NET-INVESTMENT-INCOME> 107,110
<REALIZED-GAINS-CURRENT> 147,186
<APPREC-INCREASE-CURRENT> 173,856
<NET-CHANGE-FROM-OPS> 428,152
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 423
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 5,896,237
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 12,907
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 168,198
<AVERAGE-NET-ASSETS> 2
<PER-SHARE-NAV-BEGIN> 11.940
<PER-SHARE-NII> 0.000
<PER-SHARE-GAIN-APPREC> (0.050)
<PER-SHARE-DIVIDEND> 0.000
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 11.890
<EXPENSE-RATIO> 1.950
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000875610
<NAME> DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
<SERIES>
<NUMBER> 034
<NAME> GLOBAL ASSETS FUND INSTITUTIONAL CLASS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> NOV-30-1995
<PERIOD-END> NOV-30-1995
<INVESTMENTS-AT-COST> 5,892,757
<INVESTMENTS-AT-VALUE> 6,064,812
<RECEIVABLES> 182,038
<ASSETS-OTHER> 86,820
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 6,333,670
<PAYABLE-FOR-SECURITIES> 166,031
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 236,402
<TOTAL-LIABILITIES> 402,433
<SENIOR-EQUITY> 4,982
<PAID-IN-CAPITAL-COMMON> 5,549,593
<SHARES-COMMON-STOCK> 183,682
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 60,410
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 142,396
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 173,856
<NET-ASSETS> 2,191,067
<DIVIDEND-INCOME> 35,943
<INTEREST-INCOME> 95,061
<OTHER-INCOME> 0
<EXPENSES-NET> 23,894
<NET-INVESTMENT-INCOME> 107,110
<REALIZED-GAINS-CURRENT> 147,186
<APPREC-INCREASE-CURRENT> 173,856
<NET-CHANGE-FROM-OPS> 428,152
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 38,311
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 190,085
<NUMBER-OF-SHARES-REDEEMED> 9,811
<SHARES-REINVESTED> 3,408
<NET-CHANGE-IN-ASSETS> 5,896,237
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 12,907
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 168,198
<AVERAGE-NET-ASSETS> 1,724,117
<PER-SHARE-NAV-BEGIN> 10.000
<PER-SHARE-NII> 0.473
<PER-SHARE-GAIN-APPREC> 1.697
<PER-SHARE-DIVIDEND> 0.240
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 11.930
<EXPENSE-RATIO> 0.950
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<PAGE>
The Delaware Group of Funds
Multiple Class Plan Pursuant to Rule 18f-3
This Multiple Class Plan (the "Plan") has been adopted by a
majority of the Board of Directors of each of the investment companies listed on
Appendix A as may be amended from time to time (each individually a "Fund," and
collectively, the "Funds"), including a majority of the Directors who are not
interested persons of each Fund, pursuant to Rule 18f-3 under the Investment
Company Act of 1940, as amended (the "Act"). The Board of each Fund has
determined that the Plan, including the allocation of expenses, is in the best
interests of the Fund as a whole, each series of shares offered by such Fund
(individually and collectively the "Series") where the Fund offers its shares in
multiple series, and each class of shares offered by the Fund or Series, as
relevant. The Plan sets forth the provisions relating to the establishment of
multiple classes of shares for each Fund and, if relevant, its Series. To the
extent that a subject matter set forth in this Plan is covered by a Fund's
Articles of Incorporation or By-Laws, such Articles of Incorporation or By-Laws
will control in the event of any inconsistencies with descriptions contained in
this Plan.
The term "Portfolio," when used in this Plan in the context of
a Fund that offers only a single series of shares, shall be a reference to the
Fund, and when used in the context of a Fund that offers multiple series of
shares, shall be a reference to each series of such Fund.
CLASSES
1. Appendix A to this Plan describes the classes to be issued
by each Portfolio and identifies the names of such classes.
FRONT-END SALES CHARGE
2. Class A shares carry a front-end sales charge as described
in the Funds' relevant prospectuses; and Class B, Class C and Institutional
Class shares are sold without a front-end sales charge.
CONTINGENT DEFERRED SALES CHARGE
3. Class A shares are not subject to a contingent deferred
sales charge ("CDSC"), except in the following limited circumstances. On
<PAGE>
investments of $1 million or more for which a dealer's commission is paid by the
Fund's principal underwriter, a CDSC of 1.00% of the lesser of (i) the net asset
value at the time of redemption, or (ii) the original net asset value at the
time of purchase applies to redemptions of those investments within the
contingency period of 12 months from the month of purchase.
4. Class B shares redeemed within six years of their purchase
shall be assessed a CDSC at the following rate: (i) 4.00% if shares are redeemed
within two years of purchase; (ii) 3.00% if shares are redeemed during the third
or fourth year following purchase; (iii) 2.00% if shares are redeemed during the
fifth year following purchase; (iv) 1.00% if shares are redeemed during the
sixth year following purchase; and (vi) 0% thereafter.
5. Class C shares redeemed within twelve months of their
purchase shall be assessed a CDSC at the rate of 1.00% of the lesser of (i) the
net asset value at the time of redemption, or (ii) the original net asset value
at the time of purchase.
6. The CDSC for each class is waived in certain circumstances,
as described in the Funds' relevant prospectuses. Shares that are subject to a
CDSC age one month at the end of the month in which the shares were purchased,
regardless of the specific date during the month that the shares were purchased.
7. Institutional Class shares are not subject to a CDSC.
RULE 12b-1 PLANS
8. In accordance with the Rule 12b-1 Plan for the Class A
shares of each Portfolio, the Fund shall pay to Delaware Distributors, L.P. (the
"Distributor") a monthly fee not to exceed 0.30% per annum of such Portfolio's
average daily net assets represented by Class A shares as may be determined by
the Fund's Board of Directors from time to time. The monthly fee shall be
reduced by the aggregate sums paid by or on behalf of such Portfolio to persons
other than broker-dealers (the "Service Providers") pursuant to servicing
agreements.
9. In accordance with the Rule 12b-1 Plan for the Class B
shares of each Portfolio, the Fund shall pay to the Distributor a monthly fee
not to exceed 0.75% per annum of such Portfolio's average daily net assets
represented by Class B shares as may be determined by the Fund's Board of
Directors from time to time. In addition to these amounts, the Fund shall pay
(i) to the Distributor for payment to dealers or others, or (ii) directly to
others, an amount not to exceed 0.25% per annum of such Portfolio's average
daily net assets represented by Class B shares, as a service fee pursuant to
dealer or servicing agreements.
-2-
<PAGE>
10. In accordance with the Rule 12b-1 Plan for the Class C
shares of each Portfolio, the Fund shall pay to the Distributor a monthly fee
not to exceed 0.75% per annum of such Portfolio's average daily net assets
represented by Class C shares as may be determined by the Fund's Board of
Directors from time to time. In addition to these amounts, the Fund shall pay
(i) to the Distributor for payment to dealers or others, or (ii) directly to
others, an amount not to exceed 0.25% per annum of such Portfolio's average
daily net assets represented by Class C shares, as a service fee pursuant to
dealer or servicing agreements.
11. A Rule 12b-1 Plan has not been adopted for the
Institutional Class shares of any Portfolio.
ALLOCATION OF EXPENSES
12. The Fund shall allocate to each class of shares of a
Portfolio any fees and expenses incurred by the Fund in connection with the
distribution or servicing of such class of shares under a Rule 12b-1 Plan, if
any, adopted for such class. In addition, the Fund reserves the right, subject
to approval by the Fund's Board of Directors, to allocate fees and expenses of
the following nature to a particular class of shares of a Portfolio (to the
extent that such fees and expenses actually vary among each class of shares or
vary by types of services provided to each class of shares of the Portfolio):
(i) transfer agency and other recordkeeping costs;
(ii) Securities and Exchange Commission and blue sky
registration or qualification fees;
(iii) printing and postage expenses related to printing and
distributing class specific materials, such as
shareholder reports, prospectuses and proxies to
current shareholders of a particular class or to
regulatory authorities with respect to such class of
shares;
(iv) audit or accounting fees or expenses relating
solely to such class;
(v) the expenses of administrative personnel and
services as required to support the shareholders
of such class;
(vi) litigation or other legal expenses relating solely
to such class of shares;
-3-
<PAGE>
(vii) Directors' fees and expenses incurred as a result
of issues relating solely to such class of shares;
and
(viii) other expenses subsequently identified and
determined to be properly allocated to such class
of shares.
13. Except for any expenses that are allocated to a particular
class as described in paragraph 11 above, all expenses incurred by a Portfolio
will be allocated to each class of shares of such Portfolio on the basis of the
net asset value of each such class in relation to the net asset value of the
Portfolio.
ALLOCATION OF INCOME AND GAINS
14. Income and realized and unrealized capital gains and
losses of a Portfolio will be allocated to each class of shares of such
Portfolio on the basis of the net asset value of each such class in relation to
the net asset value of the Portfolio.
CONVERSIONS
15. (a) Except for shares acquired through a reinvestment of
dividends or distributions, Class B shares held for eight years after purchase
are eligible for automatic conversion into Class A shares of the same Portfolio
in accordance with the terms described in the relevant prospectus. Class B
shares acquired through a reinvestment of dividends or distributions will
convert into Class A shares of the same Portfolio pro rata with the Class B
shares that were not acquired through the reinvestment of dividends and
distributions.
(b) The automatic conversion feature of Class B
shares shall be suspended at any time that the Board of Directors of the Fund
determines that there is not available a reasonably satisfactory opinion of
counsel to the effect that (i) the assessment of the higher fee under the Fund's
Rule 12b-1 Plan for Class B does not result in the Fund's dividends or
distributions constituting a preferential dividend under the Internal Revenue
Code of 1986, as amended, and (ii) the conversion of Class B shares into Class A
shares does not constitute a taxable event under federal income tax law. In
addition, the Board of Directors of a Fund may suspend the automatic conversion
feature by determining that any other condition to conversion set forth in the
relevant prospectus, as amended from time to time, is not satisfied.
(c) The Board of Directors of a Fund may also suspend the
automatic conversion of Class B shares if it determines that suspension is
-4-
<PAGE>
appropriate to comply with the requirements of the Act, or any rule or
regulation issued thereunder, relating to voting by Class B shareholders on the
Fund's Rule 12b-1 Plan for Class A or, in the alternative, the Board of
Directors may provide Class B shareholders with alternative conversion or
exchange rights.
16. Class A, Class C and Institutional Class shares do not
have a conversion feature.
EXCHANGES
17. Exchanges are permitted between Class A Shares and
Institutional Class Shares of a Portfolio or of any other Portfolio in the
Delaware Group funds; Class B shares of a Portfolio may only be exchanged for
Class B shares of any other Portfolio in the Delaware Group; Class C shares of a
Portfolio may only be exchanged for Class C shares of any other Portfolio in the
Delaware Group. All exchanges are subject to the eligibility and minimum
purchase requirements set forth in the Funds' prospectuses. Exchanges cannot be
made between open-end and closed-end funds within the Delaware Group.
18. Each class will vote separately with respect to the Rule
12b-1 Plan related to that class; provided, however, that Class B shares of a
Portfolio may vote on any proposal to materially increase the fees to be paid by
the Fund under the Rule 12b-1 Plan for the Class A shares of the same Portfolio.
19. On an ongoing basis, the Directors, pursuant to their
fiduciary responsibilities under the Act and otherwise, will monitor the
Portfolio for the existence of any material conflicts between the interests of
all the classes of shares offered by such Portfolio. The Directors, including a
majority of the Directors who are not interested persons of the Fund, shall take
such action as is reasonably necessary to eliminate any such conflict that may
develop. The Manager and the Distributor shall be responsible for alerting the
Board to any material conflicts that arise.
20. As described more fully in the Funds' relevant
prospectuses, broker-dealers that sell shares of a Portfolio will be compensated
differently depending on which class of shares the investor selects.
21. Each Fund reserves the right to increase, decrease or
waive the CDSC imposed on any existing or future class of shares of a Portfolio
within the ranges permissible under applicable rules and regulations of the
Securities and Exchange Commission (the "SEC") and the rules of the National
Association of Securities Dealers, Inc. (the "NASD"), as such rules may be
amended or adopted from time to time. Each Fund may in the future alter the
terms of the existing classes of such Portfolio or create new classes in
compliance with applicable rules and regulations of the SEC and the NASD.
-5-
<PAGE>
22. All material amendments to this Plan must be approved by a
majority of the Directors of each Fund affected by such amendments, including a
majority of the Directors who are not interested persons of the Fund.
Effective as of November 29, 1995
-6-
<PAGE>
APPENDIX A
List of Funds and Their Classes
1. Delaware Group Delaware Fund, Inc.
Delaware Fund
Delaware Fund A Class
Delaware Fund B Class
Delaware Fund C Class
Delaware Fund Institutional Class
Devon Fund
Devon Fund A Class
Devon Fund B Class
Devon Fund C Class
Devon Fund Institutional Class
2. Delaware Group Trend Fund, Inc.
Trend Fund A Class
Trend Fund B Class
Trend Fund C Class
Trend Fund Institutional Class
3. Delaware Group Value Fund, Inc.
Value Fund A Class
Value Fund B Class
Value Fund C Class
Value Fund Institutional Class
4. Delaware Group DelCap Fund, Inc.
DelCap Fund A Class
DelCap Fund B Class
DelCap Fund C Class
DelCap Fund Institutional Class
5. Delaware Group Decatur Fund, Inc.
Decatur Income Fund
Decatur Income Fund A Class
Decatur Income Fund B Class
Decatur Income Fund C Class
Decatur Income Fund Institutional Class
<PAGE>
Decatur Total Return Fund
Decatur Total Return Fund A Class
Decatur Total Return Fund B Class
Decatur Total Return Fund C Class
Decatur Total Return Fund Institutional Class
6. Delaware Group Global & International Funds, Inc.
International Equity Series
International Equity Fund A Class
International Equity Fund B Class
International Equity Fund C Class
International Equity Fund Institutional Class
Global Bond Series
Global Bond Fund A Class
Global Bond Fund B Class
Global Bond Fund C Class
Global Bond Fund Institutional Class
Global Assets Series
Global Assets Fund A Class
Global Assets Fund B Class
Global Assets Fund C Class
Global Assets Fund Institutional Class
-8-
Financial
=========================================================================
Statements
=========================================================================
Delaware Group
Global & International Funds, Inc. -
International Equity Series
Statement of Net Assets
November 30, 1995
Market
Number Value
of Shares (U.S. $)
COMMON STOCK - 91.42%
Australia - 9.24%
CSR Limited. . . . . . . . . . . . . . . . . . 597,874 $1,915,864
National Australia Bank. . 362,973 3,168,255
Pacific Dunlop. . . . . . . . . . . . . . . . 864,192 2,068,920
----------
7,153,039
----------
Belgium - 6.31%
Cimenterics CBR Cementbedrij 2,840 1,114,382
*Cimenterics CBR Cementbedrij Put Warrants 2,840 23,914
Electrabel NPV. . . . . . . . . . . . . . . . . 10,490 2,391,960
G.I.B. Holdings . . . . . . . . . . . . . . . . 33,800 1,336,517
G.I.B. Holdings-VVPR. . . . . . . . . . . . . . 380 14,847
----------
4,881,620
----------
Canada - 2.07%
BC Telecom. . . . . . . . . . . . . . . . . . . 91,250 1,604,384
----------
1,604,384
----------
France - 7.06%
Alcatel Alsthom. . . . . . . . . . . . . . . . 11,367 949,171
Campagnie de Saint Gobain 20,025 2,316,377
Elf Aquitaine. . . . . . . . . . . . . . . . . 31,376 2,200,951
----------
5,466,499
----------
Germany - 6.07%
Bayer AG. . . . . . . . . . . . . . . . . . . 8,009 2,083,714
Continental AG. . . . . . . . . . . . . . . . 54,500 795,703
Siemens AG. . . . . . . . . . . . . . . . . . 3,490 1,815,998
----------
4,695,415
----------
Hong Kong - 2.86%
Hong Kong Electric. . . . . . . . . . . . . . 237,000 795,096
Wharf (Holdings) Limited. 424,000 1,416,969
----------
2,212,065
----------
Indonesia - 1.64%
PT Bank Dagang Nasional. . 1,137,500 946,464
PT Semen Gresik. . . . . . . . . . . . . . . 130,000 318,809
----------
1,265,273
----------
Japan - 13.30%
Amano. . . . . . . . . . . . . . . . . . . . 165,000 2,080,173
Canon Electronics. . . . . . . . 96,000 1,692,505
Eisai. . . . . . . . . . . . . . . . . . . . 108,000 1,904,068
<PAGE>
Market
Number Value
of Shares (U.S. $)
COMMONA STOCK (Continued)
Japan (Continued)
Kinki Coca-Cola Bottling Y50 111,000 1,399,389
Matsushita Electric. . . . . . . . . . . . . 130,000 1,933,419
Senko. . . . . . . . . . . . . . . . . . . . 222,000 1,279,129
-----------
10,288,683
-----------
Malaysia - 2.15%
Oriental Holdings Berhad. 173,000 811,790
Sime Darby Berhad. . . . . . . . . . . . . . 330,000 852,326
-----------
1,664,116
-----------
Netherlands - 6.29%
Elsevier-CVA. . . . . . . . . . . . . . . . . 84,000 1,147,626
Koninklijke Van Ommeren . . . . . . . . . . . 36,000 1,037,092
Royal Dutch Petroleum . . . . . . . . . . . . 9,820 1,264,531
Unilever NV-CVA . . . . . . . . . . . . . . . 10,730 1,419,523
-----------
4,868,772
-----------
New Zealand - 2.64%
Carter Holt Harvey Limited . . . . . . . . . 277,300 584,838
Telecom Corp. of New Zealand . . . . . . . . 348,920 1,460,383
-----------
2,045,221
-----------
Philippines - 0.79%
Philippine Long Distance Telephone
Company ADR . . . . . . . . . . . . . . . . . 10,900 609,037
-----------
609,037
-----------
Singapore - 1.17%
Jardine Matheson Holdings Limited . . . . . . 149,800 906,290
-----------
906,290
-----------
Spain - 3.18%
Banco Central Hispanoamer SA . . . . . . . . . 23,452 481,335
Telefonica de Espana . . . . . . . . . . . . . 143,500 1,982,930
-----------
2,464,265
-----------
United Kingdom - 26.65%
Bass plc . . . . . . . . . . . . . . . . . . . 200,000 2,110,737
Blue Circle Industries . . . . . . . . . . . . 347,000 1,730,223
British Airways plc . . . . . . . . . . . . . 250,000 1,758,948
British Gas plc. . . . . . . . . . . . . . . . 515,000 1,918,056
Cable & Wireless plc . . . . . . . . . . . . . 275,000 1,909,605
Dawson International plc. 647,500 1,119,111
GKN plc. . . . . . . . . . . . . . . . . . . . 152,900 1,884,940
Great Universal Stores. . . 178,200 1,678,972
RTZ. . . . . . . . . . . . . . . . . . . . . . 118,700 1,702,976
Sears plc. . . . . . . . . . . . . . . . . . . 880,350 1,346,513
Taylor Woodrow plc. . . . . . . 900,825 1,550,058
Unigate. . . . . . . . . . . . . . . . . . . . 300,000 1,913,429
-----------
20,623,568
-----------
Total Common Stock
(cost $67,502,286) . . . . . . . . . . . . 70,748,247
-----------
<PAGE>
International Equity Series
Statement of Net Assets (Continued)
Market
Principal Value
Amount** (U.S.$)
BONDS - 2.42%
Spanish Government 8.20% 2/28/2009 . . . Sp276,000,000 $ 1,869,913
-----------
Total Bonds (cost $1,779,194) . . . . . . 1,869,913
-----------
REPURCHASE AGREEMENTS - 4.77%
With Chase Manhattan Bank 5.875%
12/1/95 (dated 11/30/95,
collateralized by $3,598,000 U.S.
Treasury Notes 8.5% due 5/15/97
market value $3,764,864) . . . . . . . . . $3,690,000 3,690,000
-----------
Total Repurchase Agreement
(cost $3,690,000) . . . . . . . . . . . . . . . . . 3,690,000
-----------
TOTAL MARKET VALUE OF SECURITIES - 98.61%
(cost $72,971,480). . . . . . . . . . . . . . . . . . 76,308,160
RECEIVABLES AND OTHER ASSETS
NET OF LIABILITIES - 1.39% . . . . . . . . . . . . . 1,078,790
-----------
NET ASSETS APPLICABLE TO 6,346,888,623
SHARES ($.01 PAR VALUE
OUTSTANDING) - 100% . . . . . . . . . . . . . . . . $77,386,950
===========
NET ASSET VALUE - INTERNATIONAL EQUITY
SERIES A CLASS ($62,251,378 / 5,107,965 SHARES). . . $12.19
======
NET ASSET VALUE - INTERNATIONAL EQUITY
SERIES B CLASS ($3,470,671 / 286,237 SHARES) . . . . $12.13
======
NET ASSET VALUE - INTERNATIONAL EQUITY
SERIES C CLASS ($5,028 / 412.623 SHARES) . . . . . . $12.19
======
NET ASSET VALUE - INTERNATIONAL EQUITY SERIES
INSTITUTIONAL CLASS ($11,659,873 / 952,274 SHARES) . $12.24
======
COMPONENTS OF NET ASSETS AT NOVEMBER 30, 1995:
Common stock $.01 par value, 500,000,000 shares
authorized to the Fund with 50,000,000 shares
allocated to the International Equity Series A Class,
25,000,000 shares allocated to the International
Equity Series B Class, 25,000,000 shares allocated
to the International Equity Series C Class and
50,000,000 shares allocated to the
International Equity Series Institutional Class . . . . 72,026,700
Accumulated undistributed income:
Net investment income*** . . . . . . . . . . . . . . . 1,004,623
Net realized gain on investments***. 928,156
Net unrealized appreciation on investments
and foreign currencies. . . . . . . . . . . . . . . . . 3,427,471
-----------
Total net assets. . . . . . . . . . . . . . . . . . . . $77,386,950
===========
- ------------------
*Non-income producing security for the year ended November 30, 1995.
**Principal amount is stated in the currency in which each bond is
denominated.
***Accumulated net investment income includes net realized gains on
foreign currencies. During the current fiscal year, the Fund
reclassified $317,878 from accumulated net realized gain on investments
to accumulated net investment income.
Sp - Spanish Peseta
See accompanying notes
<PAGE>
Delaware Group
Global & International Funds, Inc. -
Global Assets Series
Statement of Net Assets
November 30, 1995
Market
Number Value
of Shares (U.S. $)
COMMON STOCK - 48.54%
Australia - 2.99%
CSR Limited. . . . . . . . . . . . . . . 23,150 $ 74,183
National Australia Bank . . . . . . . . 8,467 73,905
Pacific Dunlop . . . . . . . . . . . . . 12,175 29,148
--------
177,236
--------
Belgium -1.65%
Electrabel NPV . . . . . . . . . . . . . 300 68,407
G.I.B. Holdings. . . . . . . . . . . . . 750 29,656
--------
98,063
--------
Canada - 0.81%
BC Telecom . . . . . . . . . . . . . . . 2,715 47,736
--------
47,736
--------
France - 2.18%
Campagnie de Saint Gobain 584 67,554
Elf Aquitaine. . . . . . . . . . . . . . 876 61,449
--------
129,003
--------
Germany - 1.86%
Bayer AG. . . . . . . . . . . . . . . . . 160 41,627
RWE AG. . . . . . . . . . . . . . . . . . 75 27,142
Siemens AG. . . . . . . . . . . . . . . . 80 41,627
--------
110,396
--------
Hong Kong - 0.93%
Hong Kong Electric . . . . . . . . . . . 10,500 35,226
Wharf (Holdings) Limited. 6,000 20,051
--------
55,277
--------
Indonesia - 0.45%
PT Bank Dagang Nasional . . . . . . . . 32,000 26,626
--------
26,626
--------
Japan - 4.31%
Canon Electronics . . . . . . . . . . . 2,000 35,261
Chiyoda Fire and Marine Y50 3,000 16,665
Eisai Co. Limited . . . . . . . . . . . 2,000 35,261
Hitachi Limited . . . . . . . . . . . . 8,000 81,158
Matsushita Electric . . . . . . . . . . 2,000 29,745
Yokohama Reito . . . . . . . . . . . . 5,000 57,618
--------
255,708
--------
Malaysia - 0.36%
Sime Darby Berhad . . . . . . . . . . . 8,300 21,437
--------
21,437
--------
Netherlands - 2.22%
Elsevier-CVA . . . . . . . . . . . . . . 4,000 54,649
Koninklijke Van Ommeren. . . . . . . . . 1,515 43,644
Royal Dutch Petroleum. . . . . . . . . . 260 33,480
--------
131,773
--------
<PAGE>
Global Assets Series
Statement of Net Assets (Continued)
Market
Number Value
of Shares (U.S. $)
COMMON STOCK (Continued)
New Zealand - 1.45%
Carter Holt Harvey Limited . . . . . . . . 10,800 $ 22,778
Telecom Corp. of New Zealand 15,100 63,200
--------
85,978
--------
Philippines - 0.42%
Philippine Long Distance Telephone
Company ADR . . . . . . . . . . . . . . . 450 25,144
--------
25,144
--------
Singapore - 0.49%
Jardine Matheson Holdings Limited . . . . 4,800 29,040
--------
29,040
--------
Spain - 1.41%
Banco Central Hispanoamer SA. . . . . . . 1,535 31,505
Telefonica de Espana. . . . . . . . . . . 3,775 52,164
--------
83,669
--------
United Kingdom - 9.14%
Bass plc. . . . . . . . . . . . . . . . . 6,300 66,488
Blue Circle Industries. . . . . . . . . . 12,900 64,322
British Airways plc . . . . . . . . . . . 8,600 60,508
British Gas plc . . . . . . . . . . . . . 8,000 29,795
Dalgety plc . . . . . . . . . . . . . . . 10,200 60,688
Dawson International plc. 15,900 27,481
GKN plc . . . . . . . . . . . . . . . . . 4,800 59,174
RTZ . . . . . . . . . . . . . . . . . . . 5,150 73,887
Sears plc . . . . . . . . . . . . . . . . 22,000 33,649
Taylor Woodrow plc. . . . . . . . . . . . 38,600 66,419
--------
542,411
--------
United States - 17.87%
Abbott Laboratories. . . . . . . . . . . . 400 16,250
Air Products & Chemicals. 300 16,650
Allied-Signal. . . . . . . . . . . . . . . 600 28,350
ALLTEL . . . . . . . . . . . . . . . . . . 500 14,750
American Greetings Class A 1,000 27,313
American Stores. . . . . . . . . . . . . . 900 23,625
Bank of New York. . . . . . . . . 600 28,275
Banta. . . . . . . . . . . . . . . . . . . 500 21,750
Chubb. . . . . . . . . . . . . . . . . . . 200 19,450
CMS Energy . . . . . . . . . . . . . . . . 1,000 27,250
ConAgra. . . . . . . . . . . . . . . . . . 1,100 43,863
Danaher. . . . . . . . . . . . . . . . . . 1,000 30,750
Developers Diversified Realty 1,000 28,250
Diebold. . . . . . . . . . . . . . . . . . 200 11,475
Equitable of Iowa. . . . . . . . 400 14,000
Exxon. . . . . . . . . . . . . . . . . . . 200 15,475
Federal Home Loan. . . . . . . . . . . . . 200 15,400
Foster Wheeler . . . . . . . . . . . . . . 600 23,700
GenCorp. . . . . . . . . . . . . . . . . . 1,100 12,925
General Electric . . . . . . . . . . . . . 300 20,175
General Motors Class H . . . . . . . . . . 500 23,750
Illinova . . . . . . . . . . . . . . . . . 800 22,700
Imperial Oil Limited. . . . . 400 13,950
Kerr-McGee . . . . . . . . . . . . . . . . 400 23,150
<PAGE>
Market
Number Value
of Shares (U.S. $)
COMMON STOCK (Continued)
United States (Continued)
Lockheed Martin. . . . . . . . . . . . . . 300 $22,013
Loctite. . . . . . . . . . . . . . . . . . 500 24,438
MBNA . . . . . . . . . . . . . . . . . . . 300 12,113
May Department Stores. . . . . . . . . . . 300 13,088
Nationwide Health Properties 800 31,800
Philip Morris. . . . . . . . . . . . . . . 500 43,875
Praxair. . . . . . . . . . . . . . . . . . 1,000 29,125
Procter & Gamble . . . . . . . . . . . . . 400 34,550
RJR Nabisco Holdings . . . . . . . . . . . 700 20,388
Reynolds & Reynolds Class A 800 30,500
Rite Aid . . . . . . . . . . . . . . . . . 800 25,000
Rockwell International . . . . . . . . . . 500 24,500
Sbarro . . . . . . . . . . . . . . . . . . 600 13,425
Schering-Plough. . . . . . . . . . . . . . 400 22,950
Service International. . . . . . . . . . . 600 24,375
SmithKline Beecham PLC ADR Unit 400 21,300
Sonat. . . . . . . . . . . . . . . . . . . 600 19,350
Teleflex . . . . . . . . . . . . . . . . . 500 22,188
Tyco International . . . . . . . . . . . . 1,200 37,650
United Healthcare . . . . . . . . . . . . 500 31,438
WMX Technologies . . . . . . . . . . . . . 1,100 32,450
---------
1,059,742
---------
Total Common Stock (cost $2,774,832). . . 2,879,239
---------
Principal
Amount*
BONDS - 36.60%
Australia - 1.65%
Bank of Austria 10.875% 11/17/2004 . . . A$60,000 49,963
DSL Finance 10.25% 04/07/2000 . . . . . . 60,000 48,067
---------
98,030
---------
Denmark - 3.00%
Kingdom of Denmark
9.00% 11/15/2000. . . . . . . . . . . . . Dk900,000 177,619
---------
177,619
---------
Germany - 3.98%
Bundesrepublik Deutschland
8.375% 05/21/2001. . . . . . . . . . . . . Dem300,000 236,064
---------
236,064
---------
Italy - 3.35%
Eurofima 7.700% 02/02/2004 . . . . . . . Itl180,000,000 93,054
Italian Government
9.1875% 07/15/2000. . . . . . . . . . . . 150,000,000 92,496
Italian Government
12.00% 01/01/2003 . . . . . . . . . . . . 20,000,000 13,029
---------
198,579
---------
New Zealand - 3.41%
Government of New Zealand
6.50% 02/15/2000 . . . . . . . . . . . . . NZ$210,000 133,898
Government of New Zealand
8.00% 02/15/2001 . . . . . . . . . . . . . 50,000 33,888
<PAGE>
Global Assets Series
Statement of Net Assets (Continued)
Market
Principal Value
Amount (U.S. $)
BONDS (Continued)
New Zealand (Continued)
Government of New Zealand
8.00% 04/15/2004. . . . . . . . . . . . . NZ$50,000 $ 34,665
---------
202,451
---------
Spain - 5.17%
Spanish Government
12.25% 03/25/2000. . . . . . . . . . . . . Sp22,000,000 192,148
Spanish Government
10.30% 06/15/2002 . . . . . . . . . . . . 2,000,000 16,260
Spanish Government
10.50% 10/30/2003. . . . . . . . . . . . . 12,000,000 98,224
----------
306,632
----------
Sweden - 2.60%
Swedish Government
10.25% 05/05/2000. . . . . . . . . . . . . Sk200,000 32,382
Swedish Government
13.00% 06/15/2001. . . . . . . . . . . . . 500,000 90,790
Swedish Government
9.00% 04/20/2009 . . . . . . . . . . . . . 200,000 30,910
----------
154,082
----------
United Kingdom - 0.63%
Ontario Province 6.875% 09/15/2000 . . . . Gpb25,000 37,282
----------
37,282
----------
United States - 12.81%
Abbey Healthcare Group
9.500% 11/01/2002 . . . . . . . . . . . . $25,000 $ 26,563
ADT Operations 9.25% 08/01/2003 . . . . . . 25,000 26,625
AK Steel 10.75% 04/01/2004 . . . . . . . . 25,000 27,563
Alliant Techsystems
11.75% 03/01/2003 . . . . . . . . . . . . 25,000 27,438
American General
12.875% 05/01/2002 . . . . . . . . . . . . 25,000 24,938
American Standard
10.875% 05/15/1999 . . . . . . . . . . . . 25,000 27,500
Bell & Howell 9.2500% 07/15/2000. . . . . . 25,000 25,656
Century Communications
9.75% 02/15/2002 . . . . . . . . . . . . . 25,000 25,875
Continental Cablevision
11.00% 06/01/2007 . . . . . . . . . . . . 25,000 27,813
Cott 9.375% 07/01/2005 . . . . . . . . . . 25,000 24,750
Exide 10.75% 12/15/2002 . . . . . . . . . . 25,000 26,969
Ferrellgas LP/Finance
10.00% 08/01/2001. . . . . . . . . . . . . 15,000 15,769
**Graphic Controls
12.00% 09/15/2005. . . . . . . . . . . . . 25,000 25,531
HealthSouth Rehabilitation
9.500% 04/01/2001. . . . . . . . . . . . . 25,000 26,656
Huntsman 10.625% 04/15/2001 25,000 27,281
Jones Intercable
9.625% 03/15/2002. . . . . . . . . . . . . 25,000 26,750
K-III Communications
10.625% 05/01/2002 . . . . . . . . . . . . 25,000 26,500
<PAGE>
Market
Principal Value
Amount** (U.S. $)
BONDS (Continued)
United States (Continued)
Louis Dreyfus Natural Gas
9.25% 06/15/2004. . . . . . . . . . . . . $25,000 $ 26,156
Mark IV Industries
8.75% 04/01/2003. . . . . . . . . . . . . 25,000 26,000
Metrocall 10.375% 10/01/2007 . . . . . . . 25,000 25,906
MGM Grand Hotels
12.00% 05/01/2002 . . . . . . . . . . . . 25,000 27,531
NL Industries 11.75% 10/15/2003. . . . . . 25,000 26,719
Owens-Illinois 11.00% 12/01/2003 . . . . . 25,000 27,938
Rogers Cablesystems
9.625% 08/01/2002 . . . . . . . . . . . . 25,000 25,875
Sherritt Gordon 9.75% 04/01/2003 . . . . . 25,000 25,500
TCI Communications
8.75% 08/01/2015. . . . . . . . . . . . . 25,000 26,969
Tenet Healthcare
10.125% 03/01/2005. . . . . . . . . . . . 25,000 27,219
Viacom International
10.25% 09/15/2001 . . . . . . . . . . . . 25,000 28,031
Westinghouse Air Brakes
9.375% 06/15/2005 . . . . . . . . . . . . 25,000 25,813
---------
759,834
---------
Total Bonds (cost $2,102,925) 2,170,573
---------
Repurchase Agreements - 17.11%
With Chase Manhattan Bank 5.875%
12/1/95 (dated 11/30/95,
collateralized by $990,000 U.S.
Treasury Notes 8.6% due 5/15/97
market value $1,035,593) . . . . . . . . 1,015,000 1,015,000
---------
Total Repurchase Agreements
(cost $1,015,000). . . . . . . . . . . . 1,015,000
---------
TOTAL MARKET VALUE OF SECURITIES - 102.25%
(cost $5,892,757) . . . . . . . . . . . . $6,064,812
LIABILITIES NET OF RECEIVABLES AND
OTHER ASSETS - (2.25%). . . . . . . . . . (133,575)
-----------
NET ASSETS APPLICABLE TO 498,150 SHARES
($.01 PAR VALUE) OUTSTANDING - 100% $5,931,237
===========
NET ASSET VALUE - GLOBAL ASSETS SERIES
A CLASS ($3,121,592 / 262,413 shares) . . $11.90
======
NET ASSET VALUE - GLOBAL ASSETS SERIES
B CLASS ($613,547 / 51,632 shares). . . . $11.88
======
NET ASSET VALUE - GLOBAL ASSETS SERIES
C CLASS ($5,031 / 423 shares). . . . . . . $11.89
======
NET ASSET VALUE - GLOBAL ASSETS SERIES
INSTITUTIONAL CLASS
($2,191,067 / 183,682 shares). . . . . . . $11.93
======
<PAGE>
Global Asset Series
Statement of Net Assets (Continued)
Market
Value
(U.S. $)
COMPONENTS OF NET ASSETS AT NOVEMBER 30, 1995:
Common stock $.01 par value, 500,000,000 shares
authorized to the Fund with 50,000,000 shares
allocated to the Global Assets Series A Class,
25,000,000 shares allocated to the Global Assets
Series B Class, 25,000,000 shares allocated to the
Global Assets Series C Class and 50,000,000
shares allocated to the Global Assets Series
Institutional Class. . . . . . . . . . . . . . . . $5,554,575
Accumulated undistributed income:
Net investment income. . . . . . . . . . . . . . . 60,410
Net realized gain on investments. . . . 142,396
Net unrealized appreciation on investments and
foreign currencies. . . . . . . . . . . . . . . . 173,856
-----------
Total net assets. . . . . . . . . . . . . . . . . . . $5,931,237
==========
- ------------------
* Principal amount is stated in the currency in which each security is
denominated.
** These securities are exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in transactions
exempt from registration, normally to qualified institutional buyers. At
November 30, 1995, these securities amounted to $25,531 or 0.43% of net
assets.
A$ - Australian Dollars NZ$ - New Zealand Dollars
Gbp - British Pounds Sp - Spanish Peseta
Dk - Danish Krone Sk - Swedish Krona
Dem - German Deutsche Marks $ - U.S. Dollars
Itl - Italian Lira
See accompanying notes
Delaware Group
Global & International Funds, Inc. -
Global Bond Series
Statement of Net Assets
November 30, 1995
Market
Principal Value
Amount* (U.S. $)
BONDS - 94.32%
Australia - 10.41%
Cadbury Schweppes,Australia
8.50% 06/15/99 . . . . . . . . . . . . . . . . A$40,000 $ 30,130
DSL Finance 10.25% 04/07/2000 70,000 56,078
Queensland Treasury
8.00% 08/14/2001 . . . . . . . . . . . . . . . 60,000 44,611
South Australia Government Finance
7.25% 09/22/2003 . . . . . . . . . . . . . . . 50,000 34,689
State Electricity Commission of Victoria
10.50% 05/27/2003. . . . . . . . . . . . . . . 40,000 32,825
-----------
198,333
-----------
<PAGE>
Global Asset Series
Statement of Net Assets (Continued)
Market
Principal Value
Amount* (U.S. $)
BONDS (Continued)
Denmark - 5.18%
Kingdom of Denmark
9.00% 11/15/2000 ........................... Dk500,000 $ 98,677
-----------
98,677
-----------
Germany - 4.13%
Bundesrepublik Deutschland
8.375% 05/21/2001 .......................... Dem100,000 78,688
-----------
78,688
-----------
Italy - 9.42%
European Investment Bank
12.75% 02/15/2000 .......................... Itl200,000,000 133,951
Italian Government
12.00% 01/01/2003 .......................... 70,000,000 45,603
-----------
179,554
-----------
Netherlands - 3.74%
Netherlands Government
9.00% 05/15/2000 ........................... Nlg100,000 71,278
-----------
71,278
-----------
New Zealand - 8.72%
Government of New Zealand
8.00% 02/15/2001 ........................... NZ$100,000 67,777
Government of New Zealand
8.00% 04/15/2004 ........................... 50,000 34,665
Government of New Zealand
6.50% 02/15/2000 ........................... 100,000 63,761
-----------
166,203
-----------
Spain - 13.44%
Spanish Government
10.50% 10/30/2003 .......................... Sp20,000,000 163,707
Spanish Government
10.30% 06/15/2002 .......................... 6,000,000 48,780
Spanish Government
12.25% 03/25/2000 .......................... 5,000,000 43,670
-----------
256,157
-----------
Sweden - 10.48%
Swedish Government
13.00% 06/15/2001 .......................... Sk1,100,000 199,738
-----------
199,738
-----------
United Kingdom - 3.25%
Ontario Province 6.875% 09/15/2000 .......... Gbp25,000 37,282
UK Conversion S47 Stock Gilt
9.00% 03/03/2000 ........................... 15,000 24,692
-----------
61,974
-----------
United States - 25.55%
U.S. Treasury Bond
13.375% 08/15/2001 ......................... $220,000 302,771
U.S. Treasury Note
6.125% 07/31/2000 .......................... 180,000 184,261
-----------
487,032
-----------
Total Bonds (cost $1,729,043) 1,797,634
-----------
<PAGE>
Global Bond Series
Statement of Net Assets (Continued)
Market
Principal Value
Amount* (U.S. $)
Repurchase Agreements - 10.50%
With Chase Manhattan Bank 5.875 %
12/1/95 (dated 11/30/95,
collateralized by $195,000 U.S. ................
Treasury Notes 8.5% due 5/15/97,
market value $204,058) ........................ $ 200,000 $ 200,000
-----------
Total Repurchase Agreements
(cost $200,000) ............................... 200,000
-----------
TOTAL MARKET VALUE OF SECURITIES - 104.82%
(cost $1,929,043) ............................. $ 1,997,634
LIABILITIES NET OF RECEIVABLES
AND OTHER ASSETS - ( 4.82%) ................... (91,789)
-----------
NET ASSETS APPLICABLE TO
169,426.5 SHARES ($.01 PAR VALUE)
OUTSTANDING - 100% ............................ $ 1,905,845
===========
NET ASSET VALUE - GLOBAL BOND SERIES
A CLASS ($889,477 / 79,185 SHARES) ............ $ 11.23
===========
NET ASSET VALUE - GLOBAL BOND SERIES
B CLASS ($114,623 / 10,203 SHARES) ............ $ 11.23
===========
NET ASSET VALUE - GLOBAL BOND SERIES
C CLASS ($5,028 / 447.5 SHARES) ............... $ 11.24
===========
NET ASSET VALUE - GLOBAL BOND SERIES
INSTITUTIONAL CLASS ($896,717 / 79,591 SHARES).. $ 11.27
===========
COMPONENTS OF NET ASSETS AT NOVEMBER 30, 1995:
Common stock $.01 par value, 500,000,000 shares
authorized to the Fund with 50,000,000 shares
allocated to the Global Bond Series A Class,
25,000,000 shares allocated to the Global Bond
Series B Class, 25,000,000 shares allocated to the
Global Bond Series C Class and 50,000,000 shares
allocated to the Global Bond Series Institutional Class 1,750,630
Accumulated undistributed income:
Net investment income ................................ 19,338
Net realized gain on investments ..................... 66,568
Net unrealized appreciation on investment
and foreign currencies .............................. 69,309
-----------
Total net assets ...................................... $ 1,905,845
===========
- -----------
*Principal amount is stated in the currency in which each bond is denominated.
A$ - Australian Dollars NZ$ - New Zealand Dollars
C$ - Canadian Dollars Sp - Spanish Peseta
Dk - Danish Krone Sk - Swedish Krona
Dem - German Deutsche Marks Gbp - British Pounds
Itl - Italian Lira $ - U.S. Dollars
Nlg - Netherland Guilders
See accompanying notes
<PAGE>
Delaware Group
Global & International Funds, Inc. -
Statement of Assets and Liabilities
Year Ended November 30, 1995
International Global Global
Equity Assets Bond
Series Series Series
------------ ------ ------
ASSETS:
Investments at market .... $76,308,160 $6,064,812 $1,997,634
Cash and foreign
currencies .............. 443,983 -- --
Dividends and interest
receivable .............. 440,822 80,189 62,721
Subscriptions receivable . 330,756 101,849 11,617
Receivable for
securities sold ......... -- -- 452,994
Other assets ............ 4,083 86,820 86,865
---------- ---------- ---------
Total assets ........... 77,527,804 6,333,670 2,611,831
=========== ========== =========
LIABILITIES:
Liquidations payable ..... 111,079 -- --
Payable for securities
purchased ............... -- 166,031 457,866
Other accounts payable and
accrued expenses ........ 29,775 236,402 248,120
---------- ---------- ---------
Total liabilities ...... 140,854 402,433 705,986
---------- ---------- ---------
TOTAL NET ASSETS ........ $77,386,950 $5,931,237 $1,905,845
=========== ========== =========
See accompanying notes
<PAGE>
Delaware Group Global & International Funds, Inc.
Statement of Operations
<TABLE>
<CAPTION>
Year Ended
11/30/95 12/27/94* to 11/30/95
------------- -----------------------
International Global Global
Equity Assets Bond
Series Series Series
------ ------ ------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 436,962 $96,007 $102,628
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,722,693 39,301 --
--------- ------- --------
3,159,655 135,308 102,628
--------- ------- --------
EXPENSES:
Management fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 512,638 12,907 4,777
Dividend disbursing and transfer agent fees and expenses . . . . . .. . . . . . . . . . . 426,523 3,429 1,833
Distribution expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190,486 2,546 1,547
Registration fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64,853 29,226 28,867
Custodian fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53,380 21,300 9,965
Reports and statements to shareholders. . . . . . . . . . . . . . . . . . . . . . . . . . 72,969 10,430 10,378
Professional fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,013 15,518 15,518
Salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,172 543 284
Taxes (other than taxes on income). . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,621 170 367
Directors' fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,276 4,243 4,215
Amortization of organization expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 3,527 63,606 63,643
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,150 4,280 4,759
--------- ------- --------
1,415,608 168,198 146,153
Less expenses absorbed by Delaware International Advisers Ltd.. . . . . . . . . . . . . . -- 144,304 133,308
1,415,608 23,894 12,845
--------- ------- --------
NET INVESTMENT INCOME BEFORE FOREIGN TAX WITHHELD. . . . . . . . . . . . . . . . . . . . 1,744,047 111,414 89,783
FOREIGN TAX WITHHELD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 327,827 4,304 744
--------- ------- --------
NET INVESTMENT INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,416,220 107,110 89,039
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCIES:
Net realized gain on:
Investment transactions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 911,068 142,396 66,568
Foreign currencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 392,319 4,790 6,693
--------- ------- --------
Net realized gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,303,387 147,186 73,261
Net unrealized appreciation of investments and foreign currencies . . . . . . . . . . . 2,648,697 173,856 69,309
--------- ------- --------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCIES. . . . . . . . . . 3,952,084 321,042 142,570
--------- ------- --------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS. . . . . . . . . . . . . . . . . . .$5,368,304 $428,152 $231,609
========== ======== ========
NET ASSET VALUE AND OFFERING PRICE PER SHARE - A CLASS INTERNATIONAL EQUITY
SERIES, GLOBAL ASSETS SERIES AND GLOBAL BOND SERIES, RESPECTIVELY:
Net asset value A Class (A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $12.19 $11.90 $11.23
Sales charge (4.75% of offering price or 5.01%, 4.96% and 4.99% of amount
invested per share for International Equity Series, Global Assets Series and
Global Bond Series, respectively) (B). . . . . . . . . . . . . . . . . . . . . . . . . . .61 .59 .56
--------- ------- --------
Offering price. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $12.80 $12.49 $11.79
</TABLE>
- ------------------
* Date of initial public offering.
(A) Net asset value per share, as illustrated, is the estimated amount
which would be paid upon the redemption or repurchase of shares.
(B) See Buying Shares in the current Prospectus for purchases of $100,000
or more.
See accompanying notes
<PAGE>
Delaware Group Global & International Fund, Inc.
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
11/30/95 12/27/94* to 11/30/95 11/30/94
----------- -------------------------- -----------
International Global Global International
Equity Series Assets Series Bond Series Equity Series
------------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income. . . . . . . . . . . . . . . . . . . . . $ 1,416,220 $ 107,110 $ 89,039 $ 1,076,443
Net realized gain on investments and foreign currencies. . . . 1,303,387 147,186 73,261 2,129,633
Net unrealized appreciation (depreciation) of investments and
foreign currencies . . . . . . . . . . . . . . . . . . . . . 2,648,697 173,856 69,309 (429,323)
----------- ---------- ---------- -----------
Net increase in net assets resulting from operations . . . . . 5,368,304 428,152 231,609 2,776,753
----------- ---------- ---------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
A Class. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (877,255) (11,935) (28,103) (790,811)
B Class. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (15,484) (1,244) (2,188) (491)
C Class. . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- -- -- --
Institutional Class. . . . . . . . . . . . . . . . . . . . . . . (160,418) (38,311) (46,103) (103,280)
Net realized gain from security transactions:
A Class. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,121,203) -- -- (424,858)
B Class. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (29,909) -- -- --
C Class. . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- -- -- --
Institutional Class. . . . . . . . . . . . . . . . . . . . . . . (303,387) -- -- (50,865)
----------- ---------- ---------- -----------
(3,507,656) (51,490) (76,394) (1,370,305)
----------- ---------- ---------- -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,339,753 3,199,375 824,105 53,822,589
B Class. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,885,729 613,034 110,282 682,252
C Class. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,029 5,032 5,028 --
Institutional Class. . . . . . . . . . . . . . . . . . . . . . . 7,333,145 1,975,200 810,404 5,208,314
Net asset value of shares issued upon reinvestment of dividends
from net investment income and net realized gain from security
transactions:
A Class. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,847,228 11,496 26,638 1,092,988
B Class. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42,926 1,244 647 463
C Class. . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- -- -- --
Institutional Class. . . . . . . . . . . . . . . . . . . . . . . 418,400 38,311 46,103 146,299
----------- ---------- ---------- -----------
44,872,210 5,843,692 1,823,20 60,952,905
----------- ---------- ---------- -----------
Cost of shares repurchased:
A Class. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (27,127,040) (209,669) (50,545) (34,129,609)
B Class. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (148,317) (8,549) -- (35,989)
C Class. . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- -- -- --
Institutional Class. . . . . . . . . . . . . . . . . . . . . . . (4,043,275) (105,899) (57,032) (1,852,746)
----------- ---------- ---------- -----------
(31,318,632) (324,117) (107,577) (36,018,344)
----------- ---------- ---------- -----------
Increase in net assets derived from capital share transactions . 13,553,578 5,519,575 1,715,630 24,934,561
NET INCREASE IN NET ASSETS. . . . . . . . . . . . . . . . . . . 15,414,226 5,896,237 1,870,845 26,341,009
NET ASSETS:
Beginning of period. . . . . . . . . . . . . . . . . . . . . . . 61,972,724 35,000 35,000 35,631,715
----------- ---------- ---------- -----------
End of period. . . . . . . . . . . . . . . . . . . . . . . . . . $77,386,950 $5,931,237 $1,905,845 $61,972,724
=========== ========== ========== ===========
Undistributed net investment income. . . . . . . . . . . . . . . $ 1,004,623 $ 60,410 $ 19,338 $ 323,682
=========== ========== ========== ===========
</TABLE>
- ------------------
* Date of initial public offering
See accompanying notes
<PAGE>
Delaware Group
Global & International Funds, Inc.
Notes to Financial Statements
November 30, 1995
The Delaware Group Global & International Funds, Inc. (the "Fund") is registered
as a Maryland corporation and offers three series, the International Equity
Series, the Global Assets Series and the Global Bond Series (the "Series"). Each
Series offers four classes of shares. The International Equity Series is
registered as a diversified open-end investment company and the Global Assets
Series and Global Bond Series are registered as non-diversified open-ended
investment companies under the Investment Company Act of 1940.
1. Significant Accounting Policies
The following accounting policies are in accordance with generally accepted
accounting principles and are consistently followed by the Fund:
Security Valuation - Securities listed on an exchange are valued at the last
quoted sales price as of 4:00 pm est on the valuation date. Securities not
traded are valued at the mean of the last quoted bid and asked prices.
Securities not listed on an exchange are valued at the mean of the last quoted
bid and asked prices. Securities listed on a foreign exchange are valued at the
last quote d sale price before the time when the Fund is valued. Money market
instruments having less than 60 days to maturity are valued at amortized cost.
Federal Income Taxes - Each Series intends to continue to qualify as a regulated
investment company and make the requisite distributions to shareholders.
Accordingly, no provision for federal income taxes is required in the financial
statements.
Repurchase Agreements - Each Series may invest in a pooled cash account along
with other members of the Delaware Group of Funds. The aggregated daily balance
of the pooled cash account is invested in repurchase agreements secured by
obligations of the U.S. Government. The respective collateral is held by the
Series' custodian bank until the maturity of the respective repurchase
agreements. Each repurchase agreement is 100% collateralized. However, in the
event of default or bankruptcy by the counterparty to the agreement, realization
of the collateral may be subject to legal proceedings.
Class Accounting - Investment income, common expenses and gains (losses) on
investments are allocated to the various classes of each Series on the basis of
daily net assets of each class. Distribution expenses relating to a specific
class are charged directly to that class.
Foreign Currencies - The value of all assets and liabilities denominated in
foreign currencies are translated into the U.S. dollars at the exchange rate of
such currencies against U.S. dollar as of 3:00 pm EST. Forward foreign currency
contracts are valued at the mean between the bid and asked prices of the
contracts. Interpolated values are derived when the settlement date of the
contract is an interim date for which quotations are not available.
Other - Expenses common to all Funds within the Delaware Group of Funds are
allocated amongst the funds on the basis of average net assets. Security
transactions are recorded on the date the securities are purchased or sold
(trade date). Costs used in calculating realized gains and losses on the sale of
investment securities are those of the specific securities sold. Dividend income
is recorded on the ex-dividend date and interest income is recorded on an
accrual basis. Original discounts are accreted to interest income over the lives
of the respective securities.
Organization and registration costs are amortized over a five- and two-year
period, respectively, beginning on the date of commencement of operations.
<PAGE>
The balance of organization and registration costs at November 30, 1995, were
$3,584, $86,820 and $86,865 and amortization expense for the period ended
November 30, 1995, were $3,527, $63,606 and $63,643 for the International Equity
Series, the Global Assets Series and the Global Bond Series, respectively.
Certain fund expenses are paid directly by brokers. The amount of these expenses
is less than 0.01% of each Series' average net assets.
2. Investment Management and Distribution Agreements
In accordance with the terms of the Investment Management Agreement, the Fund
pays Delaware International Advisers Ltd. (DIAL), the investment manager of each
Series, a fee which is calculated daily at the rate of 0.75% of the net assets
of each Series less fees paid to the independent directors. DIAL has entered
into a sub-advisory agreement with Delaware Management Company, Inc. (DMC) with
respect to the management of the Global Assets Series' investments in U.S.
securities. DMC will receive from DIAL 25% of the investment management fees and
other expenses for the Global Assets Series. At November 30, 1995, the
International Equity Series had a liability for Investment Management fees and
other expenses payable to DIAL for $13,097.
DIAL has elected voluntarily to waive that portion, if any, of the annual
management fees payable by the Global Assets Series and the Global Bond Series
to the extent necessary to ensure that the annual operating expenses exclusive
of taxes, interest, brokerage commissions, extraordinary expenses and 12b-1
expenses exceed 0.95% of average net assets for each Class through June 30,
1996. Total expenses absorbed by DIAL were $144,304 for the Global Asset Series
and $133,308 for the Global Bond Series.
Pursuant to the Distribution Agreement, the Fund pays Delaware Distributors L.P.
(DDLP), the Distributor and an affiliate of DMC, an annual fee of 0.30% of the
average daily net assets of the A Class and 1.00% of the average daily net
assets of the B Class and the C Class. No distribution expenses are paid by the
Institutional Class. At November 30, 1995, the International Equity Series, the
Global Assets Series and the Global Bond Series had liabilities for distribution
fees and other expenses payable to DDLP for $2,414, $33,457 and $30,734,
respectively. For the year ended November 30, 1995, the Fund paid DDLP $40,151,
$3,836 and $1,051 for commissions earned on sales of A Class shares for the
International Equity Series, the Global Assets Series and the Global Bond
Series, respectively.
The Fund has engaged Delaware Service Company, Inc. (DSC), an affiliate of DMC
to serve as dividend disbursing and transfer agent for the Fund. For the year
ended November 30, 1995, the amount expensed for these services were $426,523,
$3,429 and $1,833 for the International Equity Series, the Global Assets Series,
and the Global Bond Series, respectively.
Certain officers of DMC are officers, directors and/or employees of the Fund.
These officers, directors and employees are paid no compensation by the Fund.
On April 3, 1995, Delaware Management Holdings, Inc., the indirect parent of
DIAL, DMC, DDLP and DSC, through a merger transaction (the "Merger") became a
wholly-owned subsidiary of Lincoln National Corporation. Other than the
resulting change in ownership, the Merger will not materially change the manner
in which DIAL or DMC have heretofore conducted their relationships with each
Series.
<PAGE>
Statement of Net Assets (Continued)
3. Investments
During the year ended November 30, 1995, the Fund made purchases and sales of
investment securities other than U.S. Government securities and temporary cash
investments as follows:
<TABLE>
<CAPTION>
International Global Global
Equity Series Assets Series Bond Series
------------- ------------- -----------
<S> <C> <C> <C>
Purchases. . . . . . . . . . . . . . . . . . . . . . . . . . . . .$22,670,166 $5,946,066 $2,734,950
Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$13,928,641 $1,221,492 $1,089,466
Investment securities based on cost for federal income tax purposes at November 30, 1995 are as follows:
International Global Global
Equity Series Assets Series Bond Series
------------- ------------- -----------
Cost of Investments. . . . . . . . . . . . . . . . . . . . $72,971,480 $5,892,757 $1,929,043
Aggregated unrealized appreciation . . . . . . . . . . . . 7,670,865 232,740 70,943
Aggregate unrealized depreciation. . . . . . . . . . . . . (4,334,185) (60,685) (2,352)
----------- ---------- ----------
Market value of investments. . . . . . . . . . . . . . . . $76,308,160 $6,064,812 $1,997,634
----------- ---------- ----------
</TABLE>
The realized gain for financial reporting and federal income tax purposes
for the year ended November 30, 1995 were $911,068, $142,396 and $66,568
for the International Equity Series, the Global Assets Series and the
Global Bond Series, respectively.
4. Capital Stock
Transactions in capital stock shares were as follows:
<TABLE>
<CAPTION>
International Global Global
Equity Series Assets Series Bond Series
------------- ------------- -----------
Year Year 12/27/94* 12/27/94*
Ended Ended to to
11/30/95 11/30/94 11/30/95 11/30/95
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Shares sold:
A Class. . . . . . . . . . . . . . . . . . . . . . 2,658,163 4,382,022 276,141 77,795
B Class. . . . . . . . . . . . . . . . . . . . . . 242,649 55,284 52,254 10,144
C Class. . . . . . . . . . . . . . . . . . . . . . 413 -- 423 447
Institutional Class. . . . . . . . . . . . . . . . . 616,386 423,561 190,085 80,792
Shares issued upon reinvestment of dividends from
net investment income and net realized gain from
security transactions:
A Class. . . . . . . . . . . . . . . . . . . . . . 249,089 91,804 1,006 2,460
B Class. . . . . . . . . . . . . . . . . . . . . . 3,744 38 107 59
C Class. . . . . . . . . . . . . . . . . . . . . . -- -- -- --
Institutional Class. . . . . . . . . . . . . . . . . 36,453 12,259 3,408 4,320
---------- ---------- -------- --------
3,806,897 4,964,968 523,424 176,017
---------- ---------- -------- --------
Shares repurchased:
A Class. . . . . . . . . . . . . . . . . . . . . . (2,308,726) (2,779,645) (18,234) (4,570)
B Class. . . . . . . . . . . . . . . . . . . . . . (12,563) (2,915) (729) --
C Class. . . . . . . . . . . . . . . . . . . . . . -- -- -- --
Institutional Class. . . . . . . . . . . . . . . . . (336,513) (150,626) (9,811) (5,521)
---------- ---------- -------- --------
(2,657,802) (2,933,186) (28,774) (10,091)
---------- ---------- -------- --------
Net increase. . . . . . . . . . . . . . . . . . . . . 1,149,095 2,031,782 494,650 165,926
========= ========= ======= =======
</TABLE>
* Date of initial public offering
<PAGE>
Notes to Financial Statements (Continued)
The International Equity Series declared distributions from net realized gains
on security transactions in the amount of $0.145 per share for all Classes. In
addition, the Series declared dividends from net investment income in the amount
of $0.190, $0.140, $0.220 and $0.230 per share for the International Equity
Series A Class, International Equity Series B Class, International Equity Series
C Class and International Equity Series Institutional Class, respectively,
payable on January 4, 1996, to shareholde r of record on December 26, 1995. The
ex-dividend date was December 27, 1995.
The Global Assets Series declared distributions from net realized gains on
security transactions in the amount of $0.270 per share for all Classes. In
addition, the Series declared dividends from net investment income in the amount
of $0.145, $0.115, $0.170 and $0.180 per share for the Global Assets Series A
Class, Global Assets Series B Class, Global Assets Series C Class and Global
Assets Series Institutional Class, respectively, payable on January 4, 1996, to
shareholders of record on December 26, 1995. The ex-dividend date was December
27, 1995.
The Global Bond Series declared distributions from net realized gains on
security transactions in the amount of $0.360 per share for all Classes. In
addition, the Series declared dividends from net investment income in the amount
of $0.215, $0.200, $0.245 and $0.250 per share for the Global Bond Series A
Class, Global Bond Series B Class, Global Bond Series C Class and Global Bond
Series Institutional Class, respectively, payable on January 4, 1996, to
shareholders of record on December 26, 1995. The ex-dividend date was December
27, 1995.
5. Foreign Currency Forward Contracts
The following currency forward contracts were outstanding at November 30, 1995:
<TABLE>
<CAPTION>
International Equity Series Contract to Deliver In Exchange For Settlement Date Unrealized Gain/(Loss)
- --------------------------- ------------------- --------------- --------------- ----------------------
<S> <C> <C> <C> <C>
91,078,000 Belgian Francs $3,100,000 2/29/96 $181
4,958,140 Dutch Guilders 3,100,000 2/29/96 (1,122)
15,252,000 French Francs 3,100,000 2/29/96 42,755
4,428,350 Deutsche Marks 3,100,000 2/29/96 1,347
765,000,000 Japanese Yen 7,650,000 2/29/96 55,871
--------
$99,032
========
Global Assets Series Contract to Purchase In Exchange For Settlement Date Unrealized Gain/(Loss)
- -------------------- -------------------- --------------- --------------- ----------------------
43,062 British Pounds $66,143 12/05/95 $(279)
24,383 Canadian Dollars 17,955 12/01/95 2
158,830 French Francs 32,064 12/29/95 (198)
177,800 Hong Kong Dollars 22,989 12/01/95 (4)
30,160 New Zealand Dollars 19,725 12/06/95 (32)
--------
$(511)
========
Global Bond Series Contract to Purchase In Exchange For Settlement Date Unrealized Gain/(Loss)
- ------------------ -------------------- --------------- --------------- ----------------------
235,458,333 Italian Lira $147,438 12/01/95 $(228)
========
Global Bond Series Contract to Deliver In Exchange For Settlement Date Unrealized Gain/(Loss)
- ------------------ ------------------- --------------- --------------- ----------------------
267,358,090 Italian Lira $167,308 12/1/95 $154
12,000,000 Spanish Peseta 97,324 2/28/96 756
329,000 Swedish Krona 49,399 2/28/96 (654)
--------
$256
========
</TABLE>
<PAGE>
6. Concentration of Risk
The Fund may invest in high-yield fixed-income securities which carry ratings of
BB or lower by Standard & Poor's and/or Baa or lower by Moody's. Investments in
these higher yielding securities may be accompanied by a greater degree of
credit risk than higher rated securities. Additionally, lower-rated securities
may be more susceptible to adverse economic and competitive industry conditions
than investment grade securities.
The Fund may invest up to 10% of its total net assets in illiquid securities
which include securities with contractual restrictions on resale, securities
exempt from registration under Rule 144A of the Securities Act of 1933, as
amended, and other securities which may not be readily marketable. The relative
illiquidity of some of these securities may adversely affect the Fund's ability
to dispose of such securities in a timely manner and at a fair price when it is
necessary to liquidate such securities. These securities have been denoted in
the Statement of Net Assets.
<PAGE>
Notes to Financial Statements (Continued)
7. Financial Highlights
Selected data for each share of the Series outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
International Equity Series A Class
-----------------------------------------
10/31/91(1)
Year Ended to
11/30/95 11/30/94 11/30/93 11/30/92 11/30/91
-----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net assets value, beginning of period. . . . . . . . . . . $11.920 $11.250 $ 9.590 $9.650 $10.000
Income from investment operations:
Net investment income . . . . . . . . . . . . . . . . . . 0.297 0.140 0.499 0.162 (0.004)
Net realized and unrealized gain (loss) from security
transactions . . . . . . . . . . . . . . . . . . . . . . 0.628 0.895 1.636 (0.172) (0.346)
------- ------- ------- ------- -------
Total from investment operations. . . . . . . . . . . . . 0.925 1.035 2.135 (0.010) (0.350)
Less distributions:
Dividends from net investment income. . . . . . . . . . . (0.185) (0.225) (0.475) (0.050) none
Distribution from net realized gain on security
transactions . . . . . . . . . . . . . . . . . . . . . . (0.470) (0.140) none none none
------- ------- ------- ------- -------
Total distributions. . . . . . . . . . . . . . . . . . . . (0.655) (0.365) (0.475) (0.050) none
Net asset value, end of period . . . . . . . . . . . . . . $12.190 $11.920 $11.250 $9.590 $9.650
======= ======== ======= ======= ======
Total return(3). . . . . . . . . . . . . . . . . . . . . . 8.17% 9.23% 23.08% (0.15%) (3.50%)
Ratios/supplemental data:
Net assets, end of period (000 omitted) . . . . . . . . . $62,251 $53,736 $31,673 $4,604 $723
Ratio of expenses to average net assets . . . . . . . . . 2.07% 1.56% 1.25% 1.25% 2
Ratio of expenses to average net assets prior to expense
limitatio . . . . . . . . . . . . . . . . . . . . . . . . 2.07% 1.82% 2.16% 5.67% 2
Ratio of net investment income to average net assets . . . 2.57% 1.22% 3.91% 2.44% 2
Ratio of net investment income to average net assets
prior to expense limitation . . . . . . . . . . . . . . . 2.57% 0.96% 3.00% (2.00%) 2
Portfolio turnover . . . . . . . . . . . . . . . . . . . . 21% 27% 24% 12% 2
</TABLE>
- ------------------
(1) Date of initial public offering; ratios and total return have been
annualized.
(2) The ratios of expenses and net investment income to average net assets and
portfolio turnover have been omitted as management believes that such ratios
for this relatively short period are not meaningful.
(3) Does not include maximum sales charge of 4.75% nor the 1% limited contingent
deferred sales charge that would apply in the event of certain redemptions
within 12 months of purchase.
<PAGE>
Notes to Financial Statements (Continued)
7. Financial Highlights (Continued)
<TABLE>
<CAPTION>
International International International
Equity Series Equity Series Equity Series
B Class C Class Institutional Class
------------------ --------- -----------------------------------------
Year
Ended 9/6/94(1) 11/29/95(2) Year Ended 11/9/92(1)
------- to to ------------------------------ to
11/30/95 11/30/94 11/30/95 11/30/95 11/30/94 11/30/93 11/30/92
<S> <C> <C> <C> <C> <C> <C> <C>
Net assets value, beginning of period .............. $ 11.900 $12.860 $12.240 $11.970 $11.290 $9.590 $9.520
-------- ------- ------- ------- ------- ------ ------
Income from investment operations:
Net investment income .............................. 0.278 0.036 none 0.323 0.166 0.594 0.021
Net realized and unrealized gain
(loss) from security transactions 0.567 (0.966) (0.050) 0.637 0.899 1.581 0.049
-------- ------- ------- ------- ------- ------ ------
Total from investment operations ................... 0.845 (0.930) (0.050) 0.960 1.065 2.175 0.070
Less distributions;
Dividends from net investment income ............... (0.145) (0.030) none (0.220) (0.245) (0.475) none
Distribution from net realized
gain on security transactions ...................... (0.470) none none (0.470) (0.140) none none
Total distributions ................................ (0.615) (0.030) none (0.690) (0.385) (0.475) none
Net asset value, end of period ..................... $12.130 $11.900 $12.190 $12.240 $11.970 $11.290 $9.590
======== ======= ======= ======= ======= ======= ======
Total return(3)..................................... 7.46% (7.24%) 4 8.46% 9.47% 23.52% (0.15%)
Ratios/supplemental data:
Net assets, end of period (000 omitted) ........... $3,471 $ 624 $5 $11,660 $7 $3,959 $1,120
Ratio of expenses to average net assets ........... 2.77% 2.26% 1.77% 1.26% 0.95% 0.95%
Ratio of expenses to average
net assets prior to expense limitation ............ 2.77% 2.52% 4 1.77% 1.52% 1.86% --
Ratio of net investment income
to average net assets ............................ 1.87% 0.52% 4 2.87% 1.52% 4.21% 2.74%
Ratio of net investment income to average
net assets prior to expense limitation ........... 1.87% 0.26% 4 2.87% 1.26% 3.30% --
Portfolio turnover ................................. 21% 27% 4 21% 27% 24% 12%
</TABLE>
- ----------
(1) Date of initial public offering; ratios have been annualized and total
return has not been annualized.
(2) Date of initial public offering.
(3) Does not include contingent deferred sales charge which varies from 1% - 4%
depending upon the holding period for International Equity Series B Class.
(4) The ratios of expenses and net investment income to average net assets,
portfolio turnover and total return have been omitted as management believes
that such ratios and total return for this relatively short period are not
meaningful.
<PAGE>
Notes to Financial Statements (Continued)
7. Financial Highlights (Continued)
<TABLE>
<CAPTION>
Global Global Global Global Assets Global Global Global Global Bond
Assets Assets Assets Series Bond Bond Bond Series
Series Series Series Institutional Series Series Series Institutional
A Class B Class C Class Class A Class B Class C Class Class
------- ------- ------- ----- ------- ------- ------- -----
12/27/94(1) 12/27/94(1) 11/29/95(2) 12/27/94(1) 12/27/94(1) 12/27/94(1) 11/29/95(2) 12/27/94(1)
to to to to to to to to
11/30/95 11/30/95 11/30/95 11/30/95 11/30/95 11/30/95 11/30/95 11/30/95
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ............... $10.000 $10.000 $11.940 $10.000 $10.000 $10.000 $11.330 $10.000
------- ------- ------- ------- ------- ------- ------- -------
Income from investment operations:
Net investment income ............. 0.301 0.212 none 0.473 0.659 0.565 none 0.782
Net realized and unrealized gain
(loss) from security
transactions ...................... 1.839 1.848 (0.050) 1.697 1.171 1.205 (0.036) 1.088
------- ------- ------- ------- ------- ------- ------- -------
Total from investment
operations ....................... 2.140 2.060 (0.050) 2.170 1.830 1.770 (0.036) 1.870
Less distributions:
Dividends from net investment
income ........................... (0.240) (0.180) none (0.240) (0.600) (0.540) (0.054) (0.600)
Distribution from net realized gain
on security transactions ......... none none none none none none none none
------- ------- ------- ------- ------- ------- ------- -------
Total distributions ............... (0.240) (0.180) none (0.240) (0.600) (0.540) (0.054) (0.600)
Net asset value, end of period ..... $11.900 $11.880 $11.890 $11.930 $11.230 $11.230 $11.240 $11.270
======= ======= ======= ======= ======= ======= ======= =======
Total return(3) ................... 21.48% 20.73% 4 21.88% 18.79% 18.23% 4 19.21%
------- ------- ------- ------- ------- ------- ------- -------
Ratios/supplemental data:
Net assets, end of period
(000 omitted) ................... $ 3,122 $ 613 $5 $2,191 $ 889 $ 115 $ 5 $ 897
Ratio of expenses to average
net assets ....................... 1.25% 1.95% 4 0.95% 1.25% 1.95% 4 0.95%
Ratio of expenses to average
net assets prior to expense
limitation ....................... 7.55% 8.25% 4 7.25% 12.34% 13.04% 4 12.04%
Ratio of net investment income
to average net assets ............ 4.75% 4.05% 4 5.05% 7.70% 7.00% 4 8.00%
Ratio of net investment income
to average net assets prior
to expense limitation ............ (1.55%) (2.25%) 4 (1.25%) (3.39%) (4.09%) 4 (3.09%)
Portfolio Turnover ............... 57% 57% 4 57% 98% 98% 4 98%
</TABLE>
- ----------
(1) Date of initial public offering; ratios have been annualized and total
return has not been annualized.
(2) Date of initial public offering.
(3) Does not include maximum sales charge of 4.75% nor the 1% limited contingent
deferred sales charge that would apply in the event of certain redemptions
within 12 months of purchase for A Class and does not include contingent
deferred sales charge which varies from 1%-4% depending upon the holding
period for B Class.
(4) The ratios of expenses and net investment income to average net assets,
portfolio turnover and total return have been omitted as management believes
that such ratios and total return for this relatively short period are not
meaningful.
<PAGE>
Delaware Group Global & International Funds, Inc.
Report of Independent Auditors
To the Shareholders and Board of Directors
Delaware Group Global & International Fund, Inc.
We have audited the accompanying statements of net assets and statements of
assets and liabilities of the International Equity Series, Global Assets Series
and Global Bond Series of Delaware Group Global & International Fund, Inc. (the
"Fund") as of November 30, 1995, and the related statements of operations for
the year then ended of the International Equity Series and for the period from
the date of initial public offering (December 27, 1994) to November 30, 1995, of
the Global Assets Series and Global Bond Series, the statements of changes in
net assets for each of the two years then ended of the International Equity
Series and for the period from the date of initial public offering (December 27,
1994) to November 30, 1995, of the Global Assets Series and Global Bond Series,
and the financial highlights for each period from the date of initial public
offering of the respective Series through November 30, 1995. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments owned as of
November 30, 1995, by correspondence with the custodi an and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
International Equity Series, Global Assets Series and Global Bond Series of
Delaware Group Global & International Fund, Inc. at November 30, 1995, the
results of operations for the year then ended of the International Equity Series
and for the period from the date of initial public offering (December 27, 1994)
to November 30, 1995, of the Global Assets Series and Global Bond Series, and
the changes in net assets for each of the two years then ended of the
International Equity Series and for the period from the date of initial public
offering (December 27, 1994) to November 30, 1995, of the Global Assets Series
and Global Bond Series, in conformity with generally accepted accounting
principles.
Ernst & Young LLP
Philadelphia, PA
January 12, 1996
<PAGE>
A Report on Global & International Funds, Inc.'s Annual Meeting
At an annual meeting of shareholders held on March 29, 1995, the following
matters were submitted for shareholder vote: the election of directors, the
approval of a new investment management agreement and the ratification of the
selection of Ernst & Young LLP as independent auditors of the Fund. The new
investment management agreement was submitted for shareholder approval in
connection with the Merger because the Investment Company Act of 1940 requires
shareholders to vote on a new investment management agreement whenever there is
a change in control of an investment manager.
The name of each director elected at the meeting along with the final vote
tabulation with respect to each nominee and each matter were as follows:
<TABLE>
<CAPTION>
Number of Votes**
----------------------------------------------------------
For Against/Withheld Abstentions
<S> <C> <C> <C>
Election of Directors*:
Wayne A. Stork. . . . . . . . . . . . . . . . . . . . . . . . 3,317,543 74,157 --
Walter P. Babich. . . . . . . . . . . . . . . . . . . . . . . 3,317,543 74,157 --
Anthony D. Knerr. . . . . . . . . . . . . . . . . . . . . . . 3,317,543 74,157 --
Ann R. Leven. . . . . . . . . . . . . . . . . . . . . . . . . 3,317,543 74,157 --
W. Thacher Longstreth. . . . . . . . . . . . . . . . . . . . 3,316,106 75,594 --
Charles E. Peck . . . . . . . . . . . . . . . . . . . . . . . 3,317,543 74,157 --
Approval of the New Investment Management Agreement:
International Equity Series . . . . . . . . . . . . . . . . . 3,035,920 67,293 113,528
Global Assets Series. . . . . . . . . . . . . . . . . . . . . 131,803 -- --
Global Bond Series. . . . . . . . . . . . . . . . . . . . . . 80,174 -- --
Approval of the New Sub-Advisory Agreement+ . . . . . . . . . . 131,803 -- --
Selection of Ernst & Young LLP as Independent Auditors* . . . . 3,102,805 23,155 265,740
</TABLE>
* Voted upon by all shareholders of the Company.
+ Voted upon only by shareholders of the Global Assets Series.
** Please note that the results of this meeting were not audited by Ernst &
Young LLP.
