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PART B--STATEMENT OF ADDITIONAL INFORMATION
JULY 21, 1997
(as revised December 22, 1997)
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DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
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1818 Market Street
Philadelphia, PA 19103
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For more information about Institutional Classes:
800-828-5052
For Prospectus and Performance of Class A Shares, Class B
Shares and Class C Shares:
Nationwide 800-523-4640
Information on Existing Accounts of Class A Shares, Class B
Shares and Class C Shares:
(SHAREHOLDERS ONLY) Nationwide 800-523-1918
Dealer Services: (BROKER/DEALERS ONLY) Nationwide
800-362-7500
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TABLE OF CONTENTS
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Cover Page
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Investment Policies and Portfolio Techniques
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Accounting and Tax Issues
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Performance Information
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Trading Practices and Brokerage
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Purchasing Shares
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Investment Plans
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Determining Offering Price and Net Asset Value
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Redemption and Repurchase
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Distributions
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Investment Management Agreements and Sub-Advisory Agreements
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Officers and Directors
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Exchange Privilege
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General Information
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Financial Statements
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Appendix A
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Delaware Group Global & International Funds, Inc.
("Global Funds, Inc.") is a professionally-managed mutual
fund of the series type. This Statement of Additional
Information ("Part B" of the registration statement)
describes the International Equity Series ("International
Equity Fund"), International Small Cap Series
("International Small Cap Fund"), Global Bond Series
("Global Bond Fund"), Global Assets Series ("Global
Assets Fund"), Emerging Markets Series ("Emerging Markets
Fund") and Global Equity Series ("Global Equity Fund")
(individually, a "Fund" and collectively, the "Funds") of
Global Funds, Inc. Each Fund offers Class A Shares, Class B
Shares, Class C Shares (together the "Fund Classes"), and an
Institutional Class (individually a "Class" and collectively
the "Classes").
Class B Shares, Class C Shares and Institutional Class
shares of each Fund may be purchased at a price equal to the
next determined net asset value per share. Class A Shares
may be purchased at the public offering price, which is
equal to the next determined net asset value per share, plus
a front-end sales charge. Class A Shares are subject to
a maximum front-end sales charge of 4.75% and, absent
any applicable fee waiver, annual Rule 12b-1 Plan
("12b-1 Plan") expenses of up to 0.30%. Class B Shares are
subject to a contingent deferred sales charge ("CDSC") which
may be imposed on redemptions made within six years of
purchase and, absent any applicable fee waiver, annual
12b-1 Plan expenses of up to 1%, which are assessed
against Class B Shares for approximately eight years
after purchase. See Automatic Conversion of Class B Shares
under Classes of Shares in the Prospectuses for the Fund
Classes. Class C Shares are subject to a CDSC which may be
imposed on redemptions made within 12 months of purchase
and, absent any applicable fee waiver, annual 12b-1 Plan
expenses of up to 1%, which are assessed against the
Class C Shares for the life of the investment. Global
Equity Fund will not pay a 12b-1 fee with respect
to any Class until December 31, 1997 and International
Small Cap Fund will not pay a 12b-1 fee with respect
to any Class until May 31, 1998.
This Part B supplements the information contained in the
current Prospectuses for the Fund Classes and the
Institutional Classes of International Equity Fund,
Global Assets Fund, Global Bond Fund, Global Equity Fund
and Emerging Markets Fund dated January 29, 1998, and the
current Prospectuses for the Fund Classes and the
Institutional Class of the International Small Cap
Fund dated December 22, 1997, as they may be amended
from time to time. Part B should be read in conjunction
with the respective class' Prospectus. Part B is not itself
a prospectus but is, in its entirety, incorporated by
reference into each class' Prospectus. Prospectuses
relating to the Fund Classes and Prospectuses relating to
the Institutional Classes may be obtained by writing or
calling your investment dealer or by contacting the
Funds' national distributor, Delaware Distributors, L.P.
(the "Distributor"), 1818 Market Street,
Philadelphia, PA 19103.
INVESTMENT POLICIES AND PORTFOLIO TECHNIQUES
Investment Restrictions
Global Funds, Inc. has adopted the following restrictions
for each Fund (except where otherwise noted) which, along
with its investment objective, cannot be changed without
approval by the holders of a "majority" of the respective
Fund's outstanding shares, which is a vote by the holders of
the lesser of a) 67% or more of the voting securities
present in person or by proxy at a meeting, if the holders
of more than 50% of the outstanding voting securities are
present or represented by proxy; or b) more than 50% of the
outstanding voting securities. The percentage limitations
contained in the restrictions and policies set forth herein
apply at the time of purchase of securities.
Each Fund (other than International Small Cap Fund and
Global Equity Fund) shall not:
1. For International Equity Fund and Global Equity Fund,
as to 75% of their respective total assets, and for Global
Bond, Global Assets and Emerging Markets Funds, as to 50% of
their respective total assets, invest more than 5% of their
respective total assets in the securities of any one issuer
(other than obligations issued, or guaranteed by, the U.S.
government, its agencies or instrumentalities).
2. For International Equity, Global Bond and Global
Assets Funds, invest in securities of other open-end
investment companies, except as part of a merger,
consolidation or other acquisition. This limitation does
not prohibit a Fund from investing in the securities of
closed-end investment companies at customary brokerage
commission rates. Emerging Markets Fund may invest in
securities of open-end, closed-end and unregistered
investment companies, in accordance with the
limitations contained in the Investment Company Act of 1940,
as amended (the "1940 Act").
3. Make loans, except to the extent that purchases of
debt obligations (including repurchase agreements) in
accordance with a Fund's investment objective and policies,
are considered loans and except that the Fund may loan up to
25% of its assets to qualified broker/dealers or
institutional investors for their use relating to short
sales or other security transactions.
4. Purchase or sell real estate or real estate limited
partnerships, but this shall not prevent a Fund from
investing in securities secured by real estate or interests
therein.
5. For International Equity Fund, purchase more than 10%
of the outstanding voting securities of any issuer, or
invest in companies for the purpose of exercising control or
management.
6. Engage in the underwriting of securities of other
issuers, except that, in connection with the disposition of
a security, the Fund may be deemed to be an "underwriter" as
that term is defined in the Securities Act of 1933 (the
"1933 Act").
7. Make any investment which would cause 25% or more of
its total assets to be invested in the securities of issuers
all of which conduct their principal business activities in
the same industry. This restriction does not apply to
obligations issued or guaranteed by the U.S. government, its
agencies or instrumentalities.
8. For International Equity Fund, write, purchase or
sell options, puts, calls or combinations thereof, except
that such Fund may: (a) purchase call options to the extent
that the premiums paid on all outstanding call options do
not exceed 2% of such Fund's total assets; (b) write secured
put options; (c) write covered call options; and (d)
purchase put options if such Fund owns the security covered
by the put option at the time of purchase, and provided that
premiums paid on all put options outstanding do not exceed
2% of its total assets. Such Fund may sell put or call
options previously purchased and enter into closing
transactions with respect to the activities noted above.
9. Purchase or sell commodities or commodity contracts,
except that each Fund may enter into futures contracts and
options on futures contracts in accordance with its
respective prospectuses, subject to investment restriction
10 below.
10. Enter into futures contracts or options thereon,
except that a Fund may enter into futures contracts and
options thereon to the extent that not more than 5% of the
Fund's assets are required as futures contract margin
deposits and premiums on options and only to the extent that
obligations under such contracts and transactions represent
not more than 20% of the Fund's assets.
11. Make short sales of securities, or purchase
securities on margin, except that a Fund may satisfy margin
requirements with respect to futures transactions.
12. For International Equity Fund, invest more than 5% of
the value of its total assets in securities of companies
less than three years old. Such three-year period shall
include the operation of any predecessor company or
companies.
13. For International Equity Fund, purchase or retain the
securities of any issuer which has an officer, director or
security holder who is a director or officer of Global
Funds, Inc. or of its investment manager if or so long as
the directors and officers of Global Funds, Inc. and of its
investment manager together own beneficially more than 5% of
any class of securities of such issuer.
14. For International Equity Fund, invest in interests in
oil, gas or other mineral exploration or development
programs or leases.
15. For International Equity Fund, invest more than 10%
of the Fund's total assets in repurchase agreements maturing
in more than seven days and other illiquid assets, and for
Emerging Markets Fund, invest more than 15% of the Fund's
total assets in repurchase agreements maturing in more than
seven days and other illiquid assets.
16. Borrow money in excess of one-third of the value of
its net assets and then only as a temporary measure for
extraordinary purposes or to facilitate redemptions. Any
borrowing will be done from a bank and to the extent that
such borrowing exceeds 5% of the value of a Fund's net
assets, asset coverage of at least 300% is required. In the
event that such asset coverage shall at any time fall below
300%, a Fund shall, within three days thereafter (not
including Sunday or holidays) or such longer period as the
Securities and Exchange Commission (the "SEC") may prescribe
by rules and regulations, reduce the amount of its
borrowings to such an extent that the asset coverage of such
borrowings shall be at least 300%. A Fund will not pledge
more than 10% of its net assets. A Fund will not issue
senior securities as defined in the 1940 Act, except for
notes to banks.
Although not considered to be a fundamental policy,
restriction 5 above will apply to each of the Funds of
Global Funds, Inc. as a whole. In addition, although not
considered a fundamental policy, for purposes of restriction
15 above, securities of foreign issuers which are not listed
on a recognized domestic or foreign exchange or for which a
bona fide market does not exist at the time of purchase or
subsequent valuation are included in the category of
illiquid assets. As to International Equity Fund, Global
Assets Fund and Emerging Markets Fund, although not
considered to be a fundamental investment restriction, each
Fund will invest no more than 5% of its respective assets in
warrants. Investment restrictions 5, 8, 12, 13, 14 and 15
above are nonfundamental policies of Global Bond Fund,
Global Assets Fund and Emerging Markets Fund. Investment
restrictions 1 and 2 above are nonfundamental policies of
Emerging Markets Fund.
Global Funds, Inc. has adopted the following restrictions
for International Small Cap Fund and Global Equity Fund
which, along with their investment objectives, cannot be
changed without the approval by a "majority" of each Fund's
outstanding shares, as described above. The percentage
limitations contained in these restrictions and policies
apply at the time the Fund purchases securities.
International Small Cap Fund and Global Equity Fund shall
not:
1. As to 75% of its total assets, invest more than 5% of
its total assets in the securities of any one issuer (other
than obligations issued, or guaranteed by, the U.S.
government, its agencies or instrumentalities).
2. Invest 25% or more of its total assets in any one
industry provided that there is no limitation with respect
to investments in obligations issued or guaranteed as to
principal or interest by the U.S. Government, its agencies
or instrumentalities.
3. Make loans other than by the purchase of all or a
portion of a publicly or privately distributed issue of
bonds, debentures or other debt securities of the types
commonly offered publicly or privately and purchased by
financial institutions (including repurchase agreements),
whether or not the purchase was made upon the original
issuance of the securities, and except that the Fund may
loan its assets to qualified broker/dealers or institutional
investors.
4. Engage in underwriting of securities of other
issuers, except that portfolio securities, including
securities purchased in private placements, may be acquired
under circumstances where, if sold, the Fund might be deemed
to be an underwriter under the Securities Act of 1933. No
limit is placed on the proportion of the Fund's assets which
may be invested in such securities.
5. Borrow money or issue senior securities, except to
the extent permitted by the 1940 Act or any rule or order
thereunder or interpretation thereof. Subject to the
foregoing, the Fund may engage in short sales, purchase
securities on margin, and write put and call options.
6. Purchase or sell physical commodities or physical
commodity contracts, including physical commodity options or
futures contracts in a contract market or other futures
market.
7. Purchase or sell real estate; provided that the Fund
may invest in securities secured by real estate or interests
therein or issued by companies which invest in real estate
or interests therein.
Foreign Securities
Investors should recognize that investing in foreign
issuers involves certain considerations, including those set
forth in the Funds' Prospectuses, which are not typically
associated with investing in United States issuers. Since
the stocks of foreign companies are frequently denominated
in foreign currencies, and since a Fund may temporarily hold
uninvested reserves in bank deposits in foreign currencies,
a Fund will be affected favorably or unfavorably by changes
in currency rates and in exchange control regulations, and
may incur costs in connection with conversions between
various currencies. The investment policies of each Fund
permit it to enter into forward foreign currency exchange
contracts in order to hedge each Fund's holdings and
commitments against changes in the level of future currency
rates. Such contracts involve an obligation to purchase or
sell a specific currency at a future date at a price set at
the time of the contract.
There has been in the past, and there may be again in the
future, an interest equalization tax levied by the United
States in connection with the purchase of foreign securities
such as those purchased by a Fund. Payment of such interest
equalization tax, if imposed, would reduce a Fund's rate of
return on its investment. Dividends paid by foreign issuers
may be subject to withholding and other foreign taxes which
may decrease the net return on such investments as
comparedto dividends paid to a Fund by United States
corporations. Special rules govern the federal income tax
treatment of certain transactions denominated in terms of a
currency other than the U.S. dollar or determined by
reference to the value of one or more currencies other than
the U.S. dollar. The types of transactions covered by the
special rules generally include the following: (i) the
acquisition of, or becoming the obligor under, a bond or
other debt instrument (including, to the extent provided in
Treasury Regulations, preferred stock); (ii) the accruing of
certain trade receivables and payables; and (iii) the
entering into or acquisition of any forward contract,
futures contract, option and similar financial instruments
other than any "regulated futures contract" or "nonequity
option" marked to market. The disposition of a currency
other than the U.S. dollar by a U.S. taxpayer is also
treated as a transaction subject to the special currency
rules. However, foreign currency-related regulated futures
contracts and nonequity options are generally not subject to
the special currency rules, if they are or would be treated
as sold for their fair market value at year-end under the
marking to market rules applicable to other futures
contracts, unless an election is made to have such currency
rules apply. With respect to transactions covered by the
special rules, foreign currency gain or loss is calculated
separately from any gain or loss on the underlying
transaction and is normally taxable as ordinary
gain or loss. A taxpayer may elect to treat as capital gain
or loss foreign currency gain or loss arising from certain
identified forward contracts, futures contracts and options
that are capital assets in the hands of the taxpayer and
which are not part of a straddle. Certain transactions
subject to the special currency rules that are part of a
"section 988 hedging transaction" (as defined in the
Internal Revenue Code of 1986, as amended (the "Code"), and
the Treasury Regulations) will be integrated and treated as
a single transaction or otherwise treated consistently for
purposes of the Code. The income tax effects of integrating
and treating a transaction as a single transaction are
generally to create a synthetic debt instrument that is
subject to the original discount provisions.
It is anticipated that some of the non-U.S. dollar
denominated investments and foreign currency contracts each
Fund may make or enter into will be subject to the special
currency rules described above.
Repurchase Agreements
While each Fund is permitted to do so, it normally does
not invest in repurchase agreements, except to invest cash
balances.
The funds in the Delaware Group have obtained an exemption
from the joint-transaction prohibitions of Section 17(d) of
the 1940 Act to allow the Delaware Group funds jointly to
invest cash balances. Each Fund may invest cash balances in
a joint repurchase agreement in accordance with the terms of
the Order and subject generally to the conditions described
below.
A repurchase agreement is a short-term investment by which
the purchaser acquires ownership of a debt security and the
seller agrees to repurchase the obligation at a future time
and set price, thereby determining the yield during the
purchaser's holding period. Should an issuer of a
repurchase agreement fail to repurchase the underlying
security, the loss to a Fund, if any, would be the
difference between the repurchase price and the market value
of the security. Each Fund will limit its investments in
repurchase agreements to those which Delaware
International Advisers Ltd. (the "Manager"), under the
guidelines of the Board of Directors, determines to present
minimal credit risks and which are of high quality. In
addition, a Fund must have collateral of at least 100% of
the repurchase price, including the portion representing a
Fund's yield under such agreements which is monitored on a
daily basis.
Portfolio Loan Transactions
Each Fund may loan up to 25% of its assets to qualified
broker/dealers or institutional investors for their use
relating to short sales or other security transactions.
It is the understanding of the Manager that the staff of
the SEC permits portfolio lending by registered investment
companies if certain conditions are met. These conditions
are as follows: 1) each transaction must have 100%
collateral in the form of cash, short-term U.S. government
securities, or irrevocable letters of credit payable by
banks acceptable to Global Funds, Inc. from the borrower; 2)
this collateral must be valued daily and should the market
value of the loaned securities increase, the borrower must
furnish additional collateral to the Fund; 3) the Fund must
be able to terminate the loan after notice, at any time; 4)
the Fund must receive reasonable interest on any loan, and
any dividends, interest or other distributions on the lent
securities, and any increase in the market value of such
securities; 5) the Fund may pay reasonable custodian fees in
connection with the loan; and 6) the voting rights on the
lent securities may pass to the borrower; however, if the
directors of Global Funds, Inc. know that a material event
will occur affecting an investment loan, they must either
terminate the loan in order to vote the proxy or enter into
an alternative arrangement with the borrower to enable the
directors to vote the proxy.
The major risk to which a Fund would be exposed on a loan
transaction is the risk that the borrower would go bankrupt
at a time when the value of the security goes up.
Therefore, each Fund will only enter into loan arrangements
after a review of all pertinent facts by the Manager, under
the supervision of the Board of Directors, including the
creditworthiness of the borrowing broker, dealer or
institution and then only if the consideration to be
received from such loans would justify the risk.
Creditworthiness will be monitored on an ongoing basis
by the Manager.
Foreign Currency Transactions
A Fund may purchase or sell currencies and/or engage in
forward foreign currency transactions in order to expedite
settlement of portfolio transactions and to minimize
currency value fluctuations.
Forward foreign currency contracts are traded in the
interbank market conducted directly between currency traders
(usually large commercial banks) and their customers. A
forward contract generally has no deposit requirement, and
no commissions are charged at any stage for trades. A Fund
will account for forward contracts by marking to market each
day at daily exchange rates.
When a Fund enters into a forward contract to sell, for a
fixed amount of U.S. dollars or other appropriate currency,
the amount of foreign currency approximating the value of
some or all of a Fund's assets denominated in such foreign
currency, the Fund's Custodian Bank or subcustodian will
place cash or liquid high grade debt securities in a
separate account of the Fund in an amount not less than the
value of the Fund's total assets committed to the
consummation of such forward contracts. If the additional
cash or securities placed in the separate account declines,
additional cash or securities will be placed in the account
on a daily basis so that the value of the account will equal
the amount of a Fund's commitments with respect to such
contracts.
Options
Each Fund may purchase call options or purchase put
options and will not engage in option strategies for
speculative purposes.
Each Fund may invest in options that are either listed on
U.S. or recognized foreign exchanges or traded over-the-
counter. Certain over-the-counter options may be illiquid.
Thus, it may not be possible to close options positions and
this may have an adverse impact on a Fund's ability to
effectively hedge its securities. A Fund will not, however,
invest more than 10% (or, in the case of International Small
Cap, Emerging Markets, or Global Equity Funds, 15%) of its
assets in illiquid securities.
Purchasing Call Options--Each Fund may purchase call
options to the extent that premiums paid by the Fund do not
aggregate more than 2% of the Fund's total assets. When a
Fund purchases a call option, in return for a premium paid
by a Fund to the writer of the option, the Fund obtains the
right to buy the security underlying the option at a
specified exercise price at any time during the term of the
option. The writer of the call option, who receives the
premium upon writing the option, has the obligation, upon
exercise of the option, to deliver the underlying security
against payment of the exercise price. The advantage of
purchasing call options is that a Fund may alter portfolio
characteristics and modify portfolio maturities without
incurring the cost associated with portfolio transactions.
A Fund may, following the purchase of a call option,
liquidate its position by effecting a closing sale
transaction. This is accomplished by selling an option of
the same series as the option previously purchased. A Fund
will realize a profit from a closing sale transaction if the
price received on the transaction is more than the premium
paid to purchase the original call option; a Fund will
realize a loss from a closing sale transaction if the price
received on the transaction is less than the premium paid to
purchase the original call option.
Although a Fund will generally purchase only those call
options for which there appears to be an active secondary
market, there is no assurance that a liquid secondary market
on an Exchange will exist for any particular option, or at
any particular time, and for some options no secondary
market on an Exchange may exist. In such event, it may not
be possible to effect closing transactions in particular
options, with the result that a Fund would have to exercise
its options in order to realize any profit and would incur
brokerage commissions upon the exercise of such options and
upon the subsequent disposition of the underlying securities
acquired through the exercise of such options. Further,
unless the price of the underlying security changes
sufficiently, a call option purchased by a Fund may expire
without any value to the Fund.
Purchasing Put Options--Each Fund may invest up to 2% of
its total assets in the purchase of put options. A Fund
will, at all times during which it holds a put option, own
the security covered by such option.
A put option purchased by a Fund gives it the right to
sell one of its securities for an agreed price up to an
agreed date. A Fund intends to purchase put options in
order to protect against a decline in the market value of
the underlying security below the exercise price less the
premium paid for the option ("protective puts"). The
ability to purchase put options will allow a Fund to protect
unrealized gain in an appreciated security in its portfolio
without actually selling the security. If the security does
not drop in value, a Fund will lose the value of the premium
paid. A Fund may sell a put option which it has previously
purchased prior to the sale of the securities underlying
such option. Such sale will result in a net gain or loss
depending on whether the amount received on the sale is more
or less than the premium and other transaction costs paid on
the put option which is sold.
A Fund may sell a put option purchased on individual
portfolio securities. Additionally, a Fund may enter into
closing sale transactions. A closing sale transaction is
one in which a Fund, when it is the holder of an outstanding
option, liquidates its position by selling an option of the
same series as the option previously purchased.
Futures
Each Fund may enter into contracts for the purchase or
sale for future delivery of securities or foreign
currencies. While futures contracts provide for the
delivery of securities, deliveries usually do not occur.
Contracts are generally terminated by entering into an
offsetting transaction. When a Fund enters into a futures
transaction, it must deliver to the futures commission
merchant selected by the Fund an amount referred to as
"initial margin." This amount is maintained by the futures
commission merchant in an account at the Fund's Custodian
Bank. Thereafter, a "variation margin" may be paid
by a Fund to, or drawn by the Fund from, such account in
accordance with controls set for such accounts, depending
upon changes in the price of the underlying securities
subject to the futures contract.
In addition, when a Fund engages in futures transactions,
to the extent required by the SEC, it will maintain with its
Custodian Bank, assets in a segregated account to cover its
obligations with respect to such contracts, which assets
will consist of cash, cash equivalents or high quality debt
securities from its portfolio in an amount equal to the
difference between the fluctuating market value of such
futures contracts and the aggregate value of the margin
payments made by a Fund with respect to such futures
contracts.
Each Fund may enter into such futures contracts to protect
against the adverse affects of fluctuations in interest or
foreign exchange rates without actually buying or selling
the securities or foreign currency. For example, if
interest rates are expected to increase, a Fund might enter
into futures contracts for the sale of debt securities.
Such a sale would have much the same effect as selling an
equivalent value of the debt securities owned by a Fund. If
interest rates did increase, the value of the debt
securities in the portfolio would decline, but the value of
the futures contracts to a Fund would increase at
approximately the same rate, thereby keeping
the net asset value of the Fund from declining as much as it
otherwise would have. Similarly, when it is expected that
interest rates may decline, futures contracts may be
purchased to hedge in anticipation of subsequent purchases
of securities at higher prices. Since the fluctuations in
the value of futures contracts should be similar to those of
debt securities, a Fund could take advantage of the
anticipated rise in value of debt securities without
actually buying them until the market had stabilized. At
that time, the futures contracts could be liquidated and the
Fund could then buy debt securities on the cash market.
With respect to options on futures contracts, when a Fund
is not fully invested, it may purchase a call option on a
futures contract to hedge against a market advance due to
declining interest rates. The purchase of a call option on
a futures contract is similar in some respects to the
purchase of a call option on an individual security.
Depending on the pricing of the option compared to either
the price of the futures contract upon which it is based, or
the price of the underlying debt securities, it may or may
not be less risky than ownership of the futures contract or
underlying debt securities. As with the purchase of futures
contracts, when a Fund is not fully invested, it may
purchase a call option on a futures contract to hedge
against a market advance due to declining interest rates.
The writing of a call option on a futures contract
constitutes a partial hedge against the declining price of
the security or foreign currency which is deliverable upon
exercise of the futures contract. If the futures price at
the expiration of the option is below the exercise price, a
Fund will retain the full amount of the option premium which
provides a partial hedge against any decline that may have
occurred in the Fund's portfolio holdings. The writing of a
put option on a futures contract constitutes a partial hedge
against the increasing price of the security or foreign
currency which is deliverable upon exercise of the futures
contract. If the futures price at the expiration of the
option is higher than the exercise price, the Fund will
retain the full amount of the option premium which provides
a partial hedge against any increase in the price of
securities which the Fund intends to purchase.
If a put or call option a Fund has written is exercised,
the Fund will incur a loss which will be reduced by the
amount of the premium it receives. Depending on the degree
of correlation between changes in the value of its portfolio
securities and changes in the value of its futures
positions, a Fund's losses from existing options on futures
may, to some extent, be reduced or increased by changes in
the value of portfolio securities. The purchase of a put
option on a futures contract is similar in some respects to
the purchase of protective puts on portfolio securities.
For example, a Fund will purchase a put option on a futures
contract to hedge the Fund's portfolio against the risk of
rising interest rates.
To the extent that interest rates move in an unexpected
direction, a Fund may not achieve the anticipated benefits
of futures contracts or options on futures contracts or may
realize a loss. For example, if a Fund is hedged against
the possibility of an increase in interest rates which would
adversely affect the price of securities held in its
portfolio and interest rates decrease instead, the Fund will
lose part or all of the benefit of the increased value of
its securities which it has because it will have offsetting
losses in its futures position. In addition, in such
situations, if the Fund had insufficient cash, it may be
required to sell securities from its portfolio to meet daily
variation margin requirements. Such sales of securities
may, but will not necessarily, be at increased prices which
reflect the rising market. A Fund may be required to sell
securities at a time when it may be disadvantageous to do
so.
Further, with respect to options on futures contracts, a
Fund may seek to close out an option position by writing or
buying an offsetting position covering the same securities
or contracts and have the same exercise price and expiration
date. The ability to establish and close out positions on
options will be subject to the maintenance of a liquid
secondary market, which cannot be assured.
Options on Foreign Currencies
Each Fund may purchase and write options on foreign
currencies for hedging purposes in a manner similar to that
in which futures contracts on foreign currencies, or forward
contracts, will be utilized. For example, a decline in the
dollar value of a foreign currency in which portfolio
securities are denominated will reduce the dollar value of
such securities, even if their value in the foreign currency
remains constant. In order to protect against such
diminutions in the value of portfolio securities, a Fund may
purchase put options on the foreign currency. If the value
of the currency does decline, a Fund will have the right to
sell such currency for a fixed amount in dollars and will
thereby offset, in whole or in part, the adverse effect on
its portfolio which otherwise would have resulted.
Conversely, where a rise in the dollar value of a currency
in which securities to be acquired are denominated is
projected, thereby increasing the cost of such securities, a
Fund may purchase call options thereon. The purchase of
such options could offset, at least partially, the effects
of the adverse movement in exchange rates. As in the case
of other types of options, however, the benefit to a Fund
deriving from purchases of foreign currency options will be
reduced by the amount of the premium and related transaction
costs. In addition, where currency exchange rates do not
move in the direction or to the extent anticipated, a Fund
could sustain losses on transactions in foreign currency
options which would require it to forego a portion or all of
the benefits of advantageous changes in such rates.
A Fund may write options on foreign currencies for the
same types of hedging purposes. For example, where a Fund
anticipates a decline in the dollar value of foreign
currency denominated securities due to adverse fluctuations
in exchange rates, it could, instead of purchasing a put
option, write a call option on the relevant currency. If
the expected decline occurs, the option will most likely not
be exercised, and the diminution in the value of portfolio
securities will be offset by the amount of the premium
received.
Similarly, instead of purchasing a call option to hedge
against an anticipated increase in the dollar cost of
securities to be acquired, a Fund could write a put option
on the relevant currency which, if rates move in the manner
projected, will expire unexercised and allow a Fund to hedge
such increased cost up to the amount of the premium. As in
the case of other types of options, however, the writing of
a foreign currency option will constitute only a partial
hedge up to the amount of the premium, and only if rates
move in the expected direction. If this does not occur, the
option may be exercised and the Fund would be required to
purchase or sell the underlying currency at a loss which may
not be offset by the amount of the premium. Through the
writing of options on foreign currencies, a Fund also may be
required to forego all or a portion of the benefit which
might otherwise have been obtained from favorable movements
in exchange rates.
Each Fund intends to write covered call options on foreign
currencies. A call option written on a foreign currency by
a Fund is "covered" if the Fund owns the underlying foreign
currency covered by the call or has an absolute and
immediate right to acquire that foreign currency without
additional cash consideration (or for additional cash
consideration held in a segregated account by the Custodian
Bank) upon conversion or exchange of other foreign currency
held in its portfolio. A call option is also covered if the
Fund has a call on the same foreign currency and in the same
principal amount as the call written where the exercise
price of the call held (a) is equal to or less than the
exercise price of the call written, or (b) is greater than
the exercise price of the call written if the difference is
maintained by the Fund in cash, U.S. government
securities or other high-grade liquid debt securities in a
segregated account with its Custodian Bank.
With respect to writing put options, at the time the put
is written, a Fund will establish a segregated account with
its Custodian Bank consisting of cash, U.S. government
securities or other high-grade liquid debt securities in an
amount equal in value to the amount the Fund will be
required to pay upon exercise of the put. The account will
be maintained until the put is exercised, has expired, or
the Fund has purchased a closing put of the same series as
the one previously written.
In order to comply with the securities laws of one state,
a Fund will not write put or call options if the aggregate
value of the securities underlying the calls or obligations
underlying the puts determined as of the date the options
are sold exceed 25% of the Fund's net assets. Should state
laws change or Global Funds, Inc. receive a waiver of their
application for a Fund, the Funds reserve the right to
increase this percentage.
Options on Stock Indices
A stock index assigns relative values to the common stocks
included in the index with the index fluctuating with
changes in the market values of the underlying common stock.
Options on stock indices are similar to options on stocks
but have different delivery requirements. Stock options
provide the right to take or make delivery of the underlying
stock at a specified price. A stock index option gives the
holder the right to receive a cash "exercise settlement
amount" equal to (i) the amount by which the fixed exercise
price of the option exceeds (in the case of a put) or is
less than (in the case of a call) the closing value of the
underlying index on the date of exercise, multiplied by (ii)
a fixed "index multiplier." Receipt of this cash amount
will depend upon the closing level of the stock index upon
which the option is based being greater than (in the case of
a call) or less than (in the case of a put) the exercise
price of the option. The amount of cash received will be
equal to such difference between the closing price of the
index and exercise price of the option expressed in dollars
times a specified multiple. The writer of the option is
obligated, in return for the premium received, to
make delivery of this amount. Gain or loss to a Fund on
transactions in stock index options will depend on price
movements in the stock market generally (or in a particular
industry or segment of the market) rather than price
movements of individual securities.
As with stock options, a Fund may offset its position in
stock index options prior to expiration by entering into a
closing transaction on an Exchange or it may let the option
expire unexercised.
A stock index fluctuates with changes in the market values
of the stock so included. Some stock index options are
based on a broad market index such as the Standard & Poor's
500 or the New York Stock Exchange Composite Index, or a
narrower market index such as the Standard & Poor's 100.
Indices are also based on an industry or market segment such
as the AMEX Oil and Gas Index or the Computer and Business
Equipment Index. Options on stock indices are currently
traded on domestic exchanges such as: The Chicago Board
Options Exchange, the New York Stock Exchange and American
Stock Exchange as well as on foreign exchanges.
A Fund's ability to hedge effectively all or a portion of
its securities through transactions in options on stock
indices depends on the degree to which price movements in
the underlying index correlate with price movements in the
Fund's portfolio securities. Since a Fund's portfolio will
not duplicate the components of an index, the correlation
will not be exact. Consequently, a Fund bears the risk that
the prices of the securities being hedged will not move in
the same amount as the hedging instrument. It is also
possible that there may be a negative correlation between
the index or other securities which would result in a loss
on both such securities and the hedging instrument.
Positions in stock index options may be closed out only on
an Exchange which provides a secondary market. There can be
no assurance that a liquid secondary market will exist for
any particular stock index option. Thus, it may not be
possible to close such an option. The inability to close
options positions could have an adverse impact on a Fund's
ability effectively to hedge its securities. A Fund will
enter into an option position only if there appears to be a
liquid secondary market for such options.
A Fund will not engage in transactions in options on stock
indices for speculative purposes but only to protect
appreciation attained and to take advantage of the liquidity
available in the option markets.
Rule 144A Securities
A Fund may invest in restricted securities, including
unregistered securities eligible for resale without
registration pursuant to Rule 144A ("Rule 144A Securities")
under the 1933 Act. Rule 144A Securities may be freely
traded among qualified institutional investors without
registration under the 1933 Act.
Investing in Rule 144A Securities could have the effect of
increasing the level of a Fund's illiquidity to the extent
that qualified institutional buyers become, for a time,
uninterested in purchasing these securities. After
thepurchase of a Rule 144A Security, however, the Board of
Directors and the Manager will continue to monitor the
liquidity of that security to ensure that a Fund has no more
than 10% (or, in the case of International Small Cap,
Emerging Markets and Global Equity Funds, 15%) of its net
assets in illiquid securities.
Non-Traditional Equity Securities
International Small Cap Fund and Emerging Markets Fund may
each invest in convertible preferred stocks that offer
enhanced yield features, such as Preferred Equity Redemption
Cumulative Stock ("PERCS"), which provide an investor, such
as the Funds, with the opportunity to earn higher dividend
income than is available on a company's common stock. A
PERCS is a preferred stock which generally features a
mandatory conversion date, as well as a capital appreciation
limit which is usually expressed in terms of a stated price.
Upon the conversion date, most PERCS convert into common
stock of the issuer (PERCS are generally not convertible
into cash at maturity). Under a typical arrangement, if
after a predetermined number of years the issuer's common
stock is trading at a price below that set by the capital
appreciation limit, each PERCS would convert to one share of
common stock. If, however, the issuer's common stock is
trading at a price above that set by the capital
appreciation limit, the holder of the PERCS would receive
less than one full share of common stock. The amount of
that fractional share of common stock received by the PERCS
holder is determined by dividing the price set by the
capital appreciation limit of the PERCS by the market price
of the issuer's common stock. PERCS can be called at any
time prior to maturity, and hence do not provide call
protection. However, if called early, the issuer may pay a
call premium over the market price to the investor. This
call premium declines at a preset rate daily, up to the
maturity date of the PERCS.
International Small Cap Fund and Emerging Markets Fund may
also invest in other enhanced convertible securities. These
include but are not limited to ACES (Automatically
Convertible Equity Securities), PEPS (Participating Equity
Preferred Stock), PRIDES (Preferred Redeemable Increased
Dividend Equity Securities), SAILS (Stock Appreciation
Income Linked Securities), TECONS (Term Convertible Notes),
QICS (Quarterly Income Cumulative Securities) and DECS
(Dividend Enhanced Convertible Securities). ACES, PEPS,
PRIDES, SAILS, TECONS, QICS, and DECS all have the following
features: they are company-issued convertible preferred
stock; unlike PERCS, they do not have capital appreciation
limits; they seek to provide the investor with high current
income, with some prospect of future capital appreciation;
they are typically issued with three to four-year
maturities; they typically have some built- in call
protection for the first two to three years; investors
have the right to convert them into shares of common stock
at a preset conversion ratio or hold them until maturity;
and upon maturity, they will automatically convert to either
cash or a specified number of shares of common stock.
ACCOUNTING AND TAX ISSUES
When a Fund writes a call, or purchases a put option, an
amount equal to the premium received or paid by it is
included in the Fund's assets and liabilities as an asset
and as an equivalent liability.
In writing a call, the amount of the liability is
subsequently "marked to market" to reflect the current
market value of the option written. The current market
value of a written option is the last sale price on the
principal Exchange on which such option is traded or, in the
absence of a sale, the mean between the last bid and asked
prices. If an option which a Fund has written expires on
its stipulated expiration date, the Fund recognizes a
capital gain. If a Fund enters into a closing purchase
transaction with respect to an option which the Fund has
written, the Fund realizes a gain (or loss if the cost of
the closing transaction exceeds the premium received when
the option was sold) without regard to any unrealized gain
or loss on the underlying security, and the liability
related to such option is extinguished. If a call
option which a Fund has written is exercised, the Fund
realizes a capital gain or loss from the sale of the
underlying security and the proceeds from such sale are
increased by the premium originally received.
The premium paid by a Fund for the purchase of a put
option is recorded in the Fund's assets and liabilities as
an investment and subsequently adjusted daily to the current
market value of the option. For example, if the current
market value of the option exceeds the premium paid, the
excess would be unrealized appreciation and, conversely, if
the premium exceeds the current market value, such excess
would be unrealized depreciation. The current market value
of a purchased option is the last sale price on the
principal Exchange on which such option is traded or, in the
absence of a sale, the mean between the last bid and asked
prices. If an option which a Fund has purchased expires on
the stipulated expiration date, the Fund realizes a
short-term or long-term capital loss for federal income tax
purposes in the amount of the cost of the option. If a Fund
exercises a put option, it realizes a capital gain or loss
(long-term or short-term, depending on the holding period of
the underlying security) from the sale of the underlying
security and the proceeds from such sale will be decreased
by the premium originally paid.
Options on Certain Stock Indices
Accounting for options on certain stock indices will be in
accordance with generally accepted accounting principles.
The amount of any realized gain or loss on closing out such
a position will result in a realized gain or loss for tax
purposes. Such options held by a Fund at the end of each
fiscal year on a broad-based stock index will be required to
be "marked to market" for federal income tax purposes.
Generally, 60% of any net gain or loss recognized on such
deemed sales or on any actual sales will be treated as
long-term capital gain or loss, and the remainder will be
treated as short-term capital gain or loss.
Other Tax Requirements
Each Fund, other than International Small Cap Fund, has
qualified, and intends to continue to qualify, as a
regulated investment company under Subchapter M of the Code.
International Small Cap Fund intends to qualify as a
regulated investment company under Subchapter M of the Code.
As such, a Fund will not be subject to federal income tax,
or to any excise tax, to the extent its earnings are
distributed as provided in the Code and it satisfies other
requirements relating to the sources of its income and
diversification of its assets.
In order to qualify as a regulated investment company for
federal income tax purposes, each Fund must meet certain
specific requirements, including:
(i) The Fund must maintain a diversified portfolio of
securities, wherein no security (other than U.S. government
securities and securities of other regulated investment
companies) can exceed 25% of the Fund's total assets, and,
with respect to 50% of the Fund's total assets, no
investment (other than cash and cash items, U.S. Government
securities and securities of other regulated investment
companies) can exceed 5% of the Fund's total assets;
(ii) The Fund must derive at least 90% of its gross income
from dividends, interest, payments with respect to
securities loans, and gains from the sale or disposition of
stock and securities or foreign currencies, or other income
derived with respect to its business of investing in such
stock, securities, or currencies;
(iii) The Fund must distribute to its shareholders at
least 90% of its net investment income and net tax-exempt
income for each of its fiscal years, and
(iv) The Fund must realize less than 30% of its gross
income for each fiscal year from gains from the sale of
securities and certain other assets that have been held by
the Fund for less than three months ("short-short income").
The Taxpayer Relief Act of 1997 (the "1997 Act") repealed
the 30% short-short income test for tax years of regulated
investment companies beginning after August 5, 1997;
however, this rule may have continuing effect in some states
for purposes of classifying the Fund as a regulated
investment company.
The Code requires the Funds to distribute at least 98% of
its taxable ordinary income earned during the calendar year
and 98% of its capital gain net income earned during the 12
month period ending October 31 (in addition to amounts from
the prior year that were neither distributed nor taxed to a
Fund) to you by December 31 of each year in order to avoid
federal excise taxes. The Funds intend as a matter of
policy to declare and pay sufficient dividends in December
or January (which are treated by you as received in
December) but does not guarantee and can give no assurances
that its distributions will be sufficient to eliminate all
such taxes.
The straddle rules of Section 1092 may apply. Generally,
the straddle provisions require the deferral of losses to
the extent of unrecognized gains related to the offsetting
positions in the straddle. Excess losses, if any, can be
recognized in the year of loss. Deferred losses will be
carried forward and recognized in the year that unrealized
losses exceed unrealized gains.
The federal income tax rules governing the taxation of
interest rate swaps are not entirely clear and may require
Global Bond Fund to treat payments received under such
arrangements as ordinary income and to amortize such
payments under certain circumstances. Global Bond Fund will
limit its activity in this regard in order to maintain its
qualification as a regulated investment company.
The 1997 Act has also added new provisions for dealing
with transactions that are generally called "Constructive
Sale Transactions." Under these rules, the Fund must
recognize gain (but not loss) on any constructive sale of an
appreciated financial position in stock, a partnership
interest or certain debt instruments. The Fund will
generally be treated as making a constructive sale when it:
1) enters into a short sale on the same or substantially
identical property; 2) enters into an offsetting notional
principal contract; or 3) enters into a futures or forward
contract to deliver the same or substantially identical
property. Other transactions (including certain financial
instruments called collars) will be treated as constructive
sales as provided in Treasury regulations to be published.
There are also certain exceptions that apply for
transactions that are closed before the end of
the 30th day after the close of the taxable year.
Investment in Foreign Currencies and Foreign Securities--
The Funds are authorized to invest certain limited amounts
in foreign securities. Such investments, if made, will have
the following additional tax consequences to each Fund:
Under the Code, gains or losses attributable to
fluctuations in foreign currency exchange rates which occur
between the time a Fund accrues income (including
dividends), or accrues expenses which are denominated in a
foreign currency, and the time a Fund actually collects such
income or pays such expenses generally are treated as
ordinary income or loss. Similarly, on the disposition of
debt securities denominated in a foreign currency and on the
disposition of certain options, futures, forward contracts,
gain or loss attributable to fluctuations in the value of
foreign currency between the date of acquisition of the
security or contract and the date of its disposition are
also treated as ordinary gain or loss. These gains or
losses, referred to under the Code as "Section 988" gains or
losses, may increase or decrease the amount of a Fund's net
investment company taxable income, which, in turn, will
affect the amount of income to be distributed to you by a
Fund.
If a Fund's Section 988 losses exceed a Fund's other net
investment company taxable income during a taxable year, a
Fund generally will not be able to make ordinary dividend
distributions to you for that year, or distributions made
before the losses were realized will be recharacterized as
return of capital distributions of federal income tax
purposes, rather than as an ordinary dividend or capital
gain distribution. If a distribution is treated as a return
of capital, your tax basis in your Fund shares will be
reduced by a like amount (to the extent of such basis), and
any excess of the distribution over your tax basis in your
Fund shares will be treated as capital gain to you.
The 1997 Act generally requires that foreign income be
translated into U.S. dollars at the average exchange rate
for the tax year in which the transactions are conducted.
Certain exceptions apply to taxes paid more than two years
after the taxable year to which they relate. This new law
may require a Fund to track and record adjustments to
foreign taxes paid on foreign securities in which it
invests. Under a Fund's current reporting procedure,
foreign security transactions are recorded generally at the
time of each transaction using the foreign currency spot
rate available for the date of each transaction.
Under the new law, a Fund will be required to record a
fiscal year end (and at calendar year end for excise tax
purposes) an adjustment that reflects the difference between
the spot rates recorded for each transaction and the
year-end average exchange rate for all of a Fund's foreign
securities transactions. There is a possibility that the
mutual fund industry will be given relief from this new
provision, in which case no year-end adjustments will be
required.
The Funds may be subject to foreign withholding taxes on
income from certain of its foreign securities. If more than
50% of the total assets of a Fund at the end of its fiscal
year are invested in securities of foreign corporations, a
Fund may elect to pass-through to you your pro rata share of
foreign taxes paid by a Fund. If this election is made, you
will be: (i) required to include in your gross income your
pro rata share of foreign source income (including any
foreign taxes paid by a Fund); and (ii) entitled to either
deduct your share of such foreign taxes in computing your
taxable income or to claim a credit for such taxes against
your U.S. income tax, subject to certain limitations under
the Code. You will be informed by a Fund at the end of each
calendar year regarding the availability of any such foreign
tax credits and the amount of foreign source income
(including any foreign taxes paid by a
Fund). If a Fund elects to pass-through to you the foreign
income taxes that it has paid, you will be informed at the
end of the calendar year of the amount of foreign taxes paid
and foreign source income that must be included on your
federal income tax return. If a Fund invests 50% or less of
its total assets in securities of foreign corporations, it
will not be entitled to pass-through to you your pro-rata
shares of foreign taxes paid by a Fund. In this case, these
taxes will be taken as a deduction by a Fund, and the income
reported to you will be the net amount after these
deductions. The 1997 Act also simplifies the procedures by
which investors in funds that invest in foreign securities
can claim tax credits on their individual income tax returns
for the foreign taxes paid by a Fund. These provisions will
allow investors who pay foreign taxes of $300 or less on a
single return or $600 or less on a joint return during any
year (all of which must be reported on IRS Form 1099-DIV
from a Fund to the investor) to claim a tax credit against
their U.S. federal income tax for the amount of foreign
taxes paid by a Fund. This process will allow you, if
you qualify, to bypass the burdensome and detailed reporting
requirements on the foreign tax credit schedule (Form 1116)
and report your foreign taxes paid directly on page 2 of
Form 1040. You should note that this simplified procedure
will not be available until calendar year 1998.
Investment in Passive Foreign Investment Company
securities--The Funds may invest in shares of foreign
corporations which may be classified under the Code as
passive foreign investment companies ("PFICs"). In general,
a foreign corporation is classified as a PFIC if at least
one-half of its assets constitute investment-type assets or
75% or more of its gross income is investment-type income.
If a Fund receives an "excess distribution" with respect to
PFIC stock, the Fund itself may be subject to U.S. federal
income tax on a portion of the distribution, whether or not
the corresponding income is distributed by a Fund to you.
In general, under the PFIC rules, an excess distribution is
treated as having been realized ratably over the period
during which a Fund held the PFIC shares. A Fund itself
will be subject to tax on the portion, if any, of an excess
distribution that is so allocated to prior Fund taxable
years, and an interest factor will be added to the tax, as
if the tax had been payable in such prior taxable years. In
this case, you would not be permitted to claim a credit on
your own tax return for the tax paid by a Fund. Certain
distributions from a PFIC as well as gain from
the sale of PFIC shares are treated as excess distributions.
Excess distributions are characterized as ordinary income
even though, absent application of the PFIC rules, certain
distribution might have been classified as capital gain.
This may have the effect of increasing Fund distributions to
you that are treated as ordinary dividends rather than
long-term capital gain dividends.
A Fund may be eligible to elect alternative tax treatment
with respect to PFIC shares. Under an election that
currently is available in some circumstances, a Fund
generally would be required to include in its gross income
its share of the earnings of a PFIC on a current basis,
regardless of whether distributions are received from the
PFIC during such period. If this election were made, the
special rules, discussed above, relating to the taxation of
excess distributions, would not apply. In addition, the
1997 Act provides for another election that would involve
marking-to-market the Fund's PFIC shares at the end of each
taxable year (and on certain other dates as prescribed in
the Code), with the result that unrealized gains would be
treated as though they were realized. The Fund would
also be allowed an ordinary deduction for the excess, if
any, of the adjusted basis of its investment in the PFIC
stock over its fair market value at the end of the taxable
year. This deduction would be limited to the amount of any
net mark-to- market gains previously included with respect
to that particular PFIC security. If a Fund were to make
this second PFIC election, tax at the Fund level under the
PFIC rules would generally be eliminated.
The application of the PFIC rules may affect, among other
things, the amount of tax payable by a Fund (if any), the
amounts distributable to you by a Fund, the time at which
these distributions must be made, and whether these
distributions will be classified as ordinary income or
capital gain distributions to you.
You should be aware that it is not always possible at the
time shares of a foreign corporation are acquired to
ascertain that the foreign corporation is a PFIC, and that
there is always a possibility that a foreign corporation
will become a PFIC after a Fund acquires shares in that
corporation. While a Fund will generally seek to avoid
investing in PFIC shares to avoid the tax consequences
detailed above, there are no guarantees that it will do so
and it reserves the right to make such investments as a
matter of its fundamental investment policy.
Most foreign exchange gains are classified as ordinary
income which will be taxable to you as such when
distributed. Similarly, you should be aware that any
foreign exchange losses realized by a Fund, including any
losses realized on the sale of foreign debt securities, are
generally treated as ordinary losses for federal income tax
purposes. This treatment could increase or reduce a Fund's
income available for distribution to you, and may cause some
or all of a Fund's previously distributed income to be
classified as a return of capital.
PERFORMANCE INFORMATION
From time to time, each Fund may state its Classes' total
return in advertisements and other types of literature. Any
statement of total return performance data for a Class will
be accompanied by information on the average annual
compounded rate of return for that Class over, as relevant,
the most recent one-, five- and ten-year (or life of fund,
if applicable) periods. Each Fund may also advertise
aggregate and average total return information for its
Classes over additional periods of time. In addition, each
Fund may include illustrations showing the power of
compounding in advertisements and other types of literature
In presenting performance information for Class A Shares,
the Limited CDSC, applicable only to certain redemptions of
those shares, will not be deducted from any computation of
total return. See the Prospectuses for the Fund Classes for
a description of the Limited CDSC and the limited instances
in which it applies. All references to a CDSC in this
Performance Information section will apply to Class B Shares
or Class C Shares.
The average annual total rate of return for each Class is
based on a hypothetical $1,000 investment that includes
capital appreciation and depreciation during the stated
periods. The following formula will be used for the actual
computations:
n
P(1 + T) = ERV
Where: P = a hypothetical initial purchase order of
$1,000 from which, in the case of only
Class A Shares, the maximum front-end sales
charge is deducted;
T = average annual total return;
n = number of years;
ERV = redeemable value of the hypothetical $1,000
purchase at the end of the period after the
deduction of the applicable CDSC, if any,
with respect to Class B Shares
and Class C Shares.
Aggregate or cumulative total return is calculated in a
similar manner, except that the results are not annualized.
Each calculation assumes the maximum front-end sales charge,
if any, is deducted from the initial $1,000 investment at
the time it is made with respect to Class A Shares and that
all distributions are reinvested at net asset value, and,
with respect to Class B Shares and Class C Shares, reflects
the deduction of the CDSC that would be applicable upon
complete redemption of such shares. In addition, each Fund
may present total return information that does not reflect
the deduction of the maximum front-end sales charge or any
applicable CDSC.
The performance of each Class of the International Equity,
Global Bond, Global Assets and Emerging Markets Funds, as
shown below, is the average annual total return or aggregate
total return quotations, as applicable, through November 30,
1996.
The total return for Class A Shares at offer reflects the
maximum front-end sales charge of 4.75% paid on the purchase
of shares. The total return for Class A Shares at net asset
value (NAV) does not reflect the payment of any front-end
sales charge. The total return for Class B Shares and Class
C Shares including deferred sales charge reflects the
deduction of the applicable CDSC that would be paid if the
shares were redeemed on November 30, 1996. The total return
for Class B Shares and Class C Shares excluding deferred
sales charge assumes the shares were not redeemed on
November 30, 1996 and, therefore, does not reflect the
deduction of a CDSC.
Securities prices fluctuated during the periods covered
and the past results should not be considered as
representative of future performance. Performance
information for International Small Cap Fund and Global
Equity Fund is not provided because those Funds were not
operating on November 30, 1997.
Average Annual Total Return(1)
International International International
Equity Fund Equity Fund Equity Fund
A Class A Class Institutional
(at Offer)(2) (at NAV) Class (3)
1 year ended
11/30/96 18.29% 24.22% 24.68%
3 years ended
11/30/96 11.82% 13.64% 13.97%
5 years ended
11/30/96 11.43% 12.52% 12.79%
Period 10/31/91(4)
through 11/30/96 10.45% 11.51% 11.78%
(1) Beginning December 1, 1995, the Manager had elected
voluntarily to waive that portion, if any, of the annual
management fees payable by International Equity Fund and to
pay the Fund's expenses to the extent necessary to ensure
that the Total Operating Expenses of International Equity
Fund A Class and International Equity Fund Institutional
Class do not exceed 1.85% and 1.55%, respectively (exclusive
of taxes, interest, brokerage commissions and extraordinary
expenses, but inclusive of applicable 12b-1 expenses),
through May 31, 1998. From June 1, 1994 through November
30, 1994, a waiver and reimbursement commitment was in place
to ensure that Total Operating Expensesof International
Equity Fund A Class and International EquityFund
Institutional Class did not exceed 1.50% (exclusive
of taxes, interest, brokerage commissions, extraordinary
expenses and 12b-1 expenses) through November 30, 1994.
Prior to June 1, 1994, a waiver and reimbursement commitment
was in place to ensure that expenses did not exceed 0.95%
(exclusive of taxes,interest, brokerage commissions,
extraordinary expenses, and 12b-1 expenses) for
International Equity Fund A Class and International Equity
Fund Institutional Class. In the absence of such waiver,
performance would have been affected negatively.
(2) Prior to November 29, 1995, the maximum front-end
sales charge was 5.75%. Effective November 29, 1995, the
maximum front-end sales charge was reduced to 4.75%. The
above performance numbers are calculated using 4.75% as the
applicable sales charge, and are more favorable than they
would have been had they been calculated using the former
front-end sales charge.
(3) Date of initial public offering of International
Equity Fund Institutional Class was November 9, 1992.
Pursuant to applicable regulation, total return shown for
International Equity Fund Institutional Class for the
periods prior to the commencement of operations of such
Class is calculated by taking the performance of
International Equity Fund A Class and adjusting it to
reflect the elimination of all front-end sales
charges. However, for those periods, no adjustment has been
made to eliminate the impact of 12b-1 payments, and
performance would have been affected had such an adjustment
been made.
(4) Date of initial public offering of International
Equity Fund A Class.
Average Annual Total Return (1)
International Equity International Equity
Fund B Class Fund B Class
(Including (Excluding
Deferred Sales Deferred Sales
Charge) Charge)
1 year ended
11/30/96 19.38% 23.38%
Period 9/6/94(2)
through 11/30/96 8.49% 9.70%
(1)Beginning December 1, 1995, the Manager had elected
voluntarily to waive that portion, if any, of the annual
management fees payable by International Equity Fund and to
pay the Fund's expenses to the extent necessary to ensure
that the Total Operating Expenses of International Equity
Fund B Class do not exceed 2.55% (exclusive of taxes,
interest, brokerage commissions and extraordinary expenses,
but inclusive of applicable 12b-1 expenses) through May 31,
1998. From September 6, 1994 through November 30, 1994, a
waiver and reimbursement commitment was in place to ensure
that Total Operating Expenses of International Equity Fund B
Class did not exceed 1.50% (exclusive of taxes, interest,
brokerage commissions, extraordinary expenses and 12b-1
expenses) through November 30, 1994. In the absence of
such waiver, performance would have been affected
negatively.
(2) Date of initial public offering of International
Equity Fund B Class.
Average Annual Total Return(1)
International International
Equity Equity
Fund C Class Fund C Class
(Including Deferred (Excluding Deferred
Sales Charge) Sales Charge)
1 year ended
11/30/96 22.39% 23.39%
Period 11/29/95 (2) 22.75% 22.75%
through 11/30/96
(1) The Manager had elected voluntarily to waive that
portion, if any, of the annual management fees payable by
International Equity Fund and to pay the Fund's expenses to
the extent necessary to ensure that the Total Operating
Expenses of International Equity Fund C Class do not exceed
2.55% (exclusive of taxes, interest, brokerage commissions
and extraordinary expenses, but inclusive of applicable
12b-1 expenses) through May 31, 1998. In the absence of
such waiver, performance would have been affected
negatively.
(2) Date of initial public offering of International
Equity Fund C Class.
Average Annual Total Return(1)
Global Bond Global Bond Global Bond
Fund
Fund A Class Fund A Class Institutional
(at Offer) (at NAV) Class
1 year ended
11/30/96 8.92% 14.35% 14.68%
Period 12/27/94(2)
through 11/30/96 14.29% 17.21% 17.60%
(1) The Manager had elected to voluntarily waive that
portion,
if any, of the annual management fees payable by Global Bond
Fund and to pay the Fund's expenses to ensure that the Total
Operating Expenses of Class A Shares and Institutional Class
shares of this Fund, respectively, do not exceed 1.25% and
0.95% (in each case, exclusive of taxes, interest, brokerage
commissions and extraordinary expenses, but inclusive of
applicable 12b-1 expenses) through May 31, 1998. In the
absence of such waiver, performance would have been affected
negatively.
(2) Date of initial public offering of Global Bond Fund A
Class and Global Bond Fund Institutional Class.
Average Annual Total Return (1)
Global Bond Global Bond
Fund B Class Fund B Class
(Including (Excluding
Deferred Sales Deferred Sales
Charge) Charge)
1 year ended
11/30/96 9.51% 13.51%
Period 12/27/94(2)
through 11/30/96 14.66% 16.47%
(1) The Manager had elected to voluntarily waive that
portion, if any, of the annual management fees payable by
Global Bond Fund and to pay the Fund's expenses to ensure
that the Total Operating Expenses of Class B Shares of this
Fund do not exceed 1.95% (exclusive of taxes, interest,
brokerage commissions and extraordinary expenses, but
inclusive of applicable 12b-1 expenses) through May 31,
1998. In the absence of such waiver, performance would have
been affected negatively.
(2) Date of initial public offering of Global Bond Fund B
Class.
Average Annual Total Return (1)
Global Bond Global Bond
Fund C Class Fund C Class
(Including (Excluding
Deferred Sales Deferred Sales
Charge) Charge)
1 year ended
11/30/96(2) 12.51% 13.51%
(1) The Manager had elected to voluntarily waive that
portion, if any, of the annual management fees payable by
Global Bond Fund and to pay the Fund's expenses to ensure
that the Total Operating Expenses of Class C Shares of this
Fund do not exceed 1.95% (exclusive of taxes, interest,
brokerage commissions and extraordinary expenses, but
inclusive of applicable 12b-1 expenses) through May 31,
1998. In the absence of such waiver, performance would have
been affected negatively.
(2) Date of initial public offering of Global Bond Fund C
Class was November 29, 1995.
Average Annual Total Return(1)
Global Assets Global Assets Global Assets
Fund A Class Fund A Class Institutional
(at Offer) (at NAV) Class
1 year ended
11/30/96 12.59% 18.17% 18.38%
Period 12/27/94(3)
through 11/30/96 17.60% 20.62% 20.93%
(1) The Manager had elected to voluntarily waive that
portion, if any, of the annual management fees payable by
Global Assets Fund and to pay the Fund's expenses to ensure
that the Total Operating Expenses of Class A Shares and
Institutional Class shares, respectively, do not exceed
1.25% and 0.95%, respectively, (in each case, exclusive of
taxes, interest, brokerage commissions and extraordinary
expenses, but inclusive of applicable 12b-1 expenses)
through May 31, 1998. In the absence of such waiver,
performance would have been affected negatively.
(2) Prior to November 29, 1995, the maximum front-end
sales charge was 5.75%. Effective November 29, 1995, the
maximum front-end sales charge was reduced to 4.75%. The
above performance numbers are calculated using 4.75% as the
applicable sales charge, and are more favorable than they
would have been had they been calculated using the former
front-end sales charge.
(3) Date of initial public offering of Global Assets Fund
A Class and Institutional Class.
Average Annual Total Return (1)
Global Assets Global Assets
Fund B Class Fund B Class
(Including (Excluding
Deferred Sales Deferred Sales
Charge) Charge)
1 year ended
11/30/96 13.32% 17.32%
Period 12/27/94(2)
through 11/30/96 18.01% 19.78%
(1) The Manager had elected to voluntarily waive that
portion, if any, of the annual management fees payable by
Global Assets Fund and to pay the Fund's expenses to ensure
that the Total Operating Expenses of Class B Shares do not
exceed 1.95% (exclusive of taxes, interest, brokerage
commissions and extraordinary expenses, but inclusive of
applicable 12b-1 expenses) through May 31, 1998. In the
absence of such waiver, performance would have been affected
negatively.
(2) Date of initial public offering of Global Assets Fund
B Class.
Average Annual Total Return (1)
Global Assets Global Assets
Fund C Class Fund C Class
(Including (Excluding
Deferred Sales Deferred Sales
Charge) Charge)
1 year ended
11/30/96(2) 16.33% 17.33%
(1) The Manager had elected to voluntarily waive that
portion, if any, of the annual management fees payable by
Global Assets Fund and to pay the Fund's expenses to ensure
that the Total Operating Expenses of Class C Shares of this
Fund do not exceed 1.95% (exclusive of taxes, interest,
brokerage commissions and extraordinary expenses, but
inclusive of applicable 12b-1 expenses) through May 31,
1998. In the absence of such waiver, performance would have
been affected negatively.
(2) Date of initial public offering of Global Assets Fund
C Class was November 29, 1995.
Aggregate Total Return(1)
Emerging Emerging Emerging
Markets Markets Markets Fund
Fund A Class Fund A Class Institutional
(at Offer) (at NAV) Class
Period 6/10/96(2)
through 11/30/96 (5.05%) (0.30%) (0.10%)
(1) The Manager had elected to voluntarily waive that
portion, if any, of the annual management fees payable by
Emerging Markets Fund and to pay the Fund's expenses
toensure that the Total Operating Expenses of Class A Shares
and Institutional Class shares, respectively, do not exceed
2.00% and 1.70%, respectively (in each case, exclusive of
taxes, interest, brokerage commissions and extraordinary
expenses, but inclusive of applicable 12b-1 expenses),
through May 31, 1998. In the absence of such waiver,
performance would have been affected negatively.
(2) Date of initial public offering of Emerging Markets
Fund A Class and Emerging Markets Fund Institutional Class;
total return for this short of a time period may not be
representative of longer term results.
Aggregate Total Return(1)
Emerging Markets Emerging Markets
Fund B Class Fund B Class
(Including (Excluding
Deferred Sales Deferred Sales
Charge) Charge)
Period 6/10/96(2)
through 11/30/96 (4.58%) (0.60%)
(1) The Manager had elected to voluntarily waive that
portion, if any, of the annual management fees payable by
Emerging Markets Fund and to pay the Fund's expenses to
ensure that the Total Operating Expenses of Class B Shares
of this Fund do not exceed 2.70% (exclusive of taxes,
interest, brokerage commissions and extraordinary expenses,
but inclusive of applicable 12b-1 expenses) through May 31,
1998. In the absence of such waiver, performance would have
been affected negatively.
(2) Date of initial public offering of Emerging Markets
Fund B Class; total return for this short of a time period
may not be representative of longer term results.
Aggregate Total Return(1)
Emerging Markets Emerging Markets
Fund C Class Fund C Class
(Including (Excluding
Deferred Sales Deferred Sales
Charge) Charge)
Period 6/10/96(2)
through 11/30/96 (1.59%) (0.60%)
(1) The Manager had elected to voluntarily waive that
portion, if any, of the annual management fees payable by
Emerging Markets Fund and to pay the Fund's expenses to
ensure that the Total Operating Expenses of Class C Shares
of this Fund do not exceed 2.70% (exclusive of taxes,
interest, brokerage commissions and extraordinary expenses,
but inclusive of applicable 12b-1 expenses) through May 31,
1998. In the absence of such waiver, performance would have
been affected negatively.
(2) Date of initial public offering of Emerging Markets
Fund C Class; total return for this short of a time period
may not be representative of longer term results.
Each Fund may also state total return performance for
its Classes in the form of an average annual return. This
average annual return figure will be computed by taking the
sum of a Class' annual returns, then dividing that figure by
the number of years in the overall period indicated. The
computation will reflect the impact of the maximum front-end
sales charge or CDSC, if any, paid on the illustrated
investment amount against the first year's return. From
time to time, each Fund may quote actual total return
performance for its Classes in advertising and other types
of literature compared to indices or averages of alternative
financial products available to prospective investors. For
example, the performance comparisons may include the average
return of various bank instruments, some of which may carry
certain return guarantees offered by leading banks and
thrifts as monitored by Bank Rate Monitor, and those of
generally-accepted corporate bond and government security
price indices of various durations prepared by Lehman
Brothers and Salomon Brothers, Inc. These indices
are not managed for any investment goal.
Total return performance for a Class will be computed by
adding all reinvested income and realized securities profits
distributions plus the change in net asset value during a
specific period and dividing by the offering price at the
beginning of the period. It will also reflect, as
applicable, the maximum front-end sales charge or CDSC paid
with respect to the illustrated investment amount, but
notany income taxes payable by shareholders on the reinvested
distributions included in the calculation. Because
securities prices fluctuate, past performance should not be
considered as a representation of the results which may be
realized from an investment in a Fund in the future.
From time to time, each Fund may also quote its Classes'
actual total return performance, dividend results and other
performance information in advertising and other types of
literature and may compare that information to, or may
separately illustrate similar information reported by, the
Standard & Poor's 500 Stock Index and the Dow Jones
Industrial Average and other unmanaged indices.
The Standard & Poor's 500 Stock Index and the Dow Jones
Industrial Average are industry-accepted unmanaged indices
of generally-conservative securities used for measuring
general market performance. The total return performance
reported for these indices will reflect the reinvestment of
all distributions on a quarterly basis and market price
fluctuations. The indices do not take into account any
sales charges or other fees.
As stated in the Prospectuses, Global Bond Fund may also
quote the current yield of each of its Classes in
advertisements and investor communications.
The yield computation is determined by dividing the net
investment income per share earned during the period by the
maximum offering price per share on the last day of the
period and annualizing the resulting figure, according to
the following formula.
a-b 6
YIELD = 2[( ---- + 1) - 1]
cd
Where: a = dividends and interest earned during
the period;
b = expenses accrued for the period (net
of reimbursements);
c = the average daily number of shares
outstanding during the period that
were entitled to receive dividends;
d = the maximum offering price per share
on the last day of the period.
The above formula will be used in calculating quotations
of yield, based on specific 30-day periods identified in
advertising by Global Bond Fund. Yield assumes the maximum
front-end sales charge, if any, and does not reflect the
deduction of any CDSC or Limited CDSC. The yields of Global
Bond Fund A Class, Global Bond Fund B Class, Global Bond
Fund C Class and Global Bond Fund Institutional Class as of
November 30, 1996 were 4.82%, 4.34%, 4.34% and 5.34%,
respectively, reflecting the waiver of fees by the Manager.
Actual yield may be affected by variations in sales charges
on investments.
Past performance, such as reflected in quoted yields,
should not be considered as representative of the results
which may be realized from an investment in a Fund in the
future. Investors should note that the income earned and
dividends paid by Global Bond Fund and Global Assets Fund
will vary with the fluctuation of interest rates and
performance of the portfolio to the extent of a Fund's
investments in debt securities. The net asset value of any
Fund may change. Unlike money market funds, the Funds invest
in longer-term securities that fluctuate in value and do so
in a manner inversely correlated with changing interest
rates. A Fund's net asset value will tend to rise when
interest rates fall. Conversely, a Fund's net asset value
will tend to fall as interest rates rise. Normally,
fluctuations in interest rates have a greater effect
on the prices of longer-term bonds. The value of the
securities held in a Fund will vary from day to day and
investors should consider the volatility of a Fund's net
asset value as well as its yield before making a decision to
invest.
Statistical and performance information and various
indices compiled and maintained by organizations such as the
following, may also be used in preparing exhibits comparing
certain industry trends to comparable activity and
performance of the Funds and in illustrating general
financial planning principles. Any indices used are not
managed for any investment goal.
CDA Technologies, Inc. is a performance evaluation
service that maintains a statistical database of
performance, as reported by a diverse universe of
independently-managed mutual
funds.
Ibbotson Associates, Inc. is a consulting firm that
provides a variety of historical data including total
return, capital appreciation and income on the stock market
as well as other investment asset classes, and inflation.
With their permission, this information will be used
primarily for comparative purposes and to illustrate general
financial planning principles.
Interactive Data Corporation is a statistical access
service that maintains a database of various international
industry indicators, such as historical and current
price/earning information, individual equity and
fixed-income price and return information.
Compustat Industrial Databases, a service of Standard &
Poor's, may also be used in preparing performance and
historical stock and bond market exhibits. This firm
maintains fundamental databases that provide financial,
statistical and market information covering more than 7,000
industrial and non- industrial companies.
Russell Indexes is an investment analysis service that
provides both current and historical stock performance
information, focusing on the business fundamentals of those
firms issuing the security.
Morgan Stanley Capital International is a statistical
and research firm that maintains a statistical database of
international securities. This firm also compiles and
maintains a number of unmanaged indices of international
securities. These indices are designed to measure the
performance of the stock markets of the USA, Europe, Canada,
Mexico, Australia and the Far East, and that of
international industry groups.
FT-Actuaries World Indices are jointly compiled by The
Financial Times, Ltd.; Goldman, Sachs & Co.; and Wood
Mackenzie & Co., Ltd. in conjunction with the Institute of
Actuaries and the Faculty of Actuaries. Indices maintained
by this group primarily focus on compiling statistical
information on international financial markets and industry
sectors, stock and bond issues and certain fundamental
information about the companies issuing the securities.
Statistical information on international currencies is also
maintained.
Salomon Brothers is a statistical research firm that
maintains databases of international markets and bond
markets (corporate and government-issued securities). This
information, as well as unmanaged indices compiled and
maintained by Salomon, will be used in preparing comparative
illustrations. In addition, the performance of multiple
indices compiled and maintained by these firms may be
combined to create a blended performance result for
comparative performances. Generally, the indices selected
will be representative of the types of securities in which
the Funds may invest and the assumptions that were used in
calculating the blended performance will be described.
Comparative information on the Consumer Price Index may
also be included. The Consumer Price Index, as prepared by
the U.S. Bureau of Labor Statistics, is the most commonly
used measure of inflation. It indicates the cost
fluctuations of a representative group of consumer goods.
It does not represent a return from an investment.
Current interest rate and yield information on
government debt obligations of various durations, as
reported weekly by the Federal Reserve (Bulletin H.15), may
also be used. As well, current industry rate and yield
information on all industry available fixed-income
securities, as reported weekly by The Bond Buyer, may also
be used in preparing comparative illustrations.
Each Fund may also promote its Classes' yield and/or
total return performance and use comparative performance
information computed by and available from certain industry
and general market research and publications, such as Lipper
Analytical Services, Inc., IBC/Donoghue's Money Market
Report andMorningstar, Inc.
The following tables are examples, for purposes of
illustration only, of cumulative total return performance
for each Class of the International Equity, Global Bond,
Global Assets and Emerging Markets Funds through November
30, 1996. The calculations assume the reinvestment of any
realized securities profits, distributions and income
dividends paid during the indicated periods. The
performance also reflects maximum sales charges, if any, but
not any income taxes payable by shareholders on the
reinvested distributions included in the calculations. The
performance of Class A Shares may also be shown without
reflecting the impact of any front-end sales charge. The
performance of Class B Shares and Class C Shares
is calculated both with the applicable CDSC included and
excluded. The net asset value of a class fluctuates so
shares, when redeemed, may be worth more or less than the
original investment, and a class' results should not be
considered as representative of future performance.
Cumulative Total Return(1)
International International
Equity Fund Equity Fund
A Class Institutional
(at Offer)(2) Class(3)
3 months ended
11/30/96 5.18% 10.51%
6 months ended
11/30/96 5.79%(4) 11.26%
9 months ended
11/30/96 10.00% 15.79%
1 year ended
11/30/96 18.29% 24.68%
3 years ended
11/30/96 39.80% 48.03%
5 years ended
11/30/96 71.82% 82.57%
Period 10/31/91(5)
through 11/30/96 65.77% 76.18%
(1) Beginning December 1, 1995, the Manager had elected
voluntarily to waive that portion, if any, of the annual
management fees payable by International Equity Fund and to
pay the Fund's expenses to the extent necessary to ensure
that the Total Operating Expenses of International Equity
Fund A Class and International Equity Fund Institutional
Class do not exceed 1.85% and 1.55%, respectively (exclusive
of taxes, interest, brokerage commissions and extraordinary
expenses, but inclusive of applicable 12b-1 expenses),
through May 31, 1998. From June 1, 1994 through November
30, 1994, a waiver and reimbursement commitment was in place
to ensure that Total Operating Expenses of International
Equity Fund A Class and International Equity Fund
Institutional Class did not exceed 1.50% (exclusive of
taxes, interest, brokerage commissions, extraordinary
expenses and 12b-1 expenses) through November 30, 1994.
Prior to June 1, 1994, a waiver and reimbursement
commitment was in place to ensure that expenses did not
exceed 0.95% (exclusive of taxes, interest, brokerage
commissions, extraordinary expenses, and 12b expenses) for
International Equity Fund A Class and International Equity
Fund Institutional Class. In the absence of such waiver,
performance would have been affected negatively.
(2) Prior to November 29, 1995, the maximum front-end
sales charge was 5.75%. Effective November 29, 1995, the
maximum front-end sales charge was reduced to 4.75%. The
above performance numbers are calculated using 4.75% as the
applicable sales charge, and are more favorable than they
would have been had they been calculated using the former
front-end sales charge.
(3) Date of initial public offering of International
Equity Fund Institutional Class was November 9, 1992.
Pursuant to applicable regulation, total return shown for
International Equity Fund Institutional Class for the
periods prior to the commencement of operations of such
Class is calculated by taking the performance of
International Equity Fund A Class and adjusting it to
reflect the elimination of all front-end sales charges.
However, for those periods, no adjustment has been made to
eliminate the impact of 12b-1 payments, and performance
would have been affected had such an adjustment been made.
(4) For the six months ended November 30, 1996, cumulative
total return for International Equity Fund A Class at net
asset value was 11.07%.
(5) Date of initial public offering of International
Equity Fund A Class.
Cumulative Total Return (1)
International International
Equity Equity
Fund B Class Fund B Class
(Including (Excluding
Deferred Sales Deferred Sales
Charge) Charge)
3 months ended
11/30/96 6.30% 10.30%
6 months ended
11/30/96 6.72% 10.72%
9 months ended
11/30/96 10.98% 14.98%
1 year ended
11/30/96 19.38% 23.38%
Period 9/6/94(2)
through 11/30/96 19.99% 22.99%
(1) Beginning December 1, 1995, the Managerhad elected
voluntarily to waive that portion, if any, of the annual
management fees payable by International Equity Fund and to
pay the Fund's expenses to the extent necessary to ensure
that the Total Operating Expenses of International Equity
Fund B Class do not exceed 2.55% (exclusive of taxes,
interest, brokerage commissions and extraordinary expenses,
but inclusive of applicable 12b-1 expenses) through May 31,
1998. From September 6, 1994 through November 30, 1994, a
waiver and reimbursement commitment was in place to ensure
that Total Operating Expenses of International Equity Fund B
Class did not exceed 1.50% (exclusive of taxes, interest,
brokerage commissions, extraordinary expenses and 12b-1
expenses) through November 30, 1994.
(2) Date of initial public offering ofInternational Equity
Fund B Class.
Cumulative Total Return (1)
International International
Equity Equity
Fund C Class Fund C Class
(Including (Excluding
Deferred Deferred
Sales Charge) Sales Charge)
3 months ended
11/30/96 9.23% 10.23%
6 months ended
11/30/96 9.73% 10.73%
9 months ended
11/30/96 13.92% 14.92%
1 year ended
11/30/96(2) 22.39% 23.39%
(1) The Manager had elected voluntarily to waive that
portion, if any, of the annual management fees payable by
International Equity Fund and to pay the Fund's expenses to
the extent necessary to ensure that the Total Operating
Expenses of International Equity Fund C Class do not exceed
2.55% (exclusive of taxes, interest, brokerage commissions
and extraordinary expenses, but inclusive of applicable
12b-1 expenses) through May 31, 1998. In the absence of
such waiver, performance would have been affected
negatively.
(2) Date of initial public offering of International
Equity Fund C Class was November 29, 1995.
Cumulative Total Return(1)
Global Global Global Global
Bond Bond Bond Bond
Fund Fund Fund Fund
A Class Insti- B Class B Class
(at Offer) tutional (Including (Excluding
Class Deferred Deferred
Sales Sales
Charge) Charge)
3 months ended
11/30/96 1.25% 6.50% 2.15% 6.15%
6 months ended
11/30/96 6.07%(2) 11.52% 6.98% 10.98%
9 months ended
11/30/96 6.72% 12.35% 7.52% 11.52%
1 year ended
11/30/96 8.92% 14.68% 9.51% 13.51%
Period
12/27/94(3)
through
11/30/96 29.38% 36.71% 30.20% 34.20%
(1) The Manager had elected to voluntarily waive that
portion, if any, of the annual management fees payable by
Global Bond Fund and to pay the Fund's expenses to the
extent necessary to ensure that the Total Operating Expenses
of the Class A Shares, Class B Shares and Institutional
Class shares, respectively, do not exceed 1.25%, 1.95% and
0.95% (in each case, exclusive of taxes, interest, brokerage
commissions and extraordinary expenses, but inclusive of
applicable 12b-1 expenses) through May 31, 1998. In the
absence of such waiver, performance would have been affected
negatively.
(2) For the six months ended November 30, 1996, cumulative
total return for Global Bond Fund A Class at net asset value
was 11.35%.
(3) Date of initial public offering of Global Bond Fund A
Class, Global Bond Fund Institutional Class and Global Bond
Fund B Class.
Cumulative Total Return(1)
Global Bond Global Bond
Fund C Class Fund C Class
(Including (Excluding
Deferred Deferred
Sales Charge) Sales Charge)
3 months ended
11/30/96 5.18% 6.18%
6 months ended
11/30/96 9.93% 10.93%
9 months ended
11/30/96 10.47% 11.47%
1 year ended
11/30/96(2) 12.51% 13.51%
(1) The Manager had elected voluntarily to
waive that
portion, if any, of the annual management fees payable by
Global Bond Fund and to pay the Fund's expenses to the
extent necessary to ensure that the Total Operating Expenses
of Global Bond Fund C Class do not exceed 1.95% (exclusive
of taxes, interest, brokerage commissions and extraordinary
expenses, but inclusive of applicable 12b-1 expenses)
through May 31, 1998. In the absence of such waiver,
performance would have been affected negatively.
(2) Date of initial public offering of Global Bond Fund C
Class was November 29, 1995.
Cumulative Total Return(1)
Cumulative Total Return(1)
Global Global Global Global
Assets Assets Assets Assets
Fund Fund Fund Fund
A Class Insti- B Class B Class
(at Offer) tutional (Including (Excluding
Class Deferred Deferred
Sales Sales
Charge) Charge)
3 months ended
11/30/96 3.20% 8.35% 4.21% 8.21%
6 months ended
11/30/96 4.76%(3) 10.03% 5.62% 9.62%
9 months ended
11/30/96 7.12% 12.60% 7.81% 11.81%
1 year ended
11/30/96 12.59% 18.38% 13.32% 17.32%
Period
12/27/96(4)
through
11/30/96 36.72% 44.28% 37.64% 41.64%
(1) The Manager had elected to voluntarily waive that
portion, if any, of the annual management fees payable by
Global Assets Fund and to pay the Fund's expenses to the
extent necessary to ensure that the Total Operating Expenses
of the Class A Shares, Class B Shares and Institutional
Class shares, respectively, do not exceed 1.25%, 1.95% and
0.95% (in each case, exclusive of taxes, interest, brokerage
commissions and extraordinary expenses, but inclusive of
applicable 12b-1 expenses) through May 31, 1998. In the
absence of such waiver, performance would have been affected
negatively.
(2) Prior to November 29, 1995, the maximum front-end sales
charge was 5.75%. Effective November 29, 1995, the maximum
front-end sales charge was reduced to 4.75%. The above
performance numbers are calculated using 4.75% as the
applicable sales charge, and are more favorable than they
would have been had they been calculated using the former
front-end sales charge.
(3) For the six months ended November 30, 1996, cumulative
total return for Global Assets Fund A Class at net asset
value was 9.97%.
(4) Date of initial public offering of Global Assets Fund A
Class, Global Assets Fund Institutional Class and Global
Assets Fund B Class.
Cumulative Total Return(1)
Global Global
Assets Assets
Fund C Class Fund C Class
(Including (Excluding
Deferred Deferred
Sales Charge) Sales Charge)
3 months ended
11/30/96 7.15% 8.15%
6 months ended
11/30/96 8.48% 9.48%
9 months ended
11/30/96 10.77% 11.77%
1 year ended
11/30/96(2) 16.33% 17.33%
(1) The Manager had elected voluntarily to waive that
portion, if any, of the annual management fees payable by
Global Assets Fund and to pay the Fund's expenses to the
extent necessary to ensure that the Total Operating Expenses
of Global Assets Fund C Class do not exceed 1.95% (exclusive
of taxes, interest, brokerage commissions and extraordinary
expenses, but inclusive of applicable 12b-1 expenses)
through May 31, 1998. In the absence of such waiver,
performance would have been affected negatively.
(2) Date of initial public offering of Global Assets Fund
C Class was November 29, 1995.
Cumulative Total Return(1)
Emerging Emerging Emerging Emerging
Markets Markets Markets Markets
Fund Fund Fund Fund
A Class Insti- B Class B Class
(at Offer) tutional (Including (Excluding
Class Deferred Deferred
Sales Sales
Charge) Charge)
3 months
ended
11/30/96 (5.41%) (0.60%) (4.86%) (0.90%)
Period
6/10/96(2)
through
11/30/96 (5.05%) (0.10%) (4.58%) (0.60%)
(1) The Manager had elected to voluntarily waive that
portion, if any, of the annual management fees payable by
Emerging Markets Fund and to pay the Fund's expenses to
ensure that the Total Operating Expenses of the Class A
Shares, Class B Shares and Institutional Class shares,
respectively, do not exceed 2.00%, 2.70% and 1.70%,
respectively, (in each case, exclusive of taxes, interest,
brokerage commissions and extraordinary expenses, but
inclusive of applicable 12b-1 expenses) through May 31,
1998. In the absence of such waiver,
performance would have been affected negatively.
(2) Date of initial public offering of Emerging Markets
Fund A Class, Emerging Markets Fund Institutional Class and
Emerging Markets Fund B Class; total return for this short
of a time period may not be representative of longer term
results.
Cumulative Total Return(1)
Emerging Emerging
Markets Markets
Fund C Class Fund C Class
(Including (Excluding
Deferred Deferred
Sales Charge) Sales Charge)
3 months ended
11/30/96 (1.89%) (0.90%)
Period 6/10/96(2)
through 11/30/96 (1.59%) (0.60%)
(1) The Manager had elected to voluntarily waive that
portion, if any, of the annual management fees payable by
Emerging Markets Fund and to pay the Fund's expenses to
ensure that the Total Operating Expenses of the Class C
Shares of this Fund do not exceed 2.70% (exclusive of taxes,
interest, brokerage commissions and extraordinary expenses,
but inclusive of applicable 12b-1 expenses) through May 31,
1998. In the absence of such waiver, performance would have
been affected negatively.
(2) Date of initial public offering of Emerging Markets
Fund C Class; total return for this short of a time period
may not be representative of longer term results.
Because every investor's goals and risk threshold are
different, the Distributor, as distributor for Global Funds,
Inc. and other mutual funds in the Delaware Group, will
provide general information about investment alternatives
and scenarios that will allow investors to assess their
personal goals. This information will include general
material about investing as well as materials reinforcing
various industry-accepted principles of prudent and
responsible personal financial planning. One typical way of
addressing these issues is to compare an individual's goals
and the length of time the individual has to attain these
goals to his or her risk threshold. In addition, the
Distributor may also provide information that discusses the
overriding investment philosophy of Delaware Management
Company, Inc. ("Delaware" or the "Sub- Adviser"), Delaware
Investment Advisers, a division of Delaware, and the
Manager, an affiliate of Delaware, and how that philosophy
impacts Fund investment disciplines and strategies employed
in seeking each Fund's objectives. The Distributor may also
from time to time cite general or specific information about
the institutional clients of Delaware, including the number
of such clients serviced by Delaware.
Dollar-Cost Averaging
For many people, deciding when to invest can be a
difficult decision. Security prices tend to move up and
down over various market cycles and logic says to invest
when prices are low. However, even experts can't always
pick the highs and the lows. By using a strategy known as
dollar-cost averaging, you schedule your investments ahead
of time. If you invest a set amount on a regular basis,
that money will always buy more shares when the price is low
and fewer when the price is high. You can choose to invest
at any regular interval--for example, monthly or
quarterly--as long as you stick to your regular
schedule. Dollar-cost averaging looks simple and it is, but
there are important things to remember.
Dollar-cost averaging works best over longer time periods,
and it doesn't guarantee a profit or protect against losses
in declining markets. If you need to sell your investment
when prices are low, you may not realize a profit no matter
what investment strategy you utilize. That's why
dollar-cost averaging can make sense for long-term goals.
Since the potential success of a dollar-cost averaging
program depends on continuous investing, even through
periods of fluctuating prices, you should consider your
dollar-cost averaging program a long-term commitment and
invest an amount you can afford and probably won't need to
withdraw. You also should consider your financial ability
to continue to purchase shares during periods
of low fund share prices. Delaware Group offers three
services -- Automatic Investing Program, Direct Deposit
Program and the Wealth Builder Option -- that can help to
keep your regular investment program on track. See
Investing by Electronic Fund Transfer - Direct Deposit
Purchase Plan and Automatic Investing Plan under Investment
Plans and Wealth Builder Option under Investment
Plans for a complete description of these services,
including restrictions or limitations.
The example below illustrates how dollar-cost averaging
can work. In a fluctuating market, the average cost per
share over a period of time will be lower than the average
price per share for the same time period.
Number
Investment Price Per of Shares
Amount Share Purchased
Month 1 $100 $10.00 10
Month 2 $100 $12.50 8
Month 3 $100 $ 5.00 20
Month 4 $100 $10.00 10
_______________________________________________
$400 $37.50 48
Total Amount Invested: $400
Total Number of Shares Purchased: 48
Average Price Per Share: $9.38 ($37.50/4)
Average Cost Per Share: $8.33 ($400/48 shares)
This example is for illustration purposes only. It is not
intended to represent the actual performance of any Fund.
TRADING PRACTICES AND BROKERAGE
The Manager selects brokers or dealers to execute
transactions on behalf of each Fund for the purchase or sale
of portfolio securities on the basis of its judgment of
their professional capability to provide the service. The
Sub-Adviser performs this function with respect to
transactions on behalf of Global Assets Fund and Global
Equity Fund for the purchase and sale of U.S. securities.
The primary consideration is to have brokers or dealers
execute transactions at best price and execution. Best
price and execution refers to many factors, including the
price paid or received for a security, the commission
charged, the promptness and reliability of execution, the
confidentiality and placement accorded the order and other
factors affecting the overall benefit obtained by the
account on the transaction. A number of trades are made on
a net basis where a Fund either buys securities directly
from the dealer or sells them to the dealer. In these
instances, there is no direct commission charged but there
is a spread (the difference between the buy and sell price)
which is the equivalent of a commission. When
a commission is paid, the Fund involved pays reasonably
competitive brokerage commission rates based upon the
professional knowledge of the Manager or the Sub-Adviser as
to rates paid and charged for similar transactions
throughout the securities industry. In some instances, the
Fund may pay a minimal share transaction cost when the
transaction presents no difficulty.
During the past three fiscal years, the aggregate
dollar amounts of brokerage commissions paid by
International Equity Fund, Global Assets Fund and Emerging
Markets Fund were as follows:
November 30,
1996 1995 1994
International Equity Fund $142,445 $85,113 $137,192
Global Assets Fund(1) 21,197 5,155 N/A
Emerging Markets Fund(2) 28,013 N/A N/A
(1) Date of initial offering of Global Assets Fund was
December 27, 1994.
(2) Date of initial public offering of Emerging Markets
Fund was June 10, 1996.
The Manager or the Sub-Adviser may allocate out of all
commission business generated by all of the funds and
accounts under its management, brokerage business to brokers
or dealers who provide brokerage and research services.
These services include advice, either directly or through
publications or writings, as to the value of securities, the
advisability of investing in, purchasing or selling
securities, and the availability of securities or
purchasers or sellers of securities; furnishing of analyses
and reports concerning issuers, securities or industries;
providing information on economic factors and trends;
assisting in determining portfolio strategy; providing
computer software and hardware used in security analyses;
and providing portfolio performance evaluation and technical
market analyses. Such services are used by the Manager or
the Sub-Adviser in connection with its investment
decision-making process with respect to one or more
funds and accounts managed by it, and may not be used, or
used exclusively, with respect to the fund or account
generating the brokerage.
During the fiscal year ended November 30, 1996, portfolio
transactions of the following Funds in the amounts listed
below, resulting in brokerage commissions in the amounts
listed below were directed to brokers for brokerage and
research services provided:
Portfolio Brokerage
Transactions Commissions
Amounts Amounts
International Equity Fund $6,430,845 $15,901
Global Assets Fund $2,777,479 $4,928
Emerging Markets Fund(1) -0- -0-
(1) Date of initial public offering of Emerging Markets
Fund was June 10, 1996.
As provided in the Securities Exchange Act of 1934 (the
"1934 Act") and each Fund's Investment Management Agreement,
higher commissions are permitted to be paid to
broker/dealers who provide brokerage and research services
than to broker/dealers who do not provide such services if
such higher commissions are deemed reasonable in relation to
the value of the brokerage and research services provided.
Although transactions are directed to broker/dealers who
provide such brokerage and research services, the Funds
believe that the commissions paid to such broker/dealers are
not, in general, higher than commissions that would be paid
to broker/dealers not providing such services and that such
commissions are reasonable in relation to the value of the
brokerage and research services provided. In some
instances, services may be provided to the Manager or the
Sub-Adviser which constitute in some part brokerage and
research services used by the Manager or the Sub-Adviser in
connection with its investment decision- making process and
constitute in some part services used by the Manager or the
Sub-Adviser in connection with administrative or other
functions not related to its investment decision-making
process. In such cases, the Manager or the Sub-Adviser will
make a good faith allocation of brokerage and research
services and will pay out of its own resources for services
used by the Manager or the Sub-Adviser in connection with
administrative or other functions not related to its
investment decision-making process. In addition, so long as
no fund is disadvantaged, portfolio transactions which
generate commissions or their equivalent are allocated to
broker/dealers who provide daily portfolio pricing services
to a Fund and to other funds in the Delaware Group. Subject
to best price and execution, commissions allocated to
brokers providing such pricing services may or may not be
generated by the funds receiving the pricing service.
The Manager or the Sub-Adviser may place a combined order
for two or more accounts or funds engaged in the purchase or
sale of the same security if, in its judgment, joint
execution is in the best interest of each participant and
will result in best price and execution. Transactions
involving commingled orders are allocated in a manner deemed
equitable to each account or fund. When a combined order is
executed in a series of transactions at different prices,
each account participating in the order may be allocated an
average price obtained from the executing broker. It is
believed that the ability of the accounts to participate in
volume transactions will generally be beneficial to the
accounts and funds. Although it is recognized that, in some
cases, the joint execution of orders could adversely affect
the price or volume of the security that a particular
account or fund may obtain, it is the opinion of the
Manager, the Sub-Adviser and Global Funds, Inc.'s Board of
Directors that the advantages of combined orders outweigh
the possible disadvantages of separate transactions.
Consistent with the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. (the "NASD"), and
subject to seeking best price and execution, the Funds may
place orders with broker/dealers that have agreed to defray
certain expenses of the funds in the Delaware Group of funds
such as custodian fees, and may, at the request of the
Distributor, give consideration to sales of a Fund's shares
as a factor in the selection of brokers and dealers to
execute Fund portfolio transactions.
Portfolio Turnover
A Fund is free to dispose of portfolio securities at any
time, subject to complying with the Code and the 1940 Act,
when changes in circumstances or conditions make such a move
desirable in light of its investment objective. A Fund will
not attempt to achieve or be limited to a predetermined rate
of portfolio turnover, such a turnover always being
incidental to transactions undertaken with a view to
achieving a Fund's investment objective.
The degree of portfolio activity may affect brokerage
costs of a Fund and taxes payable by a Fund's shareholders.
A turnover rate of 100% would occur, for example, if all the
investments in the Fund's portfolio at the beginning of the
year were replaced by the end of the year. In investing for
capital appreciation, a Fund may hold securities for any
period of time. Portfolio turnover will also be increased
if a Fund writes a large number of call options which are
subsequently exercised. To the extent a Fund realizes gains
on securities held for less than six months, such gains are
taxable to the shareholder or to the Fund at ordinary income
tax rates. The turnover rate also may be affected by cash
requirements from redemptions and repurchases of Fund
shares. Total brokerage costs generally increase with
higher portfolio turnover rates.
Under certain market conditions, a Fund may experience a
rate of portfolio turnover which could exceed 100%. Each
Fund's portfolio turnover rate is calculated by dividing the
lesser of purchases or sales of portfolio securities for the
particular fiscal year by the monthly average of the value
of the portfolio securities owned by the Fund during the
particular fiscal year, exclusive of securities whose
maturities at the time of acquisition are one year or less.
During the past two fiscal years, the portfolio turnover
rates of the Funds were as follows:
November 30,
1996 1995
International Equity Fund 9% 21%
Global Bond Fund 42% 98%*
Global Assets Fund 34% 57%*
Emerging Markets Fund 36%* N/A
*Annualized
PURCHASING SHARES
The Distributor serves as the national distributor for
each Fund's four classes of shares - Class A Shares, Class B
Shares, Class C Shares and the Institutional Class, and has
agreed to use its best efforts to sell shares of each Fund.
See the Prospectuses for additional information on how to
invest. Shares of each Fund are offered on a continuous
basis and may be purchased through authorized investment
dealers or directly by contacting Global Funds, Inc. or the
Distributor.
The minimum initial investment generally is $1,000 for
Class A Shares, Class B Shares and Class C Shares.
Subsequent purchases of such Classes generally must be at
least $100. The initial and subsequent investment minimums
for Class A Shares will be waived for purchases by officers,
directors and employees of any Delaware Group fund, the
Manager or the Sub-Adviser or any of their affiliates if the
purchases are made pursuant to a payroll deduction program.
Shares purchased pursuant to the Uniform Gifts to Minors Act
or Uniform Transfers to Minors Act and shares purchased in
connection with an Automatic Investing Plan are subject to a
minimum initial purchase of $250 and a minimum subsequent
purchase of $25. Accounts opened under the Delaware Group
Asset Planner service are subject to a minimum initial
investment of $2,000 per Asset Planner Strategy selected.
There are no minimum purchase requirements for the
Institutional Classes, but certain eligibility requirements
must be satisfied.
Each purchase of Class B Shares is subject to a maximum
purchase limitation of $250,000. For Class C Shares, each
purchase must be in an amount that is less than $1,000,000.
See Investment Plans for purchase limitations applicable to
retirement plans. Global Funds, Inc. will reject any
purchase order for more than $250,000 of Class B Shares and
$1,000,000 or more of Class C Shares. An investor may
exceed these limitations by making cumulative purchases over
a period of time. An investor should keep in mind, however,
that reduced front-end sales charges apply to investments of
$100,000 or more in Class A Shares and that, absent any
applicable fee waiver, Class A Shares are subject to lower
annual 12b-1 Plan expenses than Class B Shares and Class C
Shares and generally are not subject to a CDSC.
Selling dealers are responsible for transmitting orders
promptly. Global Funds, Inc. reserves the right to reject
any order for the purchase of its shares of a Fund if in the
opinion of management such rejection is in such Fund's best
interest.
The NASD has adopted Rules of Fair Practice, as amended,
relating to investment company sales charges. Global Funds,
Inc. and the Distributor intend to operate in compliance
with these rules.
Class A Shares are purchased at the offering price which
reflects a maximum front-end sales charge of 4.75%; however,
lower front-end sales charges apply for larger purchases.
See the table below. Class A Shares, absent any applicable
fee waiver, are also subject to annual 12b-1 Plan expenses.
Class B Shares are purchased at net asset value and are
subject to a CDSC of: (i) 4% if shares are redeemed within
two years of purchase; (ii) 3% if shares are redeemed during
the third or fourth year following purchase; (iii) 2% if
shares are redeemed during the fifth year following
purchase; and (iv) 1% if shares are redeemed during the
sixth year following purchase. Class B Shares are also
subject to annual 12b-1 Plan expenses which, absent any
applicable fee waiver, are higher than those to which Class
A Shares are subject and are assessed against the Class B
Shares for approximately eight years after purchase. See
Automatic Conversion of Class B Shares under Classes
of Shares in the Fund Classes' Prospectuses.
Class C Shares are purchased at net asset value and are
subject to a CDSC of 1% if shares are redeemed within 12
months following purchase. Class C Shares, absent any
applicable fee waiver, are also subject to annual 12b-1 Plan
expenses for the life of the investment which are equal to
those to which Class B Shares are subject.
The distributor has voluntarily elected to waive the
payment of 12b-1 Plan expenses by the Global Equity Fund
from the commencement of the public offering through
December 31, 1997 and by the International Small Cap Fund
from the commencement of the public offering through May 31,
1998.
Institutional Class shares are purchased at the net asset
value per share without the imposition of a front-end or
contingent deferred sales charge or 12b-1 Plan expenses.
See Determining Offering Price and Net Asset Value and
Plans Under Rule 12b-1 for the Fund Classes in this Part B.
Class A Shares, Class B Shares, Class C Shares and
Institutional Class shares represent a proportionate
interest in a Fund's assets and will receive a proportionate
interest in that Fund's income, before application, as to
Class A, Class B and Class C Shares, of any expenses under
that Fund's 12b-1 Plans.
Certificates representing shares purchased are not
ordinarily issued unless, in the case of Class A Shares or
Institutional Class shares, a shareholder submits a specific
request. Certificates are not issued in the case of Class B
Shares or Class C Shares or in the case of any retirement
plan account including self-directed IRAs. However,
purchases not involving the issuance of certificates are
confirmed to the investor and credited to the shareholder's
account on the books maintained by Delaware Service Company,
Inc. (the "Transfer Agent"). The investor will have the
same rights of ownership with respect to such shares as if
certificates had been issued. An investor that is permitted
to obtain a certificate may receive a certificate
representing full share denominations purchased by sending a
letter signed by each owner of the account to the Transfer
Agent requesting the certificate. No charge is assessed by
Global Funds, Inc. for any certificate issued. A
shareholder may be subject to fees for replacement
of a lost or stolen certificate under certain conditions,
including the cost of obtaining a bond covering the lost or
stolen certificate. Please contact the Funds for further
information. Investors who hold certificates representing
any of their shares may only redeem those shares by written
request. The investor's certificate(s) must accompany such
request.
Alternative Purchase Arrangements
The alternative purchase arrangements of Class A, Class B
and Class C Shares permit investors to choose the method of
purchasing shares that is most suitable for their needs
given the amount of their purchase, the length of time they
expect to hold their shares and other relevant
circumstances. Investors should determine whether, given
their particular circumstances, it is more advantageous to
purchase Class A Shares and incur a front-end sales charge
and, absent any applicable fee waiver, annual 12b-1 Plan
expenses of up to a maximum of 0.30% of the average daily
net assets of Class A Shares or to purchase either Class B
or Class C Shares and have the entire initial purchase
amount invested in the Fund with the investment
thereafter subject to a CDSC and, absent any applicable fee
waiver, annual 12b-1 Plan expenses. Class B Shares are
subject to a CDSC if the shares are redeemed within six
years of purchase, and Class C Shares are subject to a CDSC
if the shares are redeemed within 12 months of purchase.
Class B and Class C Shares are each subject to annual 12b-1
Plan expenses of up to a maximum of 1% (0.25% of which are
service fees to be paid to the Distributor, dealers or
others for providing personal service and/or maintaining
shareholder accounts) of average daily net assets of the
respective Class. Class B Shares will automatically convert
to Class A Shares at the end of approximately eight years
after purchase and, thereafter, be subject to annual 12b-1
Plan expenses of up to a maximum of 0.30% of average daily
net assets of such shares. Unlike Class B Shares, Class C
Shares do not convert to another class.
Class A Shares - International Equity Fund, International
Small Cap Fund, Global Bond Fund, Global Assets Fund,
Emerging Markets Fund and Global Equity Fund
Purchases of $100,000 or more of Class A Shares at the
offering price carry reduced front-end sales charges as
shown in the accompanying table, and may include a series of
purchases over a 13-month period under a Letter of Intention
signed by the purchaser. See Special Purchase Features -
Class A Shares, below, for more information on ways in which
investors can avail themselves of reduced front-end sales
charges and other purchase features.
International Equity Fund A Class
____________________________________________________________
Dealer's
Front-End Sales Commission***
Charge as % of as % of
Offering Amount Offering
Amount of Purchase Price Invested** Price
____________________________________________________________
Less than $100,000 4.75% 4.99% 4.00%
$100,000 but under $250,000 3.75 3.90% 3.00
$250,000 but under $500,000 2.50 2.60% 2.00
$500,000 but under
$1,000,000* 2.00 2.05% 1.60
____________________________________________________________
International Small Cap Fund A Class
____________________________________________________________
Dealer's
Front-End Sales Commission***
Charge as % of as % of
Offering Amount Offering
Amount of Purchase Price Invested** Price
____________________________________________________________
Less than $100,000 4.75% 4.94% 4.00%
$100,000 but under $250,000 3.75 3.88% 3.00
$250,000 but under $500,000 2.50 2.59% 2.00
$500,000 but under
$1,000,000* 2.00 2.00% 1.60
____________________________________________________________
Global Bond Fund A Class
____________________________________________________________
Dealer's
Front-End Sales Commission***
Charge as % of as % of
Offering Amount Offering
Amount of Purchase Price Invested** Price
____________________________________________________________
Less than $100,000 4.75% 4.97% 4.00%
$100,000 but under $250,000 3.75 3.92% 3.00
$250,000 but under $500,000 2.50 2.53% 2.00
$500,000 but under
$1,000,000* 2.00 2.01% 1.60
____________________________________________________________
Global Assets Fund A Class
____________________________________________________________
Dealer's
Front-End Sales Commission***
Charge as % of as % of
Offering Amount Offering
Amount of Purchase Price Invested** Price
____________________________________________________________
Less than $100,000 4.75% 4.96% 4.00%
$100,000 but under $250,000 3.75 3.91% 3.00
$250,000 but under $500,000 2.50 2.56% 2.00
$500,000 but under
$1,000,000* 2.00 2.03% 1.60
____________________________________________________________
Emerging Markets Fund A Class
____________________________________________________________
Dealer's
Front-End Sales Commission***
Charge as % of as % of
Offering Amount Offering
Amount of Purchase Price Invested** Price
____________________________________________________________
Less than $100,000 4.75% 5.02% 4.00%
$100,000 but under $250,000 3.75 3.92% 3.00
$250,000 but under $500,000 2.50 2.61% 2.00
$500,000 but under
$1,000,000* 2.00 2.01% 1.60
____________________________________________________________
Global Equity Fund A Class
____________________________________________________________
Dealer's
Front-End Sales Commission***
Charge as % of as % of
Offering Amount Offering
Amount of Purchase Price Invested** Price
____________________________________________________________
Less than $100,000 4.75% 4.94% 4.00%
$100,000 but under $250,000 3.75 3.88% 3.00
$250,000 but under $500,000 2.50 2.59% 2.00
$500,000 but under
$1,000,000* 2.00 2.00% 1.60
____________________________________________________________
* There is no front-end sales charge on purchases of
$1,000,000 or more of Class A Shares but, under certain
limited circumstances, a 1% contingent deferred sales
charge may apply upon redemption of such shares. The
contingent deferred sales charge ("Limited CDSC") that may
be applicable arises only in the case of certain shares
that were purchased at net asset value and triggered the
payment of a dealer's commission.
** Based on the net asset values per share of the
respective Fund's Class A Shares as of the end of Global
Funds, Inc.'s most recent fiscal year, except that
International Small Cap Fund A Class and Global Equity Fund
A Class are based on an initial net asset value of $8.50
per share.
*** Financial institutions or their affiliated brokers
may receive an agency transaction fee in the percentages
set forth above.
____________________________________________________________
A Fund must be notified when a sale takes place which
would qualify for the reduced front-end sales charge on the
basis of previous or current purchases. The reduced
front-end sales charge will be granted upon confirmation of
the shareholder's holdings by such Fund. Such reduced
front-end sales charges are not retroactive.
From time to time, upon written notice to all of its
dealers, the Distributor may hold special promotions for
specified periods during which the Distributor may reallow
to dealers up to the full amount of the front-end sales
charges shown above. Dealers who receive 90% or more of the
sales charge may be deemed to be underwriters under the
1933 Act.
____________________________________________________________
Certain dealers who enter into an agreement to provide
extra training and information on Delaware Group products
and services and who increase sales of Delaware Group funds
may receive an additional commission of up to 0.15% of the
offering price in connection with sales of Class A Shares.
Such dealers must meet certain requirements in terms of
organization and distribution capabilities and their
ability to increase sales. The Distributor should be
contacted for further information on these requirements as
well as the basis and circumstances upon which the
additional commission will be paid. Participating
dealers may be deemed to have additional responsibilities
under the securities laws.
Dealer's Commission
For initial purchases of Class A Shares of $1,000,000 or
more, a dealer's commission may be paid by the Distributor
to financial advisers through whom such purchases are
effected in accordance with the following schedule:
Dealer's
Commission
(as a percentage
of
Amount of Purchase amount purchased)
Up to $2 million 1.00%
Next $1 million up to $3 million 0.75
Next $2 million up to $5 million 0.50
Amount over $5 million 0.25
In determining a financial adviser's eligibility for the
dealer's commission, purchases of Class A Shares of other
Delaware Group funds as to which a Limited CDSC applies (see
Contingent Deferred Sales Charge for Certain Redemptions of
Class A Shares Purchased at Net Asset Value under
Redemption and Exchange in the Fund Classes' Prospectus) may
be aggregated with those of Class A Shares of a Fund.
Financial advisers also may be eligible for a dealer's
commission in connection with certain purchases made under a
Letter of Intention or pursuant to an investor's Right of
Accumulation. Financial advisers should contact the
Distributor concerning the applicability and calculation of
the dealer's commission in the case of combined purchases.
An exchange from other Delaware Group funds will not
qualify for payment of the dealer's commission, unless a
dealer's commission or similar payment has not been
previously paid on the assets being exchanged. The schedule
and program for payment of the dealer's commission are
subject to change or termination at any time by the
Distributor at its discretion.
Contingent Deferred Sales Charge - Class B Shares and Class
C Shares
Class B Shares and Class C Shares are purchased without a
front-end sales charge. Class B Shares redeemed within six
years of purchase may be subject to a CDSC at the rates set
forth below, and Class C Shares redeemed within 12 months
of purchase may be subject to a CDSC of 1%. CDSCs are
charged as a percentage of the dollar amount subject to the
CDSC. The charge will be assessed on an amount equal to the
lesser of the net asset value at the time of purchase of the
shares being redeemed or the net asset value of those shares
at the time of redemption. No CDSC will be imposed on
increases in net asset value above the initial purchase
price, nor will a CDSC be assessed on redemptions of shares
acquired through reinvestment of dividends or capital gains
distributions. See Waiver of Contingent Deferred Sales
Charge--Class B and Class C Shares under Redemption and
Exchange in the Prospectus for the Fund Classes
for a list of the instances in which the CDSC is waived.
The following table sets forth the rates of the CDSC for
Class B Shares of each Fund:
Contingent
Deferred Sales
Charge (as a
Percentage of
Dollar Amount
Year After Purchase Made Subject to Charge)
0-2 4%
3-4 3%
5 2%
6 1%
7 and thereafter None
During the seventh year after purchase and, thereafter,
until converted automatically into Class A Shares, Class B
Shares, absent any applicable fee waiver, will still be
subject to the annual 12b-1 Plan expenses of up to 1% of
average daily net assets of those shares. At the end of
approximately eight years after purchase, the investor's
Class B Shares will be automatically converted into Class A
Shares the same Fund. See Automatic Conversion of Class B
Shares under Classes of Shares in the Fund Classes'
Prospectuses. Such conversion will constitute a
tax-free exchange for federal income tax purposes. See
Taxes in the Prospectuses for the Fund Classes.
Plans Under Rule 12b-1 for the Fund Classes
Pursuant to Rule 12b-1 under the 1940 Act, Global Funds,
Inc. has adopted a separate plan for each of the Class A
Shares, the Class B Shares and the Class C Shares of a Fund
(the "Plans"). Each Plan permits the relevant Fund to pay
for certain distribution, promotional and related expenses
involved in the marketing of only the class of shares to
which the Plan applies. The Plans do not apply to
Institutional Classes of shares. Such shares are not
included in calculating the Plans' fees, and the Plans are
not used to assist in the distribution and marketing of
shares of the Institutional Classes. Shareholders of the
Institutional Classes may not vote on matters affecting the
Plans.
The Plans permit a Fund, pursuant to its Distribution
Agreement, to pay out of the assets of the Class A Shares,
Class B Shares and Class C Shares monthly fees to the
Distributor for its services and expenses in distributing
and promoting sales of shares of such classes. These
expenses include, among other things, preparing and
distributing advertisements, sales literature and
prospectuses and reports used for sales purposes,
compensating sales and marketing personnel, and paying
distribution and maintenance fees to securities brokers and
dealers who enter into dealer's agreements with the
Distributor. The Plan expenses relating to
Class B and Class C Shares are also used to pay the
Distributor for advancing the commission costs to dealers
with respect to the initial sale of such shares.
In addition, absent any applicable fee waiver, each Fund
may make payments out of the assets of the Class A, Class B
and Class C Shares directly to other unaffiliated parties,
such as banks, who either aid in the distribution of shares
of, or provide services to, such classes.
The maximum aggregate fee payable by a Fund under its
Plans and a Fund's Distribution Agreement, is on an annual
basis up to 0.30% of the Class A Shares' average daily net
assets for the year, and up to 1% (0.25% of which are
service fees to be paid to the Distributor, dealers and
others for providing personal service and/or maintaining
shareholder accounts) of Class B Shares' and Class C Shares'
average daily net assets for the year. Global Funds, Inc.'s
Board of Directors may reduce these amounts at any time.
All of the distribution expenses incurred by the
Distributor and others, such as broker/dealers, in excess
of the amount paid on behalf of Class A, Class B and Class C
Shares would be borne by such persons without any
reimbursement from such classes. Subject to seeking best
price and execution, a Fund may, from time to time, buy or
sell portfolio securities from or to firms which receive
payments under the Plans.
From time to time, the Distributor may pay additional
amounts from its own resources to dealers for aid in
distribution or for aid in providing administrative
services to shareholders.
The Plans and the Distribution Agreements, as amended,
have all been approved by the Board of Directors of Global
Funds, Inc., including a majority of the directors who are
not "interested persons" (as defined in the 1940 Act) of
Global Funds, Inc. and who have no direct or indirect
financial interest in the Plans, by vote cast in person at a
meeting duly called for the purpose of voting on the Plans
and such Agreements. Continuation of the Plans and the
Distribution Agreements, as amended, must be approved
annually by the Board of Directors in the same manner as
specified above.
Each year, the directors must determine whether
continuation of the Plans is in the best interest of
shareholders of, respectively, Class A Shares, Class B
Shares and Class C Shares of the respective Funds and that
there is a reasonable likelihood of the Plan relating to a
Fund Class providing a benefit to that class. The Plans and
the Distribution Agreements, as amended, may be terminated
at any time without penalty by a majority of those directors
who are not "interested persons" or by a majority vote of
the outstanding voting securities of the relevant Fund
Class. Any amendment materially increasing the percentage
payable under a Plan must likewise be approved by a majority
vote of the outstanding voting securities of the relevant
Fund Class, as well as by a majority vote of those directors
who are not "interested persons." With respect to each
Class A Shares' Plans any material increase in the maximum
percentage payable thereunder must be approved by a majority
of the outstanding voting securities of Class B Shares of
the same Fund. Also, any other material amendment to the
Plans must be approved by a majority vote of the directors
including a majority of the noninterested directors of
Global Funds, Inc. having no interest in the Plans. In
addition, in order for the Plans to remain effective, the
selection and nomination of directors who are not
"interested persons" of Global Funds, Inc. must be
effected by the directors who themselves are not
"interested persons" and who have no direct or indirect
financial interest in the Plans. Persons authorized to make
payments under the Plans must provide written reports at
least quarterly to the Board of Directors for its review.
For the fiscal year ended November 30, 1996, payments from
Class A Shares, Class B Shares and Class C Shares of
International Equity Fund amounted to $228,319, $64,523 and
$5,409, respectively. Such amounts were used for the
following purposes:
International International International
Equity Fund Equity Fund Equity Fund
A Class B Class C Class
Advertising --- --- ---
Annual/Semi-
Annual Reports $5,565 --- ---
Broker Trails $180,704 $15,882 ---
Broker Sales
Charges --- $26,538 $5,073
Dealer Service
Expenses --- --- ---
Interest on Broker
Sales Charges --- $18,627 $336
Commissions to
Wholesalers $1,316 $2,887 ---
Promotional-Broker
Meetings $560 $589 ---
Promotional-Other $34,629 --- ---
Prospectus
Printing $5,545 --- ---
Telephone --- --- ---
Wholesaler
Expenses --- --- ---
Other --- --- ---
For the fiscal year ended November 30, 1996, payments from
Class A Shares, Class B Shares and Class C Shares of Global
Bond Fund amounted to $5,484, $3,838 and $620,
respectively. Such amounts were used for the following
purposes:
Global Global Global
Bond Fund Bond Fund Bond Fund
A Class B Class C Class
Advertising --- --- ---
Annual/
Semi-Annual
Reports $181 --- ---
Broker Trails $4,160 $277 ---
Broker Sales
Charges --- $1,589 $464
Dealer Service
Expenses --- $39 $3
Interest on
Broker Sales
Charges --- $1,096 $40
Commissions to
Wholesalers --- $608 $107
Promotional-
Broker Meetings --- $40 $2
Promotional-Other --- --- ---
Prospectus
Printing $1,035 $7 ---
Telephone $108 $182 ---
Wholesaler
Expenses --- --- $4
Other --- --- ---
For the fiscal year ended November 30, 1996, payments from
Class A Shares, Class B Shares and Class C Shares of Global
Assets Fund amounted to $23,324, $26,341 and $4,989,
respectively. Such amounts were used for the following
purposes:
Global Global Global
Assets Fund Assets Fund Assets
Fund
A Class B Class C Class
Advertising --- --- ---
Annual/Semi-
Annual Reports $473 --- ---
Broker Trails $19,128 $6,663 ---
Broker Sales Charges --- $11,249 $4,695
Dealer Service
Expenses --- --- ---
Interest on Broker
Sales Charges --- $7,189 $294
Commissions to
Wholesalers --- $974 ---
Promotional-
Broker Meetings $1 $266 ---
Promotional-Other $3,282 --- ---
Prospectus Printing $440 --- ---
Telephone --- --- ---
Wholesaler Expenses --- --- ---
Other --- --- ---
For the period June 10, 1996 (date of initial public
offering) through November 30, 1996, payments from Class A
Shares, Class B Shares and Class C Shares of Emerging
Markets Fund amounted to $3,206, $652 and $831,
respectively. Such amounts were used for the following
purposes:
Emerging Emerging Emerging
Markets Fund Markets Fund Markets Fund
A Class B Class C Class
Advertising --- --- ---
Annual/Semi-
Annual Reports --- --- ---
Broker Trails $2,508 $163 ---
Broker Sales Charges --- $242 $418
Dealer Service
Expenses --- --- $1
Interest on Broker
Sales Charges --- $215 $21
Commissions to
Wholesalers $70 $24 $354
Promotional-Broker
Meetings --- $8 $8
Promotional-Other $628 --- ---
Prospectus Printing --- --- ---
Telephone --- --- $1
Wholesaler Expenses --- --- $28
Other --- --- ---
The staff of the SEC has proposed amendments to Rule 12b-1
and other related regulations that could impact Rule 12b-1
Distribution Plans. Global Funds, Inc. intends to amend
the Plans, if necessary, to comply with any new rules or
regulations the SEC may adopt with respect to Rule 12b-1.
Other Payments to Dealers - Class A, Class B and Class C
Shares
From time to time, at the discretion of the Distributor,
all registered broker/dealers whose aggregate sales of Fund
Classes exceed certain limits as set by the Distributor,
may receive from the Distributor an additional payment of up
to 0.25% of the dollar amount of such sales. The
Distributor may also provide additional promotional
incentives or payments to dealers that sell shares of the
Delaware Group of funds. In some instances, these
incentives or payments may be offered only to certain
dealers who maintain, have sold or may sell certain amounts
of shares. The Distributor may also pay a portion of the
expense of preapproved dealer advertisements promoting the
sale of Delaware Group fund shares.
Special Purchase Features - Class A Shares
Buying Class A Shares at Net Asset Value
Class A Shares may be purchased without a front-end sales
charge under the Dividend Reinvestment Plan and, under
certain circumstances, the Exchange Privilege and the
12-Month Reinvestment Privilege.
Current and former officers, directors and employees of
Global Funds, Inc., any other fund in the Delaware Group,
the Sub-Adviser, including the Manager, the Sub-Adviser's
affiliates, or any of the Sub-Adviser's affiliates that may
in the future be created, legal counsel to the funds and
registered representatives and employees of broker/dealers
who have entered into Dealer's Agreements with the
Distributor may purchase Class A Shares of the Funds and any
such Class of shares of any of the other funds in the
Delaware Group, including any fund that may be created, at
the net asset value per share. Family members of such
persons at their direction, and any employee benefit plan
established by any of the foregoing funds, corporations,
counsel or broker/dealers may also purchase Class A Shares
at net asset value. Class A Shares may also be purchased at
net asset value by current and former officers, directors
and employees (and members of their families) of the
Dougherty Financial Group LLC.
Purchases of Class A Shares may also be made by clients of
registered representatives of an authorized investment
dealer at net asset value within 12 months after the
registered representative changes employment, if the
purchase is funded by proceeds from an investment where a
front-end sales charge, contingent deferred sales charge or
other sales charge has been assessed. Purchases of Class A
Shares may also be made at net asset value by bank employees
who provide services in connection with agreements between
the bank and unaffiliated brokers or dealers concerning
sales of shares of Delaware Group funds. In addition,
purchases of Class A Shares may be made by
financial institutions investing for the account of their
trust customers when they are not eligible to purchase
shares of a Fund's Institutional Class. Officers, directors
and key employees of institutional clients of the Manager,
the Sub-Adviser or any of their affiliates may purchase
Class A Shares at net asset value. Moreover, purchases may
be effected at net asset value for the benefit of the
clients of brokers, dealers and registered investment
advisers affiliated with a broker or dealer, if such broker,
dealer or investment adviser has entered into an agreement
with the Distributor providing specifically for the purchase
of Class A Shares in connection with special investment
products, such as wrap accounts or similar fee based
programs. Such purchasers are required to sign a letter
stating that the purchase is for investment only
and that the securities may not be resold except to the
issuer. Such purchasers may also be required to sign or
deliver such other documents as Global Funds, Inc. may
reasonably require to establish eligibility for purchase at
net asset value.
Purchases of Class A Shares at net asset value may also be
made by the following: financial institutions investing for
the account of their customers when they are not eligible to
purchase shares of the institutional class of the fund; and
any group retirement plan (excluding defined benefit pension
plans), or such plans of the same employer, for which plan
participant records are maintained on the Delaware
Investment & Retirement Services, Inc. ("DIRSI") proprietary
record keeping system that (i) has in excess of $500,000 of
plan assets invested in Class A Shares of Delaware Group
funds and in any stable value product available through the
Delaware Group, or (ii) is sponsored by an employer that has
at any point after May 1, 1997 more than 100 employees while
such plan has held Class A Shares of a Delaware Group fund
and such employer has properly represented to DIRSI in
writing that it has the requisite number of employees and
has received written confirmation back from DIRSI.
Purchases of Class A Shares of the International Equity
Fund at net asset value may also be made by bank sponsored
retirement plans that are no longer eligible to purchase
Institutional Class Shares as a result of a change in the
distribution arrangements.
Investors in Delaware-Voyageur Unit
Investment Trusts may reinvest monthly dividend checks
and/or repayment of invested capital into Class A Shares of
any of the funds in the Delaware Group at net asset value.
Investments in Class A Shares made by plan level and/or
participant retirement accounts that are for the purpose of
repaying a loan taken from such accounts will be made at net
asset value. Loan repayments made to a Delaware Group
account in connection with loans originated from accounts
previously maintained by another investment firm will also
be invested at net asset value.
The Funds must be notified in advance that the trade
qualifies for purchase at net asset value.
Letter of Intention
The reduced front-end sales charges described above with
respect to Class A Shares are also applicable to the
aggregate amount of purchases made within a 13-month period
pursuant to a written Letter of Intention provided by the
Distributor and signed by the purchaser, and not legally
binding on the signer or Global Funds, Inc., which provides
for the holding in escrow by the Transfer Agent of 5% of the
total amount of Class A Shares intended to be purchased
until such purchase is completed within the 13-month period.
A Letter of Intention may be dated to include shares
purchased up to 90 days prior to the date the Letter is
signed. The 13-month period begins on the date of the
earliest purchase. If the intended investment is not
completed, except as noted below, the purchaser will be
asked to pay an amount equal to the difference between the
front-end sales charge on Class A Shares purchased at the
reduced rate and the front-end sales charge otherwise
applicable to the total shares purchased. If such payment
is not made within 20 days following the expiration of the
13-month period, the Transfer Agent will surrender an
appropriate number of the escrowed shares for redemption in
order to realize the difference. Such purchasers may
include the value (at offering price at the level designated
in their Letter of Intention) of all their shares of a Fund
and of any class of any of the other mutual funds in the
Delaware Group (except shares of any Delaware Group fund
which do not carry a front-end sales charge, CDSC or
Limited CDSC, other than shares of Delaware Group Premium
Fund, Inc. beneficially owned in connection with the
ownership of variable insurance products, unless they were
acquired through an exchange from a Delaware Group fund
which carried a front-end sales charge, CDSC or Limited
CDSC) previously purchased and still held as of the date of
their Letter of Intention toward the completion of such
Letter. For purposes of satisfying an investor's
obligation under a Letter of Intention, Class B Shares and
Class C Shares of a Fund and the corresponding classes of
shares of other Delaware Group funds which offer such shares
may be aggregated with Class A Shares of the Fund and the
corresponding class of shares of the other Delaware Group
funds.
Employers offering a Delaware Group retirement plan may
also complete a Letter of Intention to obtain a reduced
front-end sales charge on investments of Class A Shares made
by the plan. The aggregate investment level of the Letter
of Intention will be determined and accepted by the Transfer
Agent at the point of plan establishment. The level and any
reduction in front-end sales charge will be based on actual
plan participation and the projected investments in Delaware
Group funds that are offered with a front-end sales charge,
CDSC or Limited CDSC for a 13-month period. The Transfer
Agent reserves the right to adjust the signed Letter of
Intention based on this acceptance criteria. The 13-month
period will begin on the date this Letter of Intention is
accepted by the Transfer Agent. If actual investments
exceed the anticipated level and equal an amount that would
qualify the plan for further discounts, any front-end sales
charges will be automatically adjusted. In the event this
Letter of Intention is not fulfilled within the 13-month
period, the plan level will be adjusted (without completing
another Letter of Intention) and the employer will be billed
for the difference in front-end sales charges due, based on
the plan's assets under management at that time. Employers
may also include the value (at offering price at the level
designated in their Letter of Intention) of all their shares
intended for purchase that are offered with a front-end
sales charge, CDSC or Limited CDSC of any class. Class B
Shares and Class C Shares of a Fund and other Delaware Group
funds which offer corresponding classes of shares may also
be aggregated for this purpose.
Combined Purchases Privilege
In determining the availability of the reduced front-end
sales charge previously set forth with respect to Class A
Shares, purchasers may combine the total amount of any
combination of Class A Shares, Class B Shares and/or Class C
Shares of the Funds, as well as shares of any other class of
any of the other Delaware Group funds (except shares of any
Delaware Group fund which do not carry a front-end sales
charge, CDSC or Limited CDSC, other than shares of Delaware
Group Premium Fund, Inc. beneficially owned in connection
with the ownership of variable insurance products, unless
they were acquired through an exchange from a Delaware Group
fund which carried a front-end sales charge, CDSC or Limited
CDSC).
The privilege also extends to all purchases made at one
time by an individual; or an individual, his or her spouse
and their children under 21; or a trustee or other fiduciary
of trust estates or fiduciary accounts for the benefit of
such family members (including certain employee benefit
programs).
Right of Accumulation
In determining the availability of the reduced front-end
sales charge with respect to Class A Shares, purchasers may
also combine any subsequent purchases of Class A Shares,
Class B Shares and Class C Shares of a Fund as well as
shares of any other class of any of the other Delaware Group
funds which offer such classes (except shares of any
Delaware Group fund which do not carry a front-end sales
charge, CDSC or Limited CDSC, other than shares of Delaware
Group Premium Fund, Inc. beneficially owned in connection
with the ownership of variable insurance products, unless
they were acquired through an exchange from shares from a
Delaware Group fund which carried a front-end sales charge,
CDSC or Limited CDSC). If, for example, any such purchaser
has previously purchased and still holds Class A Shares
and/or shares of any other of the classes described in the
previous sentence with a value of $40,000 and
subsequently purchases $60,000 at offering price of
additional shares of Class A Shares, the charge applicable
to the $60,000 purchase would currently be 3.75%. For the
purpose of this calculation, the shares presently held shall
be valued at the public offering price that would have been
in effect were the shares purchased simultaneously with
thecurrent purchase. Investors should refer to the table of
sales charges for Class A Shares to determine the
applicability of the Right of Accumulation to their
particular circumstances.
12-Month Reinvestment Privilege
Holders of Class A Shares of a Fund (and of the
Institutional Classes holding shares which were acquired
through an exchange from one of the other mutual funds in
the Delaware Group offered with a front-end sales charge)
who redeem such shares have one year from the date of
redemption to reinvest all or part of their redemption
proceeds in Class A Shares of that Fund or in Class A Shares
of any of the other funds in the Delaware Group, subject to
applicable eligibility and minimum purchase requirements, in
states where shares of such other funds may be sold, at net
asset value without the payment of a front-end sales charge.
This privilege does not extend to Class A Shares where the
redemption of the shares triggered the payment of a Limited
CDSC. Persons investing redemption proceeds from direct
investments in mutual funds in the Delaware Group offered
without a front-end sales charge will be required to pay the
applicable sales charge when purchasing Class A Shares. The
reinvestment privilege does not extend to a redemption of
either Class B Shares or Class C Shares.
Any such reinvestment cannot exceed the redemption
proceeds (plus any amount necessary to purchase a full
share). The reinvestment will be made at the net asset
value next determined after receipt of remittance. A
redemption and reinvestment could have income tax
consequences. It is recommended that a tax adviser be
consulted with respect to such transactions. Any
reinvestment directed to a fund in which the investor does
not then have an account will be treated like all other
initial purchases of a Fund's shares. Consequently, an
investor should obtain and read carefully the prospectus for
the fund in which the investment is intended to be made
before investing or sending money. The prospectus
contains more complete information about the fund,
including charges and expenses.
Investors should consult their financial advisers or the
Transfer Agent, which also serves as the Funds' shareholder
servicing agent, about the applicability of the Limited CDSC
(see Contingent Deferred Sales Charge for Certain
Redemptions of Class A Shares Purchased at Net Asset Value
under Redemption and Exchange in the Fund Classes'
Prospectus) in connection with the features described above.
Group Investment Plans
Group Investment Plans that are not eligible to purchase
shares of the Institutional Classes may also benefit from
the reduced front-end sales charges for investments in Class
A Shares set forth in the table on page 39, based on total
plan assets. If a company has more than one plan investing
in the Delaware Group of funds, then the total amount
invested in all plans would be used in determining the
applicable front-end sales charge reduction upon each
purchase, both initial and subsequent, upon notification to
the Fund in which the investment is being made at the time
of each such purchase. Employees participating in such
Group Investment Plans may also combine the investments made
in their plan account when determining the applicable
front-end sales charge on purchases to non-retirement
Delaware Group investment accounts if they so notify the
Fund in which the investment is being made in connection
with each purchase. See Retirement Plans for the Fund
Classes under Investment Plans for information about
Retirement Plans.
The Institutional Classes
Each Fund's Institutional Class is available for purchase
only by: (a) retirement plans introduced by persons not
associated with brokers or dealers that are primarily
engaged in the retail securities business and rollover
individual retirement accounts from such plans; (b)
tax-exempt employee benefit plans of the Manager, the
Sub-Adviser or their affiliates and securities dealer firms
with a selling agreement with the Distributor; (c)
institutional advisory accounts of the Manager, the
Sub-Adviser or their affiliates and those having client
relationships with Delaware Investment Advisers,
a division of the Sub-Adviser, or its affiliates and their
corporate sponsors, as well as subsidiaries and related
employee benefit plans and rollover individual retirement
accounts from such institutional advisory accounts; (d) a
bank, trust company and similar financial institution
investing for its own account or for the account of its
trust customers for whom such financial institution is
exercising investment discretion in purchasing shares of the
Class, except where the investment is part of a program that
requires payment to the financial institution of a Rule
12b-1 Plan fee; and (e) registered investment advisers
investing on behalf of clients that consist solely of
institutions and high net-worth individuals having at least
$1,000,000 entrusted to the adviser
for investment purposes, but only if the adviser is not
affiliated or associated with a broker or dealer and derives
compensation for its services exclusively from its clients
for such advisory services.
Shares of the Institutional Classes are available for
purchase at net asset value, without the imposition of a
front-end or contingent deferred sales charge and are not
subject to Rule 12b-1 expenses.
INVESTMENT PLANS
Reinvestment Plan/Open Account
With the exception of Global Equity Fund and International
Small Cap Fund, unless otherwise designated by shareholders
in writing, dividends from net investment income and
distributions from realized securities profits, if any, will
be automatically reinvested in additional shares of the
respective Fund Class in which an investor has an account
(based on the net asset value in effect on the reinvestment
date) and will be credited to the shareholder's account on
that date. All dividends and distributions of each Class of
Global Equity Fund and International Small Cap Fund and the
Institutional Classes of the other Funds are reinvested in
the accounts of the holders of such shares (based on the net
asset value in effect on the reinvestment date). A
confirmation of each dividend payment from net investment
income and of distributions from realized securities
profits, if any, will be mailed to shareholders in
the first quarter of the fiscal year.
Under the Reinvestment Plan/Open Account, shareholders may
purchase and add full and fractional shares to their plan
accounts at any time either through their investment dealers
or by sending a check or money order to the specific Fund
and Class in which the shares are being purchased. Such
purchases, which must meet the minimum subsequent purchase
requirements set forth in the Prospectuses and this Part B,
are made, for Class A Shares at the public offering price,
and for Class B Shares, Class C Shares and Institutional
Class shares at the net asset value, at the end of the day
of receipt. A reinvestment plan may be terminated at any
time. This plan does not assure a profit nor protect
against depreciation in a declining market.
Reinvestment of Dividends in Other Delaware Group Funds
Subject to applicable eligibility and minimum initial
purchase requirements and the limitations set forth below,
holders of Class A, Class B and Class C Shares may
automatically reinvest dividends and/or distributions in any
of the mutual funds in the Delaware Group, including the
Funds, in states where their shares may be sold. Such
investments will be at net asset value at the close of
business on the reinvestment date without any front-end
sales charge or service fee. The shareholder must notify
the Transfer Agent in writing and must have established an
account in the fund into which the dividends and/or
distributions are to be invested. Any reinvestment directed
to a fund in which the investor does not then have an
account will be treated like all other initial purchases of
a fund's shares. Consequently, an investor should
obtain and read carefully the prospectus for the fund in
which the investment is intended to be made before investing
or sending money. The prospectus contains more complete
information about the fund, including charges and expenses.
See also Additional Methods of Adding to Your Investment -
Dividend Reinvestment Plan under How to Buy Shares in the
Prospectus for the Fund Classes.
Subject to the following limitations, dividends and/or
distributions from other funds in the Delaware Group may be
invested in shares of the Funds, provided an account has
been established. Dividends from Class A Shares may not be
directed to Class B Shares or Class C Shares. Dividends
from Class B Shares may only be directed to other Class B
Shares and dividends from Class C Shares may only be
directed to other Class C Shares. See Appendix B--Classes
Offered in the Fund Classes' Prospectus for the funds in the
Delaware Group that are eligible for investment by holders
of Fund shares.
This option is not available to participants in the
following plans: SAR/SEP, SEP/IRA, SIMPLE IRA, SIMPLE
401(k), Profit Sharing and Money Purchase Pension Plans,
401(k) Defined Contribution Plans, or 403(b)(7) or 457
Deferred Compensation Plans.
Investing by Electronic Fund Transfer
Direct Deposit Purchase Plan--Investors may arrange for any
Fund to accept for investment in Class A, Class B or Class C
Shares, through an agent bank, preauthorized government or
private recurring payments. This method of investment
assures the timely credit to the shareholder's account of
payments such as social security, veterans' pension or
compensation benefits, federal salaries, Railroad Retirement
benefits, private payroll checks, dividends, and disability
or pension fund benefits. It also eliminates lost, stolen
and delayed checks.
Automatic Investing Plan--Shareholders of Class A, Class B
and Class C Shares may make automatic investments by
authorizing, in advance, monthly payments directly from
their checking account for deposit into their Fund account.
This type of investment will be handled in either of the
following ways. (1) If the shareholder's bank is a member
of the National Automated Clearing House Association
("NACHA"), the amount of the investment will be
electronically deducted from his or her account by
Electronic Fund Transfer ("EFT"). The shareholder's
checking account will reflect a debit each month
at a specified date although no check is required to
initiate the transaction. (2) If the shareholder's bank is
not a member of NACHA, deductions will be made by
preauthorized checks, known as Depository Transfer Checks.
Should the shareholder's bank become a member of NACHA in
the future, his or her investments would be handled
electronically through EFT.
This option is not available to participants in the
following plans: SAR/SEP, SEP/IRA, SIMPLE IRA, SIMPLE
401(k), Profit Sharing and Money Purchase Pension Plans,
401(k) Defined Contribution Plans, or 403(b)(7) or 457
Deferred Compensation Plans.
* * *
Initial investments under the Direct Deposit Purchase Plan
and the Automatic Investing Plan must be for $250 or more
and subsequent investments under such plans must be for $25
or more. An investor wishing to take advantage of either
service must complete an authorization form. Either service
can be discontinued by the shareholder at any time without
penalty by giving written notice.
Payments to a Fund from the federal government or its
agencies on behalf of a shareholder may be credited to the
shareholder's account after such payments should have been
terminated by reason of death or otherwise. Any such
payments are subject to reclamation by the federal
government or its agencies. Similarly, under certain
circumstances, investments from private sources may be
subject to reclamation by the transmitting bank. In the
event of a reclamation, a Fund may liquidate sufficient
shares from a shareholder's account to reimburse the
government or the private source. In the event
there are insufficient shares in the shareholder's account,
the shareholder is expected to reimburse the Fund.
Direct Deposit Purchases by Mail
Shareholders may authorize a third party, such as a bank
or employer, to make investments directly to their Fund
accounts. A Fund will accept these investments, such as
bank-by-phone, annuity payments and payroll allotments, by
mail directly from the third party. Investors should
contact their employers or financial institutions who in
turn should contact Global Funds, Inc. for proper
instructions.
Wealth Builder Option
Shareholders can use the Wealth Builder Option to invest
in the Fund Classes through regular liquidations of shares
in their accounts in other mutual funds in the Delaware
Group. Shareholders of the Fund Classes may elect to invest
in one or more of the other mutual funds in the Delaware
Group through the Wealth Builder Option. See Wealth Builder
Option and Redemption and Exchange in the Prospectus for the
Fund Classes.
Under this automatic exchange program, shareholders can
authorize regular monthly investments (minimum of $100 per
fund) to be liquidated from their account and invested
automatically into other mutual funds in the Delaware Group,
subject to the conditions and limitations set forth in the
Fund Classes' Prospectus. The investment will be made on
the 20th day of each month (or, if the fund selected is not
open that day, the next business day) at the public offering
price or net asset value, as applicable, of the fund
selected on the date of investment. No investment will be
made for any month if the value of the shareholder's account
is less than the amount specified for investment.
Periodic investment through the Wealth Builder Option does
not insure profits or protect against losses in a declining
market. The price of the fund into which investments are
made could fluctuate. Since this program involves
continuous investment regardless of such fluctuating value,
investors selecting this option should consider their
financial ability to continue to participate in the program
through periods of low fund share prices. This program
involves automatic exchanges between two or more fund
accounts and is treated as a purchase of shares of the fund
into which investments are made through the program. See
Exchange Privilege for a brief summary of the tax
consequences of exchanges. Shareholders can terminate their
participation at any time by giving written notice to their
Fund.
This option is not available to participants in the
following plans: SAR/SEP, SEP/IRA, SIMPLE IRA, SIMPLE
401(k), Profit Sharing and Money Purchase Pension Plans,
401(k) Defined Contribution Plans, or 403(b)(7) or 457
Deferred Compensation Plans. This option also is not
available to shareholders of the Institutional Classes.
Delaware Group Asset Planner
To invest in Delaware Group funds using the Delaware Group
Asset Planner asset allocation service, you should complete
a Delaware Group Asset Planner Account Registration Form,
which is available only from a financial adviser or
investment dealer. Effective September 1, 1997, the
Delaware Group Asset Planner Service is only available to
financial advisers or investment dealers who have previously
used this service. The Delaware Group Asset Planner service
offers a choice of four predesigned asset allocation
strategies (each with a different risk/reward profile) in
predetermined percentages in Delaware Group funds. With the
help of a financial adviser, you may also design a
customized asset allocation strategy.
The sales charge on an investment through the Asset
Planner service is determined by the individual sales
charges of the underlying funds and their percentage
allocation in the selected Strategy. Exchanges from
existing Delaware Group accounts into the Asset Planner
service may be made at net asset value under the
circumstances described under Investing by Exchange in the
Prospectus. Also see Buying Class A Shares at Net
Asset Value under Classes of Shares. The minimum initial
investment per Strategy is $2,000; subsequent investments
must be at least $100. Individual fund minimums do not
apply to investments made using the Asset Planner service.
Class A, Class B and Class C Shares are available through
the Asset Planner service. Generally, only shares within
the same class may be used within the same Strategy.
However, Class A Shares of a Fund and of other funds in the
Delaware Group may be used in the same Strategy with
consultant class shares that are offered by certain other
Delaware Group funds.
An annual maintenance fee, currently $35 per Strategy, is
due at the time of initial investment and by September 30 of
each subsequent year. The fee, payable to Delaware Service
Company, Inc. to defray extra costs associated with
administering the Asset Planner service, will be deducted
automatically from one of the funds within your Asset
Planner account if not paid by September 30. However,
effective November 1, 1996, the annual maintenance fee is
waived until further notice. Investors who utilize the
Asset Planner for an IRA will continue to pay an annual IRA
fee of $15 per Social Security number. Investors will
receive a customized quarterly Strategy Report summarizing
all Delaware Group Asset Planner investment performance and
account activity during the prior period. Confirmation
statements will be sent following all transactions other
than those involving a reinvestment of distributions.
Certain shareholder services are not available to
investors using the Asset Planner service, due to its
special design. These include Delaphone, Checkwriting,
Wealth Builder Option and Letter of Intention. Systematic
Withdrawal Plans are available after the account has been
open for two years.
Retirement Plans for the Fund Classes
An investment in a Fund may be suitable for tax-deferred
retirement plans. Delaware Group offers a full spectrum of
qualified and non-qualified retirement plans, including the
401(k) deferred compensation plan, Individual Retirement
Account ("IRA"), and the new Roth IRA. See Appendix A for
additional information on IRAs.
The CDSC may be waived on certain redemptions of Class B
Shares and Class C Shares. See Waiver of Contingent
Deferred Sales Charge - Class B and Class C Shares under
Redemption and Exchange in the Prospectuses for the Fund
Classes for a list of the instances in which the CDSC is
waived.
Purchases of Class B Shares are subject to a maximum
purchase limitation of $250,000 for retirement plans.
Purchases of Class C Shares must be in an amount that is
less than $1,000,000 for such plans. The maximum purchase
limitations apply only to the initial purchase of shares by
the retirement plan.
Minimum investment limitations generally applicable to
other investors do not apply to retirement plans, other than
Individual Retirement Accounts for which there is a minimum
initial purchase of $250, and a minimum subsequent purchase
of $25, regardless of which class is selected. Retirement
plans may be subject to plan establishment fees, annual
maintenance fees and/or other administrative or trustee
fees. Fees are based upon the number of participants in the
plan as well as the services selected. Additional
information about fees is included in retirement plan
materials. Fees are quoted upon request. Annual
maintenance fees may be shared by Delaware Management Trust
Company, the Transfer Agent, other affiliates of the Manager
and others that provide services to such plans.
Certain shareholder investment services available to non-
retirement plan shareholders may not be available to
retirement plan shareholders. Certain retirement plans may
qualify to purchase shares of the Institutional Classes.
See The Institutional Classes, above. For additional
information on any of the plans and Delaware's retirement
services, call the Shareholder Service Center telephone
number.
It is advisable for an investor considering any one of the
retirement plans described below to consult with an
attorney, accountant or a qualified retirement plan
consultant. For further details, including applications for
any of these plans, contact your investment dealer or the
Distributor.
Taxable distributions from the retirement plans may be
subject to withholding.
Please contact your investment dealer or the Distributor
for the special application forms required for the plans.
DETERMINING OFFERING PRICE AND NET ASSET VALUE
Orders for purchases of Class A Shares are effected at the
offering price next calculated by the Fund in which shares
are being purchased after receipt of the order by the Fund
or its agent. Orders for purchases of Class B Shares, Class
C Shares and Institutional Class shares are effected at the
net asset value per share next calculated by the Fund in
which shares are being purchased after receipt of the order
by the Fund or its agent. Selling dealers are responsible
for transmitting orders promptly.
The offering price for Class A Shares consists of the net
asset value per share plus any applicable front-end sales
charges. Offering price and net asset value are computed as
of the close of regular trading on the New York Stock
Exchange (ordinarily, 4 p.m., Eastern time) on days when the
Exchange is open. The New York Stock Exchange is scheduled
to be open Monday through Friday throughout the year except
for New Year's Day, Presidents' Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving and
Christmas. When the New York Stock Exchange is closed, the
Funds will generally be closed, pricing calculations will
not be made and purchase and redemption orders will not be
processed.
An example showing how to calculate the net asset value
per share and, in the case of Class A Shares, the offering
price per share, is included in the Funds' financial
statements which are incorporated by reference into this
Part B.
Each Fund's net asset value per share is computed by
adding the value of all the securities and other assets in
the Fund's portfolio, deducting any liabilities of the Fund,
and dividing by the number of Fund shares outstanding.
Expenses and fees are accrued daily. In determining a
Fund's total net assets, portfolio securities primarily
listed or traded on a national or foreign securities
exchange, except for bonds, are valued at the last sale
price on that exchange. Exchange traded options are valued
at the last reported sale price or, if no sales are
reported, at the mean between bid and asked
prices. Non-exchange traded options are valued at fair
value using a mathematical model. Futures contracts are
valued at their daily quoted settlement price. For
valuation purposes, foreign securities initially expressed
in foreign currency values will be converted into U.S.
dollar values at the mean between the bid and offered
quotations of such currencies against U.S. dollars as last
quoted by any recognized dealer or major bank which is a
regular participant in the institutional foreign exchange
markets. Securities not traded on a particular day,
over-the-counter securities, and government and
agency securities are valued at the mean value between bid
and asked prices. Money market instruments having a
maturity of less than 60 days are valued at amortized cost.
Debt securities (other than short-term obligations) are
valued on the basis of valuations provided by a pricing
service when such prices are believed to reflect the fair
value of such securities. Use of a pricing service has been
approved by the Board of Directors. Prices provided by a
pricing service take into account appropriate factors such
as institutional trading in similar groups of securities,
yield, quality, coupon rate, maturity, type of issue,
trading characteristics and other market data. Subject to
the foregoing, securities for which market quotations are
not readily available and other assets are valued at fair
value as determined in good faith and in a
method approved by the Board of Directors.
Each class of a Fund will bear, pro-rata, all of the
common expenses of that Fund. The net asset values of all
outstanding shares of each class of a Fund will be computed
on a pro-rata basis for each outstanding share based on the
proportionate participation in that Fund represented by the
value of shares of that class. All income earned and
expenses incurred by a Fund will be borne on a pro-rata
basis by each outstanding share of a class, based on each
class' percentage in that Fund represented by the value of
shares of such classes, except that the Institutional
Classes will not incur any of the expenses under Global
Funds, Inc.'s 12b-1 Plans and Class A, Class B and Class C
Shares alone will bear the 12b-1 Plan fees payable under
their respective Plans. Due to the specific distribution
expenses and other costs that will be allocable to each
class, the net asset value of each class of a
Fund will vary. During the period the current waivers of
12b-1 Plan expenses by the Distributor in connection with
the distribution of Class A, Class B and Class C Shares of
Global Equity Fund and International Small Cap Fund remain
applicable no such variance shall arise.
REDEMPTION AND REPURCHASE
Any shareholder may require a Fund to redeem shares by
sending a written request, signed by the record owner or
owners exactly as the shares are registered, to the Fund, at
1818 Market Street, Philadelphia, PA 19103. In addition,
certain expedited redemption methods described below are
available when stock certificates have not been issued.
Certificates are issued for Class A Shares and Institutional
Class shares only if a shareholder specifically requests
them. Certificates are not issued for Class B Shares or
Class C Shares. If stock certificates have been issued for
shares being redeemed, they must accompany the written
request. For redemptions of $50,000 or less paid to the
shareholder at the address of record, the request must be
signed by all owners of the shares or the investment dealer
of record, but a signature guarantee is not required. When
the redemption is for more than $50,000, or if
payment is made to someone else or to another address,
signatures of all record owners are required and a signature
guarantee may be required. Each signature guarantee must be
supplied by an eligible guarantor institution. Each Fund
reserves the right to reject a signature guarantee supplied
by an eligible institution based on its creditworthiness.
The Funds may request further documentation from
corporations, retirement plans, executors, administrators,
trustees or guardians.
In addition to redemption of Fund shares, the Distributor,
acting as agent of the Funds, offers to repurchase Fund
shares from broker/dealers acting on behalf of shareholders.
The redemption or repurchase price, which may be more or
less than the shareholder's cost, is the net asset value per
share next determined after receipt of the request in good
order by the respective Fund or its agent, subject to any
applicable CDSC or Limited CDSC. This is computed and
effective at the time the offering price and net asset value
are determined. See Determining Offering Price and Net
Asset Value. The Funds and the Distributor end their
business days at 5 p.m., Eastern time. This offer is
discretionary and may be completely withdrawn without
further notice by the Distributor.
Orders for the repurchase of Fund shares which are
submitted to the Distributor prior to the close of its
business day will be executed at the net asset value per
share computed that day (subject to the applicable CDSC or
Limited CDSC), if the repurchase order was received by the
broker/dealer from the shareholder prior to the time the
offering price and net asset value are determined on such
day. The selling dealer has the responsibility of
transmitting orders to the Distributor promptly. Such
repurchase is then settled as an ordinary transaction with
the broker/dealer (who may make a charge to the shareholder
for this service) delivering the shares repurchased.
Certain redemptions of Class A Shares purchased at net
asset value may result in the imposition of a Limited CDSC.
See Contingent Deferred Sales Charge for Certain Redemptions
of Class A Shares Purchased at Net Asset Value under
Redemption and Exchange in the Prospectus for the Fund
Classes. Class B Shares are subject to a CDSC of: (i) 4% if
shares are redeemed within two years of purchase; (ii) 3% if
shares are redeemed during the third or fourth year
following purchase; (iii) 2% if shares are redeemed
during the fifth year following purchase; and (iv) 1% if
shares are redeemed during the sixth year following
purchase. Class C Shares are subject to a CDSC of 1% if
shares are redeemed within 12 months following purchase.
See Contingent Deferred Sales Charge - Class B Shares and
Class C Shares under Classes of Shares in the Prospectus for
the Fund Classes. Except for the applicable CDSC or Limited
CDSC and, with respect to the expedited payment by
wiredescribed below for which, in the case of the Fund
Classes, there is currently a $7.50 bank wiring cost,
neither the Funds nor the Distributor charges a
fee for redemptions or repurchases, but such fees could be
charged at any time in the future.
Payment for shares redeemed will ordinarily be mailed the
next business day, but in no case later than seven days,
after receipt of a redemption request in good order;
provided, however, that each commitment to mail or wire
redemption proceeds by a certain time, as described below,
is modified by the qualifications described in the next
paragraph.
Each Fund will process written or telephone redemption
requests to the extent that the purchase orders for the
shares being redeemed have already been settled. A Fund
will honor the redemption requests as to shares for which a
check was tendered as payment, but a Fund will not mail or
wire the proceeds until it is reasonably satisfied that the
check has cleared. This potential delay can be avoided by
making investments by wiring Federal Funds.
If a shareholder has been credited with a purchase by a
check which is subsequently returned unpaid for insufficient
funds or for any other reason, the Fund involved will
automatically redeem from the shareholder's account the
shares purchased by the check plus any dividends earned
thereon. Shareholders may be responsible for any losses to
a Fund or to the Distributor.
In case of a suspension of the determination of the net
asset value because the New York Stock Exchange is closed
for other than weekends or holidays, or trading thereon is
restricted or an emergency exists as a result of which
disposal by a Fund of securities owned by it is not
reasonably practical, or it is not reasonably practical for
a Fund fairly to value its assets, or in the event that the
Securities and Exchange Commission has provided for such
suspension for the protection of shareholders, a Fund may
postpone payment or suspend the right of redemption or
repurchase. In such case, the shareholder may withdraw the
request for redemption or leave it standing as a request for
redemption at the net asset value next determined after the
suspension has been terminated.
Payment for shares redeemed or repurchased may be made
either in cash or kind, or partly in cash and partly in
kind. Any portfolio securities paid or distributed in kind
would be valued as described in Determining Offering Price
and Net Asset Value. Subsequent sale by an investor
receiving a distribution in kind could result in the payment
of brokerage commissions. However, Global Funds, Inc. has
elected to be governed by Rule 18f-1 under the 1940 Act
pursuant to which each Fund is obligated to redeem shares
solely in cash up to the lesser of $250,000 or 1% of the net
asset value of such Fund during any 90-day period for any
one shareholder.
The value of a Fund's investments is subject to changing
market prices. Thus, a shareholder reselling shares to a
Fund may sustain either a gain or loss, depending upon the
price paid and the price received for such shares.
Small Accounts
Before a Fund involuntarily redeems shares from an account
that, under the circumstances listed in the relevant
Prospectus, has remained below the minimum amounts required
by Global Funds, Inc.'s Prospectuses and sends the proceeds
to the shareholder, the shareholder will be notified in
writing that the value of the shares in the account is less
than the minimum required and will be allowed 60 days from
the date of notice to make an additional investment to meet
the required minimum. See The Conditions of Your Purchase
under How to Buy Shares in Global Funds, Inc.'s
Prospectuses. Any redemption in an inactive account
established with a minimum investment may trigger mandatory
redemption. No CDSC or Limited CDSC will apply to
redemptions described in this paragraph.
With respect to International Equity Fund and Global
Assets Fund only, effective November 29, 1995, the minimum
initial investment in Class A Shares was increased from $250
to $1,000. Class A accounts that were established prior to
November 29, 1995 and maintain a balance in excess of $250
will not presently be subject to the $9 quarterly service
fee that may be assessed on accounts with balances below the
stated minimum nor be subject to involuntary redemption.
* * *
Each Fund has made available certain redemption
privileges, as described below. The Funds reserve the right
to suspend or terminate these expedited payment procedures
upon 60 days' written notice to shareholders.
Expedited Telephone Redemptions
Shareholders of the Fund Classes or their investment
dealers of record wishing to redeem any amount of shares of
$50,000 or less for which certificates have not been issued
may call the Shareholder Service Center at 800-523-1918 or,
in the case of shareholders of the Institutional Classes,
their Client Services Representative at 800-828-5052 prior
to the time the offering price and net asset value are
determined, as noted above, and have the proceeds mailed to
them at the address of record. Checks payable to the
shareholder(s) of record will normally be mailed the next
business day, but no later than seven days, after the
receipt of the redemption request. This option is only
available to individual, joint and individual fiduciary-type
accounts.
In addition, redemption proceeds of $1,000 or more can be
transferred to your predesignated bank account by wire or by
check by calling the phone numbers listed above. An
authorization form must have been completed by the
shareholder and filed with the relevant Fund before the
request is received. Payment will be made by wire or check
to the bank account designated on the authorization form as
follows:
1. Payment by Wire: Request that Federal Funds be wired
to the bank account designated on the authorization form.
Redemption proceeds will normally be wired on the next
business day following receipt of the redemption request.
There is a $7.50 wiring fee (subject to change) charged by
CoreStates Bank, N.A. which will be deducted from the
withdrawal proceeds each time the shareholder requests a
redemption from Class A Shares, Class B Shares and Class C
Shares. If the proceeds are wired to the shareholder's
account at a bank which is not a member of the Federal
Reserve System, there could be a delay in the crediting of
the funds to the shareholder's bank account.
2. Payment by Check: Request a check be mailed to the
bank account designated on the authorization form.
Redemption proceeds will normally be mailed the next
business day, but no later than seven days, from the date of
the telephone request. This procedure will take longer than
the Payment by Wire option (1 above) because of the extra
time necessary for the mailing and clearing of the check
after the bank receives it.
Redemption Requirements: In order to change the name of
the bank and the account number it will be necessary to send
a written request to the relevant Fund and a signature
guarantee may be required. Each signature guarantee must be
supplied by an eligible guarantor institution. The Funds
reserve the right to reject a signature guarantee supplied
by an eligible institution based on its creditworthiness.
To reduce the shareholder's risk of attempted fraudulent
use of the telephone redemption procedure, payment will be
made only to the bank account designated on the
authorization form.
If expedited payment under these procedures could
adversely affect a Fund, such Fund may take up to seven days
to pay the shareholder.
Neither the Funds nor the Funds' Transfer Agent is
responsible for any shareholder loss incurred in acting upon
written or telephone instructions for redemption or exchange
of Fund shares which are reasonably believed to be genuine.
With respect to such telephone transactions, each Fund will
follow reasonable procedures to confirm that instructions
communicated by telephone are genuine (including
verification of a form of personal identification) as, if it
does not, such Fund or the Transfer Agent may be liable for
any losses due to unauthorized or fraudulent transactions.
Telephone instructions received by shareholders of the Fund
Classes are generally tape recorded. A written confirmation
will be provided for all purchase, exchange and redemption
transactions initiated by telephone.
Systematic Withdrawal Plans
Shareholders of Class A, Class B and Class C Shares who
own or purchase $5,000 or more of shares at the offering
price, or net asset value, as applicable, for which
certificates have not been issued may establish a Systematic
Withdrawal Plan for monthly withdrawals of $25 or more, or
quarterly withdrawals of $75 or more, although the Funds do
not recommend any specific amount of withdrawal. This
$5,000 minimum does not apply for a Fund's prototype
retirement plans. Shares purchased with the initial
investment and through reinvestment of cash dividends
and realized securities profits distributions will be
credited to the shareholder's account and sufficient full
and fractional shares will be redeemed at the net asset
value calculated on the third business day preceding the
mailing date.
Checks are dated either the 1st or the 15th of the month,
as selected by the shareholder (unless such date falls on a
holiday or a weekend) and are normally mailed within two
business days. Both ordinary income dividends and realized
securities profits distributions will be automatically
reinvested in additional shares of a Class at net asset
value. This plan is not recommended for all investors and
should be started only after careful consideration of its
operation and effect upon the investor's savings and
investment program. To the extent that withdrawal payments
from the plan exceed any dividends and/or realized
securities profits distributions paid on shares held under
the plan, the withdrawal payments will represent a return of
capital and the share balance may in time be depleted,
particularly in a declining market.
The sale of shares for withdrawal payments constitutes a
taxable event and a shareholder may incur a capital gain or
loss for federal income tax purposes. This gain or loss may
be long-term or short-term depending on the holding period
for the specific shares liquidated. Premature withdrawals
from retirement plans may have adverse tax consequences.
Withdrawals under this plan made concurrently with the
purchases of additional shares of the same Fund may be
disadvantageous to the shareholder. Purchases of Class A
Shares through a periodic investment program in a fund
managed by the Manager must be terminated before a
Systematic Withdrawal Plan with respect to such shares can
take effect, except if the shareholder is a participant in
one of our retirement plans or is investing in Delaware
Group funds which do not carry a sales charge. Redemptions
of Class A Shares pursuant to a Systematic Withdrawal Plan
may be subject to a Limited CDSC if the purchase was made at
net asset value and a dealer's commission has been paid on
that purchase. Redemptions of Class B Shares or Class C
Shares pursuant to a Systematic Withdrawal Plan may be
subject to a CDSC, unless the annual amount selected to be
withdrawn is less than 12% of the account balance on the
date that the Systematic Withdrawal Plan was established.
See Waiver of Contingent Deferred Sales Charge - Class B and
Class C Shares and Waiver of Limited Contingent Deferred
Sales Charge - Class A Shares under Redemption and Exchange
in the Prospectus for the Fund Classes. Shareholders should
consult their financial advisers to determine whether a
Systematic Withdrawal Plan would be suitable for them.
An investor wishing to start a Systematic Withdrawal Plan
must complete an authorization form. If the recipient of
Systematic Withdrawal Plan payments is other than the
registered shareholder, the shareholder's signature on this
authorization must be guaranteed. Each signature guarantee
must be supplied by an eligible guarantor institution. The
Funds reserve the right to reject a signature guarantee
supplied by an eligible institution based on its
creditworthiness. This plan may be terminated by the
shareholder or the Transfer Agent at any time by giving
written notice.
The Systematic Withdrawal Plan is not available for the
Institutional Classes, or currently, any of the Fund Classes
of Global Equity Fund or International Small Cap Fund.
DISTRIBUTIONS
International Equity Fund and Global Assets Fund will
normally declare and make payments from net investment
income on a quarterly basis. Global Bond Fund will normally
declare and make payments from net investment income on a
monthly basis. International Small Cap, Emerging Markets
and Global Equity Funds each will normally declare and make
payments from net investment income on an annual basis.
Payments from net realized securities profits of a Fund,
if any, will be distributed annually in the quarter
following the close of the fiscal year.
Dividend payments of $1.00 or less will be automatically
reinvested, notwithstanding a shareholder's election to
receive dividends in cash. If such a shareholder's dividends
increase to greater than $1.00, the shareholder would have
to file a new election in order to begin receiving dividends
in cash again. Any check in payment of dividends or other
distributions which cannot be delivered by the United States
Post Office or which remains uncashed for a period of more
than one year may be reinvested in the shareholder's account
at the then-current net asset value and the dividend option
may be changed from cash to reinvest. A Fund may deduct
from a shareholder's account the costs of the Fund's effort
to locate a shareholder if a shareholder's mail is returned
by the U.S. Post Office or the Fund is otherwise unable to
locate the shareholder or verify the shareholder's mailing
address. These costs may include a percentage of the
account when a search company charges a percentage fee in
exchange for their location services.
Each class of shares of a Fund will share proportionately
in the investment income and expenses of such Fund, except
that, absent any applicable fee waiver, Class A Shares,
Class B Shares and Class C Shares alone will incur
distribution fees under their respective 12b-1 Plans.
Under the Taxpayer Relief act of 1997 (the "1997 Act"), a
Fund is required to track its sales of portfolio securities
and to report its capital gain distributions to you according
to the following categories of holding periods:
"Pre-Act long-term capital gains": securities sold by a
Fund before May 7, 1997, that were held for more than 12
months. These gains will be taxable to individual investors
at a maximum rate of 28%.
"Mid-term capital gains" or "28 percent rate gain":
securities sold by a Fund after July 28, 1997 that were held
more than one year but not more than 18 months. These gains
will be taxable to individual investors at a maximum rate of
28%.
"1997 Act long-term capital gains" or "20 percent rate
gain": securities sold by a Fund between May 7, 1997 and
July 28, 1997 that were held for more than 12 months, and
securities sold by a Fund after July 28, 1997 that were held
for more than 18 months. These gains will be taxable to
individual investors at a maximum rate of 20% for investors
in the 28% or higher federal income tax brackets, and at a
maximum rate of 10% for investors in the 15% federal income
tax bracket.
"Qualified 5-year gains": For individuals in the 15%
bracket, qualified 5-year gains are net gains on securities
held for more than 5 years which are sold after December 31,
2000. For individual who are subject to tax at higher rate
brackets, qualified 5-year gains are net gains on securities
which are purchased after December 31, 2000 and are held for
more than 5 years. Taxpayers subject to tax at a higher
rate brackets may also make an election for shares held on
January 1, 2001 to recognize gain on their shares in order
to qualify such shares as qualified 5-year property. These
gains will be taxable to individual investors at a maximum
rate of 18% for investors in the 28% or higher federal
income tax brackets, and at a maximum rate of 8% for
investors in the 15% federal income tax bracket.
Because of each Fund's investment policy, it is expected
that either none or only a nominal portion of a Fund's
dividends will be eligible for the dividends-received
deduction for corporations. The portion of dividends paid
by a Fund that so qualifies will be designated each year in
a notice mailed to the Fund's shareholders, and cannot
exceed the gross amount of dividends received by a Fund from
domestic (U.S.) corporations that would have qualified for
the dividends-received deduction in the hands of a Fund if
the Fund was a regular corporation. The availability of the
dividends-received deduction is subject to certain holding
period and debt financing restrictions imposed under the
Code on the corporation claiming the deduction. Under the
1997 Act, the amount that a Fund may designate as eligible
for the dividends-received deduction will be reduced or
eliminated if the shares on which the dividends
earned by the Fund were debt-financed or held by the Fund
for less than a 46-day period during a 90-day period
beginning 45 days before the ex-dividend date and ending 45
days after the ex-dividend date. Similarly, if your Fund
shares are debt-financed or held by you for less than a
46-day period during a 90-day period beginning 45 days
before the ex-dividend date and ending 45 days after the
ex-dividend date, then the dividends-received deduction for
Fund dividends on your shares may also be reduced or
eliminated. Even if designated as dividends eligible for
the dividends-received deduction, all dividends (including
any deducted portion) must be included in your
alternative minimum taxable income calculation.
Shareholders will be notified annually by Global Funds,
Inc., Inc. as to the federal income tax status of dividends
and distributions paid by their Fund.
In addition to the federal taxes described above,
shareholders may or may not be subject to various state and
local taxes. Because shareholders' state and local taxes
may be different than the federal taxes described above,
shareholders should consult their own tax advisers.
See also Other Tax Requirements under Accounting and Tax
Issues in this Part B.
INVESTMENT MANAGEMENT AGREEMENTS AND SUB-ADVISORY AGREEMENT
Delaware International Advisers Ltd. ("Delaware
International" or the "Manager"), located at Third Floor, 80
Cheapside, London, England EC2V 6EE, furnishes investment
management services to each Fund, subject to the supervision
and direction of Global Funds, Inc.'s Board of Directors.
Delaware International is affiliated with Delaware
Management Company, Inc. ("Delaware"). Delaware
International has entered into separate Sub-Advisory
Agreements with Delaware for Global Assets Fund and Global
Equity Fund.
Delaware Management Company, Inc. ("Delaware") and its
predecessors have been managing the funds in the Delaware
Group since 1938. On October 31, 1997, Delaware and its
affiliates in the Delaware Group, including the Manager,
were managing in the aggregate more than $38 billion in
assets in the various institutional or separately managed
(approximately $22,496,609,000) and investment company
(approximately $16,012,252,000) accounts.
The Investment Management Agreement for each Fund, with
the exception of International Small Cap, Emerging Markets
and Global Equity Funds, and the Sub-Advisory Agreement for
Global Assets Fund are dated April 3, 1995 and were approved
by shareholders on March 29, 1995. The Investment
Management Agreement for Emerging Markets Fund is dated May
1, 1996 and was approved by shareholders on April 30, 1996.
The Investment Management Agreements for International Small
Cap Fund and Global Equity Fund, and the Sub-Advisory
Agreement for Global Equity Fund are each dated July 21,
1997 and were approved by the initial shareholder on July
18, 1997.
The Agreements have an initial term of two years and may
be further renewed after their initial terms only so long as
such renewal and continuance are specifically approved at
least annually by the Board of Directors or by vote of a
majority of the outstanding voting securities of the Fund to
which the Agreement relates, and only if the terms of the
renewal thereof have been approved by the vote of a majority
of the directors of Global Funds, Inc. who are not parties
thereto or interested persons of any such party, cast in
person at a meeting called for the purpose of voting on such
approval. The Agreements are terminable without penalty on
60 days' notice by the directors of Global Funds, Inc. or by
the Manager. The Agreements will terminate automatically in
the event of their assignment.
The Manager manages each Fund's investments. The
compensation paid by International Equity, Global Bond and
Global Assets Funds for investment management services is
equal to (on an annual basis) 0.75% of each Fund's
respective average daily net assets, less all directors'
fees paid to the unaffiliated directors by the Fund. The
compensation paid by International Small Cap Fund and
Emerging Markets Fund for investment management services is
equal to (on an annual basis) 1.25% of the Fund's average
daily net assets and the investment management compensation
paid by Global Equity Fund, is equal to (on an annual basis)
0.80% of the Fund's average daily net assets. The fees paid
to Delaware International, while higher than the advisory
fees paid to other mutual funds in general, are comparable
to fees paid by other mutual funds with similar objectives
and policies.
Under the separate Sub-Advisory Agreements for Global
Assets Fund and Global Equity Fund, Delaware manages the
Funds' investments in U.S. securities. Delaware will
receive from the Manager, 25% of the investment management
fees under the Manager's Investment Management Agreement
with Global Funds, Inc. on behalf of Global Assets Fund and
50% of the investment management fees under the Investment
Management Agreement for Global Equity Fund.
On November 30, 1996, the total net assets of Global
Funds, Inc. were $173,937,190, broken down as follows:
International Equity Fund $136,158,064
Global Bond Fund $10,999,283
Global Assets Fund $20,063,476
Emerging Markets Fund $6,716,367
Beginning December 1, 1995, Delaware International had
elected voluntarily to waive that portion, if any, of the
annual management fees payable by International Equity Fund,
Global Bond Fund and Global Assets Fund and to reimburse the
Fund's expenses to the extent necessary to ensure that the
Total Operating Expenses (i) of Class A Shares of those
Funds do not exceed 1.85%, 1.25% and 1.25%, respectively,
(ii) of Class B Shares of those Funds do not exceed 2.55%,
1.95% and 1.95%, respectively, and (iii) of Institutional
Class of shares of those Funds do not exceed 1.55%, 0.95%
and 0.95%, respectively (in each case, exclusive of taxes,
interest, brokerage commissions and extraordinary expenses,
but inclusive of 12b-1 expenses) through November 30, 1997.
Delaware International had elected to voluntarily waive that
portion, if any, of the annual management fees payable by
Emerging Markets Fund and to reimburse the Fund's expenses
to ensure that the Total Operating Expenses of Class A
Shares, Class B Shares, Class C Shares and the Institutional
Class of this Fund did not exceed 2.00%, 2.70%, 2.70% and
1.70% (exclusive of taxes, interest, brokerage commissions
and extraordinary expenses, but inclusive of applicable
12b-1 expenses) from the date of initial public offering
through November 30, 1996. The voluntary waivers for each
of these Funds have been extended through May 31, 1998.
Beginning with the commencement of operations of
International Small Cap Fund through May 31, 1998, the
Distributor has elected to voluntarily waive 12b-1 expenses
and Delaware International has voluntarily elected to waive
that portion, if any, of the annual management fees payable
by International Small Cap Fund and to reimburse the Fund's
expenses to the extent necessary to ensure that the Total
Operating Expenses of the Class A Shares, Class B Shares,
Class C Shares and the Institutional Class of this Fund do
not exceed 1.25% on an annualized basis.
Beginning with the commencement of operations of Global
Equity Fund through December 31, 1997, the Distributor has
elected to voluntarily waive 12b-1 expenses and Delaware
International has elected to voluntarily waive that portion,
if any, of the annual management fees payable by Global
Equity Fund and to reimburse the Fund's expenses to the
extent necessary to ensure that the Total Operating Expenses
of each Class of the Fund do not exceed 0.80% on an
annualized basis.
From June 1, 1994 through November 30, 1994, Delaware
International elected voluntarily to waive that portion, if
any, of the annual management fees payable by International
Equity Fund and to reimburse the Fund's expenses to the
extent necessary to ensure that the Total Operating Expenses
of International Equity Fund A Class and International
Equity Fund Institutional Class did not exceed 1.50%
(exclusive of taxes, interest, brokerage commissions,
extraordinary expenses and, in the case of International
Equity Fund A Class, 12b-1 expenses). Through November 30,
1994, the waiver and reimbursement noted above with respect
to International Equity Fund A Class also applied to
International Equity Fund B Class. Prior to June
1, 1994, a waiver and reimbursement commitment was in place
to ensure expenses did not exceed 1.25% (exclusive of taxes,
interest, brokerage commissions and extraordinary expenses,
but inclusive of 12b-1 expenses) and 0.95% (exclusive of
taxes, interest, brokerage commissions and extraordinary
expenses) for International Equity Fund A Class and
International Equity Fund Institutional Class, respectively.
Delaware International had also elected to voluntarily waive
that portion, if any, of the annual management fees payable
by Global Bond Fund and Global Assets Fund and to reimburse
a Fund's expenses to ensure that the Total Operating
Expenses of these Funds (exclusive of taxes, interest,
brokerage commissions, extraordinary expenses and, in the
case of Global Bond Fund A Class, Global Bond Fund
B Class, Global Assets Fund A Class and Global Assets Fund B
Class, 12b-1 expenses) did not exceed 0.95% through November
30, 1995.
Investment management fees incurred for the last three
fiscal years with respect to each Fund which was operational
at the end of the last fiscal year follows:
<TABLE>
<CAPTION>
November 30, November 30, November 30,
Fund 1996 1995 1994
<S> <C> <C> <C>
International $792,625 $512,638 $415,544
Equity Fund earned paid earned
$683,170 $266,273
109,455 paid
waived $149,271
waived
Global
Bond Fund(1) $29,065 $4,777 N/A
earned earned
-$0- paid -$0- paid N/A
$29,065 $4,777 N/A
waived waived
Global
Assets Fund(1) $95,908 $12,907 N/A
paid earned
-$0- paid -$0- paid N/A
$95,908 $12,907 N/A
waived waived
Emerging
Markets
Fund(2) $35,197 N/A N/A
earned
-$0- paid N/A N/A
$35,197 N/A N/A
waived
</TABLE>
(1) Date of initial public offering was December 27, 1994.
(2) Date of initial public offering was June 10, 1996.
Delaware International and Delaware are controlled and
indirectly, wholly owned by Delaware Management Holdings,
Inc.
Except for those expenses borne by the Manager under the
Investment Management Agreements and the Distributor under
the Distribution Agreements, each Fund is responsible for
all of its own expenses. Among others, these include each
Fund's proportionate share of rent and certain other
administrative expenses; the investment management fees;
transfer and dividend disbursing agent fees and costs;
custodian expenses; federal and state securities
registration fees; proxy costs; and the costs of preparing
prospectuses and reports sent to shareholders.
The ratios of expenses to average net assets for the
fiscal year ended November 30, 1996 for each Class of
International Equity Fund, Global Bond Fund and Global
Assets Fund were as follows:
Class A Class B Class C Institutional
Shares Shares Shares Class
International
Equity Fund 1.85% 2.55% 2.55% 1.55%
Global Bond
Fund 1.25% 1.95% 1.95% 0.95%
Global Assets
Fund 1.25% 1.95% 1.95% 0.95%
The ratios for Class A Shares, Class B Shares and Class C
Shares reflect the impact of 12b-1 Plan fees and the ratios
for each Class reflect the voluntary waiver of fees by the
Manager noted above. The ratios of expenses to average
daily net assets for Class A Shares, Class B Shares, Class C
Shares and Institutional Class of International Small Cap
Fund are expected to equal, on an annual basis, 2.00%,
2.70%, 2.70% and 1.70%, respectively, reflecting the 12b-1
Plan fees in the case of Class A Shares, Class B Shares and
Class C Shares, and the waiver of fees by the Manager noted
above. The ratios of expenses to average daily net assets
on an annualized basis for all Classes of Global Equity Fund
are each expected to equal 0.80%, reflecting the waivers of
investment management and 12b-1 Plan fees, and the
reimbursement of expenses, all as described below.
Distribution and Service
The Distributor, Delaware Distributors, L.P. (which
formerly conducted business as Delaware Distributors, Inc.),
located at 1818 Market Street, serves as the national
distributor of the shares of International Equity, Global
Bond and Global Assets Funds, under separate Distribution
Agreements dated April 3, 1995, as amended on November 29,
1995. The Distributor serves as the national distributor of
Emerging Markets Fund's shares under a Distribution
Agreement dated May 1, 1996 and also serves in the same
capacity for International Small Cap Fund and Global Equity
Fund under separate Distribution Agreements July 21, 1997.
The Distributor is an affiliate of the Manager and bears all
of the costs of promotion and distribution, except for
payments by each Fund on behalf of its respective Class A
Shares, Class B Shares and Class C Shares under the 12b-1
Plan for each class. Prior to January 3, 1995, Delaware
Distributors, Inc. ("DDI") served as the national
distributor of each Fund's shares. On that date,
Delaware Distributors, L.P., a newly formed limited
partnership, succeeded to the business of DDI. All officers
and employees of DDI became officers and employees of
Delaware Distributors, L.P. DDI is the corporate general
partner of Delaware Distributors, L.P. and both DDI and
Delaware Distributors, L.P. are indirect, wholly owned
subsidiaries of Delaware Management Holdings, Inc. The
Distributor has elected voluntarily to waive payments under
the 12b-1 Plan for the Class A Shares, the Class B Shares
and the Class C Shares of Global Equity Fund during the
commencement of the public offering of the Fund through
December 31, 1997 and of International Small Cap Fund during
the commencement of the public offering of the Fund through
May 31, 1998.
The Transfer Agent, Delaware Service Company, Inc.,
another affiliate of the Manager located at 1818 Market
Street, Philadelphia, PA 19103, serves as the shareholder
servicing, dividend disbursing and transfer agent for each
Fund under an amended and restated agreement dated July 21,
1997. The Transfer Agent provides accounting services to
the Funds pursuant to the terms of a separate Fund
Accounting Agreement. The Transfer Agent is also an
indirect, wholly owned subsidiary of Delaware Management
Holdings, Inc.
OFFICERS AND DIRECTORS
The business and affairs of Global Funds, Inc. are managed
under the direction of its Board of Directors.
Certain officers and directors of Global Funds, Inc. hold
identical positions in each of the other funds in the
Delaware Group. As of June 30, 1997, the officers and
directors of Global Funds, Inc., as a group, owned less than
1% of the outstanding shares of Class A, Class B and Class C
Shares of International Equity Fund, Global Assets Fund,
Global Bond Fund and Emerging Markets Fund and 2.60% of the
outstanding share of International Equity Fund Institutional
Class; and 6.44% of the outstanding shares of Global Bond
Fund Institutional Class; and 15.17% of the outstanding
shares of Global Assets Fund Institutional Class.
As of June 30, 1997, management believes the following
accounts held 5% or more of a Class of shares of a Fund:
<TABLE>
<CAPTION>
Name and Address Share
Class of Account Amount Percentage
<S> <C> <C> <C>
International Merrill Lynch, Pierce,
Equity Fund Fenner & Smith
B Class For the Sole Benefit
of its Customers Attention:
Fund Administration
4800 Deer Lake Drive East
3rd Floor
Jacksonville, FL 32246 304,902 19.00%
International Merrill Lynch,
Equity Fund Pierce Fenner & Smith
C Class For the Sole Benefit
of its Customers Attention:
Fund Administration
4800 Deer Lake Drive East
3rd Floor
Jacksonville, FL 32246 226,064 45.89%
International Northern Telecom, Inc.
Equity Fund Long Term Investment Plan
Institutional c/o BTNY Service
Class Attention: Gina Anzalone
34 Exchange Place MS 3064
Jersey City, NJ 07302 1,463,915 45.43%
RS 401(k) Plan
Price Waterhouse LLP
Savings Plan
1410 North Westshore Blvd.
P.O. Box 30004
Tampa, FL 33630 821,449 25.49%
RS DMC Employee Profit
Sharing Plan
Delaware Management Company
Employee Profit Sharing Trust
c/o Rick Seidel
1818 Market Street
Philadelphia, PA 19103 318,624 9.89%
Charles Schwab & Co. Inc.
Attention: Mutual Fund Dept.
101 Montgomery Street
San Francisco, CA 94104 253,310 7.86%
Global Assets Richard H. Hoffman
Fund A Class and Merris Ann Hoffman
1811 Lesher Mill Road
Palm, PA 18070 29,804 6.58%
Global Assets Merrill Lynch, Pierce,
Fund B Class Fenner & Smith
For the Sole Benefit
of its Customers
Attention: Fund
Administration
4800 Deer Lake Drive East
3rd Floor
Jacksonville, FL 32246 107,031 39.28%
Global Assets Merrill Lynch, Pierce,
Fund C Class Fenner & Smith
For the Sole Benefit
of its Customers
Attention: Fund
Administration
4800 Deer Lake Drive East
3rd Floor
Jacksonville, FL 32246 119,422 60.54%
Emery Jahnke
Ann Jahnke JT TEN
2402 Lilac Lane
Fargo, ND 58102 18,294 9.27%
Global Assets Delaware Management Co.
Fund c/o Joseph H. Hastings
Institutional 1818 Market Street
Class 17th Floor
Philadelphia, PA 19103 89,319 53.20%
RS DMC Employee Profit
Sharing Plan
Delaware Management Company
Employee Profit Sharing Trust
c/o Rick Seidel
1818 Market Street
Philadelphia, PA 19103 68,694 40.91%
Global Bond Merrill Lynch, Pierce,
Fund B Class Fenner & Smith
For the Sole Benefit
of its Customers
Attention: Fund Administration
4800 Deer Lake Drive East
3rd Floor
Jacksonville, FL 32246 10,755 10.32%
NFSC/FEBO
Bodil B. Ottesen
6004 Hunt Ridge Road #2631
Baltimore, MD 21210 9,309 8.93%
NFSC/FMTC IRA
FBO Jennifer J. Thomas
12603 Mt. Laurel Court
Reisterstown, MD 21136 9,197 8.81%
Bruce A. Baker and
Claire B. Baker
3 Nolen Lane
Darien, CT 06820 8,546 8.20%
Global Bond NFSC/FMTC IRA Rollover
Fund C Class FBO Lester C. Gilman, Jr.
1485 Kathleen Place
Englewood, FL 34223 21,656 38.42%
Prudential Securities, Inc.
FBO Cline G. Hickok
120 Nature Valley Place
Owatonna, MN 55060 9,726 17.26%
Donaldson Lufkin Jenrette
Securities Corporation, Inc.
P.O. Box 2052
Jersey City, NJ 07303 3,106 5.51%
NFSC/FEBO
John S. McNally
Charlotte McNally
457 Glenview Drive
Lower Burrell, PA 15068 2,978 5.28%
Global Bond Lincoln National
Fund Life Insurance Co.
Institutional Attention: Karen Gerke 4CO1
Class 1300 S. Clinton Street
Fort Wayne, IN 46802 203,038 22.53%
Global Bond Delaware Management Co.
Fund c/o Joseph H. Hastings
Institutional 1818 Market Street - 17th Floor
Class Philadelphia, PA 19103 44,810 5.53%
DMC Employee Profit
Sharing Plan
Delaware Management Company, Inc.
Employee Profit Sharing Trust
c/o Rick Seidel
1818 Market Street
Philadelphia, PA 19103 48,605 5.39%
Emerging John B. Delander
Markets P.O. Box 2873
Fund A Clearwater, FL 34617 50,000 5.42%
Class
Emerging Merrill Lynch, Pierce,
Markets Fenner & Smith
Fund C For the Sole Benefit
Class of its Customers
Attention: Fund
Administration
4800 Deer Lake Drive East
3rd Floor
Jacksonville, FL 32246 24,674 27.52%
NFSC/FMTC IRA Rollover
FBO Lester C. Gilman, Jr.
1485 Kathleen Place
Englewood, FL 34223 5,472 6.10%
Prudential Securities, Inc.
FBO Cline G. Hickok &
Dianne R. Hickok JT TEN
120 Nature Valley Place
Owatonna, MN 55060 5,417 6.04%
Emerging RS DMC Employee
Markets Profit Sharing Plan
Fund Delaware Management Company
Institutional Employee Profit Sharing Trust
Class c/o Rick Seidel
1818 Market Street
Philadelphia, PA 19103 119,053 67.78%
Bost & Co.
Mutual Funds Operations
P.O. Box 3198
Pittsburgh, PA 15230 29,661 16.89%
</TABLE>
DMH Corp., Delvoy, Inc., Delaware Management Company,
Inc., Delaware Distributors, L.P., Delaware Distributors,
Inc., Delaware Service Company, Inc., Delaware Management
Trust Company, Delaware International Holdings Ltd.,
Founders Holdings, Inc., Delaware International Advisers
Ltd., Delaware Capital Management, Inc. and Delaware
Investment & Retirement Services, Inc. are direct or
indirect, wholly owned subsidiaries of Delaware Management
Holdings, Inc. ("DMH"). On April 3, 1995, a merger between
DMH and a wholly owned subsidiary of Lincoln National
Corporation ("Lincoln National") was completed. In
connection with the merger, new Investment Management
Agreements between Global Funds, Inc. on behalf of
each Fund, with the exception of International Small Cap
Fund, Emerging Markets Fund and Global Equity Fund, and the
Manager, and a new Sub-Advisory Agreement between the
Manager and the Sub-Adviser on behalf of Global Assets Fund
were executed following shareholder approval. DMH, the
Manager and the Sub- Adviser are now indirect, wholly owned
subsidiaries, and subject to the ultimate control, of
Lincoln National. Lincoln National, with headquarters in
Fort Wayne, Indiana, is a diversified organization with
operations in many aspects of the financial services
industry, including insurance and investment management.
Certain officers and directors of Global Funds, Inc. hold
identical positions in each of the other funds in the
Delaware Group. Directors and principal officers of Global
Funds, Inc. are noted below along with their ages and their
business experience for the past five years. Unless
otherwise noted, the address of each officer and director is
One Commerce Square, Philadelphia, PA 19103.
*Wayne A. Stork (60)
Chairman and Director and/or Trustee of Global Funds,
Inc. and each of the other 32 investmentcompanies in the
Delaware Group, Delaware Management Holdings, Inc. and
Delaware Capital Management, Inc.
Chairman, President, Chief Executive Officer and
Director of DMH Corp., Delaware Distributors, Inc. and
Founders Holdings, Inc.
Chairman, President, Chief Executive Officer, Chief
Investment Officer and Director of Delaware Management
Company, Inc.
Chairman, Chief Executive Officer and Director of
Delaware International Advisers Ltd. and Delaware
International Holdings Ltd.
Chairman of Delaware Distributors, L.P.
Director of Delaware Service Company, Inc. and Delaware
Investment & Retirement Services, Inc.
Chief Executive Officer of Delvoy, Inc.
During the past five years, Mr. Stork has served in
various executive capacities at different times within the
Delaware organization.
*Jeffrey J. Nick (44)
President, Chief Executive Officer, Director and/or
Trustee of Global Funds, Inc. and each of the 32 other
investment companies in the Delaware Group.
President, Chief Executive Officer and Director of
Delaware Management Holdings, Inc.
President, Chief Executive Officer and Director of
Lincoln National Investment Companies, Inc.
President of Lincoln Funds Corporation.
From 1992 to 1996, Mr. Nick was Managing Director of
Lincoln National UK plc and from 1989 to 1992, he was
Senior Vice President responsible for corporate planning
and development for Lincoln National Corporation.
*Director affiliated with the Funds' investment manager and
considered an "interested person" as defined in the 1940
Act.
Richard G. Unruh, Jr. (58)
Executive Vice President of Global Funds, Inc. and each
of the other 32 investment companies in the Delaware Group,
Delaware Management Holdings, Inc. and Delaware Capital
Management, Inc.
Executive Vice President and Director of Delaware
Management Company, Inc.
Director of Delaware International Advisers Ltd.
During the past five years, Mr. Unruh has served in
various executive capacities at different times within the
Delaware organization.
Paul E. Suckow (50)
Executive Vice President/Chief Investment Officer,
Fixed Income of Global Funds, Inc., each of the other 32
investment companies in the Delaware Group, Delaware
Management Company, Inc. and Delaware Management
Holdings, Inc.
Executive Vice President and Director of Founders
Holdings, Inc.
Executive Vice President of Delaware Capital
Management, Inc.
Director of Founders CBO Corporation.
Director of HYPPCO Finance Company Ltd.
Before returning to the Delaware Group in 1993,
Mr. Suckow was Executive Vice President and Director of
Fixed Income for Oppenheimer Management Corporation, New
York, NY from 1985 to 1992. Prior to that, Mr. Suckow was
a fixed-income portfolio manager for the Delaware Group.
Walter P. Babich (70)
Director and/or Trustee of Global Funds, Inc. and each
of the other 32 investment companies in the Delaware Group.
460 North Gulph Road, King of Prussia, PA 19406.
Board Chairman, Citadel Constructors, Inc.
From 1986 to 1988, Mr. Babich was a partner of Irwin &
Leighton and from 1988 to 1991, he was a partner of I&L
Investors.
Anthony D. Knerr (59)
Director and/or Trustee of Global Funds, Inc. and each
ofthe other 32 investment companies in the Delaware Group.
500 Fifth Avenue, New York, NY 10110.
Founder and Managing Director, Anthony Knerr &
Associates.
From 1982 to 1988, Mr. Knerr was Executive Vice
President/Finance and Treasurer of Columbia University, New
York.
From 1987 to 1989, he was also a lecturer in English at
the University. In addition, Mr. Knerr was Chairman of The
Publishing Group, Inc., New York, from 1988 to 1990. Mr.
Knerr founded The Publishing Group, Inc. in 1988.
Ann R. Leven (57)
Director and/or Trustee of Global Funds, Inc. and each
of the other 32 investment companies in the Delaware Group.
785 Park Avenue, New York, NY 10021.
Treasurer, National Gallery of Art.
From 1984 to 1990, Ms. Leven was Treasurer and Chief
Fiscal Officer of the Smithsonian Institution, Washington,
DC, and from 1975 to 1992, she was Adjunct Professor of
Columbia Business School.
W. Thacher Longstreth (77)
Director and/or Trustee of Global Funds, Inc. and each
of the other 32 investment companies in the Delaware Group.
City Hall, Philadelphia, PA 19107.
Philadelphia City Councilman.
Thomas F. Madison (61)
Director and/or Trustee of Global Funds, Inc. and 32
other investment companies in the Delaware Group.
President and Chief Executive Officer, MLM Partners,
Inc.
200 South Fifth Street, Suite 2100, Minneapolis,
Minnesota 55402.
Mr. Madison has also been Chairman of the Board of
Communications Holdings, Inc. since 1996. From February to
September 1994, Mr. Madison served as Vice Chairman--Office
of the CEO of The Minnesota Mutual Life Insurance
Company and from 1988 to 1993, he was President of U.S.
WEST Communications--Markets.
Charles E. Peck (72)
Director and/or Trustee of Global Funds, Inc. and each
of the other 32 investment companies in the Delaware Group.
P.O. Box 1102, Columbia, MD 21044.
Secretary/Treasurer, Enterprise Homes, Inc.
From 1981 to 1990, Mr. Peck was Chairman and Chief
Executive Officer of The Ryland Group, Inc., Columbia, MD.
*Director affiliated with the Funds' investment manager and
considered an "interested person" as defined in the 1940
Act.
David K. Downes (57)
Executive Vice President/Chief Operating Officer/Chief
Financial Officer of Global Funds, Inc., each of the
other 32 investment companies in the Delaware Group,
Delaware Management Holdings, Inc, Founders CBO
Corporation, Delaware Capital Management, Inc. and
Delaware Distributors, L.P.
Executive Vice President, Chief Operating Officer,
ChiefFinancial Officer and Director of Delaware Management
Company, Inc., DMH Corp., Delaware Distributors, Inc.,
Founders Holdings, Inc. and Delvoy, Inc.
President/Chief Executive Officer/Chief Financial
Officer and Director of Delaware Service Company, Inc.
President/Chief Operating Officer/Chief Financial
Officer and Director of Delaware International Holdings,
Inc.
Vice President of Lincoln Funds Corporation.
Chairman, Chief Executive Officer and Director of
Delaware Investment & Retirement Services, Inc.
Chairman and Director of Delaware Management Trust
Company.
Director of Delaware International Advisers Ltd.
Before joining the Delaware Group in 1992, Mr. Downes
was Chief Administrative Officer, Chief Financial Officer
and Treasurer of Equitable Capital Management Corporation,
New York, from December 1985 through August 1992,
Executive Vice President from December 1985 through March
1992, and Vice Chairman from March 1992 through August
1992.
George M. Chamberlain, Jr. (50)
Senior Vice President and Secretary of Global Funds,
Inc., each of the other 32 investment companies in the
Delaware Group, Delaware Distributors, L.P. and Delaware
Management Holdings, Inc.
Senior Vice President, Secretary, General Counsel and
Director of DMH Corp., Delaware Management Company, Inc.,
Delaware Distributors, Inc., Delaware Service Company,
Inc.,
Founders Holdings, Inc., Delaware Investment & Retirement
Services, Inc., Delaware Capital Management, Inc. and
Delvoy, Inc.
Executive Vice President, Secretary, General Counsel
and Director of Delaware Management Trust Company.
Senior Vice President and Director of Delaware
International Holdings Ltd.
Director of Delaware International Advisers Ltd.
Secretary of Lincoln Funds Corporation.
Attorney.
During the past five years, Mr. Chamberlain has served
in various capacities at different times within the
Delaware organization.
Joseph H. Hastings (48)
Senior Vice President/Corporate Controller of the
Global Funds, Inc., each of the other 33 investment
companies in the Delaware Group and Founders Holdings, Inc.
Senior Vice President/Corporate Controller/Treasurer of
Delaware Management Holdings, Inc., DMH Corp., Delaware
Management Company, Inc., Delaware Distributors, L.P.,
Delaware Distributors, Inc., Delaware Service Company,
Inc., Delaware Capital Management, Inc. and Delaware
International Holdings Ltd.
Senior Vice President/Controller and Treasurer of
Delvoy, Inc.
Chief Financial Officer/Treasurer of Delaware
Investment & Retirement Services, Inc.
Executive Vice President/Chief Financial
Officer/Treasurer of Delaware Management Trust Company.
Senior Vice President/Assistant Treasurer of Founders
CBO Corporation.
Treasurer of Lincoln Funds Corporation.
1818 Market Street, Philadelphia, PA 19103.
Before joining the Delaware Group in 1992, Mr. Hastings
was Chief Financial Officer for Prudential Residential
Services, L.P., New York, NY from 1989 to 1992. Prior to
that, Mr. Hastings served as Controller and Treasurer for
Fine Homes International, L.P., Stamford, CT from 1987 to
1989.
Michael P. Bishof (35)
Senior Vice President/Treasurer of Global Funds, Inc.,
each of the other 33 investment companies in the Delaware
Group, Delaware Distributors, Inc. and Founders Holdings,
Inc.
Senior Vice President/Investment Accounting of Delaware
Management Company, Inc. and Delaware Service Company,
Inc.
Senior Vice President and Treasurer/Manager, Investment
Accounting of Delaware Distributors, L.P.
Senior Vice President and Manager of Investment
Accounting of Delaware International Holdings Ltd.
Assistant Treasurer of Founders CBO Corporation.
Before joining the Delaware Group in 1995, Mr. Bishof
was a Vice President for Bankers Trust, New York, NY from
1994 to 1995, a Vice President for CS First Boston
Investment Management, New York, NY from 1993 to 1994 and
an Assistant Vice President for Equitable Capital
Management Corporation, New York, NY from 1987 to 1993.
George H. Burwell (36)
Vice President/Senior Portfolio Manager of Global
Funds, Inc., of seven other investment companies in the
Delaware Group and of Delaware Management Company, Inc.
Before joining the Delaware Group in 1992, Mr. Burwell
was a portfolio manager for Midlantic Bank, New Jersey. In
addition, he was a security analyst for Balis & Zorn, New
York and for First Fidelity Bank, New Jersey.
Paul A. Matlack (38)
Vice President/Senior Portfolio Manager of Global
Funds, Inc., of 11 other investment companies in the
Delaware Group and of Delaware Management Company, Inc.
Vice President of Founders Holdings, Inc.
President and Director of Founders CBO Corporation.
During the past five years, Mr. Matlack has served in
various capacities at different times within the Delaware
organization.
Gerald T. Nichols (39)
Vice President/Senior Portfolio Manager of Global
Funds, Inc., of 11 other investment companies in the
Delaware Group and of Delaware Management Company, Inc.
Vice President of Founders Holdings, Inc.
Assistant Secretary, Treasurer and Director of Founders
CBO Corporation.
During the past five years, Mr. Nichols has served in
various capacities at different times within the Delaware
organization.
The following is a compensation table listing for each
director entitled to receive compensation, the aggregate
compensation received from Global Funds, Inc. and the total
compensation received from all Delaware Group funds for the
fiscal year ended November 30, 1996 and an estimate of
annual benefits to be received upon retirement under the
Delaware Group Retirement Plan for Directors/Trustees as of
November 30, 1997.
<TABLE>
<CAPTION>
Pension or
Retirement Total
Benefits Compensation
Aggregate Accrued as from
Compensation Part of Estimated all 18
from Global Annual Delaware
Global Funds, Benefits Group
Funds, Inc. Upon Investment
Name Inc. Expenses Retirement* Companies
<S> <C> <C> <C> <C>
W. Thacher
Longstreth $1,447 None $38,000 $45,145
Ann R.
Leven $1,700 None $38,000 $53,280
Walter P.
Babich $1,523 None $38,000 $49,144
Anthony D.
Knerr $1,681 None $38,000 $52,280
Charles E.
Peck $1,607 None $38,000 $48,280
Thomas F.
Madison** N/A None $38,000 N/A
</TABLE>
* Under the terms of the Delaware Group Retirement Plan
for Directors/Trustees, each disinterested director who, at
the time of his or her retirement from the Board, has
attained the age of 70 years and served on the Board for at
least five continuous years, is entitled to receive
payments from each fund in the Delaware Group for a period
equal to the lesser of the number of years that such person
served as a director or the remainder of such person's
life. The amount of such payments will be equal, on an
annual basis, to the amount of the annual retainer that is
paid to directors of each fund at the time of such person's
retirement. If an eligible director retired as of November
30, 1996, he or she would be entitled to
annual payments totaling $38,000, in the aggregate, from
all of the funds in the Delaware Group, based on the number
of funds in the Delaware Group as of that date.
** Thomas F. Madison joined Global Funds, Inc's Board of
Directors on April 30, 1997.
EXCHANGE PRIVILEGE
The exchange privileges available for shareholders of the
Fund's classes and for shareholders of classes of other
funds in the Delaware Group are set forth in the relevant
prospectuses for such classes. The following supplements
that information. Each Fund may modify, terminate or
suspend the exchange privilege upon 60 days' notice to
shareholders.
All exchanges involve a purchase of shares of the fund
into which the exchange is made. As with any purchase, an
investor should obtain and carefully read that fund's
prospectus before buying shares in an exchange. The
prospectus contains more complete information about the
fund, including charges and expenses. A shareholder
requesting an exchange will be sent a current prospectus and
an authorization form for any of the other mutual funds in
the Delaware Group. Exchange instructions must be signed by
the record owner(s) exactly as the shares are registered.
An exchange constitutes, for tax purposes, the sale of one
fund and the purchase of another. The sale may involve
either a capital gain or loss to the shareholder for federal
income tax purposes.
In addition, investment advisers and dealers may make
exchanges between funds in the Delaware Group on behalf of
their clients by telephone or other expedited means. This
service may be discontinued or revised at any time by the
Transfer Agent. Such exchange requests may be rejected if
it is determined that a particular request or the total
requests at any time could have an adverse effect on any of
the funds. Requests for expedited exchanges may be
submitted with a properly completed exchange authorization
form, as described above.
Telephone Exchange Privilege
Shareholders owning shares for which certificates have not
been issued or their investment dealers of record may
exchange shares by telephone for shares in other mutual
funds in the Delaware Group. This service is automatically
provided unless the relevant Fund receives written notice
from the shareholder to the contrary.
Shareholders or their investment dealers of record may
contact the Shareholder Service Center at 800-523-1918 or,
in the case of shareholders of the Institutional Classes,
their Client Services Representative at 800-828-5052, to
effect an exchange. The shareholder's current Fund account
number must be identified, as well as the registration of
the account, the share or dollar amount to be exchanged and
the fund into which the exchange is to be made. Requests
received on any day after the time the offering price and
net asset value are determined will be processed the
following day. See Determining Offering Price and Net Asset
Value. Any new account established through the exchange
will automatically carry the same registration, shareholder
information and dividend option as the account from
which the shares were exchanged. The exchange requirements
of the fund into which the exchange is being made, such as
sales charges, eligibility and investment minimums, must be
met. (See the prospectus of the fund desired or inquire by
calling the Transfer Agent or, as relevant, your Client
Services Representative.) Certain funds are not available
for retirement plans.
The telephone exchange privilege is intended as a
convenience to shareholders and is not intended to be a
vehicle to speculate on short-term swings in the securities
market through frequent transactions in and out of the funds
in the Delaware Group. Telephone exchanges may be subject
to limitations as to amounts or frequency. The Transfer
Agent and each Fund reserve the right to record exchange
instructions received by telephone and to reject exchange
requests at any time.
As described in the Funds' Prospectuses, neither the Funds
nor their Transfer Agent is responsible for any shareholder
loss incurred in acting upon written or telephone
instructions for redemption or exchange of Fund shares which
are reasonably believed to be genuine.
Right to Refuse Timing Accounts
With regard to accounts that are administered by market
timing services ("Timing Firms") to purchase or redeem
shares based on changing economic and market conditions
("Timing Accounts"), each Fund will refuse any new timing
arrangements, as well as any new purchases (as opposed to
exchanges) in Delaware Group funds from Timing Firms. A Fund
reserves the right to temporarily or permanently terminate
the exchange privilege or reject any specific purchase order
for any person whose transactions seem to follow a timing
pattern who: (i) makes an exchange request out of the Fund
within two weeks of an earlier exchange request out of the
Fund, or (ii) makes more than two exchanges out of the Fund
per calendar quarter, or (iii) exchanges shares equal in
value to at least $5 million, or more than 1/4 of 1% of the
Fund's net assets. Accounts under common ownership or
control, including accounts administered so as to redeem or
purchase shares based upon certain predetermined market
indicators, will be aggregated for purposes of the exchange
limits.
Restrictions on Timed Exchanges
Timing Accounts operating under existing timing agreements
may only execute exchanges between the following eight
Delaware Group funds: (1) Decatur Income Fund, (2) Decatur
Total Return Fund, (3) Delaware Fund, (4) Limited-Term
Government Fund, (5) USA Fund, (6) Delaware Cash Reserve,
(7) Delchester Fund and (8) Tax-Free Pennsylvania Fund. No
other Delaware Group funds are available for timed
exchanges. Assets redeemed or exchanged out of Timing
Accounts in Delaware Group funds not listed above may not be
reinvested back into that Timing Account. Each Fund
reserves the right to apply these same restrictions to the
account(s) of any person whose transactions
seem to follow a timing pattern (as described above).
Each Fund also reserves the right to refuse the purchase
side of an exchange request by any Timing Account, person,
or group if, in the Manager's judgment, the Fund would be
unable to invest effectively in accordance with its
investment objectives and policies, or would otherwise
potentially be adversely affected. A shareholder's purchase
exchanges may be restricted or refused if a Fund receives or
anticipates simultaneous orders affecting significant
portions of the Fund's assets. In particular, a pattern of
exchanges that coincide with a "market timing" strategy may
be disruptive to a Fund and therefore may be refused.
Except as noted above, only shareholders and their
authorized brokers of record will be permitted to make
exchanges or redemptions.
* * *
Following is a summary of the investment objectives of the
other Delaware Group funds:
Delaware Fund seeks long-term growth by a balance of
capital appreciation, income and preservation of capital.
It uses a dividend-oriented valuation strategy to select
securities issued by established companies that are
believed to demonstrate potential for income and capital
growth. Devon Fund seeks current income and capital
appreciation by investing primarily in income-producing
common stocks, with a focus on common stocks the Manager
believes have the potential for above average dividend
increases over time.
Trend Fund seeks long-term growth by investing in common
stocks issued by emerging growth companies exhibiting
strong capital appreciation potential.
Small Cap Value Fund seeks capital appreciation by
investing primarily in common stocks whose market values
appear low relative to their underlying value or future
potential.
DelCap Fund seeks long-term capital growth by investing in
common stocks and securities convertible into common stocks
of companies that have a demonstrated history of growth and
have the potential to support continued growth.
Decatur Income Fund seeks the highest possible current
income by investing primarily in common stocks that provide
the potential for income and capital appreciation without
undue risk to principal. Decatur Total Return Fund seeks
long-term growth by investing primarily in securities that
provide the potential for income and capital appreciation
without undue risk to principal. Blue Chip Fund seeks to
achieve long-term capital appreciation. Current income is a
secondary objective.
It seeks to achieve these objectives by investing primarily
in equity securities and any securities that are convertible
into equity securities. Quantum Fund seeks to achieve
long-term capital appreciation. It seeks to achieve this
objective by investing in equity securities of medium-to
large-sized companies expected to grow over time that meet
the Fund's "Social Criteria" strategy.
Delchester Fund seeks as high a current income as possible
by investing principally in high yield, high risk corporate
bonds, and also in U.S. government securities and
commercial paper. Strategic Income Fund seeks to provide
investors with high current income and total return by using
a multi-sector investment approach, investing principally in
three sectors of the fixed-income securities markets: high
yield, higher risk securities, investment grade fixed-income
securities and foreign government and other foreign
fixed-income securities.
U.S. Government Fund seeks high current income by
investing primarily in long-term U.S. government debt
obligations issued or guaranteed by the U.S. government, its
agencies or instrumentalities.
Limited-Term Government Fund seeks high, stable income by
investing primarily in a portfolio of short- and
intermediate-term securities issued or guaranteed by the
U.S. government, its agencies or instrumentalities and
instruments secured by such securities. U.S. Government
Money Fund seeks maximum current income with preservation of
principal and maintenance of liquidity by investing only in
short-term securities issued or guaranteed as to principal
and interest by the U.S. government, its agencies or
instrumentalities, and repurchase agreements collateralized
by such securities, while maintaining a stable net asset
value.
Delaware Cash Reserve seeks the highest level of income
consistent with the preservation of capital and liquidity
through investments in short-term money market instruments,
while maintaining a stable net asset value.
REIT Fund seeks to achieve maximum long-term total return
with capital appreciation as a secondary objective. It
seeks to achieve its objectives by investing in securities
of companies primarily engaged in the real estate industry.
Tax-Free USA Fund seeks high current income exempt from
federal income tax by investing in municipal bonds of
geographically-diverse issuers. Tax-Free Insured Fund
invests in these same types of securities but with an
emphasis on municipal bonds protected by insurance
guaranteeing principal and interest are paid when due.
Tax-Free USA Intermediate Fund seeks a high level of current
interest income exempt from federal income tax, consistent
with the preservation of capital by investing primarily in
municipal bonds.
Tax-Free Money Fund seeks high current income, exempt from
federal income tax, by investing in short-term municipal
obligations, while maintaining a stable net asset value.
Tax-Free New Jersey Fund seeks a high level of current
interest income exempt from federal income tax and New
Jersey state and local taxes, consistent with preservation
of capital. Tax-Free Ohio Fund seeks a high level of
current interest income exempt from federal income tax and
Ohio state and local taxes, consistent with preservation of
capital. Tax-Free Pennsylvania Fund seeks a high level of
current interest income exempt from federal income tax and
Pennsylvania state and local taxes, consistent with the
preservation of capital.
U.S. Growth Fund seeks to maximize capital appreciation by
investing in companies of all sizes which have low dividend
yields, strong balance sheets and high expected earnings
growth rates relative to their industry. Overseas Equity
Fund seeks to maximize total return (capital appreciation
and income), principally through investments in an
internationally diversified portfolio of equity securities.
New Pacific Fund seeks long-term capital appreciation by
investing primarily in companies which are domiciled in or
have their principal business activities in the Pacific
Basin.
Delaware Group Premium Fund, Inc. offers fifteen funds
available exclusively as funding vehicles for certain
insurance company separate accounts. Decatur Total Return
Series (formerly known as Equity/Income Series) seeks the
highest possible total rate of return by selecting issues
that exhibit the potential for capital appreciation while
providing higher than average dividend income. Delchester
Series (formerly know as High Yield Series) seeks as high a
current income as possible by investing in rated and unrated
corporate bonds, U.S. government securities and commercial
paper. Capital Reserves Series seeks a high stable level of
current income while minimizing fluctuations in principal by
investing in a diversified portfolio of short- and
intermediate-term securities. Cash Reserve Series (formerly
known as Money Market Series) seeks the highest level of
income consistent with preservation of capital and liquidity
through investments in short-term money market instruments.
DelCap Series (formerly known as Growth Series) seeks
long-term capital appreciation by investing its assets in a
diversified ortfolio of securities exhibiting the potential
for significant growth. Delaware Series (formerly known as
Multiple Strategy Series) seeks a balance of capital
appreciation, income and preservation of capital. It uses a
dividend-oriented aluation strategy to select securities
issued by established companies that are believed to
demonstrate potential for income and capital growth.
International Equity Series seeks long-term growth without
undue risk to principal by investing primarily in equity
securities of foreign issuers that provide the potential for
capital appreciation and income. Value Series seeks capital
appreciation by investing in small- to mid-cap
common stocks whose market value appears low relative to
their underlying value or future earnings and growth
potential. Emphasis will also be placed on securities of
companies that may be temporarily out of favor or whose
value is not yet recognized by the market. Trend Series
(formerly known as Emerging Growth Series) seeks long-term
capital appreciation by investing primarily in small-cap
common stocks and convertible securities of emerging and
other growth-oriented companies. These securities will have
been judged to be responsive to changes in the market place
nd to have fundamental characteristics to support growth.
Income is not an objective. Global Bond Series seeks to
achieve current income consistent with the preservation of
principal by investing primarily in global fixed-income
securities that may also provide the potential for capital
appreciation. Strategic Income Series seeks high current
income and total return by using a multi-sector investment
approach, investing primarily in three sectors of the
fixed-income securities markets: high-yield, higher risk
securities; investment grade fixed-income securities; and
foreign government and other foreign fixed-income
securities. Devon Series seeks current income and
capital appreciation by investing primarily in
income-producing common stocks, with a focus on common
stocks that the investment manager believes have the
potential for above-average dividend increases over time.
Emerging Markets Series seeks to achieve long-term capital
appreciation by investing primarily in equity securities of
issuers located or operating in emerging countries.
Convertible Securities Series seeks a high level of total
return on its assets through a combination of capital
appreciation and current income by investing primarily in
convertible securities. Quantum Series seeks to
achieve long-term capital appreciation by investing
primarily in equity securities of medium to large-sized
companies expected to grow over time that meet the Series'
"Social Criteria" strategy.
Delaware-Voyageur US Government Securities Fund seeks to
provide a high level of current income consistent with the
prudent investment risk by investing in U.S. Treasury
bills, notes, bonds, and other obligations issued or
unconditionally guaranteed by the full faith and credit of
the U.S. Treasury, and repurchase agreements fully secured
by such obligations.
Delaware-Voyageur Tax-Free Arizona Insured Fund seeks to
provide a high level of current income exempt from federal
income tax and the Arizona personal income tax, consistent
with the preservation of capital. Delaware-Voyageur
Minnesota Insured Fund seeks to provide a high level of
current income exempt from federal income tax and the
Minnesota personal income tax, consistent with the
preservation of capital.
Delaware-Voyageur Tax-Free Minnesota Intermediate Fund
seeks to provide a high level of current income exempt from
federal income tax and the Minnesota personal income tax,
consistent with preservation of capital. The Fund seeks to
reduce market risk by maintaining an average weighted
maturity from five to ten years.
Delaware-Voyageur Tax-Free California Insured Fund seeks
to provide a high level of current income exempt from
federal income tax and the California personal income tax,
consistent with the preservation of capital.
Delaware-Voyageur Tax-Free Florida Insured Fund seeks to
provide a high level of current income exempt from federal
income tax, consistent with the preservation of capital.
The Fund will seek to select investments that will enable
its shares to be exempt from the Florida intangible personal
property tax.
Delaware-Voyageur Tax-Free Florida Fund seeks
to provide a high level of current income exempt from
federal income tax, consistent with the preservation of
capital. The Fund will seek to select investments that will
enable its shares to be exempt from the Florida intangible
personal property tax.
Delaware-Voyageur Tax-Free Kansas Fund seeks to provide a
high level of current income exempt from federal income tax,
the Kansas personal income tax and the Kansas Intangible
personal property tax, consistent with the preservation of
capital.
Delaware-Voyageur Tax-Free Missouri Insured Fund seeks to
provide a high level of current income exempt from federal
income tax and the Missouri personal income tax, consistent
with the preservation of capital.
Delaware-Voyageur Tax-Free New Mexico Fund seeks to
provide a high level of current income exempt from federal
income tax and the New Mexico personal income tax,
consistent with the preservation of capital.
Delaware-Voyageur Tax-Free Oregon Insured Fund
seeks to provide a high level of current income exempt from
federal income tax and the Oregon personal income tax,
consistent with the preservation of capital.
Delaware-Voyageur Tax-Free Utah Fund seeks to provide a
high level of current income exempt from federal income tax,
consistent with the preservation of capital.
Delaware-Voyageur Tax-Free Washington Insured Fund seeks
to provide a high level of current income exempt from
federal income tax, consistent with the preservation of
capital.
Delaware-Voyageur Tax-Free Florida Intermediate Fund seeks
to provide a high level of current income exempt from
federal income tax, consistent with the preservation of
capital. The Fund will seek to select investments that will
enable its shares to be exempt from the Florida intangible
personal property tax. The Fund seeks to reduce market risk
by maintaining an average weighted maturity from five to ten
years.
Delaware-Voyageur Tax-Free Arizona Fund seeks to provide a
high level of current income exempt from federal income tax
and the Arizona personal income tax, consistent with the
preservation of capital. Delaware-Voyageur Tax-Free
California Fund seeks to provide a high level of current
income exempt from federal income tax and the California
personal income tax, consistent with the preservation of
capital.
Delaware-Voyageur Tax-Free Iowa Fund seeks to provide a
high level of current income exempt from federal income tax
and the Iowa personal income tax, consistent with the
preservation of capital. Delaware-Voyageur Tax-Free Idaho
Fund seeks to provide a high level of current income exempt
from federal income tax and the Idaho personal income tax,
consistent with the preservation of capital.
Delaware-Voyageur Minnesota High Yield Municipal Bond Fund
seeks to provide a high level of current income exempt from
federal income tax and the Minnesota personal income tax
primarily through investment in medium and lower grade
municipal obligations. National High Yield Municipal Fund
seeks to provide a high level of income exempt
from federal income tax, primarily through investment in
medium and lower grade municipal obligations.
Delaware-Voyageur Tax-Free New York Fund seeks to provide a
high level of current income exempt from federal income tax
and the personal income tax of the state of New York and the
city of New York, consistent with the preservation of
capital.
Delaware-Voyageur Tax-Free Wisconsin Fund seeks to provide
a high level of current income exempt from federal income
tax and the Wisconsin personal income tax, consistent with
the preservation of capital.
Delaware-Voyageur Tax-Free Colorado Fund seeks to provide
a high level of current income exempt from federal income
tax and the Colorado personal income tax, consistent with
the preservation of capital.
Aggressive Growth Fund seeks long-term capital
appreciation, which the Fund attempts to achieve by
investing primarily in equity securities believed to have
the potential for high earnings growth. Although the Fund,
in seeking its objective, may receive current income from
dividends and interest, income is only an incidental
consideration in the selection of the Fund's investments.
Growth Stock Fund has an objective of long-term capital
appreciation. The Fund seeks to achieve its objective from
equity securities diversified among individual companies and
industries. Tax-Efficient Equity Fund seeks to obtain for
taxable investors a high total return on an
after-tax basis. The Fund will attempt to achieve this
objective by seeking to provide a high long-term after-tax
total return through managing its portfolio in a manner
that will defer the realization of accrued capital gains and
minimize dividend income.
Delaware-Voyageur Tax-Free Minnesota Fund seeks to provide
a high level of current income exempt from federal income
tax and the Minnesota personal income tax, consistent with
the preservation of capital. Delaware-Voyageur Tax-Free
North Dakota Fund seeks to provide a high level of current
income exempt from federal income tax and the North Dakota
personal income tax, consistent with the preservation of
capital.
For more complete information about any of the Delaware
Group funds, including charges and expenses, you can obtain
a prospectus from the Distributor. Read it carefully before
you invest or forward funds.
Each of the summaries above is qualified in its entirety
by the information contained in each fund's prospectus(es).
GENERAL INFORMATION
Delaware International is the investment manager of each
Fund of Global Funds, Inc. and Delaware is the sub-adviser
to Global Assets Fund and Global Equity Fund. Delaware
International, or its affiliate Delaware, also manages the
other funds in the Delaware Group. Delaware, through a
separate division, also manages private investment
accounts. While investment decisions of each Fund are made
independently from those of the other funds and accounts,
investment decisions for such other funds and accounts may
be made at the same time as investment decisions for a Fund.
Delaware International, or its affiliate Delaware also
manages the investment options for Delaware Medallion(sm)
III Variable Annuity. Medallion is issued by Allmerica
Financial Life Insurance and Annuity Company (First
Allmerica Financial Life Insurance Company in New York and
Hawaii). Delaware Medallion offers fifteen different
investment series ranging from domestic equity funds,
international equity and bond funds and domestic fixed
income funds. Each investment series available through
Medallion utilizes an investment strategy and discipline the
same as or similar to one of the Delaware Group
mutual funds available outside the annuity. See Delaware
Group Premium Fund, Inc., above.
Access persons and advisory persons of the Delaware Group
of funds, as those terms are defined in SEC Rule 17j-1
under the 1940 Act, who provide services to Delaware,
Delaware International or their affiliates, are permitted to
engage in personal securities transactions subject to the
exceptions set forth in Rule 17j-1 and the following general
restrictions and procedures: (1) certain blackout periods
apply to personal securities transactions of those persons;
(2) transactions must receive advance clearance and must be
completed on the same day as the clearance is received; (3)
certain persons are prohibited from investing in initial
public offerings of securities and other restrictions apply
to investments in private placements of securities; (4)
opening positions may only be closed-out at a profit after a
60-day holding period has elapsed; and (5) the Compliance
Officer must be informed periodically of all securities
transactions and duplicate copies of brokerage confirmations
and account statements must be supplied to the Compliance
Officer.
The Distributor acts as national distributor for each of
the Funds and for the other mutual funds in the Delaware
Group. As previously described, prior to January 3, 1995, DDI
served as the national distributor for the Funds. The
Distributor ("DDLP") (for all periods after January 3, 1995)
and, in its capacity as such, DDI (prior to January 3, 1995)
received net commissions from each Fund on behalf of Class A
Shares, after reallowances to dealers, as follows:
International Equity Fund
Class A Shares
Total
Amount of
Fiscal Under- Amounts Net
Year writing Reallowed Commission
Ended Commissions to Dealers to DDLP/DDI
11/30/96 $279,857 $231,351 $48,506
11/30/95 299,368 259,217 40,151
11/30/94 653,278 564,877 88,401
Global Bond Fund
Class A Shares
Total
Amount of
Fiscal Under- Amounts Net
Year writing Reallowed Commission
Ended Commissions to Dealers to DDLP/DDI
11/30/96 $22,383 $18,968 $3,415
11/30/95(1) 5,712 4,661 1,051
(1) Date of initial public offering was December 27, 1994.
Global Assets Fund
Class A Shares
Total
Amount of
Fiscal Under- Amounts Net
Year writing Reallowed Commission
Ended Commissions to Dealers to DDLP/DDI
11/30/96 $76,066 $63,246 $12,820
11/30/95(1) 27,931 24,095 3,836
(1) Date of initial public offering was December 27, 1994.
Emerging Markets Fund
Class A Shares
Total
Fiscal Amount of Amounts Net
Year Underwriting Reallowed Commission
Ended Commissions to Dealers to
Distributor
11/30/96(1) $21,927 $18,174 $3,753
(1) Date of initial public offering was June 10, 1996.
The Distributor and, in its capacity as such, DDI received
in the aggregate Limited CDSC payments with respect to
Class A Shares of each Fund as follows:
Limited CDSC Payments
International Global Global Emerging
Fiscal Equity Bond Assets Markets
Year Fund A Fund A Fund A Fund A
Ended Class Class (1) Class (1) Class (1)
11/30/96 --- --- --- ---
11/30/95 $3,911 --- --- N/A
11/30/94 3,644 N/A N/A N/A
(1) Date of initial public offering of Global Bond Fund A
Class and Global Assets Fund A Class was December 27, 1994.
Date of initial public offering of Emerging Markets Fund A
Class was June 10, 1996.
The Distributor and, in its capacity as such, DDI received
in the aggregate CDSC payments with respect to Class B
Shares of each Fund as follows:
CDSC Payments
International Global Global Emerging
Fiscal Equity Bond Assets Markets
Year Fund B Fund B Fund B Fund B
Ended Class Class (1) Class (1) Class (1)
11/30/96 $6,825 $931 $8,335 ---
11/30/95 2,602 --- $324 N/A
11/30/94 1,283 N/A N/A N/A
(1) Date of initial public offering of Global Bond Fund B
Class and Global Assets Fund B Class was December 27,
1994. Date of initial public offering of Emerging
Markets Fund B Class was June 10, 1996.
The Distributor and, in its capacity as such, DDI received
in the aggregate CDSC payments with respect to Class C
Shares of each Fund as follows:
CDSC Payments
International Global Global Emerging
Fiscal Equity Bond Assets Markets
Year Fund C Fund C Fund C Fund C
Ended Class Class (1) Class (1) Class (1)
11/30/96 $127 --- $580 ---
11/30/95 --- --- --- N/A
(1) Date of initial public offering of International
Equity Fund C Class, Global Bond Fund C Class and Global
Assets Fund C Class was November 29, 1995. Date of initial
public offering of Emerging Markets Fund C Class was June
10, 1996.
Effective as of January 3, 1995, all such payments
described above have been paid to the Distributor.
The Transfer Agent, an affiliate of Delaware
International and Delaware, acts as shareholder servicing,
dividend disbursing and transfer agent for each Fund and for
the other mutual funds in the Delaware Group. The Transfer
Agent is paid a fee by each Fund for providing these
services consisting of an annual per account charge of $5.50
for each Fund plus transaction charges for particular
services according to a schedule. Compensation is fixed
each year and approved by the Board of Directors, including
a majority of the unaffiliated directors. The Transfer
Agent also provides accounting services to each Fund. Those
services include performing all functions related to
calculating each Fund's net asset value and providing all
financial reporting services, regulatory compliance testing
and the related accounting services. For its services, the
Transfer Agent is paid a fee based on total
assets of all funds in the Delaware Group for which it
provides such accounting services. Such fee is equal to
0.25% multiplied by the total amount of assets in the
complex for which the Transfer Agent furnishes accounting
services, where such aggregate complex assets are $10
billion or less, and 0.20% of assets if such aggregate
complex assets exceed $10 billion. The fees are charged to
each fund, including each Fund, on an aggregate pro-rata
basis. The asset-based fee payable to the Transfer Agent is
subject to a minimum fee calculated by determining the total
number of investment portfolios and associated classes.
Delaware and its affiliates own the name "Delaware
Group." Under certain circumstances, including the
termination of Global Funds, Inc.'s advisory relationship
with Delaware International and Delaware or its distribution
relationship with the Distributor, Delaware and its
affiliates could cause Global Funds, Inc. to delete the
words "Delaware Group" from Global Funds, Inc.'s name.
The Chase Manhattan Bank ("Chase"), 4 Chase Metrotech
Center, Brooklyn, NY 11245, is custodian of each Fund's
securities and cash. As custodian for the Fund, Chase
maintains a separate account or accounts for each Fund;
receives, holds and releases portfolio securities on
account of each Fund; receives and disburses money on behalf
of each Fund; and collects and receives income and other
payments and distributions on account of each Fund's
portfolio securities.
Capitalization
Global Funds, Inc. has a present authorized capitalization
of one billion shares of capital stock with a $0.01 par
value per share.
The Board of Directors has allocated fifty million shares
to each of the Fund's Class A Shares and Institutional
Class, and has allocLY
The following illustrates how much more you would have
contributing $2,000 each January--the earliest
opportunity--compared to contributing on April 15th of the
following year--the latest, for each tax year.
After 5 years $3,528 more
10 years $6,113
20 years $17,228
30 years $47,295
Compounded returns for the longest period of time is the
key. The above illustration assumes a 10% rate of return
and the reinvestment of all proceeds.
THE POWER OF TAX-DEFERRED COMPOUNDING
Over time, tax-deferred investing has the potential to
double your investment earnings. The following examples are
based on a $2000 invested on January 1 each year and assumes
an 8% fixed rate of return, with no fluctuation in the value
of principal. The figures do not reflect the impact of any
fees or sales charges. These figures are for illustration
only and are not intended to represent any future investment
results.
Accumulated Value
Over 10 years Tax Bracket
$26, 403 39.6%
$26,881 36%
$27,516 31%
$27,905 28%
$31,828 Tax-deferred
Over 20 years
$69,544 39.6%
$71, 986 36%
$75,540 31%
$77,767 28%
$102,476 Tax-deferred
Over 40 years
$254,528 39.6%
$274,662 36%
$305,626 31%
$326,046 28%
$607,355 Tax-deferred
The Delaware Group includes funds with a wide range of
investment objectives. Stock funds, income funds, national
and state-specific tax-exempt funds, money market funds,
global and international funds and closed-end funds give
investors the ability to create a portfolio that fits their
personal financial goals. For more information,
shareholders of the Fund Classes should contact their
financial adviser or call Delaware Group at 800-523-4640,
and shareholders of the Institutional Classes should contact
Delaware Group at 800-828-5052.
INVESTMENT MANAGER
Delaware International Advisers Ltd.
80 Cheapside
Third Floor
London, England EC2V 6EE
SUB-ADVISER
Delaware Management Company, Inc.
One Commerce Square
Philadelphia, PA 19103
NATIONAL DISTRIBUTOR
Delaware Distributors, L.P.
1818 Market Street
Philadelphia, PA 19103
SHAREHOLDER SERVICING,
DIVIDEND DISBURSING,
ACCOUNTING SERVICES
AND TRANSFER AGENT
Delaware Service Company, Inc.
1818 Market Street
Philadelphia, PA 19103
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young, LLP
One Commerce Square
Philadelphia, PA 19103
INDEPENDENT AUDITORS
Ernst & Young LLP
Two Commerce Square
Philadelphia, PA 19103
CUSTODIAN
The Chase Manhattan Bank
4 Chase Metrotech Center
Brooklyn, NY 11245
___________________________________
DELAWARE GROUP
___________________________________
GLOBAL & INTERNATIONAL FUNDS, INC.
___________________________________
INTERNATIONAL SMALL CAP FUND
___________________________________
INTERNATIONAL EQUITY SERIES
___________________________________
GLOBAL BOND SERIES
___________________________________
GLOBAL ASSETS SERIES
___________________________________
EMERGING MARKETS SERIES
___________________________________
GLOBAL EQUITY FUND
___________________________________
PART B
STATEMENT OF
ADDITIONAL INFORMATION
___________________________________
JULY 21, 1997
(as revised December 22, 1997)
DELAWARE
