<PAGE>
1995
Annual
Report
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DELAWARE GROUP
GLOBAL & INTERNATIONAL
FUNDS
INTERNATIONAL EQUITY FUND
GLOBAL BOND FUND
GLOBAL ASSETS FUND
------------
TRADITION OF SOUND PHOTO
A Tradition of Sound Investing Since 1929
DELAWARE
GROUP
=========
Philadelphia * London
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DELAWARE GROUP
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A TRADITION OF
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SOUND INVESTING
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Delaware Management Company's investment experience dates back to 1929. Our
first mutual fund was established in 1938 and today we provide a full range
of mutual fund investments, annuities and retirement plan services.
Delaware International Advisers Ltd., our London-based international
affiliate, was established in 1990. In addition to serving as lead manager
for our international and global funds, Delaware International oversees
institutional assets of some $3 billion in international investments.
Delaware Management Co. and Delaware International manage mutual
funds with the same time-tested, disciplined strategies demanded by the large
public and private pension plans, foundations and endowments that are among
our clients.
Our aggregate assets under management, domestically and
internationally, total some $28 billion. With more than 60 years of
experience, we have demonstrated our commitment to quality investment
management and service to nearly 500,000 mutual fund shareholders worldwide.
ABOUT OUR COVER
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Headquartered in Philadelphia, Pennsylvania, Delaware Group shares in the
tradition of a city built on the vision of opportunity. Amidst the city's
historic sites, symbolic of our nation's freedom and prosperity, Delaware
Group provides both individual and institutional investors with a
conservative, disciplined approach to money management.
FUND INVESTMENT
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OBJECTIVES
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International Equity Fund
To seek to achieve long-term growth without undue risk to principal by
investing primarily in equities that provide the potential for capital
appreciation and income. Under normal circumstances, at least 65% of the
Series' assets will be invested in securities of issuers organized or
operating in at least three different countries outside the United States.
Global Bond Fund
To seek 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. Under normal circumstances, at
least 65% of the Series' assets will be invested in the fixed-income
securities of issuers in at least three different countries, one of which may
be the United States.
Global Assets Fund
To seek to achieve long-term total return by investing in securities,
including U.S. stocks and bonds and 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. Under normal circumstances, at least 65% of the
Series' assets will be invested in securities of issuers organized or
operating in at least three different countries, one of which may be the
United States.
<PAGE>
This annual report is for the information of Global & 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 Funds' 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 Funds will fluctuate so that shares, when redeemed, may be worth more or
less than their original cost.
BOARD
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MEMBERS
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Wayne A. Stork
Chairman, President and Chief Executive Officer
Delaware Group of Funds
Philadelphia, PA
Walter P. Babich
Board Chairman, Citadel Constructors, Inc.
King of Prussia, PA
Anthony D. Knerr
Consultant, Anthony Knerr & Associates
New York, NY
Ann R. Leven
Treasurer, National Gallery of Art
Washington, DC
W. Thacher Longstreth
Vice Chairman, Packquisition Corp.
Philadelphia, PA
Charles E. Peck
Secretary of Enterprise Homes, Inc.
Fredericksburg, VA
former Chairman and CEO
The Ryland Group, Inc.
Columbia, MD
AFFILIATED
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OFFICERS
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George M. Chamberlain, Jr.
Senior Vice President and Secretary,
Delaware Group of Funds
Philadelphia, PA
Keith E. Mitchell
President and CEO,
Delaware Distributors, L.P.
Philadelphia, PA
David K. Downes
Senior Vice President, Chief Financial Officer and
Chief Administrative Officer
Delaware Group of Funds
Philadelphia, PA
<PAGE>
DECEMBER 15, 1995
DEAR
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SHAREHOLDER:
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We are very pleased to report that each of Delaware Group's Global and
International Funds turned in absolute and relative results of the first
order during their fiscal years ended November 30, 1995.
Our three Funds' results, as shown in the table below, illustrate
the potential benefits of prudent global and international investing. During
the year, our Fund managers relied on a consistent, income-oriented approach
to evaluate stocks and bonds across strikingly different markets.
Delaware Group Global Assets Fund and Global Bond Fund - which began
operating in December 1994 - participated in this past year's robust U.S.
stock and bond rallies. Our International Equity Fund, meanwhile, focused on
European and other established stock markets that also performed well.
Established bond markets throughout the world benefited from falling
interest rates and low inflation, especially in the U.S. While most
established international stock markets enjoyed positive results in 1995, few
kept pace with soaring U.S. equity prices, even after adjusting for currency
fluctuations.
Generally, your Funds were in the right places around the world at
the right time - the U.S. and Western Europe - and had only modest exposure
to markets that offered poor returns - specifically Japan and the emerging
markets of the Pacific Rim.
Historical studies of investment returns show that there has been
little direct correlation between the performance of U.S. markets and those
overseas. An investment program that combines domestic and foreign securities
may be less volatile than either type of investment alone. For U.S. investors,
this can be a key benefit of diversifying a portfolio into foreign investments,
and why we believe financial advisers are recommending Delaware Group's Global
and International Funds to their clients.
Even with international diversification, market risks remain. The
value of currencies fluctuate, and the world has a wide variety of political
systems, accounting standards and securities laws. Your Funds' portfolio
managers take these additional risk factors into account when purchasing or
selling a particular stock or bond in any market.
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Total Return
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Year Ended
November 30, 1995
International Equity Fund A Class +8.17%
Lipper International Equity Fund Average (238 funds) +5.13%
Morgan Stanley Europe Australia Far East (EAFE) Index +7.90%
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December 27, 1994
to November 30, 1995
Global Assets Fund A Class +21.48%
Lipper Global Flexible Portfolio Average (55 funds) +14.92%
Morgan Stanley World Index +17.85%
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Global Bond Fund A Class +18.79%
Lipper General World Income Fund Average (135 funds) +15.55%
Salomon Brothers World Government Bond Index +17.80%
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All performance quoted above assumes reinvestment of dividends and capital
gains. Performance of Delaware Group Funds and Lipper Averages is at net
asset value. For complete information, see pages 8 to 11. The Morgan Stanley
World Index and the Salomon Brothers World Government Bond Index include U.S.
market results. All returns stated in U.S. dollars.
===============================================================================
1
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I should point out that the returns shown in this report are
presented on a U.S. dollar basis. Returns would be different if shown in
"local currency." Shareholders in the Funds should keep in mind that when the
dollar strengthens relative to another nation's currency, the return for
Americans investing in that nation's financial markets is reduced. On the
other hand, when the dollar is weak - as was the case for much of 1995 - this
can increase the return to U.S. investors.
An encouraging note for the year ahead is that while U.S. economic
growth appears to be slowing, there is still opportunity around the world. In
the enclosed report, the managers of each Fund detail how they positioned
their portfolio during the past year and provide an outlook for established
world markets.
In 1995, the U.S. markets were the world's market performance
leaders, but as you will see in our report, that hasn't been the case for
most of the past decade. In our opinion, the Delaware Group Funds are
well-positioned to capitalize on global opportunities in the coming months.
Sincerely,
/s/ Wayne A. Stork
- ---------------------------
Wayne A. Stork
Chairman, President and
Chief Executive Officer
PORTFOLIO
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MANAGERS'
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REVIEWS
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International Equity Fund
Investment Strategy
Unlike some mutual funds that invest in overseas markets primarily for
capital appreciation, Delaware Group International Equity Fund invests in
stocks for long-term growth through a combination of dividend income and
capital appreciation, with an emphasis on income.
We believe dividend income can help protect investors in two ways.
First, this focus leads us to stocks of relatively stable, large and mid-size
companies, while avoiding smaller, and in our opinion, riskier companies. And
second, income can help to cushion losses when stock prices fall.
A Focus On Western Europe
International Equity Fund began the 1995 fiscal year with relatively few
Japanese stocks and a strong emphasis on Europe, particularly the United
Kingdom. Elsewhere in the world, we concentrated on Australia and New Zealand
and generally avoided smaller Asian markets. We did not own the stocks of any
companies based in Latin America.
The Fund had just 13% of its net assets invested in Japan as of
November 30. That was less than half the concentration of Japanese companies
2
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in the Morgan Stanley Europe Australia and Far East (EAFE) Index, an
unmanaged portfolio of stocks representing non-U.S. equity markets. Our
reduced exposure to Japan, a market which performed poorly for much of fiscal
1995, helped the Fund's performance when compared to the Index.
===============================================================================
International Equity Fund's Top Five Country Allocation
(As of November 30, 1995)
<TABLE>
<CAPTION>
Share of Allocation of Basis For
Country Net Assets EAFE Index Fund's Positioning
<S> <C> <C> <C>
United Kingdom 26.7% 16.8% Falling interest rates should boost growth
Japan 13.3% 40.7% Overvalued market
Australia 9.2% 2.7% Strong potential for economic growth
France 7.1% 6.3% Recent turmoil presents opportunity
Belgium 6.3% 1.1% Falling interest rates should boost economy
</TABLE>
===============================================================================
The limited number of Japanese stocks we owned were technology
stocks, which generally provided higher returns than the benchmark Nikkei
Index. These companies' profits are driven by exports and their stock prices
rose sharply beginning in the summer, as the yen's value dropped. This had
the effect of making their products cheaper for Americans to buy.
We believe European companies could surprise securities analysts with
better-than-expected profits, as U.S. companies did in fiscal 1995.
Many of our European investments in countries such as the United
Kingdom, The Netherlands and Belgium performed well. However, the Fund did
not participate in the robust markets of Sweden and Switzerland, Europe's
best performing markets in 1995. In general, stocks in those countries did
not fit our income-oriented selection criteria.
Outlook
Overall, the Fund expects to maintain a higher concentration of European
stocks than the EAFE Index. This is based on our belief that European
economic growth will remain strong compared to Japan and be more stable than
growth in emerging markets such as Latin America, which we expect to avoid.
We believe European companies could surprise securities analysts with
better-than-expected profits, as U.S. companies did early in fiscal 1995,
because:
* Interest rates are declining.
* Companies are reducing overhead and other costs to improve
productivity.
* Continental governments are trimming expensive social welfare programs
that are paid for with corporate taxes.
During the past year, the Fund's largest industry concentrations
were in utilities, cyclical industrial companies and consumer growth stocks,
sectors that typically do well when interest rates fall. We expect that
throughout much of the world, central bankers will be inclined to follow the
lead of the Federal Reserve Board in the U.S. and reduce interest rates to
stimulate growth in the coming months.
3
<PAGE>
Global Bond Fund
Investment Strategy
In the past, income has been the core component of long-term total return for
fixed-income securities. Though falling interest rates can lead to capital
appreciation, over time, income has proven to be the primary source of total
return from bonds.
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 don't base investment
decisions on currency exchange rates or political upheavals. Instead, we look
at trends that can be analyzed with reasonable certainty and which we believe
will have a fundamental effect on long-term returns.
Global Bond Fund places great emphasis on quality and typically
selects 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 the greatest reward relative to the risk
to principal from fluctuating interest rates.
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Global Bond Fund
Geographic Asset Allocation
As of November 30, 1995
Percent of
Country Net Assets
United States 25.6%
United Kingdom & British Commonwealth* 22.4%
Spain 13.4%
Sweden 10.5%
Italy 9.4%
Denmark 5.2%
Germany 4.1%
The Netherlands 3.7%
* Australia, New Zealand and Canada
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Note: 10.5% of the Fund's net assets were in cash not reflected in the chart.
Cash was in U.S. dollars.
A Strong Opening Year
It has been a banner year for bonds around the world, making Global Bond
Fund's inaugural year a rewarding one. It was also a year of contrasts.
Bond markets that performed well during the first half of the year
tended to lag in the second, and vice versa, especially Japan. These shifts
were the result of sharp, and we believe irrational, changes in currency
values during the early months of the year.
Although the Fund underperformed Indexes such as the unmanaged
Salomon Brothers World Government Bond Index through May, we more than made
up the difference in the second half. The Fund benefited from having a higher
weighting of Swedish bonds than the Index, as Sweden was the developed
world's best performing bond market with a total return of +37% in local
currency terms, according to Bloomberg Business News. Your Fund's performance
was enhanced by the fact that we did not have any Japanese bonds, a market
where bonds lost an average of 14% of their value during the summer and fall.
Your Fund's performance also benefited from a strong U.S. bond
market. The Merrill Lynch Corporate-Government-Mortgage Bond Index, a broad
measure of U.S. bond market performance, rose +17.75% for the 12 months ended
November 30. The Fund's U.S. Treasury bonds, which represented nearly
one-quarter of the Fund's net assets early in the year, appreciated
substantially as interest rates fell.
4
<PAGE>
Outlook
We believe that countries such as Italy and Sweden - where government bond
markets have high yields compared to other developed countries - could
provide strong opportunities in the coming months. Although both countries
have large welfare states and high government debt relative to the size of
their respective gross national products (output of goods and services),
these are established markets with growing economies.
Global Bond Fund places great emphasis on quality and typically selects only
those bonds rated "A" or better by Standard & Poor's.
In the U.S., the economic environment is still "bond friendly."
Inflation at both the consumer and business wholesale level appears to be
tame, and the prospect of a slowdown in the growth rate of the U.S. economy
suggests the Federal Reserve Board could continue easing interest rates.
However, the U.S. bond market appears to have already anticipated
this. We believe there is some risk that U.S. interest rates may rise
slightly and have reduced our exposure to U.S. bonds. As of November 30, the
current yield on 10-year Treasuries was 5.75% and the consumer price index
was rising at an annualized rate of 2.6%. Inflation trends elsewhere in the
world suggest greater potential rewards outside the U.S. at these current
levels. In our opinion, U.S. inflation would have to fall to about 2% a year
in order for a 10-year U.S. Treasury Bond to provide a competitive return
relative to many overseas markets.
Global Assets Fund
Investment Strategy
Global Assets Fund's first year in operation proved to be an auspicious
start. The Fund provided a strong total return that reflected its ability to
participate in the dynamic U.S. stock and bond markets of fiscal 1995 while
maintaining the majority of its assets in selected international stock and
bond markets, as shown in the chart below.
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Global Assets Fund
Asset Mix as of November 30, 1995
Foreign Stocks 31%
Global Bonds 24%
U.S. Stocks 18%
U.S. Cash 14%
U.S. High-Yield Bonds 13%
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In building an investment strategy, the Fund's management sought to
take advantage of the opportunities to increase return potential and reduce
risk that can result from combining asset classes that may have different
performance cycles. At all times our objective is to keep the Fund broadly
diversified.
We use an income-oriented approach to evaluate stocks and bonds
across all markets. This enables us to compare stocks to bonds within a
country as well as across countries, all using a consistent yardstick. We
take inflation into account when we evaluate both US. and foreign stocks and
bonds. From all of this we evaluate what countries and what asset classes
offer the most attractive risk/reward profile.
5
<PAGE>
We use an income-oriented approach to evaluate stocks and bonds across all
markets. This enables us to compare stocks and bonds of different countries
with a consistent yardstick.
An Auspicious Start
* Foreign Stocks
Non-U.S. stock holdings represented the largest share of the Fund's net
assets, as shown in the chart on page 5. Using the same strategy as the
International Equity Fund (see page 2), Global Assets Fund had a high
concentration of consumer growth and cyclical stocks in Europe, particularly
in the United Kingdom. We had a relatively small holding of Japanese stocks,
primarily technology companies whose earnings were driven by exports.
* U.S. Stocks
We focus on stocks that have strong potential to increase dividends and have
been emphasizing consumer growth companies in industries such as tobacco,
food processing and household products.
Many of our selections derive a substantial portion of earnings from
sales overseas and generally benefited from the falling value of the U.S.
dollar.
The strong performance of large-cap U.S. stocks contributed
significantly to the Fund's total return in 1995. As selected U.S. stocks,
especially financial stocks, have met our price targets, we have reduced our
concentration in U.S. equities to 17.9% of net assets as of November 30, from
more than 22% earlier in the year.
* Global Bonds
At year's end, the Fund's holdings included high-quality foreign government
and corporate bonds. Early in the year, we had a substantial holding of U.S.
government bonds, which we sold after interest rates declined sharply,
thereby garnering a nice gain. Global Assets had no Japanese bonds which we
believe are overvalued and will continue to avoid. In the coming months, we
believe that Europe will offer the best bond values.
* High-Yield U.S. Bonds
Managed with a focus on income and relative quality, the Fund's high-yield
bond component provided a robust total return during the year, contributing
to strong overall performance. We believe that including these high-yielding,
higher risk corporate bonds will contribute to Global Assets' current income
potential.
During the past year, the Fund's management focused on the highest
tier (bonds rated BB) within the yield market. Bond issuers in this tier have
benefited from falling interest rates and generally made timely interest
payments. Lower rated bonds, those rated CCC and B, have not enjoyed much
price appreciation in recent months, apparently due to fear that the
companies issuing these bonds will be adversely effected by a slowing U.S.
economy. Early in the fiscal year, CCC-rated bonds had outperformed other
high-yield bonds, but this changed during the summer as the U.S. economy
continued to soften.
6
<PAGE>
Outlook
We have reduced Global AssetsFund's total concentration in the U.S. stock and
bond markets from 35% of net assets as of May 31 to 30.7% as of November 30.
We believe that the magnitude of the price increases that U.S. stocks and
bonds enjoyed in 1995 is unlikely to be duplicated in the immediate future.
In the U.S. high-yield bond market, we expect to continue to
emphasize only the better quality non-investment grade bonds and generally
avoid very cyclical companies such as paper and packaging concerns.
Although the U.S. economy appears to be slowing, we are optimistic
about Europe. Western Europe is enjoying strong economic growth, even though
France faces political obstacles. We believe many European businesses are
poised to surprise securities markets with better-than-expected earnings, and
currently more than half of the Fund's stock and bond holdings are those of
companies and governments located there.
Although a year is far too short a period to judge performance, we
are pleased with Global Assets Fund's 1995 results, and we believe the
combination of diverse asset classes can make the Fund an attractive choice
for investors who want to participate in investment opportunities around the
world.
/s/ Clive A. Gillmore /s/ George H. Burwell
- ------------------------------------- -----------------------------------------
Clive A. Gillmore George H. Burwell
Delaware International Advisers Ltd. Delaware Management Company, Inc.
International Equity Fund Global Assets Fund, U.S. Stocks
Global Assets Fund, Asset Allocation
and International Equities
/s/ Ian G. Sims /s/ Paul A. Matlack
- ------------------------------------ -----------------------------------------
Ian G. Sims Paul A. Matlack
Delaware International Advisers Ltd. Delaware Management Company, Inc.
Global Bond Fund Global Assets Fund, U.S. High Yield Bonds
Global Assets Fund, Global Bonds
7
<PAGE>
FUND
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PERFORMANCE
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International Equity Fund's
Lifetime Performance
An investor who bought $10,000 worth of International Equity Fund A Class
shares on October 31, 1991, and reinvested all capital gains and dividends
would have had holdings worth $13,207 as of November 30, 1995, assuming the
payment of a sales charge of 5.75%. As you can see, the Fund has generally
kept pace with the unmanaged Morgan Stanley Europe Australia and Far East
(EAFE) Index since the Fund began operating in 1991. The Index is a
hypothetical portfolio of stocks whose performance is measured in U.S.
dollars. It does not reflect the "real world" costs of managing a mutual
fund, which in the case of international funds may involve currency
transactions.
International Equity Fund Performance
Total Return through November 30, 1995
Class A (Est. 1991) Class B (Est. 1994)
Average Annual Total Returns Average Annual Total Returns
Sales Charge Lifetime
-------------- -0.26% Excluding Sales Charge
5.75% 4.75% -3.32% Including Sales Charge
----- -----
Lifetime +7.05% +7.32% One Year
One Year +1.93% +3.07% +7.46% Excluding Sales Charge
+3.46% Including Sales Charge
8
<PAGE>
Chart assumes $10,000 invested on October 31, 1991, and includes the effect of
the 5.75% sales charge and the reinvestment of all dividends and capital gains.
Performance of other classes of International Equity Fund will vary due to
differing charges and expenses.
International Equity Fund's Lifetime Performance
Growth of a $10,000 Investment,
Total Return as of November 30, 1995
===============================================================================
10/91 12/92 12/93 12/94 11/95
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Morgan Stanley
Europe Australia and
Far East Index $10,031 $8,843 $11,756 $12,703 $13,619
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International Equity
Fund A Class $ 9,425 $9,390 $12,038 $12,236 $13,207
===============================================================================
The front-end sales charge on A Class was lowered to 4.75% on November 29,
1995. A $10,000 investment at inception would have grown to $13,345 as of
November 30, 1995, assuming a 4.75% sales charge and reinvestment of
dividends and capital gains.
Please refer to the notes below when reviewing the performance of
International Equity Fund on the previous page and Global Bond Fund and
Global Assets Fund on pages 10 and 11. Return and share value of
International Equity Fund, Global Bond Fund and Global Assets 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.
Class A returns for International Equity Fund, Global Assets Fund and Global
Bond Fund reflect the reinvestment of all distributions and a 12b-1 fee.
Returns for International Equity Fund and Global Assets Fund show the effect
of both the 5.75% maximum front-end sales charge and the 4.75% sales charge
which became effective on November 29, 1995. Class A returns for Global Bond
Fund show the front-end sales charge of 4.75%.
Class B performance for International Equity Fund, Global Assets Fund and
Global Bond Fund reflects the reinvestment of all distributions. 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 contingent deferred sales
charge if redeemed before the end of the sixth year. Lifetime performance
"excluding sales charge" assumes the investment was not redeemed.
The average annual total returns for International Equity Fund's
Institutional Class, which is available without sales or asset-based
distribution charges only to certain eligible institutional accounts, were
+8.83%, and +8.46%, respectively, for the lifetime and one-year periods ended
November 30, 1995. The Institutional Class was initially made available on
November 9, 1992. Performance prior to this date is based on Class A
performance, adjusted to eliminate sale charges, but not the asset-based
distribution charge.
As of December 1,1995, the Fund also offers Class C shares for International
Equity Fund, Global Bond Fund and Global Assets Fund, which have a 1% annual
distribution and service fee. A 1% contingent deferred sales charge applies
to shares if redeemed within 12 months. Performance of these shares may
differ from the performance of A and B class shares.
9
<PAGE>
Global Bond Fund's
Lifetime Performance
Global Bond Fund had the good fortune to begin operating just as the U.S.
bond market and several markets overseas began a year of very strong
performance.
The Fund's A Class shares generally kept pace with a benchmark, the
unmanaged Salomon Brothers World Government Bond Index, through November 30.
While investing in government bonds overseas presents additional
risks, we believe the Fund's performance illustrates the potential advantages
of an income-oriented investment with a global focus. Interest rates in some
countries may be higher than U.S. rates, providing opportunities to generate
additional income.
Chart assumes $10,000 invested on December 27, 1994, and includes the effect of
the 4.75% sales charge and the reinvestment of all dividends and capital gains.
Performance of other classes of Global Bond Fund will vary due to differing
charges and expenses.
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Global Bond Fund's Lifetime Performance
Growth of a $10,000 Investment,
Total Return as of November 30, 1995
===============================================================================
Global Bond Fund A Class Salomon Brothers World Government Bond Index
- -------------------------------------------------------------------------------
12/94 $ 9,521 $10,000
1/95 9,569 10,210
2/95 9,740 10,471
3/95 9,769 11,093
4/95 10,001 11,299
5/95 10,330 11,616
6/95 10,330 11,685
7/95 10,535 11,713
8/95 10,673 11,310
9/95 10,932 11,562
10/95 11,151 11,649
11/95 11,314 11,780
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Global Bond Fund Performance
Total Return through November 30, 1995
Class A (Est. Dec. 27, 1994) Class B (Est. Dec. 27, 1994)
Average Annual Total Returns Average Annual Total Returns
Lifetime +13.14% Lifetime
+18.23% Excluding Sales Charge
+14.23% Including Sales Charge
A voluntary expense limitation of 0.95%, exclusive of 12b-1 fees, is in effect
for Global Bond Fund. Return and share value for Global Bond Fund and Global
Assets 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.
See page 9 for important additional information and page 11 for Institutional
Class performance. Returns for Global Bond Fund Class A include the effect of
the 4.75% front-end sales charge, reinvestment of all distributions and a
12b-1 fee.
10
<PAGE>
Global Assets Fund's
Lifetime Performance
As you can see, Global Assets Fund kept pace with two benchmarks during its
first year of operation - the Morgan Stanley World Index and the Salomon
Brothers World Government Bond Index.
The Morgan Stanley World Index includes the performance of U.S. stocks,
while the Salomon Brothers World Government Bond Index includes U.S.bonds.
Chart assumes $10,000 invested on December 27, 1994, and includes the effect of
the 5.75% sales charge and the reinvestment of all dividends and capital gains.
Performance of other classes of Global Assets Fund will vary due to differing
charges and expenses.
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Morgan Stanley Salomon Brothers World Global Assets
World Index Government Bond Index Fund A Class
===============================================================================
12/94 $10,000 $10,000 $ 9,425
1/95 9,852 10,210 9,378
2/95 9,998 10,471 9,717
3/95 10,481 11,093 10,075
4/95 10,849 11,299 10,294
5/95 10,943 11,616 10,541
6/95 10,942 11,685 10,693
7/95 11,491 11,713 11,133
8/95 11,237 11,310 11,056
9/95 11,566 11,562 11,305
10/95 11,386 11,649 11,305
11/95 11,783 11,780 11,449
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The front-end sales charge on Global Assets Fund A Class was lowered to 4.75%
on November 29, 1995. A $10,000 investment at inception would have grown to
$11,569 as of November 30, 1995, assuming a 4.75% sales charge and
reinvestment of dividends and capital gains.
Global Assets Fund Performance
Total Return through November 30, 1995
Class A (Est. Dec. 27, 1994) Class B (Est. Dec. 27, 1994)
Average Annual Total Returns Average Annual Total Returns
Sales Charge Lifetime
-------------- +20.73% Excluding Sales Charge
5.75% 4.75% +16.73% Including Sales Charge
----- -----
Lifetime +14.49% +15.69%
See page 9 for important additional information. A voluntary expense limitation
of 0.95%, exclusive of 12b-1 fees, is in effect for Global Assets Fund.
Institutional Class total lifetime returns as of November 30, 1995, were
+19.21% for Global Bond Fund and +21.88% for Global Assets Fund. The
Institutional Class of both Funds is available without sales or asset-based
distribution charges only to certain eligible institutional accounts. Figures
are not annualized and are based on the inception date of December 27, 1994.
11
<PAGE>
A Look at Long-Term World Market Performance
Investing overseas entails special risks that tend not to affect U.S. stocks
and bonds. These include currency fluctuations, political changes and
different accounting standards. However, foreign markets can provide
substantial rewards, and ignoring international investing also entails a
certain amount of risk.
During the past 25 years, the market capitalization of businesses
around the world has been growing at a much faster pace than that of U.S.
companies. In 1970, the stocks of American-based businesses made up
two-thirds of the value of all the publicly-traded companies in the world.
Now, nearly two-thirds of the world's equity value is in foreign companies,
according to Morgan Stanley.
While there may be years like 1995 when the U.S. stock market's
performance ranks among the world's top performers, world markets have
historically moved in cycles. No market can be at the top year after year. In
fact, before this year's U.S. stock market boom, our country's equity market
ranked 19th out of 20 major world markets, based on total return during the
past decade. At the same time, the U.S. bond market's performance until 1995
had been below the average of the world's bond markets, based on the 10-year
total return of the Salomon Brothers World Government Bond Index.
- -------------------------------------------------------------------------------
Long-Term Performance of World Equity Markets
Top Performing Markets for the 10 years ended November 30, 1995
(With dividends reinvested, return measured in U.S. dollars)
Total Average Total Average
Market Annual Return Market Annual Return
Hong Kong +23.76% Spain +17.76%
Sweden +20.65% Switzerland +17.74%
Belgium +20.21% France +15.91%
Netherlands +19.39% S&P 500 Index (U.S.) +15.21%
Singapore/Malaysia +17.82% Australia +15.18%
Note: Performance information based on Morgan Stanley Inc. Indexes for each
respective foreign market.
- -------------------------------------------------------------------------------
Though the future can't be predicted, the history of the past century suggests
that world economic stability is a relatively new development. Political,
social and trade barriers continue to gradually break down. We believe this
presents a world of opportunities for long-term investors as we enter a new
millennium.
12
<PAGE>
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. $)
COMMON 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 $67,502,286) . . . . . . . . . . . . 70,748,247
-----------
13
<PAGE>
International Equity Series
Statement of Net Assets (Continued)
Market
Principal Value
Amount** (U.S.$)
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
--------
14
<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
15
<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
======
16
<PAGE>
Global Assets 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 Bond 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
-----------
17
<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 investments
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
18
<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
19
<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 1,823,207 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
20
<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 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.
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.
21
<PAGE>
Notes to Financial Statements (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
22
<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 shareholder 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>
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.
23
<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.
24
<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 $ 7,613 $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.
25
<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.
26
<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 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.
Ernst & Young LLP
Philadelphia, PA
January 12, 1996
27
<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.
28
<PAGE>
DELAWARE GROUP
- -------------------------------------------------------------------------------
OF FUNDS
- -------------------------------------------------------------------------------
For Growth of Capital
Trend Fund
DelCap Fund
Value Fund
For Total Return
Devon Fund
Decatur Total Return Fund
Decatur Income Fund
Delaware Fund
For Global Diversification
International Equity Fund
Global Assets Fund
Global Bond Fund
For Current Income
Delchester Fund
U.S. Government Fund
Limited-Term Government Fund
For Tax-Free Current Income
Tax-Free USA Fund
Tax-Free Insured Fund
Tax-Free USA Intermediate Fund
Tax-Free Pennsylvania 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
This report must be preceded or accompanied by a current International Equity
Fund/Global Assets Fund/Global Bond Fund prospectus and the Delaware Group
Fund Performance Update for the most recently completed calendar quarter. 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.
DELAWARE
GROUP
========
Philadelphia * London
<PAGE>
Be sure to consult your financial adviser when making investments. Mutual funds
can be a valuable part of your financial plan; however, shares of the Fund are
not FDIC or NCUSIF insured, are not guaranteed by any 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.
Investment Manager
Delaware Management Company, Inc.
Philadelphia
International Affiliate
Delaware International Advisers Ltd.
London
National Distributor
Delaware Distributors, L.P.
Philadelphia
Shareholder Servicing,
Dividend Disbursing
and Transfer Agent
Delaware Service Company, Inc.
Philadelphia
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
Copy Rights Delaware Distributors, L.P.
Printed in the U.S.A. on recycled paper.
AR-034[11/95]TKO1/96
