JUNE 10, 1996
Dear
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Shareholder:
- ----------------------------------------------------------------------------
Since November, many overseas equity markets have performed well as interest
rates have declined around the globe. International bond markets, meanwhile,
have generally provided higher returns than fixed-income investments in the
U.S.
Fund results for the six months ended May 31, 1996, shown below, were
competitive with similar mutual funds. International Equity Fund's performance
at net asset value was superior to both its unmanaged benchmark and the average
of its peers.
Our portfolio managers rely on a consistent, income-oriented approach to
evaluate stocks and bonds across a wide array of markets. During the fiscal
half, this was especially helpful in countries such as the United Kingdom and
Australia. Even though these stock markets generally under-performed other
established foreign markets, British and Australian stocks held by International
Equity Fund and Global Assets Fund generally did well.
Strong job growth and rising prices for commodities such as oil and corn in
the U.S. have led to concern about the future direction of overall consumer
prices. This specter of inflation has haunted the U.S. bond market since
February, leading to higher interest rates and more volatility in the U.S. stock
market than in 1995.
Beyond our shores, however, inflation is not a dominant issue. In Europe,
governments are seeking to stimulate economic growth by cutting interest rates
and privatizing state-run companies. The Japanese, meanwhile, continue to
grapple with banking problems that are similar to those that led to the failure
of many U.S. savings & loans in the 1980s.
Historically, there has been little direct correlation between the
performance of U.S. markets and those overseas. For U.S. investors, this
provides an opportunity because an investment program that combines domestic and
foreign securities may be less volatile than either type of investment alone.
However, international diversification can not eliminate market risk. The
value of currencies fluctuate, and the world has diverse political systems,
accounting standards and securities laws. The Funds' portfolio managers take
these additional risk factors into account when deciding
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Total Return
SIX-MONTHS 12 MONTHS
ENDED MAY 31, 1996
----------------------
International Equity A Class +11.84% +15.43%
Lipper International Equity Fund Average (344 funds) +10.48% +14.64%
Morgan Stanley Europe Australia Far East (EAFE) Index +8.28% +11.01%
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Global Bond Fund A Class +2.70% +12.46%
Lipper General World Income Fund Average (165 funds) +2.85% +7.54%
Salomon Brothers World Government Bond Index -1.22% +0.17%
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Global Assets A Class +7.46% +16.73%
Lipper Global Flexible Portfolio Average (73 funds) +8.20% +15.45%
Morgan Stanley World Index +9.91% +18.36%
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Results assume reinvestment of dividends and capital gains and is based on
net asset value. For performance information for all classes, see pages 8 and
9. The Morgan Stanley World Index includes U.S. market performance. All
returns stated in U.S. dollars.
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<PAGE>
when to purchase and sell a particular stock or bond in any market.
Investing overseas is a long-term commitment, and investors should take a
"long view" of world progress as we enter the 21st Century. Consider that the
United Nations estimates that in less than 10 years -- for the first time in
human history -- more than half the world's population will live in cities
rather than rural areas.
Such change offers substantial economic potential for mutual fund investors
with vision and patience. As more established and emerging countries around the
world offer an ever wider variety of capital appreciation and income
opportunities, Delaware will be there.
Sincerely,
/s/ Wayne A. Stork
- -------------------
Wayne A. Stork
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
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OUR NEW EMERGING MARKETS FUND
We are pleased to announce that Delaware Group's new Emerging Markets Fund
began operating June 10, 1996. The Fund seeks long-term capital appreciation by
investing in stocks and convertible securities in any of 40 emerging countries
on five continents.
As one of Delaware Group's Global and International Funds, Emerging Markets
Fund is managed by Clive Gillmore and Robert Akester, senior portfolio managers
at Delaware International Advisers, Ltd. in London. Prior to joining Delaware
earlier this year, Mr. Akester was a director at Hill Samuel Investment
Advisers, Ltd. of London. He has 25 years of overseas investment experience.
As have been Delaware International's practice, we use a "value" approach
to investing in emerging markets. That is, the Fund portfolio managers evaluate
equity prices based on the value of a company's earnings, cash flow and
dividends, adjusted for currency valuations, local inflation, political risks
and a company's growth prospects. Generally, the Fund will seek growth at a
discount.
There are risks to investing in emerging market countries that are greater
than investing in established overseas markets. For example, political and
economic freedom is new and unstable in some countries, as are securities laws.
These markets may be suitable for a portion of assets you dedicate for overseas
investing, but these markets are not places where you should put all your
investment dollars. As with any equity mutual fund, return and share value of
the Emerging Markets Fund fluctuate so that shares, when redeemed may be worth
more or less than their original cost.
Consult your financial adviser for more information. He or she can provide
you with an Emerging Markets Fund prospectus, which sets forth the Fund's risks,
expected charges and expenses, investment objectives and operating policies.
Carefully review it before investing.
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2
<PAGE>
Portfolio
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Managers' Review
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INTERNATIONAL EQUITY FUND
INVESTMENT STRATEGY
Delaware Group's International Equity Fund invests for long-term growth
using a "value" style. We seek to maximize total return from non-U.S. stocks in
established markets. The Fund looks for companies whose stocks we believe offer
superior long-term capital appreciation and income potential after taking into
account the potential effects of a country's currency fluctuations, inflation
and local economic and political situation.
STOCK SELECTION RATHER THAN
COUNTRY ALLOCATION BOOSTED PERFORMANCE
Returns from any portfolio of international stocks are influenced by three
primary factors -- specific trends and circumstances in a particular country, a
fund manager's choice of stocks and the relationship of the local currency to
the investor's home currency, in our case the U.S. dollar. During the six months
ended May 31, the Fund benefited from prudent stock selection and favorable
currency exposure.
Several of our holdings in the United Kingdom and Australia did well even
though equity markets in these countries did not perform as well as markets
elsewhere. Together, stocks in these two countries comprised more than one-third
of the Fund's net assets as of May 31.
Your Fund provided strong results even though the unmanaged FT-SE
(Financial Times-Stock Exchange) 100 Index in the United Kingdom provided a
total return of +4.64% from November to May, substantially less than the Morgan
Stanley Europe Australia Far East (EAFE) Index.
Around the world, we generally favored telecommunications, banking and
industrial companies that met our value-oriented investment guidelines.
Approximately, two-thirds of the portfolio was invested in selected countries in
Western Europe that we believed offered superior values for investors. The
Belgian market provided particularly strong returns for the Fund, and our stock
selections outperformed this market. We added to our holdings in France and
Spain, where we believe government reform and interest rates cuts could spur
economic growth.
One market that did well during the first half was Japan, a situation we
believe is temporary. Your Fund's relatively modest holdings in Japan as of May
31 (14% of net assets compared to 39.7% of the Morgan Stanley EAFE Index)
reflects our belief that the Japanese market is overvalued.
Our Fund's stock selection criteria led us to many large diversified
companies with businesses in more than one region of the world. In fact, some of
the Fund's largest holdings as of May 31 had
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International Equity Fund's Country Allocation vs.
Morgan Stanley Europe Australia Far East Index
(May 31, 1996)
International
Equity Fund Morgan Stanley EAFE Index
United Kingdom 28% 16.6%
Japan 13% 39.7%
Australia/New Zealand 12% 3.1%
Hong Kong/Other Pacific 9% 7 %
Spain 7% 1.9%
France 7% 6.6%
Other Western Europe 16% 25.1%
Canada 1.7% 0 %
- ------------------------------------------------------------------------------
3
<PAGE>
substantial U.S. operations. NATIONAL AUSTRALIA BANK, your Fund's second largest
holding (3.3% of net assets), owns Michigan National Bank, a large lender in the
Midwest. Other examples include BRITISH AIRWAYS (2.8% of net assets), which has
relationships with two major U.S. airlines, and CSR LIMITED (3.4%) owner of
Rinker Materials, a supplier of building products in Florida.
In some established European and Pacific Rim markets during the past six
months, your Fund attempted to minimize its exposure to foreign currency
fluctuations by hedging approximately one-fourth of the portfolio back into U.S.
dollars. This helped protect the value of our investments despite the rise in
the value of the U.S. dollar during 1996. In addition to this, your Fund's
concentration of securities denominated in British pounds and Australian dollars
contributed to the Fund's positive performance.
OUTLOOK
For the coming months, the Fund expects to maintain a higher concentration
of stocks in selected Western European and Pacific Rim countries than the Morgan
Stanley EAFE Index. We expect to emphasize markets we consider undervalued such
as the United Kingdom, France, Spain, the Netherlands, Australia and New
Zealand. We expect to underweight Japan. In our opinion, the Japanese government
will have to raise taxes to bail out a troubled banking industry. Interest rates
also appear poised to rise in the wake of reports that Japan's economy has
recently been growing at the fastest pace since 1973.
In the early 1990s in the U.S. many companies "downsized" to become more
competitive and increase returns for shareholders. A similar process is underway
in several countries in Continental Europe. Central banks in several European
countries meanwhile, are making it easier for businesses to expand by reducing
interest rates. We believe these two trends bode well for international
companies.
GLOBAL BOND FUND
INVESTMENT STRATEGY
Global Bond Fund relies on income potential as a key measure of value when
selecting bonds around the world. Our research focuses on long-term factors such
as inflation trends. We look at trends that can be analyzed with reasonable
certainty and which we believe will have a fundamental effect on long-term
returns.
The Funds' portfolio managers place great importance on quality and select
only those bonds rated "A" or better by Standard & Poor's. Generally, the Fund's
holdings will have an average maturity in the five to 10-year range, the range
we believe offers attractive income potential relative to the risk to principal
from fluctuating interest rates.
INTERNATIONAL BONDS OUTPERFORMED U.S. BONDS
During the past six months, income again became the dominant component of
total return for fixed-income securities around the world. Indeed, in the U.S.
market, income helped offset a loss of bond principal value as long-term
interest rates rose more than 100 basis points (1%) to more than 7%.
Global Bond Fund reduced its exposure to US bonds during the fall of 1995
after benefiting from the strongest price rally in the U.S. market since 1986.
This positioning, coupled with positive returns from our holdings in selected
European bonds, helped your Fund mitigate the effect of rising U.S. interest
rates and outperform the unmanaged Salomon Brothers World Government Bond Index
for the six months ended May 31.
As of this writing, investors in the U.S. bond market were concerned that
strong job growth this past spring will prompt the Federal Reserve Board to
raise interest rates to combat inflation in the coming months. We expect the
U.S. government securities market will remain volatile for the balance of 1996,
as bond traders react to often conflicting economic signals as well as the
rhetoric of election year politics.
4
<PAGE>
Since November, the U.S. dollar has risen in value against many currencies,
notably the Japanese yen. This had a negative effect on investment opportunities
in some countries. Your Fund's performance benefited from not having any
Japanese bonds during the first half of fiscal 1996, and we expect to continue
to avoid this market for the remainder of the year.
OUTLOOK
Lower bond prices in some markets provided an opportunity to uncover what
we believe are good values. In the coming months, we expect to put somewhat more
emphasis on investments denominated in so-called "dollar block" currencies --
that is Australia and New Zealand -- and, if conditions improve, the U.S.
market.
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PORTFOLIO HIGHLIGHTS
(MAY 31, 1996)
YIELD 5.66%*
REGION OF HIGHEST CONCENTRATION
WESTERN EUROPE 56% of net assets
AVERAGE EFFECTIVE DURATION 4.6 years
AVERAGE EFFECTIVE MATURITY 6.0 years
AVERAGE QUALITY AAA
* For Class A Shares, measured according to Securities and Exchange
Commission guidelines, SEC Yield was 5.25% for Class B and C shares
as of May 31.
- -------------------------------------------------------------------------------
A country's politics can affect the returns of any government bond
investment. Historically, the U.S. market has been considered less risky for
U.S. investors because of the lack of currency risk as well as Washington's
guarantee to honor its obligations. However, given the interest rate
uncertainties the U.S. faces in the months ahead, we believe better bond values
can generally be found abroad at the present time, even after factoring in
possible currency fluctuations.
GLOBAL ASSETS FUND
INVESTMENT STRATEGY
Since November, Global Assets Fund has provided a strong total return that
resulted from the Fund's ability to diversify among four asset classes in both
the U.S. and foreign markets. More than half the Fund's net assets were invested
abroad.
Using the same income-oriented approach as International Equity Fund and
Global Bond Fund, we compare stocks to bonds within a country as well as across
countries with a consistent yardstick. And, of course, we take inflation into
account when we evaluate both U.S. and foreign stocks and bonds. From this we
strive to evaluate which countries and which asset classes offer the most
attractive risk/reward profile.
- ------------------------------------------------------------------------------
Asset Allocation
Based on net assets May 31, 1996
U.S. Cash 14%
Foreign Stocks 33%
US Stock 22%
Foreign Bonds 22%
US High-Yield Bonds 9%
- ------------------------------------------------------------------------------
5
<PAGE>
* INTERNATIONAL STOCKS
Following the same strategy as the International Equity Fund (see page 3),
Global Assets had a high concentration of stocks in Europe, particularly in the
United Kingdom. Although this market underperformed other world markets, the
Fund's stock selections did exceptionally well. The Fund has been adding to
holdings in Spain and France and reducing its stake in Belgian stocks, a market
that has done well and where selected stocks appear to be close to fully valued.
* U.S. STOCKS
We focus on stocks that have strong potential to increase dividends, and in
recent months have been emphasizing consumer growth companies in industries such
as tobacco, pharmaceuticals and drug retailing. Some of our selections have
enjoyed substantial price appreciation since November while others have faced
government regulatory hurdles that we believe are temporary.
Generally, the stocks of smaller and mid-size U.S. companies outperformed
the stocks of large companies during the first half of 1996, partly because the
dollar has appreciated in value against major currencies. This could negatively
affect the earnings of U.S.-based multinational businesses because American
goods may be more expensive for foreigners to buy.
Your Fund's focus on consumer growth companies reflects the fact that since
1970, such stocks have increased dividends to a greater degree and generally
provided greater capital appreciation potential than the stocks of companies
whose profits are tied to the cyclical fortunes of the U.S. economy, according
to data from Smith Barney.
* GLOBAL BONDS
The Fund's holdings include high quality foreign government and corporate
bonds managed in the same style as Global Bond Fund.
We have substantial holdings of New Zealand bonds, a country where we
believe inflation is likely to remain low and which offers one of the best
long-term values within the "dollar block" countries -- that is, those non-U.S.
countries such as New Zealand, Canada and Australia that also denominate their
currency in dollars.
In Europe, we believe the bond markets providing the best value are those
in Sweden, Italy, Spain and Denmark, and we have emphasized these markets in our
portfolio. Overall, we will remain focused on bonds in established markets,
although we expect to continue to avoid Japanese bonds, a market we believe is
overvalued.
* HIGH-YIELD U.S. BONDS
High-yield bonds have outperformed other segments of the U.S. bond market
since November, and contributed significantly to your Fund's investment income
during the period ended May 31.
We have focused exclusively on the highest quality tier (bonds rated BB)
within the high-yield market. While companies that issue bonds with this rating
generally have a stronger ability to meet interest payments and repay principal
than those whose bonds have lower ratings, such bonds are also more sensitive to
changes in interest rates than other high-yield bonds.
Historically, the income generated by high-yield bonds has more than
compensated investors for the additional risks. We expect this pattern to
continue for the remainder of 1996.
OUTLOOK
We modestly reduced Global Assets' total concentration in the U.S. stock
and bond markets from 31% of net assets as of November to 30% of net assets as
of May 31. While capital appreciation may occur in the coming months, we believe
that the amount of short-term growth potential of U.S. stocks and bonds is not
as
6
<PAGE>
robust as it was 18 months ago, when the Fund began operations.
In the coming months, we expect to allocate up to 15 percent of the Fund's
net assets to stocks in emerging markets, as permitted in the Fund's prospectus,
with an initial emphasis on issues in Latin America and Eastern Europe. We
believe this will provide the Fund with an extra measure of diversity as well as
additional income and capital appreciation opportunities.
Within Global Assets Fund, we will utilize our income-oriented investment
discipline to evaluate stocks in emerging countries just as we do in established
markets. To manage the additional risks associated with developing countries,
the Fund will give greater weight to factors such as a company's cash flow,
balance sheet strength and the amount of dividends, if any, compared to a
company's earnings (the dividend payout ratio).
Although 18 months of operation is far too short a time, to judge a mutal
fund, we continue to be pleased with Global Assets Fund's results, and we
believe the combination of these diverse asset classes can make the Fund an
attractive choice for investors who want to participate in growth and income
opportunities around the world.
/s/ Clive A. Gillmore
- -----------------------------------
Clive A. Gillmore
DELAWARE INTERNATIONAL ADVISERS LTD.
INTERNATIONAL EQUITY FUND
GLOBAL ASSETS FUND, ASSET ALLOCATION
AND INTERNATIONAL EQUITIES
/s/ Ian G. Sims
- ------------------------------------
Ian G. Sims
DELAWARE INTERNATIONAL ADVISERS LTD.
GLOBAL BOND FUND
GLOBAL ASSETS FUND, GLOBAL BONDS
/s/ George H. Burwell
- ------------------------------------
George H. Burwell
DELAWARE MANAGEMENT COMPANY, INC.
GLOBAL ASSETS FUND, U.S. STOCKS
/s/ Paul A. Matlack
- ------------------------------------
Paul A. Matlack
DELAWARE MANAGEMENT COMPANY, INC.
GLOBAL BOND FUND, U.S. HIGH YIELD BONDS
JUNE 10, 1996
7
<PAGE>
Performance
- ------------------------------------------------------------------------------
Summary
- ------------------------------------------------------------------------------
International Equity Fund will mark its fifth anniversary on October 31,
1996, and as you can see in the chart on the next page, the Fund has kept
pace with the average of its peers over its lifetime period (with dividends
and capital gains reinvested before factoring in the effect of sales
charges). For the 18 month period since Global Bond and Global Assets Fund
have been operating, each Fund outperformed the average of comparable
mutual funds (based on net asset value with dividends and capital gains
reinvested).
Average Annual Total Return
THROUGH MAY 31, 1996
INTERNATIONAL EQUITY FUND
LIFETIME ONE YEAR
Class A (Est. 1991) +10.29% +15.43%
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Class B (Est. 1994)
Excluding Sales Charge +6.25% +14.65%
Including Sales Charge +4.03% +10.65%
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Class C* (Est. 1995)
Excluding Sales Charge +10.98% -
Including Sales Charge +9.98% -
GLOBAL BOND FUND
LIFETIME ONE YEAR
Class A (Est. 1994) +14.95% +12.46%
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Class B (Est. 1994)
Excluding Sales Charge +14.24% +11.72%
Including Sales Charge +11.58% +7.72%
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Class C* (Est. 1995)
Excluding Sales Charge +2.01% -
Including Sales Charge +1.07% -
GLOBAL ASSETS FUND
LIFETIME ONE YEAR
Class A (Est. 1994) +20.53% +16.73%
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Class B (Est. 1994)
Excluding Sales Charge +19.66% +15.85%
Including Sales Charge +17.05% +11.85%
- ------------------------------------------------------------------------------
Class C* (Est. 1995)
Excluding Sales Charge +6.72% -
Including Sales Charge +5.72% -
*Aggregate return through May 31, 1996
RETURN AND SHARE VALUE FOR EACH FUND FLUCTUATE SO THAT SHARES, WHEN REDEEMED,
MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PAST PERFORMANCE IS NOT A
GUARANTEE OF FUTURE RESULTS. RETURNS REFLECT REINVESTMENT OF DISTRIBUTIONS
AND APPLICABLE SALES CHARGES AS NOTED ON PAGE 9. B AND C CLASS RESULTS
EXCLUDING SALES CHARGES ASSUME THE INVESTMENT WAS NOT REDEEMED.
8
<PAGE>
YOUR FUNDS VS. COMPARABLE FUNDS
BELOW WE COMPARE HOW A $10,000 INVESTMENT IN CLASS A SHARES OF EACH FUND
WOULD HAVE GROWN IN VALUE RELATIVE TO SIMILAR MUTUAL FUNDS FROM THE TIME EACH
FUND BEGAN OPERATING TO MAY 31, 1996, (WITH DIVIDENDS AND CAPITAL GAINS
REINVESTED). SALES CHARGES ARE NOT INCLUDED.
- ------------------------------------------------------------------------------
International Equity Fund
vs. Lipper International
Fund Average
70 Funds
Inception Date: October 31, 1991
International Equity Fund $15,671
Lipper International Fund Average $15,827
==============================================================================
Global Bond Fund
vs. Lipper World Income
Fund Average
138 Funds
Inception Date: December 27, 1994
Global Bond Fund $12,200
Lipper World Income Fund Average $11,835
==============================================================================
Global Assets Fund
vs. Lipper Global Flexible
Portifolio Average
55 Funds
Inception Date: December 27, 1994
Global Assets Fund $13,054
Lipper Global Flexible Portfolio $12,446
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The following voluntary expense limitations were in effect: 0.95% of net
assets for Global Bond Fund and Global Assets Fund and 1.55% of net assets
for International Equity Fund. These limits do not include 12b-1 fees.
CLASS A returns on previous page reflect the effect of the current 4.75%
maximum front-end sales charge and 12b-1 fees. Sales charges have varied over
time for International Equity Fund and Global Assets Fund.
CLASS B shares do not carry a front-end sales charge, but are subject to a 1%
annual distribution and service fee. They are subject to a deferred sales
charge if redeemed before the end of the sixth year. Class B was initially
offered on September 6, 1994. Class B's six-month total returns for
International Equity, Global Bond and Global Assets Fund were respectively,
+11.44%, +2.28% and +7.02% with dividends and capital gains reinvested (based
on net asset value).
CLASS C shares were initially offered on November 29, 1995. Performance for
this short period may not be indicative of future performance. Class C Shares
have an annual 1% service and distribution fee and a 1% contingent deferred
sales charge if redeemed within 12 months of purchase. Class C's six month
total returns for International Equity, Global Bond and Global Assets Fund
were respectively, +11.43%, +2.33% and +7.17% with dividends and capital
gains reinvested (based on net asset value).
INSTITUTIONAL CLASS shares for each Fund, which are available without sales
or asset-based distribution charges only to certain eligible institutional
accounts, provided the following returns for the listed period ending May 31,
1996:
Lifetime One Year Six-Months
International Equity Fund* +10.54% +15.74% +12.06%
Global Bond Fund** +15.34% +12.89% +2.84%
Global Assets Fund** +20.91% +17.14% +7.59%
*Initially offered on November 9, 1992. Performance prior to this date is
based on Class A performance, adjusted to eliminate the sale charges, but
not the asset-based distribution charge. **Initially offered on
December 27, 1994.
9
<PAGE>
Financial
- -----------------------------------------------------------------------------
Statements
- -----------------------------------------------------------------------------
DELAWARE GROUP GLOBAL &
INTERNATIONAL FUNDS, INC. -
INTERNATIONAL EQUITY SERIES
STATEMENT OF NET ASSETS
MAY 31, 1996
(UNAUDITED)
Market
Number Value
of Shares (U.S.$)
COMMON STOCK - 93.38%
Australia - 8.39%
CSR Limited . . . . . . . . . . . . . 987,874 $3,604,746
National Australia Bank . . . . . . . 376,121 3,528,762
Pacific Dunlop. . . . . . . . . . . . 864,192 1,869,978
----------
9,003,486
----------
Belgium - 3.85%
Electrabel NPV. . . . . . . . . . . 12,290 2,637,758
G.I.B. Holdings . . . . . . . . . . 33,800 1,493,863
----------
4,131,621
----------
Canada - 1.63%
BC Telecom. . . . . . . . . . . . . . 91,250 1,750,456
----------
1,750,456
----------
France - 8.46%
Alcatel Alsthom . . . . . . . . . . 11,367 1,034,262
Campagnie de Saint Gobain . . . . . 26,025 3,318,169
Elf Aquitaine . . . . . . . . . . . 44,376 3,207,862
Societe Television Francaise. . . . 13,000 1,514,344
----------
9,074,637
----------
Germany - 6.15%
Bayer . . . . . . . . . . . . . . . 8,009 2,683,125
Continental . . . . . . . . . . . . 84,500 1,454,989
Siemens . . . . . . . . . . . . . . 43,900 2,460,860
----------
6,598,974
----------
Hong Kong - 2.74%
Hong Kong Electric . . . . . . . . 407,000 1,304,504
Wharf Holdings Limited . . . . . . 424,000 1,635,722
----------
2,940,226
----------
Indonesia - 2.31%
PT Bank Dagang Nasional . . . . . . 1,137,500 1,146,034
PT Semen Gresik . . . . . . . . . . 400,000 1,324,759
----------
2,470,793
----------
Japan - 13.84%
Amano . . . . . . . . . . . . . . . 165,000 2,259,019
Canon Electronic . . . . . . . . . 141,000 2,765,217
Top 10 holdings representing 29.62% of net assets, are in boldface.
<PAGE>
Market
Number Value
of Shares (U.S.$)
COMMON STOCK (Continued)
Japan (Continued)
Eisai . . . . . . . . . . . . . . . 140,700 $ 2,577,114
Kinki Coca-Cola Bottling. . . . . . 143,000 2,156,244
Matsushita Electric . . . . . . . . 160,000 2,753,006
Senko . . . . . . . . . . . . . . . 362,000 2,344,126
----------
14,854,726
----------
Malaysia - 2.28%
Oriental Holdings Berhad. . . . . . 260,000 1,560,937
Sime Darby Berhad . . . . . . . . . 330,000 884,931
----------
2,445,868
----------
Netherlands - 6.12%
Elsevier-CVA . . . . . . . . . . . 148,000 2,291,155
Koninklijke Van Ommeren . . . . . . 36,000 1,335,436
Royal Dutch Petroleum . . . . . . . 9,820 1,486,366
Unilever NV-CVA . . . . . . . . . . 10,730 1,456,743
----------
6,569,700
----------
New Zealand - 3.32%
Carter Holt Harvey Limited . . . . 477,300 1,040,993
Telecom Corp. of New Zealand . . . 619,920 2,518,767
----------
3,559,760
----------
Philippines - 1.01%
Philippine Long Distance Telephone
Company ADR . . . . . . . . . . . 18,900 1,086,750
----------
1,086,750
----------
Singapore - 1.09%
Jardine Matheson Holdings Limited . 151,487 1,166,450
----------
1,166,450
----------
Spain - 5.03%
Banco Central Hispanoamer SA . . . 86,452 1,733,399
Iberdrola SA. . . . . . . . . . . . 108,100 1,094,206
Telefonica de Espana. . . . . . . . 143,500 2,571,146
----------
5,398,751
----------
United Kingdom - 27.16%
Bass plc. . . . . . . . . . . . . . 245,000 3,091,920
Blue Circle Industries plc . . . . 617,000 3,365,107
Boots plc. . . . . . . . . . . . . 135,500 1,278,579
British Airways plc. . . . . . . . 344,000 2,987,481
British Gas plc. . . . . . . . . . 635,000 1,874,303
Cable & Wireless plc. . . . . . . . 435,000 2,992,563
GKN plc. . . . . . . . . . . . . . 182,900 2,808,396
Great Universal Stores. . . . . . . 218,200 2,297,287
RTZ . . . . . . . . . . . . . . . . 184,700 2,877,531
Taylor Woodrow plc. . . . . . . . . 1,130,825 2,785,887
Unigate . . . . . . . . . . . . . . 446,000 2,784,909
----------
29,143,963
----------
Total Common Stock
(cost $88,595,854). . . . . . . . . 100,196,161
-----------
10
<PAGE>
Statement of Net Assets (Continued)
Market
Principal Value
Amount (U.S.$)
REPURCHASE AGREEMENTS - 4.70%
With Chase Manhattan 5.30% 6/3/96
(dated 5/31/96, collateralized by
$5,021,000 U.S. Treasury Notes 6.875%
due 2/28/97 market value
$5,148,047) . . . . . . . . . . . . . . . . $5,043,000 $ 5,043,000
-----------
Total Repurchase Agreements
(cost $5,043,000) . . . . . . . . . . . . . 5,043,000
-----------
TOTAL MARKET VALUE OF SECURITIES - 98.08%
(cost $93,638,854 ). . . . . . . . . . . . . 105,239,161
RECEIVABLES AND OTHER ASSETS
NET OF LIABILITIES - 1.92% . . . . . . . . . 2,063,000
-----------
NET ASSETS APPLICABLE TO 8,101,314 SHARES
($.01 PAR VALUE OUTSTANDING) - 100.00% . . . 107,302,161
===========
NET ASSET VALUE - INTERNATIONAL EQUITY
SERIES A CLASS ($75,796,166 / 5,725,340 shares) $13.24
======
NET ASSET VALUE - INTERNATIONAL EQUITY
SERIES B CLASS ($6,372,409 / 483,124 shares). $13.19
======
NET ASSET VALUE - INTERNATIONAL EQUITY
SERIES C CLASS ($555,737 / 42,184 shares) . . $13.17
======
NET ASSET VALUE - INTERNATIONAL EQUITY SERIES
INSTITUTIONAL CLASS
($24,577,849 / 1,850,666 shares). . . . . . . $13.28
======
Market
Value
(U.S.$)
COMPONENTS OF NET ASSETS AT MAY 31, 1996:
Common stock, $.01 par value, 500,000,000
shares authorized to the Fund with 50,000,000
shares allocated to International Equity Series A Class,
25,000,000 shares allocated to International
Equity Series B Class, 25,000,000 shares allocated
to International Equity Series C Class, and
50,000,000 shares allocated to
International Equity Series
Institutional Class. . . . . . . . . . . . . . . $ 94,396,370
Accumulated undistributed:
Net investment income* . . . . . . . . . . . . . 2,073,125
Net realized gain on investments . . . . . . . . (370,933)
Net unrealized appreciation of investments
and foreign currencies . . . . . . . . . . . . 11,203,599
------------
Total net assets . . . . . . . . . . . . . . . . $107,302,161
------------
*Accumulated net investment income (loss) includes net realized gain/(loss)
on foreign currencies. Net realized gains on foreign currencies are
distributed as net investment income in accordance with provisions of the
Internal Revenue Code.
See accompanying notes
11
<PAGE>
DELAWARE GROUP GLOBAL &
INTERNATIONAL FUNDS, INC. -
GLOBAL ASSETS SERIES
STATEMENT OF NET ASSETS
MAY 31, 1996
(UNAUDITED)
Market
Number Value
of Shares (U.S.$)
COMMON STOCK - 55.32%
Australia - 3.28%
CSR Limited. . . . . . . . . . . . . 43,150 $157,454
National Australia Bank. . . . . . . 16,073 150,797
Pacific Dunlop. . . . . . . . . . . 12,175 26,345
Southcorp Holdings. . . . . . . . . 32,000 82,274
--------
416,870
--------
Belgium - 1.55%
Electrabel NPV. . . . . . . . . . . 760 163,116
G.I.B. Holdings . . . . . . . . . . 750 33,148
--------
196,264
--------
Canada - 0.41%
BC Telecom. . . . . . . . . . . . . 2,715 52,082
--------
52,082
--------
France - 2.69%
Campagnie de Saint Gobain . . . . . 1,104 140,759
Elf Aquitaine . . . . . . . . . . . 1,646 118,986
Societe Television Francaise . . . 700 81,541
--------
341,286
--------
Germany - 2.33%
Bayer . . . . . . . . . . . . . . . 440 147,406
RWE . . . . . . . . . . . . . . . . 1,850 72,794
Siemens . . . . . . . . . . . . . . 1,350 75,676
--------
295,876
--------
Hong Kong - 1.03%
Hong Kong Electric. . . . . . . . . 21,500 68,911
Wharf Holdings Limited. . . . . . . 16,000 61,725
--------
130,636
--------
Indonesia - 1.01%
PT Bank Dagang Nasional . . . . . . 62,000 62,465
PT Semen Gresik . . . . . . . . . . 20,000 66,238
--------
128,703
--------
Japan - 4.68%
Canon Electronics . . . . . . . . . 5,000 98,057
Chiyoda Fire and Marine . . . . . . 12,000 74,709
Eisai . . . . . . . . . . . . . . . 4,200 76,929
Hitachi Limited . . . . . . . . . . 13,000 120,259
Matsushita Electric . . . . . . . . 9,000 154,857
Yokohama Reito . . . . . . . . . . 5,000 69,380
--------
594,191
--------
<PAGE>
Market
Number Value
of Shares (U.S.$)
COMMON STOCK (Continued)
Malaysia - 0.18%
Sime Darby Berhad . . . . . . . . . 8,300 $ 22,257
--------
22,257
--------
Netherlands - 2.52%
Elsevier-CVA. . . . . . . . . . . . 9,150 141,649
Koninklijke Van Ommeren . . . . . . 2,515 93,295
Royal Dutch Petroleum . . . . . . . 560 84,762
--------
319,706
--------
New Zealand - 1.62%
Carter Holt Harvey Limited . . . . 32,800 71,537
Telecom Corp. of New Zealand . . . 33,100 134,487
--------
206,024
--------
Philippines - 0.41%
Philippine Long Distance Telephone
Company ADR . . . . . . . . . . . 900 51,750
--------
51,750
--------
Singapore - 0.71%
Jardine Matheson Holdings Limited . 11,627 89,528
--------
89,528
--------
Spain - 1.31%
Banco Central Hispanoamer SA . . . 1,535 30,777
Telefonica de Espana. . . . . . . . 7,575 135,724
--------
166,501
--------
United Kingdom - 9.66%
Bass plc. . . . . . . . . . . . . . 10,300 129,987
Blue Circle Industries plc. . . . . 20,900 113,988
Boots plc. . . . . . . . . . . . . 13,100 123,612
British Airways plc. . . . . . . . 12,900 112,031
British Gas plc. . . . . . . . . . 8,000 23,613
Cable & Wireless plc. . . . . . . . 15,000 103,192
Dalgety plc. . . . . . . . . . . . 23,200 134,441
GKN plc. . . . . . . . . . . . . . 8,800 135,122
Powergen plc. . . . . . . . . . . . 15,000 119,461
RTZ . . . . . . . . . . . . . . . . 8,650 134,763
Taylor Woodrow plc. . . . . . . . . 38,600 95,095
---------
1,225,305
---------
United States - 21.93%
ALLTEL. . . . . . . . . . . . . . . 1,000 31,500
American Greetings Class A . . . . 1,400 37,888
American International Group . . . 600 55,275
Bank of New York. . . . . . . . . . 600 31,125
Banta . . . . . . . . . . . . . . . 2,400 58,200
CMS Energy. . . . . . . . . . . . . 1,800 51,750
Campbell Soup . . . . . . . . . . . 1,100 70,950
Chubb . . . . . . . . . . . . . . . 2,100 97,913
12
<PAGE>
Statement of Net Assets (Continued)
Market
Number Value
of Shares (U.S.$)
COMMON STOCK (Continued)
United States (Continued)
Cincinnati Financial. . . . . . . . 930 $ 55,393
Colonial Properties Trust . . . . . 1,000 23,500
Columbia/HCA Healthcare . . . . . . 1,900 102,363
ConAgra . . . . . . . . . . . . . . 2,200 93,775
DQE . . . . . . . . . . . . . . . . 1,900 51,063
DTE Energy . . . . . . . . . . . . 700 20,475
Danaher . . . . . . . . . . . . . . 1,600 66,400
Developers Diversified Realty . . . 1,000 31,250
Exxon . . . . . . . . . . . . . . . 600 50,850
Federal Home Loan . . . . . . . . . 600 49,575
Flowers Industries. . . . . . . . . 2,500 39,375
Foster Wheeler. . . . . . . . . . . 1,100 48,950
GenCorp. . . . . . . . . . . . . . 2,400 36,300
General Electric. . . . . . . . . . 400 33,100
Illinova. . . . . . . . . . . . . . 2,400 63,000
Imperial Oil Limited. . . . . . . . 600 26,100
Kerr-McGee. . . . . . . . . . . . . 1,400 82,250
Lockheed Martin . . . . . . . . . . 800 67,100
Loctite . . . . . . . . . . . . . . 1,200 59,850
MBNA. . . . . . . . . . . . . . . . 1,200 36,750
May Department Stores . . . . . . . 500 23,688
Nationwide Health Properties . . . 1,600 34,800
Pharmacia & Upjohn. . . . . . . . . 1,300 53,138
Philip Morris . . . . . . . . . . . 1,400 139,125
Procter & Gamble. . . . . . . . . . 800 70,300
RJR Nabisco Holdings. . . . . . . . 1,400 46,375
Reynolds & Reynolds Class A . . . . 1,100 54,863
Rite Aid. . . . . . . . . . . . . . 2,700 79,313
Schering-Plough . . . . . . . . . . 1,100 64,488
Service International . . . . . . . 1,100 61,463
SmithKline Beecham plc ADR . . . . 1,600 81,600
Southern National . . . . . . . . . 1,900 55,575
State Street Boston . . . . . . . . 1,500 78,188
Sun Communities . . . . . . . . . . 1,500 40,125
Teleflex. . . . . . . . . . . . . . 1,000 46,125
Tompkins plc ADR. . . . . . . . . . 3,600 58,050
Tyco International. . . . . . . . . 2,900 114,550
U.S. HealthCare . . . . . . . . . . 1,100 59,606
United Healthcare . . . . . . . . . 1,500 82,313
Warner-Lambert. . . . . . . . . . . 1,200 67,200
---------
2,782,905
---------
Total Common Stock
(cost $6,544,461) . . . . . . . . 7,019,884
---------
<PAGE>
Market
Principal Value
Amount* (U.S.$)
BONDS - 30.85%
Canada - 3.01%
Autobahn Schnell 8.50% 03/03/03 . . C$50,000 $ 37,997
Export-Import Bank of Japan
7.75% 10/08/02 . . . . . . . . . . 50,000 36,903
GMAC Canada 6.75% 12/14/01 . . . . . 150,000 105,375
Government of Canada
10.25% 03/15/14 . . . . . . . . . . 100,000 87,990
KFW International Finance
6.50% 12/28/01. . . . . . . . . . . 50,000 35,330
Kingdom of Norway
8.375% 01/27/03 . . . . . . . . . . 50,000 37,746
Ontario Hydro 10.00% 03/19/01 . . . 50,000 40,595
-------
381,936
-------
Denmark - 3.05%
Kingdom of Denmark
8.00% 11/15/01 . . . . . . . . . . Dk200,000 36,137
Kingdom of Denmark
8.00% 03/15/06. . . . . . . . . . . 2,000,000 350,828
-------
386,965
-------
Germany - 3.36%
Bundesrepblik Deutscheland
5.75% 08/22/00 . . . . . . . . . . Dem50,000 33,596
Bundesrepblik Deutscheland
6.50% 07/15/03. . . . . . . . . . . 100,000 67,029
Bundesrepblik Deutscheland
8.375% 05/21/01 . . . . . . . . . . 440,000 325,636
-------
426,261
-------
Italy - 1.20%
Eurofima 7.70% 02/02/04 . . . . . . Itl180,000,000 108,288
Italian Government 12.00% 01/01/03 . 60,000,000 43,951
-------
152,239
-------
New Zealand - 3.99%
Government of New Zealand
6.50% 02/15/00. . . . . . . . . . . NZ$260,000 162,575
Government of New Zealand
8.00% 02/15/01. . . . . . . . . . . 180,000 117,468
Government of New Zealand
8.00% 04/15/04. . . . . . . . . . . 350,000 226,342
-------
506,385
-------
Spain - 4.06%
Spanish Government
8.20% 02/28/09 . . . . . . . . . . Sp10,000,000 71,902
Spanish Government
10.30% 06/15/02 . . . . . . . . . . 10,000,000 83,189
13
<PAGE>
Statement of Net Assets (Continued)
Market
Principal Value
Amount* (U.S.$)
BONDS (Continued)
Spain (Continued)
Spanish Government
10.50% 10/30/03 . . . . . . . . . . Sp20,000,000 $167,370
Spanish Government
12.25% 03/25/00 . . . . . . . . . . 22,000,000 192,433
-------
514,894
-------
Sweden - 0.81%
Swedish Government
9.00% 04/20/09 . . . . . . . . . . Sk200,000 30,359
Swedish Government
13.00% 06/15/01 . . . . . . . . . . 400,000 72,215
-------
102,574
-------
United Kingdom - 2.95%
Abbey National Treasury
8.00% 04/02/03 . . . . . . . . . . Gbp60,000 91,920
Barclays Bank plc 6.50% 02/16/04 . . 20,000 27,678
Depfa Finance 7.125% 11/11/03 . . . 30,000 43,490
Glaxo Wellcome plc 8.75% 12/01/05 . 70,000 108,934
Ontario Province 6.875% 09/15/00 . . 25,000 37,477
UK Conversion S47 Stock Guilt
9.00% 03/03/00. . . . . . . . . . . 40,000 65,115
-------
374,614
-------
United States - 8.42%
ADT Operations 9.25% 08/01/03 . . . $25,000 26,000
AIM Management 9.00% 11/15/03 . . . 25,000 25,563
AK Steel 10.75% 04/01/04 . . . . . 25,000 27,375
Abbey Healthcare 9.50% 11/01/02 . . 25,000 26,000
Adelphia Communications
12.50% 05/15/02 . . . . . . . . . . 25,000 25,688
Alvery Systems 11.375% 01/31/03 . . 25,000 26,125
American Standard 10.875% 05/15/99 . 25,000 26,688
Aztar 11.00% 10/01/02 . . . . . . . 25,000 25,750
BE Aerospace 9.875% 02/01/06 . . . 25,000 25,000
Bell & Howell 9.25% 07/15/00 . . . 25,000 25,563
Buckeye Cellulose 8.50% 12/15/05 . . 25,000 24,375
Century Communications
9.75% 02/15/02. . . . . . . . . . . 25,000 25,313
**Clark-Schwebel 10.50% 04/15/06 . . 25,000 26,000
Dade International 11.125% 05/01/06. 25,000 25,875
Exide 10.00% 04/15/05. . . . . . . . 25,000 24,688
<PAGE>
Market
Principal Value
Amount* (U.S.$)
BONDS (Continued)
United States (Continued)
Exide 10.75% 12/15/02. . . . . . . . $25,000 $ 25,500
Ferrellgas LP/Finance
10.00% 08/01/01 . . . . . . . . . . 15,000 15,600
First Nationwide Holdings
9.125% 01/15/03 . . . . . . . . . . 25,000 24,250
Four M 12.00% 06/01/06 . . . . . . . 25,000 25,625
G-I Holdings 0.00% 10/01/98 . . . . 19,000 15,343
G-I Holdings 10.00% 02/15/06 . . . . 16,000 16,140
Gaylord Container 11.50% 05/15/01. . 25,000 25,875
**Graphic Controls 12.00% 09/15/05 . 25,000 26,813
HEALTHSOUTH Rehabilitation
9.50% 04/01/01. . . . . . . . . . . 25,000 26,000
Jones Intercable 9.625% 03/15/02 . . 25,000 25,625
K-III Communication 8.50% 02/01/06 . 25,000 23,500
K-III Communications
10.625% 05/01/02. . . . . . . . . . 25,000 26,344
Louis Dreyfus Natural Gas
9.25% 06/15/04. . . . . . . . . . . 25,000 25,969
MGM Grand Hotel 12.00% 05/01/02 . . 25,000 27,500
Mark IV Industries 8.75% 04/01/03 . 25,000 25,125
Metrocall 10.375% 10/01/07 . . . . . 25,000 24,375
NL Industries 11.75% 10/15/03 . . . 25,000 25,969
Owens-Illinois 11.00% 12/01/03 . . . 25,000 27,219
Penn Traffic 10.65% 11/01/04 . . . . 25,000 24,375
Primark 8.75% 10/15/00 . . . . . . . 25,000 25,031
Ralphs Grocery 10.45% 06/15/04 . . . 25,000 24,188
Rogers Cable Systems
9.625% 08/01/02 . . . . . . . . . . 25,000 24,938
SPX 11.75% 06/01/02. . . . . . . . . 25,000 27,063
Teekay Shipping 8.32% 02/01/08 . . . 20,000 18,800
Tenet Healthcare 10.125% 03/01/05. . 25,000 26,688
Viacom International
10.25% 09/15/01. . . . . . . . . . 25,000 27,063
Viridian 9.75% 04/01/03 . . . . . . 25,000 26,125
Westinghouse Air Brakes
9.375% 06/15/05. . . . . . . . . . 25,000 25,125
---------
1,068,171
---------
Total Bonds
(cost $3,897,067) . . . . . . . . 3,914,039
---------
14
<PAGE>
Statement of Net Assets (Continued)
Market
Principal Value
Amount* (U.S.$)
REPURCHASE AGREEMENTS - 18.12%
With Chase Manhattan 5.30% 6/3/96
(dated 5/31/96, collateralized by
$2,289,000 U.S. Treasury Notes 6.875%
due 2/28/97 market
value $2,346,889). . . . . . . . . . . . . . . . .$2,299,000 $ 2,299,000
------------
Total Repurchase Agreements
(cost $2,299,000). . . . . . . . . . . . . . . . . 2,299,000
------------
TOTAL MARKET VALUE OF SECURITIES - 104.29%
(cost $12,740,528) . . . . . . . . . . . . . . . . 13,232,923
LIABILITIES NET OF RECEIVABLES
AND OTHER ASSETS - (4.29%) . . . . . . . . . . . . (543,839)
------------
NET ASSETS APPLICABLE TO 1,035,197 SHARES
($.01 PAR VALUE OUTSTANDING) - 100.00% . . . . . . 12,689,084
============
NET ASSET VALUE - GLOBAL ASSETS SERIES A CLASS
($7,429,335 / 606,111 shares). . . . . . . . . . . $12.26
======
NET ASSET VALUE - GLOBAL ASSETS SERIES B CLASS
($2,697,617 / 220,156 shares). . . . . . . . . . . $12.25
======
NET ASSET VALUE - GLOBAL ASSETS SERIES C CLASS
($510,268 / 41,773 shares) . . . . . . . . . . . . $12.22
======
NET ASSET VALUE - GLOBAL ASSETS
SERIES INSTITUTIONAL CLASS
($2,051,864 / 167,157 shares). . . . . . . . . . . $12.28
======
Market
Value
(U.S.$)
COMPONENTS OF NET ASSETS AT MAY 31, 1996:
Common stock, $.01 par value, 500,000,000
shares authorized to the Fund with 50,000,000
shares allocated to Global Assets Series A Class,
25,000,000 shares allocated to Global Assets
Series B Class, 25,000,000 shares allocated to
Global Assets Series C Class, and 50,000,000
shares allocated to Global Assets Series
Institutional Class . . . . . . . . . . . . . . . . $12,014,919
Accumulated undistributed:
Net investment income***. . . . . . . . . . . . . . 94,446
Net realized gain on investments. . . . . . . . . . 86,334
Net unrealized appreciation of
investments and foreign currencies . . . . . . . . 493,385
-----------
Total net assets . . . . . . . . . . . . . . . . . . $12,689,084
-----------
- ------------
*Principal amount is stated in the currency
in which each bond is denominated.
C$ - Canadian Dollars Sp - Spanish Peseta
Dk - Danish Krone Sk - Swedish Krona
Dem - German Deutsche Mark Gbp - British Pounds
Itl - Italian Lira $ - U.S. Dollars
NZ$ - New Zealand Dollars
**This security is exempt from registration under Rule 144A of the
Securities Act of 1933. This security may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At May 31,
1996, these securities amounted to 0.42% of net assets.
***Accumulated net investment income (loss) includes net realized gain/(loss)
on foreign currencies. Net realized gains on foreign currencies are
distributed as net investment income in accordance with provisions of the
Internal Revenue Code.
See accompanying notes
15
<PAGE>
DELAWARE GROUP GLOBAL &
INTERNATIONAL FUNDS, INC. -
GLOBAL BOND SERIES
STATEMENT OF NET ASSETS
MAY 31, 1996
(UNAUDITED)
Market
Principal Value
Amount* (U.S.$)
BONDS - 96.03%
Austria - 3.04%
Republic of Austria
5.625% 12/14/00 . . . . . . . . . Ast1,000,000 $ 94,669
--------
94,669
--------
Belgium - 2.41%
Kingdom of Belgium
10.00% 08/02/00 . . . . . . . . . Bef2,000,000 75,078
--------
75,078
--------
Canada - 10.11%
Autobahn Schnell 8.50% 03/03/03 C$60,000 45,596
Export-Import Bank of Japan
7.75% 10/08/02. . . . . . . . . . 60,000 44,283
Government of Canada
10.25% 03/15/14 . . . . . . . . . 100,000 87,990
KFW International Finance
6.50% 12/28/01. . . . . . . . . . 60,000 42,396
Kingdom of Norway
8.375% 01/27/03 . . . . . . . . . 60,000 45,295
Ontario Hydro 10.00% 03/19/01. . . 60,000 48,714
--------
314,274
--------
Denmark - 7.99%
Kingdom of Denmark
8.00% 11/15/01 . . . . . . . . . Dk300,000 54,205
Kingdom of Denmark
8.00% 05/15/03. . . . . . . . . . 300,000 53,819
Kingdom of Denmark
8.00% 03/15/06. . . . . . . . . . 800,000 140,331
--------
248,355
--------
Germany - 4.11%
Bundesrepblik Deutscheland
5.75% 08/22/00 . . . . . . . . . Dem80,000 53,754
Bundesrepblik Deutscheland
8.375% 05/21/01 . . . . . . . . . 100,000 74,008
--------
127,762
--------
Italy - 4.67%
European Investment Bank
12.75% 02/15/00 . . . . . . . . Itl200,000,000 145,192
--------
145,192
--------
<PAGE>
Market
Principal Value
Amount* (U.S.$)
BONDS (Continued)
Netherlands - 2.15%
Netherlands Government
9.00% 05/15/00 . . . . . . . . . . Nlg100,000 $ 66,918
--------
66,918
--------
New Zealand - 11.36%
Government of New Zealand
6.50% 02/15/00 . . . . . . . . . . NZ$200,000 125,058
Government of New Zealand
8.00% 02/15/01 . . . . . . . . . . 300,000 195,781
Government of New Zealand
8.00% 04/15/04 . . . . . . . . . . 50,000 32,335
--------
353,174
--------
Spain - 17.07%
Spanish Government
8.20% 02/28/09 . . . . . . . . . . Sp14,000,000 100,663
Spanish Government
10.30% 06/15/02. . . . . . . . . . 11,000,000 91,508
Spanish Government
10.50% 10/30/03. . . . . . . . . . 30,000,000 251,055
Spanish Government
12.25% 03/25/00. . . . . . . . . . 10,000,000 87,469
--------
530,695
--------
Sweden - 3.48%
Swedish Government
13.00% 06/15/01 . . . . . . . . . Sk600,000 108,322
--------
108,322
--------
United Kingdom - 11.03%
Abbey National Treasury
8.00% 04/02/03 . . . . . . . . . . Gbp40,000 61,280
DEPFA Finance 7.125% 11/11/03 . . . 30,000 43,490
Glaxo Wellcome plc 8.75% 12/01/05 . 40,000 62,248
Ontario Province 6.875% 09/15/00. . 25,000 37,477
UK Conversion S47 Stock Guilt
9.00% 03/03/00 . . . . . . . . . . 85,000 138,369
--------
342,864
--------
United States - 18.61%
U.S. Treasury Bond
13.375% 08/15/01 . . . . . . . . . $220,000 284,207
U.S. Treasury Note 6.125% 07/31/00. 300,000 294,642
--------
578,849
--------
Total Bonds
(cost $2,996,469). . . . . . . . . 2,986,152
---------
16
<PAGE>
Statement of Net Assets (Continued)
Market
Principal Value
Amount* (U.S.$)
REPURCHASE AGREEMENTS - 4.95%
With Chase Manhattan 5.30% 6/3/96
(dated 5/31/96, collateralized by
$153,000 U.S. Treasury Notes 6.875% due
2/28/97 market value $157,208). . . . . . . . . $154,000 $ 154,000
----------
Total Repurchase Agreements
(cost $154,000). . . . . . . . . . . . . . . . . 154,000
----------
TOTAL MARKET VALUE OF SECURITIES - 100.98%
(cost $3,150,469) . . . . . . . . . . . . . . . 3,140,152
LIABILITIES NET OF RECEIVABLES
AND OTHER ASSETS - (0.98%). . . . . . . . . . . (30,416)
----------
NET ASSETS APPLICABLE TO 291,771 SHARES
($.01 PAR VALUE OUTSTANDING) - 100.00% . . . . $3,109,736
==========
NET ASSET VALUE - GLOBAL BOND SERIES A CLASS
($1,759,242 / 165,151 shares . . . . . . . . . $10.65
======
NET ASSET VALUE - GLOBAL BOND SERIES B CLASS
($316,328 / 29,662 shares). . . . . . . . . . . $10.66
======
NET ASSET VALUE - GLOBAL BOND SERIES C CLASS
($64,585 / 6,083 shares). . . . . . . . . . . . $10.62
======
NET ASSET VALUE - GLOBAL BOND
SERIES INSTITUTIONAL CLASS
($969,581 / 90,875 shares). . . . . . . . . . . $10.67
======
Market
Value
(U.S.$)
COMPONENTS OF NET ASSETS AT MAY 31, 1996:
Common stock, $.01 par value, 500,000,000
shares authorized to the Fund with 50,000,000
shares allocated to Global Bond Series A Class,
25,000,000 shares allocated to Global Bond
Series B Class, 25,000,000 shares allocated to
Global Bond Series C Class, and 50,000,000
shares allocated to Global Bond Series
Institutional Class. . . . . . . . . . . . . . . $3,080,835
Accumulated undistributed:
Net investment (loss)**. . . . . . . . . . . . . (4,198)
Net realized gain on investments . . . . . . . . 46,389
Net unrealized depreciation of investments
and foreign currencies. . . . . . . . . . . . . (13,290)
----------
Total net assets. . . . . . . . . . . . . . . . . $3,109,736
----------
- -----------------
*Principal amount is stated in the currency
in which each bond is denominated.
Ast - Austrian Schillings Nlg - Netherland Guilders
Bef - Belgian Francs NZ$ - New Zealand Dollars
C$ - Canadian Dollars Sp - Spanish Peseta
Dk - Danish Krone Sk - Swedish Krona
Dem - German Deutsche Mark Gbp - British Pounds
Itl - Italian Lira $ - U.S. Dollars
**Accumulated net investment income (loss) includes net realized gain/(loss)
on foreign currencies. Net realized gains on foreign currencies are
distributed as net investment income in accordance with provisions of the
Internal Revenue Code.
See accompanying notes
17
<PAGE>
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.-
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1996
(UNAUDITED)
International Global Global
Equity Assets Bond
Series Series Series
------------- ------ ------
ASSETS:
Investments at market. . . . . . . $105,239,161 $13,232,923 $3,140,152
Cash and foreign currencies. . . . 2,245,809 235,315 8,418
Dividends and interest receivable. 467,082 120,980 99,578
Subscriptions receivable . . . . . 312,018 92,304 514
Other assets . . . . . . . . . . . 2,310 52,035 52,456
------------ ----------- ----------
Total assets . . . . . . . . . . 108,266,380 13,733,557 3,301,118
------------ ----------- ----------
LIABILITIES:
Liquidations payable . . . . . . . 280,744 3,000 4,997
Payable for securities purchased . 542,418 907,040 103,191
Other accounts payable and accrued
expenses . . . . . . . . . . . . 141,057 134,433 83,194
------------ ----------- ----------
Total liabilities . . . . . . . . 964,219 1,044,473 191,382
------------ ----------- ----------
TOTAL NET ASSETS . . . . . . . . . $107,302,161 $12,689,084 $3,109,736
============ =========== ==========
See accompanying notes
18
<PAGE>
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC. -
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1996
(UNAUDITED)
International Global Global
Equity Assets Bond
Series Series Series
------------ -------- --------
INVESTMENT INCOME:
Interest . . . . . . . . . . . . . $246,109 $166,229 $110,156
Dividends. . . . . . . . . . . . . 1,413,538 76,453 -
--------- -------- --------
1,659,647 242,682 110,156
--------- -------- --------
EXPENSES:
Management fees. . . . . . . . . . 353,118 32,853 8,462
Dividend disbursing and transfer
agent fees and expenses . . . . . 256,270 23,249 5,928
Distribution expense . . . . . . . 132,654 15,614 3,328
Registration fees. . . . . . . . . 37,300 21,305 15,977
Custodian fees . . . . . . . . . . 54,175 11,590 4,918
Reports and statements to
shareholders 40,088 1,269 3,634
Professional fees. . . . . . . . . 17,610 2,475 8,496
Salaries . . . . . . . . . . . . . 12,245 1,334 383
Taxes (other than taxes on income) 8,600 2,694 2,473
Directors' fees. . . . . . . . . . 1,264 1,264 1,264
Amortization of organization
expenses . . . . . . . . . . . . 1,773 34,785 34,805
Other. . . . . . . . . . . . . . . 12,330 3,385 3,008
--------- -------- --------
927,427 151,817 92,676
Less expenses absorbed by Delaware
International Advisers Ltd. . . . 65,298 93,353 77,104
--------- -------- --------
862,129 58,464 15,572
--------- -------- --------
NET INVESTMENT INCOME BEFORE
FOREIGN TAX WITHHELD . . . . . . 797,518 184,218 94,584
FOREIGN TAX WITHHELD . . . . . . 160,656 5,480 326
--------- -------- --------
NET INVESTMENT INCOME . . . . . . 636,862 178,738 94,258
--------- -------- --------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS AND FOREIGN
CURRENCIES:
Net realized gain (loss) on:
Investment transactions . . . . . (367,232) 87,965 46,398
Foreign currencies . . . . . . . 1,901,651 1,681 2,030
--------- -------- --------
Net realized gain. . . . . . . . 1,534,419 89,646 48,428
Net unrealized appreciation
(depreciation) of investments
and foreign currencies. . . . . . 7,776,128 319,529 (82,599)
--------- -------- --------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCIES . . . . . 9,310,547 409,175 (34,171)
--------- -------- --------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS . . . . $9,947,409 $587,913 $60,087
========== ======== ========
See accompanying notes
19
<PAGE>
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC. -
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED MAY 31, 1996
(UNAUDITED)
International Global Global
Equity Assets Bond
Series Series Series
------------- -------- --------
OPERATIONS:
Net investment income. . . . . . . . $ 636,862 $ 178,738 $ 94,258
Net realized gain on investments
and foreign currencies. . . . . . . 1,534,419 89,646 48,428
Net unrealized appreciation
(depreciation) of investments
and foreign currencies 7,776,128 319,529 (82,599)
----------- --------- --------
Net increase in net assets
resulting from operations . . . . . 9,947,409 587,913 60,087
----------- --------- --------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
A Class . . . . . . . . . . . . . . (1,145,557) (81,000) (58,368)
B Class . . . . . . . . . . . . . . (51,353) (15,394) (9,541)
C Class . . . . . . . . . . . . . . (867) (1,342) (1,368)
Institutional Clas . . . . . . . . (272,234) (48,647) (50,547)
Net realized gain from security
transactions:
A Class . . . . . . . . . . . . . . (745,105) (74,656) (29,829)
B Class . . . . . . . . . . . . . . (44,633) (16,187) (4,005)
C Class . . . . . . . . . . . . . . (178) (183) (228)
Institutional Class . . . . . . . . (141,941) (53,001) (32,515)
----------- --------- --------
(2,401,868) (290,410) (186,401)
----------- --------- --------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class . . . . . . . . . . . . . . 20,217,156 4,299,303 952,127
B Class . . . . . . . . . . . . . . 2,672,799 2,035,520 204,432
C Class . . . . . . . . . . . . . . 542,843 497,077 59,409
Institutional Class . . . . . . . . 14,547,158 315,831 180,549
Net asset value of shares issued
upon reinvestment of dividends
from net investment income and net
realized gain from security
transactions:
A Class . . . . . . . . . . . . . . 1,778,499 152,418 81,273
B Class . . . . . . . . . . . . . . 90,567 31,165 9,589
C Class . . . . . . . . . . . . . . 1,014 1,463 1,501
Institutional Class . . . . . . . . 409,409 101,648 83,061
----------- --------- --------
40,259,445 7,434,425 1,571,941
----------- --------- --------
Cost of shares repurchased:
A Class. . . . . . . . . . . . . . (14,226,479) (326,504) (104,511)
B Class. . . . . . . . . . . . . . (248,007) (32,133) (2,069)
C Class. . . . . . . . . . . . . . (7,725) (128) (97)
Institutional Class. . . . . . . . (3,407,564) (615,316) (135,059)
----------- --------- --------
(17,889,775) (974,081) (241,736)
----------- --------- --------
Increase in net assets derived
from capital share transactions 22,369,670 6,460,344 1,330,205
----------- ---------- ----------
NET INCREASE IN NET ASSETS . . . . 29,915,211 6,757,847 1,203,891
NET ASSETS:
Beginning of period. . . . . . . . 77,386,950 5,931,237 1,905,845
----------- ---------- ----------
End of period. . . . . . . . . . .$107,302,161 $12,689,084 $3,109,736
============ ============ ===========
Undistributed net investment
income (loss). . . . . . . . . . .$ 2,073,125 $ 94,446 $ (4,198)
============ ============ ===========
See accompanying notes
20
<PAGE>
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC. -
STATEMENT OF CHANGES IN NET ASSETS
Year Ended
11/30/95 12/27/94* to 11/30/95
International Global Global
Equity Series Assets Series Bond Series
------------- ------------- -----------
OPERATIONS:
Net investment income. . . . . . . . $ 1,416,220 $ 107,110 $ 89,039
Net realized gain on investments
and foreign currencies. . . . . . . 1,303,387 147,186 73,261
Net unrealized appreciation of
investments and foreign currencies. 2,648,697 173,856 69,309
----------- --------- --------
Net increase in net assets resulting
from operations . . . . . . . . . . 5,368,304 428,152 231,609
----------- --------- --------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
A Class . . . . . . . . . . . . . . (877,255) (11,935) (28,103)
B Class . . . . . . . . . . . . . . (15,484) (1,244) (2,188)
C Class . . . . . . . . . . . . . . - - -
Institutional Class . . . . . . . . (160,418) (38,311) (46,103)
Net realized gain from security
transactions:
A Class . . . . . . . . . . . . . . (2,121,203) - -
B Class . . . . . . . . . . . . . . (29,909) - -
C Class . . . . . . . . . . . . . . - - -
Institutional Class . . . . . . . . (303,387) - -
----------- --------- --------
(3,507,656) (51,490) (76,394)
----------- --------- --------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class . . . . . . . . . . . . . . 31,339,753 3,199,375 824,105
B Class . . . . . . . . . . . . . . 2,885,729 613,034 110,282
C Class . . . . . . . . . . . . . . 5,029 5,032 5,028
Institutional Class . . . . . . . . 7,333,145 1,975,200 810,404
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
B Class . . . . . . . . . . . . . . 42,926 1,244 647
C Class . . . . . . . . . . . . . . - - -
Institutional Class . . . . . . . . 418,400 38,311 46,103
----------- --------- --------
44,872,210 5,843,692 1,823,207
----------- --------- --------
Cost of shares repurchased:
A Class . . . . . . . . . . . . . . (27,127,040) (209,669) (50,545)
B Class . . . . . . . . . . . . . . (148,317) (8,549) -
C Class . . . . . . . . . . . . . . - - -
Institutional Class . . . . . . . . (4,043,275) (105,899) (57,032)
----------- --------- --------
(31,318,632) (324,117) (107,577)
----------- --------- --------
Increase in net assets derived
from capital share transactions . . 13,553,578 5,519,575 1,715,630
----------- --------- ---------
NET INCREASE IN NET ASSETS . . . . . 15,414,226 5,896,237 1,870,845
NET ASSETS:
Beginning of period . . . . . . . . 61,972,724 35,000 35,000
----------- --------- ---------
End of period . . . . . . . . . . . $77,386,950 $5,931,237 $1,905,845
=========== ========== ==========
Undistributed net investment income. $ 1,004,623 $ 60,410 $ 19,338
=========== ========== ==========
- --------------
* Date of initial public offering
See accompanying notes
21
<PAGE>
DELAWARE GROUP GLOBAL &
INTERNATIONAL FUNDS, INC. -
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1996
(UNAUDITED)
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 The Global Bond Series are registered as non-diversified
open-ended investment companies under the Investment Company Act of 1940.
The investment objective for each series are as follows:
International Equity Fund: To achieve long-term growth without undue risk to
principal by investing primarily in equities that provide the potential for
capital appreciation and income.
Global Assets Fund: To achieve long-term total return by investing in
securities, including U.S. stocks and bonds foreign stocks and bonds, 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.
Global Bond Fund: To provide current income consistent with the preservation
of principal by investing primarily in fixed-income securities that may also
provide the potential for capital appreciation.
1. Significant Accounting Policies
The following accounting policies are in accordance with general 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 and securities not listed on an exchange are valued at the mean of the
last quoted bid and asked prices. Securities listed on a foreign exchange are
valued at the last quoted sale price before the time when the Fund is valued.
Money market instruments having less than 60 days to maturity are valued at
amortized cost which approximates market value.
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.
<PAGE>
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 the U.S. dollar as of 3:00 pm EST. Forward foreign
currency contracts are valued at the mean between the bid and asked prices of
the contracts. Interpolated values are derived when the settlement date of
the contract is an interim date for which quotations are not available.
Other - Expenses common to all Funds within the Delaware Group of Funds are
allocated amongst the funds on the basis of average net assets. Security
transactions are recorded on the date the securities are purchased or sold
(trade date). Costs used in calculating realized gains and losses on the sale
of investment securities are those of the specific securities sold. Dividend
income is recorded on the ex-divided date and interest income is recorded on
the accrual basis. Original issue 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.
The balance of organization and registration costs at May 31, 1996, were
$1,810, $52,035 and $52,060 and amortization expense for the period ended May
31, 1996, were $1,773, $34,785 and $34,805 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, an annual fee which is calculated daily at the rate of 0.75% of
the net assets of the 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 May 31, 1996, the International Equity Series had a liability for
Investment Management fees and other expenses payable to DIAL for $57,000.
22
<PAGE>
Notes to Financial Statements (Continued)
DIAL has elected voluntarily to waive that portion, if any, of the annual
management fees payable the International Equity Series, 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 do not exceed 1.55%
for each class of The International Equity Series and 0.95% for each class of
The Global Assets and The Global Bond Series through May 31, 1996. Total
expenses absorbed by DIAL were $65,298, $93,353 and $77,104 for the
International Equity Series, The Global Assets Series and The Global Bond
Series, respectively.
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 May 31, 1996, 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 $3,234, $47,360 and
$8,333, respectively. For the six months ended May 31, 1996, the Fund paid DDLP
$26,529, $5,748 and $982 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
six months ended May 31, 1996, the amount expensed for these services were
$256,270, $23,249 and $5,928 for the International Equity Series, the Global
Assets Series, and the Global Bond Series, respectively. At May 31, 1996, The
International Equity Series had a liability for these and other expenses
payable to DSC for $19,687.
Certain officers of the Investment Manager are officers, directors and/or
employees of the Fund. These officers, directors and employees are paid no
compensation by each Series.
3. Investments
During the six months ended May 31, 1996, the Fund made purchases and sales
of investment securities other than U.S. government securities and temporary
cash investments as follows:
International Global Global
Equity Assets Bond
Series Series Series
------------- ---------- ----------
Purchases $25,413,498 $7,224,908 $1,869,946
Sales $5,747,023 $1,750,044 $650,619
Investment securities based on cost for federal income tax purposes at
May 31, 1996, are as follows:
International Global Global
Equity Assets Bond
Series Series Series
------------- ----------- ----------
Cost of Investments $ 93,638,854 $12,740,528 $3,150,469
Aggregated unrealized
appreciation 14,467,845 637,067 49,830
Aggregate unrealized
depreciation (2,867,538) (144,672) (60,147)
------------ ----------- ----------
Market value of
investments $105,239,161 $13,232,923 $3,140,152
============ =========== ==========
The realized gain (loss) for financial reporting and federal income tax
purposes for the six months ended May 31, 1996, were ($367,232), $87,965 and
$46,398 for the International Equity Series, the Global Assets Series and the
Global Bond Series, respectively.
23
<PAGE>
Notes to Financial Statements (Continued)
4. Capital Stock
Transactions in capital stock shares were as follows:
<TABLE>
<CAPTION>
International Global Assets Global Bond
Equity Series Series Series
----------------------- ------------------------ ------------------------
Six Months Year Six Months 12/27/94* Six Months 12/27/94*
Ended Ended Ended to Ended to
5/31/96 11/30/95 5/31/96 11/30/95 5/31/96 11/30/95
---------- -------- ---------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Shares sold:
A Class. . . . . . . . . . 1,580,513 2,658,163 357,857 276,141 88,153 77,795
B Class. . . . . . . . . . 208,693 242,649 168,558 52,254 18,763 10,144
C Class. . . . . . . . . . 42,281 413 41,239 423 5,504 447
Institutional Class. . . . 1,130,374 616,386 26,061 190,085 16,224 80,792
Shares issued upon
reinvestment of dividends
from net investment
income and net realized
gain from security
transactions:
A Class. . . . . . . . . . 144,274 249,089 12,890 1,006 7,545 2,460
B Class. . . . . . . . . . 7,362 3,744 2,633 107 889 59
C Class. . . . . . . . . . 80 - 122 - 140 -
Institutional Class. . . . 33,089 36,453 8,623 3,408 7,698 4,320
--------- --------- ------- ------- ------- -------
3,146,666 3,806,897 617,983 523,424 144,916 176,017
--------- --------- ------- ------- ------- -------
Shares repurchased:
A Class. . . . . . . . . .(1,107,412) (2,308,726) (27,049) (18,234) (9,732) (4,570)
B Class. . . . . . . . . . (19,168) (12,563) (2,667) (729) (193) -
C Class. . . . . . . . . . (590) - (11) - (9) -
Institutional Class. . . . (265,071) (336,513) (51,209) (9,811) (12,638) (5,521)
--------- --------- ------- ------- ------- -------
(1,392,241) (2,657,802) (80,936) (28,774) (22,572) (10,091)
--------- --------- ------- ------- ------- -------
Net increase . . . . . . . . 1,754,425 1,149,095 537,047 494,650 122,344 165,926
========= ========= ======= ======= ======= =======
</TABLE>
24
- -----------
* Date of initial public offering
<PAGE>
Notes to Financial Statements (Continued)
5. Foreign Currency Forward Contracts
The following currency forward contracts were outstanding at May 31, 1996:
<TABLE>
<CAPTION>
International Contract to In Exchange Settlement Unrealized
Equity Series Deliver For Date (Loss)
------------- ----------------------------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
134,512,500 Belgian Francs $ 4,250,000 8/30/96 $ (74,189)
7,305,750 Dutch Guilders 4,250,000 8/30/96 (68,298)
22,165,875 French Francs 4,250,000 8/30/96 (68,049)
6,540,750 Deutsche Marks 4,250,000 8/30/96 (69,901)
1,139,818,000 Japanese Yen 10,600,000 8/30/96 (90,513)
----------
$(370,950)
==========
Global Assets Contract to In Exchange Settlement Unrealized
Series Receive For Date Gain
------------- --------------------------- ----------- ---------- ----------
1,366,000 Belgian Francs $ 42,969 6/11/96 $ 563
145,335 British Pounds 219,892 6/3/96 5,294
66,274 Deutsche Marks 42,840 6/3/96 558
31,151 Singapore Dollars 22,062 6/3/96 36
147,244 Canadian Dollars 107,399 6/4/96 -0-
96,414 New Zealand Dollars 65,677 6/4/96 -0-
225,285 French Francs 43,043 6/28/96 709
-------
$ 7,160
=======
Global Bond Contract to In Exchange Settlement Unrealized
Series Receive For Date Gain/(Loss)
----------- -------------------------- ----------- ---------- -----------
13,303,925 Spanish Peseta $ 103,532 6/4/96 $ -0-
===========
Global Bond Contract to In Exchange Settlement Unrealized
Series Deliver For Date (Loss)
----------- ----------------------------- ----------- ---------- ----------
783,034 Austrian Schilling $ 73,000 8/30/96 $ (121)
2,287,820 Belgian Francs 73,000 8/30/96 (547)
111,288 Deutsche Marks 73,000 8/30/96 (502)
124,137 Dutch Guilders 73,000 8/30/96 (375)
----------
$ (1,545)
==========
</TABLE>
25
<PAGE>
Notes to Financial Statements (Continued)
6. Financial Highlights
Selected data for each share of the Series outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
International Equity Series A Class
-----------------------------------
Six Months(1) 10/31/91(2)
Ended Year Ended to
5/31/96 11/30/95 11/30/94 11/30/93 11/30/92 11/30/91
------------ -------- -------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . $12.190 $11.920 $11.250 $ 9.590 $9.650 $10.000
Income from investment operations:
Net investment income. . . . . . . . . . . . 0.439 0.297 0.140 0.499 0.162 (0.004)
Net realized and unrealized gain (loss) from
security transactions . . . . . . . . . . . 0.976 0.628 0.895 1.636 (0.172) (0.346)
------- ------- ------- ------- ------ -------
Total from investment operations . . . . . . 1.415 0.925 1.035 2.135 (0.010) (0.350)
Less distributions:
Dividends from net investment income . . . . (0.220) (0.185) (0.225) (0.475) (0.050) none
Distribution from net realized gain on
security transactions . . . . . . . . . . . (0.145) (0.470) (0.140) none none none
------- ------- ------- ------- ------ -------
Total distributions. . . . . . . . . . . . . (0.365) (0.655) (0.365) (0.475) (0.050) none
Net asset value, end of period . . . . . . . . $13.240 $12.190 $11.920 $11.250 $9.590 $ 9.650
======= ======= ======= ======= ====== =======
Total return(3). . . . . . . . . . . . . . . . 11.84% 8.17% 9.23% 23.08% (0.15%) (3.50%)
Ratios/supplemental data:
Net assets, end of period (000 omitted). . . $75,796 $62,251 $53,736 $31,673 $4,604 $ 723
Ratio of expenses to average net assets. . . 1.85% 2.07% 1.56% 1.25% 1.25% (4)
Ratio of expenses to average net assets
prior to expense limitation . . . . . . . . 1.99% 2.07% 1.82% 2.16% 5.67% (4)
Ratio of net investment income to
average net assets. . . . . . . . . . . . . 5.35% 2.57% 1.22% 3.91% 2.44% (4)
Ratio of net investment income to
average net assets prior to expense
limitation 5.21% 2.57% 0.96% 3.00% (2.00%) (4)
Portfolio turnover . . . . . . . . . . . . . 13% 21% 27% 24% 12% (4)
</TABLE>
- -------------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Date of initial public offering; ratios and total return have been
annualized.
(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.
(4) 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.
26
<PAGE>
Notes to Financial Statements (Continued)
6. Financial Highlights (Continued)
<TABLE>
<CAPTION>
International International
Equity Series Equity Series
B Class C Class
-------------------------------- ---------------------
Six Months Year 9/6/94(2) Six Months 11/29/95(3)
Ended Ended to Ended to
5/31/96(1) 11/30/95 11/30/94 5/31/96(1) 11/30/95
---------- -------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period. $12.130 $11.900 $12.860 $12.190 $12.240
Income from investment operations:
Net investment income. . . . . . . . 0.395 0.278 0.036 0.450 none
Net realized and unrealized gain
(loss) from security transactions . 0.970 0.567 (0.966) 0.915 (0.050)
------- ------- ------- ------- -------
Total from investment operations . . 1.365 0.845 (0.930) 1.365 (0.050)
Less distributions:
Dividends from net investment income (0.160) (0.145) (0.030) (0.240) none
Distributions from net realized gain
on security transactions. . . . . . (0.145) (0.470) none (0.145) none
------- ------- ------- ------- -------
Total distributions. . . . . . . . . (0.305) (0.615) (0.030) (0.385) none
Net asset value, end of period . . . $13.190 $12.130 $11.900 $13.170 $12.190
======= ======= ======= ======= =======
Total return(4) . . . . . . . . . . . 11.44% 7.46% (7.24%) 11.43% (5)
Ratios/supplemental data:
Net assets, end of period
(000 omitted) . . . . . . . . . . . $6,372 $3,471 $624 $556 $5
Ratio of expenses to average
net assets . . . . . . . . . . . . 2.55% 2.77% 2.26% 2.55% (5)
Ratio of expenses to average
net assets prior to expense
limitation . . . . . . . . . . . . 2.69% 2.77% 2.52% 2.69% (5)
Ratio of net investment income to
average net assets. . . . . . . . . 4.65% 1.87% 0.52% 4.65% (5)
Ratio of net investment income to
average net assets prior to expense
limitation . . . . . . . . . . . . 4.51% 1.87% 0.26% 4.51% (5)
Portfolio turnover . . . . . . . . . 13% 21% 27% 13% (5)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
International
Equity Series
Institutional Class
--------------------------------------------------------------
Six Months 11/9/92(2)
Ended Year Ended to
5/31/96(1) 11/30/95 11/30/94 11/30/93 11/30/92
----------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period. $12.240 $11.970 $11.290 $9.590 $9.520
Income from investment operations:
Net investment income. . . . . . . . 0.469 0.323 0.166 0.594 0.021
Net realized and unrealized gain
(loss) from security transactions . 0.976 0.637 0.899 1.581 0.049
------ ------ ------ ------ ------
Total from investment operations . . 1.445 0.960 1.065 2.175 0.070
Less distributions:
Dividends from net investment income (0.260) (0.220) (0.245) (0.475) none
Distributions from net realized gain
on security transactions. . . . . . (0.145) (0.470) (0.140) none none
------- ------- ------- ------- ------
Total distributions. . . . . . . . . (0.405) (0.690) (0.385) (0.475) none
Net asset value, end of period . . . $13.280 $12.240 $11.970 $11.290 $9.590
======= ======= ======= ======= ======
Total return(4) . . . . . . . . . . . 12.06% 8.46% 9.47% 23.52% (0.15%)
Ratios/supplemental data:
Net assets, end of period
(000 omitted) . . . . . . . . . . . $24,578 $11,660 $7,613 $3,959 $1,120
Ratio of expenses to average
net assets . . . . . . . . . . . . 1.55% 1.77% 1.26% 0.95% 0.95%
Ratio of expenses to average
net assets prior to expense
limitation . . . . . . . . . . . . 1.69% 1.77% 1.52% 1.86% -
Ratio of net investment income to
average net assets. . . . . . . . . 5.65% 2.87% 1.52% 4.21% 2.74%
Ratio of net investment income to
average net assets prior to expense
limitation . . . . . . . . . . . . 5.51% 2.87% 1.26% 3.30% -
Portfolio turnover . . . . . . . . . 13% 21% 27% 24% 12%
</TABLE>
- ------------------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Date of initial public offering; ratios have been annualized and total
return has not been annualized.
(3) Date of initial public offering.
(4) Does not include contingent deferred sales charge which varies from 1% - 4%
depending upon the holding period for International Equity Series B Class.
(5) The ratios of expenses and net income to average net assets, portfolio
turnover and total return have been omitted as management believes such
ratios and total return for this relatively short period are not meaningful.
27
<PAGE>
Notes to Financial Statements (Continued)
6. Financial Highlights (Continued)
<TABLE>
<CAPTION>
Global
Global Global Global Assets
Assets Assets Assets Series
Series Series Series Inst'l.
A Class B Class C Class Class
---------------------- ---------------------- ---------------------- ----------------------
Six Months 12/27/94(2) Six Months 12/27/94(2) Six Months 11/29/95(3) Six Months 12/27/94(2)
Ended to Ended to Ended to Ended to
5/31/96(1) 11/30/95 5/31/96(1) 11/30/95 5/31/96(1) 11/30/95 5/31/96(1) 11/30/95
---------- ----------- ---------- ----------- ---------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.900 $10.000 $11.880 $10.000 $11.890 $11.940 $11.930 $10.000
Income from investment operations:
Net investment income. . . . . . . . 0.261 0.301 0.190 0.212 0.268 none 0.277 0.473
Net realized and unrealized gain
(loss) from security transactions . 0.594 1.839 0.625 1.848 0.565 (0.050) 0.603 1.697
------- ------- ------- ------- ------- ------- ------- -------
Total from investment operations. . . 0.855 2.140 0.815 2.060 0.833 (0.050) 0.880 2.170
Less distributions:
Dividends from net investment income (0.225) (0.240) (0.175) (0.180) (0.233) none (0.260) (0.240)
Distribution from net realized gain
on security transactions. . . . . . (0.270) none (0.270) none (0.270) none (0.270) none
------- ------- ------- ------- ------- ------- ------- -------
Total distributions. . . . . . . . . (0.495) (0.240) (0.445) (0.180) (0.503) none (0.530) (0.240)
Net asset value, end of period $12.260 $11.900 $12.250 $11.880 $12.220 $11.890 $12.280 $11.930
======= ======= ======= ======= ======= ======= ======= =======
Total return(4) . . . . . . . . . . . 7.46% 21.48% 7.02% 20.73% 7.17% (5) 7.59% 21.88%
Ratios/supplemental data:
Net assets, end of period (000 omitted) $7,429 $ 3,122 $ 2,698 $613 $510 $5 $2,052 $2,191
Ratio of expenses to average net assets 1.25% 1.25% 1.95% 1.95% 1.95% (5) 0.95% 0.95%
Ratio of expenses to average net assets
prior to expense limitation . . . . 3.30% 7.55% 4.00% 8.25% 4.00% (5) 3.00% 7.25%
Ratio of net investment income to
average net assets . . . . . . . . . 3.99% 4.75% 3.29% 4.05% 3.29% (5) 4.29% 5.05%
Ratio of net investment income to average
net assets prior to expense limitation 1.94% (1.55%) 1.24% (2.25%) 1.24% (5) 2.24% (1.25%)
Portfolio turnover. . . . . . . . . . 45% 57% 45% 57% 45% (5) 45% 57%
</TABLE>
- --------------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Date of initial public offering; ratios have been annualized and total
return has not been annualized.
(3) Date of initial public offering.
(4) 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 and C Class.
(5) 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.
28
<PAGE>
Notes to Financial Statements (Continued)
6. Financial Highlights (Continued)
<TABLE>
<CAPTION>
Global
Global Global Global Bond
Bond Bond Bond Series
Series Series Series Inst'l.
A Class B Class C Class Class
--------------------- --------------------- ---------------------- ----------------------
Six Months 12/27/94(2) Six Months 12/27/94(2) Six Months 11/29/95(3) Six Months 12/27/94(2)
Ended to Ended to Ended to Ended to
5/31/96(1) 11/30/95 5/31/96(1) 11/30/95 5/31/96(1) 11/30/95 5/31/96(1) 11/30/95
---------- ---------- ----------- --------- ------------ ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.230 $10.000 $11.230 $10.000 $11.240 $11.330 $11.270 $10.000
Income from investment operations:
Net investment income. . . . . . . . 0.425 0.659 0.408 0.565 0.502 none 0.393 0.782
Net realized and unrealized gain
(loss) from security transactions . (0.130) 1.171 (0.148) 1.205 (0.247) (0.036) (0.083) 1.088
------- ------- ------- ------- ------- ------- ------- -------
Total from investment operations . . 0.295 1.830 0.260 1.770 0.255 (0.036) 0.310 1.870
Less distributions:
Dividends from net investment income (0.515) (0.600) (0.470) (0.540) (0.515) (0.054) (0.550) (0.600)
Distribution from net realized gain on
security transactions . . . . . . . (0.360) none (0.360) none (0.360) none (0.360) none
------- ------- ------- ------- ------- ------- ------- -------
Total distributions. . . . . . . . . (0.875) (0.600) (0.830) (0.540) (0.875) (0.054) (0.910) (0.600)
Net asset value, end of period $10.650 $11.230 $10.660 $11.230 $10.620 $11.240 $10.670 $11.270
======= ======= ======= ======= ======= ======= ======= =======
Total return(4). . . . . . . . . . . 2.70% 18.79% 2.28% 18.23% 2.33% (5) 2.84% 19.21%
Ratios/supplemental data:
Net assets, end of period (000 omitted) $1,759 $889 $316 $115 $65 $5 $970 $897
Ratio of expenses to average net assets 1.25% 1.25% 1.95% 1.95% 1.95% (5) 0.95% 0.95%
Ratio of expenses to average net assets
prior to expense limitation . . . . 7.20% 12.34% 7.90% 13.04% 7.90% (5) 6.90% 12.04%
Ratio of net investment income to
average net assets. . . . . . . . . 7.34% 7.70% 6.64% 7.00% 6.64% (5) 7.64% 8.00%
Ratio of net investment income to average
net assets prior to expense limitation 1.39% (3.39%) 0.69% (4.09%) 0.69% (5) 1.69% (3.09%)
Portfolio turnover . . . . . . . . . 55% 98% 55% 98% 55% (5) 55% 98%
</TABLE>
- ----------------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Date of initial public offering; ratios have been annualized and total
return has not been annualized.
(3) Date of initial public offering.
(4) 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 and C Class.
(5) 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.
29
<PAGE>
This semi-annual report is for the information of Global and International
Funds shareholders, but it may be used with prospective investors when
preceded or accompanied by a current PROSPECTUS, which sets forth details
about charges, expenses, investment objectives and operating policies of
the Fund.
Summary investment results are documented in the Fund's current STATEMENT OF
ADDITIONAL INFORMATION. The figures in this report represent past results
which are not a guarantee of future results. The return and principal value
of an investment in the Fund will fluctuate so that shares, when redeemed,
may be worth more or less than their original cost.
30
<PAGE>
Delaware Group
- -------------------
of Funds
- ------------------
FOR GLOBAL DIVERSIFICATION
Emerging Markets Fund
New Pacific Fund
International Equity Fund
World Growth Fund
Global Assets Fund
Global Bond Fund
FOR GROWTH OF CAPITAL
Trend Fund
Enterprise Fund
DelCap Fund
Value Fund
U.S. Growth Fund
FOR TOTAL RETURN
Devon Fund
Decatur Total Return Fund
Decatur Income Fund
Delaware Fund
FOR CURRENT INCOME
Delchester Fund
Corporate Income Fund
Federal Bond Fund
U.S. Government Fund
Limited-Term Government Fund
FOR TAX-FREE CURRENT INCOME
Tax-Free Pennsylvania Fund
Tax-Free USA Fund
Tax-Free Insured Fund
Tax-Free USA Intermediate Fund
MONEY MARKET FUNDS
Delaware Cash Reserve
U.S. Government Money Fund
Tax-Free Money Fund
CLOSED-END EQUITY/INCOME*
Dividend and Income Fund
Global Dividend and Income Fund
For a prospectus of any other Delaware Group fund, contact your financial
adviser or Delaware Group.
* Delaware Group Dividend and Income Fund and Delaware Group Global Dividend
and Income Fund purchases can be made through any registered broker.
<PAGE>
Be sure to consult your financial adviser when making investment decisions.
Mutual funds can be a valuable part of your financial plan; however, shares
of the Fund are not FDIC or NCUSIF insured, are not guaranteed by any bank or
any credit union, are not obligations of or deposits of any bank or any
credit union, and involve investment risk, including the possible loss of
principal. Shares of the Fund are not bank or credit union deposits.
This report must be preceded or accompanied by a current Global & International
Funds PROSPECTUS and the Delaware Group Fund Performance Update for the most
recently completed calendar quarter.
INVESTMENT MANAGER
Delaware International Advisers Ltd.
London, England
Delaware Management Company, Inc.
Philadelphia, Pennsylvania
NATIONAL DISTRIBUTOR
Delaware Distributors, L.P.
Philadelphia, Pennsylvania
SHAREHOLDER SERVICING,
DIVIDEND DISBURSING
AND TRANSFER AGENT
Delaware Service Company, Inc.
Philadelphia, Pennsylvania
1818 Market Street
Philadelphia, PA 19103-3682
Nationwide (800) 523-4640
SECURITIES DEALERS ONLY
Nationwide (800) 362-7500
FINANCIAL INSTITUTIONS REPRESENTATIVES ONLY
Nationwide (800) 659-BANK (2265)
Copy Rights Delaware Distributors, L.P.
Printed in the U.S.A. on recycled paper.
SA - 034 [5/96] PP7/96
<PAGE>
1996 SEMI-ANNUAL REPORT
- --------------------------
Delaware Group
GLOBAL
& INTERNATIONAL
FUNDS
International Equity Fund
Global Bond Fund
Global Assets Fund
- --------------------------
A Tradition of Sound Investing Since 1929
DELAWARE
GROUP
- -----------
Philadelphia . London
